The Group's procurement practices are primarily classified into raw materials, expenses, machinery, and facility engineering. Overseas machinery and equipment suppliers are di icult to include in management, while facility engineering is not applicable. Accordingly, the screening targets are raw material suppliers and spare-parts vendors within expense categories, which also account for a major share of procurement value. Major raw materials and components include sapphire substrates, gallium arsenide substrates, specialty gases, metals, lead frames, and LED mainboards.

In 2025, the Group worked with 3,517 suppliers worldwide. To ensure that suppliers meet our sustainability requirements, all suppliers in every procurement category must sign the Supplier Social Responsibility Commitment and are included in the Group's supply chain risk assessment mechanism. All critical raw materials and components are procured from at least two suppliers to maintain procurement flexibility and reduce overconcentration risk.

From 2022 to 2025, we continuously communicated, surveyed, and provided guidance to supply chain partners and rated their sustainability implementation capabilities. In 2026 and 2027, we will focus on building supplier consensus around the ratings and helping suppliers with lower sustainability capabilities improve. The goal is to implement a green procurement policy in 2028: “Promote resilient procurement and establish a sustainable, e icient, and risk-controlled green supply chain.”

 Ennostar Group has established a Supplier/Outsourcer Code of Conduct and requires all business partners to sign an Integrity Commitment and Supplier Social Responsibility Acknowledgment as part of ongoing supplier management.

The Group's two major subsidiaries, Epistar and Lextar, were the first to implement ethics and human rights codes of conduct. In addition to establishing corresponding regulatory requirements at their own factories, they extend these principles to related departments and all suppliers and outsourcers. Raw material suppliers and contractors serving sites subject to ethics and human rights code verification—including labor agencies, waste-removal contractors, and environmental-cleaning contractors—must sign the relevant documents required under the code. The Group has also implemented ISO 9001 and IATF 16949 international standards for supplier requirement assessment, management, review, audit, evaluation, improvement guidance, continuous supply management, ethics and human rights requirements, and HSF compliance. Written surveys on suppliers' implementation of ISO 14000, ISO 45001, and ISO 14064 are incorporated into supplier evaluation indicators.

 

 

 To prevent unexpected supplier failures from a ecting supply and reduce shortage risks caused by extreme climate events or major natural disasters, we monitor the supply chain through regular and ad hoc surveys of suppliers' operations and financial conditions, diversification of material sources, and geographical distribution of production lines. The Group has also established an emergency response team and supplier production-abnormality emergency procedures and conducts regular scenario drills. These measures allow the Group to take appropriate preventive action in supply chain risk management, avoiding operational harm and protecting stakeholder rights and interests.

For supplier risk assessments, the Group has established di erent processes and items based on whether suppliers are new or existing and on each subsidiary's business model. Going forward, Group subsidiaries will gradually incorporate sustainability principles into overall risk assessment items.

•  Prohibit Use of Conflict Minerals

 Ennostar Group has publicly issued its Conflict Minerals Management Statement, under which all subsidiaries commit to responsible procurement practices and ensure that none of the Group's products use or contain conflict minerals—including gold (Au), tantalum (Ta), tungsten (W), and tin (Sn)—controlled by armed groups, non-governmental forces, or illegal military factions in the Democratic Republic of the Congo (DRC) or adjoining conflict-a ected areas. The Group also requires suppliers to refrain from using these conflict minerals in products supplied to Group companies and continues to conduct due diligence on existing suppliers' conflict mineral practices to enhance transparency concerning smelters and refiners.

• Due Diligence

 The Group conducts reasonable commercial due diligence on suppliers. Vendors must sign the Supplier Conflict-Free Minerals Commitment, and the mineral sources they use must meet the standards set out in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-A ected and High-Risk Areas, or an equivalent recognized due diligence framework, before they may be included on the Approved Supplier List. Suppliers must also complete annual conflict minerals surveys in full in accordance with the requirements of the OECD-aligned Responsible Minerals Initiative (RMI), ensuring that raw materials originate from sources recognized as conflict-free by relevant industry organizations. In this way, the Group and its supplier partners jointly fulfill their sustainability commitments to society and the environment.

For suppliers of metal plating materials used in production, the Group follows RMI procedures under the OECD and conducts annual conflict minerals surveys covering 100% of the relevant suppliers. The Group collects the Conflict Minerals Reporting Template (CMRT), Extended Minerals Reporting Template (EMRT), and Pilot Reporting Template (PRT), and provides them upon customer request, ensuring that 100% of products purchased by customers are conflict mineral-free. To strengthen conflict minerals management, the Group's annual on-site ethics and human rights audits must include at least one metal supplier.

The Group formally established the Sustainable Value Chain Task Force in the third quarter of 2022. Led by senior executives of major subsidiaries, the cross-company team carries out Group-wide projects to strengthen sustainable supply chain management. The task force began formal operations in 2023 and reports directly to the Group's Chairman and President at quarterly task-force meetings. Its management scope was expanded to China sites in 2025.

Led by the Sustainable Value Chain Task Force, the Green Supply Chain Policy calls for working with supply chain partners to reduce carbon emissions, increase green energy use, strengthen supply chain resilience, and become an industry benchmark for sustainable value chains. Based on this strategy, the Group established three strategic pillars and a five-year plan: