Cost of Poor Quality (COPQ) Improvement:

The Company has always concentrated our efforts on improving overall competitiveness through process and yield rate improvement. Therefore, the primary focus of our process refinement work has been to eliminate defects. In addition to raising the yield rate, reducing COPQ is a major part of our internal cost control work because it allows the company to precisely calculate the various costs resulting from quality defects, adjust the focus of relevant work stations and extend use to each production site.

Quality System and Awards:

With regard to current quality systems, the Company has added those system certifications required by customers and obtained SONY GP recertification this year. Certification was awarded again for TS16949 and QC080000. The first of these systems is designed to meet the requirements of international customers. The second system was added to complement our overall work system and thereby raise overall competitiveness. To achieve our goals of ongoing upgrading and refinement, the Company was awarded favorable ratings in an eight-part review evaluation by cooperating closely with all personnel. The National Quality Award was presented to the Company by the Executive Yuan in April 2010 in recognition of the company’s pursuit of excellence in our business operations.

Environmental Safety and Health:

Through the efforts of our Labor Safety and Health Committee, the company has not only received the Occupation Safety and Health Performance Permit but also initiated Greenhouse Gas Verification (ISO14064-1), Carbon Footprint Verification (PAS2050) and Occupational Health and Safety Management System (OHSAS) in 2010. The ISO14064-1 audit was completed and the BSI company certification was awarded in April.

Customer and Supplier Development:

To allow better control of customer development results and progress, the company will conduct a third-stage strengthening of the customer relation management system to gain an understanding of the actual conditions of new markets, customers and material numbers and ensure that they are fully reflected in the management system in order to perform better strategy adjustment and performance control. Regarding the development of high-end products, the company will work to ensure that the necessary resources and specialized personnel are put to user to achieve superior results in the telecommunication and automotive markets. In addition, the company will perform supplier chain management (SCM) to promote closer interaction and cooperation between upstream and downstream suppliers and organize information so it is more complete and accessible.

Corporate Governance and Accountability:

Seeing that fulfillment of corporate responsibilities and giving back to society is part of our corporate mission, the company made preparations for the corporate governance ranking launched in 2009 to ensure that company operations conform to the stakeholder expectations. Due to the effort and cooperation invested by each department and its physical expression in the control system, the company was awarded corporate governance system evaluation certification from the Taiwan Corporate Governance Association in March of 2010. Furthermore, the Company began preparation of our Corporate Social Responsibility Report in 2008. In addition to the writing of this report, the company plans to obtain corporate social accountability report certification based on the Global Reporting Initiative (GRI) G3 guidelines at the end of the year to fully display the efforts of the company and encourage others in the industry to do their part for country and society. Based on our past work for social charities, environmental safety and corporate governance, the Company was awarded Commonwealth Magazine’s Enterprise Model Award for corporate social responsibility in the technology industry B category in March of 2010 in recognition of the company’s achievements in this area.

Free Trade Zone Establishment:

To promote efficiency in the Company’s overall logistic operations and speed up customer product receipt times, the company set up a logistics center at the Taoyuan Air Cargo Free Trade Zone in April of 2010. By joining together our operation management in Taiwan and China, the company hopes to effectively reduce the time between the customer order and receipt of goods and thereby improve customer loyalty and overall competitiveness.

Plant Expansion:

To achieve business forecasts and respond to demand from emerging markets, the company has initiated a new plant expansion project. The old plant facilities in Pingchen were rebuilt and new production equipment was purchased to meet the needs of global corporations.