Sustainability Partnerships

 

 

Product Safety

To fulfill its social responsibility, Wafer Works observes the Responsible Business Alliance (RBA) Code of Conduct and undergoes RBA-VAP verification by a third party. The Company has also obtained certifications such as ISO 9001:2015, IATF 16949:2016, ISO 14001:2015, ISO 14064-1:2006, ISO 45001:2018, ISO 50001:2018, and BS 8001:2017. Wafer Works identifies and formulates response measures for risks encountered at all levels of its operations, ensuring more stable and smooth business management. Wafer Works’products comply with regulatory requirements and are clearly labeled with detailed information such as origin, ingredients, and warnings. During the reporting period, there were no instances of violations related to product and service information and labeling, nor were there any breaches of regulations governing product marketing communications (including advertising, promotions, and sponsorships). Consequently, there were no severe penalties or significant fines.

 

The products provided by Wafer Works have no significant impact on health and safety and meet the needs of customers and other stakeholders. In 2023, the Company achieved a 100% recovery rate from suppliers who submitted RoHS 2.0 reports and declarations of compliance with the prohibition of hazardous substances.

 

 

 

 

Product Quality

Wafer Works has obtained ISO 9001 and IATF 16949 certifications for its quality management system. Guided by the principles of these systems, we monitor the performance of our products, processes, and systems using a process-based approach. This involves continuous measurement, analysis, review, and improvement of all processes to ensure effectiveness.

 

As stated in Wafer Works' quality policy: "Strictly adhere to management procedures and operational standards, enhance the execution of the quality system, implement continuous improvement strategies, pursue optimal quality goals, and strive to meet current and future customer needs to achieve customer satisfaction." Wafer Works is dedicated to promoting continuous improvement activities within the organization, embedding a culture of quality improvement deeply within the Company. To this end, Wafer Works encourages all employees to suggest improvements in their work areas to boost the effectiveness of various processes, including product quality, cost efficiency, and lean production. Through these ongoing improvement initiatives, our objective is to bolster our internal quality capabilities and ethos, thereby delivering consistent, top-tier products to our customers and attaining excellence.

 

In 2023, 12 Quality Control Circle (QCC) improvement teams were formed by employees at Wafer Works. These team members collaborated to analyze the current situation using quality tools and proposed improvement solutions to optimize existing processes. Throughout the year, they completed 27 improvement projects, which significantly benefited the production line operations.

 

In addition to the QCC, Wafer Works encourages all employees to participate in the improvement proposal program. Every employee can submit improvement suggestions through the system. We value the wisdom and experience of every employee. If a proposal is deemed feasible after review and evaluation, it is implemented promptly to directly and quickly enhance or optimize current operations. Meanwhile, employees who submit proposals are rewarded accordingly.

 

In 2023, Wafer Works received 148 proposals, with 15 being recognized as highly effective and excellent suggestions. 

 

 

 

 

 

Intellectual Property Rights

To strengthen Wafer Works' leadership position in the industry and ensure legal protection for advanced research and development results in the market, thereby preventing infringement disputes, reducing operational risks, and enhancing competitiveness, Wafer Works attaches great importance to intellectual property rights. In alignment with our technical R&D projects, we strategize our patent portfolio, filing internal patent applications using the Company's patent application system and adhering to patent application management regulations. Collaborating with patent law firms, we facilitate patent retrieval, application, and review processes to enhance the likelihood of patent approval. This strategic approach aims to prepare for future product rollouts and mitigate infringement risks. Wafer Works has established the "R&D Innovation and Creation Incentive Guidelines" to motivate employees to innovate actively.

 

In conjunction with the Company's development strategy, the output of intellectual property rights is increased to ensure the uniqueness of the Company's products and technology. Regular patent inventories are conducted to assess the value of each patent and to monitor the progress of each patent application, the validity period, and certificate filing. Over the past three years, we have exceeded 50 patent applications, and the target for the number of patent applications in 2023 had been met. Wafer Works will adjust next year's plan to analyze both our own patent map and that of our competitors.

Customer Satisfaction

Wafer Works is dedicated to a customer-centric approach, aiming to satisfy both current and future customer needs. We consistently uphold high quality standards to enhance customer satisfaction. In 2023, Wafer Works conducted a satisfaction survey with its top 30 customers, achieving a score of 88.75, significantly exceeding the annual target of 80. This notable improvement reflects our ongoing efforts. Moving forward, we will continue to address customer concerns to meet their expectations.

