Message from the Chairman

The COVID-19 outbreak, the tussle between the US and China, and the Russia-Ukraine war in recent years have given rise to various political, economic and market problems, which are examining the speed and resilience of all enterprises in responding to risks. Building resilience is costly, which requires not only flexible and multi-directional adjustments but also adequate resources to respond to unprecedented situations. In the short term, these measures may slow down the Company’s growth. However, in the long term, they are able to reduce the
external impacts on the Company and maintain the Company’s sustainable development.。

Since its establishment in 2005, FocalTech has been developing innovative products based on innovation R&D technology to provide customers with the best solutions. FocalTech’s revenue reached a new high in 2021, with consolidated revenue reaching NT$21.99 billion, up 59% from the previous year, and earnings per share of NT$30.23.

• Received the“ Best Financially Managed Company” award from the Global Semiconductor Alliance (GSA) in 2021.
• Invested more than NT$2.4 billion in R&D in 2021, which has effectively enhanced the Company’s core competitiveness and laid the foundation for sustainable management.
• Achieved technological breakthroughs in all product lines in 2021. The IDC products were recognized by automotive customers, with over 4 million units shipped and had the largest market share; the AMOLED were applied in wearable devices and recognized and adopted by panel manufacturers.

In response to Taiwan’s target of net zero emissions by 2050, and in line with the Financial Supervisory Commission’s initiation of the“ Roadmap for the Sustainable Development of Listed Companies” which plans to complete the greenhouse gas inventory in 2026 and the related validation in 2027, FocalTech aims to complete the greenhouse gas inventory ahead of schedule in 2024. As a non-manufacturing IC design company, FocalTech is committed to developing green products in support of environmental protection; the Company’s achievements
in 2021 in reducing wafer size and developing low power consumption feature are described in the chapter“ Technology Leadership.”

With domestic and foreign companies increasing their investment in Taiwan, technology talents are in short supply. As a result, FocalTech is tackling the issue in a more active manner.

• With an aim to accommodate more talents and provide a more comfortable workplace environment for employees, FocalTech purchased an office building in 2021 for NT$1.07 billion. The office building can house about 700 people. Additionally, it is equipped with innovative hardware and facilities, and rich environmental functions to facilitate organizational dynamics, teamwork and vitality.
• Formulate training plans every year targeting new employees, professional skills, general knowledge of management, integrity management culture, and information security, etc. Taking effectiveness as the guide and efficiency as the guideline, the training plans are incorporated flexibly in the working situation of employees, which meet the purpose of training in an unnoticeable manner.
• Systematically cultivates the successors and representatives of executives at all levels with an aim to pass on FocalTech’s skills, experience and culture.
• Establishes more diverse recruitment channels to attract more
  talents.

Deepening innovative applications and environmentally friendly products are specific actions towards implementing the concept of sustainable development. After completing the first edition of the Report in 2021, FocalTech started to compile its second edition of the ESG Report. The Company referred to some TCFD

and SASB standards in disclosing the corresponding information, while supporting the SDGs issued by the United Nations. The Report is expected to be verified by a third-party institution in the future.