Stakeholder Engagement｜Analysis of Material Topics

Analysis of Material Topics and Stakeholder Communication

Material Topic Identification

Nuvoton identifies its material topics in accordance with the GRI Standards 2021 issued by the Global Reporting Initiative (GRI) and the AA1000 AccountAbility Principles Standard (AA1000APS). Nuvoton pursues corporate sustainability by referencing the 2021 version of the Global Reporting Initiative (GRI) Standards and the AA1000 Accountability Principles Standard issued by the Global Reporting Initiative (GRI). It identifies material topics based on the principles of inclusivity, materiality, responsiveness, and impact. Following the GRI 3: Material Topics 2021 framework, it constructs a process for analyzing material topic to assess the positive and negative impacts of these issues on the environment, economy, and people (including human rights).

Nuvoton conducted its materiality assessment in coordination with its parent company, Winbond, aligning with the Group's overall survey and adjusting its list of material topics based on the Group's final determinations. This approach ensures consistency with Group-level disclosures while enhancing the completeness and international comparability of the report. The materiality matrix was developed based on weighted stakeholder concern levels and sustainability impact assessments, and further refined and prioritized by taking into account the Company's key sustainability objectives. Through this process, a total of 10 material topics were identified for 2025 (as shown in the table below). Compared to 2024, two new material topics—Water resource management and occupational health and safety—were added in 2025. In addition, the material topic of regulatory compliance has been incorporated into the 2024 material topic of Integrity operation and corporate governance.

Analysis Process of Material Topic

01 Establishing Sustainability Issues Database

Gain an understanding of the organizational context and identify 21 sustainability issues

Nuvoton developed its sustainability issues database by building upon prior-year issue inventories, referencing industry practices and international trends, and evaluating the impacts and challenges of its operations and business relationships across economic, environmental, and social (including human rights) dimensions. Stakeholder profiling was also incorporated to establish a comprehensive sustainability issues database for the year.

02 Surveying Issues of Concern by Stakeholders

1,002 surveys on stakeholder concerns

Stakeholder concern surveys were distributed to assess the level of attention each stakeholder group places on various sustainability issues. The results were used to prioritize the relative importance of each issue.

03 Evaluating Sustainability Impacts

18 surveys for assessing sustainability impact

Senior management and representatives from the Task Forces under the Sustainability Development Committee evaluated the magnitude and likelihood of both positive and negative impacts associated with each sustainability issue across economic, environmental, and social dimensions (including human rights).

04 Ranking and Confirming Material Topic

10 material topics

Building upon the significance of impacts determined from the results of Phases 02 and 03 of the questionnaire by the Group Senior Management, issues from governance, economic and social dimensions were selected, considering adjustments to the Group's sustainable development priorities, to form the final 10 material topics.

05 Approval of Material Topic

Presented to the Board of Directors for approval

Based on the Group's material topic analysis results, the list of material topics was confirmed by the Sustainability Development Committee. Relevant Task Forces then formulated corresponding management approaches for each material topic, which were subsequently submitted to the Board of Directors for final approval.