 

Recent Trends in Customer Satisfaction Performance

 

 

 

Customer Privacy

"Honesty and Innovation" is one of Wafer Works' core business principles. Before initiating any business relationship, a Non-Disclosure Agreement (NDA) is signed to ensure the confidentiality of shared information. Internally, employees are required to sign confidentiality agreements and regularly participate in training sessions and awareness programs to emphasize the importance of data protection and confidentiality. To further safeguard Wafer Works' data, USB access on all employee computers is disabled. The legal affairs department conducts educational training to reinforce these measures. Additionally, the Company employs firewalls, electronic file encryption systems, and electronic personal data storage platforms to control and audit the access and usage records of relevant personnel, ensuring robust customer data protection.

 

Wafer Works has established a Code of Ethical Business Conduct to protect the personal data and privacy of all business associates, including suppliers, customers, consumers, and employees. This code ensures compliance with privacy and information security laws and regulatory requirements during the collection, storage, processing, transmission, and sharing of personal data. In 2023, Wafer Works received no complaints regarding customer privacy violations or data loss.

 

In terms of personnel management, Wafer Works raises employees' information security awareness. New hires undergo onboarding training and sign an "Employee Code of Conduct Statement," while current employees receive ongoing information security briefings. Data access is tiered to ensure secure handling, and CRM/ERP system management data is protected at the highest level of confidentiality. Wafer Works has also refined its information security management system, continuously strengthening system and data security. This includes the building of comprehensive gateway control devices, antivirus systems, network access control systems, system vulnerability enhancements, and file encryption systems. Company regulations are established to prevent data leakage incidents.

Wafer Works is committed to establishing long-term partnerships with suppliers to ensure supply chain stability.

By signing contracts, we secure a better and more stable source of raw materials, thereby enhancing the Company's competitiveness. Additionally, through the establishment of an integrated system, we conduct supplier evaluations considering factors such as "price," "quality," "delivery time," and "sustainable development." This evaluation process ensures that suppliers abide by regulatory and environmental requirements. These measures help us select the most suitable domestic suppliers, strengthening supply chain management and contributing to the sustainable development of the supply chain.

 

 

Supply Chain Interaction

By actively investing manpower and resources in the investigation and verification of raw material suppliers, Wafer Works has developed comprehensive supply chain management guidelines and measures to lead suppliers in mutual growth. This includes supplier management, supplier evaluation, supplier audits, and green material requirements, guiding suppliers to meet green supply chain requirements and mitigate supply chain risks.

 

When introducing new suppliers for critical and important raw materials, Wafer Works requires suppliers to sign the "Supplier Evaluation Form" and "RBA Code of Conduct". Additionally, they must provide a "Third-party Quality System Certificate," "Supplier Process/Product Change Notice (PCN) Management Principles," and sign the "Commitment to Prohibit the Use of Hazardous Substances" and "Declaration of Non-Use of Conflict Minerals" before collaboration can commence.To effectively manage harmful substance data internally, we incorporate environmental principles into our supplier management mechanism. Since 2018, Wafer Works, by referencing RoHS 2.0 regulations and customer requirements for prohibited substance control, has mandated that all suppliers of critical and important materials use raw materials and packages that observe environmental regulations and refrain from using metals produced in countries with conflict minerals. We collaborate with supplier partners to seek and develop greener products that are of superior quality and environmentally sustainable.

 

Furthermore, Wafer Works contributes to local socio-economic development through procurement practices. To ensure compliance with our requirements, Wafer Works regularly assesses the compliance of suppliers handling critical materials (those directly exposed to the product) and important materials (those posing a risk of appearance difference during manufacturing). This evaluation follows the guidelines of the qualified supplier evaluation and assessment. If any noncompliance issues arise, suppliers are mandated to rectify them promptly.

 

 

 

 

Supply Chain Organization Structure

The upstream and downstream relationships of Wafer Works in its supply chain are illustrated below. The Company's suppliers mainly consist of raw material suppliers, equipment engineering suppliers, waste disposal firms, on-site contractors (such as security and cleaning personnel), as well as land, sea, and air freight forwarders. These partnerships are predominantly long-term, and we maintain good procurement relationships with our suppliers unless significant changes in demand or supply necessitate seeking new suppliers or adjusting procurement proportions.

