TIPS Implementation Status in 2024

Walsin Lihwa implemented the Taiwan Intellectual Property Right Management System (TIPS) to Yenshui plant and headquarter in 2020 and Hsinchuang plant is then joined in 2021. Walsin Lihwa continued to acquire the TIPS (level A) certification in 2023. To further improve the internal control of intellectual property management in Walsin Lihwa, in 2024, we built up automatic information connection among different plant in accordance with the automation and systemization promotion. Also, establish management measures for copyrights and trade secrets, aiming to enhance the scope of intellectual property management. The intellectual property right management policies and the targets are planned according to the TIPS regulation 5.2 and 5.3. The implementation status and annual plan are reported at a board meeting on November 8, 2024.

Intellectual Property Management Plan

• • Intellectual Property Right Management Policies
    1. R&D for innovation and competitiveness enhancement,
    2. Employees’ awareness of intellectual property rights for more effective intellectual property right management.
    3. Confidential document management, and
    4. Execution corporate governance with compliance

    ※ The targets and implementation status according to the intellectual property right management policies, are listed in the “Annual implementation status and achievement ”section.

• • Intellectual Property Management Measure
  • Since the implementation of TIPS in 2020, Walsin Lihwa has continuously conducted sampling inventories of its patents, trademarks, copyrights, and trade secrets. Additionally, measures to encourage innovation, execute periodically IP training, improve IP management and contract review are taken with systematization and automation.
    Management processes of IP risk assessment, proposal review of IP right application, IP right protection evaluation, Infringement handling procedure and attentions for the outsourcing of intellectual property affairs are regulated as intellectual property management measure. Furthermore, Walsin Lihwa refined management measures for trade secret and copyright and reconstruct process of R&D cooperation with external company or academic institute with additional regulation such as controlling unit and check points this year, which is scheduled to be executed in 2025 for the purpose of fully Intellectual Property rights protection.
    In the future, Walsin Lihwa will review the intellectual property right management policies and adjust targets and intellectual property management regulations annually in accordance with operation strategy and the changes in government policy and market. Also, to ensure the management system operated effectively, Walsin Lihwa will review our intellectual property management and improve the management system through TIPS verification, in case of potential risk and IP related dispute.

Annual implementation status and achievement

• • IP Management Targets and Implementation Status

  No.	IP Management Targets	Implementation Status
  1	To organize training sessions to all employee with topics of intellectual property and TIPS	Online training sessions of intellectual property and TIPS were provided to all employee at 1st, August.
  2	Improve IP management system to connect to systems of plants with automatically information synchronization	System connection to Yensui plant and automatic synchronization was set up.
  3	5 patent applications filed before end of 2024	12 patent applications are filed in 2024.
  4	Protection of R&D cooperation with externals – Amend the “Industry-Academia Cooperation Management Measures” and corresponding regulations	Amendment of “Industry-Academia Cooperation and Outsourcing R&D Management Measures” was filed in October and amendment of corresponding regulation “Patent, copyright and trade secret management measures” is completed.
  5	To organize training sessions to all employee with topics of trade secrets and confidential obligations	Online training sessions of trade secrets and confidential obligations were provided to all employee at 1st, July.
  6	Made an inventory of confidential documents and present management improvement	The confidential documents were reviewed during October to early November and present management improvement suggestion.
  7	At least 1 trade secrets registered in internal system and present management improvement	1 trade secret case registered in 2024 and present management improvement suggestion.
  8	Report the execution status of TIPS to the board of directors and disclose it on Walsin official website	The execution status of TIPS was reported to the board of directors at 8th, November and it will be disclosed on Walsin official website before end of December.

  • Achievements of Intellectual Property acquisition
  • In 2024, 9 patents are granted. Walsin Lihwa have file 12 global patents based on 4 R&D proposals. As of December 31th, Walsin Lihwa have 37 granted patents, including 26 inventions, 8 utility models and 3 designs; 30 pending patent applications, including 27 inventions and 3 designs; 197 registered trademarks and 7 pending trademark applications. The global IP layout is as following figure.
    
  • Advantages and contribution of IP to cooperation operation
    1. Enhancement of IP protection: Continuing implementing IP knowledges to employees with IPR and Confidentiality related training session and providing assistance of suitable equipment and measures such as document leveling management to raising confidential awareness while executing works.
    2. Global operation layout: Aligning with the group internationalization strategy, integrating technology and brand layout, and achieving high-value products and services.
    3. R&D process improvement: Strengthen the R&D project-oriented R&D process and provide a reasonable reward system to increase the willingness of R&D employee for invention and patent application, so as to increase the company’s R&D and intellectual property capabilities.
    4. Corporate governance transparency: Disclose the implementation status of the intellectual property management plan on Walsin Lihwa official website to demonstrate the effectiveness of intellectual property management.

