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	Annual Report 2024 | Contents

CONTENTS

1. Letter to our stakeholders ......................	04
2. X-FAB at a glance ......................................	06
3. Our culture ...................................................	08
4. Our business ................................................	11
5. X-FAB consolidated financial statements ..................................................	21
5.1 Summary of important developments ........................................	21
5.2 Statement of the Board of Directors ..	21
5.3 Statutory auditor’s report to the general meeting of X-FAB Silicon Foundries SE on the consolidated financial statements as of and for the year ended December 31, 2023 ...........	21
5.4 Consolidated financial statements ......	26
Notes to the consolidated financial statements	31
1 Basic information and description of the X-FAB Silicon Foundries SE Group’s business ....................................	31
2 Group structure .....................................	31
3 Basis of preparation ...............................	32
3.1 Statement of compliance ............	32
3.2 Basis of measurement ..................	32
3.3 Functional and presentation currency .........................................	32
3.4 Use of judgments, assumptions,and estimation uncertainties ..................................	32
4 Summary of accounting policies ..........	34
4.1 Basis of consolidation ...................	34
4.2 Foreign currency translation ........	34
4.3 Revenue from contracts with customers ......................................	34
4.4 Research and development expenses ........................................	35
4.5 Finance income and finance costs ...............................................	35
4.6 Rental income from investment properties ......................................	35
4.7 Employee benefits ........................	36
4.8 Property, plant, equipment, and investment properties ..................	36

4.9 Intangible assets ............................	36
4.10 Impairment .....................................	37
4.11 Financial instruments ....................	37
4.12 Derivative financial instruments ..	39
4.13 Inventories .....................................	40
4.14 Cash and cash equivalents ...........	40
4.15 Equity .............................................	40
4.16 Provisions .......................................	40
4.17 Leases ............................................	40
4.18 Subsidies ........................................	42
4.19 Income taxes .................................	42
4.20 Changes to accounting policies ..	43
5 Business combinations ..........................	45
6 Notes to the consolidated statement of profit or loss .......................................	45
6.1 Revenue .........................................	45
6.2 Cost of sales ..................................	46
6.3 Research and development expenses ........................................	46
6.4 Selling expenses ............................	46
6.5 General and administrative expenses ........................................	46
6.6 Expenses by nature ......................	46
6.7 Rental income from investment properties ......................................	47
6.8 Rental expenses related to investment properties ..................	47
6.9 Other income ................................	47
6.10 Other expenses .............................	48
6.11 Finance income .............................	48
6.12 Finance costs .................................	48
6.13 Income tax .....................................	48
6.14 Earnings per share ........................	51
7 Notes to the statement of financial position ....................................................	52
7.1 Property, plant, equipment, and investment properties ..................	52
7.2 Intangible assets ............................	54
7.3 Inventories .....................................	55

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	Annual Report 2024 | Contents

7.4 Contract assets .............................	55
7.5 Trade and other receivables ........	55
7.6 Other assets ..................................	56
7.7 Cash and cash equivalents ...........	57
7.8 Equity .............................................	57
7.9 Dividends .......................................	58
7.10 Loans and borrowings ..................	58
7.11 Other non-current liabilities .........	63
7.12 Trade payables and other current liabilities ............................	64
7.13 Provisions .......................................	64
8 Notes to the statement of cash flows .	65
9 Segment reporting ................................	65
10 Financial instruments – fair values and risk management ...................................	67
11 Leases .....................................................	70
12 Transactions with related parties .........	71
13 Other disclosures ...................................	73
13.1 Purchase commitments and contingencies ................................	73
13.2 Unresolved legal disputes and claims ..............................................	73
13.3 Employees .....................................	73
13.4 List of shareholdings .....................	74
13.5 Auditor and auditor’s remuneration .................................	74
14 Events after the reporting period ........	74
6. Sustainability at X-FAB ............................	76
6.1 Implementing sustainability within    X-FAB ......................................................	77
6.1.1 Organization and governance ........	77
6.1.2 Sustainability strategy and materiality assessment .................	78
6.1.3 Impact, risk, and opportunity (IRO)	79
6.1.4 Sustainability goals .........................	79
6.1.5 Stakeholder engagement .............	80
6.1.6 Digital transformation ....................	83
6.2 Environment ...........................................	86
6.2.1 Climate change .............................	86
6.2.2 Water ..............................................	92
6.2.3 Pollution of air, materials and waste management ......................	92

6.3 Social .......................................................	93
6.3.1 People .........................................	93
6.3.2 Social commitment ....................	100
6.4 Governance ............................................	101
6.4.1 Anti-corruption and bribery .........	101
6.4.2 Supplier relationship management .................................	102
6.4.3 Handling of minerals from conflict regions (conflict minerals).........................................	103
6.4.4 Data security ..................................	104
6.4.5 Customer support .........................	104
6.5 EU taxonomy ..........................................	105
6.6 Statutory auditor’s limited assurance report on the consolidated sustainability information of X-Fab Silicon Foundries SE ..............................	114
7. Corporate governance statement ........	119
7.1 Shareholders ..........................................	119
7.2 Management structure .........................	119
7.3 Board of Directors .................................	120
7.4 Committees ............................................	122
7.5 Executive Management ........................	123
7.6 Diversity policy .......................................	123
7.7 Remuneration report .............................	123
7.8 Policy on certain transactions ..............	128
7.9 Internal control and risk assessment procedures in relation to financial reporting .................................................	128
7.10 Description of certain information from the Articles of Association and elements pertinent to a takeover bid ..	129
7.11 Auditor ....................................................	130
7.12 Compliance with the 2020 Belgian Code on Corporate Governance ........	131
8. Shareholder information ..........................	132
9. X-FAB SE statutory accounts ................	134
10. Risk factors ..................................................	136
11. Glossary ........................................................	140

Note:

The Annual Financial Report in ESEF format is the official

version of X-FAB’s Financial Report. Other versions are

provided on a voluntary basis for convenience. In the event of

any conflict, the Annual Financial Report in ESEF format shall

prevail. The ESEF version can be downloaded here:

www.xfab.com/investors.

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	Annual Report 2024 | Letter to our stakeholders

Dear

stakeholders,

© Axel Sulzbache/Panos pictures

On behalf of the board of directors of X‑FAB Silicon

Foundries SE, I have the pleasure of submitting to you

the annual report for the year ended December 31,

2024, which has been prepared in accordance with

articles 3:6 and 3:32 of the Belgian Code on

Companies and Associations (BCCA).

We live in a complex world facing significant challenges

and constant change, but this also creates

opportunities. There are no easy solutions to these

challenges, but it is important that we accept them and

work together to make the world a better place, in

every respect. I am very proud of the solutions our

specialty technologies offer, enabling us to address

some of today’s most important megatrends, such as

the “electrification of everything” to mitigate climate

change, or the need for more efficient healthcare to

better manage growing and aging population.

Our specialty technologies include several flavors of

high-voltage CMOS, microsystems, and silicon carbide,

and they are tailored to the needs of X-FAB’s key end

markets: automotive, industrial, and medical. In the past

year we prototyped several hundreds of products, and

we have ramped up exciting applications such as

microsystems for advanced headlamps, BCD-on-SOI

for automotive battery monitoring systems, and

contactless temperature sensors for medical

applications.

All of these products make a difference in our lives.

However, there is no time to rest. Innovation is in our

DNA, and in 2024 we continued to explore new

opportunities to stay competitive, meet the ever-

changing market needs, and ensure long-term

sustainable success. A particular example of innovation

that I would like to highlight is silicon photonics. X-FAB

is coordinating the EU-funded PhotonixFAB project,

which aims to establish a European silicon photonics

value chain. This project builds on our expertise in SOI

technologies and heterogeneous integration. Although

the revenue contribution in 2024 has been small, this

groundbreaking technology has great potential; it is

used in medical sensors, LIDAR, high performance

computing, and quantum computing applications, to

name but a few.

In 2024 our business was impacted by the weak

economic climate coupled with global uncertainties, on

the one hand, and high inventory levels in the supply

chain on the other. This triggered inventory

adjustments in the semiconductor industry, with impact

and severity varying by end market and technology

type. Overall, X-FAB recorded revenues of USD 816.4

million in 2024, down 10% from the record level

achieved in 2023. Within this, X-FAB’s automotive

business recorded year-on-year growth of 2% despite

the weak environment, while industrial and medical

business declined by 25% and 16%, respectively. By

technology type, X‑FAB’s CMOS business was down by

6% and microsystems business decreased by 4%. Our

silicon carbide business declined by 30% year-on-year,

being impacted the most by the SiC inventory

corrections.

In this rather weak environment, we posted a solid

EBITDA margin of 23% in 2024, compared to 6%

during the previous downturn in 2019. X-FAB has

become a much more resilient company in recent

years, and this is no coincidence; our positive

development is the result of the successful

transformation of our business that we have been

driving forward. This includes the transition to

increasingly complex technologies to grow the share of

high value-added business in our key end markets,

which accounted for 93% of total revenues in 2024. It

is also due to the optimization and automation projects

across the Group that are helping to improve

productivity, and it reflects the economies of scale

from increasing production at existing sites, supported

by X‑FAB’s major capacity expansion program.

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	Annual Report 2024 | Letter to our stakeholders

Our three-year expansion program was launched in

2023 with a total volume of more than USD 1 billion

over three years, of which we spent the main portion of

USD 510 million in 2024. What may have seemed like a

contradiction, given that these high levels of

investment coincided with market weakness, is not.

The majority of these investments were made in the

expansion of our popular 180nm CMOS platform, for

which demand has been holding up well. The additional

capacity is essential to support the needs of our

customers and the strong new business pipeline going

forward. I am therefore very pleased with the progress

we have made on our expansion projects. We have

successfully completed the construction of the new

building and cleanroom at our Malaysian site, and we

have started to install equipment; first production is

expected to commence in the second half of 2025.

Additional equipment has been delivered to our

French site as part of the expansion program, and we

have made good progress in ramping up production. In

addition to complementing the 180nm CMOS capacity

of X-FAB Sarawak in Malaysia, X-FAB France will also

support the business with our new state-of-the-art

110nm BCD-on-SOI technology.

In response to market weakness, in 2024 we halted

investments to expand our silicon carbide capacity.

However, silicon carbide remains one of the key

technologies supporting the transition to electric

mobility and renewable energy, and X-FAB is perfectly

placed to grow this business significantly. I am very

excited about the next-generation SiC process

platform that we launched in 2024. This enables our

customers to accelerate product development and

benefit from a 30% increase in dies per wafer.

Although volume production was low in 2024, we

recorded a record activity of new product

developments.

At X-FAB we recognize that sustainable success can

only be achieved when business success is balanced

with environmental protection and social equity, and

we want to do our part by reducing carbon emissions

and water consumption, promoting and fostering a

diverse and inclusive corporate culture, and selecting

suppliers responsibly. Most importantly, we will

continue to use all our expertise and innovative

strength to further increase the share of technologies

that enable the development of sustainable and

energy-efficient products. In my opinion, this is

X‑FAB’s most important contribution to sustainability.

Unfortunately, however, today’s reporting

requirements do not adequately reflect this, and the

administrative burden on companies is excessive.

We will continue to improve X-FAB’s sustainability

reporting over time and in line with the requirements of

our stakeholders, but legislation needs to be

streamlined so that companies can focus on taking real

action to tackle challenges such as global warming,

which is one of the existential threats facing the world

today.

In December 2024 X-FAB received a very special

honor; we won the prestigious Onderneming van het

Jaar® 2024 (Entrepreneur of the Year® 2024) award in

Belgium. This award is organized by EY annually and

covers the whole globe, and our success is testament

to the hard work, dedication, and passion of everyone

at X‑FAB. I am very proud of this achievement, and I

would like to express my sincere thanks to the entire

X‑FAB team for their exceptional contributions and for

being part of our xfabulous global team.

I look forward to continuing to work with all X-FAB’s

stakeholders in 2025 and beyond, and I thank you for

the trust you have placed in us.

There have been no major events that require

disclosure since December 31, 2024.

Best regards,

Rudi De Winter

CEO

6

7

8

	Annual Report 2024 | Our culture

3. OUR CULTURE

OUR VISION

To be the foundry of choice for the analog world.

OUR MISSION

We are fully engaged to be the foundry of choice for

the analog world by focusing on innovative solutions

and manufacturing excellence that meet customer

expectations, enabling long-lasting success for all our

stakeholders.

OUR VALUES

Strong values build the basis for the success of X-FAB,

the way we work together, and how we interact with

each other and with our stakeholders. At X-FAB, we

put our clients and customers at the center of what we

do, and our values of integrity and respect, teamwork,

commitment, and innovation are guiding us every day

to live up to being a customer-oriented company.

Fig. 3.1: X-FAB’s corporate values

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	Annual Report 2024 | Our culture

Social media highlights 2024

10

11

	Annual Report 2024 | Our business

4. OUR BUSINESS

X-FAB is a global foundry group providing a

comprehensive set of specialty technologies and design

IP to enable its customers to develop world-leading

semiconductor products that are manufactured at

X-FAB's six wafer fabs located in Malaysia, Germany,

France, and the United States. With its expertise in

analog/mixed-signal technologies, microsystems/MEMS

and silicon carbide (SiC), X-FAB is the development and

manufacturing partner for its customers, primarily serving

the automotive, industrial, and medical end markets.

The specialty foundry business model

In the semiconductor industry there are two different

business models: the fabless/foundry model and the

integrated model. While the so-called IDMs (integrated

device manufacturer) cover the entire value chain, the

fabless/foundry model means that the semiconductor

value chain is split into companies specializing in the

design of ICs (integrated circuits), so-called fabless

companies, and those who provide process technologies

and manufacturing capacities, so called foundries.

The advantages are specialization effects on both sides,

the freedom fabless companies have to select the

foundry with the best technological offer for their needs,

and the higher efficiencies foundries can achieve by

consolidating the demand of many different customers

to drive utilization up and take advantage of the high

operational leverage. Additionally, X-FAB’s customers,

mainly fabless companies, do not need to fear

competition as X-FAB does not design its own products.

As a specialty foundry, X-FAB is the development

and manufacturing partner for its customers that

design analog/mixed-signal ICs, microsystems/MEMS

and SiC devices for use in their own products or the

products of their customers. X-FAB offers a modular,

highly specialized portfolio of process technologies

and associated design IP, enabling innovative

semiconductor products. X-FAB’s customers design

their products on the basis of these technologies and

contract X-FAB for their manufacturing.

Fig. 4.1: Value chains for foundries, fabless companies, and IDMs

The X-FAB Group has an established track record with

over 30 years of experience providing proprietary

manufacturing processes and advanced design and

engineering support offerings. Excellent service,

reliability, and first-class technical support: that’s what

X-FAB stands for.

X-FAB’s technology offering

X-FAB offers its customers a wide range of enhanced

options across many semiconductor technologies,

designs and processes, including complementary

metal-oxide semiconductor (CMOS), silicon on

insulator (SOI), silicon carbide, and micro-electro-

mechanical systems (MEMS). Customers can draw on a

variety of features in order to develop ICs specifically

tailored to their end-use requirements and to optimize

product performance, product size, power

consumption, and other parameters. Currently, the

foundry offers process technologies with feature sizes

of 1.0μm on 150 mm wafers and 350nm, 180nm, 130nm

and 110nm on 200 mm wafers.

CMOS and SOI: X-FAB’s open-platform technologies

The vast majority of X-FAB’s technologies are based

on CMOS, with SOI being a specialty variant offering a

so-called SOI layer for better technical performance

within certain electrical parameters. These processes

are available for all customers and include

performance-optimized primitive analog devices such

as low-noise transistors, high-voltage transistors (up to

700-volt breakdown voltage), or integrated sensor

elements such as optical sensor diodes.

Even though those open-platform technologies

typically address multiple applications and sometimes

12

	Annual Report 2024 | Our business

more than one market, most of them are qualified for

automotive use and support high temperatures up to

175°C. In 2024, revenues based on X-FAB’s CMOS

technologies amounted to USD 679.3 million.

The extensive IP offering comes with the option of

customizing certain IP blocks, which means that

customers can combine X-FAB IP with their own IP for

optimized functionality. To enable fast and easy design of

new products, X-FAB also provides process design kits

(PDKs), libraries with digital and analog circuit elements,

and complex IP blocks such as embedded flash

memories, related software, and consultancy services.

X-FAB’s DNA: Analog/mixed-signal ICs

X-FAB produces microchips and other semiconductor devices. These microchips and devices prepare real-world signals from the analog world (sensory data such as sound, light, pressure, motion, temperature, etc.) for subsequent digital processing or converting digital values into analog signals. Mixed-signal circuits (also referred to as “analog/mixed-signal ICs”) embed both digital and analog circuitry onto a single IC. With more and more electronic devices interfacing with the “real world” (such as through the Internet of Things, IoT), the demand for such devices is growing continually, making mixed-signal semiconductor ICs an increasingly important part of the market for electronic equipment.

X-FAB’s open platform technology portfolio (see

Figure 4.2) spans geometries from 110nm to 1.0μm.

All these technologies share the common principle of

high modularity and support the selection of the

different process features based on the specific

product needs, which enables a wide range of

applications. The technology portfolio is continuously

enhanced, driven by customer demand and by the

needs of future products. Existing technologies are

updated with improved features and new modules,

which extend the application area and improve the

performance while using the same technology.

Examples are the integration of next-generation high-

voltage modules within the XP018 technology or the

introduction of new high-performance photodiodes in

the XS018 technology. Likewise, new platform

technologies like the 110nm BCD-on-SOI technology

XT011 enable the long-term customer product

roadmaps and support a smooth transition from

previous technology nodes.

Fig. 4.2: X-FAB open platform process portfolio and features

A major advantage of X-FAB's open platform

technologies is their modularity. Digital features can

be combined with a wide range of analog functions,

including high-voltage, embedded sensors and MEMS.

Individual modules and features can be selected

according to product requirements, allowing for a

wide range of products while helping to increase the

customer base for the technology.

The demanding requirements of automotive

applications often determine the key process features

of open platform technologies. A good example is the

deep trench isolation (DTI) in X-FAB's 180nm and

110nm BCD-on-SOI technologies. DTI forms the basis

of robust and reliable dielectric isolation between low

and high voltage regions on a chip. Driver circuits

operating at up to 375 volts can be placed next to

sensitive amplifiers handling low voltages of a few mV.

DTI enables reliable protection against electrostatic

discharge (ESD) and electromagnetic interference

(EMI), making it safe for use in cars.

X-FAB supports the automotive quality standard

AEC‑Q100 grade 0 up to 175°C, allowing the

development of ICs that fulfil the high automotive

temperature profiles. Such high temperatures can

occur close to the combustion engine in hybrid electric

vehicles, in battery management systems, or close to

the inverter of electric vehicles.

13

	Annual Report 2024 | Our business

Microsystems: Bridging the physical and the

microelectronic worlds

Microsystems are miniaturized components that

combine the functions of entire systems or

subsystems. At X-FAB’s Microsystems business unit,

the goal is to deliver custom solutions that serve as the

interface between microelectronics and the physical

world. X-FAB focuses on three key technology areas:

• MEMS (micro-electro-mechanical systems), which

integrate mechanical functions with electronics;

• monolithically integrated on-chip solutions for

sensors, sensor interfaces, and actuators with

analog/mixed-signal ASICs; and

• advanced wafer-level integration, including 2.5D

integration and heterogeneous integration.

These systems use complex processes to create

silicon-based structures or components that convert

mechanical parameters, like pressure or acceleration,

into electrical signals. MEMS and microsystem devices

are used in a variety of products and modules, such as

airbags, medical diagnostic tools, and inkjet printer

heads. Unlike integrated circuits, MEMS development

often requires customizing manufacturing processes

to the final product’s specifications, which can lead to

higher development costs and longer timelines.

However, this also opens opportunities to create

products with unique features and strong intellectual

property protection due to the specialized knowledge

embedded in the production process.

Manufacturing MEMS products also necessitates the

use of materials that are typically avoided in integrated

circuit production to prevent contamination.

Consequently, manufacturers either specialize in

MEMS production or, like X-FAB, maintain separate

facilities for producing CMOS and MEMS wafers.

X-FAB is leveraging its existing capabilities to further

expand addressable MEMS and microsystems

applications, with particular focus on the medical

domain. This expansion, coupled with its ability to

respond to customer needs and integrate additional

manufacturing steps into the supply chain, has been

central to the success of its MEMS business.

A major proportion of X-FAB’s MEMS and microsystems

products - 72% - go into the automotive market

segment. The consolidation and decrease in demand

generally observed in the automotive sector as a whole

also had a significant impact on X-FAB’s microsystems

business which recorded revenues of USD 91 million in

2024, down 4.4% compared to the previous year.

While sensors and actuators remain traditional MEMS

applications, X-FAB continues to build on its

established processes to grow in this area. The

Company offers next-generation sensor technologies

for relative and absolute pressure sensors across

various media, including those exposed to corrosive

and high-temperature environments. Additionally,

X‑FAB provides proprietary inertial sensing technology

(XMB10) for accelerometers and gyroscopes in the X,

Y, and Z axes. This platform is gaining momentum

through its availability via the EUROPRACTICE

initiative, which supports low-entry design and

fabrication of electronic circuits.

X-FAB’s gas and flow sensors leverage its well-

established noble-metal processes to create compact

sensor devices, while temperature sensors based on

the thermopile principle require precise etching

processes. This part of X-FAB’s MEMS business

focuses on continuous technological and operational

improvement.

An emerging technology in the market are thin-film

piezoelectric MEMS. Supported by strong partnerships

with research organizations, X-FAB is currently

developing a piezo-MEMS technology based on

aluminium nitride (AlN). This material offers superior

performance figures compared to established thin-film

piezoelectric materials while enabling energy-efficient

and environmentally friendly products. Since AlN can

be processed using standard semiconductor

equipment, it enables scalable and cost-competitive

manufacturing and a high degree of integration on

device level. Typical applications include ultrasound

transducers for proximity sensors or fingerprint

sensors, bio-sensors, and MEMS printheads.

Medical and pharmaceutical research is advancing

rapidly through the use of silicon technology. Lab-on-

a-chip devices, which integrate microfluidic structures

onto silicon chips, are critical components in today’s lab

equipment. CMOS chips, capped with glass or coated

with antibodies, are employed to directly analyze

biological samples. This miniaturization reduces the

probe size to just a few microliters and shortens testing

time, allowing for smaller, lighter devices that can

perform on-site sample analysis, such as at a patient’s

home. The COVID-19 pandemic highlighted the urgent

need for fast, cost-effective testing. DNA sequencing,

virus mutation detection, pathogen identification in

blood samples, and monitoring cell responses to

pharmaceuticals are other critical applications for this

technology.

Glass wafer processing, a crucial capability offered by

X-FAB, is being utilized in biomedical and life science

devices. The integration of robust analog/mixed-signal

CMOS technologies with specialized post-processing

for medical applications is generating considerable

interest in the market. X-FAB’s customer base includes

both established companies expanding into new

application areas and innovative start-ups aiming to

combine integrated circuits with microfluidic structures

on lab-on-a-chip devices. X-FAB’s platform approach

enables the Company to support a wide variety of

applications, driving dynamic business development

and revenue growth. Further investments in

development and facilities will allow X-FAB to deliver

comprehensive solutions to medical customers.

X-FAB’s microsystems business unit also offers 3D

integration and wafer-level packaging capabilities.

Through-silicon vias (TSVs) are key for 3D stacking of

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	Annual Report 2024 | Our business

integrated circuits and components. While the first

sensor products using this technology are being

ramped into mass production, X-FAB has successfully

engaged in development projects with additional

customers, supporting applications like cellular

research and next-generation computed tomography.

Micro-transfer printing, an emerging technology for

wafer-level assembly of micro-components on foreign

chips or substrates, shows promise in applications such

as integrating micro LEDs for high-performance

displays or photonics integrated circuits for data

communication and life sciences. X-FAB is also

exploring other methods for integrating

heterogeneous electronic components in system-in-

package (SiP) designs, working with research and

technology organizations (RTOs) in alignment with

industry trends and the EU Chips Act.

X-FAB’s microsystems business unit successfully

initiated two projects within the IPCEI (Integrated

Project of Common European Interest) framework,

aimed at developing and demonstrating innovative

technologies for heterogeneous integration in

communication, automotive, and medical applications,

as well as glass wafer processing for biomedical

applications.

These activities align with customer demands and aim

to enhance X-FAB's value creation throughout the

supply chain. The strong collaboration with X-FAB

customers, reflected in substantial prototyping

revenue from the MEMS business, suggests a

promising future for these initiatives.

Silicon carbide: Powering the future of energy and

mobility

X-FAB pioneered the foundry market for wide-

bandgap materials when it entered the SiC business,

establishing itself as the leading pure-play foundry for

SiC. Following strong performance in previous years,

X-FAB’s SiC business recorded revenue of USD 51.6

million in 2024.

SiC is a semiconductor substrate that, thanks to its

material properties, supports the global trend to reduce

greenhouse gas emissions. In the transition to CO2

emissions-free mobility and transport, devices

manufactured in SiC address two of the main challenges:

driving range and charging time. The use of SiC

technology in components used in the power trains

powering electric vehicles helps extend the driving range

achievable with one battery charge by approximately 9%.

Similarly, used in charging infrastructure, SiC enables

high-power, high-speed DC charging.

SiC is an already established material for components

in the energy sector. An increasing number of suppliers

are moving towards greener and more sustainable

energy technologies. At the same time, the demand

for electrification is growing dramatically, creating an

ever‑growing market for these components. SiC

transistors are a core component in systems for power

generation from renewable sources such as

photovoltaic or wind energy. SiC also enables huge

energy savings in power supplies for data centers,

computers, chargers for mobile phones, and devices

for the Internet of Things.

The majority of devices manufactured in silicon carbide

are offered by integrated device manufacturers (IDM)

designing, manufacturing, and selling semiconductor

components under their own brand. X-FAB decided to

offer silicon carbide processing capabilities to a variety

of customers, strictly following its business model as a

specialty foundry. Customers are enabled by X-FAB to

develop solutions based on their own specifications to

differentiate and compete in the market.

X-FAB’s success as the number 1 foundry for SiC is

built on four pillars:

• secure supply chain;

• leading technology offer;

• economy of scale; and

• trusted partnership.

Customers sourcing SiC wafers from X-FAB can rely

on the supply chain that has been established for the

entire foundry business for over 30 years. The access

to leading technology in services, equipment, and

processes enables them to create outstanding device

performance. The existing foundry infrastructure

ensures ramping to production volumes individually

suited to any respective customer and product need.

Since the launch of its foundry offer for silicon carbide,

X-FAB has achieved a number of successes. X-FAB

provides standard process blocks that supports

customers in the development of diodes and transistor

products across the broad technology platform that

has been established in recent years. A state-of-the-

art tool set is available for all relevant process steps,

enhanced with next-generation processing capabilities.

This has enabled the thinning of wafers and solderable

backside metals. X-FAB has established collaborations

with design houses that can support customers during

product design and has built an extensive processing

knowledge base that will support each customer with

their individual process.

X-FAB has established long-term partnerships with its

customers and is supporting more customers than

ever. The majority of the non-IDM suppliers of SiC

devices are choosing X-FAB as their manufacturing

site. Also, smaller IDMs leverage the unique capabilities

offered by X-FAB for their products.

The SiC processes are complementing X‑FAB’s offer

for power electronics in the automotive and industrial

markets. A growing number of customers using

X‑FAB’s SiC technology, strong growth in prototyping

revenue, and increasing production volumes from a

variety of customers support the promising outlook for

this part of X-FAB’s business.

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	Annual Report 2024 | Our business

SiC revenues for the full year reached USD 51.6 million,

demonstrating resilience in a year marked by a market

stall that impacted the entire SiC supply chain. Despite

these challenges, X-FAB continued to see strong

interest, and is expanding its SiC-related equipment

and capabilities to position itself for future growth as

market conditions stabilize and recovery begins.

Innovation: an essential part of X-FAB

Innovation is one of X-FAB’s core values and

embedded at all levels of the organization. X-FAB's

collaborative and forward-thinking culture is fostered

through internal innovation programs and cross-

functional teams. It is addressed in the Group through

various initiatives such as hackathons, internal projects,

and publicly funded programs.

Highlights from 2024 are:

• Release of a new embedded flash non-volatile

memory in 110nm BCD-on-SOI technology.

The memory solution is based on the proven and

robust SONOS technology and enables highly

efficient design of products requiring memory

access over the entire automotive temperature

range from -40°C to 175°C.

• Extension of the 180nm automotive-grade

platform with second-generation high-voltage

components that enable more cost-effective

products with improved operational robustness.

• Introduction of a new generation of photodiodes in

the 180nm image sensor technology platform with

increased sensitivity. These new components offer

customers improvements in terms of their

operational capabilities and reliability.

• Launch of the next-generation SiC process

platform, which enables up to 30% increase in dies

per wafer compared to the previous generation,

while maintaining robustness as well as breakdown

performance.

• The photonics customer engagement portal has

been launched as part of the EU-funded

photonixFAB project, which marks an important

step towards establishing a European value chain

for photonics. The portal will enabling first

technology evaluations and early product

development over the course of 2024 to 2026.

PhotonixFAB is supported by the Key Digital

Technologies Joint Undertaking (KDT JU), with

funding from the EU and the national authorities.

Possible applications for the capabilities to be

developed include data communication, telecoms,

biomedical sensors/detectors, quantum

computing, and vehicle LiDAR.

• 29 new patent applications and 37 patents were

granted in 2024, contributing to an overall patent

portfolio of 467 patents and patent applications.

Investments in additional capacity,

capabilities, and productivity improvements

X-FAB has been making significant investments in the

expansion of its production capacity to meet the

demand of its customers. X-FAB is creating additional

production capacity at the 200 mm CMOS sites in

Kuching, Corbeil‑Essonnes, and Dresden, and at the

SiC foundry in Lubbock. X-FAB is also investing in

additional capacity and capabilities in the

manufacturing of microsystems at its sites in Erfurt and

Itzehoe.

A main driver for productivity improvement is

automation, standardization and digitization of

processes. In 2024, X-FAB has made progress in

implementing its automation roadmap aimed at

increasing fab efficiency and productivity. This includes

software-controlled material movement, automated

equipment setup and monitoring, and automated

transport systems. Automation projects are underway

at all sites and will continue in 2025.

These expansions and activities will enable X-FAB to

manufacture products with an increased level of

integration for its customers and thus achieving

greater added value. A complex product, such as a chip

for DNA sequencing, requires 54 masks, compared

with 19 photomasks for a conventional consumer

product. This means that the manufacturing

complexity almost triples with a proportional increase

in the value of the product.

Customer orientation: Long-standing

relationships and strong product

customization

Most of X-FAB’s customers are fabless semiconductor

companies: companies that have no own

manufacturing and process technology expertise but

rely on foundries for those services and related

expertise. A smaller portion of X-FAB’s customer base

are either original equipment manufacturers (OEMs) or

integrated device manufacturers (IDMs). Overall,

X‑FAB has a diverse base of more than 390 customers

worldwide and continually wins new customers in its

core markets (see Figure 4.3).

X-FAB takes a partnership approach to working with its

customers, with the goal to achieve long-term success

together and to create innovative products that help

make the world a better place.

As a specialized foundry, X-FAB has developed a high

level of customer proximity and services. One of the

things that customers praise X-FAB for is the strong

support they get throughout the entire journey with

X‑FAB to create a microchip: from the selection of the

right process technologies, through chip design,

prototyping, and qualification, and finally the transition

to volume production.

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	Annual Report 2024 | Our business

Fig. 4.3: X-FAB’s customer count by annual revenue

X-FAB is placing great focus on enabling customers to

make the best use of its technologies and to achieve

results quickly. Time to market is of the essence, which is

mainly determined by the time it takes to prototype and

qualify a design. The goal is to achieve first-time-right

designs, i.e., aiming to ensure that the customer designs

are “right” the first time a prototype is produced.

To achieve this, X-FAB makes significant investments in

its design IP and the precision of its design models to

enable its customers to simulate and predict exactly

what they will get afterwards in real silicon.

X-FAB offers its specialized CMOS technologies

(open-platform technologies) along with a strong

design support, which its customers often refer to as

best in class. A customer who decides to work with

X‑FAB using its modular open-platform technologies

(CMOS) is provided with free access to accurate

design models, design libraries as well as complex

design IP blocks enabling fast and easy designs aimed

at being right first time. X-FAB, as opposed to its

competitors, does not rely on third-party providers to

develop this design IP; this is done in-house.

MEMS and SiC devices are typically highly specific and

there are almost no standard open-platform MEMS

technologies available. This is referred to as customer-

specific technologies. Such technologies require high-

touch customer interactions to manage all the

challenges arising from concurrent technology and

device development, which adds significant value and

drives long-lasting customer engagements.

Fig. 4.4: Illustrative lifecycle for automotive: Analog/mixed-

signal products are much more specialized for their

applications and are used for many years

Due to the high degree of product customization

usually required by customers, X-FAB as a specialty

foundry is less vulnerable to the extreme price and

demand volatility experienced by many competitors in

the broader foundry market. X‑FAB’s focus on highly

customized analog/mixed-signal ICs results in smaller

production volumes per each product and requires

more engineering input per unit creating a high value-

add for the customer.

The long-term availability of these high-quality

products is essential for X-FAB’s customers, since

X‑FAB is the sole source for more than 90% of the

products it manufactures. A large portion of these

products have long product lifecycles of ten or more

years. For example, X-FAB’s first medical MEMS

product, a sensor used to monitor blood pressure, has

been in production for more than 25 years.

These are all important aspects that contribute to very

close customer relationships. The great support that

X‑FAB offers throughout the development and

lifecycle of a product and the considerable effort

required by the customer to migrate products to other

foundries, an effort that would often be equivalent to a

new development, result in strong customer loyalty.

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	Annual Report 2024 | Our business

Fig. 4.5: X-FAB aims to differentiate its business through unique technologies combined with excellent technical support. A strong

asset of X-FAB is its close collaboration with customers in every phase of an IC product lifetime. From a request for a quotation

and the selection of the best suited process technology to the start of volume production, X-FAB has dedicated teams to assist its

customers with technical, commercial, and logistical support and consultation.

X-FAB’s strategic markets

Fig. 4.6: X-FAB’s strategic markets and main application areas

X-FAB serves the markets for automotive, industrial,

and medical (AIM) applications. The AIM market

segments all share the same requirements for quality

and reliability and feature similar long product lifetimes.

Consequently, X-FAB places a strategic focus on AIM

while selling into the market for consumer,

communications, and computer (CCC) products when

product requirements demand technologies that are

within X-FAB’s existing portfolio.

Development of the business in 2024 was

characterized by the reduction of inventories that

customers had built up in previous years in response to

the chip shortage. X-FAB’s automotive business

remained flat with 1.5% growth, slightly above the

previous year. Business in the industrial segment fell by

25% due to weak demand for silicon carbide, which is

mainly sold to the industrial end market. Revenues

achieved with medical applications shrunk by 16%,

reflecting the effects of inventory adjustments.

On the other hand, a high level of prototyping activity

and a number of new product launches in the fourth

quarter, including an application for battery monitoring

systems for electric vehicles, will contribute positively

to X-FAB’s automotive business going forward.

Industrial CMOS revenue started to recover in the

fourth quarter. Inventory adjustments in the industrial

end market, which began as early as 2023, are slowly

coming to an end. Medical bookings continue to be

above average, with strong growth coming from

applications for personal medical devices, such as

contactless temperature sensors, pacemakers, and

hearing aids.

X-FAB enables innovative solutions to address global

challenges such as:

• global warming;

• the replacement of fossil energy by sustainable

energy; and

• the cost of healthcare and an aging population.

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	Annual Report 2024 | Our business

X-FAB is confident of success due to its:

• close collaboration with market leaders in various

segments;

• ongoing investment in new technologies;

• wide portfolio of technologies and capabilities; and

• strong pipeline of projects in prototyping stage.

Automotive electronics – We think automotive

Product reliability and established trust in suppliers are

two key prerequisites for successfully serving the

automotive industry. Meeting these demands is part of

X-FAB’s DNA.

Furthermore, X-FAB actively supports its automotive

customers in driving innovation in electronics. In

addition to further developments in advanced vehicle

safety and comfort systems, the electrification of

vehicles might be the biggest technology shift the

automotive industry has ever seen. By 2040 electric

vehicles will represent about 70% of global light duty

vehicle sales, according to Bloomberg. As cars become

more and more sophisticated, X-FAB will be right there

to develop the technologies to make it happen.

All these new technologies combined are leading to

a sharp increase in the number of semiconductor

devices in a car. Based on 2020, the total value of the

automotive semiconductor market is expected to

triple by 2030, with demand for analog chips growing

much faster than demand for microcontroller units

(MCU).

Around two-thirds of the chips in a car can be realized

with the processes offered by X-FAB. With CMOS,

BCD-on-SOI and SiC, X-FAB offers the right mix of

technologies, and with its optimization for processing

analog signals the right features for chips that interface

with the "real world."

ICs produced at X-FAB can be found everywhere in a

car – in the interior as well as under the hood. Functions

directly accessible to the driver, such as control of the

interior lighting, hands-free phone kits, and parking

assistance, as well as tire pressure monitoring and

anti‑lock braking systems, all make use of X-FAB

technologies.

	NEXT-GEN ADAPTIVE HEADLIGHTS EXPLAINED
	Ten or twenty years ago, a car's headlight was just a light bulb in a reflective bowl. Today, one in four cars has so-called adaptive headlights. They guide the driver through curves or prevent oncoming traffic from being dazzled. Over the past five years, X-FAB has worked with a customer to develop an industry-leading technology called high-resolution adaptive headlights. At the heart of this technology is a chip with 25,000 LEDs. X-FAB manufactures the CMOS wafer and special functions and layers in its microsystems facility. The customer applies the LEDs. Each of the 25,000 LEDs can be controlled individually, and in combination with an intelligent camera, the system adjusts the high beam by turning off certain LEDs to prevent others from being blinded. It can also increase driver attention by projecting images onto the road to indicate hazards and dangers. This new technology is a major step forward in improving the safety of driving in the dark.

The electrification of cars requires intelligent

solutions for battery management and charging.

Batteries for electric vehicles consist of several

thousand individual battery cells, each of which needs

to be monitored by the so-called battery management

systems (BMS). The temperature, the voltage, and the

charge of each cell must stay in an optimal range. The

better this is managed, the further the car can drive.

Typically, a BMS has up to 16 ICs to manage the

battery. X-FAB’s analog-mixed signal processes with

their high-voltage and high-temperature capabilities

and their rich portfolio of IP including embedded flash

memory are particularly well suited for this. Transistors

manufactured at X-FAB's SiC foundry enable inverters

with higher efficiency and contribute to increased

range on a single battery charge.

Safety in traffic will be improved by sophisticated

techniques of collision prevention, distance control,

lane change assistance, and blind spot detection,

ultimately paving the way for autonomous driving.

The increasing relevance of environmental protection

is leading to innovations to improve fuel efficiency and

reduce pollution of hybrid vehicles. Connected cars will

be enabled by the advent of 5G cellular mobile

networks.

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	Annual Report 2024 | Our business

Industrial electronics – We empower

the future

The market for application-specific analog ICs for

industrial applications is a highly fragmented market

spanning applications from avionics to factory

automation. About 60% of X-FAB’s current customers

in production address the industrial market and rely on

X-FAB’s ability to provide volume production over a

10- to 15-year period. Four global megatrends are

driving the next industrial revolution and will change

our way of producing, consuming, and living: Industry

4.0 with an end-to-end connected value chain;

factory automation including industrial IoT, robots,

machine-to-machine communication; smart cities,

enabling central building management and improving

urban lives through interaction and management of

connected services; and, finally, sustainable energy

through exploiting renewable sources of energy and

improving power management.

X-FAB is positioned to play a major role in addressing

those megatrends based on its commitment to

industrial markets and customers. The Group’s

competitive advantages rely on four pillars:

• Easy to work with. Collaboration with X-FAB is

made easy for industrial customers as X-FAB can

efficiently handle small to medium volumes often

required for industrial applications.

• Design support. X-FAB provides comprehensive

design support and high-quality IP to achieve first-

time-right design. For industrial customers that

want to outsource their IC design efforts, X-FAB

maintains a global partner network of service

providers for design, test, assembly, and supply

chain management.

• X-FAB’s quality systems. X-FAB’s automotive

technologies fit well with most industrial

applications, which often also operate in harsh

environments.

• X-FAB is a reliable foundry partner. X-FAB is a

trusted supplier and has built long relationships with

its industrial customers.

Medical electronics – We save lives

The chips X-FAB manufactures for medical

applications are used in equipment or devices where

people, doctors, and patients depend on reliable,

accurate, and error-free operation or data. X-FAB

delivers chips for personal medical devices from

cardiac pacemakers and spinal cord stimulators to

traditional and implanted hearing aids. X-FAB’s

specialized technologies can be found in equipment

for medical imaging technologies such as ultrasound

and X-ray sensors.

A trend for the next few years is the evolution of

consumer wearables with the aim of medical

precision, offering the user actionable insights into her

or his physical conditions.

Implantable devices are very important for patients

with chronic diseases, and research in this area will

continue to provide new therapies, for example for

rheumatism, strokes, or obesity. Portable devices will

move medical imaging from hospitals and medical

practices to patients’ homes for point-of-care testing.

Further trends in ultrasonic imaging are wireless probe

heads and 3D imaging.

With the rapid decline in the costs of DNA sequencing

since the availability of next-generation sequencing

technology in 2007, new uses have been introduced

for health care, industry, and research. There are not

only companies that offer genetic testing as a service,

DNA sequencing is also being used for the analysis of

pathogens helping to contain epidemics as well as the

examination of food to identify contamination or

allergens. The availability of affordable genetic

information is pushing the development of

personalized medicine, with great benefits for patients

and huge potential for cost-saving in the health care

sector as a result of more effective therapies. Lab-on-

a-chip or microfluidics are devices to handle minute

quantities of liquids or biomaterial, usually on a chip or

in a small cavity. That is where X-FAB’s capability to

combine CMOS and MEMS is a key benefit.

Manufacturing steps, for which customers initially had

to engage with several suppliers, are now provided by

X-FAB exclusively.

According to market research, the lab-on-a-chip

market is expected to grow at a CAGR of up to 14%

over the next five years.

Consumer, communications, and computer –

We connect people

X-FAB’s specialty technologies are also used in the

CCC market enabling applications such as optical

sensors, camera autofocus, haptic drivers, touchscreen

controllers, and gesture recognition solutions to create

intuitive user interfaces that guarantee a great mobile

experience.

Devices for augmented reality (AR) and virtual reality

(VR) require a multitude of sensors, analog/mixed-

signal chips, and wireless connectivity. X-FAB’s high-

voltage CMOS and SOI technologies enable enhanced

power management solutions to improve the energy

efficiency of consumer devices, communication

infrastructure, and computers. Examples where chips

manufactured by X-FAB help to reduce power

consumption, optimize battery lifetime, and prolong

device usage are AC/DC chargers, 5G base station

switches, and battery management ICs for power tool

applications.

21

	Annual Report 2024 | X-FAB consolidated financial statements

5. X-FAB CONSOLIDATED

FINANCIAL STATEMENTS

5.1 Summary of important developments

Revenue and results

The Group’s total sales revenue in 2024 amounted to

USD 816,383 thousand (2023: USD 906,786

thousand), a decrease of 10% compared to the

previous year. The decrease is due to a fall in demand,

mainly due to inventory adjustments in the automotive

supply chain. The Group recorded a net profit in 2024

of USD 61,526 thousand compared to a net profit of

USD 161,895 thousand in the previous year.

Gross profit decreased from USD 258,052 thousand in

2023 to USD 182,949 thousand in 2024 as a result of

the lower sales revenues.

Operating profits and profit before tax in the previous

year were reduced by costs amounting to USD 5,095

thousand incurred to settle a third-party liability claim

for damages (note 6.10).

Cost of sales

Cost of sales includes material expenses such as raw

materials, the costs of maintaining fixed assets,

depreciation, staff costs, and costs for external

services. In 2024 cost of sales decreased by

USD 15,300 thousand or 2% compared to the financial

year 2023. The fall in cost of sales was lower than the

fall in revenues, reflecting the Group’s substantial fixed

cost base and increases in the procurement cost for

materials.

Research and development expenses

Research and development expenses amounted to

USD 49,785 thousand in 2024, representing 6% of

revenue (2023: 5%). Compared to the previous year

the research and development expenses increased by

5%. The Group’s research and development activities

focus on development of new fabrication processes,

optimization of existing processes using the Group’s

key process technologies, and development of new

integrated circuit features in order to meet customers’

analog/mixed-signal needs.

General, administrative, and selling expenses

General, administrative, and selling expenses increased

by 1% in 2024.

Financial result

The Group’s net financial expense (finance costs less

finance income) amounted to USD 2,254 thousand

(previous year: net expense of USD 2,491 thousand).

5.2 Statement of the Board of Directors

The Board of Directors certifies, on behalf and for the

account of the Company, that, to their knowledge,

• the consolidated financial statements, which have

been prepared in accordance with IFRS as adopted

by the EU, give a true and fair view of the assets,

liabilities, financial position, and profit or loss of the

Company and the entities included in the

consolidation as a whole; and

• the annual report provides a fair view of the

development and results of the Company and the

companies included in the consolidation, as well as a

description of the main risks and uncertainties that

they are exposed to.

5.3 Statutory auditor’s report to the general

meeting of X-Fab Silicon Foundries SE on the

consolidated financial statements as of and

for the year ended December 31, 2024

In the context of the statutory audit of the

consolidated financial statements of X-Fab Silicon

Foundries SE (“the Company”) and its subsidiaries

(jointly “the Group”), we provide you with our statutory

auditor’s report. This includes our report on the

consolidated financial statements and the other legal

and regulatory requirements. Our report is one and

indivisible.

We were appointed as statutory auditor by the general

meeting of April 27, 2023, in accordance with the

proposal of the board of directors issued on the

recommendation of the audit committee. Our mandate

will expire on the date of the general meeting

deliberating on the annual accounts for the year ended

December 31, 2025. We have performed the statutory

audit of the consolidated financial statements of the

Group for 17 consecutive financial years.

Report on the consolidated financial

statements

Unqualified opinion

We have audited the consolidated financial statements

of the Group as of and for the year ended December

31, 2024, prepared in accordance with IFRS Accounting

Standards as issued by the International Accounting

Standards Board, as adopted by the European Union,

and with the legal and regulatory requirements

applicable in Belgium. These consolidated financial

22

	Annual Report 2024 | X-FAB consolidated financial statements

statements comprise the consolidated statement of

financial position as at December 31, 2024, the

consolidated statements of profit or loss and other

comprehensive income, changes in equity and cash

flows for the year then ended and notes, comprising

material accounting policies and other explanatory

information. The total of the consolidated statement

of financial position amounts to USD 1.906.713

thousand and the consolidated statement of profit or

loss and other comprehensive income shows a profit

for the year of USD 61.526 thousand.

In our opinion, the consolidated financial statements

give a true and fair view of the Group’s equity and

financial position as at December 31, 2024 and of its

consolidated financial performance and its

consolidated cash flows for the year then ended in

accordance with IFRS Accounting Standards as issued

by the International Accounting Standards Board, as

adopted by the European Union, and with the legal and

regulatory requirements applicable in Belgium.

Basis for our unqualified opinion

We conducted our audit in accordance with

International Standards on Auditing (“ISAs”) as

adopted in Belgium. In addition, we have applied the

ISAs as issued by the IAASB and applicable for the

current accounting year while these have not been

adopted in Belgium yet. Our responsibilities under

those standards are further described in the “Statutory

auditors’ responsibility for the audit of the consolidated

financial statements” section of our report. We have

complied with the ethical requirements that are

relevant to our audit of the consolidated financial

statements in Belgium, including the independence

requirements.

We have obtained from the board of directors and the

Company’s officials the explanations and information

necessary for performing our audit.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our

opinion.

Key audit matter

Key audit matters are those matters that, in our

professional judgement, were of most significance in

our audit of the consolidated financial statements of

the current period. These matters were addressed in

the context of our audit of the consolidated financial

statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on

these matters.

Valuation of deferred tax assets

We refer to Note 4.19 of the consolidated financial

statements for the accounting policies relating to

deferred taxes and to Note 6.13 for the disclosures

relating to deferred taxes as at December 31, 2024.

Description

The Group, which is subject to various tax jurisdictions

and resulting obligations, has a significant amount of

unused tax losses carried forward (USD 226,4 million)

and deductible temporary differences (USD 263,2

million) and has recognized deferred tax assets of

USD 66,7 million as at December 31, 2024.

Deferred tax assets are recognized only to the extent

that it is probable that sufficient future taxable profits

will be generated, against which the unused tax losses

carried forward and deductible temporary differences

can be utilized. Significant judgement is required to

assess the amount of probable future taxable profits

that support the recognition of deferred tax assets.

Our audit procedures

In collaboration with our own tax specialists, we have

assessed the Group’s ability to utilize the deferred tax

assets. Our procedures included:

• Obtaining the forecasted taxable income in the

various tax jurisdictions and reconciling these to the

latest budget and forecasts approved by the board

of directors;

• Assessing the consistency and reliability of the

Group’s approach to budgeting by comparing

historical budgets to actual results;

• Challenging management’s key assumptions used

in its budget and forecasts, such as projected

growth rates, by comparing them with our own

expectations derived from our knowledge of the

industry and our knowledge gained during our audit;

• Recalculating independently the deferred tax

assets which comprise a combination of temporary

differences between tax and accounting values as

well as available tax losses;

• Assessing whether deferred tax assets had been

appropriately recognized in the consolidated

financial statements as at December 31, 2024

based on the extent to which they can be

recovered by future taxable profits; and

• Assessing the adequacy of the relevant disclosures.

Assessment of impairment indicators and the

determination of the Value In Use (“VIU”) of Cash

Generating Units (“CGU”)

We refer to Note 4.10 of the consolidated financial

statements for the accounting policies relating to

impairment and to Note 7.1 for the disclosures relating

to property, plant, equipment, and investment

properties as at December 31, 2024.

Description

The net carrying value of property, plant and

equipment as at December 31, 2024 amounts to

USD 1.144,6 million, representing 60,0% of the Group’s

total assets. As discussed in Note 4.10, at each

reporting date, management assesses whether there is

any indication of impairment (i.e. a triggering event).

If any such indication exists then the recoverable

amount of the CGU, to which the property, plant and

equipment belongs, is estimated. Management

identified two indicators of potential impairment as

23

	Annual Report 2024 | X-FAB consolidated financial statements

explained in note 7.1 of the consolidated financial

statements.  Management subsequently tested each

relevant CGU for which impairment indicators were

identified. This process involved projections and

assumptions for revenues, changes in working capital,

economic performance of the assets, prevailing

market interest rates, and weighted average cost of

capital (WACC). Management concluded that the

recoverable amount (VIU) of each relevant CGU

exceeded the CGU’s carrying value as at December 31,

2024 and consequently, that no impairment loss is to

be recognized as at December 31, 2024.

We identified the assessment of impairment indicators

for property, plant and equipment and the

determination of the VIU for each CGU in scope as a

key audit matter. This process requires considerable

judgment for the identification of impairment

indicators and the determination of the critical

assumptions such as the WACC, projected revenue

growth rates, and terminal growth rate used in

determining the VIU of the CGU. The underlying

calculations are complex by nature and require the use

of specialists.

Our audit procedures

In collaboration with our own valuation specialists, we

performed the following procedures to address this

key audit matter:

• We inquired management regarding the indicators

they assessed as possible indicators of impairment

for CGUs;

• We evaluated the design of key internal controls

related to management’s assessment of

impairment triggers. This included controls related

to certain key assumptions used by management in

determining the VIU of the CGU, such as the WACC

and forecasted cashflows;

• We inspected management’s assessment and

considered whether further indicators should have

been assessed based on our knowledge of the

business, its operating environment, industry

knowledge, current market conditions and other

information obtained during the audit;

• We assessed the accuracy of management’s

calculations for the CGU subject to impairment

testing, including the underlying data used, and

consider whether the list of CGUs tested are

complete;

• We evaluated the valuation techniques,

assumptions and data used by management to

make their accounting estimates used for VIU;

• We challenged key assumptions and judgements

such as the discount rate as applied in the value in

use calculation;

• We performed sensitivity analyses on the WACC

and the future growth rates used by Management

to assess the impact of changes to the

assumptions, and assess whether there were any

indications of management bias in the selection of

these assumptions; and

• We evaluated the completeness, accuracy and

relevance of disclosures required by IAS 36.

Board of directors’ responsibilities for the

preparation of the consolidated financial

statements

The board of directors is responsible for the

preparation of these consolidated financial statements

that give a true and fair view in accordance with IFRS

Accounting Standards as issued by the International

Accounting Standards Board, as adopted by the

European Union, and with the legal and regulatory

requirements applicable in Belgium, and for such

internal control as the board of directors determines, is

necessary to enable the preparation of consolidated

financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the

board of directors is responsible for assessing the

Group’s ability to continue as a going concern,

disclosing, as applicable, matters related to going

concern and using the going concern basis of

accounting unless the board of directors either intends

to liquidate the Group or to cease operations, or has no

realistic alternative but to do so.

Statutory auditor’s responsibilities for the audit of

the consolidated financial statements

Our objectives are to obtain reasonable assurance as

to whether the consolidated financial statements as a

whole are free from material misstatement, whether

due to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance is a

high level of assurance but is not a guarantee that an

audit conducted in accordance with ISAs will always

detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate,

they could reasonably be expected to influence the

economic decisions of the users taken on the basis of

these consolidated financial statements.

When performing our audit, we comply with the legal,

regulatory and professional requirements applicable to

audits of the consolidated financial statements in

Belgium. The scope of the statutory audit of the

consolidated financial statements does not extend to

providing assurance on the future viability of the

Group nor on the efficiency or effectivity of how the

board of directors has conducted or will conduct the

business of the Group. Our responsibilities regarding

the going concern basis of accounting applied by the

board of directors are described below.

As part of an audit in accordance with ISAs, we exercise

professional judgement and maintain professional

skepticism throughout the audit. We also perform the

following procedures:

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	Annual Report 2024 | X-FAB consolidated financial statements

• Identify and assess the risks of material

misstatement of the consolidated financial

statements, whether due to fraud or error, design

and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient

and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting

from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the

override of internal control;

• Obtain an understanding of internal controls

relevant to the audit in order to design audit

procedures that are appropriate in the

circumstances, but not for the purpose of

expressing an opinion on the effectiveness of

the Group’s internal control;

• Evaluate the appropriateness of accounting

policies used and the reasonableness of accounting

estimates and related disclosures made by board of

directors;

• Conclude on the appropriateness of the board of

directors’ use of the going concern basis of

accounting and, based on the audit evidence

obtained, whether a material uncertainty exists

related to events or conditions that may cast

significant doubt on the Group’s ability to continue

as a going concern. If we conclude that a material

uncertainty exists, we are required to draw

attention in our auditors’ report to the related

disclosures in the consolidated financial statements

or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditors’

report. However, future events or conditions may

cause the Group to cease to continue as a going

concern;

• Evaluate the overall presentation, structure and

content of the consolidated financial statements,

including the disclosures, and whether the

consolidated financial statements represent the

underlying transactions and events in a manner that

achieves fair presentation;

• Obtain sufficient appropriate audit evidence

regarding the financial information of the entities or

business activities within the Group to express an

opinion on the consolidated financial statements.

We are responsible for the direction, supervision

and performance of the group audit. We remain

solely responsible for our audit opinion.

We communicate with the audit committee regarding,

among other matters, the planned scope and timing of

the audit and significant audit findings, including any

significant deficiencies in internal control that we

identify during our audit.

We also provide the audit committee with a statement

that we have complied with relevant ethical

requirements regarding independence, and to

communicate with them all relationships and other

matters that may reasonably be thought to bear on our

independence, and where applicable, related

safeguards.

For the matters communicated with the audit

committee, we determine those matters that were of

most significance in the audit of the consolidated

financial statements of the current period and are

therefore the key audit matters. We describe these

matters in our auditor’s report unless law or regulation

precludes public disclosure about the matter.

Other legal and regulatory requirements

Responsibilities of the Board of Directors

The board of directors is responsible for the

preparation and the content of the board of directors’

annual report on the consolidated financial statements

including the sustainability information.

Statutory auditor’s responsibilities

In the context of our engagement and in accordance

with the Belgian additional standard (revised version

2025) which is complementary to the International

Standards on Auditing as applicable in Belgium, our

responsibility is to verify, in all material respects, the

board of directors’ annual report on the consolidated

financial statements, and to report on these matters.

Aspects concerning the board of directors’ annual

report on the consolidated financial statements

The annual report on the consolidated financial

statements contains the consolidated sustainability

information that is the subject of our separate report

on the limited assurance with respect to this

sustainability information. This section does not cover

the assurance on the consolidated sustainability

information included in the annual report on the

consolidated financial statements. For this part of the

annual report on the consolidated financial statements,

we refer to our separate report on this matter.

The consolidated sustainability information included in

the annual report on the consolidated financial

statements was prepared without complying with the

dispositions of article 3:32/2 of the Code of

Companies and Associations, regarding the

preparation of sustainability information, resulting in an

adverse conclusion, due to material and significant

matters identified, regarding the assurance on the

consolidated sustainability information.

Based on specific work performed on the board of

directors’ annual report on the consolidated financial

statements, and except for the effect on the annual

report of the matter described above, we are of the

opinion that this annual report is consistent with the

consolidated financial statements for the same period

and has been prepared in accordance with article 3:32

of the Companies’ and Associations’ Code.

In the context of our audit of the consolidated financial

statements, we are also responsible for considering,

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	Annual Report 2024 | X-FAB consolidated financial statements

in particular based on the knowledge gained

throughout the audit, whether the board of directors’

annual report on the consolidated financial statements

contains material misstatements, that is information

incorrectly stated or misleading. In the context of the

procedures carried out, and except for the effect on

the annual report of the matter described above, we

did not identify any material misstatements that we

have to report to you.

Information about the independence

• Our audit firm and our network have not performed

any engagement which is incompatible with the

statutory audit of the consolidated accounts and

our audit firm remained independent of the Group

during the term of our mandate.

• The fees for the additional engagements which are

compatible with the statutory audit referred to in

article 3:65 of the Companies’ and Associations’

Code were correctly stated and disclosed in the

notes to the consolidated financial statements.

European Single Electronic Format (ESEF)

In accordance with the draft standard on the audit of

compliance of the annual report with the European

Single Electronic Format (hereafter “ESEF”), we have

also audited whether the ESEF-format is in

accordance with the regulatory technical standards as

laid down in the EU Delegated Regulation nr. 2019/815

of 17 December 2018 (hereafter “Delegated

Regulation”) and the Royal Decree of 14 November

2007 on the obligations of issuers of financial

instruments admitted to trading on a regulated market

(hereafter the “Royal Decree of 14 November 2007”).

The Board of Directors is responsible for the

preparation of an annual report, in accordance with the

ESEF requirements, including the consolidated

financial statements in the form of an electronic file in

ESEF format (hereafter “digital consolidated financial

statements”).

It is our responsibility to obtain sufficient and

appropriate information to conclude whether the

format of the annual report and the XBRL tagging of

the digital consolidated financial statements comply, in

all material respects, with the ESEF requirements

under the Delegated Regulation and the Royal Decree

of 14 November 2007.

In our opinion, based on our work performed, the

digital format of the annual report and the tagging of

information in the English version of the consolidated

financial statements as per December 31, 2024,

included in the annual report of X-Fab Silicon

Foundries SE and which will be available in the Belgian

official mechanism for the storage of regulated

information (STORI) of the FSMA, are, in all material

respects, in compliance with the ESEF requirements

under the Delegated Regulation and the Royal Decree

of 14 November 2007.

Other aspect

• This report is consistent with our additional report

to the audit committee on the basis of Article 11 of

Regulation (EU) No 537/2014.

Hasselt, March 24, 2025

KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises

Statutory Auditor

represented by

Herwig Carmans

Bedrijfsrevisor / Réviseur d’Entreprises

26

	Annual Report 2024 | X-FAB consolidated financial statements

5.4 Consolidated financial statements

Consolidated statement of profit or loss and other comprehensive income

For the year ended December 31

in thousands of U.S. dollars	Note	2024	2023
Revenue	6.1/12	816,383	906,786
Cost of sales	6.2/6.6/12	(633,434)	(648,734)
Gross profit		182,949	258,052
Research and development expenses	6.3/6.6/12	(49,785)	(47,191)
Selling expenses	6.4/6.6/12	(9,070)	(8,463)
General and administrative expenses	6.5/6.6	(47,351)	(47,157)
Rental income and expenses from investment properties	6.7/6.8/12	2,770	2,906
Impairment loss on trade receivables	7.4	(2)	(297)
Other income and other expenses	6.9/6.10/12	6,032	(175)
Operating profit		85,543	157,675
Finance income	6.11/12	36,006	34,658
Finance costs	6.12/12	(38,260)	(37,149)
Net finance income/(costs)		(2,254)	(2,491)
Profit before tax		83,289	155,184
Income tax	6.13	(21,763)	6,711
Profit for the period		61,526	161,895

27

	Annual Report 2024 | X-FAB consolidated financial statements

Consolidated statement of profit and loss and other comprehensive income (continued)

For the year ended December 31

in thousands of U.S. dollars	Note	2024	2023
Profit for the period		61,526	161,895
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of defined benefit obligation (asset)	7.11	(37)	(532)
Items that are or may be transferred to profit or loss as follows:
Foreign currency translation differences for foreign operations		763	(75)
Other	7.8	—	2,287
Other comprehensive income/(loss) for the period, net of income tax		726	1,680
Total comprehensive income for the period		62,252	163,575
Weighted average number of shares outstanding, basic and diluted	6.14	130,631,921	130,631,921
Earnings per share
Basic and diluted (in U.S. dollars)	6.14	0.47	1.25

The accompanying notes are an integral part of these consolidated financial statements.

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	Annual Report 2024 | X-FAB consolidated financial statements

Consolidated statement of financial position

in thousands of U.S. dollars	Note	December 31, 2024	December 31, 2023
			(restated, see note 4.20)
ASSETS
Non-current assets
Property, plant, and equipment	7.1	1,144,620	734,488
Investment properties	7.1	7,412	7,171
Intangible assets	7.2	6,319	5,627
Other assets	7.6	42	58
Deferred tax assets	6.13	66,725	83,772
Total non-current assets		1,225,118	831,116
Current assets
Inventories	7.3	281,765	269,227
Contract assets	7.4	18,092	24,010
Trade and other receivables	7.5/12	96,648	123,101
Income tax receivables	6.13	1,830	594
Other assets	7.6	67,423	50,065
Cash and cash equivalents	7.7	215,837	405,701
Total current assets		681,595	872,698
Total assets		1,906,713	1,703,814
EQUITY AND LIABILITIES
Equity
Share capital	7.8	432,745	432,745
Share premium	7.8	348,709	348,709
Retained earnings	7.8	241,648	180,159
Cumulative translation adjustment	7.8	462	(301)
Treasury shares	7.8	(770)	(770)
Total equity		1,022,794	960,542
Non-current liabilities
Loans and borrowings	7.10	369,616	235,318
Other liabilities and provisions	7.11	4,257	4,024
Total non-current liabilities		373,873	239,342
Current liabilities
Trade payables	7.12/12	67,658	90,681
Loans and borrowings	7.10	44,517	25,659
Income tax payable	6.13	7,737	10,233
Provisions	7.13	11,978	9,775
Other liabilities	7.12	378,157	367,582
Total current liabilities		510,046	503,930
Total equity and liabilities		1,906,713	1,703,814

The accompanying notes are an integral part of these consolidated financial statements.

29

	Annual Report 2024 | X-FAB consolidated financial statements

Consolidated statement of changes in Group equity

in thousands of U.S. dollars	Note	Shares issued and fully paid	Share capital	Share premium	Retained earnings	Cumulative translation adjustment	Treasury shares	Total attributable to owners of the Company	Non-controlling interests	Total equity
At December 31, 2022		130,781,669	432,745	348,709	16,509	(226)	(770)	796,967	—	796,967
Profit for the period		—	—	—	161,895	—	—	161,895	—	161,895
Remeasurement of defined benefit plans		—	—	—	(532)	—	—	(532)	—	(532)
Currency translation effect, net of tax		—	—	—	—	(75)	—	(75)	—	(75)
Other	7.8	—	—	—	2,287	—	—	2,287	—	2,287
Total comprehensive income		—	—	—	163,650	(75)	—	163,575	—	163,575
At December 31, 2023		130,781,669	432,745	348,709	180,159	(301)	(770)	960,542	—	960,542
Profit for the period		—	—	—	61,526	—	—	61,526	—	61,526
Remeasurement of defined benefit plans		—	—	—	(37)	—	—	(37)	—	(37)
Currency translation effect		—	—	—	—	763	—	763	—	763
Total comprehensive income		—	—	—	61,489	763	—	62,252	—	62,252
At December 31, 2024		130,781,669	432,745	348,709	241,648	462	(770)	1,022,794	—	1,022,794

The accompanying notes are an integral part of these consolidated financial statements.

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	Annual Report 2024 | X-FAB consolidated financial statements

Consolidated statement of cash flows

For the year ended December 31

in thousands of U.S. dollars	Note	2024	2023
Cash flow from operating activities:
Profit for the period		61,526	161,895
Income tax	6.13	21,763	(6,711)
Income before taxes		83,289	155,184
Reconciliation of net income to cash flow arising from operating activities:		106,148	88,948
Depreciation and amortization, before effect of grants and subsidies	6.6/7.1/7.2	103,386	87,939
Amortization of investment grants and subsidies	6.6	(3,735)	(2,972)
Interest income and expenses (net)	6.11/6.12	5,525	2,600
Loss/(gain) on the sale of plant, property and equipment (net)	6.9/6.10/ 7.1/7.2	(4,030)	(3,373)
Loss/(gain) on disposal of subsidiary	6.10	1,144	—
Other non-cash transactions (net)	8	3,858	4,754
Changes in working capital		8,726	172,490
Decrease/(increase) of trade and other receivables	7.4	30,808	(39,774)
Decrease/(increase) of other assets	7.5	5,687	4,855
Decrease/(increase) of inventories	7.3	(9,733)	(52,504)
Decrease/(increase) of contract assets		5,919	(24,010)
(Decrease)/increase of trade payables	7.11/8	(17,373)	16,634
(Decrease)/increase of other liabilities and provisions	7.11/7.12/7.13	(6,582)	267,289
Income taxes (paid)/received		(2,113)	(6,658)
Net cash from operating activities		196,050	409,964
Cash flow from investing activities:
Payments for property, plant, equipment, and intangible assets	7.1/7.2	(509,467)	(337,789)
Payments for investments in investment properties	7.1	(84)	—
Acquisition of subsidiary, net of cash acquired	5	(1,633)	—
Payments for loan investments to related parties	12	—	(276)
Proceeds from loan investments related parties	12	—	252
Proceeds from the sale of property, plant, and equipment	7.1	4,024	3,733
Interest received	6.11/6.12	11,032	10,457
Net cash used in investing activities		(496,128)	(323,623)
Proceeds from loans and borrowings	7.10	209,669	205,784
Repayment of loans and borrowings	7.10	(124,237)	(241,806)
Receipts from sale and leaseback arrangements	7.10/8	60,584	—
Payment of lease liabilities	7.10	(12,502)	(5,512)
Interest paid	6.10/6.11	(17,214)	(11,630)
Net cash from/(used in) financing activities		116,300	(53,164)
Effects of changes in foreign currency exchange rates on cash balances		(6,086)	3,099
Net increase/(decrease) of cash and cash equivalents		(183,778)	33,177
Cash and cash equivalents at the beginning of the period		405,701	369,425
Cash and cash equivalents at the end of the period		215,837	405,701

The accompanying notes are an integral part of these consolidated financial statements.

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	Annual Report 2024 | X-FAB consolidated financial statements

Notes to the consolidated financial

statements

1 Basic information and description of the X-FAB

Silicon Foundries SE Group’s business

X-FAB Silicon Foundries SE (hereafter referred to as

“X-FAB SE,” “the Company,” or “the parent company”

and, together with its subsidiaries, as “X-FAB SE

Group” or “the Group”) is a European limited company

(Societas Europaea/SE) registered under the number

BE0882.390.885 in Hasselt, Belgium. The parent

company’s registered address is Transportstraat 1,

3980 Tessenderlo, Belgium.

The Group has no associates, joint ventures, joint

operations, or investments in unconsolidated

structured entities (entities designed so that voting or

similar rights are not the dominant factor in deciding

which party controls the entity).

The X-FAB SE Group is one of the world’s leading

pure-play foundry providers specializing in analog/

mixed-signal technologies.

Analog/mixed-signal products are circuits capable of

processing digital as well as analog signals. As a pure-

play foundry, the Group develops its own technologies,

offering its customers a comprehensive range of

product development (design support) and

production services. The X-FAB SE Group

manufactures integrated circuits to customers’

designs, supplying these in the form of silicon wafers.

For this purpose, X-FAB SE offers special technology

modules, cell libraries, and design kits, which allow the

Group’s customers to develop specific circuits with

broad function spectrum and to accelerate their

development processes.

X-FAB SE Group’s customers include companies that

concentrate on the development of integrated circuits

(ICs) and leave their manufacture to others (fabless

companies). The Group’s customers are primarily in the

communication, automotive, consumer, and industrial

product sectors, and are located in Europe, the United

States, and Asia.

2 Group structure

The X-FAB SE Group structure as of December 31, 2024 , is illustrated below.

X-FAB Dresden GmbH & Co. KG refers to X-FAB Dresden GmbH & Co. KG and X-FAB Dresden Verwaltungs-GmbH

32

	Annual Report 2024 | X-FAB consolidated financial statements

The Group’s primary operations are held by X-FAB

Semiconductor Foundries GmbH (X-FAB GmbH),

X-FAB Dresden GmbH & Co. KG (X-FAB Dresden),

X-FAB Texas Inc., Lubbock, Texas (X-FAB Texas),

X-FAB Sarawak Sdn. Bhd. (X-FAB Sarawak), and

X-FAB France SAS (X-FAB France), each of which

operate wafer factories at their respective locations.

X-FAB MEMS Foundry Itzehoe GmbH (MFI) and

X-FAB MEMS Foundry GmbH (XMF) offer process

technologies for the fabrication of micro mechanical

sensors for the detection of pressure, acceleration,

rotation, and IR-radiation including integrated solutions

that combine MEMS and CMOS. The remaining entities

provide research and development, marketing and

sales, and administration services to other Group

entities or serve administrative purposes.

The Group acquired the entire share capital of M-MOS

Semiconductor Hong Kong Limited (M-MOS), a

limited liability company incorporated under the laws of

Hong Kong in 2024. Details of the acquisition are

provided in note 5.

Business activities at MikroDesign OOO, Voronesh,

Russia ceased in the financial year 2023 and the

Company was liquidated in 2024.

3 Basis of preparation

3.1 Statement of compliance

The consolidated financial statements have been

prepared in accordance with International Financial

Reporting Standards (IFRS) as endorsed by the

European Union. All IFRS and IAS standards and

associated interpretations were adopted to the extent

that they had been endorsed by the European Union

by the date of issue of these financial statements.

The consolidated financial statements of X-FAB SE

Group for the year ended December 31, 2024 , were

authorized for issue in accordance with a resolution of

the directors on March 20, 2025.

3.2 Basis of measurement

The consolidated financial statements have been

prepared on a historical cost basis, except for

derivative financial assets and liabilities and the net

defined benefit liability for post-retirement obligations,

which is measured at the present value of the defined

obligation less the fair value of plan assets.

3.3 Functional and presentation currency

The consolidated financial statements are presented in

U.S. dollars (USD), which is the functional and

presentation currency of the parent company and the

Group’s primary operating companies. Amounts are

rounded to the nearest thousand except when

otherwise indicated. Rounding differences may occur.

3.4 Use of judgments, assumptions, and estimation

uncertainties

In preparing these consolidated financial statements

management has made judgments, assumptions, and

estimates that affect the application of the Group’s

accounting policies and the reported amounts of

assets, liabilities, income, and expenses. Actual

amounts may differ from these estimates.

Estimates and underlying assumptions are reviewed on

an ongoing basis. Revisions to accounting estimates

are recognized in the period in which the estimates are

revised and in any future periods affected.

Judgments

Determination of functional currency

The functional currency of the holding company and

most of its subsidiaries has been assessed as the U.S.

dollar (USD) due to the fact that the currency that

mainly influences sales prices for goods and services is

the USD. Subsidiaries with a different functional

currency (primarily the euro) are not significant to the

Group’s consolidated financial statements.

With respect to the holding company the assessment is

based on the fact that the holding acts as an

investment holding entity (in operational subsidiaries

with USD as their functional currency) and its sole

activity consists of the re-allocation of Group costs

which are incurred and subsequently recharged in USD.

Hence the USD is deemed the most appropriate

functional currency of the holding for the preparation

of the consolidated financial statements.

Revenue recognition (note 4.3)

The Group changed the method used to recognize

revenues for the sale of process control wafers (PCM

wafers) from January 1, 2023. PCM wafers

manufactured and sold by the Group are generally

customer-specific, i.e., when manufacturing goods for

a customer X-FAB is creating an asset for the

customer that has no alternative use for X-FAB. Prior

to 2023, for the majority of contracts with its most

important customers X-FAB had determined that it

does not have an enforceable right to obtain payment

for work completed should a customer cancel an

incomplete contract for reasons other than any failure

by X-FAB to perform as promised. Based on this

assessment, revenue from the sale of PCM wafers was

recognized when shipment had been made. For

periods from the previous financial year and thereafter

X-FAB has determined that the volume of contracts

for which it supplies customer-specific goods and for

which it has an enforceable right to obtain payment for

work completed should a customer cancel an

incomplete contract for reasons other than any failure

by X-FAB to perform as promised is significant. For

such contracts revenue is recognized over time, i.e.,

over the period in which the Group meets its

performance obligations under those contracts

proportionate to the fulfillment of its performance

obligations under the contracts.

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	Annual Report 2024 | X-FAB consolidated financial statements

There has been no change in the accounting policy for

the recognition of revenues for which the Group does

not have an enforceable right to obtain payment for

work completed.

Invoices are usually payable within 30 days.

No discounts of the invoiced amounts are offered to

customers in exchange for prompt payment of

invoices. Sales prices with customers do not include a

significant financing component.

