Implementing the TCFD
Recent extreme weather, driven by GHG emissions, has posed significant global risks. The European Union's Copernicus Climate Change Service (C3S) confirmed in January 2024 that 2023 was the hottest year on record and possibly the warmest in 100,000 years. Concurrently, the World Economic Forum's "Global Risks Report 2024" highlighted extreme weather and major earth system changes as the most pressing long-term issues.
Unimicron is committed to achieving carbon neutrality by 2050 and closely monitors global climate action trends. We adopted The Climate-related Financial Disclosure (TCFD) framework in 2018 to integrate climate change risks into our risk management governance. In 2023, we included climate change risk in ESG material topics and aligned it with business strategy. We analyze policies, market and technology changes, and reputation and physical risks to develop adaptation and mitigation strategies. We also disclose climate-related financial information to showcase our resilience and responsibility while enhancing stakeholder communication.
| Framework | Strategies and Actions |
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| Governance | - Board of Directors: As the highest unit to oversee climate change management, it is responsible for reviewing sustainable management strategies, key guidelines, risk management, annual implementation results, etc.
- ESG Committee: Composed of the Chairperson, Executive President, and General Manager of each business group, this committee supervises five sub-committees to set management strategies, goals, and promotion plans, including climate-related issues. It reports to the Board annually, with 4 climate change issues reported in 2023.
- Energy Conservation and Carbon Reduction Subcommittee: A sub-committee of the ESG Committee, it assesses and/or manages climate-related issues, reviews key performance indicators, and sets short-, medium-, and long-term goals. Its strategies focus on improving energy efficiency, evaluating renewable energy use, and managing carbon emissions to enhance green management effectiveness.
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| Strategy | - We view climate action as a core mission, integrating it with our business and operations. We are dedicated to advancing green technologies, actively addressing climate change, reducing GHG emissions, and managing natural resources sustainably. Guided by ESG policy and environmental policy, we plan and implement climate mitigation strategies, align with global climate trends, and strive toward carbon neutrality.
- To enhance the company’s resilience and reduce climate change impacts, particularly given the uncertainty of extreme weather, we have assessed potential effects on Unimicron’s operations and supply chain. This evaluation, based on the TCFD framework, addresses transition and physical risks and opportunities. For short-term transition risks in 2025, we use the Intended Nationally Determined Contribution scenario, factoring in Taiwan's anticipated carbon fees and China's carbon trading prices. For medium and long-term risks, we use the third and fourth editions of NGFS climate scenarios for 2030 and 2050, and the IEA’s 2050 net-zero scenario, to assess impacts on carbon pricing, including carbon taxes and fees. Physical risks are assessed using the IPCC AR6 SSP and SSP5-8.5 scenario for Taiwan, considering extreme temperatures, annual rainfall, the annual maximum daily rainfall/consecutive drought days, and increased frequency of strong typhoons. For Mainland China, we use data from the China Climate Bulletin to assess potential risks and impacts on us and its value chain, and apply the NGFS "Current Policies" scenario, which forecasts a temperature rise above 3°C by century's end, to evaluate financial impacts and develop countermeasures. For details, refer to Section 4.2 Climate Risk Scenarios of ESG Report.
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| Risk Management | - Relevant departments on the ESG Committee score the probability and impact of risks using the TCFD framework on a 5-point scale (1 to 5). This assessment covers short (1-3 years), medium (3-5 years), and long term (5-10 years) risks and opportunities, with the scope of business and potential financial impacts detailed on ESG Report. The results are presented on a matrix chart and submitted to the ESG Committee. Risks with medium to high frequency and impact are reviewed by departments to develop management measures.
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| Metrics & Targets | Goal：
- By 2025, promote energy conservation and renewable energy procurement to achieve an 8% carbon reduction.
- By 2030, enhance energy efficiency and increase renewable energy use to target a 30% carbon reduction.
- By 2050, expand renewable energy purchases and carbon offsets to reach carbon neutrality.
