FST — Management Reports 2026

May 11, 2026

FORMOSA SUMCO TECHNOLOGY

CORPORATION 2025 Business Report

I. 2025 Business Report

The global semiconductor market in 2025 exhibited a clear trend of polarization. In the AI data center segment, demand for advanced logic products and memory increased significantly, driving strong demand for 300 mm advanced-process silicon wafers. However, although products for consumer, industrial, and automotive applications—primarily based on mature process technologies—have shown signs of bottoming out, silicon wafer sales continued to face significant challenges due to ongoing customer inventory adjustments.

In response to the rapidly evolving semiconductor market, as well as price competition from competitors in China, all employees of the Company have remained highly vigilant. In addition to continuously leveraging product quality advantages to reinforce the Company's position as a "Base Wafer" supplier to existing customers, we have flexibly adjusted our sales strategies, continued to promote process automation, optimized workforce allocation based on order conditions, and focused on cost reduction initiatives. Through our commitment to "manufacturing high-quality products at low cost," we aim to strengthen the Company's competitiveness and ensure stable revenue and profitability.

Furthermore, in alignment with global trends and increasing investor expectations regarding sustainable governance, and to enhance the Company's long-term competitiveness within the global supply

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chain, we have continued to advance our ESG strategy to higher standards. ESG is regarded as a key driver of corporate value and resilience. Environmental sustainability, talent development, supply chain responsibility, and effective governance have been fully integrated into the Company's core operations, forming a governance cycle overseen by the Board of Directors, driven by management, and implemented across all departments. Through goal-oriented management, data-driven governance, and cross-functional collaboration, we aim to strengthen trust among customers, employees, and shareholders. From an environmental perspective, we seek to reduce risks and costs; from a social perspective, to foster talent and social trust; and from a governance perspective, to enhance decision-making and discipline. We believe that only by embedding ESG principles into daily operations and across the supply chain can we continue to create meaningful, measurable long-term value for the planet, society, and shareholders, and, with transparency and accountability, work together with stakeholders to build a more resilient and sustainable future.

Below is a summary of the Company's production and sales and operating status in 2025:

(I) Production and Sales:

The Company remained focused on stable production and market expansion of its core silicon wafer business. Total annual production reached 6,614 thousand wafers, while total sales volume was 6,643 thousand wafers, slightly exceeding production—reflecting stable market demand and flexible

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supply chain management. Total sales revenue amounted to NT$12,334.29 million, of which domestic sales accounted for NT$10,381.57 million (84% of total sales), and export sales accounted for NT$1,952.72 million (16% of total sales). This sales structure indicates that the domestic Taiwan market remains the Company's primary source of revenue, while international markets continue to expand steadily, particularly in Southeast Asia and the United States.

(II) Operating Status:
In 2025, the Company reported consolidated operating revenue of NT$12,334.29 million, representing a year-over-year decrease of 0.7% compared to 2024. After deducting operating costs of NT$10,516.22 million and operating expenses of NT$822.16 million, operating income amounted to NT$995.91 million. Including non-operating expenses of NT$217.37 million, profit before tax for 2025 was NT$778.54 million, representing a year-over-year decline of 52.2%.

1. 2026 Business Plan Overview, Future Development Strategies, and the Effects of External Competition, the Regulatory Environment, and the Overall Business Environment

Looking ahead to 2026, the global semiconductor industry stands at a historic inflection point. According to forecasts by SEMI and market research firm Omdia, the global semiconductor market is expected to surpass the US$1 trillion threshold. This milestone represents not merely a cyclical recovery, but a structural demand revolution driven by artificial intelligence (AI),

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high-performance computing (HPC), automotive electronics, and data centers.

Over the past two decades, semiconductor demand growth was primarily driven by consumer electronics such as smartphones and personal computers. However, the demand structure in 2026 has fundamentally shifted. The exponential growth in computational requirements for AI model training and inference is fueling simultaneous surges in demand for GPUs, AI ASICs, HBM memory, and advanced packaging technologies. As a result, the semiconductor industry is transitioning from an “end-market demand-driven” model to a “compute infrastructure-driven” model. This structural shift is expected to extend the duration of industry cycles, as AI infrastructure investments are long-term in nature, rather than tied to short-term consumer upgrade cycles. Consequently, the semiconductor industry in 2026 is no longer merely a segment of the technology sector, but an integral part of global economic infrastructure.