Recognition of right-of-use assets and lease

liabilities (notes 4.17 and 11)

The Group recognizes right-of-use assets and lease

liabilities for certain assets held under leasing

arrangements. Some of the Group’s lease contracts

include renewal or termination options. In order to

determine the lease term for these contracts the

Group took into account all relevant facts and

circumstances in order to assess whether it is

reasonably certain that these options will be exercised.

This assessment has an impact on the term of the

lease, which has a significant effect on the amount of

the lease liabilities and the measurement of the right-

of-use asset recognized. Should the Group make

changes to its assessment of whether the renewal or

termination options will be exercised, it may be

necessary to increase or decrease the right-of-use

assets and lease liabilities recognized.

Assumptions and estimation uncertainties

Information about assumptions and estimation

uncertainties that have a significant risk of resulting in a

material adjustment in the next financial year is

included in the following notes:

Recognition of deferred tax assets (note 6.13)

Deferred tax assets are recorded where it is

considered probable that tax savings will be made in

future periods from the use of losses carried forward

and from the reversal of taxable timing differences

arising on the difference between the accounting and

tax values of the Group’s assets. Taxable profits and

the reversal of timing differences in the next financial

year may differ from the amounts assumed, and

assumptions made in the next financial year about

future taxable profits and reversals of subsequent

years may change. Such changes could result in a

material adjustment.

Measurement of expected credit losses (ECLs) on

trade receivables (note 7.5)

Allowances are made to reflect estimates of the

amount of ECLs on any receivables. The actual amount

of credit losses for receivables in the next financial year

may differ from the amounts recorded as impairments

in the year ended December 31, 2024, which may result

in a material adjustment.

The significant judgments made by management in

applying the Group’s accounting policies and the key

sources of estimation uncertainty were the same as

those that applied to the consolidated financial

statements as at and for the year ended December 31,

2023.

Measurement of fair values

A number of the Group’s accounting policies and

disclosures require the measurement of fair values,

both for financial and non-financial assets and liabilities.

If third-party information is used to measure fair

values, the evidence obtained from third parties is

assessed to support the conclusion that such

valuations meet the requirements of IFRS 13, including

the level in the fair value hierarchy in which such

valuations should be classified.

When measuring the fair value of an asset or a liability,

the Group uses market observable data as far as

possible.

Fair values are classified into different levels in a fair

value hierarchy based on the inputs used in the

valuation techniques as follows:

Level 1:quoted (unadjusted) prices in active markets

for identical assets or liabilities.

Level 2:other techniques for which all inputs that have

a significant effect on the recorded fair value

are observable, either directly or indirectly.

Level 3:techniques that use inputs which have a

significant effect on the recorded fair value

that are not based on observable market data.

If the inputs used to measure the fair value of an asset

or a liability might be categorized in different levels of

the fair value hierarchy, then the fair value

measurement is categorized in its entirety in the same

level of the fair value hierarchy as the lowest level input

that is significant to the entire measurement.

The Group measures transfers between levels of the

fair value hierarchy at the end of the reporting period

during which the change has occurred.

Further information about the assumptions made in

measuring fair values is included in the following notes:

• 7.1 Property, plant, equipment, and investment

properties

• 7.5 Trade and other receivables

• 7.10 Loans and borrowings

• 10 Financial instruments – fair values and risk

management

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	Annual Report 2024 | X-FAB consolidated financial statements

4 Summary of accounting policies

An amendment has been made to the criteria applied

to classify borrowings between non-current and

current liabilities, which has resulted in a retrospective

reclassification of certain borrowings from current to

non-current in the consolidated statement of financial

position. The change to the classification resulted from

an amendment to IAS 1. The nature of the change and

the amounts affected are described in detail in note

4.20.

With the exception of the above, the accounting

policies applied are consistent with those applied in the

annual consolidated financial statements for the year

ended December 31, 2023.

4.1 Basis of consolidation

Entities included in the consolidation

The consolidated financial statements include the

financial statements of the parent company and its

subsidiaries, which are entities directly or indirectly

controlled by the parent company. The Group controls

an entity when it is exposed to, or has rights to, variable

returns from its involvement with the entity and has the

ability to affect those returns through its power over

the entity. Control is generally obtained by ownership

of a majority of shares.

The financial statements of subsidiaries are included in

the consolidated financial statements from the date on

which control commences until the date on which

control ceases.

The financial statements of the subsidiaries are

prepared for the same reporting year as the parent

company, using consistent accounting policies.

All intra-group balances, transactions, income, and

expenses, as well as profits and losses resulting from

intra-group transactions, are fully eliminated in these

consolidated financial statements.

Non-controlling interests

Non-controlling interests represent the portion of

profit or loss, component of other comprehensive

income and net assets of a subsidiary attributable to

equity interests that are not owned, directly or

indirectly, by the parent company. Non-controlling

interests’ share of income and share of equity are

presented separately in the income statement and

within equity in the consolidated statement of financial

position respectively, separately from parent

shareholder’s equity.

Non-controlling interests are measured at the date of

acquisition at their proportionate share of the acquired

company’s identifiable net assets.

4.2 Foreign currency translation

Transactions in foreign currencies are initially recorded

at the functional currency rate ruling at the date of the

transaction. Monetary assets and liabilities

denominated in foreign currencies are translated at the

functional currency rate of exchange ruling at the

statement of financial position date. All differences are

taken to profit or loss. Non-monetary items that are

measured in terms of historical cost in a foreign

currency are translated using the exchange rate as at

the dates of the initial transactions. If the functional

currency of a consolidated entity differs from the

Group’s presentation currency, assets and liabilities of

that entity are translated into the presentation

currency at the closing rate at the statement of

financial position date, whereas equity is translated

using the historic rates, and the income statement is

translated at the average rate of the reporting period.

All resulting differences are recognized in the

cumulative translation adjustment in equity.

4.3 Revenue from contracts with customers

Sales revenue is measured based on the consideration

specified in a contract with a customer. Sales revenues

are recognized net of discounts, customer bonuses,

and rebates granted.

There is no significant uncertainty concerning the

nature, amount, or timing of the revenue or the cash

flows of the revenues reported. The Group recognizes

revenue when it transfers control over a good or

service to a customer.

Sale of process control wafers (PCM wafers)

PCM wafers are goods that are generally customer

specific, i.e. when manufacturing goods for a customer,

X-FAB is creating an asset for the customer that has

no alternative use to X-FAB. In general, revenue from

the sale of wafers is recognized at a point in time. From

the previous financial year, the financial year 2023, and

in subsequent periods the Group also reports revenues

from wafer sales which are recognized over time, i.e.,

on the basis of progress made towards fulfilling the

Group’s performance obligation under the supply

contract, and not, as is the case with revenue

recognized at a point in time, only when the wafers are

completed and delivered to the customer. Revenue for

wafer sales recognized over time represents the

Group’s rights to consideration for work completed but

not invoiced at the reporting date for wafer sales under

long-term contracts which meet the criteria for

revenue recognition over time. Contracts with

customers meet the criteria for recognition over time

when work performed under the contract creates an

asset which has no alternative use to X-FAB (for

example, due to the specific nature of the product or

to exclusivity agreements) and X-FAB has an

enforceable right to payment for the performance of

the work completed. Progress towards fulfilling the

Group’s performance obligations under such contracts

is determined based on the cost-to-cost method as

X‑FAB is of the opinion that this measure most

faithfully depicts the transformation of the work in

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	Annual Report 2024 | X-FAB consolidated financial statements

progress. Revenues for the sale of wafers which meet

the criteria for revenue recognition over time were not

material in previous reporting periods.

In connection with long-term contracts with customers,

the Group receives prepayments from customers for

future wafer sales and capacity reservation deposits.

These amounts, which are initially recognized as other

liabilities, include variable consideration for the goods

transferred to the customer within the contract. When

recognizing revenue for the contract, the Group is

required to estimate the amount of variable

consideration to which it will be entitled in exchange for

transferring the promised goods to the customer. To

the extent that part of the prepayment will be retained

by X-FAB without X-FAB being required to offset

amounts against valid purchase orders (for example,

when there is a shortfall in customer orders compared

to the amounts agreed under the sales contract when

X-FAB is entitled to retain the revenue prepaid), the

revenue recognized as revenue for the goods that

have been delivered includes amounts attributable to

the expected shortfall. However, variable consideration

is included in the transaction price only to the extent

that it is highly probable that a significant reversal in the

amount of cumulative revenue recognized will not

occur when the uncertainty associated with the

variable consideration is resolved.

Invoices are usually payable within 30 days. No

discounts of the invoiced amounts are offered to

customers in exchange for prompt payment of

invoices. Sales prices with customers do not include a

significant financing component.

Sales of non-recurring engineering (NRE) services

and technology services

When providing non-recurring engineering (NRE)

services and technology services X-FAB creates an

asset for a customer that has no alternative use to

X‑FAB as the prototype wafers created are generally

customer specific. Invoices are issued according to

contractual terms – based on milestones – and are

usually payable within 30 days. X-FAB has an

enforceable right to payment for the performance of

work completed up to the agreed milestones. Revenue

is therefore recognized over time, and X-FAB applies a

practical expedient for the measurement of progress.

Invoicing based on milestones is a reasonable

approximation of the progress made to completing the

performance obligation. No discounts of the invoiced

amounts are offered to customers in exchange for

prompt payment of invoices. Sales prices with

customers do not include a significant financing

component.

Rental and other income

Revenue in respect of rental and other income is

recognized over time when the relevant service is

provided (see note 4.6 below).

Warranty obligations

The Group typically provides warranties for defects

that existed at the time of sale, as required by the

terms and conditions of sale. These are assurance-

type warranties which are accounted for as warranty

provisions based on past experience. No service-type

warranties are sold either separately or bundled

together with the sale of the Group’s products.

Contract costs and contract fulfillment costs

Costs of obtaining contracts requiring capitalization

have been incurred by the Group; however, the

deferral of such costs is not material for the purposes

of these consolidated financial statements.

No costs of fulfilling contracts requiring capitalization

have been incurred which are not recorded as assets in

accordance with IAS 2 Inventories, IAS 16 Property,

Plant and Equipment, or IAS 38 Intangible Assets.

4.4 Research and development expenses

Research and development expenses comprise staff

expenses, depreciation, and other directly attributable

expenses and are allocated process based, i.e. relate to

research and development activities that are not

related to the improvement of the existing production

technologies. Costs incurred in connection with

improving existing production technologies used in

operational production lines are allocated to cost of

sales.

Research and development costs are expensed as

incurred. X-FAB SE Group considers that development

work performed does not qualify for capitalization

because the amount of future benefits to be derived

from use of work performed is characterized by a high

level of uncertainty until the projects are completed.

Government grants are awarded to the Group for its

research and development activities in the form of

cash tax payments or tax credits. IAS 20 Government

Grants is applied to all grants, including the research

and development grants received by X-FAB France,

which are paid out using the French corporation tax

system. The grants are recognized as income and as a

non-current or current asset, as appropriate, when

there is reasonable assurance that the entity will

comply with the relevant conditions set out in the

terms of the grant arrangement and that the grant will

be received. These income-related grants are

recognized in profit or loss on a systematic basis as the

entity recognizes as expenses the costs that the grants

are intended to compensate.

4.5 Finance income and finance costs

Interest income or expense is recognized using the

effective interest method. Dividend income is

recognized in profit or loss on the date on which the

Group’s right to receive payment is established.

4.6 Rental income from investment properties

Rental income from operating leases on investment

property is accounted for on a straight-line basis over

the lease term. Lease incentives granted are

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	Annual Report 2024 | X-FAB consolidated financial statements

recognized as an integral part of the total rental

income and recognized over the term of the lease.

4.7 Employee benefits

Employee benefits consist of short-term employee

benefits, payments into defined contribution pension

schemes, and a long-service retirement lump-sum

payment scheme at the Group’s subsidiary X-FAB

France. The Group has no share-based payment

arrangements.

Short-term employee benefits are expensed as the

related service is provided. A liability is recognized for

the amount expected to be paid if the Group has a

present legal or constructive obligation to pay this

amount as a result of past service provided by the

employee and the obligation can be estimated reliably.

Obligations for contributions to defined contribution

plans are expensed as the related service is provided.

Prepaid contributions are recognized as an asset to the

extent that a cash refund or a reduction in future

payments is available.

The Group’s net obligation in respect of the long-

service retirement lump-sum payment scheme is

calculated by estimating the amount of future benefit

that employees have earned in the current and prior

periods, discounting that amount, and deducting the

fair value of any plan assets. The calculation of the

obligation is performed annually by an independent

third-party expert actuary using the projected unit

credit method. When the calculation results in a

potential asset for the Group, the recognized asset is

limited to the present value of economic benefits

available in the form of any future refunds from the

plan or reductions in future contributions to the plan.

To calculate the present value of economic benefits,

consideration is given to any applicable minimum

funding requirements. Remeasurements of the net

defined benefit liability, which comprise actuarial gains

and losses, the return on plan assets (excluding

interest), and the effect of the asset ceiling (if any,

excluding interest), are recognized immediately in

other comprehensive income. The Group determines

the net interest expense (income) on the net defined

benefit liability (asset) for the period by applying the

discount rate used to measure the defined benefit

obligation at the beginning of the annual period to the

then-net defined benefit liability (asset), taking into

account any changes in the net defined benefit liability

(asset) during the period as a result of contributions

and benefit payments. Net interest expense and other

expenses related to defined benefit plans are

recognized in profit or loss. When the benefits of a plan

are changed or when a plan is curtailed, the resulting

change in benefit that relates to past service or the

gain or loss on curtailment is recognized immediately in

profit or loss. The Group recognizes gains and losses

on the settlement of a defined benefit plan when the

settlement occurs.

Termination benefits are recorded as an expense at

the earlier of when the Group can no longer withdraw

the offer of those benefits and when the Group

recognizes costs of a restructuring. The benefits are

discounted if it is not expected that they will be settled

wholly within 12 months of the reporting date.

4.8 Property, plant, equipment, and investment

properties

Property, plant, and equipment are measured at

purchase cost less accumulated depreciation and

accumulated impairment losses. Purchase cost

includes expenditure that is directly attributable to the

acquisition of the asset. These accounting policies

have also been applied to investment properties under

the cost model in accordance with IAS 40.

Depreciation is provided using the straight-line

method for property, plant, factory, and office

equipment and for investment properties.

Depreciation is calculated to write off the cost of items

of property, plant, and equipment less their estimated

residual values using the straight-line method over

their estimated useful lives. If significant parts of an

item of property, plant, and equipment have different

useful lives, then they are accounted for as separate

items (major components) of property, plant, and

equipment.

The following useful lives are used as a basis for

calculating depreciation:

• Buildings, including investment properties:

over 40–50 years

• Factory and office equipment: straight-line over

3–10 years

Borrowing costs were not capitalized because no

borrowing costs applicable to the assets qualifying for

the capitalization of borrowing costs were incurred in

the period. Costs incurred which extend the useful life

of assets, or which increase performance or capacity of

assets, are capitalized where appropriate. Maintenance

and repair costs are expensed as incurred.

Assets are recorded as disposals when they are sold or

scrapped. The resulting gain or loss is recorded in income

within “other income” or “other expenses” as appropriate.

4.9 Intangible assets

Purchased intangible assets are capitalized at purchase

cost, including, where applicable, own work capitalized

in preparing the intangible assets for use, and

depreciated on a straight-line basis over their expected

useful lives. The useful life applied is five years.

Internally generated intangible assets were not

capitalized because the criteria for capitalization were

not met (see note 4.4).

The Group has no intangible assets with indefinite

useful lives.

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	Annual Report 2024 | X-FAB consolidated financial statements

4.10 Impairment

The carrying amounts of the Group’s non-financial

assets other than inventories and deferred tax assets

(for which separate reviews are performed) are

reviewed at each reporting date to determine whether

there is any indication of impairment. If any such

indication exists then the asset’s recoverable amount is

estimated.

The recoverable amount of an asset or cash-

generating unit is the greater of its value in use and its

fair value less costs to sell. In assessing value in use, the

estimated future cash flows are discounted to their

present value using a pre-tax discount rate that

reflects current market assessments of the time value

of money and the risks specific to the asset. For the

purpose of impairment testing, assets are grouped

together into the smallest group of assets that

generates cash inflows from continuing use that are

largely independent of the cash inflows of other assets

or groups of assets (the “cash-generating unit”).

An impairment loss is recognized if the carrying

amount of an asset or its cash-generating unit exceeds

its estimated recoverable amount. Impairment losses

are recognized in profit or loss. Impairment losses

recognized in respect of cash-generating units are

allocated first to reduce the carrying amount of any

goodwill allocated to the units and then to reduce the

carrying amounts of the other assets in the unit (group

of units) on a pro rata basis.

An impairment loss is reversed if there has been a

change in the estimates used to determine the

recoverable amount. An impairment loss is reversed

only to the extent that the asset’s carrying amount

does not exceed the carrying amount that would have

been determined, net of depreciation or amortization,

if no impairment loss had been recognized.

4.11 Financial instruments

Recognition and initial measurement

Trade receivables are initially recognized when they are

originated, i.e. when or as the goods and services are

provided and the revenue for those goods and

services is recognized. Regular way purchases and

sales of financial assets were accounted for at the

settlement date. All other financial assets and financial

liabilities are initially recognized when the Group

becomes a party to the contractual provisions of the

financial instrument. The Group’s trade receivables do

not include a significant financing component and the

amounts recognized for trade receivables are initially

recognized at the transaction price. All other financial

assets and financial liabilities are initially recognized at

fair value plus, for items not recognized at fair value

through profit or loss (FVTPL), transaction costs that

are directly attributable to its acquisition or issue.

Classification and subsequent measurement

On initial recognition, a financial asset is classified as

measured at amortized cost; FVOCI – debt

investment; FVOCI – equity investment; or FVTPL.

(a) Financial assets at amortized cost

A financial asset is classified as measured at amortized

cost if it meets both of the following conditions and is

not designated as at FVTPL:

• it is held within a business model whose objective is

to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to

cash flows that are solely payments of principal and

interest on the principal amount outstanding.

(b) Debt investments at fair value through other

comprehensive income (FVOCI)

A debt investment is classified as measured at fair

value through other comprehensive income if it meets

both of the following conditions and is not designated

as at FVTPL:

• it is held within a business model whose objective is

achieved by both collecting contractual cash flows

and selling financial assets; and

• its contractual terms give rise on specified dates to

cash flows that are solely payments of principal and

interest on the principal amount outstanding.

(c) Equity investments at fair value through other

comprehensive income (FVOCI)

An equity investment is classified as measured at fair

value through other comprehensive income if it is not

held for trading and the Group irrevocably elects to

present subsequent changes in the investment’s fair

value in OCI. This election is made on an investment-

by-investment basis.

(d) Financial assets at fair value through profit or

loss (FVTPL)

All financial assets not classified as measured at

amortized cost or FVOCI as described above are

measured at FVTPL. This includes all derivative

financial assets, equity investments held for trading,

and equity instruments not held for trading, but for

which the Group did not elect to present fair value

changes in other comprehensive income.

On initial recognition, the Group may irrevocably

designate a financial asset that otherwise meets the

requirements to be measured at amortized cost or at

FVOCI as at FVTPL if doing so eliminates or

significantly reduces an accounting mismatch that

would otherwise arise. No such designations have been

made by the Group.

Financial assets – business model assessment

The Group makes an assessment of the objective of

the business model in which a financial asset is held at a

portfolio level because this best reflects the way the

business is managed and information is provided to

management. The information considered includes:

• the stated policies and objectives for the portfolio

and the operation of those policies in practice.

These include whether management’s strategy

focuses on earning contractual interest income,

maintaining a particular interest rate profile,

matching the duration of the financial assets to the

duration of any related liabilities or expected cash

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	Annual Report 2024 | X-FAB consolidated financial statements

outflows, or realizing cash flows through the sale of

the assets;

• how the performance of the portfolio is evaluated

and reported to the Group’s management;

• the risks that affect the performance of the

business model (and the financial assets held within

that business model) and how those risks are

managed;

• how managers of the business are compensated –

e.g. whether compensation is based on the fair

value of the assets managed or the contractual

cash flows collected; and

• the frequency, volume, and timing of sales of

financial assets in prior periods, the reasons for such

sales, and the expectations about future sales

activity.

Transfers of financial assets to third parties in

transactions that do not qualify for derecognition are

not considered sales for this purpose, consistent with

the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are

managed and whose performance is evaluated on a

fair value basis are measured at FVTPL.

Financial assets – Assessment of whether

contractual cash flows are solely payments of

principal and interest

For the purposes of this assessment, “principal” is

defined as the fair value of the financial asset on initial

recognition. “Interest” is defined as consideration for

the time value of money and for the credit risk

associated with the principal amount outstanding

during a particular period of time and for other basic

lending risks and costs (e.g. liquidity risk and

administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are

solely payments of principal and interest, the Group

considers the contractual terms of the instrument.

This includes assessing whether the financial asset

contains a contractual term that could change the

timing or amount of contractual cash flows such that

it would not meet this condition. In making this

assessment, the Group considers:

• contingent events that would change the amount

or timing of cash flows;

• terms that may adjust the contractual coupon rate,

including variable-rate features;

• prepayment and extension features; and

• terms that limit the Group’s claim to cash flows

from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely

payments of principal and interest criterion if the

prepayment amount substantially represents unpaid

amounts of principal and interest on the principal

amount outstanding, which may include reasonable

additional compensation for early termination of the

contract. Additionally, for a financial asset acquired at a

discount or premium to its contractual par value, a

feature that permits or requires prepayment at an

amount that substantially represents the contractual

par amount plus accrued (but unpaid) contractual

interest (which may also include reasonable additional

compensation for early termination) is treated as

consistent with this criterion if the fair value of the

prepayment feature is insignificant at initial recognition.

Financial assets – Subsequent measurement and

gains and losses

Financial assets at FVTPL

These assets are subsequently measured at fair value.

Net gains and losses, including any interest or dividend

income, are recognized in profit or loss. The Group

does not apply hedge accounting and accordingly

does not apply alternative allowed accounting

treatment permitted for derivatives designated as

hedging instruments.

Financial assets at amortized cost

These assets are subsequently measured at

amortized cost using the effective interest method.

The amortized cost is reduced by impairment losses.

Interest income, foreign exchange gains and losses,

and impairment are recognized in profit or loss.

Any gain or loss on derecognition is recognized in

profit or loss.

Debt investments at FVOCI

These assets are subsequently measured at fair value.

Interest income calculated using the effective interest

method, foreign exchange gains and losses, and

impairment are recognized in profit or loss.

Other net gains and losses are recognized in OCI.

On derecognition, gains and losses accumulated in OCI

are reclassified to profit or loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value.

Dividends are recognized as income in profit or loss

unless the dividend clearly represents a recovery of

part of the cost of the investment. Other net gains and

losses are recognized in OCI and are never reclassified

to profit or loss.

Financial liabilities

Financial liabilities are classified as measured at

amortized cost or FVTPL. A financial liability is

classified as at FVTPL if it is classified as held for

trading, it is a derivative, or it is designated as such on

initial recognition, whereby no liabilities as at FVTPL

have been made by the Group. Financial liabilities at

FVTPL are measured at fair value, and net gains and

losses, including any interest expense, are recognized

in profit or loss. Other financial liabilities are

subsequently measured at amortized cost using the

effective interest method. Interest expense and

foreign exchange gains and losses are recognized in

profit or loss. Any gain or loss on derecognition is also

recognized in profit or loss.

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	Annual Report 2024 | X-FAB consolidated financial statements

Derecognition

Financial assets

The Group derecognizes a financial asset when the

contractual rights to the cash flows from the financial

asset expire, or it transfers the rights to receive the

contractual cash flows in a transaction in which

substantially all of the risks and rewards of ownership

of the financial asset are transferred or in which the

Group neither transfers nor retains substantially all of

the risks and rewards of ownership and it does not

retain control of the financial asset.

The Group enters into transactions whereby it

transfers assets recognized in its statement of financial

position, but retains either all or substantially all of the

risks and rewards of the transferred assets. In these

cases, the transferred assets are not derecognized.

Financial liabilities

The Group derecognizes a financial liability when its

contractual obligations are discharged or canceled, or

expire. The Group also derecognizes a financial liability

when its terms are modified and the cash flows of the

modified liability are substantially different, in which

case a new financial liability based on the modified

terms is recognized at fair value.

On derecognition of a financial liability, the difference

between the carrying amount extinguished and the

consideration paid (including any non-cash assets

transferred or liabilities assumed) is recognized in

profit or loss.

Offsetting

No financial assets or liabilities are presented on a net

basis in these consolidated financial statements.

Impairment

The Group recognizes loss allowances for the

expected credit losses (ECLs) that it expects to incur

over the lifetime of financial assets which it measures

at amortized cost.

Loss allowances for trade receivables are always

measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial

asset has increased significantly since initial recognition

and when estimating ECLs, the Group considers

reasonable and supportable information that is

relevant and available without undue cost or effort.

This includes both quantitative and qualitative

information and analysis, based on the Group’s

historical experience and informed credit assessment

and including forward-looking information.

The maximum period considered when estimating

ECLs is the maximum contractual period over which

the Group is exposed to credit risk.

Measurement of ECLs for non-credit-impaired

receivables is assessed collectively based on a

probability-weighted estimate of credit losses

dependent on the number of days the balances are

overdue. Expected credit losses are measured based

on past experience of the recovery of similar portfolios

of receivables as the Group considers this to be a

reasonable approximation of the present value of the

shortfalls that can be expected in future. ECLs are

discounted at the effective interest rate of the

financial asset if the discounting effect is determined

to be material. Based on the contractual agreements,

receivables are in default when the balances are unpaid

by the due date. Dunning collection procedures

commence when a receivable is five days overdue.

Receivables are classified as credit impaired from the

date on which the receivable is 90 days overdue,

despite dunning procedures having being performed,

or from the date any other specific indications are

received that a significant deterioration in credit has

occurred. Credit-impaired receivables are assessed on

a case-by-case basis and assessments of collectability

are based on the information available concerning the

outstanding balance, including discussions with the

customer, assessments of the reliability of the

information provided, available counterclaims or

security, an understanding of the economic climate in

which the customer operates, and experience with that

customer, as well as experience of similar collection

procedures.

The relevant amounts are written off when the Group

considers that there is no realistic prospect of recovery

of the receivable and when no further enforcement

activity is taken. When a customer is in liquidation the

outstanding amounts are listed and monitored in an

ongoing liquidation register until the liquidation

process is complete.

No loss allowances are made for cash and cash

equivalents as it has been determined that, because of

the good standing of the Group’s banking partners, the

credit risk at the reporting date is so low that the ECLs

are insignificant both at the date of their initial

recognition and since initial recognition.

Fair values of cash and cash equivalents and current

receivables and liabilities

The fair values of cash and cash equivalents, current

receivables, and current liabilities approximate their

book values due to their short-term nature.

4.12 Derivative financial instruments

The Group holds derivative financial instruments to

hedge certain foreign currency and interest risk

exposures. Embedded derivatives are separated from

the host contract and accounted for separately if the

host contract is not a financial asset and certain criteria

are met. Derivative financial instruments are not

designated as hedging instruments for hedge

accounting purposes and are accordingly classified as

fair value through profit or loss.

Gains and losses from changes in the fair values of the

derivative financial instruments are reported in the

income statement within finance income and finance

expenses. The fair values of the derivative financial

instruments are presented in the statement of financial

position as other current assets and/or other current

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	Annual Report 2024 | X-FAB consolidated financial statements

liabilities, as appropriate, unless their maturity exceeds

12 months in which case they will be presented as non-

current.

4.13 Inventories

Inventories of raw materials, consumables, and supplies

are measured at the lower of cost and net realizable

value. The cost of inventories comprises all costs of

purchase, cost of conversion, and other costs incurred

in bringing the inventories to their present location and

condition, determined by using the weighted average

acquisition cost method. Allowances are recognized if

the carrying amount exceeds the expected sales price

less the estimated cost to complete the inventories

and the cost of marketing, sales, and distribution

activities. Allowances are made in full for inventories

with no realizable value.

4.14 Cash and cash equivalents

Cash and cash equivalents represent cash in hand,

checks, and available balances on bank current

accounts with an original maturity of four weeks or less.

The use of cash and cash equivalents reported are in

general not subject to restrictions with the exception

of term deposits reported as cash in note 7.7.

4.15 Equity

Share capital

The nominal paid-in contribution amount on each

share is recorded in share capital.

Share premium

Incremental costs directly attributable to the issue of

share capital are recognized as a deduction from the

share premium account, less any related tax effects.

Treasury shares

The Group reports treasury shares as deductions from

the Group equity at the cost of purchase.

Equity instruments and financial liabilities

Equity instruments and financial liabilities (including

share capital, redeemable preference shares, and other

loans and borrowings) are classified according to the

substance of the contractual arrangements entered

into. An equity instrument is any contract that

evidences a residual interest in the assets of the Group

after deducting all of its liabilities. Dividends and

distributions relating to equity instruments are debited

directly to reserves. Equity instruments issued are

recorded at the proceeds received, net of direct issue

costs. A financial liability exists where there is a

contractual obligation to deliver cash or another

financial asset to another entity, or to exchange

financial assets or financial liabilities under potentially

unfavorable conditions. In addition, contracts that

result in the entity delivering a variable number of its

own equity instruments are financial liabilities. Shares

containing such obligations are classified as financial

liabilities. Finance costs and gains or losses relating to

financial liabilities are included in the income statement.

The carrying amount of the liability is increased by the

finance cost and reduced by payments made in

respect of that liability.

4.16 Provisions

Provisions are recognized when present obligations

(legal or constructive) exist which result from past

events and which are expected to result in an outflow

of resources of which the timing or amount is

uncertain. The provisions are measured at the

discounted amount of the expected future cash flows

arising under the respective obligation at a pre-tax rate

that reflects current market assessments of the time

value of money and the risks specific to the liability.

The unwinding of the discount is recognized as finance

cost. Where the Group expects some or all of a

provision to be reimbursed, for example under an

insurance contract, the reimbursement is recognized

as a separate asset but only when the reimbursement

is virtually certain. The expense relating to any

provision is presented in profit or loss. If the effect of

the time value of money is material, provisions are

discounted using a pre-tax rate that reflects current

market assessments of the time value of money and of

the risk specific to the liability.

A provision for restructuring is recognized when the

Group has approved a detailed and formal restructuring

plan, and the restructuring either has commenced or has

been announced publicly. A provision for onerous

contracts is recognized for each specific contract in

which the unavoidable costs of meeting the obligations

under the contract exceed the economic benefits

expected to be received under the contract.

4.17 Leases

The Group assesses whether a contract is, or contains,

a lease arrangement. A contract is, or contains, a lease

if a contract conveys a right to control the use of an

identified asset for a period of time in exchange for

consideration.

The Group as lessee

The assets held under the Group’s leasing

arrangements are primarily commercial properties,

production equipment, and infrastructure equipment.

The Group recognizes right-of-use assets and lease

liabilities for most assets, i.e. these are presented on

balance sheet. However, it has elected to not to

recognize right-of-use assets and lease liabilities for

leases of low-value assets. The Group recognizes the

lease payments associated with these leases as an

expense on a straight-line basis over the lease term.

The Group has not applied a simplification election

available under IFRS 16 not to separate non-lease

components of a lease. At inception or on

reassessment of a contract that contains a lease

component the Group allocates the consideration in

the contract to each lease and non-lease component

of the respective contract on the basis of their relative

stand-alone prices.

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	Annual Report 2024 | X-FAB consolidated financial statements

The Group presents right-of-use assets within

“property, plant, and equipment” in the statement of

financial position, on the same line as it presents

underlying assets of the same nature that are owned

by the Group. The Group does not hold any properties

under leases which are classified as investment

properties.

The Group presents lease liabilities within “loans and

borrowings,” classified between current and non-

current liabilities as appropriate.

The Group recognizes a right-of-use asset and a lease

liability at the lease commencement date. The right-

of-use asset is initially measured at cost, which

comprises the initial amount of the lease liability

adjusted for any lease payments made at or before the

commencement date, plus any initial direct costs

incurred and an estimate of costs to dismantle and

remove the underlying asset or to restore the

underlying asset or the site on which it is located, less

any lease incentives received.

The right-of-use asset is subsequently depreciated

using the straight-line method from the

commencement date to the end of the lease term,

unless the lease transfers ownership of the underlying

asset to the Group by the end of the lease term or the

cost of the right-of-use asset reflects that the Group

will exercise a purchase option. In that case the right-

of-use asset will be depreciated over the useful life of

the underlying asset, which is determined on the same

basis as those of property and equipment. In addition,

the right-of-use asset is periodically reduced by

impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

The lease liability is initially measured at the present

value of the lease payments that are not paid at the

commencement date, discounted using the interest

rate implicit in the lease or, if that rate cannot be readily

determined, the Group’s incremental borrowing rate.

Generally, the Group uses an estimate of its

incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate

by obtaining interest rates from various external

financing sources and makes certain adjustments to

reflect the terms of the lease and type of the asset

leased.

Lease payments included in the measurement of the

lease liability comprise the following:

• fixed payments, including in-substance fixed

payments;

• variable lease payments that depend on an index or

a rate, initially measured using the index or rate as

at the commencement date;

• amounts expected to be payable under a residual

value guarantee; and

• the exercise price under a purchase option that the

Group is reasonably certain to exercise, lease

payments in an optional renewal period if the Group

is reasonably certain to exercise an extension

option, and penalties for early termination of a lease

unless the Group is reasonably certain not to

terminate early.

Some of the Group’s lease contracts include renewal

or termination options. In order to determine the lease

term for these contracts the Group takes into account

all relevant facts and circumstances in order to assess

whether it is reasonably certain that these options will

be exercised. This assessment has an impact on the

term of the lease, which has a significant effect on the

amount of the lease liabilities and the measurement of

the right-of-use asset recognized.

Generally, the Group uses an estimate of its

incremental borrowing rate as the discount rate.

The lease liability is remeasured when there is a change

in future lease payments arising from a change in an

index or rate, if there is a change in the Group’s

estimate of the amount expected to be payable under

a residual value guarantee, if the Group changes its

assessment of whether it will exercise a purchase,

extension or termination option, or if there is a revised

in-substance fixed lease payment. When the lease

liability is remeasured in this way, a corresponding

adjustment is made to the carrying amount of the

right-of-use asset, or is recorded in profit or loss if the

carrying amount of the right-of-use asset has been

reduced to zero.

Short-term leases and leases of low-value assets

The Group has elected not to recognize right of-use

assets and lease liabilities for leases of low-value assets

and short-term leases, including IT equipment. The

Group recognizes the lease payments associated with

these leases as an expense on a straight-line basis over

the lease term.

Sale and leaseback transactions

When the Group undertakes a sale and leaseback

transaction with a buyer-lessor, it determines whether

the transfer qualifies as a sale. This determination is

based on the requirements for satisfying a

performance obligation in IFRS 15 Revenue from

Contracts with Customers. If the transfer qualifies as a

sale and the transaction is on market terms the Group

splits the previous carrying amount of the underlying

asset into (a) a right-of-use asset arising from the

leaseback and (b) the rights in the underlying asset

retained by the buyer-lessor at the end of the

leaseback. The Group recognizes a portion of the total

gain or loss on the sale. The amount recognized is

calculated by splitting the total gain or loss into (a) an

unrecognized amount relating to the rights retained by

the seller-lessee and (b) a recognized amount relating

to the buyer-lessor’s rights in the underlying asset at

the end of the leaseback. The leaseback itself is then

accounted for under the lessee accounting model.

Adjustments are required if consideration for the sale is

not at fair value and/or payments for the lease are not

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	Annual Report 2024 | X-FAB consolidated financial statements

at market rates. These adjustments result in

recognition of a prepayment to reflect below-market

terms and/or additional financing provided by the

buyer-lessor to the seller-lessee to reflect above-

market terms.

The Group as lessor

The Group is lessor at several locations where it leases

commercial property which is owned by the Group but

not used for its own commercial business purposes.

The Group has classified these leases as operating

leases, because they do not transfer substantially all of

the risks and rewards incidental to the ownership of the

assets.

At inception or on modification of a contract that

contains a lease component, the Group allocates the

consideration in the contract to each lease component

on the basis of their relative stand-alone prices.

When the Group acts as a lessor, it examines each

lease at lease inception to determine whether is a

finance lease or an operating lease. This consists of

making an overall assessment of whether the lease

transfers substantially all of the risks and rewards

incidental to ownership of the underlying asset. If this is

the case, then the lease is a finance lease; if not, then it

is an operating lease. As part of this assessment, the

Group considers certain indicators such as whether the

lease is for the major part of the economic life of the

asset.

When the Group is an intermediate lessor, it accounts

for its interests in the head lease and the sublease

separately. It assesses the lease classification of a

sublease with reference to the right-of-use asset

arising from the head lease, not with reference to the

underlying asset. If a head lease is a short-term lease to

which the Group applies the exemption described

above, then it classifies the sub-lease as an operating

lease. If an arrangement contains lease and non-lease

components, then the Group applies IFRS 15 to

allocate the consideration in the contract.

All leases entered into by the Group as lessor to date

have been classified as operating leases and relate to

investment properties rented to third parties.

The Group recognizes lease payments received under

operating leases as income on a straight-line basis over

the lease term as part of “Income from investment

property rentals.”

