A Message from the Chairman
For WNC employees and stakeholders, ESG represents an opportunity to boost our resilience to changes in the environment and the market rather than a mere exercise of corporate social responsibilities or a commitment to environmental protection. Even with economic and political turmoil around the globe and drastic changes in the industry in 2022, WNC has remained committed to its ESG practices while continuing to bolster competitive advantages by optimizing financial and management structures. Shortages in materials and labor, electricity restrictions, inflation and high inventory levels are common issues faced by the industry. Trade barriers resulting from geopolitical tensions and military conflict show no signs of abating, which affects global economic performance. I want to thank all WNC’s employees, customers, suppliers, investors and partners for your trust, support and efforts. You enabled WNC to achieve record YoY revenue growth of 42% to NT$95.2 billion in 2022, a 166% surge in profit before tax. WNC’s Vietnam plant began mass production in the fourth quarter of 2021 and completed integration with the previous facility in the first quarter of 2022. Site preparation for the second phase of Vietnam factory construction has been completed and the factory is expected to commence mass production in 2024. Despite the impact of materials and labor shortages, our new site in the Tainan Science Park began operations in the first quarter of this year and is ramping up to mass production in the current quarter.
Spiraling inflation has cast a shadow over the outlook for 2023. Major economies have been reserved about GDP growth and impact on consumption seems inevitable. In addition, tensions between the US and China, the Russo-Ukrainian War and fluctuating exchange rates are bringing about challenges. The network communications sector is unlikely to be immune to this impact. Fortunately, new products and new customers of WNC saw considerable growth in the fourth quarter of 2022, a stabilizing force for the Company. Regardless of the challenges ahead, we are confident that we can overcome these obstacles. We are cautiously optimistic about the future as the coming three to five years show considerable growth potential. Our three major product lines are projected to achieve double-digit growth while the total revenue of the Company may see 10% growth or higher this year, which would translate into NT$100 billion in total annual revenue in 2023.
WNC’s well-earned reputation plays a key role in the establishing of partnerships in upstream and downstream segments. With rapid growth in international business and an increasing global presence, WNC is fully aware structural reorganization necessitates increased operational flexibility. Apart from paying attention to trends in major economies such as Europe, Japan, China, and the US, WNC is also keenly expanding business in emerging markets. Moving forward, the Company will invest more than 20 to 25% of its resources in exploring new product applications so as to sustain its competitive advantages. In the past few years, the world has weathered the COVID-19 pandemic, political and economic uncertainties and the impact of extreme weather conditions. In the wake of these challenges, WNC has found that stakeholders are placing greater emphasis on ESG issues. We aim therefore to implement measures to meet stakeholders’ demand for qualitative and quantitative indicators regarding sustainability and to gradually transform these measures into a core competitive edge. To ensure that the Company’s long-term operational strategies align with this goal, WNC established a Sustainable Development Steering Committee and Sustainable Development Committee in 2022. Starting the third quarter of 2022, meetings of the Sustainable Development Committee have been regularly convened and top tier managers are invited to formulate and review short-, mid-, and long-term goals and action plans.
In recent years, WNC has been reaping the fruits of its digital initiatives, talent nurturing and low-carbon transformation. Through this, the Company will become stronger and more resilient. Instead of simply focusing on sales growth, WNC places great emphasis on deepening its relationships with strategic partners and assisting customers in adjusting product portfolios in response to changes in the market. In the post-pandemic era, the strong demand for remote communications has become a driving force for the development of next-generation communications technologies. WNC is focused on the facilitation of cross-department cooperation, and the integration and sharing of resources. The Company will continue to develop midstream end user and edge system products while integrating antennas, connectivity, and computing modules in the upstream segment to expand automotive and consumer markets. A new smart applications business unit has been established to design products that utilize WNC’s communications technologies, IoT sensors (including RFID), and AI applications.
Over the past few years, WNC has been working to pursue the utmost benefits for stakeholders despite the negative impact of the pandemic, changes in lifestyles and consumer behavior and supply chain disruptions due to geopolitical tensions. Moving forward, WNC will continue to leverage its expertise in communications technologies and take advantage of market momentum to achieve sustainability in its technologies, human resources, management practices and ESG measures. WNC will gradually transform these measures into a core competitive edge and help create a friendlier future for coming generations.