Nexperia’s 2023
Sustainability Report

Driving
Positive
ChangeTABLE OF CONTENTS

nexperia | Sustainability Report 2023

Nexperia at a Glance

Strategy

Financial Reporting

Environmental Reporting

Letter from the CEO

42023 Highlights

5

Our Sustainability Report

6

Our Company & Business

7

New Product Design

11

Our EMT13

Our Entities

17

Our Approach to ESG

19

Materiality Assessment

30

UN Global Compact

32

ESG Risk Rating

40

Financial Performance

44

Risk Management

46

Taxation

58

Environmental Management

61

Emissions

63

Resources and Energy

72

Social Reporting

Governance Reporting

Appendix

People Management
at TeamNexperia

83

Talent Attraction and Retention

87

Talent Development

97

Diversity, Non-discrimination
and Inclusion

105

Guaranteeing labor andhuman rights

115

Health & Safety

118

Corporate citizenship126

Responsibility of Management

131

Business Integrity and Ethics

137

Responsible Sourcing and
Supplier Engagement

143

Cybersecurity, Data Protection,
and Privacy

153

GRI Content Index

156

Glossary

170

Sustainability Performance
Summary

172

Water and Wastewater
Management

76

Assurance report

173

Waste Management

80

Imprint

178

Nexperia
at a Glancenexperia | Sustainability Report 2023

Letter from the CEO

Letter from the CEO
Dear reader,
As we launch our latest Sustainability Report, I would
like to extend my deepest gratitude for TeamNexperia's
unwavering dedication and hard work throughout 2023.
Your continual strive for excellence was instrumental indriving our progress during an economically challenging
year.
Our inaugural Sustainability Report in 2022 marked
a significant milestone in Nexperia's commitment
to transparency and accountability. It served as acatalyst for increased awareness and action within ourorganization and holding ourselves to a higher standardof responsibility. I'm particularly encouraged by the
positive response to our efforts, which is a testament
to the value our stakeholders place on our sustainability
initiatives. Your enthusiasm for driving the transition
to green energy and a more equitable future is truly
inspiring.
Throughout 2023, we achieved some remarkable
milestones in technological innovation and productdevelopment. From the successful qualification of our
first IGBT devices to the widespread mass production of
GaN and SiC products, we have consistently reinforced
our commitment to moving technology forward.
Despite last year’s global and economic challenges,
including high energy prices leading to a rise inproduction costs, our team remained resilient, flexible,
and engaged. We navigated these difficulties withenthusiasm and creativity, finding intelligent solutions
to mitigate the impacts on our sustainability goals.

Our ability to weather these storms while maintaining
our focus on sustainability speaks volumes about the
dedication and ingenuity of our team.
Looking ahead, we remain steadfast in our resolve tocontinue overcoming obstacles and making meaningful
contributions to a greener, more sustainable world. As
Nexperia’s CEO, I am proud of our progress in reducing
our carbon footprint (underscored by our pledge to
become carbon neutral for Scope 1 and 2 emissions
by 2035), our first ESG Risk Rating with Morningstar
Sustainalytics achieving a low-risk score of 18.7, fostering
diversity and inclusion in the workplace, and promoting
ethical business practices internally and across our
supply chain. At the same time, there are always newchallenges on the horizon and additional ways we can
improve. That is why we continuously review and refine
our sustainability approach, ensuring we evolve with theever-changing economic landscape.
I am confident that our commitment to sustainability
and responsible operations will continue driving positivechange. I invite you to explore our latest Sustainability
Report, which embodies our dedication to transparency
and accountability.
Once again, thank you for your continued support as we
strive to build a more sustainable and equitable future.
Sincerely,
Xuezheng (Wing) Zhang
May 14, 2024

NEXPERIA AT A GLANCE

4

nexperia | Sustainability Report 2023

2023 Highlights

NEXPERIA AT A GLANCE

2023 Highlights
Commitment tocarbon neutrality
for Scope 1 and 2
emissions by

2035

First Sustainability
Performance Ratingwith EcoVadis:

See “Our Approach to ESG”

Launch of Employee Resource Groups
Global Women@Nexperia Group
Nexperia LGBTQIA+ GroupGOLD

DIVERSITY &INCLUSION
Programmedal

40%electricity
purchased fromrenewable
sources

Until 2030:
97th percentile(awarded April 2024)

ENVIRONMENT

30%
84.7%
Overallfavorabilityof working at
Nexperia

Signatory to the
UN GLOBAL
COMPACTFirst ESG Risk
Rating with
Morningstar
Sustainalytics:
Score ofNEW
Code of Conduct
Campaign

Policy Statementon human rights
and environmentrelated
due diligenceobligations

18.7
low risk

Women inmanagement
positionsAppointment of
Human Rights
Office20%
Women in R&D/
engineering
positions

SOCIALNew Corporate
Sustainability
OfficeLaunch of
Sustainability
Board

GOVERNANCE

5nexperia | Sustainability Report 2023

Our Sustainability Report

About our Sustainability Report
This report represents Nexperia’s annual corporate Sustainability
Report for 2023. This document reaffirms our commitment totransparency regarding sustainable business practices and policies.
It details information about Nexperia’s material topics relevant
to our Company’s existing and future environmental, social, andgovernance (ESG) endeavors.
This Sustainability Report covers the period of January 1 to
December 31, 2023 and was prepared in accordance with Global
Reporting Initiative (GRI) Standards. Where appropriate, we alsodetail selected developments that occurred at the beginning of
2024. The report describes the status at the end of the respective
financial year and the next Nexperia Sustainability Report will be
published in 2025.
The content presented in this report is based on the results ofour materiality analysis conducted in 2022 and was preparedin accordance with GRI Standards. In addition, we engaged incontinuous dialogue with internal and external stakeholders andhave taken their input regarding ESG issues into account.
As a signatory to the United Nations (UN) Global Compact, we
also align our reporting to the ten Global Compact principles. The
measures we implemented regarding the UN Global Compact aredescribed in this report. In addition, Nexperia supports the United
Nations Sustainable Developments Goals (SDGs). For the first time,
our Sustainability Report also covers Nexperia’s contributions to theSDGs, specifically SDGs 3, 4, 5, 7, 9, 12, and 13. Relevant measuresand initiatives are highlighted throughout this report.

This report covers all of Nexperia’s operations and locations
worldwide and represents all entities we manage. In accordancewith international certifications, we have an integrated management
system comprising various standards, policies, and protocols. We
use our management information systems to track environmental,social, and governance data. Unless stated otherwise, all informationin the report refers to Nexperia Holding B.V.
Due to the commercial rounding principles used to state thedata and indicators in this report, some totals and percentages
presented may not be exact. This report is published only in English.
External websites referred to in this report may change without our
influence, and Nexperia assumes no responsibility for their content.
Every year, we also prepare and publish an audited Annual Report,
which is available at the Dutch Chamber of Commerce. All entities
included in Nexperia’s consolidated financial statements are coveredin this report (see “List of entities” for a detailed breakdown of
Nexperia Holdings BV.). Where relevant, we refer to information in
our Annual Report.
Any references to financial information are prepared in accordancewith the International Financial Reporting Standards as adopted by
the European Union (EU-IFRS) and Title 9, Book 2 of the Dutch Civil
Code. Additional financial information outside this Sustainability
Report is available upon request from the Dutch Chamber ofCommerce under number 67423264.

NEXPERIA AT A GLANCE

6

nexperia | Sustainability Report 2023

Our Company and Business

Key facts 2023

8.9%

31

80+bn

70+

HQ

$2.1bnAnnualrevenue

8.9%

Global market
share

Units madeannually

Years’
experience

Nijmegen,
The Netherlands

Annualrevenue

Global market
share

Units madeannually

Years’
experience

Nijmegen,
The Netherlands

Own factories

70+

HQ

7

200+

800+

14,000Own factories

experience

Nijmegen,
The Netherlands

Nexperia’s
equipment andautomation
partner

Patentfamilies

New products
annually

Members of
TeamNexperia

Key facts 2023
Headquartered in the Netherlands, Nexperia is asemiconductor company with a global presence and a
31 Standard
rich European history. Nexperia was the former
Products division of NXP Semiconductors, which itself wasdivested from Philips Semiconductors in 2006. Nexperia wasfounded in February 2017 and currently has around 14,000
Annual across Europe,
Global Asia,
marketUnits madeYears’
employees
and the UnitedStates.
revenue

share

80+bn
annually31$2.1bnOur company

8.9%

7

Key facts 2023

Our Company andBusiness$2.1bnNEXPERIA AT A GLANCEThe Company’s legal name is Nexperia Holding B.V. (the“Company”), and its commercial name is “Nexperia.” The
Company is incorporated in the Netherlands as a Dutch
limited liability company (“besloten vennootschap met
beperkte aansprakelijkheid”) registered with the Dutch
Chamber of Commerce under number 67423264. The
Company’s corporate seat is in Nijmegen, the Netherlands,
and its principal executive office is at Jonkerbosplein 52,6534 AB Nijmegen, the Netherlands.
The Company’s direct sole shareholder, Yuching Holding
Limited (“Yuching”), is a limited liability company registeredin Hong Kong. The ultimate controlling shareholder is
Wingtech Technology Co. Ltd. (“Wingtech”), a listed company
on the Shanghai Stock Exchange (stock code: 600745) in
China. Wingtech’s main business includes semiconductor
IDM, imaging modules, and communication productintegration.

80+bn

70+

HQ

7

Key Applications
AUTOMOTIVEINDUSTRIAL &POWER

MOBILE &WEARABLESCONSUMERCOMPUTING› Body Control› Chassis & Safety› Powertrain› ADAS› Lighting› Braking› Steering› Power Supplies› Motor Control› Ind. Lighting› Telecom-› Smartphones› Wearables like

› Handheld› Notebooks› Desktops› Storage› Peripherals

munication
Infrastructure› Tablets› Data Servers

Smart Watches,
Fitness & GPS
trackers, …

Consumer, e.g.,Battery driven
power tools› Smart Home
applications› Audio & Video› Gaming› Appliances &White Goods

7

Own facto

Nexperia
equipment
automati
partnernexperia | Sustainability Report 2023

Our Company and BusinessOur business
Nexperia is a global leader inwhat our Company calls "essential
semiconductors." These products
provide the basic functionality tovirtually every commercial electronic
design, from cars to vacuum cleanersand mobile phones to medical
equipment. They support thefunctioning of more technologicallyadvanced memory devices,microprocessors, or sensors that othersemiconductor companies develop,
produce, and sell. Nexperia contributes
to global sustainability efforts bydeveloping products that enable ourcustomers to design energy-efficientsolutions.
We prioritize research and development(R&D) investments to continuously
expand our broad portfolio - consistingof diodes, bipolar transistors, ESD
protection devices, MOSFETs, GaN FETs,
SiC, IGBTs, Power Modules, and analog
and logic ICs - with innovative, energyefficient, and high-quality products.
Efficiency is at the heart of everything
we do, which has made us the supplierof choice for many world-leading
technology companies.
Nexperia serves a global customer baseacross automotive, industrial and power,
computing, consumer, and mobile

and wearables industries. To meet ourcustomers’ growing demands, we haveestablished a highly efficient supply
chain management process that enabled
us to ship up to 84 billion units in 2023
(down from 102 billion units in 2022).
Nexperia operates in a highly cyclicalindustry, which is very susceptible
to fluctuations in demand driven bychanges in technological advancements,
economic conditions, and consumer
preferences. Efficiency is at the heartof everything we do and is backed
by flawless execution that meets thestringent requirements of the market
and our customers. Despite thechallenges of an economically turbulent
2023, characterized by high energy costs
and fluctuating demand, we maintained
our steadfast focus on efficiency.
Every Nexperia employee is tasked
with upholding quality and adhering
to Nexperia’s Code of Conduct. This
responsibility extends throughout
our entire value chain – from productideation and design to manufacturing,
supply chain management, and sales. As
market demands evolve, we persistently
drive innovation to ensure that theelectronics we depend on – today
and in the future – enhance our lives
and address the most critical societal
challenges.

NEXPERIA AT A GLANCE

8

nexperia | Sustainability Report 2023

NEXPERIA AT A GLANCE

Our Company and Business

Nexperia – Main locations

Manchester

Hamburg

NewportMunichDetroit

NijmegenBudapest

Beijing
Seoul

Santa ClaraTokyo
DallasDurhamWuxi

Shanghai

Dongguan

Osaka
Oita
TaipeiShenzhenHong Kong

CabuyaoPenangSerembanSingapore

Headquarters:
Nijmegen/The Netherlands,
including research &development activities
Three own wafer fabs including
research & development activities
in Hamburg/Germany,
Manchester and Newport/UK

Four own assembly sites in Dongguan/China,
Wuxi/China, Seremban/Malaysia, andCabuyao/Philippines
Research, development & sales
activities in Asia, Europe, and the Americas
in close proximity to customers

For further locations
see chapter “Our Entities”.
Newport was divested in March 2024.

9nexperia | Sustainability Report 2023

Our Company and Business

Manufacturing

Back-end/Assembly Sites

Our manufacturing is overseen by
the central Technology & Operationsorganization, ensuring efficient andsustainable production. Technology &Operations achieves scale benefits throughoptimized asset utilization, purchasing
volumes, and overhead leveraging acrossdifferent business units.

› Assembly site in Dongguan, China› Assembly site in Seremban, Malaysia› Assembly site in Cabuyao, the Philippines› Assembly site in Wuxi, China (new,currently in equipment installation)

The manufacturing process forsemiconductors is divided into “front-end”
and “back-end.” The front-end involves
the actual production and fabrication ofsemiconductors in our manufacturing
facilities (“fabs”). The back-end encompasses
assembly, configuration, testing, andpackaging.
At our front-end facilities, Nexperia
produces semiconductors with various
sizes and characteristics to meet ourcustomers’ dynamic demands. The back-end
manufacturing facilities test and package
many different types of products using awide variety of assembly processes.
Front-end/Wafer fabs
› Wafer fab for Discretes in Hamburg,
Germany› Wafer fab for Power MOSFETs in
Manchester, United Kingdom› Wafer fab for Power MOSFETs, ESD
Protection, IGBTs Automotive in Newport,
United Kingdom

Vishay Intertechnology, Inc. and
Nexperia B.V. announced in November
2023 that they had entered into anagreement for Vishay to acquire
Nexperia’s wafer fab in Newport,
United Kingdom. The transaction wascompleted on March 5, 2024 (See our
Annual Report for further information).
The manufacturing of semiconductors is
a highly specialized production processwith multiple sub-processes, which requirevarious raw materials. The most criticalraw materials are raw silicon wafers. These
high-quality wafers are procured from aselect few suppliers with whom we maintainstrong relationships. We continuously
evaluate these partnerships to ensure
mutual satisfaction.
Where feasible, the Company aims for
efficient, just-in-time delivery to better
manage procurement cost and cash flows
while mitigating the risk of low inventory
levels. Whenever possible, purchase
contracts are based on fixed prices andmedium-term obligations to buffer against
the price volatility of raw materials.

Research anddevelopment, patents,and licenses

Intellectual property

As an advanced manufacturer in anever-evolving industry, research anddevelopment (R&D) is the foundationof our long-term success. Therefore,
our robust and effective researchand development approach focuses
on existing as well as untapped andunknown markets. Following its
strategy, we are significantly expanding
our research and development
capabilities and will continue investing in
the future.
Our global research and development
team continues to grow and comprises
1,122 highly skilled employees(compared to 2022: 999). Our researchand development expenses totaled$106 million in 2023 (2022: $81 million)
or 6.8% of our total revenue (2022:
4.5%).

Global research anddevelopment teamin 2023

NEXPERIA AT A GLANCE

Creating and using our intellectual
property (IP) enables us to sustain
and extend our market presence
while exploring new growth
opportunities. The value of our
IP portfolio enables Nexperia’s
freedom to operate and minimizes
the potential financial burden of, forexample, licensing royalties. Our IP
portfolio encompasses various patents,
trademarks, and other assets, noneof which are individually critical to
our operations. We are committed toprotecting our IP by obtaining patents,
trademarks, and domain names,
retaining trade secrets, and defending,enforcing, and utilizing intellectual
property rights and confidentiality
agreements where applicable.
Our trademarks in particular are
essential for product differentiation,
fostering trust and loyalty among ourcustomers, suppliers, partners, and endusers.

1,122
R&D employees

10nexperia | Sustainability Report 2023

New Product Design

New Product Design
As Nexperia’s products are ubiquitous, every
innovation and enhancement also improves
the energy efficiency of the final product.
Innovations in our semiconductors, forexample, can extend the range of electricvehicles or reduce the size of phone chargers,
reducing both shipping and material costs. Our
portfolio is under constant refinement to boost
energy efficiency. Additionally, Nexperia's
portfolio includes products with increased
power capabilities, such as wide bandgap(WBG) devices like silicon carbide (SiC) rectifiers
or gallium nitride (GaN) FETs, as well as power
management integrated circuits (ICs).
Today, most widely used power electronics
are silicon-based, but a growing number
require high current and voltage switching.
This demand necessitates wide band gap
semiconductors and new materials such as SiC
or GaN, as these advanced materials are pivotal
in increasing the energy efficiency of products
and applications. Therefore, these materials
are considered essential for the global energy
transition.
As an industry leader, Nexperia is dedicatedto the ongoing development of products thatlower energy and material use across a widearray of applications. We are equally committed
to achieving CO2 neutrality in our operations,furthering our contribution to a sustainable
future.

Our product development complies with current
environmental legislation and guidelines relating
to our products and their materials, such as the
Restriction of Hazardous Substances (RoHS).
We organize our research and development(R&D) to comply with the following standards andrequirements:› ISO 9001: Quality management systems.
› IATF 16949: Quality management system
requirements for automotive production andrelevant service parts organizations.
› ISO 14001: Environmental management systems.
Since its inception, Nexperia has been successfully
audited by specialised external auditors against thesestandards (ISO, IATF). Our ongoing compliance ispartly due to incorporating ISO 14001 product design
requirements into our standard working procedure,
our Eco Design Policy.
Our product creation process adheres to our Business
Creation and Management Process, ensuring
compliance with the above standards. Cross-functional
project teams meticulously plan, manage, and executeall R&D projects, compliant with these standards andguided by our established processes and checklists.
The responsibility of implementing this process withineach business group rests with the respective R&D
managers, while the business group management
team bears overall accountability.

NEXPERIA AT A GLANCE

11

nexperia | Sustainability Report 2023

New Product Design

NEXPERIA AT A GLANCE

Wide-bandgap-based power electronics
enable signiﬁcant energy savings and reductions in CO emissions

Potential energy savings and reductions in CO emissions in the EU
through usage of WBG materials in 2025 compared to Silicon

Energy savings[TWh/year]CO savings[mn tons]

45
7

11

3
Total saving potential of 45TWh/year in
2025 equivalent to the power generation of~20 large gas power plants

15
20
Wind

WBG devices able to reduce the energy
consumption up to 15% in key European
applications

Equivalent to a CO reduction of~11 million tons
Data centerPV

1) Including UK; TWh – Terawatt hours; WBG – Wide-bandgap material;
2) Reference: gas and steam power plant from Kraftwerke Mainz-Wiesbaden (above-averagecapacity of 2.2 billion kilowatt-hours per year; annual report 2020); Source: PECTA – 2020;
Agora – The• European Power Sector in 2020; IHS; Borderstep Institute 2015; EEA

Automotive

Total

Total

12

nexperia | Sustainability Report 2023

Our Executive Management TeamNEXPERIA AT A GLANCE

Executive
Management
Team

Xuezheng (Wing) Zhang
Chief Executive Officer(CEO and CHRO a.i.)

Stefan Tilger
Chief Financial Officer(CFO)

Wing leads the EMT, guiding theCompany’s market growth andmaintaining its leadership. Before
Nexperia, Wing founded Wingtech
Technology in 2006 – Nexperia’s current
controlling shareholder – where healso serves as the Chairman and Chief
Executive. Before founding Wingtech,
Wing had a successful career incompanies such as STMicroelectronics.
He holds an IE Bachelor’s degree from
Guangdong University of Technology, an
EMBA degree from Tsinghua University,and a Finance Ph.D. from Tsinghua
University/University of Geneva. He
serves from offices in the Netherlands
and China.

Stefan is Nexperia’s CFO, leading theteam responsible for the financial andadministrative strength of the Company.
Stefan started his career at NXP, where
he developed his knowledge andexperience in various financial roles,
transitioning with Nexperia in 2017 as
VP Global Business Controlling and as
part of the leadership team. He holds
a degree in Industrial Engineering andManagement from Schleswig-Holstein
Cooperative University of Applied
Sciences in Kiel, Germany.

13

nexperia | Sustainability Report 2023

Our Executive Management TeamNEXPERIA AT A GLANCEPaul Zhang
Chief Commercial Officer and
CM of China

Dan Jensen
Chief Strategy Officer

Irene Deng
BG Leader IC Solutions

Achim Kempe
Chief Operating Officer(COO)

Paul Zhang is Nexperia’s Senior Vice
President (SVP) of Sales & Marketing
and Country Manager of China. He
brings over 20 years of industry
experience, including more than 15
years in Semiconductors. Before joining
Nexperia, he was the CEO of Datang
NXP Semiconductors, where he wasinstrumental in designing the frameworkof the joint venture. Paul holds a BA
and an MSc degree in Electronics
Engineering from Tsinghua University inBeijing and the University of Calgary, as
well as an EMBA degree.

Dan is Nexperia’s Chief Strategy Officer,
with more than 25 years in the industry,
bringing deep market knowledge
and insight to the role. Before joining
Nexperia, he worked at NXP and Texas
Instruments in various roles, including
Strategic Marketing, Test & ProductEngineering, Applications Engineering,
Systems Engineering, and Business
Development. Dan holds a BSc in
Electrical Engineering from Kansas State
University.

Irene is Nexperia’s BG Leader for IC
Solutions. She has over 20 years ofexperience building, leading, andscaling R&D and global businesses in thesemiconductor analog IC industry. As
a former GM and one of the founding
members of the China R&D center at
Texas Instruments, Irene has extensive
expertise in RF, power, and signal chain
analog ICs. She majored in Electronics
Engineering at Iowa State University(MSc) and Nanjing University (BS).

Achim is responsible for all global
operations and oversees business andmanufacturing at our five factory sites.
He has a strong manufacturing andoperational background, implementing
high-impact manufacturing strategies
and operational excellence initiatives.
Achim brings a passion for efficiency
and more than 20 years of experience tothe role. He holds a degree in ElectricalEngineering from the Universityof Applied Sc. of Cologne and the
University of Siegen.

14nexperia | Sustainability Report 2023

Our Executive Management TeamNEXPERIA AT A GLANCE

Fredrik Öberg
BG Leader MOS Discretes

Philipp ObierBG Leader Bipolar Discretes

Ruben Lichtenberg
Chief Legal Officer

Jean-Pierre Kempeneers
Chief Corporate Affairs

Fredrik is Nexperia’s BG Leader for MOS
Discretes. With more than 20 yearsof experience in semiconductors andrelated industries, he brings a wealthof knowledge from leading globalorganizations. Before joining Nexperia,
he held various leadership roles inmarketing and general management inInfineon’s Automotive Division. Fredrikholds an MScEE from the Chalmers
University of Technology in Gothenburg
and an MBA from the University College
Dublin.

Philipp is Nexperia’s BG Leader for
Bipolar Discretes. Philipp joined NXP
in 2014 as Product Marketing Manager
for Standard Products. Over the lastten years, he has led various teams andprojects in Marketing, Commercial, andSupply Chain Management. Until 2024,
Philipp was leading the Product Group
Small Signal Discretes, which reached
new heights in revenues and market
share in the last years. Philipp holds a
BA in Business and Marketing from the
Leuphana University of Lüneburg inGermany.

Ruben is Nexperia’s Chief Legal Officer,
leading the Global legal and IP team.
Ruben started his career as an attorney
and brings more than 20 years ofexperience in international corporate
law, having worked in senior legal
functions for a range of international
companies such as Royal Haskoning,
Mercuria Energy, and Vesta Terminals.
Ruben is also Board Secretary and holds
a Master’s in Law from the Radboud
University of Nijmegen.

Jean-Pierre is Nexperia’s Chief ofCorporate Affairs, which includes Public
Affairs, Communications, and DigitalMarketing. He previously worked at
the Dutch Ministry of Foreign Affairs
from 1995, with a two-and-a-half-year
interlude as Head of the Royal Philips
EU office in Brussels from 2014 to2016. Jean-Pierre was an ambassador
for international positions for six
years. He was posted to the Dutch
embassies in Vienna, Tel Aviv, Warsaw,
Port of Spain and the Dutch Permanent
Representation to the United Nations in
NYC. He was also chief of cabinet of the
Dutch Minister for European Affairs andthe Human Rights chief of the Ministry.
Jean-Pierre holds a Master of Law from
Leiden University.

15

nexperia | Sustainability Report 2023

Our Executive Management Team

Changes in 2023

Members of the EMT in 2023

At the end of 2023, there were changes
to our EMT. Dr. Ke Jiang, Toni Versluijs,
and Mark Roeloffzen left Nexperia, andPhilipp Obier joined the EMT as the
new BG Leader Bipolar Discretes, while
Fredrik Öberg joined as the new BG
Leader MOS Discretes. Additionally, inearly 2023, Ronald van Cleef passed away
unexpectedly. Dirk Wittorf, VP Corporate
Strategy & Chief of Staff, Strategy &Governance a.i., has since served as theinterim Head of Strategy. At the start of2024, Jean-Pierre Kempeneers joined
Nexperia as Chief of Corporate Affairs,
succeeding Charles Smit, who retired.

Dr. Ke Jiang
was General Manager BG Insulated-Gate
Bipolar Transistors & Modules, and China
Design Center.
Toni Versluijs
was General Manager BG MOS Discretes
and Country Manager Nexperia UK.
Mark Roeloffzen
was General Manager BG Bipolar
Discretes.
Charles Smit
was Head of Corporate Affairs, which
included Communications and Public
Affairs.
Dirk Wittorf
was Nexperia’s Head of Strategy (interimrole) from March 2023 onward.

NEXPERIA AT A GLANCE

16

nexperia | Sustainability Report 2023

Our Entities

NEXPERIA AT A GLANCE

Our Entities
Relevant GRI
Standards:

Nexperia Holding B.V.’s material directly and indirectly wholly owned(unless indicated differently) subsidiaries as at December 31, 2023.
The country of incorporation is also their principal place of business.

2-2
Nexperia Entity Name

Place of business/country ofincorporation

Share

Nexperia B.V.

Netherlands

100%

ITEC B.V.

Netherlands

100%

Nexperia Germany GmbHGermany

100%

Nexperia Hungary Kft.

Hungary100%

Nexperia UK Ltd.

United Kingdom

100%

Nexperia Newport Ltd.

United Kingdom

100%

Neptune 6 Ltd.

United Kingdom

100%

Nexperia USA Inc.

United States of America

100%

Nexperia Malaysia Sdn. Bhd.

Malaysia

100%

Nexperia R&D Malaysia Sdn. Bhd.

Malaysia

100%

Nexperia Philippines, Inc.

Philippines

100%

Nexperia Hong Kong Ltd.

Hong Kong

100%

ITEC Technologies Hong Kong Ltd.

Hong Kong

Nexperia (China) Ltd.
Nexperia (Shanghai) Ltd.

Nexperia's consolidated financial statements also include thefinancial statements of Nexperia’s 40% owned subsidiary,
Laguna Ventures, Inc., in the Philippines. For Laguna Ventures,Inc., the Group used the full consolidation method, as Nexperia
has control over the entity. The Group controls the entity as
Nexperia is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity.
In 2022, Nexperia acquired 100% of the shares of Delft-based
Nowi Energy B.V., parent company of Nowi B.V. Following themerger, both entities have been integrated into Nexperia B.V.
This consolidation became legally effective on September 8,2023. As the acquiring company, Nexperia B.V. has assumed
ownership of the remaining assets and liabilities of these
entities.
At December 31, 2023, the below
subsidiaries had the following branches:Country

Subsidiary

Branch Name

100%

FranceNexperia B.V.

France Branch

China

100%

India

Nexperia B.V.

India Branch

China

100%

Italy

Nexperia B.V.

Italy Branch

Nexperia Technology (Shanghai) Ltd.

China

100%

Japan

Nexperia B.V.

Japan Branch

Nexperia (Wuxi) Ltd.

China

100%

Korea

Nexperia B.V.

Korea Branch

ITEC Technology (Wuxi) Ltd.

China

100%

MexicoNexperia B.V.

Mexico Branch

Nexperia Taiwan Co. Ltd.

Taiwan100%

SwedenNexperia B.V.

Sweden Branch

Nexperia Singapore Pte. Ltd.

Singapore

100%

Germany

Nexperia Germany GmbH

Munich Branch

Nexperia Newport Ltd. was divested in March 2024.

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Our Approach to ESG

nexperia | Sustainability Report 2023

Our Approach to ESG
Relevant GRI
Standards:
3-3

SDG 3, 7, 9, 12,
and 13

Our strategy

Generating long-term stakeholder value andmanaging risks and opportunities
As described in our company mission
statement, Nexperia is driven by a strong
commitment to innovation, efficiency,
and sustainability. Our forward-looking
approach includes taking a holistic view ofour organization’s impact on society and theenvironment while continually identifying
new risks and opportunities. As a memberof various communities worldwide (see alist of our key stakeholders below), we aim
to enrich the lives of our employees, theirfamilies, and people throughout our value
chain while minimizing or avoiding negative
impacts on people and the environment.
At the same time, we aim to manage socialand environmental risks and opportunities
that may impact Nexperia (see our risk
management approach in the “Financial
Reporting” chapter of this report).

STRATEGY

We combine robust internal policies andcontrols that focus on the impact of ourentire value chain and the life cycle ofour products. To evaluate and manage
our impacts, risks, and opportunities, weconsider different environmental, social,and governance (ESG) topics; Nexperia's
Sustainability Report is structured according
to these topics.
As an international manufacturer, we also
acknowledge our stakeholders’ increasing
interest in and demands to intensify our ESG
efforts. In response, we are working to morethoroughly integrate ESG into our businessand leverage our innovative and energyefficient technologies to contribute to amore sustainable world.

Our sustainability strategy is based on themateriality assessment we conducted in 2022 andour prioritization of material topics in 2022 and2023. We developed concrete goals encompassing
the most relevant ESG topics, with a focus on thefollowing sustainability performance targets:› Environment: We are committed to achievingcarbon neutrality for our Scope 1 and 2 emissions
by 2035, based on yearly reduction targets.
› Social: We are working toward increasing theshare of women in management positions to
30% and women in R&D and engineering to
20% by 2030. Our targets reflect a material
issue across the entire semiconductor Industry.
In response, we launched our D&I program androlled out numerous female empowerment
initiatives in 2023.
We acknowledge that our sustainability journey
is an ongoing process, and achieving long-term
ESG targets requires continually improving ourknowledge, systems, and actions. In 2024, we willcontinue developing our group-wide sustainability
strategy based on our new materiality assessment.
This assessment, further described in the“Materiality Assessment” chapter, will also provide
the basis for Nexperia’s Sustainability Reports
in compliance with the European Corporate
Sustainability Reporting Directive (CSRD).

19nexperia | Sustainability Report 2023

Our Approach to ESG

STRATEGY

Our ESG Highlights 2023
Environment

GovernanceCommitment to carbon neutrality for
Scope 1 and 2 emissions by 2035

Signatory to the United Nations (UN)Global Compact

First Sustainability Performance
Rating with EcoVadis:

First ESG Risk Rating with Morningstar
Sustainalytics:

GOLD medal , 97th percentile (04/2024)

Score of 18.7 (low risk )40% electricity purchased fromrenewable sources

New Corporate Sustainability Office
Launch of Sustainability Board
Appointment of Human Rights OfficeSocialDiversity & Inclusion Program› 30% women in management positionsin 2030

Policy Statement on human rights andenvironment-related due diligenceobligations
New Code of Conduct campaign› 20% women in R&D/engineering
positions in 2030
See 2023 Highlights.
Launch of Employee Resource Groups:
Global Women@Nexperia Group,
Nexperia LGBTQIA+ Group
84.7% overall favorability of working
at Nexperia

Nexperia’s mission is to serve global
megatrends, which drive steady growthacross the semiconductor industry,
challenge us as a company, and motivate
our commitments to our employees,
partners, and society. In line with thismission, we comply with a broad rangeof guidelines and standards relating tobusiness ethics, human and labor rights,
environment and climate protection,and general sustainability.

We are signatories to the UN Global
Compact, the International Labor
Organization’s (ILO) Labor Standards,
the Responsible Business Alliance(RBA), the UN Guiding Principles on
Business and Human Rights, the UN
Sustainable Development Goals (SDG),
the OECD Guidelines for Multinational
Enterprises, and the Paris Agreement.
We also adhere to various management
standards issued by the International
Standards Organization (ISO), which aredescribed in the relevant topic chapters.

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Our Approach to ESG

nexperia | Sustainability Report 2023

As a signatory to the Global Compact, wefollow its ten core principles in everything
we do. They lay the foundations ofresponsible business activities in the areasof human rights, labor, the environment,
and anti-corruption. By following theseprinciples, we continuously improve these
aspects of our work.
We also embrace opportunities to inspire
people and shape the future while
positioning ourselves for sustainablesuccess. For example, at the start of 2023,
we launched our Nexperia Diversity &Inclusion (D&I) program to respect andcelebrate our employees’ unique talents,
cultures, and backgrounds. In 2023, we
also commenced an annual global Code of
Conduct training program that is mandatory
for all employees. The training centers on
our standards for professional behavior,both internally and when interacting withcustomers and partners. In this edition,
we extended the scope of the training tobroaden our employees’ understanding of
D&I and social standards.

Another critical area of our ESG focus is ourcarbon footprint. We officially launched ourgreenhouse gas (GHG) Emissions Reduction
Roadmap in 2023 and formally committed
to becoming carbon neutral for Scope 1 and2 emissions by 2035. To reach this target, weare constantly working to reduce our energy
consumption and GHG emissions while
increasing our use of renewable electricity.
Our existing ESG management approaches
and upcoming ESG strategy are equal
aspects of our business strategy.

Of the five pillars of Nexperia’s 2023
business mission and the global megatrends
affecting our company, “Sustainability &Energy Efficiency” and “Electrification”
have clear connections to a sustainable
future. There is a growing need for powerand connectivity, an accelerating switch
to electric vehicles (including a three-foldincrease in the number of semiconductors
required), and an urgent need forsustainability and a global energy transition.
We believe Nexperia can play a vital role inthese areas, which we strategically consider
as our five megatrend applications. We also
improve our customers’ energy efficiency byproviding innovative semiconductor devices,such as silicon carbide and gallium nitride.

Megatrend ApplicationsxEV(Electromotive
vehicles)Datacenter

Megatrends

Energy Storage

Electriﬁcation

Connectivity &Digitalization

Green Energy

GeopoliticalInﬂuence

Industry 4.0 &Automation

Sustainability &Energy Efficiency

STRATEGY

Virtual Reality (VR),Augmented Reality(AR),
Internal of things
(IoT)

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nexperia | Sustainability Report 2023

Our Approach to ESG

Sustainable corporate governance structure
In 2023, Nexperia further developed its
sustainability organization and createda new structure for its sustainablecorporate governance. It comprises
three main elements, including a definedsustainability board launched at the
beginning of 2024.

Corporate Sustainability Office
The Corporate Sustainability Office is a
new team at Nexperia led by the Headof Sustainability. In 2023, this function
reported to the Head of Quality andwas subordinate to the Chief Operating
Officer (COO) and the Chief Executive
Officer (CEO). From May 2024, theHead of Sustainability directly reports
to the Chief Operating Officer (COO).
As the central sustainability team,
the Corporate Sustainability Office isprimarily responsible for creating thesustainability strategy and roadmap,
defining and driving work streams,
ensuring sustainability reporting and
ESG rating results, and representing
Nexperia externally. In 2024, thegrowing Corporate Sustainability
Office team will also be responsible
for social sustainability issues, such as
human rights, stakeholder engagement,
and sustainability-related customer
requirements that support Nexperia's
sustainability journey.

Before we introduced the new
governance structure at the end of2023, Nexperia’s ESG project, which is
now part of the Sustainability Office,was supervised by a steering board
comprising our Chief Financial Officer(CFO), Chief Operating Officer (COO),
Senior Director of Environment, Health,and Safety and Corporate Social
Responsibility (EHS and CSR), Head of
Quality, and Senior Director of Advocacy
and Alliances. The steering board
met monthly to track the progress ofvarious initiatives in the ESG project,including preparing Nexperia’s first
Sustainability Report in accordance with
GRI standards, implementing software
solutions for non-financial reporting,and our ESG risk rating with Morningstar
Sustainalytics. In subsequent steps,
the CFO or COO presented executive
summaries of the ESG project or decision
topics to the Executive Management
Team (EMT).

