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Materiality Analysis and Decision-making

PSI has established various communication channels in its daily operations to interact with stakeholders, including investors/shareholders, customers, and other key stakeholders related to its business activities. Through the daily operational processes and interactions with stakeholders, the Sustainability Development Executive Committee discusses and integrates stakeholders' concerns into key topics.


Concern Assessment	Impact Analysis	Materiality Matrix

Through a questionnaire survey conducted with six categories of stakeholders, the level of concern for sustainability issues was assessed.
A total of 83 valid questionnaires were collected.

Considering the principles of economic, environmental, and social impacts, representatives of the Sustainability Development Executive Committee were invited to participate in the evaluation. Each topic's impact and influence on the economy, society, and environment were measured.

Based on the analysis results,
a materiality matrix is determined.

Materiality Matrix

In 2023, 16 topics were included in the materiality matrix. Among them, 11 were confirmed as major topics, which are the focus of disclosure in this report, with detailed explanations of response strategies and performance results. Additionally, 5 secondary topics are also covered in the report with appropriate management measures and performance disclosures.

Environmental	Energy Management, Greenhouse Gas Management, Water Resource Management, Waste Management
Social	Talent Retention and Employee Care, Human Rights, Occupational Health and Safety
Economic	Integrity Management, Information Security, Customer Service, Sustainable Supply Chain

Note:
1."Economic Performance" is a result-oriented sustainability topic, with relevant information and performance presented in the report.
2.Air pollution prevention was improved in 2023 to meet regulatory requirements; therefore, it is not included as a major topic but is disclosed in the report with appropriate management measures and performance.

Impact Management of Key Topics

Aspects：Economic

Key Topics	Impact Explanation	Strategies	Impact Boundary and Level of Involvement			Chapter

			Up stream	Our Company	Down stream
Integrity Management	Affects the company's business operations and damages corporate brand image.	Establish codes of conduct and relevant regulations. Conduct integrity education and training programs for employees and stakeholders to understand the company's ethical standards. Disclose violations to build better corporate governance. Issue Codes of Conduct and Ethics, set up whistleblowing systems, and prevent violations of anti-corruption/anti-competition practices.	▲	●	●	Corporate Governance Integrity Management

Information Security	Threats to corporate intellectual property, trade secrets, and potential data breaches.	Establish an information security management organization, obtain ISO 27001 international information security certification, and regularly conduct disaster recovery drills for information systems to ensure strict confidentiality of customer and company information.		●	▲	Integrity Management Information Security

Customer Service	Loss of customer orders directly affects revenue and creates operational risks.	Understand customer opinions and needs to enhance customer satisfaction. Conduct customer satisfaction surveys and grievance mechanisms to maintain service quality. Identify market demands and offer new products.		●	●	Innovation Product and Service

Sustainable Supply Chain	Geopolitical risks causing supply chain disruptions, thereby affecting business operations.	Strengthen sustainable risk management (multi-source procurement/responsible minerals/codes of conduct) to reduce operational interruption risks. Promote green and low-carbon supply chains (local sourcing/ISO 14064 certification) to enhance supply chain sustainability.	●	●	▲	Innovation Sustainable Supply Chain Management

Level of Involvement：●Direct Relationship ○Indirect Relationship ▲Business Relationship

Aspects：Environmental

Key Topics	Impact Explanation	Strategies	Impact Boundary and Level of Involvement			Chapter

			Up stream	Our Company	Down stream
Energy Management	Increased Manufacturing Costs	Improve energy and resource efficiency through processes and equipment and develop renewable energy strategies.	○	●	▲	Environmental Protection Energy Management

Greenhouse Gas Management	Rising Carbon Costs and Customer Management Requirements	Conduct greenhouse gas emissions inventories and data management, focusing on Scope 1 emission reduction technologies. Implement Scope 2 emission reductions and explore energy substitution solutions.	○	●	▲	Environmental Protection Greenhouse Gas Management

Water Resource Management	Water Supply Shortages	Analyze and monitor water usage to reduce total wastewater discharge and increase water recycling. Evaluate alternative water sources.	○	●	▲	Environmental Protection Water Resource Management

Waste Management	Increased Waste Treatment Costs	Reduce and recycle waste, enabling the reuse of products, components, and raw materials to demonstrate the value of sustainable resources.	○	●	▲	Environmental Protection Waste Management

Level of Involvement：●Direct Relationship ○Indirect Relationship ▲Business Relationship

Aspects：Social

Key Topics	Impact Explanation	Strategies	Impact Boundary and Level of Involvement			Chapter

			Up stream	Our Company	Down stream
Talent Retention and Employee Care	Optimizing Workforce Utilization to Ensure Sustainable Talent Development Strategies	Listen to and embrace diverse voices, understand employee needs and perspectives, promote diverse talent retention measures, and implement compensation and welfare initiatives toward becoming a happy workplace.	▲	●	▲	Social Care Talent Retention and Employee Care

Human Rights	Impact on Workers’ Mental and Physical Development, and Disruption to Normal Operations	Conduct regular training and legal advocacy on workplace misconduct to ensure all employees understand the concept of workplace violations, related legal responsibilities, and company policies, fostering a friendly workplace environment.	▲	●	▲	Social Care Human Rights

Occupational Health and Safety	Operational Safety Risks for Workers	Adhere to occupational health and safety management systems to prevent workplace injuries, conduct disaster drills, collaborate with contractors to implement safety management, and promote employee health initiatives.	▲	●	▲	Occupational Health and Safety