Matrix on Material Topics

All

Governance dimension

Environmental dimension

Social (including human rights) dimension

List of Material Topics and Their Impact

Material Topics¹	Significance for Nuvoton	Positive / Negative Impacts	Value Chain Impact Boundaries	Lead Divisions
Integrity operation and corporate governance²	A robust governance framework ensures full compliance with all regulations relevant to the Company's operations, meets stakeholder expectations, and supports sustainable business operations	Positive By establishing and implementing relevant policies and guidelines, the Company sets clear standards for ethical business conduct, strengthens corporate governance and integrity management, and generates positive impacts for both the Company and society Negative Failure to effectively implement corporate governance and integrity operation practices may lead to the misuse of company resources, negatively impact stakeholders, and result in additional legal and litigation-related costs due to regulatory violations	Upstream (raw materials and equipment supply) Own operations (R&D design and foundry manufacturing) Downstream (packaging and testing, customer use)	Corporate Governance task force of the Sustainability Development Committee
Risk management³	A robust risk management framework supports the Company's long-term stable development, maintains customer satisfaction, and safeguards corporate assets and reputation	Positive Effective implementation of risk management enhances the Company's ability to anticipate and mitigate operational risks, protects assets and ensures operational and supply stability, strengthens business resilience, and reinforces stakeholder trust Negative An overly conservative strategy may constrain innovation and limit growth opportunities. In addition, deficiencies in risk management may undermine operational stability and customer confidence, potentially resulting in adverse impacts on order volume	Upstream (raw materials and equipment supply) Own operations (R&D design and foundry manufacturing) Downstream (packaging and testing, customer use)	Corporate Governance task force of the Sustainability Development Committee
Supply chain management	Suppliers are key partners for Nuvoton in advancing sustainable development. Supply chain risks not only affect operational, production stability and procurement costs, but supplier-related human rights or environmental incidents may also impact the Company's brand reputation and customer trust	Positive Effective supply chain management ensures that suppliers uphold human rights protections and integrity operation practices, promotes continuous improvement in suppliers' sustainability performance, supports the development of a sustainable supply chain, and maintains supply stability Negative Failure to implement supplier sustainability management may result in the inability to monitor suppliers' human rights and environmental management practices, potentially leading to adverse impacts on the Company, society, and the environment	Upstream (raw materials and equipment supply) Own operations (R&D design and foundry manufacturing) Downstream (packaging and testing, customer use)	Sustainable Supply Chain task force of the Sustainability Development Committee
Productivity and business performance	Enhancing productivity and operational performance is critical to the sustained development of Nuvoton. By optimizing resource allocation and strengthening R&D capabilities, the Company ensures a sound financial position while increasing revenue and profitability, thereby enhancing corporate value and overall operating efficiency	Positive By establishing well-defined business strategies and objectives and continuously monitoring market dynamics and industry trends, the Company enhances operational performance, profitability, and business efficiency. These efforts help maintain market competitiveness and sustain investor confidence Negative Failure to anticipate and respond to market changes in a timely manner may lead to missed business opportunities, inefficient resource utilization, and declining revenue, thereby reducing profitability, weakening market competitiveness, and affecting shareholder returns and investor confidence	Upstream (raw materials and equipment supply) Own operations (R&D design and foundry manufacturing)	Corporate Governance task force of the Sustainability Development Committee
Innovation in research and development	Innovation in research and development is a key driver of the continued growth of Nuvoton. Through technological breakthroughs and differentiated products, the Company enhances product competitiveness, expands market opportunities, and meets diverse customer needs	Positive Sustained investment in innovation strengthens growth momentum, enhances brand value, increases market share and revenue, and enables the Company to maintain a leading position in a rapidly evolving industry Negative Failure to maintain technological leadership may result in obsolescence and limit the Company’s ability to deliver competitive products and services in response to market changes, thereby reducing customer attractiveness and adversely affecting revenue and profitability	Own operations (R&D design and foundry manufacturing) Downstream (packaging and testing, customer use)	R&D departments across business groups
Green products	Green products have become a key focus across the industry in recent years. Investment in green products development not only reduces environmental impacts and meets customers' sustainability expectations, but also enhances Nuvoton's sustainable competitiveness, strengthens brand image, and supports long-term development advantages	Positive By reducing carbon emissions throughout manufacturing processes and product use, the Company meets market and regulatory requirements while enhancing brand reputation and fulfilling corporate social responsibility. These efforts help attract environmentally conscious customers, promote sustainable industry development, and strengthen competitiveness and market share Negative Green products design may increase costs related to R&D, production, and supply chain adjustments. In addition, uncertainty in market demand may affect return on investment and elevate operational risks	Own operations (R&D design and foundry manufacturing)	Green Products task force of the Sustainability Development Committee