Management indicatorsNote：- Renewable Energy Use: Increase renewable energy use by 30% by 2030 compared to the 2020 baseline.
- GHG Emissions: Maintain Scope 1 and Scope 2 GHG emission intensity below 11 in 2023 and below 10 in 2026.
- Water Resources: Maintain water consumption intensity below 300 in 2023 and below 290 in 2026.
- Energy Management: Keep power consumption intensity below 17 in 2023 and below 21 in 2026.
- Waste Management: Maintain a waste reuse rate above 90% in 2023 and 2025.
Management mechanism：
- Management of Energy, water, GHG, and waste is monitored through monthly ESG reports and committee meetings. GHG inventory details is also reported to the board of directors.
Risks related to GHG emissions：- Scope 1：Emissions primarily come from natural gas used in boiler steam during manufacturing. The addition of Chungyuan Plant, Chung Hsing Plant, Nanshan Plant, and Subtron Technology has increased consumption and emissions.
- Scope 2：Emissions result from externally purchased electricity, which is mainly related to the emissions from the use of electricity. Increased consumption due to the addition of Chungyuan Plant, Chung Hsing Plant, Nanshan Plant, and Subtron Technology has affected emissions.
- Emission Data： GHG inventory follows the protocol and ISO 14064-1, with third-party verification. Continuous mitigation measures are implemented. Details are on ESG Report.
- Internal Carbon Pricing：To achieve carbon neutrality by 2050, Unimicron is introducing internal carbon pricing in phases as a key management tool. This strategy promotes proactive carbon reduction within the company and aims to reduce external carbon costs.
- Remuneration：Climate change risk is integral to Unimicron's risk assessment. Directors' and executive managers' remuneration aligns with industry standards and considers personal and company performance, including future risks. Salary adjustments, bonuses, and other compensations of executive managers are based on the company's business performance, individual achievements, and contributions. Individual performance includes ESG factors such as environmental protection, social responsibility, corporate governance, etc. The Remuneration Committee and the Board of Directors review and evaluate these factors annually to reinforce senior management’s accountability to the company’s sustainability vision.
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Note: For more details on management indicators, please refer to Chapter 5 of ESG Report.
Climate Change Risks and Opportunities
Since 2018, relevant units on the ESG Committee have identified climate change risks and opportunities within its business scope. This year, by assessing each risk and opportunity based on possibility (5 levels) and impact (5 levels), we created a matrix to identify major risks and opportunities. This matrix informs the development of strategies to mitigate, transfer, or avoid potential impacts.
Risk Identification and Assessment
The Climate Change Risk Assessment Matrix reveals 4 high transition risks: Increase Energy Costs and Cap and Trade top the list, followed by Energy Tax/Renewable Energy Regulations/Climate Change Response Act, and Increase in GHG Emissions. There are 5 medium transition risks: Unsuccessful Investment in New Technologies, Costs to Transition to Lower Emissions Technology, Enhanced Emissions-Reporting Obligations, Changing Customer Behavior, and Stigmatization of the Sector. 3 medium physical risks include Drought, Changes in Precipitation Patterns and Extreme Weather Events such as Cyclones and Floods.
Unimicron Climate Change Risk Matrix
Policy and Legal
- Increase in GHG Emissions
- Enhanced Emissions-Reporting Obligations
- Cap and Trade
- Regulations: Energy Tax/Renewable Energy Regulations/Climate Change Response Act
- Exposure to litigation
Technology
- Unsuccessful Investment in New Technologies
- Costs to Transition to Lower Emissions Technology
Market
- Increase in Energy Costs
- Uncertainty in Market Signals
- Changing Customer Behavior
- Increased Cost of Raw Materials
Acute
- Drought
- Extreme Weather Events such as Cyclones and Floods
Chronic
- Changes in Precipitation Patterns
- Extreme Variability in Weather Patterns
- Rising Sea Levels
Transition Risks
Taiwan FacilitiesMainland China Facilities Supply Chain
| Type | Item | Period | Sites | Level | Impact | Strategy | Potential Financial Impact |
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| Policy and Legal | Increase in GHG Emissions | Short-term | | High | - GHG emissions are primarily driven by electricity use, with emissions rising as consumption increases. Starting in 2024, the authority will regulate enterprises' GHG emissions of over 25,000 tons, and a carbon fee will be imposed in 2025.
| - Continuously grasp the energy efficiency of equipment through the energy management system.