4.18 Subsidies

The Group receives government assistance in the form

of government investment grants and investment

subsidies which are dependent on the acquisition of

certain assets qualifying under the respective grant

awards. Grants and subsidies related to assets are

recognized when there is reasonable assurance that

the entity will comply with the relevant conditions of

the grant, and that grant will be received. They are

recognized in profit or loss on a systematic basis as the

entity recognizes as expenses the costs that the grants

are intended to compensate. The investment grants

and subsidies received reduce the purchase cost for

the relevant subsidized assets recorded under

property, plant, and equipment.

The receipt of government assistance is governed by

terms set out in law and by specific terms and

conditions attached to the applicable grants and

subsidies.

4.19 Income taxes

The income tax charge includes current and deferred

tax. It is recognized in profit or loss except to the

extent that it relates to a business combination, or

items recognized directly in equity or in other

comprehensive income.

Current tax comprises the expected tax payable or

receivable on taxable profit or loss for the year and any

adjustment to the tax payable or receivable in respect

of previous years. The amount of current tax payable

or receivable is the best estimate of the tax amount

expected to be paid or received. It is measured using

tax rates enacted or substantively enacted at the

reporting date.

Current tax assets and liabilities are only offset if

certain criteria are met.

The Group has applied the exception to recognizing

and disclosing information about deferred tax assets

and liabilities related to Pillar Two income taxes, in

accordance with the amendments to IAS 12 issued in

May 2023.

Deferred income taxes reflect the tax effects of

temporary differences between the carrying amounts

of assets and liabilities for financial reporting purposes

and the amounts used for income tax purposes and

the deferred benefits expected from unused tax

losses, unused tax credits, and other credits carried

forward, whereby amounts are only recognized when

their realization is considered by management to

probable. Deferred tax assets and liabilities are

measured using the tax rates expected to apply to

taxable income in the years in which these temporary

differences are expected to be recovered or settled,

based on tax rates enacted or substantially enacted at

the statement of financial position date.

The measurement of deferred tax liabilities and

deferred tax assets reflects the tax consequences that

would follow from the manner in which the enterprise

expects, at the statement of financial position date, to

recover or settle the carrying amount of its assets and

liabilities.

Deferred tax assets are not discounted and are

classified as non-current assets in the statement of

financial position. Current and deferred tax assets and

liabilities are offset only if certain criteria are met. Such

criteria mean the entity has a legally enforceable right

to set off the recognized amounts and it intends either

to settle on a net basis or to realize the asset and settle

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	Annual Report 2024 | X-FAB consolidated financial statements

the liability simultaneously. Deferred tax assets are

recognized when it is probable that sufficient taxable

profits will be available against which the deferred tax

assets can be utilized.

At each statement of financial position date, the Group

reassesses unrecognized deferred tax assets and the

carrying amount of deferred tax assets. The Group

recognizes a previously unrecognized deferred tax

asset to the extent that it has become probable that

future taxable profit will allow the deferred tax asset to

be recovered. The probability of recognition is based

on the expected tax profits included in the Group’s

current business planning. The Group conversely

reduces the carrying amount of a deferred tax asset to

the extent that it is no longer probable that sufficient

taxable profit will be available to allow the benefit of

part or that entire deferred tax asset to be utilized.

A deferred tax liability is recognized for all taxable

temporary differences, unless the deferred tax liability

arises from the initial recognition of goodwill or the

initial recognition of assets or liabilities in a transaction

that is not a business combination and that affects

neither accounting nor taxable profit or loss.

4.20 Changes to accounting policies

New accounting pronouncements

The following amendments to standards, which are

effective for annual periods beginning on or before

January 1, 2024, have been applied by the Group for

the first time in preparing these consolidated financial

statements.

Standard/interpretation	Effective date
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures: Supplier Finance Arrangements (issued on May 25, 2023)	January 1, 2024
Amendments to IAS 1 Presentation of Financial Statements: – Classification of Liabilities as Current or Non‑current (issued on January 23, 2020); – Classification of Liabilities as Current or Non‑current - Deferral of Effective Date (issued on July 15, 2020); and – Non-current Liabilities with Covenants (issued on October 31, 2022)	January 1, 2024
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on September 22, 2022)	January 1, 2024

As a consequence of the amendments to IAS 1

Classification of Liabilities as Current or Non-current

the Group has amended the presentation of

borrowings under the Group’s multicurrency revolving

credit facility.

Until December 31, 2023 borrowings under the facility

were presented as current liabilities when the Group

planned to repay those borrowings within twelve

months of the reporting date. From January 1, 2024

these obligations are reported, retrospectively, as non-

current liabilities until the borrowing facility as a whole

has a remaining period to maturity of one year or less,

triggering a reclassification of USD 192,657 thousand

from current to non-current at December 31, 2023

irrespective of whether management chooses to repay

them within one year within the process of managing

its overall capital requirements. Accordingly, the

balance sheet at December 31, 2023 has been restated

to reflect this change. The changes have had no effect

on the condensed consolidated statement of cash

flows, the condensed consolidated statement of profit

and loss and other comprehensive income, or the

condensed consolidated statement of changes in

equity for the current or previous period.

The remaining amendments to standards and

amended interpretations did not have a significant

effect on the consolidated financial statements of the

X-FAB Group.

New standards, amendments to standards, and

interpretations effective for annual periods

beginning after January 1, 2024

A number of new standards, amendments to

standards, and interpretations are not yet effective for

annual periods ended December 31, 2024, and have

not been applied in preparing these consolidated

financial statements.

The Group is still in the process of assessing the impact

of the new standard IFRS 18, particularly with respect

to the structure of the Group’s statement of profit or

loss, the statement of cash flows, additional disclosures

required, and how information is grouped in the

financial statements.

The remaining amendments are not expected to have

a material impact on the Group’s consolidated financial

statements.

All of the amendments are effective for annual

reporting periods beginning on or after January 1,

2024, with early adoption permitted.

Amendments to IAS 21 The Effects of Changes in

Foreign Exchange Rates: Lack of Exchangeability,

issued on August 15, 2023, clarify when a currency is

exchangeable into another currency (and when it is

not). When a currency is not exchangeable, a company

needs to estimate a spot rate. The Company’s

objective when estimating a spot rate is that it reflects

the rate at which an orderly exchange transaction

would take place at the measurement date between

market participants under prevailing economic

conditions. The amendments contain no specific

requirements for estimating a spot rate. Under the

amendments, companies will need to provide new

disclosures to help users assess the impact of using an

estimated exchange rate on the financial statements.

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	Annual Report 2024 | X-FAB consolidated financial statements

The amendments are effective for annual reporting

periods beginning on or after January 1, 2025, with

early adoption permitted. These amendments have

not yet been endorsed by the EU.

Amendments to the Classification and

Measurement of Financial Instruments—

Amendments to IFRS 9 and IFRS 7, issued on

May 30, 2024, will address diversity in accounting

practice by making the requirements more

understandable and consistent. The amendments

include:

– Clarifications on the classification of financial assets

with environmental, social and corporate

governance (ESG) and similar features — ESG-

linked features in loans could affect whether the

loans are measured at amortized cost or fair value.

To resolve any potential diversity in practice, the

amendments clarify how the contractual cash flows

on such loans should be assessed.

– Clarifications on the date on which a financial asset

or financial liability is derecognized. The IASB also

decided to develop an accounting policy option to

allow a company to derecognize a financial liability

before it delivers cash on the settlement date if

specified criteria are met.

The International Accounting Standards Board has also

introduced additional disclosure requirements to

enhance transparency for investors regarding

investments in equity instruments designated at fair

value through other comprehensive income and

financial instruments with contingent features, for

example features tied to ESG-linked targets.

The amendments are effective for annual reporting

periods beginning on or after January 1, 2026 with early

adoption permitted. These amendments have not yet

been endorsed by the EU.

Annual Improvements Volume 11, issued on July 18,

2024, include clarifications, simplifications, corrections

and changes aimed at improving the consistency of

several IFRS Accounting Standards.

The amended Standards are:

– IFRS 1 First-time Adoption of International Financial

Reporting Standards;

– IFRS 7 Financial Instruments: Disclosures and its

accompanying Guidance on implementing IFRS 7;

– IFRS 9 Financial Instruments;

– IFRS 10 Consolidated Financial Statements; and

– IAS 7 Statement of Cash Flows.

The amendments are effective for annual reporting

periods beginning on or after January 1, 2026 with early

adoption permitted. These amendments have not

been endorsed by the EU.

IFRS 18 Presentation and Disclosure in Financial

Statements, issued on April 9, 2024, will replace IAS 1

Presentation of Financial Statements. The new

standard introduces the following key new

requirements:

– Entities are required to classify all income and

expenses into five categories in the statement of

profit or loss, namely the operating, investing,

financing, discontinued operations and income tax

categories. Entities are also required to present

newly defined operating profit subtotal. Entities’

net profit will not change.

– Entities are required to classify all income and

expenses into five categories in the statement of

profit or loss, namely the operating, investing,

financing, discontinued operations, and income tax

categories. Entities are also required to present

newly defined operating profit subtotal. Entities’

net profit will not change.

– Management-defined performance measures

(MPMs) are disclosed in a single note in the

financial statements.

– Enhanced guidance is provided on how to group

information in the financial statements.

In addition, all entities are required to use the operating

profit subtotal as the starting point for the statement

of cash flows when presenting operating cash flows

under the indirect method.

The standard is effective for annual reporting periods

beginning on or after January 1, 2027 with early

adoption permitted. The standard has not yet been

endorsed by the EU.

IFRS 19 Subsidiaries without Public Accountability:

Disclosures, issued on 9 May 2024, will allow eligible

subsidiaries to apply IFRS Accounting Standards with

reduced disclosure requirements. A subsidiary will be

to apply the new standard in its consolidated, separate,

or individual financial statements provided that, at the

reporting date:

– it does not have public accountability; and

– its parent produces consolidated financial

statements under IFRS Accounting Standards.

The standard is effective for annual reporting periods

beginning on or after January 1, 2027 with early

adoption permitted. The standard has not yet been

endorsed by the EU.

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	Annual Report 2024 | X-FAB consolidated financial statements

5 Business combinations

On January 1, 2024, the Group acquired the entire

share capital of M-MOS Semiconductor Hong Kong

Limited (M-MOS), a limited liability company

incorporated under the laws of Hong Kong, and its

subsidiaries for a consideration of EUR 22,500

thousand (USD 24,863 thousand) payable in cash.

M‑MOS was acquired from XTRION, a related party.

M-MOS is a developer of metal–oxide–semiconductor

field-effect transistor (MOSFET) process technologies

and designs standard and custom devices using

MOSFET technologies focusing on selling wafers to its

customers. The acquisition was made to generate

business synergies in particular in respect of the

MOSFET wafer business.

No acquisition costs have been recorded as expenses

in respect of the acquisition.

The following table summarizes the assets and

liabilities assumed as a result of the acquisition at

January 1, 2024:

in thousands of U.S. dollars
Property, plant, and equipment	238
Deferred tax assets	66
Inventories	2,878
Accounts receivable	4,483
Other assets	4,532
Cash and cash equivalents	23,229
Total assets	35,426
Non-current loans and borrowings	26
Trade payables	2,691
Other current liabilities	7,712
Deferred tax liabilities	134
Total liabilities	10,563
Total identifiable assets and liabilities acquired	24,863

The above amounts represent the Group’s estimates

of the fair values of the assets and liabilities assumed at

the acquisition date.

No material differences between the carrying amounts

and fair market values of the assets and liabilities

acquired were identified due to the fact that the assets

acquired primarily consisted of cash and cash

equivalents and in view of the short-term nature of the

receivables and liabilities.

No goodwill has been recognized as a result of the

business combination.

For the year ended December 31, 2024 M-MOS

contributed revenue of USD 17,684 thousand and

profit of USD 1,861 thousand to the Group’s results.

6 Notes to the consolidated statement of profit or

loss

6.1 Revenue

Revenue, which wholly and exclusively represents

revenue from contracts with customers, comprises the

following (refer to note 9 for revenue by geographic

concentration):

in thousands of U.S. dollars	2024	2023
Gross revenue PCM wafer	734,783	787,180
Gross revenue NRE and technology services	96,884	109,246
Revenue recognized over time PCM wafer	(5,919)	16,605
Other revenue	14	24
Discounts and warranty credits	(9,379)	(6,269)
Total	816,383	906,786

Revenues from production decreased by 6.6%, driven

by inventory adjustments in the automotive supply

chain following the build-up of high inventories in

response to the chip shortage. Revenue from

prototyping decreased by 11.3%.

Revenue from PCM wafer sales is generally recognized

at the specific point in time when the wafers are

delivered to the customer, and, in addition, since the

financial year 2023 revenue is recognized over time for

certain long-term contracts which meet the criteria for

revenue recognition over time. Revenue for wafer

sales recognized over time represents the Group’s

rights to consideration for work completed but not

invoiced at the reporting date on wafer sales under

long-term contracts which meet the criteria for

revenue recognition over time. As described in note

7.12 below, the Group receives prepayments from

customers for future wafer sales and capacity

reservation deposits in connection with such long-term

contracts.

The Group has not recognized revenues of variable

consideration from customers in respect of shortfalls

of orders from customers, nor any incurred or

anticipated contract penalties, or any downward

revisions of revenues previously recognized in the

financial year 2024 or 2023 as, at the current time, it is

anticipated that all customer orders will be supplied to

customers in full without any shortfalls. In addition, no

revenue is recognized in the current year from

performance obligations satisfied in prior years (e.g.

changes in transaction price).

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	Annual Report 2024 | X-FAB consolidated financial statements

6.2 Cost of sales

The cost of sales comprises the following:

in thousands of U.S. dollars	2024	2023
Employee-related expenses	(216,109)	(214,348)
Cost of materials	(174,451)	(188,638)
Costs of fixed assets (maintenance, spare parts, etc.)	(102,265)	(100,790)
Depreciation and amortization	(92,319)	(77,925)
Facility costs	(75,759)	(93,890)
External services	(5,807)	(10,058)
Changes in inventories	16,947	19,505
Grants	19,943	20,482
Other	(3,614)	(3,072)
Total	(633,434)	(648,734)

The decrease in cost of sales of 2.4% reflects the 10%

decrease in revenues with accompanying increases in

employee-related expenses due to tariff increases and

a higher average number of employees and increases

in depreciation.

6.3 Research and development expenses

Research and development expenses comprise the

following:

in thousands of U.S. dollars	2024	2023
Employee-related expenses	(39,878)	(36,042)
Cost of materials	(8,075)	(10,944)
Costs of fixed assets (incl. maintenance software, etc.)	(3,800)	(3,920)
Depreciation and amortization	(1,718)	(1,837)
Facility costs	(984)	(1,111)
External services	(606)	(684)
Grants	4,908	6,872
Other	368	475
Total	(49,785)	(47,191)

Research and development expenses increased

consistently with the increased sales volume. It is

X‑FAB’s policy to maintain a consistent rate of

research and development expenses in relation to

revenue.

6.4 Selling expenses

The selling expenses comprise the following:

in thousands of U.S. dollars	2024	2023
Employee-related expenses	(8,095)	(7,920)
Advertising costs and costs of selling goods	(985)	(627)
External services	(258)	(198)
Facility costs	(156)	(164)
Depreciation and amortization	(123)	(106)
Other	548	552
Total	(9,069)	(8,463)

6.5 General and administrative expenses

The general and administrative expenses comprise the

following:

in thousands of U.S. dollars	2024	2023
Employee-related expenses	(27,594)	(28,498)
External services	(7,051)	(6,790)
Costs of fixed assets (maintenance software, etc.)	(6,177)	(5,871)
Depreciation and amortization	(3,366)	(3,450)
Insurance, dues, and fees	(1,600)	(1,585)
Facility costs	(1,249)	(1,416)
Other	(314)	1,264
Total	(47,351)	(46,346)

Increases in software costs include costs for a change

in ERP system.

6.6 Expenses by nature

In the income statement, expenditures are classified by

function. Expenses include depreciation charges

allocated to the following items:

in thousands of U.S. dollars	2024	2023
Included in cost of sales	(91,462)	(77,060)
Included in research and development expenses	(1,172)	(1,284)
Included in selling expenses	(123)	(106)
Included in general and administrative expenses	(2,328)	(2,038)
Included in expenses related to investment properties and other expenses	(1,918)	(1,649)
Total	(97,003)	(82,137)

47

	Annual Report 2024 | X-FAB consolidated financial statements

Depreciation increased due to capitalization of tools

for capacity increases.

Expenses include charges for amortization of

intangible assets allocated to the following items:

in thousands of U.S. dollars	2024	2023
Included in cost of sales	(857)	(865)
Included in research and development expenses	(546)	(553)
Included in general and administrative expenses	(1,038)	(1,412)
Total	(2,441)	(2,830)

Employee-related expenses allocated according to

function in the income statement consist of the

following:

in thousands of U.S. dollars	2024	2023
Wages and salaries	(222,972)	(217,684)
Social security costs	(46,433)	(44,417)
Contributions to defined contribution plans	(13,132)	(13,028)
Other employee-related costs	(9,140)	(11,679)
Total	(291,677)	(286,808)

The increase in staff costs compared to the previous

year is primarily due to the general increase in business

activity.

Defined contribution plans primarily consist of

contributions made under statutory schemes by

employers to state-based defined contribution plans.

6.7 Rental income from investment properties

Rental income from investment properties comprises

the following:

in thousands of U.S. dollars	2024	2023
Income from technical services provided	8,446	11,391
Income from investment property rentals	6,293	6,178
Total	14,739	17,569

Property rentals and technical services for tenants

represent activities outside the X-FAB SE Group’s core

activities. Technical services mainly comprise the

supply of power, water, cooling water, ultra-pure water,

bulk gases, or compressed dry air.

6.8 Rental expenses related to investment

properties

Expenses related to investment properties comprise

the following:

in thousands of U.S. dollars	2024	2023
Expenses for technical services provided	(9,746)	(12,206)
Expenses in connection with investment property rentals	(2,222)	(2,457)
Total	(11,968)	(14,663)

Expenses in connection with investment properties

primarily relate to depreciation and building

maintenance.

6.9 Other income

Other income comprises the following:

in thousands of U.S. dollars	2024	2023
Gains on disposals of property, plant, and equipment	3,985	3,595
Income from recharges	3,462	3,078
Settlement of a dispute	950	—
Governmental refunds for energy	—	942
Income from other admin services/cost sharing	839	757
Income from sales of materials	287	67
Other	1,513	968
Total	11,036	9,407

The income from recharges primarily results from

charges for software maintenance costs to Melexis, a

former related party, included in the disclosures

presented in note 12.

Gains on disposal of property, plant, and equipment in

2024 and 2023 primarily related to sales of technical

machinery and equipment previously used by X‑FAB

France for technologies in operation in its predecessor

business prior to it being acquired by the X‑FAB Group.

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	Annual Report 2024 | X-FAB consolidated financial statements

6.10 Other expenses

Other expenses comprise the following:

in thousands of U.S. dollars	2024	2023
Settlement of a dispute	—	(5,095)
Expenses from recharges	(3,462)	(3,078)
Loss on disposal of subsidiary	(1,030)	—
Losses on disposal of property, plant, and equipment	(3)	(462)
Other	(509)	(947)
Total	(5,004)	(9,582)

Expenses incurred in 2023 to settle a dispute

represent the costs incurred to settle a third-party

liability claim for damages.

The expenses from recharges primarily relate to costs

in connection with recharges for software maintenance

provided to formerly related parties. Refer to note 12.

The loss on disposal of subsidiary arose as a result of

the closure and liquidation of the Group’s Russian

subsidiary.

6.11 Finance income

Finance income comprises the following:

in thousands of U.S. dollars	2024	2023
Interest on financial assets measured at amortized cost:
Interest on cash and cash equivalents	11,137	10,463
Other:
Income from exchange rate differences	24,869	24,195
Total	36,006	34,658

Income from exchange rate differences is primarily

due to currency exchange rate gains on translation

effects of euro-denominated loans. The net income

(income less expense disclosed in note 6.12) from

exchange rate differences increased to USD 3,337

thousand (2023: income of USD 109 thousand).

6.12 Finance costs

Finance costs comprise the following:

in thousands of U.S. dollars	2024	2023
Interest on financial liabilities measured at amortized cost:
Loans and borrowings	(16,117)	(12,173)
Other interest	(545)	(889)
Other:
Expenses from exchange rate differences	(21,532)	(24,087)
Other	(66)	—
Total	(38,260)	(37,149)

Exchange rate expenses primarily result from the

effects of changes in currency rates on cash balances

denominated in Malaysian ringgit and euros.

6.13 Income tax

Income taxes comprise German corporation and trade

taxes (plus solidarity surcharge), Belgian corporation

tax, French tax, and Malaysian tax on interest received.

United States federal income taxes have not been

incurred during the reporting period as no taxable

income was generated in that country or sufficient tax

0losses were available to offset taxable income.

Belgium, the jurisdiction where the “ultimate parent

entity” (i.e. X‑FAB Silicon Foundries SE) of the X‑FAB

Group is located, formally adopted the Pillar Two

(“Global Minimum Tax”) legislation in December 2023,

effective from 2024 onwards (i.e. for financial years

starting on or after December 31, 2023). Up to and

including the financial year starting on January 1, 2025,

the X-FAB Group did not yet meet the criteria to be

subject to the Pillar Two legislation. However, as from

the financial year starting on January 1, 2026, the

X‑FAB Group expects to fall within the scope of this

legislation. The X‑FAB Group has applied a temporary

mandatory relief from deferred tax accounting for the

impacts of the top-up tax (if any) and will account for

such top-up tax as a current tax when it is incurred.

Income taxes comprised the following:

in thousands of U.S. dollars	2024	2023
Current taxes:
Actual income tax charge for the period	(5,574)	(8,243)
Adjustment of prior years’ tax charges	914	(841)
	(4,660)	(9,084)
Deferred taxes	(17,104)	15,795
Total	(21,764)	6,711

49

	Annual Report 2024 | X-FAB consolidated financial statements

The Belgian tax rate applicable for the Group’s result

was 25.00% in 2024 and 2023. The deferred tax assets

and liabilities of the foreign subsidiaries are valued

based on local tax rates. The Group’s various German

operations incur federal income taxes and local trade

taxes which result in overall applicable tax rates of

between 31.58% and 32.28%. The federal income tax

rate applicable to the Group’s earnings in the United

States is 21.00%, the tax rate applicable on earnings in

Malaysia amounts to 24.00%, and the tax rate

applicable to X-FAB France is 25.00%.

The reconciliation of the theoretical tax charge based

on the IFRS net income before tax is as follows for the

years 2024 and 2023 :

in thousands of U.S. dollars	2024	2023
Result before taxes	83,289	155,184
Theoretical tax at combined applicable Belgian tax rate	(20,822)	(38,796)
Recognition of previously unrecognized deferred tax on timing differences and tax losses	12,080	58,100
Current year losses for which no deferred tax asset is recognized	(13,161)	(16,971)
Adjustment of prior period tax liabilities recorded in the current period	914	(841)
Effect of tax-free income	4,383	3,106
Currency effects	(3,948)	4,498
Effect of permanent differences	(193)	81
Effect of non-deductible expenditures	13	(236)
Effect of changes in applicable tax rates enacted during the year	—	—
Effect of different tax rates applying to foreign operations	(1,062)	(1,470)
Differences which are only valid for special taxes	32	(760)
Income/(expense) for income taxes recognized in the consolidated statement of profit or loss	(21,764)	6,711

Previously unrecognized deferred tax on timing

differences and tax losses results in deferred tax

income as the Group recognizes deferred tax on

timing differences and tax losses which are expected

to be realized in the near future. As described below,

the amount recognized in the statement of financial

position is based on the Group’s current business

planning. The amount reported includes deferred tax

assets of USD 51,015 thousand recognized in the

Group’s Malaysian subsidiary at December 31, 2024

(December 31, 2023: USD 55,615 thousand), USD 0

thousand (December 31, 2023: USD 7,949 thousand)

recognized in the US subsidiary, and USD 15,946

thousand (December 31, 2023: USD 20,518 thousand)

recognized in the Group’s German entities. The income

statement includes recognition of previously

unrecognized deferred tax on timing differences and

tax losses carried forward of USD 12,081 thousand

(previous year: USD 58,100 thousand) based on the

carrying value at the reporting date, less the amount

recognized in the previous year, after the amount

recognized in the previous year had been reduced by

the assets utilized in the current year.

Current year losses for which no deferred tax asset is

recognized primarily arose in the current and previous

years at the Group’s subsidiary in France.

Effects from tax-free income primarily relate to

various tax-exempted items of X-FAB Sarawak, for

example interest income, exchange rate gains, and

gains from fixed asset sales.

Currency effects mainly relate to the effect of changes

in exchange rates on tax carrying amounts

denominated in euros in 2024 and 2023.

The deferred tax assets and liabilities arise from

temporary differences and unused tax losses as follows:

in thousands of U.S. dollars	2024	2023
Deferred tax assets – unrecognized amounts
On unused tax losses	226,375	211,209
On temporary differences
Property, plant, and equipment/capital allowances	254,201	220,397
Other temporary differences	9,009	5,807
Total unrecognized deferred tax assets	489,585	437,413
Deferred tax assets – recognized amounts
On unused tax losses	24,515	34,976
On temporary differences
Property, plant, and equipment/capital allowances	44,789	51,505
Other temporary differences	(2,579)	(2,709)
Total recognized deferred tax assets	66,725	83,772

X-FAB SE Group recognizes deferred tax assets resulting

from temporary differences and from unused tax losses

which exceed the deferred tax liabilities only to the extent

that, on the basis of the Group’s business planning, the

realization of these assets is assessed as probable. This

assessment involves a review by management of profits

and losses expected in the business plan and limiting

recognition of the future tax benefits to take account of

potential variances against the business plan. Accordingly,

recognized and unrecognized deferred tax assets are

subject to estimation uncertainty, and there is a significant

50

	Annual Report 2024 | X-FAB consolidated financial statements

risk that the carrying amounts will require adjustment in

subsequent periods. The estimates are, in particular,

subject to the estimation uncertainties inherent in

business planning which affect the likely utilization of

unused tax losses and subject to potential changes in

exchange rates which affect the size of timing

differences.

Unrecognized temporary differences on property,

plant, and equipment and other timing differences

which can be used to offset future taxable income

mainly relate to an investment tax allowance of the

Group's Malaysian subsidiary.

More specifically, for the assessment of future available

taxable profit a risk-adjusted profits approach was

applied to the forecasts included in the Group’s business

planning. This method was applied to reflect the risk that

actual taxable profits will fall short of the expectations.

The Board has determined that adjusting the expected

future taxable profits for this component by using a risk

factor is appropriate considering the inherent risk in the

semiconductor market and the specific exchange rate

volatility risks which affect the assessment. In addition,

the Board has determined that taxable income as from

2028 does not meet the “probable” threshold as

required under IFRS standards and is not taken into

account for the determination of the amount of

deferred tax assets to be recognized.

In particular, tax legislation in the jurisdictions in which

the Group operates provides for the full or partial

cancellation of unused tax losses on the occurrence of

significant changes in the direct or indirect equity

ownership of the taxable entity. Accordingly, there is a

risk that recognized and unrecognized deferred tax

assets may not be realized should such transactions

occur in the future.

X-FAB SE and its subsidiaries have unused corporation

tax losses as follows:

in thousands of U.S. dollars	2024	2023
Belgian tax loss carry forward	—	2,702
German corporation tax loss carry forward	105,650	128,606
German trade tax loss carry forward	144,484	163,885
U.S. federal tax loss carry forward	155,610	151,883
U.S. state tax loss carry forward	26,087	22,291
Malaysian tax loss carry forward	336,061	327,678
French tax loss carry forward	392,414	357,084

The Group’s French and German tax losses can be

carried forward indefinitely, whereby in France and

Germany there are restrictions on the amounts that

can be utilized in any specific year. U.S. federal tax

losses for years prior to 2017 expire, if unused, after a

period of 20 years. U.S. federal tax losses of USD 0

million expired in 2024 (2023: USD 28.5 million). The

Group estimates that further U.S. federal tax losses of

USD 0.4 million will expire in the year 2025 unless

utilized. Unabsorbed Malaysian business losses expire

after a period of seven years. The unused tax losses

changed as a result of tax losses in the year, tax losses

offset in the year, and, in addition, changes in currency

exchange rates. Insignificant changes resulted from

changes in estimates between the dates of

preparation of the previous year’s consolidated

financial statements and the finalization of the tax

returns and tax assessments of individual entities.

Significant deferred tax balances arise in respect of tax

losses carried forward and on timing differences on

property, plant, and equipment. A summary of the

movements is presented in the table below. Deferred

tax balances on other balance sheet positions are

presented on a combined basis for this purpose.

51

	Annual Report 2024 | X-FAB consolidated financial statements

in thousands of U.S. dollars	Tax losses carried forward	Property, plant, and equipment	Other temporary differences	Total
Balance at January 1, 2023	39,313	33,709	(5,045)	67,977
Recognized in profit and loss	(4,337)	17,796	2,336	15,795
Recognized in other comprehensive income	—	—	—	—
Balance at December 31, 2023	34,976	51,505	(2,709)	83,772
Set off of tax	—	1,215	(1,215)	—
Net balance at December 31, 2023	34,976	52,720	(3,924)	83,772
Balance at January 1, 2024	34,976	51,505	(2,709)	83,772
Recognized in profit and loss	(10,461)	(6,716)	73	(17,104)
Recognized in other comprehensive income	—	—	—	—
Acquired in business combinations	—	—	57	57
Balance at December 31, 2024	24,515	44,789	(2,579)	66,725
Set off of tax	—	1,322	(1,322)	—
Net balance at December 31, 2024	24,515	46,111	(3,901)	66,725

Changes in recognized deferred tax assets resulted in

a deferred tax expense of USD 17,046 thousand

(2023: income of USD 15,795 thousand). The decrease

in previously unrecognized deferred tax assets on

property, plant, and equipment and other timing

differences recognized in 2024 compared to 2023 is

due to a lower than previously anticipated level of

taxable income generated from current and future

planned operating results at the Group’s subsidiaries.

This has generated an increase in deferred tax assets in

timing differences available for offsetting against

taxable income in future periods.

No income tax expenses or income have been

recorded on items recorded within other

comprehensive income (previous year: none).

6.14 Earnings per share

The earnings per share is calculated by dividing the

profit for the period attributable to the ordinary

shareholders (as reported in the statement of profit or

loss and other comprehensive income) by the

weighted average number of shares in issue during the

period.

The weighted average number of ordinary shares is

identical to the number of ordinary shares in issue

during the years ended December 31, 2024, and

December 31, 2023.

No instruments with a potential diluting effect on

shareholders’ equity have been in issue during the

years ended December 31, 2024, and December 31,

2023. Accordingly, there is no potential dilution of the

profit attributable to equity shareholders and no

difference between basic and diluted earnings per

share.

52

	Annual Report 2024 | X-FAB consolidated financial statements

7 Notes to the statement of financial position

7.1 Property, plant, equipment, and investment

properties

in thousands of U.S. dollars	Land	Buildings	Technical machinery and equipment	Factory and office equipment	Assets under construction	Total
Net book value January 1, 2024	14,065	48,781	317,448	7,271	346,923	734,488
Accumulated historical cost January 1, 2024	14,307	129,605	1,325,987	35,934	346,923	1,852,756
Additions	—	185	86,509	903	421,065	508,662
Disposals	—		(34,182)	(182)	(1,365)	(35,729)
Reclassifications	53	4,941	124,921	2,235	(132,927)	(777)
Change in consolidation	—	—	198	40	—	238
Accumulated historical cost December 31, 2024	14,360	134,731	1,503,433	38,930	633,696	2,325,150
Accumulated depreciation January 1, 2024	(242)	(80,824)	(1,008,539)	(28,663)	—	(1,118,268)
Additions	(40)	(4,326)	(88,631)	(3,638)	—	(96,635)
Disposals	—	—	33,895	476	—	34,371
Accumulated depreciation December 31, 2024	(282)	(85,150)	(1,063,275)	(31,825)	—	(1,180,532)
Net book value                December 31, 2024	14,078	49,581	440,158	7,105	633,696	1,144,618
Net book value            January 1, 2023	14,080	35,029	235,678	6,619	168,720	460,126
Accumulated historical cost January 1, 2023	14,292	112,027	1,175,354	33,288	168,720	1,503,681
Additions	15	2,147	60,105	2,610	291,619	356,496
Disposals	—	—	(5,454)	(1,685)	—	(7,139)
Reclassifications	—	15,431	95,982	1,903	(113,416)	(100)
Effect of changes in exchange rates	—	—	—	(182)	—	(182)
Accumulated historical cost December 31, 2023	14,307	129,605	1,325,987	35,934	346,923	1,852,756
Accumulated depreciation January 1, 2023	(212)	(76,998)	(939,676)	(26,669)	—	(1,043,555)
Additions	(30)	(3,826)	(74,129)	(3,649)	—	(81,634)
Disposals	—	—	5,266	1,513	—	6,779
Reclassifications	—	—	—	—	—	—
Effect of changes in exchange rates	—	—	—	142	—	142
Accumulated depreciation December 31, 2023	(242)	(80,824)	(1,008,539)	(28,663)	—	(1,118,268)
Net book value  December 31, 2023	14,065	48,781	317,448	7,271	346,923	734,488

53

	Annual Report 2024 | X-FAB consolidated financial statements

Property, plant, and equipment

Additions in technical machinery and equipment and

additions in assets under construction mainly refer to

capital investments in technical machinery in X-FAB

France (USD 84 million, 2023: USD 104 million), X-FAB

Sarawak (USD 371 million, 2023: USD 145 million),

X‑FAB Texas (USD 19 million, 2023: USD 68 million),

X‑FAB Erfurt (USD 5 million; 2023: USD 6 million),

X‑FAB Dresden (USD 30 million, 2023: USD 24 million),

X‑FAB MEMS Foundry Itzehoe (USD 3 million, 2023:

USD 4 million), and X‑FAB MEMS Foundry

(USD 16 million, 2023: USD 5 million), less government

grants of USD 20 million (2023: USD 0 million). Assets

under construction primarily include investments in

technical machinery. Additions in property, plant, and

equipment resulted in cash outflows in 2024 of

USD 509,467 thousand (2023: USD 337,789

thousand). Refer to the statement of cash flows.

The Group has received investment grants related to

the acquisition of qualifying assets amounting to

USD 20,113 thousand (2023: USD 0 thousand). These

are primarily grants received under the US CHIPS Act.

There were indications of a possible impairment of

property, plant, and equipment at the cash-generating

unit X‑FAB Texas at December 31, 2024, in view of

market developments for certain products

manufactured within that unit. Impairment tests were

performed to determine whether a write-down of the

carrying amounts of non-current assets was required.

No impairment write-downs were required following the

completion of the impairment tests as the recoverable

amounts based on the value in use were higher than the

carrying amounts of the relevant assets.

In addition, there was a potential indication of

impairment for the Group as a whole in view of the fact

that the Group’s market capitalization fell below the

carrying amount of the Group’s equity in 2024. No

detailed impairment tests of other cash-generating

units in addition to the testing performed on the X‑FAB

Texas cash-generating unit as for other cash-

generating units it was clear, on the basis of past

calculations, current results and specific extrapolation

of corporate planning, that their recoverable amounts

based on the value in use could not be below their

respective carrying amounts.

Accumulated historical costs have been reduced by

investment grants received of USD 155,772 thousand

(December 31, 2023: USD 137,573 thousand) and

accumulated depreciation has been reduced by

USD 130,885 thousand (December 31, 2023:

USD 129,066 thousand).

At December 31, 2024, property, plant, and equipment

with a book value of USD 20 million (December 31,

2023: USD 17 million) had been provided as collateral

security to third-party lenders. The carrying values of

technical machinery and equipment include USD 57.1

million (December 31, 2023: USD 17.6 million) which are

not owned by the Group but which are held under

leasing arrangements as disclosed in note 11.

Investment properties

Investment properties consist of properties let to third

parties by X‑FAB GmbH, X‑FAB Dresden, X‑FAB

Texas, and X‑FAB France. The lease arrangements, the

majority of which expire at various dates until 2024,

continue after expiry unless canceled by either party

within notice periods of between one month and six

months.

Investment properties are accounted for at purchase

cost less straight-line depreciation. The book and fair

values of these properties at the reporting date were

as follows:

in thousands of U.S. dollars	2024	2023
Net book value, beginning of period	7,171	7,674
Additions	84	—
Depreciation	(575)	(503)
Disposals		—
Reclassifications	732	—
Net book value, end of period	7,412	7,171
Accumulated cost	34,463	33,647
Accumulated depreciation	(27,049)	(26,476)
Fair value	34,693	34,714

Properties are reclassified between the land and

buildings and investment properties classifications

when there is a change in the use of the property (for

example, when a property previously used by the

Group is let to third parties or the Group uses a

property previously let to third parties).

Additions to investment properties represents work

capitalized on the Group’s existing investment

properties.

