FET Supply Chain Overview

In 2021, total procurement expenditure at FET reached NT$39.09 billion, accounting for 37.06% of total expenditure, and involved transactions with 1,069 suppliers. Procurement costs from transactions with top 100 suppliers accounted for 93.9% of FET's annual procurement costs. FET separately manages the five types of suppliers, namely information and communications (ICT), handsets, construction, general administration, and media/non-media. As reference for strengthening supplier management, FET has identified 69 first-tier critical suppliers using quantitative and qualitative standards. Furthermore, 39 second-tier critical suppliers were identified through questionnaire survey.
Analysis of Annual Procurement Costs
Suppliers with transactions for two consecutive years are defined as FET's effective suppliers. In 2021, FET has had 565 effective suppliers. In particular, procurement costs for handsets and ICT amount to approximately nearly 88.74% of all FET procurements. In addition, ICT suppliers accounts for 57.3% of all FET suppliers. In 2020, FET adopt Prefer Vendor mechanism in ICT related business. In 2021, we establish KPI for the use of preferred vendors, increase the number of cooperation with quality vendors to reduce operational risks, streamline 21% of effective vendors, and improve the effectiveness of precision management.
Local and Green Procurement
Besides encouraging foreign companies to establish offices in Taiwan to promote local economic development, FET is also committed to supporting the local industry. If we deduct the orders from overseas companies and foreign brands, then in 2021 a total of 99.73% of FET's procurement was made with local companies⁹ in Taiwan. In addition, to support FET's "Environmental and Social Friendly Program" and to promote a green supply chain, FET encourages suppliers of all types andtheir respective supply chains to refer to the green procurement regulations during procurement. When the Procurement Department considers procurement bids, it also consults the Energy Saving Team for energy efficiency assessment, and includes energy-saving specifications as an open bid item. Monitoring mechanism is also established for all orders. In 2021, FET increase the amount of green procurement while expanding 5G construction. The amount of green procurement will be 46% higher than that of 2020, and Far EasTone will continue to receive awards from the government's Environmental Protection Agency and other related agencies. .