Energy and greenhouse gas management⁴	Nuvoton has implemented energy-saving technologies and increased the use of renewable energy. The Company minimizes environmental impacts across its operations, product design, and production processes, while promoting energy management systems to achieve effective green environmental management	Positive Improving energy efficiency reduces operating costs and expenses, strengthens competitiveness in green markets, and enhances supply chain resilience through supplier carbon management. These efforts also help attract sustainable investment Negative Climate change and the transition to a low-carbon economy may lead to volatility in domestic and international energy prices, increasing operating costs. In addition, inadequate management of greenhouse gas emissions may result in regulatory fees and charges. Failure to meet customer decarbonization requirements may also lead to potential loss of market opportunities	Upstream (raw materials and equipment supply) Own operations (foundry manufacturing) Downstream (customer use)	Environmental Sustainability task force of the Sustainability Development Committee and Finance unit
Water Resource Management	Water resource management is not only an environmental responsibility for Nuvoton, but also a critical factor in maintaining process stability and product quality. Semiconductor manufacturing is highly water-intensive, and any water-related risks may affect production efficiency and supply chain resilience. In addition, inadequate treatment of process wastewater may result in environmental pollution and regulatory risks	Positive Ensuring a stable water supply and improving water-use efficiency help maintain production stability while reducing operating costs and environmental risks. Effective management of wastewater discharge minimizes environmental pollution and protects ecosystems Negative The implementation of water-saving equipment and management systems requires investment in capital and human resources. Improper operation or maintenance may affect process efficiency and increase operating costs, potentially leading to water wastage or even water pollution	Own operations (R&D design and foundry manufacturing)	Environmental Sustainability task force of the Sustainability Development Committee and Finance unit
Talent management⁵	Attracting, retaining, and developing talent are not only core corporate responsibilities but also critical to maintaining a competitive edge in a highly dynamic market. Nuvoton is committed to fostering an inclusive and supportive workplace that promotes employee growth, continuously enhances employee satisfaction, and ensures sustainable talent development	Positive Effective talent management and enhanced employee well-being improve employee satisfaction and productivity, attract and retain high-caliber talent, maintain operational stability, and strengthen the Company's competitiveness and innovation capabilities Negative Inadequate talent management may lead to labor-management disputes, lower employee morale, and reduced retention rates, thereby affecting the Company's reputation and operational stability	Own operations (R&D design and foundry manufacturing)	Human Rights and Social Inclusion task force of the Sustainability Development Committee
Occupational Safety and Health	Occupational safety and health (OSH) is not only a fundamental regulatory requirement but also the cornerstone of employee well-being. Through the active participation of all employees, Nuvoton continues to reduce the disabling injury rate and minimize the use of chemical substances, implementing the principle of "design for environmental protection, safety, and health."	Positive Through systematic management and effective risk control, the Company reduces workplace incidents, downtime losses, and medical costs, while enhancing employee trust and organizational resilience Negative Inadequate management may result in workplace injuries or fatalities, operational disruptions, and associated compensation liabilities. This may also lower employee morale and productivity, and undermine business stability	Own operations (R&D design and foundry manufacturing)	Human Rights and Social Inclusion task force of the Sustainability Development Committee, Occupational Safety and Health Committee, EHS (Environment, Health, and Safety) Management Department

¹ Change in Material Topic Lists: Nuvoton Technology Corporation aligned its 2025 material topics with those of its parent company, Winbond Electronics Corporation, and made adjustments across three areas: 1. Consolidation of topics: The 2024 topic "Regulatory Compliance" has been integrated into "Integrity Operation and Corporate Governance." 2. Addition of new topics: Water Resource Management and Occupational Health and Safety were newly added in 2025. A total of 10 material topics were identified for 2025.

² The topic "Integrity Operation and Corporate Governance" encompasses the content of both "Integrity Operation and Corporate Governance" and "Regulatory Compliance."

³ Risk Management covers "Risk Management" and "Information System Security and Personal Data Protection."

⁴ Energy and Greenhouse Gas Management includes content related to both "Energy and Greenhouse Gas Management" and "Climate-Related Risks and Opportunities."

⁵ Talent management includes "Remuneration and benefits and employee care," "Talent recruitment and cultivation," "Human rights and equality" and "Labor relations."