Message from Top Management

Advantech applies its core competencies in IoT technology to support IoT education and various innovative sustainable education initiatives over the long run, aiming to transform children, adolescents, and youth in Taiwan into environmentally conscious global citizens. In particular, Advantech Foundation's actions correspond with four United Nations Sustainable Development Goals (SDGs), including SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 17 (Partnerships for the Goals).

In the areas of social investment, education, and cultural philanthropy, Advantech promotes sustainable education and public aesthetic literacy. Aside from investing in educational innovation and launching sustainable education programs in elementary and secondary schools, the Company also supports private educational platforms in advancing project-based learning (PBL). Furthermore, Advantech continues to invest resources to assist vocational schools and arts and cultural groups in nurturing high-caliber artistic talent. By vigorously promoting public aesthetic literacy and enhancing the development of the arts and cultural industry, we aim to strengthen Taiwan's artistic soft power.

Medium- and long-term goals

Guided by "Advantech's core value of 'altruism,' the Advantech Foundation envisions promoting the development of intelligent and happy communities. Through the engagement of corporate stakeholders, the Foundation promotes three major development themes: 'building IoT industry-academia co-creation,' 'enhancing children and youth's sustainability awareness and action,' and 'advancing the shared prosperity of businesses and the arts.' This serves to fulfill Advantech's role in Enabling an Intelligent and Sustainable Planet, striving to become a brand characterized by truth, kindness, and beauty."

The Foundation's core value is to "promote the sustainable development of technology and humanities communities through quality education." Its mission is to foster balanced social progress by cultivating talent that integrates technological advancement with humanistic values. By continuously tapping into Advantech's core competencies and resources, the Foundation systematically advances its goals, which focus on four key areas including "IoT Industry-Academia Cooperation," "Innovative Sustainable Education," "Shared Prosperity Between Arts, Culture, and Enterprises," and "Charitable Support for Rural Communities". All projects are reviewed and approved by the Board of Directors. Depending on the nature and relevance of each initiative, stakeholders, including community members, employees, customers, and partners, are invited to participate, fostering a shared understanding and amplifying the overall impact.

With the unveiling of ChatGPT, generative AI (GenAI) has undoubtedly become the hottest global topic in 2024. The surge in AI applications is driven by the substantial increase in computing power and Large Language Models (LLMs). Numerous companies are now starting to explore using GenAI for copywriting and content generation, as well as intelligent virtual assistants and automated code development, aiming to boost corporate productivity. Aside from continuous innovation in Data Center AI applications, Gartner Group research indicates that the market size for Edge Computing & Edge AI is expected to expand from $131 Billion in 2023 to $511 billion. Edge Computing has long been Advantech's core strength and we plan to collaborate with major global AI chip vendors, focusing on renewable energy, smart manufacturing, smart healthcare, and smart cities to offer corresponding Edge AI solutions in conjunction with our partners, with specific implementation involving the establishment of an experience center in Linkou Industrial Park. Furthermore, at Computex in May 2025, Advantech will present our Edge AI hardware and software solutions to customers, allowing them to understand Advantech's evolution from a global leader in industrial computers to a global leader in edge computing and Edge AI.

In 2024, Advantech continued to improve in sustainability performance, retaining the fifth position among InterBrand Taiwan brands, with a brand value reaching US$912 million. In terms of Corporate Governance Evaluation for TWSE listed companies, Advantech has consistently maintained our standing within the top 5%. Furthermore, in 2024, the Company improved from 12th to 4th place in the Taiwan's Excellence in Corporate Social Responsibility Award and received the first prize in the 2024 Global Views ESG Corporate Sustainability Award. Overall score in the Dow Jones Sustainability Index (DJSI) improved by 3 points, ranking seventh in the Computers & Peripherals and Office Electronics sector

As new sustainability issues emerge, specifically global climate change, corporate decarbonization, biodiversity and forestation protection, DEI (diversity, equity, inclusion), and supply chain carbon reduction, there remains many areas where Advantech can continue to improve. Looking forward to 2025, the ESG Corporate Sustainability Development Office has defined the following key issues. External experts, partners, and internal teams are engaged to continuously drive sustainable transformation:

