Sustainability Management｜Message from Management

Looking back at the challenges of the past, particularly an overall market contraction and a challenging economic environment encountered in 2023, our team has consistently demonstrated unwavering commitment and diligent effort. By harnessing Nuvoton's diverse product portfolios and the expertise of eight business groups across Taiwan and Japan, we have effectively utilized our distinctive strengths in product diversification to confidently move forward into 2024.

Therefore, despite the impact of geopolitical tensions and the underperformance of the automotive and consumer electronics markets in 2024, we remain dedicated to enhancing our market diversification strategy, and attach more importance to the long-term growth markets such as automotive electronics and the industrial Internet of Things (IoT), while actively expanding into application areas like AI and green semiconductors, in order to reduce our dependence on any single market. The diverse range and comprehensive portfolio of products will enhance our global presence, establish an international brand, and maximize opportunities.

Facing uncertainties caused by geopolitics, we have implemented a diversified supply chain strategy, established customer-focused global service teams to provide technical support in the United States, Japan, and Singapore, actively improved the flexible management of upstream and downstream supply chain, and sought alternative solutions from various regions. This approach not only reduces geopolitical risks but also ensures the resilience of the overall supply chain and product technical support.

In climate change, Nuvoton is steadfastly progressing towards achieving net carbon zero by 2050. We have consistently implemented energy-saving and carbon reduction solutions. These solutions include substituting liquefied petroleum gas with natural gas, optimizing and adjusting the consumption of process gases, and obtaining GHG emissions reduction credit for early stage projects from the Ministry of Environment. As an IC design company, Nuvoton is committed to sustainable development from the outset, and invests its R&D resources to green products and low-power, high-efficiency and secure solutions.

Besides incorporating sustainable development into our operations, Nuvoton also prioritizes the sustainability of talents. In 2024, we announced our participation in the 2024 TALENT, in Taiwan, Taiwan Talent Sustainability Development Alliance. We are dedicated to fostering a diverse, equitable, and inclusive workplace for our employees by organizing DEI (Diversity, Equity, and Inclusion) activities and promotions, implementing comprehensive health support programs, establishing a complete functional and learning resource system, and conducting our first human rights due diligence. Ultimately, it's expected that this sustainability report will allow us to showcase our achievements and capabilities in various areas, foster strong relationships with stakeholders, and consistently strive for a sustainable future.
 

In 2024, the slowdown in the global automotive market and geopolitical uncertainties have brought unprecedented pressure to Nuvoton's operations. Nonetheless, these challenges also offer opportunities for transformation and innovation.

Nuvoton has adopted and expanded a diversified product portfolio strategy into the automotive and industrial IoT sectors to mitigate market volatility risks. We have also enhanced the resilience of our supply chain to guarantee a steady product supply while proactively tackling geopolitical challenges. Furthermore, our global market layout, including the establishment of new offices in the United States, Germany, and India, aims to capitalize on growth opportunities.

In product innovation and R&D, we prioritize green design and manufacturing trends, increase investments in Edge Computing Microcontroller Units (MCUs) and AI PCs used for the field of Artificial Intelligence (AI), and focus on developing high-performance, energy efficient green products and advance safety technologies. We are actively enhancing product computing performance and security,creating high-efficiency products to reduce energy consumption, and employing intelligent power management technology to reduce the carbon footprint of the overall PC and Server industry. Our green technologies, such as 48V fan drivers and battery management technologies, have achieved significant results in energy saving. In response to the challenges of green product development, a green supply chain management platform is established to collaborate with suppliers to reduce harmful substances and enhance the environmental performance of production processes.

We recognize the importance of AI in various industries worldwide and are actively investing in the R&D of next-generation MCU, neural processing unit (NPU), and microprocessor unit (MPU) solutions to drive the growth of the AI application market. In the sector of AI, we launched several highlight products in 2024, including a new terminal AI platform and the NuEdgeWise, a machine learning development tool. We also introduced the NuEzAI-M55M1 no-code development board powered by the M55M1 microcontroller, enabling developers to expedite the training and deployment of image recognition models.
 

These strategies and innovations enable Nuvoton to drive the development of the industrial IoT sector, and help Nuvoton achieve the dual goals of technological progress and environmental responsibility. We will persist in our efforts to lead the industrial IoT sector, and explore the depths of smart manufacturing and industrial automation markets. In line with the global shift towards a low-carbon economy, we aspire to be the preferred choice for industrial users, and consistently deliver efficient, stable, and sustainable development solutions to our customers.
 

Chairman of the Sustainable Development Committee of Nuvoton Taiwan

Nuvoton has set a long-term target of achieving net carbon zero emissions by 2050 and has established short-, medium-, and long-term goals to actively respond to the global trend of net carbon zero emissions. Nuvoton has implemented and certified an Energy Management System (ISO 50001) to reduce indirect CO2 emissions caused by burning fossil fuels during electricity usage through systematic and traceable energy-saving plans. For Scope 1 and 2, Nuvoton reviews its operations and manufacturing processes, installs greenhouse gas treatment equipment to reduce energy consumption, decrease emissions, and improve operational efficiency.

  Nuvoton is also actively increasing its renewable energy capacity, with its installed solar power system expected to generate 880,000 kWh of green electricity annually. In Scope 3, the company continues to collaborate with suppliers to collect greenhouse gas inventory data across the supply chain and helps customers reduce energy consumption during product use through improved product performance, thus achieving energy savings and carbon reduction.On the path to carbon reduction, Nuvoton aims not only to move quickly but also to progress alongside its partners in the value chain. Nuvoton adheres to a "people-oriented" philosophy, considering talent as key capital for sustainable development.

The company emphasizes talent cultivation and development, strives to create a friendly workplace, and provides a safe and healthy working environment. By implementing a comprehensive human resource management system and optimizing human resource integration, Nuvoton continually promotes a people-oriented corporate culture and enhances employees' sense of belonging.Practicing sustainability is a long-term journey.

Nuvoton will continue to enrich human life through green semiconductor technology and actively promote various carbon reduction measures. By collaborating with more partners who share ESG-related values, Nuvoton is committed to becoming a green enterprise dedicated to sustainable development.

Chairman of the Sustainable Development Committee of Nuvoton Japan

NTCJ is committed to environmental, social, and governance (ESG) activities to achieve a sustainable society and aims to be a company trusted by society. The year 2023 marked the beginning of NTCJ's ESG activities, during which we established a new system in collaboration with NTC Taiwan. This system is designed to advance the activities of Taiwan and Japan as a whole. We have established seven major sustainability working groups, each dedicated to disclosing the details of our corporate sustainability activities and performance to all stakeholders in a transparent and open manner to gain understanding and trust.

Through regular integration meetings among the seven working groups, we share progress on various activities and set future short-, medium-, and long-term goals. This promotes a unified direction for corporate sustainability management for both NTC Taiwan and Japan. We anticipate that, through solid planning, we can simultaneously grasp risks and opportunities, laying the foundation for achieving our goals. It is crucial to turn our aspirations into actions, continuously creating value through semiconductors to achieve sustainable development in human society,  and working proactively with a sense of mission.

Nuvoton has a clear vision: "Be a hidden champion in providing sustainable semiconductors to enrich human life." We will continue our efforts to contribute to the realization of a sustainable society.