Business Philosophy and Vision

In 1986, Chairman Pat Chiao founded Helitek in the United States, initiating the silicon wafer business. The founding team comprised members from Silicon Valley and the domestic semiconductor industry, all with extensive experience in the field. This team laid the foundation for Wafer Works' development in silicon wafers and served as the precursor to Wafer Works. In 1997, Wafer Works was officially established in Taiwan. In 2011, the headquarters was set up in the Longtan Science Park. Over more than 20 years of dedicated effort and commitment to the steady growth of its core business, Wafer Works expanded its production bases to six plants in China. Today, the Company is one of the world's top 10 suppliers of semiconductor silicon wafer materials and one of the top three leaders in heavily doped low resistance products. The Company boasts advanced semiconductor silicon wafer manufacturing facilities with a total plant area exceeding 120,000 square meters and nearly 2,200 employees worldwide. In 2007, Wafer Works was recognized by Forbes Asia as one of the "Best Under a Billion" companies in the Asia-Pacific region.

Wafer Works firmly believes that only by establishing trustworthy and cooperative partnerships with customers and suppliers, deeply understanding customer needs, and creating close, flexible collaboration mechanisms with suppliers, can we develop innovative products and services that exceed customer expectations. Adhering to strict operational and sales management, Wafer Works has never been heavily fined for violating laws and regulations in the provision and use of its products and services, nor involved in any legal actions related to anti-competitive behavior, antitrust, or monopolistic practices. Customer-centric and committed to our promises, Wafer Works operates with integrity to create and share a win-win-win scenario for the Company, customers, and suppliers. At the same time, we focus on our employees, recruiting and retaining top talent through our core corporate values. We are committed to creating a safe and inclusive workplace, ensuring that every employee enjoys human rights, skill development, and a safe, friendly work environment, sharing in the Company's success.

With sustainable development as the highest guiding principle, Wafer Works Corporation is committed to progressing toward the goal of becoming a customer-centric semiconductor materials supplier. This is achieved through six key pillars: corporate governance, diversity and inclusion, environmental sustainability, customer service, supply chain management, and social engagement. Through these efforts, the Company continues to deliver greater services and contributions to society, striving for continuous improvement in sustainability. Upholding the concept of corporate sustainability, the Company published its first Corporate Social Responsibility Report in 2012. In recent years, as ecological and environmental issues have gained increasing attention, the scope of subsequent reports has gradually expanded to encompass various aspects of sustainable development and corporate social responsibility. Continuing the spirit of previous reports, this Sustainability Report provides comprehensive information on business strategies, risk management, environmental management systems, and more, offering full transparency to the public and investment partners interested in Wafer Works' development. It reflects the Company's steadfast commitment to fulfilling its social responsibilities and pursuing sustainable growth, while also sharing the outcomes of its sustainable operations.

Wafer Works Yangmei Fab (WWXT)	Wafer Works Longtan Fab Headquarter (WWXL)

 Wafer Works Business Philosophy

  Main Products and Services

Wafer Works primarily offers semiconductor epitaxial silicon wafers, semiconductor polished silicon wafers (single-sided and double-sided polished wafers), and silicon-on-insulator (SOI) wafer products (or services). We strive to provide customers with suitable materials, applicable and legal products, and achieve better quality. We are committed to developing and researching products that enable customers to use and sell better products. During transactions, we ensure that customers receive high-quality and prompt service. All products produced by Wafer Works comply with relevant laws and regulations, maintain product quality, comply with regulatory standards, and improve product yield for better products.

Below is the sales statistics for each region for the year 2024:

Global Deployment

Operational Performance

Operational Performance –Optimization of 12-inch Product Portfolio

The global economic system faced many challenges in 2024 due to continued geopolitical instability, supply chain shifts caused by the constantly evolving international trade relations, cost fluctuations and rising prices. Many countries reduced interest rates to stimulate economic activity, but end market demand remained weak; creating headwinds for the expected economic recovery. In the semiconductor industry, the rebound of the market for mature process technologies was slower than anticipated as capital investment flowed primarily into advanced process technologies. According to Semiconductor Equipment and Materials International (SEMI), global silicon wafer shipments in 2024 totaled 12.2 billion square inches, sales revenue reached US$11.5 billion, marking a year-over-year decline of 6.5%.Amid this challenging business environment, the company continued to allocate more resources to R&D, focusing its efforts on making breakthroughs in heavy doped silicon technology and the development of light-doped 12-inch wafers. The team worked actively with our strategic partners by strengthening the existing relationships and securing additional business, we managed to achieve consolidated revenue of NT$8.721 billion, maintaining break-even performance despite the tough market conditions. Revenue from 12-inch products in 2024 grew by nearly 400% compared to 2023. In addition, our Shanghai subsidiary successfully went public on the STAR Market of the Shanghai Stock Exchange. Our dedicated team once again demonstrated our ability to be resilient, flexible and adaptive in adverse situations.

