SSE ������

2022
ESG ReportCover Story

Inclusive Society for a Better Tomorrow
Dots connect to form lines and then planes like a circuit,
Intuiting threads of technology and society intertwined.
With technology's infusion, we can work to realize a better future together.
As a leading global company of electronic design and manufacturing services,
USI turns innovative technologies into value for our customers and continues toleverage corporate inﬂuence to promote public welfare and sustainable
development for the betterment of society.

Sustainability
Management
Sustainability Committee
Sustainability Policy
Sustainability Strategy

11

Stakeholder Engagement

Table of Contents
About this Report4

About USI

5

57

Social Activities Overview

127

14

Supply Chain Management

60

Contributing to Society

130

14

Letter from the Chairman

7

Letter from the President

8

Realizing the Sustainable
Development Goals

9

Sustainable Performance10
Highlights

3

31

Business Ethics and Compliance 33
Financial Performance and Tax
34
GovernanceGreen Products
Innovation Management andSustainable Production

58

35
39

40
42
51

Investing in Education

128

Conserving the Environment 132
Promoting Arts and Culture 133

26

Board GovernanceGreen Products
and Innovation

Customer Relationship17

29

Cybersecurity Management

Social Involvement 125

Product Value Chain

Operations andGovernanceEnterprise Risk Management

55

12

Sustainable Impact Assessment 15
Materiality Analysis

Value Chain
Management

External Participation

Environmental
Protection andOccupational Safety 71
Climate Change and Carbon
Management

74

Waste Management

83

Biodiversity

86

Water Resource Management 82
Air Pollution Control
Occupational Health and
Safety85
91

Inclusive Workplace 101
Human Rights Protection
Talent Attraction andRetention

103
109

Human Capital Development 121

Appendix134

135

Awards and Recognitions

135

ESG Key Performance Data

138

TCFD Index

158

SASB Index

167

Contributions to the SDGs
Sustainability Data
GRI Index
Management Systems andCertiﬁcations Table
Third-Party AssuranceStatement

136
145

159
168
169

Manufacturing Sites

171

Sales Ofﬁces

172About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

About this Report

Universal Scientiﬁc Industrial (Shanghai) Co., Ltd. (USI, Company, We) publishes an ESG Report in Traditional/Simpliﬁed Chinese and English every year. This report is the 11th ESG Reportpublished by USI and its subsidiaries. (From 2010 to 2012, USI's indirect controlling shareholder Universal Scientiﬁc Industrial Co., Ltd. published 3 ESG Reports). Through this report,
stakeholders could learn about USI's sustainability performances and the progress of our ESG efforts.

Principles
for ReportCompilation

ReportScope and
Boundaries

This report has been prepared with reference to the GRI Standards 2021 and the SASB
Electronic Manufacturing Services & Original Design Manufacturing Standards. We also use
the SSE Listed Companies Self-Regulatory Guidelines No.1-Regulations (Chapter 8 Social
Responsibility) framework and provide ESG data consistent with the 2022 Annual Report.
Please refer to the Materiality Analysis section for material issues and report boundaries.

The data collection period of this report was from 01/01/2022 to 12/31/2022, and ﬁnancial
data are expressed in CNY throughout the report. Environmental, health and safety data aredescribed using accepted international standard units and indicators. The report scope (1)includes Zhangjiang Facility, Jinqiao Facility, Huizhou Facility (2), Kunshan Facility,
Nantou Facility (Nantou-TT and Nantou-NK 1), and Mexico Facility which covers morethan 95% of our annual revenue. If data numbers have a data scope different from thedeﬁned scope above, there will be a note indicating the particular scope for that data.
ASE Technology Holding Co., Ltd. is the parent company of USI and is referred to as our"parent company" or "ASEH" in this report.

Report Publication

Since 2013, USI has published an ESG Report annuallyand is accessible on the USI Sustainability Web.

Previous
VersionReleased inJuly 2022

Current
VersionReleased inJuly 2023

Next
VersionPlannedRelease in
July 2024

If you have any suggestions, pleasecontact us at:• Address: No.1558 Zhang Dong Rd., Pudong New
Area, Shanghai 201203

External
Assurance

The annual ESG Report has been reviewed by the Board. Every year, we conduct a thirdparty veriﬁcation for this report to improve information transparency and accountability.
SGS Taiwan Ltd. provided third-party assurance for this report following AA1000 AS v3 (2020)
Type 2 Moderate Level with GRI 48 disclosures veriﬁed with High Level. We also veriﬁed
SASB Electronic Manufacturing Services & Original Design Manufacturing disclosure topics.
For details, please refer to the Third-Party Assurance Statement.

Note:
1. Please refer to the Sustainability Data - Governance B. Scope Comparison Table of the 2022 Annual Report and ESG Report
2. Shenzhen Facility relocated to Huizhou in 2022. Thus, the data scope of the Huizhou Facility disclosed in this report includes data from Shenzhen Facility• Tel: +86-21-5896-6996• Email: csr@usiglobal.com• Web: https://www.usiglobal.com• Address: No.141, Lane 351, Sec. 1, Taiping Road,
Tsaotuen, Nantou County 542007• Tel: +886-49-235-0876

4

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

About USI
Headquarters

2022 Revenue (CNY)

Registered Capital (CNY)Area of Manufacturing Facilities (1)Chairman and Chief Executive Ofﬁcer

Stock Number/Name

President and Chief Operation Ofﬁcer

Date of Stock Issue

Pudong New Area,
Shanghai
472,582 Square meters(5,086,830 Square feet)
Global Total of Employees(as of 12/31/2022)

23,77468.5 Billion

Jeffrey Chen
C.Y. Wei

Main Products and Services

2,201,284,633

601231/USI Shanghai in SSE
February 20, 2012

Wireless communication products, cloud andstorage products, consumer electronics, industrial
products, medical and automotive products

5

USI is a member of ASEH (TWSE: 3711, NYSE: ASX) andan industry leader in miniaturized module and System-inPackage (SiP) products manufacturing. We provide D(MS)2
product services: Design, Manufacturing, Miniaturization,industrial software and hardware Solutions, material
procurement, logistics and maintenance Services forbrand owners. USI Shenzhen Facility relocated to Huizhou
in 2022 to meet growing market demand in South
China and build a foundation for upgraded intelligent
operations. Also, Nantou Facility set up Nantou-NK 2 toexpand our product assembly capacities, strengthen R&D
capabilities to develop high-end products, and actively
expand USI's global presence to enhance competitiveness.
Please refer to the USI website for more information.
Note:
1. The area of manufacturing facilities only includes facilities in thescope of this report, excluding the Shenzhen Facility. For moredetails, please refer to Global Locations

About this Report

Sustainability
Management

Operationsand Governance

Global Operations

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
Workplace

Supply chain with a global
mindset coupled with volume
purchasing capabilities

United Kingdom

SocialInvolvement

AppendixGermany
PolandFranceCzech Republic

Tunisia
Mainland China
TaiwanUSA Silicon Valley
MexicoVietnamOperations span across Asia, Europe,
America, and Africa, providing acomplete range of services

USI Manufacturing Locations

28 manufacturing locations,with more than 220 SMT Lines6

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Letter from the Chairman
For years with sustainable operations as our utmost goal, USI
continually enhanced our corporate governance and investor
relations to establish a good corporate image in the capital
market, increasing our corporate social value. Our strategy
of stable operations and effective risk control resulted in aconsolidated revenue of CNY 68.5 billion in 2022, achieving
record revenue growth of 24%. This achievement brought
excellent ﬁnancial value to our investors and made positive
contributions to society.
In 2022, USI received several honors through our efforts. In
the corporate governance dimension, coinciding with the10th anniversary of our IPO, we established the Board of
Directors Diversity Policy to optimize the Board organization
management structure and strengthen corporate governance.
Based on our market position and industry characteristics, weconstantly monitor industry developments and relevant regional
policies and gain insight into the glocalization of the supply
chain. We actively deployed glocalization strategies such as
consolidating regional production bases, allocating a global
pool of localized talents, cultivating competitive differential
capabilities, establishing an international digital production
and sales information network, and promoting a new businessmodel of global platforms and localized services. In recognitionof USI's effective management, quality development, and a signof trust and expectations for the future, the China Listed Companies
Association awarded USI the 2022 Board Ofﬁce Best Practices Award.
On the environmental front, USI has been actively implementing
various environmental protection policies and taking low-carbon
and emission reduction measures. In the ﬁrst authoritative
assessment of China Listed Companies TCFD Disclosures, we
received the 2022 highest rating of BBB.

7

At the social dimension, USI respects and protects the rights ofour employees, creating a safe and friendly work environmentand building sustainable relationships with all stakeholders. We
attach great importance to the relationship with our upstream
and downstream industry partners and investors and work topromote value chain growth through cooperation and innovation,
contributing to society's development. We continuously
optimize communication with investors and openly disclose ourbusiness strategies and development status to the market, thus
maintaining ﬁve years of Information Disclosure A Rating on the
SSE and being included in the SSE Corporate Governance Index.
International ESG evaluations have recognized USI's commitment
to sustainable growth. We were again recognized by S&P Global,
ranking in the top 10% of the Electronic Equipment, Instruments& Components industry group, and included in the S&P Global
Sustainability Yearbook for two consecutive years. USI wasawarded the ESG Pioneer Award at the 3rd ESG Corporate Summit
for outstanding performance in green development, social
responsibility, and governance effectiveness.
These honors recognize our past year's efforts and encourage
us to keep moving forward on our ESG journey. USI will continue
to follow our Low Carbon, Circular, Collaborative, and Inclusive
Sustainability Strategy, uphold our corporate philosophy ofsustainable operations, and practice the motto "think responsibly,
learn deeply, and work productively" to work together for the
long-term coexistence and prosperity of Earth and society.

Chairman Jeffrey Chen

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Letter from the President
Looking back at 2022, the world faced many challenges suchas the ongoing war between Russia and Ukraine, energy andprice spikes that led to inﬂation, extreme climate disasters,
and geopolitical issues that affected supply chains. To tackle
these issues, we are committed to improving our environmental
protection (E), social responsibility (S), and corporate governance(G) practices.
We believe that everyone has a role to play in ESG compliance.
To raise awareness and encourage action, USI provides educationand training to enhance employees' understanding of global
sustainability trends and corporate sustainability actions.
USI is taking practical steps to implement ESG strategies andprograms in all areas. Environmentally, we have developed a netzero carbon emission strategy, with science-based targets as
our action plan to reduce the environmental impact of climatechange by raising energy efﬁciency and reducing GHG emissions.
On the social front, we continue to care for our employees andpromote social engagement activities to maximize our corporate
inﬂuence, realizing global partnerships and achieving a social
contribution value (1) of CNY 3.77 per share. We prioritize soundcorporate governance by safeguarding shareholders' rights andinterests, strengthening operational risk management, andimplementing information security controls.
Excessive carbon emissions are accelerating global warming,
leading to extreme weather and ecological changes thatjeopardize the survival of humanity. We are committed to
implementing our Low Carbon Sustainability Strategy, reﬂectedin our Mainland China Facilities completing GHG inventory
certiﬁcation and reducing 1,316 metric tonnes of carbon throughkey projects. For ten years, we have invested in Shanghai Roots &Shoots' Million Tree Project, which reduces desertiﬁcation andsoil erosion while restoring biodiversity. We are pleased toreport that the number of species observed in Inner Mongolia
and Ningxia has been increasing yearly, with 47 species in Inner
Mongolia and 14 in Ningxia.
Furthermore, we are dedicated to improving our work
environment and promoting diversity and inclusion. We provide
opportunities for people with physical and mental disabilities
and strive to ensure that women have equal opportunities forleadership positions.
By aligning our business strategy and operational managementwith sustainable development goals, we aim to contribute to
public welfare and beneﬁt society and nature. We will continuecommunicating with our employees and partners to achieve our
ESG commitments.

President C.Y. Wei

Note:
1. Social contribution value per share = (earnings per share + tax payments +employee salaries + interest expenses + total social input) ÷ total numberof shares issued in the year8About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Realizing the Sustainable Development Goals (SDGs)
According to the identiﬁed material issues and annual sustainable goals, USI focused on 6 SDGs to be key indicators of sustainable development in 2022.

Talent is an important growth driver for enterprises, USI
invests in education to encourage students in literary
pursuits. USI has several industrial-academic partnershipand internship projects to enhance youth employability,and develop the next generation of technology talents andfuture human capital

USI uses mitigation and adaptation methods to respondto climate change. Following our Low Carbon strategy,
we adapted the TCFD framework and managed productlife cycle emissions from the supply chain, design, andproduction processes to achieve the 2050 Net Zerotarget9

Facing global economic changes, USI creates businessgrowth by steady operation strategies to support
production activities and employment opportunities,
and reach sustainable operations

USI promotes the rule of law and builds a responsible
system for sustainability development. We establish
Code of Business Conduct and Privacy Policy with
reporting mechanisms to ensure compliance withbusiness integrity

USI actively creates sustainable communities, prevents
environmental impacts by monitoring air quality and
efﬂuents quality to meet local safety standards.
USI considers "Waste Minimization and Reuse" ascorporate policy. The principle of "Pollution Prevention &Circular Reuse" has been treated as annual performanceindicator and carried out thoroughly in all the facilities

As a global corporate citizen, USI advocates industrial
key issues to business partners through the organizations
we joined, increases inﬂuence of sustainable goals
through daily operations, and strengthens global
partnership to achieve our sustainability vision

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Sustainable Performance Highlights

GovernanceSocialEnvironmental• Record high sales revenue of CNY
68.5 billion• Sustainalytics Negligible Risk ESG
risk rating• Global local procurement rate 43%• Customer satisfaction score 84.2

• Provided 18,267 opportunities across
six major manufacturing facilities. Our
employees hail from 10 countries, with
19% of females in top management,
and tailored jobs for 83 employees withdisabilities• Supported 157 employees to takeadvanced studies in top-tier schools
worldwide• Invested CNY 818 thousand in 5 rural
revitalization programs, beneﬁting
1,838 students• Maintained 100% renewable energy
use in Mainland China Facilities,
achieving 82% renewable energy use
globally• Generated 2,142 MWh of renewableenergy through solar panels at
Nantou-NK 1 Facility• Reduced 1,316 metric tonnes ofcarbon through CIP key projects• Planted 130,214 trees covering
86.36 hectares

Maintained Five Years Information Disclosure

A Rating on the SSE 2018-2022

Awarded 2022 AUO SupplierIntelligent Supply Chain Contribution Award

Received 2022

EcoVadis Silver Sustainability Rating

Included in the S&P Global Sustainability Yearbook

Top 10% S&P Global ESG Score 2022
Top 1% S&P Global ESG Score (China) 2022

Nantou-NK 1 Received

Green Factory Certiﬁcation

Received

BBB Rating

2022 China Listed Companies TCFD Disclosures10About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Sustainability Management
USI integrates core values of four sustainability strategies, Low Carbon, Circular,

Inclusive and Collaborative into corporate policy and operation management. Not
only bringing in the most beneﬁts for shareholders and investors but creating social
value to pursue the sustainable development of co-existing environment, society,and governance.

We commit to11

Provide a diversiﬁed,
fulﬁlling, and challenging
working environment

Generate exceptional
rewards for stakeholders

Contribute towards
building a better place
to liveAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Sustainability Committee
USI Sustainability Committee is the highest-level organization of corporate sustainable
development management, and the committee covers all manufacturing facilities. The
committee's mission has been divided into ﬁve taskforces, Corporate Governance, Green
Product & Innovation, Value Chain Management, Employee Care & Social Involvement,
and Environmental Protection & Occupational Safety. Committee members are
representatives chosen from each department and the President acts as the Chair, senior
managers act as Leaders and Coordinators.

The committee coordinators will hold quarterly meetings; leaders and task force
members will decide and track the sustainable targets in the meetings. The sustainableachievements will be presented to committee Chair and members in the annual
Sustainability Committee meeting. A Sustainability Committee Annual Meeting & Forum
was held on December 14, 2022. Sustainability consultants were invited to share andsuggest directions for USI sustainable performance.

USI Sustainability
Committee
Executive Secretariat
S&HS DivisionCorporate
GovernanceGreen Products &Innovation

We strive toThink Responsibly
Learn Deeply
Work Productively
with sustainable development in mind

Jeffrey Chen, CEO

Value Chain
Management

Employee Care &Social Involvement

Only when the global ecosystemis thriving can there be sustained
human life where legal entities cangrow and prosper

C.Y. Wei, President
Sustainability Committee Chair

Environmental Protection &Occupational Safety

Internalize ESG core values
Protect the environment
Fulﬁll social responsibility
Develop good governanceThrive as a sustainable company

Gilbert Wei, SVP
Sustainability Committee Vice Chair

12

About this Report

Sustainability
Management

Operationsand GovernanceRealize USI's spirit
Ensure Accountability & Take Action
to steer ESG
sustainable development

JP Shi, SVP
Sustainability Committee Leader

With sustainability and accountability
in our genes, we commit tosustainable governance, coexist
with the environment & cultivate
relationships with local communities

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
Workplace

Implement a legal and compliant system
Reinforce a people-oriented management
Deepen sustainable development
Create corporate competitiveness

Brian Shih, Supervisory Board Chair
Sustainability Committee Leader

Building a greener environmentis a responsibility that we must face.
More corporate effort and care
Creates a more sustainable planet

Clement Chen, SVP
Sustainability Committee Leader

Alex Lee, SVP
Sustainability Committee Leader

SocialInvolvement

Appendix

Go green &Enhance ecological product design
Pursue Low Carbon products

John Fang, SVP
Sustainability Committee Leader

To promote ESG sustainability activities,
we need toThink Ahead
Start Early
Set a Solid Foundation
there is no best, only better
Otto Yu, VP
Sustainability Committee Leader

Sustainable Promotion

In 2022, USI launched sustainable promotion events to enhance employees' sustainability capabilities:
Developed ESG e-learning materials
to impart sustainability concepts
for worldwide indirect employees

13

Broadcasted sustainability topics on
TV monitors at worldwide facilities,
so employees have opportunities
to understand the basics ofsustainability

Published sustainability trends in the
USI Newsletter, please refer to the ESG
360 column in Corporate Publications
for related articles

Held 2 seminars where externalsustainability consultants sharedglobal sustainability trends
including Net Zero Emissions and
ESG case studies

About this Report

Sustainability
Management

Operationsand Governance

Sustainability Policy

Through the understanding of Environmental, Social,and Governance (ESG) dimensions in sustainability, USI
considers that sustainable business development isclosely linked with the interests of employees, customers,
investors, suppliers, and other stakeholders. The scopeof ESG covers the issues of labor rights, workplace safety
and health, environmental protection, and businessethics. To accomplish our ESG goals effectively andmeet stakeholders' expectations, USI set the following
measures to achieve sustainability goals. The complete
policy can be accessed at the USI Sustainability Web.

Environmental

SocialGovernance

Respond to climate action;
Reduce greenhouse gas emissions
Invest in green innovation;
Improve energy efﬁciency
Promote circular economy;
Prevent and control pollutants
Ensure workforce diversity;
Endorse human rights
Stimulate social welfare;Support community investment
Advocate supplier development;
Achieve global partnership
Upgrade corporate governance;
Uphold business ethics
Create company value;
Connect with stakeholders
Drive transparency culture;
Disclose sustainable indicators

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Sustainability Strategy

To reach the SDGs and pursue corporate sustainability, USI follows four sustainability strategies, Low Carbon, Circular,
Collaborative, and Inclusive, to prioritize response SDGs based on the Company's core values. This enables the Company
to take comprehensive actions concerning corporate sustainability. In 2022, we generated strategic approaches and2027 targets according to key sustainable issues, focused on the corresponding SDGs, tracked the target achievements
and published the sustainable missions and performances in the annual Sustainability Committee meeting. For strategic
approaches and targets of key sustainable issues, please refer to the respective chapter and section for more information.

CSR/Sustainability

Decarbonized Products and Services

Circular Design

Adaptation and Resilience

Waste as a Valuable Resource

Low-carbon Manufacturing

Green and Renewable Energy
Investment

Environmental Conservation

Industry-academia Collaborations

Energy Resources Recycling

Low Carbon

Circular

Inclusive

Collaborative

Community Engagement

Circular Economy in Value Chains

Smart Procurement

Strategic Partnership

Supply Chain Management GoHigh Tech

Public Advocacy

Environmental Education

Commitments/Value

14

Value Chain
Management

Proﬁt taxes
206.3

Recycle water4
Biodiversity<1

Proﬁts3,060.0

s

t

t

pac

Other taxes
274.3

Note:
1. The impact driver Education was merged with Social Cohesion in 2022

e nt al I m

on m

Ta x I m p a ct

Intangible assets
1,744.2

15

vir

e

rs

ld

En

Commu
nit
y

nomic Impact
Eco

Os Shareho

CNY 33,283

NGeGovernment

NG

Waste
-2.2

2022
Sustainable Value

er

er

s

Payroll
4,305.5

GHG emissions-12.9

ers Em
plo
stom
Cu
y

p li

p li

Proﬁts1,856.7

Water
consumption-14.4

Employeehealth & safety
121.7

l Impact
Socia

Investment
1,286.3

SupSup

CNY 25,786

Government

2021
Sustainable Value

Air pollution-1.3

Socialcohesion
19.5

s
ee

ers Em
plo
stom
Cu
y

Employeeengagement &development
527.3

Supplier partnership
21,252.2

GHG emissions
-11.1

s
ee

Payroll
3,696.0

Through the TIMM assessment (1), USI generated CNY 33,283 million worth ofsustainability value for stakeholders in 2022. Compared with 2021, we increased CNY
7,497 million or 29% in positive sustainability value, creating positive contributions to thesociety.

Os Shareho

ld

pac

l Impact
Socia

Investment
1,244.3

Appendix

Sustainability Value and Impacts

e nt al I m

Employeeengagement &development
517.3
Social
Education cohesion
Employee
6.7
15.2
health & safety
124.0

Supplier partnership
16,125.9

SocialInvolvementon m

To monitor the progress of our sustainability strategies and goals, USI introduced the
Total Impact Measurement and Management (TIMM) methodology starting in 2021 toinventory the impacts and contributions to stakeholders from Company's operations in
the Economic, Social, Environmental, and Taxes dimensions. In 2022, USI's record-highbusiness performance reﬂected the growth in economic and tax dimensions and invested
in environmental and social activities to bring contributions for stakeholders.

Inclusive
Workplacevir

Sustainable Impact Assessment

Environmental Protection
and Occupational Safety

En

Green Products
and Innovationrs

Operationsand Governance

Commu
nit
y

Sustainability
Management

nomic Impact
Eco

About this Report

Ta x I m p a ct

Intangible assets
2,119.7
Proﬁt taxes
285.5

Air pollution
-1.4

Water
consumption
-18.7
Waste
-2.3

Recycle water
5.4
Biodiversity
2.0

Other taxes
333.3

Unit: CNY million

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Economic and Tax dimensions
USI created 26% higher of positive value than in 2021. Though the electronics
production chain was impacted by geopolitics and COVID-19, USI applied glocalization
strategy to make countermeasures and reduce the impacts of production capacity. On
the other hand, USI grasps business opportunities to develop new energy vehicle powersystems and power modules through providing a complete supply chain technology andcontinuously improving core competitiveness based on years of automotive electronics
experiences. In 2022, USI increased 65% of annual net proﬁt which created substantial
beneﬁts for shareholders, suppliers, employees, and the government.

Environmental dimension
To compare with 2021, USI increased 12% of negative value due to expansion of
production capacity. The major impacts were water consumption and GHG emissions.
To make sure the use out of every drop of water, USI has been planning to recycle
as much water as possible via improvement of equipment and technology. Throughprocess water recycling system, the positive beneﬁt of recycled water has been
increasing every year. The recycled water rate was 29% in 2022. And USI launches GHG
reduction policy to inventory GHG emissions and product carbon footprint, purchasecertiﬁed renewable energy to offset carbon dioxide emissions generated by traditional
electricity used. The renewable energy rate was 82% in 2022. USI will continue to keepa track on the use of water resources and conserve water, promote green promises
and environmental protection measurements for a friendly environment, and lower
environmental impact.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Environmental Proﬁt and Loss

To further create useful products and services by natural capital and reduce the direct orindirect impact on the environment, USI introduced TIMM methodology to help the company
to make effective decisions by weighing different issues through monetization management.
We focus on major environmental issues related to operations, including greenhouse gas
emissions, air pollution emissions, waste generation, water resources use, and biodiversity.
We map out the impact event chain of environmental pollution emissions and resource
consumption and calculate the environmental cost of human health damage, environmental
resource reduction and ecosystem impact caused by these behaviors.
The environmental impact of USI production operations in 2022, after value conversion,
was CNY 27.8 million, of which the main source of environmental impact is water
consumption accounting for 48%. The major reasons of water consumption increased in
2022 were business expansion and facility relocation from Shenzhen to Huizhou. Followedby GHG emissions (the impact of GHG emissions is the result of offsetting the positive
beneﬁts of carbon sinks from biodiversity) Scopes 1 and 2 accounting for 39%. In 2022,
our revenue grew by 24% compared to 2021. Despite our signiﬁcant increase in revenue,
our external environmental costs remained relatively low, only increasing by 12% in thesame period, showing our dedication and results in reducing environmental impact. USI's
environmentally friendly measures, such as recycled water and biodiversity, respectively
generated a positive value of CNY 5.4 million and CNY 2.0 million in 2022, signifying that
USI's efforts in environmental protection were able to mitigate negative impacts.

Social dimension
USI increased 31% higher of positive value than in 2021. The primary performanceswere good relationships with suppliers and human capital cultivation. USI holds a
Sustainable Value Chain Webinar every year to promote company ESG policy. We
support local suppliers, which facilitates the growth of the local economy and increases
local employment rates. In 2022, the average local purchasing rate was 43% which
increased by 4% compared with 2021. Human capital development was executed by
employee engagement survey to exhibit employees' working performances and values.
While creating economic performances, company also actively engages in community
construction and sustainable development and contributes to society through various
charitable activities.

16

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

During the business operating, USI has not only directly ﬁnancial impacts on stakeholders, but also positive and negativesocial impacts including supplier partnership, employee engagement & development, employee health & safety, andsocial cohesion. In 2022, the total value of social impact was CNY 21,920.4 million which mainly contributed by supplierpartnership. The impact value of social dimension from direct operations (1) was CNY 21,909.4 million, CNY 5,136.2 million
higher than in 2021.

DirectOperations

Indirect
Operations

Activity/Output

Outcome/Impact

Supplier
partnerships

Conducted document and on-site audits of 46
material suppliers, and on-site audits of 35 on-site
service contractors, audit results are 100% low-risk
Held Sustainable Supply Chain Webinar for theGreater China region at the Nantou Facility. 342
supplier partners attended this webinar, and 256
feedback surveys conveyed they were "very satisﬁed"
Global local procurement rate reached 43% in 2022

Employeeengagement &development

An employee engagement survey is conducted every
two years, the last survey activity was held in 2021.
The effective response rate of the questionnaire was
89%, and the overall employee engagement score
was 84%The impact value is CNY 527.3
millionPlease refer to the Employee
Engagement Survey section forfurther details

Employeehealth & safety

There were 11 occupational injuries and 5 near missincidents
USI conducts physicals every year, also, specialized
health exams are provided for employees in high-riskworking environments

The impact value is CNY 121.7
millionPlease refer to the Occupational
Health and Safety section forfurther details

Social cohesion

660 students beneﬁted from industrial-academic
partnerships programs and participated 54,616 hours

The impact value is CNY 8.4 million
Please refer to the Investing in
Education section for further details

Engaged 701 employees to volunteer 2,047 hours ofservice in 2022

The impact value is CNY 11.0
millionPlease refer to the Social
Involvement chapter for further
details

Social cohesion

The impact value is CNY 21,252.2
millionPlease refer to the Supply Chain
Management section for further
details

Note:
1. The social impact value directly related to operations is calculated by excluding charitable donations and non-industrial-academic educational program

17

SocialInvolvement

Appendix

Materiality Analysis

Social Impact

Impact Driver

Inclusive
Workplace

USI uses the AA1000 Stakeholder Engagement Standards
and the AA1000 Accountability Principles of Inclusivity,
Materiality, Responsiveness, and Impact as our framework
to identify material issues for ESG disclosure. We
referenced GRI 3: Material Topics 2021 and integrated theValue Balancing Alliance methodology, Harvard Business
School Impact-Weighted Accounts methodology, London
Benchmarking Group (LBG) framework, and the TIMM
Impact Evaluation framework to assess the signiﬁcanceof economic, environment, and people/human rights
impacts mapped to sustainable issues. The results arethen prioritized according to their signiﬁcance, presented
to the Sustainability Committee, and incorporated into
our enterprise risk management process to serve as areference for setting our long-term sustainability goals
and strategies. For more details, please refer to theEnterprise Risk Management section.
Analyzing the differences between material issues in
2022 and the previous year, companies are paying more
attention to environmental issues due to climate change,
net-zero initiatives, and social inclusion impacted by
COVID-19, so Energy Management and Social Involvement
are added as material issues based on expert opinions andrecommendations from the Sustainability Committee.
Studying global sustainability trends and reexamining
our sustainable issues, we added Biodiversity as a newissue to report on. Although Regulatory Compliance andData Privacy are not material issues, they are still partof USI's long-term sustainability management, and theirperformance results are also disclosed in this report.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Process to Determine Material Issues
Phase I. Inclusivity

Phase II. Materiality

Based on our previously identiﬁed stakeholders, we assessed our business
relationships and identiﬁed banks as increasingly important to USI due to facility
expansions, mergers and acquisitions, and green ﬁnance trends. After USI
Sustainability Committee review, we followed ASEH's requirement and added banks
in the same stakeholder category as shareholders/investors. We deﬁned our 7 major
stakeholders as: shareholders/investors/banks, employees, customers, suppliers/
contractors, governments, industry unions/associations, and communities (includingNGOs and the media).

In 2022, we collected 1,089 Stakeholder Concern Surveys from external and internal
stakeholders. Respondents include shareholders/investors/banks (10), customers(20), employees (548), suppliers/contractors (427), government (18), industry unions/associations (14), and communities (52). We analyzed the surveys and identiﬁed
issues of high stakeholder concern.
Considering the EU concept of double materiality, we conducted an Operational
Impact Survey to reﬂect Financial Materiality and measured the impact of eachsustainable issue on the Company's revenue, risks, customer satisfaction, andemployee engagement. 89 senior executives and Sustainability Committee members
ﬁlled out this survey as representatives of USI's operations. For SigniﬁcanceMateriality, apart from incorporating TIMM impact evaluation results, 10 managers
and colleagues conducted an External Sustainability Impact Survey that includes
9 positive impacts and 6 negative impacts on the economy, environment, people/
human rights and assesses the severity (1) and likelihood (2) of actual and potential
impacts. The survey results identify 6 signiﬁcant impacts, including 3 positive
economic impacts, 1 positive, and 2 negative environmental impacts.

We integrated the SDGs, GRI Standards, SASB Standards, Task Force on Climaterelated Financial Disclosures (TCFD), Responsible Business Alliance (RBA) Codeof Conduct, S&P Global Corporate Sustainability Assessment (CSA), and Morgan
Stanley Capital International (MSCI) ESG Rating with our industry speciﬁccharacteristics and ASEH's requirements and compiled them into 8 governanceissues, 6 environmental issues, and 7 social issues, 21 sustainable issues in total.

We ranked the top 5 sustainability issues of stakeholder concern, signiﬁcant
operational impact, and signiﬁcant external sustainability impact, and then tallied
the number of occurrences. The preliminary material issues are the intersection
results of the three surveys.

Step

1

Identify Stakeholders
7 Stakeholders

Step

2

Design Sustainability Survey
21 issues summarized

Note:
1. Severity: an actual or potential negative impact is determined by the following characteristics:• Scale: how grave the impact is• Scope: how widespread the impact is, for example, the number of individuals affected or the extent ofenvironmental damage• Irremediable character: how hard it is to counteract or make good the resulting harm

Step

3

Investigate Stakeholder
Concerns
1,089 feedback surveys

Double Materiality Impact Analysis
89 senior executives andSustainability Committee members
Stepparticipated in the Operational
Impact Survey
4
10 managers and colleagues
participated in the External
Sustainability Impact Survey

2. Likelihood: a potential negative impact refers to the chance of the impact happening/probability

18About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Phase III. Responsiveness

Phase IV. Impact

We assessed the signiﬁcance of the issues by cross analyzing the Stakeholder
Concern Survey, Operational Impact Survey, and External Sustainability Impact
Survey, then mapped it to previous material issues and consulted external experts
and the Sustainability Committee to determine 13 material issues. The materiality
assessment results were then reviewed and approved by the Board of Directors.
We mapped 19 GRI topic standards and 5 USI speciﬁc topics (1) that respond to thematerial issues identiﬁed. Non-material issues such as Diversity & Inclusion are also
disclosed in this report as they are essential in USI's sustainable development.

USI's ﬁve Sustainability Taskforces have disclosed management approaches, shortand long-term goals, and strategies for each material issue according to theirrequirements, formulating 38 long-term goals.

Scope and Structure of the Report: Following the principle of comparability, our2022 ESG Report covers the material issues of the previous year. The structureof this report is based on collecting internal data and management approaches,
following indicator reporting requirements, and fully disclosing USI's current policies
and plans for fulﬁlling ESG sustainability development.

Step

5

Identify Material Issues
13 material issues

Step

6

Deﬁne Topic Disclosures
and Boundaries
19 topic standards
5 USI speciﬁc topics
6 manufacturing facilities

In addition to quarterly Executive Team meetings, the Sustainability Taskforces
also meet semiannually to review the progress of each goal. At the annual
Sustainability Committee meeting, we review our achievements, make rolling
adjustments, track sustainability trends, and manage the impact of oursustainability goals. We publicly disclose the direction, progress, and performanceof our sustainability goals in our annual ESG Report.

Step

7

Formulate Long-term Goals
38 long-term goals

Step

8

Evaluate Impact
7 regular meetings

Note:
1. USI speciﬁc topics include Cybersecurity Management, Innovation Management & Sustainable Production, Customer Relationship Management, Sustainable Supply Chain, Social Involvement, Data Privacy, and Biodiversity

19About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Impact Evaluation - Monetization Model (TIMM)
Dimension

Economic

Environmental

SocialTax

Impact DriverType of
ImpactCause of
ImpactStakeholder/
Impact Area

Investments

Positive

Operations

Shareholders/investors/banks

Capital expenditure

Payroll

Positive

Operations

Employees

Payroll and beneﬁts given

ProﬁtsPositive

Products/
Services

Shareholders/investors/banks

Asset depreciation costs, repair
expenses
Employee salary expenses, social
insurance, pension funds

Proﬁt distribution

Output MetricImpact Valuation

Monetization(M CNY)

Impacted SustainableIssue

4,305.5

Innovation Management& Sustainable Production
Talent Attraction andRetention

Net proﬁt reported

3,060.0

Financial Performance

Amortization of intangible assets, R&D
expenses

2,119.7

Innovation Management& Sustainable Production

1,286.3

Intangible assets

Positive

Operations

Shareholders/investors/banks

Greenhouse
gases
Other emissions

R&D investment andintellectual property
acquisition

Negative

Operations

Environment

GHG emissions

Social cost of carbon-12.9

Negative

Operations

Environment

Pollutant emissions

Natural capital cost

-1.4

Water use

Negative

Operations

Environment

Water consumption

Natural capital cost

-18.7

Waste

Negative

Operations

Environment

Natural capital cost

-2.3

Waste Management

Recycled water

Positive

Operations

Environment

Natural capital cost

5.4

Water Resource
Management

Biodiversity

Positive

Operations

Environment

Hazardous and nonhazardous waste
Reduced water
consumption
Water conservation
Reduced soil erosion
Carbon sequestration andair puriﬁcation

Climate Change/Energy
Management
Air Pollution Control
Water Resource
Management

Ecological beneﬁts of vegetation
restoration

2.0

Biodiversity/
Climate Change

Supplier
partnerships

Positive

Supply chain
business
activity

Suppliers/
contractors

Supplier RBA audit
Supplier training
Local procurement

Employeeengagement &development

Positive

Operations

Employees

Employee careerdevelopment
Work environment
Employee care

Social cohesion

Positive

Operations

Society
Environment

Employee health& safety

Positive

Operations

Employees
Suppliers/
contractors

Proﬁt taxes
Other taxes

Positive
Positive

Operations
Operations

Governments
Governments

Occupational training
Arts & culture
sponsorship
Disadvantaged groups
support
Number of occupational
injuries
Employee physicals
Health insurance
expenses
Taxes paid
Taxes paid

Market price valuation:
Property losses or external training
fees
Perceived value according to suppliersurveyLocal procurement valueMarket price valuation:
Mental wellbeing courses
Company beneﬁts and subsidies
Training and development expenses
Team building motivational course fees

21,252.2

Sustainable Supply Chain

527.3

Talent Attraction &Retention/Human
Capital Development

Value transfer valuation (1)19.5

Social Involvement

Health and safety expenses

121.7

Occupational Health &SafetyIncome tax
Real estate taxes, other taxes, and fees

285.5
333.3

Tax GovernanceTax GovernanceNote:
1. Based on the value transfer model described in the Social Capital Protocol, we referenced Taiwan Social Return on Investments (SROI) reports certiﬁed by Social Value International on similar topics, mapped and matched
impact paths with USI activities to calculate the social value

20About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Impact Evaluation - Prioritizing Signiﬁcant Impacts/Quanititve Data Model
Identifying Actual &Potential Impacts

Impact Signiﬁcance Assessment

ImpactEconomyEnvironment
People/Human Rights

21＋ Creating upstream or industrial value

Positive Negative
4

0

1

3

4

3

6 Signiﬁcant Impacts
Innovating products that advance＋industrial development

Likelihood

15 Impacts

Material Issues Prioritizedby Signiﬁcant Impacts＋

Paying taxes & fees to support
infrastructure and social welfare

Producing products with environmental＋ beneﬁts (energy-saving/carbon-reducing/water-saving/low-polluting/recyclable)

Severity
Severity = (1) + (2) + (3)(1) Scale(2) Scope(3) Irremediable－ Pollutant emissions affecting human health

Environmental
Impact＋ Positive

1
2
3
4
5
6
7
8

－ Resource consumption

Economic
ImpactRank－ Negative

9
10
11
12
13

Material Issues

ImpactDegreeInnovation Mgmt.
& Sustainable
Very High
Production
Climate Change
Energy Mgmt.
Business Ethics
CustomerHigh
Relationship Mgmt.
Sustainable Supply
Chain
Air Pollution Control
Talent Attraction &Retention
Human Rights
Social Involvement
Signiﬁcant
Cybersecurity Mgmt.
Occupational Health& Safety
Human Capital
Development

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Double Materiality Assessment Results
Operational Signiﬁcance(Financial Materiality)
DimensionMaterial Issue

Business Ethics

Revenue

Risks

External Sustainability Impact(Signiﬁcance Materiality)

Innovating
Creating
Paying Taxes &Products
Upstream orFees to Support
that Advance Industrial Value Infrastructure
Customer
Employee
Satisfaction Engagement
Industrial
and Social
Development
Welfare( ＋ Positive)( ＋ Positive)( ＋ Positive)

Producing
Products withEnvironmental
Beneﬁts( ＋ Positive)

Resource
Consumption( － Negative)

Pollutant
Emissions
Affecting Human
Health( － Negative)

Customer RelationshipManagement

Governance/
Economic

Sustainable Supply
Chain
Innovation Management& Sustainable Production
Cybersecurity
Management
Climate Change

Environmental

Energy Management
Air Pollution Control
Occupational Health &SafetyTalent Attraction &Retention

SocialHuman Capital
Development
Human Rights
Social Involvement

22About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Material Issues Risk Impact Management
Material Issue Impact Boundaries
Material Issue
1

Innovation Management &Sustainable Production

2

Climate Change

4Business Ethics

5

Customer RelationshipManagement

3

6

Sustainable Supply Chain

7

Air Pollution Control

8

Talent Attraction &Retention

9

Human Rights

10Social Involvement

12

Occupational Health &Safety11

13

23

Energy Management

Cybersecurity Management
Human Capital
Development

Impact: Causes

GRI

SASB

302 Energy
416 Customer Health and Safety
USI Speciﬁc Topic-

302 Energy-

305 Emissions-

205 Anticorruption
206 Anticompetitive Behavior-

USI Speciﬁc Topic

TC-ES-440a.1 Materials Sourcing
TC-ES-320a.2 Labor Conditions
TC-ES-320a.3 Labor Conditions

202 Market Presence
401 Employment
402 Labor/Management Relations
405 Diversity and Equal Opportunity

TC-ES-000.C Activity Metrics

406 Non-Discrimination
407 Freedom of Association andCollective Bargaining
408 Child Labor
409 Forced or Compulsory Labor
411 Rights of Indigenous Peoples
USI Speciﬁc TopicUSI Speciﬁc Topic

403 Occupational Health and Safety
404 Training and Education

Inﬂuence Boundaries
USI (2)

Directly Linked(1)

Customers

Society-

204 Procurement Practices
308 Supplier Environmental
Assessment
414 Supplier Social Assessment
USI Speciﬁc Topic
305 Emissions

Suppliers

Contributes to-

TC-ES-310a.1 Labor Practices
TC-ES-320a.2 Labor Conditions
TC-ES-320a.3 Labor Conditions
TC-ES-320a.1 Labor Conditions-

Note:
1. Stakeholders can report grievances and provide feedback through the grievance mechanism detailed in the Business Ethics section
2. USI's boundaries covers Zhangjiang Facility, Jinqiao Facility, Huizhou Facility, Kunshan Facility (the above are Mainland China Facilities), Nantou Facility, and Mexico Facility. The disclosure boundaries of emissions will be
explained in the Environmental Protection and Occupational Safety chapter

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Material Issues Risk Management
Material Issues

Risk Factor

Innovation
Management& Sustainable
Production

Failure to foresee industry
trends and develop
innovative technologies

Climate Change

Operational impact due
to climate disasters,
increased GHG emissions,and international
regulations andrequirements

Inclusive
WorkplaceSocialInvolvement

Appendix

Risk Type: Strategic ❖ Operational ★ Hazards

Risk Type

Risk Impact Evaluation

Likelihood (1)Severity❖★

Advanced miniaturization has become more challenging and costly. Failure to keep up
with industry trends and customer needs will affect our competitiveness and market
share and result in a potential negative economic impact. To mitigate this, we'redeveloping green technologies that reduce waste and energy consumption, improving
our core competencies, and expanding our business innovation model for positive
results.

Mitigation/
Management
Approach

3

4

Green
Products andInnovation❖★

In response to stakeholder requests, USI is increasing the use of renewable energy to
reduce environmental impact, which will also result in increased costs, and failure tomeet this demand may affect our orders.

3

4

Environmental
Protection andOccupational
SafetyPower shortages and disruptions can cause delays in delivery and operational losses,
affecting USI's reputation and customers' conﬁdence in placing orders. To reduce theactual and potential impact on the economy and the environment, we will continue
to improve energy efﬁciency and replace old equipment to reduce GHG emissions andoperational risks.

3

4

Environmental
Protection andOccupational
SafetyAny corrupt behavior will affect USI's reputation and, in turn, the conﬁdence of ourcustomers in placing orders, potentially creating economic and human rights impacts.

1

1

Operationsand Governance★

If we cannot satisfy customers' diversiﬁed needs and provide professional services
and quality products, customers will seek solutions from other companies. Building
a good customer relationship will help improve customer satisfaction and loyalty,
positively impacting people and the economy.

1

1

Value Chain
Management★

We promote supplier sustainability performance evaluations and audits to avoid shortchain supply competition, key component shortages, and production interruption
risks, avoid conﬂict minerals, mitigate adverse human rights impacts, and join handswith our supply chain partners to work together for environmental protection, labor,
and social welfare, and maintain our operations and commitments to customers.

2

3

Value Chain
Management

EnergyManagement

Power shortage or outage★

Business Ethics

Various forms of bribery
and corruption

Customer
RelationshipManagement

Unable to provide
products or technicalservices that meetcustomer needs★

Sustainable
Supply Chain

Suppliers do not meet
USI or regulation
requirements

Note:
1. On a scale of 1 to 5, the higher the score, the higher the likelihood or severity

24About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Risk Type: Strategic ❖ Operational ★ Hazards

Material Issues

25

Risk Type

Risk Impact Evaluation

Air Pollution
Control

Air pollutants impact theenvironment★

If the air pollution control equipment is not operated correctly or malfunctions, it
might result in excessive emissions, and USI will face government sanctions that willaffect our reputation. Different equipment should be used for each type of pollutant
to comply with regulatory standards and reduce negative impacts.

2

3

Environmental
Protection andOccupational
SafetyTalent Attraction& Retention

Failure to attract or retain
enough high-quality,
diverse talent

Failure to provide salaries and beneﬁts that reﬂect the needs and standards of thelocal community will prevent USI from recruiting and retaining sufﬁcient and talented
personnel, which may reduce our ability to develop new markets and may affect ourbusiness.

1

1Inclusive
Workplace

Human Rights

Failure to protect USI
employees' and suppliers'
human rights

Failure to protect the human rights of employees or supplier employees is a potential
human rights and economic impact that will affect employee engagement andmotivation, diminish the attractiveness of recruiting talent, and may affect USI's
reputation and the willingness of customers to do business with us.

1

1

Value Chain
Management
Inclusive
WorkplaceSocialInvolvement

Failure to respondadequately to community
requests

Failure to respond adequately to neighboring community requests can affect USI's
reputation and potentially impact the people and the environment. Through Investingin Education, Contributing to Society, Conserving the Environment, and Promoting
Arts & Culture, we respond to community needs and strive to maximize our positive
impact on society while minimizing our environmental impact.

1

1SocialInvolvement

Cybersecurity
Management

Various forms of hacking
attacks

A lack of cybersecurity awareness can cause leaked conﬁdential information, leading
to economic losses for USI and its customers. Implementing training and a holistic
cybersecurity system can lower risks, increase customer conﬁdence, and generate
positive economic beneﬁts.

3

5Operationsand GovernanceOccupational
Health & Safety

Various natural or manmade disasters

Natural and occupational disasters are potential negative impacts on the economy,
environment, and people. Damaged equipment, damaged or collapsed buildings, andfailure to implement operational safety regulations may endanger worker safety andcause disruptions to USI's operations.

3

2

Environmental
Protection andOccupational
SafetyHuman Capital
Development

Employee capabilities
failing to progress withthe times

If employees' capabilities cannot progress in line with development demands, it willaffect USI's future growth and competitive edge and has a potential human andeconomic impact. With suitable training courses, information sharing, and learning
mechanisms, we can develop employees' abilities to help achieve business objectives.

1

1

Inclusive
Workplace★

★

★

Likelihood

Severity

Mitigation/
Management
Approach

Risk Factor

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Stakeholder Engagement

To respond to issues that highly impact corporate operations and are also of high stakeholder concern, we communicate with our stakeholders through various platforms on oursustainable development strategies and progress to maintain and strengthen our relationships. Issues identiﬁed as non-material will also be disclosed in their respective chapters tomaintain report continuity.

Communication Channel/Frequency
Shareholders/Investors/Banks
Board meetings (yearly/non-periodic)
Annual general meeting (yearly/non-periodic)
Quarterly/semiannual/annual report (periodic)
Investor brieﬁngs (quarterly)
Investor Relations on USI website (all the time)
Shanghai Stock Exchange-SSE E-interaction(all the time)
Receptions, visits, and roadshows (1) (non-periodic)
Other interim announcements (non-periodic)
Customers

RBA-Online (all the time)
After-sales service system (e-RMA) (all the time)
Customer's satisfaction questionnaire (quarterly)
Mail (all the time)2022 Performance
Focus Issues: Occupational Health & Safety, Innovation Management & Sustainable Production, Water Resource
Management, Waste Management, Human Capital Development
6 board meetings were held.
Held 2 shareholders' meetings to explain our operating performance, investment plan, and respond to investors'
concerns.
USI publishes the Company's ﬁnancial information on the SSE website regularly (quarterly/semi-annual/annual reports),
which also analyzes USI's business situation and performance data.
Held a video conference each quarter to explain USI's production and management to investors.
Participate in brokers' strategy meetings and receive investors during their visits.
The Chairman delivered a speech at the 2022 Yicai Annual Conference to let stakeholders understand the USI's
glocalization development strategy.
Focus Issues: Occupational Health & Safety, Human Rights, Diversity and Inclusion, Financial Performance, Business Ethics
Report Self-Assessment Questionnaire (SAQ) assessment results through the RBA-Online platform.
Constant monitoring of RMA (2) status through the system (e-RMA).
Carry out satisfaction surveys each quarter through sales associates, and the customers satisfaction score is 84.2.
Respond to customers' green product marketing needs with 100% compliance with international safety standards/
environmental regulations or energy-saving requirements.
USI continuously implement NIST CSF (3) maturity assessment tool, and improvement cybersecurity management
capabilities to enhance assurance for customer.
Conduct annual General Cybersecurity Fundamentals training to boost employee cybersecurity awareness.

