Ennostar Group focuses on the R&D and manufacturing of optoelectronic semiconductors and has a complete vertically integrated LED optoelectronic semiconductor supply chain covering epitaxy, chips, packaging, modules, and integrated solutions. It provides e icient and competitive one-stop services to meet diverse application needs. Through the Dual Value-Added Engine Strategy, growth is driven by both application-field value enhancement and solution value enhancement. The application-field strategy focuses on the “3+1” core areas of automotive applications, advanced displays, smart sensing, and emerging markets, including AI optical interconnects and professional lighting. The solution value-added strategy leverages the Group's extensive resources to build a vertically integrated solutions ecosystem and become an important value chain partner for customers. To identify potential future challenges early and systematically and respond appropriately to enhance corporate resilience, the Board discussed and established a risk management policy in 2022, which is revised annually in response to legal and practical operating requirements. In November of that year, under Board guidance, the Group began implementing an enterprise risk management system. A Risk Management Committee was formed under the Corporate Sustainability Committee to establish the Group's risk management organization. Each year, the Group regularly conducts risk scenario analyses and risk assessments, develops response strategies and action plans, reports implementation of risk management work to the Corporate Sustainability Committee and Board each quarter, and periodically prepares an annual risk management report.

 

1. Governance Commitment and Policy 

The Board and senior management of Ennostar Group have long been committed to strengthening corporate governance and advancing risk management. In view of the increasingly complex business environment, and to achieve sound operations and sustainable development, the Board established the Risk Management Policies and Procedures in February 2022 with reference to international standards—the COSO Enterprise Risk Management Framework and ISO 31000 Risk Management Principles and Guidelines—and the Taiwan Stock Exchange's Risk Management Best Practice Principles for TWSE/TPEx Listed Companies, thereby comprehensively promoting enterprise risk management (ERM). The Group also established the Risk Management Operating Procedures, which define operating processes for all personnel to follow in maintaining sustainable operations.

2. Annual Regular and Ad Hoc Risk Identification and Methodology

Ennostar Group conducts comprehensive risk identification at least once a year. Drawing on existing operating experience and macroeconomic trends, the Group reviews and evaluates potential internal and external risks item by item using a risk management knowledge base designed around five dimensions: corporate governance, strategy and planning, operations and infrastructure, legal compliance, and reporting. The Group's risk management knowledge base is then updated and adjusted accordingly.

The responsible departments within the risk management organization follow the processes below in accordance with the Risk Management Operating Procedures:

 Risk management implementation in 2025 was jointly completed by 18 units of ENNOSTAR Inc. and its major subsidiary, Ennostar Corporation. By expanding the risk management scope and continuously promoting and deepening the mechanism, the Group followed a comprehensive framework to conduct annual risk identification, analysis, evaluation, and response activities.

The Risk Management Committee approved a residual risk score of 7 or below as the acceptable risk level for Ennostar Group in 2025. Accordingly, risks scoring 8 or above require action plans and corresponding management or response mechanisms to reduce them to an acceptable level, with periodic review and performance tracking. From June to October 2025, operating units completed 18 Risk Analysis and Evaluation Forms, identifying 197 annual risk scenarios in total: 28 scenarios with residual risk scores of 8 or above (high risk), 92 with scores of 5–7 (medium risk), and 77 with scores of 2–4 (low risk). Risk management personnel in operating units developed corresponding response action plans for risks scoring 8 or above. A er review by risk management members, 28 high-risk items were prioritized, resulting in 28 Risk Response Strategy and Action Plan Forms.

In addition, a er a senior calibration meeting of the Ennostar Group Risk Management Committee reviewed operating units' risk-identification results and assessed internal and external risks, five key risk items were selected for the Group's focus during the year: innovation, technology enhancement, industry competition, product responsibility, and shortages of critical talent. Action plans for identified high-risk items will be tracked at regular risk management meetings, and implementation status will be reported quarterly to the Committee and Board.

In addition to routine annual risk assessments and responses, Ennostar arranged a seminar on the global economic and financial market outlook in 2025 to strengthen risk awareness among Group personnel. Major unexpected event reporting procedures and risk scenario drills were conducted once in each half of the year to focus on, prevent, and address risks that may arise in daily operations. Starting at the operational level, these activities enhance the Group's ability to respond to risk impacts and reinforce a sound corporate governance and risk management culture.

•  Ennostar Group's Top Five Major Risks in 2025