Looking ahead to 2025, the global political uncertainties will remain, and the competitive landscape of the semiconductor industry will persist. The company will execute a strategic expansion plan which will put us in a position to capture the potential business up-side when market demand surges. The company will also implement corporate level strategies to align with customer requirements. In response to the growing demands from our customers, we have outlined our 2025 operational plans based on three key directions: (1)operational efficiency, (2) technology innovation and product advancement, and (3) global strategy and diversification.

Financial Information

The table below presents various financial information for Wafer Works, including disclosure of employee salaries and social investments:

During the reporting period, Wafer Works received financial subsidies from the following government units:

Board of Directors

Wafer Works adopts the candidate nomination system stipulated in Article 192-1 of the Company Act for the election of directors, with a term of three years. The independence of independent director candidates must also comply with the provisions of the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies." The current board of directors consists of seven male directors and two female director, four of whom are independent directors. The average age range is mostly over 60 years old. Directors serve a three-year term, and each director has at least 30 years of work experience in business, legal, financial, accounting, or corporate affairs fields. Their expertise spans industries such as semiconductors, optoelectronics, and venture capital, demonstrating rich knowledge, personal insight, and business judgment, providing valuable advice on Wafer Works' operational strategies and development direction. To enhance the professional knowledge, legal literacy, and sustainability awareness of Board members, the Company proactively arranges at least three hours of annual training courses conducted by external professional instructors. In 2024, the total training hours completed by the Board of Directors amounted to 98.5 hours, of which 32 hours were related to sustainable development, accounting for 32.5% of the total. For details regarding Board training, please refer to Wafer Works's 2024 Annual Report. The Board of Directors held a total of 9 meetings in 2024, representing an increase compared to 2023, in response to the Company's business challenges and sustainability goals.

The Company has established the "Procedures for Managing the Acquisition or Disposal of Assets," "Regulations Governing the Election of Directors," "Ethical Corporate Management Best Practice Principles," "Procedures for Ethical Management and Guidelines for Conduct," "Procedures for Handling Material Inside Information and Preventing Insider Trading," and "Rules of Procedure for Board of Directors Meetings." These documents cover various aspects including the prevention of conflicts of interest, avoiding opportunities for personal gain, confidentiality responsibilities, fair trading, protection and proper use of company assets, compliance with laws and regulations, encouragement to report any illegal or unethical behavior, and disciplinary measures. All related guidelines have been approved by the Board of Directors and are implemented accordingly. Disclosure of cross-shareholding, transactions, and outstanding balances between the highest governing body members and critical suppliers will be made in the future. For information on the highest governing body members serving on other boards, please refer to the corporate governance report in the Company's 2024 Annual Report , specifically the sections on Board Member Information (I) and Director Information (II). Directors must abstain from voting on proposals in which they have a personal interest, ensuring no cross-shareholding situations with stakeholders.

The education, experience, and attendance of the Board members are shown in the table below:

Audit Committee

To enhance corporate governance and the professional functions of the Board of Directors, Wafer Works established the Audit Committee on June 27, 2018. The committee consists of three independent directors and meets at least once every quarter. In 2024, the committee convened eight times with an average attendance rate of 96.9%. The primary objectives of the Audit Committee are to assist the Board in performing and supervising the following tasks:

1. Ensuring the fair presentation of the Company's financial statements.
2. Selecting, dismissing, and assessing the independence and performance of the external auditors.
3. Effectively implementing the Company's internal controls.
4. Ensuring the Company's compliance with relevant laws and regulations.
5. Managing existing or potential risks faced by the Company.

According to the Audit Committee Charter, the committee is authorized to conduct any appropriate audits and investigations within its scope of responsibility. It maintains direct communication channels with the Company's internal audit personnel, external auditors, and other relevant individuals. The committee is also empowered to engage legal counsel, accountants, or other professionals to assist in the execution of its duties.

Attendance of Independent Directors at the Audit Committee in 2024:

Compensation Committee

To assist the Board of Directors in evaluating the performance of management and to improve the compensation system for directors and managers, Wafer Works established the Compensation Committee on December 29, 2011. The committee is composed of a majority of independent directors and meets at least twice a year. In 2024, the committee held four meetings with an average attendance rate of 100%. The resolutions passed by the committee were submitted to the Board of Directors for discussion and subsequently approved by the board.

