2024 Environmental Social and Corporate Governance ReportSG Micro CorpCONTENTS
Message from the Chairman 01 Company About SGMICRO 02 Green Comes Green R&D 06 Science-Based Enhance Governance 13
Overview Social Responsibility 03 First Environmental 07 Governance Structure
Performance Highlights Management Business Ethics 15
Awards and Recognition 03 Energy Conservation 09 Internal Control and 16
Corporate Culture 04 and Carbon Footprint Risk ManagementReduction Information Security 17
Waste and Material 10 and Protection
Management Refine Sustainable 19
Corporate Governance
Innovation Research Development 23 Responsible Build a Sustainable 31 Together Recruitment 35 Appendix About this Report 47
and R&D and Innovation Procurement Supply Chain We Thrive Salary and 37 Key Performance 48
Strict Quality Control 27 Conflict Minerals 33 Compensation Indicators
Intellectual Property 29 Management Employee Benefits 38 GRI Index 50
Rights Talent Development 39 Glossary 51
Employee Care 42 Feedback Form 51
Health and Safety 43
Taking Social 45
ResponsibilityMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 01
Message from the Chairman
The year 2024 presented both challenges R&D investment push the boundaries of Believing that corporate growth and social sustainable framework and ethical conduct we
and opportunities. Amidst a complex and technological innovation and develop more progress are fundamentally interconnected enhance the effectiveness of risk and compliance
dynamic market SGMICRO actively navigated efficient and energy-saving analog ICs. Our SGMICRO maintains a customer-centered management. Reflecting on 2024 SGMICRO
these complexities while strategically capitalizing product portfolio now encompasses 34 approach to delivering high-quality reliable achieved steady growth across various fronts
on emerging opportunities. We remain steadfast categories and over 5900 products. Many of products. This is supported by a comprehensive including financial strength team efficiency and
in our founding aspiration: to become a leading these are widely adopted across diverse and quality management system and responsive resilience against risks delivering robust overall
integrated analog IC enterprise dedicated to critical markets including new energy vehicles customer feedback mechanisms. Externally we performance.enhancing lives through technological photovoltaic energy storage intelligent have raised environmental standards for our
innovation. Technology is a pivotal force driving manufacturing and green household appliances. suppliers reinforcing a joint commitment to Looking ahead SGMICRO will adopt an even
societal progress and each advancement This not only creates value for our customers but building a sustainable and responsible supply more responsible stance collaborating with
broadens human prospects and enriches also serves our collective goal of energy chain. Internally fostering a diverse equitable stakeholders to advance economic social and
possibilities. We firmly believe that our conservation and environmental protection. and inclusive workforce remains a priority. We environmental sustainability. In the face of
continuous pursuit of technological innovation consider a supportive workplace culture that unforeseen challenges and environmental shifts We recognize climate change as the defining
and breakthroughs will guide our era toward a SGMICRO's team will continue to contribute with global challenge of our generation. In response values employee well-being and development
future that significantly benefits global crucial for strengthening cohesion and a strong sense of mission working SGMICRO has proactively integrated carbon
well-being and the sustainable development of reduction into our core sustainability strategy. enhancing a sense of belonging across the
collaboratively to bring about positive change in
our planet. We've established ambitious medium- to company. Furthermore SGMICRO actively
the world.Since our inception we've focused on long-term goals: a 50% reduction in carbon participates in various social welfare events to
developing high-performance high-quality and emissions per million yuan of output by 2030 raise public awareness of sustainable
eco-friendly Integrated Circuit (IC) products. This and a 90% reduction by 2050. These targets are development and social responsibility.commitment stems from a sincere desire to underpinned by continuous initiatives to We are committed to improving operational Zhang Shilong
protect our environment and improve the quality optimize our energy mix enhance operational efficiency through lean management practices. Chairman and CEO
of life for future generations. Driven by our efficiency and embed green development By refining comprehensive aspects of our
pursuit of excellence we continuously increase principles across all facets of our operations. governance including our corporate structureMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 02
About SGMICRO
SGMICRO specializes in the research development and sales of high-performance high-quality analog Overview
integrated circuits with the goal of becoming a leading comprehensive analog IC company. From its very
beginning the company established a core operating principle centered on customer needs focusing on
developing and producing highly reliable and consistent analog IC products through a process of
continuous innovation. SGMICRO is fundamentally driven by an engineer-led culture. Headquartered in Beijing China
SGMICRO began by specializing in high-performance operational amplifiers and LDOs primarily serving
industrial applications. The company then strategically broadened its product portfolio to offer
comprehensive signal-chain solutions in analog and mixed-signal conditioning alongside a complete suite Listed on the SZSE ChiNext
of power management solutions. As a fabless analog IC company SGMICRO has maintained a (stock code 300661) on June 6 2017
long-standing partnership with TSMC since its inception. This collaboration enabled the successful
development of a range of high-precision low-noise high-speed operational amplifiers (OpAmps). By
leveraging CMOS process technology to replace traditional bipolar processes SGMICRO gained significant
market recognition for its technical expertise and achieved a distinct cost advantage. As of the end of 2024 nearly
SGMICRO consistently upholds a strong dedication to independent product development a principle 1600 employees including
rooted in its profound respect for intellectual property rights. This commitment has cultivated extensive approximately 1200 in R&D
in-house technical expertise thereby fostering robust capabilities for continuous improvement. Through
sustained effort over many years this dedication has culminated in an impressive portfolio of proprietary
products. Concurrently the company has established a comprehensive and systematic quality assurance
mechanism. Furthermore all integrated circuit (IC) products from SGMICRO rigorously meet RoHS
regulations and other environmental standards. 3.347
SGMICRO prioritizes attention to detail and continuous improvement striving to offer our customers the 2024 Revenue (RMB Billion)
utmost support and seamless service. While steadily expanding its industrial client base the company has
also demonstrated a strong adaptability to the dynamic global market for communication and
information-related consumer electronics. This has honed its stable supply chain management and cost
competitiveness. As a result we have earned an excellent reputation for delivering high-quality products
with short lead times and large-scale shipments thereby securing the respect and trust of its customers. 5000+ 5000+
Since its inception the company has maintained a stable founding team and low employee turnover enabling
consistent and rapid business growth. We have been continuously profitable annually since 2009. The company Customers Products
was successfully listed on the Shenzhen Stock Exchange on June 6 2017 trading under stock code 300661.SGMICRO aims to be a leading global supplier of analog IC solutions. The company cooperates directly with
top manufacturers in various industries including factory automation solar inverters new energy vehicles
Li-battery formation white appliances 5G wireless base stations optical fiber modules servers office
equipment machine vision smartphones audio systems VR game consoles and smart watches.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 03
Social Responsibility Performance Highlights
Environmental 12630.16 7893380.47 4248.18
Performance
Water consumption (m3) Power consumption (kWh) Greenhouse gas emissions (Scope 1-2 tCO2e)
Social 1598 100 58
Performance
Number of employees Employee training coverage rate (%) Average learning hours
R&D 370 162 0.87
Performance
Patents obtained Newly applied patents Investment on R&D (RMB Billion)
Awards and Recognition
Top 10 China IC Brands World Electronics Achievement China Analog IC Automotive Awards "Product of the Year" Industry Excellence Award
China Patent National Intellectual Property
Excellence Award Demonstration EnterpriseMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 04
Corporate Culture
Corporate Strategy
SGMICRO is committed to achieving its business objectives by creating societal value through innovation-driven
market-oriented strategies. We prioritize strategic planning emphasizing robust research and development to address critical Diligent and Team Work
technical challenges and continually enhance our existing product portfolio. We are actively advancing next-generation Innovative
high-performance analog IC technologies steadily reinforcing our position within the industry. With a long-term vision of
becoming a leading integrated analog IC provider SGMICRO aims to contribute to societal progress and improve the quality
of life through continuous innovation and technological advancement. People-
oriented Responsible
Our Culture and Values
SGMICRO champions a people-oriented philosophy fostering a culture defined by diligence innovation teamwork and
accountability. We are dedicated to cultivating an environment that is positive straightforward trustworthy confident
inclusive open-minded and supportive. We encourage independent thinking and continuous experimentation through open
direct and authentic communication. Our aim is for every employee to deeply understand the value of their work align with
team goals and integrate personal growth with team advancement and the company's sustainable development. We
empower our employees to boldly pursue breakthroughs embrace challenges and enhance their professional skills ensuring
their career development progresses alongside the company's steady growth enabling them to share in its collective success.Our company embraces a philosophy of continuous improvement and a flat organizational structure promoting equality and
unhindered communication among colleagues. We encourage every supervisor to actively participate in resolving critical team
issues serving as a motivator facilitator and trainer. Similarly we empower each team member to proactively collaborate with
colleagues on task implementation continuously accumulating experience deepening understanding optimizing processes
and enhancing efficiency. This fosters individuals who are experts challengers and innovators in their roles. We pay particular
attention to fostering internal team vitality and efficiency emphasizing a competitive dynamically optimized resource
allocation mechanism built upon synergistic overall goals. Our results-oriented performance evaluation system consistently
incentivizes employees to grow and develop alongside the company for the long term.The company mandates that all employees conduct themselves in accordance with legal regulations and social ethical
standards ensuring that all activities and decisions align with the long-term interests of customers the company and
employees. We prohibit the provision of false or misleading information and strictly adhere to anti-corruption commitments
and anti-commercial bribery regulations in all business operations. SGMICRO practices corporate citizenship across all its
operational locations. Our corporate governance mechanisms are designed to ensure that business policies meet the
long-term interests and demands of relevant stakeholders including government society customers employees and
shareholders. We are actively committed to fulfilling our social and environmental responsibilities thereby ensuring the
company's sustained long-term development.Green Comes First
SGMICRO is committed to sustainable development in response to global climate
change. We aim to reduce our environmental impact by integrating eco-friendly
practices into our operations. Through research and innovation we advance
green low-carbon technologies to support industry sustainability.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 06
Green R&D
As an analog integrated circuit company We have always adhered to the philosophy of to monitor the environmental impact of
committed to continuous improvement green "prioritizing energy conservation emission production. These measures enable our products
research and development isn't just a core driver reduction and environmentally sustainable to achieve optimal energy conservation and
of our technological innovation; it's also our development" in all our R&D activities. We uphold emission reduction simultaneously conserving
unwavering commitment and contribution to our commitment to green R&D throughout the raw materials and reducing wastewater gas and
building a greener planet. As the company entire lifecycle of each chip from definition and solid waste emissions during production.expands our products are increasingly integrated design to manufacturing. In the initial product Concurrently the superior performance quality
into a wide range of industrial and consumer definition phase we focus on parameters such as and market alignment of our products contribute
electronics applications. From the initial stages of low energy consumption compact size and to a longer product lifecycle. This in turn extends
product development we strive to embed simplified processes. During the circuit design the lifespan of our customers' end products
environmental protection principles into every stage we emphasize reducing overall chip power consequently reducing electronic waste from
process. Each product we create reflects our deep consumption across various states minimizing devices as well as packaging waste thereby
consideration for environmental sustainability chip area decreasing chip layer count and alleviating environmental pressures.aiming to minimize resource consumption and enhancing product reliability and lifespan. For the
waste. This approach demonstrates our active chip manufacturing process we maintain close
response to the industry's trend toward green and communication with our foundry partners to
low-carbon development. ensure compliance in raw material selection andMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 07
Environmental Management
SGMICRO strictly adheres to environmental protection laws and regulations of the People's Republic of China including SGMICRO pledges:
the Environmental Protection Law Water Pollution Prevention and Control Law Air Pollution Prevention and Control Law
Prevention and Control of Environmental Pollution by Solid Wastes Law and Environmental Noise Pollution Prevention Using 2025 as the base year
and Control Law. Upholding a green development philosophy we actively support China's "carbon neutrality and peak
carbon emissions" goals and diligently fulfill our social responsibility for energy conservation and emission reduction.In 2024 SGMICRO identified "mitigating climate change and promoting sustainable development" as the core initiative of
our environmental responsibility. We have since made a formal climate action commitment established a scientific
greenhouse gas accounting system based on the ISO 14064 standard and set mid- and long-term carbon reduction
50 we are committed to reducing carbon emissions targets. Carbon emission reduction performance is regularly tracked and assessed. % of per million sales in scope I+II in owned facilities by 50% by 2030.
90 and to reduce carbon emissions of per million % sales in scope I+II in owned facilities by 90% by 2050.
Using 2023 as the base year
25 we are committed to reducing carbon emissions % of per million procurements by 25% by 2030.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 08
The company actively advances the standardization of our Environmental Management System strictly comply with Environmental Policy
applicable laws and regulations in all locations of operation and remains committed to green development. In line with
ISO 14001 requirements SGMICRO continues to improve our internal environmental management framework and
organizational structure. Guiding documents such as the Environmental Management Manual and Objectives Management
and Control Procedures clearly define the leadership responsibilities in the environmental management system. Legal compliance Continual improvement
Compliance with applicable laws Continuous improvement of the
Responsibilities of Management in Environmental Management regulations and other requirements environmental management system
Green operation
Risk prevention
Energy conservation emission Provide the best products and
reduction pollution prevention services for green energy customers
and control promote a green supply chain
Taking accountability Ensuring that environmental policies Ensure the integration of the Ensure that the
of the effectiveness of and environmental objectives are environmental management resources needed
the environmental established and are compatible with system requirements into the for the environmental Throughout 2024 our company's team-building events across
management system the strategic direction and the organization business management all regions featured an "Environmental Protection on the Go"
context of the organization processes system are available initiative. Employees enthusiastically participated as environmental
volunteers actively embracing green principles and contributing
to the collective effort of safeguarding our planet.Promoting Directing and supporting Ensure that the environmental Communicating the importance of
continual persons to contribute to the management system effective environmental management
improvement effectiveness of the environmental achieves its intended and of conforming to the environmental
management system outcome(s) management requirements
Annually the company sets multi-dimensional targets for various environmental factors including solid waste recovery
control rates noise emissions electricity consumption health and safety incidents and hazardous substance
non-compliance events. These environmental objectives and targets are formally documented in the Quality and
Environmental Objectives Release Order and integrated into our management review processes.SGMICRO has consistently maintained our ISO 14001 Environmental Management System certification and successfully
passed the annual audit in 2024. Utilizing the ISO 14001 environmental management system we conduct annual training
on related content to enhance employee environmental protection awareness. At the time of this report 100% of the
employees participated in environmental protection-related training.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 09
Energy Conservation and Carbon Footprint Reduction
Our company actively supports environmental protection by prioritizing the effective and strategic use and management of energy.We integrate these practices into our core daily operations and implement energy-saving and emission-reduction policies. This
approach not only reduces our environmental impact but also lowers production costs whereby enhancing our corporate
competitiveness.Our Approaches
We regularly inspect maintain and The Integrated Management Prominent notices in public areas
repair our equipment to promptly Department tracks monthly electricity promote water conservation energy
identify and resolve any malfunctions. and water usage conducts statistical saving and paper conservation
This ensures stable operation and analysis and promptly addresses any encouraging employees to incorporate
efficient energy utilization across all anomalies according to established energy-saving awareness into their
our machinery. procedures. daily habits.We utilize variable-frequency air Paper usage is consistently monitored Energy-efficient LED lighting is
conditioning units and ensure their with employees being advised to reuse installed throughout our office spaces
operation adheres to company paper to reduce waste. Meeting rooms to reduce energy consumption.guidelines. During summer times air are furnished with electronic pads to
conditioning temperatures are set no encourage paperless office practices.lower than 26 degrees Celsius and in
winter times they are kept no higher
than 20 degrees Celsius.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 10
Waste and Material Management
Waste Disposal Noise Pollution Prevention
and Control
SGMICRO develops and sells analog ICs outsourcing manufacturing. We manage solid and electronic Solid Waste Management
waste through categorized storage with clear labeling recycling points in operational areas and employee SGMICRO rigorously follows GB12348-2008
training on waste sorting and recycling. We also maintain waste disposal records and have contracts with Industrial Enterprise Boundary Noise Standards
third-party processors to ensure compliance. Class III functional areas standards maintaining
For all end-of-life electronic products test kits and other electrical equipment the company partners with Discarded Batteries company boundary noise levels below 65dB
qualified professional recycling organizations for proper disposal. Similarly discarded ink cartridges toner during the day and below 55dB at night (from
cartridges computers and other devices from all regional offices are collected by the local IT department. Battery recycling bins 10?00 PM to 6?00 AM the next day). Additionally
These items are then regularly retrieved and documented by certified environmental protection agencies are set up for centralized regular maintenance and upkeep of
effectively mitigating associated environmental risks. recycling and processing noise-generating equipment are performed to
reduce noise pollution.Discarded Toner Cartridges
and Drums
Centralized recycling and
processing
Discarded Circuit Boards
Samples and Solder Dross
Centralized recycling and
crushing are conducted
with video documentation
of the crushing processMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 11
Green Sourcing
SGMICRO actively upholds its commitment to a green supply chain. Across all stages—from raw material selection to
wafer manufacturing and packaging & testing—we rigorously require our supply chain partners to adhere to stringent
green environmental standards. They must provide the latest third-party test reports for raw materials and products
ensuring full compliance with environmental protection laws regulations and certification standards. This minimizes the
environmental impact throughout the chip's production usage and post-disposal phases.The company actively encourages and supports its suppliers in implementing sustainable practices. We prioritize
suppliers with commitments to reducing energy consumption and emissions collaboratively minimizing environmental
and climate impact.In addition our product's internal and external labels clearly display relevant green environmental markings. For outer
packaging we utilize biodegradable and recyclable materials prioritizing those made from recycled content. We also
facilitate information exchange through barcode scanning and digital transmission aiming for paperless product
documentation whenever possible to further reduce consumption.Compliance with the Restriction of All company products comply with RoHS requirements completing the necessary
Hazardous Substances Directive investigations confirmations and testing to ensure they meet regulatory timelines and
(RoHS) deliver on customer requirements.By the REACH legislation the company confirms that our products do not contain
volatile substances or intentionally release substances. Additionally the company does
REACH Declaration not directly export any chemical substances to the EU. The content of substances of very
high concern (SVHC) in company products meets the EU requirement of less than 0.1%.Packaging and Packaging Waste The directive requires that the total concentration of heavy metals i.e. lead (Pb)
Directive (94/62/EC) and its cadmium (Cd) mercury (Hg) and hexavalent chromium (Cr6+) in packaging does not
amendment (2004/12/EC). exceed 100 ppm.The company confirms after thorough investigation of our supply chain that plastic
materials containing red phosphorus or antimony trioxide flame retardants are not
Other Substances used. Furthermore all products and raw materials do not contain perfluorooctane
sulfonate (PFOS) perfluorooctanoic acid (PFOA) C9-C21 perfluorocarboxylic acids (PFCA)
perfluorohexanoic acid (PFHxA) and perfluorohexyl sulfonic acid (PFHxS) substances.Halogen-free materials are used in all products. For products that meet halogen-free
requirements the label includes the addition of "HF" mark except "Pb free" and "RoHS"
Halogen-Free Requirements marks. Relevant material composition tables and third-party testing reports are also
provided to demonstrate product compliance.Science-Based
Governance
SGMICRO is diligently refining its corporate governance structure and
developing a science-based governance system. We implement a streamlined
efficient and smoothly functioning framework that adheres to principles of
integrity and compliant management. This approach aims to effectively
protect investor interests and consistently enhance company value.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 13
Enhance Governance Structure
Corporate Governance
Since its establishment SGMICRO has consistently adhered to relevant legal requirements and proactively SGMICRO places strong emphasis on diversifying our Board of Directors to enhance corporate governance
refined our corporate governance framework. Clear and standardized responsibilities are assigned to the effectiveness and improve decision-making quality through a more comprehensive perspective. The company's
Board executive officers supervisors and the management team creating a robust mechanism for Board of Directors consists of five members including two independent directors. All directors possess extensive
independent oversight and strong corporate governance. This ensures that decisions made adhere to legal experience in corporate management and risk management control. To improve the efficiency and quality of
regulations while safeguarding the collective interests of our shareholders. major decisions directors are assigned to various committees based on their professional backgrounds and
industry expertise laying a solid foundation for the company's long-term growth.Shareholders' Composed of all company shareholders and serves as the company's At the time of the report the attendance rate of the Board members was 100%
Meeting governing body. with all directors performing their duties faithfully honestly and diligently. 100 %
Audit Committee: Review the company's financial information and
disclosure supervising and evaluating internal and external audit
work and internal controls. Board of Directory Diversity
Compensation Committee: Tasked with establishing performance
evaluation criteria for directors and senior management devising and Professional Industry: 2 Management: 1
Board of reviewing compensation policies and schemes. Backgrounds
Directors Legal: 1 Finance: 1
Strategy committee: Responsible for formulating the company's
development strategies and medium to long-term development plans.Nomination Committee: Responsible for selecting and reviewing candidates for
directors and senior management positions and assessing their qualifications.Serves as the supervisory body of the company with the focus on
Board of Male: 2 30-50 yrs old: 2financial oversight ensuring lawful and compliant performance of the
Supervisors company's directors general manager and other senior executives. Female: 3
Gender Age 50+ yrs old: 3
Governance structureMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 14
Disclosure of Information
The Board of Directors is responsible for overseeing and managing the disclosure of information. The
Board Secretary coordinates and organizes specific activities related to this disclosure with support from
the Securities Affairs Representative. At SGMICRO we rigorously enforce our information disclosure system
and maintain strict confidentiality of company insider information. This dedication is essential in protecting
the interests of our investors.We disseminate information through various channels including CNINFO and media outlets designated by
regulatory authorities such as China Securities Journal Shanghai Securities News Securities Times and
Securities Daily. This ensures all shareholders have equal access to information.Performance:
In 2024 in the Announcement on the Results of the 2023-2024 Annual Information Disclosure
Assessment for Companies Listed on the ChiNext Market released by Shenzhen Stock Exchange
SGMICRO was granted "A" grade in recognition of our outstanding disclosure practices.This is the third consecutive year we have been awarded the "A" grade by Shenzhen Stock Exchange.Investor Relations
SGMICRO places high importance on investor relations management designating the Board Secretary as
the responsible person to coordinate relationships with investors handle visits and respond to inquiries. A
comprehensive investor communication mechanism has been established including the regular release of
financial reports organization of on-site research and roadshows provision of dedicated investor hotlines
and email channels and the use of digital platforms to promptly address investor concerns—all aimed at
enhancing investors' understanding of the company.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 15
Business Ethics
SGMICRO is guided by the principles of authenticity compliance resilience and sustainability with authentic data and legally compliant operations. We crack down on
commercial bribery and oppose unfair competition. We comply with all relevant laws and regulations to maintain a fair equitable and competitively open commercial Whistleblowing and
environment. Our products and services of superior quality combined with an excellent reputation enable SGMICRO to continue securing new business opportunities. Protection Mechanism
Integrity and Honesty SGMICRO consistently clarifies requirements for standardized operations anti-corruption and fair
trade creating an internal environment of strong
In accordance with strict integrity guidelines we have developed policies such as the Integrity and Anti-Corruption Management Standards and are committed to business ethics. We rigorously implement integrity
strict compliance with applicable anti-bribery and anti-corruption laws and regulations. We prohibit any form of bribery corruption embezzlement extortion and compliance management into all business activities. Employees and partners who discover any
misappropriation of funds or any related conduct to ensure the smooth operation of the company. All employees are required to refrain from promising offering illegal or non-compliant behavior with the company's
giving granting or accepting any improper and illicit benefits. business ethical standards can promptly lodge
complaints through dedicated channels. SGMICRO
protects whistleblowers ensures their identities
Establishment of Supervisory Management Integrity and Honesty Management Training remain confidential and maintains channels and
Institutions
We conduct regular integrity and honesty management training for employees reinforcing their understanding of business policies of open communication. Employees and
The Audit Committee established under the conduct and principles. During orientation new employees gain a deep understanding of the company's Integrity and Honesty partners can express their compliance concerns
Board of Directors adheres to relevant laws and Management Standards which apply to all employees of SGMICRO and its direct and indirect subsidiaries and branches. through dedicated channels whether anonymously
regulations while overseeing business ethics or identified. Complaints will be investigated and any
and corruption issues. It promotes a We require all marketing and procurement personnel to sign the Integrity Commitment Letter strictly adhering to retaliatory actions or threats against whistleblowers
comprehensive system of integrity continuously prohibited conduct regulations on integrity and honesty including: prohibition on soliciting or accepting cash securities are strictly prohibited. The company will take
enhances SGMICRO's capacity for legal payment instruments or other valuable items in any form from business partners or having them pay for any goods or appropriate disciplinary action against any violation
governance and standardizes the management services; prohibition on directly or indirectly offering promising or providing any payment or item of value to government
of business ethics in the company. officials/employees political candidates or employees/officials of international organizations to obtain or retain business
including but not limited to termination of
or any improper advantage. employment contracts and pursuing legal liability.It is of primary importance to SGMICRO that we emphasize continuous improvement of integrity and compliance
awareness among managers and employees. Through internal training programs employees gain a deeper understanding
Annual Integrity and Honesty Management Audit of their compliance obligations when engaging with business partners ensuring adherence to contractual terms and
Relevant departments of the company organize lawful supervisory channels to regulate conduct. Email: informer@sg-micro.com
annual integrity and honesty management audits
encompassing all employees and business Dedicated phone line: 010- 88825983
partners who have direct business dealings with
SGMICRO. The Annual Integrity and Honesty Promotion of Integrity and Honesty Management Mailing address: Office of Integrity and
Management Audit Report is released following Every year SGMICRO organizes activities to promote integrity and honesty management concepts to business partners Compliance Room D-1106 International
a comprehensive evaluation and analysis who have direct business dealings with the company ensuring that they comply with the integrity and honesty management Finance Center No. 87 North Third Ring
process. standards and relevant regulations. Business partners of the company all have signed the Commitment to Integrity and Honesty. Road Haidian District Beijing ChinaMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 16
Internal Control and Risk Management
Internal controls Risk Identification
SGMICRO has a rigorous internal control management
mechanism and a well-defined internal control Regulatory requirements (changes in laws
management policy. The risk management system is and regulations/industry standards) Financial status (asset-liability
backed by robust internal control management ratio/inventory turnover
measures that help ensure its effective operation. Requirements of relevant parties ratio/accounts receivable)
(supervision level of regulatory
We continuously refine the internal control system to authorities/requirements of relevant Company management
comply with relevant laws and regulations such as the (management process/after-sales
Company Law of the People's Republic of China
parties)
Basic service/document control/data
Standard for Enterprise Internal Control and other Technology (new products/new
internal control supervision requirements. information security technologies) management/authority)
The Board of Directors is responsible for establishing Politic (supply chain/exchange
strengthening and effectively implementing internal r Resources (company operating rates/trade compliance) s
controls. The Audit Committee which operates under environment/infrastructure
the Board of Directors serves as the company's internal Resources (intensified market management/performance
control supervision agency. The Board of Supervisors competition/macroeconomic environment appraisal/personnel turnover)
oversees the Board's actions in establishing and and industry fluctuations/IT software)
implementing internal control mechanisms. Through
ongoing operation analysis and assessment the internal
control system has been instrumental in mitigating
operational and management risks thus facilitating the
company's continuous sound development. Measures Against Risks
Risk management
Continuously assess various Based on the risk assessment
We underline the importance of corporate risk
evaluation and identification therefore we formulated risks; develop and update risk
results appropriate and
sufficient resources are allocated
the Risk and Opportunity Control Procedure. By utilizing response plans. to ensure operation continuity.an efficient risk assessment system potential risks are
identified and analyzed in areas such as policy
operations and finance based on internal control
mechanisms strategic planning and industry Organize various compliance
characteristics. By thoroughly assessing and sorting the Develop effective emergency
risks and considering the characteristics significance trainings to strengthen legal response and control
and probability of occurrence we can manage and risk management awareness. procedures.address any potential risks promptly.E
ternal Facn tI ors
xternal Fact
oMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 17
Information Security and Protection
Our goal is to build a safe and stable corporate network environment proactively apply advanced security protection
technologies and develop a scientifically rigorous information security management system. Simultaneously we actively
promote the establishment and improvement of risk assessment mechanisms accurately predict potential security risks
and take efficient preventive measures to ensure the long-term security of our corporate information systems.Information Security
The company strictly complies with relevant national Measures to Strengthen Information Security Management
laws and regulations of People's Republic of China such
as the Cyber Security Law the Data Security Law and
the Personal Information Protection Law. Considering
our industry and the specific characteristics of our
company we have established an information security Awareness and Training 01 Security Policy Updates 02 Network Isolation and Monitoring 03
management committee and working group using the
ISO 27001 Information Security Management System as We regularly send out reminders to help employees We continually revise and refine our security policies We maintain strict segregation between our office
the policy benchmark. Our goal is to establish an prevent phishing attacks enhancing their to align with evolving business needs and and R&D networks with VPN access and robust
information security management system for carrying cybersecurity awareness and response capabilities. technological advancements. controls and auditing for all data transmissions.out information security protection and improving our We provide cybersecurity awareness training for all We revise our cybersecurity policies and procedures We conduct real-time monitoring of our networks
networks security defense system. In 2024 the company employees through online lectures and video tutorials. to ensure continuous alignment with the latest and systems to enable automated alerts. This ensures
conducted a gap analysis and applicability assessment Additionally our IT team receives specialized security cybersecurity standards and regulations. that any faults or anomalies are promptly detected
of existing policies in alignment with the latest legal training and regular updates. allowing us to take immediate preventative measures.regulations and industry best practices. We updated the
Information Security Emergency Response and Business
Continuity Plan to effectively prevent promptly control
and minimize the impact of emergencies ensuring
business continuity. Endpoint and Security Management 04 Emergency Response Drills and Vulnerability Scanning 05 Supervision and Audit 06
The company continues to strengthen its network
security capabilities and develop innovative security We implement access controls for external and mobile We regularly conduct cybersecurity emergency drills We conduct regular audits of data management prac-
solutions to achieve all-round and three-dimensional storage devices restrictions on outbound email to validate the feasibility and effectiveness of incident tices across all departments to ensure data compli-
protection from hardware facilities to software application control and comprehensive software response plans enhancing our IT team's ability to ance and security.applications from defense against external threats to compliance management. react and collaborate during incidents. Additionally
internal management and control thereby establishing
We implement access control for critical areas we perform routine security vulnerability scans of our
We engage third-party auditors to verify the effective-
robust safeguards for operational stability. At the time systems to promptly identify assess and remediate ness of our IT system and resource security controls.of this report the company has seen no information alongside surveillance and IoT device monitoring to
security incidents. enable automated security incident alerts.potential security risks.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 18
Case Information Security Training Case Access Control
At the time of the report the company At the time of the report SGMICRO
conducted information security training for implemented refined management of its
new employees and organized multiple access control mechanisms. Access
company-wide awareness sessions on an permissions were assigned based on
ad-hoc basis. These initiatives strengthened employees' job responsibilities and business
employees' security awareness and practical needs with multi-tiered access controls
skills building a robust defense line for the applied to data. Unauthorized privilege
company's data security. escalation was strictly prohibited.Data Protection
The company rigorously complies with national laws regulations and industry standards regarding
information and data exchange to ensure the secure storage and use of information. By establishing
relevant management systems we protect our assets from unauthorized access or attacks thereby
minimizing various information risks. Employees are required to comply with national laws and regulations
related to network usage and strictly adhere to confidentiality policies preventing leakage or theft of
company information. Through a combination of policies and technologies we effectively safeguard our
information security.For customer information and data security the company strictly complies with relevant laws and
regulations on information protection and continuously enhances mechanisms to secure various customer
information and data.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 19
Refine Sustainable Corporate Governance
While focusing on technology and product development SGMICRO continuously strengthens our
sustainable development system advancing our ESG management efforts. We understand the demands of Stakeholder Communication
our stakeholder and aim to respond to our stakeholders on a timely basis improving the company's level of
sustainable development management. SGMICRO attaches great importance to communication with various stakeholders and carries out the
identification evaluation and analysis of substantive issues through various channels such as shareholders'
meetings customer satisfaction surveys employee and management symposiums websites and WeChat
accounts. We strive to continuously improve our sustainable development performance.ESG Management System
Stakeholders Recognition Expectation and Demands Communication and Responses
SGMICRO believes that sound ESG management is the foundation of high-quality sustainable Financial performance
development. Internally we have established an ESG management system led by our Board of Directors R&D and innovation Shareholders' meeting
Investors Investor relations management Disclosure of informationwith cooperation from various relevant departments.Board structure and governance Investor communication
ESG Management Structure Risk and internal control management
Government/ Product responsibility management Official correspondence
regulators Community charity Supervision & inspectionEnvironmental management Disclosure of information
Occupational health and safety
Board Office Product responsibility management
Leads the ESG management system in coordination with R&D and innovationRisk and internal control management Customer service
various departments. Customers Industrial exchange and cooperation Technical seminar
Information security and privacy protection Customer satisfaction survey
Business ethics
Various Departments
Employee health and safety A democratic communication platform
ESG Departments such as Human Resources Operations Employee assemblyEmployee Protection of employee rights and interestsQuality Internal Control and Information Technology are Employee training and development Employee trainingEmployee activities
responsible for implementing specific ESG initiatives.Suppliers/ Supply chain management Suppliers screening and review
Service Providers Mutual benefit and progress Suppliers exchange and training
ESG Work Group Cooperative Organizations
(i.e. NGOs Scientific R&D and innovation Industry forum
Coordinates ESG management communication and research institutions) Industry win-win relationships Industry-university-research cooperation
information disclosure reporting progress and outcomes
Community and Community building collaborations Disclosure of informationto the Board.the Public Rural revitalization Community activitiesExchange and interviewMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 20
Analysis of Substantive Topics
Based on the expectations of internal and external stakeholders as well as factors relating to business
scope and sustainable development we carry out identification evaluation and analysis of substantive
topics to determine issues pertinent to the company and our stakeholders.Substantive Topics of ESG
Environmental Topics Social Topics Topics of Corporate Governance
Green R&D Product quality control Corporate governance
Tackling climate change Product R&D and innovation Board composition
Energy conservation and Intellectual property rights Board of supervisors performance
carbon footprint reduction Quality of customer service Disclosure of information
Water resource utilization
and management Sustainable supply chain Investor relations management
Green operation Employee benefits Business ethics
Talent development Compliance control
Health and safety Internal control and risk
Salary and compensation management
Industry-university research Information security and data
cooperation protection
Taking social responsibilityMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 21
Response to the UN's Sustainable Development Goals
Sustainable Sustainable
development goals Action Corresponding chapter development goals Action Corresponding chapter
Good Health Implement annual general and occupational health check-ups Industry
and well-being for all employees with zero cases of occupational illness innovation andinfrastructure Enhance technological innovation
Focus on occupational health and safety training Health and Safety Research Development
Carry out intelligent transformation and Innovation
Build employee clubs organize cultural and sports events
for the employees
Quality Reduce
education Focus on employee training inequalities
Support education by providing scholarships and Talent Development Prohibit all discrimination of any types Recruitment
teaching awards to multiple universities
Gender Sustainable
equality Supporting our female employees cities andcommunities R&D of highly efficient semiconductor products to
Implement a non-discrimination policy and strictly Employee Benefits promote the use of clean energy and facilitate urban Green R&D
prohibit sexual harassment and misconduct sustainable development
Clean water Responsible
and sanitation consumption
Conservation of water resources Energy Conservation and and production Responsible emissions management
Improve utilization of water resources Carbon Footprint Reduction
Waste and Material Management
Efficient management of resource
Affordable and Peace justice Oppose commercial bribery and unfair competition by
clean energy and strong
institutions formulating the Integrity and Anti-Corruption ManagementPromote the photovoltaic industry development Green R&D Standards and require business partners to sign the
Business Ethics
and the utilization of solar energy Integrity Commitment Letter Employee Benefits
Listen to the employees through multiple channels
Decent work Partnerships Build channels for stakeholder communication
and economic for the goals Refine Sustainable Corporate
growth Focus on supply chain construction and carry out technical Governance
Legal employment promote employment rate Recruitment exchanges and training with suppliers Build a Sustainable Supply Chain
Open up ecological cooperation and promote the
development of a healthy ecosystem in the industry Conflict Minerals ManagementInnovation and R&D
SGMICRO specializes in research and development of analog Integrated
Circuits (IC). We consistently benchmark ourselves against the world's
top-ranking analog manufacturers. Notably our products excel in key
specifications surpassing those of our international peers. Our outstanding
product performance and quality along with timely and effective customer
support have earned the trust and recognition of our large customer base.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 23
Research Development and Innovation
Research and development (R&D) and innovation form the cornerstone of our company's sustained growth. We view To manage the R&D projects efficiently we are continuingly enhancing our R&D management system. This includes
product R&D capabilities as our most critical core competency and have established a comprehensive R&D further enhancing sub-project management document administration and cost control efficiency through the
management system and processes. Since our inception we have consistently pursued an independent innovation optimization and upgrade of our specialized R&D management software. Through persistent independent innovation
driven technical development strategy. With technical innovation at our core we continuously increase R&D investment increased investment continuous accumulation of core technologies and timely adjustment of market strategies aligned
accumulating numerous critical core technologies. Concurrently based on market trends customer demands and with customer demands we offer competitive analog IC products and solutions to global markets. We aim to
predictions of future technological shifts we proactively conduct technological research and product planning. This consistently expand our portfolio of new technologies and products to empower the company's long-term
allows us to anticipate changes in end-user demand strategically position ourselves for growth opportunities and competitiveness.promptly deliver internationally competitive products to our target markets. While ensuring the full application of
existing product technologies we actively pursue next-generation innovations.Investment on R&D
We have consistently invested a substantial portion of our revenue in research and development progressively
increasing our commitment. The ongoing R&D investment has resulted in the rapid expansion of our technical team and
significantly bolstered our technological capabilities. We take pride in independently developing a wide range of core
technologies. Leveraging these cutting-edge technologies SGMICRO offers a comprehensive product portfolio that
caters to diverse market requirements. We provide specialized solutions for specific segments.In fiscal year 2024 our R&D investment totaled 871 million RMB representing a 26.02% share of total revenue for the
period. This marks an 18.14% increase in R&D investment compared to the previous year. This significant investment has
yielded strong results as evidenced by our expanded portfolio of over 5900 products. This demonstrates the
effectiveness of our R&D efforts in broadening our product matrix.Investment in R&D (in 10000 RMB) Historical Sales-Ready Product Number
202487074.6820245900
202373707.4120235200
202262582.8020224300
2021 37801.99 2021 3800Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 24
R&D Team
The construction and cultivation of our talent pool have always been a strategic priority at the company.We are dedicated to nurturing outstanding professionals who resonate with our corporate culture and core
values. We actively attract talent through a wide variety of channels. Amidst the challenges presented by
2024 the size of our R&D team continued to expand with 1184 R&D personnel accounting for 74.09% of
our total employees. Of these 658 individuals hold master's degrees or above which comprise 55.57% of
the total R&D personnel providing solid technical support for long-term development.R&D Personnel Performance
118415515.06%
R&D personnel in 2024 Increase compared to previous year Increase percentage compared to previous year
We have established a reward system to encourage employee innovation driving the company towards
continued excellence. Our R&D innovation incentive scheme combined with the R&D performance
evaluation system recognizes employees' innovative achievements in their daily work. These incentive
schemes are regularly updated emphasizing innovation as the driving force behind our ongoing
development. Our patent portfolio continues to expand. At the time of the report the number of patents
held by the company further increased.Disclosure item Unit 2022 2023 2024
Total number of granted patents Piece(s) 162 229 370
Total number of registered IC layout
design registration certificates Piece(s) 147 259 340Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 25
Green R&D and Opportunities Case Our products are extensively employed in energy conservation and High-Efficiency Energy-Saving Switched Capacitor Products environmental protection facilitating the across-the-board adoption
and rapid development of various green and energy-efficient products.SGMICRO develops innovative energy-efficient circuit designs. Our switched capacitor chargers
SGMICRO integrates sustainable development into its efficiently power single-cell lithium-ion or lithium-polymer batteries via smart adapters or wireless Global climate change presents both challenges and opportunities. As
innovation practices actively promoting the research chargers. With a 50% duty cycle the switched capacitor reduces battery current to one-quarter we address this challenge humanity is compelled to explore and adopt
and development of green low-carbon technologies to minimizing voltage drop energy loss and thermal buildup. This design offers higher power low-carbon and sustainable development models. Emerging sectors
create energy-efficient products. Concurrently the density lower conduction and switching losses and better voltage drop performance than such as clean energy and energy-saving environmental protection offer
company is seizing new opportunities in green R&D to traditional inductor-based converters. Additionally it optimizes efficiency under varying loads unprecedented development opportunities. There are new impetus for
provide customers with solutions for efficient energy providing a greener power solution. economic growth as well as effective means to address environmental
utilization meeting the growing demand for intelligent issues. Semiconductor technology as the cornerstone of modern society
living and environmental sustainability. plays a crucial role in driving the development of green technology. In
response to these opportunities the company began laying out
SGMICRO has optimized energy consumption reduction Case Environmental Benefits of AMOLED Power Management Chips innovative products for applications in new green and clean energy
in its analog IC design across various categories. fields many years ago. Collaborating with relevant end-products
Efficiency low power consumption and miniaturization SGMICRO has launched a series of power management chips designed for AMOLED displays manufacturers we have launched multiple next-generation analog IC
are important trends in IC development particularly incorporating multiple energy-saving technologies. These include a proprietary SIMO (Single products for energy conservation and environmental protection in
within the analog chip domain. These are also Inductor Multiple Outputs) structure an inductor-less charge pump solution and a symmetric various applications such as photovoltaic energy storage lithium battery
SGMICRO's areas of expertise. Through years of voltage supply design that reduces power consumption and simplifies circuit design. These manufacturing and management new energy vehicles and
targeted independent research and development innovations significantly improve energy efficiency while reducing chip size and PCB footprint. third-generation semiconductors. These efforts contribute to the
SGMICRO has developed technologies intellectual With their advantages in low power consumption high efficiency and compact design these widespread adoption and rapid development of various green and
property and products in areas including chip power products are widely applicable in smartphones AR/VR devices tablets and small- to energy-efficient products providing a more environmentally friendly and
reduction enhanced power conversion efficiency medium-sized active matrix OLED displays. They help customers reduce the energy consumption efficient experience for our lives. Furthermore they contribute to
process optimization and chip size reduction. These of their end products. improving the Earth's environment and human sustainable development.include ultra-low power operational amplifiers
comparators low-dropout regulators (LDO)
Buck-Boost DC/DC converters. These products utilize
innovative power conversion circuit architectures
low-power circuit module designs dynamic power
control technologies and more compact packaging
technologies that significantly enhance power
conversion efficiency while reducing energy
consumption and raw material usage. The application of
these advanced technologies strengthens the market
competitiveness of the company's products and
provides customers with lower-power more
energy-efficient and environmentally friendly solutions.These solutions help extend standby time and overall
battery life for portable electronic devices contributing
to greener low-carbon development of end products.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 26
Industry Partnership
We are dedicated to fostering industry prosperity through robust collaborative partnerships.Beyond active participation in industry associations and conferences we significantly
contribute to the development of national and industry semiconductor standards thereby
promoting vital information exchange and overall industry growth.Industry Collaborations (some):
Industry Association/Union Title
China Semiconductor Industry Association Director of the Integrated Circuit Design Branch
China Integrated Circuit Innovation Association Managing Director
Beijing Semiconductor Industry Association Director
Shanghai Integrated Circuit Industry Association Member
China Automotive Chip Industry Innovation Strategic
Alliance Director
Automotive Electronics Industry Alliance MemberMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 27
Strict Quality Control
SGMICRO offers high-performance quality analog IC products. A stringent quality assurance system meets
top industry standards ensuring each product is thoroughly tested for consistency and reliability. We
enforce a "zero-defect" culture and apply our quality policy throughout the supply chain to maintain
production efficiency and product stability. Customer needs are our priority and we continually strive to
improve service quality.Advanced Technology Reliable Quality
By leveraging globally Strive to create strong
leading technologies and and dependable
continuous development products with a focus on
efforts we have expanded achieving the highest
our market share with level of quality and
advanced high-performance reliability.products thereby bolstering
the overall strength of our
company.Quality
Policy
Customer Satisfaction Continuous
Maintaining consistent high improvement
product quality is essential The quality management
for ensuring customer system refined over time
satisfaction while ensures continuous
simultaneously striving for product quality
continuous improvement. improvements—a
foundational element of
our growth.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 28
Quality System Customer Service
We have implemented a comprehensive quality assurance policy in accordance with the Product Quality In line with our commitment to customer-centric principles we place the demands of customers as top
Law of the People's Republic of China and other relevant specifications adhering to the highest industry priority constantly improving our service quality to ensure the delivery of exceptional products and
standards. Our guiding principles encompass "advanced technology reliable quality customer solutions. Our distribution strategy primarily leverages product distribution channels complemented by
satisfaction and continuous improvement". Rigorous quality assessments are conducted on every direct sales. This decision aligns with industry standards and SGMICRO's unique circumstances. By
product to ensure its quality and reliability. We preferentially select wafer foundries and assembly & test adopting this approach we effectively reach a broad spectrum of end customers enhance sales channel
factories with the highest reliability and yield rates. Additionally every new product undergoes stringent efficiency expand our customer base and promote our products.testing against the highest standards to uphold the utmost quality and reliability allowing us to
guarantee our product quality while continually expanding our product lines. Our technical team is dedicated to improving customer satisfaction and product quality. Their competencies cover various aspects including quality technology and service for our clients. In 2024
Strict product quality standards and quality management processes are established to oversee product we have enhanced our relationship with customers by understanding their needs better through
design production and sales comprehensively. Rigorous tests are carried out before product meetings and surveys. We prioritize honest transparent and efficient communication ensuring prompt
warehousing and shipment. Moreover the company diligently monitors crucial elements such as design responses and follow-ups to meet customers' quality requirements and provide direct technical support.standards manufacturing methods production workflows and testing protocols to consistently enhance
product quality and bolster resilience against external factors. This approach ensures both high The company is dedicated to refining the Customer Complaint Handling Process Guidelines which
production efficiency and consistent product quality. thoroughly delineate the individuals responsible for managing customer complaints the procedures involved response time frames steps for escalation and closed-loop management requirements. This
At the time of the report SGMICRO has consistently maintained certification under the ISO 26262 approach ensures that customer complaints are addressed in a timely efficient and professional
automotive functional safety management system ISO 9001 quality management system and the ISO manner. The company continually conducts customer satisfaction surveys actively seeking and
14001 environmental management system. By aligning our quality and environmental management implementing feedback to improve our services and products.
practices with international standards we have established a strong foundation that supports the
company's continuous growth and optimization.Performance: 93.54%
At the time of the report customer satisfaction score reached 93.54%.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 29
Intellectual Property Rights
SGMICRO places a high value on the protection of intellectual property rights and actively pursues their application and
establishment. We emphasize the strategic breadth and coverage of our patents to ensure a comprehensive and robust
intellectual property framework. Our dedication to intellectual property management throughout our operational
processes enhances our ability to acquire protect utilize and uphold these rights. This method effectively safeguards
our innovative achievements thereby fortifying our core competitive advantage.Intellectual Property System Protection of Intellectual Property
Reasonable selection of the scope of protection and
The company follows laws like the Patent Law strategy for patented technology ensures adequate
Trademark Law and Enterprise Intellectual Property protection of the company's innovations. Before
Management Standards in China to build a strong implementation patent search analysis and evaluation
intellectual property management system. This helps are conducted; after implementation the effective form
protect our innovation and market competitiveness. We of protection is determined and timely application is
are continuously enhancing our intellectual property completed to protect the intellectual property.management system and preventing related risks.Strengthen patent early-warning mechanisms and
inquiries on trademarks as well as other related
Protection of Intellectual Property intellectual property to avoid the risk of infringement.Actively conduct various intellectual property training
to effectively improve the intellectual property
SGMICRO prioritizes the protection of its intellectual protection awareness of all employees as well as the
property in accordance with its management philosophy. understanding and application of intellectual
The company follows the Intellectual Property Management property knowledge for relevant personnel.Work Manual which is customized to fit its specific For business partnerships a Non-Disclosure Agreement
characteristics and the integrated circuit industry. These (NDA) is signed by all parties comprehensively
principles ensure that intellectual property matters are outlining intellectual property rights their respective
handled properly effectively systematically accurately ownership and stipulated usage permissions."
and promptly. The guidelines set expectations to
standardize the intellectual property workflow and
enhance company-wide awareness of intellectual
property protection. As of the report the company
continues to advance the application and strategic Some Intellectual Property Awards
organization of intellectual property rights focusing on
building an intellectual property portfolio centered China Patent National Intellectual Property
around patents covering a wide array of technologies. Excellence Award Demonstration Enterprise
At the time of this report the company continued to Beijing Municipal National Intellectual Property
advance the application and strategic development of Invention Patent Award Advantage Enterprise
intellectual property rights building an intellectual
property portfolio primarily centered on patents.Responsible
Procurement
SGMICRO's highly collaborative supply chain is a key competitive
advantage. We maintain close cooperation with our suppliers having
established a standardized process for supplier onboarding and evaluation.Our categorized supplier management approach optimizes oversight
reduces costs and enhances supplier value. Adhering to our sustainable
development philosophy we integrate critical factors such as product
quality management environmental protection and social responsibility
into our supplier evaluation system. SGMICRO is firmly committed to
avoiding conflict minerals and actively promotes sustainable development
throughout the entire industry supply chain.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 31
Build a Sustainable Supply Chain
Sustainable Supply Chain
Our company regularly reviews and updates its risk and opportunity assessment criteria. We conduct various risk At the time of the report the company has signed codes of conduct and other relevant agreements with
assessments for our suppliers developing corresponding mitigation strategies. Furthermore through our business suppliers requiring them to carry out thorough due diligence on their supply chains to ensure full compliance
continuity management protocols we clearly define our business continuity management structure and policies. with laws and regulations during their business with our company. The areas included in due diligence are but
To ensure uninterrupted supply we've established and refined a business continuity assurance system regularly not limited to labor rights health and safety environment and hazardous substances ethical standards business
assessing risks of operational disruption. We implement various measures to prevent supply chain interruptions continuity and information security.including introducing secondary suppliers for production-related processes requiring suppliers to develop business SGMICRO conducts annual audits of suppliers to promote social responsibility emphasizing transparency and
continuity plans and mandating that suppliers maintain safety stock levels that meet our specific requirements. integrity. We require suppliers to comply with legal standards uphold ethical business conduct follow human
rights regulations and avoid forced or child labor. Suppliers must also avoid conflict minerals and meet
environmental standards. Compliance agreements are established supplier performance is evaluated and
Supplier Management warnings are issued to low-scoring suppliers with time for improvement. Persistent non-compliance may lead to disqualification.Our company evaluates new suppliers across multiple dimensions drawing upon international standards such as
ISO9001 IATF16949 and ISO14001. This assessment leverages management systems like ISO14001 QC080000 Review of Suppliers' Social Responsibilities
and ISO45001. Critically during the initial onboarding phase and on-site audits of new suppliers we consistently
include environmental and social responsibility criteria. These factors directly influence the supplier's score and
overall evaluation outcome.At the time of the report our suppliers maintained ecological social and quality certifications as listed below:
Environmental Management
Category Certification Percentage of certified suppliers Integrity Commitment Letter Complaints
ISO 14001 Environmental Management Systems 100%
Environment QC080000 Hazardous Substance Process 100% Items for
Management System
Review
Society ISO 45001 Occupational Health and Safety Management System 100%
ISO 9001 Quality Management 100% Environment and Quality Third-party Test Reports
Related Certifications (RoHS2.0 HF)
Quality IATF 16949 Automotive Quality Management 100%
SystemMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 32
Supplier Integrity Management
The company has a longstanding commitment to promoting responsible supply chain development
through our Transparent Procurement initiative. Our suppliers sign documents such as the Commitment to
Integrity and Honesty which mandates transparency in all business transactions. They are required to
accurately reflect these transactions in their business accounts and records. Our procurement process
adheres to principles of transparency fairness and impartiality. We continuously optimize our procedures
conducting periodic supplier audits to ensure compliance with integrity requirements.During the reporting period through strict oversight and enforcement the company found no significant
illegal or non-compliant activities within its procurement processes.Transparent
Procurement Transparency Fairness ImpartialityMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 33
Conflict Minerals Management
SGMICRO is committed to mitigating the Economic Cooperation and Development (OECD) conflict mineral management systems. Following
environmental and social impact of conflict we use tools such as the Conflict Minerals the audit it was found that all our suppliers have Performance:
minerals. As part of our supplier approval process Reporting Template (CMRT) to conduct due established conflict-free metal procurement
we conduct due diligence specifically related to diligence on all suppliers. Detailed disclosures of policies. Investigations into conflict-free metals in
conflict minerals. This ensures that materials such mineral sources and usage and information on downstream supply chains have confirmed that
as tantalum tin tungsten gold and other related smelters are provided ensuring that all metals (gold tin tantalum tungsten) procured 100 % 100 %
minerals used in our products do not originate relevant suppliers are certified by RMI. The are from conflict-free areas. At the time of the
from conflict areas. We have established the Environmental Agreement signed by both the report 100% of the mineral raw materials involved
Environmental Restricted Substances company and the suppliers explicitly states that in SGMICRO’ s supply chain were sourced from 100% of the raw Supplier due
Management Operation Specification which suppliers must comply with the DRC conflict-free RMI-accredited smelters or countries and some minerals used by diligence rate
defines conflict minerals outlines their scope policy under the U.S. Dodd-Frank Act. suppliers have obtained Responsible Business SGMICRO are sourced
management methods and associated Furthermore we have established comprehensive Alliance (RBA) certification. from RMI certified
commitments. This document is regularly updated processes to ensure traceability of materials. smelters or countries
in accordance with updates in law and customer
demands. Additionally we transparently disclose The company is diligent in constructing a
the use of cobalt and mica in our supply chain as responsible system for sourcing minerals closely
detailed in the company’ s EMRT survey report. collaborating with upstream and downstream 100 % 100 %businesses to promote responsible procurement
Following the Responsible Minerals Initiative (RMI) practices. At the time of the report we conducted
guidelines created by the Organization for audits of all suppliers' hazardous substances and Suppliers with Traceability
hazardous substances white list rate
and conflict mineral
management systemTogether We Thrive
The stable growth of our talent team is the core driving force behind the
company's sustainable development. SGMICRO consistently upholds a
talent philosophy of "integrity and competence dedication to teamwork
pursuit of excellence and practical responsibility" coupled with a
people-centric approach to long-term growth. We're dedicated to
providing a broad career platform for all employees and fostering a fair
diverse and safe work environment. SGMICRO deeply cares for the
well-being of every employee continuously optimizing our welfare system
building advanced and efficient training mechanisms and actively
exploring diverse communication channels. We're committed to fulfilling
our employees' aspirations for the future working hand-in-hand with them
to plan and achieve the company's long-term vision.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 35
Recruitment
Careers
SGMICRO adheres to a “people-oriented” core philosophy and considers our core talent the key driver behind During the reporting period we offered a significant number of professional technical positions to university
our innovation breakthroughs and sustainable development. By continuously optimizing the Recruitment students attracting and cultivating top talent through various campus activities and training programs.Management Policy and building a diversified matrix of recruitment channels the company integrates both Concurrently we further enhanced our employer branding by bringing in experienced technical and management
campus and social recruitment mechanisms to ensure openness and diversity in talent acquisition. This approach personnel through external hiring initiatives.attracts individuals with varied experiences and backgrounds fostering innovation and growth. During the
selection process SGMICRO strictly adheres to the principles of fairness impartiality and transparency to identify Number of Total Employees
top talent build a strong talent pipeline and enhance talent reserves thereby laying a solid foundation for steady
development and future strategic upgrades.
2024 1598 The company ensures that all employees sign legally compliant
2023 1415 labor contracts or employment Campus Recruitment agreements. Additionally we
2022 1243 provide social insurance and a 100 %The company provides diverse job opportunities
through campus recruitment leveraging online housing provident fund according 2021 858
and offline promotional efforts as well as to local regulations maintaining a
campus-enterprise collaborations. This strategic coverage rate of 100%.2020 572
approach not only expands our talent pool but
also fulfills our corporate social responsibilities
contributing to our reputation as an exceptional
employer. Master's degrees and above: 49.00%
Male: 65.89%
Gender Education Bachelor's degree: 40.80%
Female: 34.11%
College degree or under: 10.20%
Experienced Recruitment
As our company continues to grow and expand our ability to attract talent consistently strengthens. We
actively utilize a variety of recruitment channels and methods including but not limited to various job Over 40 yrs old: 21.03% Technicians: 75.59% Administration: 4.44%
boards our company website and official WeChat accounts. This approach helps us attract seasoned Age 30 to 40 yrs old: 32.79% Position Sales: 13.77% Finance: 1.19%
industry professionals bolstering our talent pool and continuously refining our talent pipeline. This in turn Production: 5.01%
meets our increasing talent demands and accelerates our technological innovation. Under 30 yrs old: 46.18%Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 36
Diversity and Anti-discrimination
Our company is dedicated to fostering a Measures for Diversity
diverse and inclusive work environment.We strictly adhere to a non-discriminatory
hiring policy basing all employment Policy making
decisions solely on an individual's work
abilities and the requirements of the SGMICRO has incorporated equal employment and diversity
position. We unequivocally prohibit guidelines into our management framework which are communicated
discrimination based on race color social to employees through various means such as new employee training
class nationality religious belief disability programs and assemblies ensuring their understanding and
pregnancy gender sexual orientation adherence to the guidelines.ethnic background union membership
political affiliation age or marital status. Establishment of supervision mechanisms
Furthermore the company explicitly The company has established effective supervision mechanisms led
prohibits sexual harassment and all forms by the Human Resources Department to regularly inspect the
of inappropriate conduct striving to protect implementation of equal employment and diversity policies able to
the dignity and safety of every employee. promptly identify issues for improvements.Additionally SGMICRO collaborates with Enhanced communication and feedback
the China Disabled Persons' Federation to
provide employment opportunities for people SGMICRO promotes and strengthens employee communication through
with disabilities. At the time of the report various channels and methods encouraging employees to provide
the company has 14 disabled employees. feedback and suggestions on equal employment and diversity policies.Labor & Human Rights
The company thoroughly verifies the age of applicants to ensure that only employees aged eighteen and above
are hired in compliance with legal requirements. We respect the fundamental labor rights of our employees and
value their freedom to choose their employment setting a zero-tolerance policy towards forced labor and human
trafficking. No violation was reported at the time of the report.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 37
Salary and Compensation
Our company embraces a "total compensation" philosophy offering industry-competitive salaries and
benefits to attract and retain key talent who drive our future growth. While ensuring overall fairness and
equity our compensation structure favors those who take on greater responsibility and create high
value. We adjust compensation based on actual economic performance labor market conditions and
industry developments in conjunction with individual employee performance. We are committed to
equal pay for equal work ensuring no differential treatment based on an employee's gender.We use various incentive mechanisms such as awards performance bonuses and employee benefits to
boost employee satisfaction and strengthen their sense of honor and belonging. Our company's
competitiveness is strengthened in the process Our long-term equity incentive plans allow employees to
share in the company's growth. This continuously attracts and retains skilled technical and management
talent who strongly identify with our culture and values. It helps ensure the stability of our core team while
constantly injecting vitality into our ongoing development. In recent years we've significantly enhanced
these long-term incentive programs launching five plans since becoming a public company closely
aligning company performance with employee interests and fostering a shared focus on long-term growth.Performance Management
SGMICRO's long-term focus emphasizes a balance between performance targets and individual/team
development driving sustained improvement. We encourage employees to aspire to ambitious goals to
ignite greater passion performance and growth.In 2024 aligned with our industry-specific demands and corporate values we further optimized our
performance management system. By adopting a structured goal-cascading methodology we translated
the company's strategic objectives into actionable departmental and individual Key Performance
Indicators (KPIs). This ensures company-wide directional alignment and effectively transforming goals
into actionable plans for all employees promoting higher performance and continuous growth.Performance:
In 2024 the coverage rate of comprehensive performance 100 %
management (including performance evaluation performance
coaching and performance goal setting) reached 100%.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 38
Employee Benefits
SGMICRO strictly adheres to national laws and regulations in China such as the Labor Law Labor Contract
Law and Law on the Protection of Minors. Additionally we comply with international guidelines and Employee Assembly 01 Regular Communications with HR 03
standards including the Universal Declaration of Human Rights The Core Conventions of the International
Labor Organization and the UN Guiding Principles on Business and Human Rights placing significant Employee assemblies are organized periodically A mechanism for regular communication with that cover policy briefings performance reviews HR is in place focusing on facilitating dialogue
emphasis on respecting employees' fundamental rights and legitimate interests. and communication on future outlook of the between different employee groups including
company. These meetings ensure that all new hires long-time employees frontline staff
employees are informed about the company's middle managers and key personnel. This
strategic direction development goals and approach maintains timely exchange and
Work Hours and Holidays major decisions enhancing their sense of feedback across the company.belonging and solidarity.SGMICRO champions work-life balance for our employees ensuring compliance with relevant laws and
regulations such as the Labor Law of the People's Republic of China. Employees are entitled to statutory
holidays weekends off sick leave maternity leave and other leave arrangements. Quarterly Review Meetings 02 Suggestion Box 04
Our company upholds the principle of fairness creating equal employment and career development In quarterly review meetings departments Suggestion boxes are available at all office
opportunities for female employees. We ensure they receive comprehensive benefits including full report on progress and exchange thoughts. This locations. Managed by HR these boxes collect practice ensures all departments align in their employee opinions and suggestions which are
maternity and parental leave along with maternity insurance dedicated mother-and-baby rooms and direction. then forwarded to relevant departments and
special Women's Day benefits. individuals for follow-up.Employee Communication Employee Grievance Report
SGMICRO values the input of all employees and encourages honest and effective communication as part of SGMICRO upholds the core principle of "respecting every employee's voice" by establishing a robust
our corporate structure and culture. To foster an open and inclusive workplace the company has grievance management system and a timely response mechanism. Based on the fundamentals of being
implemented communication management procedures to welcome diverse suggestions and criticisms "objective fair and just" the company offers multiple feedback channels: reporting to direct supervisors or
while ensuring prompt and appropriate responses. Employees are encouraged to communicate feedback department heads; submitting complaints via the company's internal dedicated email; use of suggestion
suggestions and personal grievances to managers at all levels who shall actively respond and take boxes; and directly contacting Human Resources department or the management.responsibility to address them. The company strictly enforces confidentiality throughout the grievance process to protect employee
Additionally a series of effective communication mechanisms are implemented to promote internal privacy. Upon receiving a complaint or appeal we respond promptly with a thorough and impartial
communication convey corporate culture and management philosophy as well as solicit employee investigation while providing regular updates to the employee on the progress. All decisions are made
feedback and suggestions. These mechanisms include: fairly and reasonably based on investigation findings in full compliance with company policies ensuring the
protection of employees' legitimate rights and interests.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 39
Talent Development
Recognizing that talent is the cornerstone of sustainable growth SGMICRO is dedicated to fostering an
environment of mutual development for both the company and its employees. Our people-oriented open
inclusive and proactive corporate culture combined with abundant career development opportunities
driven by our rapid expansion and a comprehensive compensation and incentive program are crucial for
attracting motivating and retaining top talent.Career Development
SGMICRO focuses on employee growth offering career paths for technical specialization and team
management along with cross-functional mobility. As the company evolves employees gain expanded job
responsibilities and career prospects. They can develop skills move into leadership or explore new roles
across departments. A structured promotion system ensures opportunities for mutual growth.Technical and Managerial Path
Technical path Managerial path
Our business expansion is driven by The company offers a clear and accessible
effectively meeting the ever-growing promotion path providing significant career
demands of our customers and target development opportunities for employees
markets. This will create increased ready to assume greater management
opportunities for our employees to develop responsibilities. This framework empowers
innovative and complex solutions individuals to fully leverage their
continually enhancing their technical management skills and expertise supporting
expertise. their career progression goals.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 40
Employee Training and Development Parts of 2024 Training Programs
Employee growth powers our company's sustainable development. We've built a robust training system
continuously fostering a "learning organization" to actively support and empower employees' career Professional Development Program
advancement. By creating comprehensive talent development plans we aim for a virtuous cycle of SGMICRO continues to enhance both team-wide and individual technical capabilities by offering diverse and sys-
"learning-application-innovation". This boosts our team's professional competitiveness and enhances our tematic training programs tailored to the needs of various technical teams.employees' career satisfaction.The training system covers all business areas functional departments and talent categories. It includes New Graduate Training Program
courses for new hire orientation technical skill enhancement management and leadership development
professional competency enhancement and management systems for environmental and safety measures. For many years we have built our graduate employer
Our company prioritizes training effectiveness employing a systematic management approach that spans brand around the "Star for the Future" program. This
need assessment planning course development delivery and evaluation of results. We leverage digital program not only provides new graduates with
tools to efficiently manage training resources and records. comprehensive systematic training for their initial entry into the workplace but also offers specialized
professional training and on-the-job project
opportunities tailored to the demands of different roles.Management and Leadership Training Programs
Company training sessions increased by 60% this year creating a more
dynamic atmosphere at all levels. 60% "The Journey" workshops were organized for managers
at all levels focusing on the implementation of annual
performance goals. These sessions encouraged
in-depth reflection and discussion across departments
regarding the company's strategic objectives for the
year.
2024
Training time on average 58 Training coverage per person: 58 hrs h rate: 100% 100 % Mentorship Program
Our ongoing Mentorship Program aims to enhance the coaching capabilities of our senior staff particularly for
guiding new hires.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 41
SGMICRO focuses on providing employees with up-to-date technical knowledge and industry trends to
promote growth through new product research and development. To achieve this we offer internal training Industry- University- Research Cooperation
to improve R&D skills for new employees ensuring we remain technologically advanced. Furthermore we
work with external partners to offer courses in quality management organizational management and Our company is dedicated to fostering deep industry-university collaboration and nurturing talent in the
business compliance which helps strengthen our overall competitiveness. integrated circuit field by combining the academic strengths of universities with our own professional
expertise. We work with universities on research competitions and curriculum development to teach
advanced engineering and practical skills. This fulfills our need for innovative talent while sharing resources
Case R&D Technical Seminars and leveraging complementary strengths.SGMICRO is committed to fostering a culture of continuous learning and innovation
through its R&D Seminars. These seminars serve as a vital platform for professional Case New Generation of Talents
exchange featuring sessions led by renowned industry experts who present on leading for the Future
technologies and address current industry challenges. In addition we facilitate internal Our company actively practices the
technical seminars to encourage in-depth discussions among our employees. These concept of industry-university
initiatives ensure our team remains at the forefront of technological advancements collaborative research and innovation. As
promote innovative thinking through collaborative idea exchange and ultimately a sponsor of university student chip
enhance SGMICRO's core technological capabilities driving both individual professional design competitions we provide
development and the company's overall innovation-driven growth. cutting-edge engineering cases derived
from real-world business challenges as
competition topics. We also assemble a
team of senior technical experts to serve
Case Process R&D Trainings as mentors guiding participating students
through specialized training sessions and
The Process Engineering Department in partnership with Human Resources has introduced a specialized training dedicated Q&A email support. This
program to boost process R&D capabilities. Senior engineers lead this systematically structured curriculum multi-faceted approach helps students
covering essential areas like device fabrication process integration and ESD. The program combines fundamental enhance their innovative thinking and
theories with technical standards and practical case studies aiming to deepen R&D personnel's understanding of professional skills actively cultivating
common process challenges. future talent for the industry's development.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 42
Employee Care
SGMICRO places great importance on employee well-being striving to create an environment where every team member
can thrive both at work and in their personal lives. Employee Activities
Employee Benefits A rich array of cultural activities is crucial for sparking creativity and strengthening team cohesion. Our company regularly organizes diverse events that provide employees with opportunities for physical well-being help them manage
their work pace and offer a platform to showcase personal talents. These activities also foster communication and
Our company is dedicated to providing comprehensive employee benefits and care for every employee to facilitate collaboration among colleagues creating an open lively and proactive work environment.work-life balance. Employee Activities
We've implemented a flexible work system
making commutes easier for employees and
contributing to a lower carbon footprint;
A diverse range of sports events and
team-building activities are organized regularly
to enhance team solidarity and employee
satisfaction; Sports activities
To support employee well-being we offer a variety of
Annual health check-ups and group accident sports activities such as football basketball badminton Team-building
insurance are also in place with 100% coverage table tennis and hiking subject to availability. These We offer varied team-building excursions often short
for employee health examinations; programs boost the physical and physiological health trips in breathtaking scenery. Through activities like
of our team members. group competitions and collaborative games these
outings foster understanding and trust among colleagues.Paid sick leave is offered to all employee to
ensure their physical wellbeing;
Customized holiday benefits for special
occasions are offered;
Shuttle services and employee cafeterias are
available in some cities bringing convenience for Photography competition
employees in work and life; Our popular annual photography competition invites Women's Development Forum
employees to share life's beauty. With themes like In 2024 we hosted a Women's Development Forum
"blossoming" "light" and "limitless" the contest encourages themed "Be the Best Version of Yourself". Our female
We provide care and support to employees and our team to capture the essence of our world. This activity employees shared their experiences in work and life
their families facing serious illness. celebrates creativity and fosters a sense of community. telling stories of growth and passion.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 43
Health and Safety
SGMICRO prioritizes the health and safety of our employees continuously enhancing our occupational Measures to Raise Employees' Safety Awareness:
health and safety management system to ensure a safe and supportive work environment.Safety Specialized courses on "Environment 01 04Safety reminders are posted in lounge
Health and Safety" are incorporated into areas restrooms and water dispensers
The company strictly complies with occupational health and safety laws regulations and standards in all employee training programs with organized across the workplace.regions where it operates. We have established the Occupational Health and Safety Manual continuously learning sessions and assessments for employees.optimizing the safety management system and operational processes clarifying the responsibilities authorities
and relationships of various levels of positions. Following the PDCA (Plan-Do-Check-Act) management
model we are constantly improving the company’ s system as well as the overall performance on 02 05
occupational health and safety. Additionally we conduct regular safety inspections and maintenance at Fire safety drills are regularly carried out The factory holds daily pre-shift safety
production facilities and workspace to ensure timely identification and elimination of potential safety hazards. and firefighting equipment is placed in meetings.accordance with regulations to ensure
Following the requirements of the ISO 45001 Occupational Health and Safety Management System our clear access to fire exits.company has established an EHS (Environment Health and Safety) working group and refined our
occupational health and safety management standards and procedures. In 2024 we further introduced or
revised relevant policies and processes thoroughly implementing our "Occupational Health and Safety Policy." The workplace regularly conducts safety 03
inspections including daily safety checks
Occupational Health and Safety Policy major safety inspections before important
holidays and specialized safety inspections.Safety first Putting people first Energy-saving and Honesty and
Prioritize prevention Scientific management reduced consumption compliance
Control pollution Continual improvementMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 44
Health
Committed to employee well-being SGMICRO ensures a healthy and safe work environment. This commitment is reflected in our rigorous management of quality and
environmental standards across facilities procurement decoration material selection and construction. We maintain comprehensive safety protocols in
equipment-dense areas such as laboratories and factories complemented by the provision of multi-functional spaces to further enhance employee health and safety.Occupational Health and Safety Management Measures Performance
Facilities procurement: We prioritize the purchase of environmentally friendly materials and
equipment to mitigate potential impacts on employee health from the work environment. We Key Performance Indicators Amount
avoid the use of harmful materials and reduce air and noise pollution. Additionally regular
inspections and maintenance of facilities are conducted to ensure safe and proper operation Recordable work-related 0
and reduce the risk of equipment failure. accident
Our Work Environment: We've created human-centered multi-functional spaces including Lost days of work-related
break areas and dining zones to help employees relax and recharge during work periods. All accident 0
company offices are equipped with drinking water dispensers and we regularly replace water
filters to ensure the healthiest drinking water for our staff.Major accidents (Resulting
Laboratory safety measures: Our laboratories implement a comprehensive set of measures to in disability or loss of life) 0
ensure a safe working environment. These include: Air Quality Control: Installation of air
purification equipment and regular filter replacement to maintain optimal air quality. Noise Occurrences of
Reduction: Establishment of soundproof rooms to minimize noise levels. Accident Prevention: occupational disease 0
Implementation of anti-static measures and equipment grounding to prevent safety incidents.Employee health check
First aid supplies: First aid kits and commonly used trauma medications are available in the coverage rate 100%
workspace for prompt emergency response in case of employee accidents.Renovation material selection: We prioritize the use of eco-friendly renovation materials to
minimize harmful substances. All materials chosen for our office spaces meet environmental
protection requirements. Furthermore prior to official occupancy air quality testing is
conducted to ensure compliance with national environmental standards thereby providing a
healthy office environment.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 45
Taking Social
Responsibility
SGMICRO is committed to sustainable development. We
recognize the significance of social responsibility and
actively engage in charitable events. Through concrete
actions SGMICRO aims to spread love and hope for a
harmonious society.We firmly believe that an enterprise's long-term sustainable
development is intrinsically linked to ongoing social progress.We are dedicated to a range of philanthropic causes and
are consistently increasing our contributions to social
responsibilities. SGMICRO remains committed to playing
our part in achieving sustainable development goals.Case Charity and Donation in 2024
SGMICRO has partnered with charity foundations to
jointly carry out a series of public welfare and charity
activities actively supporting students from
underprivileged remote areas in their pursuit of
education and continuing to create more
heartwarming stories.We continue to extend support to the development
of microelectronics-related education in universities
providing scholarships and teaching grants to
students and faculty in multiple universities aiming
to foster top-tier talents.AppendixMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 47
About this Report
Purpose Basis for Compilation
This report (the "Report") is the annual 2024 Environmental Social and Corporate Global Reporting Initiative's GRI Standards
Governance (ESG) Report released by SG Micro Corp and our subsidiaries (referred to as
"SGMICRO" or "the company" "company" "we" or "us"). The purpose of the report is to The Chinese National Standard Guidelines for the Preparation of Social Responsibility Reports
facilitate a transparent dialogue between SGMICRO and our stakeholders regarding our (GB/T 36001-2015)
environmental social and governance practices and to address their expectations with a The Chinese Academy of Social Sciences China Corporate Sustainable Development Report
comprehensive and structured approach. Guide (CASS-ESG 6.0)
SZSE Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—
Scope Sustainability Report (For Trial Implementation)
2030 UN Sustainable Development Goals (SDGs)
The disclosure scope of this report is consistent with that of the financial information in the ISO 26000?2010 Guidance on Social Responsibility
company's 2024 annual report and some information may involve policies and practices
from previous years. Compilation Process
Data This report is based on our company's ESG practices following a process of "project setting
and research information collection drafting and revision executive review board review
and public release". At some stages we engage with relevant stakeholders to discuss and
The report quotes data from various sources including the company's operation validate the report's framework and content ensuring transparency and alignment with our
information publicly available government documents annual financial reports internal corporate values.statistical reports among others. Financial data in this report is presented in Chinese
currency RMB. In cases where discrepancies arise between this report and the financial
statements the financial statements shall take precedence. Versions and Availability
Reliability Guarantee The report can be accessed and downloaded from the official website of SGMICRO
(www.sg-micro.com) the Shenzhen Stock Exchange website (www.szse.cn) and the
CNINFO website (www.cninfo.com.cn). The Report is available in both Chinese and English.The report contains no false representations misleading statements or major omissions In case of any discrepancy the Chinese version takes precedence. We welcome feedback
and we attest to the truthfulness accuracy and completeness of the contents. for the ESG report. Please do not hesitate to reach out to us at Investors@sg-micro.com if
you have any questions or comments.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 48
Key Performance Indicators
Business Performance Environmental Performance
Sector Disclosure Item Unit 2024 Sector Disclosure Item Unit 2024
Revenue RMB 10000 334698.31 Natural gas consumption m3 4913.82
Net profit attributable to shareholders
of the listed company RMB 10000 50024.79
Energy Gasoline Liters 889.49
Power consumption kWh 7893380.47
Investment on R&D RMB 10000 87074.68
Scope I tCO2e 12.59
Business R&D investment percentage % 26.02 Greenhouse Gas Scope II tCO e
Performance 2 4235.59R&D personnel person 1184
Total greenhouse gas emissions (Scope I + II) tCO2e 4248.18
R&D personnel percentage % 74.09
Office Operation Water consumption m3 12630.16
Total cash dividends distributed during
the period (with tax) RMB 10000 4707.27
Note:
Basic earnings per share RMB/share 1.0619 1. The disclosed data are collected from some of the company’s operating regions.
2. The emission of greenhouse gases represents the sum of Scope I and Scope II greenhouse gas emissions.
The emissions from Scope I are calculated based on the consumption of natural gas gasoline and
corresponding emission factors. The emissions from Scope II are calculated based on purchased electricity
and corresponding emission factors.Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 49
Corporate Governance Performance Sector Disclosure Item Unit 2024
Total number of obtained patents piece 370
Sector Disclosure Item Unit 2024 Newly applied patents piece 162
Patents
Number of board members person 5 Total number of newly licensed invention patents piece 132
Male directors person 2 Newly registered IC layout design registration certificates piece 81
Corporate
Governance Female directors person 3 Number of total employees person 1598
Independent directors person 2 Male staff person 1053
Non-independent directors person 3 Female staff person 545
Over 40 yrs old person 336
Social Performance 30 to 40 yrs old person 524
Under 30 yrs old person 738
Sector Disclosure Item Unit 2024 Master's degrees and above person 783
Safety Number of people with work-related injuries person 0
Bachelor’s degree person 652
The number of suppliers identified as having actual or
potential significant negative social impacts Number 0 Employee College degree or under person 163
The number of suppliers identified as having actual or Production person 80
potential significant negative environmental impacts Number 0
The percentage of new suppliers that were screened based Technicians person 1208
on environmental criteria % 100 Sales person 220
Supply The percentage of new suppliers that were screened based
Chain on social criteria % 100 Finance person 19
The percentage of RMI certified supplier % 100 Administration person 71
Supplier due diligence rate % 100 Disabled person 14
Traceability white list rate % 100
Average training time per year per employee hrs 58
Suppliers with management system for hazardous
substances and conflict mineral % 100 Social insurance coverage rate % 100Message from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 50
GRI Index
GRI Index GRI Standards Disclosure Item Corresponding Chapter
GRI 302: Energy 2016 302-1 Energy consumption within the organization
Key Performance
Indicators
SG Micro Group reported the information quoted in this GRI content index according to GRI Energy Conservation
Instructions standards between January 1 2024 and December 31 2024. 303-1 The interaction with water as a shared resource and Carbon Footprint
GRI 303: Water and Reduction
GRI 1 Used GRI 1: standard 2021 Effluents 2018 303-2 Management of water discharge-related impacts /
303-3 Water consumption Key Performance Indicators
GRI Standards Disclosure Item Corresponding Chapter 306-1 Waste generation and significant waste-related impacts Waste and Material Management
2-1 Detailed information about the organization About this Report GRI 306: Waste 2020 306-2 Management of significant waste-related impacts Waste and Material Management
2-3 Reporting period frequency and contact point About this Report 306-3 Waste generated Waste and Material Management
2-7 Employee Together We Thrive GRI 308: Supplier Environmental
308-1 New suppliers that were screened against environmental Build a Sustainable Assessment 2016 criteria Supply Chain
2-9 Governance framework and composition Enhance Governance Structure 401-1 The percentage of new employee hires and employee turnover /
GRI 2: General
2-12 In terms of governance impact the supervisory Enhance Governance
GRI 401: Employment 2016
401-2 Benefits provided to full-time employees Disclosure 2021 role of the highest governance body Structure (excluding temporary or part-time employees) Employee Care
2-14 The highest governance body’s role in Refine Sustainable
403-1 Occupational health and safety management system (OHSMS) Health and Safety
sustainability reporting Corporate Governance
403-3 Occupational health services Health and Safety
2-22 Statement on sustainable development strategy Refine Sustainable Corporate Governance 403-4 Occupational health and safety topics: worker participation consultation and communication Health and Safety
GRI 403: Occupational
2-29 Approach to stakeholder engagement Refine Sustainable Worker training on occupational health safety Health and SafetyCorporate Governance Health and Safety 2018
403-6 Promote worker health Health and Safety
3-1 The process of determine substantive issues Refine Sustainable Corporate Governance 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Health and Safety
GRI 3: Substantive 3-2 List of substantive issues Refine Sustainable 403-10 Work-related health Health and Safety
Topics of ESG 2021 Corporate Governance
GRI 404: Training and 404-1 Average hours of training per year per employee Talent Development
3-3 Management of substantive issues Refine Sustainable Corporate Governance Education 2016 404-2 Programs for upgrading employee skills and transition assistance programs Talent Development
GRI 201: Economic GRI 405: Diversity and
Performance 2016 201-1 Directly generated and distributed economic value Key Performance Indicators Equal Opportunity 2016 405-1 Diversity of governance bodies and employees Recruitment
GRI 205: Anti-corruption 2016 205-2 Communication and training about anti-corruption policies and procedures Business Ethics
GRI 414: Supplier Social
Assessment 2016 414-1 New suppliers that were screened against social criteria
Build a Sustainable
Supply ChainMessage from Company Green Science-Based Innovation Responsible Together
the Chairman Overview Comes First Governance and R&D Procurement We Thrive Appendix SGMICRO ESG Report 2024 51
Glossary Feedback Form
This report is the 2024 annual Environmental Social and Corporate Governance (ESG) Report of SGMICRO
Technical Terms Definitions publicly released to society. In order to improve the company's ESG management and enhance our
performance in fulfilling ESG responsibilities we sincerely ask for your opinions and suggestions. Please fill
Low Dropout Regulator (LDO) is a type of integrated circuit voltage regulator in the feedback form and choose one of the following methods to send:
LDO characterized by its ability to provide a stable output voltage with minimal 1. What is your overall view of the ESG report
power loss.□ Very good □ Good □ Average □ Poor □ Very poor
MOSFET short for Metal-Oxide-Semiconductor Field-Effect Transistor is a
MOSFET type of transistor widely used in integrated circuits. It plays a crucial role in 2. Do you think the report can comprehensively and accurately reflect the company's significant economic
switching and amplifying electronic signals in various applications. social and environmental impacts
□ Very good □ Good □ Average □ Poor □ Very poor
A DC/DC converter is a converter that transforms a direct current power source
DC/DC into another direct current power source with a different voltage or current. 3. How do you rate the quality of this report in terms of responding to and disclosing issues of concern to
stakeholders
Active Matrix Organic Light Emitting Diode (AMOLED) is a type of organic □ Very good □ Good □ Average □ Poor □ Very poor
AMOLED electroluminescent device.
4. What do you think of the clarity accuracy and integrity of the information data and indicators
disclosed in the report
Light Emitting Diode is a solid-state semiconductor device with diode
LED characteristics that can convert electrical energy into light energy. □ Very good □ Good □ Average □ Poor □ Very poor
5. How would you rate the readability of this report including its logical structure content design
SVHC Substances of Very High Concern language and formatting
□ Very good □ Good □ Average □ Poor □ Very poor
The restriction of the use of certain hazardous substances in electrical and
RoHS electronic equipment Open-ended Questions
REACH Registration Evaluation Authorisation and Restriction of Chemicals
What aspect of this report are you most satisfied with
LBMA London Bullion Market Association
Responsible Jewellery Council Do you have any suggestions for our future ESG reportsRJCSG Micro Corp
Address: F11 Building D
No. 87 North Third Ring Road Haidian District
Beijing China
Phone: 010-88825397
Email: investors@sg-micro.com
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