NEW
Corporate
Sustainability
OfficeSTRATEGY

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Our Approach to ESG

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Sustainability work streams

Sustainability Organization
CEO
Xuezheng (Wing)
Zhang

Our sustainability projects are supported
and owned by specific experts fromdifferent departments, combined withadditional management
structures for relevant
ESG topics. These thematicmanagement approaches
are described in more detail
Sustainability
in the appropriate topic
Board
chapters of this report.
monitoring and

COO
Achim KempeNEW

steering ESG
The delegated experts
initiatives
collaborate in sustainability
work streams, while thesupporting corporate
functions own and are
responsible for steering the respective
ESG initiatives. Each work stream ownerand their colleagues are responsible for
implementing and executing actions andcoordinating the various activities.
The ownership of ESG topics bydifferent departments is described in
the graphic on the next page. Besides
the ownership of ESG-related projects
by EHS & CSR, Procurement, Legal, andHuman Resources, the Sustainability
Office closely collaborates with thedepartments of Finance, Enterprise Risk
Management, Corporate Affairs, Sales,
Strategy, Supply Chain, and Research &Development (R&D).

STRATEGY

CFO
Stefan Tilger

CHRO a.i.
Xuezheng (Wing)
Zhang

General Counsel
Ruben Lichtenberg

Head of Quality

Global EHS / CSR

GHG Emission

Head of
Sustainability

Procurement

Procurement
Sustainability and Risk

Legal
ESG
HR

Central Sustainability
OfficeSupporting Corporate
Functions› Create sustainability› Delegates for eachstrategy & roadmap

corporate function› Deﬁne and drive› Owner of activities› Coordinate the activities› Execute actions

workstreams› Ensure ESG rating results› Represent Nexperia

Corporate
Affairs

From May 2024 onward, the Head of Sustainability
reports directly to the COO.

23

nexperia | Sustainability Report 2023

Our Approach to ESG

Sustainability Board

Ownership of ESG topics per department
EHS & CSRPROCUREMENT

LEGAL

HUMAN
RESOURCESSUSTAINABILITY› Environmental› Sustainable Supply› Business Integrity &› Own Workforce /› Materiality &Protection

Chain

HR Management

Due Diligence› Emissions & Energy› Resources› ECO-Products› Chemical› Supplier Code of

Ethics(Code of Conduct)› Diversity & Inclusion› Labor & Working› Sustainability

Conduct› Risk Analysis Supply
Chain

Conditions

Strategy› ESG Risk Management› Stakeholder› Chair of Law Review› Social Sustainability /(ESG-related laws)

Human Rights

Human Rights in the
Supply Chain› Data Protection

Ecosystems› Supplier Trainings on› Local Ethics Liaison› Reporting› Risk Rating &› Health & Safety› Membership in

Sustainability

Management› Supplier Self-Assess-› Grievance Mechanism› Trade Compliance› Carbon Border
Adjustment
Mechanism

ments› Conﬂict Minerals› Water› Waste› Biodiversity /› Supplier Audits› Actions for Labor &Engagement

Officer

Performance Rating› Sustainability-related
customer requirements

Industry Associations› Communication &Representation
Nexperia

Contributing departments
FINANCEENTERPRISERISKMANAGEMENTSTRATEGYCORPORATEAFFAIRSSALESSTRATEGY

SUPPLY
CHAIN

R&D

The Sustainability Board serves as themonitoring and steering body for all
ESG initiatives. Its inaugural meeting
took place at the beginning of 2024.
The board comprises our Chief Financial
Officer (CFO), Chief Operating Officer(COO), General Counsel, Head of Quality,
Head of Procurement, Senior Director
EHS & Corporate Social Responsibility,
and Senior Director of Advocacy andAlliances. All key ESG topic owners
from applicable departments are also
integral members of the Sustainability
Board. The Head of Sustainability hosts amonthly meeting to assess and manage
Nexperia's sustainability performance,
address any shortfalls, and drive
meaningful progress.
Key insights from these Sustainability
Board meetings are conveyed to the
Executive Management Team (EMT) andthe Chief Executive Officer (CEO) for
their information or approval. Our Headof Sustainability ensures consistent anddirect reporting to the EMT.

24

nexperia | Sustainability Report 2023

Our Approach to ESG

STRATEGY

ESG policies
Concrete policies and guidelines are thefoundation of effective sustainability and
ESG management. Many of our policies
have specific application scopes within ourmaterial ESG topics, which are described in thecorresponding chapters. Some other policies
also guide our daily sustainability initiatives on abroader level.
Our Sustainability Policy supports the Code of
Conduct for environmental, health, and safety
topics. It also provides a general overview of
our approach to important ESG topics, withclear commitments to ethics, labor and humanrights, employees, products, operations,compliance, local initiatives, transparency, andstakeholder dialogue. The policy classifies these
topics and commitments, making it simple foreveryone at Nexperia to understand our values
and goals.
Our Code of Conduct is a vital document thatclearly defines how we want to work witheach other and achieve our collective goals as
a company. It includes decision trees, ethicalguidance, the SpeakUp Line, and our guaranteeof no reprisals. It also outlines the general
ethical standards we apply to our employment,
business, and personal integrity, as well as ourcompany assets and external activities that
may impact people or the environment. All
employees can raise questions or concerns
via the different reporting lines described inchapter two of our Code of Conduct. To ensurea uniform approach, every employee must
read and comply with our Code of Conduct,
supported by yearly training sessions tracked
in our e-learning system. Our Code of Conduct
also applies to temporary employees andworkers in our supply chain. In 2023, we rolled
out a new global Code of Conduct campaign,
supported by a statement from our CEO andbespoke posters for display at all Nexperia sites
worldwide.
For our suppliers, we enhance our Code of
Conduct with a Supplier Code of Conduct. This
document provides the framework to help ourpartners and suppliers mirror our commitments
to sustainability and social responsibility. It
is based on our Code of Conduct and theprinciples of the Code of Conduct of the
Responsible Business Alliance (RBA). It ensures
the working conditions in our supply chainsare safe and within the regulatory bordersof the countries where they operate. Bysigning a “Supplier Statement of Conformity,”
our suppliers commit to treating workers
with respect and dignity and maintaining
minimum standards of environmentally
responsible manufacturing. We foundedthese commitments using globally recognized
standards, such as the Universal Declarationof Human Rights, the ILO Labor Standards,
the Ethical Trading Initiative (ETI), and corelabor norms. More information on this topic
can be found in the “Responsible Sourcing and
Supplier Engagement” chapter of this report.

NEW
Policy Statementon human rights
and environmentrelated due diligenceobligations

To further underpin our commitment to humanrights, we published our new Policy Statementon human rights and environment-related due
diligence obligations in Q1 2024. This policy
explains that Nexperia - as a global company withapproximately 14,000 employees representing
diverse cultures and nations - is firmly committed
to upholding human rights. The policy describes
our risk analysis, preventive and remedial
measures, and complaint mechanism.

25

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Our Approach to ESG

STRATEGY

Stakeholder engagement
We recognize that Nexperia is part of a diverse
ecosystem, and our success depends on
the responsible relationships we build with
our stakeholders. Therefore, as part of ourcommitment to sustainability, we engage
with our stakeholders to ensure transparency,
understand their expectations, concerns, andperspectives, and collaborate with them todevelop and implement sustainable solutions.
Engaging with our stakeholders creates sharedvalue and promotes sustainable development.
Effective stakeholder engagement is vital tobuilding trust, managing risks, and driving
long-term business success. Our stakeholders’voices are critical to shaping our sustainability
strategy and ensuring we remain accountable
to the communities and environments where
we operate.
To ensure we engage with the rightstakeholders in the right way, we undertook
a comprehensive stakeholder identification
and assessment process in 2022. We will refine
these insights in our next materiality analysis,planned for 2024 (described in the “Materiality
Assessment” chapter). Our assessment included
both internal and external stakeholder groups.

We engage with our stakeholders regularly,
using various methods and channels to ensure
we capture a diverse range of perspectives.
Throughout the year, we communicate with ourpartners, customers, and internal and external
stakeholders on sustainability-related topics,
trends, and developments relevant to ourindustry. Our engagement process is designed
to be inclusive, transparent, and responsive
to stakeholder input and feedback. We aim
to achieve dynamic, two-way communicationthat enables us to create sustainable solutions
together.

An essential aspect of our engagement
strategy is contributing to various initiatives
and associations, such as signing the UN Global
Compact in January 2023. As an international
company, Nexperia is also a member of several
other national and global industry associations
and is regarded as a think tank of relevance inthe semiconductor industry.

Our key stakeholders and industry associations
International

EuropeanNational› United Nations Global
Compact› European Semiconductor
Industry Association (ESIA)› German Electro and Digital
Industry Association (ZVEI)› Responsible Business Alliance(RBA); Responsible Minerals
Initiative (RMI)› ECPE European Center forPower Electronics› Techworks/NMI (Electronics
manufacturing, UK)› SEMI Global Industry
Association› Federation of Malaysian
Manufacturers (FMM)› FME-CWM Association, theNetherlands

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Our Approach to ESG

nexperia | Sustainability Report 2023

Involving our stakeholders
We are committed to maintaining strong engagementwith our diverse range of stakeholders. Through ongoing
dialogue, we transparently communicate our actions anddecisions to foster goodwill with our employees, partners,
the general public, and other stakeholders. Overall, we
aim to unite divergent interests, build trust, and create
sustainable, long-term relationships.

Stakeholder

Stakeholder

Customers

Workers’ Councils

Engagement

Engagement› Conferences, customer productlaunches, trade shows, and regularbusiness review meetings.

› Presentation of Sustainability Report,
ESG Risk Rating results, and our
ESG approach to German and Dutch
workers’ councils.

› Responding to customer requests
relating to ESG topics.

Stakeholder
Suppliers

Engagement› Supplier Day 2023: Exchange on ESG topics andGerman Supply Chain Due Diligence Act.

STRATEGY

Feedback, lessons learned,
and future activities
From ongoing dialogue with ourcustomers, we learned that there isa growing demand for regular anddetailed Sustainability Reporting and
ESG Risk ratings.

› Presentation of D&I program andplanned D&I survey to German works
council.
Feedback, lessons learned,
and future activities
Ongoing dialogue› Regular social responsibility audits.
› Distribution of revised Supplier Code of Conduct(planned for 2024).
› Exchange with industry peers through the RBA
Validation Assessment Program.
Feedback, lessons learned, and future activities
Main violations of social responsibility supplier audit:
1) Recruitment fees2) Exceeding working hours
3) Overtime pay

Stakeholder

Stakeholder

Responsible Minerals Initiative (RMI)

European Semiconductor Industry
Association (ESIA)Engagement

Engagement› Participation in monthly plenary calls.

Participation in conferences, meetings,
and several working groups (e.g.,
Sustainability, EU Taxonomy, CSDDD,
and CBAM).

› Involvement in Due Diligence
Practices and Smelter Engagement
Teams.

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nexperia | Sustainability Report 2023

Our Approach to ESG

By listening to our stakeholders and incorporating their feedback,
we enhance our sustainability performance and reputation as a
responsible corporate citizen. Some examples include our regular
employee survey, which we repeated in 2023 (see “Talent Attraction
and Retention” chapter), utilizing communication opportunities
such as town halls, social media, newsletters, and our website, andstructural engagements with policymakers, industry associations,and other interest groups through meetings, workshops, task forces,
and topical events.

Stakeholder
Responsible Business Alliance (RBA)Engagement› Monthly and quarterly calls as an RBA
member.
› Regular participation in thematic
workshops on new regulations.
› Member of the chemicals
management taskforce.
› Submitted feedback on new Codeof Conduct version (operational
manual).

We are committed to being transparent about the outcomes
and impact of our stakeholder engagement activities, both todemonstrate our accountability and inspire others to follow ourlead. We will continue evolving our stakeholder engagement
approach by incorporating stakeholder feedback and learning frombest practices in the field.

Stakeholder
FME-CWM Association, theNetherlands
Engagement

To ensure we comply with the European Corporate Sustainability
Reporting Directive (CSRD) and European Sustainability ReportingStandards (ESRS), we plan to actively engage with our stakeholders
for our new materiality analysis in early 2024.

Participation in conferences, meetings,
and relevant working groups.

Stakeholder

Stakeholder

Stakeholder

German Electro and Digital Industry
Association (ZVEI)

Federation of Malaysian
Manufacturers (FMM)

Techworks/NMI (Electronics
manufacturing, UK)

Engagement

Engagement

Engagement› Chairing the semiconductor working
group of ZVEI.

Participation in conferences, meetings,
and relevant working groups.

Participation in conferences, meetings,
and relevant working groups.

› Additional participation in other ZVEI
working groups and committees.

STRATEGY

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Our Approach to ESG

nexperia | Sustainability Report 2023

Overview of
Nexperia’s Stakeholders

EXTERNALSTAKEHOLDERSPRIVATE AND
INDUSTRIAL NEIGHBORS
Impacted by the Company’s activities
in the vicinity of company sites

STRATEGYCERTIFICATION BODIES
Organizations that have been accredited fortheir competence to audit and issue certiﬁcationaccording to the requirements of a standard

EMPLOYEESSTANDARDS ORGANIZATIONSCUSTOMERS

People who belong to the Company and are directly
and indirectly responsible for manufacturing products,
delivery of service; expect to work in a safe andhealthy environment

Standardization bodies relevant forthe semiconductor industry

Purchase Nexperia’s products andservices, also including end users

EMPLOYEE LIABILITY
INSURANCE ASSOCIATIONPARTNER
Direct cooperation between companies,
e.g., in the mutual supply of products
INVESTORSTHE PUBLIC | MEDIA
Provide transparency on entrepreneurial
activities and their impacts

Provide funding to
the Company; areconcerned with theﬁnancial health of
the Company

Insure employees against accidents atwork and occupational diseases

INTERNALSTAKEHOLDERS

INSURANCE COMPANIESProvide insurance and assure risks
TOP MANAGEMENTTRADE UNIONSWORKERS’ COUNCIL

Organization of workers with theaim of maintaining and improving
employment conditions

Institutionalized body
representing employees
in the Company

Management level thatexercises direct inﬂuenceon the Company

NGOs | ASSOCIATIONS
Non-governmental organizations
representing societal interests as well asother associations formed to assert
common interests

SUPPLIERS | SUBCONTRACTORSSTATES | AUTHORITIES | GOVERNMENTS

Provide raw materials, subcontracted
manufacturing processes, criticalsupport services, staffing agents,
consultants, equipment, etc.

Set the regulatory frame, having direct
inﬂuence on the Company and the businessenvironment
UNIVERSITIES
People and institutes that deal scientiﬁcallywith companies, industries, and theirinteractions with the business environment

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Materiality Assessment

nexperia | Sustainability Report 2023

STRATEGY

Materiality Assessment
Relevant GRI
Standards:
3-1, 3-2

Overview on Nexperia’s 16 Material topics

ENVIRONMENTAL
SOCIALOur approach to defining
materiality
A robust materiality assessment is afundamental aspect of corporate sustainability
management. We conducted our initialmateriality assessment in the second halfof 2022. Following the approach of double
materiality, we identified material sustainability
topics based on their impact on people andthe environment (impact materiality) and/or
on financial concerns (financial materiality). In
addition, our analysis allowed us to determine
whether topics are strategically important andmust be included in our Sustainability Report.

low  FINANCIAL MATERIALITY  high

GOVERNANCE

Cyber security, data protection & privacy

Environmentally responsible procurement
Resource efficiency
Responsible sourcing of minerals
Reduction of greenhouse gas emissions
Business integrity and ethics

Supply chain management

Talent attraction &retention

Talent development
Water & wastewater management

Health & safety

Standards for labor & human rights
Waste management
Working hours
Accountability & responsibility ofmanagement and supervisory bodies

Diversity, non-discrimination & inclusion

low  IMPACT MATERIALITY  highOur materiality assessment was based on
an analysis of various internal and external
documents and an online stakeholder survey.
Covering both impact and financial materiality,
we consulted Nexperia’s stakeholders on
the impact intensity and the probability ofoccurrence of sustainability topics. Nexperia’s
Sustainability Report 2022 offers a detailed
description of our materiality assessment
process, including the identification ofsustainability topics, involvement of
stakeholders, validation, and results.

30nexperia | Sustainability Report 2023

Materiality Assessment

ESRS-compliant
materiality
From January to April 2024, we
conducted a new materiality assessment
according to the European Sustainability
Reporting Standards (ESRS). Thesestandards outline the requirements
for companies and organizations totransparently disclose sustainability
information in alignment with the EU’s
Corporate Sustainability Reporting
Directive (CSRD). The results are
expected by May 2024. In addition to
focusing on the topic list defined in the

ESRS, we considered our entire value
chain and different timeframes. In linewith the ESRS disclosure requirements,
we also identified significant potential
positive and negative impacts, risks,and opportunities. As in 2022, we
engaged with stakeholders to assess
the topics. We updated our value
chain and stakeholder mapping andopted for a qualitative approach inour corresponding analysis, consulting
selected representatives of our
stakeholder groups in one-on-one
interviews.

“Our double materiality analysis
in preparation for the CSRD was
guided by two main goals: complying
with the CSRD requirements andpinpointing the environmental,social, and governmental issues
crucial to both our company and our
stakeholders.”

STRATEGY

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UN Global Compact

UN Global Compact
Our commitment
and approach
Since January 2023, Nexperia has beena signatory to the United Nations Global
Compact.
The Global Compact identifies ten universal
principles in four important areas: humanrights, labor, the environment, and anticorruption. As a voluntary initiative supportedby over 20,000 companies worldwide, theGlobal Compact encourages businesses toalign their strategies and operations with theseprinciples and contribute to the UN Sustainable
Development Goals (SDGs).
As a signatory to the Global Compact,
we follow its ten universal principles andproactively approach sustainability through ourrobust management systems. Overall, we aim
to incorporate socially and environmentallyfriendly practices across our global operations.
We detail Nexperia's policies, procedures,
and actions in the respective chapters of thisSustainability Report, and the Communication
on progress section below summarizes our
steps toward more sustainable and socially
responsible policies and practices.

Since January2023
Signatory to theUnited Nations
Global Compact

STRATEGY

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UN Global Compact

STRATEGY

Communication on progress
Human Rights
Principle 1: Businesses should
support and respect the protectionof internationally proclaimed humanrights; andPrinciple 2: make sure that they are notcomplicit in human rights abuses.

› Nexperia is a signatory to the UN
Global Compact, the International
Labor Organization’s (ILO) Labor
Standards, the Responsible
Business Alliance (RBA), the UN
Guiding Principles on Business andHuman Rights, the UN Sustainable
Development Goals (SDGs), theOECD Guidelines for Multinational
Enterprises, and the Paris Agreement.
We also adhere to various
management standards issued by theInternational Standards Organization(ISO).
› Nexperia’s Code of Conduct,
Supplier Code of Conduct, and our
Sustainability Policy demonstrate
our commitment to labor and humanrights, providing a safe working
environment, promoting good
health, minimizing the environmental

impact of our activities, protecting
the environment, and adhering to
ethical business practices. We foster
innovations and creative solutions
that add value for our customers,
communities, and planet.
› Our human rights-related policies
and processes are guided by globally
recognized standards, such as the
Universal Declaration of Human Rights(UDHR) and standards issued byorganizations such as the International
Labor Organization (ILO), Social
Accountability International (SAI), andthe Ethical Trading Initiative (ETI).
› We are committed to preventing
human and labor rights abuses. We
conduct risk analyses, supplier andself-assessments, and audits of both
Nexperia and supplier sites in line with
the Responsible Business Alliance(RBA) standard. Nexperia’s Social
Responsibility Auditable Standard
covers employees at our Company
and along our supply chain. The
standard details our commitment totransparent and safe workplaces andsupply chains, including requirements
regarding human rights, equal pay,
non-discrimination measures, training,and more.

Labor
Principle 3: Businesses should
uphold the freedom of associationand the effective recognition of theright to collective bargaining;
Principle 4: the elimination of all
forms of forced and compulsory
labour;Principle 5: the effective abolitionof child labour; andPrinciple 6: the elimination of
discrimination in respect of
employment and occupation.

› We support and participate
in dialogues with employee
representation bodies, including
workers’ councils at the site level
and trade unions at sectoral andnational levels. We have collective
bargaining agreements in placein several countries, including
Germany, the Netherlands, thePhilippines, and the UK (for oursite in Manchester).

› We also support the aim of theInternational Labor Organization (ILO)
to promote and realize universally
accepted labor standards. We respect
and recognize our employees’
freedom to establish, join, or be
represented by an organization,
trade union, or employee group of
their choice. Across all global sites,
our employees have the freedom toassociate and the right to collective
bargaining as provided by local
statutes.
› The Nexperia Supplier Code of
Conduct and the Nexperia Slavery and
Human Trafficking Statement explicitly
state that we do not tolerate any formof slavery – including forced, bonded,indentured, or prison labor, as wellas human trafficking, child labor, anddiscrimination – within our company or
across our supply chain.

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nexperia | Sustainability Report 2023

Environment
Principle 7: Businesses should
support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives
to promote greater environmental
responsibility; andPrinciple 9: encourage thedevelopment and diffusion ofenvironmentally friendly technologies.

› Nexperia takes a proactive approachto environmental protection. We
implement robust management
systems and incorporate practices
across our operations to minimize
our environmental footprint. In
addition, we adhere to the principlesof the Global Compact based on our
ISO 14001-certified Environmental
Management System, covering all our
manufacturing sites and headquarters.
The Environmental Management
System requires us to identify, control,
and reduce the ecological impact of
our operations and establish compliant
and impactful policies, processes, andprocedures to manage all material
environmental aspects.

UN Global Compact› In 2023, Nexperia announced the longterm target to become carbon neutral
by 2035. This commitment includes
direct operational emissions (Scope1) and indirect emissions associatedwith procuring energy for operations(Scope 2). In the future, Nexperia
also aims to analyze and decrease
its supply chain emissions wherever
possible (Scope 3).
› Nexperia is a company driven
by an unwavering commitment
to innovation, developing
semiconductors for energy-efficient
everyday products used by people
worldwide. To do so, we continuously
work to improve the energy efficiencyof our original portfolio, including
products with increased power
capabilities, such as wide bandgap(WBG) devices like silicon carbide(SiC) rectifiers, gallium nitride (GaN)
FETs, and power management ICs. We
continue improving and developing
products that reduce energy andmaterial consumption in a broad
range of applications while striving
to make our operations CO2 neutral
to contribute to a more sustainable
future.

Anti-Corruption
Principle 10: Businesses should
work against corruption in all its
forms, including extortion andbribery.

› Nexperia has robust policies andprocedures to prevent corruption
and promote ethical businesspractices across our operations
and supply chain. We address all
relevant business ethics risks thatcome to our attention using our
ethical risk assessment procedures.
› Our Code of Conduct details
our commitment to preventing
corruption and promoting ethicalbehavior in an accessible andstructured format. It provides
concrete operating guidelines
for appropriate behavior andcorrect procedures, including
ethics escalation (whistleblowing).
Overall, it aims to promote a clear,strong, and consistent culture of
ethics.

STRATEGY

34

nexperia | Sustainability Report 2023

UN Sustainable Development Goals
In 2015, the United Nations (UN) adopted 17 Sustainable
Development Goals (SDGs). Together with the 2023 Agenda, they
serve as a critical roadmap to create a more sustainable future forpeople and the environment. The SDGs define concrete targets for2030, and we have joined many other companies in embedding the
SDG reporting framework into our Sustainability Report.
We have identified seven core SDGs and how Nexperia cancontribute to their objectives. Our contributions focus on the subtargets listed below, which we strive to impact with our businessactivities.
Going forward, we will work on a comprehensive assessment ofprogress toward the SDG targets across the 17 SDGs at a global
level, following the SDG progress chart.
SDG 3 – Good health and well-being
SDG 4 – Quality education
SDG 5 – Gender equality
SDG 7 – Affordable and clean energy
SDG 9 – Industry, innovation, and infrastructure
SDG 12 – Responsible consumption and production
SDG 13 – Climate action

UN Global Compact

STRATEGY

35

nexperia | Sustainability Report 2023

UN Global Compact

STRATEGY

Our contribution to the SDGs
SDG 3 | Good health and well-being
Ensure healthy lives and promote well-being
for all at all ages

SDG 4 | Quality education
Ensure inclusive and equitable quality education andpromote lifelong learning opportunities for all

The health and safety of our employees is our highest priority. We continually work
to ensure that everyone at Nexperia – our employees, temporary workers, interns,
partners, and visitors – feels safe in a secure environment. This includes medical,
physical, and emotional or mental health.

Education is vital for personal, professional, social, and economic development.
We strive for equal access to quality education and invest in our employees' skills andcompetencies.

TargetOur contributions

3.8
Achieve universal health coverage,
including financial risk protection,access to quality essential healthcare services, and access to safe,
effective, quality, and affordable
essential medicines and vaccines
for all.

› Comprehensive Health & Safety policies in

3.9
By 2030, substantially reduce thenumber of deaths and illnesses
from hazardous chemicals andair, water, and soil pollution andcontamination.

Nexperia’s Code of Conduct, Sustainability
Policy, and Supplier Code of Conduct (“Health& Safety”; “Business Integrity and Ethics”)› Comprehensive health and pension plans for
employees (“Talent Attraction and Retention”)› Health events and campaigns at the local andglobal levels (“Corporate Citizenship”)› Effective risk prevention and management
measures: since Nexperia’s foundation in 2017,
zero recorded fatalities and high-consequencework-related injuries› Management approach Health & Safety: HSE
Management System› Robust reporting processes for any safety
risks, accidents, and injuries
Further details: “Health & Safety”

TargetOur contributions

4.3
By 2030, ensure equal access for
all women and men to affordable
and quality technical, vocational,
and tertiary education, including
university.

› Diversity & Inclusion program with targets for4.4
By 2030, substantially increase
the number of youth and adults
who have relevant skills, including
technical and vocational skills, foremployment, decent jobs, andentrepreneurship.

› Trainee and graduate programs for young

women in management and R&D (“Diversity
and Inclusion”)

talents (“Talent Attraction and Retention”)› Cooperation with schools and universities

to stimulate interest and innovation intechnology (“Corporate Citizenship”)› Kids’ day events for career guidance andinspiration for children aged 11-13 (“Corporate
Citizenship”)

36

nexperia | Sustainability Report 2023

UN Global Compact

STRATEGY

SDG 5 | Gender equality
Achieve gender equality and empower
all women and girls“It’s not only about
the conversation
surrounding female
equality; it’s more
about the actions
we take to ensure
there are, and will be,
opportunities for future
generations of womenand all subsequent
generations.”

We champion gender equality and empower all women and girls.
We value diversity and inclusion in our culture and teams.
TargetOur contributions

5.1
End all forms of discrimination against
all women and girls everywhere.

› Nexperia’s Code of Conduct with a clear commitment
to prevent and address any forms of discrimination,harassment, or misconduct› Internal and external reporting mechanisms to raise cases of
misconduct, e.g., SpeakUp Line.
› Global employee awareness campaign on our updated Codeof Conduct› Comprehensive company-wide Diversity & Inclusion program
Further details: “Diversity, Non-Discrimination, and Inclusion”
and “Business Integrity and Ethics”

5.c
Adopt and strengthen sound policies and enforceable
legislation for the promotion of gender equality and theempowerment of all women and girls at all levels.

› Targets for women in management and R&D/engineering› Female Leadership Program› Diversity ambassadors to inspire more women to pursue a
career in engineering
Further details: “Diversity, Non-Discrimination, and Inclusion”
and “Business Integrity and Ethics”

5.5
Ensure women’s full and effective participation and equal
opportunities for leadership at all levels of decisionmaking in political, economic, and public life.

› Targets for women in management and R&D (“Diversity,
Non-Discrimination, and Inclusion”)

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nexperia | Sustainability Report 2023

UN Global Compact

STRATEGY

SDG 7 | Affordable and clean energy
Ensure access to affordable, reliable, sustainable, andmodern energy for all

SDG 9 | Industry, innovation, and infrastructure
Build resilient infrastructure, promote inclusive andsustainable industrialization, and foster innovation

We strive for affordable and clean energy to support sustainable development andprotect the environment. We aim to reduce our carbon footprint and use more
renewable energy in our operations and value chain.

We pioneer innovative products across diverse markets and industries, tailored todriving the development of energy-efficient products and applications.

TargetOur contributions

7.2
By 2030, increase substantially theshare of renewable energy in the
global energy mix.

› Sustainability and Environmental Policies
inscribed into our Code of Conduct (“OurApproach to ESG”)› Ambitious GHG Emissions Reduction Roadmap
to achieve carbon neutrality across Scope 1
and 2 emissions by 2035 (“Emissions”)› Renewable Energy program to purchase green
electricity for all our sites; 40% electricity
purchased from renewable sources in 2023(“Our Approach to ESG”)

TargetOur contributions

9.4
By 2030, upgrade infrastructure andretrofit industries to make themsustainable, with increased resourceuse efficiency and greater adoptionof clean and environmentally soundtechnologies and industrial processes,with all countries taking action inaccordance with their respective
capabilities.

› Providing innovative, e.g., wide band

9.5
Enhance scientific research, upgrade
the technological capabilities ofindustrial sectors in all countries,
in particular developing countries,
including, by 2030, encouraging
innovation and substantially
increasing the number of researchand development workers per one
million people and public and private
research and development spending.

gap (WBG) and silicon carbide- or gallium
nitride-based semiconductors geared
toward boosting energy efficiency inproducts and applications› Product innovation: over 800 new products
annually
Further details: “New Product Design”› 11 R&D centers worldwide› R&D investment of $106 million in 2023
(2022: 81 million)› R&D staff of over 1,122 experts in 2023
(2022: 999)
Further details: “Our Company and Business”

38nexperia | Sustainability Report 2023

UN Global Compact

STRATEGY

SDG 12 | Responsible consumption and production
Ensure sustainable consumption andproduction patterns

SDG 13 | Climate action
Take urgent action to combat climate change
and its impacts

We aim to be carbon neutral by 2035 and use resources efficiently. We reduce andrecycle waste, source renewable energy, and report on our sustainability performance.

We are committed to climate action and aligning our business with the Paris
Agreement. We aim to achieve net-zero emissions across Scopes 1 and 2 by 2035.

TargetOur contributions

TargetOur contributions

12.2
By 2030, achieve the sustainable
management and efficient use
of natural resources.

› Comprehensive Environmental Management

13.2
Integrate climate change
measures into national policies,
strategies, and planning.

› Ambitious GHG Emissions Reduction Roadmap

12.5
By 2030, substantially reduce
waste generation throughprevention, reduction, recycling,
and reuse.

› Recycling activities and waste reduction initiatives

12.6
Encourage companies,
especially large andtransnational companies, toadopt sustainable practices
and to integrate sustainability
information into their reporting
cycle.

System (ISO 14001-certified), targets, andperformance (“Environmental Management”)› Commitment to carbon neutrality: net-zeroemissions for Scope 1 and 2 by 2035 (“Emissions”)› Green electricity purchases and renewable energy
projects (“Emissions”; “Our Approach to ESG”)› In 2023, 83% of regular waste in our

manufacturing sites recycled, based on
definitions from local legislation
Further Details: “Waste Management”› Annual non-financial ESG disclosures inaccordance with GRI standards› Limited assurance of selected KPIs in our 2023
Sustainability Report
Further Details: “Our Sustainability Report” and“Our Approach to ESG”

launched in 2023 (“Emissions”)› Renewable energy sourcing ongoing in various
green electricity and renewable energy
projects (“Emissions”; “Our Approach to ESG”)› Energy efficiency measures to optimize energy
consumption and performance (“Emissions”)› Assessment of climate-related risks andopportunities (“Our Approach to ESG”;“Environmental Management”)

39nexperia | Sustainability Report 2023

ESG Risk Rating

STRATEGYESG Risk Rating
Relevant GRI
Standards:
3-3

Nexperia ensures that progress
toward the Company’s environmental,social, and governance (ESG) goals
is monitored and communicatedtransparently. This includes providing
investors with insights that enable
informed investment decisions on
business activities that promote a moresustainable, long-term development. For
this purpose, we liaise with renowned
agencies to analyze and evaluate our
ESG performance.

In July 2023, we received our first ESG
Risk Rating from Morningstar
Sustainalytics. This rating captures our
exposure to material, industry-specific
ESG risks as well as our managementof those risks. With a score of 18.7,
we were assessed to be at low risk ofexperiencing material financial impacts
from ESG factors.
This result places Nexperia among the
top 11% out of a total of 221 assessed
entities within the semiconductor design
and manufacturing subindustry. We
are also among the top 16% within thelarger global semiconductor industry.

18.7
ESG Risk Rating
Morningstar
Sustainalytics
Industry Group
Semiconductor

Subindustry Group
Semiconductor Design and
Manufacturing

Top 16%

Top 11%

51 out of 320

24 out of 221

40

Stefan Tilger
CFO“Given the positive results of our first ESG
risk rating, we are proud that our efforts
have been recognized in Morningstar
Sustainalytics' assessment, allowing us toposition ourselves among the leaders of thesemiconductor industry in this field.
At Nexperia, shaping a sustainable futurefor our electronics is part of our DNA. Our
mission is to serve global megatrends,
which drive steady growth across thesemiconductor industry, challenge us as acompany, and drive our commitments to ouremployees, partners, and society.
We know there is a long road ahead andwill continue on the path toward further
reducing our carbon footprint, providing
more support for diversity and inclusionin the workplace, and promoting ethicalbusiness practices.”

nexperia | Sustainability Report 2023

ESG Risk Rating

STRATEGY

Sustainability-Linked Loan
Nexperia’s leading industry position
regarding ESG factors and its
commitment to environmental andsocial ambitions was reaffirmed in 2023.
In December 2023, Nexperia successfully
signed an $800 million Senior
Sustainability-Linked Loan (SLL) (forfurther details, see our Annual Report).
The SLL includes environmental andsocial Key Performance Indicators(KPIs). This method incentivizes
environmentally and socially sustainableeconomic growth and innovation. The
SLL’s KPIs primarily relate to greenhousegas emissions and gender diversity, witha focus on including more women in
management positions. With these KPIs,
the SLL directly reflects our strategy andtarget of achieving carbon neutrality by
2035 for Scope 1 and 2 emissions andreaching 30% women in management
positions by 2030.
For additional transparency and robust
governance, Morningstar Sustainalytics
supported the SLL’s KPIs with a secondparty opinion. A third party will provide
independent annual assurance.

ECOVADIS SUSTAINABILITY RATINGGOLD - TOP 5%
In April 2024, Nexperia received its first EcoVadis
rating and was awarded a Gold Medal. In a
competitive comparison, Nexperia reached the 97th
percentile. The EcoVadis score (0-100) reflects thequality of a company’s sustainability management
system at the time of the assessment.

SDG 5, 7, 9This result places Nexperia among the top 5% ofcompanies in our industry assessed by EcoVadis in thepast 12 months.

42

Financial
Reportingnexperia | Sustainability Report 2023

Financial Performance

Financial Performance
Relevant GRI
Standards:
2-2, 3-3, 201-1

For the year ended December 31, 2023, Nexperia
generated product revenue of $2,096 million(2022: $2,284 million). In addition, the Company
generated revenue from manufacturing, foundry,and other sales of $59 million (2022: $81 million)
from Newport wafer sales to external parties, thefront-end and assembly production of competitor
products in Nexperia-owned fabrication plants(“fabs”) as well as from the production ofequipment for external customers.
In 2023, 55.4% (2022: 66.7%) of the total productrevenue was generated through distributors,
40.4% to original equipment manufacturer (OEM)customers (2022: 29.3%) and 4.2% to electronics
manufacturing service (EMS) customers (2022:
4.0%). The distribution sales comprise fulfillment
business sales, in which Nexperia manages
design and distributors manage logistics, inaddition to sales to mass market customers. The
Group’s biggest worldwide distributors acrossall applications are Arrow, Avnet, Future, and

WPI (in alphabetic order). In addition to OEM
customers, Nexperia has worldwide leading EMS
as customers, such as Foxconn, Flextronics, Jabil,
Pegatron, Sanmina, and Quanta.
In 2023, $1,162 million (55.4%) of the productrevenue was generated via distribution (2022:$1,523M). Out of this, the distribution fulfillment
sales accounted for $446 million (38.4%) and themass market for $716 million (61.6%). The sales
completed by Nexperia’s distribution partners to
end customers are called “Point of Sale (POS).”In 2023, a point of sale of $1,397 million wasachieved (2022: $1,599 million).
Nexperia’s total market segments of $2,096
million (2022: $2,284 million) are Automotive,
Mobile & Wearables, Industrial & Power,
Consumer, and Computing. It’s the sum of thesales to customers with direct market assignment
and the remaining customers served by EMS
and distribution for which the sales are split
into market segments by using the split into
market segments of the POS sales. Segments
are assigned if the business goes via direct

FINANCIAL REPORTING

44

nexperia | Sustainability Report 2023

OEM customers or via Distribution Fulfillment
customers. The remaining sales of non-assigned
market segments for Distribution Mass Market(MM) amounted to $716 million in 2023
(2022: $955 million) and customers and EMS
customers to $88 million in 2023 (2022: $92
million). The total product revenue for 2023
is split into segments of Automotive 62.8%,
Mobile & Wearables 6.9%, Industrial & Power
21.7%, Computing 4.8%, and Consumer 3.8%
(see also the table below).
The gross profit for the year ended December
31, 2023, was $808 million (2022: $1,004
million) or 37.5% (2022: 42.5%) of the revenue.
The decrease in margin was mainly driven by
volume decreases as well as a negative effectfrom underutilization of the factories. Grossprofit was significantly weaker than expected($-283 million), which was also driven by lower
volumes and the underloading effect.

