Integrity Management

Climate Strategy

Information Security

Corporate Governance & Ethic

Environmental Policy & Management

Cyber Security

With the beliefs of “Integrity, Service, Quality, and Innovation”, PSMC and has set the highest standards for its directors, managers, and employees to comply with the anticorruption and anti-bribery laws and regulations applicable in the countries in which we operate. PSMC also strives to enhance the work ethics and professional competence of its internal staff through the three main pillars of “Establishing a Integrity Management Regulation”, “Implementing Education and Training”, and “Establishing a Whistleblower System” for integrity management and communication. If the company fails to manage its business with integrity, it may face penalties for dishonest and illegal behavior, which will not only affect the company's revenue, but also affect its reputation.

PSMC has established a "Sustainability Committee" to formulate various climate change strategies and review the compliance and appropriateness of response strategies and goals. PSMC has also established a "Risk Management Committee" to identify and analyze organizational climate-related risks and effectively control potential risks that organizations face from climate change. Companies are facing risks and challenges brought about by climate change. If the company fails to formulate mitigation measures, operating costs will increase when climate risks occur. PSMC has identified five key climate risks through the TCFD framework. If the company fails to promptly propose response strategies, it will lead to increase in operating costs, risks of opera-tional disruptions, input costs, and reduce revenue.

As PSMC continues to make breakthroughs in technological development, information security and confidential information protection have become increasingly important. Information security issues are also among the top three issues ranked by impact after assessment by internal and external stakeholders of PSMC. If the information security of the company, customers or suppliers is not protected, the risk of information leakage will increase, thereby affecting the company's reputation.

Risk

Cost

Risk

1. PSMC has established standards such as the "Code of Integrity Management" and "Integrity Management Operating Procedures and Behavior Guidelines".
2. In 2024, there were no incidents that PSMC violated the integrity management such as corruption or bribery, conflicts of interest, money laundering or insider trading, etc.
3. 100% completion of the courses related to "insider trading prevention, ESG development, integrity management, social responsibility & business ethics", etc. for our employees in 2024, and all directors have completed the educational on anti-corruption policies.
4. PSMC has set up the "Business Ethics Maintaining Whistleblowing System" and "whistleblowing mailbox", through which external whistleblowers can report unethical cases in an anonymous or a named way to the Company. In addition, whistleblowing channel information is conveyed to external stakeholders through the Company's ESG website, orders and invoices for stakeholders to make whistleblowing reports or file complaints if any violations are identified.

1. Establish a “Sustainable Development Committee” and a “Risk Management Committee” for managing relevant climate change.
2. PSMC has identified 12 climate risks and 9 climate opportunities by considering the domestic and international climate change development trends and its own current operating conditions, and the relevant departments of authority have jointly evaluated the level of impact of climate related risks and opportunities. The evaluation covers the entire value chain of PSMC. Based on the level of impact, vulnerability, control, and probability of occurrence that each risk and opportunity, and the characteristics of the scale for short-middle-long term period has on PSMC, we identified the key issues that we should prioritize and address for climate change after an internal investigation, and formulated the strategies and targets in order to implement climate change management.

1. Regularly conduct information security campaigns, purchase additional related analysis software, and develop communication checking systems to implement information security.
2. PSMC has passed the ISO 27001 Information Security Management System Certification, and formulated short, medium, and long-term goals such as developing a trade secret registration system in 2030 to ensure the secure protection for technologies developed and business secrets.
3. PSMC has formulated its information security policy and management regulations, and set up the "Information Security Committee" to serve as the core decision-making unit to supervise information security management and implementation to reduce related threats and risks.
4. The ransomware attack disaster recovery drill results shall be used as a reference for measures taken to fortify information security protection to comprehensively and completely protect enterprise assets and stakeholders' rights and interests.

Integrity management

2025

• Continuous execution ethical management risk assessment operations

• The goals set for integrity management in 2024 have been achieved. Please refer to P.20 and P.123 of the 2024 Sustainability Report.
• Formulate the Integrity Management Risk Assessment and Management Procedures
• Conducted companywide integrity management compliance audits
• Maintained a record of zero corruption incident for the entire year and a zero tolerance attitude toward integrity management practices.

Regarding the issues of integrity management, the performance of non-financial indicators related to ESG governance has been included as a variable remuneration evaluation item for senior management

Climate strategy

2030

• Average annual reduction rate of greenhouse gases 1%
• Reduction of total perfluorinated compound emissions from the manufacturing process 90.0%
• Greenhouse gas direct emissions – Absolute reduction 14%；1.5tons (base year 2020)
• Greenhouse gas scopes 1 and 2, Absolute reduction 10% (base year 2020)

• The goals set for climate change in 2024 have been achieved. Please refer to P.18, P.63-64 of the 2024 Sustainability Report.
• Promote energy saving /carbon reduction pro-grams to reduce green-house gases by an average of 1% per year.
• 84.5% reduction of total perfluorinated compound emissions from the manufacturing process.