Note:
1. Roadshows: Roadshows are used to promote the issuance of securities, referring to securities issuers' promotion activities targeting institutional investors before the issuance of securities, and is an important promotion andpublicity tool to facilitate the successful issuance of shares with full communication between investors and ﬁnanciers
2. RMA, Return Merchandise Authorization
3. NIST CFS, US National Institute of Standards and Technology Cybersecurity Framework

26

About this Report

Sustainability
Management

Operationsand GovernanceCommunication Channel/Frequency
Employees

Employee Welfare Committee/staff congress(quarterly)
Employee Relationship Website (all the time)
President's symposium (quarterly)
Industrial relations meetings (quarterly)
Training programs (non-periodic)
Employee engagement survey (every other year)
Newsletter (quarterly)
Announcement (all the time)

Suppliers/Contractors

Quarterly business review (quarterly)
Business meetings (non-periodic)
Supplier evaluation (yearly)
Purchase contracts/Conducts (in contract period)
Training of suppliers (non-periodic)
On-site audit for suppliers (non-periodic)
Questionnaire investigation for suppliers (yearly)
Supplier sustainability conferences (yearly)

27

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix2022 Performance
Focus Issues: Occupational Health & Safety, Talent Attraction & Retention, Human Rights, Financial Performance, Human
Capital Development
Held a workers' conference each quarter to discuss and plan recent activities related to employees and propose
employees' opinions. "Employee Relationship Website" is set up in USI's intranet. In addition to providing information
regarding employees' welfare and activities, employees can share their opinions in the "suggestions box for employees"on the website. And a total of 398 employee opinions were given back.
President's Symposium was held each quarter for the general manager to announce the future trend and expectationsof USI to colleagues. Additionally, the president can listen to employees' opinions in the meeting. Total held 140
employee symposiums.
Company has been established to irregularly provide employees with various educational training programs to perfecttheir professional skills. Every employee received 28.8 hours of training on average.
Share the experience of high-ranking ofﬁcials through the Company's quarterly journals and WeChat group andunderstand information such as the latest industrial developments, health education knowledge, employee activities,
and so on. Held 87 employee activities and 118 employee health education trainings.
In order to provide employees with more ﬂexibility in terms of time utilization and choice of workplace during work, theCompany has implemented a telecommuting (remote work) system, with a total of 1,521 applicants.
Focus Issues: Sustainable Supply Chain, Business Ethics, Customer Relationship Management, Data Privacy, Occupational
Health & Safety
Continue to promote green supply chain, ask, and help suppliers to pass quality management system certiﬁcations.
Control the usage of raw materials to ensure the products and materials correspond to the regulations of USI green
products.
38 new suppliers were subject to evaluation and 100% were approved and became to USI's Approved Vendor List (AVL).
In addition to the compliance with purchase contract, suppliers must sign the Supplier Code of Business Integrity andSupplier's Commitment to Corporate Social Responsibilities.
A total of 409 each category contractors join our occupational safety and health education and training.
Suppliers are selected each year to carry out on-site inspection for RBA. The number of suppliers were selected was 81.
A supplier survey is conducted irregular to comprehend the current situations and trends of suppliers. A total of 560
suppliers were surveyed.
2 suppliers were mentored, introduced and obtained greenhouse gas and product carbon footprint certiﬁcation(ISO 14064-1:2018 & ISO 14067).
We held an online supplier sustainability brieﬁng in Mainland China to promote our policies and philosophy andexplained USI's ESG requirements for suppliers and shared future goals. A total of 342 supplier partners attended theonline sharing session. We also held 25 Executive Business Review (EBR) meetings with material suppliers, 47 suppliers
were mentored to implementation of corrective actions and 19 new product and technology presentations.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Communication Channel/Frequency
Governments
Ofﬁcial document (non-periodic)
Governmental agencies brieﬁngs/public hearings/
seminars (non-periodic)
Industry Unions/Associations

Industry conferences (non-periodic)
Industry Union/Associations conference forum(non-periodic)
Member meeting (non-periodic)

Communities (NGOs and the Media)
USI Website/Email/Direct line/Press release (allthe time)
Community activities (non-periodic)

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix2022 Performance
Focus Issues: Occupational Health & Safety, Social Involvement, Talent Attraction & Retention, Business Ethics, Customer
Relationship Management
Actively participate in brieﬁngs/public hearings/seminars held by competent authorities.

Focus Issues: Energy Management, Air Pollution Control, Data Privacy, Climate Change, Waste Management
Actively participate in conferences or forums held by Industry Unions or Associations. We participated in 37 externalorganizations.
Through the collaboration between USI University (USIU) with partner manufacturers' associations, public
associations, and universities, and with the internal lecturers cultivated by the Company, we share our own experience,
knowledge, or the latest technology trend of the industry to the relevant people and students, with a total of 16
sharing sessions held.
Publish operating results and development direction periodically.
Focus Issues: Air Pollution Control, Waste Management, Social Involvement, Talent Attraction & Retention, Energy
Management
Draw up environmental protection, occupational safety & health (ESH) Standard Operation Procedure and measuresof environment safety communication, consultancy, and participation. Keep friendly relationships with community
residents.
Actively participate in social activities and establish a good relationship with the local communities we operate in.
Held 63 philanthropic social activities.

M

28

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Operations and Governance
USI's vision is to be the most reliable provider for electronic

design, manufacturing service, and modularization with diversiﬁed
global footprints and miniaturization solutions. Through thecollective contribution of employer and employees, we establishedeffective governance mechanisms with respective responsibilities
and accountabilities. We strive to generate exceptional rewards forstakeholders and to build a better place to live.

CNY

68.5

Billion Record High Sales Revenue

CNY

3.06

Billion Net Proﬁt

Included in SSE Corporate Governance Index

A

A-levelReceived 2022 Board Ofﬁce Best Practices Award

SDGs
29

Key Stakeholders: Shareholders/Investors/Banks, Governments

Rating of Information Disclosure in the SSE

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose

Business Ethics

Prevent corruption and bribery

Cybersecurity Management

Establish a holistic cybersecurity
system and ensure its effectiveness

KPI

2022 Target

2022 Performance

Inclusive
WorkplaceMaterial Issue

Status2023 Target

SocialInvolvement

Achieved

Appendix

Not Achieved

2027 Target

Management Approach: Implement the related policies and speciﬁcations of business ethics, continue to promote policies and training
courses to reﬂect business ethics in daily operations
Evaluation Mechanism: Arrange Sunshine Behavior Policy advocacy and Business Ethics training courses and ensure employee training
completion rate
USI Employee
Sunshine
Behavior Policy
or Code of
Conduct training
completion rate

100% completion
rate of USI Employee
Sunshine Behavior
Policy or Code of
Conduct training

100% completion
rate of USI Employee
Sunshine Behavior Policy
and Code of Conduct
training

100% completion
rate of USI Employee
Sunshine Behavior
Policy or Code of
Conduct training

100% completion
rate of USI Employee
Sunshine Behavior
Policy or Code of
Conduct training

Management Approach: Strengthen USI employee's awareness of the Company's and customer's information asset protection responsibilities,
construct a safe and convenient information network environment to protect employees from internal and external cybersecurity threats
Evaluation Mechanism: Arrange Cybersecurity courses for employees, track and follow up the completion rate
USI
Cybersecurity
training
completion rate

90% completion rateof USI Cybersecurity
training

100% completion rateof USI Cybersecurity
training

90% completion rateof USI Cybersecurity
training

100% completion rateof USI Cybersecurity
training

Included in the
SSE Corporate
GovernanceIndex

Continue to be included
in SSE Corporate
Governance Index

Included in SSE
Corporate GovernanceIndex

Continue to be included
in SSE Corporate
Governance Index

Continue to be included
in SSE Corporate
Governance Index

ObtainISO 22301
certiﬁcation

Obtain ISO 22301
certiﬁcation in Nantou
Facility

Obtained ISO 22301
certiﬁcation in Nantou
Facility

Implement ERM to
Huizhou Facility

Implemented BCMS tomajor Facilities

Corporate GovernanceRealize sustainability by corporate
governance improvement
Business Continuity/Enterprise
Risk Management
Achieve sustainable targets throughrisk management30

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Board GovernanceValue Chain
Management

The USI's Board of Directors candidates are nominated according to Articles of Associationof USI, and voted by the Shareholders' Meeting. Each Board Director's term is three years.
Currently, USI's Board of Directors is composed of 9 directors, with three independent
directors. Independent director candidates are required for the attitude of independence.
Jeffrey Chen serves as Chairman of the Board. The responsibilities of Chairman are tosupervise the execution progress of Board resolutions and exercise the authorities oflegal representative. Board of Directors shall exercise its authorities according to laws,
administrative regulations, department rules or articles of the company. Material events
must be deliberated and voted by directors after full discussion. But if the events areout of the authorization to Board of Directors, it should be submitted to Shareholders'meeting for deliberation and approval. The Company holds at least two board meetings
every year. There were 6 board meetings in 2022 with a 100% attendance rate.

Board Structure
General Meeting of
Shareholders
Strategy
Committee
Board ofSupervisors

Nomination
Committee

Board ofDirectors

Compensation
Committee
Audit
Committee

GeneralManager

Manufacturing
Sites

31

Business
Units

Function
Units

Audit
CenterEnvironmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Board Diversity

USI made Board of Directors Diversity Policy. Selection of candidates will be based on a
range of diversity criteria, including but not limited to gender, age, nationality, culture
background and ethnicity. The directors are assigned to different committees according
to their expertise to enhance corporate core competitiveness, increase the efﬁciency andquality of major investment decisions, implement diversity policy, as well as perfect thecorporate governance structure.

Board Committees

USI's Board of Directors has four special committees: Strategy Committee, Nominating
Committee, Compensation Committee, and Audit Committee. There are rules ofprocedure for the committees. Each special committee reports to the Board of Directors,
and the proposals of the special committees shall be examined and determined by the
Board of Directors.
The members of special committees shall all be directors. The number of independent
directors in the Audit Committee, Nominating Committee, and Compensation Committee
shall be in the majority, and the independent directors shall be the conveners of thosecommittees. The convener of the Audit Committee shall be a professional accountant.
The members of the Strategy Committee shall include at least one independent director.

Audit Center

Audit Center is subordinate to the Audit Committee. The employment of the head ofauditing must be approved by half of the board members. A full-time head auditor isestablished, and auditors are established in major facilities as well. Group Internal Audit
establishes a risk-based internal audit system and performs internal audit activities inaccordance with the annual audit plan approved by the board of directors.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Internal Audit Process

Audit
strategy

The regular audit is practiced based on the annual audit project decided
by the board of directors; a special case audit will be practiced if needed.
The goal is to prevent possible shortages from the internal control systemand present improving suggestions. Besides, the Audit Center urges all
departments to practice self-examination and assessment to evaluate therationality and effectiveness of the outcomes. The Audit Center will produce
an auditing report after the auditing activity performed. The compiled
report will be submitted to the board of directors as the realization of theCompany's governance spirits.

Range ofaudit

All operations and management of ﬁnance and business are included.
According to related regulations, there are eight divided circles plus
information circle and ﬁnancial reporting ﬂow responsible for respective audit.

Object ofaudit

All institutes and legal branches around the world of USI.

Continuous Education for Board Members

To expand board members' competencies, USI arranges training courses that covercorporate governance and sustainability for board members in hopes that they will
incorporate the spirit of sustainability in steering USI corporate policy. In 2022, board
members completed 121.51 hours of training.
Course Name
Online training for directors and supervisors of listed companies inShanghai in 2021
Special training on new judicial interpretation of securities
misrepresentation and legal risks of listed companies
Special training on shareholding reduction for shareholders,
directors, supervisors and executives of listed companies
The third follow-up training for independent directors of listedcompanies in 2022
Global anti-corruption development trends & elements for USI anticorruption compliance program
Special training on governance of listed companies
The ﬁfth follow-up training for independent directors of companies
listed on the main board in 2022

Hour(s)
67.65
2.83
1.20
20.00
4.50
5.33
20.00

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Board Participation in Sustainability GovernanceThree USI Board Members, namely, USI President C.Y. Wei, USI Chairman Jeffrey Chen, and
ASEH Chief Administration Ofﬁcer Dtuang Wang, have roles in our sustainable governance.
USI President C.Y. Wei acts as the Chair of Sustainability Committee, and the other two board
members are members in the ASEH Corporate Sustainability Committee. Their participationin the Sustainability Committee can provide suggestions on ESG performance and targets,and it can also strengthen the relationship between the Board and sustainability strategies.
Each year, the Sustainability Committee submits the annual ESG Report to the board of
directors, and a series of discussions and plans will be carried out by the board of directors
regarding our implementation of Corporate Social Responsibility activities.

Board Performance and Compensation

USI established an evaluation and incentive mechanism to measure the performance of
directors and senior ofﬁcers respectively. Board of Directors will submit Working Reports,
and Compensation Committee will draft a compensation proposal according to achievement
rate of annual proﬁt and operating targets, and link to sustainable targets of material issues
by duty requests, such as energy intensity, GHG emissions. The proposal is generated after
considering about industrial salary level and company status, and interlinking the business
operator's annual salary, company asset, proﬁtability, and business goals. It is expected toenhance operator's positivity, perfect the mechanism to select the superiors and strengthen
goal constraint. For further details of Compensation of Directors, Supervisors and SeniorOfﬁcers, please refer to Section 4 of the 2022 USI Annual Report.

Conﬂict of Interests Management

According to the Company Articles, any corporations related to the matters in the
resolutions made in the director meetings and board meetings shall not vote on such
resolution or exercise the right to vote on behalf of other directors. In the deliberations
relating to connected transaction at a general meeting of shareholders, any connectedshareholder shall abstain from voting. The voting result of non-connected shareholders
shall be fully disclosed in the public announcement of the resolutions of the general
meeting. USI has developed corporate Investor Relations Management Guidelines to build
a good communication platform for direct engagement. USI is committed to providing
transparency about the status of our business operations and periodically updates on our
Investors Relations website to maintain a long-term, stable, and harmonious relationshipbetween the corporation and investors. USI held 2 Shareholders meetings in 2022;
shareholder representatives passed resolutions of Directors and Supervisors and ﬁnancial
proposals in accordance with the laws. Please refer to Section 10 of the 2022 USI Annual
Report for related party transactions.

32About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Business Ethics and ComplianceBusiness Ethics

USI adopts a zero-tolerance attitude with the violations of fraud behaviors. To make sure employees do not have fraud
or illegal proﬁt exchanges with related institutes, USI employees must put more emphasis on incorruptible deeds. In
employees' working regulations, they are required not to engage in activities for personal gain with their authority.
USI has drawn up a Code of Business Conduct and Ethics and a Privacy Policy to be the business dealing standards ofcompany employees, business partners and other stakeholders. Participating in the political process through donations is
prohibited in the Code of Business Conduct and Ethics. In 2022, USI did not make any political donations.

Promotion and Training

To ensure that employees understand and comply with the USI Employee Code of Conduct, Fraud Risk Management
Procedure and The Rule of Punishment for Fraud in the Sunshine Act. Except the newcomers are given related training
courses, all employees need to ﬁnish the required reading and pass the quiz every year. All records are listed as tracking
list to ensure the course of Employee Code of Conduct has been ﬁnished by each employee. In 2022, 100% of board
members got anti-corruption compliance program. Furthermore, the Sunshine Conduct Policies have been conducted
to employees regularly to remind them of relevant corporate regulations and strict observance of rules. And theSunshine Conduct is also announced to suppliers every year. Once the violations of the Sunshine Conduct Policies havebeen veriﬁed to be true, the punished personnel must return unjustiﬁed enrichment to compensate company's losses,
and their bonus, performance appraisal and promotion will be restricted according to the degree of negligence.

Risk Assessment

Inclusive
WorkplaceSocialInvolvement

Regulatory Compliance

USI has devoted to maintaining the corporate image foryears and strictly complied with national or internationallaws and regulations related to corporate governance,
ﬁnancial management, intellectual property, green
environmental protection and safety rules, labor rights,
and fair market competition. We also cherish customer
value, rights, and interests. For any negative impact on
corporate image or violation of the law, a task force will
be formed by USI to take countermeasures. By the end of2022, no violations resulting in a signiﬁcant penalty (2),antitrust or other non-economic punishment occurred.
And we did not use collected personal data for any
secondary purposes other than the speciﬁc purposes forwhich the personal data was ﬁrst collected, and there
were no incidents of infringement of customer privacy
rights, and no incidents of customer data leakage.
Reporting areas

Number of
breaches in 2022

After identiﬁed and assessed by risk management process in 6 major facilities in 2022, Fraud was identiﬁed as a low
risk and controllable item, so there were no important corruption cases required for corrective actions.

Corruption or Bribery0

Grievance Mechanism and Whistleblowing Protection

Discrimination or Harassment

2

Customer Privacy Data0

Conﬂicts of Interest0

Money Laundering or Insider Trading

0(1)

Stakeholders can feedback or appeal through meetings, e-mail or Contact USI in USI website. Company provides thefraud notice mailbox for all employees and outsiders to report any integrity-related improper or suspected illegal
practices. Reporting with name or anonymous are both accepted. The Company shall follow Code of Business Conduct
and Ethics to do due diligence to investigate all reported cases and keep conﬁdential of reporters in accordance withthe laws to ensure safety of reporters and no threat or damage to reporters' rights and interests.

Ethics mailbox

Appendix

ethics@usiglobal.com
Note:
1. Six major facilities are the report scope of this ESG Report
2. The deﬁnition of signiﬁcant penalty is sanctions over CNY 67,000(USD 10,000)

33

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Financial Performance and Tax Governance
Financial Performance

The global supply chain was highly impacted by COVID-19, material shortages, and supply chain transfer. However, USI
achieved superior business performance for stakeholders. In 2022, USI reported consolidated sales revenue of CNY 68.53
billion with an increase of 23.93% comparing with 2021. The earnings per share were CNY 1.4 and dividend remittance
was CNY 566,586,797, accounting for 0.83% of revenue. The data scope in this section includes USI global operation
locations, for more details, please refer to the ESG Key Performance Data - Governance: Financial Performance, orFinancial Information on the USI website.

Tax Governance

Please refer to the charts below for the 2022 income tax
accrued and income tax paid by operating regions (1):Income Tax Accrued

6%

38%

5%

USI established tax policy to organize tax governance and follow tax laws of global operation locations, we believe thatbeing an honest and responsible taxpayer fosters economic growth and contributes to long term business sustainability.
The Company focused on tax risk management and included Tax Report to be one of the risk assessment items. The
Chief Financial Ofﬁcer must approve and supervise tax policy compliance, and ﬁnancial staff must take taxation training
courses to prevent any risks from uncertain tax regulations. USI obtained a standard unqualiﬁed audit report in 2022,
please refer to the Important Notices of the 2022 USI Annual Report for related information.
Our principal operating facilities and ofﬁces are in Mainland China and Taiwan. Therefore, a large proportion of operating
revenue and proﬁt before income tax is accounted by business activities conducted in Mainland China and Taiwan, which
contributed around 90% of income tax expense and income tax paid. The statutory tax rates in Mainland China andTaiwan are 25% and 20% respectively. Mainland China Facilities qualiﬁed as high-technology enterprises, and thus wereentitled to a reduced income tax rate of 15% and were eligible for weighted deduction of research and development
expenses. Additionally, Nantou Facility was also qualiﬁed as industrial innovation enterprise and thus entitled to reduce
research and development before income tax. The effective tax rates in Mainland China and Taiwan were 9% and 19%
respectively in 2022.

Tax Policy
1. Comply with all applicable tax laws and regulations of all countries in which we operate and duly reporting and paying
all necessary taxes in a timely manner.
2. Take both short term and long-term tax impacts into consideration when making major business decisions.
3. Be transparent and disclose tax information in accordance with applicable regulations and reporting requirements.
4. Pay taxes on the proﬁts earned from business activities conducted in relevant jurisdictions and ensure intra-grouptransactions are conducted at arm's length.
5. Don't use tax havens and tax structures that are meant for tax avoidance or aggressive tax planning.
6. Construct an appropriate mechanism to evaluate potential tax risks which are given rise to our global manufacturing
and sales activities.
7. Develop mutually trustful and respectful relationships with tax authorities in the countries we operate andcommunicating with them on tax matters where appropriate.

51%
Mainland China

APAC

EuropeOthersIncome Tax Paid
20%

71%

8%
1%

Mainland China

APAC

EuropeOthersNote:
1. APAC: includes Taiwan, Hongkong, Vietnam and Japan; Europe:
includes France, Germany, UK, Czech, Poland, and Tunisia; Others:
includes Mexico and the U.S.A.

34

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Enterprise Risk Management
Risk Management Committee

To ensure sustainable business achievements, USI organized a Risk Management
Committee to execute annual risk management activities according to businessenvironment, industrial trend, and company operations. The Company COO (Chief
Operating Ofﬁcer) acts as the Chair, committee members are representatives chosenfrom Vice Presidents of business units, functional units, and manufacturing sites. The
operating units of Risk Management Committee should investigate the internal andexternal risk factors, evaluate the risk levels, and inspect the effectiveness of activities.
According to evaluation of risk level, the committee takes the responsibilities to adopt
countermeasures and ensure the risk management policy can be executed by each
operation unit. Committee secretariat will track the targets of risk management activities
from each operating unit. And the achievements will be presented to Vice President of
Risk Management unit.
For the purpose of cultivating risk awareness, USI arranged training courses for board
members, and held Risk Management Introduction for Mainland China and Taiwan
employees by online course in 2022. It is expected to reduce crisis through risk prevention
and monitoring process.

Risk Management Committee

Secretariat
Operating
Units

Business Units

35

Functional Units

Manufacturing Sites

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Risk Governance Policy

Through worldwide manufacturing sites, business units and functional units, USI engages
Enterprise Risk Management (ERM) project to identify risk events and factors, evaluate
and adopt proper countermeasures. Through monitoring progress of risk mitigation plansto ensure the risks are effective controlled and convert the corporate risk management
actions to the organization strategies enhancement to ensure sustainable management
and achieve business operational goals.

Risk Governance Process
Identiﬁcation

Risk Assessment

Risk Response

Identify focused items
through corporate risk
management by senior
management andapply Risk Evaluation
Questionnaire tocollect feedback fromeach operation unit.
Manage risks by Topdown and Bottom-up
models to identify therisk factors of impact
on USI sustainable
development.

1. Evaluate the risk levels
from two aspects
The possibility ofoccurrence
The negative
impacts on ﬁnance,
reputation,and continuing
operations
2. Inspect theeffectiveness of exist
activities, and evaluate
residual risk after
control activities

Find out and evaluate
countermeasures andcorrective actions
to control risks that
include:Implementation costand resources
Feasibility andpossible beneﬁt
Proposal leadtime and schedule
planning

12

3

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Risk Level

H

M

L

Industrial Trends
Planning Simulations
Production Management
Enterprise Development
Cybersecurity

Materials Shortage/
Labor Shortage
Talent Management/
Recruitment
Innovation, Research,and Development
Tax Report
Customer Credit
Management
Geographical Politics
Pricing
Inventory Management

R&D Technology
Production Equipment and
Raw Material Management
Key Technical Talents
Law and Regulatory
Compliance/Privacy andData Protection
Business Sustainable
Management
Business Model
Financial Process
Management
Product Development
Management

Risk Monitoring
Shipment Management
Business Concentration
Fraud
Board Structure andManagement
Performance Reward
Supplier Chain
Management
Natural and Man-madeDisasters

Problem Management
Project Management
Archives and Records
Management
System ChangeManagement
Information System
Operation

Yes

PartialControl Effectiveness

Inclusive
WorkplaceSocialInvolvement

Appendix

In the phase of risk assessment, USI will identify the risk level by frequency
occurred, and evaluate the enterprise risk impact levels from the dimensionsof ﬁnance, reputation and continuing operations. Comprehensive both ofrisk impact level and frequency of occurrence, we will refer to the control
effectiveness criteria to scale our existing controls and countermeasures,and decide whether an action plan needs to be developed. If the risk levelis low, we will keep tracking the control effectiveness. But if the risk level ismoderate, we need improve the controls or countermeasures. Once the risk
level is high, we will take an immediately action, conﬁrm the action ownerand schedule to track the improvement progress periodically.

Risk Assessment Matrix

Natural Disaster Risks
Financial Disclosure
Production Schedule
Logistics

Environmental Protection
and Occupational Safety

After evaluated the risk tolerance level of information technology byrisk governance process, its risk level was high. To face this high risk, USI
immediately made corrective actions to concentrate resources to improvecapabilities of information security team, enhance employees' safety
awareness and emergency response capabilities, and cooperate withcybersecurity consultants to strengthen information security level. We
followed ISO 27001 guideline to grade information security incidents whichwere reviewed by Information Security Steering Committee and establishedtolerable downtime of critical system. According to the notiﬁcation standardsof operational and reputational impacts to set up risk team and adopt
countermeasures to prevent the expansion of damage.

No

USI has built a complete human resources and development mechanism toresponse USI's global layout, but the risk tolerance level of human resources
was still identiﬁed by high. We set up KPI to track achievements and perform
annual human rights risk assessment to ensure a diverse and inclusive
workplace. In the dimension of human capital development, USI encourages
employees to improve professional skills and take further education to
obtain academic degrees, and develops core competence and managementcompetence for senior managers. In terms of talent retention, we build
key successor system to improve the potential talents' retention rate. It is
expected to attract more key talents and reduce operating risks throughcomprehensive talent development and retention plans, and establish thebasis for the sustainable operations.
Every year, USI performs sensitivity analysis on ﬁnancial risks that include
interest/exchange rates risks. And we also review company's exposure
to operational risk, market risk, climate change risk, water regime risk,
regulatory compliance risk and strategic risk.

36

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix2022 USI Risk Assessment Countermeasures (1)Risk Category

Risk Factor

Risk Situation

Countermeasure

Corporate Chance

Regional
Politics

Regional conﬂicts
will impact global
commodities andenergy prices, and drageconomic recovery
from global inﬂation toincrease business andinvestment risks

1. Evaluate macro-economy, industry trend and emerging
risk. Keep interactions with stakeholders. Adopt actionplans to enhance company core competence andoperation resilience
2. Adjust manufacturing sites and business allocation to
reduce regional supply chain impacts from trade frictionand epidemic; through business growth and merger toenhance the market placement of non-Mainland China
areas
3. Continue to enhance supply chain management andrisk identiﬁcation; through corrective actions andprogress tracking to ensure supply chain resilienceand sustainability. And adjust purchasing strategies
according to regionalization trend

1. Cooperate with customers to ﬂexible adjust
production facilities and improve products andservices value
2. Enhance manufacturing strategy in non-Mainland
China areas and convert local resources to becompetitive advantages; strengthen company global
manufacturing service capability
3. Aggressively develop and build local suppliers'
capability to achieve a win-win situation

Short Supply
Chain
Competition

Supply chain has been
impacted by COVID-19
and natural disasters,
the production lines
are facing the risks of
manpower shortage,
unstable logistics andkey parts shortage, thatwill result in production
interruption and lostcompetitiveness

Develop local suppliers to response the trend of regional
supply chain. Enhance global manufacturing layout
through merger and strategic cooperations

Through external competitive analysis to understandindustrial trend and company's strength and weakness.
Plan operation strategies and enhance company's
advantages to keep competitivenessEmerging Risk

Note:
1. The focused items are the risk factors integrated by ASEH. Please refer to the 2022 USI Annual Report Risk Management: Section 3: (IV) Possible Risks

37

About this Report

Sustainability
Management

Risk Category

Strategy
andPlanning

Corporate
SocialResponsibility

Information
Technology

Operationsand GovernanceRisk Factor

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Risk Situation

Countermeasure

Corporate Chance

ClimateChangeIgnore the sustainable
operation threats fromclimate change risks

1. Incorporate climate risks into the ERM process
2. Collaborate across departments to identify climaterelated risks/opportunities along the value chain,assess ﬁnancial impact and develop countermeasures
to manage them using Mitigation and Adaptation
methods
3. Identify short, medium, and long-term climatechange risks and opportunities. Assess risks andopportunities based on different climate scenarios
4. Set climate-related performance indicators andquantitative targets; regularly track progress, anddisclose to the public without concealing information
5. Set a long-term goal for Net-Zero Carbon Emissions
in 2050

1. Announce our goal of achieving net zero carbon
emissions by 2050 and continues to implement
climate change and energy management, water
management, waste management and air pollution
prevention to help customers produce energy-saving
and carbon-reducing products
2. Present our efforts and results in response to climatechange through a systematic disclosure framework,
further raising awareness of climate crisis,
formulating relevant mitigation plans and measures,
accelerating the implementation of risk control andclimate change mitigation actions, strengthening ouroperating sustainability management capabilities,
and moving towards sustainable corporate
development

Cybersecurity

1. Lack cybersecurity
awareness
2. Leak system accountor password
3. System is locked byhacker or data loss
4. System is crashedby unﬁxed systemvulnerabilities

1. Hold regular cybersecurity training courses for
employees
2. Two-factor authentication
3. Regular backup & offsite backup
4. Regular vulnerability assessment and remedy systemvulnerabilities

1. Enhance all employees' cybersecurity awareness
2. Upgrade system safety level and assure corporate
reputation
3. Train the employees' resilience to reduce the hazard
impacts

Operating risk fromimperfect cultivationof the talent teamand management
mechanism

1. Build key successor system:(1) Regular inventory the requirements of key
positions(2) Make succession development plans and provide
resources(3) Systematized talent database for ongoing regulartracking
2. Build Talent development scheme: the development
plans of succession talents and potential talents

1. Ensure corporate sustainable development through a
successor system, and prevent business impact from
unexpected changes in personnel
2. Implement talent development mechanism to ensure
the successors have the capability to perform key
responsibilities
3. Provide diversiﬁed development resources
to potential talents, increase development
opportunities, and focus on individual development
requirements to improve the potential talents'
retention rate

Operation
andInfrastructure
Human
Resource

Green Products
and Innovation

Succession
Plan andRecruitment

38

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Cybersecurity Management

Effective cybersecurity management is fundamental to all operations. To ensure wehave consensus of cybersecurity goals, USI set up a committee to boost cybersecurity
awareness. The committee members are composed of CIO, CFO, GISO, Vice Presidents
or Division heads level above, CIO shall report to Senior Vice President of Administration
Group. Under the committee, there are information security representatives to assist theInformation Security Committee in implementing cybersecurity affairs. Dtuang Wang,
ASEH CISO (Chief of Information Security Ofﬁcer), has role in USI board and Information
Security Steering Committee member. He joins the strategies making together toreach cybersecurity targets. USI obtained ISO 27001:2013 Certiﬁcation in 2020 and thecybersecurity management is further implemented in the USI Group.

Information Security Division
Global Information Security Ofﬁcer
Information Security
Steering Committee
CIO, CFO, GISO

Business
Information
Security (Asia)

Business
Information Security(North America)

Business
Information
Security (EMEA)

Cybersecurity Goals

USI's cybersecurity objectives are to ensure the preservation of Conﬁdentiality,
Integrity, Availability and Compliance of the core systems engaged in business
operations. Additionally, quantitative goals are deﬁned according to organization leveland job function to ensure the achievements of the Information Security Management
System implementations and cybersecurity objectives.
1. Protect USI's important information assets, including USI and customer products,
manufacturing processing information and recipe, R&D information, services, and maintaintheir conﬁdentiality, integrity, and availability.

39

Inclusive
WorkplaceSocialInvolvement

Appendix

2. Strengthen USI employee's awareness of the Company's and customer's information asset
protection responsibilities.
3. Ensure that the execution of all business comply with the requirements of relevant laws or
regulations.
4. Construct a safe and convenient information network environment to protect employees
from internal and external cybersecurity threats.
5. Establish a cybersecurity sustainability plan to ensure the business contingency.
6. In-depth assess existing cybersecurity level and enhance the maturity of entire
cybersecurity management.

Cybersecurity Vision

Information Technology Unit
Chief Information Ofﬁcer

Security
Architecture
and Operaitions

Environmental Protection
and Occupational Safety

Strengthen employees' cybersecurity awarenessProtect customers and USI's sensitive information
Establish a holistic cybersecurity system and ensure its
effectiveness
Ensure the conﬁdentiality, integrity, and availability of
information assets

Cybersecurity Advocacy and Training

USI has made Enterprise Network Cybersecurity Management Approach and introduced
Threat Intelligence System to increase cybersecurity protection. Through regularannouncement, employees are required to follow network cybersecurity regulations
and use legal software. IT also irregularly practices Social Engineering (Phish Insight)
to enhance employees' cybersecurity awareness. IT Department spot-checks illegal useof software, any illegal cases will be punished according to regulations. USI arranges anonline training course to strengthen employees' cybersecurity thinking. All employees
should take Cybersecurity courses and pass tests. Cybersecurity training completion
rate was 100% in 2022.
To be a gatekeeper of company cybersecurity, IT members not only take professional
training courses, but also need be certiﬁed to ensure the effectiveness of ourcybersecurity organization can systematically solve cyber incidents. USI had nocybersecurity incidents in 2022.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Green Products and Innovation
With our core competitiveness as the industry leader, we grasp the smart
manufacturing trend and actively enhance our eco-design capabilities,
promote low-carbon product designs, improve product energy efﬁciency,
and advance smart manufacturing projects. USI's Green Product (Clean
Technology) Strategy of Modularization, Globalization, Diversiﬁcation,
Vertical Integration, and Smart Manufacturing responds to the SDGs andaddresses climate change and energy resource reduction.

100% Meet International Safety, Environmental
Protection, Energy Saving Standards

1,501
CNY

SDGs

Cumulative Number of Patents

415

Million Saved from CIP and Smart Manufacturing
Projects

CO2

82% Eco-design Product Revenue Ratio

22

GWh Product Energy Efﬁciency

1,316

Metric Tonnes Carbon Reduced from CIP
Key Projects

Key Stakeholders: Shareholders/Investors/Banks, Customers, Suppliers/Contractors

40About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose
Innovation
Management& Sustainable
Production

Ensure green products
manufactured and soldmeet various stakeholder
demands and strengthen
competitiveness, increase
revenue, and enhance
corporate image throughcontinuous improvement

41

KPI

2022 Target

Inclusive
WorkplaceMaterial Issue

2022 Performance

Status2023 Target

SocialInvolvement

Achieved

Appendix

Not Achieved

2027 Target

Management Approach: Launch green product speciﬁcations in compliance with the law, continue to research and develop innovations and process
improvements, and focus on the deployment of patents to protect technological intellectual property rights, and set medium and long-term goals forsustainable products in response to sustainability trends
Evaluation Mechanism: The Green Products & Innovation Taskforce coordinator will follow up on KPI targets quarterly. The Taskforce leader willconduct a semiannual performance review and report to the Chair and Vice Chair at the annual Sustainability Committee meeting
Meet internationalsafety, environmental
protection, energy
saving standards

100% shipped products
meet standards

100% shipped products
met standards

100% shipped products
meet standards

100% shipped
products meetstandards

Sustainable design(for Mechanism)

More than 80%
of mechanicalcomponents use
recyclable and reusableraw materials

Recyclable and reusableraw materials accounted
for 87% of mechanicalparts

More than 80%
of mechanicalcomponents use
recyclable and reusableraw materials

More than 80%
of mechanicalcomponents use
recyclable andreusable raw materials

Product carbon
footprint inventory

Promote 1 seriesof product carbon
footprint inventory

100% completed 1
series of product carbon
footprint inventory(total 28 products)

Keep promoting 1
series of productcarbon footprint
inventory

Keep promoting 1
series of productcarbon footprint
inventory

Cumulative number ofpatents

1,471 patents

1,501 patents

1,527 patents

1,672 patents

Smart manufacturing

Reach 2.4 stars in the
Industry 4.0 5-Star
rating standard

Introduced Industry 4.0
5-Star rating, and reached
an average of 2.85 stars

Introduce Industry 4.0
5-Star rating, and reachan average of 3.2 stars

100% of the Industry
4.0 Facilities havebecome 5-Star lightsout factory

Continuous
Improvement Program

Cost saved accounted
for 0.21% of revenue

Cost saved accounted
for 0.27% of revenue

Cost saved accounted
for 0.21% of revenue

Cost saved accounted
for 0.21% of revenue

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Green Products

USI has ﬁve product categories: Wireless Communication, Cloud & Storage, Industrial &Medical, Consumer, and Car Electronics. Our vision for green products for the medium
term lies in using miniaturization technology to vertically integrate SiP modules in ourcustomers' products, promoting low-carbon design, energy efﬁciency, and environmental
impact reduction. Additionally, we are investing in developing electronic products forelectric vehicles to reduce CO2 emissions and mitigate pollution.

io
ivi n
ty

at

r
pe

ct

O du
o
Pr

VerticalIntegration

In

Globalization

Diversiﬁcationdust
S o ria llut M o b
ion ileIn d ust

a
nn
e
t
An gn
R F & D e si

rial & M e d i c aCore CompetenceMarket

Cloud
&
S
tor
ag
e

in
st
Te ien
c
Efﬁ

cy

Smart
Modularization
Manufacturing

Strategyrk/StoNetwoolutionrage
S

Green
Promise
g

cs
ati
m
le
Te

Automotive

Gr
ee
n
De

ion
at nt
ov eme
g

I
Ma nn
na

Com Wirele
mun ssica
tionMiniat SiP
uriz
ati
on

ics
ron
t
lec

er
sum
Con

ct
du
o
Pr igns

In the long term, we will certify our 5G testing capabilities to provide the bestminiaturized antenna design for smart mobile devices. We will apply this to computers,
communication, wearable and industrial electronics, and electric vehicles. Thenintegrate all product technologies to form an Internet of Things network. With our green
product clean technologies, we will develop market opportunities for low carbon, lowconsumption, and low pollution products to meet customer demands.

Ca
rE

Green Product Vision and Futurel42About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Green Product Management

USI has been devoted to promoting green management to pursue a harmonious coexistence of our environment andsociety. To ensure our operations comply with international environmental protection regulations and customers'
standards, we have established good communication channels with our suppliers and customers and implemented
preventive measures from the procurement of raw materials to the customer-end after services. The objective is tominimize negative environmental impacts from our products and production.
Following the strategies of green management and product eco-design, USI conducts annual third-party IECQ QC080000,
ISO 14001, and ISO 14064-1:2018 management systems audits. Thus, USI can quickly respond to changes in international
environmental protection laws. In addition, USI integrates and stipulates Standards for Green Environmental Protection
Products to control hazardous substances in electronic components and products. And formulated our green productpolicy and four main aspects of green product eco-design.

Green Product Policy

Product development and raw materials 100%
meet the requirements of customers and
USI green product environmental protection
regulations
Products must comply with international
regulations and directives on hazardous
substances
Product introduction of ecologicaldesign concept

Four Main Aspects of Green Product Eco-design
Main Aspect

43

Environmental Directive

Requirement

USI Design for Environment (DfE)

Hazardous Substances
Management

RoHS (Restriction of Hazardous Substances)
REACH (Registration, Evaluation, Authorization, andRestriction of Chemicals)
Halogen-free parts and process requirements
Battery Directive and Packaging and Packaging Waste
Directive

Low polluting
Non-toxic

Phase out the use of BFRs
Phase out the use of PVC
Use non-halogen materials

Recycling Management

WEEE (Waste Electrical and Electronic Equipment)

Recyclable
Easy to take apartEasy to process

Reduce the number of tools used to take machines apart
Increase the percentage of recyclable module designs
Introduce the labeling for recyclable plastics

Ecological Energy Design

ErP (Energy-related Product)
CEC (California Energy Commission)

Energy saving
Resource saving
Reduceenvironmental
impactReduce the energy consumption of machinery in standby
and off mode
Increase the efﬁciency of energy conversion of EPS
Keep machinery in power-saving mode

Miniaturization Design

SiP (System in Package)
SOM (System on Module)

Size reduction
Easy to integrate

Improve the system's functions
Reduce the complexity of the circuit
Reduce the materials usage

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Green Supply Chain

USI designs green products that meet global regulations based on the four aspectsof Green Product Eco-design, and constantly improves ecological design capabilities
so products can meet current trends. As a principle, we Eco-Design products in theplanning stages of product development. USI introduced a professional green value chain
management platform Green Parts Aggregations & Reporting System (GPARS) and Green
Parts (GP) database to manage the materials we use in our products and meet Hazardous
Substance Free (HSF), RoHS (1), REACH (2), WEEE and USI Green Environmental Protection
Products Requirements.
In response to the increase in global green product laws and the diversiﬁed customer
requirements for green product standards, suppliers can refer to GPARS to learn about
the latest green product speciﬁcations and conduct green parts certiﬁcations. Suppliers
should also comply with the requirements of the Green Product Speciﬁcations set
forth by USI. For substances without feasible substitutes at this stage, the Company
has also formulated a Banned Substance Elimination Plan (3~5) and communicated thisinformation to suppliers in the Annual Conferences, requiring suppliers to comply withthe speciﬁcations and cooperate with the implementation of the Banned Substance
Elimination Plan. In addition, suppliers must provide Environmental Hazard Non-Use
Declaration and Safety Data Sheet (SDS) or material composition tables to ensure thatthe content of relevant controlled substances complies with company speciﬁcations.
The trend toward sustainable green products is inevitable. Industries could face upcoming
challenges only by establishing a long-lasting green supply chain. USI integrates upstream
and downstream partners to generate maximum environmental beneﬁts from the entire
production process, including product design, material procurement, manufacturing,transportation, packing, selling, and product recycling through a comprehensive andtransparent management system. Our R&D, production, and quality assurance teams
can also stay up-to-date on current standards for our products through GPARS and takenecessary control measures. The systematic management of our global green productsupply chain helps us improve data accuracy, strengthen cooperation with supply chain
partners, and achieve a green supply chain.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

GPARS System
GE Staff
Approve the
GP Data
Accept the
GP Request
Suppliers
Upload / Fill /Revise GP Data

Approvalof the GP
Data

GP
Database

GPARS
Note:
1. To date, we have controlled over 300 chemical substances under the Green Product Speciﬁcations to ensurethat our products are in compliance with RoHS European Union directives
2. In response to the announcement of adding the 28th batch of 9 Substances of Very High Concern (SVHC),
the candidate list of REACH has been extended to 233 substances
3. Ban the use of the three substances Indium Phosphide, Nickel Sulfate, and Nickel Amino Sulfate from
01/01/2023
4. Tetrabromobisphenol-A and Medium-chain Chlorinated parafﬁns the threshold below 1,000 ppm after
01/01/2023, and ban their use according to the EU announcement date
5. According France's Regulatory announcement date to banning use of mineral oil in packaging items anddocuments
I. Mineral oil aromatic hydrocarbons (MOAH) (From 1 to 7 aromatic cycles)- The threshold below 1% after 01/01/2023- The threshold below 0.1% after 01/01/2025
II. Mineral oil aromatic hydrocarbons (MOAH) (From 3 to 7 aromatic cycles)- The threshold below 0.0001% after 01/01/2025
III.Mineral oil saturated hydrocarbons (MOSH) (From 16 to 35 carbon atoms)- The threshold below 0.1% after 01/01/2025

44

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Hazardous Substance Free (HSF) Management

Value Chain
Management

We follow the IECQ QC080000 Hazardous Substances Process Management System
Standard and establish green parts/material management and control procedures tomeet HSF standards. The main management requirements are as follows (for a partial
Directive

45

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

list of banned substances and requirements, please refer to the Sustainability Data Environmental F. Partial Selection of Restricted Environmentally Hazardous Substances
Contained in Products table):
Control Requirements

EU Directive - RoHS

RoHS directive was ofﬁcially implemented on July 1, 2006. It mainly regulates the material and technical standards of electronic and electrical products.
To protect human and environmental health, it prohibits the use of lead, mercury, cadmium, hexavalent chromium, PBB, PBDE, DEHP, BBP, DBP, and
DIBP in electronic products. (RoHS Directive includes (2011/65/EU) and Amendment Directive (EU) 2015/863).

EU Directive - REACH

REACH is a statutory ordinance that compulsory registration, evaluation, permitting, and monitoring of chemicals entering the EU market, which cameinto effect on June 1, 2007. The bill raises the quality requirements and entry barriers for products from different countries and regions to enter the EU.
For SVHC in REACH, suppliers must conﬁrm all provided components, non-BOM and packaging materials, and report back to USI via GPARS orquestionnaire methods for any SVHC substances at/or above the 0.1% weight by weight (w/w) concentration. For the current SVHC candidate list, please
visit ECHA.
The chemical substances restricted in REACH regulations are REACH Annex XVII hazardous substances. USI requests suppliers must conﬁrm all provided
components, non-BOM and packaging materials, and ban the use of Annex XVII list of dangerous substances. For detail conditions of restriction, pleaserefer to Annex XVII (amended directive) content. For the current Annex XVII list, please visit ECHA.

California Proposition 65

California Proposition 65, ofﬁcially known as the Safe Drinking Water and Toxic Enforcement Act of 1986, was enacted as a ballot initiative in November
1986. The proposition protects the state's drinking water sources from being contaminated with chemicals known to cause cancer, birth defects orother reproductive harm, and requires businesses to inform Californians about exposures to such chemicals. USI supplier must conﬁrm all provided
components, non-BOM and packaging materials, and report back to USI via GPARS or Questionnaire methods for any containing hazardous substances.
For the current Proposition 65 list, please visit OEHHA.

Toxic Substances Control Act（ TSCA ）The Toxic Substances Control Act (TSCA) is a U.S. law that was implemented by the U.S. Environmental Protection Agency (EPA) in 1976. The law
regulates the introduction of new or existing chemicals. The main goal is to evaluate and supervise new commercial chemicals before they enter themarket, to regulate the chemicals that existed in 1976 and pose unreasonable risks to health or the environment and regulate the distribution and useof these chemicals.
TSCA prohibits the production or import of chemicals that are not on the TSCA list or subject to exemptions. Chemicals listed in TSCA are called Existing
Chemicals, while chemicals not listed are called new chemicals. Manufacturers must submit a pre-manufacturing notice to the EPA before manufacturing
or importing new chemicals for commercial use. USI suppliers must conﬁrm and reply whether the materials provided contain hazardous substances
controlled by TSCA through questionnaires. For the current TSCA control list, please visit the EPA website.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Product Compliance

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

non-toxic raw materials to ensure that our products comply with the relevant regulations
and directives. Furthermore, we conduct product lifecycle inventory and eco-design
evaluations, and publish product eco-characteristics manual to comply with the EU ErP
Directives.

In the process of product design, USI is committed to meeting regulatory compliancerequirements, such as complying with region-speciﬁc sales market safety and regulatory
requirements to avoid the production of products that pose a health and safety hazard tocustomers. All suppliers are required to comply with the USI's Green Product Speciﬁcation,and the Company's products and operation system shall meet relevant international
standards and the safety regulations of the respective regions where they are sold. We
stringently control the use of raw materials for our products and use low-pollution and

USI also developed a Chemicals Management Procedure to assess and prevent risks that
may arise whenever we introduce a new chemical into our production process as detailed
in the Occupational Health and Safety section.

USI Products Compliance with Directives in 2022

Percentage of USI Products within the Directive
Green
Products Directive綠色環保產品指令

EU RoHS

Automotive
Electronics andWireless & Wearable
Miniaturization
Product

Intelligent
Connectivity
Product

Speciﬁc
Application
Product

Advanced Mobile
and Miniaturization
Product

Advanced LowCost Module
Manufacturing
Product

Visual Product

100%

100%

100%

100%

100%

100%

7%

11%

38%

100%

100%

97%

Halogen Free (HF)
China RoHS

100%

100%

100%

Our products undergo rigorous design review, such as modeling various usage scenariosin the early stages and addressing regulation deﬁciencies to strengthen product safety
standards. With our Factory Inspection Mechanism (1), products are quarterly or annuallyaudited by a third-party (ex. UL, TUV, CCC) to ensure user safety and compliance with
relevant international and local laws and regulations. Electronic system products withsafety certiﬁcations are all tagged with safety warnings and equipped with operation
manuals. In 2022, we received zero complaints about products endangering human health

100%

100%

100%

and safety, and no product safety-related violations were found.
To meet the Americans with Disabilities Act Standards, we established designing
guidelines and testing procedures for home/building security and retail IoT products.
In the future, we will integrate charging/power supply safety certiﬁcations to meet theelectric vehicle market and provide safe and high-quality products for our customers.

USI System Products Compliance with Safety Regulations in 2022
Percentage of USI Products within
the Regulations

Safety Regulations
UL 60950-1 / 62368-1

EN/IEC 62368-1

CNS 14336.1

GB 4943.1

Intelligent Connectivity Solutions

81%

93%

70%

56%

Speciﬁc Application Product

-

100%

-

-

Note:
1. Factory Inspection Mechanism: a manufacturing factory that manufactures products which are labeled with safety regulations shall receive factory inspection (to be audited by an external certiﬁcation unit) based on the requestof a certiﬁcation issuance unit to ensure that its products conform to safety regulations46

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Promoting Green Design

Since 2016, USI has been holding Technology Forums to cultivate and improve the design
capabilities of R&D personnel. The forum covers new knowledge and internal applications
in miniaturization/packaging technology, Wi-Fi technology, testing technology, reliability
testing, mechanism design, hardware design, and smart manufacturing. R&D personnel or
employees interested in related topics can converge and exchange latest technologicalapplication insights through this platform. We have also expanded the forum from oneday to a two-day event starting in 2020 and invited Dr. Li-Chun Wang and Dr. HongHan Shuai from the National Yang Ming Chiao Tung University as keynote speakers toprovide advice on the development of USI projects. At the same time, USI has added
an Intelligence Express column to our Newsletter so that employees who are unable toattend the events can learn new technologies and applications in our regular publications
or bulletins to enhance their technical knowledge.
USI R&D personnel have ecological design capabilities and continues to implement green
concepts and clean technology into their projects, which allows us to sell environmentalfriendly products around the world. According to the Design for Environment (DfE)
operating procedures, USI not only considers potential environmental impacts in thedesign phase, but also conﬁrms product speciﬁcations with Project Managers andcustomers to meet the requirements of Energy Star and ErP, as to meet a range ofenvironmental factors, such as material use, energy saving and CO2 reduction, efﬁcientuse of water resource, pollutant emission, resource wasting and recyclability, in order tominimize negative impacts to our environment during the product life cycle.
A green product with clean technology needs to comply with two or more green products
ecological design standards to improve energy efﬁciency and reduce environmental
pollution. In 2022, green products accounted for 24.6% of USI's revenue, down 8.2%
from the previous year due to the discontinuation of older products and lack of mass
production of new ones.
Furthermore, in response to the miniaturization technology promotion of green productstrategy and evolving product characteristics, the calculation basis of eco-design
was readjusted. Although the proportion of total revenue declined, the proportionof electronic waste recycling and eco-design of slim and light products increased
signiﬁcantly, and the total economic beneﬁt of material recycling increased 3.45 times
compared to 2021, please refer to the Sustainability Data - Environmental E. Materials
Recycled and Reused table. In the future, we will continue to promote and invest in R&D
to increase the proportion of clean technology and eco-design.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

The Proportion of Green Product Revenue to the Company's
Overall Revenue
Green Product Category (1)Percentage of Revenue in 2022

Communication Product21.8%

Industrial & Automobile Electronic
Product

0.4%

Consumer Electronics & Cloud andStorage Product

2.4%

Total

24.6%

Performance of Eco-designed Products
Category

2019

2020

2021

2022

Energy Star Compliance Rate

100%

100%

100%

100%

WEEE Compliance Rate

100%

100%

100%

100%

RoHS Compliance Rate

100%

100%

100%

100%

Energy Efﬁciency(Product Revenue Ratio)

34.4%

38.6%

45.9%

11.2%

Electronic Waste Recycling(Product Revenue Ratio)

9.2%

6.3%

5.2%

13.2%

Light and Compact(Product Revenue Ratio)

39.0%

41.6%

41.0%

58.0%

The Proportion of Total
Revenue

82.6%

86.5%

92.1%

82.4%

Note:
1. USI's product categories fall into ﬁve categories, and this section does not cover medical categories

47

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

In our product energy-saving evaluation, USI's eco-design products saved 22,023 MWh, equivalent to reducing 14,191 metric tonnes of CO2 and accounting for 10.14% of USI's total revenue.

Product Energy Efﬁciency Evaluation
Product Category

Communication

Consumer Electronics

Cloud and Storage

Industrial

Automobile Electronic

Total

Energy Saving in 2022 (kWh)684,542

39,4204,324,796

13,30016,960,801

22,022,859

To intensify the promotion of green products, USI established the Green Design Innovation and Invention Patent Incentive System at the end of 2017. We give weighted scores to greenrelated designs to encourage a green and innovative corporate culture and facilitate green design proposals. In 2022, green products were designed based on the four main aspects ofgreen product eco-design and four directions of green promise, the results of green-related design are as follows:

USI's Green Design in 2022
Product Design Aspect
Choice of raw materials
or components that havea lower environmental
footprint

Direct operations,production &manufacturing
Distribution, storage,
and transportation

Use phase - operation andservicing/maintenance

Key Features
Miniaturization
designHazardous
Substance Free
management
Reduction waste
Product testing
operating efﬁciently
Manufacture CO2
reduction and circular
Using recyclable andreusable packaging
material
Improve energy
efﬁciency
Energy efﬁciency
regulations
Energy-saving

End of life management

Meet WEEE criteria

Performances
Reduced raw material usage by a total of 5,664 kg in the annual shipment of miniaturized products• In terms of optimal circuit design, CAD reports are used to optimize the layout of components and wiring, reducing the use of
capacitive/resistive components by up to 11.5%• The antenna design for wearable devices continues to replace existing parts with small, slim, and lightweight parts, and themodular design saves up to 56% of the material area for the reference circuit board area
100% met RoHS environmental protection requirements
Improved shared speciﬁcations by using the same size shield, thus reducing the use of mold material by up to 75%
Streamlined the product testing process and reduced testing lead time by up to 11% to reduce energy consumption in the
production line
Facilities promote energy-saving schemes, which saved a total of 1,563 MWh of electricity and reduced CO2 emissions by 960 metrictonnesWe plan to recycle as much water as possible via improvement of equipment and technology, the process water recycling rate of 78.1%
USI recycled and reused about 30,000 plastic pallets, 10,000 wood pallets, 6.43 million trays, 150,000 partitions, and 350,000
recycling bins, reducing a total of 828 metric tonnes of waste
The DC-DC conversion efﬁciency of the DC power supply of the server product is more than 90.4%
All internal power supplies complied with 80 Plus Titanium certiﬁcation
100% in compliance with the California Energy Commission Appliance Efﬁciency Regulations (CEC), European Commission's Ecodesign Directive (EU ErP Lot 3, Lot 26) and the latest regulations of the EU Code of Conduct Tier 2 (CoC Tier-2)
In our product energy-saving evaluation, eco-design products saved 22,023 MWh
Collaborated with customers and 100% met WEEE criteria in mechanical parts design
33,362 kg of recyclable and reusable materials were used in USI's annual shipments48

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Product Life Cycle Assessment

Life Cycle Assessment (LCA) means systemically analyzing the environmental impacts ofa product or technology throughout its Cradle-to-Grave life cycle, from the acquisition andhandling of raw materials, through manufacturing, transportation, sales, use and maintenanceof the product, to its ﬁnal recycling or disposal. Among different methodologies, the productcarbon footprint is a life cycle inventory of carbon emissions generated at each stage of a
product, which is converted into the sum of CO2 equivalents, making the Product Carbon
Footprint the best example of a Simpliﬁed Life Cycle Assessment (SLCA). Due to the variety
of USI products offered, we have completed carbon footprint inventories for various products
in phased stages. We intend to inventory at least one product series' carbon footprint eachyear and establish a consistent methodology to calculate product carbon footprints to meetcustomer green product needs. To expand facility capabilities, we have shared relevant
knowledge and experience of green product integration development low carbon materials
with other facilities. In 2022, USI products that have completed LCA accounted for 25.4%
of our total revenue. This percentage includes USI's LCA environmental impact assessmentand our customer's LCA evaluation of their end products (with USI components).
Since 2017, USI has inventoried the carbon footprint data of one product series by using
SimaPro, IPCC 2013 100a, and ReCiPe 2016 to calculate ISO 14067 product carbon

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

footprint and ISO 14045 eco-efﬁciency evaluations. This is used to explore the impact
and damage of products in 18 environmental aspects, analyze the environmental impact
of products at various stages and seek hot spots for improvement, and calculate theproduct eco-efﬁciency in terms of the value of the product or service and its impact on
carbon emissions or the environment (1). For example: about 90% of the carbon emissions
came from raw materials and manufacturing processes. We also found that there areopportunities to further identify action items with development potential, including
optimizing the optimal input quantity and cutting ratio in the use of raw materials
to reduce excess consumption; increasing the amount of raw materials purchased
locally to reduce distribution consumption; replacing aging machines to continuously
save electricity in the manufacturing process; and cooperate with carbon inventory
in the facility to analyze greenhouse gas reduction performance in the production
and manufacturing, while also promoting the use of 100% renewable energy in the
manufacturing facility, please refer to the Energy Management section. This experienceis further utilized to establish more product projects and a more complete carbon
footprint inventory to reduce environmental impact, achieve product responsibility andconsumption, and realize the concept of low carbon footprint products.

Product Carbon Footprint Inventory Performances

49

Carbon Footprint (2)Eco-efﬁciency Assessment/
Environmental Footprint

Emissions(Kg CO2e/pcs)

Product Category

Product Name

Consumer

LCD Drive X Board

4.00

Consumer

LCD Drive XC Board

9.20

Communication

4G LTE Module

6.56

Industrial, Automobile Electronic

Digital Inkjet Printhead

31.07

Cloud and Storage

XnBay Smart Server

163.60

Cloud and Storage

USB-C Dock

290.36Note:
1. Eco Efﬁciency↑＝ Product or Service Value↑÷ Environmental Impact↓
2. The various product carbon footprint certiﬁcate please refer to the USI website

AppendixAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Green Education

Besides implementing the green management internally,
USI made stakeholders further aware of the importanceof environment protection and applied the correct
environmental concepts to various steps in production
process (i.e., the product planning, raw material
control and greenhouse gas emission reduction). We
keep communicating with its employees, suppliers andcontractors regarding our EHS-associated principles,knowledge, and requirements. The e-learning coursesof green education were added to USI's internal trainingthat informed the employees of GP-related regulations,requirements, operating procedures, and eco-friendly
materials. In 2022, the total number of all facilities' green
education training hours was 7,918 hours.
To meet customer requirements, USI is not only keen
to participate in international forums on carbon
emission disclosure, but also carry out plans for energy
conservation and carbon emission reduction. By instilling
the green concepts at internal training programs while
drawing from external experiences, USI conveyed its
green values and fulﬁlled the Green Promises.

CourseCourse Content

Hazardous Substance Management
SystemRequirements for Green Products

Quality Policy
Hazardous Substance Management System
Green Product Management System

Green Design Controlling Process

Green Product Workﬂow

Green Products Laws andRegulations Introduction

EU RoHS
China RoHS
Taiwan RoHS
Japan RoHS
REACH

Green Manufacture Management

RoHS (EU) 2015/863
WEEE 2012/19/EU
Green Manufacture Management

OQC Shipping Area Control

Global Green Product Environmental Regulations
USI GP and HF LabelingOQC Items and Standards

Green Part Veriﬁcation andApproval

Operating Standards and Regulations for Green Products

RoHS (EU) 2015/863
Halogen-Free
Green Product Workﬂow

WEEE
Halogen-Free
CEC
ErP

50

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixInnovation Management and Sustainable Production
Research and Patents

IP in USI is considered as responsibility of each employee, we not only endeavor to lower
the risk of infringement but also encourage the innovation activities internally. Company
provides the greatest beneﬁt to all of our stakeholders through the most effective IP
management, and devotes itself to create an encouraging environment and management
system to protect our IP and the detail refer to our IP Policy. For years Company haspresented research performances to the electronics industry through applying patents
and international journals.
USI has 2,728 R&D employees, accounting for 11.47% of the employee population,
increased by 2.05% comparing with 2021, and invested CNY 2.034 billion, accountingfor 2.97% (1) of the revenue in 2022. The Company continues to cultivate and improve
the ability of design and development personnel to maintain a stable and sustainable
development in the intensity of research and development.

R&D Spending and Intensity
3.69

3.31

2.97

1.37

2019

2.97

2021

2022

R&D Intensity(%)

In terms of patents, to encourage research, development, innovation, and enhance
technology and competitiveness, USI set up Patent Management and Incentive andregular R&D competitions. After the project has been veriﬁed, employees that proposed
the patents will be ﬁnancially rewarded and publicly recognized. According to thestatistics, the number of patent proposals approved by the Patent Review Committee
exceeds 100 each year. By the end of 2022, the cumulative number of effective granted
Note:
1. Please refer to page 25 of the 2022 USI Annual Report for detailed information

51

46 44

163

2019

Facility

1.64
R&D Spending(in CNY Billion)

2020

628

56 39

165

740

696

660

76 44

2020

173

2021

123

216
51
2022

Annual Filed
Application
Annual Granted
Application
Accum. FiledPatent (Pending)
Accum. Effective
Granted Patent

In 2022, four of the proposals involved green process designs and have passed internal
patent review meetings. The green process proposal is to increase the proportion of
automated and unmanned facility operations by reducing work hours, lowering laborcosts, or improving efﬁciency to achieve energy and carbon savings in the process.

2.03
1.58

patents stood at 740, an increase of 44 over 2021, and the cumulative number ofapproved patent applications reached 1,501, an increase of 3%. The patents obtained in
the last four years are shown in the ﬁgure.

Green Proposal

Zhangjiang

Support forks designed toaccommodate separated andstacking functions

Huizhou

Improved the way of residual
power surges caused by abnormal
power failure of test ﬁxtures

KunshanDeveloped methods to improve
the functional testing on USB
Type C production lines

NantouResearch and development ofsystem packaging with bottom
mold seal and its manufacturingmethodProposal Beneﬁt
Modular design to enhance system
functionality and reduce parts
damage, which reduced the risk of
product damage due to dropped trays
Reduced the complexity of test ﬁxture
cablesNew circuit architecture reduced thecomplexity of conventional circuits,
reduced layout space and routing,
reduced testing time, and increased
production efﬁciency and yield

The packaging method can save one
balling and grinding process, reducing
the number of workstations andprocess cost, while improving yield

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Smart Manufacturing

In recent years, the market environment faced by the manufacturing industry isundergoing profound changes. The manufacturing model characterized by low cost as themain competitiveness factor can no longer meet the demand for industrial upgrading andcompetition, and the development of smart manufacturing and Industry 4.0 has becomea key strategy for the manufacturing industry to improve quality, safety and technology.
Since 2013, USI has been taking its Zhangjiang Facility as a benchmark factory to
introduce smart manufacturing. The Company's smart manufacturing development
team are developing integrated test and inspection systems for production equipment
to increase productivity and optimize product quality through equipment IoT, automatic
data collection, real-time monitoring and big data analysis, electronic reporting andparameter management, etc. The Company is using mainstream Industry 4.0 automation
technology to realize the blueprint of smart manufacturing, while promoting automation
projects at an annual growth rate of 20%.
USI's Smart Manufacturing Program has adopted the concept of Industrial Internetof Things (IIoT) and plans the development of the Industry 4.0 Smart Manufacturing
Program in line with the electronic manufacturing industry, and this is called the 5-starIndustry 4.0 Smart Manufacturing. We have also formulated the 5-star Factory Standard
with reference to the industry, i.e. 100% automation of machines, more than 80% of
production lines can be produced with lights off, and direct labor is less than 30%. This
plan sets out a phased development over the next ﬁve to ten years to increase the levelof automation in USI facilities around the world. In 2022, we successfully introduced 70
automated manufacturing projects, saving a total of CNY 295.4 million in labor costs,
with an average of 2.85-star Facilities, including the highest level of automation at the
3.7-star Jinqiao Facility. By 2023, the Company plans to upgrade all of its Industry 4.0
Facilities to 3 to 4 stars, with an average of 3.2 stars, and to upgrade four of its Facilities
to 5-star Lights Out Factories by 2025 to achieve fully automated production.

USI's Industry 4.0 Automation Technology

Automation equipment communication network that supports
5G and 4G
Automated Material Handling Systems (AMHS)/Auto Guide
Vehicle (AGV) based production workshop for Work-In-Progress(WIP) transmission system
Fully automated 6-sided product inspection system/unmanned
testing workshops with fully automated robot arms
Real-time environmental monitoring and alarm system withremote access instrument boards
Artiﬁcial Intelligence (AI) online SPC is used for process controlof key production equipment
Production equipment data automation applications

The Nantou Facility has also been carrying out the Company's Industry 4.0 smart
manufacturing program since 2015, and has launched the Ten-Year Winning plan tospearhead the entire USI to empower customers gain competitiveness through smart
automation strategies, create a globally competitive smart manufacturing environment,
and create better business results for shareholders and investors.

52About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Continuous Improvement Program

Continuous Improvement Program (CIP) proposes improvement plans for the productivity,
process, quality, efﬁciency, equipment, software, hardware, energy conservation and CO2
emission reduction, automation, safety...etc., and have cost saving beneﬁts.

Environmental Protection
and Occupational Safety

Jinqiao19.61

Zhangjiang

The cases proposed by each facility are reviewed by Site Review Committee (SRC) for theirproject results that including innovation and development capability, actual saving value
attainment capability, technical application capability, standard operation capability, andreproduction operation capability. After the organizer samples the cases, Corporate Review
Committee (CRC) will review their saving beneﬁts and promote cases with reproducible
results to enlarge the beneﬁts. According to the statistics in the ﬁgure below, over 270
new cases (1) are proposed each year.

340

360

Case

2019

2020

2021

2022

Note:
1. Updated the number of new project submissions for 2019~2021 due to adjustments to remove themultiyear redundant section

53

Appendix

After the 2022 annual performance examined and approved by CRC, the actual tangible
cost saving was CNY 119.3 million and the saving cost accounted for 0.27% of revenue.
Please refer to the ﬁgure for the details of each facility.

Build a platform to realize ideas and approve employees'
endeavors and awards
Encourage employees devoting to continuous improvement
Enhance teamwork and enterprise competitiveness

319

SocialInvolvement

CIP Performance by Facility

CIP Purposes

277

Inclusive
Workplace

45.56

CIP
Performance
%

7.95

19.07
7.82

Huizhou

KunshanNantouThe CIP annual performance bonus includes basic bonus and incentive bonus (converted
from the total annual savings of the Facility), which is distributed according to theemployees' respective contributions to the project, and the bonus provided to individual
employees accounts for 20%~70% of the total bonus of a single project, while the other
30%~80% of the bonus is distributed to the project lead in charge of the project (including
the supervisors of the project-related business departments, and the employees of the
support units) after a holistic consideration by the Facility general manager. The total
bonus distributed was CNY 735,000. In addition, the CIP Excellent Contribution Awardis a global competition that includes a Case Category competition and a SMT Run Rate
Improving Gains Award competition, in which the winning teams are awarded prizes andawarded a total of CNY 169,000 to winning employees for their efforts in continuous
improvement.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

CIP Excellent Contribution Award

In response to the issue of climate change, USI has included energy saving and carbon reduction as key project categories, set a corresponding scoring mechanism, and increased
the quota of key project awards to promote relevant compelling green proposals. In 2022, 7 projects achieved the targets, included two Energy Saving and Carbon Reduction projects
awarded.
Facility

Ranking

Project Name

Project Beneﬁt
Key ProjectJinqiao

Nantou-NK 1

BronzeBronzeClean Dry Air (CDA)
Recycling and Energy Saving
Improvement

Splitting the nitrogen production air discharge line into two lines, allowing the surplus nitrogen production CDA to be fully
utilized to reduce the load on the existing production demand of the air compressor and thus saving energy, saving 1,253,977
kWh of electricity annually and reducing carbon emissions by 1,014 metric tonnes, within estimated annual savings of CNY
606,467.

Factory Facilities
Optimization and
Improvement

By optimizing measures such as integration of exhaust gas, reduction of dryer cooling, and stable air supply, we can reduce
electricity expenses to achieve energy and carbon savings, saving 593,637 kWh of electricity annually and reducing carbon
emissions by 302 metric tonnes, within estimated annual savings of CNY 344,039.
Other ProjectGold

All-In Industrial Internet
Platform Establishment

Self-developed USI All-In Industrial Internet platform to connect resources between systems, explore more resource value,
and ﬁll in system gaps to improve system limitations. In addition to enhancing the Company's I4.0 rating, the Company was
also awarded the Jiangsu Province Industrial Internet Demonstration Project. It is expected to save CNY 6,564,989 annually.

Zhangjiang

SilverSMT Vacuum Spacer Import
Cost Saving

Designed the introduction of feeder vacuum gasket to generate vacuum suction during the feeding process to maintain thefeeding stability and resolve the problem of high throwing rate of non-magnetic materials due to excessive packaging slope
and gap. It is expected to save CNY 931,954 annually.

Jinqiao

SilverShield Fence Technology
Development for
Compartment Shielding

Developed a masking fence solution to replace the conventional resin-ﬁlled process used for compartmentalized masks. It is
expected to save CNY 6,681,145 annually.

IQ5630 Internal Calibration
Replaced External Calibration

Developed internal calibration platform to test, verify, and import models into the internal calibration process, and meet thedemand of the production line for timely calibration. It is expected to save CNY 8,438,698 annually.

Whole Line Automation

Introduced automatic tray-positioning machine, automatic testing machine, and automated 6-sided product inspection andpackaging integrated machine to enhance the automation of the production line, save manpower, reduce transport and idle
waste, while also improving production efﬁciency. It is expected to save CNY 4,256,104 annually.

KunshanZhangjiang

KunshanBronzeBronze54

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Value Chain Management
Facing the boundless development trend in the globe, good supply
chain management can not only effectively lower production costs
and enhance the quality of products to win more satisfaction, but also
expand the Company's business and social responsibility with partners
to create a sustainable future.

43
100
100

% Global Local Procurement Rate

SDGs
55

% Target Suppliers Use Conﬂict-free Minerals% New Suppliers Passed Sustainability
Assessment
Key Stakeholders: Customers, Suppliers/Contractors

84.2
0

Customer Satisfaction Score

Cases Product Recalls

342

Supplier Partners Participated in the Sustainable
Value Chain Webinar

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose
Customer RelationshipManagement
USI is committed to customer
satisfaction as our core goal
and value through providing
professional services andcompetitive quality products tomeet our customers' diverse needs

Sustainable Supply Chain

We work together with suppliers tocreate a sustainable supply chainthat protects the environment,emphasizes corporate social
responsibility, enforces labor rights,
and ensures health and safety

KPI

2022 Target

2022 Performance

Inclusive
WorkplaceMaterial Issue

Status2023 Target

SocialInvolvement

Achieved

Appendix

Not Achieved

2027 Target

Management Approach: Through customer satisfaction surveys and feedback channels, we gain insight and respond to customer expectations
accurately, provide quality and diversiﬁed service solutions, and create a win-win situation with customers
Evaluation Mechanism: We develop and implement improvement plans to enhance customer satisfaction through customer satisfaction
surveys and customer feedback systems
Customersatisfaction
score

Customer satisfaction
score reaches 84

Customer satisfaction
score reached 84.2

Customer satisfaction
score reaches 84

Customer satisfaction
score reaches 84

Zero productrecalls

0 product recalls

0 product recalls

0 product recalls

0 product recallsManagement Approach: Develop sustainable procurement policies around evaluating supplier environmental/social performance, avoiding
purchasing conﬂict minerals, and advancing with our suppliers to lower operational risks and secure overall supply chain resilience
Evaluation Mechanism: Conduct annual statistics on the procurement amount of each region, conduct a Conﬂict Minerals Reporting Template(CMRT) and Supplier Sustainability Assessment Questionnaire (SSAQ) survey on suppliers, and evaluate and track deﬁciencies based on thesurvey results to conﬁrm the achievement and completion rate of various indicators
Support local
suppliers andprocurement

Global local
procurement rate
reaches 35%

Global local
procurement rate
reached 43%

Global local
procurement maintainat least 40%

Global local
procurement maintainat least 40%

Percentage oftarget suppliers
completing theconﬂict-freeminerals

100% target suppliers
use conﬂict-freeminerals

100% completion of
conﬂict-free minerals

100% target suppliers
use conﬂict-freeminerals

100% target suppliers
use conﬂict-freeminerals

Percentage ofTier 1 Suppliers
completing the
SSAQ

Tier 1 Suppliers
completing the SSAQ
reaches 72%

SSAQ completion rate
reached 73%

Tier 1 Suppliers
completing the SSAQ
reaches 75%

Tier 1 Suppliers
completing the SSAQ
reaches 75%

56

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Product Value Chain

USI is a global leader in electronic design and manufacturing, providing Design, Manufacturing, Miniaturization, Industrial
software, and hardware Solutions, as well as material procurement, logistics, and maintenance services for leading
domestic and international brands. We integrate our products and services into a Value Chain and provide a Turnkey
Service (1) for our customers, as shown in the ﬁgures below:

Product Value Chain

Supplier (2)AgentContractor

Customer

ConsumerCommunication
5G SiP

Smart Phone & Tablet

WiFi SiP

WW No.1 for Smart Phone& TabletIndustrial & Car & Medical
SHD & POSWW No.2 for Logistics &Warehousing

Power Module
Car LED Lighting
InverterPower Module
xEV Powertrain

Wearable Device
WW No.1 for
Watch, Wristband…

Products &MarketPositionsLCD X-Y Board
TV, NB, Monitor

Turnkey Service

Material sourcing& RFQ

Material planning& purchasing

VMI hub
management

Inventory
management

RMA
service

Supplier
management

Logistic
arrangements

System integrator
relationship

Cloud & Storage
SSD & Array

Enterprise & SMB

X-86 M/B & Docking
Server/WS
Docking for NB

PCBA & Box assemblyNote:
1. The essence of Turnkey Service is service integration
2. Material suppliers refers to suppliers of PCBs, substrates, active/passive components, other electromechanical components, mechanical components, packaging materials, and accessories

57

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Customer Relationship

Since its inception, the Company has been providing professional services and quality
products to meet the diverse needs of our customers. We possess cutting-edge productdevelopment and manufacturing capabilities to provide customers with complete services
from design to distribution and services spanning across global production locations.
Regarding technical and supporting logistics services, USI is committed to providing themost agile and fastest services close to our customers. Customer satisfaction is a core
goal and value pursued by the Company.

Quality and Service

To meet or exceed customer needs and expectations provides customers with highstability, high-reliability, and cost-advantage products. With the experience andtechnology accumulation by working with top clients in the world for years, we integrate
the three core technologies: computing, communications, and multimedia processing,and provide customers with the most complete solution for wireless communication
products, computer and industrial applications, storage of products and servers,
automotive and video products, and miniaturized products.

Improving the performanceof the related quality control
process

Quality
Mission
Provides an efﬁcientmanagement process
for management

Proven compliancewith customer,
regulatory and/or otherrequirements

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

USI has a Quality Policy and a comprehensive quality management system certiﬁed with
ISO 9001 and other international standards (please refer to the Management Systems
Certiﬁcation Table). Through quality inspections, audits, and other process management
methods, we control and eliminate potential risks and strive to improve our quality
control capabilities in our facilities worldwide to ensure customer satisfaction.

Customer Complaints and Product Recall

By following the quality policy of "All involvement, continually improve, and pursue Zero
Defect" , USI adheres to "Three Non-Defective Principles" : No acceptance of defective
products, No fabrication of defective products, and No delivery of defective products.
The Company is highly concerned about products with potential quality issues. USI's R&D
and engineering units are invited to discuss the treatment plans and cause analysis andthe regular study meetings to continuously track the countermeasure effectiveness aswell as to prevent from the repetition of defective products. For the products with safetyconcerns or batch issues, USI establishes preventive measures to recall them right away.
The losses can be avoided, and customer lives, and properties can be protected fromdamage.
Regarding customer feedback, we established a system to log and respond to quality
feedback rapidly. Related personnel are immediately notiﬁed when there's feedback. They
then will analyze and propose the most effective solutions to the customers and takesteps to prevent similar issues from arising again. According to the Company's statistics,
there were 3 customer complaints (1) in 2022, with a 100% resolution rate and no productrecalls. Based on the analysis of customer complaints received, all of which are design
problems, the Company's improvement measures, including changing the control method
and automatically increasing the leakage voltage test, are deﬁned in the management
procedures and regulations to avoid recurrence of problems and to implement
improvement measures.

Continuous assessment
and improvement
Note:
1. Data covers Zhangjiang, Jinqiao, Huizhou, Kunshan, and Nantou Facilities

58

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Driving up Customer Satisfaction

USI offers a full range of services tailored to customer needs, providing high quality, high efﬁciency, and ﬂexible service
content to meet the needs of customers. We communicate effectively with our customers worldwide, and each customer
has a dedicated customer service personnel to collect valuable feedback and concerns. Through regular and ad hoc
business meetings, customer scorecards and satisfaction surveys, we proactively collect customers' opinions and requests
to understand customers' evaluation of our products in terms of quality, delivery, technology, green products, service
and other six aspects. In response to the survey results, the relevant units within the Company hold discussion meetingsand leverage customers' feedback, needs and suggestions to formulate viable response strategies. Furthermore, we
communicate effectively, formulate improvement plans and action plans, continuously track and monitor the improvement
status, and provide feedback to customers at any time to improve the quality of communication and customer satisfaction
and strengthen the solid relationship with customers in order to obtain their afﬁrmation and long-term support and createa win-win scenario.
The 2022 customer satisfaction (1) survey covers all customers, accounting for 100% of USI's revenue. Using 80% as a
threshold target for satisfaction, 93% of customers are satisﬁed with USI's services. In addition, the overall customer
satisfaction score averages out to 84.2 (Successful) across all satisfaction dimensions. In terms of individual satisfaction
dimensions, except for "Other" which did not reach 80 points, all the other dimensions reached "Successful" or above. For
dimensions that do not meet the required standards, we continue to communicate with our customers to and make allnecessary improvements. USI strives to improve customer satisfaction in all aspects to achieve a higher level of customer
satisfaction for sustainable corporate development and to maintain an annual goal of "Successful" or higher, with the
expectation of moving towards "Excellent" in customer satisfaction in the future.

Inclusive
WorkplaceSocialInvolvement

Percentage of Satisﬁed Customers
93%

93%
86%

82%

2019

2020

2021

Regarding customer document management, the Company stipulates that all customer documents are deﬁned to havethe highest level of conﬁdentiality to protect product information provided by customers. Document information shall beencrypted and stored in the Company's internal network system. Information authorization management is adopted toensure that customer privacy is tightly protected. For information security management, the Company has establishedinformation security standard management procedures and training courses to promote and implement information
security policies through various management systems and management committees, strengthen the information security
environment and information security incident response capabilities, and protect the Company's intellectual property andcustomer data from leakage or unauthorized access. For details, please refer to the Cybersecurity Management section.

59

2022

Customer Satisfaction Score

Customer Privacy Protection

Conﬁdential customer information and customer health and safety are always treated with the highest priority as they
are crucial assets for both parties and the basis for mutual trust. USI commits to maintaining customer privacy anddata conﬁdentiality. We set systems and procedures in place to center customer privacy and data conﬁdentiality as thefoundation of all business contracts. In addition to signing conﬁdentiality agreements with our customers to safeguardcustomers' proprietary and conﬁdential information, and require related units to observe conﬁdentiality measures, we havealso established privacy and personal information protection policies that serve as the basis for compliance management.
This includes managing the collection, processing, and use of personal information, and practicing privacy and personal
information protection to ensure the rights and interests of all. Please refer to the Business Ethics and Compliance section
for our Privacy Policy.

Appendix

84.1

84.1

2020

2021

84.2

83.8

2019

2022

Note:
1. Deﬁnition of Customer Satisfaction Score: Outstanding (Satisfaction≥ 90), Excellent (Satisfaction ≥ 85), Successful (Satisfaction ≥ 80),
Satisﬁed (Satisfaction ≥ 70), Improvement Required (Satisfaction ≥60), Unacceptable (Satisfaction < 60)About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Supply Chain Management

The year 2022 is a year of profound change, from epidemics, wars, and political unrest to extreme weather, the threats
to the world are increasing, and companies around the world continue to face unprecedented impacts and challenges.
In the face of unprecedented impacts and challenges, we have joined hands with our global partners to ﬁght against the
pandemic. To build a sustainable supply chain, we are adjusting our procurement strategy according to global industry
trends and adopting various procurement strategies according to the major categories of raw materials to diversify oursources of supply to reduce risks and ensure competitive pricing, reasonable cost, accurate delivery, and sound quality. In
addition, we have identiﬁed ﬁve key material categories for production: materials with unique characteristics, customized
materials, or materials subject to market supply constraints. To maintain operational efﬁciency and avoid supply chain
disruptions, we established the following strategic procedures to communicate and cooperate with our partners, driving avirtuous cycle.

Critical Material Risk Management
Development of alternative
material mechanisms

We evaluate the life cycle and supply sustainability of bill of materials during thedesign phase of new products and add replacement materials to ensure smooth
mass production to end of product lifecycle.

Material shortage review
mechanisms

Through open market information, the Company holds quarterly price negotiation
meetings to keep track of market dynamics and weekly delivery status of supplier
responses, identify material risks and take timely countermeasures.

Purchase mechanism fromspot dealers

Establish a list of suppliers from approved off-the-shelf suppliers to meet urgent
material procurement needs.

Inter-facility transfer andrebalancing mechanisms

Establish internal inventory transfer processes to meet the demand for balancing
the stock of slow-moving inventory between facilities and the demand for
emergency inventory transfer in case of material shortages.

Emergency responsemanagement measures

After a disaster/emergency, proactively contact suppliers to understand theimpact of material supply and harness internal and external resources tominimize the impact of material outages as much as possible.

Inclusive
WorkplaceSocialInvolvement

Appendix

Supply Chain Overview

USI products are diverse and can be applied in many
sectors. Our raw material suppliers, including original
manufacturers, agents, and off-the-shelf suppliers, arespread worldwide to meet our product demand. We
mainly procure active/passive components, substrates,
mechanical components, and other peripherals. Of our six
main manufacturing facilities, Zhangjiang Facility mainly
manufactures products for the biggest OEM customer,
which makes up a substantial amount of transactions but
procures relatively simple materials. Nantou Facility has
multiple production lines and procures a wide range ofmaterials from numerous suppliers, accounting for thetransaction amount. In 2022, we strategically centralized
our procurement and traded with over 1,900 material
suppliers worldwide.

Raw Material Supplier Categories
6%
2%
7%
71%

Active14%

Passive

Mechnical

PCB

Others60

About this Report

Sustainability
Management

Operationsand GovernanceDistribution of Raw Material Suppliers (1)
1%

16%

14%
2%
4%

45%

18%

Mainland China
Northeast Asia

EuropeSoutheast Asia

MexicoTaiwan

North America

Transaction Amount at All Facilities (2)

16%

21%
Zhangjiang
NantouJinqiao

MexicoHuizhou

KunshanNote:
1. The percentages of the amount purchased are calculated according
to the supplier distribution regions
2. The percentages of the purchase amount of each facility
3. The percentages of the amount purchased locally by facility region

61

Inclusive
WorkplaceSocialInvolvement

Appendix

For our six major manufacturing facilities in Zhangjiang, Jinqiao, Huizhou, Kunshan, Nantou, and Mexico, we divide
them into three regions: Mainland China, Taiwan, and Mexico. The local procurement rate grew to 43% in 2022, basedon the ratio of local procurement to global procurement by those manufacturing facilities. Our strategic procurement
department will continue to strengthen the management of target suppliers and select local suppliers with competitive
advantages. We will continue to develop local suppliers with competitive advantages and aim to maintain a local
procurement rate of at least 40% worldwide in 2023 to enhance the competitive advantage of the local industry andstrengthen the partnership with suppliers.

Percentage of Procurement from Local
Suppliers at All Facilities (3)Global Local Procurement Rate
37%

61
42

12%

6%

Environmental Protection
and Occupational Safety

USI supports local suppliers. This strategy not only facilitates the growth of the local economy and local employment
rates, but also effectively saves energy and time consumed in transportation, helping us to minimize the impact on ourenvironment. Therefore, our raw materials are primarily purchased from local or nearby suppliers. Raw material shortages
remained critical in 2022, and the Company continued to proceed with decentralized production sites and evaluate new
suppliers and completed the development of diversiﬁed sourcing solutions for raw materials, increasing the proportion of
local procurement in Mainland China by 7% and by 1% in Taiwan. Starting in 2021, in response to customer requests for
production locations and due to geopolitical risks, many products originally produced in Mainland China were moved to
Mexico. However, major suppliers were still based in Asia, resulting in a continued decline in local procurement in Mexico.

6%

39%

Value Chain
Management

Green Products
and Innovation

30
19

14
2019

2020
Mainland China

39%

50

43

38

43%

30

29
12
2021
Mexico5
2022

Procurement Rate %Taiwan

18%

35%

30%
22%

15%

2019

2020
Performance

2021

2022
TargetAbout this Report

Sustainability
Management

Operationsand GovernanceSupplier Code of Conduct

As the supply chain is the essential link of our value
chain and an extension of USI's values, we require our
suppliers and their suppliers to comply with the Supplier
Code of Conduct. Our suppliers must follow all laws andregulations of their respective countries/regions, meetlabor, health and safety standards, environment, ethics,
and management standards, and monitor their suppliers'
compliance with the Code. USI annually promotes
the Code to ensure suppliers' acknowledgment andcompliance. In 2022, 100% of our 1,900 suppliers we hadtransactions with acknowledged their compliance. As partof our anti-corruption governance mechanism, USI has adedicated whistleblower mailbox where all stakeholders
can report business integrity and ethics concerns (Pleaserefer to the Business Ethics and Compliance section).
There were no reports of corruption or bribery fromsuppliers in 2022.

Supply Chain Strategy

USI fully understands that the overall power ofprocurement is a unique resource. In order to pursue
sustainable growth while meeting the needs of ourcustomers, in the Company's daily procurement
operations, in addition to cost and quality considerations,
we have developed six major supply chain strategies
and evaluated the sustainability value of different
projects such as supply chain diversity and sustainableprocurement. With the development and progress ofthese projects, the Company shall continue to improveoverall supply chain resilience, grow together with our
suppliers, and implement sustainable procurement. In
all, we hope to create a mutually beneﬁcial future for ourcustomers, our company, and our suppliers by developing
stable partnerships with them.

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Supply Chain Management Strategy
Value-Oriented

Responsible Minerals Sourcing

To obtain a competitive overallvalue in the supply chain.

To ensure that suppliers are using
only responsibly sourced, conﬂictfree minerals in their products.

Diversiﬁed Sources

To maintain at least two suppliers
for the same material to ensure acontinuous supply.

Quality First

Sustainable Sourcing

To obtain the best quality
products and services
from suppliers.

To raise suppliers' economic,
environmental and social
performance in sustainability.

Strategic Cooperation

To integrate suppliers' resources andcapabilities for greater innovation.

Sustainable Supply Chain Projects
Supplier Financial
Risk Monitoring

Bringing in
Second Sources

To ensure the continuous
operation of suppliers andprevent the risk of material
shortage due to ﬁnancial
problems, we regularly
review suppliers' ﬁnancial
risks and identify supplierswith potential operationalrisks for control.

To reduce material costs,
strengthen supply resilience,
foster vertical integrationof procurement, and avoid
serious material shortage
problems, USI is establishinga substitute material
supply chain to improve theﬂexibility of supply.

Collaborate with major
processing vendors
and recycle packaging
materials, reducing raw
material, energy, andpollutant treatment
costs, and minimizing
environmental impact.

Cooperate with local
suppliers and reusedshipping pallets, reducing
pallets used andsubsequent environmental
damage.

The Procurement
Department collaborated
with the Finance
Quantitative/ Department and monitored
Qualitative the ﬁnancial risks of 37
suppliers on a semi-annual
Resultsbasis in 2022.

USI is actively developing
competitive suppliers in
the China market andrecommending parts
solutions to our customers.
Successful projects
implemented in 2022
resulted in annual costsavings of CNY 7.94 million.

Huizhou, Kunshan, andNantou Facilities recycled
6.43 million trays, 150,000
partitions, and 350,000
recycling bins in 2022,
reducing 828 metrictonnes of waste and saving
approximately CNY 30.8
million.

In 2022, Huizhou, Kunshan,
and Nantou Facilities
recycled and reused 29,415
plastic pallets and 9,965
wood pallets and saved
approximately CNY 5.85
million.

Highlights

Recycling
Packaging Materials

Pallet Recycling
and Reuse62About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Supplier Evaluation

Following customer demands, procurement strategy, and future trends, USI has a system
to evaluate potential suppliers for technical capability, quality, and productivity andselect those that meet the requirements as our ofﬁcial suppliers. A cross-departmental
evaluation team would initially survey potential new suppliers' capacity by screening theirbasic company information, ﬁnancials, product services, and primary customers and thenassess their quality, green management, and sustainability through the SSAQ (including
labor rights, health and safety, environmental protection and other components). The
team would rate the supplier on the survey report and present it to the Quality Review
Board for ﬁnal assessment and approval. All new suppliers developed by USI are required
to sign the Supplier's Commitment to Corporate Social Responsibilities and Supplier Codeof Business Integrity along with the Purchasing Contract to ensure they will address andmanage their environmental, labor, and human rights impacts. In 2022, 38 new suppliers
were evaluated, and 100% passed the screening criteria to become qualiﬁed suppliers.

Supplier ESG Program

In recent years, the United Nations and international assessment requirements for
supplier management are not only about quality, delivery, cost, and service but also
about environmental friendliness, social responsibility and sustainable governance. The
Company therefore holistically reviews suppliers' ESG aspects and works with them to
implement ESG sustainability programs.
The USI ESG Program for suppliers is implemented and monitored by the Sustainability
Committee's Value Chain Management Taskforce, and the results of related plans are
submitted to the Board of Directors annually for review. Each year, through Sustainability
Risk assessment and conﬂict minerals due diligence, written assessments and on-site
audits or visits, we identify suppliers, evaluate their environmental impact, social
responsibility and governance practices, and plan corrective measures for sustainability
to ensure that suppliers continue to comply with our "Supplier Code of Conduct".

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

The Company has established the "Supplier Performance Measurement Procedure",
which focuses on suppliers with monthly transactions with the Company and conducts
regular assessments based on the proportion of transactions. The assessment results are
divided into ﬁve levels, and according to the assessment regulations, the Company will
reward those who become outstanding suppliers with priority in acquiring new productcontracting rights or increasing the order quantity. If the supplier does not meet the
expectations, the Company will request a Vendor Corrective Action Report (VCAR) andfor the supplier to provide a reply and proof of improvement within one month, and if
the supplier fails to meet the improvement requirements after tracking, the supplier's
qualiﬁcation will be suspended. For the improvement plan proposed by the supplier, therelevant unit shall provide counseling for identiﬁed deﬁciencies.
Based on the quarterly supplier performance measurement results, USI invites suppliers
to participate in the Company's quarterly Executive Business Review (EBR) meetings,
using a scorecard to score the four major components of price, delivery and cooperation,
quality and ESG by the responsible units. Through this channel of communication, USI isable to educate suppliers on the Company's sustainability policy and ESG strategy, gain
insights into market supply and demand and development trends, share experiences witheach other, maintain close interaction with suppliers, and ﬁnd long-term suppliers. In
2022, a total of 25 EBR meetings were held.
In addition to the supplier assessment process, in 2022 we trained 100% of our internal
procurement staff and other employees in sustainability knowledge and awareness, witha total of 5,821 employees participating 854 hours in the training sessions, to ensurethat they understand the Company's supplier ESG program and instill ESG principles andknowledge into each employee's role and implement their daily operations. The Company
follows the Supplier ESG Program to build strong relationships with suppliers and promotesustainability improvements throughout the supply chain to reduce overall supply chain
risk and simultaneously build resilience and capacity to respond to global climate change.

Developing Sustainability Competency

63

CourseNo. of Employees

Total Training Hours

SDG Sustainability Trends

4,950

495

RBA Code of Conduct

766

306

Conﬂict Minerals Management62

31

Supplier RBA SAQ Introduction

43

22About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Supplier Sustainability Risk Management

In order to properly grasp the sustainability risk status of suppliers and continuously
comply with USI's "Supplier Code of Conduct", suppliers are required to sign acommitment to comply with the Code of Conduct and complete an annual SSAQ covering
the ﬁve major components of labor rights, health and safety, environmental protection,
sustainability and risk management, and supply chain management. Furthermore, we

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

carry out supplier risk assessments to ensure that their risks can be effectively controlled
and reduced and conduct on-site audits of suppliers that may have higher risks to gaina deeper understanding of the current status of supplier sustainability development,
implement effective supplier management, reduce risks and improve the overall efﬁciencyof the supply chain, and strengthen the sustainable development of the supply chain.

Sustainability Risk Assessment Process
Sustainability Requirement
Suppliers' Commitment to
Corporate Social Responsibilities tofollow RBA Code of Conduct
Supplier Sustainability Assessment
Questionnaire

Risk Assessment
Active risk assessment to screen
and select suppliers
Supplier Sustainability Assessment
Questionnaire
High-risk supplier risk assessment/audit

Validation
On-site/Online/Document
Audit
Supplier RBA Validated Audit Program(VAP)
Corrective action veriﬁcation

Improvement
Supplier trainings & support
Uncompliant suppliers would havetheir transactions reduced or eligibility
suspended

Before conducting risk assessment of suppliers, the Company must ﬁrst proactively conduct supplier screening. USI selects suppliers to be included in control by annual procurement
amount and identiﬁes suppliers with potentially high risks in terms of governance, environment and social as the basis for key management. For details regarding Supplier Screening,please refer to the Sustainability Data - Social I. Coverage and Progress of our Supplier Screening Program table, and for supplier country analysis, please refer to the Sustainability Data Social J. Supplier Selection by Country table.

Supplier Screening
Methodology for Suppliers Screening
We proactively review and investigate all suppliers' countries/regions, their production processes, and their respective product categories to conduct preliminary assessments of suppliers andanalyze potential risks.
Country-speciﬁc risk: Minerals from the Democratic Republic of the Congo and neighboring countries in Central Africa may lead to human rights violations and risks of environmental damage.
Sector-speciﬁc risk: Suppliers of raw materials, labor agencies, contractors and ﬁeld service providers that provide labor, energy consumption, and manufacturing processes with special risksof pollution emissions in the manufacturing industry, as well as labor agencies, contractors and ﬁeld service providers who provide manpower.
Commodity-speciﬁc risk: Parts containing metals and hazardous materials are selected according to the classiﬁcation of parts.

Aspects of Suppliers Screening

Environmental

Any ﬁre, explosion, industrial accident
resulting in serious injury, death, toxic
substance release into the environment, or
property damage
Any violation of applicable environmental
protection laws and regulations, such as
penalties or work suspensions ordered bycompetent authorities

SocialAny violation of labor, human rights, andlabor health and safety related laws andregulations that results in penalties orwork suspensions ordered by competentauthorities

GovernanceAny violation of the Company Act,
Securities and Exchange Act, information
security or other network security
incidents

Business Relevance

Annual procurement amount of direct,
indirect, and packaging materials
Technical and price advantages
Productivity satisfaction and cooperation

64

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Supplier Sustainability Risk Assessment

In order to enhance the competitiveness of the overall supply chain and to ensure that suppliers fulﬁll their corporatesocial responsibility, USI follows the RBA Code of Conduct framework, with an audit task force formed by the Human
Resources and CSR departments. We conduct desk and on-site assessments on suppliers, where the assessment scopeincludes ﬁve dimensions: labor, occupational health and safety, environment, ethics, and management systems.
The Company conducts SSAQ surveys for Tier 1 Suppliers. In addition to asking suppliers to ﬁll in related questionnaires,suppliers are also required to provide relevant management system certiﬁcates as supporting evidence (e.g. ISO 14001,
ISO 14064-1, ISO 45001, ISO 27001 etc.), and the results of third-party risk assessments and audits by suppliers who havecompleted RBA VAP are also accepted. 73% of Tier 1 Suppliers completed the SSAQ survey in 2022. For details regarding
Supplier Assessment data, please refer to the Sustainability Data - Social K. Coverage and Progress of our Supplier
Assessment Program table.
We consolidated suppliers' response to the SSAQ and audited the suppliers with high risks. In 2022, we conducted on-siteand documented audits of 46 material suppliers (including 44 non-responding SSAQ suppliers and 2 high-risk suppliers)and on-site audits of 35 service contractors, with 100% of the audits yielding a low-risk rating. For the deﬁciencies foundin the audit, suppliers were required to propose improvement plans and were required to complete the improvement
within one month, and a review conducted. The closure rate was 100% after the review. For details regarding Corrective
Action Plans data, please refer to the Sustainability Data - Social L. Coverage and Progress of Suppliers with Corrective
Action Plans table. In addition, for suppliers that do not respond to the questionnaire, we will conduct a sustainability
risk investigation through the information publicly disclosed by the supplier. We had not terminated relationships in 2022
after assessment and analyzed the deﬁciency items in supplier audits and found that of the ﬁve major areas, 42% were
health and safety. The detailed results are shown in the chart on the right. In 2023, we will continue to focus on healthand safety improvements through counseling and advisory measures and will continue to assist suppliers with the goalof complying with the RBA Code of Conduct and contribute to the improvement and enhancement of the supply chain
business environment together with suppliers.

Inclusive
WorkplaceSocialInvolvement

Appendix

Distribution of Supplier Sustainability
Audit Findings
9%
42%
20%

29%

Health and Safety

Management System

Environmental

Labor

Supplier Audit Findings and Corrective Actions (1)Category

RBAClassiﬁcation
Young Workers

Labor

Working Hours
Wages andBeneﬁts

Major Non-conformance Findings
Failure to establish a written policy prohibiting the useof child labor
No compensation measures for hiring underage
employees
Monthly overtime hours in excess of regulatory
requirements
Failure to describe how employees' work hours aremonitored, managed and controlled

Maternity leave and marriage leave do not comply withregulations
SOPs involving deduction of employees' basic wages

Note:
1. Identify the ﬁrst three main categories of the key audit deﬁciencies

65

Corrective Actions
Establish a policy to prohibit child labor and promote it
Increase the compensation measures required for hiring underage employees
Increase automated production and the working hours monitoring and alert systems
Strengthen the supervision of the use of attendance machines and establish a soundmanagement system
Update of maternity and wedding leave regulations in the latest employee handbook
Revision of salary management regulations

About this Report

Sustainability
Management

Category

Health and
SafetyOperationsand Governance

RBA
Classiﬁcation

Environmental Protection
and Occupational Safety

Major Non-conformance Findings

Inclusive
WorkplaceSocialInvolvement

Appendix

Corrective Actions

Failure to provide and repair personal protective
equipment
No spill prevention device and no SDS posted inchemical storage area

Regular issuance of protective gear, enhanced inspection of protective gear, and staff
safety awareness training
Immediately order leak-proof trays and post SDS to strengthen the monitoring ofmaterial storage

Emergency
Preparedness

Fire-ﬁghting equipment blocked by objects and failure
to conduct checks
Emergency medical facility location information not
speciﬁed

Immediately remove items and enhance staff training and equipment management
Update emergency medical facility location information in SOPs

Pollution
Prevention
and Resource
Reduction
Hazardous
Substances

Management
SystemValue Chain
Management

Occupational
SafetyHealth and Safety
Communication

Environment

Green Products
and Innovation

Legal andCustomerRequirements
Training
Documentation
and Records

Failure to conduct occupational medical examinations
for personnel involved in positions with exposure toradiation
Failure to conduct occupational safety education
training

Immediately arrange for medical examinations of workers exposed to radiation toensure that there are no health hazards
Conduct safety education and training for employees and maintain training records

Hazardous waste disposal vendor does not conduct
on-site assessment
Expired chemical SDS data

On-site assessment of hazardous waste disposal contractors
Update SDS issuance and strengthen internal document control

Failure to establish climate change risk management
procedures
Leakage of pipelines and susceptibility to operational
errorsFailure to establish procedures for regulatory
identiﬁcation and customer requirements
Inadequate identiﬁcation of regulatory lists and failure
to identify the latest version for compliance

Climate change risk management is established in the management process andexisting controls are in place for risk opportunities
Immediate shutdown for maintenance, additional pipeline valve locks, and increased
staff inspections

Develop procedures for regulation identiﬁcation and customers' requirements
Update the list of laws and regulations and review the latest version

No mention of occupational safety training in
employee handbook

Revised employee handbook

Failure to establish a written policy covering ethics

Establish ethical measures and policies in the Management Regulations

In addition, USI conducts supplier human rights risk assessments to understand the importance of human rights issues in the supply chain. Through supplier responses to the SSAQ andsupplier sustainability reports or publicly disclosed information, etc., we achieve 92% supplier disclosure of human rights issues in 2022. The evaluation results found that "Freely Chosen
Employment, Non-Discrimination/Non-Harassment, Occupational Safety, and Industrial Hygiene" were the main human rights risk issues. We identiﬁed suppliers that may face high risks
and take corresponding measures to continuously track the effectiveness of their different risk conditions. We will continue to assist and counsel suppliers on human rights issues for
suppliers who do not respond or disclose relevant information.

66

About this Report

Sustainability
Management

Operationsand GovernanceValue Chain
Management

Green Products
and Innovation

Supplier Human Rights Incident Mitigation and Compensation
Measures
Category
Risk Issue

Mitigation
MeasureCompensation
MeasureLabor

Health and Safety

Freely Chosen Employment
Non-Discrimination/NonHarassment

Occupational Safety
Industrial Hygiene

Annual audits or RBA VAP to assess suppliers' human rights risks
through each Facility to mitigate risks
Requiring suppliers to adopt corrective measures for human rights risks
and conduct follow-up on implementation
Instilling the importance of human rights in supplier labor througheducation and training on sustainable supply chains to reduce risks inadvanceRequiring suppliers to provide guidance or compensation, or to
implement policy changes or other measures for employees whose
human rights have been violated
If a high-risk supplier is identiﬁed, the Company shall conduct on-site
audits and provide recommendations for improvement and require thesupplier to submit improvement reports on a regular basis to track the
performance of continuous improvement

External grievance mechanism & reporting mailbox: for details, please refer to theBusiness Ethics and Compliance section

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Conﬂict Minerals ComplianceConﬂict Minerals refer speciﬁcally to tantalum, tin, tungsten, gold (collectively "3TG"),and cobalt mined and traded illegally by local militias in the Democratic Republic of
the Congo and neighboring countries through forced labor and abusive child labor. As amember of ASEH who joined the Responsible Minerals Initiative (RMI) in 2015, USI utilizes
RMI's resources and guidance to make responsible choices regarding conﬂict minerals,
protecting human rights and the environment through sustainable procurement, andachieving a conﬂict-free mineral supply chain.

