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Corporate Governance

Risk Management

JPC follows its overall operational strategy to identify and define various risks, while continuously monitoring key domestic and international issues and changes in the external environment. The company actively promotes risk prevention and loss control measures; regularly reviews and strengthens organizational resilience to reduce and avoid potential risks in operations. This is achieved through internal training, transparent information disclosure, and the implementation of early warning and reporting mechanisms.

Risk management level
Risk Management Levels
Third Line of Defense

An independent internal audit unit objectively inspects and supervises the effectiveness of compliance processes in the first and second lines of defense, implements internal controls, and systematically strengthens risk management. Reports are submitted to company management and periodically presented to the Sustainability Development Committee and the Board of Directors.

Second Line of Defense

Responsible for corporate risk management and regulatory compliance. Overseen by senior executives at the highest level, this line assists in supervising the risk management operations of the first line of defense, ensuring proper implementation and compliance with systems and regulations.

First Line of Defense

Focused on corporate operations, with business and production units playing the main role in operational control and risk identification.

Risk Management Process and Implementation

Risk Identification and Assessment

Identify and evaluate the impact of risks on various business and operational activities, taking into account the nature, scale, and complexity of operations. Risks are regularly reviewed, managed, and corresponding response measures are implemented.

Risk Response and Monitoring

Adopt appropriate countermeasures for identified risks, including avoidance, transfer, and mitigation. Measures are taken accordingly, and risks along with response approaches are reported to senior management.

Risk Reporting and Disclosure

Report the status of risk governance to the Sustainability Development Committee and the Board of Directors.

2026 Risk Management Operations

The Company periodically reports on risk management operations and sustainability oversight to the Board of Directors. The most recent report was dated August 3, 2026.
The respective units plan and implement risk responses and follow-up actions for major risk factors.

Risk Item

Macroeconomic Market Risk

Risk Factors
  • Inflation and rising cost risks
  • Geopolitical and market competition risks
  • Newly identified in 2026:
  • Longer technology investment payback
  • U.S. tariff and trade barrier uncertainty
  • AI infrastructure setbacks and volatility from rising leverage
Responsible Unit

Global Business & R&D Centers

2026 Implementation
  • Increase the share of R&D investment, the number of patents, and the revenue share of high value added products.
  • Increase digital process coverage, shorten decision-making time, and improve forecast accuracy.
  • Track the number of co-development projects, design win value, and customer satisfaction.
Risk Item

Exchange Rate and Interest Rate Risk

Risk Factors
  • Monetary policy and geopolitical risks across countries
Responsible Unit

Management Center
Finance and Accounting

2025 Implementation
  • Foreign exchange losses decreased from 8.17% to 3.74%.
  • Quotations for Mainland China plants were previously in renminbi and are now in U.S. dollars.
  • Use the better-performing currency of the month to exchange stronger currencies for weaker ones. For example, when the U.S. dollar strengthened against the renminbi in June (USD/CNH > 6.8), the Company took the opportunity to exchange currencies, providing a natural hedge.
Risk Item

Supply Chain Risk

Risk Factors
  • Single supplier
  • Newly identified in 2026:
  • Geopolitical risks
  • Raw material price volatility
Responsible Unit

Global Manufacturing Center
Strategic Procurement

2025 Implementation
  • The completion rate for establishing alternative sources of key raw materials for new and existing products reached 61.53%.
  • Increase the share of local procurement to 60%.
  • Among rising commodity and raw material prices, gold prices increased by approximately 58% this year and copper prices by approximately 44%. Gold accounted for approximately 9% of costs; strategic measures prevented an impact.
  • Copper prices affected approximately 15.57% of costs. Under a strategic agreement, orders are not placed based on copper prices, reducing the impact to 10%.
Risk Item

Information Security Risk

Risk Factors
  • Low security awareness and weak policy compliance
  • Leakage of critical data
  • Cyberattacks
  • Newly identified in 2026:
  • Delayed response to service server anomalies
  • Data encryption caused by cyberattacks
  • Introduction of multi-factor authentication (MFA) for VPN access
Responsible Unit

Management Center
Information Management Department

2025 Implementation
  • Employee information security training: at least twice in the first half of the year.
  • Information security awareness training for new employees: 10 sessions in the first half of the year.
  • Phishing email drills: once a year.
  • Conduct vulnerability scans once a year, remediate identified vulnerabilities, and apply firewall policies for protection.
  • Monitor server operations and continuously remediate server vulnerabilities.
  • Regularly conduct disaster recovery drills for critical application systems to ensure their effectiveness.
  • Introduce multi-factor authentication (MFA) for VPN access to strengthen remote access security and reduce the risk of account theft and unauthorized logins.
  • Service server availability reached 99.99%.
  • Apply allowlist management to internal servers, achieving 100%.
  • Deploy endpoint detection and response (EDR) on all servers, achieving 100% deployment and comprehensively strengthening endpoint protection, threat detection, and incident response capabilities.
Risk Item

Environmental Risk

Risk Factors
  • Global net-zero carbon policies and climate change
  • Changes in environmental regulations across regions
  • Increasing customer environmental requirements (RBA)
  • Newly identified in 2026:
  • Update to RBA Code of Conduct version 8.0.2
  • Low employee awareness of ESG
Responsible Unit

Global Manufacturing Center

2025 Implementation
  • RBA Code of Conduct update: Audit on-site outsourced suppliers, including cafeteria operators, security personnel, and waste disposal contractors.
    1. The plants have completed audits of outsourced suppliers to ensure that workers comply with RBA standards and local regulations.
    2. Ensure that waste disposal contractors handle waste in compliance with regulations when processing plant waste.
    3. Ensure that staff cafeterias and kitchens meet food hygiene requirements, staff hold health certificates, and food waste is collected for disposal by qualified contractors.
  • The Taipei plant and three plants in China have completed basic ESG training for a total of 1,079 people. Training will be extended to the Vietnam plant in the second half of the year.
Risk Item

Human Resources Risk

Risk Factors
  • Global expansion and organizational adjustments
  • Talent retention risks amid industry competition
  • Newly identified in 2026:
  • Technical and management talent hiring and retention
  • AI, HPC, and data center talent competition
  • Overseas localization and cross-cultural management
  • Key talent succession and knowledge transfer
  • AI adoption and talent data governance gaps
Responsible Unit

Management Center
Human Resources and Administration

2026 Implementation
  • Strengthen employer branding: Participate in 9 campus recruitment events and receive 350+ resumes, continuing to expand talent sources.
  • Build an AI talent database: Introduce AI search and talent tags to improve matching efficiency.
  • Expand the overseas talent pool: Establish local recruitment in the United States and Vietnam and cross-region talent mechanisms.
  • Improve key talent management: Implement talent reviews, promotions, succession planning, and role backup arrangements.
  • Deepen talent development: Promote e-Learning, AI courses, and management training, while maintaining a health check-up rate above 95%.
  • Strengthen HR data management: Keep turnover below 25%, achieve a recruitment target attainment rate of 45%, and a training completion rate of 85%.
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