Production capacity risk
- Inadequate purchase orders, delay in supply of materials
- Adjustment of production equipment, quality control
- Force majeure
The supply of materials and production equipment by particular supplier may run the risk of a break in materials or unstable supply of materials.
- Avoid supply by only one supplier. For overseas suppliers, the establishment of an agent or warehouse in Taiwan is necessary to avoid delay in supply of materials that affects production.
- Implement sound inventory management for important raw materials and maintain a safety stock.
- Keeping a viable quality management system with assurance of the status of production capacity, and maintain sound customer satisfaction at all time to reduce risk.
Market risk
- Development of new products, development of new customers
- Action of competitors, product price fluctuation
Over concentration at a few customers that may result in rapid change in demand and keen competition in the industry.
- Meet the needs of the customers and develop a wide array of products and customer groups to avoid the risk of over concentration of business
Information risk
- Information system failure
- Cyber security control and protection
The loss of data may affect the normal operation of individuals. The more serious scenario is the impact on the reputation of the company that may result in loss in operation.
- Intensification of information security management and the law-abiding mentality of the employees, fortification of the backup system, firewall, anti-virus software, encryption capacity of the computer system of the company and the policy of responsibility of designated duties, implementation of education and training of the employees to avoid the risk of losing vital information.
- Routine backup of data, and conduct exercise drill on backup and recovery from time to time.
Litigation and non-litigation matters (Freiwillige Gerichtsbarkeit)
- Infringement of patents or intellectual property rights
The company will have to pay a huge sum of money that add to the cost of operation.
- Reduce possible loss deriving from the claim of intellectual property rights and litigation, fortify the portfolio of intellectual property rights of the company, acquire intellectual property rights for defense and offense in very short time. Enrich the basic knowledge of laws among the employees perpetually through training and education.
Financial risk
- Interest rate and exchange rate fluctuation, inflation risk
- Taxation risk
Any fluctuation of interest rate and exchange rate will intensify the uncertainty of the profit position of the company in operation.
Any change in the regulatory environment or scale of operation will inflict impacts on the operation performance of the company and the effective tax rate.
- Adjust the maturity date of borrowing for cutting down the cost of interest through the identification and assessment of market risk, undertake relevant derivatives for hedging purpose to tackle with exchange rate fluctuation.
- Taxation risk is subject to management, and report to the senior officers of the management team on potential taxation risk at regular intervals or at any time where necessary. Retain external tax consultant for assistance to minimize the cost of potential tax burden.
- Development of taxation professionals to strengthen tax management of the company.
Investment risk
- Benefits from investment, direct investment, and mergers and acquisitions.
Risks such as inflation, interest rate fluctuations, and political instability may lead to a risk of investment loss.
- The Company formulates the most appropriate investment strategy based on factors such as financial objectives and the market environment. We regularly review the investment portfolio, evaluate the reinvestment plan, and make the most appropriate position adjustment to align with development goals.
