Material Sustainability

Material sustainability begins with supplier management, ensuring that sustainability requirements for materials are met through this process.

(1) Supply Chain Management

A. Supplier Management Principles

Supplier Evaluation	Requirements for Meeting Standard Conditions – Material Suppliers
Supplier Evaluation Criteria	Suppliers are categorized into two types based on the importance of raw materials and quality system management requirements. The "Supplier Information Evaluation Form" is completed and scored, and suppliers with a score of 70 or above are considered qualified suppliers. a. Category A: Primary raw materials, which play a key role in product quality and safety. Examples include sterilization packaging materials, BI, CI, tube adhesives, plastic pellets, etc. b. Category B: Auxiliary materials, which are non-critical to the product. Suppliers exempt from evaluation: Suppliers of general administrative materials or trading agents.
Supplier Sustainability Management Requirements	Supplier Classification
1. Give priority to suppliers that comply with environmental, health, and safety management systems and hold green labels. 2. Localize the supply chain, considering service efficiency, delivery times, raw material transport distance, and carbon emissions, and prioritize local suppliers. 3. Encourage and cooperate with suppliers on packaging recycling. 4. Require suppliers to respond to corporate social responsibility questionnaires to establish a foundation for understanding their sustainability performance. 5. Promote and implement electronic procurement processes.	(Taiwan) Suppliers are classified based on the risk level of the products and services provided. Classified as Grade A, Grade B, or exempt from evaluation.　　　　　　　　　　　　　　　　(Vietnam) Suppliers are classified based on the risk level of the products and services provided. Classified as Grade A, Grade B, or Grade C.

B. Supplier Quantity and Types in 2024

Supplier	Total Number	Parts	Raw Materials	Sterile Packaging	Packaging	Semi-finished Products	Outsourced Processing
Grade A Supplier	93	(Taiwan) 28, (Vietnam) 10	(Taiwan) 23, (Vietnam) 12	(Taiwan) 3, (Vietnam) 1	(Vietnam) 11	(Vietnam) 3	(Vietnam) 2
Grade B Supplier	42	(Taiwan) 1, (Vietnam) 2	(Taiwan) 7, (Vietnam) 1		(Taiwan) 21, (Vietnam) 10		(Taiwan) 1
Grade C Supplier	146	(Taiwan) 144, (Vietnam) 1			(Vietnam) 2

C. Illustration of New Supplier Selection Process --> (Taiwan) Data Collection → Supplier Evaluation → Supplier Evaluation Form → Qualified Registration → Transaction Quality Monitoring → Re-evaluation Plan → Record Retention
(Vietnam) Find alternative suppliers → Supplier Evaluation → Supplier Evaluation Form → Qualified Supplier Registration → Transaction Quality Monitoring → Periodic Evaluation → Record Retention

D. Evaluation of Qualified Suppliers
(1) Certification(3) Strategic DirectionOur product development is customer-oriented. As long as customers provide design concepts, our R&D team first evaluates whether the technology,materials, and manufacturing capabilities meet customer requirements to support the development of market-oriented products. At the same time, product design, manufacturing technology, and pricing are all covered by confidentiality agreements with customers to ensure trade secrets.Future Product Planning: Between 2024 and 2026, we will launch a series of new products that will effectively enhance our market competitiveness, especially in surgical catheters, curved needles, aspiration reservoirs, and safety blood collection needles. We expect these products to meet the increasing safety and efficiency requirements of the medical industry,while aligning with environmental protection and sustainable developmentgoals. For some mature products in the market, such as suction packs, gauze, alcohol swabs, and nasal cannulas, despite intense competition, we will continue to invest and consolidate market share, gradually enhancing market positioning through product upgrades and innovation.To support sustainability, during the development of new products,we focus on selecting eco-friendly materials, reducing carbon emissions, and optimizing production processes to minimize resource waste.This not only enhances product market competitiveness but also provides customers with medical products that meet environmental requirements. Furthermore, we will continue to strengthen the recycling and reuse mechanisms for secondary materials, promoting a circular economy and creating sustainable value in collaboration with all parties.