Environmental

• RE100 Progress: Advantech aims to achieve 100% renewable energy usage by 2040. In Taiwan, we has signed renewable energy procurement contracts with partners, adopting an approach that integrates power plant investment, selfgenerated renewable energy, and third-party renewable energy transfer. Over the next six years, around 40 million kWh of renewable energy is expected to be supplied to support our Taiwan operations in reaching renewable energy goals. The Company's other overseas properties, including the North California building and the new South California headquarters in North America, as well as the Kitakyushu plant in Japan, have adopted self-installed solar panels to meet approximately 70–80% of our office electricity needs
• Pilot carbon pricing and strive for decarbonization:To accelerate the move towards net zero, Advantech launched a project for our Japan and Korea subsidiaries to complete our GHG inventory in 2024. In 2025, these initiatives will be extended to the Netherlands subsidiary. Advantech also launched a carbon pricing project, starting with a pilot program in the IIoT business group and planning to extend it to all other business groups and operational units. We also developed the AI Product Carbon Footprint platform to accurately calculate product carbon footprints in response to the sustainable raw material policy, the introduction of carbon reduction designs into product planning, and other important projects aimed at materializing decarbonization.
• Biodiversity and employee engagement: Advantech began preparing TCNFD integrated report in Q4 of 2024. The report is expected to be released in 2025 to keep abreast of international developments and strengthen our response towards nature and climate impact. Advantech hosted over six volunteer events focusing on biodiversity and forest conservation. Furthermore, at the location of our operational office, Advantech's Netherlands subsidiary teamed up with a non-profit organization (NPO) to establish a bee eco hotel and organize employee engagement activities.

Social

• Promote IoT industry-academia co-creation value chain: Work together with industry, government, academia, and research institutions to support youth employment and entrepreneurship. Sustainability education initiatives are advanced via the ACT Dreamer Platform, the ESG Impact Project, and PBL (Program Based Learning). The former facilitates co-creation of potential ESG business opportunities projects with external stakeholders, while the latter integrates the spirit of the SDGs and PBL approaches to foster sustainability literacy from an early age. Advantech fosters social investment and shares prosperity through three main pillars: sustainable education, IoT innovation, and cultural literacy. Furthermore, the Company is evaluating social impact through monetization for the first time.
• DEI (diversity, equality and inclusive) workplace: As an international corporation with operations spanning 27 countries, Advantech recognizes that talent from diverse generations and backgrounds forms the bedrock of our operations and innovation. In 2024, DEI activities were expanded to overseas subsidiaries, plant staff, and migrant workers, and they were carried out in conjunction with key annual events, with an emphasis on the development of cultural intelligence. Additionally, the HCM (Human Capital Management) platform was also officially launched in the Kunshan plant. In 2025, we plan to expand the platform to five subsidiaries in Southeast Asia as well as the Japan subsidiary. From a high-level strategic perspective, Advantech has initiated a talent information digital transformation plan and implemented data visualization. These measures enhance our talent recruitment, development, and retention strategies, empowering Advantech’s global workforce to generate value for a sustainable and intelligent planet.

Governance

• Information security and risk management: High-risk items are defined and response strategies are devised through the Risk Management Committee. BCP (Business Continuity Planning) drills were also conducted in 2024. In 2025, the information and cyber security management framework is planned to be extended to product departments. This includes establishing the framework and highlights that two products, AFE-E350, a board dedicated to EV charging, and ARK-3534, an industrial automation system, have obtained IEC 62443-4-2 (Verification of Conformity, VoC) certification, reinforcing the information and cyber security defenses of edge computing equipment and IoT technology.
• Development of Sustainable Intelligent Solutions: With our core business as the focal point, we work with industry partners to roll out sustainable intelligent solutions like Intelligent Energy Management System (iEMS), smart healthcare, smart factory, and smart transportation. This will gradually raise Advantech's sustainable economic activities and their share of revenue. The revenue share from Advantech's sustainable intelligent solutions, calculated according to the EU Taxonomy framework, is 55.6%. This makes a positive contribution towards mitigating climate change and enhancing climate adaptation. Advantech will strive for low-carbon innovation and continue to move forward.
• ESG sustainable governance: In 2023, Advantech introduced a mechanism that links senior supervisors’ sustainability performance with incentives. This approach involves analyzing domestic and international sustainability trends to set KPIs that integrate corporate operations, risk management, and ESG materiality. The goal is to establish actionable sustainability performance indicators that promote ESG accountability and deliver tangible results. In 2024, KPI and remuneration plans were also formulated specifically for the execution level. The aim is to use these incentive mechanisms to ensure ESG achievements are realized and to share the benefits of this progress.
• Sustainable supply chain management: To expedite the deployment of carbon reduction efforts, Advantech uses our Vendor Day to pursue carbon reduction and sustainability objectives with our partners. This involves acknowledging outstanding suppliers and continuing to conduct ESG empowerment education for suppliers. In 2025, Advantech will require specific supplier categories to carry out carbon footprint assessments to advance the net zero vision together

In conjunction with our value chain and internal/ external stakeholders, Advantech will put corporate sustainability actions into practice to achieve its vision of "Enabling an Intelligent and Sustainable Planet".