In light of these market transformations, the silicon wafer industry is entering a critical turning point following several years of supply-demand adjustments. As a fundamental material in semiconductor manufacturing, trends in the silicon wafer market reflect the overall demand momentum across the technology supply chain for AI, advanced processes, and emerging applications. Accordingly, the Company’s future development strategy will focus on: deepening its presence in the high-end wafer market, increasing the proportion of high value-added products, expanding into international markets, and continuously upgrading technological

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capabilities. With memory products—currently showing a clear recovery trend—as a core growth driver, the Company will actively expand sales and prioritize the development of its second 300 mm fab to scale advanced wafer foundry processes and memory-related business, progressing toward full-spectrum production capabilities. At the same time, adhering to the philosophy of “creating win-win value with customers,” the Company will closely track customer demand and actively participate in new product development projects to ensure alignment between product deployment and market trends.

In terms of ESG, the Company will continue to develop sustainable production technologies to reduce carbon emissions and environmental impact. To minimize the impact of carbon fees under the Climate Change Response Act, the Company will expand energy-saving and carbon reduction initiatives while striving to secure the most favorable carbon fee rates. Solar photovoltaic systems have been installed on the rooftops of existing and newly constructed facilities, and renewable energy has been introduced to reduce carbon emissions and advance toward carbon neutrality. The Company will also continue to develop low-energy production technologies by optimizing silicon ingot growth and wafer slicing processes, while leveraging AI applications to reduce energy consumption and improve production efficiency. In addition, the Company has established an e-commerce platform over the years to collaborate with suppliers on carbon reduction initiatives. Beyond monitoring suppliers' carbon reduction performance, the platform

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facilitates the sharing of energy-saving best practices, with priority procurement given to suppliers demonstrating outstanding carbon reduction results—working together to create a better environment.

In response to changes in the global environment, the Company is committed to sustainable operations as its core objective. To strengthen overall business operations, the following initiatives have been established and will be advanced in collaboration with all employees to build an organizational structure capable of flexibly responding to rapid changes in the global environment and semiconductor market conditions. The Company anticipates that the current year will be a year of growth.

I. Full Compliance and Strengthened Safety and Environmental Management Systems
- Adhere to a “Safety First” policy and rigorously implement safe operating practices.
- Promote business continuity planning for disasters such as earthquakes, typhoons, and floods.
- Implement a “Zero Accident” program to prevent major accidents, environmental incidents, and traffic accidents.
- Fulfill corporate social responsibility through ESG initiatives and contribute to sustainable societal development.
- Strengthen information security measures.

II. “Quality First” Engineering Management and Stable Production

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• Provide reliable products and quality assurance systems trusted by customers, achieving zero defects and strengthening preventive measures against abnormal outflows.

• Enhance process management through the implementation of visualization and automation technologies; promote 1σ activities and improve engineering capabilities.

• Strengthen the supply chain to establish a stable supply system for auxiliary materials.

• Ensure prompt and coordinated cross-departmental responses to customer needs and complaints.

• Strictly comply with customer delivery schedules and achieve a 100% on-time delivery (OTD) rate.

• Proactively propose quality improvement solutions to customers to mitigate potential risks that may affect future sales.

III. Initiatives to Address Market and Environmental Changes

• Increase face-to-face engagement with customers to deepen communication and become their preferred partner.

• Actively support customers in new product development and strive to secure “Base Wafer” positions.

• Coordinate production and sales functions to respond promptly to urgent customer demands.

IV. Driving Operational Efficiency and Cost Competitiveness

• Improve workforce productivity through automation and process improvements.

• Continue cost reduction initiatives to establish a cost

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structure that remains profitable under market pricing conditions.

• Implement workforce planning and continuously enhance productivity.

V. Strengthening Manufacturing Capabilities through TPM

• Establish TPM as the foundation for improvements in safety, quality, cost, and productivity.
• Continue promoting TPM activities and maintain optimal equipment conditions.