To those who are concerned about Novatek sustainability:
In 2023, the global economy faced escalating pressure from persistent inflation and the effects of interest rate hikes. The sluggish demand for consumer electronics and an extended period of industry inventory correction led to a slowdown in overall economic growth. Despite the negative impact of the macro environment and intense competition within the industry, Novatek's annual revenue increased slightly. In 2023, revenue totaled NT$110.429 billion, up 0.4% from 2022. Although selling prices experienced a decline due to competition and proactive inventory correction, Novatek focused on optimizing its product portfolios, reducing costs, and moderating general operating expenses. Gross margin for 2023 was 41.85%, down 4.48 percentage points year-over-year. Operating margin for 2023 was 24.14%, down 5.63 percentage points year-over-year. Net income for 2023 was NT$23.318 billion dollars, compared with NT$27.970 billion in 2022, down 16.6% year-over-year. Annual EPS was NT$38.32. Operating performance remains stable.
In terms of product lines, although the market demand for large-size display driver ICs and medium to small-size display driver ICs was sluggish in 2023, the annual shipment volume increased compared to the previous year, maintaining an upward trend. System-on-Chip (SoC) in the areas of gaming display, television applications, and related Application-Specific Integrated Circuits (ASICs) achieved significant gains, leading to substantial revenue growth. Timing controller (TCON) ICs performed well in capturing the high-end laptop market, contributing to revenue. Furthermore, efforts to diversify markets and reduce single-region risks have shown results, with performance in markets outside China growing at double-digit rates. Coupled with improved efficiency in production and sales coordination, overall inventory has been well managed.
Novatek is committed to strengthening corporate governance, upholding balanced development in operations and ESG (Environmental, Social, and Governance) aspects, and actively responding to the United Nations Sustainable Development Goals. The Company values the rights and interests of all stakeholders. In the 10th Corporate Governance Evaluation, Novatek received recognition and was ranked in the top 5% among participating enterprises. Additionally, it has been awarded in the "Volunteer" and "Sports" fields by the Ministry of Education for multiple consecutive years. Novatek has also been selected for various honors, including the "Excellence in Corporate Social Responsibility Award" of CommonWealth Magazine. In terms of practicing green operations and achieving net-zero greenhouse gas emissions, the Company is committed to developing energy-saving products, continuously increasing its renewable energy utilization rate, and promoting greenhouse gas inventories among suppliers to jointly respond to net-zero emission goals. Furthermore, through Novatek Foundation, the Company collaborates with the Ministry of Education's "Night Angel Lighting Program" to promote activities caring for disadvantaged children in rural areas. This includes organizing nature experience program for special education students, with Novatek employees serving as volunteers to accompany and guide them. The Company also encourages employees to participate autonomously in social welfare activities through a "paid volunteer leave" system, thereby giving back to society through practical actions.
Novatek continues the five major dimensions of the previous year to continuously and steadily implement corporate social responsibility and sustainable development based on “Corporate Governance”, “Partner’s Co-Prosperity”, “Environmental Sustainability”, “Friendly Workplace” and “Social Participation”:
Corporate Governance
Corporate Governance
Corporate governance is the cornerstone of enterprise’s sustainable development. Novatek attaches great importance to corporate governance. Not only does it adhere to the principle of focusing on its own business and integrity management, the Company also operates in compliance with government laws and regulations, while protecting the rights and interests of its shareholders and taking into account the interests of stakeholders. We are continuously selected for several years as a constituent stock of the "TWSE Corporate Governance 100 Index", the "FTSE4Good TIP Taiwan ESG Index", and the "TWSE RA Taiwan Employment Creation 99 Index", and ranked in the top 5% of companies for the 10th corporate governance evaluation, which is a recognition of the excellence of Novatek's corporate governance. We will continue to work hard to enable the steady and long-term development of Novatek. In 2023, we continued to deepen our efforts to protect intellectual property by introducing the ISO 27001 Information Security Management system and passing the Taiwan Intellectual Property Management System (TIPS) A-level verification for the second time. We also continued to provide training and promotion on ethical business practices to instill a sense of corporate ethics among all employees. Establishing and implementing corporate governance mechanisms from top to bottom that enables Novatek to develop in a long-term and stable manner is our commitment to all our stakeholders.
Partner’s Co-Prosperity
Partner’s Co-Prosperity
Teamwork and wholeheartedly working in the interests of our customers constitute the Novatek business philosophy. Novatek and its suppliers are always looking for better and more consummate technology and methods, striving to meet customer needs and expectations. In addition, to meet with international environmental protection laws and customer requirements for environmental protection, Novatek has also established a green product management system that has been recognized by major international manufacturers. We continue to strengthen and improve our sustainable supply chain management, assisting suppliers in obtaining relevant ISO management system certifications. In 2023, Novatek issued the "Novatek Supplier Code of Conduct" and required its suppliers to comply and sign. Additionally, the Company promotes carbon management among suppliers, working together with supply chain partners to set sustainable business goals. Furthermore, we strive to provide high-quality customer services, improving customer satisfaction year by year. Novatek regards suppliers and customers as strategic partners, and looks forward to creating a win-win ecosystem through joint cooperation and efforts.