Financial Performance

$'000

45

FINANCIAL REPORTING

2023

2022

2021

2020

2019

2,096,038

2,283,894

2,057,950

1,397,910

1,432,108

58,63180,73978,83333,00353,296

2,154,669

2,364,633

2,136,783

1,430,913

1,485,404

Netherlands

54,672

91,226

95,68918,581

6,791

Greater China

902,419

1,058,896

1,014,414

736,967624,200

The Americas

238,427

252,416

175,009

119,044

141,338

EMEA (excluding Netherlands)

527,194

527,897

460,154

289,041

374,693

Others431,957

434,198

391,517267,280

338,382

Total

2,154,669

2,364,633

2,136,783

1,430,913

1,485,404

1,317,259

1,109,987

950,386

631,569

683,987

Industrial & Power454,452

529,090451,836

308,060

303,789

Mobile & Wearables

145,135

326,565

333,139

323,714309,009

Computing

100,999

188,188

200,61462,69257,203

Consumer

78,193130,064

121,975

71,87578,1212,096,038

2,283,894

2,057,950

1,397,910

1,432,109

Product Sales
Manufacturing, Foundry, andother sales
Total
0

0
Automotive

Totalnexperia | Sustainability Report 2023

Risk Management

FINANCIAL REPORTING

Risk Management
Relevant GRI
Standards:
3-3, 201-2

Risk management and internal
controls form an integral part ofbusiness management. Nexperia’s Risk
Management Policy and principles help its
management team proactively monitor
the Group’s day-to-day operations, achieve
strategic goals, ensure compliance withall legal requirements, safeguard theCompany’s assets, and maintain integrityin its financial reporting and related
disclosures.
Management holds overall accountability
and responsibility for managing risk
to the organization and implementing
appropriate risk response measures
focusing on material risks. By considering
all reasonable possibilities, management
identifies opportunities for the Company
and unique challenges associated withcurrent and future opportunities.

Risks, opportunities (as part of theplanning process), and internal controls
are regularly assessed, evaluated,
actively managed, and reported to senior
management.
Risks and opportunities are classified asfollows:› Strategic› Operational› Financial› Compliance› ESG

Nexperia has designed its internal Control
and Risk Management System based on
the criteria and principles established ininternational best practice standards, suchas the COSO Model and C-SOX-Standards.
Risks and opportunities are listed ina register maintained by the Risk andInternal Control Office.
To understand the impacts associatedwith an identified risk or opportunity andits characteristics, the following factors
are reviewed:› Potential impact› Probability of occurrence› Time-related factors

46

nexperia | Sustainability Report 2023

The risk assessment is also affected byany divergence or deviation of risk, biases,
professional judgments, and quality of
the used information. Therefore, it should
be noted that any risk management andinternal control system, regardless of
how well it is designed and operated, canprovide only reasonable, not absolute,assurance that its objectives will be met.
Potential financial losses or gains
associated with an identified risk andopportunity are assessed as follows:› High [$29 million]› Medium [$7 – 29 million]› Low [$7 million]

FINANCIAL REPORTING

Risk Management

We calculate materiality based on the
average PBT (profit before tax) using
audited actuals and RFF (Rolling Financial
Forecast) figures. The assessment ofmateriality is re-performed annually.
The Company has insurance measures inplace, the efforts of which are consideredin the net risk analysis. The insurance
program is reviewed on a regular basis.

Our Enterprise Risk Management process

Establish
internal
environment
Monitoring

1
8

Nexperia has implemented a digitalsystem to manage risks within theorganization. This system supports theefficient and effective identification,
analysis, and monitoring of risks. Startingfrom Q1 2024, all risk management
activities will be carried out using
Enterprise Risk Management (ERM)
software. During the preparation of the
response plan, the costs of actions taken
to manage both risks and opportunities
will be considered, wherever feasible.

Objectives
setting2

ERMProcess

7

6

3

4
5

Event
identiﬁcation

Risk
Assessment

Risk
response
Information &communication

In addition to the risks summarized on the following
pages, please refer to the other chapters of this reportfor more details.

Control activities

47

nexperia | Sustainability Report 2023

Risk Management

FINANCIAL REPORTING

Strategic Risks
Risk title

Risk description

Strategy to address the risk

Market risk - cyclical industry

The semiconductor industry is regarded as highly cyclical. The demand is mostly driven
by end products that are highly sensitive to an economic downturn. As a result of
this the semiconductor market is highly sensitive to economic conditions. In strong
economic conditions semiconductor companies cannot keep up with the demand
for the products and then expand their manufacturing capacity. In periods of lower
economic activity, these higher fixed costs and over stocking could result in lower
gross profit.

Nexperia focuses on market analysis and productdevelopment to ensure that it is always well positioned toremain profitable even in economic downturns.

Market risk - price erosion

As competition in the market continues to increase and technology continues to
evolve, competitively pricing Nexperia’s products remain one of the most importantparts of achieving a competitive advantage. Failure to achieve this will have a negative
effect on the profitability of the Company.

In order to continue to profitably supply the Group’s products,
Nexperia focuses on reducing the production cost in line withthe competitors whilst at the same time keeping the Group’s
focus on the quality of the produced products. Usually, thismust be accomplished through improvements in process
technology and production efficiencies.

Reputational risk

Risks associated with negative publicity, product recalls, and other events that
could damage the company's reputation. Nexperia’s reputation is a major driver ofcorporate goodwill. Damage of corporate reputation could have material impact on
Nexperia’s brand value and financial position.

Nexperia set up a Corporate Affairs Department to closely
monitor and measure its reputation and take risk response
accordingly, e.g., an information and communication strategy
is defined toward suppliers, customers, and other relevant
stakeholders.

Technological changing
industry

As the industry Nexperia operates in is changing at a rapid rate, the risk exists that
Nexperia will fall behind in terms of its technological capabilities of its facilities
and the results of its research and development. This requires significant capital
investment. If Nexperia is unable to generate sufficient cash flows or raise sufficient
capital on favorable terms, this could have a material adverse effect on the business,financial condition, and results of its operations.

To remain relevant, extensive and continuous research anddevelopment and capital investments are a focus point for
Nexperia.

Nexperia is active in various markets and not dependent on
the economic conditions of a single market.
Nexperia’s products are versatile and can be used in various
segments and by different customers.

48

nexperia | Sustainability Report 2023

Risk Management

FINANCIAL REPORTING

Strategic Risks
Risk title

Risk description

Strategy to address the risk

Geopolitical risks

Geopolitical risks, including political instability, conflict, and economic sanctions, may
indirectly impact the semiconductor industry as a whole. These impacts could result
from worldwide trade sanctions and economic disruption followed by possible priceincreases in the supply chain.

Nexperia created a dedicated team to closely monitor thegeopolitical situation and ensure that the Group is compliant
with any sanctions and fully understands any impact ofsanctions on business continuity.

For Nexperia, the impact of the ongoing Russian and Ukraine war (including possible
non-compliance to sanctions regulations) has been rated as remote.

Nexperia reduced the risk exposure by investing in long-term
agreements and partnerships, as well as in the ecosystem andnear sourcing.

Risk title

Risk description

Strategy to address risk

IT/OT risks including cyberrisk

Nexperia relies heavily on the efficient and uninterrupted operation of complex
information technology applications, systems, and networks to run the business. As aresult of this, the reliability and security of the information technology infrastructure
and its ability to expand and remain up to date is critical to the business. A significant
breach or interruption of the information technology application can have a serious
effect on Nexperia's operations.

Through developed security strategy, regular self-review,
penetration tests, and external input, Nexperia ensures thatthe maintenance and security of information technology
systems are of the required quality to mitigate the risk
mentioned.

Capacity expansion

The market for semiconductors is a dynamic and cyclical market. This leads to rapid
demand changes. If Nexperia does not effectively plan for the demand changes, overor under expansion can lead to financial losses and loss of market share.

Nexperia ensures that it mitigates this risk by having a longterm planning process covering relevant market trends andregularly reviewing and adjusting these forecasts.

Operational Risks

Nexperia has established an External Manufacturing
department to promptly respond to the market needs andensure capacity from external suppliers.

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nexperia | Sustainability Report 2023

Risk Management

FINANCIAL REPORTING

Operational Risks
Risk title

Risk description

Strategy to address risk

Intellectual property rights

Due to the nature of the industry, the quality and protection of the Company’s
current intellectual property rights as well as the development of new and improved
intellectual property rights are major success drivers of the Company. Failure toprotect and develop these will result in operating losses and losses of competitive
advantage.

Nexperia seeks various appropriate ways to protect its
intellectual properties. Nexperia also understands theimportance of developing new and improved intellectual
property rights through investment in research anddevelopment.
Nexperia regularly reviews the existing patents, closely
monitors market requirements, and works on innovations.

Production risks

Nexperia manufactures in its own factories as well as with third parties. The
manufacturing consists of processes that are highly complex, require advanced
and costly equipment, and must continuously be modified to improve yields andperformance. Difficulties in the production process can reduce yields or interrupt
production, and, because of such problems, the Company may on occasion not beable to deliver products or do so in a timely or cost-effective or competitive manner.
As the complexity of both the products and fabrication processes has become
more advanced, manufacturing tolerances have been reduced and requirementsfor precision have become more demanding. As a result of the above, Nexperia has
experienced manufacturing difficulties due to internal or external problems thathave given rise to delays in delivery and quality control problems. There can be noassurance that any such occurrence in the future would not materially harm theGroup’s results of operations.

Nexperia has established a business continuity management
team to respond to potential production line interruptions,which includes business continuity plans that are regularly
reviewed. Critical incidents are managed by a crisis
management team, which is set up as required.

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Risk Management

FINANCIAL REPORTING

Operational Risks
Risk title

Risk description

Procurement risks including
supply chain risk
Nexperia is highly dependent on a few suppliers and the quality and timely delivery of
raw materials. To effectively manage cash flows, the Company makes use of just-intime delivery of some of its raw materials. As some of the raw materials are highly
specialized, Nexperia sources these of a small number of trusted suppliers. Because
the raw materials that Nexperia purchases are complex, it is frequently difficult or
impossible for the Company to substitute the materials with a similar product. The
business, reputation, financial condition, and results of operations could be harmed
if Nexperia is unable to obtain adequate supplies of quality raw materials in a timely
manner.

International business risks
including trade compliancerisks

The international business environment that Nexperia participates in is subject tomany economic and political uncertainties, including the following international
business risks:› Negative economic developments in economies around the world and the instabilityof governments and international trade agreements.

› Social and political instability in a number of countries around the world having anegative effect on the Group’s business, financial condition and operations.

› Potential terrorist attacks.
› Epidemics and pandemics, which may adversely affect the Group’s workforce andfinancial position.

› Adverse changes in governmental policies, especially those affecting trade andinvestment.

› Nexperia’s customers or other groups of stakeholders might impose; requirementsthat are more stringent than the laws in the countries in which the Group is active.

› Threats that the Group’s operations or property could be subject to nationalizationand expropriation.

Strategy to address risk
Through previous business ventures, Nexperia’s management
has long-standing relationships with all the big suppliers.
Nexperia understands that it is dependent on some of its
suppliers and will continue to build on these relationships andfurther improve the procurement and supplier selection (dualsourcing) process.
Nexperia assesses the risk for each supplier and ensures thedual sourcing of raw materials necessary for production.
Additionally, Nexperia is monitoring all relevant supplier risk
management legislation according to relevant legislation andInternational Best Practices.
These international business risks are monitored and assessedby management on a continuous basis to ensure that theserisks are managed and appropriately and proactively reacted
to where needed. Furthermore, Nexperia has set up a Trade
Compliance Organization and specific controls to covertrade compliance risks, e.g., export control; restricted party
screening on business partners, customers, vendors, andhiring.

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Risk Management

FINANCIAL REPORTING

Operational Risks
Risk title

Risk description

Strategy to address risk

Product quality risks

Potential risk of product quality issues related to the product defects and safety can
result in product recalls, warranty claims, and the failure to comply with the terms andconditions of our contracts. This can lead to financial losses and reputational damage.

Nexperia defined a Quality Policy in which various risk
response measures are defined, which are regularly
monitored and steered by Business Group Quality
Management.

Risk title

Risk description

Strategy to address the risk

Currency risk

Nexperia is a global company and, as a direct consequence, movements in the financial
markets may impact the financial results. This is further heightened by the fact that
the Group’s reporting currency of the consolidated accounts differs from some of
Nexperia’s entities’ local currencies. The impact of foreign currency translation of thefinancial statements of foreign operations in the consolidated accounts may have anegative effect on Nexperia’s shareholders’ equity.

Nexperia monitors its foreign currency risk on a regular basis
and controls them through natural hedges, cash flow hedges
and other hedging instruments. Since a component of its
outstanding debt is denominated in Renminbi, Nexperia
managed and mitigated its currency risk by using various
financial derivatives, such as entering into forward contracts.

Credit and interest rate risk

Nexperia invests available cash and cash equivalents with various financial
institutions across the world and is in that respect exposed to the credit risk of thesecounterparties. Nexperia is also geared in terms of long-term debt. An increase ininterest rates will lead to higher financial expenses.

Nexperia seeks to actively manage concentration risk on adaily basis adhering to its stringent treasury management
policy. Nexperia also limits the credit risk by only transactingwith financial institutions with strong credit ratings.

Financial Risks

To mitigate the fluctuation of interest cash flow, Nexperia
entered into interest rate swap contracts where the variableinterest rates are converted into fixed interest rates.
Commodity price risk

Nexperia is a purchaser of certain base metals, precious metals, chemicals, and energy
used in the manufacturing process of its products. The prices of these raw materials
can be volatile due to global demand trends. These fluctuations, when not planned forproperly, can have a negative effect on the profits made by the Company.

Nexperia employs experienced individuals who areresponsible for planning and purchasing these raw materials
to ensure that this risk is appropriately managed.

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Risk Management

FINANCIAL REPORTING

Financial Risks
Risk title

Risk description

Strategy to address the risk

Market risk - inflation

The global economy in which Nexperia conducts its business is vulnerable tounexpected fluctuations in inflationary expectations, political uncertainty, andnegative interest rate policies. These occurrences will negatively affect the purchasepower of the end users which will have a negative ripple effect on the demand for
Nexperia’s products.

Nexperia understands the risks relating to this and addresses
them through effective monitoring, forecasting, andcontinuous increases of efficiencies to drive manufacturing
cost down whilst retaining the highest quality.

Risks related to the goodwill
and other intangible assets

Goodwill and other identifiable intangible assets are recorded at fair value on
the acquisition date. Impairment of these may result from, among other things,
deterioration in performance, adverse market conditions, adverse changes inapplicable laws or regulations, including changes that restrict the activities of theCompany or affect the products and services that the Company sells, challenges to thevalidity of certain registered intellectual property, reduced sales of certain products
incorporating registered intellectual property, and a variety of other factors. The
amount of any identified impairment must be expensed immediately as a charge toresults of operations. Depending on future circumstances, it is thus possible that theCompany may not be able to realize the full value of its intangible assets. Any future
determination of impairment of goodwill or other identifiable intangible assets could
have a material adverse effect on its financial position, results of operations, andshareholders’ equity.

At initial recognition, Nexperia takes the necessary steps toensure that the goodwill and other identifiable intangible
assets are measured at their fair value appropriately andnot overstated. Furthermore, Nexperia reviews its goodwill
and other intangible assets balances for impairment upon
any indication of a potential impairment, and in the case of
goodwill, at a minimum of once a year to ensure that any
identified impairments are processed in a timely manner.

Ineffective internal controls

Deficiencies in the internal control systems that govern the accuracy and reliability ofthe periodic reporting may lead to financial losses and reputational damage.

Nexperia has adopted effective policies and procedures
to ensure that the internal control systems regarding theperiodic reporting are in place and are regularly reviewed.
Technically Nexperia’s internal control process is managed bymeans of SAP GRC Process and Access Control.

In addition, Nexperia increased prices toward customers tocompensate any price increase on the procurement side.

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Risk Management

FINANCIAL REPORTING

Financial Risks
Risk title

Risk description

Strategy to address the risk

Nexperia’s indebtedness

On December 31, 2023, Nexperia has an outstanding debt with a principal amountof $561 million (2022: $506 million). This indebtedness exposes the Company torisks that could adversely affect its financial condition. The risk drivers for the abovementioned risks are as follows:

Nexperia seeks to manage and mitigate this risk throughemploying a stringent treasury management policy andperforming detailed planning prior to entering into any
additional financing agreements.

› Increasing vulnerability due to adverse economic industry and competitive
developments.
› Requiring a substantial portion of cash flow to service the capital and interest
payments.
› Reducing the ability to use the current cash flows to fund operations, capital
expenditures, future business opportunities, and other strategic acquisitions.
› Heightened interest rate risk as the loan bears interest at a variable rate.
› Limiting the Company’s ability to obtain additional financing to fund its working
capital, capital expenditures, restructuring, product development, research anddevelopment, debt service requirements, investments, and acquisitions.
› Limiting the Company’s flexibility in planning for, or reacting to, changes inthe business or market conditions and placing the Company at a competitive
disadvantage compared to its competitors who are less highly leveraged and who
therefore, may be able to take advantage of opportunities that Nexperia’s leverage
prevents it from exploiting.

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Risk Management

FINANCIAL REPORTING

Compliance Risk
Risk title

Risk description

Strategy to address the risk

Business integrity, ethics andcompliance

Due to the nature of Nexperia’s products and business model, certain environmental
laws and other regulations expose the Company to risks regarding compliance withthese laws and regulations. These laws and regulations are sometimes unique inevery jurisdiction in which Nexperia operates. These regulations govern, among
other things, emissions of pollutants into the air, wastewater discharges, the use andhandling of hazardous substances, waste disposal, the investigation and remediationof soil and ground water contamination, and the health and safety of the employees.
Failure to adhere to these regulations can lead to financial penalties, sanctions etc.

The management of Nexperia fully understands the risks
regarding compliance. In order to successfully mitigate this,Nexperia has appointed experienced employees across all
jurisdictions that is responsible for ensuring compliance withrelated laws and regulations in line with the Three Linesof Defense Model (TLD). Nexperia also ensures that thisexperience is updated regularly through external trainings.

Tax compliance risks acrossjurisdictions including tax
rate risk

Since Nexperia operates internationally, the Group is subjected to various tax
jurisdictions. Failure to adhere and the uncertainty of these different tax rules can leadto penalties, interests, and other financial losses. With regards to the Group’s transfer
pricing agreements in place, Nexperia also runs the risk that the uncertainty regardingthese lead to disputes and financial losses.

To mitigate this risk, Nexperia has employed tax professionals
and ensure that these individuals are appropriately updated
at all times. Specific direct and indirect tax risks are managed
through specific tax controls, which are assessed on a regularbasis.

Nexperia cannot give any assurance as to what its effective tax rate will be in the
future, because of, among other things, uncertainty regarding the tax policies of thejurisdictions where it conducts its business. The Company’s actual effective tax rate
may vary from its expectation and that variance may be material. Additionally, the tax
laws of the Netherlands, and other jurisdictions could change in the future, and suchchanges could cause a material change in our effective tax rate.

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Risk Management

FINANCIAL REPORTING

Compliance Risk
Risk title

Risk description

Strategy to address the risk

Fraud risk

The Company is exposed to various fraud risks that include bribery, corruption, andbreaches against the company's Code of Conduct, along with the theft or misuse of
assets (misappropriation). These risks may originate from both internal and external
parties, organized to obtain money, property, or services, evade payment, or gain an
unfair advantage for personal or business benefit. Such fraudulent activities can haveserious consequences for the company, jeopardizing its integrity, financial stability,
and reputation.

With regard to Nexperia’s Code of conduct, management has
implemented a mandatory training program for all Nexperia
employees.
Potential fraud cases are investigated and reviewed by
the Ethics Committee, which also decides on possible
risk response measures like follow ups by the Internal
Audit Department or additional investigations by external
specialists, if needed. The Chairman of the Board is informed
accordingly.
Additionally, all employees and stakeholders can reportpossible misconduct via external, independent andanonymous SpeakUp Line that is available 24/7 in all relevant
languages.

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Risk Management

FINANCIAL REPORTING

ESG Risks
Risk title

Risk description

Strategy to address risk

Environmental risks

Environmental and other disasters like pandemics, may negatively impact the Nexperia
business or directly impact its manufacturing facilities. Even if the manufacturing
facilities are not directly damaged, a large natural disaster may result in disruptions
in distribution channels or supply chains and significant increases in the prices of raw
materials used for its manufacturing process. Furthermore, any disaster affecting
the customers (or their respective customers) may negatively impact the demandfor Nexperia’s products and revenues significantly. The impact of any such natural
disasters depends on the specific geographic circumstances but could be significant,as some of the factories are in areas with known earthquake fault zones and, flood orstorm risks.

The Company cannot predict the economic impact, if any, of
possible disasters including pandemics or climate change.
Nexperia has however implemented thorough business
continuity plans to minimize the risk, if possible, in the eventof a disaster as explained.
Furthermore, the Company continuously screens thelegislative requirements for new/upcoming ESG regulations
e.g., CSRD and enhances the risk management processaccordingly.
Nexperia initiated a ESG strategy project to improve the GRI
reporting and perform ESG Rating.

Pandemic risks

Pandemic risks like COVID-19 are causing negative effects for the worldwide economy.
Such risks could impact Nexperia’s supply chains, the production process, and sales
activities, because of regulative restrictions and limitations imposed by governmental
authorities.

Immediately after the virus outbreak in January 2020
Nexperia has activated crisis management teams for all
major sites to closely monitor the pandemic risk and takeappropriate risk response measure for the health and safetyof its employees and to continue its business under thesecircumstances.
Nexperia’s Board and Executive Management Team are
informed on an ongoing basis with regard to the planningassumptions. Nexperia has established local pandemic
procedures for every operating site.

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Taxation

Taxation

FINANCIAL REPORTING

Tax principles
Compliance

Relevant GRI
Standards:
3-3, 207

In line with our core values, we arecommitted to observing all applicable tax
laws, rules, regulations, reporting, anddisclosure requirements wherever we are
obligated to do so due to our businesspresence and transactions.
Our tax policy is linked to our Code of
Conduct, which sets out guiding principles
on integrity and ethics in our businessconduct. Nexperia’s management has
adopted the Code of Conduct to underpin
the commitment to socially responsible
corporate citizenship and the pursuit of asustainable future – economically, socially,and environmentally.
As a responsible taxpayer, Nexperia’s
tax planning is based on long-term
considerations and takes into account theinterests of all stakeholders. Therefore,
we believe it is essential to have a set of
guiding tax principles and communicate
our tax approach openly and clearly.

Nexperia’s tax approach is intended
to ensure consistency with its overallbusiness strategy, risk approach, and corevalues. The tax approach should ensure
that:
The strategy is adopted and followed
consistently, with clear lines of
responsibility and accountability.
The strategy aligns with Nexperia’s
overall approach to corporate
governance and risk management.
Nexperia pays the correct amount of tax
required by the laws and regulations of
the countries in which it operates.

In all its tax affairs, Nexperia is committed to complying
with all relevant laws, rules, regulations, and reportingand disclosure requirements wherever we operate. We
are guided by recognized international standards, suchas the OECD Guidelines, and comply with both the spirit
and the letter of the tax laws and regulations.

Tax governance
Nexperia’s group tax department is in continuous
dialogue with senior management and the businessgroups. This ensures management is engaged andinvolved in all relevant tax matters.
Our tax department is organized to ensure compliancewith all tax laws and regulations in the countries where
we operate. It is a centralized organization that manages
both regional and functional requirements. Additionally,
the organization regularly engages with external tax
advisors and/or local tax authorities to ensure our tax
obligations are correctly handled and disclosed in ourannual and quarterly reports.
The tax team is part of the finance department
reporting to the Chief Financial Officer (CFO). The CFO is
responsible for regularly updating the audit committee,
with support from the tax department.

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Taxation

FINANCIAL REPORTING

Transfer pricing

Tax planning and incentives

Transparency

Nexperia operates in many different tax jurisdictions,and there are many transactions between groupcompanies. As a result, the transfer pricing for thesetransactions must reflect an “arm’s length” or market
price. Our pricing is driven by the activities undertaken
and the value created in each segment of our businessaccording to OECD transfer pricing guidelines. This
compliance should ensure all parties receive fair
remuneration for their services. Our alignment withthe arm’s length principle is supported by frequent
benchmarking.

Nexperia believes it should pay the tax amounts
legally due in any territory. However, there will besome circumstances where this amount may not beclearly defined, or alternative approaches may result indiffering tax outcomes. In these cases, we will use ourbest judgment to determine the appropriate courseof action, using available reliefs and incentives where
possible. These positions taken will be documented ina transparent manner and shared with local authorities
where deemed appropriate.

We are transparent in our approach to tax and our tax
position. We disclose information in accordance with
relevant domestic regulations and applicable reporting
requirements and standards, such as IFRS. We also
strive to maintain an open dialogue on tax matters withgovernments, policymakers, businesses, investors, andcivil society.

Nexperia does not have a presence in blacklisted
jurisdictions (as defined by the European Union)and does not use artificial structures to achieve tax
advantages or minimize tax liabilities.

Relationships with tax authorities
Nexperia seeks to foster constructive, professional,
and transparent relationships with tax authorities
based on integrity, collaboration, and mutual trust.
We are committed to the principles of openness andtransparency in our approach to dealing with tax
authorities wherever we operate around the world.
We aim to conduct all dealings with tax authorities andother relevant bodies in a collaborative, courteous, andtimely manner. To avoid any potential tax disputes, we
aim to secure early agreements on disputed matters andachieve upfront certainty wherever possible.

The most important tax incentives for which Nexperia
is eligible relate to the areas of innovation and R&D.
Nexperia may engage in tax planning initiatives anduse incentives and reliefs to minimize the tax costs ofconducting its business activities. Nexperia also believes
that such planning requires due consideration of
Nexperia’s legitimate interests, reputation, brand, andcorporate social responsibility. Nexperia will not use tax
planning for purposes that are knowingly contradictory
to the intent of the legislation.
As a good corporate citizen, Nexperia does not enter
into aggressive tax planning structures, use so-called“tax havens” for tax avoidance, or create artificial tax
structures with no commercial or operational substance.

“A responsible tax
approach is essential
to the sustainability ofour business.”

Accountability and governanceA responsible tax approach is essential to thesustainability of our business. We employ diligent
professional care and judgment to assess tax risks
and arrive at well-reasoned conclusions on how theyshould be managed. In cases of uncertainty around theapplication or interpretation of tax law, we may takeappropriate written advice evidencing the facts, risks,and conclusions from third-party advisers to support ourdecision-making process.
Nexperia uses a tax risk management framework to
identify, mitigate, manage, and report tax risks globally.
We maintain policies and procedures at global andlocal levels for key tax processes, including compliance,transfer pricing, and risk management. This tax approachshould ensure that we apply professional diligence andcare in managing all risks associated with tax matters
as well as appropriate governance and assurance
procedures.

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Reportingnexperia | Sustainability Report 2023

Environmental Management

Environmental
Management at Nexperia
Relevant GRI
Standards:
2-28, 3-3, 301, 302,
303, 305, 306

At Nexperia, we take a proactive approach tosustainability by implementing robust management
systems and incorporating environmentally friendly
practices across our operations. As a signatory to
the UN Global Compact, we adhere to its three coreenvironmental principles:

1

1

2

2

3

Businesses
should support
a precautionary
approach toenvironmental
challenges,

Undertake initiatives
to promote greater
environmental
responsibility, andEncourage thedevelopment
and diffusion ofenvironmentallyfriendly technologies

In addition to following our Code of
Conduct and Sustainability Policy, we
adhere to the principles by managing
our material environmental topics inaccordance with certified management
systems. To ensure a consistentalignment of our global strategy, we
have unified our management systems(including all corporate documents
and policies) to create the Nexperia
Management System. The systemfollows the structured approach of theenvironmental management systems
standard ISO 14001, which helps us drive
continuous improvement in all relevant
environmental areas.

ENVIRONMENTAL REPORTING

Our Environmental Management
System is certified to ISO 14001 andcovers all our manufacturing sites
and our headquarters, totaling 92%
of Nexperia's global employees.
Compliance with the requirements ofthe management system standard isverified through external audits by thecertification body. The environmental
management system standard requires
us to identify, control, and reduce theenvironmental impact of our operations.
It also requires us to establish policies,
processes, and procedures to manage
all material environmental aspects
in a way that is legally compliant andminimizes our environmental impact.
As a result, the list of environmental
aspects relevant to Nexperia exceeds
the material topics covered in thisSustainability Report.

3

SDG 7, SDG 13

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We assess our environmental impacts,
risks, and opportunities and set goals
and objectives to enhance our positive
outcomes while reducing negative
ones. To achieve these goals, we
implement programs and processes
that are monitored quarterly using Key
Performance Indicators (KPIs), and we
update our goals and programs annually.
The KPIs, goals, and objectives aredescribed in the respective chapters of
this report.
Additionally, as part of our membershipin the Responsible Business Alliance(RBA), each of our manufacturing sites
is required to complete an annual RBA
Self-Assessment Questionnaire that
also covers environmental topics andmanagement systems. These selfassessments help us evaluate potentiallysignificant environmental risks at our
manufacturing sites and apply suitable
mitigation and control measures.

Environmental Management

Our overall sustainable corporate
governance structure is embedded in
the Nexperia Management System,
detailed in the "Our Approach to
ESG" chapter of this report. Our
Chief Operations Officer (COO) has
overall accountability for the general
Nexperia Management System, which
includes environmental management.
The Head of Global Environment,
Health & Safety (EHS) is accountable
for the implementation of our global
EHS Management System. They
are supported by the Manager EHS
Management System, who is responsible
for the system's documentationand coordinating EHS certification.
Additional environmental topics such as
ECO-Products, Chemicals Management,
and audit support are managed bybespoke positions. Local EHS managers
and teams provide additional support
and function as Nexperia’s EHS
team. Our Vice President Front End
Operations, Global Real Estate andFacilities, and EHS is responsible forthe effectiveness of the Management
System.

Our internal environmental data
management software allows us to trackcompany-wide metrics and performancetargets set by our management.
We report our data and update ourmanagement teams each quarter,
ensuring our progress is transparent and
we identify areas of development andimprovement.
We also conduct annual internal audits
at our headquarters and manufacturing
sites to maintain compliance with ISO
14001 management system standards.
Additionally, we perform internal annual
audits at our Hamburg (Germany)and Newport (UK) site to comply withISO 50001. We conduct these auditsin accordance with the global audit
procedure guideline, which ensures
standardized audits across all sites.

ENVIRONMENTAL REPORTING

Nexperia’s Data Management System
tracks and calculates our environmental
data for each site to provide a global
overview of our performance. Eachsite submits its environmental data on
a quarterly basis, which is analyzed,
validated, and reported on a corporate
level.
The validation stage comprises several
steps:› First, we check the completenessof the data to ensure all sites andparameters have been measured andreported. Next, we compare the latest
data against the previous reporting
years to identify any significant
changes. If any significant changes are
identified, we assess their magnitude
and investigate their causes.
› Second, we investigate external
factors that may have impacted
the data, such as power outages orweather events.
› In the final step, we validate the data
to ensure it is accurate and reflects ouractual environmental performance.

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Emissions

Emissions

ENVIRONMENTAL REPORTING

Introduction and management approach
As the impacts of climate change
intensify worldwide, companies
across all industries are being held
accountable for their carbon footprint
and environmental impact. As asemiconductor company, we recognizethat we must take responsibility forour greenhouse gas (GHG) emissions,which trap heat in Earth's atmosphereand contribute to global warming
and climate change. The 1997 UN
Kyoto Protocol defined the six maingreenhouse gases as carbon dioxide(CO2), methane (CH4), nitrous oxide(N2O), sulfur hexafluoride (SF6),
and fluorinated gases, summarized
as hydrofluorocarbons (HFCs) andperfluorocarbons (PFCs). Even though
sulfur hexafluoride (SF6) does not belong
to the group of PFCs, it is common in thesemiconductor industry to report theseemissions together as PFC emissions.

Relevant GRI
Standards:
3-3, 305

SDG 7, SDG 13

As our industry evolves andsemiconductors grow in capacity,
their manufacturing is becoming more
complex and requires more energy
and processing chemicals. In 2023, adrop in production volume combinedwith the underutilization of several
factories resulted in a slight decrease
in Nexperia’s Scope 1 and 2 emissions
compared to 2022. Scope 1, 2, and3 emissions refer to the different
GHG emissions that comprise anorganization’s overall carbon footprint.
At Nexperia, we track our Scope 1
emissions, which we generate internallythrough on-site manufacturing andstationary fuel combustion. We also
monitor our Scope 2 emissions, which
are generated externally from theelectricity we purchase from utilities.
As our business continues to grow,we are committed to mitigating ourenvironmental impact by optimizing
our processes, embracing greener
alternatives, and decreasing our direct
GHG emissions where possible.

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Emissions

ENVIRONMENTAL REPORTING

Definition of greenhouse gas emissions
CO₂ = Carbon dioxid
CH₄ = Methane
N₂O = Nitrous oxide
HFC = Hydroﬂuorocarbons
PFC = Perﬂuorocarbons
SF₆ = Sulfur hexaﬂuorid
NF₃ = Nitrogen triﬂuorid

CO2
PFC S

CH4

SF6

HFC S

N 2O

NF3

SCOPE

2
SCOPE

1

INDIRECTEMISSIONS
from purchased electricity

DIRECT
EMISSIONS
on-siteSCOPE

3
VALUE CHAIN
EMISSIONS
upstream & downstream activities(not included in scope 2)

Our structure for managing GHG emissions is
described in the “Environmental Management
at Nexperia” chapter. The topic of GHG and
non-GHG emissions is part of our Responsible
Business Alliance (RBA) Validated Assessment
Programs (VAP) audits and internal audits
according to our Environmental Management
System. The topic of Nexperia’s physical andtransitional climate risks is part of our enterpriserisk management and, therefore, within the
responsibility scope of Nexperia’s Board. We
are committed to elevating our climate risk
management procedures and managing all
relevant climate risks.
This chapter focuses on our four primarysources of carbon emissions: purchased
electricity, use of PFCs, fossil fuels we combust
directly, and heat-transfer fluids (HTFs), which
are integral substances used in semiconductor
manufacturing to transfer heat from one
point to another. Nexperia is committed
to increasing its contribution to a net-zero
economy. Our long-term target is to be carbon
neutral across our global operations by 2035,
including direct operational emissions (Scope 1)
and indirect emissions associated with energy
procurement (Scope 2). Due to the lack ofavailable technological solutions by 2035 andthe calculation methods to be used, e.g., for
PFC emissions, Nexperia is aware that someemissions cannot be avoided and must be offset
through compensation.

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In 2023, Nexperia introduced acomprehensive GHG Emissions Reduction
Roadmap. It summarizes our strategic
approach to achieving carbon neutrality,
which includes quantified targets, emissionreducing initiatives, and expert partnerships.
It also gives stakeholders a transparent
view of our ongoing progress in key
environmental, social, and governance (ESG)
topics. In the reporting year, Nexperia’s
efforts in these areas were recognized byrenowned third parties in the capital market.
For more information, the chapter “ESG
Risk Rating” details Nexperia’s Sustainalytics
Rating and $800 million SustainabilityLinked Loan.

Emissions

ENVIRONMENTAL REPORTING

Our approach: Nexperia’s GHG Emissions
Reduction Roadmap toward carbon neutrality
Our GHG Emissions Reduction Roadmap
underscores our commitment tosustainable business growth andprovides an efficient and realistic
pathway to achieving carbon neutrality
by 2035 (for Scope 1 and 2 emissions).
We have also set mid-term goals as
progress milestones: we aim to reduce
our Scope 1 and 2 emissions by 4% a
year between 2024 and 2029 (a linear
reduction against a 2022 baseline). We
calculate our carbon footprint basedon the GHG Protocol, an internationallyrecognized standard for quantifying andreporting GHG emissions.

Project governance and strategic management
Robust project governance is the backbone of our GHG
Emissions Reduction Roadmap, and accountability across ourorganization is vital. For these reasons, we have established amultidisciplinary team responsible for our Roadmap’s day-today management and implementation. It comprises experts
in sustainability, technology, and project management tocoordinate and align the many complex and interrelated topics.
Given the semiconductor industry’s dynamic nature andunique resource requirements, achieving carbon neutrality is asignificant challenge for Nexperia. In response, we emphasize
continuously developing our internal expertise and building
partnerships with industry peers, governmental bodies, andsustainability organizations (see our “Approach to ESG” chapter).
We also proactively consult with external experts, who havemade valuable contributions to developing our Roadmap andincorporating best practices from the countries and regions
where we operate.