Regarding the issues of climate strategy, the performance of non-financial indicators related to ESG governance has been included as a variable remuneration evaluation item for senior management.

Information security

2027

• Continuous reinforcement enhance employee education and training to improve information security awareness
• Strengthen trade secret management
• Introduce Team Drills Enhance defense against hacker attacks

• The goals set for information security in 2024 have been achieved. Please refer to P.20, P.135-137 of the 2024 Sustainability Report.
• No significant information security incidents occurred.
• Critical information systems must establish a backup & recovery mechanism and implement backup & recovery exercises.
• Obtained ISO 27001 certification to continuously strengthen employee education and training and enhance information security awareness.
• No substantiated complaints concerning breaches of customer privacy and losses of customer data , or other violations of laws and regulations.
• The proportion of secondary use of customer information was 0%.

Regarding the issues of information security, the performance of non-financial indicators related to ESG governance has been included as a variable remuneration evaluation item for senior management.

Talent Attraction and Retention

Innovation and Intellectual Property Management

Human Capital Management

Sustainable Products & Services

>50% of business activity

>50% of business activity

• Society
• Consumers/end-users
• External employees (e.g. supply chain, contractors)

• Environment
• Consumers/end-users

Type of impact：Both positive and negative Impacts

Impact on external stakeholders:

Positive impact：
In response to changes in the employment environment, continuous adjustments in talent recruitment and employee salaries, etc., it can attract more talent to join the company and increase retention rates.

Negative impact：
If the company does not continuously adjust salaries and benefits, it will affect talent recruitment decisions, and the company will be unable to recruit outstanding talents and reduce retention rates.

PSMC adheres to the human-oriented business philosophy and is committed to creating a suitable working environment for employees, providing competitive salaries and benefits, comprehensive education and training, performance appraisal and labor management communication systems, and cooperating with universities and colleges to cultivate high-tech talents for the future. In addition, PSMC has also invested in the "Semiconductor Academy Program" in the hope of training more Taiwanese engineers.

Type of impact：Both positive and negative Impacts

Impact on external stakeholders:

Positive impact：
In order to meet the needs of applications in various fields, it is necessary to continue to strengthen technological innovation and internal intellectual property management, and ensure product quality to enhance competitiveness.

Negative impact：
If PSMC does not consider low-carbon products or processes in product innovation or processes, it will not only increase the financial burden on customers due to carbon fee or tax, but also increases the impact of customers on the environment.

PSMC focuses on process innovation, product design, and power management solutions. PSMC invests in developing energy-efficient semiconductor manufacturing processes, designs high-performance electronics with optimized energy efficiency, and leads the industry in developing power management chips that reduce energy loss

Number of unemployed people (person)

Carbon emission reduction (t- CO2e )

Impact valuation：Social costs caused/avoided
Description of the impact assessed： The "Semiconductor Academy Project" cultivates talents, reduces the number of unemployed people, and thereby avoids social costs.

Impact valuation：Environmental lost/gained
Description of the impact assessed： Changes in environmental value bring about by the development of low-carbon products.

1. PSMC participated in the Executive Yuan's "Semiconductor Academy Project". The "Semiconductor Academy Project" is an initiative launched by the Executive Yuan of Taiwan to cultivate semiconductor professionals by providing scholarships and training opportunities. The project aims to train 400 additional semiconductor master's and doctoral students annually, effectively increasing the number of individuals with semiconductor expertise by 400. These students, equipped with specialized skills, are expected to join Taiwan's semiconductor and high-tech industries. Ensuring their smooth employment path can significantly prevent them from falling into the low-income household category due to employment difficulties or low salary levels.
2. In Hsinchu City, Taiwan, the government provides monthly living allowances of NT$11,850 to each low-income household, totaling NT$142,200 per year. This translates to an annual social cost savings of NT$56.88 million (400 people * NT$142,200 = NT$56.88 million). (Data source: Hsinchu City Government Social Affairs Department)

1. The measurement indicator is that for every ton of carbon dioxide emissions reduced, approximately US$185 in social costs can be avoided (Source: Nature research report)
2. According to research, for every 1 ton of carbon dioxide emissions reduced, approximately US$185 in social costs can be avoided. Based on this, the IGBT products launched by PSMC in 2024 have helped customers reduce a total of approximately 31.2 mil-lion metric tons of CO 2e greenhouse gas emissions, which is equivalent to avoiding environmental damage costs of approximately US$5,772 million. (31.2 million metric tons CO 2e*US$185=US$5,772 million)