- Invest in green electricity and energy-saving, carbon-reducing equipment.
- Participate in CDP Carbon Disclosure.
| Increased operating costs. |
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| Enhanced Emissions-Reporting Obligations | Short-term | | Medium | - The Corporate Governance 3.0 blueprint mandates that listed companies complete GHG inventories for subsidiaries and report emissions data by 2025.
- Investors and customers increasingly demand disclosure of carbon emissions information.
| - Conducting GHG inventories.
- Disclose information on the company's official website, annual report, ESG report, Market Observation Post System, and in the media.
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| Cap and Trade | Medium-term | | High | Shenzhen City, Mainland China, pioneered carbon emissions trading in June 2013. Unimicron (Shenzhen) joined the Shenzhen carbon trading mechanism in 2014. As we encounter stricter carbon caps and a more advanced carbon trading market, expanding operations and production capacity could lead to higher carbon costs if our quota does not cover total emissions. | - Implement greenhouse gas inventory following ISO 14064 and continuously manage efforts to reduce carbon emission intensity.
- Expand R&D capabilities and collaborate with equipment and material manufacturers to develop low-carbon technologies.
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| Regulations: Energy Tax/Renewable Energy Regulations/Climate Change Response Act | Medium-to-long term | | High | - Energy Tax：When the Energy Tax is imposed, it will increase the Company's operating expenses.
- Renewable Energy Regulations：Compliance with Taiwan's Renewable Energy Development Act will increase capital expenditure for renewable energy installations.
- Climate Change Response Act：
- Future carbon fees will constrain capacity expansion and elevate operating costs.
- Installation and operation of carbon reduction equipment will also increase operating costs. - Carbon Border Adjustment Mechanism (CBAM)：Announced by the EU in July 2021, CBAM specifies the carbon content of imported products and imposes a carbon border tax.
| - Energy Tax：
- Pay attention to changes in regulations and establish response measures in advance to meet regulatory requirements.
- Enhance energy efficiency through equipment upgrades and replacements. - Renewable Energy Regulations：Plan renewable energy use and assess solar photovoltaic needs by 2025, based on demand.
- Climate Change Response Act：
- Adhere to ISO 14064 standards for GHG inventory, implementing continuous monitoring to reduce carbon intensity.
- Expand R&D and collaborate with manufacturers to advance low-carbon technologies.
- Set carbon reduction targets and continuously assess and plan carbon offset strategies to achieve carbon neutrality.
- Stay updated on the implementation of relevant laws and regulations. - CBAM：To mitigate potential tax impacts from international carbon taxes, the Company is actively implementing carbon reduction measures and GHG inventory.
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| Technology | Unsuccessful Investment in New Technologies | Long-term | | Medium | - Customers may reduce orders or impose additional tax payments if the Company fails to meet regulatory goals.
| - For low-carbon and new product development, the R&D department oversees new equipment and technology advancements, providing weekly progress reports to senior executives.
| R&D expenditures in new and alternative technologies. |
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| Costs to Transition to Lower Emissions Technology | Medium-term | | Medium | - Investing in hydrogen fuel cells for power generation will raise operating costs.
| - Set up hydrogen fuel cells.
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| Market | Increase in Energy Costs | Long-term | | High | - Yearly increases in electricity prices are driving up energy costs.
- In alignment with the government's 2050 net-zero target, renewable energy is expected to account for 60%-70% by 2050.
- Green electricity is more expensive than conventional electricity.
| - Enhance energy efficiency.
- Seek renewable energy suppliers.
