Chairman's Statement
> Investor Relations > Corporate Governance > Shareholders’ Meetings > Chairman's StatementDear Shareholders,
2022 is a year full of turmoil and challenges, and the market momentum in the first half and second half of the year is polarized. The post-COVID-19 effect, rapid changes in the overall economy, rising international political conflicts, continued deterioration in global inflation, and weak demand in the terminal market. These factors that plague business operations are still fermenting, and have brought significant and long-term changes to society, businesses, and individuals. Influence. The first half of 2022 is the deferred market demand of the previous year, and it is also one of the causes of the economic reversal in the second half of the year. Even though the overall market environment is severe, the company's management team upholds the solid fighting spirit for many years, demonstrates strong corporate resilience, and makes unremitting efforts of all members to create good results throughout the year.
The impact of the development of the global situation in 2023 on the business environment is not optimistic. Many factors such as uncertain customer orders, slow inventory depletion, rising supply chain risks, weak terminal demand, rising global inflation, and shifts in the labor market have all brought Long-term and huge changes and challenges for enterprises. No matter how the environment changes, the company must focus more on insight into market opportunities, provide customers with certain products and services, maintain the ability to execute quickly and adapt quickly, and constantly innovate and evolve and change thinking in order to continue to create the value that the market needs.
| Items Year | 2022 | 2021 | Increase (Decrease)Amount | Change Rate% |
| Net Revenue | 13,169,688 | 15,244,851 | (2,075,163) | (13.61) |
| Gross Profit | 5,030,838 | 5,627,229 | (596,391) | (10.60) |
| Net Profit | 2,805,504 | 3,116,984 | (311,480) | (9.99) |
Consolidated statement of income and profitability：
| Item | Year | 2022 | 2021 |
| Financial Structure (%) | Debt/Assets Ratio | 37.17 | 38.66 |
| Long-term Capital/Fixed Assets Ratio | 245.51 | 272.23 | |
| Debt-Paying Ability (%) | Current Ratio | 263.22 | 232.29 |
| Quick Ratio | 198.69 | 175.70 | |
| Profitability(%) | Return on Assets(%) | 13.99 | 16.84 |
| Return on Equity(%) | 22.24 | 27.81 | |
| Earnings per Share（NT$） | 9.06 | 10.06 |
2、Budget Execution：
The internal budget target set by the company every year does not disclose the financial forecast. The overall revenue and profit will be affected by market demand, industry changes and product structure, and the consolidated sales revenues and net profits in 2022 will reach the budget target of 89.69% and 106.83% respectively.
3、Research and development：
In recent years, the competition among the global frequency component industry has become increasingly tense. In addition to competing for mature market share, various companies have launched investment plans for new technologies and new applications in order to seize opportunities in new markets. In order to maintain the company's leading position in the frequency component industry, the company promoted the wafer-level advanced process technology development plan as early as 2020, and the board of directors approved a substantial increase in R&D-related capital expenditures in 2021. The company concentrated its resources on the development of new technologies for wafer manufacturing frequency components. Due to technical problems, the new process equipment was not delivered and installed on time, which resulted in the inability to fully mass-produce the new process. At the same time, in order to achieve the strategic goals of wafer manufacturing process and smart manufacturing, the automated smart manufacturing digital system has been successfully put into operation at the end of 2022. When the new process equipment is fully installed and mass production begins, the direct production cost will be greatly reduced, and the stable quality will be improved to meet customer and market requirements. By continuously improving the operational efficiency of the supply chain, reducing the manufacturing cost of mature products, and investing in new process technologies for mass production, the company will consolidate and maintain its leading position in the industry.
4、Results from execution of other projects：
| (1) Green enterprise： | In order to cooperate with the government's energy-saving and carbon-reduction policies and energy regulations, the company continues to implement energy-saving and carbon-reduction plans every year. The company has completed the replacement of high-efficiency lamps in the entire factory. After completing the construction of the roof-type solar power generation system, it can be officially commercialized and obtained a green electricity certificate in the first quarter of 2023. Continue to promote process improvement, and energy-saving measures such as air compressors and air-conditioning cooling fans, and continue to promote certification and activities related to green enterprises. In addition to the entire group's Pingzhen factory, Ningbo factory, Jingchuang factory and Chongqing factory to disclose and organize greenhouse gas inventory (ISO14064-1), the Pingzhen factory will also gradually plan product carbon footprint inventory from 2023. |
| (2) Occupational safety and health： | In 2022, the company established an epidemic prevention command center to coordinate and command epidemic prevention measures and dispatch epidemic prevention resources, and coordinate the MIS, welfare committee, human resource department, and occupational safety office to actively grasp the new crown epidemic, combined with effective isolation and remote diversion operations, and tracked colleagues every day and the health status of their families, take the initiative to care for the health of all colleagues, maintain the safety of the factory area and employees, and ensure uninterrupted production and operation. Under the leadership of the "Occupational Safety and Health Committee" and the "Labor-Management Conference", regularly discuss and deal with issues related to occupational safety and health and continue to promote the verification of occupational safety and health management systems, improve safety and health technology, reduce overall operational risks and reduce operating losses . As for the health management of employees, in addition to regularly arranging health checks, multiple health promotion activities are held, such as: various health lectures, workplace voluntary smoking cessation activities, cancer screening activities, physical fitness activities, body fat rate monitoring activities, Emotional stress relief and mental health activities, blood pressure monitoring activities, intraocular pressure measurement activities, bone density measurement activities, flu vaccination activities, occasional promotion of epidemic prevention precautions in response to the new crown pneumonia epidemic, daily body temperature monitoring, etc. Help colleagues strengthen their own health conditions. In addition, we will provide immediate assistance and care for occupational accidents and traffic accidents in the factory, and will continue to build a safe working environment to provide employees with the greatest security. |
| (3) System certification： | For the maintenance of various operating systems, continuous certification includes quality management system (ISO9001), automotive industry quality system certification (IATF 16949), environmental management system (ISO14001), Taiwan occupational safety and health management system (CNS15506), information security Management System (ISO/IEC27001), Hazardous Substance Process Management System (IECQ QC 080000:2017), Occupational Safety and Health Management System (ISO45001), Taiwan Intellectual Property Management Standards (TIPS) Certification Level A Certificate Renewal Passed, Health and Welfare Issued Health Workplace Certification - Health Promotion Mark, etc. Continue to submit the relevant materials of the safety certification quality enterprise (AEO) certification management system every year to maintain the validity of the AEO certificate. In addition, ISO 14064-1:2018 organization greenhouse gas verification is carried out every year, and the company will continue to meet and exceed customer requirements. |
| (4) Corporate governance and responsibility： | Following the establishment of the Sustainability Committee in 2021, the company will fully implement ESG-related measures in 2022. Already completed the adaptation of the corporate social responsibility report into a corporate sustainability report earlier than the time required by the government, and compiled the TCFD and SASB climate change international norms into the sustainability report. The 2021 sustainability report will be completed in August 2022 and approved British Standards Institution (BSI) certified. The company attaches great importance to the balance between business performance and social responsibility for a long time. In 2022, it won the Taoyuan City Happy Enterprise and Sexy Enterprise Double Gold Medal Award, as well as the internationally renowned ESG sustainability evaluation agency Sustainalytics low-risk evaluation. The company's responsible attitude over the years and the contribution has been highly affirmed and recognized by the public sector and the investment market. The company adheres to the concept of honest management and actively strengthens corporate governance to protect the rights and interests of stakeholders. The company has set up investment review, audit, and remuneration committees to assist the board of directors in improving corporate governance performance, improving its supervisory functions and strengthening management functions. It is selected every year The Corporate Governance Evaluation of the Financial Supervisory Commission is the first stage of all listed companies. |
1、1、 Sizing up the situation, maintaining profit and maintaining prosperity, sustainable development
(1)Comprehensively and strictly control operating costs and expenses, and promote the leanness of organizational personnel.
(2)Utilize the Group's global resources and regional geographical advantages to strengthen supply chain resilience and improve product gross profit.
(3)Effectively improve inventory turnover, capacity utilization, product gross profit mix, and balance revenue and profit.
(4)Continue to implement the ESG plan, establish an energy management digital system, and obtain ISO50001 energy management certification.
(5)Expand the disclosure scope of the Group's sustainability report to include TXC (NINGBO) CORPORATION, TETC CORP. NINGBO, and TXC (CHONGQING) CORPORATION.
2、Grasp the commanding heights of the market and accelerate mass production of advanced manufacturing processes
(1)Expand the successful coverage rate of upstream customers, optimize the service quality and sales mix of mid- and downstream customers, fully grasp the market pulse, disperse the risk of excessive market concentration, and effectively promote new product sales and new customer development.
(2)Focus on customer needs and product applications, stabilize the existing market position, accelerate penetration and expand business opportunities in new markets.
(3)Focus on the 5G+ and vehicle market with the framework of the ecological chain, actively adjust and build a global layout with more competitive advantages, and simultaneously improve the three aspects of production cost, product technology and operational risk.
(4)Accelerate the implementation of mass production of advanced processes in smart wafer factories, establish technical depth and technical barriers, and improve competitive advantages
3、Comprehensive digital automation to build differentiated competitiveness.
Combining the direction of technological transformation with the core of the wafer factory, implement the goal of integration of production, sales and research, adopt semiconductor equipment system standards, and establish the entire structure of the wafer factory from BLK, Die to Assembly. Continuously improve existing and new information application systems, comprehensively operate in marketing, quality assurance, R&D, manufacturing, supply chain and administrative management, use digital tools and process improvement, improve operation and communication efficiency, and accelerate problem solving. Especially focusing on the wafer factory based on the wafer process, equipment automation, big data analysis platform, product development and digital application in quality management, in order to achieve the goal of improving the competitiveness of production costs, production costs and quality costs.
4、4、 Lean and high-quality manpower, sound organizational development
Inventory the performance of managers at all levels, strengthen the leadership of managers at all levels, identify and cultivate the right talents, and introduce individual performance indicators, combined with intelligent transformation, to make the contribution and value of each employee transparent and instant. Through disciplined leadership and planned talent development, an upward spiral kinetic energy is formed interactively, which promotes an innovative and high-performance organizational culture, and establishes the kinetic energy of the company's sustainable growth. In line with the company's overall smart transformation strategy, it began to adjust the human resources structure in 2023 and planned to improve the quality of personnel and increase the per capita contribution value year by year, in response to the future changes and challenges of the company's comprehensive digitalization and declining birthrate employment labor market. Comprehensively and systematically implement talent development in the five aspects of recruiting talents, utilizing talents, cultivating talents, retaining talents, and eliminating or replacing, to promote a high-performance organizational culture and establish a talent echelon for the company's sustainable growth.
Looking to the future, various challenges, risks and rapid changes have become the norm around the world. The company's management team will continue to uphold the pragmatic attitude of excellence and the spirit of entrepreneurship and hard work, and continue to create value for shareholders and happiness for colleagues responsibly. 2023 is the 40th year since the establishment of TXC. We expect and require ourselves to assess the situation, work hard to be resilient, break through adversity, and achieve greater success.
Chairman and CEO : Lin, Wan-Shing President : Kuo, Ya-Ping