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Focused Issues in 2020

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Focused Issues in 2020 Focused Issues in 2020 ⚫ Focusing on E in ESG with a total of TWD 1,500,000 invested "Optoelectronics energy saving and environmental sustainability" is the main axis of LITEON's ESG development strategy. In response to the zero-carbon green economy, we continue to strive to expand the market for sustainable materials. Meanwhile, we work with the government and all stakeholders in our value chain to enhance LITEON's green product design and continue to pay close attention to corporate carbon management issues that are closely related to us. LITEON works with domestic social enterprises that process Styrofoam marine waste, the Penghu County Government, and the Industrial Technology Research Institute to modify recycled Styrofoam marine waste into recycled plastics. LITEON succeeded in using modified recycled plastics in LITEON's keyboard and mouse products. We also obtained certification of 76% use of PCR content and certification of origin. In 2020, LITEON went on to sponsor the Penghu County Government and the Kinmen County Government in getting the world's first containers that could be processed on-site and significantly reduce the transportation volume of Styrofoam marine waste. We hope to promote the market visibility of our products and maintain close communication with the government on policies and applications of corporate environmental sustainability. In addition, in 2021, we joined the “Taiwan Climate Partnership” formed by the government, to jointly consult on corporate carbon management related future policies. ⚫ Continue to develop high-performance power conversion technologies and products with a total of TWD 586,514 invested. LITEON's ICT products account for 76% of its total revenue and are mainly power supplies. Given slowing growth in the PC market, LITEON will continue to explore opportunities in consumer electronics, high-end network communication, and servers and other non-PC power supply markets. With the fast-rising demand in handset electronic devices and the cloud computing industry, the company develops power sources specifically for mobile phones and tablets, such as wireless chargers and quick chargers as well as high-end network communication server power management systems to enhance the product portfolio. LITEON will start exploring opportunities in special industry-grade power systems and positioning itself as a provider of power management solutions in the future to continue the revenue growth momentum in power supply units. Besides cooperating with industry, government, and academia through the associations, LITEON’s Power Module Solution BU has participated in response to the future trend of digitization, extending the focus of research and development to wireless charging, and continuing to apply the latest technology in development. Introduce high-quality products more in line with customer needs. WPC is the first industry standard organization for wireless power supplies with standards developed for low-power applications less than 15W to achieve interoperability between various charging boards and portable devices. LITEON developed a wireless charger module compatible with the latest Qi-standard of WPC with a free-of-position feature for phone sitting and foreign object detection (FOD). The first-generation product (5W) has been mass-produced globally for many years and the 11kW high-power wireless charger for EV application is under development and expected to be completed in 2022. 1 ⚫ Support the technology research and development of the optoelectronic industry and expand the development of the global market with a total of TWD 532,427 invested. Founded in 1975 as a LED manufacturer, LITEON is the longest-running and largest-scale optoelectronic components supplier in Taiwan; our optoelectronic components products are widely used for applications for all purposes. Therefore, supporting the R&D of the optoelectronics industry and expanding the global market are critical to LITEON for “Best Partner in Opto-Electronic and Eco-Friendly” are the foundation of LITEON’s vision. As one of the worldwide major suppliers of opto device supplies with 31.9 billion production amounts in 2020, LITEON Opto is always forging ahead with new product development. We are developing visible opto products as well as products outside the visible range. Outside the company, LITEON is an active supporter of business associations and trade organizations and promotes the adoption of international standards in the industry. Through the Taiwan Optoelectronic Semiconductor Industry Association (TOSIA), of which LITEON's former OPS president used to be the chairman, we not only consult for policies relevant to the industry but also play an active role in establishing standards and guidelines. We support Taiwan’s national policy of “Southbound” by founding the "Smart Optoelectronic Semiconductor Sensor" and "LED Lighting Southbound Chain" task forces, which promote participation in trade conferences, introduce a global perspective into the industry and hopefully expand our global market. ⚫ Develop innovative automotive products and Continue to strengthen LITEON's presence in the automotive market through Taiwan Telematics Industry with a total of TWD 517,295 invested. The LITEON Automotive Electronics Applications BG(AEA) focuses on automotive vision solutions, vehicle lighting solutions, vehicle control & applications, and EV Charging Solutions. In addition, many Business Groups of LITEON are in the automotive market value chain. For example, the Power BG provides parts for middle and upper reaches by designing and developing combined electric vehicle AC charging piles and 2.5kW hybrid electric vehicle 48V bidirectional DC converters. The Optoelectronics Product Solutions (OPS) BG provides for downstream applications with automotive lighting, automotive LEDs. Others include Automotive solid state drives(ODD BG), smart car applications and car networking applications, etc.(Smart Applications Solution BG). Through participating in the Automobile Industry Association (TTIA), continue to influence/participate in the formulation of public sector policies and regulations in the country, such as the Ministry of Economic Affairs: Telematics and automotive electronic technology/application services industry chain construction and industry Ministry of Chemistry and Transportation: Policy planning and follow-up promotion of Intelligent Transportation System (ITS), Environmental Protection Agency: Assist in the formulation of carbon footprint/green footprint technology, regulations and policies, and implement them to the industry. For tourism Bureau: assist the domestic tourism industry. For overseas development, we will continue to combine domestic electrical and electronic industry exchanges and cooperation to build unique product competitive advantages. And actively organize groups to participate in overseas exhibitions to expand overseas markets. ⚫ Focusing on ESG and compliance insights with a total of TWD 308,447 invested. 2 LITEON works with Responsible Minerals Initiative (RMI), BCSD Taiwan and Taiwan Corporate Governance Association, etc. With the rise of Sustainable Investment, ESG performance is now the most important non-financial indicator for company assessment. With a 52% foreign shareholding ratio, LITEON’s must focus more on sustainable development issues. Participate in ESG advocacy initiatives to obtain the latest ESG regulatory information and best practices in order to respond to stakeholders (including customers, government, investors.... etc.) expectations. ➢ Through BCSD and the Corporate Governance Association and other organizations related to ESG issues, we can keep up and comply with the latest domestic and foreign trends and related laws and regulations to reduce corporate legal compliance risks. ➢ In response to our customers' request on LITEON's conflict mineral management, we joined RMI for its tools and resources to make sourcing decisions that improve regulatory compliance and support responsible sourcing of minerals from conflict-affected and high- risk areas. ➢ Pursue sound corporate governance and business management and fulfill corporate social responsibility and environmental protection by getting involved in business associations and organizations and sharing experience in sustainability issues. Combine and implement action plans unique to others in the industry and work together to achieve sustainability. 2020 Contributions & Other Spending unit: $NTD / Data coverage: 100% of revenue 2017 2018 2019 2020 Lobbying, interest representation or similar 0 0 0 0 Local, regional, or national organizations 0 0 0 1,500,000 Local, regional, or national political campaigns / 0 0 0 0 candidates Trade associations or tax-exempt groups (e.g., think 783,017 653,018 1,882,231 1,591,875 tanks) Other (e.g., spending related to ballot measures or 0 0 0 0 referendums) Total contributions and other spending 783,017 653,018 1,882,231 3,091,875 3 2020 Expense of Participating Public Association unit: $NTD Public Association LITEON Joined Expense Taipei Computer Association 15,000 Taipei Neihu Technology Park Development Association 5,000 Taiwan Electrical and Electronic Manufacturers' Association 42,000 Taiwan Lighting Fixture Export Association 6,000 Business Council for Sustainable Development of Taiwan (BCSD-Taiwan) 60,000 Photonics Industry and Technology Development Association 40,000 Taiwan Optoelectronic Semiconductor Industry Association, TOSIA 225,000 Electronic & Computer Employers’ Association (Thailand) 18,500 Chai-Klong Personnel Management (Thailand) 1,500 SEMI 236,250 Taiwan Transportation Vehicle Manufacturers Association 32,400 Institute of Internal Auditors-Chinese 12,000 Taiwan Corporate Governance Association 15,000 Open Compute Project 77,174 Open Data Center Committee 449,060 Wireless Power Consortium 463,044 Taiwan Enterprise Association of Guangzhou 44,906 Guangdong Investment Promotion Association 22,453 SMT Professional Committee of Jiangsu Institute of Electronics 8,981 Anti-Static Equipment Branch of China Electronic Instrument Industry Association 4,491 Wujin Human Resources Association 4268 Responsible Minerals Initiative 221,447 Total 1,591,875 4 .
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