- Implement renewable energy use and set promotion goals.
| Increased production costs due to changing input prices (e.g., energy, water) and output requirements (e.g., waste treatment). |
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| Changing Customer Behavior | Medium-to-long term | | Medium | - Short-term：
- Increased procurement costs due to requirements for low-carbon materials and the need for suppliers to adopt low-carbon practices.
- Customers require recycled gold salt, copper, and reused trays. In 2023, the procurement cost of recycled copper will rise at the Sanying, Luchu II, Luchu III, and Jenyi I plants. - Medium-term：Customers' preference for low-carbon and eco-friendly products, such as green electricity, poses a revenue risk if they switch to other brands.
- Long-term：Operating costs may rise due to customer demands for increased green power.
| - Short-term：
- Require suppliers to meet customer standards or seek alternative suppliers.
- Invite suppliers to join the Energy Saving and Carbon Reduction Project by the Industrial Development Bureau to enhance carbon reduction efforts.
- Medium-term：Collaborate with suppliers and academia to develop low-carbon and energy-saving materials. Continue investing in carbon reduction technologies and establish new technology platforms.
- Long-term：
- Plan to purchase green electricity and evaluate solar photovoltaic installations.
- Enhanced energy usage efficiency.
- Certify recycled gold and copper in relevant plants starting in 2024.
| - Short-term：Sudden changes in energy costs.
- Medium-term：Reduced demand for goods and services due to shifting in consumer preferences.
- Long-term：Plan to purchase green power and evaluate solar photovoltaic installations.
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| Reputation | Stigmatization of Sector | Short-term | | Medium | - The production process generates pollutants that are regulated by the government, necessitating advanced pollution prevention and control equipment and management.
| - Upgrade water and air pollution control equipment to improve efficiency.
- Implement energy-saving, high-efficiency equipment with intelligent controls.
- Increase the waste recycling rate.
| Reduction in capital availability. |
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Physical Risks
| Type | Item | Period | Sites | Level | Impact | Strategy | Potential Financial Impact |
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| Acute | Drought | Short-term | | Medium | - Extreme rainfall or drought could disrupt water supply, damage equipment, or impact the value chain, leading to production delays or business impacts.
| - Regularly monitor water shortage trends and develop contingency measures.
- Hold emergency response meetings during droughts.
- The emergency response water dispatch team manages water trucks, tanks, and sources to ensure continuous operations.
| Reduced revenue from decreased production capacity (e.g., transport difficulties, supply chain interruptions) |
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| Extreme Weather Events such as Cyclones and Floods | Long-term | | Medium | - Facility System damage may result in property loss.
| - Implement a flood warning system and emergency response plan.
- Equip existing buildings with water barriers and raise the base of new factory buildings.
- Establish and phase in emergency response procedures for natural disasters.
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| Chronic | Changes in Precipitation Patterns | Long-term | | Medium | - Concentrated rainfall may cause water shortages in specific areas.
| - Regularly monitor water shortage trends and develop contingency measures.
- The emergency response water dispatch team manages water trucks, tanks, and sources to ensure continuous operations.
- Implemented the AWS Standard for sustainable and systematic water management.
- Enhanced water usage efficiency through improved production processes and equipment upgrades.
- A water recycling project for production line equipment achieved a 6.5 million-ton annual reduction in water use.
| Increased production costs (Water saving facilities and water recycling systems) |
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Financial Information for Climate-related Actions
- In 2023, climate change-related expenditures—including energy-saving improvements, energy-efficient product purchases, GHG inventory, and investments in new low-carbon equipment and materials—accounted for approximately 3% of annual revenue.
- From 2024 to 2026, we will invest an estimated NTD 3.156 billion in energy-saving and carbon reduction projects, green energy, hydrogen fuel cells, and low-carbon product development.
Opportunity Identification and Assessment
Based on the matrix analysis of climate change opportunities, two high-impact opportunities are Reduced Water Usage and Consumption and Use of Lower-emission Sources of Energy. Seven medium-impact opportunities include Use of Recycling, Development and/or Expansion of Low emission Goods and Services, Use of New Technologies, Use of Supportive Policy Incentives, Use of More Efficient Production, Access to New Markets and Use of Public-sector Incentives.