Conﬂict Minerals Management

In order to avoid the inadvertent use of conﬂict minerals in the manufacturing process of
our products, the Company has established a conﬂict minerals procurement management
policy that commits to not using conﬂict minerals and requires suppliers to source raw
materials from Qualiﬁed Smelters Disclosed by RMI and to sign and commit to comply withthe conﬂict minerals procurement management policy of USI to achieve the Company's
conﬂict minerals-free supply chain and customer requirements. For details, please referto the USI website. USI follows the ﬁve major frameworks of the "Due Diligence Guidancefor Responsible Supply Chains of Minerals from Conﬂict-Affected, and High-Risk Areas"developed by the Organization for Economic Cooperation and Development (OECD)to establish a management system that includes a due diligence process to identify,
assess, respond to, and mitigate supply chain risks. Furthermore, the Company has
designed supplier conﬂict mineral audit forms, through on-site/documentation audits toguide suppliers to establish a management mechanism in line with OECD due diligence
directives.

Conﬂict Minerals Management Process67

Conﬂict Minerals
Management

Reasonable Country of
Origin Inquiry (RCOI)Due Diligence (DD)

Independent Private
Sector Audit (IPSA)Management system

Identify and assess risks

Respond to identiﬁed risks

Conduct third-party audits

Report annually on due diligence

Comply with USI conﬂict
minerals sourcing policy
Set corporate annual
conﬂict minerals
objectives

Assess supplier conﬂict
minerals reporting
template (CMRT)
Request supplier conﬂict
minerals representation

Undergo annual IPSA

Disclose annual conﬂict
minerals reporting

Deﬁne supplier risk
assessment criteria
Conduct supplier document
or on-site audit
Support suppliers withmanagement mechanism

Conﬂict Minerals Report（CMR）About this Report

Sustainability
Management

Operationsand GovernanceValue Chain
Management

Green Products
and Innovation

Reasonable Country of Origin Inquiry (RCOI)The Company has established a conﬂict minerals management program to conduct areasonable level of country-of-origin survey on target suppliers (1) every year to identify andconﬁrm the source of 3TG, cobalt and mica in product bill of materials and component
materials to conﬁrm whether they are sourced from conﬂict mineral areas. We deploy the
GPARS system to collect CMRT and EMRT (Extended Minerals Reporting Template) fromour suppliers. We consolidate this data with the latest published list of smelters provided
by the RMI to verify and ensure that the smelters' sources are qualiﬁed. If a supplier uses

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

non-qualiﬁed smelters, we follow the risk identiﬁcation and management process alongwith three mitigation options (mitigation for continued trading, temporary suspension of
trading during mitigation period, and non-mitigation resulting in the cessation of trading)to address the issue. We require the supplier to immediately remove or replace such
smelters from the supply chain. In 2022, all target suppliers used material from qualiﬁed
smelters. The geographical distribution of the analyzed 3TG smelters is as follows: themajority of smelters are located in Asia, with a secondary concentration in the Americas.

Risk Identiﬁcation Management Process
Identify
Smelter
Risks

Supplier Provides/
Updates CMRT

3TG Parts

Qualiﬁed Smelter

Case Closed

Non-Qualiﬁed Smelter

3TG Qualiﬁed Smelter Distribution Area
27
1
3

170

Yes
Risk Mitigation
Efforts

Risk
Mitigation
Options

No
Risk Mitigation
Non-Feasible

List High Risk Suppliersand Evaluate toContinue Trading

49

Asia

EuropeOceania

AfricaAmericasNote:
1. Target suppliers are the top 90% of suppliers according to the annual purchase amount and the suppliers for the top customer of the year68About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

USI continues to promote conﬂict-free mineral sourcing into the supply chain byconducting supplier due diligence and requiring the use of qualiﬁed smelters. In 2022,
a total of 199 target suppliers completed due diligence with 100% compliance with theconﬂict-free minerals requirement; in addition to 3TG, we are progressively including
more minerals from Conﬂict-Affected and High-Risk Areas (CAHRAs) (e.g., cobalt andmica) in the survey, with a total of 150 suppliers surveyed and disclosed for cobalt andmica. We also shared our conﬂict minerals policy and related requirements through our
Sustainable Supply Chain Webinar sharing sessions and shared our future planning andpromotion direction with our suppliers.

Independent Private Sector Audit and Annual Report

The Company is committed to complying with customer requirements regarding
conﬂict minerals audits and management standards. Every year, USI conducts an IPSA
based on the results of due diligence investigations conducted on our suppliers. Our
target suppliers are veriﬁed to use qualiﬁed smelters and comply with the annual
declaration of conﬂict-free minerals. ASEH, the parent company of USI, is required toﬁle annually with the United States Securities and Exchange Commission (SEC) and
its Annual Conﬂict Minerals Report, which covers USI and its subsidiaries. For details,
please refer to the USI website.

2019~2022 Conﬂict Minerals Compliant Target Supplier
Future Plans

1. Continue to conduct supplier assessment, and guide suppliers to establish
management mechanisms
2. Optimize supplier management system to improve the management of smelter
information quality, while achieving customers' reporting requirements
3. Set up a plan to investigate the sources of cobalt and mica to meet RMI and
Responsible Minerals Assurance Process (RMAP) standards
4. Communicate USI's management and investigation requirements throughsupplier conferences69

Inclusive
WorkplaceSocialInvolvement

Appendix

Sustainable Supply Chain Development

Due Diligence (DD)100%

Environmental Protection
and Occupational Safety

Supplier sustainability helps companies reduce their environmental footprint, risk
and reputation, drive value by improving efﬁciency and reducing costs, and build
strong partnerships of mutual trust and respect to enhance overall sustainability. USI
considers suppliers as key partners and attaches great importance to communicationand interaction with them. Through supplier education and training, presentations, andtechnical/competency counseling, USI empowers suppliers to develop an awareness ofsustainability management to meet the ever-changing trends and enhance the overallsustainability of the supply chain.

Sustainable Supply Chain Training

The Sustainable Supply Chain
Webinar is an annual event
held by USI for our suppliers.
In 2022, the Webinar for theGreater China region washeld at the Nantou Facility.
Through the event, we
communicated with suppliers
around the world on our ESG
philosophy and implementation
policy, which includes thecontinuous implementationof a sustainable supply chain,international environmental
requirements, our requirements for suppliers' ESG programs, the experience ofcarbon management implementation and the sharing of future goals. At the sametime, Prof. Kevin Kuo from Taipei Tech's Sustainability, Innovation and Assessment
Center was invited to share USI's Product Carbon Footprint & Environmental Impact
Assessment, elaborating on product carbon footprint inventory based on international
trends, government regulations and customer requirements. These include an endto-end product life cycle assessment from raw material acquisition to ﬁnal disposal,
calculating the carbon emissions of inputs and outputs, and assessing the potential
environmental impacts. In addition, USI also shared the results of USI's product carbon
footprint and environmental impact implementation, so that suppliers can understandthe use of high-efﬁciency and low-energy materials in product design, as well as
packaging reduction to reduce the impact on the environment, and low-carbon control
at the source, to achieve the goal of net-zero carbon emissions. A total of 342 supplierpartners attended this online sharing session, and 256 feedback questionnaires werereceived after the session, with "Very Satisﬁed" rating to USI.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

New Technology/Product Presentation for Suppliers

Through the Technology Forum, USI cultivates and enhances the capabilities of our
R&D personnel, communicates new technology applications across departments, andholds regular courses to exchange the latest technology applications and market
dynamics with suppliers, so that the entire supply chain can keep abreast of the latest
market information and regulations, and establish a sustainable partnership. In 2022,
we held a total of 19 sessions with material suppliers to share information on new
products and technologies.

Supporting Suppliers with Improvement Actions

The improvement of suppliers' ESG performance is a pivotal factor that affects
the overall development of the Company. Therefore, during the document/on-site
assessments conducted on raw material suppliers and on-site service contractors,
we counsel them on their deﬁciencies through online discussions or on-site face-toface explanations. For example, measures such as implementing a policy prohibiting
the use of child labor, increasing monitoring and warning systems for working hours,
implementing attendance management systems, using leak-proof trays for chemicals,
and posting SDS were recommended to address the identiﬁed deﬁciencies for 22
suppliers. In addition, pertaining to the written assessment of conﬂict minerals, written
interviews and guidance were provided to 25 suppliers after reviewing the responses
from suppliers, whereby incomplete questionnaire content or inadequate management
processes and conﬂict mineral policies were identiﬁed. In total, 47 suppliers were
counseled in 2022.

Supplier Capacity/Technology Development Program

Supplier competency and technology development is an integral component of suppliermanagement. USI provides technical support and counseling to reduce operationalrisk and foster supplier development through various programs, allowing suppliers tounderstand USI's ESG-related requirements and establish sustainable partnerships.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Supplier Carbon Mentoring Program
In response to the risks and impacts of global climate change, the Company
continues to promote greenhouse gas reduction policies and encourages
suppliers to adopt energy-saving and carbon-reducing measures. Together, we
aim to achieve set supplier carbon inventory targets and lay the foundation for
future initiatives such as conducting carbon hotspot analysis and quantitative
calculations for suppliers. In 2022, ASEH convened all subsidiary companies
to implement a supply chain carbon counseling program, emphasizing theimportance of carbon reduction efforts throughout the supply chain. In April
2022, the Company initiated the Supplier Carbon Inventory Counseling Program
by conducting a kick-off meeting and providing educational training to suppliers.
Dedicated resources were allocated to assist suppliers in establishing greenhousegas inventory management systems (ISO 14064-1) and product carbon footprints(ISO 14067) that comply with regulatory requirements. The program involved
a guidance and inventory process lasting for more than six months, aiming toenhance the supply chain's carbon inventory capabilities and improve theiroverall competitiveness. Through the team's guidance, two suppliers involved in
PCB manufacturing and stamping were ofﬁcially certiﬁed for greenhouse gas andproduct carbon footprint in March 2023.

Supply Chain Financing Program
Intended for qualiﬁed suppliers with good credit, stable quality, and no quality or
ﬁnancial crisis, as well as suppliers with large annual procurement amounts withproven track record of sound partnership with USI. To help them reduce theiroperational capital cost, USI has been providing ﬂexible and efﬁcient working
capital solutions. Since 2015, the Company has been providing ﬂexible and
efﬁcient working capital solutions to suppliers, allowing them to increase theirhigh turnover ratio and stabilize their supply sources to meet sales growth andseasonal capital requirements, thereby helping them to achieve economies ofscale and improve ESG performance. USI has established long-term collaborationand partnerships with key suppliers through this program. In 2022, four suppliers
joined the program. Cumulatively, we continue to provide ﬁnancing support for
15 suppliers.

70About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Environmental Protection
and Occupational Safety
With an emphasis on environmental protection, USI takes aggressive measuresagainst climate change. We look forward to considering environmental
protection as well as achieving environmental sustainability while pursuinghigh quality products and services. In addition, we are committed to promoting
a culture of occupational safety and health and providing a quality working
environment for our employees.

100% Renewable Energy Use in Mainland China Facilities

2,142
CNY

SDGs
71

30

MWh Renewable Energy Produced throughSolar Panels

Million Invested in Environmental Conservation

92.5
0% Non-hazardous Waste Recycling Rate

Cases Contractor Occupational Injuries

8,611

Employees Attended Health
Promotion Activities

Key Stakeholders: Shareholders/Investors/Banks, Employees, Suppliers/Contractors, GovernmentsAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose
Occupational Health &SafetyPromote occupational safety andhealth culture and enhance risk
management, injury prevention andemergency response capabilities tocreate a safe and healthy working
environment for all workers

Climate Change

Regularly review and reduce GHG
emissions in the face of the impact
of climate change as the main axleof the Low Carbon sustainability
strategy

KPI

2022 Target

2022 Performance

Inclusive
WorkplaceMaterial Issue

Status2023 Target

SocialInvolvement

Achieved

Appendix

Not Achieved

2027 Target

Management Approach: Construct ISO 45001 occupational safety and health management system to enhance safety and health awareness tohave the ability to identify potential hazards, assess and dispose of risks, and implement the spirit of PDCA continuous improvement to ensure
the workplace safety and health of all workers
Evaluation Mechanism: Monthly/quarterly/yearly tracking of management indicators through the Safety and Health Production Committee
Obtain/maintain
ISO 45001
certiﬁcation

Obtain/maintain
ISO 45001 certiﬁcation

Obtained/maintained
ISO 45001 certiﬁcationin all major facilities

Obtain/maintain
ISO 45001 certiﬁcationin all major facilities

Obtain/maintain
ISO 45001 certiﬁcationin all major facilities

Major occupational
disease incidences

No major occupational
diseases

No major occupational
diseases

No major occupational
diseases

No major occupational
diseasesMajor occupational
injury incidences (1)No major occupational
injuries

No major occupational
injuries

No major occupational
injuries

No major occupational
injuries

Major infectious
disease incidences

No major infectious
diseases

No major infectious
diseases

No major infectious
diseases

No major infectious
diseases

Management Approach: Establishment for ISO 14064-1 management system to conduct an organizational greenhouse gas inventory to
manage related emissions towards the 2050 net zero carbon emissions target
Evaluation Mechanism: Annual review of facility GHG emissions to ensure ISO 14064-1 certiﬁcation
ObtainISO 14064-1:2018
certiﬁcation

ObtainISO 14064-1:2018
certiﬁcation

Obtained
ISO 14064-1:2018
certiﬁcation

ObtainISO 14064-1:2018
certiﬁcation for all major
facilities

ObtainISO 14064-1:2018
certiﬁcation for all major
facilities

GHG Scope 1 &2 absoluteemissions

15% decrease from2016

78% decrease from2016

17.5% decrease from2016

27.5% decrease from2016

GHG Scope 3
absolute
emissions

3% decrease from2020

37% decrease from2020

4.5% decrease from2020

10.5% decrease from
2020

Note:
1. Number of work-related fatalities

72

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceMaterial Issue

Management Purpose
Energy Management
Improving energy efﬁciency andreducing energy costs throughsystematic energy management tofulﬁll corporate social responsibility
Air Pollution Control
Reduce air pollution emissions onsite to reduce air pollution andimprove air quality

KPI

2022 Target

2022 Performance

Status2023 Target

SocialInvolvement

Achieved

Appendix

Not Achieved

2027 Target

Management Approach: Establishing ISO 50001 energy management systems to systematically improve energy efﬁciency and reduce the riskof changes in energy demand, supply and cost through integrated management systems to enhance business sustainability
Evaluation Mechanism: Annual review of regulations and site energy consumption ratios to propose energy saving improvement projects andensure energy intensity performanceElectricity
intensity

7% decrease from 2015

36.6% decrease from2015

8% decrease from 2015

12% decrease from2015

Management Approach: Comply with local regulations on air pollution prevention and control, and continuously reduce air pollution
Evaluation Mechanism: Quarterly review and conﬁrmation of air pollutant emissions without violations
Air pollution
violations

No air pollution
violations

0 air pollution violations

No air pollution
violations

No air pollution
violations

Water intensity

7% decrease from 2015

28.5% decrease from2015

8% decrease from 2015

12% decrease from2015

Hazardous waste
generation
intensity

1% decrease from theprevious year (1)8.8% decrease from theprevious year

1% decrease from theprevious year

1% decrease from theprevious year

Non-hazardous
waste recyclingrate

Non-hazardous waste
recycling rate reaches
90%

Non-hazardous waste
recycling rate reached92.5%

Non-hazardous waste
recycling rate reaches
90%

Non-hazardous waste
recycling rate reaches
90%

Water Resource Management
Facing the impact of water
resources, efforts were made toincrease process water recovery rate
to reduce water demand and risk
Waste Management
Responding positively towards
environmental protection by
reducing waste generation andreducing disposal costs througheffective recycling and reuse ofresources

Note:
1. Revised the 2022 hazardous waste generation intensity target of 1% decrease from the previous year73About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Climate Change and Carbon Management
Global warming caused by greenhouse gas emissions over the years has exposed theworld economy to signiﬁcant risks and has threatened many businesses around theworld. As a result, stakeholders are starting to focus on risks and opportunities due toclimate change. USI integrates the concept of ecologically sustainable developmentwith company's managerial decision-making and operation management. Through thecontinuous promotion of management systems ISO 14001, ISO 50001, andISO 14064-1:2018 (please refer to the Management Systems Certiﬁcation Table), we have
improved and reduced environmental impact of our operations and hereby make a public
disclosure about USI's environmental information for the implementation of corporate
environmental responsibility.

Following our Regulatory Compliance & Responding to Environmental Campaigns pillar of
USI's Environment, Health, Safety, and Energy Policy (EHS & Energy Policy), we continue
to cooperate with local environmental protection authorities and actively participate
in environmental improvement agreements to create an eco-friendly, healthy, and safe
working environment. USI supports the Paris Agreement's objectives and responds byfollowing the TCFD framework to disclose our strategies and measures to address therisks and opportunities brought by climate change. The Sustainability Committee is the
dedicated unit for climate change management and reports to the Board. The Boardand related executives assume management responsibility and take the opinions ofstakeholders as reference to formulate the corresponding management strategy.
Stakeholders are welcome to provide feedback via telephone hotline or email. In 2022,
we received no ofﬁcial complaints about environmental impact, notice of violations
against environmental regulations, or environmental pollution incidents. There were no
signiﬁcant environmental or ecological related ﬁnes or penalties (1) within 4 years.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Task Force on Climate-related Financial
Disclosures (TCFD)

In response to international initiatives and our Low-Carbon Strategy, USI adopted the
TCFD framework and discloses the risks and opportunities brought by climate change,demonstrating corporate responsibility and strategy to allocate capital more reasonably
and effectively to achieve the vision of low carbon economic transformation.
USI Sustainability Committee,
the highest organizational unit to
manage the Group's sustainable
development, annually prepares an
ESG report that
includes climatechange-related
issues for the Board
Governanceof Directors' review

Metrics
Set climate-related
andperformance
Targets
indicators andquantitative targets;regularly track progress,and disclose to the public without
concealing information
Set a long-term goal for Net-Zero
Carbon Emissions in 2050

Strategy

RiskManagement

Identify short, medium,and long-term climatechange risks andopportunities
Assess risks andopportunities basedon different climate
scenarios

Climate risk isincorporated into the
ERM management
process

Collaborate across departments
to identify climate-related risks/
opportunities along the value chain,assess ﬁnancial impacts and develop
countermeasures to manage them using
Mitigation and Adaptation methods

Note:
1. The deﬁnition of signiﬁcant ﬁne or penalty is sanctions over CNY 67,000 (USD 10,000)

74Sustainability
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Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Climate Change Risk and Opportunity Management Process

Background
Data Collection

Risk/Opportunity
Possibility
Analysis

Environmental Protection
and Occupational Safety

SocialInvolvement

High

4
8

Financial Impact
Analysis

Risk Assessment

Control
Mechanism

75

Evaluate risk/opportunity indices based on the possibility andﬁnancial impact scales
According to the risk/opportunity indices, it is classiﬁed as• Red: High risk/opportunity (for immediate action)• Blue: Moderate risk/opportunity• Green: Low risk/opportunity

Review the existing control mechanism and set feasible control
indicators

High Risk/Opportunity

Low

9

5

1

2

3

Low Risk/Opportunity
Moderate Risk/Opportunity

Use impact on monthly revenue as an indicator (indicator levels
are divided into 1 to 5, with the ﬁfth level having the highest
impact)Appendix

Climate Change Risk and Opportunity Matrix

Collect background and scenario data from news, internet,
other countries or company events
Consider the transition risks (policy and law/market/
technology/reputation), the physical risks (chronic and acute)and the opportunities (resource efﬁciency, energy, products
and services, markets and adaptation)

To analyze the targets in the value chain that are being affected(including direct operations, supply chain or customers)
Impact duration (now within 0 to 1 year, short-term 1 to 3 years,
medium-term 4 to 10 years and long-term 11 to 30 years)
Possibility (almost sure, highly possible, possible, unlikely, andextremely unlikely)

Inclusive
Workplace

Financial Impact

About this Report

7

6

Risk Probability

HighPhysical Risk

Transition Risk

Opportunities

1 Floods(Operations/Customers)

4 Customer demand forgreen products
5 International carbon
tax and emission quota
requirements
6 Energy transition

7 Import energy
management system
to improve energy
efﬁciency
8 Develop energy saving
components

2 Drought(Operations/Customers)
3 Floods (Supply Chain)

9 Demand for electriccars market

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Financial Impact from Risk and Opportunity

With reference to IEA's NZE 2050 and country-deﬁned contribution scenario targets foreach facility, we have conducted ﬁnancial impact analysis of climate change risks andopportunities. USI's physical and transition risks and opportunities are analyzed withthe relevant units in the organization, and the physical risks are identiﬁed in the form ofﬁnancial and revenue losses due to the impact of natural disasters that would impact our
production, operations and supply chain, and transition risks are identiﬁed in the form ofcustomer demand for green products and future international carbon tax requirements;
failure to do so will result in reduced customer orders and higher carbon tax costs. In
terms of opportunities, we will continue to manage and improve energy efﬁciency,
actively develop energy-saving components and enter the electric vehicle market, which
Risk and
Opportunity
Types

Description of Risks
and Opportunities
FloodsDrought
Physical Risks

Transition Risks

Opportunities

Targets

Risk

Operations
Downstream/customers

Shortterm risk

Potential
Financial Impact
The production
was adversely
inﬂuenced,
resulting in
ﬁnancial losses andrevenue decline

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendixis envisaged to save manufacturing costs and increase demand for our products. In the
future, we will evaluate establishing a mechanism to estimate the ﬁnancial impactof risks and opportunities. We ranked the projects with high climate risk in terms ofrisk score and manage them according to "mitigation" and "adaptation". In terms of
mitigation, we actively promote sustainable manufacturing, the use of renewable energy
and the enhancement of energy efﬁciency; in terms of adaptation, we strengthen USI's
climate resilience and search for alternative energy sources, analyze the risk of climatechange and propose research and development strategies, and provide customers withintegrated solutions to help them adapt to climate change. The following are our current
strategies for responding to the corresponding risks and opportunities.
Countermeasures
Simulate ﬂood and drought risks using physical scenarios of climate change and propose contingency
preventive measures

Energy transition

Operations

Introduce an energy
management system
to improve energy
efﬁciency

Longterm risk

Increase in energy
costs

Establish a substitute mechanism for materials
Purchase mechanism for spot dealers
Implement cross-site material transfer mechanism
Provide market information to prepare materials in advance (MPA)
When an emergency occurs that causes a lack of material, the emergency response management
procedures will be activated according to the SOP
We have developed biodegradable plastics (emission reduction) that ﬁt the customers' needs based on
climate change issues to facilitate the energy-saving and carbon-reducing product applications for ourcustomers
We absorb cutting-edge knowledge through papers, seminars, and exhibitions to effectively meetcustomers' requirements for Energy Star and CoC Tier 2
We propose to introduce eco-friendly materials in the early stage of product development, which caneffectively reduce carbon emission in line with customers' product development plan for carbon neutral
products
We have developed a carbon supply chain management plan that will allow us to understand the carbon
emissions from our supply chain in the future
We have adopted green power gradually to minimize the impact of carbon pricing
Improve equipment efﬁciency, upgrade the power supply and replace power systems
Organize regular sessions of successful power saving case studies with related taskforces

Operations

Shortterm risk

Reduce electricity
cost for operation

We can identify primary energy consumption areas through our ISO 50001 energy management system,
formulate energy-saving plans, and control our energy performance to effectively save energy andreduce carbon emissions through the PDCA cycle every year

Shortterm risk

To meetcustomers'
energy-saving
product needs;
therefore, we
can increase therevenues

We can reduce the material and energy consumption by increasing the output per material unit throughthe miniaturization design; in addition, the energy consumption required for transportation is lower
than that of other products
We can meet the design requirements such as ERP, CEC, and DoE for different types of products toimprove the overall power efﬁciency in the system
We have developed a series of Pad Extension ﬂip-chips to meet the high current density requirements ofheadlights, focusing on LED chip life, reliability, and brightness for Car Lights
For the Powertrain, we continue to design and promote low energy consumption and high efﬁciency
products to our customers. We also design and develop products to meet the IATF 16949 requirements

Floods

Upstream/
supply chain

Shortterm risk

Customer demand
for green products

Downstream/customers

Shortterm risk

Additional
carbon reduction
equipment
installation and
R&D costs

Mediumterm risk

Additional
operating costs

International carbon
tax and emission
quota requirements

Develop energy
saving components
Demand for electriccars market

Operations
Upstream/
supply chain
Downstream/customers

Operations
Downstream/customers

Mediumterm risk

76

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

For the physical risk analysis of USI's operational sites and supplier sites in Taiwan, the World
Bank's Climate Change Knowledge Portal and Taiwan Climate Change Projection Information
Platform databases were used to estimate the RCP2.6, RCP4.5, RCP6.0, and RCP8.5 (1)risk levels for extreme rainfall hazards and vulnerabilities (including ﬂoods, mudslides,
and landslides) between 2021 to 2100. Although analysis indicated no risk of ﬂooding or
potential landslides in USI's own operations, we have established contingency measures inplace for sudden ﬂoods and drought. Supplier site vulnerability analysis has identiﬁed 484
ﬂooding risks and 2 landslide risks, and no supplier sites have landslide risks, which we will
evaluate and implement supply chain procurement mechanisms to mitigate risks.

Hazard and Weakness Scenario Risk Analysis Chart
RCP 2.6

RCP 6.0

RCP 4.5

RCP 8.5

Environmental Protection
and Occupational Safety

SocialInvolvement

Appendix

For the physical risk analysis of Mainland China and Mexico Facilities, we have referredto the World Resources Institute database and estimated the multiplier analysis of water
stress from 2020 to 2040 compared to the base period for SSP2-4.5, SSP2-8.5, and SSP38.5 (2) scenarios. Except for Huizhou Facility, where the pressure on water resources isdecreasing, the pressure on water resources in other facilities is increasing. We will continue
to monitor the water consumption of each facility and evaluate the planning of the processwater recycling system. The facilities have also formulated emergency preparedness
response procedures and prepared sufﬁcient emergency supplies in case of unexpected
ﬂoods or droughts.

Base Period Water Stress Multiplier Analysis Chart

Note:
1. RCP, Representative Concentration Pathways: different possible warming scenarios based on GHG concentration trajectories
2. SSP, Shared Socioeconomic Pathways: ﬁve different scenarios models based on projected population, economic growth, energy demands, social equality, and other factors

77

Inclusive
WorkplaceAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

We plan to progressively obtain high-quality carbon credits by 2045 to offset our remaining carbon emissions and achieve our goal of net zero carbon emissions by 2050. We continue to
implement climate change and energy management, water management, waste management and air pollution prevention to help customers produce energy-saving and carbon-reducing
products. we are presenting our efforts and results in response to climate change through a systematic disclosure framework, further raising awareness of climate crisis, formulating
relevant mitigation plans and measures, accelerating the implementation of risk control and climate change mitigation actions, strengthening our operating sustainability management
capabilities, and moving towards sustainable corporate development.

Metrics and Targets Related to Climate Change
35% reduction in absolute GHG Scope 1& 2 emissions in 2030 (base year: 2016,
2.5% reduction per year)
15% reduction in absolute GHG Scope 3
emissions in 2030 (base year: 2020, 1.5%
reduction per year)

Net Zero Carbon Emissions Target Pathway

2025

Complete GHG inventory
in all sites
85% renewable energy
in operations

2030

Accomplish SBT Targets✓ Reduce absolute Scope 1 & 2 GHG
emissions by 35% (base year: 2016)✓ Reduce absolute Scope 3 GHG emissions
by 15% (base year: 2020)
Set internal carbon pricing
95% process water recycling rate

Manage carbon
emissions andimprove energy
efﬁciency

2035

100% renewable energy
in operations

Increase the useof renewableenergy85% renewable energy
use in 2025
100% renewable energy
use in operational
processes by 2035

100
%

2045

R&D for low
carbon products

Increase R&D expenses for lowcarbon products and continue
to increase the ratio of energysaving beneﬁts and revenue
for low-carbon products

Forest carbon sink:afforestation investment

2050

Net zero carbon
emissionsCO²78

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Environmental Protection
and Occupational Safety

Value Chain
Management

Carbon Management

USI continues launch greenhouse gas reduction policy. The greenhouse gas (GHG)
emissions inventory was performed in 2007 according to ISO 14064-1. Another check
was conducted in 2010 on our worldwide production bases and the results were veriﬁed
by a third-party institution to establish USI inventory benchmark data. Since the initial
inventory of GHG Scope 3 emissions of Nantou Facility in 2018, we fully inventoried
Mainland China Facilities the next year. In 2020, a more comprehensive and in-depth
inventory was conducted. In 2017, we also started to conduct product carbon footprint
inventory; and disclosed relevant information in compliance with international regulations,
initiatives, and customers' requirements. USI collaborates with ASEH on the Carbon
Disclosure Project (CDP) and conducts annual inventory surveys. For detailed information,please refer to the 2022 ASEH ESG Report.
Climate change has impacted USI operations. Our Mainland China Facilities are using
100% renewable energy, while the Mexico Facility used 50% of its annual electricity
consumption (I-REC, please refer to the Renewable Energy section for details). In
addition, Zhangjiang and Jinqiao Facility have also initiated carbon quota managementin accordance with local regulations. Cap and trade system for GHG and possible energy
or carbon taxes are issues USI is always paying attention to. In addition to the continuous
efforts in energy efﬁciency improvement, the promotion of Green Promise and theenvironmental protection measures of will be in facilities to minimize risks from climatechange.

Inclusive
WorkplaceSocialInvolvement

Appendix

The Ratio of Scope 1 to Scope 2 Greenhouse Gas Emissions (1~5)
Fugitive Emission
1.6%

Scope 2
97.6%

Scope 1
2.4%

Mobile Burning
Emission
0.1%

Greenhouse Gas Emissions and Intensity

Fixed Burning
Emission
0.7%

6.24

5.86

5.31

Greenhouse Gas Emissions

4.48

4.85

4.02

4.13

3.72

USI's total GHG emissions in 2022 were 220,896.47 metric tonnes of CO2e (Scope 1 & 2),
an increase of 14,764.92 metric tonnes of CO2e from 2021, and our GHG emissions
intensity was 3.72 metric tonnes of CO2e, a decrease of 0.4 metric tonnes of CO2e from2021. The analysis is due to the continued growth in production capacity in 2022 resulting
from the expansion of the business and the continued improvement in energy efﬁciency
and reduction in energy costs. The analysis is shown in the following ﬁgure:
151,993.76
Note:
1. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place
2. The data organization boundary is summarized by the operation control method
3. The signiﬁcant threshold is set at 3%, and the substantial threshold is set at 5%
4. The greenhouse gas emission includes various categories such as CO2, CH4, N2O, HFCs, PFCs, NF3, and SF6
5. GWP value adopts the IPCC Sixth Assessment Report (2021)

79

142,043.16 149,881.38 148,201.93

168,730.49

184,225.84 201,538.85

215,510.73

8,017.46

8,057.25

7,853.69

7,024.93

8,438.83

6,802.39

4,592.71

5,385.74

2015

2016

2017

2018

2019

2020

2021

2022

GHG Emissions - Scope 1 (metric tonnes CO2e)
GHG Intensity (metric tonnes/M CNY)

GHG Emissions - Scope 2 (metric tonnes CO2e)About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

USI continued to promote the greenhouse gas inspection (ISO 14064-1). Following the
introduction of the Scope 3 inspection at Nantou Facility in 2018, in 2020 we began
to conduct 15 categories of signiﬁcant identiﬁcation and inventory of upstream anddownstream activities in Scope 3, the results of which were veriﬁed by a third-party
veriﬁcation unit as follows:

Category

Description

1

Purchased goods and services

3

Fuel and energy related activities

2
4
5

Capital goods

Upstream transportation anddistribution

Waste generated in operations

Unit: metric tonnes CO2e

Greenhouse Gas Emissions
8,068,349.38
126,694.20
17,263.83

119,164.28
1,324.25

6

Business travel

7

Employee commuting

10,515.81

8

Upstream leased assets

2,840.17

9
10
11
12
13

Downstream transportation anddistribution

243.42SocialInvolvement

Appendix

In the green-house gas emissions, power loss shares about 97.6% in USI. The key toreducing carbon emission is to save power, making maximum efforts for electricity efﬁciency.
To reduce energy consumption during the operational activities and product processes andsave the cost, the external power supply unit with low energy consumption will be selectedin priority when the products are designed, as well as the tests will be evaluated to ensure
the products can meet the requirements of environmental protection. The different energysaving improvement plans will be executed for air conditionings, lighting equipment andheavy-energy consumption facilities in all facilities as well, continuously reducing the energy
consumption and saving the electricity bill, such as variable-frequency control, seasonableadjustment of air-conditioning temperature, replacement of old equipment, monitoring andmanagement of electricity bill.
The total energy consumption of USI in 2022 was 1,095,673.3 gigajoules, an increase of
109,040.1 gigajoules from 2021. Mainly due to increased revenue in 2022 and acquired
heat value coefﬁcient conversion data for Mexico, increasing direct and indirect energy
consumption in Mexico. Based on the turnover, the energy consumption per million CNY
in 2022 decreased by 2.1 gigajoules. USI's energy intensity for 2022 is 18.5 (GJ/M CNY), a
decrease of 36.6% compared to 2015. In terms of energy saving, there were 5 major energysaving schemes, which saved a total of 1,563 MWh of electricity and reduced carbon dioxide
emissions by 960 metric tonnes. The total investment is CNY 1,878,052, and the annual costsaving is CNY 1,133,003. The detailed results are shown in the following chart:

Energy Consumption (3~4)

60,451.29

Processing of sold products

N/A(2)

Use of sold products

N/A

End-of-life treatment of soldproducts

Inclusive
Workplace

Energy Management

Indirect Greenhouse Gas Emissions

Indirect Greenhouse Gas Emissions (1)Environmental Protection
and Occupational Safety

N/A

Downstream leased assets

N/A

14

Franchises

N/A

15

Investments

2,067,094.67

Total

10,473,941.30

Note:
1. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place,
converted to the GHG Protocol for disclosure
2. N/A: Non-signiﬁcant after assessment of the indirect emissions materiality criteria in accordance with
ISO 14064-1:2018
3. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 1st decimal place

Category

Direct Energy Consumption
DieselGasoline

2022

1,266.0

2,215.42021

1,335.8

2020
2019

Natural Gas/Liquid
Petrol Gas

Indirect
EnergyConsumption
Electricity

Unit: GJ

Total Energy
Consumption

28,307.9

1,063,884.0

1,095,673.3

2,575.2

34,239.0

948,483.2

986,633.2

1,393.6

2,523.9

74,103.6

870,905.2

948,926.3

1,065.4

3,572.9

103,881.1

769,756.9

878,276.2

4. Conversion data of the heat value index:• Zhangjiang, Jinqiao and Kunshan Facilities have adopted Annex A (referential energy conversion standard
coal factors) of General Principles for Calculation of the Comprehensive Energy Consumption (GB/T 25892020)• Huizhou Facility adopted Table E.2 (Fossil Fuel Combustion Emission Factors) of the Organizational
Guidelines for Greenhouse Gas Emissions and Reporting (SZDB/Z 69-2018)• Nantou Facility adopted "Heat Content of Energy Products" from Taiwan Energy Statistics Handbook (2020)• Mexico Facility adopted "Lista de combustibles 2022"

80About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Energy Consumption and Intensity
29.1

776,645.7

2015

31.3

731,386.2

2016

26.1

25.5

22.0

20.6

20.6

18.5

986,633.2
878,276.2 948,926.3

2018

2019

Energy Consumption (GJ)

2020

2021

1,095,673.3

Jinqiao2022

Location
basedMarket
based

81

Item

Scope 1

Scope 2Total

GHG Emissions(Metric tonnes CO2e)5,385.74

215,510.73

220,896.47

2%

98%

100%

5,385.74

26,912.82

32,298.56

17%

83%

100%

Percentage
GHG Emissions(Metric tonnes CO2e)
Percentage

Description
Replacement of 4 air handlingunits (AHU) with 1 ﬂoormounted high-efﬁciency
AHU, reducing overall energy
demand and air supply losses

Excess CDA
recycling energy
saving project
Cleanroom
outdoor air
handlers
improvement
project

Energy Intensity (GJ/M CNY)

USI actively responds to the call for renewable energy use. We purchased 241,221 MWh
International Renewable Energy Certiﬁcate (I-REC) and Green Electricity Certiﬁcate(GEC) in 2023 to offset CO2 emitted by traditional power in 2022 (the annual electricity
use for Zhangjiang, Jinqiao, Huizhou, Kunshan Facilities were all offset, and 50% of
Mexico Facility's electricity was offset). Low-carbon products produced in facilities
using renewable energy accounts for 67.07% of USI's annual revenue. According to GHG
Protocol Scope 2 Guidance, the statements are used to neutralize Scope 2 market-based
emissions. The greenhouse gas emissions amount by location and market (1) are as follows:

Project

Production line
air conditioning
Zhangjiang
improvement
project

Renewable Energy

Category

Inclusive
Workplace

Power Saving Performances in 2022
Facility

758,413.1 738,890.4

2017

Environmental Protection
and Occupational Safety

NantouAir cooled water
chiller energy
saving projectPower system
optimization andenergy saving
project

SocialInvolvement

Appendix

Power CO2 Reduction(2~3)
Saved(metric tonnes
CO2e)
(MWh)
12.7

10

Excess CDA derived from
nitrogen generators areprovided to in-facility
processes to reduce the loadon the ZR355 air compressor
to achieve energy saving
effects

566.9

449

Replaced pre-cooling andcooling coils of outdoor air
handlers to improve cooling
efﬁciency

307.5

176

Replaced 20-year-old aircooled water chiller with a
new model featuring energysaving technology and ecofriendly refrigerant

330.0

168

346.3

157

1,563.4960

Modiﬁed air duct and added
inverters to improve the
efﬁciency of the windmill, andadded PCM (4) energy storage
dryer to reduce energy loss
during system operation

Total

Note:
1. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place
2. Carbon emissions reduction = electricity saved x electricity emission coefﬁcient
3. Electricity emission coefﬁcient:• Zhangjiang, Jinqiao, and Kunshan Facilities adopt the Huadong Power Grid 0.792 metric tonnes CO2e/
MWh based on the "2019 Emission Reduction Project: China's regional grid baseline emission factor" by
the Department of Climate Change• Nantou Facility adopts the "2021 Electricity Emission Factor" announced by the Bureau of Energy, with a
CO2 emission factor of 0.509 kg CO2e/kWh
4. PCM, Phase Change Material

About this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Water Resource Management

USI does not have issues on contaminating catchment areas as our facilities are not built
around it. But Mainland China's regulation has become increasingly rigorous and ASEH
paid close attention, the storage and distribution of water resources have also become
an important topic for us. USI has been making efforts in conserving water resources andcontinues to manage the resources in our production and daily life. Apart from regularly
tracking the water usage of USI's six major manufacturing facilities, USI also commissions
a third-party to check the quality of efﬂuents on a regularly basis to prevent waterpollution from happening. Each facility conducts tests in accordance with local regulation
requirements: in Zhangjiang and Jinqiao Facilities, test items include pH value, SS, BOD,
COD, ammonia nitrogen, total phosphorus, petroleum, animal and vegetable oils, andtotal nitrogen; in Nantou Facility, test items include water temperature, pH value, SS,
BOD, and COD; in Mexico Facility, test items include pH value, water temperature, BOD,
SS, copper, nickel, cadmium, lead, zinc, arsenic, mercury and hexavalent chromium; in
Huizhou Facility, there are no relevant test items and the discharge water management
follows the national discharge water standards; Kunshan Facility leases some ﬂoors of
the ASEH's factory. In the water intake and discharge, ASEH is responsible for control
and Kunshan Facility only shares water-related costs. There was no violation of water
discharging regulations in 2022, and USI will continue to keep a track on the use of water
resource and save as much water as possible for a friendly environment and reduction ofenvironmental impacts.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

USI total water consumption in 2022 was 1,068.17 ML, an increase of 23.9% from2021 (861.89 ML). However, our water intensity is reduced by 28.5% (1) compared with2015, achieving the goal of water saving. In terms of water intake, except for the use ofunderground water sources in Nantou-TT Facility, all other facilities use tap water sources.
The annual underground water consumption is 66.1 ML, and the water consumption of tap
water is 1,002.08 ML. In terms of water discharge, 930.22 ML of wastewater was discharged
into the sewage systems. Analyzing the data, operational expansion which resulted in record
revenue, and the relocation of the Shenzhen Facility to the Huizhou Facility are the main
reasons why the overall water intake of USI has increased compared with the previous year.
To make the use out of every drop of water, USI is planning to recycle as much water
as possible via improvement of equipment and technology. In 2018, the process water
recycling system was introduced to Zhangjiang Facility. This system enables USI to recycle
process water produced from the cutting process; ﬁlter and sterilize the water throughﬁltration, disc ﬁlter, ceramic ultraﬁltration membrane and UV sterilization processes;
and reuse the water in the production. With respect to the installation of process waterzero discharge system at Jinqiao Facility, this project has adopted advanced oxidation
technology. In 2022, USI recycled 307.54 ML of water, with a recycling rate of 28.8%. In
addition, the process water consumption is 395.14 ML, with a recycling rate of 78.1%.

Water Withdrawal and Discharge in 2022 (2)Unit: ML

NantouFacility

Zhangjiang

Jinqiao

Huizhou

Kunshan

SourceTap water

Tap water

Tap water

Tap water

Tap water

Groundwater

Tap water

Tap water

Water Withdrawal

386.583

115.685212.792

118.077

21.15266.095100.51847.270Discharge Flow

Sewage treatment
facility

Sewage treatment
facility

Sewage treatment
facility

Sewage treatment
facility

Sewage treatment
facility

Sewage treatment
facility

City sewage
treatment facility

Water Discharge

347.925104.117191.513106.269

47.38890.46642.543TT

NK 1

MexicoNote:
1. Water intensity of 0.169 (m3/KUSD) in 2015 and 0.121 (m3/KUSD) in 2022, a decrease of 28.5% from the base year
2. Apart from the Nantou-TT Facility, USI has no discharge water ﬂow meter in each facility. Thus, the water discharge volume is estimated based on the estimation principle of 90% of the water intake

82About this Report

Sustainability
Management

Operationsand Governance

22.7

22.3

28.8

1,068
682

2019

804

862

2020

2021

Water Withdrawal (ML)

Value Chain
Management

Inclusive
WorkplaceSocialInvolvement

Appendix

2022

USI considers "Waste Minimization and Reuse" as corporate policy. The principles of "Impact Mitigation & Continuous
Improvement" and "Effective Reduction & Circular Reuse" have been carried out thoroughly in all the facilities and treatedas annual performance indicator. Therefore, through regular data record and tracking, the relevant units such as process
unit, facility affairs unit, and EHS unit strictly monitor the usage and outputs, and strengthen the effective control ofwaste.
According to the data, the total amount of waste generated in 2022 was 10,842 metric tonnes, and recycled 9,329.396
metric tonnes, with a recycling rate of 86%. Although it is slightly higher than the previous year, it still meets the annual
target (80%); The non-hazardous waste recycling rate of 92.5% also meets the annual target (90%), the details areshown as follows. The hazardous waste generation intensity is 0.125 (kg/KUSD) in 2021 and 0.114 (kg/KUSD) in 2022, adecrease of 8.8% from the previous year. In 2022, the production of non-recyclable hazardous waste in the manufacturing
process increased due to the introduction of new manufacturing processes and chemicals in some facilities. USI continues
to focus on product package outer box, partition and tray cleaning and recycling, with a total weight of 1,060.718 metrictonnes recycled and reused in 2022. In the future, USI will continue to implement the waste reduction policy, reducevolume from the source, and strive to achieve the goal of resource sustainability.

Water Recycling Rate (%)

86.1

Water Usage Ratio
7,814

94%

697
2019

Groundwater

7,806

783
2020

Hazardous Waste(metric tonnes)

6%83

Environmental Protection
and Occupational Safety

Waste Management

Water Withdrawal and Recycle
27.5

Green Products
and Innovation

Tap Water

8,766

967
2021

9,836

1,066
2022

Non-hazardous Waste(metric tonnes)

2019

85.3

85.5

2020

2021

Waste Recycling Rate (%)

86.0

2022

About this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

USI has developed a waste disposal program specifying that hazardous wastes must be handled by qualiﬁed suppliers with valid licenses for disposal and that non-hazardous wastes mustbe given to licensed recycling operators for recycling or shipped to the licensed incinerators for incineration.

Statistics of Disposal Methods for Various Wastes in 2022 (1)Treatment

Reuse

Unit: metric tonnes

RecycleHazardous

Nonhazardous

Zhangjiang

0.000

0.000

Jinqiao

0.000

Huizhou
KunshanLandﬁll

Incineration

Nonhazardous

Hazardous

Nonhazardous

Hazardous

Nonhazardous

Hazardous

Nonhazardous

61.229

1,075.140

0.000

448.0620.000

32.364314.647

0.000

0.000

0.000

581.9360.000

292.833

0.000

15.27090.421

0.000

0.000

391.489

46.975

1,326.345

0.000

78.3120.000

108.04370.103

0.000

0.000

0.000

120.000

1,733.013

0.000

165.5520.000

44.77061.640

0.000

TT

0.000

510.0340.000

254.8780.000

67.230

0.000

0.000

123.734129.938

NK 1

0.000

159.195

0.000

483.9190.000

67.230

0.000

0.000

15.844215.224

Mexico

0.000

0.000

3.929

1,290.918

0.000

171.177

0.000

192.80397.721

0.000

Percentage

0.0%

9.8%

2.1%

62.2%

0.0%

11.9%

0.0%

3.6%

7.1%

3.2%

Facility

NantouTotal

1,060.718

Hazardous

Compost6,978.282

1,290.396

393.250

1,119.272

Note:
1. Statistics are rounded to the 3rd decimal place84Sustainability
Management

About this Report

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Air Pollution Control

In recent years, air pollution is getting worse in Mainland China and Taiwan. It seriously
affected the quality of life to residents that become an urgent issue. This is the reason
that local authority has made relevant amendments to local regulations. As our
production facilities are within the affected areas, we also pay great attention to air
pollutant control within our facilities.
In terms of volatile organic compounds (VOCs), Nantou Facility was the only one required
to be regularly inspected and declared. However, requested by the competent authorityof Shanghai City at the end of 2017, Zhangjiang Facility and Jinqiao Facility made theirﬁrst declaration. In 2018, in response to the "Environment Protection Tax" declaration
requirements of the supervisory authority, the statistical methods were adjusted anddeclared, and activated carbon towers and water washing towers were installed. Regularmonitoring and management of regulated pollutants such as volatile organic compounds,
nitrogen oxides (NOx), sulfur oxides (SOx) and ﬁne suspended particulates. Huizhou Facility
and Kunshan Facility carry out detection and management of volatile organic compounds
and suspended substances in accordance with the regulations of the local authorities, and44.6402019

47.0562020

55.2382021

Note:
1. UV beam can break the molecular bond of industrial wastes as well as the water and oxygen in the air. Then,with the use of ozone, the oxidization reaction takes place for deodorization and sterilization
2. The data includes Zhangjiang, Jinqiao, Huizhou, Kunshan, Nantou Facilities
3. The estimated emission level and amount in the test report produced by a third-party test body are adopted
for the Zhangjiang, Jinqiao, Huizhou, and Kunshan Facilities, and the data are rounded to the 3rd decimal
place

SocialInvolvement

Appendix

For the emissions of NOX , SOX , and particulate matter, in 2019, to reduce theemissions of NOx in boiler exhaust gas, Jinqiao Facility carried out boiler exhaust gastransformation and equipped with a low-nitrogen burner. In the future, USI will let otherfacilities disclose relevant information, and actively promote the expansion of related
improvement measures to other facilities. The air pollutant emissions data (3~6) for 2022
is shown in the table below:
Unit: metric tonnes

Facility

Zhangjiang

Jinqiao

Huizhou

KunshanVolatile Organic
Compounds(VOCs)

3.340

1.692

0.567

Nitrogen Oxides
(NOX)

0.562

0.364

Sulfur Oxides
(SOX)

N.D.

Particulate
Matter(PM)

1.284

Pollutant2022

Inclusive
Workplace

have launched relevant preventive measures, such as UV photolysis (1), activated carbon
treatment and zeolite rotor with catalyst thermal oxidizer, to reduce VOCs emissions.
According to statistics (2), VOCs emissions in 2022 were 60.064 metric tonnes, an increaseof 8.7% from the previous year. After analysis, the reason was that the increase in theuse of organic solvents in response to the expansion of the company's operations, so
the VOCs emissions have increased slightly from the previous year. Therefore, in 2023,
the zeolite rotor and rotary thermal oxidizer are expected to be installed in Nantou-NK 1
Facility to reduce the emission of VOCs.

60.064Emissions (metric tonnes)

85

Environmental Protection
and Occupational Safety

Nantou
TT

NK 1

0.057

19.60134.807

N/A

N/A

N/A

N/A

N.D.

N/A

N/A

N/A

N/A

0.450

N/A

0.241

N/A

N/A

4. The discharge amount of Nantou Facility are based on the declared amount of air pollution fees collectedby local environmental protection organizations, which are calculated with mass balance
5. N.D.: Non-Detectable, the level is too low to be detected by the instrument
6. N/A: No applicable local regulation and no available self-testing dataAbout this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Biodiversity

USI values the provisioning, regulating, supporting, and cultural services ecosystems
provide for our business operations and strives to reduce our impact on the ecosystem.
Mainland China, Nantou, and Mexico facilities are in high-tech industrial parks, notbiodiversity-sensitive areas.

Biodiversity Commitment

To achieve a balanced coexistence and maintain the integrity of natural ecosystems andforest conservation, USI established our Biodiversity and No Deforestation Commitment
and publicly disclosed our biodiversity targets:
Target Objective: to work towards No Net Loss (NNL) and No Gross Deforestation
across our operations and value chain, we establish a global monitoring system totrack biodiversity loss and comply with statutory biodiversity and forest conservation
regulations, reducing environmental impacts and dependencies in the best practicableway.
Risk Assessment: USI engages with internal and external stakeholders to assess
potential biodiversity and deforestation risks following international guidelines.
We analyze dependencies and impacts, consider local operational and ecologicalcharacteristics, identify priority areas to work on, and manage material risks bydeveloping action plans with clear and measurable metrics.

Mitigating Impact: to balance our impact on the ecosystem, USI adopts a nature-based
mitigation hierarchy approach of prevention, mitigation, restoration, and offsetting
throughout the operation life cycle to investigate and monitor material risks, protect
biodiversity and ecosystem services, and prevent deforestation or invasive species.
Scope of Coverage: all operations, suppliers, and partners are subject to theCommitment. New Facilities and value chain operational activities are prohibited,
where avoidable, to be located near sites containing globally or nationally importantbiodiversity, environmentally-sensitive hotspots, ecological corridors, in areas
contiguous with hydrological and vegetation conditions, or the vicinity of the sites
mentioned above.

With the Board of Directors' endorsement and approval, this Commitment is implemented
across all operating sites, subsidiaries, suppliers, and business partners inside and outside
the value chain worldwide to achieve the long-term goal of 2050 Net Positive Impact (NPI).
Note:
1. Dependency: It refers to the services provided by natural resources or ecosystem during the operation process;if the services provided by ecosystem are lost, it will lead to natural disaster and cause the risk of occurrence
2. Impact: It refers to the risk of regulatory or goodwill exposure due to changes in natural capital as a result of
operations

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

As part of our restoration efforts, USI began afforestation in partnership with anorganization in 2013 to increase biodiversity and soil and water conservation, as detailed
in the Conserving the Environment section. In addition, to reduce the Potentially
Disappeared Fraction of species and achieve No Gross Deforestation by 2050, USI
continues the hierarchical mitigation approach of prevention, mitigation, restoration,and offsetting in our facilities and carry out measures such as energy saving, carbon
reduction, and resource recovery to ameliorate our impact.

Biodiversity Risk Assessment

We use the LEAP process proposed by the TNFD framework to understand the interaction
between the Nantou Facility and the suppliers' operations in Taiwan and the natural
ecology, to assess the dependency (1) and impact (2) on nature and biodiversity, and to
capture the related risks and opportunities.

Biodiversity Risk Assessment Process

Gather operational
locations and value
chain activity areas,
and identify priority
levels of interaction
with natural
ecosystems

LocateEvaluate
Evaluate thedependence andimpact on ecosystemservices in terms ofoperational
locations and value
chainsIdentify
signiﬁcant naturerelated risks andopportunities

Assess

PrepareBased on theanalysis results,
formulate strategies
and resource
allocation, setgoals for tracking
management

According to the speciﬁc protection zone delineated by local regulations, the biodiversity
map overlap analysis was conducted in 2 km radius buffer area between the Nantou
Facility and the supplier's operation sites in Taiwan. The analysis of supplier locations
in Nantou and Taiwan has been completed, and some suppliers are known to haveoverlapping locations with the legal areas.

86About this Report

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and Innovation

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Management

Operation & Supplier Location Analysis

87

SocialInvolvement

Appendix

Overlap
Analysis
Locational
Analysis

Regulation
Sources

Coastal Protection
Zone
National Park

National Park
Law

Wildlife Refuge

Wildlife
Conservation Act

Major Wildlife
Habitats

Cultural Heritage
Preservation Act

Nature Reserves

The Forestry
Act

Inclusive
Workplace

Buffer Analysis of Supplier Locations

Ecosystem
Maps

Coastal Zone
Management Act

Environmental Protection
and Occupational Safety

Forest Reserves
Important
Wetlands

WetlandConservation Act

Biodiversity
Hotspot

Speciﬁc Area

Important Bird
Area

Business
LocationIntersectional
Analysis of
Biodiversity andBusiness Location

Coordinates
ReportingLocation

Coastal Zone
Management ActCoastal Protection
Zones

National Park LawNational Parks

2 km Radius Buffer
Area

The Forestry ActForest Reserves

Wildlife Conservation ActWildlife Refuges

Wetland Conservation
Act-Important
Wetlands

Cultural Heritage
Preservation ActNature Reserves

Wildlife Conservation ActMajor Wildlife Habitats

2 km Radius
Buffer Analysis

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Through the Materiality Survey of Nature and Biodiversity Questionnaire, we havespeciﬁed the natural resources required for operations or the services provided byecosystems as dependency indicators, and the impact of operations on ecosystems
as impact indicators. Based on the survey results, consider the degree of concern andinﬂuence, and identify the concerns and risks of dependence and impact. From theidentiﬁcation results, it is found that the company has a high risk of relying on climate
regulation and water supply. We have proposed countermeasures for the risks. Pleaserefer to the Climate Change and Carbon Management section.

Issues of Concern and Risk Levels of Dependence and Impact
Objective

Operations
Dependency
Supplier

Operations

ImpactSupplier

Issues of Concern (1)Level of Risk (2)Water Shortage

MediumUneven Rainfall

MediumHigh Temperature

Low

Degraded Air Quality

Extremely Low

High Temperature

Low

Non-Organic Materials Shortage(metals)

MediumProcess Wastewater (containing
chemicals and heavy metals)

Extremely Low

Greenhouse Gases

Extremely Low

Waste

Low

Greenhouse Gases

Low

Minerals (e.g., metals, non-metals)

Low

Fossil Fuel & Energy (e.g., steam,electricity, heat)

Low

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
0%

SocialInvolvement

Appendix

Low

Extremely Low
10%

20%

30%

40%

50%

Level of Concern

Water Shortage
Large-Scale Noise Pollution andVibrations (including earthquakes)
Uneven Rainfall

60%

70%

80%

Degraded Air Quality
Extreme Rainfall

Pandemic Outbreak

Supplier Ecosystem Dependency Assessment
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
0%

MediumLow

Extremely Low
10%

20%

High Temperature
Water Shortage

Note:
1. Issues of Concern: Only issues with more than 10% of concern are selected
2. Level of Risk: The most serious ﬁnancial impact may be graded, setting more than 60% as high risk,
40~60% as medium risk, 20%~40% as low risk, and 20% or less as extremely low risk

Inclusive
Workplace

MediumHigh Temperature

Likelihood

Relevance

Environmental Protection
and Occupational Safety

Operational Ecosystem Dependency Assessment

Likelihood

About this Report

Uneven Rainfall

Pandemic Outbreak

30%

40%

50%

Level of Concern
Degraded Air Quality

60%

Extreme Rainfall

Large-Scale Noise Pollution andVibrations (including earthquakes)

Non-Organic Materials Shortage (metals)

88About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Likelihood

Operational Nature-related Impacts Assessment
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
0%

40%

Level of Concern

60%

Supplier Nature-related Impacts Assessment
35%

Likelihood

30%

Low

25%
20%
15%
10%

Extremely Low

5%

10%

20%

Level of Concern

30%

Minerals (e.g. metals, non-metals)
Greenhouse Gases
Waste
Fossil Fuel & Energy (e.g. steam, electricity, heat)
Process Wastewater (containing chemicals and heavy metals)

89

SocialInvolvement

Customer Concerns

80%

Freshwater (e.g. rivers, lakes, groundwater)
Minerals (e.g. metals, non-metals)
Fossil Fuel & Energy (e.g. steam, electricity, heat)Greenhouse Gases
Air Pollutants (non-greenhouse gases)
Waste
Process Wastewater (containing chemicals and heavy metals)

0%0%Inclusive
Workplace

Appendix

For customers, the following issues are known to be of higher concern. USI will consider
the concerns of customers and further review the areas that need to be strengthened in
our operations.

Extremely Low

20%

Environmental Protection
and Occupational Safety40%

Dependency

ImpactPandemic OutbreakHigh Temperature

Minerals
Freshwater
Fossil Fuels &Energy (e.g., steam,electricity, heat)About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

31

31
23

8

8

Uneven Rainfall

FloodsCustomer Concerns about the Impact of Nature31

To calculate our investment in the environment, we have classiﬁed relevant costs according
to the nature of ASEH's environmental expenditure (including Operating Cost, Upstream/
Downstream Cost, Management Overhead and Social Activities Cost. For expenditure details,
please refer to the Sustainability Data - Environmental D. Environmental Expenditures
table). In 2022, due to the increase in operating cost investment, USI's total environmental
expenditure was approximately CNY 30 million, an increase of 15% from the previous year.
In the meantime, we have continued to further improve our environmental management by
calculating and analyzing relevant costs on a quarterly basis.

Expenditures of Environmental Protection

31

15

15

23,179,611

29,912,628

25,989,443

Waste

Process Wastewater

8
Air Pollutants(non-greenhouse gases)

Greenhouse Gases

Fossil Fuel &Energy (e.g. steam,electricity, heat)

Minerals

8

Appendix

In 2019, Nantou-NK 1 Facility started undergoing EEWH green building certiﬁcation, andsuccessfully obtained the ﬁrst green building certiﬁcation in 2020. In addition, we havecooperated with solar construction companies to build a solar power generation system witha total capacity of 499 kWp (1). Since October 2019, it has ofﬁcially put into power generation.
In 2022, it produced a total of 2,142 MWh green power. In the future, we will continue tofocus on clean production and green building promotion to build up a green factory of USI.

28,131,111

Freshwater

Level of Concern (%)

38

Habitat Destruction

Non-Organic Materials
Shortage (non-Metals)

Non-Organic Materials
Shortage (metals)

Pandemic OutbreakLarge-Scale Noise
Pollution and Vibrations(including earthquakes)

8
Strong Winds(sandstorms, typhoons)

Water Shortage

Degraded Air
QualityHigh
Temperature

15

8SocialInvolvement

In addition to adopting ecological design for its products, USI conforms to the principlesof the cleaner production evaluation system at all its facilities in production andmanufacturing, logistics and transportation, green management, and social responsibility
to implement resource conservation, green manufacturing processes, pollution prevention
and innovative eco-friendly design. This has not only lowered the impact of manufacturing
processes upon the environment, but also reduced costs of raw materials, energy, andpollutant treatment while increasing economic and environmental protection beneﬁts.

38

Extreme Rainfall

Level of Concern (%)

54

8Inclusive
Workplace

Green Manufacturing and Expenditures

Customer Concerns about Ecosystem Dependence

15

Environmental Protection
and Occupational Safety

2019

2020

2021

2022

Environmental Expenditure (CNY)Note:
1. kWp is the calculation unit of the solar cell's power output under standard sunshine conditions; 1 kWp = 1
kilowatt-hour (kWh)90About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Occupational Health and Safety

In addition to complying with local labor laws and safety regulations, all major facilities
have established and certiﬁed ISO 45001 Occupational Safety and Health Management
Systems, encompassing employees and non-employee workers (1) (coverage rate: 100%).
USI has a health and safety policy, standard operating procedures, educational training,and LOHAS activities to ensure workers' physical and mental health during working hours.
In order to maintain the validity of the certiﬁcate, the occupational safety and healthmanagement policy and business performance are reviewed annually to meet therequirements of occupational health and safety laws and our own guidelines to continue
to provide a safe and comfortable working environment for workers.

Occupational Health and Safety Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Safety and Health Production Committee's Responsibilities
Guard theworkplace
Guarantee theinvestments are
inputedPrevent
occupational
diseases

Health and Safety Management Goals and Statuses in 2022
Goals

Performance

Maintaining Zero Occupational
Disease Incidences

No cases of occupational disease occurred

Maintaining Zero Work-Related
Deaths

No cases of work-related deaths occurred

Zero Infections from Infectious
Diseases within Facilities

Since 2016, we established a universal notiﬁcation
system and enhanced our emergency response
capabilities. No infectious disease-related cases
occurred in 2022

USI's six major manufacturing facilities have set up Safety and Health Production
Committees required by local regulations. According to the regulations, labor
representatives should take up at least a third of the committee. The frequency of thecommittee meetings varies from facility to facility, but regular meetings are held at least
quarterly to coordinate and recommend occupational safety and health management
matters. Besides, an internal exchange platform and paths for the sharing of theCompany's information system are also established within the facility (including WeChat
and irregular exchange sessions) to ensure the availability of smooth communication
channels.

Develop andimplement
healthmanagement
and promotion

Safety and Health
Production
Committee

Superviseand check the
production
works

Ensure thetrainings andeducations areaccomplished

Perfect thesystem ofproduction
responsibility

To ensure the safety and health of workers in the facility, USI invested CNY 184 million
in safety production and chemical safety management in 2022. Occupational safety andhealth costs include employee insurance, physical check-up, labor protection, safetymeasures improvements, operating environment monitoring, and ISO 45001 certiﬁcation
fee.

Note:
1. Non-employee workers: workers that include temporary workers and contractors, such as construction,
kitchen, security, cleaning personnel, stationed personnel, and others, with 4,838 people in total91

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Occupational Safety Risk Management

As part of the risk-based thinking required by the ISO 45001 Occupational Safety and Health Management System, USI
establishes a process to manage procurement, contracts, and changes. We implement necessary safety assessments,
trainings, and data updates to reduce potential safety and health risks from operating conditions or the work environment.
To effectively identify and assess safety and health hazards and risks and opportunities derived from the operations
and work environment, we request responsible units to identify hazards based on occurrence probability, exposure
frequency, and consequence severity regularly each year. Where there's change in legal regulations, production activity,or stakeholder request, the identiﬁcation and assessment procedures must be applied again. USI identiﬁes and controls
priority risks and opportunities and requests relevant parties to amend plans based on the level of involved dangers andopportunities to minimize negative impacts, enhance our occupational safety and health performance, and create a soundmanagement system. Also, to ensure quality, safety & health departments and representatives undergo regular safety
training and internal auditor training within the ISO 45001 management system and acquire qualiﬁcations (Please refer to
the Occupational Safety and Health Training section).

Hazards, Risks, and Opportunities Identiﬁcation Management Measures in 2022
Risk and
Opportunity
Level
1. Serious
2. High

3. MediumHigh
4. Medium5. Low

6. Slight

Corrective Action
1. Control measures must reduce the risk to an
acceptable range
2. Review the integrity of existing protection
and control measures and formulate plans for
improvement. If there is no improvement, itis necessary to formulate operation control
procedures or emergency response plans

Identiﬁcation
ResultHazard or Impact Above
Medium Level

SocialInvolvement

Appendix

Hazards, Risks, and Opportunities
Identiﬁcation Procedure
Draw hazard
identiﬁcation
ﬂowchart

Plan

Establish
Actsafety andhealth goals andmanagement plans
Conﬁrm improvement

Analyze the job andoperation items
Identify hazards,
risks, andDo
opportunities
Summarize
and deﬁne
priorities to lower
risks and opportunities

Check

Management Measures

There are no Serious or High-Level risks or opportunities in the work activities or working environment of USI facilities.

Elevated operations: drop, fall
It must be reviewed whether there are still
opportunities to improve the performance ofoccupational safety and health, such as:
1. Measures to further reduce personnel
exposure frequency or incident rate
2. Adjust the work, work plan, and working
environment suitable for workers
3. Reduce the monotonous work or working
frequency
4. Strengthen existing control measures

Inclusive
WorkplacePart of the factory
operations
and high-risk
operations
employees have
Medium High or
Medium Level risks
and opportunities;
others are Low or
Slight Level risks
and opportunities.

Conﬁned space operations: hypoxia
COVID-19: public health
Hot work operation: ﬁreWork environment (such as usingorganic solvents, X-Ray inspections):
inhalation hazard, skin contact
hazard or body pathology

Must wear safety belts and helmets and use compliant auxiliary
equipment; set up the operation control area and have workers
from the same industry to assist in the operation.
Wear self-contained breathing apparatus and strengthen training.
Carry out relevant requirements and measures for personnel
access control, self-monitor temperature, notiﬁcation system,and environmental protection.
Must control ﬁre sources and combustibles, wear personal
protective equipment, carry spare ﬁre extinguishers, andstrengthen training.
In addition to regular monitoring of high-risk operating
environments (including lighting), environmental inspections
should be conducted. The inspection items include noise, carbon
dioxide concentration, organic solvents, specialized substances,
dust, lead workplaces, and free radiation; they require personal
protective gear during operation.

92

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

In 2022, there were more than 40 safety and health management programs included in
the tracking management, which includes strengthening the management of hazardous
operations, eliminating safety hazards of machinery and equipment, reducing chemicaluse or using alternatives, and occupational disease prevention.
At the same time, to provide a better workplace environment, USI rewards employees for
proposing any improvement measures that mitigate any occupational hazard or disease,and if employees ﬁnd that there is a direct threat to personal safety and other emergency
situations, they can immediately suspend their work at hand and evacuate the workplace
according to the emergency response measures of each facility. USI will not punish any
employees for the above actions.

Safe Workplace

To ensure the safety of workers and facilities, each facility conducts inspections in accordancewith local government regulations and the Company's operating standards, and EHS personnel
also conduct routine facility safety audits, with the scope encompassing Occupational Healthand Safety Management Systems. In some facilities, the inspection results are included in
the occupational safety and health evaluation activities, and outstanding units are publicly
recognized in the regular occupational safety and health (production) meetings to encourage
personnel to participate in safety and health management and improvement measures.

Audit Findings Results Over the Years (1)
Year

2019

2020

2021

2022

Safety

330

376

747

535

Health

53

108

121

59

Management System

5

11

47

13

Aspects

In addition, according to the actual operating hazards of each facility, qualiﬁed
institutions are also commissioned to regularly implement environmental testing tocontrol the operating environment of the hazard factors, testing items such as building
security, drinking water safety, sewage testing, Legionella pneumophila bacteria,
emergency lighting, lightning protection testing, smoke detection equipment and ﬁreequipment testing. At the same time, the company also regularly monitors operational
environments with high risks including noises, the concentration of carbon dioxide,
Note:
1. The data includes Zhangjiang, Jinqiao, Huizhou, Kunshan, and Nantou Facilities

93

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendixorganic solvents, speciﬁc chemical substances, lead in the workplace and free radiation
to ensure that the threshold values of concentration of harmful substances and noises
are below standards. If there are any abnormalities, it will be immediately corrected
and maintained; if it is close to the abnormal state, we will provide employees withappropriate preventive training, and with a healthy and safe working environment.

Chemical Safety Management

We developed our Chemical Management Procedure in line with the UN Strategic Approach
to International Chemicals Management (SAICM), so chemicals are controlled and used inways that minimize adverse impacts on the environment and human health. The key to our
Procedure is a comprehensive review of substances and all applicable chemical regulations
and use restrictions. We grade chemicals according to environmental and safety risks
and constantly update them into our database. As part of source control, chemicals must
be checked against the database, reviewed, and ﬁled before they can be procured andsubsequently introduced into our manufacturing process. All personnel involved withhandling chemicals must undergo before work training and regular training to ensure thatchemicals are handled safely from the moment they enter our operations until they areappropriately disposed or recycled. We keep all relative records to optimize our Procedureand prevent occupational hazards.

Chemical Safety Management Process

USI’s internal
chemical database

New chemicals
evaluation

Check forprohibited
substances

Hazardidentiﬁcation

Filed andcontrolled

Authorizedpurchase and use

Find alternative
substances

Check forregulatory
exemption

Approved
for one year

Operational risk and waste
management, personnel
training and record keepingAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Occupational Incident Management

Value Chain
Management

To ensure that the relevant units can respond quickly when an occupational incident
occurs, each facility has established procedures for accident investigation and handling,
stipulating that if a near miss, occupational injury or occupational disease occurs in thefacility, procedures such as ﬁrst aid, reporting, investigation, and improvement measureswould be carried out, and at the same time improvement measures are proposed based on
the root cause of the accident. All improvement measures would be carried out across all
facilities, and relevant continuous improvement would be tracked regularly to prevent therecurrence of similar accidents. In 2022, there were 11 work-related injuries and 5 nearmisses, with the highest percentage being physical injuries followed by chemical injuries.
In addition to improving the hardware and equipment, the company is also actively raising
the safety awareness of its employees and continuing to work towards the goal of "zeroaccidents". There were no accidents resulting in injury or death of employees or damage
to equipment resulting in production stoppage in 2022.

Occupational Injury Causes and Improvement Measures
Physical Injuries
Causes:BruiseFall/Slip
Crush
Scrape/Cut

Improvement Measures:

Strengthen communication(warning signs)
Increase adequate machinesafeguards
Formulate SOP
Personnel education andtraining
Wearing of protective
equipment

Chemical Injuries

Environmental Protection
and Occupational Safety

Appendix

Occupational injury
accident occurred
On-site emergency treatment, notify
EHS to assist in emergency aid

Is the injury serious or fatal?

Yes

No

Notify authorities according
to local regulations

Internal accident
investigation
Government agencies intervene
to assist in theaccident investigation

Implement corrective andpreventive actions

Spraying of chemicals
Formulate SOP
Personnel education andtraining
Strengthen the noticeof wearing protective
equipment

SocialInvolvement

Occupational Injury Accident Reporting Procedures

Causes:

Improvement Measures:

Inclusive
Workplace

Closed2022 Occupational Injury Category
90.91%

9.09%

Physical Injuries

Chemical Injuries

94About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Occupational Injuries and Occupational Diseases in 2022 (1)
Year

2019

2020

2021

2022

45,670,981

42,065,676

44,539,170

14

12

Lost-Time Injury Frequency Rate
(LTIFR) (2)0.31

Number of high-consequence workrelated injuries
Rate of high-consequence workrelated injuries (3)Items

Facility
Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexico47,217,045

8,670,584

4,445,801

7,961,496

7,630,200

7,977,532

10,531,432

14

11

0

0

0

0

5

6

0.29

0.31

0.23

0

0

0

0

0.63

0.57

0

0

0

1

0

0

0

0

1

0

0

0

0

0.02

0

0

0

0

0.13

0

0

0

2

5

0

0

0

0

5

0

0

0

0.05

0.11

0

0

0

0

0.63

0

0

0

0

0

0

0

0

0

0

0

Rate of fatalities as a result of workrelated injuries (5)

0

0

0

0

0

0

0

0

0

0

Occupational Diseases Rate (ODR) (6)

0.02

0

0

0

0

0

0

0

0

0

75

124

460

309

0

0

0

0

222

87

1.64

2.95

10.33

6.54

0

0

0

0

27.83

8.26

Total hours worked
Number of lost-time injuries

Number of near misses
Near Miss Frequency Rate (NMFR) (4)Number of work-related fatalities

Number of days lost due to injuries
Lost Day Rate (LDR) (7)Note:
1. Statistical count excludes trafﬁc accidents during commutes. Please refer to the Contractor Management section for contractor work-related injuries data
2. Lost-time injuries frequency rate (LTIFR) = (Number of lost-time injuries ÷ Total hours worked) × 1,000,000
3. Rate of high-consequence work-related injuries = (Number of high-consequence work-related injuries ÷ Total hours worked) × 1,000,000
4. Near Miss Frequency Rate (NMFR) = (Number of Near Misses ÷ Total hours worked) × 1,000,000
5. Rate of fatalities as a result of work-related injury = (Number of fatalities as a result of work-related injuries ÷ Total hours worked) × 1,000,000
6. Occupational Diseases Rate (ODR) = (Number of occupational diseases ÷ Total hours worked) × 1,000,000. Statistics of occupational disease are in accordance with the deﬁnition of occupational diseases from relevant local
laws and regulations for each facility
7. Lost Day Rate (LDR) = (Number of days lost due to injury ÷ Total hours worked) × 1,000,000. Number of days lost due to injury are based on the information collection period until 12/31/202295About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Occupational Safety and Health Training

In order to enhance employees' awareness of occupational safety and health, USI has
established "Environmental Safety and Health and Energy Education and Training
Management Regulations" at each facility to draw up annual environmental safety
and health education and training plans according to practical needs, and to conductsafety and health education and training for new recruits and in-service personnel (e.g.,chemical safety operation, electrical safety, personal protective equipment use andworkplace accident management training), regulatory and certiﬁcation training (e.g., ﬁrstaid personnel, special machinery and equipment safety management and radiation device
operation training), management system operational training, emergency response
training, and contractor training (please refer to the Contractor Management section),
as well as arranging drills and tests for employees to enhance their knowledge andskills and their ability to deal with emergencies. Due to pandemic prevention, only 118
training courses were held in 2022. In total, 10,967 employees logged 11,008 hours in
occupational safety training.

Occupational Health and Safety Training Data
Year

2019

2020

2021

2022

Total Number of Courses

183

207

410

118

Total Number of Trainees

32,44356,28550,851

10,967

Total Training Hours

21,942

48,411

57,776

11,008Items

As a manufacturing company, USI has comprehensive Emergency Response Procedures tocontrol and mitigate negative impacts caused by disasters. Our EHS Emergency Response
Center conducts emergency response training for disasters caused by earthquakes, ﬁres,and chemical leaks to ensure employees fully understand facility evacuation routes andhow to use emergency response equipment. In 2022, 30 emergency drills were held,
including ﬁrst responder training and earthquake, ﬁre, and chemical spill drills.

96About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Contractor Management

Nowadays, outsourcing technical and professional projects to contractors are part ofdaily operations. Besides requesting contract project quality and schedule, USI values
contractors' safety and health. USI's Policy clearly commits to "Awareness Training" andcommunication for all workers, and our Contractor and On-Site Construction Management
Regulations were formulated using the concept and principle of the PDCA cycle, andwe use the Regulations as our guidance to effectively manage and improve contractor
occupational safety and health.

Contractor and On-Site Construction Management Regulations

01

02

Document
Review

Education andTraining

Construction
requirements
Contractor qualiﬁcation
evaluation

Contractor information
review
Construction
application form
Hazardous work
application form

Construction worker
training
Construction permit
application
Sub-contractor
training

Construction
Management
Notiﬁcation of working
environment hazards
Sub-contractor meeting
Construction
supervision
Environmental safety
inspection and audit

97

Inclusive
WorkplaceSocialInvolvement

Appendix

The quality of the contractor's personnel has a signiﬁcant impact on the quality,
duration, and safety of the work being contracted. Therefore, USI contractors are asked
to provide the necessary documentation of education and training, as well as participate
in occupational safety and health education and training conducted by USI.
In 2022, more than 300 occupational safety and health training sessions were held for
3,454 participants from 409 contracting companies (trainees include contractors formaterial contractors, factory services, construction, waste, and other services). After
training and evaluation by each facility's EHS departments, 2,030 contractor employees
obtained construction permits.

03

Construction
Assessment

04

Environmental Protection
and Occupational Safety05

Post-Construction
Management
Fines for violation
Occupational injury
statistics
Feedback tocontractor evaluation

Huizhou

NantouMexicoTo ensure construction safety during work performed by contractors, we focus on
dangerous operations and repeat offenders to strengthen the inspection of operationalsafety during construction, such as protective equipment for workers and compliancewith safe conduct. If deﬁciencies are found and not improved immediately, penalties will
be imposed in accordance with company regulations and the results will be includedin the evaluation of the contractor's qualiﬁcations (1). In 2022, no qualiﬁed contractors
were disqualiﬁed due to safety and health audits.

Note:
1. Mainland China Facilities: Contractors will be disqualiﬁed if there are two abnormalities within half a year;
Nantou Facility: If major violations are not improved within the time limit, they will be suspended for one
yearAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Contractor Construction Application and Audit Findings
Year

Value Chain
Management

2020

2021

2022

2,483

2,694

3,099

3,174

Number of applications forhazardous work (2)

564

744

997

886

Number of major ﬁndings (3)

67
40

103

34

66

Number of construction
applications

Number of ﬁndings in on-site audit

47

34

2019

2020

2021

2022

4,868,030

3,766,409

3,157,842

7,724,377

0.21

0.27

0.00

0.00

0

0

0

0

Rate of high-consequence workrelated injuries

0.00

0.00

0.00

0.00

Near Miss Frequency Rate (NMFR)

0.00

0.00

0.00

0.00

Rate of fatalities as a result ofwork-related injuries

0.00

0.00

0.00

0.00

Occupational Diseases Rate (ODR)

0.00

0.00

0.00

0.00

Lost Day Rate (LDR)

1.64

6.37

0.00

0.00

Total hours worked

Number of lost-time injuries

Lost-Time Injury Frequency Rate
(LTIFR)

Number of high-consequence workrelated injuries
Number of near misses

Number of work-related fatalities

Number of days lost due to injuries

1

0
0

8

1

0
0

24

0

0
0

0

Appendix

Amenities and Programs

28

Contractor Occupational Injuries and Occupational Diseases (5)YearSocialInvolvement

To provide employees with comprehensive health care, USI has built a healthy workplace
better than what is required by law. We have amenities and programs on-site withspecialized personnel to provide professional services. Programs include health knowledge
bulletins, health seminars, workshops, and group activities regularly conveyed throughchannels such as the USI Newsletter, WeChat groups, email announcements, and bulletinboards to enhance employee health knowledge and skills and build an excellent healthy
workplace.

It is our policy to monitor, report, investigate, analyze, and record all types of incidents
that occur with our contractors in the USI Facilities, including occupational disasters,
ﬁres, or explosions in accordance with USI's accident investigation and improvement
procedures. Since 2019, only one contractor-related (4) work injury incident occurred in2019 and one in 2020, and the main root causes of the incidents were analyzed, and thefacilities asked to strengthen the awareness and supervision. Therefore, in 2022, USI did
not have any more work-related injuries or work safety accidents involving contractors.

Items

Inclusive
WorkplacePhysical and Mental Healthcare

(1)

2019

Items

Environmental Protection
and Occupational Safety

USI provides employees with quality healthcare services. We have on-site nurses andregularly invite specialized family medicine doctors, occupational medicine doctors,
psychologists, physiotherapists, and nutritionists to provide employees with psychological,
work stress, career, and other consulting services. In 2022, 30,211 health consultations
totaled 9,777 hours.
As for amenities, USI nurse stations are equipped with simple wound dressing stations,blood pressure meters, and weighing scales to provide basic healthcare for employees.
Nurse stations also have a resting lounge, counseling room, and breastfeeding room for
rest, consultations, and breastfeeding. Nantou Facility has received the Nantou County
Excellent Breastfeeding Room certiﬁcation for nine consecutive years, providing a
comfortable breastfeeding space for mothers.

0

0
0

0

Physical Therapist Intervention

Accredited Nantou County Breastfeeding Room

Note:
1. The data includes Zhangjiang, Jinqiao, Huizhou, Kunshan, and Nantou Facilities
2. Hazardous work: including hot work, hanging work, conﬁned space work, elevated work
3. Major ﬁndings: on-site auditing ﬁndings and issuing a ticket
4. For details, please refer to the 2019 Corporate Social Responsibility Report, page 48 and 2020 Sustainability
Report, page 122
5. Please refer to the Occupational Incident Management section for the relevant ratio calculation formula98

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Health Risk Management

A healthy workforce is an integral part of a company's competitiveness and a key driverof sustainable growth. To achieve effective health management, USI provides freeannual physicals for employees and occupational medical exams for employees in highrisk operating environments, and the results are classiﬁed and managed. In addition tocomplying with laws, regulations, and related guidelines, employees' health risks areanalyzed according to the nature of work and the health risk matrix. The top three themes
are health management of special health examination management, cerebrovascular andcardiovascular disease prevention and management, and prevention and management ofmusculoskeletal diseases.

Occupational Health Risk (1)High

273 Employees

Special health examination
management

35 Employees

Risk Severity

Cerebrovascular &cardiovascular disease
prevention management

18 Employees

Occupational
musculoskeletal disorder
prevention management

49 Employees

Maternal healthcare
management

73 Employees

Medical evaluation for
respiratory protective
equipment (RPE) use

430 Employees

General physicals
abnormalities management

Low

99

100% of the employees involved in hazardous
operations completed special health exams andrelated follow-ups. Medium & high-risk cases areclosely monitored.

After a holistic assessment of work-related andpersonal overwork factors, medium & high-riskcases would be further advised on working hours
management and psychological counseling if
necessary.

Employees assessed with NMQ ≧ 3 and above areconsidered medium or high-risk cases. USI would
arrange physical therapists and occupational
specialists to conduct on-site assessment,
consultation, and health management.

Expecting mothers' physical and mental healthand work environment are evaluated during
pregnancy and the year after giving birth. Basedon evaluation results, work adjustments are
made when necessary.
Employees required to wear RPE are given ﬁt
tests and physiological evaluations to assess
for suitability.
Tiered management of employee physicalexam abnormalities includes arranging
health consultations and follow-up exams
when necessary.

Relevance to Work

High

Note:
1. The data includes Nantou Facility
2. Metabolic syndrome: when three out of ﬁve factors are met (a. abdominal obesity, b. high blood pressure, c.
high blood sugar, d. high triglycerides, e. low high-density lipoprotein cholesterol)
3. NMQ, Nordic Musculoskeletal Questionnaire

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

In terms of special health examination management, we analyzed employee healthexamination results and found no individuals with unusual work-related conditions.
Cerebrovascular and cardiovascular disease are closely related to employees' health(physiological) and workload (psychological), while musculoskeletal-related diseases are
the ﬁrst cause of occupational diseases (by industry). Therefore, we set management
indicators for metabolic syndrome (2), cerebrovascular and cardiovascular disease, andmusculoskeletal-related disease, as shown in the table below.

Health Risk Issues and Management Metrics
IssuesManagement Metrics

2022 Performance Status

Metabolic Syndrome

Less than 22%

17.30%

Cerebrovascular
and Cardiovascular
DiseaseRisk level of 3 or more, less than 2%

0.40%

Musculoskeletal
Disorders

NMQ (3) of 3 or more, less than 10%

3.66%

Health Promotion

Health promotion is an integral part of preventive healthcare. Based on the results of
the health examination and the willingness to participate in health promotion activities,
USI holds various health seminars, trainings, and activities such as pregnancy healthcare,cancer screening services, vaccination services, blood donation activities, weight-loss
competitions, quit smoking contests, and bone density detection to prevent chronic andoccupational diseases. USI also encourages employees to exercise regularly, eat and drink
healthily, and maintain good living habits.
In mental health, USI not only hold fellowship campaigns regularly for employees(please refer to the Employee Beneﬁts section for details), but also has Employee
Assistance Programs (EAP). It works with the human resources department to improvetheir performances by enhance employees' mental wellbeing. In addition to managing
human resources more effectively, it can deal with crises efﬁciently, improve production
efﬁciency, and make sure employees' pressure from their families, work, and life canbe balanced and addressed. We have specially arranged an overall work adaptability
assessment for employees with physical or mental difﬁculties this year to ensure that all
employees have received professional assistance.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Performance of Diverse Health Promotion Activities
A total of 51 events were held during the year, with a total of 8,611 participants
The Nantou Facility was awarded the "Healthy Workplace Certiﬁcation - Health
Promotion Label" by the National Health Agency
Nearly 4,000 employees attended health promotion activities

Donated 546 bags of plasma in a blood donation campaign with the participationof 368 employees
113 employees participated in tobacco control and prevention activities

Musculoskeletal Injuries and Prevention

Blood Donation Drives

Healthy Fiber, Easy Cooking

Goddess Festival

Tobacco Control Activities

Vaccination Services

Annual Health Promotion Activities"Stick"Out YourThoughtful
Words of
PraiseSleep Well

Emotional
Adjustment
and Stress
Management

Donate Bloodand Spread
Love

Health Points
Collection

FamilyHealth Day
Pampering
Moms

Give Me
Quality Air

Move forHealthHealthy Fiber,
Easy Cooking

Musculoskeletal
Physical Fitness
Injuries andEmpowered byHealthy
Prevention
Technology
Workplace isEveryone's
Responsibility

100About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Inclusive Workplace
Talents are the essential seeds for USI's continuous growthand need to be carefully nurtured and watered. We build an
inclusive workplace for employees by Enforcing Human Rights,
Implementing Talent Development, Providing Comprehensive
Beneﬁts, and Cultivating Harmonious Labor Relations.

16,660

SDGs
101

Employees Total Headcount

140

95

% Key Talent Retention Rate1995

% Local Hire Rate

157

Key Stakeholders: Employees, Governments

Events Employee Communication Symposiums% Female Top Management Rate

Employees Sponsored to Obtain Degrees

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose
Human Rights/Diversity &Inclusion

Construct a workplace free ofhuman right violations, equal ingender and job opportunities,
diverse and inclusive

Human Capital Development

Provide employees with a lifelong
learning and optimized learning
environment to enhance the ability
for the future career development
Talent Attraction &Retention

Provide employees with suitablejobs and retain talents for thesustainable operation of theenterprise

KPI

2022 Target

Inclusive
WorkplaceMaterial Issue

2022 Performance

StatusSocialInvolvement

Achieved

2023 Target

Appendix

Not Achieved (1)2027 Target

Management Approach: No forced labor. No child labors. No discrimination. No harassment. Respect the freedom of association and privacy
right. Implement working hours restrictions to protect human rights. Manage and mitigate human right risks to create a happy workplace
Evaluation Mechanism: Conduct annual human right risk assessment and track human right hazard improvement plans every six months;
track the employment status of disabled employees annually
Ensure females tohave participating
chances in all-level
decision-making
leadership

More than 16% females
in top management
positions

More than 19% females
in top management
positions

More than 17% females
in top management
positions

More than 25% females
in top management
positions

Employ disabled
employees

Employ more than 80
disabled employees

Employed 83 disabled
employees

Employ more than 90
disabled employees

Employ more than 160
disabled employees

Improve employee
skillsInternal instructor
number adds up to over
910

1,118 internal instructors

Internal instructor
number adds up to
over 920

Internal instructor
number adds up to over
970

Management Approach: Encourage employees to continue their advanced studies. Plan training courses for employees to ﬁt in the rightposition and cultivate internal instructors to inherit corporate culture and organizational capabilities
Evaluation Mechanism: Quarterly/yearly review the internal Instructor training plan and track employee training status

Subsidize more than 50
employees to obtain
degrees

Subsidized 24 employees
to obtain degrees

Employee turnoverrate

Direct employee (DL)turnover rate of lessthan 55%
Indirect employee (IDL)
turnover rate of lessthan 12%

DL turnover rate of 38%
IDL turnover rate of 14%

DL turnover rate ofless than 45%
IDL turnover rate ofless than 12%

DL turnover rate of lessthan 40%
IDL turnover rate of lessthan 12%

Key talentretention rate

Key talent retention
rate of more than 95%

Key talent retention
rate of 95%

Key talent retention
rate of more than 95%

Key talent retention
rate of more than 95%

Employee careerdevelopment plan

Subsidize more than
40 employees toobtain degrees

Subsidize more than 40
employees to obtain
degreesManagement Approach: Provide competitive salary plans and welfare measures, build a sound welfare system and harmonious labor relations,increase employees' willingness to stay, and reduce employee turnover
Evaluation Mechanism: Monthly/quarterly/yearly statistics on employee turnover and retention rates to ensure management performance

Note:
1. For not achieved targets, please refer to the corresponding sections for relevant explanations and future improvement plans102Value Chain
Management

USI strongly believes that corporates have the responsibility to respect human rights.
We are committed to protecting and promoting human rights with our employees, joint
ventures, suppliers, business partners, customers, local governments, communities, andother stakeholders. We support and respect the United Nations' Universal Declarationof Human Rights, human rights as deﬁned in Principles 1 and 2 in the United Nations
Global Compact, the United Nations Guiding Principles on Business and Human Rights,
the International Labor Organization's Declaration of Fundamental Principles and Rights
at Work, and the laws of the countries in which we operate. Being a member of the RBA,
we adopt its Code of Conduct in our global operations to enforce our commitment toprotecting human rights, enforcing employees' rights and interests at work, creating adiverse, inclusive, and healthy workplace, and making a commitment to a balanced life
between work and family. USI Human rights management-related Policies include: Human
Rights Policy, Anti-Discrimination and Anti-Harassment Policy, Sustainable Development
Manual, USI Code of Business Conduct and Ethics, Supplier Code of Conduct, USI
Corporate Policy for Sourcing Conﬂict Minerals, Environment, Health, Safety (EHS) &Energy Policy, Policy on the Protection of Privacy and Personal Data.

Due Diligence

USI understands and manages human right issues in a responsible manner. Adhering to theconcepts of PDCA management process and continuous improvement, the taskforce teams
under the Sustainability Committee will identify, evaluate, monitor, prevent and reduce
human rights impacts through the due diligence process.

RBA Risk Assessment Framework

Our human rights management focuses on our employees and suppliers' that are in
our operational process. Through the RBA management mechanism, we implement
SAQ (1) internally every year and entrust an external third-party agency that has received
special training in social and environmental audits to simultaneously provide RBA VAP (2)auditing services for all USI Facilities or new business relationship companies to do therisk management that is a two quantiﬁable indicators risk matrix--frequency and impact.
Investigate the results of the risk assessment in the past two years, identify issues andobjects that are vulnerable to human rights risks, formulate measures and plans, andcontinue to make improvement. The survey results are compiled and submitted to thetask-forced teams of the Sustainability Committee and reported to the top management
at the annual meeting. For our joint venture human rights risk assessment, it is required
to conduct human rights risk identiﬁcation every year. Those human rights risk issues

103

SocialInvolvement

Appendix

listed in their sustainability reports, or the SAQ human rights risk identiﬁcation results arenecessary to formulate corresponding improvement plans and track their mitigations. For
the Tier 1 suppliers' human rights risk assessment, we conduct annual human rights risk
assessments and further identify their human rights risks through on-site RBA VAP audits
to know which supplier might face high risks, and continuously track the effectivenessabout their different risk countermeasures. For details of supplier human rights risks,
please refer to the Supply Chain Management section.

Due Diligence Process
Formulate human rights risk items andidentify its major human rights risks
List human rights risk items via RBA
inspection framework
Conduct risk assessment every two
years on a risk matrices with twoquantiﬁable indicators of frequency
and impact, and rank major
human rights risk issues

Ac

Implement human rights risk
mitigation and remedial measures

Implement actions in daily management,
and avoid the possibility of humanrights risk incidents from the policies,
measures, publicities and records

Do

t

k

Human Rights Protection

Inclusive
Workplace

Environmental Protection
and Occupational Safety

Formulate human rights risk
measures and targets

Set mitigation and remedial plans ormeasures for human rights risk issuesecGreen Products
and Innovation

Ch

Operationsand Governancean

Sustainability
Management

Pl

About this Report

Check performance

Sustainability Committee members
quarterly review the implementation
effectiveness and adjust the measures
Collect and submit the implementation
results to the task-forced teams of the
Sustainability Committee, and reportto the top management through theannual meeting

Note:
1. SAQ, Self-Assessment Questionnaire
2. VAP, Validated Audit Process, an on-site audit of suppliers, potential suppliers, and the company's own
factory, which is performed by a RBA approved independent third-party audit company to provide thecompany with risk identiﬁcation assurance, driving improvement and implement a powerful management
system of labor, ethics, health, safety and environmental conditions in the supply chain

About this Report

Sustainability
Management

USI Role

Employer

Purchaser

Product/Service
ProviderOperationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

TargetHuman Rights Issues

Main Policy

Employees
Third-party workers

Prohibition of forced labor, working hours, wages and beneﬁts, non-discrimination, antiharassment, freedom of association, occupational safety, emergency preparedness, workrelated injuries & diseases, data privacy & security, youth workers, workplace illegal infringement
prevention, right to collective bargaining

Foreign migrant
employees

Working hours, equal renumeration, non-discrimination, prohibition of forced labor, prohibition ofhuman trafﬁcking, freely chosen employment, religious freedom, sanitation, food & housing

Female employees

Equal renumeration, anti-harassment, gender equality

Child labor

Prohibition of child labor, young workers

Suppliers/contractors

Freely chosen employment, working hours, wages and beneﬁts, non-discrimination, antiharassment, occupational safety, emergency preparedness, work-related injuries and occupational
diseases, data privacy and security, prohibition of use of conﬂict minerals

Supplier Code of Conduct
USI Corporate Policy for Sourcing
Conﬂict Minerals
Policy on the Protection of Privacy
and Personal Data

Customers

Data privacy and security

Policy on the Protection of Privacy
and Personal Data

Human Rights Policy
Anti-Discrimination and AntiHarassment Policy
Environment, Health, Safety (EHS) &Energy Policy

RBA Human Rights Management Mechanism

In accordance with the RBA management framework, each facility implements internal and external audits regularly. We arrange cross-site mutual audits every year to ensure fullcompliance with the normative standards. If there are any non-compliant item, an improvement plan needs to be proposed and got improvements within the requested period. The
Sustainability Committee meets quarterly to review the achievement and improvement of various performance indicators of labor, ethics, environment, and occupational safety andhealth to ensure that the company fulﬁlls various social responsibilities. The company has established investigation mechanisms and complaint channels to ensure the implementationof human rights policies and avoid incidents that endanger human rights. USI has also established employee reporting mechanisms to manage employees' complaints. The investigation
procedure is shown as follows:1

Lodge complaint2

1. Dept. manager or HR accept thecomplaint case
2. Set investigation team to investigate
3. Complete investigation within 30 days

3

Based on the investigation
results, the review committee
makes the punishment decision

4

1. Announcement of
disciplinary action
2. Conﬁdential ﬁling of thecomplainant and investigation
information (case closed)104

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Human Rights Risks Assessment Results

In 2022, all facilities got a score above 85 on the SAQ assessment, indicating that all facilities are at low human rights risks. After arranging the results of the VAP audit and employee
complaints, we have developed corresponding human rights mitigation measures and compensatory content to the ﬁndings.

Human Rights Risk Assessment Result (1)Human Rights Risk Analysis (2)Zhangjiang
180.7

Working Hours

High

Nantou
190.1

92.8
93.3

88.2

Jinqiao180.2

Frequency

Mexico
176.6

95.8

93.9

Huizhou
183.6

94.0
173.8

Kunshan
SAQ

VAP

MediumWages and Beneﬁts

Low

Emergency Preparedness
Harassment
Occupational Safety
Supplier Responsibility
Sanitation, Food & Housing, Air Emission

Low

Medium

ImpactNote:
1. The SAQ assessment score: above 85 is considered low risk; 65~85 is considered medium risk; below 65 is high risk
2. Major risks are those events with high frequency and high impact; minor risks are those events with low frequency and low impact; other events are classiﬁed as secondary risks

105

High

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Human Rights Risk Mitigation & Remediation

According to the results of the six Facilities' RBA SAQ and VAP human rights risk assessments and the employee complaint statistics, we proposed corresponding mitigation andremuneration measures based on the risks of each facility. In 2022, the issues that are prone to exposure risks are working hours, wages and beneﬁts, sexual harassment, sanitation,
food & housing, occupational safety, emergency preparedness. For the details of mitigation and compensation measures of "Supplier Responsibilities", please refer to the Supplier
Sustainability Risk Management section.
Objectives

Employee
Labor

Health & Safety

Working Hours, Wages and Beneﬁts, Sexual Harassment

Sanitation, Food & Housing, Occupational Safety,
Emergency Preparedness

Mitigation

Working Hours:
Recruit sufﬁcient staff to meet production capacity needs and avoid overtime due to an
insufﬁcient workforce
Establish a working hour management mechanism system and notify the overtime employees andtheir direct supervisors with an early warning
Enforce the "After Continuously Working 6 Days, Need to Take One Day Off" management andtracking mechanism
Wages and Beneﬁts:
Regularly review and make sure management regulations that follow labor laws and regulations
Sexual Harassment:
Strengthen human rights (including non-discrimination, sexual harassment, privacy rights, etc.,
but not limited to) training and publicity, and reiterate the relevant human rights complaints andhandling procedures

Sanitation, Food & Housing:
Post proper signs for dormitory evacuation routes
Occupational Safety, Emergency Preparedness:
Strengthen document management mechanisms to ensure
document integrity
Clearly post the icons of on-site equipment and evacuationroutes according to the management regulation
Check and set the door correct opening direction for evacuation

Compensatory

Wages and Beneﬁts:
For the unpaid overtime fee, review the system settings and pay wages compliance with the laws
and regulations
Sexual Harassment:
For human right-related issues, use the reporting mechanism to complete the investigation
process, track the effective implementation of disciplinary and counseling measures, and adjust
the corresponding internal management mechanism and remuneration
Provide clinic physician consultation service and information to assist employees in psychologicalcounseling and stress relief counseling

Sanitation, Food & Housing:
Regularly check dormitory building structure, safety facilities
and evacuation route signs

Risk Issues

Grievance
Mechanism

USI provides internal reporting channels: including human resources mailboxes, employee complaint lines and reporting mailboxes in all facilities

106About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Human Rights Training

USI continuously pays attention to human rights protection issues, promotes relevant
training, and enhances human rights protection awareness to reduce the possibility ofrelated risks. Every year employees in all Facilities around the world are requested totake "Employee Code of Conduct" and "Humane Treatment in the Workplace" courses toknow the deﬁnitions and requirements of proper behavior, verifying training effectivenessthrough tests. To strengthen employees' understanding of human rights issues, we havecreated many "micro-learning" training videos for employees to learn in their independent
fragmented time. In 2022, the per capita human right-related training was 1.4 hours; thetotal training hours was 39,707 hours; the total number of trained employees were 29,110(including resigned employees). 100% of employees have completed human rights training
as the training schedule.

Human Rights Training Participant Numbers and Training Hours
37,29135,31339,707

26,606
16,273
19,7452018

24,18827,3062019
No. of Employees

Employee Rights

2020

30,9022021

29,1102022

Total Training Hours

USI complies with the labor Laws and regulations in the country or jurisdiction where
the Facility is. All employees signed employment contracts with USI in compliance withlocal regulations (the signing rate is 100%). When does the company's operation occurs
a major change and cannot keep the employment relationship, the company shallinform the affected employees in advance per local laws and regulations of the notice
period (1) and explain their due rights and interests to them. In addition, the company
will also try its best to assist employees to change jobs As the Nantou Facility did,

107

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

the Company will cooperate with the Taichung-Changhua-Nantou Regional Branch ofWorkforce Development Agency to provide employees with working competency training
information, collect job information in the neighboring areas, and assist employees inchanging jobs.
All Facilities have formulated working rules to ensure that employees are aware of theirrelevant rights and obligations. For example, Nantou Facility clearly stipulates various
employee rights in the Employee Handbook, including appointment, resignation, working
hours, vacations, bonuses, insurance, behavioral disciplines, and other requirements,
and posts it on the company's internal website, bulletin board, or conspicuous place inthe workplace. Every facility has recruitment guidelines that had deﬁned standardized
operating procedures to select the most suitable candidates who are willing to serve in USI
without discrimination and difference to attract more diverse talents for USI. The "Policyof Workplace Humane Treatment Establishment" is to show a workplace culture of safety,
dignity, non-discrimination, mutual respect and tolerance, and equal opportunities, and toprotect all employees from physical or mental harm while employees conduct their jobs.