The committee's responsibilities include formulating and regularly reviewing the policies, systems, standards, and structures for performance evaluation and compensation for directors and managers. It ensures that individual compensation is tied to company performance in compliance with relevant laws, and is linked to future operational performance and risks. Given the industry's significant economic cycles and profit volatility, and the absence of shareholders with relative control participating in compensation decisions, the directors' remuneration remains stable. Currently, no consultants are involved in setting compensation.

The Company continuously reviews the external market competitiveness of employee salaries and compensation packages, participates in salary surveys to stay informed about market salary levels, and sets salary adjustment policies. It also establishes principles for holiday bonuses, employee bonus plans, outstanding employee incentive measures, and retention bonuses for key talent, recognizing long-serving outstanding employees to attract, motivate, and retain exceptional talent.

To enhance the linkage between performance and compensation for key talent and senior executives, short-term incentive plans focus primarily on performance bonuses, with employee profit sharing as a secondary bonus. Long-term incentives and retention measures consider the Company's financial and operational performance, as well as future development, to retain talent over the long term. From 2022 to 2024, employee restricted stock awards were provided to senior executives and key talent. These rewards were tied to shareholder interests and the outcomes of corporate governance, the economy, the environment, and society initiatives, increasing the Company's competitiveness and maximizing benefits for the Company and its shareholders. In accordance with Article 267 of the Company Act and the Financial Supervisory Commission's "Regulations Governing the Offering and Issuance of Securities by Securities Issuers," the "Regulations on the Issuance of Employee Restricted Stock Awards" for 2022 and 2024 were established to attract and retain key outstanding talent.

The bonuses of directors at Wafer Works are governed by Article 29 of the Company's Articles of Incorporation. In profitable years, Wafer Works shall allocate up to 2% of its profits as director bonuses. However, in the presence of accumulated losses, an amount must be set aside in advance for offset. Article 25 thereof provides that the Chairman and directors of Wafer Works shall be remunerated by the Company for their duties. The amount of such remuneration is determined by the Board of Directors based on their level of involvement and contribution to the Company's operations, while also considering industry standards. In order to implement the spirit of corporate governance and provide a basis for the distribution of compensation to directors at Wafer Works, the "Regulations Governing the Payment of Compensation to Directors" was established. These Regulations were proposed by the Compensation Committee during the first meeting of the fourth term on August 7, 2018, and were subsequently approved by the Board of Directors during the second meeting of the ninth term on August 7, 2018.

In 2024, the highest annual compensation at Wafer Works Corporation was received by the President. The ratio of the President's annual total compensation to the median annual compensation of other employees was 9.6:1. The percentage increase in the President's annual compensation compared to the median compensation increase of all other employees was -33.9%.

Attendance of Independent Directors of the Compensation Committee in 2024：

Risk Assessment

Wafer Works is committed to sustainable business practices, environmental and energy resources protection, and ensuring employee safety and health. Through a structured risk assessment process, we identify, evaluate, and respond to risks in economic, legal, operational, environmental, safety, health, and cybersecurity areas. We adhere to risk management procedures outlined in management systems such as ISO 9001:2015、IATF 16949:2016 、ISO 50001:2018、ISO 14001:2015、ISO 14064-1:2006、ISO 14064-1:2018、ISO 45001:2018、ISO 59004:2024、ISO/IEC 27001:2022. These procedures enable us to thoroughly assess potential emergencies, natural disasters, environmental impacts, and occupational risks, and to implement comprehensive response plans and processes. The risk assessment outcomes for 2023 were reported to the Board of Directors quarterly in 2024. Each department within Wafer Works conducts risk assessments and formulates management strategies relevant to their respective responsibilities, as detailed below:

Wafer Works Risk Management Strategy

Business Continuity Management (BCM)

Wafer Works Corporation continues to promote Business Continuity Management (BCM). Based on risk assessment outcomes, the Company focuses on high-risk events such as extreme weather, fires, earthquakes, and information security threats. On April 3, 2024, a magnitude-5 earthquake in Taiwan caused an operational interruption. The Company immediately activated its BCP (Business Continuity Plan) emergency response team to

implement its earthquake response plan. BCM execution was tested, and operations were restored within 12 hours, with no significant impact. Following an incident in the industry where operations were disrupted by a malicious cyberattack, the Company reviewed and updated its virus attack response BCP to enhance its information security BCM preparedness.