Resource Efficiency
- Use of More Efficient Modes of Transport
- Reduced Water Usage and Consumption
- Use of More Efficient Production
- Use of Recycling
- Move to More Efficient Buildings
Energy Source
- Use of Lower-Emission Sources of Energy
- Use of Supportive Policy Incentives
- Use of New Technologies
- Participation in Carbon Market
Products and Services
- Development and/ or Expansion of Low Emission Goods and Services
- Shift in Consumer Preferences
Resilience
- Participation in Renewable Energy Programs and Adoption of Energy-efficiency Measures
Markets
- Access to New Markets
- Use of Public-sector Incentives
Taiwan FacilitiesMainland China Facilities Supply Chain
| Type | Item | Period | Sites | Level | Impact | Strategy | Potential Financial Impact |
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| Resource Efficiency | Reduced Water Usage and Consumption | Short-term | | High | - Enhance water resource efficiency and reduce reliance on raw water.
| - Recycle manufacturing water, monitor the quality of reclaimed water, and reuse to increase the recycling and reuse rate.
| Reduced operating costs (e.g., through efficiency gains and cost reductions). |
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| Use of Recycling | Short-term | | Medium | - Reduce resource waste and promote circular economic value：
- Packaging Reused：Carrier SBU has promoted reused trays since 2018.
- Gold Salt Recycling：PCB SBU's Shanying, Luchu, and Jenyi I Plants have used gold salt from recycled gold since 2021.
- Copper Recycling：PCB SBU's Shanying, Luzhu II, and Jenyi I Plants began using recycled copper in 2023.
| - Packaging Reused：Priority is given to purchasing reused trays. After shipment, suppliers collect used trays from customers for reuse.
- Gold Salt Recycling：Gold salt made from 100% recycled gold is used in processes. Waste gold liquid is recycled by the supplier, and re-refined gold salt is supplied to Unimicron.
- Copper Recycling：The Shanying Plant, Luzhu II Plant, and Jenyi I Plant have adopted recycled copper materials, including substrate, copper foil/powder/ingot, and Copper Plating Solution.
| - Promote circular economy and enhance customer satisfaction.
- Promote energy conservation and carbon reduction to lower future carbon taxes or fees.
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| Use of More Efficient Production Processes | Long-term | | Medium | - Introduce new materials to streamline manufacturing processes, cut production costs, and improve yield rates.
| - Implemented a protective film to replace the dry film process, reducing steps from four to two.
| - Reduced operating costs (e.g., through efficiency gains and cost reductions).
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| Energy Source | Use of Lower-Emission Sources of Energy | Short-term | | High | - Boilers previously fueled by oil and diesel have been gradually switched to natural gas, effectively reducing greenhouse gas emissions from fossil fuels.
| - Continue replacing high-energy-consuming equipment to enhance energy efficiency and incorporate low-carbon measures into new plant designs.
- Replace high-energy-consuming equipment and enhance energy efficiency by 2025. Plan for renewable energy and solar photovoltaic installations by 2030. Continue advancing low-carbon energy-saving measures and monitor evolving laws and policies.
| Reduced operational costs (e.g., through use of lowest cost abatement). |
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| Use of New Technologies | Medium-term | | Medium | - Medium-term：Enhance environmental processes by integrating eco-friendly technical considerations into production design to minimize environmental impact.
- Long-term：Adopt hydrogen fuel cells for power generation to diversify energy sources.
| - Medium term：Invest in new technologies and equipment through tripartite partnerships. For instance, in 2023, we invested NT$ 17.75 million in long-term research collaborations with National Taiwan University, National Tsing Hua University, and Yuan Ze University. The outcomes will be integrated into the Company's manufacturing processes.
