Sustainable Supply Chain｜Supplier Management

Sustainable Supply Chain Management

As a key player in the semiconductor supply chain, with a focus on chip design upstream and wafer manufacturing midstream, Nuvoton closely collaborates with suppliers in the industry chain to form partnerships based on specialized division of labor and mutual cooperation. As a global semiconductor industry leader, collaborating with suppliers to build a sustainable supply chain is a key indicator of Nuvoton's sustainable development management. Nuvoton pays attention to labor rights in the supply chain, requiring suppliers to operate in compliance with relevant laws of their operating countries and comply with relevant international industry codes of conduct, including the Responsible Business Alliance (RBA) Code of Conduct and any changes or amendments thereto. All manufacturers in the supply chain are required to sign the "Compliance Commitment Code of Conduct" and "Confidentiality Agreement." Over the past three years, 100% of Nuvoton's suppliers have signed the Supplier Code of Conduct. In 2024, Nuvoton's suppliers did not experience any human rights disputes related to child labor, forced labor, violation of the freedom of association or collective bargaining rights of employees.

In the risk management of critical materials (wafers, chemicals, gases, targets), Nuvoton employs three main control strategies. In 2024, there were no instances of critical material shortages:

Supplier Selection and Evaluation

Nuvoton's selection mechanism for new suppliers is designed with reference to RBA standards. It considers multiple factors, such as the use of hazardous substances, quality, price, and environmental considerations. Suppliers meeting Nuvoton's requirements must sign agreements including the "Code of Conduct Commitment," "Confidentiality Agreement," and "Declaration of Non-Usage of Conflict Minerals." Nuvoton also requires suppliers to faithfully execute all transactions without harming Nuvoton's interests or reputation to become qualified suppliers. Additionally, Nuvoton encourages suppliers to obtain international certifications such as ISO 14001 for environmental management systems. If suppliers cannot obtain these certifications promptly, Nuvoton requires them to provide a schedule for obtaining the certification.

Selection Mechanisms for Suppliers
Environmental Management System Certification	Nuvoton Taiwan Encourage its supply chain manufacturers to obtain international certifications such as ISO 14001 for environmental management systems. If they cannot obtain them promptly, they are required to establish a schedule for obtaining the certification. Nuvoton Japan Regularly inspect suppliers to ensure that manufacturers have established environmental management systems and tracked actual operations
Code of Conduct	Nuvoton Taiwan Aetirls al spies tactories to fin sign sie Bmilence ome Rent Code of Conduct, and "Confidentiality Agreement." Manufacturers must faithfully execute all transactions without harming Nuvoton's interests or reputation. Nuvoton Japan Before cooperating with new suppliers, we conduct quality and environmental audits and require manufacturers to sign a "Guarantee of Non-Usage of Hazardous Substances."
Conflict Minerals Management	Nuvoton Taiwan Relevant suppliers are required to sign the "Non-Use of Conflict Minerals Declaration," including wafer foundry subcontractors, packaging plants, and raw material suppliers. Nuvoton Japan Currently discussing with the Taiwan headquarters to extend the scope of signing the "Non-Use of Conflict Minerals Declaration" to Nuvoton Japan's suppliers

Risk Assessments

In 2023, we conducted RBA risk assessments for our top 92% suppliers by revenue, covering ESG risk evaluation content (including environmental, social, and governance aspects).

Starting from 2024, key suppliers are required to undergo regular assessments, including completing a self-assessment questionnaire (SAQ) on the Business Continuity Plan (BCP) and compliance with product-related regulations and customer specifications. Nuvoton commits to continually assessing supplier risks, measuring the extent of negative environmental and social impacts, and devising improvement plans to enhance the resilience of the overall supply chain.