Sustainability Management｜Message from Management

In 2025, amid evolving challenges such as tariffs, geopolitical tensions, and the rapid expansion of AI applications, Nuvoton faced operational headwinds while also identifying structural opportunities for growth. 

We have closely integrated sustainability with our core business strategy, responding to customers' dual expectations for low-carbon solutions and high reliability through energy-efficient design and high-performance solutions. At the same time, we have strengthened overall supply chain resilience and operational stability by diversifying both our production footprint and customer portfolio, thereby reducing reliance on any single regional market. In response to growing demand in AI, automotive electronics, and intelligent applications, we have introduced AI-enabled Machine Learning Microcontroller Unit (MCU), empowering customers to deploy AI models and smart applications more efficiently and with lower barriers to entry.

On climate action, we announced our science-based emissions reduction targets in March 2025. Internally, we are focusing on process emissions reduction and optimizing energy efficiency; externally, we are driving low-carbon transformation across our supply chain by requiring major suppliers to obtain ISO 14064 or equivalent international certification, alongside ongoing monitoring to ensure effective implementation of decarbonization initiatives. In parallel, we have strengthened water risk governance by reducing water consumption at the source and promoting recycling and reuse, thereby lowering dependence on external water resources. We have also established water resource monitoring and reservoir alert mechanisms to enhance operational resilience and environmental sustainability.

We are equally committed to ecological sustainability. Through our participation in the Carbon Sink and Biodiversity Project of the Forestry and Nature Conservation Agency under the Ministry of Agriculture, titled "Butterfly Revival – Protecting the Habitat of the Great Purple Emperor," we collaborate with partners on ecological surveys and public awareness efforts, fulfilling our commitment to biodiversity and natural resource conservation.

In advancing talent sustainability, we focus on four key pillars: "Empowering the Future, Global Inclusion, a Happy Workplace, and Shared Social Value." We have launched AI empowerment initiatives within the Company, while continuing to promote diversity, equity, and inclusion (DEI). Human rights training has been expanded to our global subsidiaries, and we are deepening local engagement and community care to amplify positive impact both within and beyond the organization.

Looking ahead, we remain committed to our core belief in advancing growth alongside sustainability. Through green innovation, integrity governance, and a people-centric approach, we will continue to build long-term competitiveness. Together with our stakeholders, we will move forward—realizing sustainability through growth, and achieving growth through sustainability.

Amid intensifying geopolitical turbulence and the global surge of AI, Nuvoton has responded with a steady strategy grounded in "building on a solid foundation and growing with resilience." Through diversified product portfolios, expanded market positioning, and geographically distributed supply chains, we continue to strengthen our long-term sustainable competitiveness.

In response to rapidly evolving geopolitical dynamics, we have adopted a multi-pronged globalization strategy to enhance supply chain resilience. We actively promote local sourcing while implementing a multi-supplier, multi-region sourcing principle for critical raw materials. In addition, we have introduced BI-based visualization dashboards and disaster notification systems to effectively mitigate production risks.

As a "Hidden Champion in Providing Sustainable Semiconductors", we are committed to supporting our customers' low-carbon transition. Guided by green design principles, we continue to advance low-power and high energy-efficiency product strategies. In 2025, we launched several key innovations, including: the NuMicro® M2L31 series microcontrollers, achieving a 40% reduction in power consumption compared to the previous generation; fourth-generation Battery Management ICs (BMIC); next-generation embedded controllers (EC) designed for AI PC; USB4 Re-timer; and next-generation Baseboard Management Controllers (BMC). These solutions effectively reduce energy consumption and carbon emissions in customer devices, supporting the broader industry’s transition toward a low-carbon economy. In our manufacturing processes, we have incorporated circular economy principles to improve material reuse rates, while adopting advanced process technologies to reduce energy consumption and environmental impact.

In terms of AI applications, we work closely with customers to operationalize real-world use cases. For industrial automation, machine learning-enabled MCU executes AI models on-device, enabling real-time vibration and acoustic fingerprint analysis on factory floors—reducing latency from seconds to tens of milliseconds. With regard to smart home and healthcare devices, AI enables ultra-low-power, always-on voice activation and gesture recognition, while wearable devices can perform on-device physiological signal inference and anomaly detection—balancing privacy protection with energy efficiency.

Looking ahead, the continued advancement of global AI technologies alongside the acceleration of the energy transition will represent key growth drivers for Nuvoton. By advancing in parallel along the dual pillars of "technological innovation" and "ESG governance," we are strengthening strategic partnerships with leading global enterprises and enhancing our presence in cloud computing and AI server markets. Leveraging secure architectures and ultra-low-power technologies as our core strengths, we are developing high-performance AI-on-Chip solutions—ensuring our growth remains aligned with global digital transformation trends. At the same time, we continue to implement internal decarbonization and green design practices, delivering lower-power, higher-efficiency solutions that enable value creation and environmental sustainability to progress hand in hand.