Employee Unions

USI respects employees' freedom of association. Employees who have like-minded orinterested partners can independently form associations and can also freely organizeand participate in trade unions to conduct collective consultations in accordance with
relevant laws and regulations. USI will not interfere in any way with the establishment,
operation, or management of the trade unions. The Company will maintain a smoothcommunication channel with the trade union, implement the employment, wage, andtermination relevant matters of the group agreement and the regulations on employees'
health, safety, and hygiene so that both labor and management can abide by it anddevelop a stable and harmonious labor relationship. Now, Zhangjiang, Kunshan, andMexico Facilities have established their trade unions, and group agreements are signedwith the trade unions. Employees participating in the trade union enjoy the protectionof the group agreements. The group agreement coverage rate is around 72% (2). In 2022,with the Company's initiative-taking communication with employees, there were no
strikes or work stoppages that resulted from major labor disputes.
Note:
1. Notice Period: Mainland China Facilities: employees should be notiﬁed at least 30 days in advance; Nantou
Facility: employees should be notiﬁed at least 10 days in advance; Mexico Facility: employees should be
notiﬁed at least 7 days in advance
2. Group agreement coverage rate = number of employees participating in the labor union in the facility area
÷ number of employees in the facility area at the end of the period × 100%

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

The Proportion of Employees Participating in Trade Union
33.7%

35.1%

35.4%

Environmental Protection
and Occupational Safety

5,900

6,350

4,435

2019

No. of Feedback

No. of Closed Case

Electronic Employee Suggestion Box

55

Employee Complaint Hotline
Employee Relations Network

No. of Join the Union

2021

2022

Employee Communication

We actively establish a positive employee relationship and continuously maintain an
open, mutual trust, and smooth two-way communication environment, so that employees
can instantly understand company trends and the workplace-related rights andobligations and protect employee rights and interests. In addition to arranging courses tointroduce the channels for employees to express their opinions, the locations of Employee
Suggestion Box, and how to ﬁll in the relevant information. We listen to employees' voices
by holding regular senior executive seminars, providing instant feedback meetings andchannels, conducting questionnaires, and taking practical actions to promote harmony inlabor-management relations. In 2022, there were 140 employee communication seminars
in total (37 President/General Manager Symposiums, 21 New Employees Outreach, 12Foreign Employees Caring Meetings, and 70 Employee Feedback Meetings) and vigorously
push and disseminate communication messages through various media and strengthen
the promotion of information on internal and external reporting and feedback channels
when the messages are conveyed.

President/General
Manager Symposium
Labor Conference

0

20

435

Regular
Symposiums& Meetings

No. of Employees in Unions

263

147

Total

2020

Appendix

Internal Opinion Response Pathway

HR Dedicated Suggestion Mailbox

5,901

SocialInvolvement

Internal Communication Channels

Employee Suggestion Box

24.3%

Inclusive
Workplace

Employee
Engagement
SurveyInstant
Feedback
Channels

226
0

20

147

398

EmployeeCommunication Meeting
Instant Messaging Tools(WeChat)
Employee Relation
WebsiteEmployee Suggestion
Box
HotlineE-mailHarmonious Labor Relations

Whether employees submit suggestions through electronic or physical means, thecorresponding responsible unit members will deal with the opinions expressed as soon as
possible and provide feedback. In 2022, there were 435 employee suggestions, and 91%
of the suggestions have been processed and closed by the end of 2022.

108About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

In 2022, there were 16 employee complaints, with 13 cases conﬁrmed throughinvestigation, including 2 sexual harassment cases, 3 cases related to wages
and working conditions, and other cases where employees violated workplace
ethics. For the 3 cases related to wages and working conditions, after
communicating with the employees involved, we quickly paid the shortage
and resolved the cases. In the 2 sexual harassment cases, the complainants
were offended by inappropriate contact against their will. Based on our Policyof Humane Treatment in the Workplace, we instigated an internal conﬁdential
investigation team to process each case and protect both parties. Bothparties were separately interviewed by the investigation team. After collecting
statements from both sides and conﬁrming the accused misconduct, theDisciplinary Committee meted punishment according to the Employee Codeof Conduct. To remediate the harm the employees underwent, we continue
to communicate and actively take action to improve working conditions.
Meanwhile, we also provide employees with mental health counseling services
for psychological reconstruction, work pressure relief, career planning,and other counseling services performed by on-site physicians. To prevent
employees from being ignorant of human rights-related laws and regulations
and bringing a negative impact on the company's creation of gender equaland a happy workplace, we have strengthened publicity at each Facility,
planned a complete complaint and handling process, and formulated a system
to protect the privacy of victims. We conduct annual human right-related
employee training, including RBA, humane treatment in the workplace,gender equality laws and sexual harassment act, etc.

Sexual Harassment Case Handling and Remediation
Principles

Punishment

For those who constitute sexual harassment cases, the Disciplinary
Committee will make a punishment decision based on the violation andthe working rules

Counseling

Keep the victim's personal information and the case conﬁdential,
provide psychological medical consultation referrals, and provide HR
assistance in adjusting work or units if necessary

Remediation

Review the cause and track the effectiveness of the counseling or
punishment, and adjust the system to avoid the occurrence of a similar
incident or retaliation

109

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Talent Attraction and Retention

We believe that an inclusive work environment allows everyone to feel respected and supported andmakes it easier to ﬁnd the best way to work, develop everyone's expertise, and grow together. As USI
expands its business, how to create a multicultural workplace that integrates multi-national cultures,
accepts individual differences of employees, and establishes a workplace with no prejudice against
different ages, genders, races, religions, nationalities, political parties or physical disabilities, and adiversiﬁed workplace for employees to grow together is the top priority of USI. Therefore, USI is investing
lots of effort in the establishment of workplace culture, women's participation in decision-making, andthe job arrangement of disabled employees.

Workforce Structure

As of the end of 2022, the six major manufacturing facilities covered by this report have a total of 16,660
employees, including 15,686 permanent employees and 974 temporary employees. Divided by job
categories, 1,061 employees are in management positions, 3,543 employees are in technical positions,
2,044 employees are in administrative positions, and 10,012 employees are in skilled positions. Divided bynationalities, there are 15,848 natives and 812 non-natives; divided by regions, there are 9,754 employees
in Mainland China, 4,302 employees in Taiwan, and 2,604 employees in Mexico. For other detailed
classiﬁcation information, please refer to the Sustainability Data - Social A. Workforce Structure table.

Employee Headcount (1)18,2679,866(54%) 8,401
(46%)

2019
Male

17,486

9,426(54%) 8,060
(46%)

2020
FemalePermanent/Temporary Employees (2)2,259

18,081
16,6609,938(55%) 8,143
(45%)

2021

1,827

2,691

16,00815,65915,39015,686

2019

2020

2021

2022

(12%)

(88%)

9,271

(10%)

(90%)

974

(15%)

(85%)

(6%)

(94%)

(56%) 7,389
(44%)

2022
Total Employees

Permanent

TemporaryNote:
1. Dispatch workers are excluded from the headcount of contracted (temporary) employees and revise the total number of
employees, gender, and number of contract employees over the years
2. Permanent (regular) employees refer to employees who have signed an indeﬁnite labor contract with the company.
Temporary employees refer to employees who sign a ﬁxed-term labor contract with the company, and are also called
contracted employees. Permanent/regular/temporary/contracted employees are full-time employees

About this Report

Sustainability
Management

Operationsand Governance

Job Category Distribution

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Geographic Distribution
2,546
(14%)

1,061
7%

10,012
60%

2,521
(14%)

2,490
(14%)

3,796
(22%)

4,057
(22%)

11,169(64%)

11,534
(64%)

3,768
(21%)

3,543
21%

11,953
(65%)

2,604
(16%)
4,302
(26%)
9,754
(58%)

2,044
12%
Technical

Administrative

Skilled

2020

2021

Mainland China

TaiwanDistribution of Top Management Position (1)

100%

85

84

37%

41%

29

17

26

2019

100%
2

18
2020

100%
4

52%

110

2022
Mexico

100%

100%
100%

SocialInvolvement

Appendix

We pay attention to the working environment for employees
and commit to creating a gender-friendly workplace for female
workers to fully utilize their talents in this diversiﬁed andinclusive workplace. In terms of female employment, by the endof 2022, female employees in all facilities accounted for 44.4%
of total employees; the ratio of females in top management
positions has increased from 17.6% in the previous year to19.2%. We cultivate female employee management capabilities
and strive to have more than 25% females in top management
positions by 2026.

Gender Diversity Indicators
2019Management

Inclusive
Workplace

121
59%

Diversity Indicator (%)

2019

2020

2021

2022

Females in total employees

46.0%

46.1%

45.0%

44.4%

Females in management
positions

23.2%

23.6%

22.6%

23.1%

Female in juniormanagement positions (2)

25.2%

26.2%

25.9%

25.6%

39

33

Females in middle
management positions (3)

24.6%

23.5%

20.3%

21.8%

42

47

Females in top
management positions (4)

12.8%

12.9%

17.6%

19.2%

Females in revenuegeneration function
management positions (5)N/A (7)

45.5%

47.9%

50.0%

Females in STEM job
positions (6)

N/A

22.3%

22.1%

21.7%

2021

100%
2

2022

92%
1
11

Mainland China Domestic

Taiwan Domestic

Mexico Domestic

Mainland China Foreign

Taiwan Foreign

Mexico Foreign

Note:
1. The proportion of domestic top management position ＝ No. of domestic top managers in the Facility ÷
No. of all top managers in the Facility × 100%
2. The junior management positions refer to section and sub-section heads
3. The middle management positions refer to department heads

4. The top management positions refer to the division heads and above
5. Revenue-generating functions: sales function, excluding support functions such as HR, IT, and Legal
6. STEM refers to personnel with job functions related to science, technology, engineering, and mathematics ﬁelds
7. N/A: There is no relevant statistical classiﬁcation for that year

110

Sustainability
Management

About this Report

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

We actively solve the employment problem of local citizens and people with disabilities
across our facilities and adhere to the principle of giving priority to the recruitment of"Local Talents". 95% of employees are local citizens where the factories locate. Over theyears, the proportion of local employees who were promoted to management positions
has increased to 95%. In addition, we also strive to tailor competent job content fordisabled people, so that the incumbents have more sense of job accomplishment. In
2022, 83 disabled employees were hired around the world.

Employees with Disabilities
83

79

83

73

62

26

17
2019

2020
Male

53

51

47

32

2021
FemaleRecruiting the Right Talents

30

Inclusive
Workplace

Total

SocialInvolvement

Appendix

innovative research and development, so that diversiﬁed talents from around the world cangive full play to their strengths and meet different customers and diverse market needs.
Starting in 2021, USI's Facilities need a large number of employees due to facility expansion
and relocation. In 2022, we recruited 9,434 new hires (excluding dispatch workers). By theend of the year, USI has a total of 16,660 employees and 1,607 dispatch workers.
USI actively sets up the mentor system and promotes the "369 3-Stage Care for New
Employees". We assign mentors and provide training programs to guide new employees toquickly integrate into the company. We have a complete welfare system, a comfortable andconvenient working environment, and excellent communication channels. We also careabout the work and life of employees and hold a celebration party to enhance employee
recognition and loyalty to USI to avoid human capital loss. There are 6,583 new employees
who have served for more than 90 days; this is around a 40% of newcomer retention rate,
an increase of 17% compared to the previous year.
We value the opinions of employees. Over the years, we have conducted Employee
Satisfaction Surveys and Employee Engagement Surveys to understand employees'
expectations, listen to employees' voices, and put forward improvement plans to increase
employees' willingness to stay in USI. By analyzing the termination reasons of direct
employees (1) and indirect employees (2), we conduct corresponding improvement measuresand propose a retention plan to reduce employee turnover.

2022

USI recruits suitable professionals based on the operation and development goals.
Resulting from approved departmental personnel demands, the HR recruitment
department reviews the recruitment progress every month, analyzes the labor market
situation, and plans various recruitment channels and employment models. We openly
recruit talents through multiple channels, such as campus recruitment, employee
recommendation programs, industrial-academic internship programs, corporate sharing
sessions, online recruitment, and multimedia recruitment. And then, it is planned
according to the labor needs of each facility to establish the most suitable employment
relationship (such as full-time/part-time workers, permanent/temporary workers,
dispatch workers, or appointed professionals), and treat all applicants without prejudice
or discrimination. And we use objective interview testing tools to screen candidates'
occupational suitability, accumulating the energy required for our continuous growth and111

Environmental Protection
and Occupational Safety

Recruiting
the Right
Talents

TalentAttraction
and Retention
Employee
Engagement
SurveyComprehensive
Compensation
SystemMulti-Faceted
Performance
Appraisal
SystemNote:
1. Direct employees (DL) refer to employees working in skilled positions
2. Indirect employees (IDL) refer to employees working in management, technical and administrative positions

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

In 2022, the overall turnover rate of the company is 28.8%, and the turnover rate of DL is 37.7%; the turnover rate of IDL
is 14.3%. The main reason for the overall employee turnover rate decreased by 9.9% compared to the previous year was
the company's regularization system, which will select dispatch/contract employees with high company recognition andwork commitment to become regular employees so that the DL turnover rate decreased by 13.1% compared with theprevious year. For other detailed classiﬁcation information, please refer to the Sustainability Data - Social B. New Hiresand Employee Turnover table.

Number and Ratio of New Entry Employees
86

80

%

%

Number and Turnover Rate of Former
Employees
44.2
%

74
%

33.7
%

54
%

15,7732019

14,251

2020

13,2072021

No. of New Employees

8,132
9,434
2022
New Entry Rate

Number and Ratio of New Entry IDL
Employees
19
%

17

2019

1,087

2020

No. of New IDL Employees

2020

No. of Resigned Employees

%

28.8
%

6,878

2021

5,003
2022

Employee Turnover Rate

Number and Turnover Rate of IDL Former
Employees
17.8
%

18
%

17
%

%

1,218

2019

6,027

38.7

1,210

2021

13.0
%

14.3

13.6

%

%

1,165
1,136

818

2022

2019

New IDL Entry Rate

887

2020
No. of Resigned IDL
Employees

2021

950

2022

IDL Employee
Turnover Rate

Inclusive
WorkplaceSocialInvolvement

AppendixComprehensive Compensation
SystemUSI Compensation Philosophy
Recognize employees' contributions to theCompany, formulate the differences between
each position, and maintain the balance of
paying salaries

Respond to employees' performances
appropriately for encouraging employees andrecruiting required talents
Provide employees fair and reasonable
treatment and adjust the salary as
responsibilities are enriched

Adjust ﬂexibly to the human resource market
and the changes in the organization
USI abides by the requirements of local labor laws; there
are no different starting salaries and rewards based on
employees' gender, religion, politics, and marital status.
We provide employees with consistent salary standards
and beneﬁts through a fair, reasonable, and motivatedsalary assessment system. After reviewing employees'
contributions and performance through a multi-faceted
evaluation system, outstanding employees shall be given
reasonable and substantial returns that are monthly job
bonuses, equity incentive plans, employee stock options
and proﬁt-sharing plans. In addition, USI participates
annually in well-known public salary surveys held by local
business consultants and regional salary associations
to evaluate the overall economic indicators and market
salary standards, external competitiveness of talents, andlabor market supply and demand conditions to promptly
adjust our offer to reﬂect market prices and enables
employees to receive reasonable treatment and USI's
overall compensation is competitive in the talent market.

112

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

In 2022, USI adjusted the employee basic salary in each facility area to maintain the competitiveness of the talent market. Except for the DL in Kunshan Facility which follows the twoyear basic salary adjustment rule, the salary adjustment range of the Mainland China Facilities is about 1% to 18%, the Nantou Facility is about 2.3% to 4.1%, and the Mexico Facility
is about 4% to 15%, so as to maintain the competitiveness of the talent market. The ratio of the standard starting salary of DL to the local minimum salary is about 1.00~1.09 after
calculation. The ratio of basic salary (1) and compensation (2) of females and males (3) in each facility are shown in the table:
Ratio of DL starting salaries
to local minimum wages (4)Management
Position
Technical
Position
Administrative
Position
SkilledPosition

Ratio of the basic salary offemales and males (5)Ratio of the compensationof females and males
Ratio of the basic salary offemales and males
Ratio of the compensationof females and males
Ratio of the basic salary offemales and males
Ratio of the compensationof females and males
Ratio of the basic salary offemales and males
Ratio of the compensationof females and males

Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexico

1.00

1.00

1.00

1.05

1.09

1.00

0.89

1.15

0.93

1.08

0.84

0.65

1.00

1.23

0.94

1.06

0.79

0.75

1.15

1.08

0.87

0.99

0.85

0.81

1.17

1.12

0.91

0.98

0.82

0.91

0.84

0.93

0.87

0.92

0.87

0.87

0.89

0.95

0.88

0.92

0.82

0.88

1.02

0.95

1.08

0.98

0.95

1.02

1.02

0.94

1.10

0.98

0.92

1.15

Employee Beneﬁts

Due to USI's globalization, the cross-site and cross time zone communication has become
increasingly frequent. We set up multiple working hours for the same shift based on theprinciple of ﬂexible working, to meet the needs of the working in different business hours
or time zones. If any employee has the need of family care or taking education, employee
can apply for a change of working hours after obtaining the approval of the supervisor.
"Emergency Management" is a must-have capability for the sustainable management.
To reduce the company risk of being unable to operate due to factors such as natural
disasters, ﬁres, and infectious diseases, USI implements a remote work mode according
to the "Global Remote Work Guidelines" and provide subsidies for the purchase of work
equipment and meal allowance to the employees who apply to work from home. By the

113

Note:
1. Salary refers to the monthly remuneration paid to the employees, including the basic pay, allowance, andbonus (ex. meal allowance, shift allowance, supper allowance, overseas expatriate allowance, position
allowance, monthly work bonus, and full attendance allowance)
2. Compensation is the sum of salary and bonuses. Bonuses refer to non-monthly remunerations (such as
three festival bonuses, proﬁt sharing, job performance bonuses, and special bonuses)

end of 2022, 1,521 employees around the world worked from home.
Simultaneously, considering the aspects of food, housing, education, entertainment,
transportation, physical and mental health for global employees, USI provides employee
support programs (please refer to the Sustainability Data - H. Employee Support
Programs table for more details), considerate beneﬁts, and insurance plans in linewith local regulations. In our facilities, we also have rooms dedicated for physical andmental development, and various activities designed to strengthen physical and mental
adjustment ability. Both the regular and irregular employees who have an employment
agreement with USI can enjoy this beneﬁt and realize a balanced life with their families
after work.
3. Due to regional differences, there will be big differences in Mainland China Facilities' ratios
4. Ratio of the direct employee starting salary to local minimum salary = direct employee starting salary ÷
local minimum salary
5. Ratio of female to male salary/compensation = female salary/compensation ÷ male salary/compensation

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixComprehensive Welfare System
Bonus
Holidays &LeavesLabor
Practices

Insurance
Meals
Dormitory
Transportation

Sport Activities

Sport
and
HealthStressManagement
HealthManagement

FamilySupports

ParentingRelatedCondolences

OthersFestival bonus, full attendance bonus, overtime wage and allowance, performance bonus, three festival gift certiﬁcates, birthday gift certiﬁcate, R&D incentive
bonus, patent incentive reward, employee seniority bonus (Mainland China and Nantou Facilities)
Besides statutory holidays and two-day weekly holidays, there are more leaves such as period leave, paid sick leave, paid annual leave (1), welfare leave (2) (Mainland
China and Nantou Facilities), Indigenous holiday leave (Nantou Facility) and election voting leave (Nantou Facility)
Provide social insurance for employees, pensions and retirement pay by laws, add commercial group insurance plans such as Employee Group Insurance,
domestic and overseas travel insurance (for expatriates and their families to participate during their oversea assignments), and life insurance (Mexico Facility)

Every facility has an employee cafeteria, vending machines, and meal subsidies. Additionally, we provide pregnant employees with Mom stickers, and they can
get an extra portion of the meal
Diverse types of dormitories are equipped with household appliances, air-conditioning, hot water, wi-ﬁ, and furniture. USI pays for all full-time employees'
housing accumulation funds and provides housing subsidies (Mainland China Facilities)
Cross-site shuttle bus, parking lots, and pregnancy priority parking
Employee (domestic and foreign itineraries) travel, family days, parent-child activities, annual dinner party and lottery, birthday parties, sports meetings,
singing competitions, and cultural and artistic activities
Sponsor various club activities and hold various events and activities: Sports clubs are basketball club, softball club, badminton club, bowling club, swimming
club, Iron Horse (bike) club, jogging club, billiard club, volleyball club, yoga aerobic ﬁtness club; Learning/leisure clubs are USI Toastmasters (English speechclub), ﬁshing club, ﬁeld camping club, photography club, volunteer club
Leisure facilities: basketball and volleyball court, badminton court, snooker table, tennis table, treadmills
Conduct stress adjustment questionnaire surveys, provide psychological counseling services, lectures and activities on physical and mental health, art, culture& movie appreciation

USI provides full-time nursing employees and professional doctors (contracted with hospitals) to provide services such as free medical consultation andemergency treatment. Our employees have one free physical check-up every year. Moreover, various hygiene training sessions and seminars are held irregularly
Paternity leave, pregnancy checkup leave for female employees (Mainland China and Nantou Facilities), maternity leave, parental leave, breastfeeding leave
Each facility is equipped with a medical room and a breastfeeding room
Employees can get discounts on preschool childcare tuition and fees from institutions we have preferential contracts wedding subsidies, childbirth subsidy,
education subsidies and scholarships for employees and their children (Mainland China and Nantou Facilities)
Funeral allowance for employees and dependents, hospitalization solatium/allowance for employees, hospitalization solatium for employees' families (Mexico
Facility), emergency subsidy
Implement remote working, ﬂexible working hours, part-time working hours system; pay residence/working permit for foreign employees; communication
expenses, care for workgroup expenses; special activity facility such as: worship room, computer classroom, reading room, Muse and Creativity Center (ﬁtnessroom); on-site convenience stores to provide employees payment and ticketing services (Mainland China and Nantou Facilities); provide information on
restaurants, shopping stores, and language learning institutions with preferential partnerships

Note:
1. Paid annual leave is implemented according to local regulations. Mainland China Facilities: An employee who has been working for more than one year and less than ten years will have ﬁve days of annual leave; more than ten
years and less than 20 years have ten days; more than 20 years have 15 days. Nantou Facility: An employee who has been working for more than six months and less than one year will have three days of annual leave; morethan one year and less than two years will have seven days; more than two years and less than three years will have ten days; more than three years and less than ﬁve years will have 14 days; more than ﬁve years and less thanten years will have 15 days; more than ten years will be offered with one additional day each year. Mexico Facility: Those who have been working for one year will have six days; more than one year will have one day of annual
leave each additional year (no more than 12 days in total); more than four years will be offered with two additional annual leave every ﬁve years
2. Welfare leave: It is regarded as a long-term reward in Mainland China Facilities. Employees who have served for more than two years will be provided with full-paid welfare leave ranging from 2 to 10 days according to theirlength of service; The time limit is to be used within one year after the entry date; after one year of employment, employees are entitled to 7 days of full-paid sick leave for the whole year, and 7 days of full-paid sick leave forless than one year will be given according to the percentage of employment, which is better than the 30-day half-paid sick leave stipulated by law

114About this Report

Sustainability
Management

Operationsand Governance

Employee Beneﬁts and Subsidies
Beneﬁt Item

Beneﬁciaries

Beneﬁt Amount(CNY)

Three Festival Gift
Certiﬁcate

32,8386,950,699

Birthday Gift
Certiﬁcate

9,794

3,278,504

Employee Continued
Education Subsidy

266

368,838

Scholarships for
Employees' Children

5,304

2,858,646

41

59,182

48,243

13,515,869

Subsidy
Recipients

Subsidy Amount(CNY)

Retirement Gift
Total

Subsidy Item

Value Chain
Management

Inclusive
Workplace

Environmental Protection
and Occupational Safety

SocialInvolvement

Appendix

In response to the government's policy of encouraging births to solve the problem of aging population, the company
adjusts suitable work shifts for pregnant employees, provides convenient parking spaces, extra meal quotas, andmaternity subsidies and employees who breastfeed by themselves after giving birth can take breastfeeding leave. If
employees need to take care of their families for a longer period, they can also apply for family care leave or parental
leave to take care of their family. Employees are clearly given the right to apply for parental leave in accordance withthe local laws. They can apply for reinstatement after the need for childcare leave is disappeared. The company also
proactively reminds employees of the expiration date of childcare leave. In 2022, there are 327 newborns in our global
facilities, which shows that the company's childbearing beneﬁts and measures can improve employees' willingness to havechildren. However, the need for family care has not slowed down, so the reinstatement rate and retention rate have not
improved.

Parental Leave in Nantou Facility
Item

2019

2020

2021

Employees qualiﬁed to apply for parental leave thatyear (1)219

298

Employees that applied for parental leave that year

16

Employees expected to return from leave that year

2022
Male

Female

Total

280

127

65

192

23

34

4

30

34

15

14

25

10

24

34

Employees that returned from leave that year

11

14

17

8

15

23

Employees that returned from leave the previous year

3

11

14

1

16

17

3

11

11

0

8

8

Wedding Subsidy

234

97,265

Childbirth Subsidy

168

122,378

6,171

2,390,520

Hospital Consolation
Subsidy

163

31,146

Employees reinstated in the previous year andcontinued to work for more than one year

Condolence Payment

176

59,504

Reinstatement rate (2) for parental leave

73%

100%

68%

80%

63%

68%

Emergency Assistance4

22,683

6,916

2,723,497

Retention rate (3) after back from parental leave

100%

100%

79%

0%

50%

47%

Travel Subsidy

Total

115

Green Products
and Innovation

Note:
1. Eligibility for parental leave in the current year: those who have taken "paternity leave" or "pregnancy leave" (20 weeks or more) from 2018 to 2021
and are still working in 2022
2. Reinstatement rate: the number of people actually reinstated after parental leave in the current year ÷ the number of people who should bereinstated in the current year after parental leave × 100%
3. Retention rate: the number of people who were still employed 12 months after the childcare leaves in the previous year ÷ the number of people
who were returned to work after the childcare leave in the previous year × 100%

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Employee Retirement Plan

USI and its subsidiaries provide pension and elderly insurance in accordance with the retirement laws and regulations ofeach business location. Employees who meet the statutory retirement conditions may apply for retirement to withdraw
pensions in accordance with the law. In 2022, 34 employees at the Nantou Facility applied for retirement, and 5 and 6
employees retired at the Mainland China and Mexico Facilities respectively. To sum up the contributions of all facilities (1),
USI has allocated CNY 220,035,658.76. USI's relevant retirement system is shown as follows:

NantouMainlandChina

Old System

Practice

Practice

In accordance with the Labor Standards Act, the retirement
provision fund shall be handed over to the Labor Retirement
Reserve Supervision Committee, and deposited into a
special account in the Bank of Taiwan in the name of thecommittee; each year, the actuarial assessment shall be
conducted to determine whether the balance of the special
account is sufﬁcient to pay the estimated amount payablefor the year, if there is insufﬁcient payment for possible
retirement payments, the balance of the special account will
be made up in the following year. The pension calculation is
calculated by multiplying the average salary of the employee
six months before retirement by the seniority base, and 2%of the total monthly salary of the employee is allocated tothe employee retirement fund.
2022 results: Retirement reserves totaled CNY 21,761,132.44
and the ending balance was CNY 114,695,814.64.

New System
Practice

According to the Labor Pension Act, the employer shalldeposit 6% of the employee's monthly salary into theemployee's personal pension account monthly. Employees
can choose to deposit 0~6% of the distribution ratio into
their personal accounts and enjoy tax-free beneﬁts.

Participate in endowment insurance plansestablished by government agencies as
required, pay monthly contributions to theseplans according to the corresponding proportionof the deposit base, and allocate 8% of theemployee's salary; employers contribute 15% to
20% of the salary.

Inclusive
WorkplaceOpen a retirement savings account for
employees according is required by the local
regulations and make contributions according
to the corresponding proportion of thecontribution base each month. The employee
contributes 2% of the salary; the employer
contributes 8% of the salary.

Appendix

Work-Life Balance

Based on the three tenets of Health, Happiness, andLearning, USI sponsors various clubs every year toorganize various activities and promote the physical andspiritual development of employees.

Three Main Themes of Employee Activities

HealthHappiness

MexicoPractice

SocialInvolvement

Learning

Only a healthy body can create
inﬁnite possibilities. By improving
employees' knowledge andenvironment of healthy life,
the efﬁciency is improved andproductivity doubled
The philosophy of happiness isthe magic wand to create win-win
for a company and its employees.
If failure is the mother of success,happiness will be the father ofsuccess. Employees get their
passion and inspiration fromhappiness, whereas happiness isthe spring of power that keeps
employees going
Learning keeps you young.
Learning is to take care of
employees for the rest of theirlives. Learning programs aredeveloped for employees' careerdevelopment. Looking for the funof learning keeps life going andmakes employees willing to work
harderNote:
1. All facilities include: Zhangjiang, Jinqiao, Huizhou, Kunshan, Nantou, and Mexico Facilities, other manufacturing facilities, and sales ofﬁces

116About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

To organize employees' welfare and activities and maintain harmony between labor andmanagement, USI encourages employee to well-plan their personal time for job andtheir families. We invite our employees and their families to participate in the activities,
create a happy learning atmosphere, provide employees with spiritual joy, implement the
purpose of "life skills, skills life". At the same time of joining those employee activities,
we cultivate team understanding, create a harmonious working atmosphere, and greatly
improve work efﬁciency.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Employee Activities
Sports Competition: Employees can enhance their physical ﬁtness,
improve their skills and enrich their cultural life through physical exercise,technology, training, competitive competitions, etc.

USI attaches great importance to the employee health and actively promotes employees
to have exercise habits by sponsoring the activities of 58 various clubs. We plan andimprove various facilities, regularly hold various lectures, activities, and competitions. In
2022, USI supports a total of around CNY 885,000 in organizing 87 employee activities,
with 38,524 participants.

58

Clubs

49 Sports & Health Clubs
8 Arts & Culture Clubs
1 Charity Club87

Employee Activities

25 Sporting Activities
62 Other Activities,
such as Celebrity
Lectures, and DIY
Activities.

117

38,524

Participants

5,573 Participants in
Sporting Competitions

Art and LOHAS: Provide employees with various art and cultural activities
to promote physical and spiritual exploration and growthAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Energy Supplement: Provide employees with various lectures andappreciation, DIY activities for stress relief, and obtain knowledge in otherﬁelds when improving self-energy

Warmth and Gratitude: Participate in social activities, offer blessingsand care to colleagues and those who need help, gather solidarity amongcolleagues, show humanistic care, and realize self-achievement

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Employee Performance Appraisal and Development
Through a fair and comprehensive performance management system, USI connects thecompany's overall strategic goals with employees' individual objectives and performancemeasurement standards, and regularly evaluates employees' work performance during
the evaluation cycle according to job category. The performance appraisal process isin the form of a review committee, consisting of upper-level supervisors, supervisors of
upstream and downstream business units or colleagues, customer opinions, etc. andthe judges jointly evaluate the individual performance from multiple angles. Supervisors
need to provide development suggestions and forced ranking results. According to theperformance appraisal results, rewards, training plans and various career development
opportunities are provided. For those with excellent performance and potential, they
are actively promoted and cultivated through an open and transparent promotion
mechanism, providing higher responsibilities and compensation. Salary rewards motivate
employees to achieve individual and unit objectives and move towards the Company
overall goals.

Review and Followup Adjustments

Set Goals and Working
Plans

Promotion
Nomination

Salary Incentive

Coach and
Motivation

Planning

Execution

Application

Appraisal

Career Development

Evaluation System

Performance Review
and Feedback
Individual
Development Plan

118

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Employee Performance Appraisals
Types of Performance
Appraisals

Objectives

Agile Conversations

IDL

Management by
Objectives and Ranking

AllTeam-based
Matrix Management

IDL

Multidimensional

IDL

Multiskilled

DL

Assessment Items
Job completion

Assessment items cover work objectives
and functional performance:
1. Professional ability
2. Presentation ability
3. Competencies:(1) Core competencies: problem
analysis & solving, execution,
teamwork, innovation, andlearning & application(2) Managerial competencies:
leadership, change management,
decision-making, strategic
thinking & planning

Real practiceFrequency

Practices

Ongoing/anytimeSupervisors evaluate job progress/working attitude at any time, and communicate
improvement plans with employees.
Employees put forward their working plans and quantiﬁable key performance indicators(KPI) on the performance appraisal management system at the beginning of each year.
After discussing the KPI with the direct supervisor and agreeing with both parties,
employees put their KPI based on this consensus. During the performance appraisal
period, the supervisors provide their consultations and motivations to the employees tocomplete the assigned tasks. At the end of the appraisal cycle, the evaluation and forced
ranking are carried out according to the achievement of each objective.
In the spirit of project management, cross-functional/departmental individual work
together to complete project goals. The project leader is responsible for conﬁrming
and tracking the work executing status of each project member during the project. The
project members report to the project leader and the organizationally direct supervisor
simultaneously. The project leader will participate in the performance appraisal meetingof the project members to provide their observation and member's working performance.
It is a review committee, consisting of upper-level supervisors, supervisors of upstream
and downstream business units or colleagues, customer opinions, etc., and the judges
jointly evaluate the individual performance from multiple angles. Supervisors need toprovide development suggestions and forced ranking results.
The line instructors will assess every employee to see whether their competency ofworking in the production line, machine operation, product inspection and exception
elimination are qualiﬁed or not.

Semi/annual

Ongoing/anytimeSemi/annual

Semi/annual
Quarterly

Employee and Distribution of Taking Regular Performance Appraisal and Competency Review (1~2)
GenderPositionManagement
Technical
Males
Administrative
SkilledSubtotal
Management
Technical
Females
Administrative
SkilledSubtotal
Total

119

Performance Appraisal
Number of Employees

804
2,796
672
3,616
7,888
244
626
1,286
4,450
6,606
14,494

No. of Employees Taking
Performance Appraisal

804
2,796
672
3,616
7,888
244
626
1,286
4,450
6,606
14,494

Percentage of Taking
Performance Appraisal

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Competency Review
Number of Employees

804
2,796
672
3,616
7,888
244
626
1,286
4,450
6,606
14,494

No. of Employees
Taking Review

768
2,796
672
3,616
7,852
243
626
1,286
4,450
6,605
14,457

Percentage of
Taking Review

95.52%
100.00%100.00%100.00%99.54%
99.59%
100.00%100.00%100.00%99.98%
99.74%

Note:
1. Qualiﬁcation of Performance Appraisal and Competency Review: The employee who has assumed to pass for three months or more during the assessment period. However, those who haven't passed the probationary assessment,or those on leave without pay for over three months are not listed in the name list to do the performance appraisal and competency review
2. Vice presidents and above do not ﬁle their competency review in the system

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Employee Engagement Survey

Employee engagement affects the employees' willingness of devoting themselves to theirwork, offering others their work experiences and suggestions for improvement, and it also
affects the smoothness when they perform their jobs. Therefore, employee engagement
has a positive impact to USI. USI conducted the ﬁrst biennial survey with expert consultantsin 2017. We hope that this can help us effectively understand and collect employees'
opinions and use it as a policy tool for attracting, retaining, and cultivating talents, thereby
improving the company's processes, strategy, and various measures to be closer to theemployees" needs and achieve a win-win situation between USI and employees.
In 2021, we implemented a new survey structure and measurement benchmark, adding
the Engagement Indexes (sustainable engagement, retention, and ESG 3 dimensions) in
the survey to be more deeply and effectively listen to employees' voices and closer to theemployees' expectations to achieve the goal of attracting and retaining talents.

Employee ExperienceWork

RewardPeopleInspiration

Drive

GrowthTrust

Inclusion

Voice

Capability

Collaboration

Fair Pay

SocialInvolvement

Appendix

According to the 2021 employee engagement survey results, "organizational efﬁciency,
potential realization, and reasonable rewards" has a high impact on employee
engagement. To raise "organizational efﬁciency", we implemented process simpliﬁcationand established a new system to strengthen the communication channels and methods.
In response to "potential realization", we established a career planning and lifelong
learning mechanism for employees, revisit the training plans of all employee positions,develop differentiated training content and training materials, and encourage employees
to take on-the-job training in the company's special classes to improve their academic
qualiﬁcations. Regarding "reasonable reward", we redeﬁned the key focus objects, propose
an incentive bonus mechanism, promptly praise outstanding employees, and shorten thetime for temporary DL to become regular employees to increase employees' willingness
to stay in USI.

(3 Categories)

PurposeOrganization

Inclusive
WorkplaceEngagement Indexes(4 Dimensions, 12 Categories)

Understanding

Environmental Protection
and Occupational Safety

SupportSustainable Engagement
EngagedEnabledEnergized

Retention

Pull Force
Push Force

Employee
Behaviors

ESG

Environment
Society
Governance120

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Human Capital Development

Employees are important assets of USI. They are also the spirit of and motivation for the Company to progress and grow. Therefore, USI has been devoted to investing talents and createda learning organization culture to providing employees the most appropriate resources and effective learning models, helping them to enhance themselves and show their value in
relevant expertise.

Dual Career Ladder

Through diversiﬁed educational training, USI helps its employees cultivate professional
abilities and grow, and improve in learning effectiveness. The most important learningand development system in the USI cultivation program is USI University (USIU). USIU
sets up "College of Management, College of Technology, College of Quality, College of
Manufacturing, and General Knowledge Center". The USIU President is served by thepresident, and the deans of the colleges and General Knowledge Center are respectively
served by the vice presidents with prestigious and professional knowledge in each ﬁeld.
USIU integrates global learning resources for employees to learn and develop.

USIU provides a holistic learning and development framework for employees to actively
retain talents, by strengthening "Dual Career System" of management and professional
positions. With a mission of realizing high operational performance, USI establishes
an innovative learning environment and is committed to improving the employee
professional quality, leadership management and innovative research and development
capabilities inside the organization. It has targeted employees with different competences
to plan various employee training and courses, provide them a complete learning
platform, help them to solve work issues, and enhance their professional capability toreach organizational targets.

Competency

Technical/Prof. Manager
Expert/Lecturer

en

on

De
ve
lo

pm

i
sit
Po
n

Engineer/Administrator
Basic Training

Note:
1. UMBA, USI Master of Business Administration
2. MTP, Manager Training Program
3. MIT, Manager Initial Training
4. TWI, Training Within Industry for Supervisors

121

USI Camp

ip
rsh
de
Le
a

tio

ca

ﬁ
rti

Ce

Senior Engineer/Administrator
Middle Training

New Employee
Orientation

Division Mgr.
UMBA (1)t

Staff Engineer/Administrator
Advanced Training

Executives

USI University
USI Motto: Realizing IDEAS Together

Department Mgr.
MTP (2)
Section Mgr.
MIT (3)
Supervisor
TWI (4)

COO's
Communication

Tech./Mgmt.
ForumAbout this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Diversiﬁed Channels and Platforms of Learning

USIU provides employees with all-round training courses that talents need to take. It
offers not only diversiﬁed training content but also designed the training methods andrelevant activities based on the different course category. The courses include training in
the classroom, e-learning training, on-job training, and external training. These courses
enable employees to learn and continuing education in a more efﬁcient and ﬂexible
manner. Under the multiple learning models and a precise and solid training framework,
we plan internal and external training and build diverse, innovative learning channels to
inspire employees to grow continuously. So, more employees can show the training results
through the process reengineering, research and development achievement, project
execution, and innovation, and apply what they have learned to practice ﬁeld of works.

Diverse Learning Modes
College
CompetenceCore CompetenceManagement
Competence

Self-learning
OJT

College ofManagement
College ofTechnology
College of
Quality
College of
Manufacturing
General Courses

Director Training
SOP Training
Internal E-system
Professional
Knowledge and Skill
Internal Sharing
Study

Study
(Books, Journals,
Network...etc.)
External Training,
Lecture, SeminarOn-the-Job
Training
Professional
Accreditation

e-platform (LMS, Global OA, SOP, DMP, PDM)

USI Motto: Realizing IDEAS Together

Note:
1. VUCA, Volatility, Uncertainty, Complexity, Ambiguity
2. SWOT, Strengths, Weaknesses, Opportunities, and Threats
3. SMART, Speciﬁc, Measurable, Attainable, Relevant, Time-Based
4. The 70-20-10 Rule, Learning by Doing - Learning from Others - Learning by Curriculum

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Cultivating talents in the VUCA (1) era to cope with the changing environment in the future
is an important part of the sustainable development of enterprises. It requires talents
to build new capabilities by accumulating different practical experience, cross-borderexperience, and using "Role Swap" to allow employees to grow and move between different
roles and teams according to their personal career development goals and organizational
development needs. The launch of the talent training plan will lead those who are at thehelm who are striving forward in the turbulent waves to tap their potential by constantly
accepting challenges, try multiple cross-border development to cultivate a comprehensive
perspective, and jointly create a stage full of a sense of belonging and achievement.
Therefore, based on the intersection of the three cores, Individual Ability, Individualinterest, and Organizational Demands, we establish an Individual Development Planning(IDP) management mechanism. This is a structured learning plan led by employees.
Through the assistance of supervisors, employees and their supervisors jointly set up
their individual career development plan and individual growth plan and will achieve thedevelopment goals that are consistent with USI's strategic mission and goals together.
At the same time, various forums and keynotes are held on a regular basis to improvevarious employees' competencies by the sharing and communication from the famous
industry leaders and colleagues. In 2022, 1,929 employees participate in the Leadershipand Management Forums, 160 employees participate in the Technology Forums, and201 employees participate in the Sustainable Development Lectures to cultivate andstrengthen their own capabilities. A total of 753 employees took the opportunity andchallenge of new positions and their abilities were afﬁrmed.

01

03

05

Conﬁrmation

Development Plan

Evaluation & Adjustment

Self-Reﬂection &Career Exploration
Goals Identiﬁcation
and Development

Formulate Annual
SMART (3) Goals
The 70-20-10 Rule (4)SelfAssessment

Self-Assessment Using
SWOT (2) Analysis
Build a Win-Win Strategy

02

Implement

Follow-up, Sharing &Feedback, Consulting and
Listening
Recording, Adjustment &Continuous Improvement

One Small Step a Day;
Self-Reﬂection
Seek Feedback and Support
Face Obstacles
Commitment and Motivation

04

122

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

In the post-epidemic era, we have optimized our training platform and course production tools and replaced some physical face-to-face courses with electronic courses. At the sametime, we have made our course content more streamlined and vivid, and the choice of course location and class time is more ﬂexible. In 2022, our total training hours reached 480,548
hours, and on average, every employee was trained 28.8 hours (1). The total training cost exceeds CNY 17.1 million. For details, please refer to the Sustainability Data - Social G. Training
Hours and Cost table.

Training Statistics for Each Employee Category
Category

Employee Training Hours

2022
Total Training Hours

Average Training Hours

Male

300,950

32.5

Female179,598

24.3

Management Position

24,463

23.1

Technical Position

157,83744.5

Administrative
Position

42,88521.0

Skilled Position

255,363

25.5

New Employees

231,356

22.6

All Employees

480,548

28.8

31.0

30.7

28.8

22.6
6,878

577,370592,663

2020

2021

480,548

417,860

2019

Total Training Hours

2022

Average Training Hours

Training Statistics Breakdown by Issues
Training Topics

Environment

Health and Safety

Human Rights

Green ProductBusiness Ethics

Enterprise Risk

Cybersecurity

Total Training Hours

28,83832,411

39,707

7,918

60,621

12,887

7,545

No. of Employees

21,217

24,391

29,11013,771

27,155

9,784

7,917

1.4

1.3

1.4

0.6

2.2

1.3

1.0

Average Training Hours

Note:
1. Average training hours ＝ The actual total training hours of employees of this category/gender ÷ the number of employees of this category/gender at the end of the period123

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Tailored Career Plan

In terms of management positions, to ensure that the company internal management
talents meet the company development demands, we arrange management cadres
to receive training for managers at all levels and make a good succession plan for theorganization according to the company's policies, company core skills, management
functions, human resources, ﬁnancial accounting, and other concepts. We organize
the Leadership Development Strategy Program (TWI/MIT/MTP) is to strengthen the
management ability to improves the work efﬁciency of themselves and their subordinates.
The estimated beneﬁt is CNY 3.58 million.
In terms of professional skills certiﬁcation, USI promotes the job certiﬁcation system, andestablishes an inspection mechanism for the professional ability that each position should
have, so that employees in the same position have a certain level of professional skills.
For example, in 2019, Kunshan Facility became the ﬁrst batch of high-skilled certiﬁcationenterprises in Jiangsu Province. In 2021, it has already had the ability to certify three
types of jobs (as special installation and adjustment electronic equipment technician,debugging broadcasting and communication equipment technician, and electronic
installation in broadcasting and communication equipment technician) and four levels of
qualiﬁcations for junior, middle, high, and advanced technicians. As of 2022, a total of 249
junior technicians, 550 intermediate technicians, 578 senior technicians, 157 advanced
technicians. 1,534 skilled workers have been trained and certiﬁcated in total. The High
Skill (Lean Production) Certiﬁcation Program is to enhance employees' key competencies
such as analyzing and problem-solving ability through taking the certiﬁcation course,
and to provide a clear technical career roadmap for employees' self-development. The
estimated beneﬁt of the course this year is CNY 78.63 million.

Strengthen Employee Sustainable Employment Ability andLifelong Learning Program

In an era of ever-increasing demand for comprehensive talents, professionals withmerely one skill are no longer enough to meet the working requests. USI has, therefore,
continuously enhanced employees' sustainable employment ability, assisted employees
doing acquiring skill and ability management and lifetime learning programs thatare required for a job transfer in the future. Since 2018, USI has invited local collegesor universities to cooperate with Zhangjiang, Kunshan, and Mexico Facilities letting
employees to take the classes inside the factory. We have set up 14 classes to save
employees from the trouble of commuting, so that employees can make good use of theirown time arrangements, and then obtain academic qualiﬁcations/degrees. Starting from2018, a total of 157 employees have been supported to obtain academic qualiﬁcations/

Inclusive
Workplace

Environmental Protection
and Occupational Safety

SocialInvolvement

Appendixdegrees, and a total of 24 employees have been supported to obtain bachelor's degrees
with majors in preschool education, human resources management, environmental
design, engineering management, business administration, investing, informationengineering and logistic management in 2022.

Internal Instructor Training Program

Over the years, USI has trained and certiﬁed employees through the internal instructor
system to serve as lecturers, forming a good knowledge inheritance culture, and giving
full play to internal human resources and inﬂuence to provide employees with highquality and forward-looking courses to cultivate world-class talents for the Company toenhance the Company's global competitiveness. By the end of 2022, 1,118 worldwide
instructors have passed internal instructor program.
1,118

867

833
733

774

608
586

523

580

287

414
210

2018

247

194
2019
Male

2020
Female

287
2021

344

2022

Total Internal Instructors

124About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixSocial Involvement

To manage our relationships with our surrounding communities
and the environment, USI actively engages in corporate
citizenship through external participation and four approaches:
Investing in Education, Contributing to Society, Conserving theEnvironment, and Promoting Arts & Culture. Together, we cancreate social value and build a sustainable future.

5.28
130,214660
CNY

Million Invested in Social Involvement
Trees Planted in the Million Tree ProjectStudents Participated in Industrial-Academic
Partnerships

SDGs
125

2,047
1,838
200

Key Stakeholders: Employees, Communities, Industry Unions/Associations

Volunteer Hours Contributed to Local
Communities
Students Reached through 5 Rural
Revitalization Programs

kg Trash Picked from Creek Cleanup

About this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Sustainable Issue Performance and Targets
Management Purpose
Social Involvement

Effective management ofsocial activities investment
to maximize social value forboth the company and the
beneﬁciaries

KPI

2022 Target

Material Issue

2022 Performance

StatusSocialInvolvement

Inclusive
Workplace

Achieved

2023 Target

Appendix

Not Achieved (1)2027 Target

Management Approach: Focus investment in accordance with the USI Public Affairs Engagement Policy and encourage employees to volunteer insocial activities through the Corporate Volunteer Regulations
Evaluation Mechanism: Adopt the LBG framework and SROI methodology to assess social activities input, output, and outcome, and adjust
investments to create more value
Rural area reading
activities

Hold 6 reading activities
in rural areas

Held 11 rural reading
activities

Hold 6 reading activities
in rural areas

Hold 6 reading
activities in rural areas

Number of industrialacademic partnerships

Conduct 2 researchindustrial-academic
partnerships

Conducted 2 researchindustrial-academic
partnerships

Promote industrialacademic partnerships

Conduct 2 researchindustrial-academic
partnerships

Number of interns

Admit 50 interns

Admitted 72 interns

Admit 30 interns

Admit 150 interns

Number of USIU classes
sharedShare 20 USIU classes

Shared 16 classes

Share 20 USIU classes

Share USIU 40 classes

Number of students
beneﬁting from rural
revitalization programs

Support 1,000 rural
students

1,838 rural students
supported through 5
programs

Support 1,100 rural
students

Support 2,000 rural
students

Number of volunteers

Reach 500 volunteers

Reached 701 volunteers

Reach 500 volunteers

Reach 2,000 volunteers

Number of art groups
supported

Support 2 art groups

Supported 3 art groups
and 3 artists

Support 3 art groups

Support 3 art groups

Number of trees plantedPlant 8,000 trees in the
Employee Forest

Planted 8,381 trees inthe Employee Forest

Plant 14,000 trees in
the Corporate Forest

Plant 14,000 trees in
the Corporate Forest

Amount of trash picked

Pick up 200 kg of trash

Picked up 200 kg of
trash

Pick up 300 kg of trash

Pick up 1,000 kg of trash

Number of environmental
seminars held

Hold 2 environmental
seminars

Held 4 environmental
seminars

Hold 2 environmental
seminars

Hold 5 environmental
seminars

Note:
1. For not achieved targets, please refer to the corresponding sections for relevant explanations and future improvement plans126

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Social Activities Overview

As a corporate citizen, we believe that social involvement is more than monetaryinvestments. Our contributions should be anchored in sustainable development andcontribute to community development, making a positive impact. As the top management
for Social Involvement, the Sustainability Committee established our Public Affairs
Engagement Policy and Corporate Volunteer Regulations to systemically manage andfocus our strategic direction. We encourage employees to volunteer in social activities
that align with our four approaches: Investing in Education, Contributing to Society,

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixConserving the Environment, and Promoting Arts and Culture.
To measure the social value of our programs, we adapted the LBG framework to makebetter decisions, be more accountable, and maximize the effectiveness of each programby evaluating our inputs, outputs, and impact. USI invested CNY 5.28 million in 63 social
activities and 37 external organizations in 2022 and engaged 701 employees to volunteer
2,047 hours of service throughout the year.