Keyword: carbon neutral
Carbon neutrality refers to activities releasing zero carbon
emissions (and equivalents) into the atmosphere. The first step
involves tracking emissions and working to reduce them asmuch as possible. Nexperia uses the term carbon neutrality toreference achieving net-zero emissions in our operations (Scopes
1 and 2) by 2035. We will offset any (direct or indirect) remaining
emissions that cannot be avoided through activities that remove
carbon dioxide from the atmosphere.

65

nexperia | Sustainability Report 2023

ENVIRONMENTAL REPORTING

Emissions

Nexperia’s path toward carbon neutrality:
reducing Scope 1 and 2 emissions
In 2023, we took a range of measures to monitor
and reduce Nexperia’s global Scope 1 and 2
emissions in line with our GHG Emissions Reduction
Roadmap.
Overall, our absolute Scope 1 and 2 emissions
decreased by 2% compared to 2022 due to lower
production volumes and the underutilizationof several factories. This decreased production

Scope 1 & 2 Emissions – tons CO₂e

volume also led to reduced electricity and HTF
consumption. Our normalized Scope 1 and 2
emissions increased by 3% compared to 2022
due to introducing new process technologies andpreparing our sites to meet future production
volumes, which also increased our PFC
emissions. Considering the long-term developmentof normalized emissions, we have achieved a 19%
reduction since Nexperia’s foundation in 2017,
driven by our collective efforts in the previous
decade.

Normalized Scope 1 & 2 Emissions – kg CO₂e/m²
SCOPE 1SCOPE 2350,000

12,000300,000

10,000250,000

8,000

200,000
6,000
150,000
4,000

100,000

2,000

50,000
0

0
2018

2019

2020

2021

2022

2023

2018

2019

2020

2021

The 2018–2020 period includes five manufacturing sites, whereas the 2021–2023 period includes six. This difference explains the increase in emissions from 2021 compared to previous years.
(Since there is no secured data for the additionally purchased locations before 2020, the data was not corrected in accordance with the specifications of the GHG Protocol for the years before 2020.
Because 2022 is the base year for our mid-term target and the long-term target, this is considered acceptable).

2022

2023

66

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Emissions

Reducing Scope 1 emissions

After many years of optimizing our processes to reduce
CO2e emissions (CO2 e), it has become difficult toachieve additional large-scale reductions. Nevertheless,we embraced this challenge by establishing a newprogram in 2022 to further reduce our Scope 1 CO2emissions and our normalized PFC emissions by 2025.
Our PFC Policy aims to lower PFC emissions to lessthan 1.25 tons of CO2e per m2 (2023: 1.72 tons of CO2e
per m2). Data for the PFC Policy and 2023 value wasrecalculated for IPCC 2019 tier 2c.

PFCs are crucial for semiconductor manufacturing,and no alternatives are currently available. Despite
this challenge, we have taken measures to minimize
their environmental impact, including signing theMemorandum of Agreement in Europe and supporting
the Global Semiconductor Industry PFC voluntaryagreement. While our PFC consumption increased by
12% in 2023 due to greater product complexity, ourabsolute PFC emissions increased by only 7% to 71,450
tons of CO2 equivalent (CO2e), and our normalized PFC
emissions by 13% compared to 2022. Our calculationof PFC emissions is based on the IPCC 2019 tier 2cmodel. A more detailed explanation can be foundbelow in the "Perfluorocarbons PFCs" chapter.

Nexperia's Scope 1 emissions are those directly
released by our activities, including consuming or
burning fossil fuels (e.g., natural gas, diesel, liquefied
petroleum gas (LPG), and gasoline), the use of PFCs
(including SF6), N2O, and releasing HTFs. Nexperia does
not produce biogenic Scope 1 emissions or emissions
from ozone-depleting substances. To reduce our
Scope 1 emissions, we focus on designing or installing
more efficient equipment, substituting chemicals withmore sustainable alternatives, and optimizing ourmanufacturing processes.

PFC Emissions – tons CO₂e

Normalized Scope 1 Emissions – kg CO₂e/m²

ENVIRONMENTAL REPORTINGPFC IPCC 2006
PFC IPCC 2019

4,000

75,0003,000
50,0002,000
25,000
1,000

0

0
2018

2019

2020

2021

2022

2023

2018

2019

2020

2021

2022

2023

67

nexperia | Sustainability Report 2023

After an inspection in 2023, we concluded that
the PFC reporting for 2022 was incorrect. We
have updated our reporting methodology andupdated our PFC data for 2022 (both IPCC 2006
Tier 2a and IPCC 2019 Tier 2c). Previous years
were not affected by this change.
In addition to PFCs, we also use HTFs in
our manufacturing processes. After the
replacement of several chillers in our facility in
Newport (UK) during 2022, we have been able
to reduce the equivalent CO2 emissions by 36%
compared to 2022.
Another large share of our GHG emissions
comes from using fossil fuels, primarily fornatural gas heating and generating electricity
and heat in combined heat and power plants.
Our fossil fuel consumption varies, as it isprimarily geared toward balancing weather
conditions and associated fluctuating
temperatures. In 2023, we installed anothercombined heat and power plant at our
Manchester site (UK) to produce high-efficiency
electricity and heat. We also use diesel fuel topower emergency systems and small amountsof LPG in Nexperia staff catering facilities,
especially in Seremban (Malaysia) and Cabuyao(Philippines). We also use N2O in several stagesof our manufacturing processes, including
chemical vapor deposition, diffusion, andchamber seasoning. In 2023, our N2O usage
increased by 31%, and the associated emissions
were 4,691 tons of CO2e. We calculate our N2Oemissions based on the IPCC 2019 tier 2c model(see “Calculating Perfluorocarbons”).

Emissions

ENVIRONMENTAL REPORTING

CALCULATING PERFLUOROCARBONS (PFCs)
In the semiconductor industry, CO2e emissions
from PFCs are determined using a scientificaccounting model based on research by theIntergovernmental Panel on Climate Change(IPCC). In 2019, the IPCC released a refinementof its 2006 Guidelines for National Greenhouse
Gas Inventories (IPCC 2006), resulting in a new
accounting model, IPCC 2019.
Under the methodology of this new model,
Nexperia’s PFC emissions increased by 36% (basedon 2023 data) compared to calculations using
IPCC 2006. Therefore, calculations based on IPCC
2006 Tier 2a cannot be compared to those basedon IPCC 2019 Tier 2c.
For example, we used IPCC 2019 Tier 2c to
calculate and compare our PFC emissions for
2023, as well as 2022 and 2021. This reportpresents our Scope 1 emissions using calculations
based on IPCC 2019 Tier 2c, and we have updated
our historical Scope 1 emissions for 2021 and2022. As a result, our Scope 1 emissions for theseyears are now higher than previously reported.
In addition to the new methodology, Nexperia
uses a unique PFC gas (C3F8) and process
combination that the IPCC has not yet
investigated. Consequently, our emissions
calculations must use relatively unfavorable
factors to comply with IPCC guidelines, even if

they do not clearly identify our specific use case.
This fact alone resulted in 6% higher emissions(based on 2023 data) compared to the previous
calculation model.
The amounts of PFC gases Nexperia used in 2023
was higher than previous years. This increase
was due to producing more complex productswith more processing steps requiring PFC gases.
Compared to 2022, our CO2e emissions from PFC
gases increased by 7% (based on ESIA tier 2c IPCC
2019_AR5 tool).
Despite this increase, we remain committed to
our PFC Policy and strive to achieve a value of< 1.25 tons CO2e/m2 (data recalculated for IPCC
2019 tier 2c) by 2025. In 2023, our value was
1.72 tons of CO2e/m2.
The previous chart illustrates the disparities incalculation methodologies. For our historical
data up to 2020, we continue using results basedon IPCC 2006 Tier 2a methodology. From 2021
onward, we have adopted the new emission
factors under IPCC 2019 Tier 2c, including further
refinement by process type.
In parallel to determining our emissions using thisnew method, we will continue using the previous
method. This approach ensures our PFC reporting
remains accurate and transparent.

68nexperia | Sustainability Report 2023

Reducing Scope 2 emissions
Nexperia’s Scope 2 emissions are
generated externally from the electricity
we purchase from utilities. Since ourfoundation in 2017, we have emphasizeda measured and realistic approach toincrease our utilization of renewableenergy sources. We aim to foster reliablelong-term partnerships with relevant
stakeholders, ensuring internationallyaccepted renewable energy contracts
and certifications. This approachfacilitates CO2 reductions across our
back-end sites by utilizing credible
green energy mechanisms tailored toour manufacturing sites’ locations andenergy markets. These mechanisms
include corporate power purchaseagreements (PPAs), energy attributecertificates (EACs), green tariffs, on-site
power generation, and other custom
solutions. Since February 2023, Nexperia
has also procured renewable electricity
for all three of our front-end facilities.
To ensure our green investments make ameaningful, long-term impact, we workwith external consultants to address our
Scope 2 emissions. These collaborations
help us identify risks, explore
opportunities, and formulate strategies
for procuring 100% renewable electricity
across our back-end facilities.

Emissions

As a semiconductor company, ouroperations involve complex productmanufacturing processes that requiresignificant amounts of electricity. In
2023, we experienced production volume
decreases and underutilization acrossseveral factories compared to 2022. As
a result, our absolute Scope 2 emissions
decreased by 5% in 2023, while ournormalized Scope 2 emissions increased
by less than 1% compared to 2022. We
calculate our Scope 2 emissions based on
the GHG Protocol market-based approachand available emissions data from ourenergy providers.
Our ongoing sustainability efforts
have decreased our absolute Scope 2
emissions by 3% and our normalized
value by a remarkable 40% compared
to 2017. This substantial improvement
reinforces our commitment to reducing
our emissions intensity as we expand ouroperations. We continue exploring newopportunities to minimize our Scope 2
emissions, such as investing in renewableenergy sources, improving operational
efficiency, and investigating alternative
energy sources.

ENVIRONMENTAL REPORTING

Scope 2 Emissions – tons CO₂e200,000
180,000
160,000
140,000
120,000
100,000
80,00060,00040,00020,000
0
2018

2019

2020

2021

2022

2023

Normalized Scope 2 Emissions – kg CO₂e/m²

7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2018

2019

2020

2021

2022

2023

69

Achim Kempe
COO“In 2023, Nexperia committed to achieving carbon neutrality by
2035, signaling an important step in our sustainability journey. This
commitment encompasses a focus on mitigating both direct operationalemissions (Scope 1) and the indirect emissions associated withenergy procurement for operations (Scope 2). As we progress, we arecontinually strengthening our efforts, building upon this foundational
commitment to ensure a sustainable future for generations to come.
But our vision extends beyond immediate operational impacts toencompass the broader scope of emissions across our global value
chain. Recognizing and addressing Scope 3 emissions, which represent
indirect emissions associated with our supply chain and product lifecycle,
is integral to our commitment to environmental stewardship. This
comprehensive strategy underscores our commitment to responsible
business practices and aligns with our core values of transparency andaccountability.
As we navigate toward our carbon neutrality target, our ongoing efforts
serve as a testament to Nexperia's commitment to sustainability. By
integrating environmental considerations into our business strategy,
we not only mitigate risks but also seize opportunities to drive positivechange. Together, we are forging a path toward a greener, more resilient
future, grounded in transparency, accountability, and a collective vision
for a better world.”

nexperia | Sustainability Report 2023

Emissions

Reducing Scope 3 emissions

Non-greenhouse gas emissions

Nexperia’s Scope 3 emissions areindirect emissions (not included in Scope2) that occur in the value chain of thereporting company, including both
upstream and downstream emissions.
We are committed to tackling our Scope
3 emissions, which entails identifying
relevant categories, gathering data,
engaging with stakeholders, quantifying
emissions, setting realistic goals, andgenerating measurable long-term
impacts. As in the case of Scope 2
emissions, we approach Scope 3
reduction measures with an emphasis on
thorough analysis, achieving the highest
possible impact, and realistic feasibility.
We are in the process of planning thenext steps for accurate and complete
Scope 3 data collection.

While GHG emissions negatively
influence Earth’s climate, there aremany other substances companies emitthat can negatively impact human andthe environmental health. Of these
non-GHG emissions, nitrogen oxides(NOx) and volatile organic compounds(VOCs) are most relevant to Nexperia.
These emissions primarily result fromour combined heat and power plants
and manufacturing processes involving
the use of chemical solvents in thephotolithography process, as well as
emissions from boilers and emergency
generators.

ENVIRONMENTAL REPORTING

NOx emissions result mainly fromburning fossil fuels in power plants orabatement systems. They contribute to
the formation of smog, which can leadto respiratory problems and intensify
existing heart and lung diseases. In 2023,
our NOx emissions decreased by 34% to
21 tons, compared to 32 tons in 2022.
The higher value in 2022 was due to ouruse of emergency power systems in the
UK during several energy supply issues inearly 2022.
VOCs, such as chemical solvents, areused in the photolithographic processesof semiconductor manufacturing.
Their use results in VOC emissions thatremain after going through exhaust air
treatment systems. These emissions
contribute to the formation of groundlevel ozone, which is harmful to humanhealth and the environment. Our VOC
emissions decreased by 3% in 2023 to
23.6 tons.

71nexperia | Sustainability Report 2023

Resourcesand Energy
Relevant GRI
Standards:
3-3, 301, 302

Overview andmanagement approach
Efficient resource and energy management
are critical aspects of sustainability in thesemiconductor industry. At Nexperia, our
key materials include lead frames, moldcompounds, raw silicon wafers, processing
chemicals, and various types of equipment
and spare parts. Semiconductor production
also requires significant amounts of energy,
which is why we continuously analyze ourmaterials and energy use to find new areas
where we can improve.

SDG 7, SDG 12,
SDG 13Resources and Energy

ENVIRONMENTAL REPORTING

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nexperia | Sustainability Report 2023

Resources and Energy

Our Procurement department is responsible for sourcing materials.
At the board level, our Chief Procurement Officer (CPO) holds
overall accountability and reports relevant information to the otherboard members. Our formal procurement process is detailed in
the “Responsible Sourcing and Supplier Engagement” chapter. The
Procurement department works closely within the Environment,
Health, and Safety (EHS) Management structure described in the“Environmental Management at Nexperia” chapter.
Our certified Environmental Management System governs ourefficient energy initiatives and the environmental aspects ofour material procurement. Our sites in Hamburg (Germany) and
Newport (UK) are certified to ISO 50001, a global standard inenergy management systems. Our compliance with this standard
underscores our commitment to reducing energy consumption andincreasing operational efficiency. The certification of these two sites
covers approximately 15% of our total workforce.

Electricity Consumption 2023

41%
59%
274,369,013 kWh

FRONTEND
BACKEND

Distribution between front-end (FE – Hamburg, Manchester, Newport)
and back-end (BE – Dongguan, Seremban, Cabuyao) factories.

190,649,558 kWh

ENVIRONMENTAL REPORTING

Our approach: making production more
efficient and embracing green energy
Our manufacturing locations draw
the majority of their energy from thepower grid and, whenever possible,
purchase renewable energy. However,in regions where reliable and abundant
renewable sources are not yet available,
we rely on electricity generated fromfossil fuels. We also use natural gas toefficiently produce electricity and heatthrough combined heat and power(CHP) plants. These plants are crucial
for powering the heating, cooling, andhumidity management equipment
we rely on in our manufacturing
processes. We also use abatement
systems that effectively decompose
climate-damaging process gases. In
emergencies, we use small amounts ofdiesel to fuel our generators to mitigate
the risk of power outages.
We have steadily increased our
production capacity since thefoundation of our company. At thesame time, we are manufacturing
increasingly complex products andintroducing new process technologies
to create more environmentallyfriendly solutions for end users. As
these advanced products and process
technologies require more energy, ourmanufacturing sites continually work to

optimize their processes and replace or
upgrade equipment to minimize energy
use. Additionally, as part of our EHS
Management System, we set annual
targets for each site to incrementally
decrease its electricity consumption,
supported by specific reduction andefficiency measures such as integrating
advanced low-energy technology in
our production lines and conducting
targeted employee awarenesscampaigns.
Some other examples of our energy
efficiency measures include:› Reducing and optimizing exhaust andair-extraction systems› Upgrading air dryers› Purchasing energy-efficient chillers,
compressors, and vacuum pumps› Turning equipment off when it is not
in use› Using waste heat to produce cooling
via adsorption chillers
In 2023, while our absolute electricity
consumption remained stable, these
efficiency measures reduced ournormalized electricity consumption(kWh/m2) by 12% compared to 2017.

73nexperia | Sustainability Report 2023

Resources and Energy

Energy Consumption 2023 – GJ

2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2018

2019

2020

2021

ELECTRICITY

NATURAL GASGASOLINE

LPG

2022

DIESELIt should be noted that Nexperia purchased another manufacturing site in 2021.
Years 2018–2020 represents five manufacturing sites; years 2021–2023 represent six.

“Our sites in Hamburg (Germany)and Manchester (UK) havepurchased 100% renewable energy
since 2020. Our site in Newport(UK) followed suite in Q1 2023.”

2023

In addition to reducing our electricity
consumption, we are committed toutilizing more sustainable sources.
Globally, renewables currently supply
around 40% of our purchased electricity.
Since 2020, our sites in Hamburg(Germany) and Manchester (UK) havepurchased 100% renewable electricity,and our last front-end fab in Newport(UK) achieved this goal in early 2023.
While we are exploring opportunities toutilize more green electricity in our backend facilities, sourcing renewables poses
unique challenges in some regions. The
Asian market, for example, features
diverse regulatory landscapes across
many different countries. In response,
we strive to develop effective solutions
tailored to each site, working closelywith local experts to gain detailed
knowledge of evolving markets.
Along with electricity, we rely on several
fossil fuels in our operations. These
include natural gas, diesel, and small
amounts of gasoline and liquified petrolgas (LPG). We primarily use natural
gas to generate electricity and heatefficiently, heat buildings, produce
steam for humidity, and power ouremissions-abatement equipment.
Our use of natural gas is influenced
by external weather conditions and

ENVIRONMENTAL REPORTING

our internal production activities. For
example, due to installing an additional
combined heat and power plant at
our site in Manchester, our natural gas
consumption increased by 11% in 2023.
We also use emergency diesel
generators to support our essential
safety systems during power outages.
Our diesel consumption varies
depending on the frequency of testing
and the need for these emergency
systems. In 2023, we used 24 tons ofdiesel globally. In addition to natural
gas and diesel, we use gasoline forforklifts and LPG in some of our on-site
cafeterias.
In 2023, Nexperia consumed around2,245,268 GJ of energy globally. Theenergy intensity recorded as GJ/m2
amounted to 54 GJ/m2.

(GJ)

2023

Electricity

1,402,421

Natural Gas

839,302

Diesel

1,029

Gasoline

448

LPG

2,086

Total

2,245,286

Energy consumption in GJ of the manufacturing sites

74nexperia | Sustainability Report 2023

Resources and Energy

ENVIRONMENTAL REPORTING

Our approach:Using resources carefully and efficiently
There are many different resources
used in semiconductor manufacturing,some of which can negatively impact
people or the environment. One
particularly relevant category of theseresources is chemicals. To reduce theiradverse effects, we have ongoing
containment actions and substitutepotentially harmful chemicals withsafer alternatives. As part of ourEnvironmental Management System,
we also employ an active Chemicals
Management System to review all
chemicals used in our production andidentify critical chemicals.
As a large-scale semiconductor
manufacturer, we also use rare earth
metals and minerals. To protect theenvironment and uphold humanrights, we pay particular attention tomaterials that may come from conflictaffected and high-risk areas (CAHRAs).
This is described in more detail in the“Responsible Sourcing and Supplier
Engagement” chapter.

When selecting materials, we seek tominimize our impact on people andthe environment. Although we must
consider quality specifications and thepurity grade of production materials,
there are also growing opportunities
to use recycled materials. These can
include reclaimed or refurbished wafers,
recycled gold, and backside plates oftargets. We also apply shield cleaninginstead of buying new ones, and mayreuse manufacturers’ wafer cassettes totransport our wafers to back-end sites.
These are just a few measures we are
adopting to make our production moresustainable, efficient, and ethical. In
line with our sustainability roadmap,
we are also intensifying our focus on
responsible and green material sourcing.

75nexperia | Sustainability Report 2023

Water and Wastewater Management

Water and Wastewater
Management
Relevant GRI
Standards:
3-3, 303

Overview andmanagement approach
Water is a critical natural resource, and it isalso essential for Nexperia's semiconductor
production. As part of our commitment
to sustainability, we strive to use water
responsibly, working to preserve natural
water resources and minimize our impact oncommunities and the environment. These aims
are reflected in our global water strategy,
which focuses on conservation, recycling, andhigh standards for wastewater treatment anddischarge.
Through our Sustainability Policy, we arecommitted to reducing our relative overallwater use and consumption as we continue
growing as a company. For example, we strive
to reuse water wherever possible and have
implemented reduction programs at all oursites.

SDG 12, SDG 13

ENVIRONMENTAL REPORTING

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nexperia | Sustainability Report 2023

Water and Wastewater Management

Our approach: understanding andreducing our water footprint

Water and wastewater management are integral aspects of ourenvironmental, health, and safety (EHS) Management System, outlinedin the “Environmental Management at Nexperia” chapter. We also
conduct risk assessments to calculate more general water-related risks,such as flooding or tsunamis, and have established crisis management
plans to address these potential hazards.
As part of our commitment to conserving water, we place a particularfocus on water-scarce areas. For example, many of our manufacturing
and testing facilities are in regions that may become vulnerable
to prolonged droughts associated with climate change, leading toresource scarcity. Therefore, based on location, our manufacturing
facilities assess the impacts of water scarcity and identify best practices
to conserve and recycle water to meet our goals.

30%
Decrease innormalized water
consumption(compared to 2017)

Water Consumption 2023

38%
62%

Water Performance
2023

20%
FRONTEND
BACKEND

Distribution of water use between front-end (FE – Hamburg,
Manchester, Newport) and back-end (BE – Dongguan, Seremban,
Cabuyao) factories in cubic metres.

ENVIRONMENTAL REPORTING

Water reclaimed
in 2023

Even before Nexperia was established in 2017, we
continually worked to conserve water – for over 30
years at some facilities – and achieved considerable
savings in relation to our output. While the successof these efforts prior to our base year of 2017 means
additional large-scale reductions are no longer
practical, we continuously emphasize the use of more
efficient tools, seek new opportunities to recycle
water, and strive to optimize our processes. As aresult, we have kept our water consumption relatively
low compared to 2017 and substantially reduced ournormalized water footprint since our foundation.
We believe it is also essential to understand thebroader impacts of water availability on society
and the environment. In addition to impacting ourmanufacturing sites, water access affects otherindustrial, agricultural, and residential users in theregions where we operate. By using less water, we canhelp increase the supply for others in our communities.
Therefore, our global water approach focuses onwater conservation and recycling while maintaining
high standards for our wastewater treatment anddischarge.
We also understand that our water demands will riseas our production increases and that it is not viable
to dramatically reduce the total amount of water we
use in our manufacturing processes. Therefore, we areworking to increase our water recycling rate compared
to previous years. In 2023, we reclaimed 20% of ourwater, amounting to nearly 1 million cubic meters ofwater globally.

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nexperia | Sustainability Report 2023

Water and Wastewater Management

To measure and manage our water use effectively, we
use the water-related KPI “cubic meters water usage persquare meter produced silicon.” This KPI allows us to set
and monitor yearly targets to reduce the water intensityof our manufacturing sites. We track our progress
through regular EHS and Social Responsibility reporting
and analysis, which ensure we continuously improve ourwater efficiency and management.

ENVIRONMENTAL REPORTING

We treat our industrial wastewater on-site toprevent environmental pollution, in line with local
requirements and our Environmental Management
System. The treated industrial wastewater, as well as
further wastewater flows from the air-conditioning ofproduction rooms, sanitary facilities, or canteens, aredischarged in accordance with local laws and permits.
Parts of the water also evaporate.
In addition, our Stormwater Management Policy aims toprevent the release of pollutants into the environment
during stormwater runoff. All our manufacturing sites
complete the included risk assessment template, whichforms a risk evaluation for each location. The water

Water Withdrawal 2023 – m³

4,001,407
465,264

EXTERNAL
GROUNDWATER

Source of water withdrawal – 465,264 m3 are from own extraction(groundwater in Manchester), the rest is purchased.

78

nexperia | Sustainability Report 2023

management requirements and procedures are
fully auditable and guarantee our compliancewith laws and regulations in our countriesof operation. We also periodically monitor
and control the effectiveness of all related
measures.

Projects

We monitor water data at the site level incompliance with local requirements. Our sites thenenter their data into the Group-wide environmental
data management software each quarter, where
it is checked and analyzed centrally. We source
approximately 90% of our water from third-party
providers and extract the remaining amounts
internally from groundwater sources.

Local authorities define substances of concern
in wastewater streams in the discharge
permits. We continually analyze and review
their acceptable limits. These measures help
to progressively reduce our impacts on water
availability and the environment.

Total Water Consumption – m³

ENVIRONMENTAL REPORTING

Water and Wastewater Management

FRONTEND

Since the foundation of Nexperia in 2017, we have continually
worked to reduce our water demand on a site-level basis. This
commitment is guided by our Sustainability Policy and ongoing
improvement efforts. Our dedication to improving water
sustainability has led to significant water savings and more
efficient usage at multiple sites. In addition, we are continually
launching new initiatives and projects to reduce our demands
on precious natural water sources. Many of these technicallychallenging projects are ongoing but are already yielding positive
results. In 2022, we reclaimed 19%; in 2023, we reclaimed 20%of the total water used.

Normalized Water Consumption – m³/m²

BACKEND

5,000,000

150

100
2,500,000
50

0

0
2018

2019

2020

2021

2022

2023

It should be noted that Nexperia acquired an additional manufacturing site in 2021. Years 2018–2020 represent 5
manufacturing sites; years 2021–2023 6 manufacturing sites. This accounts for the increase in water consumption from2021 compared to previous years. The changing number of sites per year applies here and to the following graph.

2018

2019

2020

2021

2022

2023

Units in the graph for normalized water consumption have been corrected compared tolast year's report.

79nexperia | Sustainability Report 2023

Waste Management
Relevant GRI
Standards:
3-3, 306

Overview and management approach
Semiconductor manufacturing generates hazardous and non–hazardous waste streams, including solvents, acids, and metal
plating waste. Our operations also produce paper, plastic,
wood, metal, electronic, kitchen, and general office waste.
We understand that reducing or eliminating waste streams
contributes to greater operational efficiencies and a moresustainable circular economy.

Waste Management

ENVIRONMENTAL REPORTING

80

Waste – Kilograms (kg)15,000,000

REGULAR WASTEONETIME WASTE

10,000,000

5,000,000

0
At Nexperia, waste management is part of our broader
Environmental Management System, detailed in the“Environmental Management at Nexperia” chapter of this report.
Our commitment to reducing all waste is reflected in our Codeof Conduct, Sustainability Policy, and our ongoing efforts tophase out hazardous substances wherever possible.
Nexperia maintains high standards when it comes to waste
management. Each site closely monitors its generated waste
and separates it based on its type and specific requirements forhandling or disposal. To ensure the safe and proper disposal ofwaste - particularly hazardous materials - we collaborate withpartners who specialize in handling specific types of waste.

2018

2019

Regular waste is defined as recycled, nonhazardous or hazardous waste generated
during normal production activities.

Regular Waste – Kilograms (kg)

2020

2021

2022

2023

One-time waste is defined as recycled, non-hazardous or
hazardous waste generated outside normal production
activities. Examples are building or rebuilding work,building demolition, clean-up after move to other premises,
replacement of equipment, etc.

RECYCLING

HAZARDOUS WASTE
NONHAZARDOUS WASTE

10,000,000
7,500,000
5,000,000

SDG 12, SDG 132,500,000
0
2018

2019

2020

2021

2022

2023

nexperia | Sustainability Report 2023

Waste Management

Our approach: reducing, recycling,and handling waste carefully
We generate regular and ongoinghazardous and non–hazardous waste
in our manufacturing activities, offices,
canteens. We also produce so-called
one-time waste in construction andother manufacturing. Our waste
handling methods for either type comply
with all local rules and regulations.
At our manufacturing sites, we collectmanufacturing waste, including acids,
solvents, waste molding compounds,
and hazardous waste from metal
plating; office waste, including paper,
cardboard, and beverage containers;
canteen waste, such as food and othercompostable items; and items fromsupport operations, including scrap
metal, wood, and coolant chemicals.
Each site separates its waste using
appropriate disposal methods based onlevels of hazardousness.
The main goal of our waste management
is to reduce or completely eliminate
waste or waste streams. For waste thatcannot be avoided, we continuously seek
solutions to increase reuse or recycling.
In 2023, we recycled 83% of the regularwaste in our manufacturing sites, basedon definitions from local legislation.

At the beginning of each calendar year,
we set recycling rate targets for eachmanufacturing site. We then monitor
and record each site’s monthly waste
generation and compare its recycling
rates to its target, serving as the primary
Key Performance Indicator for waste.
We also consolidate this data on a
global level. If a site is not on target, thegeneral environmental management
teams and local staff collaborate
to identify the reasons and explore
potential corrective actions.
We track each manufacturing site’s
waste consumption for recycled andreused non-hazardous and hazardous
waste in our EHS database every quarter.

ENVIRONMENTAL REPORTING

Projects
Since our inception, we have implemented
various projects to avoid, reduce, reuse, andrecycle waste at all our sites worldwide.
In addition to these initiatives to reduce,reuse, and recycle waste at our sites
worldwide, we are continuously exploring
new and innovative ways to minimize waste
and promote sustainability.

In Action

At our site in Hamburg (Germany),
we hold an annual campaign eventto collect and recycle e-waste
and metals from our employees.
Collaborating with a local wastecompany, our staff can dispose of
items that a partner then sells in therecycling market. The proceeds are
donated to local charities benefiting
children (see “Our Responsibility andEngagement” chapter).

81

SocialReportingnexperia | Sustainability Report 2023

People Management
at TeamNexperia
Relevant GRI
Standards:
3-3, 401, 402, 404,
405, 406, 407

Overview andstrategic approach
Nexperia’s people fuel our mission tocreate some of the world’s most advanced
semiconductors. Our employees foster acollaborative ecosystem of ideas, energy,
and innovation, developing products thatenrich our everyday lives. As a geographicallyand culturally diverse workforce, we are
multidisciplinary and multitalented, yet always
striving to learn and grow. We come frommany different backgrounds, but are united inour shared values and work with purpose toachieve common goals.

People Management at TeamNexperia

SOCIAL REPORTING

Nexperia Employees 2023
(Signiﬁcant Locations,
100+ workforce)

Seremban (MY)3,395
Nijmegen (NL)442

Hamburg (DE)1,537

Newport (UK)502

Manchester (UK)1,089

Cabuyao (PH)2,681

Therefore, we are committed to maintaining
a safe and secure workplace where every
employee achieves a positive work-life balance
and is treated with respect and dignity.

Shanghai (CN)180
Dongguan (CN)3,114
TaipeiHong Kong

188

141

SDG 4, SDG 5
Significant locations are operations or offices with over 100 employees(headcount). In the reporting year, Nexperia had significant locations ofoperation in Nijmegen, Seremban, Cabuyao, Taipei, Manchester, Newport,
Dongguan, Shanghai, Hamburg, and Hong Kong.

83nexperia | Sustainability Report 2023

People Management at TeamNexperia

Workforce
Employees by Region(December 31, 2023)

2,999
4,939

5,187

754

3,753
EMEA
122

24

146
Americas10,126Asia

FEMALEAt Nexperia, employees have the option to choose
between female, male, and diverse as theirgender. There were no cases of diverse people
reported in 2023.

MALE

SOCIAL REPORTING

We have created several policies that influence how we work,
interact with each other, and manage our Human Resources (HR)responsibilities. In addition to the general values outlined in our
Code of Conduct and Sustainability Policy, we are also guided by our
TeamNexperia values. These help members of TeamNexperia more
effectively navigate onward and forge rewarding careers within ourorganization. We created these values organically during the earlyyears of our company, reflecting the spirit and best practices of ouremployees. These values are, in essence, our company culture thattells our people and the world who we are.
PASSION:
Our commitment and strength,
belief in our goals, our drive to
succeedPERSEVERANCE:
Our attitude to obstacles, agility
with purpose, our ability toinnovate through challenges

PROFESSIONALISM:
Our expertise and integrity,
respect of people andresources, our fairness andtransparency

PERFORMANCE:
Our forward momentum,
teamwork in products andpeople, our proof throughresults84

nexperia | Sustainability Report 2023

People Management at TeamNexperia

Our approach:managing TeamNexperia
As a responsible employer, we maintainstrict compliance with all regulations andlegal agreements. We are also regularly
involved in social dialogue with employee
representation bodies, such as workers’
councils at the site level and trade unions
at sectoral and national levels. We currently
have collective bargaining agreements inplace in several countries, such as Germany,
the Philippines, the Netherlands, and ourUK site in Manchester, reaching a collective
bargaining coverage rate of about 30% of
our global workforce.
We also support the aim of the International
Labor Organization (ILO) to promote
and realize universally accepted labor
standards. We respect and recognize our
employees’ freedom to establish, join, or be
represented by an organization, trade union,or employee group of their choice. Acrossall of our global sites, our employees also
have the freedom to associate and the rightto collective bargaining as provided by local
statutes.
In our operating model, the HR function
distinguishes three critical roles with uniquefocus areas. The three work together tofind the optimal balance between various
objectives that are important to theCompany:

1

2

3

HR Business Partners
safeguard and drive theimpact of people on
business performanceand strategy execution.

Country HR oversees
our adherence andcompliance with relevant
legislation, maintains
industrial relations,and ensures our local
operational processes
run smoothly.

Centers of Expertise(CoE) support
businesses, functions,and countries in theirarea of expertise
while driving quality,
professionalism,
consistency, andinnovation throughout
the Company.

SOCIAL REPORTING

85

nexperia | Sustainability Report 2023

In the HR Leadership Team (HRLT), we seek
to maintain a healthy balance between
these three roles and facilitate constructive
dialogue in policy-making and performance
management. Within this structure, theChief Human Resources Officer (CHRO),
a member of our Executive Management
Team (EMT), acts as a natural escalation
point. In addition, our VP Head of Talent,
Learning & OD has been appointed as an
operational representative of HR to the
EMT. We generally structure our country
HR management into HR generalists, local
HR specialists, and payroll experts. This
structure ensures Nexperia can continue
expanding without needing to change its
organizational design.

People Management at TeamNexperia

We also need a solid foundation of datacollection to manage our workforce
effectively. Therefore, we use Workday as
our global Human Resources Information
System (HRIS). At the site level, HR enters
all employee data into the system, including
job details, personal data, compensation
information, and other work-related data.
On a global level, the HRIS team can accessall data and generate reports to collate
employee information. Individual sites also
use additional systems for purposes such as
time registration and payroll.

SOCIAL REPORTING

As the success of our company relies onmaintaining a motivated, well-trained
workforce, we continually address thecurrent and emerging challenges facing
our HR departments as part of a humancapital risk assessment. These challenges
include the increasing competition forskilled personnel, rising trends of remote
work and more diverse teams, and aging
demographics in key locations. In response,
our approach to addressing these HR
challenges includes:

Our approach addressing HR challenges

Conducting regular andmore objective talentreviews by appraisingobjective performance
KPIs and involving formal
assessment committees
in the process.

Supporting Nexperia’s
growth ambitions
by incorporatinginternal and externalbenchmarking to ensure
we achieve our bottomline results.

Investing in humancapital and expanding
into new regions andcountries to achieve
leading industry
performance.

Engaging and retaining
new and existing
talent to support ourenhancement of a uniqueand differentiatedproduct portfolio.

86nexperia | Sustainability Report 2023

Talent Attraction and Retention

SOCIAL REPORTING

Talent Attraction and Retention
Relevant GRI
Standards:
3-3, 401

Our approach: striving to be an attractive employer
As a leading manufacturer in the fast-moving
technology sector, we aim to continually attract,
support, and retain world-class talent. To
achieve these goals, we strive to create dynamic
and engaging work environments that welcome
new employees and encourage existing teammembers to progress within the Company. We
believe our status as an attractive employer
stems from our company’s strengths andofferings, which include:› Our commitment to an inclusive and diverse
corporate culture (described in more detailin the “Diversity, Non-Discrimination, andInclusion” chapter).

In addition to attracting and retaining talent,
our efforts have also won Nexperia several
awards, including:› For the second year in a row, Nexperia
Germany won the “Top Company 2023” award
from kununu – an online portal for employer
evaluation – for being among the mostpopular employers in Germany, Austria, andSwitzerland listed on the platform.
› Like in 2022, Nexperia Malaysia received the“Human Resources Excellence” award and the“Employee Experience” award from Human
Resources Online for 2023.

