Stakeholder

2025 Letter to Shareholders

Dear Shareholders,

Global Economic Outlook In 2025, under the prosperity driven by technology, the global economy gradually emerged from the shadow of tariff shocks, demonstrating significant resilience with an annual growth rate of about 3.3%. Investments in artificial intelligence and information technology continued to rise, with strong performance from the U.S. and major Asian exporters creating spillover effects worldwide. However, growth momentum remained uneven, and geopolitical risks, trade policy changes, and supply chain restructuring kept the overall situation in a cautious recovery mode with risks coexisting.

Looking ahead to 2026–2027, global economic growth is expected to remain at 3.2%–3.3%. While appearing stable, this balance is built on multiple forces. Potential risks include downward revisions to AI productivity expectations, rising trade tensions, expanding fiscal deficits and debt, and heightened political uncertainty. The key lies in striking a balance between optimism and prudence, strengthening sound policies and structural reforms, and ensuring that Tech Dividends transform into sustainable and inclusive growth momentum, avoiding sharp cyclical fluctuations.

According to the update of the World Economic Outlook released by the International Monetary Fund (IMF) in January 2025, the global economic growth rate in 2024 is 3.2%, and it is predicted to be 3.3% in both 2025 and 2026, which is lower than the historical average of 3.7%. Growth rates among countries diverge, with the US growth rate increasing but risks for other economies tending to the downside. Global inflation is expected to drop from 4.2% in 2025 to 3.5% in 2026. Inflation in developed economies will return to target earlier, providing room for interest rate cuts. The IMF pointed out that the medium-term growth rate of the global economy is still below historical levels, and policymakers must rebuild fiscal and monetary buffers, promote structural reforms, and strengthen multilateral cooperation to enhance growth prospects and ensure sustainable economic development.

Global Electronics Market Outlook Despite economic slowdown and tariff pressures, Prismark raised its forecast for the global electronics market in 2025 to USD 2.77 trillion, up 8.5% year-on-year, mainly driven by strong expansion in infrastructure, especially AI servers, which significantly outpaced moderate growth in other applications. In 2026, the market is expected to reach USD 2.93 trillion, up 5.8%, with servers remaining the main driver, smartphones recovering moderately under AI influence, and automotive gradually rebounding as inventories adjust. The compound annual growth rate (CAGR) for 2025–2029 is projected at 5.9%, showing that AI infrastructure investment has become the core driver of medium- to long-term growth.

However, concerns about whether AI investment is forming a bubble are increasing. AI data center investment is highly concentrated at the service provider level rather than the end-consumer market, with capital expenditure far exceeding actual revenue. Equity and transaction structures may also create cyclical risks, which may not pose immediate problems but could amplify risks during downturns. Overall, whether the AI industry can avoid bubble formation depends on whether future revenues can sustainably support massive capital spending.

PCB Market Outlook Prismark forecasts that the PCB market output value will grow about 15.4% in 2025, driven mainly by AI servers and high-speed network infrastructure, with strong demand from military and aerospace applications. The recovery of smartphones and PCs also contributed. The multilayer board market is expected to grow over 18%, with boards above 18 layers increasing more than 50%. Boards with 8–16 layers will continue to grow due to server and PC demand, though competition and price pressure remain. High-density interconnect (HDI) boards are projected to grow 25.6%, driven by penetration into AI servers, networking equipment, satellite communications, and automotive electronics. Challenges include tariffs, inflation, overcapacity, and shortages of advanced materials. Geopolitical tensions are pushing supply chain diversification, with Thailand emerging as a manufacturing hub in Southeast Asia, offering lower production costs than Japan, Korea, and Taiwan. In 2026, the PCB market output value is expected to continue strong growth at 9.1%. HDI boards, driven by AI server and high-speed network demand, are projected to grow about 13%, while multilayer boards are expected to grow about 11%, supported by advanced materials, complex designs, and processes.

