GIGABYTE evaluates all existing and new suppliers in accordance with the “Guidelines for the Management of Supplier Quality” for tiered management. The classification criteria incorporate not only factors such as long-term supply contracts and material evaluations but also the results of the suppliersʼ annual sustainability assessments. This ensures that the rating and classification system comprehensively reflects suppliersʼ sustainability performance, enabling the planning of corresponding management actions based on the different tiers of suppliers.

Supplier grading results will serve as a reference guide for procurement units. GIGABYTE has also established incentive and elimination mechanisms: new suppliers that fail the assessment must undergo a re-evaluation within 60 days after making improvements; if they still fail the re-evaluation, they will not be used. For suppliers that pass the assessment, they will undergo regular annual audits and be managed according to their grade; if they fail, they must make improvements within a specified timeframe and may be excluded from the supply chain if necessary.

2025 Supplier Classification Overview

GIGABYTE conducts supplier high-risk assessments on the four aspects of society, environment, governance, and business every quarter based on the tiered supplier management system. Particular emphasis is placed on sanctions over labor, environment, financial transactions and conflict minerals among key suppliers; corporate governance evaluation, scope of ESG disclosure, and positive/negative media coverage are also added to the weighted matrix to identify and screen high-risk suppliers for that quarter. The outcomes are provided to the relevant personnel at each BU and subsidiary to ask for supplier improvements.

In the first quarter of 2025, 19% of suppliers experienced high-risk incidents. Although this figure rose slightly to 29% by the third quarter, following notifications and follow-up improvements, the proportion of suppliers with risk incidents dropped to 27% by the fourth quarter. We will continue to request assistance from business groups to track suppliers with risk incidents, while also implementing an alert mechanism in the procurement system and strengthening supplier management.

Change in Supplier Risk Assessment

To effectively mitigate the potential negative impacts of supply chain risks, while addressing stakeholder concerns and sustainability disclosure requirements, GIGABYTE has established a supplier quality system audit and a RBA risk tracking model. These have been progressively implemented across business groups and subsidiaries, with audit results regularly compiled and reported, and incorporated into the companyʼs procurement decision-making process. For suppliers with audit findings, GIGABYTE requires them to make improvements within a specified timeframe and to develop corrective actions and measures addressing the audit deficiencies. If improvements are not made, the business group is advised to seek alternative suppliers.

GIGABYTE conducts annual spot checks and audits of qualified new suppliers. It also establishes an annual audit schedule and defines the types of suppliers to be audited and the frequency of spot checks to ensure the quality of the risk tracking mechanism. In 2025, audits were conducted on a total of 138 suppliers. The audit results showed that 100% of existing suppliers and 86% of new suppliers were classified as low-risk; among the new suppliers, 3 were initially assessed as medium-risk, but after follow-up reviews and improvements, all were reclassified as low-risk, achieving a 100% improvement rate; one high-risk supplier has been removed from the current supplier list .