• • TIPS verification
  • Walsin Lihwa passed TIPS Level A verification last year and the TIPS Level A certificate is valid through December 31, 2025. On 10th April, 2024, Walsin Lihwa successfully passed the TIPS Level A spot check.

• • Potential IP risk type and Countermeasures
  • To ensure the R&D achievement and the corresponding rights are protected, preserve its economic values and prevent the IP right infringement, the IP risk type and countermeasures are listed below:

    IP risk type	Countermeasures
    Patent	• Patent risk evaluation in R&D process • Encourage R&D employee to propose patent application
    Trademark	• Strengthen control power of trademark application, maintenance and usage
    Confidential information management	• Strengthen and implement IP training for employee • Improve confidential mark usage • Attention for reviewing contract with external vendors

Prospects for Intellectual Property Management

Looking forward to the future, Walsin Lihwa expects to encourage internal R&D energy, protect technology and R&D results by establishing a complete intellectual property management system. With Industry 4.0 implementation, process is gradually optimized, product innovation is promoted and upgraded, thus leads smart manufacturing and the high-value transformation strategy is realized. Furthermore, obtain the trust of financial institutions and investors by disclosing the energy of intellectual property. With complete information, customers and investors would correctly evaluate the true value and competitiveness of Walsin Lihwa. Based on Industry 4.0, stick to energy conservation and environmental protection and invent product and technology for environmental sustainability. Realize environmental friendly and society caring achievement and which meets the purpose of sustainable company operation.

Information Security Management Structure Implementation

• To strengthen information security management for company transformation, Walsin Lihwa established its Big Data and Cyber Security Division for information security policy development, planning, coordination, implementation of information security protection, information security risk assessment and management, comprehensive information security planning, and information security management solution development year by year.
• Pursuant to its Regulations Governing Information Security Organization Management , Walsin Lihwa has established its IT Steering Committee as an information security management and decision-making body for the headquarters and individual business units. The IT Steering Committee has an information security promotion team convened by the Chief Information Security Officer (CISO). Under the CISO, there shall be at least one information security manager and more than two full-time information security specialists to review relevant plans and objectives on a regular basis while planning for, implementing, and monitoring information security compliance.

Information Security Policy

• Objectives of information security: To maintain the confidentiality, completeness, and availability of business information including sensitive information at Walsin Lihwa, all the employees, internal and external information service users, and 3rd-party service contractors are expected to work steadfastly together to achieve the following objectives:
  1. Comply with relevant laws and regulations to protect company confidential information; prevent unauthorized access, tempering, damage, and/or improper disclosure.
  2. Protect company business information from unauthorized access or disclosure to ensure the correctness of every category of business information
  3. Set up comprehensive business continuity planning and procedures for effective management of information security events to ensure such events are properly responded, controlled, and processed, and conduct scenario drills on a regular basis to ensure ongoing operation of IT systems and information services in case of any information security events.
  4. Cautiously handle and protect personal information and intellectual property rights pursuant to relevant domestic and overseas requirements.
  5. Review the status of compliance with information security requirements to ensure effective information security management.
  6. Enhance employees’ awareness of information security and reduce the risks associated with how information is used through management review, risk appraisal. internal auditing, education and training, and information security drills.
  7. Require all the employees to strengthen compliance with the Information Security Policy as well as relevant regulations and SOPs.

Specific Program for Information Security Management

• Develop information security plans for information security policy implementation year by year, bring in information security systems and workflow standards, and continue making information security technologies and relevant protection measures more complete.
• The specific management program has 5 objectives, separation of intranet from extranet, multi-layered security defense, identification of security loopholes or other potential risks by log analysis and security inspection, smart security protection, and behavior analysis by log and big data analysis at the security operation center, which can be achieved step by step through 4 approaches, IT governance, data and equipment protection, network and system control, and boundary defense.
• The specific management program includes:
  1. Information protection mechanism planning and implementation to decrease confidential information leakage risks.
  2. Continue bringing in advanced information solutions to enable effective system, host, and network behavior management and protection.
  3. Reinforcement of protection of external information service to effectively block hacker attacks.
  4. Focus on important systems to conduct disaster backup drills on a regular basis to rapidly resume operation in case of any disasters.
  5. Evaluate and improve endpoint, server, and network equipment protection, and engage 3rd party professional services such as the information security inspection and diagnosis provided by the Industrial Development Bureau, Ministry of Economic Affairs.
  6. Implementation of endpoint detection and response (EDR) to strengthen endpoint, server, and network equipment protection.
  7. Security operation center (SOC) implementation to enable effective and timely responsiveness to security issues.
  8. Walsin Lihwa’s ISO 27001 Information Security Management System implementation in 2022 obtained 3rd-party certification. The Company is committed to the PDCA cycle for effective information security management, and a comprehensive information security management system is in place to ensure the confidentiality, integrity, and availability of all the company data and keep strengthening information security management by effective prevention, monitoring, and responsiveness throughout any information security event.
  9. Reinforcement of cloud information security management through Zero Trust to help achieve digital and ESG sustainability.