The following ﬁgures show the ratio of CNY invested by type of approach (1), type of activities, and type of contribution (2):Investment by Approach

9

7

42

50

24

24

14

9

13
49

29

2019
Investing in
Education

21
46

23
2020

2021

Contributing
to Society

Conserving theEnvironment

26

2022
Promoting
Culture & Arts

38

5
46

Investment by Type of Contribution
8

37
37
49
37

43

25
2019

2020

Commercial
Initiatives

42,352

49

2021

2022

Community
Investments

Charitable
Donation

1%
Percentage of Total Costs (%)

20

Percentage of Total Costs (%)

20

Investment by Type of Activity

Note:
1. External organizations participation costs are excluded from the social involvement four approaches
2. Total social investment costs are based on cash and in-kind giving. Volunteering time and management overhead costs are not included in the calculations

127

4,697,034

157,88285%

3%584,053
11%

Unit: CNY

Cash
Contributions

In-Kind
GivingTime

Mangement
Overheads

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Investing in Education
Talent is an important growth driver for enterprises. Reading is thegroundwork for accumulating innovative capabilities. As part of
the Investing in Education strategic pillar, USI helped establish the
Taiwan Reading Culture Foundation and its Philanthropic Library.
The Library is set up in each township as a resource for teachers toborrow and use in class. We co-organized the Chinese Literary Prize
for Global Youth to encourage students in literary pursuits. In termsof youth training, we have several industrial-academic partnershipand internship projects in multiple facilities to enhance youth
employability and develop the next-generation of technology talents.

Child Reading activity, 71% parents believed that the event could enhance family reading
quality. For detailed analysis, please refer to the charts on the next page. In total, every $1
invested in the Philanthropic Libraries can generate $4.00 of social value.

Magical Physics Science Camp-Outcome
Incidences for Students
77

75

73

71

71

65

Sponsor Taiwan Reading Foundation (Nantou Facility)"Broadening children's horizons and cultivating reading interest" cannot be done
overnight. Therefore, USI has continuously sponsored the Taiwan Reading Culture
Foundation to build Philanthropic Libraries since 2005 and invested CNY 110,000 every
year purchasing new books for the Libraries. To date we have donated 767 boxes of books,
developing the reading ability of students in rural and remote areas. We understand that
only continuous investment can bring substantial impact and change to students, and notjust ﬁnancial and material assistance.
Understanding that different methods are needed for different age groups to guidereading, in addition to book donations, USI collaborates with the Foundation to organize
Parent-Child Reading, Meet the Author, and Magical Physics Science Camp activities. We
spare no effort to expand investment in local education, enhance reading habits, andpromote interest in science. In 2022, we held 11 reading activities. For preschool to lower
graders, families are the cradle of learning, we held 2 Parent-Child Reading activities andguide children to read picture books in a lively way to cultivate active interest in reading
and learning. Additionally, for upper graders, we held 1 Magical Physics Science Camp
where students can verify and explore physics through their ﬁve senses and a handson approach. We also held 8 Meet the Author activities where invited authors talked atschools about their works and experiences, letting students approach books from anotherperspective.
We continued to use the SROI methodology to analyze and quantify our impact tostudents and children through the Philanthropic Libraries program and activities. Throughour survey, we found 77% students who participated in the Magical Physics Science Camp
felt their science knowledge increased. From the parents that participated in the Parent-

Increased Science
Knowledge

Increased Interest in
STEM Subjects
2021

2022

Rate
(%)

Increased Reading
Motivation

Parent-Child Reading: Outcome Incidences
for Parents and 1st-3rd Graders
Parents

1st-3rd Graders

77

77
72

73

72

71

74
70

71

73

71

65
Improved Family
Reading Quality

2019

Rate
(%)

Improved Reading
Comprehension
2020

2021

Improved Reading Focus
2022

128

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Sponsor Chinese Literary Prize for Global Youth(Nantou Facility)

Value Chain
Management

The Chinese Literary Prize for Global Youth is known as the fountain of living waters for
new literary talents. Many literary luminaries such as Chang Man-Chuan, Jian Zhen, andHou Wenyong had won this prize as students. To encourage student participation andadvance Chinese literary culture, USI sponsors CNY 66,000 every year as prize money toscout for new literary stars. The call for manuscripts has expanded to include Chinese
students from all over the world. In 2022, the 40th Global Chinese Student LiteratureAward received 1,141 entries, mainly from Taiwan, Mainland China, and Malaysia. There
were 387 submissions from Malaysia. The Global Chinese Student Literature Award, cosponsored by Mingdao Literature and Art Magazine, Mingdao Middle School, and Modern
Literature Museum, is a cradle for literary talents in the Chinese region. We look forward
to more award-winning students emerging in the Chinese literary world.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

USI University Courses & Industrial-Academic Partnerships(Global)Over the years, USI focused on internal employee education and training. Internal lecturers
from USI University cooperate with industrial guilds, associations, and universities
provided several free courses to share their knowledge, experience, or the industry's latest
trends to associated organizations and students. Through courses such as DISC personality
analysis, school partnerships experiences, talent selection and business competitiveness,
we share our experiences with industry peers and hold career planning courses to help
university students grasp the job market. Due to the pandemic, we only shared 16 coursesthat totaled 932 hours of lessons in 2022. In the future, we will continue investing in the
education of youth capacity training once the pandemic eases up.
Also, to put academic theory into practice, USI provides internship opportunities in
Huizhou, Kunshan, Nantou, and Mexico Facilities with one-on-one mentor system sostudents can bridge the gap between school and work after graduation. In 2022, 72
students interned in our internship programs. In addition to internship opportunities,
Nantou Facility partnered with National Chiao Tung University and Taipei Tech to conduct
reseach projects such as the Cross-Component Short Circuit and Tin Defect Detection andModule Miniaturization Reliability Testing research. Overall, 660 students beneﬁted fromthese industrial-academic partnerships and participated 54,616 hours in 2022.

USI University Courses (Global)
Facility

129

Appendix

Course Name

Zhangjiang

Career Planning (Shanghai Tech School)
RBA Introduction (Suppliers)

Huizhou

DISC Personality Analysis (Industry)
RBA Introduction (Suppliers)

Kunshan

USI Kunshan School Partnership Sharing(Kunshan Human Resources Market)
Reading Enhances Life (Industry)
How to Select the Right Talent (Industry)

NantouLanguage, Talent, Competitiveness (Industry)About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Contributing to Society
Rural Revitalization

In response to SDGs (Goal 1: No Poverty; Goal 4: Quality Education), USI sponsors several educational rural revitalization
programs to help children in impoverished regions obtain resources for quality education and narrow the gap between
urban and rural areas. For example, in 2022, USI invested CNY 818 thousand in the Rural Digital Education Program,Western Region Student Aid Program, Spark Philanthropic Library, Hope for Pearls Project, and the Kunshan Peace
Packages Activity, assisting 1,838 students in need.

Rural Digital Education Program(Zhangjiang Facility)

USI believes in tech for good and thus focuses on bridging the computer education gap in remote areas. We launched
the Rural Digital Education Program and donated computer classrooms in response to the United Nations digital literacy
advocacy initiative and rural revitalization efforts. By enriching tech resources and supporting local education in remoteareas, USI upholds our corporate spirit of Realizing IDEAS Together and continues to follow up on the usage of computerclassrooms, adjusting our implementation according to feedback to enhance program efﬁciency.
Expanding on the 5 classrooms we built, we set
up another 3 classrooms and upgraded theirequipment. We also focused on training rural
technological talents and provided customized
support for the teachers in the 5 computerclassrooms. To increase interest in digitalknowledge, we planned a mini contest to encouragelearning and knowledge retention, developing
students' digital literacy. In 2022, we set up 3
computer classrooms in Henan and Gansu anddonated 197 sets of computers and beneﬁted 1,573
students, with a cumulative beneﬁciary of 2,444
students.

Hope for Pearls Project(Huizhou, Kunshan Facilities)

Since 2016, USI has actively participated in the Hope for
Pearls Project, helping students with excellent grades but
cannot afford tuition to actualize their dream of ﬁnishinghigh school. In 2022, we held a "Walk for Pearls", where
USI employees walked 5,000 steps a day to promote
the Hope for Pearls Project. We raised CNY 100,000 for
Qianshan Yezhai Middle School in Anhui Province andcontinued to support the 2021 USI Shueijin Pearl Class
with 40 students. In addition to funding, we continued
to follow up on these pearl students and support thememotionally and spiritually. With our love and support,
USI Shueijin Pearl Class of 2019 passed their Gaokao withﬂying colors. 100% pearl students got accepted to their
dream universities and 94% got in tier 1 schools.

Western Region Student Aid Program(Zhangjiang Facility)

It takes ten years to grow trees, but a hundred years to nuture people. Investing in education beneﬁts the present andfuture generations as education is the pathway out of poverty. Therefore, USI carried out the Western Region Student Aid
Program through the Cihui Foundation in rural western regions such as Yunnan and Sichuan and invested CNY 48,000
to provide ﬁnancial aid to 12 impoverished outstanding college students to ensure their opportunities for education andgrowth. We believe when they complete their studies, they will use the knowledge learned to help more people.

130

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Spark Philanthropic Library(Zhangjiang, Jinqiao Facilities)

As part of the Investing in Education and Contributing to Society strategy, USI built a
Spark Philanthropic Library at Gaiguo Elementary School in Gansu.
During construction, USI held a book donation campaign: Share the Fragrance of Books,
Spread the Love, to bring better educational resources to 163 students. When the Library
was completed, USI and 51 employees donated 1,241 books and 20 audio players with 200
audiobooks to enrich the school's resources. We hope to provide practical help to narrow
the urban-rural gap. We sincerely hope that the students will learn from books, keep up
with the times, and thrive like the children in the city.

Kunshan Charity Foundation "Peace Packages" Activity(Kunshan Facility)

Under the pandemic, vulnerable groups are often the most impacted. This year's Chinese
New Year Care Packages and Children's Day Heartfelt Wishes were canceled due to thepandemic. With the spirit of "never omit to do a good deed thinking it's too trivial", USI
donated CNY 5,000 worth of Peace Packages, ﬁlled with sports equipment, stationery, andpersonal protective supplies to send warmth and care to 50 elementary school students ineconomically disadvantaged areas, migrant children, and students in need.

131

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixSocial Inclusion

Christmas Dreams Come True Project(Nantou, Mexico Facilities)

Christmas is a time to spread joy and blessings. Apart from Nantou Facility that has beenorganizing a gift registry for the Nantou Renai Home for Children for ﬁve consecutive
years, this year, Mexico Facility also arranged to hold a christmas party on site for
Salvation Army children. In 2022, 96 children participated in this festive Christmas event,where USI ambassadors shared the joy of the holidays with children in an atmosphere of
exciting performances, fun competitions, and Christmas dinners.

Chinese New Year's Eve Dinners(Nantou Facility)

In the face of an ultra-aging society, the issues of elderly care and lonely elders are
becoming increasingly urgent. With sincere respect for elders, USI organized a Chinese
New Year's Eve dinner donation through the Huashan Foundation. 268 dinners weredelivered to the seniors through the Foundation and volunteers. When visiting, we not
only gave them their Chinese New Year dinner but also stayed to chat and ask about theirday, advising them to keep warm and take their medications. Through this activity, we
hope to draw the resonance of kind-hearted people and make the disadvantaged elderly
feel that there is warmth everywhere.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Conserving the Environment
Climate change is an issue that humanity must face. Saving energy
and reducing carbon emissions is the starting point for Conserving theEnvironment. For years, USI has been cooperating with Shanghai Roots &Shoots in the Million Tree Project to purify air quality and restore
biodiversity. We also organize activities such as Environmental Seminars,
Mini Farmers' Markets, and Environmental Cleanups to promote green
and low-carbon lifestyles, raise environmental awareness, deepen
connections with neighboring communities, mitigate negative impacts,and do our part for the global environment.

Million Tree Project(Global)In response to SDGs (Goal 13: Climate
Action; Goal 15: Life on Land), USI
actively promotes environmental
education, protects ecosystems,
combats desertiﬁcation, and reverses
land degradation through collaboratingwith Shanghai Roots and Shoots's Million
Tree Project. In addition to reversing
land degradation and desertiﬁcation in Inner Mongolia and Ningxia, planting trees also
restores local biodiversity. A recent ecological survey reports 47 species observed in Inner
Mongolia and 14 species in Ningxia, with the number of species steadily increasing. By
the end of 2022, USI has planted 130,214 trees covering 86.36 hectares, which conserves
about 118,485.92 metric tonnes of water in a year and captured 17,906 kg of CO2.
The USI Employee Forest was launched in 2016 as an awareness-raising campaign. We
organized employees' donations and volunteers to plant trees in Inner Mongolia andNingxia. Unfortunately, due to the pandemic, our tree-planting ambassadors couldn't
go to the planting sites. Thus, employees participated even more actively in donating
saplings to contribute to environmental protection. In 2022, 22,381 trees were newly
planted, of which employees donated 8,381 trees, an increase of 7% over last year.

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

USI Tree Planting Data
76.71

Appendix

86.36

67.20
53.06

3.00

7.85

10.85

4,000 4,000 4,000
2013

2014

2015

18.30

26.79

39.62

21,04019,654 20,111

21,864 22,381

6,160 7,004

2016 2017

Trees Planted

2018

2019

2020

2021

2022

Cumulative Area (Ha)Creek Cleanup Project(Nantou Facility)

In addition to protecting the marine
ecosystem, the waters around ourlives are also essential. USI organizeda creek clean-up activity to pick up
waste near the Maoluo River and plant
trees in 2022. Under the guidanceof the Environmental Protection
Bureau, 30 USI volunteers picked up
200 kg of trash, taking action to raise
environmental protection through ahands-on approach.

132

About this Report

Sustainability
Management

Operationsand Governance

Mini Farmer's Market (Nantou Facility)

The Mini Farmers' Market is formed by farmers advocating
direct from farms and farmers. They insist on usingorganic fertilizers and natural farming methods instead ofchemical pesticides to maintain sustainable operations.
Not only is the market a platform for individual farmers
to sell their produce, but it is also a place where
consumers can buy with peace of mind. When consumers
have questions about farm produce, they can directly
get answers from the farmer that planted it and learn
agricultural facts and knowledge as a bonus. Throughthe Mini Farmers' Market, USI encourages employees tosupport eco-friendly farming, reduce carbon footprints,
and build a virtuous cycle of life and land.

Adopt-a-Road Program (Nantou Facility)
USI Nantou Facility adopted a stretch of Caoxi Road (fromZhongxing Road to Maoluoxi Bridge), the provincial
highway No.14B access road to Freeway No.3 (fromMaoluoxi Bridge to the intersection at Shengfu Road), andShengfu Road intersection to the central island at Shanglin
police station and maintained these roads' hedges andcleanliness. Our adoption has entered its 16th year, andwe are proud to invest in our town's efforts in greening andlandscaping these roads.

133

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Promoting Arts and Culture
Sponsor Youth Go Competitions(Zhangjiang Facility)

Due to the pandemic, evenly matched Go players acrossthe strait met online to compete in virtual matches. USI
sponsored CNY 493 thousand in the 2022 Twin Cities Cup
Professional Summit Tournament to enhance Go players'
skills and promote cross-strait youth cultural exchange.
With this platform, passionate Go players can interact andgrow together through matches.

Sponsor Ming Hua Yuan Theatre
Performance (Nantou Facility)
Promoting traditional arts and giving back to the community
is central to USI's commitment to social activities. Although
the Straw Crafts Culture Festival was canceled due to thepandemic in 2021, once the pandemic subsided in 2022,
we continued our support. The Minghuayuan Theatre
Group was invited to perform Shooting Star at Caotun
Zhongshan Park, where over 2,000 locals came and enjoyed
the traditional opera outdoors. We want to keep traditional
culture alive through regular performance and broad
distribution to be passed down through generations.

Sponsor Cloud Gate Dance Theatre Annual Tour
(Nantou Facility)
Since 2005, USI has annually supported the Cloud Gate Culture and Art
Foundation as we believe that while technology can improve our qualityof life, art can improve the quality of our minds and souls. Cloud Gate
productions not only show the beauty of dance, but also express theinfectious joy of life and depth of culture. This year, we sponsored Send ina Cloud production and invited supplier partners to enjoy the show with
our senior management.

Inclusive
WorkplaceSocialInvolvement

AppendixAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

External Participation

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

As a global corporate citizen and leader in electronic design and manufacturing services,
we recognize the need to be more visible in advocating key industry issues such as climatechange, corporate sustainability, human rights, and supply chain resilience.

Our assessment determined that all 37 industrial associations we joined are Paris-aligned.
Examples of the associations actively involved in developing climate policy and advocacy
are listed below:

The Sustainability Committee systemically manages and guides our company-wide
associations through the Public Affairs Engagement Policy. Organizations we choose
to participate in are ones we share similar values with, and we regularly review ourmemberships for alignment on material issues, such as the Paris Agreement goals. Every
year, the Senior Vice President of the Employee Care & Social Involvement Taskforce,
responsible for the stewardship of public affairs engagement, reports review results to the
Sustainability Committee. Where misalignments are found, the Committee reviews anddeliberates whether to continue our membership.

Responsible Business Alliance (RBA) and Responsible Minerals Initiative (RMI)
As a member of ASEH, USI joined RBA and RMI in 2015. RBA is an industrial alliance thatis dedicated to enhancing the global supply chain's social, environmental, and ethicalresponsibility. They work with all sectors and initiate activities to mitigate climatechange. USI follows the RBA Code of Conduct and requests our facilities around theworld to implement it through annual RBA SAQ, internal audits, and 100% completionof RBA VAP. We disclose our performance on the RBA-Online platform. Externally, USI
accepts customers' audits and requests suppliers to follow the RBA Code of Conduct
and join the RBA-Online platform to disclose their results. For more information, pleaserefer to the Supply Chain Management and Human Rights Protection sections.

USI actively participated in 37 industrial organizations (1~3) and contributed CNY 448.3
thousand in 2022 (4). Upon review, most associations we joined focus on other industryspeciﬁc issues, including workplace safety, sharing best practices, and professional
development. Through networking events and serving important positions, USI keeps intouch with the industry and contributes to its progress. The following is a partial list oforganizations USI joined:

Zhangjiang Facility

Shanghai Integrated Circuit Industry
Association
Pudong Association of Foreign
Investment

Huizhou Facility

Taiwan Merchant Association
Shenzhen

Nantou Facility

Taiwan Electrical and Electronic
Manufacturers' Association
Taiwan Telematics Industry Association
Nankang Industrial Manufacturers
Association
Taiwan Association of Occupational Health
NursesTaiwan Electrical and Electronic Manufacturers' Association (TEEMA)TEEMA's mission is to promote economic development and act as a bridge for crosssector communications. In response to international trends and regulations, TEEMA
actively participates in and promotes energy saving and carbon reduction. USI
responded by setting and achieving energy-saving goals. In addition to meeting the SBT
targets pledged by ASEH to support the Paris Agreement goals, we have also introduced
the TCFD & CDP framework into our environmental management system. Please referto the Climate Change and Carbon Management section for our performance andprogress results.

Kunshan Facility

Taiwan Compatriot Investment
Enterprises Association of Kunshan
Note:
1. Represents the position of Chairman/Vice-chairman
2. Represents the position of Executive Director
3.
Represents the position of Director/Supervisor
4. USI's Business Code of Conduct prohibits political participation through donations to lobbyists and political groups.
And USI did not make any monetary contributions to political campaigns or organizations, lobbyists, or other taxexempt groups whose role is to inﬂuence political campaigns or legislation

134

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

AppendixAwards and Recognitions
GovernanceSocialZhangjiang Facility
2022 Forbes China Digital 100
2022 Top 100 Competitive Enterprises in Electronics
Information
2021 Top 10 in 2021 Shanghai Integrated Circuit Packaging
and Testing Sales
2021 Panorama Investor Relationship Awards - Investor
Earnings Call Innovation Award
2022 Board Ofﬁce Best Practices Award

Huizhou Facility
2021-2022 Shenzhen Excellent Foreign-Invested Enterprises-Double
Excellence Award

Zhangjiang Facility
12th China Charity Festival-2022 Responsible Brand Award
Shanghai Harmonious Labor Relations Enterprise2022 Pudong Safety Culture Exemplar Enterprise

Huizhou Facility
2022 Certiﬁcate of Honor for Supporting People with Disabilities

Jinqiao Facility
2022 Pudong Safety Culture Exemplar Enterprise

Environmental

Zhangjiang Facility
Shanghai Roots & Shoots - 2022 Million Tree ProjectSponsorship Award
Huizhou Facility
2021-2023 Shenzhen Nanshan District Green Channel
Enterprise

135

Kunshan Facility
China Export Leading Indicator Enterprise
Jiangsu Industrial Internet Demonstration Program (Benchmark Factory)
Jiangsu Industrial Internet Demonstration Program-Five Star CloudEnterprise
Cross-strait Internet Innovation Development Exemplar

Nantou Facility
2022-2025 Accredited Nantou County Breastfeeding Room-Most
Accommodating Room2022-2024 Accredited Healthy Workplace-Health Promotion Badge
15th Arts and Business Awards-Long-term Sponsorship Award
15th Arts and Business Awards-Sliver Award

Kunshan Facility
Suzhou "Near Net-Zero" Factory

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Contributions to the SDGs

Invested in 5 rural
revitalization
programs, beneﬁting
1,838 students.

Held 51 health activities, suchas blood donation, weight-loss
competition, and bone density
testing with 8,611 participants.
Provide medical and emergency
support for unexpected orsudden illnesses for employees
on business trips or stationed
overseas.

Donated 268 Chinese
New Year's Eve dinners to
disadvantaged lonely elders
to spread warmth and cheer.

Employees have the rightto equal pay for equal work
regardless of gender.
Increased percentage of females
in top management positions for
5 consecutive years, an increaseby 1.6% compared with 2021.

Donated a cumulative total of 767
boxes of books to the Philanthropic
Libraries for 18 years running.
Built 3 more computer classrooms
through the Rural Digital Education
Program, beneﬁting 2,444 students.
Trained cumulative total of 1,118
USIU internal lecturers.
Supported 157 employees to takeadvanced studies.

Purchased certiﬁed renewableenergy to offset carbon
dioxide emissions generated
by traditional electricity used.
100% renewable energy use in
Mainland China Facilities and
50% in Mexico Facility.

Reduced 28.5% water use intensityfrom the baseline year 2015.
Recycled 78.1% of process water.

Solar panels installedon Nantou-NK 1
Facility generated
2,142 MWh ofrenewable energy asof 2022.

23.93% revenue growth in 2022
compared to 2021.
Actively engaged in sound tax policies
and honest tax contributions to
support the government's efforts topromote economic growth.
Customer satisfaction score reached
84.2.
Starting salaries for direct laborers
at each facility are higher than local
minimum wages.
Provided 18,267 job opportunities
worldwide with 95% local hires.

136

About this Report

Sustainability
Management

Employed 83 people
with disabilities.
Employed 703 ethnic
minorities with 7 inmanagement positions.

Operationsand GovernanceValue Chain
Management

Environmental Protection
and Occupational Safety

Implemented enterprise risk management assessment and applied
relevant countermeasures.
Established an email protection mechanism to strengthen USI email
security.
Introduced Threat Intelligence System to strengthen cybersecurity
protection capabilities.
Cooperated with suppliers to recycle pallets and packaging materials,
reducing 828 metric tonnes of waste, and saved CNY 36.65 million.
Banned use of Indium Phosphide, Nickel Sulfate, and Nickel Amino
Sulfate from 01/01/2023 and restricted use of TBBP-A and MCCP
according to regulations to minimize their impact on workers and theenvironment.
Used 87% recyclable or reusable materials in designing mechanicalproducts, which reached 33,362 kg in USI's annual shipments.

Consistently monitored ourcompliance with legal emission
regulations to lessen our negativeenvironmental impact andcontribute to building sustainablecommunities. There were 0
signiﬁcant air pollution incidents in
2022.
Reached 92.5% recycling rate
for non-hazardous waste throughqualiﬁed disposal/recyclers.

137

Green Products
and Innovation

Promoted green product design,
reduced energy loss, and engaged incontinuous improvement to reduce
CO2 emissions, saving 22,023 MWhof electricity in 2022, equivalent to
reducing 14,191 metric tonnes of CO2.
0 days of production interruptions due
to climate-related disasters.
Implemented TCFD to analyze USI
climate risks. USI will use 100%
renewable energy in our operations
by 2035 and achieve net-zero carbon
emissions by 2050.

Inclusive
Workplace

Supported the Million
Tree Project for 10 years
running, planting a
total of 130,214 trees
covering 86.36 hectares.

Cleaned up Maoluo
River and picked 200 kg
of trash.
Held 4 environmental
protection seminars.

SocialInvolvement

Appendix

Provide a wide range ofelectronic products andservices under Global
Demand, Local Service
to our customers with
operations covering Asia,
Europe, America, andAfrica.
Global local procurement
rate reached 43%.

Established Sunshine Conduct
Policies and Anti-Corruption
Management Measures with
reporting mechanisms to ensurecompliance from suppliers andemployees. No corruption or bribery
instances were found.
No major ﬁnes or violations related
to anti-competitive practices orantitrust laws and regulations.
100% target suppliers met ConﬂictFree minerals requirements.

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

ESG Key Performance Data
Environmental

Renewable Energy Use Percentage (1)USI Group

Unit

2019

2020

2021

2022

%

82.7

79.6

80.3

81.6

Mainland China Facilities

%

100

100

100

100

Mexico Facility

%

10

21

31

50

Nantou Facility

%

0

0

0

0

GHG Emissions

Unit

2019

2020

2021

2022

Scope 1

metric tonnes
CO2e8,438.84

6,802.39

4,592.71

5,385.74

Scope 2

metric tonnes
CO2e168,730.49

184,225.84

201,538.85

215,510.73

Scope 3

metric tonnes
CO2e22,623.67

16,722,053.37

12,980,878.70

10,473,941.30

Unit

2019

2020

2021

2022

Water withdrawal

ML681.848803.690861.887

1,068.173

Recycled waterML

155.058

179.145236.972307.539

Recycling rate

%

22.7

22.3

27.5

28.8

Water Resource Management

Waste Management

Unit

2019

2020

2021

2022

Hazardous waste generated

metric tonnes

696.641783.065967.233

1,006.243

Non-hazardous waste generated

metric tonnes

7,813.671

7,805.962

8,766.093

9,835.675

Non-hazardous waste recycled

metric tonnes

7,067.916

7,079.345

8,115.463

9,097.263

90.46

90.69

92.58

92.49

Non-hazardous waste recycling rate

%

Note:
1. Renewable energy use ﬂuctuated in 2020 and 2021 because: (1) we included Nantou-TT 1 energy consumption data in 2020 and (2) expanded production lines in Nantou-NK 1 sharply increased energy consumption in 2021

138

About this Report

Sustainability
Management

Operationsand Governance

Environmental Expenditures

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Unit

2019

2020

2021

2022

CNY

23,179,611

28,131,112

25,989,443

29,912,628

Operating cost

CNY

11,428,159

15,177,012

12,176,028

12,634,136

Upstream/downstream cost

CNY

516,463854,709

1,058,487

862,255

Management overhead

CNY

10,806,289

11,880,177

12,464,402

16,237,399

Social activities cost

CNY

428,700

219,214290,527

178,839

Unit

2019

2020

2021

2022

Number of employees-

18,267

17,48618,081

16,660Male employees

-

9,866

9,426

9,938

9,271

Female employees

-

8,401

8,060

8,143

7,389

Percentage of females in total workforce

%

46.0

46.1

45.0

44.4

Employees in senior management positions(director and above)

-

133

132

199

213

Female employees in senior management

-

17

17

35

41

Percentage of females in senior
management positions

%

12.8

12.9

17.6

19.2

Employees in management positions

-

1,046

1,082

1,091

1,061

Female employees in management

-

243

255

247

245

Percentage of females in management
positions

%

23.2

23.6

22.6

23.1

-

1,086

868

920

745

-

379

310

319

278

-

79

73

83

83

Total

SocialTalent Attraction and Retention

IDL employees promoted
Female IDL employees promoted
Employees with disabilities

139

AppendixAbout this Report

Sustainability
Management

Operationsand Governance

Talent Attraction and Retention

Unit

Green Products
and Innovation

Value Chain
Management

2019

Environmental Protection
and Occupational Safety

2020

Inclusive
Workplace2021

SocialInvolvement

2022

Average age of employees

year

30.5

31.6

31.7

33.0

Average number of years employees worked
in USI

year

4.6

4.7

4.8

5.2

Employee turnover rate

%

44.2

33.7

38.7

28.8

Ratio of DL entry level wage compared to
local minimum wage-

1.00~1.13

1.00~1.10

1.00~1.08

1.00~1.09

Employee engagement score

%

77

-

84

-

Return to work rate of employees that tookparental leave

%

73

100

68

68

Retention rate of employees that tookparental leave

%

100

100

79

47

Training & Talent Development

Unit

Employees that complete the internal
lecturer training program

2019

2020

2021

2022

-

608

833

867

1,118

-

194

247

287

344

M CNY

7.3

4.2

28.9

17.1

Coverage of employee training

%

100

100

100

100

Average training per employee

hour

22.6

31.0

30.7

28.8

-

15

43

73

24

Female internal lecturers
Total cost of employee training anddevelopment

Employees supported to take advanced
studies

Human Rights

Unit

Average human rights training per employee

hour

1.1

1.4

1.1

1.4

Labor contract signage rate

%

100

100

100

100

Number of employee symposiums

-

294

216

116

140

Employees in unions

-

4,435

5,900

6,350

5,901

%

24.3

33.7

35.1

35.4

Percentage of union labor in workforce

2019

2020

2021

Appendix

2022

140

About this Report

Sustainability
Management

Operationsand GovernanceOccupational Health and Safety

Value Chain
Management

2019

Environmental Protection
and Occupational Safety

2020

Inclusive
Workplace2021

SocialInvolvement

2022

Incidences of occupational disease

-

1

0

0

0

Work-related fatalities

-

0

0

0

0

Amount invested in safety production

M CNY

150

166

159

184

Number of emergency drills conducted

-

52

58

32

30

Number of health and well-being activities held

-

38

53

42

51

Number of participants in health and wellbeing activities

-

4,447

13,701

13,028

8,611

session

19,1699,692

18,51930,211hour

13,455

9,140

9,558

9,777

Unit

2019

2020

2021

2022

CNY

6,269,375

5,970,377

3,826,752

5,281,086

Investing in Education

CNY

1,521,946

1,259,165

1,713,707

2,205,556

Contributing to Society

CNY2,175,354

2,769,476

489,454

1,015,895

Conserving the Environment

CNY

468,147

433,558

451,281423,275

Promoting Arts & Culture

CNY

1,053,759

1,087,534

829,772

1,188,091

External Participation

CNY

1,050,169

420,645

342,538

448,269

-

536

1,412

314

701

hour

3,633

1,674

1,717

2,047

Number of doctor consultations held
Total hours consulted

Social Involvement
Total amount of social involvement

Number of employees engaged in social
activities
Number of hours volunteered

Environmental Protection

Unit

2019

2020

2021

2022

-

20,111

21,04021,864

22,381USI Corporate Forest-

14,00014,00014,00014,000USI Employee Forest

-

6,111

7,040

7,864

8,381

Ha

13.44

14.14

9.51

9.65

Annual number of trees planted

Annual area of trees planted

141

Unit

Green Products
and Innovation

AppendixAbout this Report

Sustainability
Management

Operationsand Governance

Environmental Protection

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Unit

2019

2020

2021

2022

Cumulative area of trees planted-

64,92985,969107,833

130,214

Ha

53.06

67.20

76.71

86.36

Kg

486.3049.00

335.20200.00

Rural Revitalization

Unit

2019

2021

2022

Cumulative number of trees planted
Weight of coastal/stream trash picked
Number of programs invested
Number of students assisted

Amount invested in targeted programs

2020

-

6

6

5

5

-

964

1,001

1,050

1,838

K CNY

685

1,362

216

818

Investing in Education

Unit

Cumulative number of Philanthropic Libraryboxes donated

box

645

685

725

767

-

136

100

119

111

-

93

754

1,415

660

Number of people engaged in Parent-Child
Reading Activity
Number of students beneﬁting fromindustrial-academic partnerships

Local Procurement
GlobalMexicoTaiwanMainland China

Supplier Sustainability Evaluation
Number of suppliers evaluated withsustainability metrics

Unit

2019

2019

2020

2020

2021

2021

2022

2022

%

18

37

39

43

%

25

19

12

5

%

42

30

29

30

%

14

38

43

50

Unit

2019

2020

2021

2022

-

515

576

419

525

%

70

70

73

73

Number of suppliers and contractors on-site
audited with sustainability metrics

-

80

76

83

81

Supplier Communication

Unit

Number of suppliers that attended theSustainable Supply Chain Seminar/Webinar-

Percentage of suppliers that completed
Supplier Sustainability Assessment
Questionnaire

2019
222

2020
120

2021
276

Appendix

2022
342

142

Sustainability
Management

About this Report

Operationsand GovernanceConﬂict Minerals
Number of suppliers that completed due
diligence (CMRT survey)

Percentage of target suppliers completingthe conﬂict-free minerals

Unit

Green Products
and Innovation

Value Chain
Management

2019

Environmental Protection
and Occupational Safety

2020

Inclusive
Workplace2021

SocialInvolvement

2022

-

352

359

416

199

%

100

100

100

100

Governance
Financial Performance

Unit

2019

2020

2021

2022

Operating revenue

K CNY

37,204,188.4

47,696,228.2

55,299,654.8

68,516,076.0

Operating cost

K CNY

33,499,411.1

42,710,970.3

49,981,479.2

61,327,074.5

Operating proﬁt

K CNY

1,422,151.4

1,961,650.8

2,131,813.5

3,460,804.0

Total proﬁt

K CNY

1,432,763.0

1,973,563.1

2,138,858.9

3,477,195.2

Net proﬁt

K CNY

1,260,107.6

1,733,565.2

1,856,693.0

3,059,989.8

Government subsidies

K CNY

52,011.8

76,779.5

50,678.1

56,144.7

Taxes

K CNY

352,271.7

397,576.8

618,989.5

897,547.9

Earnings per share

CNY

0.58

0.80

0.85

1.40

Research and Patents

Unit

Share of R&D personnel of total workforce

%

6.8

6.7

9.4

11.5

M CNY

1,373

1,576

1,641

2,034

%

3.69

3.31

2.97

2.97

Share of ecological designed product of
total revenue

%

82.6

86.5

92.1

82.4

Number of patents accumulated

-

628

660

696

740

Amount invested in R&D
R&D intensity

Smart Manufacturing
Saving beneﬁts

143

Unit
K CNY

2019

2020

2019
91,231

2021

2022

2020

2021

2022

142,388

208,247

295,439

Appendix

Sustainability
Management

About this Report

Operationsand GovernanceContinuous Improvement
Number of improvement proposals
Cost saved

Customer Relationship

Unit

Green Products
and Innovation

Value Chain
Management

2019

Environmental Protection
and Occupational Safety

2020

Inclusive
Workplace2021

SocialInvolvement

2022

-

277

319

340

360

K CNY

92,62876,95178,756

119,251

Unit

2019

2020

2021

2022

Customer satisfaction score

-

83.8

84.1

84.1

84.2

Satisﬁed customers

%

82

93

86

93

Percentage of revenue covered by customer
surveys

%

93

93

89

100

Board of Directors

Unit

Number of directors on the board

Compensation Committee-

9

Independent directors-

3

Percentage of independent directors

%

33.3

Strategic Committee
Number of committee members

Unit
-

5

Number of independent directors in thecommittee-

1

Percentage of independent directors

%

20.0

Audit Committee
Number of committee members

Unit
-

5

Number of independent directors in thecommittee-

3

Percentage of independent directors

%

60.0

Number of committee members

Unit
-

5

Number of independent directors in thecommittee-

3

Percentage of independent directors

%

60.0

Nomination Committee
Number of committee members

Unit
-

5

Number of independent directors in thecommittee-

3

Percentage of independent directors

%

60.0

Board of Supervisors
Number of board members

Appendix

Unit
-

3

Number of employees on the board of
supervisors-

1

Percentage of employees

%

33.3

144

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and Innovation

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Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Sustainability Data
Environmental
A. Scope 2 Market-based GHG Emissions
Unit

2019

2020

2021

2022

metric tonnes CO2e

22,165.63

26,056.90

26,617.41

26,912.82

Unit

2019

2020

2021

2022

Recycled/reused

metric tonnes

255.13247.23202.79232.13Total

metric tonnes

441.52535.83764.44774.11

Landﬁlled

metric tonnes

14.58

29.83

0.64

0

Incinerated with energy
recoverymetric tonnes

0

0

0

0

Incinerated without energy
recoverymetric tonnes

426.94506.00763.80774.11

Unit

2019

2020

2021

2022

Recycled/reused

metric tonnes

7,072.29

7,079.35

8,115.46

9,097.26

Total

metric tonnes

741.38726.62650.63738.41

Landﬁlled

metric tonnes

352.32353.46312.78393.25

Incinerated with energy
recoverymetric tonnes

0

0

0

0

Incinerated without energy
recoverymetric tonnes

389.06373.16337.85345.16Item
Scope 2 Market-based

B. Hazardous Waste
Item

C. Non-hazardous Waste
Item

145

AppendixAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

D. Environmental Expenditures (1)Category
Operating cost (2)

2020

2022

2021

CapitalInvestment

OperatingExpensesCapitalInvestment

OperatingExpensesCapitalInvestment

OperatingExpensesCapitalInvestment

OperatingExpenses

1,779,973

9,648,186

548,685

9,690,160

1,996,631

10,179,397

532,048

12,102,087

0

516,4630854,7090

1,058,487

0862,255

1,731,219

9,075,070

56,792

11,823,385

168,781

12,295,620

2,416,689

13,820,710

0428,700

0219,21470,919219,6080

178,839

3,511,192

19,668,419

5,543,644

22,587,468

2,236,331

23,753,112

2,948,737

26,963,891

Social activities cost (5)Total

Unit: CNY

2019

Upstream/downstream cost (3)Management overhead (4)Appendix

E. Materials Recycled and Reused
Unit

2019

2020

2021

2022

Pallets

pcs

14,42821,81736,78639,384

Packaging materials

pcs

6,119,847

7,218,172

8,701,254

6,917,126

metric tonnes

620.40728.43

1,170.46

827.98K CNY

3,452,049

3,050,159

2,387,932

8,248,872

Item

Recycled and reused weight
Total ﬁnancial beneﬁts

Note:
1. The data covers Zhangjiang, Jinqiao, Huizhou, Kunshan, and Nantou Facilities
2. Operating cost: includes pollution prevention costs (air, water, noise, and hazardous substances) and resource circulation costs (efﬁcient resource utilization, waste reduction, and recycling and disposal costs)
3. Upstream/downstream cost: includes green procurement and recycling of used products
4. Management overhead: includes workers engaged in environmental improvement activities and environmental education, acquisition of external environmental licenses/certiﬁcations, and government environmental fees
5. Social activities cost: includes donations to, and support for, environmental groups or activities

146

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Management

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and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

F. Partial Selection of Restricted Environmentally Hazardous Substances Contained in Products
Requirement

Substance/Regulation CodeRequirement

Cadmium (Cd) and its compounds

Commission directive 2013/2/EU

Lead (Pb) and its compounds

Batteries directive 2013/56/EU

Banned substancesand legal
requirements

Mercury (Hg) and its compounds
Hexavalent chromium (Cr ) and its compounds
6+

Polybrominated Biphenyls (PBB)

Banned substancesand legal
requirements

Substance/Regulation CodePOPs recast regulation 2019/1021
REACH regulation (EC) 1907/2006
California Proposition 65

Polybrominated Diphenyl Ethers (PBDE)

Toxic Substances Control Act (TSCA)

Diethylhexyl Phthalate (DEHP) (117-81-7)

Indium Phosphide (01/01/2023)

Butyl Benzyl Phthalate (BBP) (85-68-7)

Nickel Sulfate (01/01/2023)

Dibutyl Phthalate (DBP) (84-74-2)

Nickel Amino Sulfonate (01/01/2023)

Diisobutyl Phthalate (DIBP) (84-69-5)

Planned elimination

Bromine

Chlorine

Tetrabromobisphenol A (TBBP-A)[Prohibited/restricted according to EU announced dates]
Medium Chain Chlorinated Parafﬁn (MCCP)[Prohibited/restricted according to EU announced dates]

Perﬂuoroalkyl Substances (PFAS)France Mineral Oils Ban[Prohibited/restricted according to France announced dates]

Perﬂuorooctanyl Sulphonic acid and its salts (PFOS)
Perﬂuorooctyl acid and its salts (PFOA)

Reporting substance

Polychlorinated Biphenyls (PCB)

Global Automotive Declarable Substance List (GADSL)
Conﬂict Minerals

G. Low-Carbon ProductsType & Description of Products

Level of
Aggregation

Estimated total Total Avoided
Emissions per Year
(metric tonnes CO2e)

Comment

Low carbon products
Communications, Consumer Electronics, Industrial
Products, Cloud and Storage, Automobile
Electronics% of Total Revenues
from Climate Change
Products in FY 2022

Company-wide

67.07%

188,598

USI deﬁnes a facility that purchases more than
5% of renewable energy as a low-carbon productproduction facilityGroup ofproducts

10.14%

14,191

Energy saving beneﬁts compared to previous
generation products or market equivalent products

Avoided emissions for third-parties
Communications, Cloud and Storage, Automobile
Electronics

147

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Huizhou

KunshanInclusive
WorkplaceSocialInvolvement

AppendixSocialA. Workforce Structure
Category

Position (1)Gender

Employment
Type

Zhangjiang

Jinqiao

NantouMexicoCategory Total &Percentage
HC

% of
Total

6.9%

816

4.9%

20

1.9%

245

1.5%

32.0%

168

4.7%

2,900

17.4%

247

7.0%

47

1.3%

643

3.9%

5.7%

237

11.6%

142

6.9%

707

4.2%

175

8.6%

474

23.2%

111

5.4%

1,337

8.0%

10.0%

1,540

15.4%

485

4.8%

685

6.8%

4,848

29.1%

752

7.5%

780

7.8%

1,370

13.7%

1,358

13.6%

5,164

31.0%

9.7%

1,555

16.8%

2,094

22.6%

2,140

23.1%

1,068

11.5%

9,271

55.6%

538

7.3%

1,177

15.9%

1,043

14.1%

2,162

29.3%

1,536

20.8%

7,389

44.4%

15.6%

1,435

9.1%

2,732

17.4%

2,169

13.8%

4,296

27.4%

2,604

16.6%

15,686

94.2%

0.0%

0

0.0%

0

0.0%

968

99.4%

6

0.6%

0

0.0%

974

5.8%

HC

%
(Facility)%(Facility)

HC%(Facility)

HC%(Facility)

HC%(Facility)

Management-Male

141

13.3%

92

8.7%

113

10.7%

113

10.7%

284

26.8%

73

Management-Female

59

5.6%

22

2.1%

50

4.7%

23

2.2%

71

6.7%

Technical-Male

561

15.8%

379

10.7%

334

9.4%

324

9.1%

1,134

Technical-Female

128

3.6%

81

2.3%

75

2.1%

65

1.8%

Administrative-Male

71

3.5%

37

1.8%

103

5.0%

117

Administrative-Female

202

9.9%

75

3.7%

300

14.7%

Skilled-Male

744

7.4%

389

3.9%

1,005

Skilled-Female

544

5.4%

360

3.6%

Male

1,517

16.4%

897

Female933

12.6%

Permanent (2)2,450Temporary (3)

0

HC

%
(Facility)

HC

Note:
1. The position category is divided into Management (employees with management responsibilities such as the Sub-Section manager to Vice Presidents belong to Management), Technical, Administrative, and Skilled positions
2. Permanent employees: employees who have signed an employment contract with the company and work 8 hours a day, excluding dispatch workers
3. Temporary employees: employees who have signed a ﬁxed period employment contract with the company, excluding dispatch workers and hourly workers

148About this Report

Sustainability
Management

Category

Nationality

Age

Education

Green Products
and Innovation

Zhangjiang

Jinqiao

Value Chain
Management

Environmental Protection
and Occupational Safety

Huizhou

KunshanInclusive
Workplace

NantouSocialInvolvement

MexicoCategory Total &Percentage
HC

% of
Total

1,009

6.1%

%
(Facility)

HC%(Facility)

HC%(Facility)

HC%(Facility)

HC%(Facility)

DomesticManagement

180

1.1%

109

0.7%

154

1.0%

126

0.8%

354

2.2%

86

0.5%

DomesticProfessional

2,235

14.1%

1,315

8.3%

2,554

16.1%

2,996

18.9%

3,242

20.5%

2,497

15.8%

ForeignManagement

20

2.5%

5

0.6%

9

1.1%

10

1.2%

1

0.1%

7

0.9%

52

0.3%

ForeignProfessional

15

1.8%

6

0.7%

15

1.8%

5

0.6%

705

86.8%

14

1.7%

760

4.6%

< 30

804

12.0%

486

7.3%

1,053

15.7%

2,018

30.1%

1,139

17.0%

1,194

17.8%

6,694

40.2%

30-50

1,627

17.9%

942

10.4%

1,635

18.0%

1,106

12.2%

2,649

29.2%

1,122

12.4%

9,081

54.5%

> 50

19

2.1%

7

0.8%

44

5.0%

13

1.5%

514

58.1%

288

32.5%

885

5.3%

PhD

1

8.3%

0

0.0%

0

0.0%

0

0.0%

11

91.7%

0

0.0%

12

0.1%

Masters

89

7.3%

43

3.5%

27

2.2%

21

1.7%

1,027

84.0%

16

1.3%

1,223

7.3%

Bachelors

1,182

18.2%

709

10.9%

818

12.6%

917

14.1%

2,265

34.9%

607

9.3%

6,498

39.0%

High School & Under

1,178

13.2%

683

7.7%

1,887

21.1%

2,199

24.6%

999

11.2%

1,981

22.2%

8,927

53.6%

2,450

14.7%

1,435

8.6%

2,732

16.4%

3,137

18.8%

4,302

25.8%

2,604

15.6%

-

-

Total

%
(Facility)

AppendixHC

Subtotal by Facility

149

Operationsand GovernanceHC

14,83989.1%

16,660About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

B. New Hires and Employee Turnover (1)New Hires
Male
Gender

New Entry Rate
Female
New Entry Rate
Management
New Entry Rate
Technical

Position

New Entry Rate
Administrative
New Entry Rate
SkilledNew Entry Rate
< 30
New Entry Rate

Age

30-50
New Entry Rate
> 50
New Entry Rate

(2)

2019

2020

2021

8,705

8,628

87%

2022
Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexico

Total

8,619

456

222

1,696

1,974

496

1,025

5,869

89%

89%

29%

25%

102%

85%

23%

98%

61%

7,068

5,623

4,588

181

112

944

671

668

989

3,565

84%

68%

57%

18%

21%

66%

54%

32%

66%

46%

58

70

77

3

1

1

0

16

50

71

6%

7%

7%

1%

1%

1%

0%

5%

42%

7%

723

632

660

107

46

132

50

207

94

636

21%

18%

19%

15%

10%

33%

13%

15%

49%

18%

437

385

473

34

16

118

33

132

96

429

24%

21%

25%

12%

13%

29%

11%

19%

45%

21%

14,555

13,164

11,997

493

271

2,389

2,562

809

1,774

8,298

120%

116%

107%

35%

38%

112%

94%

46%

88%

77%

12,462

10,973

9,967

409

210

1,630

2,482

685

1,207

6,623

116%

125%

123%

33%

33%

124%

104%

63%

103%

89%

3,231

3,191

3,146

228

124

1,010

163

466

700

2,691

46%

38%

35%

14%

14%

58%

14%

18%

63%

30%

80

87

94

0

0

0

0

13

107

120

15%

14%

13%

0%

0%

0%

0%

3%

40%

14%

Note:
1. The calculation of the number of employees excludes dispatch workers and corrects the relevant numbers and proportions
2. New entry rate of the category = New employee headcount of the category in the current year ÷ ((employee headcount of the category at the beginning of the current year + employee headcount of the category y at the endof the current year) ÷ 2) × 100%

150

About this Report

Sustainability
Management

New Hires

Operationsand GovernanceGreen Products
and Innovation

2019

2020

2021

15,773

14,251

86%

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

2022
Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexicoTotal

13,207

637

334

2,640

2,645

1,164

2,014

9,434

80%

74%

25%

24%

86%

74%

28%

79%

54%

1,218

1,087

1,210

144

63

251

83

355

240

1,136

19%

17%

18%

12%

9%

26%

10%

15%

46%

17%

14,555

13,164

11,997

493

271

2,389

2,562

809

1,774

8,298

120%

116%

107%

35%

38%

112%

94%

46%

88%

77%

(CNY)

910

1,016

2,114

3,317

Total No. of IDL Job Transfers

1,086

868

922

753

Inter-departmental IDL
Replacement Rate (2)

47%

44%

43%

40%

2019

2020

2021

4,720

3,317

47%

Total No. of New Employees
New Entry Rate
Total No. of New IDL Employees
New Entry Rate
Total No. of New DL Employees
New Entry Rate
Average Hiring Cost

(1)

Employee Turnover (3)Male
GenderTurnover Rate
FemaleTurnover Rate
Management

Position

Turnover Rate
Technical
Turnover Rate

(4)

2022
Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexico

Total

3,529

364

139

477

1,073

284

471

2,808

34%

36%

23%

16%

29%

46%

13%

45%

29%

3,412

2,710

2,531

212

121

554

455

299

554

2,195

41%

33%

31%

21%

22%

39%

37%

14%

37%

28%

53

57

93

9

5

9

5

21

23

72

5%

5%

9%

4%

4%

6%

4%

6%

19%

7%

509

548

704

89

60

119

52

132

66

518

15%

15%

20%

13%

13%

30%

13%

10%

35%

15%

Note:
1. Inter-departmental IDL replacement rate = Total IDL Job Transfers ÷ (Total IDL Job Transfers + Total New IDL Employees) × 100%
2. The calculation of the number of employees excludes dispatched workers and corrects the relevant numbers and proportions
3. Turnover rate for each category = No. of people leaving of that category in that year ÷ [(No. of people of that category at the beginning of that year + No. of people of that category at that year-end) ÷ 2] × 100%
4. Number of Turnovers excludes personnel that leave within 90 days of employment

151About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Employee Turnover

2019

2020

2021

Administrative

256

282

367

14%

15%

7,314

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

2022
NantouMexico

Total

45

95

69

360

23%

15%

14%

32%

18%

169

811

1,426

335

867

4,053

32%

24%

38%

53%

19%

43%

38%

4,041

317

133

316

1,378

227

591

2,962

47%

50%

34%

25%

24%

58%

21%

50%

40%

1,658

1,767

1,925

254

126

710

150

318

377

1,935

23%

21%

22%

16%

14%

41%

13%

12%

34%

21%

55

95

94

5

1

5

0

38

57

106

10%

15%

13%

24%

15%

13%

0%

8%

21%

13%

Total No. of Resigned Employees

8,132

6,027

6,878

576

260

1,031

1,528

583

1,025

5,003

Total Employees Turnover Rate

44%

34%

39%

22%

18%

33%

43%

14%

40%

29%

Total No. of Resigned IDL

818

887

1,165

131

91

220

102

248

158

950

IDL Turnover Rate

13%

14%

18%

11%

13%

23%

12%

10%

30%

14%

Total No. of Resigned DL

7,314

5,140

5,713

445

169

811

1,426

335

867

4,053

DL Turnover Rate

60%

45%

51%

32%

24%

38%

53%

19%

43%

38%

Total No. of Voluntary
Resignation (1)