The fair values of the investment properties relate to

properties in Germany (December 31, 2024:

USD 19,087 thousand; December 31, 2023: 18,016

thousand), the USA (December 31, 2024: USD 1,791

thousand; December 31, 2023: USD 2,081 thousand),

and France (December 31, 2024: USD 13,815 thousand;

December 31, 2023: 14,617 thousand). The fair value

measurements of the investment properties have

been categorized as a Level 3 fair value based on the

inputs to the valuation techniques used. The valuations

disclosed of the Group’s investment properties are

updated annually. In the U.S. and in France the

valuations were performed by independent third-party

experts with the appropriate professional qualifications

and the necessary expertise in the location and

category of property. In Germany they are performed

by the management of X‑FAB SE Group, calculated on

the basis of discounted future cash flows, and

discounting future rents at a rate of 6.0%

(December 31, 2023: 6.0%). The valuation model takes

into account the rent per square meter, expected

rental growth rates, other costs, and the maturity of

the contracts.

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	Annual Report 2024 | X-FAB consolidated financial statements

No impairment charges were recorded against

investment properties in 2024 or 2023.

The following table sets out a maturity analysis of lease

payments which will be received in respect of

investment properties, showing the undiscounted

lease payments to be received after the reporting

date.

in thousands of U.S. dollars	2024	2023
2024		5,835
2025	5,689	5,796
2026	5,350	2,513
2027	1,901	2,091
2028	1,397	1,125
2029	1,144	—
Total	15,481	17,360

7.2 Intangible assets

The movements on intangible assets were as follows:

in thousands of U.S. dollars	Licenses	Payments on account	Total
Net book value January 1, 2024	4,005	1,622	5,627
Accumulated historical cost January 1, 2024	63,937	1,622	65,559
Additions	234	2,927	3,161
Disposals	—	—	—
Reclassifications	2,811	(464)	2,347
Accumulated historical cost December 31, 2024	66,982	4,085	71,067
Accumulated amortization January 1, 2024	(59,932)	—	(59,932)
Additions	(2,441)	—	(2,441)
Disposals	—	—	—
Reclassifications	(2,375)	—	(2,375)
Accumulated amortization December 31, 2024	(64,748)	—	(64,748)
Net book value December 31, 2024	2,234	4,085	6,319
Net book value January 1, 2023	4,381	1,818	6,199
Accumulated historical cost January 1, 2023	61,556	1,818	63,374
Additions	760	1,398	2,158
Disposals	(73)	—	(73)
Reclassifications	1,694	(1,594)	100
Accumulated historical cost December 31, 2023	63,937	1,622	65,559
Accumulated amortization January 1, 2023	(57,175)	—	(57,175)
Additions	(2,830)	—	(2,830)
Disposals	73	—	73
Accumulated amortization December 31, 2023	(59,932)	—	(59,932)
Net book value December 31, 2023	4,005	1,622	5,627

Intangible assets in the statement of financial position

do not include any capitalized costs of internally

generated assets. Payments on account refer to

advance and milestone payments made for the

acquisition of software licenses and the customization

of such software in a project not yet fully completed.

Refer to note 4.9.

No impairment against the carrying values of payments

on account was recorded in 2024 or 2023.

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	Annual Report 2024 | X-FAB consolidated financial statements

7.3 Inventories

Inventories comprise the following:

in thousands of U.S. dollars	2024	2023
Materials and supplies	160,618	163,949
Work in progress	118,354	105,765
Finished goods	9,941	6,749
Merchandise	6	6
Write-downs	(7,154)	(7,242)
Total	281,765	269,227

Changes in work in progress and finished goods

totaling USD 19,072 thousand were included in cost of

sales in 2024 (2023: USD 20,244 thousand). Write-

downs are recorded against inventories and

recognized as an expense in cost of sales in the period

of USD 2,125 thousand (2023: USD 739 thousand).

There have not been any reversals of write-downs.

Inventories wholly represent amounts which are

expected to be realized within 12 months.

Inventories for the manufacture of wafers under

contracts for which sales are recognized over time are

not recognized in work in process; instead they are

recorded as an expense within cost of sales with the

associated rights to consideration for work completed

but not invoiced at the reporting date recognized

within contract assets (note 7.4 below).

7.4 Contract assets

Contract assets relate to the Group’s rights to

consideration for work completed but not invoiced at

the reporting date on wafer sales recognized over

time. No impairment charges have been recognized on

contract assets. The contract assets are transferred to

receivables when the rights become unconditional.

This usually occurs when the Group issues an invoice to

the customer.

7.5 Trade and other receivables

Trade receivables and other receivables comprise the

following:

in thousands of U.S. dollars	2024	2023
Trade accounts receivable	97,806	121,646
Amounts due from related party entities	172	2,774
Allowances	(1,331)	(1,319)
Total	96,647	123,101

Trade receivables are generally on 30 to 90-day terms

and are non-interest bearing. They are classified as

financial assets at amortized cost for financial reporting

purposes. Under consideration of allowances made,

the fair values of trade receivables approximate their

carrying amount. The amounts due from related

parties are in respect of trade accounts receivable

balances.

As at December 31, the aging analysis of trade

accounts receivables (third parties, net of allowances)

is as follows:

in thousands of U.S. dollars	2024	2023
Neither past due nor impaired	74,547	83,269
Past due 1–30 days	7,910	24,149
Past due 31–60 days	1,188	941
Past due 61–360 days	3,662	11,968
Past due >360 days	9,169	—
Total	96,476	120,327

The Group measures the expected credit losses of

trade receivables by using an allowance matrix to

measure the expected losses on trade receivable

balances, including those with related parties. The

allowances are based on the number of days each

balance is overdue. The assessment of expected

losses on trade receivable balances that are not

impaired is based on past experience of credit losses,

which the Group considers to be a reasonable

approximation of the losses that can be expected in

future periods since there are no indications that there

will be significant changes in the industry going

forward. No expected credit loss has been recorded

against prepayments under long-term wafer supply

agreements amounting to USD 10.5 million included in

amounts in excess of 360 days overdue (previous year:

61-360 days overdue) in view of the fact that the

payments are to be made in advance of services being

provided. An analysis of receivables by geographic

region or by type of customer is not made since X‑FAB

mainly deals with global customers and hence there is

no significant difference in risks between the

geographic regions where X‑FAB is active or the type

of customers served by X‑FAB. The amount of trade

receivables due from related parties is disclosed

separately from trade receivables in the table above

and in the related party disclosures in note 12 below.

In addition, X‑FAB recorded several additional

allowances on individual case-by-case assessments for

credit-impaired balances.

There are 2 (previous year: one) accounts receivable

with customers with individual balances in excess of

10% of the total accounts receivable balance at

December representing USD 46,475 (previous year:

USD 50,663), which is 48% (previous year: 41%) of the

total accounts receivable at the reporting date.

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	Annual Report 2024 | X-FAB consolidated financial statements

The following tables provide information on the

exposure to credit risk and the loss allowances made

for balances which are not credit impaired as at

December 31, 2024, and December 31, 2023:

December 31, 2024
in thousands of U.S. dollars	Weighted average loss rate	Gross carrying amount	Loss allowance
Neither past due nor impaired	0.08%	74,803	(60)
Past due 1–30 days	0.08%	7,910	(6)
Past due 31–60 days	1.50%	1,188	(18)
Past due 61–90 days	3.75%	123	(5)
More than 90 days past due (less credit impaired)	9.75%	2,124	(207)
Total		86,148	(296)

December 31, 2023
in thousands of U.S. dollars	Weighted average loss rate	Gross carrying amount	Loss allowance
Neither past due nor impaired	0.08%	94,756	(76)
Past due 1–30 days	0.08%	24,149	(19)
Past due 31–60 days	1.50%	941	(14)
Past due 61–90 days	3.75%	869	(33)
More than 90 days past due (less credit impaired)	9.75%	2,386	(233)
Total		123,101	(375)

in thousands of U.S. dollars	2024	2023
Balance at January 1	(1,319)	(1,087)
Impairment loss recognized	(103)	(4)
Use of allowance	8	(33)
Reversal of allowance	2	—
Net remeasurement of loss allowance	81	(195)
Balance at December 31	(1,331)	(1,319)

There are no balances which were written off during

the period and which continue to be the subject of

collection processes.

7.6 Other assets

Other assets comprise the following:

in thousands of U.S. dollars	2024	2023
Other assets	67,423	50,064
Other non-current assets	42	58
Total	67,465	50,122

Current other assets comprise the following:

in thousands of U.S. dollars	2024	2023
R&D grants receivable	26,795	25,188
Prepaid expenses	17,538	13,072
Receivables from energy surcharges	5,706	5,116
Taxes (other)	6,337	5,658
Investment grants and subsidies receivable	9,890	—
Deposits	483	543
Other	674	487
Total	67,423	50,064

Investment grants receivable relate to qualifying

property, plant and equipment awarded to X-FAB

Texas (refer to note 7.1).

Research and development grants receivable in 2024

include USD 17,876 thousand research and

development tax credits and competitiveness and

employment tax credits attributable to X‑FAB France

(December 31, 2023: USD 10,343 thousand).

Research and development tax credits and

competitiveness and employment tax credits

attributable to X‑FAB France totaling USD 0 thousand

(2023: USD 8,510 thousand) were sold without

recourse to a bank in 2024. The carrying amounts of

the credits sold generated cash inflows of USD 0

thousand (2023: USD 7,639 thousand) net of USD 0

thousand representing interest expenses and fees

(2023: USD 871 thousand). On initial recognition,

X‑FAB France presents the grant receivables as a

reduction of cost of sales and research and

development expenses, consistent with the Group’s

general presentation of subsidized expenses. The sales

accelerate the cash inflows from tax credits; in the

normal course of events where the credits are not sold

they can be offset against income tax payable by

X‑FAB France or will be paid to X‑FAB France at a

subsequent date if there is no income tax to be paid.

Due to the sale, these repayments will be received by

the bank directly. There are no remaining ongoing

obligations to be fulfilled by X‑FAB France in respect

of the tax credits and the credits have been

derecognized and the amounts received by the bank

have been recognized as cash and cash equivalents.

Prepaid expenses refer to prepayments made for raw

materials.

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	Annual Report 2024 | X-FAB consolidated financial statements

The deposits mainly represent security deposits

provided as collateral security and are classified as

current assets as they are either in connection with

contractual arrangements which may be canceled at

short notice or are expected to be released within

12 months on other grounds.

7.7 Cash and cash equivalents

Cash and cash equivalents comprise the following:

in thousands of U.S. dollars	2024	2023
Cash and bank balances	153,164	157,545
Restricted cash	4,189	4,018
Term deposits	58,484	244,138
Total	215,837	405,701

Term deposits and some cash at bank balances earn

interest at floating rates based on daily bank deposit

rates. Restricted cash refers to pledged cash against

bank guarantee facilities for electricity charges and

custom clearance charges in X‑FAB Sarawak. The fair

values of cash and short-term deposits are identical to

the carrying amounts.

7.8 Equity

Share capital

X‑FAB Silicon Foundries SE had 130,781,669 fully

paid‑in ordinary shares in issue at December 31, 2024,

and December 31, 2023. Each share carries one vote at

the Company’s general meetings. There are no

unissued shares authorized for issue.

Share premium

The share premium of X‑FAB Silicon Foundries SE

represents the excess of paid-in capital for shares at

the time of their issue over the fractional value of the

shares.

Retained earnings

Retained earnings represent the accumulated profits

and losses of the Group together with the

accumulated balance of the remeasurement of the

Group‘s defined benefit post-employment benefit

plans.

Other comprehensive income in the financial year

2023 included an amount of USD 2,287 thousand to

record the accumulated effect of wafer sales

recognized over time at the beginning of the reporting

period.

Cumulative translation adjustment

The translation reserve comprises all foreign currency

differences arising from the translation of the financial

statements of foreign operations that have functional

currencies other than USD.

Treasury shares

At December 31, 2024 the Group held 149,748

treasury shares of X‑FAB Silicon Foundries SE held by

its fully owned subsidiary X‑FAB GmbH. Based on the

purchase price of EUR 11.25 per share, the treasury

shares reduced the equity capital of the parent

company by USD 770 thousand (December 31, 2023:

USD 770 thousand).

Share-based payment arrangements

The Group had no share-based payment

arrangements and no share option programs during

the years ended December 31, 2024, or December 31,

2023.

Authorization to acquire treasury shares

In accordance with the Belgian Companies and

Associations Code, the Articles of Association permit

the Company to acquire, on or outside the stock

market, its own shares, profit-sharing certificates or

associated certificates by resolution approved by the

shareholders’ meeting by a majority of at least 75% of

the votes cast where at least 50% of the share capital

and at least 50% of the profit certificates, if any, are

present or represented. Prior approval by the

shareholders is not required if the Company purchases

the shares in order to offer them to the Company’s

employees.

The shares, profit-sharing certificates, or associated

certificates can only be acquired with funds that would

otherwise be available for distribution as dividend. The

total nominal value or fractional value of the shares,

profit-sharing certificates, or associated certificates

held by the Company can at no time be more than 20%

of the share capital. Voting rights attached to shares

held by the Company as treasury shares are

suspended.

On April 28, 2022, an extraordinary shareholders’

meeting authorized the Board of Directors to purchase

up to 20% of the outstanding shares, for a price not

lower than 10% below the lowest closing price in the last

30 trading days preceding the transaction and not

more than 5% above the highest closing price during

the last 30 trading days preceding the transaction. This

authorization is valid for five years from April 28, 2022.

The above authorization is also valid if the acquisition

was made by one of the subsidiaries directly controlled

by the Company, as set out in Article 5 SE Regulation

juncto Article 7:221 of the Belgian Companies and

Associations Code.

The Board of Directors is authorized to divest all or

part of the shares, profit-sharing certificates, or

associated certificates at a price it determines, on or

outside the stock market or in the framework of its

remuneration policy to employees, directors, or

consultants of the Company, or to prevent any serious

and imminent harm to the Company. This authorization

is valid without any restriction in time, except when the

divestment is made to prevent serious and imminent

harm to the Company, in which case the authorization

58

	Annual Report 2024 | X-FAB consolidated financial statements

is only valid for three years as from the date of the

publication of the authorization in the Annexes to the

Belgian State Gazette (Belgisch Staatsblad/Moniteur

belge) (i.e. May 2, 2022). The authorization covers the

divestment of the shares, profit-sharing certificates, or

associated certificates by a direct subsidiary of the

Company, as set out in Article 5 SE Regulation juncto

Article 7:221 of the Belgian Companies and

Associations Code.

7.9 Dividends

No dividends were resolved or paid in the years 2024

or 2023.

Under Belgian company law, the shareholders decide

on the distribution of profits at the annual

shareholders’ meeting, based on the latest audited

statutory accounts of the Company. Dividends may be

paid either in cash or in kind. However, shareholders

may not declare a dividend if the Company has not first

reserved at least 5% of its profits for the financial year

until such reserve has reached an amount equal to 10%

of its share capital (the “Legal Reserve”) or if, following

any such dividend, the level of the net assets adjusted

for the unamortized balance of the incorporation costs

and capitalized research and development costs of the

Company falls below the amount of the Company’s

paid-in-capital and of its non-distributable reserves.

The Board of Directors may pay an interim dividend,

provided certain conditions set forth in Belgian

company law are met.

7.10 Loans and borrowings

The Group has unused credit lines available under bank

loan facilities as follows:

in thousands of U.S. dollars	2024	2023
Unused credit lines
Unused part of multicurrency revolving credit facility denominated in EUR or in USD – variable rates	133,197	19,000
Interest rate USD: SOFR +1.25%
Interest rate EUR: EURIBOR +1.0%
Unused part of multicurrency revolving credit facility denominated in EUR or in USD – variable rates	193,175	—
Interest rate USD: SOFR +1.7%
Interest rate EUR: EURIBOR +1.35%
Unused credit lines denominated in EUR – fixed rates	7,311	7,735
Interest rate: 5.47–5.75%
Other unused credit lines denominated in EUR – variable rates	2,089	2,210
Interest rates: EURIBOR +2.5%

The carrying amounts of the Group’s loans and

borrowings at December 31 are shown in the following

table:

59

	Annual Report 2024 | X-FAB consolidated financial statements

in thousands of U.S. dollars	2024	2023 *restated
Bank loans and overdrafts
Fixed interest bank loans denominated in EUR	64,142	47,373
Maturity: 2025–2029
Interest rates: 0.9–4.27%
Repayments in monthly or quarterly installments
Fixed interest bank loans denominated in USD	530	405
Maturity: 2025-2028
Interest rates:.8.25–8.5%
Repayments in monthly installments/on maturity
Variable interest bank loans denominated in EUR	26,110	—
Maturity: 2029
Interest rates:  EURIBOR + 0.95%
Repayments in monthly or quarterly installments
Variable interest revolving credit facility denominated in USD	143,231	99,876
Maturity: 2026
Interest rates: SOFR + 1.67%
Repayment on maturity
Variable interest revolving credit facility denominated in EUR	75,197	91,715
Maturity: 2026
Interest rates: EURIBOR + 1.0%
Repayment on maturity
Variable interest revolving credit facility denominated in EUR	6,825	—
Maturity: 2029
Interest rates: EURIBOR + 1.35%
Repayment on maturity
Leasing arrangements
Leasing liabilities denominated in EUR	62,360	11,230
Maturity: 2025–2034
Interest rates: 0.15–3.57%
Repayment in monthly installments
Leasing liabilities denominated in USD	8,376	6,526
Maturity: 2025–2038
Interest rates: 3.32%
Repayment in monthly installments
Leasing liabilities denominated in MYR	27,362	3,852
Maturity: 2025–2034
Interest rates: 4.66%
Repayment in monthly installments
Total	414,133	260,977
Current loans and borrowings	44,517	25,659
Non-current loans and borrowings	369,616	235,318

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	Annual Report 2024 | X-FAB consolidated financial statements

Variable interest bank loans include loans amounting to

USD 142,000 thousand and EUR 78,500 thousand

(December 31, 2023: USD 98,000 thousand and

EUR 83,000 thousand ) under the Group’s two

EUR 200,000,000 multicurrency revolving facility

agreements (“the facilities”) entered into between the

parent company and its principal subsidiaries and a

syndicate of eight international banks on December 1,

2021 and August 1, 2024 respectively. Both credit

facilities are for a five-year period until December

2026 and July 2029 respectively, with an option for

X‑FAB to request an extension of the facility’s maturity

date for a further year until December 2027 and July

2030 respectively. The options are exercisable not

earlier than 90 days prior to and not 45 days later than

prior to the respective initial termination dates.

In the consolidated financial statements for the

previous year the borrowings under the facility were

reported as current liabilities as, at the reporting date

the Group did not expect to refinance or roll over

these obligations for at least 12 months after the

reporting date under the facility. At December 31,

2024, in accordance with the amended IAS 1, the

borrowings have been presented as non-current as the

Group has the right to refinance or roll over these

obligations for at least 12 months under the facility.

Consistent with this approach, the amounts reported

for the previous year have been restated to present

these amounts as non-current liabilities.

The movements on loans and borrowing include

exchange rate gains of USD 8,214 thousand resulting

from the translation of euro-denominated loans and

borrowings (2023: exchange rate losses of USD 4,415

thousand).

The fair values of the Group’s loans and borrowings are

presented in note 10.

Approximately 20% of the Group’s loans are at a fixed

rate of interest (December 31, 2023: 27%). Refer to

note 10. Bank loans and overdrafts of USD 2,531

thousand (2023: USD 10,298 thousand) are secured by

charges on plant and machinery and land (see note 7.1).

Contractual maturities

The contractual maturities of the Group’s non-

derivative financial liabilities (including lease liabilities)

at December 31, 2024, and December 31, 2023, are

shown in the table below. The amounts presented in

the table are undiscounted and do not include interest

as most of the liabilities are linked to credit facilities for

which interest can fluctuate over time depending on

the level of the used part of these facilities:

in thousands of U.S. dollars	2024	2023
2024		215,469
2025	40,667	19,484
2026	259,718	13,853
2027	32,261	2,860
2028	32,544	3,256
2029-2035	48,942	6,055
Total	414,132	260,977

The Group is exposed to a liquidity risk in that the

maturity of bank loan agreements, which are presented

based on the contractual payment obligations, could

be brought forward should the Group fail to comply

with its contractual obligations under the bank loan

agreements.

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	Annual Report 2024 | X-FAB consolidated financial statements

The following table provides a reconciliation of the movements in liabilities to the cash flows arising from financing

activities for the year 2024:

in thousands of U.S. dollars	Liabilities		Equity
	Loans and borrowings	Lease liability	Share capital	Share premium	Retained earnings	Total
Balance at December 31, 2023	239,369	21,608	432,745	348,709	180,158	1,222,589
Changes from financing cash flows
Proceeds from loans and borrowings	209,669	—	—	—	—	209,669
Repayment of loans and borrowings	(124,237)	—	—	—	—	(124,237)
Receipts from sale and leaseback arrangements	—	60,584	—	—	—	60,584
Payments of lease liabilities	—	(12,502)	—	—	—	(12,502)
Interest paid	(17,214)	—	—	—	—	(17,214)
Total changes from financing cash flows	68,218	48,082	—	—	—	116,300
Other changes
Effect of changes in foreign exchange rates	(8,214)	(2,904)	—	—	—	(11,118)
Liability related
New leases	—	27,903	—	—	—	27,903
Prolongation of existing lease contracts	—	3,409	—	—	—	3,409
Interest expenses	16,662	—	—	—	—	16,662
Equity related	—	—	—	—	61,489	61,489
Total liability-related other changes	16,662	31,312	—	—	—	47,974
Total equity-related other changes	—	—	—	—	61,489	61,489
Balance at December 31, 2024	316,035	98,098	432,745	348,709	241,647	1,437,234

62

	Annual Report 2024 | X-FAB consolidated financial statements

The following table provides a reconciliation of the movements in liabilities to the cash flows arising from financing

activities for the year 2023:

in thousands of U.S. dollars	Liabilities		Equity
	Loans and borrowings	Lease liability	Share capital	Share premium	Retained earnings	Total
Balance at December 31, 2022	270,434	26,509	432,745	348,709	16,508	1,094,905
Changes from financing cash flows
Proceeds from loans and borrowings	205,784	—	—	—	—	205,784
Repayment of loans and borrowings	(241,806)	—	—	—	—	(241,806)
Payments of lease liabilities	—	(5,512)	—	—	—	(5,512)
Interest paid	(11,630)	—	—	—	—	(11,630)
Total changes from financing cash flows	(47,652)	(5,512)	—	—	—	(53,164)
Other changes
Effect of changes in foreign exchange rates	4,414	23	—	—	—	4,437
Liability related
Prolongation of existing lease contracts	—	588	—	—	—	588
Interest expenses	12,173	—	—	—	—	12,173
Equity related	—	—	—	—	163,650	163,650
Total liability-related other changes	12,173	588	—	—	—	12,761
Total equity-related other changes	—	—	—	—	163,650	163,650
Balance at December 31, 2023	239,369	21,608	432,745	348,709	180,158	1,222,589

63

	Annual Report 2024 | X-FAB consolidated financial statements

7.11 Other non-current liabilities

Other non-current liabilities primarily comprise defined

benefit pension obligations and deferred rental

income.

Other non-current liabilities include an amount of

USD 4,157 thousand at December 31, 2024

(December 31, 2023: USD 3,967 thousand),

representing the net defined benefit obligations under

a long-service retirement lump-sum payment scheme

at the Group’s subsidiary X‑FAB France. An additional

USD 0 thousand (December 31, 2023: USD 730

thousand) of defined benefit obligations relating to

this plan are recorded as other current liabilities. The

net defined benefit obligation consists of defined

benefit obligations under the scheme of USD 8,475

thousand (December 31, 2023: USD 9,057 thousand)

less plan assets recorded at their fair values of

USD 4,318 thousand (December 31, 2023: USD 4,360

thousand). Under this scheme, X‑FAB France awards

its employees a lump-sum payment on reaching

retirement age of 65 (for management employees)

and 62 (for other employees). The payment is

dependent on the final salary of the employee and the

length of time the employee has been employed by

X‑FAB France. Employees are not required to

contribute to the plan. The liability recognized for the

future defined benefit obligation under this scheme is

presented net of the funding plan assets which are

“ring fenced” to meet obligations under the scheme.

The plan assets at December 31, 2024 consist of

investments in a fund that is managed by a financial

institution of which the underlying assets relate to

long-term bonds with capital guarantees of USD 1,910

thousand at December 31, 2024 (December 31, 2023:

USD 1,969 thousand) and equity savings plans with a

value of USD 2,408 thousand at December 31, 2024

(December 31, 2023: USD 2,391 thousand).

Accordingly, there are risks typical of such defined

benefit obligations, i.e. actuarial risks associated with

the uncertainties of the estimated obligations under

the scheme and with the anticipated performance of

the investment assets held to offset the obligations

under the scheme.

in thousands of U.S. dollars	DBO	Fair value of plan assets	Net defined benefit liability
January 1, 2024	9,057	(4,360)	4,697
Included in profit or loss:
Current service cost	782	—	782
Currency effects from conversion into USD	(493)	110	(383)
Included in OCI:
Return on plan assets	—	(68)	(68)
Actuarial losses	104	—	104
Other:
Benefits paid	(975)	—	(975)
December 31, 2024	8,475	(4,318)	4,157
			—
January 1, 2023	8,547	(4,034)	4,513
Included in profit or loss:
Current service cost	674	—	674
Currency effects from conversion into USD	304	(282)	22
Included in OCI:
Return on plan assets	—	(44)	(44)
Actuarial losses	577	—	577
Other:
Contributions paid by the employer	(1,045)	—	(1,045)
December 31, 2023	9,057	(4,360)	4,697

The primary assumptions made in calculating the

defined benefit obligation were as follows:

in thousands of U.S. dollars	2024	2023
Discount rate	3.32%	3.18%
Employee turnover	5.00%	5.00%
Social security costs	47.00%	47.00%

The discount rate used is calculated by reference to

marked yields on high quality corporate bonds. Future

salary growth is assumed to be 1.0% higher than

inflation (December 31, 2023: 1.0%). Assumptions

regarding future mortality have been based on

published statistics and mortality tables.

The Group expects to pay no contributions to the

funding plan in 2025.

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	Annual Report 2024 | X-FAB consolidated financial statements

Reasonably possible changes at December 31, 2024,

and December 31, 2023, to one of the actuarial

assumptions, holding other assumptions constant,

would have affected the defined benefit obligation

changing the discounted amounts of the net liability by

the amounts shown below:

in thousands of U.S. dollars	Increase at Dec. 31, 2024	Decrease at Dec. 31, 2024	Increase at Dec. 31, 2023	Decrease at Dec. 31, 2023
Discount rate (+0.25% movement)	—	138	—	153
Future salary growth (+0.25% movement)	146	—	163	—

The defined benefit obligation is not materially

sensitive to a reasonable potential change in the

assumed mortality rate.

7.12 Trade payables and other current liabilities

Trade payables are non-interest bearing and are

normally settled on 60-day terms. Trade payables

totaled USD 67,658 thousand at December 31, 2024

(USD 90,681 thousand at December 31, 2023). This

decrease was influenced by the general decrease of

business.

Other current liabilities comprise the following:

in thousands of U.S. dollars	2024	2023
Accrued liabilities	29,968	39,606
For invoices not yet received	28,048	37,385
Royalties	622	682
Sales commissions	481	415
Staff association costs	588	632
Other	229	492
Advances received	323,915	301,287
Deferred income	814	(29)
Employee-related liabilities	23,458	26,722
Wages	2,078	3,165
Earned holiday entitlement, incentives	15,758	17,419
Payroll taxes	1,310	1,358
Social security costs	4,312	4,780
Other	2	(4)
Total	378,157	367,582

Advances received relate to prepayments from

customers for future wafer sales of USD 40,718

thousand (December 31, 2023: USD 29,186 thousand)

and capacity reservation deposits received under

long‑term agreements concluded with customers of

USD 283,197 thousand (December 31, 2023:

USD 272,101 thousand). These amounts represent

contract liabilities as defined in IFRS 15 and, depending

on the respective agreements with the customer, will

be settled by offsetting advances received against

deliveries of wafers made or by settlement against

trade accounts receivable within the next three to five

years.

All prepayments from customers for future wafer sales

and capacity reservation deposits are recorded as

current or non-current based on the usual classification

principles, i.e., items that are settled within the normal

operating cycle are classified as current, even if they

are expected to be settled after twelve months.

However, the Group expects prepayments from

customers for future wafer sales and capacity

reservation deposits totaling USD 225,311 thousand to

be settled after more than 12 months (December 31,

2023:.USD 261,914 thousand).

7.13 Provisions

Provisions comprise the following:

in thousands of U.S. dollars	2024	2023
Current provisions	11,978	9,775
Non-current provisions	54	56
Total	12,032	9,831

Current provisions primarily relate to warranty costs.

Warranty provisions are estimated based on the

Group’s experience of past claim rates and knowledge

of current claims together with an assessment of

rectification costs. Increased business resulted in an

increase in warranty provisions in the financial year.

Non-current provisions refer to anniversary bonuses

for employees accounted for in accordance with

IAS 19, which include estimates of future staff turnover,

based on the Group’s experience of staff turnover

rates in recent years.

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	Annual Report 2024 | X-FAB consolidated financial statements

The movements on provisions during the year were as

follows:

in thousands of U.S. dollars	Warranty provisions	Employee provisions	Other	Total
January 1, 2024	8,523	593	716	9,832
Provided for	6,696	29	237	6,962
Utilized	(3,563)	(212)	(791)	(4,566)
Released	(125)	(1)	—	(126)
Effect of changes in exchange rates	(47)	7	(30)	(70)
December 31, 2024	11,484	416	132	12,032

in thousands of U.S. dollars	Warranty provisions	Employee provisions	Other	Total
January 1, 2023	6,854	616	—	7,470
Provided for	3,687	10	1,000	4,697
Utilized	(1,500)	(50)	—	(1,550)
Released	(535)	—	(287)	(822)
Effect of changes in exchange rates	17	17	3	37
December 31, 2023	8,523	593	716	9,832

8 Notes to the statement of cash flows

The change in trade payables in working capital

excludes changes in the amounts of outstanding

liabilities for additions to property, plant, and

equipment, as payments for additions to fixed assets

are recorded in the statement of cash flows when

payment is made.

Cash flows from operating activities in the financial

year 2023 included, for the first time, significant

amounts of receipts of prepayments from customers

for the future supply of wafers and receipts and

repayments of capacity reservation deposits received

under long-term agreements concluded with

customers. The amounts of prepayments from

customers and capacity reservation deposits carried

forward for offsetting against trade accounts

receivable or for repayment to customers are

disclosed within other current liabilities as reported in

note 7.12.

Non-cash transactions primarily include the effects

from exchange rate differences, allowances on trade

receivables and increases in provisions.

The difference between the cash outflows for

investments and the additions to property, plant, and

equipment is primarily due to the level of outstanding

invoices for additions recorded at the end of the

financial year.

The Group entered into sale and leaseback

transactions for property, plant, and equipment in

2024. The cash inflow from that transaction was

received in 2024 and amounted to USD 60,584

thousand.

9 Segment reporting

Operating segment

The Group manages its CMOS, SiC and MEMS

operations as one single operating segment. Operating

decisions are taken on a product and technology level

by the President and Chief Executive Officer, who is

assisted by the parent company’s management team.

Accordingly, X‑FAB has identified its President and

CEO as its chief operating decision maker for the

purposes of defining segments in accordance with

IFRS 8. No separate operating results for the CMOS,

SiC and MEMS operations are used by the chief

operating decision maker to manage X‑FAB’s

operations, assess performance, or make resource

allocation decisions. As a result, X‑FAB has determined

that its operations constitute one single segment.

Geographic concentrations

The following table shows an analysis of revenue

(based on the customer’s billing location) and non-

current assets by geographic area for the reporting

period.

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	Annual Report 2024 | X-FAB consolidated financial statements

Revenue by geographic area:

in thousands of U.S. dollars	2024	2023
Europe	550,500	595,583
Belgium	365,731	402,545
Germany	94,849	87,558
United Kingdom	50,646	58,871
Austria	13,756	8,351
France	7,688	7,098
Switzerland	5,864	8,434
Sweden	1,646	6,116
Denmark	2,090	3,475
Other	2,566	3,288
Finland	1,429	2,369
Netherlands	1,947	4,872
Ireland	2,288	2,606
Asia	186,368	213,476
China	102,537	104,855
Japan	31,297	40,947
Malaysia	898	18,237
Singapore	13,548	14,021
Thailand	23,224	18,230
Taiwan	5,571	5,388
South Korea	8,137	9,532
New Zealand	425	1,001
Other	731	1,265
United States of America	77,244	96,154
Rest of the world	2,271	1,573
Total	816,383	906,786

Non-current assets by geographic area:

in thousands of U.S. dollars	2024	2023
Malaysia	658,101	318,794
France	248,627	197,106
Germany	200,916	174,167
United States of America	117,463	141,050
Total	1,225,107	831,117

Significant customers

The Group has one (2023: one) customer whose

revenues exceeded 10% of the Group’s consolidated

external revenues. The total revenue from this

customer, which was a related party until November 14,

2023 (see note 12), amounted to USD 364,240

thousand in 2024 (2023: USD 399,844 thousand).

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	Annual Report 2024 | X-FAB consolidated financial statements

10 Financial instruments – fair values and risk management

Accounting classifications and fair values

The following tables show the carrying amounts and fair values of financial assets and financial liabilities measured

at fair value through profit or loss and measured at amortized cost, respectively, including their levels in the fair

value hierarchy.

December 31, 2024
in thousands of U.S. dollars	Carrying amount	Fair value
	Total	Level 1	Level 2	Level 3	Total
Financial assets measured at amortized cost
Trade and other receivables	96,648
Cash and cash equivalents	215,837
Financial liabilities measured at amortized cost
Trade payables	(67,658)
Bank loans, overdrafts, and lease liabilities	(414,133)		(418,212)		(418,212)
December 31, 2023
Financial assets measured at amortized cost
Trade and other receivables	123,101
Cash and cash equivalents	405,701
Financial liabilities measured at amortized cost
Trade payables	(90,681)
Bank loans, overdrafts, and lease liabilities	(260,977)		(261,273)		(261,273)

Financial instruments measured at amortized cost

The carrying amount of cash and cash equivalents,

bank overdrafts, trade and other receivables, and trade

payables approximates their fair value due to the

short-term maturity of these financial instruments.

The fair value of the Group’s non-current liabilities is

based on their present values calculated by

discounting future cash flows at current rates of

interest available for debt with the same maturity

profile.

The Group’s principal financial instruments not carried

at fair value are cash and cash equivalents, trade

receivables, other current assets, other non-current

assets, trade and other payables, bank overdrafts, and

long-term borrowings.

There have been no transfers of assets or liabilities

between levels of the fair value hierarchy in the current

or previous year.

Financial assets and liabilities accounted for at fair

value through profit or loss

The Group held no financial instruments measured at

fair value through profit or loss in the current or

previous financial year.

The Group held no forward foreign exchange

contracts or interest rate swaps in the current or

previous financial year.

Financial assets and liabilities accounted for at fair

value through other comprehensive income

The Group held no financial assets and liabilities

accounted for at fair value through other

comprehensive income in the current or previous

financial year.

Management of risks arising from financial

instruments

The X‑FAB SE Group’s principal financial liabilities

comprise bank loans and bank overdrafts, and trade

payables. The main purpose of these financial liabilities

is to finance the Group’s operations. The Group has

various financial assets, such as trade receivables and

cash and short-term deposits, which arise directly from

its operations.

Financial assets in the form of free short-term cash

available are placed on deposit with banks with a high

credit rating.

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	Annual Report 2024 | X-FAB consolidated financial statements

Deliveries made by the Group are subject to the

reservation of proprietary rights until the customer has

paid for the goods. Generally, further security is not

obtained.

While the Group did not hold any derivative financial

instruments in the current or previous year, it does,

from time to time, enter into derivative financial

instruments to manage the foreign exchange risks and

interest rate arising from the Group’s sources of

finance where the risks of financial loss or the liquidity

risk appears excessive. Such transactions are

exclusively entered into to reduce the risk of

contractually agreed or highly probable transactions.

These transactions are classified as FVTPL for

accounting purposes because the Group does not

formally account for them using hedge accounting

techniques.

The primary risks arising from the Group’s financial

instruments are market risks (interest rate and foreign

currency risks), credit risk, and liquidity risk. The Board

of Directors reviews and agrees policies for managing

each of these risks. The primary objective in managing

these risks is to minimize the risk of financial loss and

the risk of any interference with the Group’s ability to

pursue its commercial objectives. The policies followed

in respect of each risk are summarized below.

Interest rate risk

The X‑FAB SE Group’s exposure to the risk of changes

in market interest rates relates primarily to the Group’s

long-term debt obligations with floating interest rates.

The Group’s policy is to manage its interest cost using

a mix of fixed and variable rate debts. To manage this,

the Group might enter into interest rate swaps, in which

the Group agrees to exchange, at specified intervals,

the difference between fixed and variable rate interest

amounts calculated by reference to an agreed-upon

notional principal amount. At December 31, 2024

approximately 20% of the Group’s borrowings

(excluding financial leases) are at a fixed rate of

interest (December 31, 2023: 20%).

Foreign currency risk

The Group’s statement of financial position can be

affected by changes in the dollar exchange rates, in

particular movements against the euro (EUR) and the

Malaysian ringgit (MYR). This risk mainly relates to

transactions in foreign currency.