Resources for information and communication security management

Resources and plans for information and communication security management issues:

• Material issue: Inclusion of information security management into one of the material issues in the company’s 2023 sustainability report.
• Dedicated organization: The Information Security and System Maintenance Division with a chief information security officer (CISO), an information security manager, and more than two dedicated information security personnels responsible for information security policy planning and development, as well as coordination for and implementation of information security protection,
• Management review: At least one management meeting convened by IT supervisors every year for information security policy and implementation effectiveness review to ensure information security standardization, policy effectiveness and appropriateness, as well as compliance with relevant laws and regulations and competent authorities’ requirements.
• Information security certification: Certified by the ISO 27001 Information Security Management System (ISMS) every year with no major deficiency identified by information security auditing.
• Related party issue: No major information and communication security issue, no. confidential information leakage, and no relevant damage to the company and its customer in 2023.
• Promotion and training: An ongoing information security month at the company every year, mandatory information security education and training throughout the company with more than 2,500 attendances in 2023, implementation of 2 email social engineering drills with more than 5,000 attendances in 2023, and an online information security course and test required for those who failed the drills.
• Information security regulations: Amendment to the company’s all information security regulations in 2022 and further amendments to 3 of the company’s information security regulations in 2023 to comply with domestic and foreign regulatory requirements and respond to external changes.

ISO 27001 Information Security Management System

The Procedures for Handling Material Inside Information and Prevention of Insider Trading of Walsin Lihwa are adopted to establish sound mechanisms for the handling and disclosure of material inside information to prevent improper information disclosures, ensure the consistency and accuracy of information released by the Company to the public, and prevent insider trading.
Moreover, to strengthen stock trading control measures, the Company may amend the Procedures for Handling Material Inside Information and Prevention of Insider Trading based on its Corporate Governance Best Practice Principle. The 2023 implementation status is tabulated as below.

Walsin Lihwa has been promoting relevant laws and regulations against insider trading to its board of directors and executives above managers every year.

Implementation of Internal Promotion in 2023 (online and offline courses totaling 1 hours)

Supply Chain Policy

In order to implement supplier management effectively and create a sustainable supply chain, Walsin developed short-, medium-, and long-term targets based on three major aspects as shown above, and identified key suppliers based on the “CSR sustainability self-assessment form”. In the meantime, through the exchange of various information and practical operations, we continue the promotion, expand the scope and depth of sustainable management policy and resilient supply chain, and promote towards common values and goals.

Key Supplier Identification

To implement effective supplier management, we identified 156* key suppliers from total of 3,619 suppliers based on important raw materials, equipment and construction contracts, and waste disposal projects according to the principles of procurement amount, importance, influence, and uniqueness. The 156 key suppliers amount to 63.09% of the total procurement value and are also the objects of promotion of supply chain resilience to strengthen supplier corporate social responsibilities.

Note 1: Suppliers that are documented, paid, and managed in accordance with the procurement process and have substantial receipt amounts in the current year will only be included in the amount of suppliers with receipt records in the current year, and the number of merged related parties and duplication between factories will be deducted.
Note 2: Included Head Office, Wire and Cable Business ( Hsinchung plant, Yangmei plant, Shanghai Walsin), Stainless Steel Business ( Yenshui plant, Taichung plant, Yantai Walsin, Changshu Walsin, Jiangyin Walsin (Specialty Alloy Materials), Jiangyin Walsin (Steel Cable)), Real Estate Business and Walsin Precision suppliers.

Supplier’s Undertaking about their Commitment to Social Responsibility

Supplier’s Undertaking

Suppliers’ Commitment to Sustainability and Self-Assessment

To strengthen and implement sustainability of supplier management, suppliers must fill out the “Supplier’s Undertaking” to enhance supplier awareness, and suppliers would evaluate their own management status and fill in the “CSR sustainability self-assessment form“. The assessment items include economic, social, and environmental aspects. The sustainability management of suppliers is analyzed based on the assessment results, Walsin will give priority to those with better ESG performance for transactions; however, if the assessment is a “high-risk supplier”, Walsin’s safety and environmental unit will conduct on-site review and counselling in the following year of the assessment.
Suppliers are also required to improve their deficiencies within the stipulated time to meet the minimum ESG requirements.
If there is no improvement, the procurement ratio will be gradually reduced depending on the situation or they will be included as unqualified suppliers. Once listed as unqualified suppliers, they will no longer be eligible Sign a contract to make a deal.

For more information, please visit the sustainability website: https://esg.walsin.com/en