Item	Content	Remarks
Supplier Identification or Classification	Taiwan: A: Primary raw materials, critical to product quality and safety, such as sterile packaging, BI, CI, tube adhesives, pellets, etc. B: Auxiliary materials, not critical to the product. Exempt: General supplies or trade agents. Vietnam: Classification and risk-based selection according to importance of raw materials and quality management requirements, scored using the "Supplier Evaluation Form" (Form 8.1): a. A: Primary raw materials, critical to product quality and safety, e.g., sterile packaging, product parts, CPP film, sterilized gases, BI, CI, tube adhesives, pellets, etc. b. B: Cartons, cotton rolls, cotton strings, tapes, boxes, printing ink, separator papers, anti-fold sleeves. c. C: Alcohol, separators, auxiliary materials not critical to the product.	Annual evaluation: Assess quality, process, delivery, and service attitude of suppliers of main raw materials, outsourced processing, and services. Rating: Four levels—Excellent, A, B, C. Below B is considered unqualified. Handling of unqualified suppliers: B: Guidance for one year, upgrade to A upon improvement. C: Disqualification. Conditional retention allowed if sole supplier. Conditional retention: Quality or procurement team discusses and coordinates improvement methods to assist supplier in enhancing delivery quality.
Supplier Audit	Taiwan: Audit frequency: (1) A: Annually in January. (2) B: If score <80 after one year, annual audit; if score ≥81, audit every 2 years; major quality issues trigger immediate audit; applies regardless of supplier size or transaction amount; re-audit required after >1 year without transactions; new suppliers evaluated; suppliers inactive for >3 years removed from qualified list. Two consecutive delivery anomalies: on-site audit using "Supplier On-site Evaluation Form"; at least one supplier audited annually if deliveries are normal. Applicable to: (1) Suppliers of raw materials, molds, equipment, services, adhesives, and consumables with transactions in the year. (2) General supply or project development suppliers are exempt. Vietnam: Audit frequency: (1) A: Semi-annual. (2) B: Annual. (3) C: Annual. Applicable to: (1) A: Suppliers with ≥1 transaction. (2) B: Suppliers with ≥3 transactions. (3) C: Suppliers with ≥5 transactions.	Audit items: Document control, training, product traceability, corporate social responsibility. Risk-based classification: A, B, C. A: Audited every 2 years. B: Audited when major quality complaint occurs, five repeated complaints within 3 months, product recall, or other situations. C: No audit. In 2022, 21 A-grade suppliers were audited, all passed.

(1) Certification

Category	Certification Name	Validity
Quality	QMS0017 Domestic Medical Device Manufacturer Compliance with Medical Device Quality Management System	October 30, 2026
	ISO 13485 Medical Device Quality Management System	April 22, 2027
	MDR Blood Circuit EU Medical Device Regulation	April 29, 2029
	MDD EU Medical Device Directive	May 26, 2024
	ISO 13485:2016 Medical Device Quality Management System Standard	November 10, 2025
	U.S. FDA 510(k) Pre-market Notification for Medical Devices	No Expiration

(3) Strategic Direction

The company adopts a customer-oriented approach in product development. As long as customers provide a design concept, our R&D personnel first evaluate whether the technology, materials and manufacturing capabilities meet customer requirements to support the development of products needed for the market. At the same time, product design, manufacturing technology, and pricing are all covered under confidentiality agreements with customers to ensure trade secrets are protected.

Future product planning: Between 2024 and 2026, we will launch a series of new products that will effectively enhance the company’s competitiveness in the market, particularly in areas such as surgical tubing, curved needles, aspiration bottles, and safety blood collection needles. We anticipate these products will meet the growing demands for safety and efficiency in the medical industry, while aligning with environmental protection and sustainability goals. For some products in mature markets, such as suction packs, gauze, alcohol swabs, and nasal cannulas, despite intense market competition, we will continue investing and consolidating market share, and gradually enhance their market positioning through product upgrades and innovations in the future.

To support sustainable development, we place special emphasis on selecting eco-friendly materials, reducing carbon emissions, and optimizing production processes to minimize resource waste during new product development. This not only helps improve the market competitiveness of our products but also provides our customers with medical products that meet environmental requirements. In addition, we will continue to strengthen the recycling and reuse of secondary materials, promote a circular economy model, and work together with all parties to create sustainable value.