Avalue has established a systemized procurement and supplier management mechanism, incorporating quality, delivery, cost, legal compliance, and sustainability into supplier management and procurement decision-making considerations. This strengthens supply chain stability and operational resilience. In response to recent global supply chain restructuring, geopolitical changes, and international sustainability regulations, Avalue continues to enhance supply chain risk management and sustainability governance capabilities, gradually improving supply chain transparency and risk identification mechanisms.
All cooperating suppliers must comply with Avalue's supplier management procedures, and through supplier qualification reviews, document checks, and risk assessments, identify environmental, labor rights, legal compliance, and supply chain management risks associated with procurement activities as a basis for adjusting procurement practices and supply chain management.
In supplier management, Avalue has established a tiered management system for core suppliers, general suppliers, and alternative suppliers to distribute operational risks and enhance supply flexibility. At the same time, through a regular supplier performance evaluation system, quantitatively evaluating suppliers based on quality, delivery, cost, cooperation, and flexibility, ensuring overall supplier performance meets company requirements.
In terms of legal compliance and responsible supply chain management, Avalue regularly reviews suppliers to ensure they comply with RoHS, REACH, and conflict minerals among other international environmental and ethical regulations. Suppliers are required to sign the 'Supplier Corporate Social Responsibility Commitment', 'Integrity Commitment', and 'Confidentiality Agreement' to implement honesty, labor rights, and legal compliance requirements. Currently, the signing rate for the 'Supplier Corporate Social Responsibility Commitment' is 99.5%, covering four core labor standards: labor relations, occupational health and safety, prohibition of child labor, and prohibition of forced labor.
Additionally, Avalue has established a stakeholder complaint mechanism to ensure human rights and social fairness in the supply chain, continuously constructing transparent, responsible, and resilient sustainable supply chain systems.
Avalue has established clear payment policies and operational procedures, executing payment operations according to procurement contracts to ensure reasonable and transparent payment conditions and avoid adverse impacts on suppliers' operations. For local and small and medium-sized suppliers, Avalue maintains stable payment mechanisms to support their operational stability and reduce supply chain risks.
In terms of procurement policies, Avalue prioritizes local suppliers under conditions of quality, delivery period, and cost, to enhance supply flexibility, shorten delivery periods, and reduce transportation risks and environmental impacts. The term 'local' refers to the main operating base's country or region, currently Taiwan; 'important operating base' refers to the main operating bases with significant impact on the company's operations and supply chain, currently the headquarters in New Taipei, Taichung, and Kaohsiung.
By 2025, Avalue has a total of 396 suppliers, with local procurement expenditures accounting for 87% of the total procurement expenditures of the important operating bases, indicating that Avalue's procurement activities are mainly sourced from local suppliers, which helps to strengthen supply stability and support local industrial development.
In supplier selection and cooperation processes, Avalue adheres to fair procurement and economic inclusiveness principles, providing opportunities for participation in procurement for small and medium-sized and local suppliers, and prioritizing long-term cooperation with local and small and medium-sized suppliers under the premise of meeting quality and delivery period requirements, to promote supply chain diversity and local economic development. Avalue also references the principles for recognizing small and medium-sized enterprises by the competent authorities, including small and medium-sized suppliers with smaller scale and relatively limited resources into the category of small and medium-sized suppliers, as the basis for supply chain inclusiveness management.
To enhance supply chain transparency, Avalue tracks the sources, origin, and production conditions of key raw materials and production inputs through document reviews. It requires suppliers to provide declarations on compliance with relevant laws and product conformity as important bases for supply chain risk management.
Currently, Avalue’s supplier evaluation mechanism has not fully incorporated GRI 300 series indicators or ISO 14001 environmental management system, among other environmental management standards. At present, it mainly executes environmental compliance and preliminary risk management through supplier document reviews. During the reporting period, Avalue has not identified any significant actual or potential negative environmental impacts in its supply chain. In the future, Avalue will gradually strengthen supply chain environmental risk identification, management, and sustainability assessment mechanisms based on supplier risk grading results, continuously improving supply chain sustainability governance capabilities.