Message from the Chairman

The IC design industry faced various negative factors such as the pandemic, conflicts, and inflation in 2022, leading to a rapid downturn in the consumer market. Companies throughout the upstream and downstream supply chains made concerted efforts to reduce excessive inventory, and FocalTech was no exception. However, FocalTech has consistently maintained resilience and adaptability, promptly implementing response measures. At this moment, we believe that the worst times have passed, and FocalTech will gradually approach a healthy inventory level and restore its operational capabilities.

While the company's operational capacity is being tested by the changes in the external environment, the impacts of extreme weather caused by climate change are pervasive. Currently, there is no significant reduction in the deterioration rate due to human improvement efforts. We deeply understand that regardless of market conditions, whether good or bad, we must remain proactive in our actions to promote energy conservation and carbon reduction.

Since 2015, FocalTech has been investing in the research and development of IDC (TDDI integrated touch display driver) technology. In 2022, it made remarkable achievements in the automotive market, creating a cumulative shipment volume of over 10 million units and capturing a market share of 36%. This product significantly reduces the manufacturing processes and consumables required by panel customers, leading to a direct 50% reduction in IC procurement by end customers, effectively reducing resource consumption on our planet.

To provide employees with a more comfortable environment and better public facilities, FocalTech relocated to a newly purchased office in June 2022. The new office space is 43% larger than the previous leased office. Taking advantage of this opportunity with our own property, we proactively planned for future energy-saving and carbon reduction benefits. We made a total investment of NTD 7.4 million, including the procurement of a central control system (PLC), full adoption of LED lighting, insulated windows, and more. By analyzing the actual electricity usage from September to December 2022 and comparing it to the same period of the previous year, we achieved a significant 16% reduction in electricity consumption despite an increase in floor area.

 Since 2021, FocalTech has been strengthening its industry-academia collaboration programs. In the fiscal year 2022, we allocated a total investment of NT 8.73 million to actively cultivate semiconductor talent through partnerships with institutions such as the Semiconductor Institute at TsingHua University, YangMing University, and National Taiwan University of Science and Technology.

FocalTech has implemented a "Training-oriented Individual Development Plan" specifically for the R&D department. This plan involves developing a "Job Skills Matrix" to identify required talent capabilities and then creating a "Training Roadmap" based on these needs. The training programs are designed according to factors such as years of experience, job positions, and levels, covering general knowledge, specialized skills, management, and other areas.

Additionally, the establishment of an online course system in 2021 has further enhanced our talent development efforts. In the 2022 year, both internal and external training participants increased significantly by 2.3 times compared to the figures in 2021 and 2020. For more details, please refer to Chapter Five of this report.

Since its establishment in the United States in 2005, FocalTech has embarked on its 18th year. We have always maintained an unwavering courage to face every challenge and actively address ESG issues. In addition to consistently maintaining a corporate governance evaluation score between 6% and 20%, we were honored to receive the Gold Award in the Electronics and Information Manufacturing category at the 15th Annual Sustainable Report Awards organized by the Taiwan Sustainable Energy Research Foundation in 2022. This award recognizes our commitment to sustainable development.

We express our gratitude to all our partners and colleagues. It is through our collective efforts, perseverance, and unwavering commitment that we continuously strive for improvement and excellence in all aspects. This enables us to fulfill our commitments to society and the environment, driving positive and transformative changes for a better future.