› Offering highly competitive compensation
and benefits packages.
› Investing in the professional and personal
development of each individual (describedin more detail in the “Talent Development”
chapter).

SDG 4, SDG 5

The kununu“Top Company 2023”
for Nexperia
Germany

Human Resources
ExcellenceAwards 2023
Malaysia

EmployerAwardsHuman Resources
Employee ExperienceAwards 2023
Malaysia87

nexperia | Sustainability Report 2023

Talent Attraction and Retention

Adhering to the principle that happy andengaged employees are the cornerstone ofsuccess, Nexperia Malaysia has implemented arange of innovative programs - from wellness
initiatives to opportunities for professional
development - to foster a supportive andinclusive work environment.
We are committed to supporting TeamNexperia
and making all employees feel valued
and appreciated. As part of this goal, we
acknowledge the long tenure of employees
who have been with us since before Nexperia's
foundation in 2017. Our employees’ loyalty tothe organization and its preceding companies
is also reflected in the high average length ofservice.

We manage the material topic of “Talent attraction
and retention” as part of our HR management
approach described in the “People Management at
Nexperia” chapter of this report. With the help of
our Human Resource Information System (HRIS), we
measure the success of our initiatives and progress
toward talent attraction and retention targets. Data
points and KPIs include our retention rate and thetime between job posting and hires (time to fill).

For example, in Hamburg (Germany), ouraverage employment length is 13 years. Other
regions show similar results, with 9.5 years at
our site in Cabuyao (Philippines) and 8.6 years
in Manchester (UK). In 2023, our employee
retention rate for indirect employees reached93.4%, indicating our ability to maintain a stable
workforce over a given time frame.

Staff Departure by Gender & Age

New Employees by Gender

SOCIAL REPORTING

In addition to using the HRIS, we conduct anemployee engagement survey every two years tounderstand our employees’ thoughts, perspectives,and concerns.

New Employees by Age

MEN

2,000
WOMEN

1,000

37%

1,500
1,000

500

500

63%
0

0
< 30

3039

4049

>50

Staff departure by gender and age, inclusive of voluntary resignations and other reasons forleaving, for 2023. Nexperia's employees can choose between female, male, and diverse as theirgender. There were no cases of diverse people reported in 2023.

< 30

3039

4049

>50

88

nexperia | Sustainability Report 2023

The survey covers our entire global
workforce and includes questions
covering a diverse range of perspectives
and relevant HR-related topics, such as:› Clarity of Direction› Continuous Improvement› Employment Engagement› Customer Focus› Performance Management› Resources & Support› Manager Relationship› Employment Empowerment› Teamwork & Collaboration› Growth & Development› Recognition & Reward› Values› Well-being

Talent Attraction and Retention

As a company, we engage with our
employees through regular dialogue
and during key stages such as ourhiring process or staff exits. We use
this feedback to improve our corporate
culture and the working conditions of
our employees. During this feedback
process, our teams present and discuss
results internally, coordinated by their
managers. The teams then identify
specific points and create action plans
we can incorporate into our operating
mechanisms, such as employee
meetings, reviews, and performance
discussions.

› Strong results for Teamwork andCollaboration, with 9 out of 10
employees agreeing that their team iscommitted to high-quality work.
› Strong results with 9 out of 10
employees agreeing that Nexperia
provides a safe working environment.

93%
Response rate
Results Employee
Engagement Survey
2023

There are two important KPIs tomeasure the progress of our actionplans: a high response rate and a highoverall favorability rating. In 2023,
the response rate was 93% of global
employees, and the overall favorabilityof working at Nexperia was 84.7%, a
4.4% decrease compared to the last
survey in 2021. Customer Focus is themost favorable scoring category for
Nexperia overall, with all items scoring
above 80% favorable.

84.7%
Overall favorabilityof working at
Nexperia

SOCIAL REPORTING

Despite declines across all items since2021, our employee survey results
still exceed the external norms ofour providers and industry peers.
Our employees have shown interestin sharing their views on improving
their workplace experience (93%), andwe will act on their feedback. After
hosting multiple manager sessions, wehave initiated 842 action plans, withactions including attending external
conferences or setting up internal award
programs. To reduce bureaucracy,
we plan to implement the Nexperia
Management Model as a common
language for reviews and logical, clear,fast, and efficient decision-making (forfurther details, see the “Responsibility ofManagement” chapter of this report).

89

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Talent Attraction and Retention

SOCIAL REPORTING

Employee benefits
We aim to create engaging work environments
supported by employee benefits that enhancetheir work-life balance. In addition to thecompetitive compensation and annual paid
leave at each site, we offer employees annual
incentive plans (linked to company performance)and sales incentive plans where appropriate.
To show appreciation for our team members
and their work, we award long-term service
prizes to employees in some countries. We also
support the ongoing well-being of our employeeswith discounted collective health insurance(in Malaysia, this also extends to employees’
children) as well as pension plans. To support ouremployees’ work-life balance and family planning
activities, we offer pregnancy and maternity
leave, parental leave, adoption, and foster careleave. In the Netherlands, employees are entitled
to take long-term carer's leave to support
family members who are facing life-threatening
circumstances. In Germany and Hungary, we offer
employees nursery and daycare support. We
also provide advice to all employees through our
Employee Assistance Programs, covering subjects
such as work-life balance, managing life changes,
parenting, and others.
In addition to state pension plans, our employees
in several countries receive company pension
benefits, as either defined benefit plans ordefined contribution plans. Our defined benefit
plans are differentiated by offering either
pensions or post-retirement medical benefits.

90nexperia | Sustainability Report 2023

Benefits generally depend on factors such as
an employee’s length of service, contributions,and compensation. They also factor in relevant
labor, tax, and social security laws in the
countries where the Company is located.
The obligations and the plan assets used to fundthe obligations are subject to demographic,
legal, and economic risks. Economic risks areprimarily unforeseen developments in goods orcapital markets.
Nexperia has a number of defined benefit
pension plans. The largest plans are in Germany
and the Philippines, representing 92% of our
total net liability. Our funding of these plans is
consistent with the local requirements in the
countries where we operate.
Since the pension liability is adjusted to thesalary increase percentage of each country theplan belongs to, the pension plan is exposed toeach country's inflation, interest rate risks, andchanges in pensioner life expectancy. As theplan assets include significant investments incash, cash equivalents, and government bonds,
Nexperia is also exposed to interest rate risks
arising in the jurisdictions that the investments
relate to.

Talent Attraction and Retention

SOCIAL REPORTING

The following table shows the defined benefit pension obligation and related plan assets:
$'000

2023

2022

2021

2020

2019

Defined benefit pension obligation

51,08850,87662,442

71,142

52,950Less: Pension plan assets(12,426)(12,196)(10,394)(8,635)(7,224)

Total

38,662

38,68052,04862,50745,726

In addition to the defined benefit plans related topensions, we granted one closed defined benefit
plan related to post-retirement medical benefits
to employees in the UK. In this plan, eligible retired
individuals make their own arrangements with adesignated private health insurer and then claim anannual subsidy back from Nexperia.

Our obligations are subject to demographic
and economic risks. Economic risks are primarily
unforeseen developments in goods and capital
markets. The defined benefit plan is exposed toUK’s inflation, interest risk, and changes in the life
expectancy for pensioners.

The following table shows the obligation and related plan assets for the defined benefit
plan for post-retirement medical benefits:
$'000

2023

2022

2021

2020

2019

Defined benefit pension obligation

1,705

1,788

2,870

3,080

2,810

—

—

—

—

—

1,705

1,788

2,870

3,080

2,810

Less: Pension plan assets
Total

The following table shows the annual expense for Nexperia’s defined contribution plans:$'000
Total expenses for defined
contribution plan

2023

2022

2021

2020

2019

38,11430,88731,48825,097

26,92991

Irene Deng
General Manager
BG Leader IC Solutions“At Nexperia, we are dedicated to empowering women in
their pursuit of careers in technology.
Women naturally connect more with daily life duties.
Their thoughts and inputs tend to link to how products
raise people’s living standards. Looking at things withdifferent angles will help our products and services
reach a broader audience. In a corporate world, women
statistically show stronger desire to communicate andto resolve conflict. This brings in efficiency in corporate
management. Tech sectors are largely operated in
multinational manner. Communication plays a vital role.
Women tends to over-estimate the challenges in having
a career in tech sector. As a leader in sector, I believe intraining and coaching early. As early as early childhood
to plant a seed by offering creative thinking toys. I also
believe in continuous mentorship program in corporate
to cultivate technical and business leadership. Thisapplies to both female and male leaders.”

nexperia | Sustainability Report 2023

Talent Attraction and Retention

Attracting young talents: our corporate trainee andapprenticeship programs
Our corporate trainee programs are a key part of our efforts to attract andretain young talent. These programs offer valuable learning opportunities andpromote a culture of mentorship and growth within our company, in line withour commitment to attracting, supporting, and retaining top talent.
Nexperia has strong young talent programs at each of its major manufacturing
sites to recruit and develop future leaders. In 2023, our programs in Germany,
the UK, China, Malaysia, and the Philippines recruited and developed 78
graduates, with program durations ranging from 9 to 36 months. Over 90% ofparticipants were offered permanent contracts upon completion.

In Action

In Germany, our apprenticeship program allows us
to invest in the next generation of young people tobecome skilled professionals. The dual education
system combines theoretical knowledge at schools
with practical, hands-on experience in companies.
Throughout the apprenticeship, participants alternate
between periods of work in the Company and attending
vocational school, allowing them to acquire bothtechnical expertise and practical skills. They enter theCompany directly after completing their training andembark on a qualified career in their chosen field.

At Nexperia Germany, five students attended a dual
study program in 2023. This program integrates
academic studies at a university with practicalon-the-job training in our company. Participants
alternate between classroom learning and work
experience, gaining both theoretical knowledge andpractical skills relevant to their field of study. Thisapproach allows students to earn a degree while
gaining valuable work experience, often leading to
excellent career prospects and smoother transitions
into the workforce after graduation.

SOCIAL REPORTING

93

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Talent Attraction and Retention

SOCIAL REPORTING

Selected trainee and graduate programs at Nexperia in 2023:
RegionTotal / Average

GermanyUK

China

Malaysia

Philippines

Sum of graduates

78

5

5

27

14

27

Program Duration

19 months

36 months

24 months

15 months

12 months

9 months

Conversion rate (from graduate
to employee)

92%

100%

80%

100%

80%

100%

Male-Female Ratio

64/36

60/40

80/20

60/40

60/40

60/40

In Germany, students typically graduate after three years when attending the dual study program.
Since 2020, eight students have graduated.

In Action

Our Fresh Grad Development Programin China helps young graduates
to quickly learn and improve theirskills in a 15-month training plan at
Nexperia. It consists of four stages,
including unified company onboarding
training, departmental on-the-job
training with mentors, job rotation
training (optional), challenging small
project assignments to enhance theirown abilities and skills.

In Malaysia, our NextGEM programis a 12-month initiative for young
talent. Participants follow a structured
onboarding and job rotation plan, withnew rotations every four months. They
receive training, participate in quarterly HR
development talks, undergo assessments,
and receive mid-year and final reviews.
Upon completion, NextGEM participants
attend a graduation day where awards arepresented for the top NexGEM and mentor.

In the Philippines, our nine-month Cadetshipprogram aims to identify and develop highpotential talent. Young leaders are trained toadvance horizontally and vertically within two
years. The training roadmap comprises five phases,
covering our culture, business processes, process
familiarization, work immersion, and a project
presentation. It combines theoretical and practicalknowledge with technical and behavioral training
objectives. Our cadets can choose between a line
management or technical career path.

94nexperia | Sustainability Report 2023

Projects

ONBOARDING
When new employees join our company,
they can also join a selection of internal
communities. These include event
teams, TeamNexperia Young for emerging
talents, community, charity, and sports
committees, and technical communities
exploring complex technical topics. These
communities help our employees build
stronger bonds and friendships withcolleagues they may not have met otherwise.
In several countries, we also have a “buddy
system” to help new employees embrace ourorganizational culture and values. During
their onboarding process, new hires receivea welcoming gift and are assigned a buddy– typically an experienced employee – whoprovides advice on policies, procedures,and work rules while helping the new teammember socialize. We also evaluate thisonboarding process using an electronic
feedback form sent to the new employee aftera few months at Nexperia.

Talent Attraction and Retention

SOCIAL REPORTING

95

nexperia | Sustainability Report 2023

To ensure we continually attract high-level talent, we
maintain close connections with local talent pools during
our recruitment and hiring processes. Members of ourTalent Acquisition team stay in contact with promising
candidates to re-engage in talks when new positions
become available. This approach demonstrates ourcommitment to building long-term relationships, not onlywith new colleagues but also with students or potential
hires. As a result, we have many examples of students
joining our company as interns and staying on for a
successful career. We also invest in employee engagement
initiatives and host challenges and events (such as ourTechnical Forum, an internal innovation summit) to help
our workforce remain creative, inspired, and connected.

Talent Attraction and Retention

HOW WE REWARD REFERRALS –REFERRAL PROGRAM & CAMPAIGN
As a global company that values thediversity of our workforce, we encourage
our employees to use their professional
networks and refer suitable candidates foropen positions. This way, our employees canhelp identify potential hires who have theright skills, qualifications, and cultural fit
for TeamNexperia and can contribute to our
growth goals.
We have two referral programs:
TalentMagnet and the Global Referral
Program.

EMPLOYER BRANDING CAMPAIGN
To communicate our company strengths and initiatives
more transparently, we continue promoting our employer
branding campaign, “Be part of something Bigger.”
We believe TeamNexperia’s proactive involvement in
employee testimonials and social media campaigns
creates a more authentic picture of who we are and what
we value as a company. In addition, our employer branding
campaign focuses on several important topics, such as
women in engineering, the onboarding experiences of newtalents, and the value of building communities. In 2023,
Nexperia was present at numerous campus recruitment
events and sponsored several initiatives aiming to attract
talents and raise brand awareness.

SOCIAL REPORTING

Our TalentMagnet program rewards
employees with gifts for each successfulreferral, i.e., each candidate who reaches theinterview stage. The value of the gifts varies
based on the number of successful referrals
made by the employee.
In addition, if a referred colleague is hired
into a Nexperia position, the referring
employee is eligible for a payment of €2,000.
This bonus is paid in the local currency
through regular payroll cycles and is subject
to local tax laws.
In 2023, our employees recommended 716
new candidates, 175 of whom reached theinterview stage, leading to 122 hires.

96

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Talent Development

Talent Development
Relevant GRI
Standards:
3-3, 404

As Nexperia’s success depends on our people and their abilities,
it is critical to continually learn and grow together to sustainably
achieve our corporate objectives. To this end, our talentdevelopment has three specific pillars:

Build the right teams to achieve
our strategic goals

Develop robust talent pipelines
to stimulate our future growth

Inspire our people to grow andrealize their full potential

These pillars guide our efforts and help
streamline our development actions.
Importantly, we strive to achieve and maintainall three at the same time – a sophisticatedbalancing act for our leaders and HR experts.

SDG 4

SOCIAL REPORTING

97

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Talent Development

Talent to realize our strategic ambitions
Since Nexperia’s foundation in 2017,
we have focused our performance
management approach on both “results”
and “behavior” to reinforce that what
we achieve is just as important as
how we achieve it. As a result, during
our annual review cycle, we evaluate
indirect employees on both their impact
and behavior. Indirect employees do
not work on the product directly, but
for the overall business. All managers
receive a one-hour training session
in preparation for the performance
management process. Performance
review calibrations - in which managers
discuss their proposed reviews withother managers – provide an additional
fail-safe to ensure fairness, objectivity,and consistency.

For our direct employees working
as operators in manufacturing sites,
we have our own performance
management system in place, which
differs from country to country and islocally managed by HR. For example, in
Hamburg and Manchester, we conduct
annual performance appraisals with
employees, typically 12 months after
they join Nexperia and at further review
intervals. In Seremban, Cabuyao, andDongguan, every operator has a monthly
KPI – including output, quality, yield, andpersonal behavior – determining their
end-of-year performance rating andincentive payment. All newly hired direct
labor employees receive a completeorientation one or two days before
reporting to their workstation, covering
Nexperia's policies, EHS awareness, andquality mindset.

SOCIAL REPORTING

Mutual responsibility andcalibrated assessments
We take a shared approach to aligning our company
ambitions, contribution requirements per position, andindividual performance. As part of this approach, we expect
our employees to seek clarity and feedback to improve theirperformance and our managers to actively provide clarity
and constructive feedback. We encourage our employees
and managers to make this a continuous dialogue, which we
augment with a formal appraisal once a year. Throughout theyear, our HR environment Workday enables both employees
and managers to request direct feedback from any personat any moment. To ensure this dialogue remains honest andopen, constructive feedback from employees must neverresult in personal consequences. Employees can also use our
SpeakUp Line to give feedback anonymously. This reporting
tool is described in more detail in the “Business Integrity andEthics” chapter of this report.
To maintain consistency and fairness, our appraisals andfeedback undergo a calibration cycle before they are
finalized and discussed with the employee.

“Our success depends on our people.
Growing our people to their full potential
creates a strong, robust internal talentpipeline and makes Nexperia an exciting
place to develop a career.”98

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Talent Development

SOCIAL REPORTING

Goal setting in 2023:
embedding our strategic plans
In 2023, we focused on the directconnection and translation of strategicplans to individual goals. We havealso implemented the concept of“organizational goals” in Workday toreflect our strategic objectives. These
measures allow individuals to explicitly
plan their contributions, connect
them to their overarching department
plans, and then deploy these plans to
the people needed to achieve them.
Additionally, in recognition of thegrowing interdependencies between
our departments, we enable employees
to explicitly link their personal goals with
their department’s goals and those of
any other departments they work for.
For example, a quality leader may reportto the quality organization but also work
for a specific business group. In this case,they would link their personal goals to
the goals of both departments. We also
introduced a feedback appraisal systemin our performance review process.
The aim is to provide comprehensive
and balanced feedback on individual
contributions. Employees areencouraged to actively seek feedback
from a broader range of stakeholders,
including project managers and "dottedline managers," who oversee employees'
assignments without being their directline managers.

70%
Learning throughon-the-job
experience

Learning approach

In 2023, 86% of employee goals werelinked to department goals. While goal
setting has always been a part of ourprocess, we aim to increase our impact
by setting goals that are inclusive andactively monitor progress throughout
the year, rather than reflecting onthem at the end of the year. Thisexplicit connection to organizational
goals brings individual performance
management and business performance
management closer together.

20%
Learning from
active coaching andfeedback

10%
Formal learning

To support this important step towardachieving our common aim as acompany, we offered briefing sessions
to all employees to elaborate on
strategic planning, goal setting, andperformance management. In 2024,
we will further define our department
goals using the Nexperia Management
Model and Deep Dive approach. Our
senior management teams are currently
working on defining the exact goals,
KPIs, and action plans to help us achieve
our strategic ambition.
To ensure we use goals to promote
development and improve performance– rather than assessing performanceafter the fact – we request quarterly
reviews throughout the year. In addition,
we are exploring other ways to include
forward-looking assessments in thesequarterly reviews to increase our focus
on development.

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Talent Development

Utilizing the “70-20-10” model
We believe mastery of a subject isachieved through a combinationof formal knowledge, practice, andfeedback – commonly known as the “7020-10” model. Within this approach, 70%of all learning comes from practicing
in a relevant context, 20% comes fromreceiving active coaching and feedback,and the remaining 10% - often in theform of behavioral change - comesfrom formal learning. At Nexperia, ourdevelopment support focuses primarilyon the 20 and 10 by encouraging
feedback from managers and peers andmaking formal learning available.
Traditionally, our formal learning
content has been developed byindividual departments or countries.
This approach has yielded a relatively
scattered learning landscapewith inconsistent quality andavailability. Since 2022, we have invested
in our learning platform “Nexperia
Academy.” It allows us to combine all
our learning functions into a single,
user-friendly database. It also enables us
to manage our learning asset portfolio
more effectively and includes suggested
learning and knowledge-sharing features
to enhance our development practices.
Our learning approach increasingly

uses “blended” learning and features“performance support,” in which
relevant information is presented or canbe accessed in small sections to improveengagement and knowledge retention.
Since we introduced this learning
platform, 598 courses have been logged
in the system. Forty-five power users – or“administrators” – manage the courses,
and we recorded 2,649 active users ina single month. Due to high levels of
demand and usage, Nexperia Academy
will focus on strengthening the roleof our power users in 2024. We willoffer administration training, covering
topics such as enrolment notification
and reporting, to enable them to fulfill
their role more effectively. Additionally,further e-learning training will enhance
our learning content and standardize
branding across learning formats.
The goal for Nexperia Academy is toconstantly attract our employees to
upskill and reskill at anytime, anywhere.

SOCIAL REPORTING

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Talent Development

In 2023, each employee averaged 14.3 hours of voluntarytraining attendance and 29.3 hours of mandatory training
attendance, averaging 43.6 hours of training in total.
We recorded 612,534 hours of training from the Netherlands,
Germany, the UK, China, Malaysia, the Philippines, Taiwan, andHong Kong.
We offered 1,473total courses to our employees. On average,
each employee participated in 4.7 courses.
The following examples illustrate the course types offered:onboarding courses on topics such as Code of Conduct, Quality
and Security awareness, 5S Training, and EHS Training; technicalcourses on Work Instruction Writing, our Manufacturing Risk
Assessment Tool (MRAT), and First Aid Training; audit training on
IATF 16949, ISO 14001 and 45001; behavioral courses on Stress
And Anxiety, Conflict Resolution, and Customer Satisfaction;and voluntary courses on Python, 7 habits, and Toastmasters
presentation.

14.3
Voluntarytraining hours

Average training
hours per employee
in 2023

29.3
Mandatory
training hours

1,473
Different courses

SOCIAL REPORTING

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nexperia | Sustainability Report 2023

Talent Development

Professional development
and coaching

Robust talent pipelines
for the future

To address our growing need for expert
coaching in a range of development areas,
we are piloting a coaching service with aprofessional coaching brokerage platform.
This service provides the capacity to help
specify development needs and connects
our teams with coaches from a network ofover 3,000 certified members. The service
also includes formal evaluations and trend
reporting to help us identify and addresscommon development challenges.

In the buy-or-build equation, robustinternal talent pipelines and internal careerdevelopment pathways help us mitigate
talent availability risks, enhance our culture,and create an attractive proposition toretain and attract top talent.

From a managerial perspective, we assess
development gaps and determine to what
extent we will develop an incumbent or
appoint a member with clear development
needs versus hiring someone who alreadypossesses the required knowledge andexperience.

We explicitly plan successions for key
positions, especially those that are
difficult to replace. At present, 44% of
our leadership positions have a successionplan, and by 2024, we aim to have 60%
with strong, validated plans. For leadership
positions without strong plans, andwhich have moderate or high retention
risk and medium or high loss impact (i.e.,
replaceability), we maintain an external
succession list to mitigate retention risk.
To fill important positions with internal
candidates more effectively, we are actively
building and maintaining succession pools,
starting with the categories “Product line
General Managers” and “Critical technology
experts.”

SOCIAL REPORTING

750
Promotion count

5.6%
Global employee
promotion rate
in 2023

Promotions at Nexperia
Our HR business partners work closely with their businesscounterparts to support the career growth and developmentof their teams. Once a year, all promotion nominations
are reviewed by our Management Team and HR business
partners. This cadence ensures our talents have theopportunity to grow into more advanced positions and canhelp drive Nexperia's continued business success.
In 2023, we advanced 5.6% of our team members throughinternal promotions.
Promoting women into leadership position is also a key
focus. We are currently working to implement and further
intensify initiatives to support the successful careerdevelopment of female managers (see the “Diversity, NonDiscrimination, and Inclusion” chapter of this report).

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The Nexperia Talent Program
Talent development remains one of Nexperia’s
key priorities. The Global Talent Programs
are integral to our people development andretention strategy, designed to engage,develop, and retain our high-potential
talents. In 2024, Nexperia will continue offering
four signature programs, each targeted ata different job level: Key Young Talent for
graduates, Connections group for individual
contributors, Emerging Leadership for people
managers, and Nexperia Leadership for
director-level employees. These intensive
programs aim to accelerate the leadershipskills and readiness of our talents in line withcompany growth. We select participants basedon their leadership potential within Nexperia,
and the curriculum is designed to foster theirdevelopment as current and future leadersand catalysts for innovation and growth. Thisis achieved using the Nexperia Management
model, which will help us to reach our mission
and 2030 goal.
We ensure that every cohort has strong
talent earmarked as successors or with clear
potential as successors and balance the groups
in terms of department, country, and gender
representation. The program runs over a
six-month period in both Europe and Asia,
utilizing our site facilities. During this time, ourtalents have multiple opportunities to work on
business and personal leadership objectives,
and to model Nexperia’s best practices, culture,and values.

Talent Development

SOCIAL REPORTING

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nexperia | Sustainability Report 2023

Development goals, strengths,
and opportunities
To reinforce our commitment to developing
our employees as professionals - both intheir existing roles and future careers - weask them to define personal development
goals along with performance goals.
In our reviews, we broaden our official
feedback beyond reviewing and supporting
their progress toward development
goals to include general strengths andopportunities.
To further support personal and leadershipdevelopment as well as well-being, theNexperia Academy is available to all
employees and offers an extensive libraryof course materials. A dedicated “career”
section in our Workday app also helps
employees find internal opportunities andset alerts for exciting future roles.

Talent Development

SOCIAL REPORTING

Our career ladder
Traditional job evaluation typically attributes theimpact of subordinates to managerial positions. As aresult, higher-level positions tend to be managerial.
People looking to advance their careers often needto add managerial accountability to the point where
they must relinquish their expert activities to focus
on managing other experts. At Nexperia, we believe
top-level experts can bring value to the Company that
equals or even far exceeds that of their managers.
Additionally, we wish to encourage our employees
to progress in the direction that brings them themost professional and personal satisfaction. For

these reasons, we have adopted a ladder approach,which recognizes expert careers alongside “regular”
managerial careers. The ladders chart a clear path froman individual’s first role at Nexperia to advancing to thehighest levels of achievement within the Company.
In our employee survey, detailed in the “Talent
Attraction and Retention” chapter, we measure
the extent to which our people experience growth
opportunities.

Nexperia Career LadderTechnical Expertise

Project Management

Line Management

FELLOWSENIOR PROJECTDIRECTORSENIORDIRECTORTECHNICALDIRECTORPROJECT
DIRECTORDIRECTORSENIOR PRINCIPAL
ENGINEERSENIOR PROJECTMANAGERSENIOR
MANAGER

PRINCIPALENGINEER

PROJECT
MANAGERMANAGERENGINEERS

PROJECT LEADERS

University / Tertiary Education
Further Entry Level104

nexperia | Sustainability Report 2023

Diversity,
Non-Discrimination,and Inclusion
Relevant GRI
Standards:
3-3, 202, 405,
406

SDG 5

Diversity, Non-Discrimination, and Inclusion

SOCIAL REPORTING

Overview andmanagement approach
At Nexperia, having “the right team” means
embracing a diverse range of people, perspectives,and cultures. As a global company powered byinnovation, we aim to foster inclusive working
environments where all people can be authentic,
develop professionally and personally, and work
together to achieve common goals.
Nexperia is a proud global community of talented
professionals. As an equal-opportunity employer,
we are committed to providing a diverse, fair, andinclusive working environment for all employees.
By uniting various backgrounds, cultures, andskill sets, we gain a wealth of perspectives that
stimulate creativity and enrich our corporate
culture. Embracing diversity also means learningfrom different voices and opinions, finding newconnections and similarities, and forming strong
collaborations to develop new solutions.
We are committed to a working environment
where ethics, integrity, and trustworthinessare valued and shared, not only internally but
among all stakeholders and the communities
where we live and work. Therefore, we do nottolerate any form of inhumane treatment suchas harassment, bullying, public shaming, verbal
abuse, or discrimination based on factors suchas race, nationality, skin color, gender, religion,age, pregnancy, health, sexual orientation, socioeconomic background, physical or mental ability, or
political affiliation.

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To strengthen our commitment todiversity and inclusion (D&I), welaunched an official D&I strategy in 2023.
It comprises three main goals:

Diverse workforce

Leadership

Inclusive culture

Diversity, Non-Discrimination, and Inclusion

To achieve these goals, we developed afour-pillared approach based on:
1. Maintaining inclusive, diverse, andfair hiring practices
2. Empowering leaders to champion
D&I within their teams
3. Supporting pay equality
4. Fostering an inclusive culture andactivating D&I ambassadors
We support these pillars withcomprehensive communication
measures as the foundation of our D&I
strategy.

We manage the material topic of“Diversity, non-discrimination, andinclusion” using the same structures
outlined in the “People Management
at Nexperia” chapter. Our new D&I
Program is coordinated by our Head of
Talent Acquisition, who represents oursenior HR management and reports
directly to our Chief Human Resources
Officer (CHRO). Our D&I strategy
combines global governance andsubject matter expertise with localized
activation, allowing us to balance aholistic approach with the needs of each
Nexperia location.

The topic of “Diversity, nondiscrimination, and inclusion” is also
within the management scope of ourCompliance Department and Ethics
Committee (EC). The EC comprises ourChief Operating Officer (COO), Human
Resources Director, Senior Director
Legal, and Head of Global Audit. The
EC meets at least once a quarter andadvises our EMT on defining andenforcing our Code of Conduct. It isalso responsible for ensuring accurate
recordings of any misconduct allegations
and coordinating appropriate follow-up
actions.

PROGRAM
MANAGEMENT

Sponsorand advisor

D&I Program governance
ESG
Steering
Committee

ESG
ProgramWorkstream
Leadership

Workstream
TalentAcquisition

SOCIAL REPORTING

Workstream
Comms

Workstream
Rewards

Country HR

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Diversity, Non-Discrimination, and Inclusion

SOCIAL REPORTING

Diversity & Inclusion Program

30%
Women inmanagement
positions

D&I PROGRAM:
Driving positive change

OUR COMMITMENTAt Nexperia, having “the right team” means embracing
a diverse range of people, perspectives, and cultures.
As a global company powered by innovation, we aim to foster
inclusive working environments where all people can be authentic,
develop professionally and personally, and work together toachieve collective goals.

OUR GOALSDIVERSEWORKFORCEOUR APPROACH

Maintain inclusive,
diverse, and fairhiring practices

FOUNDATIONDiversity Goals
by 2030

COMMUNICATIONSLEADERSHIP

Empower Leaders
to champion
Diversity andInclusion within
their teams

20%
INCLUSIVE
CULTURE

Support pay
equality

Women in R&D/
engineering
positions

Foster an inclusive
culture and activate
D&I ambassadors

Our roadmap includes concrete targets for thenumber of female employees in departments
where women are currently underrepresented.
By 2030, we aim to increase the numberof female employees in our research anddevelopment (R&D) and engineering
departments, management positions, andExecutive Management Team (EMT).

107

Helene Heyer
Senior Director, Global Head of HR, Technology and Operations“I am proud to work for a company that cares about
gender diversity in leadership positions.
As an HR professional and a mother, I do believethat women leaders are critical to the success of
our company, by bringing different perspectives
and experiences that enable more creativity,
support diversity of thoughts in problem solving andultimately drive better solutions. By encouraging andsupporting women in leadership positions, we will
foster a more diverse and inclusive workplace, which
is needed in the high-tech industry.
I am also excited to be part of Nexperia’s Global
Women Initiative group to help support women’sdevelopment, coaching and mentoring. By building
a strong network and sharing best practices, womenat all levels of leadership can gain experience andconfidence in reaching one’s full potential and makea stronger impact on our company.”nexperia | Sustainability Report 2023

During the reporting year, we
accelerated our D&I Program byprioritizing the areas of hiring practices,
inclusive culture, and communication
with the following company-widemeasures:

Diversity, Non-Discrimination, and Inclusion

SOCIAL REPORTING

Approach

Approach

Approach

Maintain inclusive, diverse, and fairhiring practices

Foster an inclusive culture andactivate D&I ambassadors

Communications

Measures

Measures

Measures› Conducted an unconscious bias
awareness session for the Global
Talent Acquisition team.

› Nexperia Manchester set up a
Women in Nexperia Employee
Resource Group (ERG) for female
employees in Manchester (allroles and departments) to discuss
professional development resourcesand opportunities and empower eachother.

› Integrated D&I questions into theCode of Conduct training, with afocus on unconscious bias.

› Updated our hiring processes, suchas implementing a global guideline
and automated “structural interview
feedback” in our HR system.
› Updated our job descriptions andadverts with more inclusive language
and D&I statements.
› Activated D&I ambassadors within
the Talent Acquisition (TA) team ateach site to implement initiatives
and campaigns, such as “Female
colleagues Interview in China”(WeChat Campaign) and “Nationaland ethnical diversity video
campaign.”› Engaged our TA D&I ambassadors
in continuous professional
development and D&I certifications.

› Nexperia Malaysia was recognizedby the Ministry of Human Resourcesat the Life at Work Awards (LAWA).
As the second runner-up, Nexperia
Malaysia was lauded for its female
empowerment initiatives, including
mentorship, leadership development
programs, and educational and skill
development.
› Nexperia Philippines introduced aCommunication Philosophy, which
engages and empowers individuals in
the art of meaningful interaction. The
site also continues nurturing young
and newly graduated engineers
through comprehensive training andexpert guidance.

› Launched Women in Nexperia ERG in
early 2024.
› Launched Pride ERG.
› Celebrated various cultural andreligious practices through employee
communications channels and social
media.

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Diversity, Non-Discrimination, and Inclusion

SOCIAL REPORTING

Activities for 2024 and beyond

Building on the strong D&I foundation we laid in
2023, our efforts in 2024 and beyond will focus on
the following measures to reach our D&I goals:

Approach

Approach

Approach

Maintain inclusive, diverse,
and fair hiring practices

Empower leaders to champion
D&I within their teams

Foster an inclusive culture andactivate D&I ambassadors› Reaching diverse talent throughalternative and specialized
channels and campaigns.

› Establishing a Female
Leadership Program.

› Cultivating employee feedback
through a D&I survey.

› Embedding a D&I focus into
People Managers’ materials.

› Scaling our knowledge databaseof D&I content through ourinternal Sharepoint environment,
community pages, and external
D&I page on our career website.

› Updating recruitment guidancefor hiring managers with astronger D&I focus.
› Continuing unconscious bias
campaigns for recruiters andhiring managers.
› Scaling our data analytics in the
D&I space.

› Updating the Nexperia Academy
with microlearning on culture
and inclusion, which we will
integrate into onboarding andtalent management procedures.

› Conducting mentorshipprograms (target groups to be
defined based on D&I survey
results).

› Scaling D&I ambassadors andemployee resource groups(ERGs).
› Establishing Global Womenin Nexperia ERG, Pride ERG(Europe/US), and Neurodiversity
ERG.
› Hosting leadership talks at
various sites, such as TeaTalkwith Senior Female Leaders in
China.

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Diversity, Non-Discrimination, and Inclusion

Our approach:ensuring equal opportunity
for all

We have developed our holistic D&I
strategy to go beyond our existing
decentralized approach. In addition
to increasing underrepresented
demographics, we focus on topics
including psychological safety,
awareness, and broadening our cultureof acceptance.

Our global workforce is diverse in professional
discipline, nationality, gender, race, culture,ethnicity, language, age, religion, and sexual
orientation. We embrace this variety, as
demonstrated in our EMT and Senior Management
teams which feature diverse genders, nationalities,
and age groups.

Senior Management
by Nationality (Regions)

Senior Managementby Gender

17%
37%
52%

83%

To further embed anti-discrimination,
diversity, and inclusion into ourcompany DNA, we have adopted
internal procedures and guidelinesthat reinforce our values. We mirror
these expectations in our Sustainability
Policy and standards of behavior andetiquette in our Code of Conduct.
Through these guiding principles, wewant all employees to enjoy a safe,
open, and equitable workplace and feel
confident reporting any infringementson their rights. When incidents do
occur, we ensure all employees
can discretely report all forms of
discrimination and communicate withmanagement without fear of reprisal,
intimidation, or harassment. To achieve

12%
ASIA

MALE

AMERICAS

FEMALE

EMEA
Total number of senior managers in 2023: 1.086

SOCIAL REPORTING

this aim, all Nexperia employees areencouraged to “speak up” and reportany incidents of discrimination via our
external whistleblowing platform, theSpeakUp Line, where they can leavean anonymous message, contact theirlocal Ethics Liaison Officer, or addressincidents directly with their manager.
Our SpeakUp Line is described in moredetail in the chapter “Business Integrity
and Ethics” and our Whistleblowing
Policy.
Additionally, the programs we use tomonitor labor and human rights at
Nexperia and across our supply chain(described in the chapter “Responsible
Sourcing and Supplier Engagement”)
also include the topics of diversity andnon-discrimination. These programs
include our Social Responsibility
Auditable Standard Policy and due
diligence procedures that accompany
our RBA membership, including RBA
Self-Assessments.

