Greenhouse Gas Emissions and Energy Management

Environmental Policy and Energy Policy

To ensure the effectiveness of environmental management, FocalTech has implemented a systematic management system using the ISO 14001 environmental management system. This system includes setting environmental policies, implementing environmental goals, implementing relevant control measures, and annually reviewing operational performance. This system aims to reduce operating costs, alleviate environmental burdens, and enhance employee environmental awareness and compliance, ultimately achieving the goal of sustainable business operations. FocalTech fully considers the impact on the environment and safety during the design, production, and operation of its products. Based on a preventive approach and continuous improvement, the company adheres to the following environmental goals:

Through the energy conservation and recycling policy and the purchase of energy-saving equipment.

Review energy management performance annually to reduce the company's energy costs and alleviate environmental burden to achieve corporate sustainable development goals.

• All public areas are equipped with flat panel lighting and energy-saving air-conditioning equipment.
• The air outlets in the IT room are changed to grille type to improve air outlet efficiency and heat extraction equipment is installed to achieve recycling and energy saving.
• Add hot and cold aisles and adjust air outlets in the IT room.
• The outdoor unit has been changed from a shared outlet to an independent outlet to improve heat dissipation efficiency.
• The indoor air conditioner is equipped with PLC programmable control, automatically adjusting back to the set temperature within 5 seconds, and automatically starting and stopping to replenish outdoor air circulation during get off work and commuting.
• The water dispenser automatically starts and stops when the work starts and ends.
• Purchase printers, copier supplies, electrical appliances and other supplies from low-carbon sources.

1. Adopting new technologies: Using environmentally friendly materials and new production processes to reduce environmental impact and hazard risks during the production process.
2. Implement hazard prevention: regularly identify environmental factors and major hazards, develop management plans, and implement supervision.
3. Comply with laws and regulations: Comply with national, local and industry-related laws and regulations and be a law-abiding enterprise.
4. Commitment to continuous improvement: Continuously improve environmental pollution and health hazards, and enhance environmental and health safety performance.
5. Implement environmental safety training: Implement environmental safety education and training and safety management to enhance environmental protection and health and safety awareness.

FocalTech recognizes the limited availability of energy resources. Although our operations are office-based and energy use is primarily for daily office administration, we actively promote energy conservation and fulfill our corporate responsibility for resource use. Currently, neither our Taiwan headquarters nor our mainland China subsidiaries utilize renewable energy; our primary energy source is purchased electricity.To avoid excessive energy consumption and resource waste, the company continues to improve energy monitoring and facility efficiency. In June 2022, the company moved from a leased office to its own office. This not only provides employees with a more comfortable work environment, but also prioritizes environmentally friendly energy conservation and carbon reduction measures. A central monitoring system (PLC) has been installed in the new office, integrating multiple systems, including electricity meters, UPS, variable-frequency multi-split outdoor units, and IT room temperature and humidity monitoring, to better monitor and adjust temperature and humidity, reducing unnecessary waste.Adopting new technologies: Using environmentally friendly materials and new production processes to reduce environmental impact and hazard risks generated during the production process.

• Implement hazard prevention: regularly identify environmental factors and major hazards, develop management plans, and implement supervision.
• Comply with laws and regulations: Comply with national, local and industry-related laws and regulations and be a law-abiding enterprise.
• Commitment to continuous improvement: Continuously improve environmental pollution and health hazards, and enhance environmental and health safety performance.

• Implement environmental safety training: Implement environmental safety education and training and safety management to enhance environmental protection and health and safety awareness.

FocalTech is located in the Changyi Technology Industrial Park office building. Our business operations are primarily office-based, and we do not engage in product production or manufacturing; therefore, there is no process water demand. All water consumption is limited to municipal tap water used for daily domestic purposes. Since water usage is included in the park’s management fees and no independent water meter is installed, the Company estimates its annual water consumption based on the “Government Open Data Platform – Daily Domestic Water Consumption per Capita by County and City in Taiwan.” The estimated water consumption is 46,469 cubic meters for 2024 and 47,914 cubic meters for 2025.

The Company’s activities do not cause any significant environmental impact on water resources or water source ecosystems, and no violations or unlawful pollution incidents have occurred as of 2025. The Company will continue to promote water conservation and the use of water-saving labeled products.

Climate extremes caused by greenhouse gases are a major global environmental issue. Although FocalTech is not a major energy user, we recognize that we are all part of the planet and that greenhouse gas reduction is a shared goal for all businesses. FocalTech is conducting its own greenhouse gas inventory, hoping to understand current conditions and trends through this inventory to proactively address them. We also continuously estimate greenhouse gas emissions from our energy use, which will serve as a reference for future energy conservation and carbon reduction efforts. We have been conducting third-party verification since 2023 and have passed this verification.

• Direct greenhouse gas emissions (Category 1)

FocalTech's owns or controls emission sources directly from refrigerants used in factory utilities, carbon dioxide fire extinguishers, and septic tanks.

• Energy indirect (Category 2) and other indirect greenhouse gas emissions (Categories 3-6)

FocalTech's indirect emissions primarily consist of indirect greenhouse gas emissions from purchased electricity. This includes electricity used in equipment, offices, and public areas. Other indirect emissions (Categories 3-6) will be quantified and disclosed in 2024.