7,960

5,328

6,502

4,089

43%

30%

37%

24%

Position

Turnover Rate
SkilledTurnover Rate
< 30
Turnover Rate

Age

30-50
Turnover Rate
> 50
Turnover Rate

Turnover Rate

Zhangjiang

Jinqiao

Huizhou

33

26

92

19%

12%

22%

5,140

4,896

445

60%

45%

44%

6,419

4,165

60%

KunshanNote:
1. Total number of voluntary turnovers: number of departures that year deducting those who did not pass the trial period and those who were dismissed152

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

C. Workforce Breakdown: Nationality Distribution
Total Workforce

Nationality

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

D. Workforce Breakdown: Ethnic Minorities (1)Management

Ethnicity

Headcount%

Headcount%

Mainland China

9,701

58.23%

577

54.38%

Taiwan3,668

22.02%

393

Mexico2,583

15.50%

Philippines

511

Vietnam

Employees

Management

Headcount%

Headcount%

Zhuang

155

0.93%

1

0.09%

37.04%

Miao

117

0.70%

1

0.09%

86

8.11%

Yi

116

0.70%

0

0.00%

3.07%

0

0.00%

Tujia

66

0.40%

3

0.28%

190

1.14%

0

0.00%

Buyei

64

0.38%

0

0.00%

United States

2

0.01%

2

0.19%

Yao

40

0.24%

0

0.00%

France

2

0.01%

0

0.00%

Li

26

0.16%

0

0.00%

Singapore

1

0.01%

1

0.09%

Shui

22

0.13%

0

0.00%

Canada

1

0.01%

1

0.09%

Bai

18

0.11%

0

0.00%

United Kingdom

1

0.01%

1

0.09%

Hui

15

0.09%

0

0.00%

16,660

100%

1,061

100%

Dai

12

0.07%

0

0.00%

Total

Appendix

E. Human Capital Return on Investment & Average Proﬁt per Employee
Item
Human Capital Return on
Investment (2) (HC ROI)
Average Proﬁt per Employee (3)

Unit
CNY

2019

2020

2021

2022

1.5

1.6

1.5

1.8

77,796

110,400

120,272

200,178

Note:
1. There are 703 employees that are ethnic minorities, accounting for 4.22% of the total workforce, including 7 in management positions, accounting for 0.66% of managers. 47 employees not included above are from 18 other
different ethnicities. Since there are less than 10 employees in each of these ethic categories, they were not represented in this chart
2. HC ROI = (Total operating income for the current year - (Total operating expenses for the current year - Total employee-related expenditures for the current year (salary + beneﬁts))) ÷ Total employee-related expenditures forthe current year
3. Average proﬁt per Employee = total proﬁt ÷ ((number of employees at the beginning of the year + number of employees at the end of the year) ÷ 2), excluding dispatched employees

153

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

F. Average Salary and Compensation Data by Employee Category

Appendix

Unit: K CNY

Female Average

Male Average

Ratio of Average Salary/Compensation
Female to Male

18.3

20.9

0.88

34.4

39.4

0.87

8.4

9.0

0.93

Technical Position Average Salary

11.2

12.0

0.94

Technical Position Average Compensation

15.5

16.5

0.93

Administrative Position Average Salary

9.9

11.2

0.89

Administrative Position Average Compensation

13.7

15.2

0.90

Skilled Position Average Salary

3.9

3.8

1.02

Skilled Position Average Compensation

4.3

4.2

1.03

Category
Management Position Average SalaryManagement Position Average Compensation(1)

Non-Management Position Average SalaryG. Training Hours and Cost
CategoryGroup
GenderTraining
Hours(hours)Position

Total

Subtotal% of Group

12,274300,95063%

24,027

17,649179,598

37%

3,635

7,915

662

24,463

5%

88,335

8,892

19,997

1,373

157,839

16%

3,409

5,857

5,519

12,0428,180

42,8859%75,41439,804

6,454

94,712

19,272

19,709255,36570%

29,787

19,927

17,744

97,861

4,157

21,999191,47540%

84,05841,73485,393

14,89655,0687,924

289,07360%

113,845

61,661

103,137

112,757

59,22529,923

Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexicoMale

73,79939,823

61,76878,08835,199Female40,046

21,83841,36934,669Management

6,496

3,264

2,492

Technical

24,057

15,185Administrative

7,879

SkilledTypes ofCourses

Facility

Compulsory Courses(2)

Non-Compulsory Courses(3)

480,548

Note:
1. Executive level compensation is calculated based on the 2022 Annual Report. The average of male executive median compensation is CNY 1,636.36 K
2. Compulsory course: basic and necessary training for employees, such as: Sunshine behavior policy advocacy, establishment of humane treatment in the workplace, and RBA
3. Non-compulsory course: training to improve the skills of employees in related ﬁelds, such as: DOE experimental design, program development and other related training courses

154About this Report

Sustainability
Management

CategoryGroup
GenderAge
Training
Cost
(CNY)

Operationsand GovernanceManagement

Types ofCourses

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Facility

Inclusive
WorkplaceSocialInvolvement

Appendix

Subtotal% of Group

582,834

11,188,374

66%

1,867,234

630,338

5,871,294

34%

2,637,334

1,081,984

600,279

6,685,988

39%

1,752,128

2,043,270

4,061,738

504,5028,900,574

52%

2,093

88,484

38,576

1,221,960

108,391

1,473,106

9%

41,911

18,50383,45252,368677,453

128,507

1,002,19433%

Middle42,212

22,362

189,965

199,070

696,8546,444

1,156,907

39%

Junior39,124

27,68547,893

144,609513,268

66,122

838,702

28%

Compulsory Courses

48,114

48,842

3,393,985

3,782,092

221,948

912,973

8,407,955

49%

Non-Compulsory Courses

407,188

195,592

667,910937,088

6,143,735

300,200

8,651,713

51%

455,302244,435

4,061,896

4,719,180

6,365,683

1,213,172

Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexicoMale

275,255

171,350

2,416,631

3,243,855

4,498,449

Female180,047

73,085

1,645,264

1,475,325< 30

100,086

45,0212,221,283

30-50

341,615

197,321> 50

13,601Top

Total

17,059,668

H. Employee Support Programs
Employee
Beneﬁts

Work
Conditions

Workplace stress management
Sport & health initiatives
Flexible working hours
Working-from-home arrangements
Childcare facilities or contributions
Breastfeeding room and beneﬁts

FamilyBeneﬁts

Maternity leave, pregnancy checkup leave
Paternity leave, parental leave

155

Conduct stress adjustment surveys, provide psychological counseling services, lectures and activities on physical and mental
health, art, culture & movie appreciation
Sports activities: the company subsidizes various sports associations to organize activities and activity venues
Health management: annual physical examination, full-time medical staff to provide free medical consultation

Set multiple working periods for one shift, for example: 8:00-17:00, 8:30-17:30 and 9:00-18:00 for the day shift, to meetdifferent job requirements. Employees who need to take care of their families or study can also apply to work in the approved
time period that works for their multiple responsibilities
Set Global Remote Work Guidelines that provides subsidies for work equipment purchase and meal allowance to theemployees who apply to work from home
Tuition and miscellaneous fees discounts for preschool childcare service contractors
There is a breastfeeding room in each Facility
Breastfeeding leave: 60 minutes of breastfeeding time per day

Maternity leave: Nantou Facility: 56 days; Mainland China Facilities: more than 158 days; Mexico Facility: 84 days
Pregnancy checkup leave: Nantou Facility: 7 days; Mainland China Facilities: 4 hours each time

Paternity leave: Nantou Facility: 7 days in total for giving birth or checkups accompany; Mainland China Facilities: 14 days forgiving birth accompany; Mexico Facility: 5 days for giving birth accompany
Parental leave: Nantou Facility: Maximum 6 months; Mainland China Facilities: 5 or 10 days per year

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

I. Coverage and Progress of our Supplier Screening Program (1~2)
Supplier Screening

Unit

2022

Total number of Tier-1 Suppliers-

560

Percentage of total spend on Signiﬁcant Suppliersin Tier-1%

93

Total number of Signiﬁcant Suppliers (Tier-1 andnon-Tier-1)

-

30

-

327

Total number of Signiﬁcant Suppliers in Tier-1-

Total number of Signiﬁcant Suppliers in non-Tier-1

Total number of suppliers assessed via desk
assessments/on-site assessments

297%

Country

248

44.3%

Taiwan201

35.9%

British Virgin
Islands

Mexico16

2.9%

United States
Singapore
Japan

Korea

Germany
CanadaIsraelFranceUnitedKingdom37
10
7Percentage of Signiﬁcant Suppliers assessed

Number of suppliers assessed with substantial
actual/potential negative impacts

Percentage of suppliers with substantial
actual/potential negative impacts with agreed
corrective action/improvement plan

7
6
4
3
3
3

0.4%

Malaysia2

0.4%

Ireland2

0.4%

Nederland

1.8%

Denmark

1.3%

Belgium

Eswatini

1.1%

American Samoa

0.5%

Mauritius

0.7%

%

2

6.6%

1.3%

Number of
Suppliers

Switzerland

0.5%

Samoan Islands

0.5%

Total

2
1
1
1
1
1
1
1
560

0.4%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
100.0%Note:
1. Deﬁnition of Tier 1 Suppliers:
I. Material suppliers (including direct materials, indirect materials, and packaging materials) that we have
traded with for two consecutive years and have an annual purchase amount exceeding USD 200,000
II. Service contractors (data covers Zhangjiang, Jinqiao, Huizhou, Kunshan, and Nantou Facilities)
2. Deﬁnition of Signiﬁcant Suppliers:
I. Top 85% of direct material procurement amountSocialInvolvement

Appendix

K. Coverage and Progress of our Supplier Assessment Program

Number of suppliers with substantial actual/potential negative impacts that were terminatedNumber of
Suppliers

Mainland
China

Inclusive
Workplace

Supplier Assessment

J. Supplier Selection by Country
Country

Environmental Protection
and Occupational Safety

Unit

2022

Target for 2022-

419

400 suppliers

%

75

-

81

%

100

-

0

L. Coverage and Progress of Suppliers with Corrective Action Plans
Corrective Action Plan Support

Unit

2022

Target for 2022

Total number of suppliers supported incorrective action plan implementation-

22

100% of Signiﬁcant
Suppliers%

100

Percentage of suppliers assessed with
substantial actual/potential negative
impacts supported in corrective action
plan implementation

M. Coverage and Progress of Suppliers in our Capacity Building
Programs
Capacity Building Programs
Total number of suppliers in capacity
building programs

Percentage of Signiﬁcant Suppliers incapacity building programs

Unit

2022

Target for 2022-

17

6 suppliers%

1

II. Indirect and packaging material suppliers with a procurement amount of more than USD 1 million
III.Preferred suppliers: suppliers approved by the Business, Supplier Quality Engineering, and R&D Units
IV. High Risk Suppliers: Suppliers with priority or other non-conformances regarding labor rights, health andsafety, environment, sustainability, supply chain management or production safety violations that resultin ﬁnes or shutdowns
V. Service contractors

156

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Governance

A. Business Ethics Anti-Corruption Trainings in 2022 (1)Facility

Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexicoTotal

Employees (excluding senior managers)

3,503

1,764

9,334

5,651

4,538

2,149

26,939

36

11

18

17

122

12

216

144%

124%

342%

181%

108%

83%

163%

ESG Report
Scope

Note

Senior managers
Training Rate

B. Scope Comparison Table of the 2022 Annual Report and ESG Report (2)Annual Report
Universal Scientiﬁc Industrial (Shanghai) Co., Ltd.

ESG Report
Scope

Note

Annual Report

Zhangjiang Facility

Universal Scientiﬁc Industrial Vietnam Co., Ltd.

Universal Global Scientiﬁc Industrial Co., Ltd.

Nantou Facility

Universal Scientiﬁc Industrial (France)

Universal Global Technology (Kunshan) Co., Ltd.

Kunshan Facility

Universal Scientiﬁc Industrial Co., Ltd.

Universal Global Technology Co., Ltd.

Universal Scientiﬁc Industrial Poland Sp. z o.o.

Universal Global Technology (Shanghai) Co., Ltd.

Jinqiao Facility

Asteelﬂash (Suzhou) Co., Ltd.

Universal Global Technology (Huizhou) Co., Ltd

Huizhou Facility

SUMA-USI Electronics Co., Ltd.

USI Electronics (Shenzhen) Co., Ltd.

Shenzhen Facility

M-Universe Investments

Universal Global Industrial Co., Ltd.
Universal Scientiﬁc Industrial De Mexico S.A. De C.V.

Mexico Facility

Note:
1. Data includes employees that passed the 3-month probation, dispatch workers, and resigned employees
2. Please refer to Section 3 of the 2022 Annual Report for the analysis of major holding and joint stock companies

157

Nantou Facility

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

TCFD Index
1. Governance: Disclose the organization's governance around climate-related risks and opportunities
Disclosure

SectionPage

Describe the board's oversight of climate related risks and opportunities

Task Force on Climate-related Financial Disclosures (TCFD)

74

Describe management's role in assessing and managing climate-related risks and opportunities

Sustainability Committee

12

2. Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and ﬁnancial planning
Disclosure

SectionPage

Describe the climate-related risks and opportunities the organization has identiﬁed over the
short, medium, and long term

Financial Impact from Risk and Opportunity

76

Describe the impact of climate-related risks and opportunities on the organization's businesses,
strategy, and ﬁnancial planning

Financial Impact from Risk and Opportunity

76

Describe the resilience of the organization's strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario

Financial Impact from Risk and Opportunity

76

3. Risk Management: Disclose how the organization identiﬁes, assesses, and manages climate-related risks
Disclosure

SectionPage

Describe the organization's processes for identifying and assessing climate-related risks

Climate Change Risk and Opportunity Management Process75

Describe the organization's processes for managing climate-related risks

Financial Impact from Risk and Opportunity

76

Describe how processes for identifying, assessing, and managing climate-related risks areintegrated into the organization's overall risk management

Risk Governance Policy

35

4. Metrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities
Disclosure

SectionPage

Metrics used by the organization to assess climate-related risks and opportunities in line with
its strategy and risk management process

Key Performance and Targets

72

Disclose Scope 1, Scope 2, and Scope 3 GHG emissions, and the related risks

Greenhouse Gas Emissions

79

Describe the targets used by the organization to manage climate-related risks andopportunities and performance against targets

Metrics and Targets Related to Climate Change

78

158

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Management

About this Report

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

GRI Index
Statement of use
GRI 1 used

USI has reported the information cited in this GRI index for the period 01/01/2022 to 12/31/2022 with reference to the GRI Standards
GRI 1: Foundation 2021

Applicable GRI Sector Standards

None
Level of External Assurance: Moderate

Disclosure

SectionPage

Additional Explanation

GRI 2 General Disclosures 2021
The organization and its reporting practices
2-1

Organizational details

About USI

5

2-2

Entities included in the organization's sustainability reporting

About this Report

42-3

Reporting period, frequency and contact point

About this Report42-4

Restatements of information

-

-

2-5

External assurance

Third-Party Assurance Statement

169

About USI

5

Workforce Structure

109

Sustainability Data - Social

148

Occupational Health and Safety Management

91

Activities and workers
2-6

Activities, value chain and other business relationships

2-7

Employees

2-8Workers who are not employees

Governance

159

2-10

Nomination and selection of the highest governance body

Board Diversity

31

2-12

Role of the highest governance body in overseeing themanagement of impacts

Board Participation in Sustainability
Governance

32

2-13

Delegation of responsibility for managing impacts

Sustainability Committee

12

2-14

Role of the highest governance body in sustainability
reportingBoard Participation in Sustainability
Governance

32

2-15

Conﬂicts of interest

Conﬂict of Interests Management

32

Explained in each chapter

High

External
AssuranceAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Disclosure

Environmental Protection
and Occupational Safety

Section

Page

2-16

Communication of critical concerns

Board Governance

31

2-17

Collective knowledge of the highest governance bodyContinuous Education for Board Members

32

2-19

Remuneration policies

Board Performance and Compensation

32

2-20

Process to determine remuneration

Board Performance and Compensation

32

Comprehensive Compensation System

112

Sustainability Strategy

14

Sustainability Policy

14

Business Ethics and Compliance33

Supplier Code of Conduct

62

Conﬂict Minerals Compliance67

Climate Change and Carbon Management74

Human Rights Protection

103

Social Activities Overview

127

Material Issues Risk Impact Management

24

Stakeholder Engagement

26

Inclusive
WorkplaceSocialInvolvement

Additional Explanation

AppendixExternal
Assurance

Strategies, policies, and practices
2-22

2-23
2-24

Statement on sustainable development strategy

Policy commitments
Embedding policy commitments

2-25

Processes to remediate negative impacts

2-26

Mechanisms for seeking advice and raising concerns

Business Ethics

33

2-27

Compliance with laws and regulations

Regulatory Compliance

33

2-28

Membership associations

External Participation

134

Stakeholder engagement
2-29

Approach to stakeholder engagement

Stakeholder Engagement

26

2-30

Collective bargaining agreements

Employee Unions

107

GRI 3 Material Topics 2021
3-1

Process to determine material topics

Materiality Analysis

18

3-2

List of material topics

Material Issues Risk Impact Management

23

160

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Level of External Assurance: Moderate

GRI Standard/
Other Source

Disclosure

Section

Page

Material Topics
Innovation Management & Sustainable Production
3 Material Topics (2021)

3-3 Management of material topics

Green Products and Innovation

41

302 Energy

302-5 Reductions in energy requirements of products andservices

Promoting Green Design

48

416 Customer Health and
Safety416-1 Assessment of the health and safety impacts ofproduct and service categories

Product Compliance46

USI Speciﬁc Topic

Innovation Management and Sustainable Production

Research and Patents

51

Continuous Improvement
Program

53

SSE Listed Companies SelfRegulatory Guidelines No.1 Regulations

Compliance with product safety laws, regulations, andindustry standards

Product Compliance46

3-3 Management of material topics

Environmental Protection andOccupational Safety72

305-1 Direct (Scope 1) GHG emissions

Carbon Management79

305-2 Energy indirect (Scope 2) GHG emissions

Carbon Management79

305-3 Other indirect (Scope 3) GHG emissions

Carbon Management80

305-4 GHG emissions intensity

Carbon Management79

305-5 Reduction of GHG emissions

Energy Management80

3-3 Management of material topics

Environmental Protection andOccupational Safety73

302-1 Energy consumption within the organization

Energy Management80302-3 Energy intensity

Energy Management81

302-4 Reduction of energy consumption

Energy Management

81

Climate Change
3 Material Topics (2021)

305 Emissions

Energy Management
3 Material Topics (2021)

302 Energy

161

Additional Explanation

AppendixHigh

External
AssuranceAbout this Report

Sustainability
Management

Operationsand Governance

GRI Standard/
Other Source

Green Products
and Innovation

Value Chain
Management

Disclosure

Environmental Protection
and Occupational Safety

SectionPage

Inclusive
WorkplaceSocialInvolvement

Additional Explanation

AppendixExternal
Assurance

Business Ethics
3 Material Topics (2021)

205 Anti-corruption

206 Anti-competitive
Behavior

3-3 Management of material topics

Operations and Governance30

205-1 Operations assessed for risks related to corruption

Business Ethics

33

Business Ethics

33

Sustainability Data - Governance157

Supplier Code of Conduct

62

205-3 Conﬁrmed incidents of corruption and actions
taken

Business Ethics

33

206-1 Legal actions for anti-competitive behavior, antitrust, and monopoly practices

Regulatory Compliance33

205-2 Communication and training about anti-corruption
policies and procedures

Customer Relationship Management
3 Material Topics (2021)

3-3 Management of material topics

Value Chain Management

56

USI Speciﬁc Topic

Customer Relationship Management

Customer Relationship58

3 Material Topics (2021)

3-3 Management of material topics

Value Chain Management56

204 Procurement Practices

204-1 Proportion of spending on local suppliers

Supply Chain Management61308-1 New suppliers that were screened using
environmental criteria

Supplier Evaluation

63

308-2 Negative environmental impacts in the supply chain
and actions taken

Supplier Sustainability Risk
Management65414-1 New suppliers that were screened using social
criteria

Supplier Evaluation

63414-2 Negative social impacts in the supply chain andactions taken

Supplier Sustainability Risk
Management

65

Sustainable Supply Chain

Conﬂict Minerals Compliance67

Sustainable Supply Chain

308 Supplier Environmental
Assessment

414 Supplier Social
Assessment
USI Speciﬁc Topic

162

About this Report

Sustainability
Management

Operationsand Governance

GRI Standard/
Other Source

Green Products
and Innovation

Value Chain
Management

Disclosure

Environmental Protection
and Occupational Safety

SectionPage

Inclusive
WorkplaceSocialInvolvement

Additional Explanation

Air Pollution Control
3 Material Topics (2021)

3-3 Management of material topics

Environmental Protection andOccupational Safety73

305 Emissions

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and othersigniﬁcant air emissions

Air Pollution Control

85

3-3 Management of material topics

Inclusive Workplace102

202-1 Ratios of standard entry level wage by gendercompared to local minimum wage

Comprehensive Compensation
System113

202-2 Proportion of senior management hired from thelocal community

Workforce Structure109

401-1 New employee hires and employee turnover

Recruiting the Right Talents

111

401-2 Beneﬁts provided to full-time employees that are
not provided to temporary or part-time employees

Employee Beneﬁts

113

401-3 Parental leave

Employee Beneﬁts

115

402 Labor/Management
Relations402-1 Minimum notice periods regarding operationalchanges

Employee Rights

107

405 Diversity and Equal
Opportunity

405-2 Ratio of basic salary and remuneration of women tomen

Comprehensive Compensation
System113

3 Material Topics (2021)

3-3 Management of material topics

Inclusive Workplace102

406 Non-discrimination

406-1 Incidents of discrimination and corrective actions
taken

Human Rights Risk Mitigation& Remediation

106

407 Freedom of Association
and Collective
Bargaining

407-1 Operations and suppliers in which the right tofreedom of association and collective bargaining
may be at risk

408 Child Labor

408-1 Operations and suppliers at signiﬁcant risk forincidents of child labor

409 Forced or CompulsoryLabor409-1 Operations and suppliers at signiﬁcant risk forincidents of forced or compulsory labor

411 Rights of Indigenous
Peoples411-1 Incidents of violations involving rights of indigenous
peoplesTalent Attraction & Retention
3 Material Topics (2021)
202 Market Presence

401 Employment

Human Rights

163

Due Diligence
Employee Unions
Supplier Sustainability Risk
Management
Conﬂict Minerals Compliance

103
107
65
67

Due Diligence

103

There were no signiﬁcant freedomof association and collective
bargaining risks found for any of ouroperations or suppliers

AppendixExternal
AssuranceAbout this Report

Sustainability
Management

Operationsand Governance

GRI Standard/
Other Source

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Disclosure

SectionPage

3 Material Topics (2021)

3-3 Management of material topics

Social Involvement

126

USI Speciﬁc Topic

Social Involvement

Social Activities Overview

127

Social Contribution per Share

Letter from the President

8Community Responsibility Efforts

Social Activities Overview

127

Rural Revitalization Projects

Contributing to Society

130

3 Material Topics (2021)

3-3 Management of material topics

Operations and Governance30

USI Speciﬁc Topic

Cybersecurity Management

Cybersecurity Management

39

3 Material Topics (2021)

3-3 Management of material topics

Environmental Protection andOccupational Safety72403-1 Occupational health and safety management
systemOccupational Health and
Safety91403-2 Hazard identiﬁcation, risk assessment, and incident
investigation

Occupational Health and
Safety92403-3 Occupational health services

Physical and Mental
Healthcare

98403-4 Worker participation, consultation, andcommunication on occupational health and safety

Occupational Health and
Safety Management91403-5 Worker training on occupational health and safety

Occupational Health and
Safety Management96403-6 Promotion of worker health

Physical and Mental
Healthcare

99403-7 Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

Occupational Health and
Safety Management91403-8 Workers covered by an occupational health andsafety management system

Occupational Health and
Safety91403-9 Work-related injuries

Occupational IncidentManagement94403-10 Work-related ill healthOccupational Health and
Safety Management95

Social Involvement

SSE Listed Companies SelfRegulatory Guidelines No.1 Regulations
Cybersecurity Management

Occupational Health & Safety

403 Occupational Healthand Safety (2018)

Inclusive
WorkplaceSocialInvolvement

Additional Explanation

AppendixExternal
Assurance

164About this Report

Sustainability
Management

Operationsand Governance

GRI Standard/
Other Source

Green Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Disclosure

SectionPage

3-3 Management of material topics

Inclusive Workplace

102404-1 Average hours of training per year per employee

Human Capital Development

123404-2 Programs for upgrading employee skills andtransition assistance programs

Tailored Career Plan

124

404-3 Percentage of employees receiving regularperformance and career development reviews

Employee Performance
Appraisal and Development

119

Financial Performance and Tax
Governance

34

Comprehensive Compensation
System113

201-2 Financial implications and other risks andopportunities due to climate change

Climate Change and Carbon
Management74

201-3 Deﬁned beneﬁt plan obligations and otherretirement plans

Employee Beneﬁts

113

201-4 Financial assistance received from government

ESG Key Performance Data143

303-1 Interactions with water as a shared resource

Water Resource Management82

303-2 Management of water discharge related impacts

Water Resource Management82

303-3 Water withdrawal

Water Resource Management82

306-1 Waste generation and signiﬁcant waste-related
impacts

Waste Management83306-2 Management of signiﬁcant waste-related impacts

Waste Management83306-3 Waste generated

Waste Management83306-4 Waste diverted from disposal

Waste Management84306-5 Waste directed to disposal

Waste Management84416-2 Incidents of non-compliance concerning the healthand safety impacts of products and services

Product Compliance46

Inclusive
WorkplaceSocialInvolvement

Additional Explanation

Human Capital Development
3 Material Topics (2021)

404 Training and Education

Topic Standard Disclosures

201-1 Direct economic value generated and distributed
201 Economic Performance

303 Water and Efﬂuents(2018)

306 Waste (2020)

416 Customer Health and
Safety165

There were no violations orcomplaints concerning health andsafety impact of products in 2022

AppendixExternal
AssuranceAbout this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
Workplace

SectionPage

Additional Explanation

Regulatory Compliance

33

There were no incidents of noncompliance concerning marketing
communications in 2022

Business Ethics

33

There were no incidents of data
breaches or customer privacy
violations in 2022

Customer Privacy Protection

59

We did not receive any privacy
complaints in 2022

Regulatory Compliance

33

Customer Privacy Protection

59

Biodiversity

Biodiversity

86

Environmental protection investment and green
technology development

Green Manufacturing andExpenditures

90

Environmental pollution control equipment setup andperformance

Water Resource Management

82

Voluntary agreements entered with environmental
protection authorities to improve the environment

Climate Change and Carbon
Management

74

Recognitions from environmental protection authorities

Awards and Recognitions

135

Establishment of a safe and reliable production
environment and process

Quality and Service

58

Establishment of product quality and safety assurance
measures and emergency response plans for productsafety incidents

Quality and Service

58

GRI Standard/
Other Source

Disclosure

417 Marketing and Labeling417-3 Incidents of non-compliance concerning marketing
communications

418 Customer Privacy

418-1 Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

SocialInvolvement

AppendixExternal
Assurance

USI Speciﬁc Disclosures
USI Speciﬁc Topic

SSE Listed Companies SelfRegulatory Guidelines No.1 Regulations

Data Privacy

166

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

SASB Index
Code

Accounting Metric

Unit ofMeasureWater
Management

TC-ES-140a.1(1) Total water withdrawn, (2) total water
consumed, percentage of each in regions with Highor Extremely High Baseline Water Stress

Waste
Management

TC-ES-150a.1

Amount of hazardous waste from manufacturing,
percentage recycled

Labor Practices

TC-ES-310a.1(1) Number of work stoppages and (2) total days idle

TC-ES-320a.1(1) Total recordable incident rate (TRIR) and (2)near miss frequency rate (NMFR) for (a) direct
employees and (b) contract employees

TC-ES-320a.2

Percentage of (1) entity's facilities and (2) Tier 1
supplier facilities audited in the RBA Validated Audit
Process (VAP) or equivalent, by (a) all facilities and(b) high-risk facilities

Topic

Page

m 3, %

Water Management

82

t, %

Waste Management

83

Employee Unions

107

Occupational Health &Safety95
98

There were no work stoppages due tomajor labor disputes or strikes in 2022

Rate

%

1.a) Percentage of Facilities that passed RBA VAP: 100%1.b) Percentage of high-risk Facilities that passed RBA VAP: NA
2.a) Percentage of Tier 1 suppliers that passed RBA VAP: 4%2.b) Percentage of high-risk Tier 1 suppliers that passed RBA VAP: 6%-

TC-ES-320a.3(1) Non-conformance rate with the RBA VAP orequivalent and (2) associated corrective action ratefor (a) priority non-conformances and (b) othernon-conformances, broken down for (i) the entity's
facilities and (ii) the entity's Tier 1 supplier facilities

Rate1.i) Facilities' priority non-conformance rate: 0;other non-conformance rate 3.3
1.ii) Tier 1 suppliers' priority non-conformance rate: 0.04;
other non-conformance rate 5.52.i) Facilities' priority corrective action rate: NA;other corrective action rate 100%2.ii) Tier 1 suppliers' priority corrective action rate: 100%;other corrective action rate 66%-

Product Lifecycle
Management

TC-ES-410a.1

Weight of end-of-life products and e-waste
recovered, percentage recycled

t, %

N/A

-

-

Materials
Sourcing

TC-ES-440a.1

Description of the management of risks associatedwith the use of critical materials

N/A

Supply Chain Management
Conﬂict Minerals ComplianceEnterprise Risk Management

60
67
37

TC-ES-000.A

Number of manufacturing facilities

Number

About USI

6

TC-ES-000.B

Area of manufacturing facilities

ft

About USI

5

TC-ES-000.C

Number of employees

Global Workforce Structure

109

Labor Conditions

Activity Metrics

167

SectionNumber,days idle

Summary2

NumberAbout this Report

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Management Systems Certiﬁcation TableManagement System (1)Facility

Zhangjiang

Jinqiao

Huizhou

KunshanNantouMexico--ISO 14001
ISO 14064-1
ISO 50001
ISO 45001
IECQ QC080000
TL 9000-

ISO 9001
IATF 16949-

ANSI/ESD S20.20
ISO 13485--

ISO 26262

-

-

-

-

-

-

-

-

ISO 27001---

GB/T 23001

-

-

-

RBA VAP

-

-

-

-

Note:
1. All management systems are continuously updated to the latest version as of 2022

168About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixThird-Party Assurance Statement

The assurance of this report has been conducted according to the following Assurance Standards:

ASSURANCE STATEMENT

Assurance
Standard
Options

SGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE
UNIVERSAL SCIENTIFIC INDUSTRIAL(SHANGHAI) CO., LTD.’S ESG REPORTFOR 2022
NATURE AND SCOPE OF THE ASSURANCE/VERIFICATIONSGS Taiwan Ltd. (hereinafter referred to as SGS) was commissioned by UNIVERSAL SCIENTIFIC
INDUSTRIAL(SHANGHAI) CO., LTD. (hereinafter referred to as USI) to conduct an independent assurance of
the ESG Report for 2022. The scope of assurance is based on the SGS Sustainability Report Assurance
methodology and AA1000 Assurance Standard v3 Type 2 Moderate level and High level to assess whether the
text and data in accompanying tables contained in the report and complies with the GRI Universal Standard (2021)
and AA1000 Accountability Principles (2018) during on-site verification (2023/02/14~2023/05/31). In addition,certain significant disclosures were evaluated using the AA1000 Assurance Standard v3 Type 2 at the High level.
The assurance process did not include the evaluation of specific performance information outside the scope, suchas climate-related financial disclosures (TCFD).
SGS reserves the right to update the assurance statement from time to time depending on the level of reportcontent discrepancy of the published version from the agreed standards requirements.
INTENDED USERS OF THIS ASSURANCE STATEMENT
This Assurance Statement is provided with the intention of informing all USI’s Stakeholders.
RESPONSIBILITIESThe information in the USI’s ESG Report of 2022 and its presentation are the responsibility of the directors or
governing body (as applicable) and management of USI. SGS has not been involved in the preparation of any ofthe material included in the ESG Report.
Our responsibility is to express an opinion on the report content within the scope of verification with the intention
to inform all USI’s stakeholders.
ASSURANCE STANDARDS, TYPE AND LEVEL OF ASSURANCEThe SGS ESG & Sustainability Report Assurance protocols used to conduct assurance are based uponinternationally recognized assurance guidance and standards including the principles of reporting processcontained within the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) GRI 1:
Foundation 2021 for report quality, GRI 2: General Disclosure 2021 for organisation’s reporting practices andother organizational detail, GRI 3: Material Topics 2021 for organisation’s process of determining material topics,
its list of material topics and how to manages each topic, and the guidance on levels of assurance contained
within the AA1000 series of standards.

SGS ESG & SRA Assurance Protocols(based on GRI Principles and guidance in AA1000)

B

AA1000ASv3 Type 2 Moderate Level(AA1000AP Evaluation plus evaluation of Specified Performance Information)

48 disclosures of GRI Standards (201-1、201-2、201-3、201-4、202-1、202-2、
C

204-1、205-1、205-2、205-3、206-1、302-1、302-3、302-4、302-5、303-3、305-1、305-2、305-3、305-4、305-5、305-7、306-3、306-4、306-5、308-1、
308-2、401-1、401-2、401-3、402-1、403-8、403-9、403-10、404-1、404-2、
404-3、405-2、406-1、407-1、408-1、409-1、414-1、414-2、416-1、416-2、417-3、418-1) for 5 facilities - Zhangjiang, Jinqiao, Huizhou, Kunshan & Nantou

SCOPE OF ASSURANCE AND REPORTING CRITERIA
The scope of the assurance included evaluation of quality, accuracy and reliability of specified performance
information as detailed below and evaluation of adherence to the following reporting criteria:

ASSURANCE METHODOLOGY
The assurance comprised a combination of pre-assurance research, interviews with relevant employees,
superintendents, Sustainability committee members and the senior management in Nantou; documentation andrecord review and validation with external bodies and/or stakeholders where relevant.
LIMITATIONS AND MITIGATION
Financial data drawn directly from independently audited financial accounts, Total Impact Measurement andManagement, and Social Return on Investment assessments (SROI) and Task Force on Climate-related Financial
Disclosures (TCFD) has not been checked back to source as part of this assurance process.
STATEMENT OF INDEPENDENCE AND COMPETENCEThe SGS Group of companies is the world leader in inspection, testing and verification, operating in more than
140 countries and providing services including management systems and service certification; quality,
environmental, social and ethical auditing and training; environmental, social and sustainability report assurance.
SGS affirm our independence from USI, being free from bias and conflicts of interest with the organisation, its
subsidiaries and stakeholders.
The assurance team was assembled based on their knowledge, experience and qualifications for this assignment,
and comprised auditors registered with ISO 26000, ISO 20121, ISO 50001, SA8000, RBA, QMS, EMS, SMS,
GPMS, CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance
service provisions.
VERIFICATION/ ASSURANCE OPINION
On the basis of the methodology described and the verification work performed, we are satisfied that the specified
performance information included in the scope of assurance is accurate, reliable, has been fairly stated and has
been prepared, in all material respects, in accordance with the reporting criteria.

Reporting Criteria Options

We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting.

1

GRI Universal Standard (2021) (Reference)

AA1000 ACCOUNTABILITY PRINCIPLES (2018) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS

2

AA1000 Accountability Principles (2018)

3

SASB(ELECTRONIC MANUFACTURING SERVICES & ORIGINAL DESIGN MANUFACTURING)

Inclusivity
USI has demonstrated its commitment to stakeholder inclusivity and stakeholder engagement. A variety ofengagement efforts such as survey and communication to employees, customers, investors, suppliers,
sustainability experts, and other stakeholders are implemented to underpin the organization's understanding ofstakeholder concerns. For future reporting, USI could plan to gather additional feedback from a diverse range ofstakeholders. This data will be utilized to incorporate their perspectives into the organization's governance,
strategic planning, and relevant decision-making procedures.
Materiality
USI has established effective processes for determining issues that are material to the business. Formal review
has identified stakeholders and those issues that are material to each group and the report addresses these at
an appropriate level to reflect their importance and priority to these stakeholders. USI is encouraged to take into
account the evolving sustainability, macroeconomic, geopolitical, and regulatory contexts, as well as the maturityof topics and concerns.
ResponsivenessThe report includes coverage given to stakeholder engagement and channels for stakeholder feedback. USI has
developed a strategy that is founded on a comprehensive and balanced understanding and response to material
sustainability topics and stakeholder concerns.
Impact
USI has demonstrated a process on identifying impacts that fairly encompass a range of environmental, socialand governance topics from wide range of sources, such as activities, policies, programs, decisions and products
and services, as well as any related performance. Impacts related to material topics were in place at target settingwith qualitative and quantitative measurements and evaluation, leading to more effective decision-making andresults-based management. During impact assessment, USI should conscientiously consider the sustainable
challenges that exist at local, regional, and global levels, paying specific attention to sectors and the geographic
locations in which its activities and business relationships are established.

•

•
•

•

169

A

AA1000ASv3 Type 2 High Level(AA1000AP Evaluation plus evaluation of Specified Performance Information)•

TWLPP5008 Issue 2305

Level of Assurance

evaluation of content veracity of the sustainability performance information in relation to the determinedmaterial topics (as listed in Appendix A of this statement) at a moderate or high level of scrutiny for USI
and applicable aspect boundaries outside of the organization covered by this report;
AA1000 Assurance Standard v3 Type 2 evaluation of the report content and supporting management
systems against the AA1000 Accountability Principles (2018); andAA1000 Assurance Standard v3 Type 2 evaluation of the report content veracity at a high level ofscrutiny for 48 disclosures of GRI Standards (201-1、201-2、201-3、201-4、202-1、202-2、204-1、
205-1、205-2、205-3、206-1、302-1、302-3、302-4、302-5、303-3、305-1、305-2、305-3、3054、305-5、305-7、306-3、306-4、306-5、308-1、308-2、401-1、401-2、401-3、402-1、403-8、
403-9、403-10、404-1、404-2、404-3、405-2、406-1、407-1、408-1、409-1、414-1、414-2、
416-1、416-2、417-3、418-1) that reveal the sustainability performance information of Zhangjiang,
Jinqiao, Huizhou, Kunshan & Nantou facilities;
evaluation of the report against the requirements of Global Reporting Initiative Universal Standards(2021) listed in the GRI content index where the organization has referenced for the preparation of thereported information.
evaluation of the report against the SASB Disclosures and Metrics included in the ELECTRONICMANUFACTURING SERVICES & ORIGINAL DESIGN MANUFACTURING Sustainability AccountingStandard (VERSION 2018-10) and conducted alongside an evaluation of accuracy assurance atmoderate level of scrutiny.

TWLPP5008 Issue 2305

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Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

AppendixThird-Party Assurance Statement

GLOBAL REPORTING INITIATIVE REPORTING STANDARDS CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, USI’s ESG Report of 2022, is reporting with reference to the GRI Universal Standards 2021 andcomplies with the requirements set out in section 3 of GRI 1: Foundation 2021. The significant impacts wereassessed and disclosed with reference to the guidance defined in GRI 3: Material Topic 2021 and the relevant
200/300/400 series Topic Standard related to Material Topic have been disclosed. The report has properly
disclosed information related to USI’s contributions to sustainability development. For future reporting, USI is
encouraged to prepare for the transition to reporting in accordance with the GRI Standards, with morecomprehensive details of its management processes on the identified impacts on the economy, environment, andpeople, including impacts on their human rights. USI is expected to provide more detailed descriptions of thehighest governance body's involvement with ESG management. It is strongly recommended that USI strives tooffer comprehensive disclosures of remuneration information, aligning with GRI Indicator 2-21. These disclosuressignificantly improve transparency and accountability, enabling stakeholders to gain a thorough understanding of
the organization's remuneration policies, practices, and ratios.

SASB CONCLUSIONS, FINDINGS AND RECOMMENDATIONSUSI has referenced with SASB’s Standard, ELECTRONIC MANUFACTURING SERVICES & ORIGINAL DESIGNMANUFACTURING, VERSION 2018-10 to disclose information of material topics that are vital for enterprise value
creation. The reporting boundaries of the disclosed information correspond to USI’s ESG Report of 2022. USI
used SASB accounting and activity metrics to assess and manage the topic-related risks and opportunities, where
relevant quantitative information was assessed for its accuracy and completeness to support the comparability ofthe data reported. Process to identify, assess, and manage topic-related risks and opportunities were integrated
into USI’s overall management process. USI is advised to implement a practice of consistently monitoring peer
disclosures in order to gain a deeper understanding of evolving expectations from investors and otherstakeholders. By keeping track of peer disclosures, USI can gain insights into industry trends, benchmarks, andevolving reporting practices. This monitoring process would facilitate the identification of areas for improvement
and ensure that USI could provide comparable information in its own reporting efforts.

Appendix A
ASSURANCE OF MATERIAL TOPICS AND CORRESPONDING SUSTAINABILITY PERFORMANCE
Material Topics

Innovation Management andSustainable Production

Climate Change

GRI 305-1 Direct (Scope 1) GHG emissions 2016
GRI 305-2 Energy indirect (Scope 2) GHG emissions 2016
GRI 305-3 Other indirect (Scope 3) GHG emissions 2016
GRI 305-4 GHG emissions intensity 2016
GRI 305-5 Reduction of GHG emissions 2016

Energy Management

GRI 302-1 Energy consumption within the organization 2016
GRI 302-3 Energy intensity 2016
GRI 302-4 Reduction of energy consumption 2016

Business Ethics

GRI 205: Anti-corruption 2016
GRI 206: Anti-competitive Behavior 2016

Customer RelationshipManagement

TWLPP5008 Issue 2305

Customer Relationship Management

Sustainable Supply Chain

GRI 204: Procurement Practices 2016
GRI 308: Supplier Environmental Assessment 2016
GRI 414: Supplier Social Assessment 2016
Sustainable Supply Chain

Air Pollution Control

GRI 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions 2016

Talent Attraction & Retention

GRI 202: Market Presence 2016
GRI 401: Employment 2016
GRI 402: Labor/Management Relations 2016
GRI 405-2 Ratio of basic salary and remuneration of women to men
2016

Human Rights

GRI 406: Non-discrimination 2016
GRI 407: Freedom of Association and Collective Bargaining 2016
GRI 408: Child Labor 2016
GRI 409: Forced or Compulsory Labor 2016
GRI 411: Rights of Indigenous Peoples 2016

Social Involvement

Social Involvement
Social Contribution per Share
Community Responsibility Efforts
Rural Revitalization Projects

Cybersecurity Management

Cybersecurity Management

Occupational Health & Safety

GRI 403: Occupational Health and Safety 2018

Human Capital Development

GRI 404: Training and Education 2016

Signed:For and on behalf of SGS Taiwan Ltd.

Stephen Pao
Knowledge Deputy General Manager
Taipei, Taiwan
20 June, 2023
WWW.SGS.COM

Corresponding Sustainability Performance
GRI 302-5 Reductions in energy requirements of products andservices 2016
GRI 416-1 Assessment of the health and safety impacts of productand service categories 2016
Innovation Management and Sustainable Production
Compliance with product safety laws, regulations, and industry
standards

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Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Manufacturing Sites
USI
SHANGHAI-ZHANGJIANG

NANTOU-NANKANG 1

ASTEELFLASH TECHNOLOGIES

No.1558, Zhang Dong Road, Pudong New Area, Shanghai

No.300, Gongye Road, Nantou City, Nantou County

Rue de Gâtel, ZI Nord, Pôle activités d'Ecouves, 61250

Tel: +86-21-5896-6996

Tel: +886-49-221-2700

Tel: +33-2-3380-3450

201203, China

SHANGHAI-JINQIAO

540027, Taiwan

NANTOU-NANKANG 2

No.501, Longgui Road, Jinqiao Export Processing (South)

No. 4, Ziqiang 3rd Rd., Nantou City, Nantou County

Tel: +86-21-3813-6668

Tel: +886-49-221-2700

Zone, Pudong New Area, Shanghai 201201, China

HUIZHOU

540027, Taiwan

MEXICO

No.369, Xinhe Boulevard, West District Daya Bay, Huizhou

Anillo Periférico Manuel Gómez Morin No. 656, Jardines deTel: +86-752-5830-888

Tel: +52-33-3648-1800

City, Guangdong Province 516000, China

KUNSHANSanta Isabel, C. P. 44300, Guadalajara, Jalisco, México

POLAND

Valframbert, France

ASTEELFLASH ATLANTIQUELe Clos de La Grée, 35660 Langon, France
Tel: +33-2-9908-6666

ASTEELFLASH EST

9, rue Ampère, 67120 Duttlenheim, France
Tel: +33-3-8804-6450

ASTEELFLASH DÉVELOPPEMENT

43, chemin du Vieux-Chêne, 38240 Meylan, France
Tel: +33-4-7663-3350

No.497 Huangpujiang Road, Qiandeng, Kunshan, Jiangsu

ul. Innowacyjna 4, 55-040 Biskupice Podgórne, Lower

Tel: +86-512-5528-0000

Tel: +48-71-769-4720

1 Rte de St Âme, ZA Champs de l'Etraye, 88120 Cleurie,

VIETNAM

Tel: +33-3-2928-8888

Province 215341, China

NANTOU-TSAOTUEN

Silesia, Poland

No.141, Lane 351, Sec. 1, Taiping Road, Tsaotuen, Nantou

Lot CN4.1H Dinh Vu Industrial Zone, DinhVu-Cat Hai

Tel: +886-49-235-0876

Phong City, Vietnam

County 542007, Taiwan

171

Asteelﬂash

Economic Zone, Dong Hai 2 Ward, Hai An District, Hai
Tel: +84-225-385-9989

ASTEELFLASH LORRAINEFranceASTEELFLASH NORMANDIE

Bd Lénine, 76800 Saint-Étienne-du-Rouvray, France
Tel: +33-2-3210-7000

About this Report

Sustainability
Management

Operationsand GovernanceGreen Products
and Innovation

Value Chain
Management

Environmental Protection
and Occupational Safety

Inclusive
WorkplaceSocialInvolvement

Appendix

Sales Ofﬁces
HEADQUARTERS

ASTEELFLASH ÎLE-DE-FRANCE

Tel: +44-1234-216-222

ASTEELFLASH PLZEN

Zone Industrielle, BP 5, 02200 Mercin Et Vaux, France

Podnikatelská 1227/24, 301 00 Plzen, Czech Republic

ASTEELFLASH BAD HERSFELDASTEELFLASH LA SOUKRA

Tel: +33-3-2375-5800

Tel: +420-373-740-905

Konrad-Zuse-Straße 19, 36251 Bad Hersfeld, Germany

104 Avenue de l'UMA - 2045 Soukra, Tunis, Tunisia

ASTEELFLASH BONN

ASTEELFLASH FREMONT

Tel: +49 (0) 6621-84-201

Tel: +216-36-066-015

No.169, Shengxia Road, Pudong New Area,
Shanghai 201210, China
Tel: +86-21-5896-6996

SUZHOU

No.8 Gutang Road, Wujiang District, Suzhou,
Jiangsu Province 215200, China
Tel: +86-512-6343-6156

HONG KONG

Unit A, 7/ F., Yuen Long Hi Tech Centre, 11 Wang Yip Street
West, Yuen Long, New Territories, Hong Kong
Tel: +852-2109-0166

EUROPE

Allerstraße 31, 53332 Bornheim - Hersel, Germany

4211 Starboard Drive, Fremont, CA 94538, USA

Drève Richelle, 161M, WOP, Box 23, 1410 Waterloo, Belgium
Tel: +32-2-647-8461

ASTEELFLASH EBERBACH

ASTEELFLASH TIJUANA

4211 Starboard Drive, Fremont, CA 94538, USA
Tel: +1-510-440-2840

Tel: +49 (0) 2222-9964-101

Neuer Weg-Nord 49, 69412 Eberbach, Germany
Tel: +49 (0) 6271-81-200

ASTEELFLASH DESIGN SOLUTIONS HAMBURG

Meiendorfer Straße 205, 22145 Hamburg, Germany
Tel: +49-040-2022-997-363

ASTEELFLASH BEDFORD

Unit 1 and 2 - St Martins Way, St Martins Business Centre,
Bedford MK42 0LF, UK

Tel: +1-510-440-2840

Avenida Producción No. 5-A Parque Industrial Finsa,
22427 Tijuana, B.C., México
Tel: +52-664-231-5007

ASTEELFLASH SUZHOU

No.8 Gutang Road, WETDZ, Wujiang District, Suzhou,
Jiangsu Province 215200, China
Tel: +86-512-6343-6156

USA

JAPAN

Sumitomo Fudosan Shin-yokohama Bldg. 10F 2-5-5, Shinyokohama, Kouhoku-ku, Yokohama, 222-0033, Japan
Tel: +81-45-478-7317

SINGAPORE

3 Fusionopolis Link #02-10, Nexus@One-North, South Tower,
Singapore 138543
Tel: +65-6500-1310

TAIPEI

Room 6, 3F, No.66, Sanchong Road, Nangang District, Taipei
115602, Taiwan
Tel: +886-2-2782-0366

172

Published by
Publisher
Address

Universal Scientiﬁc Industrial (Shanghai) Co., Ltd.
Jeffrey Chen / C.Y. Wei

No.1558, Zhang Dong Road, Pudong New Area, Shanghai 201203

No.141, Lane 351, Sec. 1, Taiping Rd., Tsaotuen, Nantou 542007
Telephone
Editorial
Supervisor
Editorial Design
Editor-in-Chief
Senior Editor+86-21-5896-6996+886-49-235-0876

QA&CSR / S&HS / CSR

President Ofﬁce

Otto Yu / Aaron Chen
Yunren Lee

Executive Editors May Lee / Nancy Lin / Chingyi Lin / Water Liu / Momoco Chang /Joanna Wei / YuAn Chen / YuJing Yeh
Web Editors
Website
Editorial
Committee

Art Design

Paper from responsible sources and printed with EU RoHS compliant toner.

Ticky Wang / May Lee / Nancy Lin / Chingyi Lin / Water Liu /Momoco Chang / Joanna Wei / YuAn Chen / YuJing Yeh

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