111

Tomas Sheppard
Talent Acquisition Manager“Diversity & Inclusion is a vital topic for a global company
like Nexperia. D&I in the workplace can help create
an environment where all employees feel equally
involved, supported and represented without having toconform or change who they are to fit in and succeed.
When employees feel comfortable and appreciated in
the workplace they have an increased ability to share
more openly, drive innovation and challenge the statusquo with their diversified thoughts and ideas. This
environment ultimately increases employee satisfaction,
retention and confidence in creativity enabling us to
seize new opportunities and grow together.
Everybody performs best when they can proudly bethemselves at work. Having a PRIDE Network in a largeorganisation such as Nexperia is important as it can
provide a safe space for LGBTQ+ employees and allies toconnect on important topics whilst sharing advice whenneeded. The Network acts as a community for LGBTQ+
employees to connect and work toward growing a
support network for those who may need it.”

nexperia | Sustainability Report 2023

Targets, data development, and KPIs
The topics of diversity, equality, and anti-discrimination
all include fair pay. To ensure our compliance, we
maintain a pay philosophy based on fair pay principles,
covering base pay, short-term, and long-term elements.
Additionally, we use third-party data to compare ourwages and salaries against industry benchmarks.
We determine our remuneration and any associatedindividual changes based on objective criteria, regardlessof gender. We aim to balance global and local incentives
with our remuneration levels, supported by stringent
checks and safeguards.

Diversity, Non-Discrimination, and Inclusion

As part of our Nexperia D&I strategy, we aim to eliminate
any possible gender pay gap. We also understandthat gender pay equality cannot be achieved throughpolicies and guidelines alone. The actions we are taking
encompass promoting pay equity and improving gender
representation across all levels of our company. To
support pay equity, we have introduced a new talentreview model and merit matrix system to further
objectify our performance measurement and changes toindividual remuneration.
Improving gender representation across all levels of
our company is an important step in achieving gender
pay equality. One of the challenges we are actively
addressing is the low percentage of female workers in

SOCIAL REPORTING

the semiconductor industry. We continuously benchmark
the external talent market to identify opportunities tocorrect the gender representation imbalance. Currently,
40.75% of our global employees are women.
Correcting the imbalance in gender pay equality
includes focusing on the number of women in senior
management positions. Many of these are engineering
roles, where the percentage of women in the talent poolis significantly lower than in other fields. At the sametime, this challenge also presents new opportunities.
As part of our Nexperia D&I strategy, we have set clear
targets to increase the percentage of women in ourleadership and engineering roles.

Diversity and inclusion campaigns

PROMOTING CULTURAL AWARENESS
We create opportunities to learn about the different people andcultures at Nexperia through internal and external channels,
such as our employee newsletter, X.press, and social media
accounts. These initiatives - combined with our employer branding
campaigns and accompanying materials - celebrate D&I whileraising cultural awareness. As part of this approach, we use video,
photography, and other content to show the diversity of ourworkforce (across backgrounds, positions, and locations), allowing
individuals to share their unique stories and perspectives.

HIGHLIGHT: NEXPERIA CELEBRATESINTERNATIONAL WOMEN IN ENGINEERINGDAYTeamNexperia values and recognizes the strong women in
our engineering teams. To support International Women in
Engineering Day, we share the stories of female engineers at
Nexperia, celebrate their achievements, and encourage newgenerations of women to take up careers in engineering. In 2023,
we shared stories internally and externally, covering why they love
what they do and how they entered the field of engineering.

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We are committed to achieving a minimum of 30%
women leaders by 2030. This target is reaffirmed in oursocial KPI, stipulated by Nexperia's first SustainabilityLinked Loan (see chapter “ESG Risk Rating”). In addition,
we are committed to increasing the percentage ofwomen in R&D and engineering to 20% by 2030. To reachthese concrete targets, we have developed a holistic
approach for 2024 and beyond, including a dedicatedfemale leadership program and Women in Nexperia
Employee Resource Group. We are also exploring targets
on geographical representation, generation, and age
cohorts. With 25.1% women in management positionsin 2023, we were able to increase the number of female
leaders from 24.1% in 2022, and from 17.6% (2022) to
18.6% in 2023 for women in R&D and engineering.

Diversity, Non-Discrimination, and Inclusion

We believe these goals also need to be reflected at
our highest levels of management. In 2023, we had a
8.3% share of women in our EMT and aim to continue
increasing gender diversity in our EMT until 2030.

SOCIAL REPORTING

Women in management positions
25.1%
currently

30%
by 2030

Women in R&D/engineering positions
18.6%
currently

Diversity and inclusion campaigns

WOMAN IN NEXPERIA EMPLOYEERESOURCE GROUP (ERG)

ACKNOWLEDGING RELIGIOUS CELEBRATIONSAND CULTURAL TRADITIONSIn Q4 2023, over 20 women from Nexperia sites worldwide
joined forces to start the Global Woman in Nexperia Group.
EMT member Irene Deng is a co-founder and outspoken
ambassador of the group. The ERG aims to inspire, educate,coach, and connect with all the women at Nexperia andinspire them to achieve their full potential.

In 2023, we began showcasing various religious celebrations
and diversity days through our internal channels and employee
systems. This initiative aimed to acknowledge the diverse religious
backgrounds and cultural traditions of our employees from aroundthe world. We will continue these efforts in 2024, extending theirreach globally and including more internal channels.

20%
by 2030114

nexperia | Sustainability Report 2023

Guaranteeing
labor and humanrightsRelevant GRI
Standards:
2-23, 2-24, 2-25, 3-3,
407-1, 408-1, 409-1

SDG 3, 4, 5

Guaranteeing labor and human rights

SOCIAL REPORTING

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Guaranteeing labor and human rights

Overview and management approach
Around the world, companies play a vitalrole in implementing and respecting
labor and human rights. As a globalorganization, Nexperia understands
that labor and human rights are someof our most important topics, bothwithin our own company and ourpartners across our supply chain. We
embrace the responsibility to upholdhuman rights, prevent violations, andsafeguard people and the environment.
We also strive to make sustainability
and social responsibility part of our daily
work (more details in the “Responsible
Sourcing and Supplier Engagement”
chapter). Overseen by our general HR
Management and our new Human Rights
Office and Compliance management
structures, our programs aim to ensure
we treat all people with respect anddignity.
We have formalized this approach inseveral concrete policies that guideour processes. For example, the Social
Responsibility Auditable Standard covers
our employees and members of our
supply chain. It details our commitment
to a transparent and safe workplaceand supply chain, including standards
for human rights, equal pay, non-discrimination measures, training, andmore. By committing to this standard,
we are also more closely aligned with
the International Labor Organization(ILO) standards. These efforts are also
reflected in our Code of Conduct andSustainability Policy.
The Code of Conduct stipulates that
our remuneration is consistent with theprovisions of all applicable wage laws,
including those relating to minimum
wage, overtime hours, and legally
mandated benefits. We also enforce astrict working hours policy in compliancewith local laws and guarantee all
Nexperia employees the right tocollective bargaining.
Our Sustainability Policy commits us tomaintain an open and ongoing dialogue
with our employees and workers’
representatives. As transparency is avital topic for our employees, we takesteps such as adhering to minimum
notice periods for relevant working
changes and including our employees
in important company decisions. In
addition to these measures, the workers’
councils at our sites work closelywith Nexperia management teams tocreate and maintain positive working
environments for all employees.

SOCIAL REPORTING

Nexperia’s commitment to human rights
Since our foundation in 2017, we have been dedicated toprotecting human and labor rights. We publicly reinforced thiscommitment by signing the UN Global Compact and supporting
the UN’s 2030 Agenda for Sustainable Development and its
17 Sustainable Development Goals (SDGs). Our priorities andprotocols in this area are detailed in our company-wide Code of
Conduct, Sustainability Policy, and Policy Statement on humanrights and environment-related due diligence obligations(applicable to Nexperia Germany GmbH). We have aligned these
documents with leading international human and labor rights
frameworks such as the Universal Declaration of Human Rights(UDHR), the ILO Labor Standards, the UN Guiding Principles
on Business and Human Rights, the OECD Guidelines forMultinational Enterprises, and the SDGs.

OUR COMMITMENT TOPROTECT HUMAN RIGHTS
In 2023 and early 2024, Nexperia Germany
implemented several measures to comply with theGerman Supply Chain Due Diligence Act. They included
appointing a Human Rights Office and publishing a
Policy Statement on human rights and environmentrelated due diligence obligations. This document
defines the steps and measures we take to identify,
prevent, and mitigate potential human rights abuses
across our business activities.

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117

SOCIAL REPORTING

Relevance of human rights

Human rights due diligence

Remedy and grievance mechanisms

According to the UDHR, human rights arefundamental rights that every individual
possesses from the moment they are born.
These include the right to dignity and liberty,
as well as fair and equal treatment. Nexperia iscommitted to protecting and promoting theserights while contributing to the betterment ofsociety.

We employ a human rights due diligenceapproach to mitigate any unfair treatment
or harm to individuals. It comprises five key
elements:

Any violations of human rights or othertopics covered in our Code of Conduct canbe reported via our grievance mechanisms,
described in the “Business Integrity and Ethics”
chapter.

Implementation within our organization
We implement our measures, processes, andpolicies relating to human and labor rights
based on our Social Responsibility Management
System. It includes policies, standards, andprocedures such as our Code of Conduct,
Supplier Code of Conduct, Sustainability Policy,
and Social Responsibility Auditable Standard.
Since joining the Responsible Business Alliance(RBA) in June 2017, we have also aligned ourSocial Responsibility Management System withthe provisions of the RBA Code of Conduct.
Our newly established Human Rights Office(HRO) is tasked with further developing
Nexperia's human rights strategy andmeasures. The Human Rights Office consist of
our Director Legal and Head of Sustainability.

1. Assessment to identify and prioritize risks› At our manufacturing sites, we conduct
regular RBA self-assessments and internal
audits for labor, human rights, and social
responsibility compliance according to the
RBA’s Validated Assessment Program (VAP).
› For our suppliers, we conduct annual risk
assessments and, based on the results,
perform social responsibility audits (seethe “Responsible Sourcing and Supplier
Engagement” chapter).

Assess1

2. Actions to create positive impacts
3. Tracking to measure our progress
4. Communication to share our progress
5. Engagement with stakeholders to increase
our positive impacts
In addition to human rights topics, our due
diligence approach applies to all aspects of
Nexperia's Code of Conduct and Supplier Codeof Conduct.

4

5Engage3
Communicate

Track

2

Act

nexperia | Sustainability Report 2023

Health & Safety
Relevant GRI
Standards:
3-3, 403

SDG 3, SDG4

Health & Safety

Overview andmanagement approach
The health and safety of our employees
is our highest priority. We continuallywork to ensure that everyone at
Nexperia – our employees, temporary
workers, interns, partners, and visitors –feels safe in a secure environment. Our
focus encompasses medical, physical,
and emotional or mental health. In our
Code of Conduct and Sustainability
Policy, we commit to providing healthyand safe working conditions to protect
people from harm, promote all formsof health, and foster a positive work-lifebalance.
In keeping with these aims, we assurea very high standard of occupationalsafety, which is integral to ouroperations. We systematically rate
all workplaces with risk assessment
procedures and ensure we have thenecessary health and safety measures
for all positions. Taking the hierarchyof controls into account, we takemeasures in the following order to be
most effective: elimination, substitution,engineering controls, signage andwarnings and/or administrative controls,
and personal protective equipment.

SOCIAL REPORTING

We enforce mandatory safety
training for all employees before
they commence work and base all
our safety training and activities
on local risk assessments. Throughthese actions, we follow ourcorporate health and safetyphilosophy of “Vision ZERO.” This
prevention approach integrates
the three dimensions of safety,
health, and well-being at all levelsof our work.
We monitor, follow-up, and report casesthat resulted in first aid, restricted
workdays, medical treatment beyond
first aid, lost workdays, and fatalities.
Along with our internal policies,
we promote safety through ourmembership in the European
Semiconductor Industry Association(ESIA). Every year, we provide ESIAwith safety data from our European
manufacturing sites, including thenumber of recordable cases, days awayfrom work, working hours, FTEs, total
case incident rate, severity rate, andother indicators.

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Health & Safety

Since Nexperia’s foundation, we
have supported the well-being of ouremployees to ensure they feel secure,
happy, and healthy at work. We organize
various well-being and health-related
services at our locations, including onsite nursing and doctors, medical andhealthcare events such as vaccinations
and screenings, and healthcare services.
More specific examples can be foundlater in this chapter.

Our Health and Safety (H&S)
Management System is a component of
our EHS Management System (detailed
in the “Environmental Management
at Nexperia” chapter), which isan integral part of our integrated
Nexperia Management System. Our
H&S Management System covers ourheadquarters and manufacturing
sites and is certified to ISO 45001,
the globally recognized Occupational
Health & Safety Management Systems
standard. Compliance with therequirements of the management
system standard is verified throughexternal audits by the certification body.
We have also developed robust healthand safety programs and initiatives
to safeguard our team members,
partners, contractors, and visitors.
This approach ensures we follow ourinternal programs and results in thesame way we follow all national andinternational laws and regulations.
Our non-certified sites – primarily ouroffices – must still comply with minimum

SOCIAL REPORTING

environmental and occupational healthand safety requirements using the “EHSManagement System Light” approach.
We have converted this procedure intoa checklist detailing the key issues theselocations must evaluate. It also helps
their responsible personnel check anddocument our compliance with laws
relating to occupational health andsafety and the environment.

Elimination

Substitution

Engineering
Controls

Administrative
Controls

Hierarchy of controls

Personal
Protective
Equipment

In addition to audits and reviews required by the
Occupational Health and Safety Management Systems
standard (ISO 45001), we verify the effectiveness of our
H&S Management System using our Social Responsibility
Auditable Standard. We also perform self-assessments aspart of our Responsible Business Alliance (RBA) membership.
The standardized RBA self-assessment approach rates companies
from 0 to 100 – with 100 being the highest. In 2023, Nexperia
achieved a risk score of 90.4, equating to a low-risk assessment.
Both our RBA membership and Social Responsibility Auditable
Standard are described in more detail in the “Responsible
Sourcing and Supplier Engagement” chapter.

90.4
RBA Risk Score
2023

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As we manage health and safety using
our EHS Management System andstructure, the same organizational
setup and positions described in
the “Environmental Management
at Nexperia” chapter apply to thismaterial topic. At the site level and forspecific health and safety matters, weposition trained experts to supervise
protective measures and create safe andergonomically friendly workplaces. We
also guarantee our employees access to
occupational health care, which occurs
either directly on-site or in a nearby
contracted facility.

Nexperia’s Social Responsibility
and certified EHS Management
System include establishinga strong data collection base,consistent and standardized
reporting from each manufacturingsite, ongoing training, and internaland external audits. In addition,
we guide our daily business using
procedures from relevant healthand safety topics, such as chemical
spills, emergency response
systems, pandemics, and more.

Health & Safety

Chemicals are essential in our
manufacturing processes, development
activities, and laboratories. We workwith chemicals in a specialized manner,
following our Chemicals Management
System. To protect our employees
and facilities, we have strict safety
protocols based on risk assessmentand management measures, including
technical safety measures, clear
procedures, and continual education andtraining. We also prioritize emergency
response skills related to chemical
management, such as conducting
regular evacuation exercises andpracticing for emergencies. Additionally,
we require all our industrial sites to have
employees with professional emergency
skills, and our larger offices musthave employees trained in emergency
response.
Guided by our Management System
and Vision ZERO, all employees must
immediately report accidents, injuries,
or any unsafe equipment, practices, orconditions to a supervisor or appropriate
team member. These measures haveyielded exceptional results: zero
fatalities since our foundation and zerohigh-consequence work-related injuries.
These data points include employees,
temporary workers, and contractors.
In 2023, we also recorded zero workrelated ill health incidents.

SOCIAL REPORTING

Training on H&S
We define our various training courses in individual
learning plans that apply to all employees.
We provide our employees with information
about their site, legislation, and responsibilities,
combined with specific knowledge about safe
work systems, clean room safety, working withchemicals, handling machinery, first aid, andemergency procedures. In addition, we frequently
communicate all relevant health and safety topics
and developments and reinforce security andsafety. We provide all training and communicationin an employee’s native language or another theycan easily understand. For visitors and external
parties working for or on behalf of Nexperia, we
supply all relevant health and safety information,and some must also complete appropriate training
before commencing work in our facilities.

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Ongoing COVID-19
response management
The COVID-19 pandemic persisted in 2023,
although with notable improvements compared
to previous years. Nevertheless, we continued
maintaining a safe working environment whilenavigating the pandemic's unique challenges.
At the beginning of the year, we saw only alimited number of cases that did not impact
our operations. Despite this positive trend, we
remained vigilant and equipped all employees
at our manufacturing sites and offices with thenecessary tools and protocols to prevent spreading
the virus. Building on our experience from theinitial outbreak in 2020, our crisis management
team, supported by dedicated local teams,
continued monitoring the local, national, andinternational COVID-19 risk landscapes. Our crisis
management team ensures Nexperia complies withall remaining COVID-19 regulations.
We extended our working-from-home policies
throughout 2023. They include providing thenecessary IT infrastructure to facilitate digitalcollaboration and support e-learning opportunities
for our employees. We will continue adapting to
the situation as it evolves, prioritizing the safety
and welfare of our employees while aligning withthe most current guidelines and recommendations.

Health & Safety

SOCIAL REPORTING

Our approach:safety in all situations
SEVERITY RATE
Number of lost workdays
per 100 full time equivalent
employees (ESIA definition)

TOTAL CASE
INCIDENT RATE (TCIR)
The number of new recordable
cases per 100 full timeequivalent employees

LOST WORKDAYS
Total number of workdaysthat employees miss due
to occupational injuries orillnesses

We work to eliminate all forms of hazards via
regular audits, safety walks, and various open
communication channels. Nevertheless, although
they are rare, we acknowledge that health andsafety incidents can still occur. Therefore, we
study all cases – including near-misses and firstaid requirements – to improve our management
systems and better understand their causes
and impacts. Additionally, we check for all
possible high-potential events and monitor our
preparedness.
At the same time, we also focus on our employees’
and temporary workers’ basic needs to maintaintheir health and safety according to occupational
health and safety labor standards. For example,
we provide suitable working conditions with readyaccess to clean toilet facilities, potable water, andsanitary food preparation and storage facilities. In
addition, worker dormitories provided by Nexperia
or a third party must be clean and safe, including
emergency exits, adequate heating and ventilation,and reasonable personal space.
We monitor and measure our health and safety
performance using various data points and specific
KPIs. We record and categorize all health and safetyincidents via local data management software orcollection. We report all incidents to the relevant
authorities, including any contractor fatalities, ofwhich there has never been a recorded incident.

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For 2023, we set a health and safetytarget to reduce our total case incident
rate (TCIR) by 10% below the median of
the past five years, equating to a rateof 0.18. Over the year, we achieved anaverage total case incident rate of 0.26
across all sites, slightly higher than ourgoal. Most cases recorded were minor
incidents in the categories of “fall orslip” or “being struck by/against/caught
in, under, or between objects.”
We also compare our data with theEuropean Semiconductor Industry
Association, for which we were well
below average over the last few years.
In round numbers, we recorded 20
lost workday cases (LWC) in 2023, an
improvement compared to 25 in 2022.
In addition to our KPIs, we measureand quantify our Severity Rate, which
was 2.67 in 2023 and lower compared
to 2022. Our individual sites often use
further KPIs to measure their progressin specific focus areas or against internal
targets.

Health & Safety

We identify and assess potential
risks and emergency situations andcontrol them through appropriate
design, engineering, administrative
controls, preventive maintenance,
safe work procedures, and ongoingsafety training and drills. Our plansand procedures aim to minimize all
harm to people, the environment,
and property. We assess all healthand safety risks as part of our ISO
certification and our responsibility
as an employer.

A general assessment is also part ofour Business Continuity Procedures. In
our daily operations, the most common
work-related incidents (in order of
frequency) include falling and slipping,
being struck by or against an object,and being cut by sharp edges or objects.
To prevent high-consequence injuries,
we focus on accidents such as possible
exposure to fires, chemical burns,
electric shocks, and toxic fumes. While
we continually work to eliminate thesehigh-impact risks, we also maintainattention on regular incidents tominimize all cases.

To manage risks, we perform
comprehensive annual risk assessments
at each site using the repetitive PDCA
(Plan-Do-Check-Act) process. These
assessments play a significant rolein evaluating and maintaining theeffectiveness of our management
systems. We also empower our
employees to prevent workplace
hazards and incidents by providing
several channels to report concerns oropportunities for improvement. They
include our anonymous SpeakUp Line,
which is described in more detail in our
Code of Conduct and the “Business
Integrity and Ethics” chapter. Employees
can also report directly to their site’s
Occupational Health and Safety (OHS)
representative, participate in sitelevel safety committees and councils,
or use one of our official grievancemechanisms. In all cases of concern, we
ask our employees to stop working andspeak up immediately.

SOCIAL REPORTING

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Projects
Across our global operations, we run various
initiatives to support our employees, their families,
and local communities. One popular example is
our Employee Assistance Program (EAP), which
provides online guidance on important issues,
including health, finances, child care, elderly
relatives, legal matters, and relationships. It also
features other health-related courses, such as
yoga and general fitness. While we engage witha range of suppliers in our EAP, our goal is toprovide independent support that is easy for our
employees to access. The EAP also includes online
support and options to speak with an independent
advisor if needed.
We also promote health and well-being at our
locations by holding campaign events. For example,
our site in Nijmegen (Netherlands) organizes a biannual well-being week featuring various activities
for the body and mind. In 2023, we offered
mindfulness training, an anti-stress workshop,
Pilates courses, instructions for ergonomic work
posture, a dietician presentation, healthy lunches,
various screen-off breaks such as puzzles, andmuch more.

Health & Safety

SOCIAL REPORTING

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Health & Safety

IN ACTIONIn Malaysia, our site in Seremban
holds regular health talks
throughout the year. Once a
year, it organizes a health andsafety fair where employees canlearn and participate in different
activities to raise health and safety
awareness.

Total Case Incident Rate

NEXPERIA

ESIA

0.75

SOCIAL REPORTING

Our health and well-being approach also incorporates
preventative measures based on each site’s uniquematerial issues. These include managing vaccinations
for COVID-19 and yearly influenza waves. Our
measures also encompass more general prevention
management, such as at our Manchester (UK) site,where employees can access mental and physicalhealth support and guidance through external
providers.
We also enhance our first aid capabilities by training
selected employees as mental health first aiders. At
the same time, our primary focus is on maintaininga healthy work-life balance to avoid the stage where
mental health first aid is necessary. For example, ourNijmegen (Netherlands) site offers employees various
leisure activities such as table tennis and table soccer
to encourage off-screen breaks. To support regularsports and movement, it also arranges weekly kickboxing group lessons. At Nexperia’s Hamburg site(Germany), the HR team organized a health day for
employees in cooperation with a health insurance

0.50

0.25

Nexperia monitors the total case incident rate (TCIR) as a Key Performance Indicator (KPI)
for the effectiveness of its OHS Management System. Comparing Nexperia’s TCIR with ESIA’s
TCIR, enables the evaluation of the maturity level of Nexperia’s OHS Management System.

0.00
2018

2019

2020

2021

2022

2023

To improve the accuracy of Nexperia’s TCIR data, we reviewed and updated the historical
records from 2017 to 2023 for all sites, using the Sustainability Tool 2.0. Previously, oursites reported lost workday cases (LWC) due to severity and resulting time away from work.
Recognizing the importance of comprehensive reporting, we have now included restricted
workday cases (RWC) and medical treatment cases (MTC) as per the Occupational Safety and
Health Administration's (OSHA) TCIR criteria. This has led to the revision of historical data
across all sites to reflect these additional categories.

124nexperia | Sustainability Report 2023

Health & Safetycompany. These efforts aim to reduce stress,
improve physical and mental health, and prevent
work disruptions and extended absences. Our sitein Manchester (UK) also has a focus on these areas,
managing cases with processes to help employees
successfully return to work in cooperation with theirline managers.

SOCIAL REPORTING

Lost Workday Cases

WORKDAYS

30.00

20.00

Health and safety are crucial components of our secureand sustainability-oriented business. Moving forward,
we will continue to assess and improve our health andsafety practices to meet the evolving needs of our
stakeholders and the world around us.

10.00

0.00
2018

Severity Rate

NEXPERIA

ESIA

2020

2021

2022

Recordable Cases

10.00

40.00

7.50

30.00

5.00

20.00

2.50

10.00

0.00

2019

2023

WORKDAYS

0.00
2018

2019

2020

2021

Similar to the TCIR, Nexperia monitors the severity rate (SR) as a second indicatorof the effectiveness of its OHS Management System.

2022

2023

2018

2019

2020

2021

2022

2023

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Corporate citizenship

SOCIAL REPORTING

Our Responsibility
and Engagement –Corporate CitizenshipSocial activities on the local,
national, and global level
We believe it is important to give back to thecommunities where we live and work. We do thisby supporting various social and environmental
initiatives and encouraging employees to take partin activities that benefit their communities.
Throughout 2023, Nexperia and its employees
took action at local, national, and international
levels. Together, we contributed to the Company’s
uncompromising support for the UN’s Sustainable
Development Goals (SDGs).
Our corporate citizenship actions primarily focus on:
SDG 3 – Good health and well-being
SDG 4 – Quality education
SDG 5 – Gender equality
SDG 12 – Responsible consumption and production
SDG 13 – Climate action“At Nexperia, we aim to makea difference! We believe in givingback to the communities where
we operate as a company –and live as citizens.”

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Corporate citizenship

Examples of Nexperia's corporate citizenship actions in 2023
Health and well-being

Education

SDG 3 and SDG 4

SDG 4

Our employees’ mental andphysical health is one of our highest
priorities. Therefore, several of oursites offered awareness days or
programs in 2023. For example, in
May, our site in Seremban (Malaysia)
held a health screening programfor employees in collaboration with
the LPPKN (National Population
and Family Development Board),
reaching 250 people. The screenings
featured various indicator checks,
including Body Mass Index (BMI)
assessments and tests to evaluate
stress, cholesterol, and glucose
levels.

In addition to advancing our
employees’ professional andpersonal development, we workto nurture the bright mindsof tomorrow. The Hamburg
team (Germany) hosted 40
brilliant children for Kids’
Future Day 2023 in cooperation
with the Micro:bit Educational
Foundation. Working in small
groups, the children could
either build solar-powered
catamarans and take part in arace or receive a crash course incomputer programming. Thesefamily days at our sites arevaluable opportunities to honechildren’s curiosity and create
fun environments that foster
interest in technology.

Several other sites, such as
Budapest, Nijmegen, andManchester, organized healthdays or sporting events during thereporting year.

#MentalHealthMatters
Raising Awareness

SOCIAL REPORTING

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Corporate citizenship

Diversity and inclusion

Environment

SDG 5

SDG 12, SDG 13

We believe embracing diversity, gender equality, and inclusion
is fundamental to our growth as a company and as people.
A recent milestone for Nexperia was the foundation of our
LGBTQIA+ community by employees from around the world(see the chapter "Diversity, Non-discrimination and Inclusion"
for more details). The community's first meeting was inNovember 2023 and aimed to stimulate diversity and inclusion at
TeamNexperia.

Keeping the environment clean isa major focus of TeamNexperia in
Malaysia. Thirty employees from our
Seremban site volunteered for a CSR
beach cleaning day at Pantai Saujana.
The beach is a 40-minute drive from our
premises, and we organized the sessionin collaboration with Port DicksonCity Council. In parallel, around 100
employees from the Seremban site took
part in a Hiking & Cleaning initiative,
combining exercise with picking up litter
for a cleaner natural environment. In
Cabuyao (Philippines), our EHS Team
organized a tree-planting event. Working
with community volunteers, 22 Nexperia
employees from our local management
team and various departments planted
over 150 hardwood seedlings provided
by Nexperia. Their hard work will directly
contribute to a greener and healthierlocal environment.

L

G

B

T

Q

I

A

+

LesbianGay

Bisexual

Transgender

Queer orQuestioning

Intersex

AsexualPlus e.g.
Pansexual

With a similar goal, members of our Communications andBranding team initiated a pilot project on International Women’sDay. At our headquarters in Nijmegen (Netherlands), theteam launched a discussion and networking event to amplify
the conversation on equality and help women advance in theorganization. We also promoted female empowerment on
International Women in Engineering Day, sharing stories of ourfemale engineers, celebrating their achievements, and hoping to
inspire a new generation of young women to pursue careers inengineering.

SOCIAL REPORTING

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Corporate citizenship

SOCIAL REPORTING

Community engagement“Join us in creating
a greener future!
Be part of the solution,
not the pollution.”

SDG 4 and SDG 13

In Dongguan (China), Nexperia
employees work with children in the
Yuxing Special School. During theirbreaks, volunteers spend time with thechildren to play games, study, and try
new food. Additionally, they planted
flowers and plants to create a greener
campus. Nexperia employees also
engage in community actions such asproviding companionship to elderly
people and donating books and clothes
to remote mountain towns and disasterareas.
Employees in Hamburg (Germany)
donated €6,000 to the local children’scharity Dunkelziffer e.V. The charity,
launched in 1993, offers therapy andsupport for children and young people
affected by sexual violence. Nexperia’s
Hamburg team generated its donation
throughout the reporting year via acollection and recycling campaign
for electronic and metal waste. Our

employees were proud to contribute to
the charity’s crucial work of providing
young people and their families withemergency services, safe spaces forcounseling, and legal support.
Nexperia also made direct financial
contributions to important social andhumanitarian causes. In 2023, we
donated €50,000 to the UNHCR for
emergency response and recovery
following the devastating earthquake in
Turkey and Syria.

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Reportingnexperia | Sustainability Report 2023

Responsibility of Management

Responsibility of Management
Relevant GRI
Standards:
2-9, 2-10, 2-11, 2-12, 2-18,
2-24, 2-25, 2-26, 3-3

Effective governance is a critical aspectof a sustainable business strategy.
At the heart of good governance lie
the principles of responsibility andaccountability. A company's board
and top management are crucial toensuring it operates sustainably and in
the best interests of its stakeholders. At
Nexperia, we follow this approach with
our Board and Executive Management
Team (EMT).

SDG 9

Our Board of directors for Nexperia
Holding B.V. and Nexperia B.V. comprises
the Chief Executive Officer and Chief
Legal Officer. While retaining overall
responsibility, Nexperia’s Board of
directors assigns specific tasks andprocesses to permanent committees,
whose members are appointed by the
Board. The Board has also established
Audit Committees for Nexperia
Holding B.V. and Nexperia B.V. and aCompensation & Nomination Committee
for Nexperia B.V.

GOVERNANCE REPORTING

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Responsibility of Management

Nexperia EMT
CEO
Xuezheng Zhang(Wing)BG Leader
BipolarPhilipp ObierBG Leader MOS
Fredrik Öberg

Chief Operations
Officer
Achim Kempe

Chief Commercial
OfficerPaul Zhang

BG Leader ICS
Irene Deng

BG Leader
WBG&M
Xuezheng Zhang(Wing) a.i.

Chief Financial
Officer
Stefan Tilger

Chief Strategy
Officer
Dan Jensen

Chief HR Officer
Xuezheng Zhang(Wing)

Chief Legal
Officer
Ruben Lichtenberg

Chief Corporate
Affairs
Jean-Pierre
Kempeneers

See chapter “Our EMT” for further information on
Nexperia's Executive Management Team.

At the end of 2023, there were changes to our EMT. Dr. Ke Jiang, Toni Versluijs, and Mark
Roeloffzen left Nexperia, and Philipp Obier joined the EMT as the new BG Leader Bipolar
Discretes, while Fredrik Öberg joined as the new BG Leader MOS Discretes. Additionally,in early 2023, Ronald van Cleef passed away unexpectedly. Dirk Wittorf, VP Corporate
Strategy & Chief of Staff, Strategy & Governance a.i., has since served as the interim Headof Strategy. At the start of 2024, Jean-Pierre Kempeneers joined Nexperia as Chief ofCorporate Affairs, succeeding Charles Smit, who retired.

GOVERNANCE REPORTING

To manage daily business decisions andrespond to urgent matters, the EMT (under
the chairmanship of the CEO) is entrusted withthe general management of the Company. This
includes deploying Nexperia’s strategy andpolicies and achieving its objectives and results.
In this function, the EMT oversees all operations
and reviews the Group’s global business results,
enabling it to make operational decisions andassess our overall performance. The individual
members of our EMT are introduced in the “Our
Executive Management Team” chapter.
The EMT, shown in the chart below, ensures weefficiently share business issues and practices
across our organization. The managerial
overview of sustainability through our EMT
is described in detail in the “Our Approach to
ESG” chapter. We have structured our EMT asa matrix organization with multiple layers ofmanagerial accountability and responsibility.
This approach allows us to maximize our focus
on our customers and the market, leveragecompany resources, and achieve excellence inall our core processes and support functions.

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Our matrix organization has three main
clusters:

Responsibility of Management

GOVERNANCE REPORTING

Nexperia Processes
PRODUCT
CREATION› Business groups (BGs) that are theentities responsible for achieving
business results.
› Core processes that build our corecompetencies and leverage the mosteffective ways of working to achieve
our business goals in product creation,order fulfilment, and sales andmarketing.
› Support functions for the BGs toachieve leadership positions in themarket. These functions are HR,
Corporate Development, Strategy,
M&As, Finance, Corporate Affairs,
Legal & IP (Intellectual Property), IT,
Equipment and Automation (E&A),
Master Data Management (MDM),
Quality, and Sustainability.

COMPANYSTRATEGY
BUSINESSMANAGEMENTORDERFULFILMENT

SALES &
MARKETING

BG Bipolar Discretes
BG Analog & Logic IC
BG MOS Discretes
BG IGBT & Modules
BG Power- & Signal Conversion

MARKETS &CUSTOMERS› Technology & IP

› Sales &› Account

Roadmapping

Operations plan

Management› Project, Portfolio,› Demand› Demand

Pipelining

Fulﬁlment

Generation› Project Execution› Sourcing &Procurement
Management› Factory Ops
FE/BE Internal
CORE
PROCESSES› Factory Ops
FE/ BE Ext Manuf.

SUPPORT PROCESSES
HRM | Finance | Corporate Affairs | IT | E&A | MDM | Quality | Legal & IP | Sustainability | Facilities

MANAGEMENT TEAM
As of February 2024, Nexperia operates in fourbusiness groups: BG IC Solutions (ICS), BG MOS
Discretes (MOS), BG Bipolar Discretes (BD), and BG
Wide Band Gap, IGBT and Modules (WIM).

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Responsibility of Management

GOVERNANCE REPORTING

Nexperia management model
Target setting› through benchmarking
KPI
by organizationand individuals(e.g., via BG, Finance, T&O)

› through technology
requirements

NEXPERIA’S THREESTRATEGIC FOCUS AREAS
1. Innovation, primarily supported by increasing R&D spending
2. Enhancing efficiency and driving further cost reductions
3. Growing our business in a sustainable and eco-friendly way

Gape.g., towards mostaggressive cost leaders

As part of this strategy, Nexperia aims to strengthen its
position with technology- and industry-shaping customers
by anticipating megatrend requirements in Electrification,
Connectivity & Digitalization, Industry 4.0 and Automation,
Sustainability and Energy, and Geopolitical specifics.

Action Plan
to close the gap

Nexperia
Gap Closure Cycle

Key organizational principles and policies

One process to come fromtarget setting, via gap identiﬁcation,to action plan and KPI setting
Vision/Mission &Objectives
Company
StrategyManagement

Nexperia management governance
From vision and mission to
strategy and action plans
Every employee contributes to
Nexperia’s strategic goals andits vision and mission

Action Plan &KPIs

All of Nexperia’s activities are
essential to supporting our overall
mission and strategy. Therefore,
we have created an organizational
structure comprising businessgroups and centrally led coreand support processes. Nexperia
is managed as a fully integrated
business.
1. Key decisions are made by the
EMT, which gives direction to thebusinesses, core, and support
processes.

2. We have a company culture andvalues led by our efficient andpassionate team to support our
mission and vision.
3. Our strategy enables us tooutline strategic directions andactivities to further enhance
Nexperia's competitive
positioning and achieve its
company objectives.
4. We have defined core processes(Product Creation, Order
Fulfilment, and Sales andMarketing) and several support
functions and processes.

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The leadership of our core and support processes is
responsible for:› Providing business-enabling technologies,
effective and efficient working methods, andtraining to ensure our competencies match ourstrategy and customer requirements.
› Determining the optimum balance between
central and decentralized resourcing.
› Providing cross-unit support, coordination, andlearning to leverage considerable company
advantages in decentralized activities.
Driven by our Quality Policy, our qualitycommitments ensure:› We aim for zero customer incidents in ourstandard› We promote that everyone is responsible for
quality› We have recognized leadership in quality› We maintain a company-wide focus on quality
The EMT underpins our commitment to responsible
corporate citizenship and our pursuit of a moresustainable future - economically, socially, andenvironmentally. To strengthen these efforts, theEMT rolled out a new Code of Conduct campaign
in 2023. Our Code of Conduct details Nexperia’s
core principles on integrity and ethics in businessconduct and governance. It guides our businessdecisions and actions worldwide and applies
equally to corporate actions and our employees’
behavior while conducting business. Further details
can be found in the “Business Integrity and Ethics”
chapter.