Considering that our company is a continuously expanding enterprise with annual adjustments to its operating locations and output scale, to more accurately reflect actual operating conditions, starting in 2024, we will use emissions intensity per unit of production area as the primary assessment basis for greenhouse gas reduction performance. Furthermore, we will formally follow the ISO 14064-1:2018 standard and include indirect emissions from Categories 3 to 6 within the scope of our inventory.

The company originally used 2023 as the base year for greenhouse gas emissions. However, due to changes in the 2024 boundary compared to the previous year, the base year was adjusted to 2024 in accordance with the internal "Greenhouse Gas Inventory Management Procedures." To ensure the integrity and credibility of the inventory data, in addition to outsourcing the inventory to professional consultants, a systematic internal management system was established to enhance inventory quality and data transparency.

Facing the environmental and operational risks brought about by climate change, FocalTech Electronics is actively promoting greenhouse gas management. By setting clear policies and reduction targets, and annually reviewing operational performance, FocalTech aims to balance environmental responsibility with operational efficiency, reduce environmental burdens, and achieve sustainable development goals.

Adhering to the philosophy of "Green Environment, Protecting Health," the company fully considers the impact on the environment and employee health during product production and operations, and continuously implements preventive management and improvement measures.

As a Fabless IC design company, our carbon emissions are significantly below Taiwan’s carbon fee threshold of ≥ 25,000 tons CO₂e per year, resulting in extremely low financial exposure. Despite our low emission profile, the Company has adopted Internal Carbon Pricing, applying a shadow carbon price to investment evaluations—such as equipment replacement and data center management—to account for future carbon costs.

In addition, we complete Scope 1, Scope 2, and Scope 3 inventories in accordance with international standards, undergo third‑party verification, and provide transparent disclosure in our sustainability reports. We also regularly respond to customer questionnaires such as CDP, RBA, CBAM, and ESG assessments. Our Company not only maintains low emissions but also demonstrates a mature carbon management capability, ensuring readiness to meet future requirements related to carbon fees, CBAM, and customer ESG expectations.

1. Greenhouse Gas Management Policy

• Continue to monitor risks and opportunities related to climate change and assess potential impacts on operations.

• Understand international trends and changes in laws and regulations, and adjust response strategies on a rolling basis.

• Regularly review greenhouse gas management performance to reduce operational risks and environmental impacts.

2. Reduction Strategy and Action Plan

FocalTech is a professional fabless integrated circuit design company, primarily engaged in the development, design, and testing of various integrated circuits. By improving product materials, dimensions, and performance, we aim to maximize the sustainable use of resources,In addition, we actively reduce waste and lower production costs by improving processes and operational management to minimize waste generation, and developing and selecting pollution-free and low-pollution design processes. FocalTech outsources all product manufacturing to professional wafer foundries and packaging and testing facilities. We recycle defective IC products through effective management procedures. All waste is reclaimed and processed by qualified removal and treatment companies, who then recycle and reuse the defective products. Precious metals are extracted from these waste products, transforming them from misplaced resources into raw materials for new production cycles, thus reducing resource waste.

2025 Goals

• Implement climate change risk and opportunity analysis and response in accordance with TCFD and FSC requirements.
• Continue to complete ISO 14064-1 greenhouse gas and third-party verification every year.
• Collect green certificates and green electricity information.
• Evaluate the list of appropriate green electricity procurement manufacturers.
• Continue to implement and evaluate energy conservation and carbon reduction goals.
• Evaluate purchasing green electricity to replace the current main electricity before 2040 to reduce Category 2 carbon emissions.
• Use renewable energy and increase utilization rate.

Empowering a Low-Carbon Future with Semiconductor Technology At FocalTech, we deeply understand the crucial role of integrated circuit (IC) solutions in the global transition to a low-carbon economy.

We are committed to integrating "clean technology" into our core R&D DNA, translating technological potential into tangible, measurable environmental impact. Strategic Investment and Quantifiable Targets To fulfill our sustainability commitment, FocalTech has developed a clear transformation roadmap and set specific investment targets for its clean technology portfolio: Dedicated R&D Investment: We allocate 15% to 20% of our annual R&D budget specifically to developing low-power and environmentally friendly IC designs. The focus is on optimizing power management architecture and significantly reducing energy consumption in display and touch technologies.

Next-Generation Energy Efficiency: We are committed to continuous innovation in energy efficiency. Our goal is to ensure that the average power consumption of next-generation IC products is reduced by 10% to 15% compared to previous generations, helping customers extend device battery life and effectively reduce indirect carbon emissions in Scope 3.

Expanding Green Product Portfolio: FocalTech is accelerating its transformation to sustainable solutions. By 2026, revenue from products featuring "clean technology" characteristics is projected to reach 10% of the company's total annual sales. Duntai's IC solutions, adhering to the "Green by Design" principle, bring tangible benefits to the global electronics industry value chain: Technical Features, Environmental Benefits, and Efficiency: Ultra-low power display drivers significantly reduce overall device energy consumption, minimizing the carbon footprint of smartphones and wearable devices. Integrated touch and display driver (IDC) simplifies hardware architecture, reducing material usage and waste generation during manufacturing. Intelligent power management incorporates intelligent sleep mode and dynamic voltage regulation, minimizing idle power consumption.