Level of Involvement：●Direct Relationship ○Indirect Relationship ▲Business Relationship

Key Topics and Sustainability Goals

Aspects：Economic

Match with GRI and SDGs	Key Topics	Target of 2024	Status	2024 and Mid-Term Goals
GRI 205 GRI 2-23 GRI 2-24 GRI 2-27 SDGs 5 SDGs 16	Integrity Management	• Number of major violations: 0 cases 　• Number of corruption cases: 0 cases 　• Employee completion rate for training on integrity management topics: 100% 　• Number of complaints or whistleblowing cases related to integrity violations: 0 cases	• Achieved • Achieved • Achieved • Achieved	• Number of major violations: 0 cases • Number of corruption cases: 0 cases • Employee completion rate for training on integrity-related topics: 100% • Number of complaints or whistleblowing cases related to integrity violations: 0 cases

GRI 2-23 GRI 2-27 SDGs 9 SDGs 13	Information Security	• Implementation of ISO 27001 international information security standards 　• Employee completion rate for online information security training: 100% 　• 30 information security awareness initiatives completed 　• At least one vulnerability assessment conducted 　• Information service reliability rate: 99.9%	• Achieved • Achieved • Achieved • Achieved • Achieved	• Completed re-certification of ISO 27001 international information security standards • Number of cybersecurity incidents affecting operations: 0 cases • Achieve ISO 27001 international information security certification by 2026

GRI 417 GRI 418	Customer Service	• Customer satisfaction scores: Wafer regeneration: 92 points Wafer thinning: 81 points	• Partially Achieved • Achieved	• Customer Satisfaction • Maintain customer satisfaction for wafer regeneration at 92 points or above • Maintain customer satisfaction for wafer thinning at 83 points or above

GRI 204 GRI 308 GRI 414	Sustainable Supply Chain	• 100% of partners signed the Code of Conduct 　• 100% conflict-free minerals usage 　• 50% local procurement	• Achieved • Achieved • Partially Achieved	• Continuously ensure 100% responsible mineral procurement • Develop 12 diversified sourcing solutions by 2024, and accumulate 40 solutions by 2027 • Achieve localization of raw material procurement at over 44% by 2024 and over 67% by 2027 • Achieve localization of component procurement at over 33% by 2024 and over 74% by 2027 • High-energy-consuming suppliers to obtain ISO 14064 greenhouse gas emission verification certificates:10% completion rate by 2024100% completion rate by 2027

Note: High-energy-consuming suppliers are defined as suppliers in Taiwan with single-site electricity consumption exceeding 5 million kWh per year.

Aspects：Environmental

Match with GRI and SDGs	Key Topics	Target of 2024	Status	2024 and Mid-Term Goals
GRI302 SDGs 7	Energy Management	• Reduce electricity consumption per unit product by more than 1%.	• Achieved	Baseline Year: 2023 • Achieve an annual company-wide electricity saving rate of ≥2%. • Reach a green energy usage rate of 10% by 2023 and 30% by 2027.

GRI 305 SDGs 7	Greenhouse Gas Management	• Reduce greenhouse gas emissions per unit product by more than 2%.	• Achieved	Baseline Year: 2023 • Reduce carbon emissions by >2% in 2024. • Return to 2021 emission levels by 2027.

GRI 303 SDGs 6	Water Resource Management	• Reduce tap water usage per unit product by more than 1% compared to the previous year. 　• Reduce wastewater discharge per unit product by more than 1% compared to the previous year.	• Achieved	• Achieve a recycled water recovery rate of >10% in 2024. • Reach a process water recovery rate of 50% in 2024. • Reduce the total ammonia nitrogen pollution in discharged water by 50% (mid-term goal).

GRI 306 SDGs 12	Waste Management	• Increase the waste recycling and reuse rate by more than 3% compared to the previous year.	• Achieved	• Reduce waste by 140 tons in 2024. • Achieve 0.5% of revenue from circular products by 2025. • Achieve zero waste by 2040.

Aspects：Social

Match with GRI and SDGs	Key Topics	Target of 2024	Status	2024 and Mid-Term Goals
GRI404 SDGs 4 SDGs 8	Talent Retention and Employee Care	• Turnover rate: <3% 　• Employee satisfaction score: 4.54 　• Employee engagement score: 4.7 　• At least 4 labor-management communication meetings annually 　• Conduct 2 employee forums	• Achieved • Partially Achieved • Partially Achieved • Achieved • Achieved	• Employee satisfaction/engagement scores increase by 5% compared to the previous year • New employee retention rate after 3 months: ≥70% • Internal training course completion rate: ≥90%

GRI 2-24 GRI 2-25 SDGs 6 SDGs 8	Human Rights	• Number of workplace misconduct cases: 0 　• Employee grievance resolution rate: 100% 　• Completion rate for human rights protection advocacy and training: 100%	• Achieved • Achieved • Achieved	• Completion rate for workplace misconduct prevention training: 100% • Employee grievance case resolution rate: 100%

GRI 403 SDGs 3	Occupational Safety and Health	• Disabling injury frequency rate (FR): 0 　• Disabling injury severity rate (SR): 0 　• Improvement proposal implementation rate: 100%	• Partially Achieved • Partially Achieved • Partially Achieved	• FR and SR below the 3-year average for the semiconductor industry • No occupational fatalities (excluding traffic-related incidents)



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