Environmental Sustainability
Environmental Sustainability
As an important member of the global supply chain for semiconductor products, Novatek has the obligation to assume the responsibility for environmental sustainability. Through the formulation and implementation of environmental safety and health policies, as well as the continuous promotion of greenhouse gas inventory, business activities that affect the environment, safety and health must meet the requirements of laws and regulations. Novatek is committed to reducing the negative impact of business operation on the environment. For this reason, the design and manufacturing of products are in compliance with the environmental protection regulations and energy-saving trends around the world, offering products that comply with customers’ environmental protection and energy-saving requirements. As a result, the revenue of energy-saving products has been growing year by year. Novatek has declared its renewable energy usage goal and achieved a renewable energy utilization rate of 7.8% in 2023. In addition to sponsoring the maintenance of the "Yushan National Park Trails and Facilities" for many years, Novatek also continues to sponsor the "Sea Viewing Park" in the Hsinchu Air Quality Purification Zone, gathering corporate volunteers to jointly protect the environment. In the future, Novatek’s keystone goal of sustainable development will include continuing to strive for the refinement of product design, and bringing out more energy-saving products with low burden on the environment, thereby making a contribution to the sustainable development of the environment.
Friendly Workplace
Friendly Workplace
Talent is not only an asset of a company, but also the foundation for its sustainable development. Novatek’s achievements today rely on high-quality human resources. The importance that Novatek attaches to professional expertise is fully reflected in the workplace environment and conditions provided by the Company. Novatek has not only been awarded the "Healthy Workplace Certification Mark" by the Health Promotion Administration of the Ministry of Health and Welfare (MOHW) for six consecutive years, but also received the “2023 Taiwan iSports Certification” from the Ministry of Education, and the “Excellence Award for Promoting Workplace Gender Equality in 2023” from the Hsinchu Science Park Bureau. The Company has been consistently selected as constituent stocks for the "Taiwan High Compensation (HC) 100 Index" published by the Taiwan Stock Exchange (TWSE). The Company also continues to implement childcare allowances and work from home for parenting, demonstrating its commitment to not only offering highly competitive salary and benefits packages to attract and retain talent, but also emphasizing the physical and mental health, personal growth, and work-life balance of its employees. This is all aimed at promoting sustainable development for the Company's talent. Apart from that, harmonious labor relations are also beneficial to the Company’s long-term stable development. The diverse communication mechanisms that exist within Novatek allow our employees’ opinions to be heard, and the responsible unit to quickly respond to those opinions, thereby constructing an excellent barrier-free communication culture and an open and enlightened working atmosphere. In addition, Novatek is committed to ensuring a safe workplace, that employees are treated with respect and dignity, and that operations are environmentally friendly and ethical. To fulfill this commitment, Novatek has formulated a human rights policy and promoted gender equality and friendliness, clearly defined various human rights protection norms and guidelines, and conducted a complete investigation process to ensure that its code of conduct is consistent with the "Responsible Business Alliance (RBA) Code of Conduct".
Social Participation
Social Participation
Novatek adheres to the spirit of social citizenship and the belief of “take from society, give back to society”, engages in social welfare activities and charities, and fulfills its responsibilities as a social citizen. Novatek chose the path of education and caring for the disadvantaged, because we believe that only through education can the individual and society be changed completely, creating every possibility. In addition to establishing the “Novatek Foundation”, Novatek integrates company resources and the voluntary efforts of employees, actively engaging in nurturing technology talent, promoting sports development through adoption, supporting education in disadvantaged rural areas, providing corporate volunteer services, and sponsoring social welfare initiatives. It is hoped that through such efforts, Novatek can provide more resources and create more hope for the disadvantaged and children in rural areas. Due to its long-term dedication to social participation, Novatek received the "2023 Buying Power - Social Innovation Products and Services Procurement: Third Prize in Procurement " issued by the Ministry of Economic Affairs, as well as the “2023 Excellent Utilization Unit in Education Volunteer Service” and the "2023 Youth Volunteer Excellent Utilization Unit" (1st Youth Volunteer Action Award)" issued by the Ministry of Education, showing positive affirmation to Novatek's long-term engagement in social participation and sustainable development.
Enterprise management is not easy and is a long-term work.
Novatek has always been adhering to the philosophy of “Less Words, More Action” while implementing corporate social responsibility. It is hoped that through this Report, a simple summary of Novatek’s efforts and dedication in the past year can be made, symbolizing its emphasis on being a corporate citizen. In the foreseeable future, Novatek will continue to invest more efforts and resources to implement corporate social responsibility and sustainable development, allowing the existence and development of Novatek’s technologies to bring greater value to all stakeholders and society.
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