- Long term：Install 33 hydrogen fuel cell systems across plants in Taoyuan and Hsinchu over the next five years, generating a total of 10MW and 78 million kWh annually. At the Hejiang Plant, the hydrogen fuel cells provided 600KW, representing less than 10% of its power supply. Future expansions will include the Hsinfeng, Yangmei, Shanying, Guangfu, and Luchu III plants.
| - Reduced operational costs (e.g., through use of lowest cost abatement).
- The benefits of investing in low carbon technologies.
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| Use of Supportive Policy Incentives | Long-term | | Medium | - Invest in low-carbon energy improvements and apply for government subsidies.
| - Collaborate with Taiwan Industrial Development Bureau and Taiwan Printed Circuit Association (TPCA) to advance low-carbon projects.
| Returns on investment in low-emission technology. |
| Markets | Access to New Markets | Medium-term | | Medium | - Our investments will focus on boosting PCB industry competitiveness, reinforcing existing assets, and approaching new investments with greater caution.
| - By aligning with government regulations and the Group's core development strategies, we efficiently allocate resources to achieve low-carbon transformation, garner recognition from new and existing customers, and boost revenue and profitability.
| Increased revenues through access to new and emerging markets (e.g., partnerships with governments, development banks). |
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| Use of Public-sector Incentives | Medium-term | | Medium | - Participate in government climate change projects, secure subsidies and rewards, and enhance the visibility of products and services.
| - Implemented according to the R&D Department's New Product Development Incentive Measures.
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Climate Risk Scenario Analysis
To enhance the Company’s strategic planning and climate resilience amid the high uncertainty and impact of climate change. We follow the TCFD framework to analyze transition and physical risks, evaluating potential climate change impact on the Company's operations and supply chain in the future.
Transition Risk Scenario Analysis
In recent years, countries worldwide have enacted international regulations to limit global warming to 1.5°C. In 2022, Taiwan introduced "Taiwan's Pathway to Net-Zero Emissions in 2050 and related regulations to enhance climate resilience. Therefore, this chapter shows short-term transition risks through 2025 using the Intended Nationally Determined Contributions (INDC) scenario, including evaluations based on Taiwan's Ministry of the Environment carbon fees and China's carbon trading market prices. For medium- and long-term transition risks in 2030 and 2050, we use common international climate scenario methodologies, the International Energy Agency's net-zero emissions scenario for 2050, and the Network for Greening the Financial System (NGFS) Phase 3 and 4. This approach assesses the impact of transition risks on carbon pricing systems, such as carbon taxes and fees, to capture mid- to long-term climate development trends.
| Type | INDC | Net Zero Emissions by 2050 Scenario |
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| IEA NZE 2050 | NGFS Phase 3 | NGFS Phase 4 |
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| Warming by The End of The Century | ~1.5°C | ~1.5°C | ~1.5°C | ~1.5°C |
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| Scenario Goal | - Taiwan：24% ± 1% reduction in 2030
Net zero by 2050 - China：Peak in 2030
Net-zero emissions by 2060 | - Achieve net-zero CO2 emissions from the global energy sector by 2050.
- Limit the global average temperature increase to no more than 1.5°C above pre-industrial levels by 2100.
| Achieve net-zero CO₂ emissions by 2050 to limit global warming to 1.5°C above pre-industrial levels. | Net-zero by 2050 aims to limit global warming to 1.5°C through stringent climate policies and innovations, achieving net-zero CO2 emissions. |
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| Description | Drawing on projections from the International Energy Agency and other sources, overall energy consumption growth has slowed due to enhanced efficiency and carbon reduction measures. Future energy system development is explored, with both short- and long-term goals established. | Evaluate key changes in energy policies, technologies, markets, and supply chains since 2021, as well as developments across different countries and regions. | - Governments worldwide are increasingly focused on climate change and actively encourage enterprises to pursue low-carbon transformation.
- Consider the net-zero emission commitments and renewable energy developments announced by countries at COP 26 in 2021.