Dynamic Outlook In 2025, Dynamic’s revenue grew by 9.4%, reaching a new record high. This was mainly due to strong growth in the HDI market, with HDI revenue up 26% and its share rising from 32% to 37%, optimizing the product mix. In applications, storage devices, networking and servers, and computers and peripherals grew by 65%, 53%, and 57% respectively, showing strong momentum. Gross margin declined slightly due to higher initial operating costs at the Thailand plant and rising raw material prices. However, with high-end AI products entering mass production in Thailand in the second half of 2026, margins are expected to improve significantly. Net profit margin in 2025 was 4.02%, with EPS at NT$2.7, showing stable profitability.

Dynamic Electronics (Huangshi) was listed on the Shanghai Stock Exchange on October 24, 2025 (stock code: 603175), significantly enhancing capital market financing capacity, which will support revenue and profit growth in the coming years.

The most important achievement in 2025 was Dynamic’s AI deployment. With AI booming, PCB technology advanced to a higher level, and overall output value surged. Customers demanded supply chain stability and flexibility, requiring production base reallocation. Dynamic held a leading advantage, having planned its Thailand plant in 2022, starting mass production in Q3 2024, and focusing on advanced process technology. By 2025, Dynamic had completed its layout with high-end AI products as the main growth engine for the next 5–8 years, with three product lines—GPU, ASIC, and Switch—progressing simultaneously. Customer certifications for factories and products were obtained, securing supplier qualification. Dynamic continues deep collaboration with key customers, actively deploying next-generation PCB process development, with professional talent and advanced equipment in place, maintaining industry-leading technical and mass production capabilities.

In 2025, to address carbon fee transition risks and meet its Science Based Targets initiative (SBTi) carbon reduction goals, Dynamic introduced an internal carbon pricing system, implemented via shadow pricing, aligning with international trends and corporate carbon reduction strategies. Dynamic’s internal carbon pricing application and evaluation scope covers Scope 1, 2, and 3. Preliminary assessments indicate that it will be applied to the company’s procurement management and product R&D design, incorporating related carbon emissions and carbon footprints into decision-making considerations. In terms of renewable electricity usage, in 2025 the group generated 2.15 million kWh of solar power and purchased 139 million kWh of green electricity, achieving a 30% green power usage rate. Dynamic will continue to promote the transition to green energy, moving toward a more sustainable future. In addition, in 2025 Dynamic continued to work hand in hand with supply chain partners to conduct ISO 14067 Product Carbon Footprint (PCF) audits, improving the supply chain carbon footprint management system, providing customers with the necessary information, and jointly reducing product carbon footprints to realize the vision of sustainable development and environmental coexistence.

2025 Sustainability Achievements

1. International Recognition: Selected for the S&P Global Sustainability Yearbook for two consecutive years and awarded Ecovadis Gold (top 5% globally).
2. Sustainability Awards: Won TCSA Top 100 Sustainability Model Award, Sustainability Report Silver Award, ranked in the top 5% in corporate governance evaluation, and received TIP Taiwan Sustainability AAA rating (top 5%).
3. Supply Chain Excellence:
   • Foxconn Sustainability Excellence Award
   • AUMOVIO Supply Chain Excellence Award
   • Kimtigo Pillar of Strength Award
   • Honored by Foxconn Industrial Internet with Quality Improvement Award and Service Excellence Award
4. Green Sustainability Development::
   • Business Weekly Carbon Competitiveness Top 100
   • Taoyuan 1.5°C Model Enterprise
   • Thailand plant awarded Green Industry Level 3 Certificate
   • Certified Green Supply Chain Management Enterprise
   • Hubei Provincial Green Manufacturing Enterprise

These achievements show Dynamic’s strong resilience and continuous ESG optimization momentum.

2026 will be the first year of revenue generation from AI products, with explosive growth expected in 2027. Our goal is to become the world’s first-class team in AI product PCB by 2027.Our vision and goals are clear: we must work hand in hand with all partners, execute swiftly and precisely, maintain caution and awareness of being elimated by customer, and move forward confidently.

Finally, I want to wish everyone health and safety for yourselves and your families.