Ethical Corporat Management

"Honesty and Innovation" serves as the foundation of our operational ethos, dedicated to advancing corporate governance with elevated ethical standards, and upholding the principles of fairness, honesty, trustworthiness, and transparency in all business endeavors.

To embody the spirit of ethical management, Wafer Works has established the "Ethical Corporate Management Best Practice Principles," "Procedures for Ethical Management and Guidelines for Conduct," and "Procedures for Handling Material Inside Information and Preventing Insider Trading," which have been approved by the Board of Directors. These guidelines regulate the behavior of board members and company employees. Furthermore, in alignment with the principles advocated by the Responsible Business Alliance (RBA), Wafer Works has implemented the "Code of Ethical Business Conduct" to promote ethical behavior among all employees. This initiative seeks to standardize behavior during business operations, emphasizing the importance of professional competence and ethical judgment in protecting the Company's assets, interests, and reputation.

To ensure that daily operations meet high ethical standards, Wafer Works has established basic conduct guidelines for directors, managers, general employees, and business partners while performing their duties, including the "Code of Ethical Business Conduct" and "RBA Code of Conduct Identification and Management Guidelines." Commitment to these standards includes: (1) Ethical principles; (2) Respect for individuals and customers; (3) Avoidance of conflicts of interest; (4) Gifts and business hospitality; (5) Facilitation payment; (6) Provision of complete, proper, accurate, timely, and understandable information disclosure; (7) Reporting, protection, and immunity; and (8) Corporate social responsibility. We advocate for a culture of integrity and, in the face of various challenges in industry competition, are obligated to collectively uphold the Company's reputation to earn the respect and trust of customers, suppliers, and the industry, ensuring the sustainable operation and development of Wafer Works. In 2024, a "Wafer Works Supplier Code of Conduct Compliance Statement" was issued to critical and important suppliers, with a signing and returning rate of 99%. Looking ahead to 2025, Wafer Works Corporation will remain committed to working with key and critical suppliers to ensure the ongoing execution of the "Supplier Code of Conduct Compliance Declaration." Wafer Works adheres to the principles of integrity and pragmatism, complying with government laws and regulations, and is committed to abiding by government social and economic policies, fulfilling its corporate social responsibility. During the reporting period, Wafer Works did not incur any fines for violations of environmental, social, or product (or service) regulations, nor did it face any antitrust or anti-monopolistic lawsuits.

Wafer Works regularly conducts educational training and awareness programs to ensure that employees fully understand the Company's commitment to ethical operations, policies, preventive measures, and the consequences of unethical behavior. We uphold a positive pursuit and quality assurance, aspiring to innovate for the future and sustain operations based on these principles.

At Wafer Works, we respect the diversity of employee backgrounds and abilities, striving for balanced development in employees' work and life quality. In human resources management, we balance institutionalization with humanization, treating all employees fairly and justly. We establish mutual trust and open communication channels, providing a work environment free from any discrimination or unequal treatment, enabling employees to contribute their best and become important long-term partners. Wafer Works provides a complaint process (as shown in the diagram below) for handling relevant issues, and there were no incidents of discrimination this year.

Anti-corruption System

Wafer Works Corporation adheres to the Code of Ethical Conduct and the RBA Code of Business Ethics. In accordance with the “RBA Risk Assessment Management Guidelines,” the Company conducts anti-corruption risk assessments for directors, supervisors, managers, and employees. Based on the “RBA Code of Business Ethics,” the Company regularly conducts training and awareness sessions. In 2024, RBA and ethical business (anti-corruption and insider trading prevention) training courses were held, with 100% Board member participation rate and a total of 1,108 employee participants. These trainings aim to ensure that the governance units and all employees understand the Company's commitment to ethical business practices, related policies, preventive measures, and consequences of misconduct. “Integrity First” is the core business philosophy of Wafer Works Corporation. All directors and employees at job grade 9 and above signed the Anti-Corruption Commitment Declaration, with a 100% completion rate, demonstrating the Company's strong anti-corruption stance. In 2024, corruption risk assessments were

conducted at the Longtan and Yangmei sites, and no corruption risks were identified. There were no corruption incidents or complaints of suspected corruption reported throughout the year.

Information Security Policy

Information Security Organization, Members, and Oversigh

The Company has established an Information Security Committee tasked with formulating and reviewing information security policies, resource allocation, and reviewing the implementation of various measures. Senior management executives serve as management representatives, responsible for coordinating and promoting information security management matters. Regular cyber security meetings are held, and reports are submitted to the board of directors.

Wafer Works Information Security Management Plan

Wafer Works is comprehensively enhancing its cyber security management. The cyber security resource investment for 2024 includes the following projects: