From the president

To all partners and friends with an interest in the sustainable development of Realtek:

In 2021 we marked the 35th anniversary of Realtek’s establishment, and we continued making breakthroughs in product and technology development, as well as hitting a record high in revenue and profit! Our gratitude goes out to all of our partners and friends for their continued interest, support, and backing over the years, and for assisting with the multifaceted growth and development of Realtek.

Realtek understands that business operations are inseparable from global sustainability development. Therefore, we continue to develop sustainability management policies in accordance with domestic and international standards to conduct ethical management, strengthen environmental protection, and promote social prosperity. The 2021 ESG Report focuses on corporate sustainable development issues, responds to global sustainability goals, and attaches importance to the expectations of internal and external stakeholders. We not only adopted GRI Standards for the report preparation, but also considered standards from the Task Force on Climate-related Financial Disclosures (TCFD) when disclosing our climate change response and actions. Our aim is to develop a systematic and in-depth mechanism that has short-, medium-, and long-term benefits. Detailed evaluations anddiscussions of progress will be disclosed faithfully in the Company’s ESG reports for all interested parties to read and understand.

In 2021, COVID-19 continued to impact multiple aspects of our business. Realtek actively responded to the changing pandemic situation, and developed corresponding actions to reduce impact. We implemented a diverse range of critical pandemic prevention  measures and risk prevention management. Meanwhile, we united with manufacturers to jointly expand our pandemic prevention chain, which enhanced pandemic prevention measures. Furthermore, we increased donations of supplies to local charitable organizations and educational institutions to help society in fighting against the pandemic. In this period, when the pandemic is still undergoing rapid changes, we want to express our deepest gratitude to all of our global partners for their cooperation and encouragement. The exceptional cooperation has kept global production and supply running smoothly. We also thank all Realtek employees for working with a common purpose towards coordinating pandemic prevention measures introduced by the government and the Company. Together, we create robust R&D innovations, and operations, fulfill our responsibilities as a corporate citizen, and join our partners to become a positive influence.

Sound Management, R&D and Innovation, and Corporate Governance

Ethical management, innovation, and R&D form the core foundations of sustainable development of Realtek. Since establishment in 1987, we adhere to the belief of selfconfidence, trusting in people, and innovation and teamwork to implement stable operations through sound management. Realtek has continued to deliver technology breakthroughs and develop innovative products to provide customers with the best integrated solutions. We have developed market-leading products and continued to create greater value for customers and end users in various fields. Moreover, we continue to closely watch the importance of the biomedical industry and the benefits it can generate for the global community. Therefore, we combine Realtek’s leading technologies in the areas of IoT, cloud computing, and artificial intelligence to stake a position in the development of biomedical engineering. Furthermore, we had groundbreaking for a Realtek biomedical office in 2021, building an R&D base that combines information technology and biomedical engineering that will further sustain Realtek’s innovative breakthroughs and developments while spreading support and service to benefit the global community.

Realtek again delivered an impressive economic performance in 2021. Consolidated revenue reached NT$105.504 billion, surpassing the NT$100 billion threshold for the first time. Consolidated revenue grew by 35.7% over the previous year and earnings per share was NT$33, both achieving record highs. For product innovation and R&D, Realtek again received awards and strong recognition, including Best Choice Awards at COMPUTEX Taipei, the AI, Big Data & Cloud Computing Award, and the D&I  Award.

Over 35 years, Realtek’s management team has adhered to the principles of ethical management through prudent corporate management strategic planning. The Company brings together all professional units within the organization to enhance corporate governance, ensuring that each unit fulfills sustainable development responsibilities, complies with regulations and risk management, increases information disclosure transparency, upholds shareholder rights and interests, strengthens the function of the Board of Directors, and protects human rights. Meanwhile, we openly communicate ESG-related issues with stakeholders. Corporate governance and ethical management are key tasks and responsibilities in our fulfillment of corporate

Talent Development Strategy and Corporate Culture

As a member of the knowledge and technology intensive semiconductor IC design industry, Realtek relies on talent and intellectual property. These are the cornerstone of the company’s advancement, sustainability, and competitiveness. Realtek has longstanding talent strategies in place that enable us to retain a workforce that can drive innovation, optimize the organization’s competitiveness, and respond to short-, medium-, and long-term strategic development needs. Our human resource policy is based on valuing and respecting talent. Safety and happiness are as important as work quality, and are emphasized along with learning and development for better organizational performance. Innovation and service, together with full participation, create comprehensive value for all. In terms of knowledge and innovation development, the Realtek Corporate University offers five academies with various training programs for the continued development and reinforcement of organizational learning and competitiveness. Work and lifestyle improvements include setting up the Realtek Employee Care Center to combine diverse employee welfare benefits and create a friendly work environment while advancing the spirit of teamwork and energy. We also established the Occupational Safety and Health Center for employee health and care, as well as environmental testing, in order to build a safe and reliable work environment.

Realtek’s corporate culture is defined by self-confidence and trust in people, teamwork, innovation, and vitality. Self-confidence comes from professionalism, while trust in people derives from sharing, belief in the team, and helping others. Teamwork comes from members oordinating with and supporting the team spontaneously of their own volition. Innovation arises from leadership and breakthroughs that create new value, new fields, and new opportunities. Vitality is about proactivity and passion. We believe that our organizational culture provides consensus on direction of development and successful collaboration within the organization. Its practice by every Realtek employee is behind our unique and sustained competitive advantages.

Product Responsibility and Environmental Protection – Implementing Green Pledges

Realtek fully recognizes the risks of global climate change, and that depletion of natural resources continues to affect the global environment. Related problems are already affecting societies and environments around the world. For many years, Realtek has actively participated in the global environmental protection movement by formulating environmental sustainability policies. We gather resources and implement green pledges, from developing innovative green products and heeding climate changes, to making systematic improvement plans, including conserving water, managing energy efficiency, and conducting waste management. In the overall business operation of our organization, Realtek carries out continuing improvements focusing on environmental management in which all employees can participate. In accordance with international standards, the Company obtained the Sony Green Partner certification program, ISO 14001, and ISO 45001. These measures cover various aspects related to green products, environmental protection, and occupational safety and health to further uphold sustainability responsibilities.

In terms of green products, Realtek attaches great importance to the deployment of green energy concepts, starting from the R&D and design process and implementing our expectations and commitments for environmental protection into IC design development and manufacturing chains. While we pursue product innovation, stable growth, and profits, we aim to improve and ensure product durability to reduce the use of energy and resources during the product lifecycle, making the most pragmatic contribution to energy-saving and carbon reduction. We will further elaborate on our achievements when we describe several innovative products in the following chapters. For environmental issues, to fulfill our green sustainability pledges we manage and reduce greenhouse gases (GHG) as well as water and energy consumption. Besides this, we evaluate the effectiveness of our efforts and formulate improvement plans. We also engage in advocacy, education, and training on environmental topics. Consensus on environmental protection responsibility is achieved through systematic management aimed at realizing environmental sustainability. As well as developing green products and environmental protection plans, Realtek adopted the Task Force on Climate- Related Financial Disclosures (TCFD) to enhance climate change response mechanisms and proactively respond to potential climate change challenges and opportunities. Therefore, the Company can seize opportunities in the new era of industrial development.

Social Care and Sustainability Outlook – Common Prosperity with the Global Society

Fulfilling corporate citizenship is one of Realtek’s business goals. Our planned social care programs and subjects include the following six categories: youth growth and
safety care for women and children, rural community care and educational assistance, social mutual aid actions, academic research and social institution sponsorship, charity projects, and individual cases. These categories encompass a wide range of topics and care recipients. In the future, Realtek will continue to consolidate the needs through planning, while integrating financial support, manpower, and materials towards continued social care engagement.

To carry out social care and sustainability, in 2021 Realtek leveraged its advantage as a technology company to cooperating with Taipei’s Longshan Temple, the Liver Disease Prevention & Treatment Foundation, and Yuan High-Tech for a cross-industry program to offer free hepatitis and liver cancer screenings. The Company wholeheartedly hopes that the event raised awareness of liver disease prevention and health promotion. Through collaboration in religious, health care, and digital technology fields, Realtek won an Asia Responsible Enterprise Award (AREA) in the Health Promotion category in September 2021. In the future, we will continue to utilize our technological innovation, application, and service advantages to synergize with professional groups from various fields to jointly develop programs that create a new model for corporate citizenship and lead to greater positive impact.

Having an understanding of people’s expectations and needs allows Realtek to define and plan a clearer sustainable development roadmap. An appreciation for the importance of our responsibilities ensures even greater rigor in each area of development. We will continue to take substantive actions towards building our vision for sustainable operations. We again send our gratitude to friends and partners in the industry for their continued interest in our development. Your interest, support, and care help to drive the development of corporate sustainability at Realtek.

Realtek’s corporate sustainable development goals and commitments are as follows:

  • Commitment to sustainability goals,honesty, and integrity
  • Implementation of green energy policiesand environmental responsibility
  • Sustainable talent development and asafe environment
  • Active cooperation on service and qualityrequirements
  • Innovation and R&D to enrich the world andimprove convenience
  • Continued progress to warm the hearts ofmore people

We are committed to doing our best on corporate sustainable development. Organizational participation and energy shall integrate operational policies and goals in a way
that makes sustainability part of the mindset of every Realtek employee. We will work hard to fulfill Realtek’s sustainable development goals and commitments!