Innovation Mechanisms

Advantech's systematic allocation of resources towards products and technology, business innovation, and a co-creation mechanism with ecosystem partners to generate shared prosperity is motivated by its corporate vision of "Enabling an intelligent planet"

Building on the vision defined in 2015 and the "AIoT Development Roadmap", Advantech considers AIoT as the main driver of future growth in the industry. Through diverse innovation approaches, the Company is transitioning from an industrial PC vendor to a technology supplier and service provider delivering comprehensive end-to-cloud solutions for IIoT. Advantech has implemented innovative mechanisms on six items across three categories including product, technology, and industry-academic collaboration. In 2025, Advantech strives to become a leading brand in Edge Computing & Edge AI, driving global innovation in five key domains: intelligent edge systems, smart manufacturing, energy and public service, smart healthcare, and smart retail/service. Innovative mechanisms are developed by targeting product, technology, industry-academia collaboration, and other dimensions.

Innovation management is elevated from being process-driven to the corporate development level, and this is used as a key approach for tapping into emerging business opportunities. By strategically communicating the concept of external strategic collaboration and co-creation to potential external partners, we can enhance the diversity of innovation proposals and their execution flexibility, thereby seizing opportunities arising from the development of the AIoT industry.

• Promoting innovation is an important strategy for the Company's continuous improvement and long-term sustainability. Innovation also reflects our investment in technology and knowledge to enhance competitiveness through R&D capabilities and the pursuit of new ventures.
• AIoT application solutions signify that we can meet the needs of diverse industrial and commercial scenarios with more effective and lower-cost means, leading to positive impacts such as process optimization and yield improvement, which can reduce waste, lower energy consumption, etc.
• Innovation solutions targeting specific application scenarios can more directly address challenges faced by businesses or users. For instance, a self-checkout IoT system can mitigate the problem of labor shortage in the industry and also help consumers enjoy a more convenient shopping experience.

Possibility of technical risks and failure. During the new technology or innovative mechanism implementation process, risks associated with technical failures or low market acceptance can lead to wasted capital and time.

Advantech's response towards negative impacts are as follows：

• Promote internal business innovation and new business incubation: 3.2.2 Innovative Products and Technologies
• Form a Core Technology Committee to promote technology sharing and standardization: 3.2.2 Innovative Products and Technologies
• Promote open innovation and industry-academia collaboration: 3.2.1 Business Innovation and Emerging Business Opportunities

• No targets were set last year / description of key achievements in 2024:
• Mechanisms such as IMAX-C have been implemented for a number of years. We regularly and systematically conduct proposal discussions for innovative products and business strategies, as well as departmental technical innovation discussions on R&D, serving as the foundation of our innovative mechanism.
• Regarding the innovative development of new business opportunities, in continuation of the Vote for 2030 activity in 2023, we will conduct new business opportunity evaluation by focusing on six material topics. In response to the flourishing development of global robotics applications, we have formed the AS&R (Autonomous Systems & Robotics) business group.
• Starting in 2023-2024, Advantech launched a comprehensive sector driven strategic transformation with the establishment of four major sectors (iSystem, iAutomation, Service IoT, and Embedded IoT) to target different application markets. At the same time, we aim to strengthen our regional sales organizations and channel management capabilities to expedite product innovation and application implementation.

• Through an internal platform for soliciting emerging business opportunity ideas, we will collect 10–20 proposals and launch a new business opportunity management system to conduct market research, mobilize internal and external resources, and develop products and business models.
• We aim to implement 10 collaborative innovation projects with academic and research institutions and startups.

• Continue to invest in innovative mechanisms to expand our qualitative and quantitative goals.
• Consolidate more partners in the industry ecosystem to establish a resilient and innovative co-creation model.

• Building on the existing mechanism and goals for emerging business opportunity management, specific resources are introduced to accelerate the incubation of innovative proposals.
• By reinforcing ties with external experts and consultants, the Company targets emerging innovation topics and effectively analyzes their value and feasibility. Guided by comprehensive information and expert insights, we can engage in resource allocation and implementation plans.
• Foster an internal corporate innovation culture through the internal platform for soliciting emerging business opportunity ideas.
• Improve the efficiency of corporate operations through AI technology, thereby optimizing resource utilization and lowering environmental impact.

Advantech evaluates the effectiveness of its innovative mechanisms through internal reviews and external validation. Internally, Advantech monitors key performance indicators such as the speed of new product launches, revenue growth, and patent output during quarterly and annual business group reviews. The results are fed back into programs such as IMAX-C, EBO, TSU, and industry-academia collaborations to continuously track and optimize the maturity of technologies and business models. Externally, the Company participates in major international awards and industry competitions, using these recognitions to validate its innovation standards and ensure that its sales and technological innovations generate significant economic, social, and environmental impact.

The Company’s innovation strategy and direction are closely aligned with the decisions of the Board-level Sustainability Development Committee (SDC). To evaluate innovation proposals, the Company engages external experts, including specialized scholars and consultants. In executing the plans, we have applied co-creation with startups and academic research institutions, while also pursuing strategic collaborations and investments with relevant ecosystem partners. Internally, the Company has engaged in the horizontal integration of investment, strategy, innovation management, and the product and R&D units of various business units to promote innovation and co-creation-related efforts.