Supply Chain Management

The Company's major operating bases include Taiwan and mainland China. Its supply chain comprises raw materials, equipments, and engineering services, in which raw material procurement accounts for the largest share. Raw materials are primarily purchased from foreign suppliers, with Japan being the main source. In 2025, the Company had actual transactions with 1,008 suppliers, representing an increase of 13% compared with 2024, due to the establishment of new product development at the GIS Chengdu Factory and Houli Factory. The number and proportion of domestic and foreign suppliers, along with procurement amounts over the past three years, are presented in the table below

Supply Chain Sustainability Management

GIS follows the "Supplier Management Operating Standards" and "Conflict Minerals Management Regulations" for supplier management, with the policy of "Social Responsibility and Sustainable Development". To actively implement supply chain sustainability management, in 2025, GIS revised the “Supplier CSR Management Operating System” to the “Supplier ESG Management Operating System”, clarifying processes and definitions for supplier ESG management; at the same time, adding the “Supplier ESG Risk Assessment Management Operating Regulations” and the “Supplier ESG Audit Operating Regulations”, established a system, and strengthened the platform to execute ESG management on suppliers of mass production raw materials.

Supplier Management Process

To reduce operational risks, enhance product competitiveness, and accelerate the industry's low-carbon transition through its own choices and influence, GIS’s supplier management has four stages: Selection, Verification, Mass Production, and Continuous Improvement, based on its Supplier CSR Management Operating System. GIS regularly conducts risk assessments and reviews for both new and existing suppliers, actively promoting sustainable management.

The Company also regularly monitors and refers to various international standards. In 2024, the EU issued the Corporate Sustainability Due Diligence Directive, requiring companies to implement human rights and environmental due diligence. Prior to this, the Company had already developed the Supplier Social and Environmental Responsibility Code of Conduct Operating Standard in alignment with RBA 8.0 and incorporated the Code into supplier commitment letters. In addition to requiring all new suppliers to sign the letter, the Company also carries out reviews from time to time. The Operating Standard outlines five key areas: ethics; labor rights (including the prohibition of child labor and forced labor, restrictions on excessive working hours, prohibition of discriminatory practices, the right to collective bargaining, and equal pay for equal work); health and safety; environment (hazardous substances and waste management); and management systems.

GIS also provides a complaint channel for suppliers via audit@gis-touch.com. In 2025, the Company did not receive any complaints.

Selection of New Suppliers

GIS requires all new suppliers to sign the Supplier Commitment Letter, which requires adherence to the principles of good faith, integrity and fair competition, corporate social responsibility, confidentiality, and a strict prohibition on the use of conflict minerals. Suppliers must also commit to environmental guarantees, ensuring that all products and components provided comply with international environmental regulations (e.g., REACH, RoHS, etc.). For specific suppliers (such as customer-designated vendors) who do not sign the Supplier Commitment Letter, approval from the President is required for classification as specially controlled suppliers. In 2025, a total of 147 new suppliers were added, among which 116 signed the Supplier Commitment Letter, while 28 customer-designated suppliers were approved by the President as specially controlled suppliers. Excluding specially controlled suppliers, the signing rate was 95.2%.

Annual Audit of Existing Suppliers

The Company regularly designates qualified material suppliers that have transitioned to mass production as the primary audit targets for the year. In accordance with the "Supplier Management Operating Procedures," the Company conducts quality system and quality process audits based on the suppliers' quality and service performance in the preceding year. Suppliers assessed as high risk are included in the annual on-site audit plan, with product-related matters serving as the primary audit focus, while low-risk suppliers are audited as necessary. In addition, pursuant to the "Supplier ESG Risk Assessment Management Operating Procedures," the procurement department reviews and evaluates the "GIS Supplier SER Risk Assessment Form," covering supplier attributes, contractual risk transfer, labor conditions, and management systems. After the annual audit, the Company actively tracks suppliers' corrective actions for their deficiencies, led by the quality unit to oversee supplier improvements and validate the effectiveness of improvement measures before closing the case. Additionally, supplier quality performance is continuously monitored and encouraged for improvement. If a supplier fails to complete or does not actively cooperate with improvements within the timeframe specified by GIS, the Company will evaluate whether to remove it from the Approved Vendor List (AVL). In 2025, GIS conducted an annual audit plan for a total of 109 suppliers, all of whom passed, with none disqualified or removed

Supplier ESG Review and Verification

GIS also requires all new and existing raw material suppliers listed in the Bill of Materials (BOM) to complete the Supplier ESG Audit Checklist, which covers thematic areas such as labor rights, health and safety, environment, ethics, and information security. This serves as the basis for risk assessment, with a sustainability rating of over 80 considered low risk (qualified). Medium to high risk raw material suppliers are included in the annual audit plan. 100% of new and existing raw material suppliers will undergo ESG audits in 2025, and all results are Low Risk (qualified). For deficiencies, the procurement unit assists suppliers in improvements and validates the effectiveness of improvement measures before closing the case. In 2025, 100% of deficiencies have been closed, and continuous monitoring and improvement are promoted.

ESG Supplier Assessment Levels and Corresponding Measures

ESG Survey and Audit Practices

Critical Material Risk Management

GIS carries out risk assessments on critical materials to identify factors that may affect the stable supply of raw materials. These factors include supply disruptions caused by extreme weather events, international situations, scarcity of raw materials, and the issue of conflict minerals. Raw material supply risk is managed in accordance with the Procurement Management Operating System, Business Continuity Management Operating Regulations, Supplier Management Operating Regulations, and New Supplier Operating Regulations. Specific actions include defining critical and non-critical materials, conducting regular supplier reviews, building a diversified supplier base, and implementing BCM (Business Continuity Management) processes. These measures enable GIS to respond promptly to risks of material supply disruptions or quality issues, and ensure stable operations and long-term corporate development.

Note: According to GIS's Supplier Management Operating Regulations, the Key Parts List include TFT Glass and Mesa Tape, while the Normal Parts List include Primer C and Copolymer (piezoelectric materials, acetamide compounds).