- To meet 70% of global primary energy demand by 2050, substantial investment in clean energy, including renewable and biomass energy, is essential.
| - Consider each country's net-zero commitments and renewable energy developments up to March 2023. Incorporate the latest renewable technologies and the impact of the Ukraine-Russia War on the energy market to align with the Paris Agreement goals.
- Identify the sources of parameters assumed for achieving GHG net-zero emissions in jurisdictions such as the US, EU, and Japan.
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Note 1: Intended Nationally Determined Contributions (INDC) are based on self-determined GHG targets expected from Taiwan and China.
Note 2: The International Energy Agency's "2050 Net Zero Roadmap" (Net Zero Roadmap 2023 Update – A Global Pathway to Keep the 1.5 °C Goal in Reach) provides the basis for IEA NZE 2050 parameters.
Note 3: Networking for Greening the Financial System (NGFS) reference assumptions are drawn from Phase 3 and Phase 4 climate change scenario parameters published by NGFS.
Potential Financial Impact of Transition Risk
| Schedule | Short-term | Medium-term | Long-term |
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| Year of impact | 2025 | 2030 | 2050 |
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| Type | INDC | IEA NZE 2050 | NGFS Phase 3 | NGFS Phase 4 | IEA NZE 2050 | NGFS Phase 3 | NGFS Phase 4 |
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| Scenario Carbon Pricing(NT$/ton) | Taiwan | 300 | 2,700 | 2,864 | 4,266 | 6,000 | 16,901 | 28,144 |
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| Mainland China | 300 | 2,700 | 2,888 | 2,954 | 6,000 | 20,697 | 41,678 |
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| Financial ImpactNote | Taiwan | 0.16% | 1.45% | 1.53% | 2.28% | 3.21% | 9.05% | 15.07% |
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| Mainland China | 0.11% | 0.99% | 1.06% | 1.08% | 2.20% | 7.60% | 15.31% |
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Note: The financial impact of carbon pricing scenarios is expressed as a percentage of revenue.
Physical Risk Scenario Analysis
To assess the impact of physical risks on the Company’s strategy and financial planning, we reference the IPCC AR6 SSP for Taiwan, adopting the worst-case SSP5-8.5 high emissions scenario. This includes maximum daily rainfall, annual rainfall, consecutive dry days, increased frequency of strong typhoons, and extreme high temperatures. For China, we use data from the China Climate Bulletin to assess potential risks to the value chain. Also, we consider the NGFS "Current Policies" scenario, which forecasts a temperature rise 3°C by century's end, to evaluate financial impacts and develop resilience strategies.
Taiwan
| Category | Scenario Analysis | Possible Impacts | Financial Impact Assessment | Countermeasures |
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| Extreme Rainfall and Shifting Patterns, and Severe Weather Events Like Typhoons and Floods | | Item | SSP5-8.5 Scenario |
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| Maximum Daily Rainfall | The average annual growth rates in the middle and end of the 21st century were 20% and 41.3%. | | Precipitation | - Annual total rainfall is projected to rise by 8% by 2030 and 15% by 2050.
- Annual rainfall maximum compared with 1995-2014：
| Region | 2021-2040 | 2041-2060 |
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| Taoyuan | ↑18.8% | ↑29.8% | | Hsinchu | ↑23.4% | ↑30.2% |
| | Typhoon | Mid of the century, the proportion of strong typhoons is expected to double, despite a 15% decrease. | | Flood Hazard Potential | Some plants are flooded when the 24-hour rainfall is >600 mm. |
| - Based on disaster risk levels from Global Climate Models (GCMs) for the base period (1976-2005) and the RCP8.5 scenario (2036-2065), the flooding risk for plants in Taiwan is projected to be Level 4 or higher. This indicates the higher risk that could damage equipment and disrupt operations.
| - Historical records show no damage to plant from extreme rainfall at Taiwan Facilities.
- Impact estimates based on the NGFS "Current Policies" scenario indicate that annual expected losses from typhoons in Taiwan will increase：
- By 2.6% in 2030 compared to 2020.