Responsibility of Management

Our ambition to satisfy our customers andstakeholders relies on the continuous operationof our critical and vital processes. Therefore, ourBusiness Continuity Management (BCM) acts
as a catalyst to anticipate, plan for, and react toany disturbances to our critical and vital businessprocesses. The BCM also defines appropriate
measures and procedures to sustain our operations
and enables us to proactively identify and mitigate
risks.
Each Nexperia site has identified the potential
risks in their factory operations that can impact the
supply of products to end customers. These risks
include physical factory asset risks within frontend and back-end operations, such as facilities
systems, utility infrastructure (electricity, water,etc.), regional risks (natural hazards), or othersupply risks (wafers, chemicals, gases). To maintainreadiness, we review, audit, and update these risks
periodically.
We categorize each site based on our assessedrisk and the size and magnitude of its operations.
Then, for each of the three category tiers - with tier1 meaning significant disruption to our operationand tier 3 representing low risk - we submit arange of requirements. They include defining crisis
teams and emergency plans, establishing processes
to restore operations, and various degrees ofmonitoring, training, and other relevant actions.

GOVERNANCE REPORTING

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Responsibility of Management

GOVERNANCE REPORTING

Continuous improvement and negative impact remediation
As an organization, we are committed to learning andcontinuous improvement. To support these aims, weestablished a comprehensive, group-wide approach
focused on identifying and solving problems to deliver
exceptional quality in all areas of our work. Our business
review structure, improvement projects, and audits
program form the core of this continuous improvement
process. It enables our board and EMT to achieve steadybusiness enhancement and identify and remediate
negative impacts where possible.
As every issue that is not addressed could affect
the quality of our products, we are committed toempowering our employees to actively participate
in quality improvement. We prioritize employee
development to ensure our team members can act as
creative problem solvers and our managers as excellent
mentors and coaches. Consequently, we see high levelsof active engagement in our quality improvement acrossall teams. In addition, our EMT focuses on problem
elimination rather than mere reduction, underscoring
our commitment to understanding critical issues
and enabling us to take more targeted and effective
corrective actions. More information can be found in the“Talent Development” chapter.

We use a range of methods to identify areas of
improvement, including audits (internal, external,
and customer), complaints, customer feedback (Net
Promoter Score), business review meetings, andimprovements identified at the staff level. We thenimplement corrective and preventive actions at thenecessary levels to reduce negative impacts. We support
these activities using appropriate quality tools andconducting an employee survey every two years.
Overall, we believe effective governance andsustainability practices are critical to the long-term
success of our company and stakeholders. Our EMT
and top management play a crucial role in ensuring we
operate sustainably and responsibly. Their performance– as well as that of Nexperia overall – reflects in ourcompany’s valuation, which is assessed twice a year. The
procedure also includes strategy planning, ensuring oursystems and processes are relevant and we are readyto embrace new opportunities. Through these steps,
we align our governance practices with our businessstrategy and sustainability values.
As a company, we are committed to upholding theseprinciples and will continue integrating sustainability
and good governance into all aspects of our operations.
By establishing strong policies and practices,
communicating transparently with stakeholders, andcontinuously improving our processes, Nexperia cancreate long-term value for all stakeholders.

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Business Integrity and Ethics

Business Integrity
and Ethics

Introduction andmanagement approach
We are committed to conducting ourbusiness with integrity and complying withall applicable laws and regulations. We
support these aims with robust policies
and procedures that prevent corruption
and promote ethical business practices
across our operations and supply chain.
We address all relevant business ethics
risks using our ethical risk assessment
procedures. In August 2023, we launched a
global campaign titled “What’s your limit?”
to promote our updated Code of Conduct
and encourage our employees to speak up
if they encounter any suspected violations.
The launch included a letter from our CEO
outlining the behavior, ethics, and values
that underpin Nexperia's high standards forbusiness conduct.

Relevant GRI
Standards:
2-15, 2-16, 2-23, 2-24, 2-25,
2-26, 3-3, 205, 206, 415

GlobalCode of Conductcampaign 2023

GOVERNANCE REPORTING

Overall, the Code of Conduct aims to fostera clear, strong, and consistent culture of
ethics across our entire organization. It
covers a broad range of sustainability andcompliance topics and includes various
other policies, such as anti-bribery andwhistleblowing.
Our Ethics Committee (EC) is operationallyresponsible for our ethics and compliancemanagement. It comprises a dedicatedteam of executive leaders that ensures all
employees, suppliers, and business partners
understand and comply with our businessethics standards. The EC is responsible forgoverning and interpreting our Code of
Conduct and ensuring it communicatedand implemented effectively. It also
advises the Executive Management Teamand reports on the current status of Codedeployment. Additionally, EC members
oversee investigations to ensure all
misconduct reports and supporting actions
are appropriate and complete.

What's your limit?

“Compliance to our
Code of Conduct is nonnegotiable. It is the basisof how we operate.”

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Business Integrity and Ethics

GOVERNANCE REPORTING

Our approach
Our Code of Conduct details our commitment topreventing corruption and promoting ethical businesspractices in an accessible and structured format. In single
chapters, it provides concrete operating guidelines forappropriate behavior and correct procedures, including:› How to apply the Code itself› How we work (including anti-discrimination,prohibition of modern slavery, and health and safety)› How we compete (including the topics of anti-trust,
bribery, data protection, and trade compliance)› How we conduct ourselves (defining guidance on gifts
and hospitality, conflicts of interest, and social media
usage)› How we protect company assets (including
specifications on proper use, intellectual property,
confidentiality, and record retention)› How we take responsibility (covering lobbying andpolitical activity, donations, and environmental topics)“WHAT’S YOUR LIMIT”
NEW GLOBAL CODE OF CONDUCT CAMPAIGN
In August 2023, we launched a global campaign to introduce our updated Code of Conduct
to all employees. The “What’s your limit?” campaign promoted the values and principles
that guide ethical business conduct at Nexperia and encouraged employees to speak up.
We used multiple channels to promote these key messages:› Poster campaign: Eight eye-catching poster
designs, each highlighting a different
violation and the response actions
employees can take. To support each site’s
unique context, our Ethics Liaisons carefully
selected the posters most relevant to theiroperations. They were available in German,
English, and Chinese, ensuring accessibility
for our diverse workforce.
› SpeakUp Line business cards: Business cards
with information about our confidential
SpeakUp Line, reminding employees toreport any concerns and seek guidance via
our hotline.
› Round table discussions: Across oursites, we facilitated round table events
where management, Ethics Liaisons, andemployees discussed the Code of Conduct

and related topics. These dialogues
fostered a clear understanding of theCode and reinforced our commitment toethical conduct and a transparent speak-up
culture.
› Town hall meetings: Our Code of Conductcampaign was highlighted at local town
hall meetings. Management emphasized
the importance of compliance, respectful
behavior, and the role each employee plays
in upholding our values.
› Enhanced training: In 2023, we updated
our Code of Conduct training incorporating
the campaign and our additional content
on Diversity & Inclusion (D&I).

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What’syour limit?

What’syour limit?

What’syour limit?

How much does a secret cost?

When is it harassment ?

Information is valuable, and sharing it in the wrong place can cost morethan you think. Whether it’s Nexperia’s intellectual property,
our partners’ product roadmaps or your former employer’s
process ﬂow, it’s conﬁdential for a reason.
So, keep it to yourself, because breaking ourcode of conduct isn’t worth the price.

When you make someone uncomfortable through verbal or physical contact,such as shouting, aggression or unwanted touching. Whether it involves
male or female colleagues, it can still be harassment, which is
unacceptable and against our Code of Conduct.

When is it bribery ?

We all love receiving (and giving) gifts, but with business contacts,
we must be very careful and always professional. Anything worth
more than EUR 100,– must be reported to your manager or Ethics
Liaison directly. Whether it’s a gift card or event tickets,a branded keyring or an expensive watch, make sureit’s not a bribe by making sure you discuss
it with your Ethics Liaison ﬁrst.

If someone reached your limit:

If someone reached your limit:

Contact SpeakUp Anonymously

Call SpeakUp Anonymously

If you suspect a breach of the Nexperia Code of Conduct:Call the free and conﬁdential SPEAKUP line: 0800-1801733, access code 60077
Or contact your local Ethics Liaison Oﬃcer: Andreas.Jantschak@nexperia.com
Or mail the Nexperia Ethics Committee code.compliance@nexperia.com

If someone reached your limit:

Call SpeakUp Anonymously
If you suspect a breach of the Nexperia Code of Conduct:Call the free and conﬁdential SPEAKUP line: 0800-1801733, access code 60077
Or contact your local Ethics Liaison Oﬃcer: Andreas.Jantschak@nexperia.com
Or mail the Nexperia Ethics Committee code.compliance@nexperia.com“Our Code of Conduct is the guiding
document that raises awarenessabout all forms of unethical businessconduct, including corruption,bribery, and harassment.”

If you suspect a breach of the Nexperia Code of Conduct:Call the free and conﬁdential SPEAKUP line: 0800-1801733, access code 60077
Or contact your local Ethics Liaison Oﬃcer: Andreas.Jantschak@nexperia.com
Or mail the Nexperia Ethics Committee code.compliance@nexperia.com

GOVERNANCE REPORTING

In 2023, all members of TeamNexperia attended a
mandatory Code of Conduct training. We conduct thistraining annually and monitor participation. The next
round is scheduled for November 2024. In the meantime,
new employees must complete the training and sign
the Code of Conduct during their company onboarding.
Our Code of Conduct training guides employees on
conducting business in line with Nexperia’s core values
and principles. The main topics cover how we treat ourcolleagues, suppliers, and customers and how employees
can make ethical decisions in the workplace. The training
included example scenarios, questions about conflictsof interest, and lessons about respecting each other andcompany assets.
To support the values of our Code of Conduct, we have
implemented internal measures, including monitoring,to detect and prevent bribery, conflicts of interest, andother forms of corruption and business ethics violations.
We have an entity-level internal control that specificallyaddresses the risk of unethical business practices andnon-compliance with the Code. We execute this control
at least once a year, including risk assessments of cases
reported via our Whistleblower hotline.
We have also established due diligence procedures toassess the integrity of potential suppliers and business
partners and mitigate any compliance and ethics
risks. These procedures are detailed in the “Supplier
Engagement” chapter, which includes the Social
Responsibility Auditable Standard we use to audit ourinternal and external operations, including our supply
chain.

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Additionally, we address fraud and corruption risks
through additional controls, such as supplier selection
process controls. However, the cornerstone of effective
compliance management lies in the initial step ofidentifying risks and actual cases. For this purpose, we
utilize incident report hierarchies we have established ateach site.
We encourage our employees to speak up and address
any concerns if they witness actions violating our Codeof Conduct. In many cases, simply raising questions isenough to prevent non-compliant behavior. We also
recommend that employees contact and consult their
managers to discuss relevant matters. If these actions
do not resolve the issue, our stakeholders can contact
their local Ethics Liaison (serving as an independent
ombudsperson) or our Ethics Committee. Our Code of
Conduct details the full procedure.

Business Integrity and Ethics

GOVERNANCE REPORTING

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Whistleblowing
We provide several ways for our
employees and stakeholders to reportsuspected cases of misconduct. Our
primary investigation mechanism is
the SpeakUp Line, which is available
24/7 in all relevant languages. It is anexternal, independent, anonymous,and confidential reporting channel
available to all employees, suppliers,
business partners, and other thirdparty stakeholders. Available via a freetelephone number, the SpeakUp Line
offers a secure webpage that provides
the caller with clear instructions.
We actively promote the line to ouremployees and third parties and test theservice provider annually to maintainquality.
The EC is notified of each submission
and given adequate time to thoroughly
consider and investigate the issue. All
submissions are treated with strict
confidentiality. The EC can inform thecaller that their message has been
received and ask follow-up questions.
The caller then has the option to submit
a new message, either immediately or
at a later time. This format facilitates
an ongoing dialogue that can remain
anonymous if desired. Any form of
retaliation against a person reporting

suspected misconduct in good faith orparticipating in a related investigationis strictly prohibited. We have clear
boundaries that no one shall discharge,
demote, suspend, threaten, harass, or
discriminate against a person reporting
suspected violations of the Code. We
also guarantee the protection of eachwhistleblower as part of our Code of
Conduct.
We investigate all reports of suspected
misconduct promptly and thoroughly
and take appropriate actions on
substantiated claims. For liable
individuals, these actions may impact
their future employment at Nexperia
and result in legal repercussions. We
also monitor and assess all logged cases
using a range of metrics. This approach,combined with the increased likelihoodof discovery, also serves as a deterrent.
In 2023, we received 54 submissions via
the SpeakUp Line. We have followed up
on all cases in compliance with our EC
guidelines. During the reporting year,
there were no legal actions pending orcompleted regarding anti-competitive
behavior or violations of anti-trust or
monopoly legislation.

GOVERNANCE REPORTING

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Business Integrity and Ethics

GOVERNANCE REPORTING

Contributions
An essential aspect of ethical businessis transparency regarding lobbying andpolitical contributions. Accordingly, we
specify our perspective on these mattersin two chapters of our Code of Conduct.
While our business activities include
engaging with governments andgovernmental organizations, we nevermake payments to political candidates orsupport political activities on behalf of
Nexperia. We have a general rule not to
pay any advisory fees, make payments,
or donate money or in-kind support topolitical parties, political organizations,or individual politicians. As part of theCode, any envisaged diversions from thisprinciple must be explicitly approvedby our management, and all public
disclosure requirements must be met in
full.

When preparing this Sustainability
Report, we assessed all donations
and membership fees to industry
associations, interest groups, andthink tanks in 2023. Nexperia did notrecord any cases of financial or in-kindpolitical contributions, either directly or
indirectly.

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Responsible Sourcing and
Supplier Engagement
Relevant GRI
Standards:
3-3, 204, 308,
408, 409, 414

SDG 12

Overview andmanagement approach
Nexperia sources components and materials
from all over the world, including regions
where we cannot assume human and laborrights are upheld as standard. This concern is
especially true for specific resources, which
require extra diligence to source responsibly
and from conflict-free areas. To assist these
efforts, we rely on established, long-term
partnerships with our suppliers and contractors
and seek to create mutually beneficial
relationships. We also regularly communicate
sustainability topics to our suppliers andencourage them to report any problems orconcerns. As part of this approach, we seek toaward our business to suppliers that act fairly
and with integrity toward their stakeholders,observe applicable laws, and respect anduphold universal human rights.

Responsible Sourcing and Supplier Engagement

Since 2017

Affiliate Member
of Responsible
Business Alliance(RBA)

Our Sustainability Policy recognizes the criticalimportance of responsible procurement
practices and engaging with suppliers to drive
sustainability across our supply chain. Throughvarious policies and guidelines, we cement ourcommitments to human and labor rights, fairworking and living conditions, environmentally
responsible business, compliance, and nondiscrimination.
Our Code of Conduct details clear guidelines
relating to sustainability and complianceacross our supply chains. For example, we
make it clear that Nexperia respects andrecognizes labor and human rights worldwide,
and we expect our suppliers to do the same.
Additionally, our Code describes the grievancemechanisms for actions that violate our Codeof Conduct. Any suspected or confirmed
breaches or incidents can be reported throughchannels such as our SpeakUp Line.

GOVERNANCE REPORTING

Nexperia
Supplier Code of
Conduct corresponds
to principles of
RBA CoC

As supply chain sustainability is essential to
our Company, we ask all suppliers to sign our
Supplier Statement of Conformity. This binding
contractual agreement requires suppliers tomaintain strict compliance with our Supplier
Code of Conduct. Nexperia's Supplier Codeof Conduct aligns with the principles of theCode of Conduct of the Responsible Business
Alliance (RBA), which we joined in 2017. Our
Supplier Code of Conduct is guided by globally
recognized standards, such as the Universal
Declaration of Human Rights (UDHR), andstandards issued by organizations such as
the International Labor Organization (ILO),
Social Accountability International (SAI), andthe Ethical Trading Initiative (ETI). The Codeprovides commitments and guidance onlabor and human rights, health and safety,
environment, business ethics, and standards for
management systems in use.

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Additionally, we work with a rangeof procedure descriptions for audits,assurance processes, or necessary
management actions against unethicalsuppliers, which are described on thefollowing pages.
Many of the sustainability topics
material to our operations are also
relevant in our supply chain. We
acknowledge and manage theseoverlaps by clarifying our principles andcommitments and encouraging our
suppliers to mirror them. For example,
in the area of water and wastewater, werecommend our suppliers implement
systematic approaches to wastewater
generated in their operations, industrial
processes, and sanitation facilities,
and to monitor, control, and treat
wastewater in line with legislation prior
to discharge or disposal. In addition, werequest they work to reduce the amountof wastewater generated, regularly
monitor wastewater treatment systems,
and provide Nexperia with ongoing
updates.

Overall accountability for responsible
sourcing and supplier engagement
extends to our management team. It
includes the COO, Chief Procurement
Officer (CPO), VP of Quality, andSenior Director of Global Environment,
Health, and Safety (EHS) and Corporate
Social Responsibility (CSR), who
also leads the topics from a social
responsibility perspective. In 2023, our
Global Procurement department was
accountable for supplier selection andmanagement, while supplier audits
were performed by our Supplier Quality
department and EHS department.
The EHS and CSR department isaccountable for monitoring the audit
program and overseeing corrective
actions. In turn, we expect suppliers
to cooperate with our audits andimplement containment and remedial
measures for any identified issues.
We coordinate these actions using
our Social Responsibility Management
System, which comprises various policies
and other building blocks described
below. In Q1 2024, given this topic's
overall criticality, we introduced our
new Procurement Sustainability and
Risk Management department within
Global Procurement and transferred
responsibility for supplier audits.

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Our approach:careful supplier selection andmanagement
We are committed to working with suppliers
who share our values and dedication tosustainability. To achieve this aim, we haveestablished supplier selection criteriathat include sustainability and ethicalconsiderations, along with other factors such as
quality, cost, and delivery.

Supplier selection
We select and approve new suppliers following defined
standards and procedures. New suppliers must meetvarious preselection criteria, including assessments
and scores on CSR and sustainability acceptance. Usinga risk-based approach, we ask suppliers to complete a
self-assessment questionnaire to gauge their compliancewith our EHS sustainability and social responsibility
requirements. Each questionnaire must be reviewed andsigned by a member of the supplier’s top management
and then approved internally by our EHS and CSR
department. In early 2024, the responsibility for ourinternal approval process was transferred to Global
Procurement.
If the potential supplier cannot meet our requirements,
we either attempt to reach mutual values by defining
new engagement measures or reject their registrationand explain why we cannot engage further. Our Global
Procurement Organization controls the entire supplierselection and approval process. It comprises the COO
and the Technology & Operation Management Team.

New department
Procurement
Sustainability and
Risk - part of Global
Procurement

One vital element of our supplier management
processes is our RBA-aligned Supplier Code of Conduct,
which all active suppliers must sign. If a supplier refuses,
our supplier selection and approval process includes
various escalation scenarios. These scenarios can involve
accepting the suppliers’ own Code of Conduct after
a comprehensive review, or customized proceedings
defined by our Procurement Management Team.

GOVERNANCE REPORTING

Until December 2023, Nexperia’s Supplier Codeof Conduct was managed by our Corporate Social
Responsibility function within the EHS organization.
However, given this topic’s critical and dynamic nature,
we introduced a dedicated department, Procurement
Sustainability and Risk Management, within our Global
Procurement organization in Q4 2023. Starting in Q1
2024, this new function oversees topics related toresponsible supply chains, including but not limited
to the Supplier Code of Conduct and continuously
improving our supplier engagement processes.
As part of our commitment to fostering moresustainable supply chains, we frequently revise ourCode with updates released by the RBA, international
regulations, and the latest industry benchmarks. In cases
where our customers’ Social Responsibility requirements
exceed those of the RBA Code of Conduct, we mayassess and integrate them into our procedures toenhance our existing system. We performed a major
update to improve our Supplier Code of Conduct in thesecond half of 2023. In February 2024, we initiated a
global rollout of the revised Code to all active supplierswith a targeted coverage rate of at least 80%.
› A supplier is classed as active if it has a recorded spend,
purchase order, invoice, or any open transaction within
the past 18 months. Additionally, a supplier is classed
as active in cases of master data changes in the past 18
months or if transactions are planned in the future.
› Coverage Rate includes either a signature or the
supplier's own approved Code of Conduct (after aninternal Nexperia review).
In 2023, we had 4,201 active suppliers, of which 74%
signed the Nexperia Supplier Code of Conduct at theend of Q4 2023.

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Responsible Sourcing and Supplier Engagement

GOVERNANCE REPORTING

Sourcing strategy

The role of audits

Local sourcing is crucial to our Sourcing Strategy, as
it supports local economies and reduces our carbon
footprint by minimizing transport emissions. We
balance this ambition with our need for a diverse andresilient supply chain, which is another of our long-term
objectives. Nexperia sources approximately 55% fromlocal suppliers.

Auditing is an essential aspect of promoting responsible
procurement and sustainability across our supply chain.
We have a comprehensive audit standard in our Auditing
Procedure Policy, which covers internal and certification
audits for our operations and supplier audits. We
use these audits to verify suppliers’ adherence toour requirements, including human and labor rights,
conformity with international standards, governance andcompliance, and environmental topics. In this process,we follow the requirements of our Social Responsibility
Auditable Standard, which strictly adheres to RBA
Validated Assessment Program (VAP) specifications.
It also includes requirements from the ISO 14001 andISO 45001 management system standards. We audit
contractors according to our internal audit program
guidelines.

Sourcing from local suppliers (% of total procurement budget)
Entities

Location

Ratio of Spend %Nexperia B.V.

Nijmegen49%

Nexperia Germany

Hamburg73%

Nexperia UK

Manchester

51%

Nexperia Malaysia

Seremban46%

Nexperia Philippines

Cabuyao44%

Nexperia Hong Kong

Hong Kong

2%

Nexperia (China)

Dongguan

60%

Nexperia (Shanghai)

Shanghai

79%

Nexperia Taiwan

Taipei94%

The percentage of procurement budget used for significant locations. Significant locations
are operations or offices with more than 100 employees (headcount). In 2023, Nexperia hadsignificant locations in Nijmegen, Seremban, Cabuyao, Taipei, Manchester, Newport, Dongguan,
Shanghai, Hamburg, and Hong Kong.

As strong collaborations are also critical to driving
sustainability in our supply chain, we regularly monitor
the sustainability performance of our suppliers. One
valuable source of information is the NGO engagementthat comes with our RBA membership. We ascertain
whether a supplier audit is necessary via a yearly risk
assessment of each supplier, in line with our SupplierSocial Responsibility Risk Assessment Process. If a
supplier exceeds selected risk thresholds or continuallyshows low ESG performance, we engage them for an
audit. Relative to the threshold surpassed, our EHS andCSR department chooses either a mandatory on-site
audit performed by Nexperia or an RBA VAP audit.

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These on-site audits are part of the Nexperia
Supplier Social Responsibility Audit Program,which drives a collaborative approach to
our supplier and contractor relationships.
We promote continuous improvement inour supply chain by conducting annual risk
assessments and auditing suppliers we
identify as high-risk. We developed this risk
assessment process with our Procurement
department and review and update it annually
to reflect the evolving environmental, labor,
and human rights landscape. Our supplierrisk assessment considers criteria such as
geographical risk, product and/or service risk,
and business criticality or spend risk. We assign
each category a score of 1 to 10 (10 being thehighest) to generate a percentage that signifies
the supplier’s risk level, with higher numbers
indicating higher risk exposure.
Nexperia’s Social Responsibility Audit Programis a collaborative and consultative processthat guides suppliers to meet the Nexperia
Supplier Code of Conduct and Nexperia
Auditable Standards on Social Responsibility.
The audit scope covers labor and human rights,
the environment, health and safety, businessethics, management systems, and compliance

GOVERNANCE REPORTING

Responsible Sourcing and Supplier Engagement

nexperia | Sustainability Report 2023

with the Nexperia Supplier Code of Conduct.
We conduct these audits to help our suppliers
improve their processes and procedures inthese areas. The Nexperia Supplier Code of
Conduct and the Auditable Standards apply
to all Nexperia suppliers, contractors, on-site
service providers, labor agents, and external
manufacturers.
In 2023, we performed 19 social responsibility
supplier audits and intend to increase thisnumber each year.

Social Responsibility Supplier Audits 2018–2023

25
SINGAPORE

20

USA
TAIWAN

15

HONG KONG
PHILIPPINES

10

MALAYSIATHAILAND

5

CHINA

0
2018

2019

2020

2021

2022

2023

In 2023, we extended our audits to the USA and Singapore. We did not perform audits in the Philippines.

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We work closely with suppliers who haveaudit non-conformances (NCs) to ensure they
fully understand our standards and have thenecessary skills and knowledge to prevent
reoccurrence. We also use the results of these
efforts to evaluate the effectiveness of ourstandards within the supply chain. In 2023, werecorded 295 supplier findings, including 34
core violations, 255 major NCs, and 6 minor
NCs. Most suppliers were willing to rectify thefindings within the specified timeframe andcomply with Nexperia's requirements. We allow

Responsible Sourcing and Supplier Engagementa minimum threshold to our suppliers when
closing the NC's because we understand thatcertain corrective actions, such as financial
investments and labor interruptions, may
require more than 90 days to resolve. The
most frequently reported NC's through our SR
supplier audit program are related to working
hours and consecutive working days.

Social responsibility supplier audit ﬁndings per country in 2023

In addition to ongoing risk assessments
and audits through our Supplier Social
Responsibility Audit Program, ourwhistleblower SpeakUp Line provides ourmanagement with valuable feedback andhighlights potential issues in our supply chains.
The line is available 24/7 in all languages andcan be used by our stakeholders to report any
ESG issues they identify. The SpeakUp Line isfurther described in the “Business Integrity andEthics” chapter.

Top six core violations of social responsibility supplier audits by category 2023
20%

200

VIOLATIONS

16%

CORE VIOLATION

150

GOVERNANCE REPORTING

16%

15%

MAJOR NONCONFORMANCE

13%
MINOR NONCONFORMANCE

100

10%

50

5%

9%

9%

9%

Consecutive
working days

Legally
mandated
beneﬁts

Surrender
original identity
documents

0%

0
China

Hong Kong

Malaysia

ThailandRecruitment
fees

Exceedingworking days

Overtimepay

148Responsible Sourcing and Supplier Engagement

nexperia | Sustainability Report 2023

GOVERNANCE REPORTING

Our commitment to sourcing minerals responsibly
Semiconductor device production relies on metals
like tin, tungsten, tantalum, and gold (known as 3TGs
or Conflict Minerals), as well as cobalt. These metals
often come from conflict-affected and high-risk areas(CAHRAs), where their extraction and trade may
finance armed groups, fuel human rights abuses,
and support corruption and money laundering. As asocially responsible company, we prioritize ethical andsustainable sourcing practices to ensure our products do
not create negative social or environmental impacts.
We are committed to reducing the use of 3TGs andcobalt in our products and supply chains and apply
rigorous due diligence when their use is necessary. Asan active member of the Responsible Minerals Initiative(RMI), we promote responsible mineral sourcing andadhere to RMI's risk assessment procedures and tools,
which are regarded as industry standards. We also
support independent third-party audits by the RMI
through its Responsible Minerals Assurance Process(RMAP) and assessment programs that are crossrecognized by RMI for their effectiveness. We design
our processes to comply with the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals andother relevant laws and regulations.
Our procurement team uses a risk-based approach toscreen suppliers of materials and finished goods for thepresence of 3TGs and cobalt. This method is part of ourinternal Responsible Minerals Assurance Process, a setof comprehensive guidelines and procedures we havedeveloped to meticulously document and specify all
relevant information about these suppliers. Setting clear
supplier expectations is vital to achieving our responsible
sourcing goals, which are reflected in our Supplier Codeof Conduct. We require all direct suppliers, contractors,
and external manufacturers to adopt policies andconduct due diligence on the sources and chains ofcustody of minerals. Going a step further, they mustalso ensure their own suppliers adhere to Nexperia’s
principles and align with the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas.

Responsible sourcing practices are vital to our businesssustainability, but they are also crucial to the welfare
of communities and environments impacted by ouroperations. With this in mind, we are committed toleading by example, continuously innovating, andenhancing our responsible mineral sourcing practices tocreate positive social and environmental outcomes.
We will continue collaborating with suppliers to increasetransparency and develop joint initiatives and programs
that reduce our environmental impact and improvesocial responsibility.

149

Tanja Sagemüller
Head of Nexperia Procurement Operations & Sustainability
Global Procurement“The essential semiconductors we build have aremarkable reach. Virtually every commercial electronic
device worldwide is enabled by Nexperia's products. On
average, each person in the world carries about 10 ofour products.
We are committed to sustainable operations thatcomply with the latest legislation. It goes without sayingthat we in procurement regard our ethical businessvalues, constituted in our Supplier Code of Conduct,as the foundation for a trustworthy and responsible
business partnership with our suppliers.
Of course, the German Supply Chain Act requires more
effort on our end, but it also strengthens an even morediligent and conscious sourcing choice. Our sourcing
process is updated to apply globally, i.e., to all of oursites, to be ready once the Corporate Sustainability Due
Diligence Directive (CSDDD) becomes effective. It sets
a valuable legal framework that will help our businessgrow sustainably – in the truest sense of the word.”Responsible Sourcing and Supplier Engagement

nexperia | Sustainability Report 2023

GOVERNANCE REPORTING

Compliance with the German Supply Chain
Due Diligence Act
From January 2024 onward, the German Supply
Chain Due Diligence Act applies to Nexperia
Germany GmbH. In preparation, we establishedthe necessary standards and protocols
supported by various measures and compliancetargets. These efforts aim to ensure equal
rights for everyone involved in our supply chain
and our internal operations.
We also formed an expert team responsible
for all processes relating to supply chain due
diligence. Representing departments suchas Procurement, Legal, Sustainability, andEnvironment, Health and Safety (EHS), theteam combines the varied expertise needed forthe expansive nature of this regulation and allunderlying processes.

National legislation –global outreach
German Supply Chain
Due Diligence Act

NEW
Human Rights
OfficeTo prepare for these new supply chain due
diligence requirements, we implemented a
Human Rights Office represented by our Legaland Sustainability departments. Our Head of
Sustainability is responsible for investigatinginternal and external human rights andenvironmental complaints, while our Ethics
Committee is responsible for investigatinginternal and external ethics-related complaints.

The committee is supported by local Ethics
Liaison Officers at several Nexperia sites. Our
SpeakUp Line, Nexperia’s complaint mechanism
for internal and external cases, is accessible toemployees and external parties via telephoneand email. Reports can be made anonymously
and are treated confidentially.
Across the Company, we draw on a range ofeffective existing processes and functions,which we adapted to the new requirements
as needed. Over the last few years, our EHS
team has continuously developed our Social
Responsibility management structures and our
supplier screening and auditing processes. We
reviewed and revised global processes focusing
on sustainability to better meet due diligencerequirements along our supply chain. Our newly
formed procurement sustainability and risk
management team has assumed responsibility
for supply chain due diligence and social
responsibility, strengthening our direct supplierengagement.

151nexperia | Sustainability Report 2023

We expect a seamless adoption of the German
Supply Chain Due Diligence Act requirements,
based on the following additional measuresand our Company-wide experience:› Several sites are already within the scope of
the UK Modern Slavery Act, contributing vital
experience with human rights regulations.
› We are implementing a software solution
for automated visibility and transparency of
supply chain risks.
› In Q4 2023, we published our Whistleblowing
FAQ on Nexperia's approach to managing
internal and external complaints.
› In Q1 2024, we published a Policy Statementon our approach to due diligence obligations
regarding human rights and environmental
topics.

In 2023, we conducted a comprehensive risk
analysis to further prepare for new humanrights and environmental due diligence
regulations. Our method included an index
analysis of country-specific risks followed bya text-based analysis of industry-specific risks.
We categorized risks into no risk, low risk,
medium risk, severe risk, and critical risk. Ourrisk analysis found that material risks include
working hours, minimum wage, discrimination,and pollution of water, soil, and air. In response,
we have prioritized these risks accordingly inour due diligence processes and measures.

Responsible Sourcing and Supplier Engagement

GOVERNANCE REPORTING

152

nexperia | Sustainability Report 2023

Cybersecurity, Data Protection, and Privacy

GOVERNANCE REPORTING

Cybersecurity, Data Protection,
and Privacy
Relevant GRI
Standards:
3-3, 418

Overview and management approach
The compliant handling of information is critical for leading
innovation companies like Nexperia. In the area of cybersecurity,
the scope of our responsibility covers product and process
information as well as personal data. When using all forms of
personal data, we respect and protect the privacy and rightsof our customers, employees, business partners, and all otherrelevant parties.
Through our global security infrastructure and crisis
management team - comprising our Chief Information Officer(CIO), Information Security (InfoSec) Management within our
IT department, and our Data Protection Officer (DPO) - we are
well prepared against cyberattacks or other leaks that may
compromise our systems.
Our diverse range of data protection systems, privacy policies,
and associated standards comply with all applicable laws andare communicated to our employees via an annual awarenesstraining. We also regularly engage third parties to stress test our
security systems to evaluate and reinforce their defences.

Our approach: data protection through responsible
handling and high security standards
As a responsible company and employer, we
strictly adhere to all regulations and legal
agreements concerning data protection. By
doing so, we protect the interests and rightsof our customers, employees, and suppliers
while safeguarding our critical information
assets.
At the group level, cybersecurity is managed
by the Office of the CIO and InfoSec within
our IT department. Data protection is
managed by our global legal team which
has an appointed DPO. Our global dataprotection and awareness training isorganized by our InfoSec Management.
We use the National Institute of Standards
and Technology (NIST) Cyber Frameworkas the foundation of our cybersecurity
approach. It is based on five key steps:
identify, protect, detect, respond, andrecover. The NIST Cyber Framework helps
us develop an organizational understandingof how to manage cybersecurity risks toour systems, assets, and data and protect
our critical infrastructure. By implementing
appropriate activities and mechanisms,

we can quickly identify any cybersecurity
incidents and respond appropriately. We canalso maintain resilience and recover our dataand services in the event of a cybersecurity
incident.
The security monitoring of our global IT
infrastructure environment is maintainedby an external service provider. It
operates 24/7 and immediately reports
any identified security incidents to ourInfosec Management. Through ourvulnerability management, we can checkand eliminate any system liabilities via
regular scans of our global infrastructure.
Our service provider can also provide asecurity incident response at any timeupon request. Incidents are passed to ourrelevant IT resolver groups, which directly
mitigate the vulnerabilities. Through ouruse of Cyber Threat Intelligence, which isknowledge-, capability-, and experiencebased information about the occurrence
and assessment of threats and threat actors,
we are well prepared against all potential
cyberattacks.

153nexperia | Sustainability Report 2023

Cybersecurity, Data Protection, and Privacy

Zero “high-level data breaches” in 2023

Key policies

All company-wide incidents and alerts are reported
immediately to our global InfoSec team. Any potential
data loss incidents are automatically labeled as “P1,”
our highest level of IT security breach. These levels are
determined by the Security Operations Center. Shoulda P1 security breach occur at any site, all processes aremanaged by the global InfoSec team, which includes the
CIO. The DPO is also involved if the P1 security breach
relates to privacy. InfoSec, the CIO, and DPO initiate allnecessary measures to remedy data leaks and comply
with legal reporting requirements. We did not record
any P1 data breaches in 2023.

We define our group-wide principles for processing
personal data using our various data protection andprivacy policies, combined with relevant standards andprocedures. Our approach to data protection is basedon European legislation, particularly the EU’s General
Data Protection Regulation (GDPR). To strengthen oursystems, we also take measures to comply with local dataprotection regulations if they are stricter than our own
applicable standards. For transparency, our employees
can access all standards and procedures via the Nexperia
Document Management System. Our stakeholders,customers, and suppliers can also learn how we use theirdata by reading our website’s Privacy notice.

Awareness training
In March 2024, Nexperia becameaware that an unauthorized third
party accessed certain Nexperia IT
servers. We promptly took action
to terminate the unauthorizedaccess, launched an investigation,and reported this incident to thecompetent authorities and police.

Our cybersecurity and data protection strategies,
policies, standards, and procedures are cascaded
globally in conjunction with local IT and businessteams, coordinated by the global InfoSec manager. We
conduct and monitor a mandatory annual awarenesstraining for all employees. Infosec manages all training
sessions in cooperation with local training teams. To
maintain awareness about data protection beyond
these sessions, we also distribute regular articles in
Nexperia's e-magazine, X.Press. We also offer morein-depth training to the departments responsible forhandling personal data on a daily basis, with a primary
focus on HR. All employees must complete awarenesstrainings relating to quality and security every two years
and our Code of Conduct every year. We ensure thatthe completion rate reaches at least 80% and all new
employees complete these mandatory trainings within
72 hours as part of their onboarding.

