Focusing on the profound impact of the raw materials used in the manufacturing process on the environment and society, PSMC has formulated a "raw materials policy" to implement the spirit of sustainable raw material use in its procurement practices. Through the supplier risk management process, we evaluate whether the supplier's operation and production of raw materials have negative impacts or potential risks on social and environmental aspects such as labor safety, energy resource consumption, ethics, and quality, and prioritize the procurement of raw materials and use this process to confirm the traceability of raw material sources to suppliers.

In order to reduce the impact of raw material production on the environment and society, in addition to requiring suppliers to sign the Supplier Code of Conduct to comply with environmental and social regulations, PSMC will in the future provide technical support and project cooperation with suppliers to reduce the negative external impacts of raw material production for making substantive contributions. In addition, in order to systematically implement the raw material management plan, PSMC has launched the development of in-plant recycling and remanufacturing technology for some raw materials and is gradually increasing the use of third-party verified sustainable raw materials and the proportion of procurement and use of recycled raw materials to continuously track and report on the progress of procurement targets. And through themed training courses, purchasing personnel can fully grasp the concepts and essentials of sustainable raw material purchasing, so as to achieve phased purchasing goals as scheduled.

PSMC follows the principle of local procurement for our raw material sourcing operations. Local procurement not only helps to reduce greenhouse gas emissions from transportation, create local employment opportunities, and promote economic development, but also improves PSMC’s ability to mastering product quality and lead times, while helping build a resilient and competitive supply chain. In 2025, local suppliers accounted for 96.68% of PSMC’s suppliers, and their procurement accounted for 83.08% of total value, compared to 2024, it maintained stable development.

At the supplier selection stage, PSMC gives priority to products and services that are Green Label certified, and recognized by governments and international organizations. The green product/service assessment criteria have been incorporated into the company’s procurement practices and supplier assessment screening mechanisms. PSMC’s total green procurement value in 2025 exceeded NT$553 million, a 175.92% increase compared to the previous year. The major procurement items were products that have passed Taiwan’s Type I environmental labeling certification, Taiwan’s Type 2 environmental labeling certification, Taiwan’s Type 3 green label products ( include Energy Label, Water-saving mark, Green Building Material Label) Carbon Label/carbon reduction label products; products with foreign environmental protection labels; and products from countries with whom Taiwan has signed mutual recognition agreements. In addition, it also covers products certified by ENERGY STAR, EPEAT (Electronic Product Environmental Assessment Tool) Registry, TCO Certified (Swedish Professional Employees Association IT Product Verification Standard), Forest Stewardship Council (FSC) and PEFC (Programme for the Endorsement of Forest Certification ) Sustainable Forestry Mark, etc. The aforementioned products are primarily applied in green energy and renewable energy generation, energy management systems, and air/water pollution, waste, toxic chemical, and other prevention and control measures.

Tantalum, tin, tungsten, gold, and cobalt are essential minerals required for the manufacturing of electronic products. However, most of these minerals come from the Congo region and neighboring countries, where armed conflicts constantly occur, these minerals are thus called conflict minerals. To avoid using minerals from conflict-affected areas in product manufacturing processes, PSMC conducts precise supplier due diligence investigations, and also requires all suppliers for target materials and gases, with whom transactions have been conducted, to commit not to use materials or gases from upstream vendors/ origin countries located in conflict-affected areas, in order to achieve the goal of 100% freedom from use of conflict minerals. PSMC also calls on all supplier partners who have business dealings with PSMC to declare that they will "not accept the use of metals from conflict-affected areas", as promoted by the Responsible Business Alliance (RBA). PSMC also requires raw material suppliers to comply with the following regulations to convey PSMC’s No Conflict Mineral Use policy to their upstream suppliers and supply chain partners.

• Suppliers must fulfill social and environmental responsibilities, to mitigate the impact of business operations on local communities and the environment.
• Suppliers must ensure that their products do not use any minerals from upstream vendors/origin countries located in conflict-affected areas that have not been deemed qualified through third-party verification, nor minerals mined in poor working environment.
• Suppliers must disclose the sources of the metals/minerals they use, including tantalum, tin, tungsten, gold (3T1G), etc., and complete the investigation forms to implement PSMC's mineral origin investigations.

Conflict minerals are from the Conflict-Affected and High Risk Areas, or neighboring armed countries that illegally mine such minerals: tantalum (Ta), tin (Sn), tungsten (W), gold (Au) and Cobalt(Co).

• Tantalum (Ta), tin (Sn), tungsten (W) , gold (Au)：PSMC and its suppliers have committed themselves to avoid using conflict minerals, have proceeded to conduct an annual detail research in its supply chain and updated its research data, and checked and collected the latest information on the RMI official website every year. If there are any updates, the supplier will be requested to provide the update and feedback.
• Cobalt(Co)：If there are any updates in the conflict mineral template, the supplier will be requested to provide the update and feedback. This encourages suppliers to participate in Responsible Minerals Assurance Process (RMAP). If cobalt is in the scope of CMRT management, PSMC will require suppliers to strictly obey the rule of CMRT.

PSMC established the Supplier Code of Conduct based on the「Responsible Business Alliance (RBA, formerly known as EICC) Code of Conduct」. It requires suppliers to make sure that their labor, health and safety, environment, business ethics and the management system are subject to the code, and that suppliers are to strictly obey the laws/ rules of the country/ area where their business run. The aforementioned will be checked in the pre-selection and annual supplier audit, suppliers’ status of compliance with this Code will be one of the considerations for PSMC’s evaluation of and decision making on the purchasing.

RBA Commitment  

Powerchip Semiconductor Manufacturing Corporation (PSMC) is a professional wafer manufacturing company. Sustainable development is the core vision of the corporation. PSMC has established a comprehensive policy of the raw material and the commitment are implemented after approval of the president to ensure it's procurement behavior and to meet standards regarding to account environmental, social and governance (ESG) factors.

PSMC is committed to abiding by the following concepts and principles and we will establish a sustainable, stable and responsible supply chain to bring positive impacts to the enterprise, society and the environment through the promotion and implementation of these raw material policies.

1. Sustainability first: Commitment to give priority to the purchase of sustainable raw materials verified by third parties, encouraging suppliers to increase the production of recycled raw materials and plan to increase the proportion of sustainable raw materials and recycled raw materials. We are seeking to establish long-term cooperative relationships with suppliers and work together to reduce consumption of energy and resource in the production process and the impact on local communities and groups, and to minimize the negative impact of the use of raw materials on sustainable development.
2. Supply chain transparency: The advocacy requires suppliers to provide detailed information on the source and manufacturing process of their products to ensure compliance and traceability of the raw materials.
3. Risk Management: Committed to identifying and managing risks related to raw material procurement, including supply interruptions, price fluctuations and regulation changes, etc., to lower down the uncertainty through pre-planning and risk assessment.
4. Continuous improvement: To improve the policy and process of raw material procurement continuously and establish a model of sustainable raw material procurement through cooperation with suppliers, PSMC welcomes suggestions and feedback from internal and external stakeholders to create a more resilient and sustainable supply chain.
5. Comprehensive compliance: Avoid using raw materials containing materials from globally important biodiversity sites and adhere to all relevant laws, regulations and standards.