- By 6.1% in 2050 compared to 2020. | - Strengthen management measures for buildings in high-flood-risk areas, such as those in Guishan, Taoyuan.
- Conduct internal drills and prevention to mitigate the impact of unexpected natural disasters and flooding.
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| Drought | Taiwan's temperature has risen by 1.6°C over the past 110 years (1911-2020), accelerating in the last 50 and 30 years. In the early 21st century, summer length increased from 130 to 155-210 days, while winter length decreased from 70 to 0-50. Projections indicate that Taiwan's temperatures will continue to rise.
| Item | SSP5-8.5 Scenario |
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| Annual Mean Temperature | The average annual mean temperature increase in the middle and end of the 21st century were 1.8°C and 3.4°C. | | Maximum Temperature Rise | - The maximum temperature increase compared with 1995-2014：
| Region | 2021-2040 | 2041-2060 |
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| Taoyuan | ↑1.3˚C | ↑2.4˚C | | Hsinchu | ↑1.4˚C | ↑2.6˚C |
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| - Rising average summer temperatures heighten the risk of droughts and water shortages.
| - According to the NGFS "Current Policies" scenario, heat waves are projected to reduce labor productivity in Taiwan by：
- By 0.6% in 2030 compared to 2020.
- By 1.4% in 2050 compared to 2020. - Based on the IPCC AR6 Report and Taiwan's climate projections, emergency water purchases and increased air conditioning costs of Unimicron will impact operating revenue as follows：
- By 0.177% in 2030 compared to 2020.
- By 0.228% in 2050 compared to 2020.
| - Enhance air conditioning system efficiency and install inverter smart controls to reduce energy use and GHG emissions.
- The emergency water dispatch team will prepare water trucks, tanks, and sources to ensure continuous operations.
- Use only energy-saving and environmentally friendly labeled products.
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Note: The scenario data were sourced from the National Science and Technology Center for Disaster Reduction (NCDR), the Taiwan Climate Change Projection Information and Adaptation Knowledge Platform (TCCIP), and the IPCC AR6 Climate Scenario Analysis and Disaster Application Evaluation Report.
Mainland China
| Category | Description | Scenario Analysis | Possible Impacts | Countermeasures |
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| Precipitation | The Pearl River Basin recorded an average precipitation of 440 mm, 53% above normal and the second highest since 1961. This led to flooding in Guangdong and other areas, disrupting transportation. | - Based on the NGFS "Current Policies" scenario, with a 1.5°C temperature rise, rainfall compared to 2020 is as follows：
| Region | 2030 | 2050 |
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| Guangdong | ↑0.2% | ↑2.1% | | Jiangsu | ↑2.5% | ↑2.8% | | Hubei | ↑3.2% | ↑4.9% |
| - Plants, equipment, and operations may be damaged due to flooding.
| - Conduct flood control drills for high-risk plants and implement enhanced measures to mitigate impacts from unexpected natural disasters.
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| Labor Force Declines Due to Heatwaves | The comprehensive intensity of the high temperature red warning issued by the China Meteorological Administration in 2022 was the strongest since records began in 1961. Prolonged high temperatures have negatively impacted human health, agriculture, and electricity supply. Severe heat stroke cases have been reported in Zhejiang, Jiangsu, Sichuan, and other regions. The Yangtze River Basin, including Hubei, continues to experience extreme heat and drought conditions, reaching or exceeding moderate drought levels. | - Based on the NGFS "Current Policies" scenario, under 1.5°C warming, changes in the labor force due to heat waves compared to 2020 are as follows：
| Region | 2030 | 2050 |
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| Guangdong | ↓1.1% | ↓2.7% | | Jiangsu | ↓0.8% | ↓2.0% | | Hubei | ↓0.7% | ↓1.8% |
| - Rising summer temperatures could lead to heat stroke among employees, reducing average productivity.
| - Concerns about high temperatures affecting employee health in vulnerable areas.
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Note: The data source of the factual description is the "China Climate Bulletin 2022.