GOVERNANCE REPORTING

Assessments and measures:third party tests in 2023
We continually assess our protective measures toenhance the effectiveness of our security systems. As
part of this approach, we engage third-party experts
to evaluate our security infrastructure. In the categoryof Security Incident Response, we received a “solid
foundation” result. In 2022, we also complied withthe provider’s recommendations to help strengthencommunication between our IT and crisis management
teams.
We conducted our last IT assessment in 2021 as partof the Cybersecurity Maturity Assessment. In 2022, we
conducted an Operational Technology (OT) Assessment
and incorporated the results into our 2023+ program.
For 2023 and beyond, this program adopts a seriesof technical and organizational measures to improvecybersecurity in our factories and OT. In 2024, we planto perform a Trusted Information Security Assessment
Exchange assessment (TISAX), aiming to demonstratecompliance with the high security standards of ourclients in the automotive industry. For security purposes,
we refrain from disclosing specific measures in thisreport.
A third-party penetration test during the TechnicalCybersecurity Assessments in 2022 confirmed we have
all relevant security controls in place. The next thirdparty penetration test is scheduled for 2024.

154

Appendix

nexperia | Sustainability Report 2023

GRI Content Index

GRI Content Index
Disclosure

Response

GRI 1 - Foundation
Nexperia Holding B.V. reporting in accordance with the GRI Standards for the period January 1, 2023 - December 31, 2023.
GRI - 1 used

GRI - 1 Foundation 2021

Applicable GRI sector
standards

Not currently available

Disclosure

Disclosure
Number

Disclosure Description

References

General Disclosures 2021
GRI - 2

2-1

Organizational details

Our Company & Business
Our Entities
Imprint

GRI - 22-2

Entities included in the organization's
sustainability reporting

Our Entities
Financial Performance

GRI - 22-3

Reporting year, frequency, and contact point

Imprint

GRI - 2

2-4

Restatements of information

Imprint

Notes

APPENDIX

156

nexperia | Sustainability Report 2023

Disclosure

GRI - 2

GRI - 2Disclosure
Number

Disclosure Description

2-5

External assurance

2-6

Activities, value chain, and other business
relationships

GRI Content Index

References

APPENDIX

Notes
For the 2023 Sustainability Report, PwC Netherlands
conducted an independent limited assurance engagement
on six KPIs . The examination was conducted in accordancewith Dutch law, including the Dutch Standard 3000A
Assurance, other than audits or reviews of historicalfinancial information. In addition, some of the information
contained in the Sustainability Report has been disclosed
in the consolidated financial statements, which havebeen prepared in accordance with International Financial
Reporting Standards as adopted by the European Union(EU-IFRS) and also in accordance with Section 2:362 (9) of
the Dutch Civil Code. We perform extensive internal due
diligence and data validation to ensure the accuracy of theinformation and data presented in this report. For further
information, reference is made to the 2023 Annual Report,
which is available at the Dutch Chamber of Commerce.

Our Company & BusinessResponsible Sourcing and Supplier
Engagement
In chapter "People Management" we disclose a total of
14,024 (2022: 15,109) employees across Europe, Asia &Americas.

GRI - 2

2-7

Employees

People Management

This can be further categorized as:
Permanent: 13,131 (2022: 13,486)
Temporary: 836 (2022: 1,561)
Interns: 57 (2022: 62)157

nexperia | Sustainability Report 2023

Disclosure

Disclosure
Number

Disclosure Description

GRI Content Index

References

APPENDIX

Notes
For the year ended December 31, 2023, we had thefollowing contingent worker type as stipulated in HRIS:

GRI - 22-8

External Temporary: 433 (2022: 699)
Contractor: 124 (2022: 144)

Workers who are not employees

Contingent employees are deployed throughout Nexperia
in functions when needed.

GRI - 2

2-9

Governance structure and composition

Our EMT
Our approach to ESG
Environmental Management at Nexperia
Responsibility of Management
Diversity, Non-discrimination, and Inclusion

GRI - 22-10

Nomination and selection of the highest
governance body

Responsibility of management
Diversity, Non-Discrimination, and Inclusion
Our approach to ESG

GRI - 2

2-11

Chair of the highest governance body

Our EMT
Responsibility of Management

GRI - 22-12

Role of the highest governance body inoverseeing the management of impacts

Responsibility of management

GRI - 22-13

Delegation of responsibility for managing
impacts

Our approach to ESG
Environmental Management at Nexperia

GRI - 2

2-14

Role of the highest governance body insustainability reporting

Materiality assessment

GRI - 22-15

Conflicts of interest

Business Integrity and Ethics

GRI - 2

2-16

Communication of critical concerns

Business Integrity and Ethics

GRI - 2

2-17

Collective knowledge of the highest
governance body

EMT
Approach to ESG (ESG Governance)

There were no incidents during the reporting year. (2022:
0)158nexperia | Sustainability Report 2023

Disclosure

Disclosure
Number

GRI - 2GRI Content Index

APPENDIX

Disclosure Description

References

Notes

2-18

Evaluation of the performance of thehighest governance body

Responsibility of Management

GRI - 2

2-19

Remuneration policies

Due to confidentiality reasons we choose not to disclose
remuneration information.

GRI - 22-20

Process to determine remuneration

Due to confidentiality reasons we choose not to disclose
remuneration information.

GRI - 2

2-21

Annual total compensation ratio

Due to confidentiality reasons we choose not to disclose
remuneration information.

GRI - 2

2-22

Statement on sustainable development
strategy

Letter from the CEO
Our approach to ESG

GRI - 2

2-23

Policy commitments

Our approach to ESG
Guaranteeing labor and human rights
Business Integrity and Ethics

GRI - 22-24

Embedding policy commitments

Our approach to ESG
Guaranteeing labor and human rights
Responsibility of management
Business Integrity and Ethics

GRI - 22-25

Processes to remediate negative impacts

Guaranteeing labor and human rights
Responsibility of management
Business Integrity and Ethics

GRI - 22-26

Mechanisms for seeking advice and raisingconcerns

Responsibility of management
Business Integrity and Ethics

GRI - 22-27

Compliance with laws and regulations

There were no incidents during the reporting year. (2022:
0)

Membership associations

Nexperia has a significant role at ZVEI (Germany). Seniordirector EHS & CSR is chair of the Semiconductor working
group of ZVEI. Additional participation in other ZVEI
working groups and committees.

GRI - 22-28

Our approach to ESG
Environmental Management at Nexperia

159

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GRI Content Index

Disclosure

Disclosure
Number

Disclosure Description

References

GRI - 22-29

Approach to stakeholder engagement

Our approach to ESG

GRI - 22-30

Collective bargaining agreements

People Management

APPENDIX

Notes

Employees at our global locations have the freedom
to associate and/or right to collective bargaining as
provided by local statutes. There are collective bargaining
agreements in place in Germany, the Netherlands, thePhilippines, and the UK (for our site in Manchester). We
are compliant with all agreements required by laws. Ourcollective bargaining coverage reached approximately 30%
of our global workforce.

Material topics
GRI - 33-1

Process to determine material topics

Materiality Assessment

GRI - 3

3-2

List of material topics

Materiality Assessment

GRI - 33-3Management of material topics

Materiality Assessment
ESG Risk Rating

Economic performance
GRI - 33-1 - 3-3

Management approach

Financial performanceGRI 201

201-1

Direct economic value generated anddistributed

Financial performanceGRI 201

201-2

Financial implications and other risks andopportunities due to climate change

Risk Management

GRI 201

201-3

Defined benefit plan obligations and otherretirement plans

Talent attraction

GRI 201

201-4

Financial assistance received fromgovernment

See our Annual Report 2023, available at the Dutch
Chamber of Commerce.

See our Annual Report 2023, available at the Dutch
Chamber of Commerce.

160

nexperia | Sustainability Report 2023

Disclosure

Disclosure
NumberGRI Content Index

Disclosure Description

References

Proportion of senior management hiredfrom the local community

Diversity, Non-Discrimination, and inclusion

APPENDIX

Notes

Market presenceGRI 202

202-2

Procurement practices
GRI - 33-1 - 3-3

Management approach

Responsible Sourcing and Supplier
Engagement

GRI 204

204-1

Proportion of spending on local suppliers

Responsible Sourcing and Supplier
Engagement

3-1 - 3-3

Management approach

Business Integrity and Ethics

GRI 205

205-1

Operations assessed for risks related tocorruption

GRI 205

205-2

Communication and training about anticorruption policies and procedures

GRI 205

205-3

Confirmed incidents of corruption andactions taken

Anti corruption
GRI - 3

We assess corruption and risks globally for ourorganization. Current risks are included in our Risk
Management chapter. For more information, see our Codeof Conduct.
Business Integrity and Ethics
There were no incidents during the reporting year. (2022:0)Anti competition
GRI - 33-1 - 3-3

Management approach

Business Integrity and Ethics

GRI 206

206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

Business Integrity and Ethics

GRI - 33-1 - 3-3

Management approach

Taxation

GRI 207207-1

Approach to tax

Taxation

Tax161

nexperia | Sustainability Report 2023

Disclosure

Disclosure
NumberGRI 207
GRI 207

GRI 207

GRI Content Index

Disclosure Description

References

207-2

Tax governance, control, and risk
management

Taxation

207-3

Stakeholder engagement and managementof concerns related to tax

Taxation

APPENDIX

Notes

Nexperia pays all taxes in compliance with the tax laws
applicable in the relevant jurisdiction in the countries
in which we operate. Further information and legallyrequired disclosures on the subject of tax are provided
in the Annual Report, available at the Dutch Chamber ofCommerce.

207-4

Country-by-country reporting

Taxation

GRI - 33-1 - 3-3

Management approach

Environmental Management at Nexperia
Resources and Energy

GRI 301

301-1

Materials used by weight or volume

Resources and Energy

We do not track materials to report at a corporate level.

Materials

GRI 301

301-2

Recycled input materials used

Resources and Energy

As a semiconductor company, we need to be cautious
with the high quality specification and purity grade of
production materials. Where possible, we will reusematerials.

GRI 301

301-3

Reclaimed products and their packaging
materials

Resources and Energy

We utilize reclaimed products as stated in our Resources
and Energy chapter, but we are unable to provide
quantifiable data.

GRI - 33-1 - 3-3

Management approach

Environmental Management at Nexperia
Resources and Energy

GRI 302

302-1

Energy consumption within the organization

Resources and Energy

GRI 302

302-2

Energy consumption outside theorganization

EnergyWe are currently not tracking consumption outside ourorganization.

162

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GRI Content Index

Disclosure

Disclosure
Number

Disclosure Description

References

GRI 302

302-3

Energy intensity

Resources and Energy

GRI 302

302-4

Reduction of energy consumption

Resources and Energy

GRI 302

302-5

Reductions in energy requirements ofproducts and services

Resources and Energy

3-1 - 3-3

Management approach

Environmental Management at Nexperia
Water and Wastewater Management

APPENDIX

Notes

Water
GRI - 3

We ask all our suppliers to be compliant with the Nexperia
Supplier Code of Conduct: Wastewater generated fromoperations, industrial processes, and sanitation facilities
are to be characterized, monitored, controlled, andtreated as required prior to discharge or disposal. We
ask our suppliers to conduct routine monitoring of theperformance of their wastewater treatment systems.

GRI 303

303-1

Interactions with water as a shared resource

Water and Wastewater Management
Responsible Sourcing and Supplier
Engagement

GRI 303

303-2

Management of water discharge related
impacts

Water and Wastewater Management

GRI 303

303-3

Water withdrawal

Water and Wastewater Management

We will continue to monitor areas of water stress andprovide feedback in the future.

GRI 303

303-4

Water discharge

Water and Wastewater Management

We will continue to monitor water discharge data andprovide feedback in the future.

GRI 303

303-5

Water consumption

Water and Wastewater Management

We will continue to monitor areas of water stress andreport in the future.

GRI - 33-1 - 3-3

Management approach

Environmental Management at Nexperia
Emissions

GRI 305

305-1

Direct (Scope 1) GHG emissions

Emissions

GRI 305

305-2

Energy indirect (Scope 2) GHG emissions

Emissions

Emissions163

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GRI Content Index

APPENDIX

Disclosure

Disclosure
Number

Disclosure Description

GRI 305

305-3

Other indirect (Scope 3) GHG emissions

GRI 305

305-4

GHG emissions intensity

Emissions

GRI 305

305-5

Reduction of GHG emissions

Emissions

GRI 305

305-6

Emissions of ozone depleting substances(ODS)

Emissions

GRI 305

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx),
and other significant air emissions

Emissions

GRI - 33-1 - 3-3

Management approach

Environmental Management at Nexperia
Waste Management

GRI 306

306-1

Waste generation and significant wasterelated impacts

Waste Management

GRI 306

306-2

Management of significant waste-related
impacts

Waste Management

GRI 306306-3

Waste generated

Waste Management

GRI 306

306-4

Waste diverted from disposal

Waste Management

We are continuously improving our data monitoring on
waste management and include more data in the future.

GRI 306

306-5

Waste directed to disposal

Waste Management

We are continuously improving our data monitoring on
waste management and include more data in the future.

References

Notes
We currently have no data for disclosure purposes.

Waste

Supplier environmental assessment
GRI - 33-1 - 3-3

Management approach

Responsible Sourcing and Supplier
Engagement

GRI 308308-1

New suppliers that were screened using
environmental criteria

Responsible Sourcing and Supplier
Engagement

GRI 308

308-2

Negative environmental impacts in the
supply chain and actions taken

Responsible Sourcing and Supplier
Engagement164nexperia | Sustainability Report 2023

Disclosure

GRI Content Index

Disclosure
Number

Disclosure Description

References

3-1 - 3-3

Management approach

People Management at TeamNexperia

APPENDIX

Notes

Employees
GRI - 3

In addition to the breakdown of employees according toage and gender, please see below by region:
GRI 401

401-1

New employee hires and employee turnover

Talent attraction and retention

GRI 401

401-2

Benefits provided to full-time employeesthat are not provided to temporary or parttime employees

Talent attraction and retention

GRI 401

401-3

Asia: 1,194 (2022: 3,791)
Europe: 423 (2022: 873)
Americas: 55 (2022: 71)
For benefits, Nexperia does not distinguish between fulltime, temporary, and part-time employees.
We provide our employees with parental leave thatmeets or exceeds local regulatory requirements, but ourofferings vary from country to country. Currently our HRIS
only covers absence modules for parental leave in somecountries, such as Germany, the Netherlands, Hungary
and the USA. We plan to roll-out this absence module forfurther countries in 2024.

Parental leave

Labor relations
GRI - 33-1 - 3-3

Management approach

People Management at TeamNexperia

GRI 402402-1

Minimum notice periods regarding
operational changes

People Management at TeamNexperia

Occupational Health and Safety
GRI - 33-1 - 3-3

Management approach

Health & Safety

GRI 403403-1

Occupational health and safety
management system

Health & Safety

GRI 403403-2

Hazard identification, risk assessment, andincident investigation

Health & Safety165

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GRI Content Index

Disclosure

Disclosure
Number

Disclosure Description

References

GRI 403403-3

Occupational health services

Health & Safety

GRI 403403-4

Worker participation, consultation, andcommunication on occupational health andsafetyHealth & Safety

GRI 403403-5

Worker training on occupational health andsafetyHealth & Safety

GRI 403403-6

Promotion of worker health

Health & Safety

GRI 403403-7

Prevention and mitigation of occupational
health and safety impacts directly linked bybusiness relationships

Health & Safety
Responsible Sourcing and Supplier
Engagement

GRI 403403-8

Workers covered by an occupational healthand safety management system

Health & Safety

GRI 403403-9

Work-related injuries

Health & Safety

GRI 403403-10Work-related ill healthNotes

No cases reported in 2023. (2022: 0)

Training and education
GRI - 33-1 - 3-3

Management approach

People Management at TeamNexperia
Talent development

GRI 404

404-1

Average hours of training per year per
employee

Talent development

GRI 404404-2

Programs for upgrading employee skills andtransition assistance programs

Talent development

APPENDIX

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Disclosure

GRI 404

Disclosure
Number404-3

Disclosure Description

Percentage of employees receiving regularperformance and career development
reviews

GRI Content Index

APPENDIX

References

Notes

Talent development

88% of female employees out of year-end female
population and 83% male employees out of malepopulation. 85% of direct labor (DL) and 85% of indirect
labor received performance and career development
reviews in 2023.
This data includes all eligible indirect labor (IDL) anddirect labor (DL) employees; new hires and union/tariff
employees are not covered.

Diversity and equal opportunity
GRI - 33-1 - 3-3

Management approach

People Management at TeamNexperia
Diversity, Non-Discrimination, and Inclusion

GRI 405

405-1

Diversity of governance bodies andemployees

Diversity, Non-Discrimination, and Inclusion

GRI 405405-2

Ratio of basic salary and remuneration of
women to men

Diversity, Non-Discrimination, and Inclusion

Non-discrimination
GRI - 33-1 - 3-3

Management approach

People Management at TeamNexperia
Diversity, Non-Discrimination, and Inclusion

GRI 406406-1

Incidents of discrimination and corrective
actions taken

Business Integrity and Ethics

Freedom of association and collective bargaining
GRI - 33-1 - 3-3

Management approach

People Management at TeamNexperia

GRI 407407-1

Operations and suppliers in which the rightto freedom of association and collective
bargaining may be at risk

People Management at TeamNexperia
Guaranteeing labor and human rights

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GRI Content Index

Disclosure
Number

Disclosure Description

References

GRI - 33-1 - 3-3

Management approach

Responsible Sourcing and Supplier
Engagement

GRI 408408-1

Operations and suppliers at significant risk
for incidents of child labor

Guaranteeing labor and human rights
Responsible Sourcing and Supplier
Engagement

3-1 - 3-3

Management approach

Responsible Sourcing and Supplier
Engagement409-1

Operations and suppliers at significant risk
for incidents of forced or compulsory labor

Disclosure

APPENDIX

Notes

Child labor

For further information reference is made to:
Code of Conduct
Supplier Code of Conduct

Forced or compulsory labor
GRI - 3

GRI 409

Guaranteeing labor and human rights
Responsible Sourcing and Supplier
Engagement

Supplier Social Assessment
GRI - 33-1 - 3-3

Management approach

Responsible Sourcing and Supplier
Engagement

GRI 414414-1

New suppliers that were screened usingsocial criteria

Responsible Sourcing and Supplier
Engagement

GRI 414414-2

Negative social impacts in the supply chain
and actions taken

Responsible Sourcing and Supplier
Engagement

GRI - 33-1 - 3-3

Management approach

Business Integrity and Ethics

GRI 415415-1

Political contributions

Business Integrity and Ethics

Public Policy

For further information reference is made to:
Code of Conduct
Supplier Code of Conduct

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Disclosure

Disclosure
Number

Disclosure Description

GRI Content Index

References

APPENDIX

Notes

Customer Health and Safety
GRI - 33-1 - 3-3

Management approach

Responsibility of Management

GRI 416416-1

Assessment of the health and safety impacts
of product and service categories

New Product Design

GRI 416416-2

Incidents of non-compliance concerning thehealth and safety impacts of products andservices

We currently do not disclose any data on assessments ofour products but will do so in the future.
There were no incidents during the reporting year. (2022:
0)

Customer Privacy
GRI - 33-1 - 3-3

Management approach

Cybersecurity, Data Protection, and Privacy

GRI 416

418-1

Substantiated complaints concerning
breaches of customer privacy and losses ofcustomer data

Cybersecurity, Data Protection, and Privacy

There were no incidents during the reporting year. (2022:
0)169nexperia | Sustainability Report 2023

Glosssary

APPENDIX

Glossary
Abbreviations

Abbreviations

Abbreviations

BCM

Business Continuity Management

CSDDD

ESRS

BE

Back-end

Corporate Sustainability Due Diligence
Directive

European Sustainability ReportingStandards

BG

Business Group

CSR

Corporate Social Responsibility

ETI

Ethical Trading Initiative

CAHRAsConflict-affected and high-risk areas

CSRD

Corporate Sustainability Reporting
Directive

Fab

Front-end manufacturing, i.e. wafer fab

CBAM

Carbon Border Adjustment Mechanism

FE

Front-end

D&I

Diversity and Inclusion

CDC

China Design Center

FET

Field-Effect Transistor

DPO

Data Protection Officer

CEO

Chief Executive Officer

GaN

Gallium Nitride

E&A

Equipment and Automation

CFO

Chief Financial Officer

GDPR

General Data Protection Regulation

EAC

Energy Attribute Certificates

CH4

Methane

GHG

Greenhouse Gas

EAP

Employee Assistance Program

CHRO

Chief Human Resources Officer

GJ

GigajouleEC

Ethics Committee

CIO

Chief Information Officer

GRI

Global Reporting Initiative

EFRAG

CO2

Carbon dioxide

European Financial Reporting Advisory
Group

H&S

Health and Safety

CO2e

Carbon dioxide equivalents

EHS

Environment, Health & Safety

HFCs

Hydrofluorocarbons

CoC

Code of Conduct

EMEA

Europe, Middle East & Africa

HG

Highest Governance

CODM

Chief Operating Decision Maker

EMS

Electronics manufacturing service

HR

Human Resources

CoE

Centers of Expertise

EMT

Executive Management TeamHRIS

Human resources information system

COO

Chief Operating Officer

ERG

Employee Resource Group

HRLT

HR Leadership Team

COSO

Committee of Sponsoring Organizationsof the Treadway Commission

ERM

Enterprise Risk Management

HRM

Human Resources Management

ESD

Electrostatic Discharge

HTF

Heat-Transfer Fluid

ESG

Environmental, Social and GovernanceIC

Integrated Circuit

ESIA

European Semiconductor Industry
Association

IGBT

Insulated Gate Bipolar Transistor

CPO

Chief Purchasing Officer

C-SOXStandards

China SOX - China's version of the
Sarbanes-Oxley-Act

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Glosssary

APPENDIX

Abbreviations

Abbreviations

Abbreviations

IFRS

International Financial ReportingStandards

N2 O

Nitrous oxide

Si

SiliconNCs

Non-conformances

SiC

Silicon Carbide

ILO

International Labor OrganizationNGO

Non Governmental Organization

SLL

Sustainability-Linked Loan

InfoSec

Information Security

NIST

Severity rate

Intellectual Property

National Institute of Standards andTechnology

SR

IP

SVP

Senior Vice President

IPCC

International Panel on Climate Change

NOx

Nitrogen oxides

TA

Talent Acquisition

ISO

International Standards Organization

OECD

TCIR

Total Case Incident Rate

IT

Information Technology

Organisation for Economic Co-operation
and Development

Industrial Technology and Engineering
CentreOEM

Original equipment manufacturer

TISAX

ITEC

Trusted Information Security
Assessment Exchange

OHS

Occupational Health and Safety

3TGs

Tin, tungsten, tantalum, gold (collectively
referred to as 3TGs or Conflict Minerals)

kg

Kilograms

OT

Operational Technology

KPI

Key Performance Indicators

PDCA

Plan-Do-Check-Act process

TLD

Three Lines of Defense Model

LkSG

Lieferkettensorgfaltspflichtengesetz(Supply Chain Due Diligence Act)PFC

Perfluorocarbon

TWhTerawatt hours

POS

Point of sale

UDHR

Universal Declaration of Human Rights

LPG

Liquified petroleum gas

PPA

Power Purchase Agreement

UN

United Nations

LWC

Lost Workday Cases

R&D

Research and Development

USD

US Dollar

M&A

Mergers and Acquisitions

RBA

Responsible Business Alliance

VAP

Validated Assessment Program

MDM

Master Data Management

RFF

Rolling Financial Forecast

VOCs

Volatile organic compounds

MM

Mass Market

RMI

Responsible Minerals Initiative

VP

Vice President

MOSFETs

Metal Oxide Semiconductor Field-EffectTransistors

SAI

Social Accountability International

WBG

Wide-bandgap material

MRAT

Manufacturing Risk Assessment Tool

SDGs

Sustainable Development Goals

ZVEI

SF6

Sulfur hexafluoride

Verband der Elektro- und Digitalindustrie,
German Electro and Digital Industry
Association

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Assurance report

APPENDIX

Sustainability Performance Summary
The indicators that fall within the scope oflimited assurance of the external auditor for2023 are marked with the following symbol:

Indicator

Unit

2023

Scope 1 and 2 GHG emissions

Indicator

2023

Share of women in management positions(%);

25.1%; Total number ofmanagement positions (maleand female) in 2023: 1,365.

Share of women in senior management
positions (%);

17%; Total number of senior
managers (male and female)in 2023: 1,086.

Annual promotion rate (%);

5.6% global employee
promotion rate; Promotion
count: 750.

Total Case Incident Rate (TCIR) (per200,000);

Average total case incident
rate of 0.26 across all sites.

Share of suppliers signed Nexperia Supplier
Code of Conduct (%).

74% of active suppliers(total number of active
suppliers: 4,201) signed the
Nexperia Supplier Code of
Conduct.

Scope 1: Direct CO2 emissions
Fossil fuel emissions

tons CO2e44,398

PFCs (incl. SF6)

tons CO2e71,450N2O

tons CO2e

4,691

HTFs

tons CO2e

13,512

Subtotal Scope 1 Direct CO2 emissions

tons CO2e

134,050

Purchased electricity

tons CO2e

179,498

Subtotal Scope 2 Indirect CO2 emissions

tons CO2e

179,498

Sum Scope 1 and Scope 2 GHG emissions

tons CO2e313,548

Scope 2: Indirect CO2 emissions

172nexperia | Sustainability Report 2023

Assurance report

Assurance report of the independent auditor
Assurance report on the selected non-financial indicatorsin the Sustainability Report 2023 of Nexperia
Our Conclusion
Based on the procedures performed andevidence obtained, nothing has come to ourattention that causes us to believe that the
selected non-financial indicators marked
with the checkbox symbol in the Nexperia
Sustainability Report 2023 over 2023 are
not prepared in all material respects, withreference to the Sustainability ReportingStandards of the Global Reporting Initiative(GRI) and in accordance with the applied
supplemental reporting criteria as includedin the “Glossary” of the report as the basis toevaluate the indicators.

What we have examined
The object of our assurance engagement
concerns the selected non-financial indicators(hereafter: the indicators) for the year ended
December 31, 2023. The indicators examined
are as follows:

Scope 1 and 2 GHG emissions(tons CO2 equivalent);
Share of women in management
positions (%);
Share of women in senior
management positions (%);

Annual promotion rate (%);

Total Case Incident Rate (TCIR)(per 200,000);
Share of suppliers signed Nexperia
Supplier Code of Conduct (%).

We have examined the indicators in the
Sustainability Report 2023 of Nexperia Holding
B.V. for 2023. Other information included in
the Report are not in scope of this limited
assurance sustainability engagement. We were
not engaged to report on or conclude on otherinformation presented within the Sustainability
Report 2023 which is outside our scope.

APPENDIX

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The basis for our conclusion

Responsibilities for the indicators andthe examination thereof

We conducted our examination inaccordance with Dutch law, including
the Dutch Standard 3000A Assurance
engagements, other than audits orreviews of historical financial information(attestation-engagements). This
engagement is aimed to provide limited
assurance. Our responsibilities under
this standard are further described in
the section ‘Our responsibilities for theexamination’ of our report.

PwC applies the ‘Nadere voorschriften
kwaliteitssystemen’ (NVKS, Regulations
for quality systems) and accordingly
maintains a comprehensive system of
quality control including documented
policies and procedures regarding
compliance with ethical requirements,
professional standards and otherapplicable legal and regulatory
requirements.

We believe that the assurance
information we have obtained issufficient and appropriate to provide abasis for our conclusion.

Applicable criteria

Independence and quality control
We are independent of Nexperia Holding
B.V. in accordance with the ‘Verordening
inzake de onafhankelijkheid vanaccountants bij assurance opdrachten’(ViO, Code of Ethics for Professional
Accountants, a regulation with respect
to independence) and other relevant
independence requirements in the
Netherlands. Furthermore we havecomplied with the ‘Verordening
gedrags- en beroepsregels accountants’(VGBA, Code of Ethics for Professional
Accountants, a regulation with respect torules of professional conduct).

APPENDIX

The indicators need to be read andunderstood together with the reporting
criteria. The reporting criteria used forthe preparation of the indicator is theSustainability Reporting Standards ofthe Global Reporting Initiative (GRI) andthe applied supplemental reporting
criteria as included in the ‘Glossary’of the report. The absence of anestablished practice on which to draw,
to evaluate and measure non-financial
information allows for different, but
acceptable, measurement techniquesand can affect comparability between
entities, and over time.

Responsibilities of the management
board

Our responsibilities for theexamination

The management board of Nexperia
Holding B.V. is responsible for the
preparation of the Indicators withreference to Sustainability ReportingStandards of the Global Reporting
Initiative (GRI) and in accordance withthe applied supplemental reporting
criteria as included in the report as
the basis to evaluate the indicators,
including the identification of theintended users and the criteria being
applicable for the purpose of theseusers.
Furthermore, the management board is
responsible for such internal control as
it determines is necessary to enable thepreparation of the Indicators that is freefrom material omission, whether due tofraud or error.

Our responsibility is to plan and perform
our examination in a manner that allows
us to obtain sufficient and appropriate
evidence to provide a basis for ourconclusion.

The management board is responsible
for overseeing the company’s reporting
process on the Indicators.

Our conclusion aims to provide limited
assurance. The procedures performedin this context consisted primarily of
making inquiries with officers of theentity and determining the plausibilityof the information included in theindicators. The level of assurance
obtained in a limited assurance
engagement is substantially lower than
the assurance that would have beenobtained had a reasonable assurance
engagement been performed.

Procedures performed
We have exercised professional
judgement and have maintained
professional scepticism throughout
the examination in accordance with
the Dutch Standard 3000A, ethicalrequirements and independence
requirements.

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Our examination consisted, among
other things of the following:› Identifying areas of the indicators witha higher risk of a material omission,
whether due to fraud or error,
designing and performing assurance
procedures responsive to thoserisks, and obtaining evidence that is
sufficient and appropriate to provide abasis for our conclusion. Assessing thesuitability of the criteria used, theirconsistent application and related
disclosures to the indicators.

› Assessing the suitability of the criteria
used, their consistent application andrelated disclosures to the indicators.

› Through inquiries, obtaining ageneral understanding of the control
environment, the reporting processes,
and the information systems andthe entity’s risk assessment process
relevant to the preparation of
the indicators, without obtaining
assurance evidence about theimplementation or testing theoperating effectiveness of controls.

Imprint› Designing and performing assurance
procedures aimed at determining theplausibility of the indicators, responsive
to the risk analysis. These proceduresconsisted amongst others of:› inquiring management and/or
relevant staff at corporate level
responsible for the sustainability
strategy, policy and results;› inquiring relevant staff responsible
for providing the information
for, carrying out internal control
procedures on, and consolidating thedata of the indicators;› obtaining assurance evidence
that the indicators reconcile with
underlying records of the company;› reviewing, on a limited test basis,
relevant internal and external
documentation;› performing an analytical review ofthe data and trends of the indicators
submitted for consolidation at
corporate level.

› Reading the information other than
the indicators in the Sustainability
Report 2023, which is not included in
the scope of our review, to identify
material inconsistencies with theindicators.

We communicate with the management
board regarding, among other matters,
the planned scope and timing of thereview and significant findings that we
identify during our review.

Amsterdam, May 14, 2024
PricewaterhouseCoopers Accountants N.V.
R.P.G. ter Braak MSc RA AA
partner

APPENDIX

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APPENDIX

Glossary non-financial indicators
Term

Definition

Term

Definition

Reporting period

January 1, 2023 – December 31, 2023.

Scope

All indicators are calculated based on all Nexperia entities.

Share of Women in
Management positions(%)

Scope 1 and 2 GHG
emissions

Scope 1 emissions: direct greenhouse (GHG) emissions
that occur from sources that are controlled or owned
by our organization (e.g., emissions associated with fuelcombustion in boilers, furnaces, vehicles).

The percentage of women in management positions,is calculated by dividing the number of women in
management positions by the total number of management
positions. Nexperia defines management position as
a position that has a minimum of one person directly
reporting. Direct reports (subordinates) are classified asother employees who directly report to an employee in a
manager/management position.

Share of Women in
Senior Management
positions (%)

The percentage of women in Senior Management
positions, is calculated by dividing the number of womenin Senior Management positions by the total number ofSenior Management positions. Nexperia defines Senior
Management position as a position with a job grade 70 andabove.

Scope 2 emissions: indirect GHG emissions associated withthe purchase of electricity, steam, heat, or cooling, reported
on market-based approach. Calculation of our scope 1 and
2 GHG emissions includes our front-end and back-end sites,
Hamburg (Germany), Manchester and Newport (both UK),
Cabuyao (Philippines), Seremban (Malaysia) and Dongguan(China).
Management position

Employee with people management responsibility.
A manager has direct reports.

Senior management
position

Employee on job grade 70 and above.

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APPENDIX

Term

Definition

Term

Definition

Annual promotion rate

Percentage of employees promoted during reporting period.

Indirect labor

Indirect labor refers to the salaries and wages paid toworkers not directly involved in the manufacture of a
specific product or in performing a service. At Nexperia,
usually desk and/or computer workers.

We calculated annual promotion rate percentage by
dividing our annual promotion count by average headcountof the reporting year and multiplied by 100. Our average
headcount is the sum of headcount beginning of the year
and headcount end of the year divided by 2.
A promotion is a move to a higher job level that has greater
impact, complexity, responsibility, and authority, andtherefore a higher job grade, a job grade change from lower
to higher. The promotional increase is dependent on theposition of the employee’s current salary in the new salaryrange.

Total Case Incident Rate TCIR is a measure used by OSHA to assess workplace safety.
(TCIR)
It calculates the total number of work-related injuries andillnesses per 100 FTE over a specific period.
We calculated TCIR by dividing the total number ofrecordable cases by the total hours worked by all employees,
then multiplied by 200,000.
We encountered difficulties in gathering precise data
for total hours worked by employees, particularly at our
manufacturing sites. Therefore, we used number of FTE
and contractual working hours for our sites in Seremban(Malaysia) and Cabuyao (Philippines), and number of FTE andlegal working hours for our site in Dongguan (China).

There are two approaches to when a promotion takes place:Direct labor: the promotion of an employee performing
direct labour, is based on a decentralized performance
review. There is no standard procedure which is followed
to evaluate the performance of these employees. The
promotion of these employees are registered in Workday(HRIS) and do not hold any other supporting evidence.
Employees performing direct labor often hold a position with
job grade of 50.
Indirect labor: A promotion occurs when an employee moves
up in job grade, an example of this could be moving from job
grade 50 to 60. The promotion process follows the following
steps: Promotions are reviewed via the Talent Review model.
Direct labor

Direct labor refers to the salaries and wages paid to workers
directly involved in the manufacture of a specific productor in performing a service. At Nexperia usually line and/or
production workers.

Share of suppliers
signed Nexperia
Supplier Code of
Conduct (%)

Percentage of active suppliers signed supplier CoC (signatureof approval of own Supplier CoC) is calculated by:
Total active supplies which have signed the supplier code of
conduct/total list of active suppliers.

Active supplier

Active supplier has a recorded spend, purchase order,
invoice, or any open transaction within the past 18
months. A supplier is active in cases of master datachanges in the past 18 months or if transactions areplanned in the future.

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Imprint
Publisher: Nexperia Holding B.V., Nijmegen, the Netherlands
Copy deadline: May 14, 2024
Reporting period: January 1, 2023 to December 31, 2023
Designed by: Veronika Grigkar
Forward looking statements
This ESG report of Nexperia B.V. may contain forward-looking
statements that are subject to risks, uncertainties, and changes
in circumstances. Actual results may differ materially from thoseexpressed or implied in the forward-looking statements due
to various factors, including economic, environmental, social,
and regulatory conditions, customer demand, technologicaladvancements, competitive pressures, and other factors beyond
the Company's control. Nexperia B.V. does not undertake any
obligation to update or revise forward-looking statements, andreaders are cautioned not to place undue reliance on them.
The forward-looking statements in this report are provided for
informational purposes only and do not constitute a guarantee,
representation, or warranty, express or implied, regarding
future events or results. Please refer to the Company's otherdisclosures and reports for a comprehensive understanding of
associated risks and uncertainties.

All rights reserved. Reproduction in whole or in part is prohibitedwithout the prior written consent of the copyright owner. The
information presented in this document does not form part ofany quotation or contract, is believed to be accurate and reliable
and may be changed without notice. No liability will be acceptedby the publisher for any consequence of its use. Publication
thereof does not convey nor imply any license under patent- orother industrial or intellectual property rights.

Nexperia Holding B.V.
Headquarter:
Jonkerbosplein 52, 6534 AB Nijmegen, the Netherlands
Contact: info@nexperia.com
Our website: www.nexperia.com
Date of release: May 2024

APPENDIX

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