  

 

Supplier Management

Wafer Works has formulated standard procedures for supplier selection and evaluation as well as sample validation to evaluate a new supplier to ensure that the selected suppliers and materials meet the requirements. Upstream suppliers are required to comply with the RoHS standards, national provisions pursuant to the industrial safety qualifications for manufacturers, ISO qualifications, and requirements of labeling and pictograms of hazardous substances on the goods, etc. Manufacturers need to properly recycle the used container or loading device and attach no-radioactive contamination certificate to the consignment, etc. We stated our standpoint of upholding the spirit of sustainable management and required suppliers to strictly comply with the regulations as well as principle of fair trade in the "Request for Quotation" and "Purchase Order". We dedicate ourselves to requiring our suppliers to meet the requirements of environmental protection, industrial safety, and human rights. Non-compliant supplier will be rejected and listed for supplier evaluation and other punishments.

 

Besides, in response to the global human rights issue that has gained increased attention in recent years, suppliers are required to conduct detailed investigations on compliance with "conflict-free metals" for the procurement of materials, parts or products contain metallic components to ensure that all purchased raw materials are from legal sources. Also, we ensure that the work environment is safe, employees' rights and interests are protected and respected, pollution prevention for manufacturing processes and products are implemented, and social responsibilities are fulfilled.

 

As for the waste management companies, we will conduct on-site audit every year for all waste management companies to ensure that the waste disposal by vendors is conducted in accordance with the law and all the wastes are properly handled.

 

The Structure and Management Policies of Critical and Important Raw Material Suppliers:

 

 

Currently, Wafer Works predominantly sources materials from Taiwan. To facilitate comprehensive business operations, we partner with procurement entities to actively promote ESG and green procurement initiatives, fostering material localization to bolster the growth of local suppliers. This strategy not only cuts down on unnecessary air and sea freight expenses but also diminishes the carbon footprint associated with material transportation.

 

Wafer Works also implements environmental protection mechanisms. In addition to pallets and PP buffer materials being recycled and reused by warehouse personnel, measures such as using recycled materials for packaging corner paper and recycling shipping boxes have been undertaken to reduce costs and minimize resource waste.

 

Percentage of Pallets, PP Buffer Materials, and Shipping Boxes Recycled in 2023

 

Wafer Works views suppliers as important partners in co-creating value. Together with our brand customers, we aim to influence the supply chain to uphold business ethics and social responsibility, thereby reducing environmental resource consumption and impact. This enhances our ability to create value for the overall economy, environment, and society (including people and human rights), fostering industry growth and sustainable development.

 

Below is the regional distribution of Wafer Works' suppliers to mitigate concentration risk. We employ a multi-region strategy to develop suppliers:

 

 

 

 

 Supplier Management

Wafer Works carries out evaluations of new suppliers based on comprehensive supplier selection, assessment, and sample approval processes to ensure that selected suppliers and materials meet requirements. Upstream suppliers must comply with RoHS 2.0 standards, national regulations regarding occupational safety qualifications, and ISO certifications. It should be "the label of shipment should contain" hazardous materials free, properly recycle containers and loading tools, and adhere to fair trade principles. We are committed to ensuring that trading partners fulfil environmental, occupational safety, and human rights requirements. Failure to comply with regulations will result in rejection and inclusion in the vendor evaluation process.

Furthermore, in response to the increasing emphasis on international human rights issues in recent years, when purchasing materials, parts, or products containing metal components, suppliers are required to thoroughly investigate compliance with "conflict-free metals" to ensure that purchased raw materials are obtained through legal channels. We ensure that the working environment is safe, employees' rights are protected and respected, pollution prevention is implemented in processes and products, and social responsibilities are fulfilled.

 

To ensure legal waste management practices, annual on-site audits are performed for all waste disposal providers to verify their proper handling of the waste entrusted to them.

 

 

 

Vision of Supplier Management

Wafer Works envisions strengthening product quality through collaboration with suppliers, balancing the effectiveness of supplier management and quality costs, and thereby enhancing customer service efficiency and satisfaction. This aims to build a win-win partnership within the supply chain with customers and suppliers.Supplier management follows a process of retaining high-performing suppliers and phasing out underperformers. After a supplier is approved, a cross-functional team comprising engineering, procurement, and quality assurance departments conducts annual evaluations based on document submissions, material quality, lead time control, and overall performance.According to the internal supplier audit plan, once any instability is detected, the supplier will be urged to initiate continuous improvement.

 

 

 

Supplier Evaluation and Audit

According to the "Qualified Supplier Evaluation and Assessment Regulations," Wafer Works conducts assessments of suppliers in terms of quality, delivery, pricing, cooperation, and sustainability every six months. Additionally, annual supplier audits are carried out to ensure that supplier performance meets the required standards. In the 2023 annual supplier evaluation, a total of 105 critical and important material suppliers were evaluated.

 

The results showed that 97% of the suppliers were graded B or above, matching expectations. Suppliers who fell short of the target were required to implement continuous improvement activities, with their progress monitored, and were included in the next year's audit plan. In 2022, seven suppliers were listed for improvement tracking and all completed verification audits in 2023, meeting expectations. For the first half of 2023, three suppliers were rated below B, mainly due to quality issues. They were requested to peruse and sign the assessment report and provide improvement plans, with follow-up reviews completed by the Quality Assurance department in October 2023. In the second half of 2023, no suppliers received a grade below B, reaching the set target.

 

 

 

 

Green Product

To uphold sustainable development and fulfill social responsibility, Wafer Works has established a green material management Procedure. In accordance with the "Green Product-Related Substance Management Procedure," relevant regulations such as RoHS 2.0, REACH/SVHC, and customer requirements, suppliers are requested each year to provide third-party laboratory test reports, agreement, or declaration form to confirm that the related materials conform to RoHS 2.0 and REACH/SVHC. The test results for heavy metals, and other harmful chemicals are all found to be "Not detected," ensuring that the Company’s products are safe for both humans and the environment.

 

Wafer Works consistently promotes green procurement, mandating suppliers of raw materials and packaging materials to provide certificates guaranteeing that their products do not contain hazardous substances. Additionally, they are requested to provide test reports to ensure compliance with customer requirements and relevant regulations, as well as to confirm that materials from conflict areas are not used. Suppliers of raw materials and packaging materials are also obligated to provide commitments pledging not to use any materials from conflict areas. Wafer Works has drawn up the "Green Product-Related Substance Management Procedure," which cover supplier management, raw materials, packaging material inspection, product verification, internal audits, and customer inquiries. Regarding regulations or directives governing hazardous substances, such as RoHS 2.0 and SONY SS-00259, which customers are concerned about, the official instructions are disseminated to company employees through the Knowledge Management System (KMS).

 

Wafer Works undertakes product compliance assessments in accordance with regulations or directives to ensure that all relevant substances are regulated and compliant with RoHS 2.0, REACH/SVHC, and customer requirements. This effort aims to meet the standards for green products and minimize the impact of products on the natural environment.

 

 

 

Green Procurement

Using products with environmental labels can reduce resource consumption, minimize environmental pollution, and lessen the impact on the planet. As a responsible global citizen, Wafer Works actively advocates for the procurement of green products to fulfill its corporate social responsibility, preserve the Earth's environment, and enforce green product policies. Furthermore, material suppliers are required to submit inspection reports batch by batch or on a periodic basis to prove compliance with diverse international environmental regulations on prohibited and restricted substances and to fulfill customer requirements, thereby endorsing the principles and dedication of green supply chain management.

  

Conflict Minerals

Wafer Works has incorporated the prohibition of "conflict minerals" into its supplier management policy. As a global citizen, we declare and pledge not to accept metals sourced from conflict areas. Furthermore, suppliers are obliged to commit to not using metals from such conflict areas in their products, thus leveraging market mechanisms to eliminate such practices.

  

Human Rights Related Issues

Wafer Works incorporates human rights clauses in its procurement contracts, mandating suppliers to sign the "Supplier Evaluation Form" and the "Wafer Works Supplier Code of Conduct." Suppliers are expected to complete self-assessment questionnaires as requested by Wafer Works to ensure that they do not employ forced labor (including debt bondage, involuntary prison labor, slavery, etc.), nor discriminate against employees based on differences such as race, color, age, gender, sexual orientation, disability, pregnancy, religion, political affiliation, club membership, or marital status in recruitment or employment activities (such as promotion, remuneration, etc.). Additionally, they must not contravene relevant child labor laws or corporate social responsibility requirements. If any deviations are found at the suppliers’ business premises, appropriate corrective actions will be implemented.