The following tables provide an analysis of monetary

assets and liabilities by currency denomination,

expressed in thousands of USD:

Assets and liabilities denominated in EUR:

in thousands of U.S. dollars	2024	2023
Assets
Trade accounts receivable	24,777	33,813
Other assets	39,461	36,616
Cash	66,238	110,763
Liabilities
Trade payables	13,226	34,095
Loans and borrowings	234,634	150,318
Other liabilities and provisions	119,606	133,012

Assets and liabilities denominated in MYR:

in thousands of U.S. dollars	2024	2023
Assets
Trade accounts receivable	8	38
Other assets	517	5,461
Cash	25,551	43,419
Liabilities
Trade payables	555	89
Loans and borrowings	27,362	3,852
Other liabilities and provisions	1,767	2,000

The Group’s policy is to manage selected foreign

currency exchange risk by entering into forward rate

currency purchase or sale transactions (currency

forwards) for specific amounts of foreign currencies in

anticipation of transactions which are contractually

fixed or highly probable.

The following exchange rates were used in preparing

the consolidated financial statements:

	2024	2023
USD/EUR
Closing rate	0.957	0.905
Average rate	0.924	0.925
USD/MYR
Closing rate	4.465	4.595
Average rate	4.575	4.559

The Group also has currency exposures arising from

sales or purchases made when operating units

undertake transactions in currencies other than their

functional currencies.

Approximately 41% (2023: 44%) of the Group’s sales

and 45% (2023: 44%) of the Group’s costs are

denominated in currencies other than the functional

currency of the operating unit making the sales.

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	Annual Report 2024 | X-FAB consolidated financial statements

The following table demonstrates the sensitivity to

changes in fair value of monetary assets and liabilities

on the Group’s profit before tax to reasonably possible

changes in the USD/EUR and USD/MYR exchange

rates, with all other variables held constant and

excluding effects of foreign exchange related

derivatives held. We have also assessed that the

sensitivity to changes in fair value of monetary assets

and liabilities to profit before tax is a good

approximation of the effect on equity of the Group as

the associated tax effect would not be significant.

USD/EUR	Increase/ (decrease) in EUR rate	Effect on profit before tax
2024	5%	(11,293)
	-5%	11,293
2023	5%	(6,875)
	-5%	6,875
USD/MYR	Increase/ (decrease) in MYR rate	Effect on profit before tax
2024	20%	(722)
	-20%	722
2023	20%	7,643
	-20%	(7,643)

The Group believes that a reasonably possible change

of other exchange rates, with all other variables held

constant, will not have a significant effect on the

Group’s profit before tax and on the Group’s equity.

The currency risk from translating foreign entities with

a functional currency that is different from the

presentation currency can be considered to be

immaterial as it relates to non-significant entities.

Credit risk

The Group’s primary credit risk concentrations

affecting financial assets are in respect of trade

receivables (described in note 7.5), balances with

related parties (note 12), and balances and short-term

deposits at banks (note 7.7).

The Group only trades with recognized, creditworthy

third parties. It is the Group’s policy that all customers

who wish to trade on credit terms are subject to credit

verification procedures. In addition, receivables

balances are monitored on an ongoing basis to ensure

that the Group is not exposed to significant risk of

credit loss. The maximum exposure is represented by

the carrying amounts disclosed in notes 7.5 and 7.6.

With respect to credit risk arising from financial assets,

including cash and cash equivalents, the Group’s

maximum exposure to credit risk arising from default

of the counterparty is equal to their carrying amounts

in the statement of financial position.

The Group has not recorded any expected credit

losses for cash and cash equivalents as it considers that

any measurement of the 12-month expected loss

would be an insignificant amount given the good credit

rating of the respective banks.

Liquidity risk

The Group monitors its risk of a shortage of funds and

of difficulties in meeting obligations associated with

financial liabilities. The Group’s objective is to maintain

a balance between continuity of funding and flexibility

through the use of bank loans, bank overdrafts, and

other financial instruments. Based on the positive cash

flow projections and the excess of current assets over

current liabilities, there was no significant liquidity risk

at December 31, 2024, or December 31, 2023. The

expected cash inflows from trade and other

receivables maturing within two months total

USD 96,647 thousand (December 31, 2023:

USD 123,101 thousand). Trade accounts payables are

due within the next 12 months. An analysis of the

maturity of financial liabilities and available credit lines

is presented in note 7.11.

Capital management

The primary objective of the Group’s capital

management is to ensure that it maintains a strong

credit rating and healthy capital ratios in order to

support its business and maximize shareholder value.

Further, management aims to maintain a stable level of

cash balances available for ready use at all times and to

at least maintain, or increase, the available cash at the

current level and to ensure that it meets financial

covenants attached to the interest-bearing loans and

borrowings. These goals can be achieved by a

combination of cash inflows and the use of new

external new financing arrangements. The Group

manages its capital structure (consisting of equity and

borrowings) and makes adjustments to it in light of

changes in economic conditions. To adjust its capital

structure, the Group may choose to take measures

such as making payments to or adjusting dividend

payments made to shareholders, returning capital to

shareholders, or raising new capital by issuing new

shares or adjusting its borrowing levels. No change was

made to the Group’s capital management objectives,

policies, or processes during the years ended

December 31, 2024, and December 31, 2023.

The Group’s two EUR 200,000,000 multicurrency

revolving credit facility are available to the parent

company and its primary subsidiaries for use for euro

and U.S. dollar capital expenditures, general working

capital requirements and general corporate purposes

(including acquisitions).

The Group’s two EUR 200,000,000 multicurrency

revolving credit facilities and certain other bank loan

agreements contain conditions stating that the

borrower shall ensure that the ratio of total net

indebtedness cannot exceed 3.5 times its EBITDA,

otherwise the loan will be repayable on demand.

Further, certain lease agreements require lenders to

consent to additional borrowings should the Group’s

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	Annual Report 2024 | X-FAB consolidated financial statements

ratio of net indebtedness exceed 4.0 times its

EBITDA.The Group was in compliance with this

covenant during the financial year and at December 31,

2024.

The Group’s multicurrency revolving credit facilities

and other bank loan agreements contain further

additional covenants typical for such borrowing

arrangements which impose a number of requirements

on the borrower, including, among other things, early

termination and set-off of asset balances against

matured obligations balances in case of a material

event of default, negative pledge clauses, obligations

to provide certain information relating to the financial

condition of the borrower, and change of control

provisions. Early repayments of amounts borrowed

may be demanded or offset against asset balances

and renewals or drawdowns of additional tranches

under credit arrangements may not be available if

there is an event of default or should the Group fail to

meet its other obligations under such terms and

conditions. A reclassification of the borrowings

currently presented as non-current liabilities to current

liabilities could be required should a default event or

failure occur within 12 months of the reporting date.

Further, the Company has entered into undertakings

under the terms of certain credit agreements to

maintain its existing equity percentage in the share

capital and related percentage of voting rights of its

respective subsidiaries.

The X‑FAB SE Group’s other bank loan agreements do

not include requirements to comply with externally

imposed capital requirements, for example

requirements to meet specific equity and free cash

flow ratios.

11 Leases

The Group has various lease arrangements for the use

of commercial properties, infrastructure, and technical

equipment and machinery. The arrangements run for

various periods until 2038 and carry interest rates

between 0.15% and 4.66% (December 31, 2023: 0.15%

and 4.66%). The contractual arrangements vary from

lease to lease. Some of these arrangements include

purchase options at a price that is lower than the

expected fair value of the assets at the end of the

lease period, so that the Group expects that these will

be acquired at a later date. Other leases are for a fixed

period of time and are renewed unless canceled by

either party, or include lease period extension options

exercisable by the Group.

The carrying values of right-of-use assets presented

as property, plant, and equipment were as follows:

in thousands of U.S. dollars	2024	2023
Net book value January 1	17,588	21,438
Additions	44,074	588
Depreciation	(4,536)	(4,438)
Disposals	1	—
Reclassifications	26	—
Net book value December 31	57,153	17,588

For lease arrangements which include extension

options exercisable by the Group, the Group assesses,

at the commencement of the lease, whether it is

reasonably certain to exercise the extension options.

The Group makes subsequent reassessments of

whether it is reasonably certain to exercise such

options if there is a significant event or significant

changes in circumstances which are within its control.

Should the Group exercise the extension options, the

future cash outflows under leasing arrangements, the

right-of-use assets recognized, and the commitments

under the lease liabilities would be increased. The

Group does not make estimates of such potential

increases as the most significant extension options are

at future dates and the amounts and available

operational alternatives may change. The overall level

of right-of-use assets and leasing obligations are,

however, unlikely to change by material amounts.

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	Annual Report 2024 | X-FAB consolidated financial statements

The future minimum lease payments due in respect of lease liabilities are as follows:

in thousands of U.S. dollars	2024		2023
	Minimum leasing payment	Present value	Minimum leasing payment	Present value
2025	21,566	17,439
2026–2028	93,362	80,698
2024			5,916	5,503
2025–2027			17,554	16,104
Total	114,928	98,137	23,470	21,607
Interest	(16,791)	(16,791)	(1,863)	(1,863)
Liability	98,137	81,346	21,607	19,744

Expenses relating to short-term leases amounted to

USD 938 thousand (2023: USD 868 thousand), and

expenses relating to leases of low-value assets

(excluding short-term leases of low-value assets)

amounted to USD27 thousand (2023: USD 26

thousand).

The Group has entered into a sale and leaseback

agreement which commenced January 1, 2024. This

lease arrangement generated USD 60,584 thousand

(EUR 55,735 thousand) of financing cash flow which

was received in 2024. Repayment of the lease liability is

made over five years in monthly installments together

with interest based on an EURIBOR plus an agreed

lending margin.

12 Transactions with related parties

Transactions with shareholders and their

subsidiaries

As part of its normal business activities, the Group

undertakes transactions with entities in the XTRION

Group, a group of companies controlled by

XTRION NV, which holds equity stakes in a range of

portfolio companies in the semiconductor industry.

XTRION NV and the companies controlled by it are

related parties of X‑FAB SE due to the fact that

XTRION NV is jointly controlled by Roland Duchâtelet,

Françoise Chombar, and Rudi De Winter via STAK

Xpeqt.

Until November 14, 2023, XTRION NV was the

controlling shareholder of X‑FAB SE and Melexis NV.

Melexis NV (and its subsidiaries) develop, design, and

sell integrated circuits to customers such as the

automotive industry and is a significant customer of

X‑FAB SE’s subsidiary companies. On November 14,

2023 Sensinnovat BV and Elex NV acquired the

shareholdings in X-FAB SE and Melexis NV held at that

date by XTRION NV. On the same date, XTRION NV,

and Sarawak Technology Holdings Sdn. Bhd also

terminated their shareholders agreement under which

they were acting in concert in regard to their holdings

in X‑FAB SE. Accordingly, Melexis NV, companies in the

Melexis Group and Sarawak Technology Holdings Sdn.

Bhd together with companies controlled by Sarawak

Technology Holdings Sdn. Bhd ceased to be related

parties of X-FAB SE and its subsidiaries with effect

from November 14, 2023.

Transactions disclosed as related party transactions

with shareholders and their subsidiaries include, in

addition to transactions with XTRION NV and its

subsidiaries, transactions with Melexis NV and its

subsidiaries until November 14, 2023, and management

fees paid to Sensinnovat BV, ESA Management BV,

and FAJEL Consultants SPRL for services as directors

of the Company. Such management fees are included

in, and not in addition to, the amounts disclosed below

within remuneration of persons with key management

positions.

Transactions entered into between the Group and

XTRION NV and its subsidiaries and Melexis NV and its

subsidiaries until November 14, 2023, included the

purchase of certain work in process and services, as

well as the sale of products and provision of services to

these companies. X-FAB SE’s subsidiaries are the main

wafer suppliers for the Melexis Group, and Melexis is a

significant customer of X-FAB SE’s subsidiaries. In

addition, the Melexis Group also provides final test

services as well as design support to X-FAB SE

subsidiaries.

On January 1, 2024, the Group acquired the entire

share capital of M-MOS Semiconductor Hong Kong

Limited (M-MOS), a limited liability company

incorporated under the laws of Hong Kong, and its

subsidiaries for a consideration of EUR 22,500

thousand (USD 24,863 thousand) payable in cash.

M‑MOS was acquired from XTRION, a related party.

Further details on this transaction are provided in

note 5.

Conditions of the commercial relations between

X‑FAB and its related parties are in line with those that

have been agreed upon between independent parties

in comparable circumstances.

The tables below show the balances with shareholders

and their subsidiaries included in the statement of

financial position.

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	Annual Report 2024 | X-FAB consolidated financial statements

in thousands of U.S. dollars	2024	2023
Trade accounts receivable due from M-MOS group companies	—	2,408
Trade accounts receivable due from X-Celeprint	32	32
Trade accounts receivable due from X Display Company Technology	140	334
Total	172	2,774

in thousands of U.S. dollars	2024	2023
Advances received from    M-MOS group companies	—	3,827
Trade accounts payable due to M-MOS group companies	—	23
Trade accounts payable due to XTRION	—	33
Other	18	—
Total	18	3,883

Receivables from related parties relate to trade

receivables, do not carry interest, and are payable on

normal credit terms.

Sales made to XTRION group companies (Melexis

group and M-MOS group until their sale by XTRION

and X-Celeprint and X Display Company) primarily

include the supply of PCM-tested wafers and NRE on

the basis of wafer supply agreements made between

the parties.

Other income results from the provision of technical

facilities, supplies, utilities, property rentals, and

services provided. Services provided include

information technology, personnel, and legal support

services. For services provided, charges are made in

relation to the costs incurred based on an agreed

formula which considers the use of facilities, employee

time spent, and specific transaction details. Interest

income and expenses arose in connection with loan

arrangements.

Sales and other income comprise the following:

in thousands of U.S. dollars	2024	2023
Sales to Melexis group companies	—	339,229
Sales to M-MOS group companies	—	13,300
Sales to X Display Company Technology	515	255
Property rental and other income from Melexis group companies	—	3,484
Other income from M-MOS	—	48
Other income from X Display Company	—	11
Total	515	356,327

Property rental and other income from Melexis group

companies includes rentals and charges for technical

services included in the amounts described in note 6.7

as well as other items classified in other positions in the

consolidated statement of income.

Purchases, expenses, and other transactions recorded

with shareholders and their subsidiaries were as follows:

in thousands of U.S. dollars	2024	2023
Services provided by Melexis group companies	—	618
Services/purchases provided by M-MOS group companies	—	21
Services provided by XTRION	—	105
Services provided by Elex	17	76
Services provided by              X-Celeprint	32	—
Warranty cost Melexis group	—	1,288
Total	49	2,108

Services purchased from member companies of the

XTRION group primarily included wafer test and final

test services. Outstanding balances from sales and

purchases of goods and from receiving and rendering

of services at the reporting date are unsecured,

interest free, and settled in cash. There have been no

guarantees provided or received for any related party

receivables or payables.

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	Annual Report 2024 | X-FAB consolidated financial statements

Remuneration of persons with key management

positions

in thousands of U.S. dollars	2024	2023
Short-term employee benefits	1,300	1,334
Short-term employee benefits for members of management that are not on the payroll of the Company (CEO, CFO, and COO)	1,097	1,305
Directors’ compensation	188	187
Total	2,585	2,826

The persons with key management positions as

referred to above as of December 31, 2024, include the

Group’s CEO, CTO, CFO, COO, the CEO of X-FAB

Dresden, the CEO of X‑FAB Sarawak, the CEO of

X‑FAB Texas, the CEO of X‑FAB Erfurt, and the CEO

of X-FAB France. Short-term employee benefits for

members of management that are not on the payroll

of the Company disclosed above represent payments

for the provision of key management personnel that

are provided by separate management entities.

The Group has made contributions to defined

contribution pension plans for the benefit of persons

with key management positions totaling USD 94

thousand (2023: USD 106 thousand). Contributions to

defined contribution plans primarily comprise statutory

contributions to be made by employers to state-based

defined contribution plans. In connection with these

plans there are no minimum guarantees by the

employer. The defined contribution is based on a fixed

percentage of the (capped) gross salary determined

by state laws.

13 Other disclosures

13.1 Purchase commitments and contingencies

Purchase commitments comprise the following at

December 31:

	2024	2023
Purchase commitments for:
Property, plant, and equipment	167,821	600,040
Intangible assets	34	1,465
Material and services	4,503	10,869
Total	172,358	612,374

Purchase commitments mainly refer to purchase

orders placed for investments in technical machinery.

Commitments concerning investment grants and

subsidies received

Various Group entities receive grants and subsidies in

connection with the acquisition of certain qualifying

assets (asset-related grants and subsidies) and

subsidies to offset research and development costs

(income-related grants). No material amounts of other

government assistance are received.

Specifically, XMF, X-FAB Texas and X-FAB Dresden

receive grants and subsidies in connection with the

acquisition of certain qualifying assets (asset-related

grants and subsidies). The grant rules require that the

assets on which investment grants have been received

are retained for a period of five years (the subsidy rules,

which largely apply to the same assets, have a similar

three-year retention requirement) and that specified

employee levels are maintained at specific locations. If it

is not possible to fulfill these conditions, the grants and

subsidies may be partially repayable. The total amount

of grants and subsidies received in the past (and thus

deducted from the carrying amounts of the assets) on

property, plant, and equipment amounted to USD 155.8

million (December 31, 2023: USD 137.5 million); the

retention requirements have not yet been fulfilled in full

for grants and subsidies received totaling USD 22.9

million included in that total.

13.2 Unresolved legal disputes and claims

The Group is not aware of any unresolved legal

disputes, claims or proceedings which could have a

significant financial impact on the Group.

13.3 Employees

The average number of employees employed by the

Group during the year was as follows:

	2024	2023
Production	3,926	3,845
Research and development	316	309
Sales, marketing, and administration	319	307
Trainees	135	128
Total	4,696	4,589

The total number of employees employed by the

Group at December 31 was as follows:

	2024	2023
Production	3,879	4,000
Research and development	306	318
Sales, marketing, and administration	318	317
Trainees	149	137
Total	4,652	4,772

Note: Number of employees excludes contract workers

(borrowed)

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	Annual Report 2024 | X-FAB consolidated financial statements

13.4 List of shareholdings

Entity	Place of incorporation	Principal activities	Shareholding in %
X-FAB Silicon Foundries SE	Tessenderlo, Belgium	Holding company
X-FAB Semiconductor Foundries GmbH	Erfurt, Germany	Wafer manufacturing	100.00%
X-FAB Dresden GmbH & Co. KG	Dresden, Germany	Wafer manufacturing	100.00%
X-FAB Dresden Verwaltungs-GmbH	Dresden, Germany	No activity	100.00%
X-FAB Texas Inc.	Texas, USA	Wafer manufacturing	100.00%
X-FAB Sarawak Sdn. Bhd.	Kuching, Malaysia	Wafer manufacturing	100.00%
X-FAB France SAS	Corbeil-Essonnes, France	Wafer manufacturing	100.00%
X-FAB Japan KK	Yokohama, Japan	Trading company	100.00%
X-FAB MEMS Foundry GmbH	Erfurt, Germany	Wafer manufacturing	100.00%
X-FAB MEMS Foundry Itzehoe GmbH	Itzehoe, Germany	Wafer manufacturing	100.00%
X-FAB Global Services GmbH	Erfurt, Germany	R&D, administration services	100.00%
M-MOS Semiconductor Sdn. Bhd.	Kuching, Malaysia	Wafer front-end process	100.00%
M-MOS Semiconductor Hong Kong Ltd.	Hong Kong	R&D	100.00%

13.5 Auditor and auditor’s remuneration

During the general shareholders’ meeting on April 27,

2023, KPMG Bedrijfsrevisoren BV was reappointed as

the Company’s auditor for the years 2023, 2024, and

2025.

The auditor’s remuneration for the period was as

follows:

in thousands of U.S. dollars	2024	2023
Audit cost
KPMG	603	583
Other audit firms	118	107
Other services
KPMG	167	95
Total	888	785

14 Events after the reporting period

There have been no significant reportable events since

the reporting dates.

Tessenderlo, March 20, 2025

Managing Director, CEO

Sensinnovat BV

Represented by Rudi De Winter

CEO

75

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	Annual Report 2024 | Sustainability at X-FAB

6. SUSTAINABILITY

This chapter provides a comprehensive review of

X‑FAB’s Environmental, Social, and Governance (ESG)

performance for the 2024 financial year.

X-FAB has made significant strides in enhancing its

ESG practices based on the EU’s Corporate

Sustainability Reporting Directive (CSRD) (EU)

2022/2464 of the European Parliament and of the

Council of December 14, 2022, amending Regulations

(EU) No 537/2014, 2004/109/EC, 2006/43/EC, and

2013/34/EU) and the EU Taxonomy Regulation

(Regulation (EU) 2020/852 of the European

Parliament and of the Council of June 18, 2020,

establishing a framework to promote sustainable

investment).

As part of these efforts, X-FAB has undertaken

extensive efforts to convert the previous materiality

assessment towards a double materiality assessment

based on the guidelines of the European Financial

Reporting Advisory Group (EFRAG). The completion

of this assessment is still ongoing and will enable X‑FAB

to identify and prioritize ESG topics critical to its

stakeholders (impact materiality) as well as the

financial resilience and performance of the business

(financial materiality). This approach will lay a solid

foundation for aligning future reporting with CSRD

requirements.

In addition, X-FAB has placed significant focus on

updating its carbon footprint analysis (Scope 1, 2, and 3

emissions), a key area of interest for investors and

other stakeholders. By evaluating greenhouse gas

emissions across its value chain, X-FAB is well-

positioned to identify high-impact reduction

opportunities that are aligned with global climate goals

and stakeholder expectations. This analysis reinforces

X-FAB’s commitment to transparency and strengthens

its role in advancing meaningful climate action within

the semiconductor industry.

X-FAB remains committed to reporting in accordance

with the EU Taxonomy Regulation, despite ongoing

uncertainties regarding its specific applicability to

semiconductor manufacturing. While the regulatory

framework is still evolving, X-FAB is dedicated to

offering stakeholders insights into its eligibility and

alignment with the Taxonomy’s environmental

objectives. The Company will continue to monitor

regulatory developments and industry best practices,

refining its reporting approach as necessary.

Although substantial progress has been made, X-FAB

acknowledges that full alignment with CSRD

requirements has not yet been achieved. For 2024,

X‑FAB will continue to rely on the GRI Standards, which

have guided its disclosures in previous years. The GRI

framework provides a reliable structure, ensuring

transparency and comparability as X-FAB works

towards full compliance with the CSRD.

Looking ahead, X-FAB is committed to achieving

CSRD compliance by 2025. Significant resources are

being allocated to implement the necessary systems,

processes, and governance structures to align with the

directive’s objectives.

As part of the materiality analysis and GRI standards

review, both external and internal stakeholders have

been involved. This report covers a wide range of

sustainability-related topics, including the Company’s

dedication to social, environmental, and governance

issues. Additionally, this chapter includes information

on X-FAB’s supplier relationship management,

responsible mineral sourcing, data security, customer

support, and an overview of the EU Taxonomy and its

associated reporting obligations.

Unless otherwise specified, the statements and figures

provided in this report apply to the entire organization.

Site-specific information is provided where relevant.

The scope and boundaries of the report encompass all

entities of the X-FAB Silicon Foundries SE Group, as

confirmed by the X-FAB Board.

Guided by the 17 Sustainable Development Goals

(SDGs) established by the United Nations, X-FAB is

committed to advancing these goals through its

product portfolio. The SDGs serve as key indicators of

X-FAB's societal impact, offering a strategic

framework to identify potential business opportunities.

Fig. 6.1: The United Nations Sustainable Development Goals

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	Annual Report 2024 | Sustainability at X-FAB

Fig. 6.2: X-FAB contributes to The United Nations Sustainable

Development goals (refer to chapter 4. Our Business)

6.1 Implementing sustainability within X-FAB

6.1.1 Organization and governance

In September 2024, X-FAB reached a significant

milestone with the official launch of the X-FAB

Sustainability Office, which is central to driving the

Company’s sustainability efforts. The Sustainability

Office plays a vital role in aligning X-FAB’s sustainability

initiatives with the objectives of the CSRD and the

ESRS (European Sustainability Reporting Standards).

The office is responsible for implementing, tracking,

and reporting on initiatives that promote

environmental, social, and economic progress, ensuring

compliance with ESG standards and adhering to the

ESRS framework. Through these actions, the

Sustainability Office supports X-FAB in maintaining

transparency, managing risks, and enhancing long-

term sustainability performance.

At the same time, the CEO of X-FAB plays a crucial

role in guiding the Company’s broader sustainability

strategy. As a key member of the board of directors

and the management team, the CEO provides

leadership and direction, ensuring that sustainability is

integrated into every facet of X-FAB’s operations.

The Company has committed to ambitious

sustainability goals, such as reducing its carbon

footprint and aligning with global standards, including

the EU Taxonomy Regulation and CSRD. While the

Sustainability Office drives the day-to-day execution

of sustainability initiatives, the CEO’s strategic

oversight ensures that sustainability remains at the

forefront of X-FAB’s long-term vision, shaping product

development, operational practices, and governance

across the organization.

Other responsibilities of the Sustainability Office

include:

• developing and designing the sustainability strategy

and implementing sustainability reporting in

coordination with the relevant departments;

• coordinating sustainability projects and measures

(e.g. CO2 accounting, determining sustainability key

figures);

• analyzing and evaluating statutory requirements

and market targets and deriving recommendations

for action;

• formalizing a decarbonization roadmap (with a

quantified carbon reduction target trajectory that

can be monitored and ultimately communicated);

• preparing reports on sustainability/ESG in

accordance with legal requirements or customer

requirements;

• implementing sustainability KPIs;

• being the interface for auditors and customers in

relation to sustainability;

• providing sustainability information (e.g., customer

portals and questionnaires), coordinating the

compilation of relevant data from various

departments, and showing X-FAB’s continuous

improvements;

• establishing and further developing processes and

ensuring compliance with such processes;

• supporting internal and external audits; and

• advising and training all departments.

Fig. 6.3: ESG governance structure

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	Annual Report 2024 | Sustainability at X-FAB

6.1.2 Sustainability strategy and materiality

assessment

X-FAB Group Quality and Sustainability Policy

Quality and sustainability are core pillars of X-FAB’s

operations. X-FAB is dedicated to delivering high-

quality products and services that not only meet

customer expectation but also contribute to

environmental and social responsibility.

X-FAB is committed to reducing its environmental

footprint, promoting sustainable practice throughout

its supply chain, and fostering a culture of continual

improvement to ensure a better future for generations

to come.

X-FAB Sustainability Policy

We care. We act responsibly. We stay safe.

We pursue sustainability.

Fig. 6.4: X-FAB’s Sustainability Policy is supported by the

Company values (refer to chapter 3. Our Culture)

Unless otherwise specified, the statements and figures

provided in this report apply to the entire organization.

To meet the product and service quality expectations

of its customers, X‑FAB has established and maintains

a quality management system certified according to

ISO 9001:2015 and IATF 16949:2016.

ISO 9001 and IATF 16949

ISO 9001:2015 specifies the requirements for a quality management system. It helps organizations to ensure they meet the needs of customers and other stakeholders while also respecting statutory and regulatory requirements related to a product or service. IATF 16949:2016 as an automotive industry standard for quality management systems is implemented as a supplement to and in conjunction with ISO 9001:2015. It specifies the requirements for establishing, implementing, maintaining, and continually improving a quality management system in the automotive supply chain.

Furthermore, X‑FAB assumes responsibility by seeking

an appropriate balance of interests between the

consequences of required business decisions and its

activities on economic, technological, social, and

environmental levels. To save natural resources and to

support the global reduction of CO2 emissions, X‑FAB

operates an environmental and energy management

system that is certified according to ISO 14001:2015

(except for X-FAB MEMS Foundry Itzehoe) and ISO

50001:2018 (except for X-FAB Texas, USA, X-FAB

Sarawak Sdn. Bhd., Malaysia and X-FAB Itzehoe).

Additionally, X‑FAB is a member of the German

Electrical and Electronic Manufacturers association

(ZVEl) and is committed to the ZVEI Code of Conduct.

International references such as the RBA Code of

Conduct are considered by X-FAB.

ZVEI

The ZVEI (“Zentralverband Elektrotechnik- und Elektronikindustrie e.V.”) is the representative of the economic, technological, and environmental interests of the German electrical industry. The ZVEI has drawn up a Code of Conduct of its own, governing corporate social responsibility. The ZVEI Code of Conduct takes internationally established benchmarks as its reference and covers all relevant subjects.

RBA

The RBA (Responsible Business Alliance) is the world's largest industry coalition dedicated to responsible business conduct in global supply chains. The RBA Code of Conduct is a set of social, environmental, and ethical industry standards. The RBA Code of Conduct takes internationally established benchmarks as its reference and covers all relevant subjects.

Materiality assessment

X-FAB has undertaken extensive efforts to convert

the previous materiality assessment towards a double

materiality assessment based on the guidelines of the

European Financial Reporting Advisory Group

(EFRAG). The completion of this assessment is still

ongoing and will enable X-FAB to identify and prioritize

ESG topics critical to its stakeholders (impact

materiality) as well as the financial resilience and

performance of the business (financial materiality).

This approach will lay a solid foundation for aligning

future reporting with CSRD requirements.

X-FAB used a materiality assessment to identify and

distinguish between material and non-material topics

that are critical for X-FAB’s long-term success,

sustainability, and financial performance. The goal is to

determine which environmental, social, and

governance (ESG) topics are most important to the

business and its stakeholders, such as investors,

customers, employees, regulators, and communities.

The double materiality assessment was conducted to

provide an understanding and evaluation of

sustainability issues from two perspectives: impact

materiality and financial materiality.

The matrix presentation offers an overview of the

prioritization of material topics, considering three key

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	Annual Report 2024 | Sustainability at X-FAB

dimensions: stakeholder relevance, X-FAB’s impact on

the environment and society (inside out), and the

impact on X-FAB (outside in). Materiality is evaluated

based on two aspects:

• Impact materiality: X-FAB activities impact the

environment, society, and governance.

• Financial materiality: Environmental, social, and

governance issues affect the financial performance

and value of X-FAB.

Fig. 6.5 DMA inputs (ESRS topics and impacts) and result

(material or non-material topics)

Material topics

Material topics are those that have a substantial impact

on X-FAB's operations, strategy, and value creation,

serving as key drivers of its long-term success. While

these topics directly affect X-FAB's financial

performance, operational efficiency, and reputation,

they also encompass broader impacts that, while

important, do not directly influence the company’s

core operations, strategy, or value creation. Although

these indirect impacts remain relevant to stakeholders,

they do not materially alter X-FAB’s overall business

outcomes.

Non-material topics

From X-FAB's perspective, non-material topics are

those that, while potentially important to certain

stakeholders, do not have a direct or significant impact

on the company’s operations, strategy, or value

creation. Unlike material topics, non-material topics do

not directly influence X-FAB's financial performance,

operational efficiency, or reputation. These topics may

still be relevant in the broader context of sustainability

and stakeholder interests, but they do not drive the

company's long-term success or impact its core

business outcomes. While X-FAB acknowledges the

importance of these non-material topics, they are not

considered critical for the company’s strategic

priorities or value creation.

A scoring method using a numeric approach is used to

determine which material topics are most significant,

and each issue is assessed by assigning scores for:

Fig. 6.6: Impact materiality and financial materiality

Fig. 6.7: Materiality analysis result

6.1.3 Impact, risk, and opportunity (IRO)

X-FAB’s activities and initiatives in the context of the

CSRD and ESRS focus on effectively managing

impacts, risks, and opportunities related to

sustainability. X-FAB integrates the evaluation of IRO

into its operations by systematically identifying and

assessing environmental, social, and governance (ESG)

risks that could affect its business.

In terms of impact, X-FAB actively evaluates how its

operations influence the environment and society,

ensuring that any negative effects are minimized, and

positive contributions are maximized. The Company

tracks these impacts to meet CSRD requirements and

enhance transparency in its reporting.

For risk management, X-FAB uses the ESRS guidelines

to identify potential ESG-related risks — such as

climate change, resource scarcity, or regulatory

changes — that could affect its long-term sustainability.

These risks are integrated into the Company’s broader

risk management processes, and strategies are

developed to mitigate them.

Regarding opportunities, X-FAB explores how

sustainability trends and innovations can create value,

both by addressing market demands for sustainable

products and improving operational efficiency. These

opportunities are leveraged to ensure that X-FAB

remains competitive and resilient in the face of

evolving environmental and social expectations.

In the future, by focusing on impact, risk, and

opportunity management, X-FAB will ensure that its

sustainability practices not only comply with CSRD and

ESRS but also drive long-term value creation and

corporate responsibility.

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	Annual Report 2024 | Sustainability at X-FAB

6.1.4 Sustainability goals

Sustainability has been a key factor in driving X-FAB's

development efforts for several years. The Company

prioritizes not only the diversity of its product offerings

but also a wide range of internal and external initiatives.

X‑FAB's mission is to support the social, environmental,

and economic progress of the regions and countries

where it operates. Back in 2022, during X-FAB’s first

sustainability workshop, X-FAB made notable strides in

corporate sustainability by establishing long-term ESG

goals and initiatives, reaffirming its ongoing

commitment to sustainability as a continuous journey.

X‑FAB, as one of the industry’s largest specialty

foundry groups, is aware of its social responsibility in

view of the Company’s global business activities.

X‑FAB’s company culture is based on universal ethical

values and principles, especially integrity, honesty,

diversity, respect of human dignity, openness, and

non-discrimination comprising religion, ideology,

gender, and ethnicity. X‑FAB is also committed to

promoting those values wherever possible and along

the entire value chain.

To the best of X‑FAB’s knowledge, there has been no

non-compliance of any laws or regulations identified

concerning the use and provision of products and

services related to environmental laws and regulations

in 2024. X‑FAB fosters partnerships and trustworthy

interactions with its supervisory authorities, its supply

chain partners, and its customers.

X‑FAB also manufactures a large variety of products

with sustainable impact on mobility, healthcare, and the

energy sector. In particular, the products

manufactured at X-FAB play a critical role in reducing

CO2 emissions. However, as stated in the EU

Taxonomy, the ultimate end product is largely

unknown to X-FAB. In compliance with the EU

Taxonomy, X-FAB discloses the portion of its turnover

that includes eligible technologies contributing to

sustainability, including those related to electrification

and renewable energy.

X‑FAB’s key environmental, social, and governance

(ESG) goals

Sustainability has been a significant driver of X‑FAB's

development activities for several years, as the

Company focuses not only on the broad range of its

products but also on various internal and external

activities. X‑FAB's mission is to contribute to the social,

environmental, and economic development of the

countries and regions where it operates. In 2022,

X‑FAB took significant steps towards corporate

sustainability by setting long-term key ESG objectives

and initiatives, as sustainability is a journey that X‑FAB

is ever more committed to.

X-FAB has committed itself to the following four long-

term key ESG objectives. These objectives were

reviewed in 2024 and remain valid:

Fig. 6.8: X‑FAB’s ESG objectives

Drive technological innovation to support health,

well-being, and environmental sustainability

Semiconductor technology is key for the digital

transformation of and efficiency improvements in the

healthcare sector, and X‑FAB supports its customers

to develop products for medical applications that meet

the needs of a growing and aging populations. We want

to increase the use of X‑FAB technologies in medical

applications and aim to grow X‑FAB’s medical business

at an average annual growth rate of 10% until 2030. In

2024 and in line with general market trends, X‑FAB

recorded a year-on-year decline of 16% in the medical

end market.

X‑FAB recognizes the importance of environmental

protection for a sustainable future and supports its

customers in developing green technologies. Energy

efficiency can play a critical role in reducing

greenhouse gas emissions, conserving natural

resources, and promoting sustainable development

across a broad range of sectors, such as transportation,

industrial, or communication technology. Therefore, we

intend to increase the percentage of our technologies

that contribute to higher energy efficiency of the

products they are used for, from 38% of total revenue

in 2021 to 65% in 2030. In 2024, 59% of total revenue

(excluding revenue recognized over time according to

IFRS 15) has been generated through technologies

that contribute to higher energy efficiency.

6.1.5 Stakeholder engagement

In August 2024, the results of the internal double

materiality assessment (DMA) were shared with key

external stakeholders, including banks, investors,

customers, and suppliers. These groups were selected

due to their critical roles in the organization's

ecosystem and their potential to offer valuable insights

into the Company’s performance and data capabilities.

This assessment aimed to evaluate both the financial

and non-financial impacts of the Company’s activities,

reflecting the increasing importance of ESG factors in

decision-making.

To effectively communicate the results, an online

survey was sent to the identified stakeholders. This

survey was structured to gather comprehensive

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	Annual Report 2024 | Sustainability at X-FAB

insights from different perspectives, addressing the

material issues identified in the internal DMA. The

stakeholders were asked to provide feedback on the

Company’s current practices, policies, and

performance related to both the financial and

environmental/social dimensions of the business. The

goal was to assess how well the Company’s actions

align with external expectations, industry standards,

and regulatory trends.

Feedback gathered through the survey has been

instrumental in shaping the Company’s future strategy.

The insights collected from banks, investors,

customers, and suppliers are now being used as a basis

for refining existing practices, improving transparency,

and enhancing the Company’s sustainability and risk

management frameworks. For example, banks and

investors raised concerns around the Company's

exposure to climate-related financial risks, prompting

the integration of more robust climate risk reporting

into financial disclosures. Meanwhile, customers and

suppliers provided valuable suggestions on enhancing

sustainability in the supply chain and adopting more

eco-friendly practices.

In conclusion, the online survey served as an essential

tool for engaging stakeholders and collecting relevant

feedback, which is now guiding the next phase of

X‑FAB strategic development. By integrating

stakeholder input into the Company’s decision-making

process, X‑FAB aims to create long-term value for

both the business and society, while completing the

adherence to the principles of double materiality in

accordance to EFRAG guidelines.

Stakeholder	Key expectations	Engagement method
Employee	• Occupational health and work safety • Human rights • Talent attraction engagement	• Global intranet • Global employee performance management system • Meet the Management • Regular staff information (via email, video message and on-site monitors) • Surveys
Global Management	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Alignment and global setting • Sustainability reporting • Policy and regulatory compliance
Site Management	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Data collection, monitoring and reporting • Risk management and compliance • Cross-functional collaboration
Legal Counsel	• Occupational health and work safety • Human rights • Ethics	• Compliance with regulations • Contractual Agreements and vendor relations • Sustainability reporting and disclosures
Customers	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Website • Customer audits • Customer portal (My X-FAB portal) • Customer satisfaction survey • Quarterly business review • Social media • Technical webinar
Investors	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Website • Annual general meeting • Quarterly report • Annual report • Investor update via E-Mail
Banks	• Occupational health and work safety • Human rights • Ethics	• Annual report • Financial meeting • Regulatory filings
Government Authorities	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Site visits • Audits • Meetings
Suppliers	• Occupational health and work safety • Greenhouse gas emissions • Human rights	• Supplier audits • Business review • Supplier of the Year awards

Fig. 6.9: Key expectations and engagement methods identified for each stakeholder group

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	Annual Report 2024 | Sustainability at X-FAB

Employee engagement

X‑FAB continued its employer branding campaign with

various activities aimed at attracting new talent to

support future growth. These included, among other

things, xfabulous-branded buses and railway in Erfurt

and Dresden, as well as local sponsoring of science fairs

and other related activities.

Fig 6.10: X-FAB advertising on an Erfurt street car

At the same time, the Group continues to use various

initiatives targeted at existing employees to increase

their commitment to X‑FAB. X-FAB regularly holds

events at all of its sites, enabling employees to

participate in a range of events including organized

sport events, such as football matches, bike trips, and

community runs.

Fig. 6.11: Company run in Corbeil-Essonnes

Fig. 6.12: Maureen Labarge, Senior Director P&C at X-FAB

Sarawak, was presented with the Asia HRA Award

X-FAB Sarawak was honored with the Asia HRA

Awards in the Contribution to Organisation category at

the ITC Grand Chola in Chennai. This award recognizes

X-FAB's commitment to innovation, diversity, and

inclusion, fostering an empowering workplace that

promotes creativity, well-being, and career

advancement. X-FAB Sarawak ensures continuous

employee engagement and development, notable for

its corporate social responsibility and employee well-

being initiatives. The Company is dedicated to building

a healthy, supportive, and inclusive culture while driving

the semiconductor industry forward through

operational excellence and innovation.

Customer engagement

Beyond the day-to-day business, X-FAB engages with

its customers on multiple levels. In the year 2024,

X‑FAB took part in various conferences and exhibitions

worldwide.

In North America, we participated in several events with

our own booth: APEC (dedicated to power electronics)

and Sensors Converge – both in California – and

ICSCRM, one of the most prestigious silicon carbide

conferences, in Raleigh, North Carolina. The Microtas

conference in Montreal, Canada, was also an excellent

platform to show how X-FAB enables medical

products for diagnostics, therapy, and analysis.

X-FAB participated in a series of events in China

(CSTIC, Semicon, and ICCAD), where technical and

product marketing experts gave presentations on our

latest developments as well as business perspectives.

A technical webinar on X‑FAB’s next-generation 110nm

automotive technology was held in Mandarin to

address our customers and prospects in China.

In Europe, X-FAB organized its two-day Technology

Conference in Wiesbaden (Germany) in September

2024, with more than 200 participants. The main focus

of this event was on collaboration, whether internally,

with external partners, or with our customers. In fact,

many of the topics on the conference program were

the result of such collaboration and benefited

significantly from early customer feedback. Silicon

Saxony Day in Dresden, Germany, was a great

networking opportunity for X-FAB within Europe’s

largest semiconductor hub. Other European

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conferences such as ISPSD, a symposium on power

semiconductors (Germany), or ISSW, the International

SPAD Sensor Workshop (Italy), allowed X-FAB to

showcase its technical capabilities and latest

achievements. X-FAB also had a booth at electronica

in Munich, Germany, the world's largest electronics

trade show with more than 80,000 visitors and 3,480

exhibitors.

In 2024, X-FAB’s technical experts presented more

than 70 papers, posters, and invited talks at

semiconductor-related conferences and exhibitions.

Political engagement and memberships

In line with X-FAB's principles, X-FAB is committed to

refraining from providing donations or other

contributions, either directly or indirectly, to politicians,

political parties, or organizations (refer to chapter 7).

These guidelines are also outlined in X‑FAB's Code of

Conduct (ZVEI). X‑FAB does not maintain dedicated

offices for the political representation of the

Company’s interests or any corresponding agencies.

Sponsorship agreements, contributions to trade

associations, and membership fees for organizations

that represent the Company’s interests are not

considered donations.

X-FAB political involvement is limited to memberships

in industry associations. The most relevant associations

for X-FAB include the Zentralverband Elektrotechnik-

und Elektronikindustrie (German Electrical and

Electronic Manufacturers association) (ZVEI) and

Semiconductor Equipment and Materials International

(SEMI).

Through the work with these associations, X-FAB

actively contributes to advancing goals such as

energy-efficient, resource-friendly, and high-quality

semiconductor solutions. X-FAB strives to ensure that

new specifications not only meet users’ needs but also

align with industry standards and fair-trading

conditions, supporting both standardization and the

broader objectives of the sector.

Industry associations
X-FAB is a member of or otherwise related to several industry associations as well as scientific, governmental, and standardization organizations, including but not limited to:
A. Industry associations • AENEAS – Association for European Nanoelectronics Activities • ACSIEL – Professional French organization for the electronic field • edaCentrum – Association for Electronic Design Automation, Germany • EPIC - European Photonics Industry Association • ESIA – European Semiconductor Industry Association • FOA – Fab Owners Alliance • Förderkreis Mikroelektronik (Society for the Promotion of Microelectronics, Germany) • GSA – Global Semiconductor Alliance • Minalogic – Competitiveness cluster for digital technologies in the Auvergne Rhone Alpes region in France • MSIA - Malaysia Semiconductor Industry Association • OptoNet - German Photonics cluster • SECA – Sarawak Electronics and Supporting Industries Companies Association, Malaysia • SEMI – Global industry association serving the manufacturing supply chain for the micro- and nanoelectronics industries • SFAM – Semiconductor Fabrication Association of Malaysia • Silicon Saxony, Germany • ZVEI – Zentralverband Elektrotechnik- und Elektronikindustrie (Electrical Industry Association, Germany)	B. Scientific organizations • Curatorship in different Fraunhofer Institutes, Germany • IMMS Institut fur Mikroelektronik- und Mechatronik- Systeme (IMMS Institute for Microelectronic and Mechatronic Systems, Germany) • C2N Center for Nanoscience and Nanotechnology at the University Paris-Saclay • Texas Tech University, Electrical Engineering Industrial Advisory Board, and Dean's Council for the College of Engineering C. Governmental committees/organizations • Mikroelektronik Strategiekreis (Microelectronics strategy circle, Germany) • Silicon Germany D. Standardization organizations • DKE – Deutsche Kommission Elektrotechnik Elektronik Informationstechnik in DIN und VDE (German Commission for Electrical Engineering, Electronics, and Information Technology of DIN and VDE)

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6.1.6 Digital transformation

Digital Transformation (DT) plays a vital role in

advancing X-FAB’s sustainability goals by introducing

innovative tools and approaches to reduce resource

consumption, minimize waste, and enhance production

efficiency. At X-FAB, digital transformation is deeply

integrated across all departments, enabling process

improvements and technology adoption to drive

continuous progress.

The Digital Transformation Department is dedicated to

fundamentally reshaping the way we work, creating

customer value, and fostering a forward-thinking

organizational culture. Acting as a central hub with

reach across all sites, the DT team aims to drive

digitalization and automation projects to success.

"The DT Department unites and empowers

progressive thinkers while fostering a collaborative,

community-driven approach across all sites and

departments. A key component is to drive innovation,

demand management, and roadmap development,

ultimately creating agile fabs within a One X-FAB

culture," says Ulrike Sampermans, VP of Digital

Transformation.

In close collaboration with Operations, Information

Technology, and other key departments, the DT team

applies change management, transformation

strategies, digital planning, and portfolio management

frameworks to build an efficient, highly digitized

company culture.

X-FAB’s digital strategy focuses on enhancing

efficiency, improving customer satisfaction, and

fostering a positive work environment. The overarching

goal is to streamline and strengthen connections—both

within X-FAB and with our customers and suppliers.

At the core of our Digital Transformation Strategy

(2025–2029) are four key focus areas, each with

clearly defined goals, structured roadmaps, and priority

initiatives led by global teams to drive implementation

across all sites and departments. Through this

approach, X-FAB continues to lead the way in digital

innovation, sustainability, and operational excellence.

New work

X-FAB has launched and implemented the “ONE X”

new work strategy in 2024 to foster a more efficient,

engaging, and productive work environment. This

initiative further progresses agile systems such as

global interoffice and hybrid collaboration tools, a

transition to a paperless office with automated

workflows, a unified project management solution to

accelerate development cycles, and modern people

and culture management tools. A key component of

this strategy is the full-scale adoption of X-FAB’s

collaboration, communication, and business application

platform, enabling seamless connectivity for

employees—anytime, anywhere, on any device. With

the completion of this project in 2024, X-FAB is now

better connected, significantly more efficient, and

well-equipped for streamlined communication,

collaboration, and knowledge management across all

sites and departments.

A harmonized, optimized, and automated process

landscape is at the core of this transformation. In 2024,

a major focus was placed on business process

improvement, closely linked to the implementation of

X-FAB’s new ERP system. These initiatives have also

fueled advancements in Robotic Process Automation

(RPA), which gained significant traction with the launch

of a new platform across the business in late 2024.

Initial results confirm strong potential for improving

manufacturing and business efficiency, reducing costs,

and enhancing overall employee satisfaction. Through

these efforts, X-FAB continues to modernize

workflows, increase agility, and drive innovation across

the organization.

Fab efficiency

In 2024 X-FAB has further progressed the integration

and implementation of the global fab efficiency

initiative to drive efficiency, productivity, and

innovation across its fabs and manufacturing

processes. This effort includes the implementation of

yield enhancement tools, advanced scheduling

systems, MES solutions, equipment automation, lot

tracking, material transportation, and energy efficiency

systems. Additionally, robotics has been introduced in

select areas to optimize operations, shifting manual

labor toward higher-value activities.

Through these automation advancements, X-FAB aims

to enhance quality and delivery, reduce cycle times,

lower costs, and minimize environmental impact, all

while improving the safety and well-being of

employees. In 2024, X-FAB successfully completed

several key projects with a strong focus on global

integration, whilst still ensuring the improvements are

targeted at the local challenges and requirements.

Notable milestones include the Scheduler

implementation in Kuching, Erfurt, Dresden and

Lubbock and the release of a unified MES system at a

second site in addition to our Lubbock pilot.

Additionally, equipment integration initiatives

advanced across multiple locations, while the

foundation was laid for the finalization of the material

handling systems project at two more sites, set for

completion in 2025.

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These strategic automation efforts position X-FAB for

continued operational excellence, enhanced agility,

and sustainable growth across its global manufacturing

network.

Data and AI

X-FAB is advancing its data and AI strategy with a suite

of global initiatives, having developed a

comprehensive approach and begun implementing key

components in 2024. The vision — “Transform X-FAB

into a leading data-driven organization focused on

continuous business improvement and operational

efficiency” — guides all activities in this focus area.

Fig 6.13: The path to becoming a data-driven organization

X-FAB has established a robust governance

framework that promotes global and cross-

departmental collaboration, a structured demand

management process, and streamlined delivery

mechanisms to maximize business value.

In 2024, X-FAB is driving 35 ongoing AI and data

initiatives, building on numerous successfully

completed projects. The estimated total business

impact of these initiatives since their launch is USD 21

million in identified cost savings, primarily through

AI‑driven process optimization.

At the core of X-FAB’s AI efforts is the IT AI & Machine

Learning (ML) Center of Excellence (CoE) in Kuching,

which serves as the innovation hub, with an extended

footprint across all sites. X-FAB also fosters strong

communities in data, software development, and R/

Shiny, embracing a citizen-developer approach that

empowers employees. While the focus areas remain

quality, yield, efficiency, cycle time, and process

optimization, in 2024, there was an increased emphasis

on business efficiency covered by key initiatives.

With over 300 employees actively engaged in bottom-

up innovation communities, X-FAB continues to

promote AI-driven advancements. The Company has

successfully hosted three consecutive hackathons,

fostering efficiency, collaboration, and innovation. At

the 2024 Hackathon in Dresden, six successful

prototypes were developed, most of which were

partially or fully implemented by year-end. Additionally,

pilot projects leveraging Generative AI are equipping

employees with cutting-edge AI tools to enhance

productivity and decision-making.

Key AI Projects in 2024:

• AI-driven fault detection & classification (FDC) for

equipment and process monitoring

• A standardized AI platform for automatic image

recognition (AIR) to improve wafer defect

detection and classification

• Generative AI pilots and all-staff initiatives,

including chatbot developments

• Advanced data analysis using R/Shiny to enhance

insights and decision-making

Beyond these initiatives, X-FAB is enhancing business

intelligence capabilities through capacity planning and

operational benchmarking solutions, strengthening

reporting and analytics. Through collaborative efforts,

such as the global R/Shiny community, Software

Developer Communities (SDC) and annual hackathons,

X-FAB continues to unite programmers, engineers,

and domain experts to drive innovation and develop

AI-powered solutions that address critical business

challenges.

Unified customer interface

A key pillar of X-FAB’s future strategy is the

development of a unified customer interface across all

departments and technologies. By integrating, further

digitalizing, and automating customer-facing

processes, X-FAB is enhancing both the customer

experience and its business development and growth

potential.

This initiative includes a wide range of improvements,

such as the continuous enhancement and integration

of the customer portal “myX-FAB”, enabling direct

Business-to-business (B2B) integration, and optimizing

business development and sales and marketing

processes through Customer Relationship

Management (CRM) and Customer Projects (CP)

automation.

As part of its quality and continuous improvement

efforts, X-FAB is driving cross-site harmonization of

processes and software tools for identical applications,

ensuring greater consistency and efficiency across

locations. Additionally, X-FAB is introducing

professional software tools for specific applications,

such as the further rollout of FMEA and SPC

management in 2024, to enhance operational

capabilities and improve yield.

A key strategic priority is the preference for integrating

existing solutions over further software diversification

where possible, focusing on automation and the

simplification of routine workflows and repetitive tasks.

By streamlining processes, reducing complexity, and

enhancing efficiency, X-FAB continues to strengthen

its digital ecosystem to deliver seamless customer

interactions and optimized business operations.

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Fig. 6.14: Focus areas of X‑FAB’s digital transformation

strategy

6.2 Environment

X-FAB uses its technology skills to help customers

create products for different fields (Fig 6.2),

supporting environmental sustainability. However, in

general, the production of high-quality microchips and

microsensors requires a huge amount of materials and

energy. Thus, X‑FAB has a responsibility regarding

environmental topics. This is why, in addition to the

Company’s business, environmental activities are

handled with an integrated quality management

system with all sites (with the exception of X-FAB

MEMS Foundry Itzehoe) being certified in accordance

with ISO 14001:2015 standard It is X‑FAB’s goal to

balance current environmental, social, and economic

requirements in order to minimize its impact on future

generations. One standard and permanent goal is to

fulfill all existing compliance obligations.

Fig 6.15: X-FAB’s EHS & Facility team participating in the 2024

Global EHS-Facility workshop

6.2.1 Climate change

X‑FAB is committed to reducing its carbon footprint

and aims to reduce the CO2 emissions per stepped

mask layer by 40% by 2030 (Scope 1 & 2 only). The

target is based on the reference year 2021 and is

reviewed and reported annually. The definition of site-

specific goals ensures the continuous reduction X-

FAB’s impact on the environment.

6.2.1.1 Transition plan for climate change mitigation

Currently, X-FAB does not have a formal transition

plan for climate change mitigation as more studies

need to be carried out in 2025 to gain a deeper

understanding of the complex relationships in the

semiconductor wafer foundry value chain. This is due

to X-FAB’s limited visibility into the end use and market

of its products. In addition, X-FAB does not sell its

products directly to the open market.

Meanwhile, X-FAB has procedures in place to monitor

the consumption of production materials and utilities

to ensure that the identified risks, impacts, and

opportunities have minimal impact on the Company's

business strategy and operations. Existing

stakeholders have been identified from current

relations, e.g. relations with external stakeholders, such

as government authorities, suppliers, customers, banks,

investors, etc., and internal stakeholders, such

employees, management team, etc.

6.2.1.2 Climate-related risks

In the ongoing DMA analysis, X-FAB had assessed the

identified impacts, risks, and opportunities (see Fig.

6.16), specifically evaluating potential climate-related

risks or hazards. This was done in a general manner as

X-FAB had focused on activities that are well known

and on existing targets.

The impacts, risks and opportunities (IROs) are listed in

the table below.

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Type of IRO	Name of IRO	Description of IRO	State (actual / potential)	Effect (positive / negative)
Impact	Accelaration of climate change due to operations	High CO2 output due to high energy usage	Actual	Negative
Opportunity	Reduction of CO2 emissions	Contribution to low carbon technologies with produced goods	Actual	Positive
Opportunity	Reduction of CO2 emissions	Improvement projects for energy efficiency	Potential	Positive
Opportunity	Reduction of CO2 emissions	Change to low carbon energy sources	Potential	Positive
Risk	Increased energy costs	Carbon pricing	Potential	Negative
Risk	Production impact due to supply chain interruptions from climate issues	Combination of multiple events or single large event	Potential	Negative
Risk	Production impact due to supply chain interruptions from climate issues	Single smaller event	Potential	Negative
Opportunity	Increase energy efficiency lowering energy costs	Improvements in system, tool, and process efficiency leads to lower energy usage, in turn reducing costs	Potential	Positive

Fig. 6.16: Impacts, risks and opportunities from the ongoing DMA analysis

X-FAB will conduct further detailed investigations and

develop strategies in 2025 to address these IROs with

time horizons.

6.2.1.3 Environmental IROs

As described in X-FAB’s overall process, an initial DMA

analysis was started in 2023 and directly illustrated (Fig

6.17) that the topic climate change is material.

However, due to the complexity of the supply chain

and the low visibility of the target market for X-FAB’s

products, X-FAB decided to:

a. continue with the existing target of reducing

X‑FAB’s carbon footprint normalized per stepped

mask layer by 40% by 2030, compared to 2021

levels:

i. limited to scope 1 and 2 greenhouse gas

reduction. Scope 3 is not included in 40%

reduction goal; and

b. engage South Pole to assist in the preparation of

scope 1, 2, 3 greenhouse gas reporting:

i. calculation is for scope 1, 2, and 3; and

ii. contribution of scope 3 to the existing 40%

reduction target will be evaluated in 2025.

The above activities were performed and tracked

across all of X-FAB’s operations. Details of these

activities are described in the following sections.

6.2.1.4 Policies

Following the establishment of the X-FAB

Sustainability Policy in the second half of 2024, X-FAB

is in the process of establishing the sustainability

roadmap for the entire X-FAB Group, to be completed

by 2025. This will cover the material and non-material

issues identified through the DMA exercise (section

6.1.2 Sustainability Strategy and Materiality

Assessment).

Fig. 6.17: X-FAB activities used for greenhouse gas reporting

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6.2.1.5 Actions

While X-FAB’s sustainability roadmap is being

developed, X-FAB will continue to maintain its existing

environmental policies linked to climate change. These

policies will be reviewed further in 2025 for climate

change actions.:

a. monitoring of all utilities and production materials

to respond quickly to unusual consumption trends

and take appropriate action; no purchase of carbon

offsets, but regular monitoring of energy

consumption (electricity, fuel, chemicals, etc.);

b. rigorous review of any disruptions to ensure that no

spillage or waste is prolonged; necessary actions to

prevent future recurrence and better response

plans to minimize detrimental impact on the climate

change and production activities;

c. annual review of existing activities for efficiency

and effectiveness in achieving X‑FAB's EHS policy

and objectives and developing prompt action plans

to optimize plant operations in line with the

Company's business strategy and long-term

growth, e.g. reviewing the performance of aging

equipment for timely replacement and

opportunities to upgrade to improved technology

that reduces negative and/or improves positive

environmental impacts; and

d. engage with customers and suppliers to identify

potential issues that could impact X‑FAB's ability to

quickly address CO2 emissions reductions and

other climate change-related challenges.

6.2.1.6 Targets

X‑FAB is committed to reducing its carbon footprint by

40% by 2030 (Scope 1 & 2 only, normalized to

emissions per stepped mask layer). The target with

reference to 2021 is reviewed and reported annually

with site-specific goals to continually reduce the

Company’s impact on the environment.

The production of semiconductors requires the use of

many different materials, among them toxic materials

and greenhouse gases. Tracking the material flow and

monitoring the material efficiency as well as their use is

necessary to reach sustained environmental

conservation and to minimize climate change impact

from X-FAB’s activities.

Improvement activities at site level are:

Scope 1:

Mobile combustion, stationary combustion,

refrigeration, processing

Site	Improvement activity
France	Installation of seven thermal processing units (TPU) to improve atmospheric treatment, reducing emissions of fluorinated gases and thereby reducing the carbon footprint with an estimated savings of 2,000 tons CO2eq
Kuching	Installation of plasma scrubber to treat PFC gases via abatement system

Although there are waste improvement activities

(section 6.2.2), these were not linked to the carbon

emissions target, but to waste reduction.

Scope 2:

Electricity, district heating

Site	Improvement activity
Erfurt	Replacement of old emergency power generators to keep critical systems working during blackouts, target to be completed in March 2025
Erfurt- MEMS	Reduction of power consumption by replacing steam humidifier by spray humidifier with estimated savings of 550 MWh (212 tCO2eq)
Lubbock	4 cooling tower replacement in 2024 with savings of 83.5 MWh (39.85 tCO2eq)
	Aging chiller replacement with savings of 116 MWh (55.5 tCO2eq)
	Replacement of main mechanical room (MMR) boiler with estimated savings of 126 MWh (28.6 tCO2eq) annually
	Ongoing project of using VLF (vertical laminar flow) drives and variable frequency drives. Through 2024, 110 fans replaced, giving an estimated savings of 3,927 MWh (8.1 tCO2eq)
	Air compressor replacement with newer technology that resulted in 40 kW savings (0.036 tCO2eq)

6.2.1.7 Energy consumption and mix

Energy consumption and mix		2024	2023
1	Fuel consumption from coal and coal products (MWh)	0	0
2	Fuel consumption from crude oil and petroleum products (MWh)	1,976	2,237
3	Fuel consumption from natural gas (MWh)	32,737	27,907
4	Fuel consumption from other fossil sources (MWh)	0	0
5	Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh)	171,662	175,335

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6	Total fossil energy consumption (MWh)	206,375	205,479
	Share of fossil sources in total energy consumption (%)	37%	38%
7	Consumption from nuclear sources (MWh)	0	0
	Share of consumption from nuclear sources in total energy consumption (%)	0	0
8	Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh)	0	0
9	Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh)	350,668	335,216
10	The consumption of self-generated non-fuel renewable energy (MWh)	0	0
11	Total renewable energy consumption (MWh)	350,668	335,216
	Share of renewable sources in total energy consumption (%)	63%	62%
12	Total energy consumption (MWh)	557,043	540,695

X-FAB’s overall energy consumption increased by 3%

from 540,695 MWh in 2023 to 557,043 MWh in 2024.

Non-renewable sources

Energy from non-renewable sources covers natural

gas, liquefied petroleum gas (LPG), diesel, and fuel

which are mainly used for our exhaust treatment

(abatement systems) and genset, Dynamic Diesel

Uninterruptible Power Supply (DDUPS) and steam

boilers.

Renewable sources

Renewable energy includes electricity and district

heating for some X-FAB sites. The data is based on the

energy mix provided by the power utilities.

At the sites in Erfurt, Dresden, and Corbeil-Essonnes,

X‑FAB has implemented an energy management

system in accordance with the requirements of ISO

50001:2018.

ISO 50001

This international standard specifies requirements for establishing, implementing, maintaining, and improving an energy management system, the purpose of which is to enable an organization to follow a systematic approach in achieving continual improvement of energy performance, including energy efficiency, energy use, and consumption.

This enables the assessment of improvement

potentials of the Company’s energy efficiency and

their implementation in daily work. Across the

Company, different activities and projects are in place

to reduce energy consumption, which are part of the

aforementioned annually renewed environmental

goals.

6.2.1.8 Scope 1, 2, 3, and total GHG emissions

	Base year
	2021	2022	2023	2024
Scope 1 GHG emissions (tCO2eq)	126,903	115,892	74,621	86,635
Scope 2 GHG emissions (tCO2eq)	94,199	94,879	94,525	91,975
Total scope 1 & 2 GHG emission (tCO2eq)	221,102	210,772	169,146	178,610
Significant scope 3 GHG emissions (tCO2eq)			1,060,472	808,625
1. Purchased goods and services			942,221	178,069
2. Capital goods			41,201	62,345
3. Fuel- and energy-related services			64,262	63,296
4. Upstream transportation and distribution			2,288	207,059
5. Waste generated in operation			2,593	912
6. Business travel			2,702	1,893
7. Employee commuting			3,464	3,397
9. Downstream transportation and distribution			1,741	289,056
Total GHG emissions (location-based) (tCO2eq)	221,102	210,772	1,229,618	987,235
Total GHG emissions (market-based) (tCO2eq)	NA	NA	NA	NA

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	Annual Report 2024 | Sustainability at X-FAB

Only Scope 1 and 2 emissions are reported for 2021 and

2022. To improve data quality and the total scope of

emissions, Scope 3 has been included from 2023

onwards. Scope 3 comprises eight categories.

The market-based emissions were not available as data

was not available. They will be reported in 2025.

Scope 1

Scope 1 emissions are derived from site activities and

equipment owned by X-FAB:

• stationary combustion: boilers, emergency

generators, and exhaust abatement systems;

• mobile combustion: vehicles using fossil fuel;

• refrigerants: fugitive emissions from chillers; and

• processing: residual emissions after GHG exhaust

abatement systems.

The emission factor databases used were from Bilan

Carbone v8.9 and Defra GHG Conversion Factors

2023.

For the year 2024, there was 16% increase in X-FAB’s

Scope 1 emissions from 74,621 tCO2eq in 2023 to

86,635 tCO2eq in 2024. Although there was an

increase in X-FAB’s Scope 1 emissions, when compared

to the 2021 base year, we saw a 32% decrease in Scope

1 emissions from 126,903 tCO2eq in 2021 to 86,635

tCO2eq in 2024.

Scope 2

Scope 2 emissions are derived from site activities and

equipment owned by X-FAB that requires:

• electricity to power equipment needed to carry out

X-FAB’s activities, i.e. production, support systems,

and offices;

• district heating: to serve locations where additional

heating is required for some offices.

The emission factor databases used were Bilan

Carbone v8.9, AIB 2023 and EcoInvent v3.10.

For X-FAB’s Scope 2 emissions, there was a 3%

decrease from 94,525 tCO2eq in 2023 to 91,975

tCO2eq in 2024. When compared to 2021 base year, we

saw a 2% decrease from 94,199 tCO2eq in 2021 to

91,975 tCO2eq in 2024.

Scope 3

Total scope 3 emissions decreased by 24% from

1,060,472 tCO2eq in 2023 to 806,028 tCO2eq due to

using the 2024 wafer supplier emission factor instead

of the 2023 spend based data. This led to a large

reduction of emissions for 1 Purchased goods and

services, even though there were slight increases in

other Scope 3 categories. More investigation on the

following categories is planned to further improve the

data quality of X-FAB’s scope 3 carbon footprint

calculations.

In 2024, X-FAB’s scope 3 emissions reporting is sub-

divided into the following eight categories:

1 Purchased goods and services

• Purchased goods and services for direct and

indirect spend (OPEX data) calculated from data

based on material quantity and spend-based data.

• In 2024, there was a 81% decrease from 942,221

tCO2eq in 2023 to 178,069 tCO2eq in 2024. The

decrease was due to using the wafer supplier’s

emission data for 2024 while the 2023 data was

based on spend based data.

2 Capital goods

• Capital goods for supporting facilities (i.e.,

computers, machinery, etc.) were calculated from

expenditure-based data for capital expenditures in

high-level categories.

• In 2024, there was a 51% increase from 41,201

tCO2eq in 2023 to 62,345 tCO2eq in 2024. The

increase was due to more CAPEX spent in 2024

compared to 2023.

3 Fuel and energy related activities

• All significant fuel and energy related activities are

accounted for in Scope 2.

• In 2024, there was a 2% decrease from 64,262

tCO2eq in 2023 to 63,296 tCO2eq in 2024..

4 Upstream transportation and distribution

• This includes transportation data from the main

outbound transportation. Available data for

estimating the footprint from inbound

transportation was inefficient.

• In 2024, there was a large increase from 2,288

tCO2eq in 2023 to 207,059 tCO2eq in 2024. The

increase was due to more outbound transportation

data in 2024 compared to 2023 activities. Not all

2023 outbound transportation data was available.

5 Waste generated in operations

• Quantitative data on waste type and treatment

type was used to calculate the waste generated

from X-FAB’s operations.

• In 2024, there was a 65% decrease from 2,593

tCO2eq in 2023 to 912 tCO2eq in 2024. A further

data review is to be done in 2025 to improve data

quality.

6 Business travel

• Employee business travel includes mode of

transportation, flight dates, distance traveled, and

accommodations. The data used was a combination

of distances traveled and mode of transportation

for all German sites and business travel expenses

for all locations.

• In 2024, there was a 30% decrease from 2,702

tCO2eq in 2023 to 1,893 tCO2eq in 2024. The

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decrease was due to less business travel spend

data.

7 Employee commuting

• Data was calculated by daily employee commute

using FTE per site. Assumptions based on

benchmark studies with regional/country specific

data were applied to this FTE data. Additional data

on these items will be collected as part of the 2025

reporting.

• In 2024, there was a 2% decrease from 3,464

tCO2eq in 2023 to 3,397 tCO2eq in 2024..

9 Downstream transportation

• Downstream transportation refers to the shipping

routes of outbound sold products and includes the

transportation mode, origin, and destination.

• In 2024, there was a large increase from 1,741

tCO2eq in 2023 to 289,056 tCO2eq in 2024. The

increase was due to more capital purchase on

production tools (heavier weight and long distance

travels to Malaysian and French site).

The following Scope 3 emissions categories were not

available at the time X-FAB calculated its carbon

footprint or are not applicable to X-FAB.

8 Upstream leased assets

• X-FAB does not have any leased assets that are not

under its control.

10 Processing of sold products

• X-FAB does not sell physical products that require

further processing by our clients.

11 Use of sold products

• X-FAB does not have visibility of customers’ end

products to quantify the impacts of the products in

sold products.

12 End-of-life treatment of sold products

• X-FAB does not sell physical products that would

require disposal or treatment at the end of their

lifecycle.

13 Downstream leased assets

• X-FAB does not act as a lessor.

14 Franchises

• X-FAB does not operate with franchises.

15 Investments

• X-FAB reported the CO2 emissions for its factories

and offices in the other categories of this report.

Energy intensity based on net revenue

Energy intensity based on net revenue	2024
Total energy intensity per net revenue (MWh/ million USD)	682

Energy intensity based on net revenue is calculated by

dividing the total energy consumption of all sites by the

reported net revenue in millions of US dollars. Energy

data was derived from actual consumption as stated

on supplier invoices, online data via supplier online

portals/reports, open requests to suppliers via written

communication, estimates based on historical data and

average price per unit of consumption, and estimates

based on publicly available average price per unit of

consumption. However, details of the data hierarchy

will be reported in future reports once further analysis

has been conducted.

GHG intensity based on net revenue

GHG intensity based on net revenue	2024
Total GHG intensity per net revenue (tCO2eq/ million USD)	1,206

GHG intensity based on net revenue is calculated by

dividing Scope 1 gross emissions, Scope 2 location/

market emissions, and Scope 3 gross emissions by

reported net revenue in millions of US dollars. The

limitations of Scope 1,2,3 are reported in section 6.2.1.8

Emissions data was derived from actual consumption

as stated on supplier invoices, online data via supplier

online portals/reports, open requests to suppliers via

written communication, estimates from historical data

and average price per unit of consumption, and

estimates based on publicly available average price per

unit of consumption. However, details of the data

hierarchy will be reported in future reports once further

analysis has been conducted.

High-carbon and low-carbon energy sources

At X-FAB, energy is primarily consumed in the form of

electricity, with other sources playing a minor role.

Production has the highest energy consumption due to

the energy-intensive advanced cleanroom conditions

and production processes used. In 2024, X-FAB's total

energy consumption was about 557 GWh, increasing

slightly due to the increase in production equipment.

The share of low-carbon electricity sources such as

hydro, nuclear, solar, and wind was 67%, and the share

of high-carbon sources such as oil, gas, coal, biofuels,

etc. was 33%. The breakdown for X-FAB Sarawak is

based on data for 2022, as this is the most recent data

available from the local electricity provider.

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Fig. 6.18: Power consumption of all X-FAB sites from 2021 to

2024 (in GWh)

Fig. 6.19: 2024 share of low-carbon and high-carbon electricity

power sources (in percent)

6.2.2 Water

In 2024, X‑FAB’s production used roughly 233 liters of

water per stepped mask layer. The majority was used

for cooling as well as for the supply and cleaning of

production tools. Different sources of water supply are

used, including surface water, municipal water, and

ground water. There was a slight increase in

consumption due to more production loading at some

of the production sites compared to 2023. The

Group’s 2024 total water consumption (normalized to

stepped mask layers) increased by 9.6% compared to

2021, given a value of 233 liters of water per stepped

mask layer.

	Amount in liter/sML
From a river	23
Ground water	57
Local drinking water supplier (city council)	154
Total water withdrawal	233

Fig. 6.20: Total water withdrawal by source in 2024

Fig. 6.21: Total water consumption (liter per stepped mask

layers) over a four-year period against X-FAB’s water

reduction target

Fig. 6.22: Total water consumption (liter per stepped mask

layers) over a four-year period

Water improvement projects carried out in 2024 were:

• recycling of last rinse water from wet benches to

ultra pure water (UPW) plant instead of wastewater

treatment plant by installing TOC (total organic

carbon) analyzer to determine acceptable level of

TOC for recycling. Water saving was 45,990 m3

(USD 10,900) (Kuching); and

• installation of well water pretreatment system as

additional silica filtration to protect ion exchange

membranes and reduce consumption of city water.

Savings are to start in 2025 (Lubbock).

No water is packaged together with X-FAB products.

All water is returned back to the environment via

wastewater discharge or air emission discharge

through the exhaust and cooling tower systems.

6.2.3 Pollution of air, materials and waste

management

The need to use materials that might cause toxic waste

(solid, liquids, and fumes) in the production of

semiconductor products is a special challenge and a

key environmental aspect. Therefore, material

departments and waste commissioners have been

established at each X‑FAB site. Materials used for

production include solvents, photoresists, neutral

etchants, acids and bases, metals, gases, and water.

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All sites have environmental permits or legal

requirements that specify limits for air emissions and

waste discharges (liquid, solid) for relevant key

parameters in accordance with applicable local

legislation. This is to prevent pollution of the

environment (air, land, and water bodies).

Hazardous classifications are used and waste is

separated by X‑FAB to reduce the amount of

hazardous or non-recyclable waste. The majority of the

waste (both hazardous and non-hazardous) is sent for

recycling in order to recover valuable resources. The

remainder, which cannot be recovered or recycled, is

processed to further render it in a non-hazardous form

through pollution treatment systems (in-house or

external) to meet local discharge limits. Waste is

handled in solid, liquid, and gaseous forms.

A monitoring program is in place to ensure that all sites

are in compliance with local regulatory limits and that

each site can respond quickly to changes.

Improvement projects are developed and

implemented when regulatory changes occur,

improving plant performance and/or reducing material

use and disposal.

With 86.4% of waste recovered, the total waste

disposal in 2024 is higher compared to 2023 with a

waste recovery of 81.5%.

Fig. 6.23: Amount of waste by type and disposal method

normalized to stepped mask layers (in metric tons per million

stepped mask layers)

X‑FAB pursues permanent environmental objectives to

decrease its overall environmental impact.

Air pollution, material and waste improvement projects

carried out in 2024:

• completed a 2022 project in 2024 to increase the

recycling rate of fluoride sludge waste used as a

co-processing raw material in a cement plant from

15 to 70 tons/month (savings of USD 26.9

thousand) with a recycling rate of at least 80% of

total hazardous waste (Kuching);

• replacement of ammonia meter to improve

ammonia concentration process with better

continuous monitoring of ammonia discharges

(Corbeil-Essonnes);

• installation of a treatment facility for BSG (boro-

silicate-glass) aqueous discharges to reduce

aqueous discharges and to increase water recycling

rate (Corbeil-Essonnes);

• upgrading of the TLM (Triple Level Metal)

Scrubber pH Probe System for up-to-date

calibration methods, ease of probe maintenance,

better accuracy, and air permit compliance tracking

(Lubbock);

• air emissions modeling for accuracy and impact

review and future permitting actions. The modeling

was conducted to determine concentration of

chemicals emitted from the facility to indicate

future possibility of facility growth opportunities

(Lubbock); and

• installation of wet scrubber for treatment of bypass

exhaust streams to reduce risk of environmental

pollution and odor nuisance. Additional advantages

include energy savings and noise reduction

(Dresden).

Information on conflict minerals can be found in

chapter 6.4.3.

Information on X-FAB’s compliance status with EU

RoHS and REACH regulations (including SVHC

substances) can be found in chapter 6.4.5.

6.3 Social

6.3.1 People

As one of the leading specialty foundry groups, X-FAB

recognizes the significant social responsibility

associated with its global business operations. X-FAB’s

corporate culture is rooted in universally recognized

ethical principles, including integrity, honesty, respect

for human dignity, transparency, and a commitment to

non-discrimination based on religion, ideology, gender,

or ethnicity. X-FAB's mission is to foster the social and

economic development of the regions and countries in

which it operates, while also encouraging meaningful

volunteer initiatives among its employees. Through

these efforts, X-FAB aims to enhance the well-being

and long-term sustainability of the communities it

impacts, particularly in terms of working conditions,

social and environmental responsibility, transparency,

collaboration, and open dialogue.

6.3.1.1 Labor and human rights

X‑FAB’s corporate ethics are based on universally held

ethical values and principles, including respect of

human dignity, openness, and non-discrimination.

X‑FAB has has signed and adopted the ZVEI Code of

Conduct, committing itself to human rights as stated in

the Charter of the United Nations, especially

protection from harassment, the prohibition of child

and forced labor, the prohibition of discrimination, fair

working standards and compensation, and freedom of

thought, expression, association, and assembly, as well

as collective bargaining. Based on the principle of

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“freedom of association” 98% of our employees in

Europe are organized under the regulation of local and

national collective bargaining agreements. These

agreements give the highest level of transparency of

working conditions to all employees.

All operations are monitored and reviewed regarding

human rights on an ongoing basis. All of X‑FAB’s

investments are in compliance with respective local

laws. Respecting human rights is a matter of course for

X‑FAB and in all employment contracts. Any kind of

child and/or forced labor is prohibited. Health and

safety for all employees is guaranteed. The Group

ensures that employees are protected from corporal

punishment and any other forms of physical, sexual,

psychological, or verbal harassment and abuse.

In 2023 a global equal treatment policy was created by

reviewing local policies and establishing a global

approach. In 2024, the policy was implemented and

published internally via a specifically created e-learning

training module on “unconscious bias.” Within that

training, the policy is read out and employees are

required to answer specific questions on the policy.

This procedure is designed to ensure that every

employee has read and understood the policy.

Internal and external security personnel follow very

high standards of human rights practices. During the

selection process, they have to undergo special

screenings and have to provide special certifications

and qualification. They undergo specific training on

values, behavior standards, and policies of X‑FAB.

X-FAB supports disabled or handicapped persons in

accordance with local laws. At X-FAB, more than 110

disabled employees (officially registered with

disabilities) are well integrated into the daily work

processes and routines at the Group’s locations. Any

form of discrimination is strictly prohibited. All new

employees who started in 2024 attended a mandatory

employee orientation, of which training on human

rights policies and X‑FAB’s Code of Conduct is an

important focus. Relevant local laws together with

company handbooks are accessible to all employees

on X‑FAB’s intranet as well as in printed form. This is

implemented by the People & Culture (formerly “HR”)

department, whose members are regularly trained

externally and internally on human rights topics in more

detail, such as inclusion, equity, diversity, and anti-

discrimination.

Employees are encouraged to report incidents related

to human rights to the People & Culture department

or, where available, the workers’ council and the equal

opportunities officer. No incidents were reported in

2024.

In the case of reported incidents, corrective actions are

initiated in consultation with the People & Culture

department and in compliance with local laws. The

identity and well-being of employees who report on

the violation of any law or regulation of the Company,

on any activities that are against the interests of the

Company, or on any matter likely to harm any other

person are protected by the Group’s global

whistleblower procedure. X‑FAB operates a no-

retaliation policy for those individuals.

Employee statistics

At the end of 2024, X‑FAB had approximately 4,500

employees worldwide at six different manufacturing

sites in Europe, Asia, and the USA. At all of its sites,

X‑FAB’s recruitment policy is based on the employee’s

qualifications and the Company’s requirements.

Consequently, different requirement profiles exist in

technology and operations-related positions.

More than half of X‑FAB’s staff is located in Europe.

Location	Absolute # of employees	Percentage of male employees [%]	Absolute # of male employees	Absolute # of female employees	Percentage of female employees [%]
North America	458	72.9	334	124	27.1
Europe	2,548	75.0	1,911	637	25.0
Asia	1,520	65.3	993	527	34.7
TOTAL	4,526	71.5	3,238	1,288	28.5

Fig. 6.24: Number of employees (excluding trainees) by region and gender at the end of 2024

In line with the slowdown in the semiconductor industry

in the second half of 2024, the number of employees

decreased from 2023 to 2024 by 125. The decrease

was due to natural fluctuation at the affected sites.

Several secondment programs between the sites were

established, which helped to balance resources

between the X-FAB sites.

X-FAB continues to pursue its objective of increasing

the proportion of female employees in the workplace.

The share of female employees is steadily increasing in

all regions X‑FAB is operating in. It remains stable at

28% in 2024. There was, however, a slight reduction

compared to the previous year (28.6% in 2022 vs.

28.4% in 2023) as a result of hiring of a higher number

of male employees in 2023.

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Fig. 6.25: Share of male and female employees by region

2010–2024

Employees’ rights and working standards are highly

valued at X‑FAB. Consequently, all arrangements

comply with corresponding national laws and

requirements. X‑FAB employees with a full-time

contract, which applies to 95% of all employees, work

between 35 and 40 hours per week. 94% of employees

hold a permanent employment contract. Less than 1%

of staff are contract workers.

In 2024 the number of part-time contracts increased

slightly, primarily attributable to an increase in the

number of part-time employees in Europe.

The full “Flex@work” policy was deployed during the

coronavirus pandemic at all X‑FAB locations, so that,

where practical, employees were able to work from

home and were provided with the technical

requirements for remote work. After the end of the

coronavirus-related restrictions, X‑FAB introduced a

Work from Home policy at all X‑FAB sites as a

permanent method of working if the nature of the

work allows such a model.

Location	Gender	Temporary/ fixed term	Permanent employees	Contract workers	Trainees/ internships	Full-time	Part-time
North America	Male	0	334	0	0	330	4
	Female	0	124	0	0	123	1
Europe	Male	105	1,805	1	123	1,790	121
	Female	28	609	0	26	506	131
Asia	Male	17	976	0	0	993	0
	Female	15	512	0	0	527	0
TOTAL	Male	122	3,115	1	123	3,113	125
	Female	43	1,245	0	26	1,156	132

Fig. 6.26: Employment contracts by type, region, and gender as at year end 2024

Approximately 98% of all employment contracts in

Europe are covered by collective bargaining contracts.

In France a new collective bargaining agreement was

implemented and went live in January 2024. In other

regions of the world this concept is not common, and

therefore, there are no collective bargaining

agreements in place at the Group’s non-European

locations.

In 2024, 341 new employees were hired, 72% of whom

were male and 28% were female. The majority of newly

hired employees are younger than 35 years. The

average 12-month turnover rate in 2024 was 4%, stable

from the previous year.

Location	Gender	<35 yrs	36–50 yrs	51–60 yrs	> 60 yrs	Total
North America	Male	9	2	1	1	13
	Female	4	4			8
Europe	Male	139	21	9	0	169
	Female	41	11	3	0	54
Asia	Male	53	9	1	0	63
	Female	28	6	0	0	34
TOTAL	Male	201	32	11	1	245
	Female	73	21	3	0	96

Fig. 6.27: Newly hired employees (including contract workers, excluding trainees) by age and gender in 2024

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Location	Gender	<35 yrs	36–50 yrs	51–60 yrs	> 60 yrs	Total
North America	Male	26	12	3	8	49
	Female	14	6	6	4	30
Europe	Male	256	67	11	1	335
	Female	73	26	6	0	105
Asia	Male	53	9	1	0	63
	Female	28	6	0	0	34
TOTAL	Male	335	88	15	9	447
	Female	115	38	12	4	169

Fig. 6.28: Number of employees (excluding trainees and retirements) who have left X‑FAB in 2024 by age and gender

X‑FAB conducts an employee engagement survey,

referred to as the Barometer, on a regular basis.

The results of the most recent survey conducted in

2021 indicated some areas for improvement. In

response, X‑FAB management has established local

action teams, who continued their work throughout

2024. As a result, several initiatives have been

launched in the areas of training and development,

benefits, communication, and leadership.

Average employee ages vary across the Group’s

locations, ranging from an average of 38 years in Asia

to an average of 43 years in North America.

Location	Average age of all employees	Average age of male employees	Average age of female employees
North America	44.0	45.0	43.0
Europe	41.2	41.1	41.3
Asia	37.5	38.4	35.8
TOTAL	40.9	41.5	40.0

Fig. 6.29: Average age by location and gender in 2024

X‑FAB is aware of the importance of fair payment.

Therefore, all employees receive salaries above the

minimum wage according to individual qualification

irrespective of gender or age. Based on specific local

laws and regulations, the relevant employees have the

opportunity to inform themselves about the equal pay

policy of X‑FAB by benchmarking their payment against

a relevant group of employees. Of all employees who

were on parental leave, nearly 100% returned to X‑FAB.

Developing excellence

The success of a company, and thus also X‑FAB,

depends on whether its employees are able to

optimally contribute their individual strengths, which

consequently need to be identified and individually

developed. The required expertise includes solid

knowledge and understanding of X‑FAB’s internal

procedures and production processes as well as job-

specific knowledge, all of which are part of the

introductory training plan for each new employee.

In 2022 X‑FAB introduced LinkedIn Learning licenses

for all employees for private and professional use. In

2024 X‑FAB globally and locally executed campaigns

via LinkedIn Learning on several topics, such as

diversity and inclusion, feedback culture, and work

safety. In addition to the global campaigns and based

on the yearly training needs analysis, specific training

was recommended on the e-learning system.

For individuals who have no direct access to a

computer, X‑FAB offers private areas with access to

undertake relevant training in each location.

To strengthen individual development and drive

performance improvement, X‑FAB extended and

improved the performance management process

(PMP) via SAP SuccessFactors. It is based on constant

feedback from supervisor to employee on performance

and goal achievement. This standardized global process

allows X‑FAB to ensure that every employee is aware of

his or her individual goals as well as the goals of the

department, the site, and the Company.

For a high level of environmental and social awareness,

company values, quality awareness, and employee

rights are highlighted from the beginning of the

working relationship at X‑FAB. In 2024, several

campaigns were launched on sustainability to raise

employees’ awareness for X‑FAB’s sustainability goals

in the area of innovation, diversity and inclusion, water

consumption, and carbon emission.

Enabling employees to be promoted to positions with

either higher technical or staff responsibility requires

constant development in different areas. To ensure

global knowledge transfer and continual development

of all employees, internal workshops, training sessions,

Lunch & Learn sessions, knowledge networks, and

webinars on various technical topics are incorporated

into the daily work of every X‑FAB employee. Hybrid or

purely virtual meetings became a normal way of

communicating during the pandemic, while there was

also a return to more face-to-face meetings in 2024.

The average number of training hours per employee

decreased compared to 2023. Increasing online or

e‑learning is expected to result in more on-the-job

training and less classroom training.

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Location	Gender	<35 yrs	36–50 yrs	51–60 yrs	> 60 yrs
North America	Male	24.0	24.0	24.0	12.0
	Female	24.0	24.0	24.0	12.0
Europe	Male	21.8	22.8	17.9	14.2
	Female	22.5	29.8	13.8	11.0
Asia	Male	18,0	21.6	13.6	0.0
	Female	16.8	22.8	26.4	0.0

Fig. 6.30: Average training hours (excluding e-learning) per

year and employee in 2024

6.3.1.2 Health and safety

Employees’ well-being and safety

X‑FAB ensures that all company activities are

performed in a manner that considers the health and

safety of employees, contractors, suppliers, customers,

and the general public with no adverse impact on the

environment through manufacturing operations and

products by operating an EHS management system

that is certified according to ISO 14001:2015 for all sites

(with the exception of X-FAB MEMS Foundry Itzehoe).

Education and training to improve employees’ EHS

awareness, safety, and well-being is critical for X‑FAB.

Regular safety-related training and instruction help to

avoid accidents and injuries. Each location has an

associated company doctor performing routine

medical examinations, such as eye examinations,

vaccinations, travel-related medical consultations, etc.

Security personnel (internal and outsourced) are also

trained in company policies. Safety risks of equipment

and infrastructure are assessed and improvement

programs are implemented.

The Group has an Employee Training System for

Environmental, Health and Safety (EHS) training and

awareness in place for all sites where periodic safety

briefings are performed, and a global EHS week

program has been established. At the annual EHS week,

information about health protection, safety,

sustainability, and environmental topics is offered to all

employees via information desks, posters, and other

events. Company tours offered by coworkers are

designed to increase employees’ awareness of hazards

in the workplace, and several training sessions are

offered to improve their skills in first aid and firefighting.

Furthermore, a variety of fitness activities and trial

lessons, as well as fitness and health checks, are offered

to employees. In addition to these dedicated training

sessions and events, information on environmental and

quality awareness is provided and made accessible to all

employees via the Company’s intranet. Continual

feedback is received from all internal and external

stakeholders and considered for improvements on

safety of the workplace and nearby surroundings.

At all X‑FAB locations, accidents are tracked in

accordance with local laws, but there is no globally

harmonized procedure to collect additional

information related to accidents or occupational

diseases. However, X‑FAB tracks accidents in the

operations department the same way at all

manufacturing locations.

Based on this information, X‑FAB recorded 32

accidents in 2024, which caused 7,380 work hours lost,

resulting in a frequency rate of 5.12 and a severity rate

of 147.56.

Safety improvement programs that took place in 2024

include:

• improved toxic/flammable gas detection online

monitoring using PC outside of the hazard area

(Lubbock);

• circulation risks awareness program to address

walking on site (highest workplace accidents). Two

workshops conducted on attention distraction and

falls and slips (France); and

• replacement of four aging mixed bed exchangers

at the ultra-pure water plant by electrodeionization

(EDI) units to minimize the risk of failure and

eliminate chemical storage and handling. Additional

benefits include reduced hazardous chemical

handling (Erfurt).

Fig. 6.31: Opening of new EDI units in Erfurt with site CEO

Gabriel Kittler (right) and Sebastian Haupt

Hygiene concepts for cleanrooms

At each of X‑FAB’s production sites, a large share of

employees work in cleanroom environments where the

use of rubber gloves, special clothes, and shoes is a

requirement. It is necessary to avoid particle and ion

contamination or electrostatic discharge as it would

negatively impact the functionality of the

semiconductor products manufactured. X‑FAB aims to

prevent any medical harm as well as ensure a safe

working environment and employees’ well-being.

X‑FAB has therefore established cleanroom concepts

to maintain a high level of hygiene and health including

specific protection plans. For example, to prevent skin

diseases, there is a skin protection plan in place with

skin care products available at any time for each

employee. For orthopedic reasons, cleanroom shoes

are individualized and ergonomic. Cleanroom clothes

are partially personalized. Ear plugs are available for

noise protection.

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Preventive maintenance

Maintenance activities are the basis for the safe

operation of equipment and tools. To prevent

equipment malfunctions and failures, X‑FAB uses a

global procedure to manage a preventive maintenance

system. Even though the system’s focus is on securing

the productivity of the equipment, operational safety is

one of the objectives covered. The proper execution

of the global procedure is ensured with the use of local

instructions, which govern the preventive maintenance

regime for each production site. The maintenance

instructions and schedule include information based on

vendor manuals, experiences during operation, tool

performance parameters, major incidents, product

quality, and audit findings. Furthermore, two types of

preventive maintenance actions exist: actions

triggered by a time interval, and actions triggered by

reaching special tool parameters describing the

current tool wear.

Taken together, this helps to ensure that the overall tool

status remains excellent and to prevent accidents caused

by machine malfunctions such as electrical hazards,

leakage of dangerous materials, or mechanical issues.

6.3.1.3 Diversity, equity and inclusion

Promote diversity, equity and inclusion (DEI)

In 2022 X‑FAB founded a global Diversity Council

comprised of members from Germany, France,

Malaysia, and the USA to support our efforts on

diversity and inclusion. The Council met on a quarterly

basis and held a three-day workshop in Dresden,

Germany, in November 2024.

Fig. 6.32: Members of the Diversity Council (from left to right:

Susanne Appel, Henryk Schoder, Maureen Labarge, Venessa

Garver, Rowena Tan, Claudia Jung-Hildebrand, Rymanie

Guerra, Charla Rosenthal, and Sören Lorenz)

In 2024 X-FAB launched its global Equal Treatment

Policy, which was communicated to all employees.

Alongside the introduction of the group-wide policy

additional training was implemented. One of the goals

was the development and group-wide roll-out of an

e‑learning course in support of an unconscious bias

awareness campaign. The e-learning program in

German, French and English was launched successfully

in December, and approximately 1,500 employees had

completed the course by the end of January. The

Group is increasing its awareness campaign with the

objective of ensuring that every employee has

participated in the training by end of June 2025.

On the initiative of employees in Germany, X-FAB

supported the creation of a video entitled "United in

Diversity." This simple but inspiring video shows X-FAB

employees from different backgrounds quoting from

the UN Declaration of Human Rights and the German

Constitution. The video was shared internally and

externally on social media.

X-FAB France joined the EU-funded project

“European Chips Diversity Alliance” as member of the

consortium. The project aims to enhance diversity,

equity, and inclusion in the European semiconductor

sector by building bridges from industry to the world of

education.

The Diversity Council also continued to monitor female

leadership at X-FAB. The percentage of women in

leading roles increased from 21% in 2022 to 23.5% in

2024. X-FAB’s Diversity Council has defined actions to

continue this positive trend. The major goals for 2025 are:

1. Continue to increase the visibility of the Diversity

Council and DEI by conducting an activity at each

site to promote DEI matters and goals.

2. Create a DEI roadmap with the goal of making it

part of the Company’s strategy. Among others,

X‑FAB will promote local women initiatives to

increase female leadership at X‑FAB.

3. Benchmark X-FAB’s DEI initiatives with other

semiconductor companies and derive actions for

improvement.

4. The members of the Diversity Council will

participate in conferences and other events to

promote X-FAB’s DEI roadmap externally.

As a first step, the Diversity Council has developed a

five-year DEI roadmap that will be presented to and

discussed with X-FAB’s senior management.

6.3.1.4 Talent attraction and engagement

In 2023 X‑FAB launched a Global Leadership Program

(GLP) tailored to establish a common company-wide

understanding of culture and leadership based on

X‑FAB’s core values. To strengthen a new leadership

mindset, X-FAB leaders from all over the world

participate in a unique program, which continued in

2024.

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To support the career of X‑FAB’s technical experts and

to acknowledge that technical and management

expertise make contributions to the organization that

are equally important, X‑FAB has established a system

of human capital management. An important part of

that is X‑FAB’s Technical Ladder. It enables visionary

technical leadership and expertise, and supports

recruitment, individual development, and retention of

talented people in a competitive employment market,

acknowledging the highest levels of technical

expertise. In 2024 X‑FAB promoted 18 technical

experts to a global grade Member Technical Staff

(MTS) or Senior Member Technical Staff (SMTS) on

the Technical Ladder. This not only shows that more

and more of the Company’s experts work on global

projects, but it also stands for the broad technical

knowledge base X‑FAB has.

To keep up with the fast development within the high-

tech area, X‑FAB supports innovation – being one of

the Company’s values – and participates in publicly

funded projects. In those projects, X‑FAB enables

technical experts to conduct research and to propel

state-of-the-art technologies by proving feasibility of

new concepts or the industrialization of innovative

process technologies. Innovation is appreciated by

X‑FAB, and technical experts are explicitly invited and

encouraged to publish their findings in international

journals and to file patents. As at year end 2024

X‑FAB’s overall patent portfolio amounts to 467

patents and patent applications.

Besides the development of its existing staff, X‑FAB is

highly interested in offering a wide range of

opportunities to potential future employees, for

example via apprenticeships, internships, and student

training. This comprises commercial and technical

careers, dual study programs, and financial support for

employees who enhance their skills and knowledge by

obtaining relevant qualifications.

X‑FAB also offers dual study programs in Germany,

France, and Malaysia, which combine theoretical

sessions and practical work, allowing students to

integrate these skills into their future working life from

the beginning of their studies. Apprenticeships offered

by X‑FAB to young talent cover commercial as well as

technical careers. In Germany and France more than

140 apprentices are currently undertaking their first,

second, or third year of VET (vocational and

educational training).

In 2022 X-FAB launched a new two-year education

program for professionals and talent from all X-FAB

sites designed to develop project management and

personal skills. This global talent development program

is referred to as ProMPT (Project Management for

Professionals and Talents). The program concentrates

on the areas of “personality and leadership,” “project

management,” “quality management,” “strategic

thinking,” and “cultural awareness.” In 2024 the

program was concluded with participants giving

presentations of their projects in front of senior

management. Several follow-up activities will be

performed in 2025 to track the results of the projects

created during this program.

Fig. 6.33: Outdoor event in the Saxon mountains with the

global ProMPT team in 2024

Rewarding efforts

As an international company, X‑FAB employs people

from many different regions around the world with

different ethnic origins and social backgrounds,

resulting in a broad range of individual needs. Being

aware of those needs and driven by the responsibility

for the Company’s staff as well as the aim of long-term

employment, X‑FAB strives to meet those needs.

Nowadays, the modern world demands a high level of

self-responsibility and flexibility, especially for working

parents and those with responsibilities for caring for

the elderly. Therefore, X‑FAB offers flexible working

time models and strives to find individual working time

solutions for its employees. X‑FAB now offers a full

“Flex@Work” approach by offering mobile working

wherever the tasks are suitable for remote work.

X‑FAB grants leisure time for private matters, such as

moving and marriage, and supports working parents

financially in case of their children’s illness. As part of

collective bargaining agreements, German employees

above a certain age are offered the possibility to

reduce their weekly working hours, if appropriate. The

flexibility to start and end the working day at variable

times at X‑FAB’s Asian sites was a benefit that was well

perceived to balance personal and private matters.

Moreover, X‑FAB’s company pension scheme supports

its employees financially after their transition to

retirement.

X‑FAB cares about its employees’ increased health

awareness and growing interest in an active way of life.

To help employees stay healthy, X‑FAB supports a

variety of activities at various locations, such as internal

sports groups, football teams, and running groups, as

well as reduced rates for fitness clubs. Employees are

also offered trial classes at fitness clubs, as well as

fitness and health checks.

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Work environment

X‑FAB is interested in a good working atmosphere for

its employees and strives to provide a pleasant and

inspiring working environment. Cafeterias, lunchrooms,

and subsidized meals are offered to employees.

Furthermore, chill-out rooms and staff rooms with

magazines, internet access, and free non-alcoholic

drinks are available to support employees during their

work breaks. In several locations the breakout rooms

for shift personnel have been updated and

refurbished. In Corbeil-Essonnes and in Erfurt, outside

seating areas were implemented, which can be used

during break hours.

X‑FAB continues to improve the environment and

quality of the local cafeterias for the well-being of the

employees. At the site in Erfurt a new cafeteria

concept was created in 2023 and will be implemented

in 2025. During weekends as well as night shifts, X‑FAB

staff have the opportunity to use the cafeteria and

breakout rooms.

X‑FAB rewards outstanding employee performance

with incentive payments during the year and in the

form of bonuses. Both individual employees and teams

who undertake extraordinary efforts for X‑FAB’s

benefit are acknowledged by the Company’s

corporate management.

6.3.2 Social commitment

X‑FAB encourages its employees to engage in non-

profit and educational activities that contribute to the

communities X‑FAB is active in. Across several

sessions, each employee is trained in the Company’s

values with the implementation of those values in

everyday work life being recorded in a learning

management system (LMS) aimed at personal

development. Eventually, this leads to even more

innovation and higher ethical standards, which also has

a positive impact outside the working environment. In

2024 a monthly campaign via the e-learning platform

LinkedIn Learning on IT security, lean principles,

diversity and inclusion, etc. was implemented to raise

awareness of specific topics.

Social awareness and responsibility

X‑FAB identified opportunities for global and local

activities that contribute to the communities in which

X‑FAB is operating. X‑FAB has also raised money to

support local programs as well as international charity

organizations, such as United Way Worldwide.

In December 2024, X‑FAB hosted its traditional

Christmas donation campaign. For each click on the

Company’s Christmas webpage, X‑FAB donated

USD 0.25. The campaign raised USD 1,500. In 2024, the

X‑FAB site in Lubbock, Texas, donated to the Lubbock

Area United Way. The money will be put to good use in

the Lubbock community, helping to provide financial

and educational support.

Fig. 6.34: Rico Tillner (CEO of X-FAB Texas) and Mac Johnson

(COO of X-FAB Texas) handing over the donation from

X‑FAB’s Christmas donation campaign

X‑FAB also supports sports events with a charity

background by enabling its employees to attend these

events. This not only helps to increase team spirit but

also supports local organizations and sports clubs.

Fig. 6.35: X‑FAB Sarawak employees at a local charity run for

autism

X‑FAB encourages its employees to engage in

volunteer activities that benefit local communities and

promote collaboration and dialog. A particular focus is

on improving working conditions and promoting social

and environmental responsibility, thus contributing to

the well-being and long-term development of

societies.

At each site, X‑FAB supports several activities of its

employees. In Kuching, X-FAB donated RM 10,000 to

support the Salvation Army's new children’s home in

Kota Samarahan.

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Fig. 6.36: Handover of the check to representatives of the

Salvation Army

Educational awareness and responsibility

X‑FAB places a high importance on investing in the

education and skill development of children and young

people as the next generation and does this by

sponsoring books and other educational material for

use in kindergartens, supporting lectures at universities

(e.g. providing design courses in engineering schools),

investing in education competitions, and organizing

summer schools (“Microchip Summer University”). To

provide opportunities for practical training and work

experience in technical fields, X‑FAB offers internships

to high school and university students and also offers

students company tours on request.

Back in 2019, X‑FAB France was the only French

semiconductor company invited to participate in a

Pan-European project, funded by the European

Commission, called METIS (microelectronics, training,

industry, skills). As part of the ERASMUS+ consortium,

which consists of over 30 participating parties from

industry, education, university, and training, X‑FAB

actively contributes to the success of the program. In

2024 X‑FAB supported the successful closing of the

program and is now benefiting from the results.

Various scientific and engineering competitions are

supported either by providing knowledge to the

participants or by serving as judges, e.g. at the student

robotics competition. X‑FAB works with many global and

local partners to improve educational opportunities for

children and young people, e.g. by supporting

corresponding technical clubs. Besides the educational

responsibility towards society, X‑FAB cares about gender

equality and the development of girls in STEM jobs.

In addition, each X‑FAB site participates in college and

university career fairs in order to recruit interested

students and to provide information about career

opportunities. Besides its presence at job fairs, X‑FAB

also participated in numerous technical exhibitions and

conferences to offer its employees the possibility to

gain and exchange professional knowledge and to

network.

X‑FAB developed a social media campaign to serve

customers as well as the general public.

6.4 Governance

Further information on corporate governance can be

found in chapter 7 of the annual report.

6.4.1 Anti-corruption and bribery

X‑FAB’s business practices follow the principles of fair

competition with particular focus on professional

behavior. X‑FAB respects consumer interests by

abiding by regulations that protect consumers, and by

using appropriate sales, marketing, and information

practices in accordance with the ICC International

Code of Advertising Practice and the OECD

Guidelines for Multinational Enterprises.

In particular, X‑FAB rejects corruption and bribery as

stated in the relevant UN Convention against

Corruption from 2003, and promotes transparency,

trading with integrity, responsible leadership, and

company accountability.

In order to prevent corruption, X-FAB is aiming to increase

awareness of the risk of corruption by providing

comprehensive sessions on the Company’s values and

strict regulations as outlined in the Company’s handbook.

These sessions are attended by all employees and

emphasize the corporate values, such as integrity and

respect, as well as X‑FAB’s code of conduct. Training is

organized at least once every two years, and every

employee is required to attend. New employees are

provided with special initial training during their on-

boarding. An Ethics and Conflict of Interest policy is part

of X‑FAB’s code of conduct. Furthermore, anti-corruption

is mentioned in the Company’s rules and handbooks,

which are part of each employment contract. Concerns

about unethical behavior are reported either via the

workers’ council or directly to Human Resources.

X-FAB installed a whistleblower policy in 2018, which was

made available to all employees and which enables

employees to report any violations on a confidential basis.

All employees worldwide can report incidents anonymously

in their native language. All reports are treated

confidentially, and there is a strict no-retaliation policy.

No incidents were reported in 2024.

Ethics training is provided to all employees. In addition

to regular training and as part of the newly introduced

framework of the global leadership program, a

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dedicated module deals with all relevant information on

the topic “business ethics.” At the start of employment

with X‑FAB, each new employee receives a copy of the

work regulations, which comprise policies on

harassment prevention and the acceptance of gifts,

and include definitions of infractions that lead to legal

action, such as contract termination. Actions taken in

response to incidents of corruption comprise all legal

actions according to the corresponding national laws.

In addition to following all national laws regarding ethical

and anti-corruption behavior, X‑FAB does not influence

politics, neither by participating in political activities nor

by donating to or supporting parties in elections.

6.4.2 Supplier relationship management

As a manufacturer of a large variety of products,

X‑FAB relies on a large number of suppliers. It is part of

the Company’s corporate ethics to strive for long-term

partnerships with its suppliers. The selection and

auditing of suppliers is carried out by means of a global,

cross-site procedure valid for all X‑FAB sites. Part of

this procedure is a classification of suppliers, based on,

among others, the supplied quantity as well as the

frequency of supply: tier 1 suppliers, strategic suppliers,

and all others that do not qualify for one of the two

categories. In order to be approved as a new supplier,

depending on the categorization, the supplier has to

pass a process audit according to the requirements of

the automotive standard VDA 6.3 (the German

Association of the Automotive Industry) and answer

various questions, including on environmental and

governance topics. The existence of an environmental

management system and compliance with RoHS or

REACH (e.g. SVHC (Substances of Very Hazardous

Concern) Candidate List) are important criteria for

X‑FAB during the selection process for new suppliers

as well as changes in manufacturing location and

material composition changes.

6.4.2.1 Selection and categorization of

X‑FAB suppliers

X‑FAB has implemented and maintains a supplier

selection and monitoring process which is compliant

with the quality management system standards ISO

9001 and IATF 16949 as well as with the environmental

management system standard ISO 14001. Suppliers of

strategic materials are requested to confirm

compliance with X‑FAB’s list of banned substances and

are required to provide transparent information

regarding their quality and environmental management

systems as well as with respect to the composition,

sources, and environmental impact of the supplied

materials.

Those aspects are intensively checked and validated

by X‑FAB’s supplier quality management and

procurement organization before any new strategic

material or supplier is released. This is done via on-site

audits and contractual agreements. After the initial

release, which has to be authorized by a

multidisciplinary team, the compliance of suppliers with

the relevant requirements and their overall

performance with respect to X‑FAB’s objectives are

continually monitored by X‑FAB.

Requirements to qualify as an X-FAB strategic supplier

• Certified quality management system according to ISO 9001

• Certified environmental management system according to ISO 14001

• Demonstration of compliance with quality management system in line with the requirements of IATF 16949

• Commitment to a code of conduct, e.g. ZVEI Code of Conduct, Ten Principles of UN Global Compact, or equivalent

• Conflict minerals reporting if applicable

X‑FAB has a global approach towards sourcing of main

supplies to run the factories, and therefore local

suppliers are only taken into account if they meet the

high quality standards.

6.4.2.2 Audits and continual improvement of

suppliers

X-FAB stores all certificates and completed

questionnaires from its suppliers in a database that is

accessible for stakeholders at all X-FAB sites in order

to improve the harmonization and standardization of

supplier management. The most important suppliers

are subject to a supplier assessment once a year.

If X-FAB’s requirements are not met by at least 85%,

the supplier must submit proposals for improvement

actions to stay under contract with X-FAB. In addition

to these annual assessments, a regular audit exists to

verify the existence of a management system in

compliance with the defined requirements.

Supplier audits have been performed in 2024 in

accordance with the quality management system

standards ISO 9001, IATF 16949, and VDA 6.3 for

process audits by X-FAB’s supplier quality

management organization at three different suppliers

for strategic materials (e.g. chemicals, equipment,

gases, and wafers) or services, all of them located in

Asia. These audits also focused on environmental,

social, governance, and other aspects according to

X-FAB’s standards. Furthermore, assessment audits

regarding the compliance with minimum automotive

quality management system requirements (MAQMSR)

have been performed at six different suppliers for

strategic materials in 2024.

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Supplier	Category	Location	Audit type and result
Supplier 1	Subcontracting	Malaysia	Supplier audit/rating B
Supplier 2	Wafers	China	Supplier audit/rating A
Supplier 3	Chemicals	Japan	Supplier audit/rating A
Supplier 4	Gases	Korea	Supplier MAQMSR assessment/positive
Supplier 5	Photo masks	France	Supplier MAQMSR assessment/positive
Supplier 6	Chemicals	Japan	Supplier MAQMSR assessment/positive
Supplier 7	Gases	Germany	Supplier MAQMSR assessment/positive
Supplier 8	Chemicals	United States	Supplier MAQMSR assessment/positive
Supplier 9	Chemicals	Belgium	Supplier MAQMSR assessment/positive

Fig. 6.37: Supplier audits performed by X-FAB in 2024

Supplier Corrective Action Requests (SCAR)

In 2024, in total, 20 SCARs had to be issued to various

suppliers, the majority of which were not critical to the

continuity or quality of the wafer manufacturing

processes at X-FAB or the products of the Group’s

customers. However, all SCARs have been tracked and

the effectiveness of the defined corrective and

preventive actions has been checked and validated by

X-FAB’s supplier quality management organization.

Engagement with non-compliance suppliers to

reach compliance

In 2024, seven new quality assurance agreements with

suppliers of X-FAB have been implemented in order to

ensure the suppliers’ commitment to several key

requirements with respect to quality and

environmental management and other aspects.

Furthermore, X-FAB actively supported various

potential suppliers to achieve conformance to the

X-FAB requirements for strategic suppliers.

In 2022, to prove the financial sustainability of its

suppliers, X-FAB established access to an international

database that allows us to check the financial health of

suppliers as well as their revenues. The aim is not only

to ensure that very small suppliers are not in a situation

of financial dependency towards X-FAB (i.e. X-FAB’s

business volume must not represent more than 25% of

a supplier’s revenue), but also to check the financial

sustainability of some critical suppliers.

Furthermore, X-FAB has established a supplier award

system to encourage its suppliers to continuously

commit to environmental protection and social

aspects. An annual “Supplier Excellence Award” is

awarded to the best local supplier for each X-FAB site.

The supplier with the highest value in the supplier

assessment is nominated as “Supplier of the Year.”

6.4.3 Handling of minerals from conflict regions

(conflict minerals)

X-FAB has a Conflict-Free Mineral Policy and provides

information to customers on the sourcing of tin,

tantalum, tungsten, and gold from conflict regions in

accordance with the US Dodd–Frank Act

requirements. The commitment of X‑FAB suppliers to

these requirements is documented in a central

company database to ensure traceability and

transparency.

X‑FAB has issued a product declaration stating that to

the best of its knowledge, X‑FAB products do not

contain materials that have been sourced from mines

in conflict regions in the eastern region of the

Democratic Republic of Congo. X‑FAB performs

checks on smelters to ensure that they are certified

conflict-free by comparing them against the list of

compliant smelters on the Responsible Mining Alliance

(RMA) website.

All strategic material suppliers for materials containing

tungsten, tantalum, tin, and gold must complete the

Conflict-Free Smelter Reporting Template according

to an industry-benchmark reporting format, e.g.

Responsible Minerals Initiative (RMI) or Conflict

Material Reporting Template (CMRT).

X‑FAB is also working with suppliers on other minerals

disclosures. These include cobalt reporting. Currently,

X‑FAB is working with suppliers to ensure sourcing

from conflict-free cobalt smelters.

6.4.4 Data security

Customer data privacy

The protection of customer data is of the highest

importance to X-FAB and all stakeholders and is critical

to safeguarding X-FAB's reputation and brand.

X-FAB does not currently apply a customer data

deletion policy as the IATF automotive standard only

allows deletion after at least 15 years of inactivity.

X-FAB deactivates data records on request and has

not received any customer complaints about data

protection. X-FAB utilizes an email opt-out system for

customer data for hotline news, webinars, and

customer surveys. These are maintained via various

technologies, including the ERP system, surveys, and

email marketing tool, using automated or semi-

automated processes. X-FAB has identified activities

to be implemented to comply with NIS 2 Directive (EU)

and Cyber Security Act 2024 (Malaysia).

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Cybersecurity

In 2024, X-FAB IT continued its commitment to

safeguarding infrastructure by implementing robust

internet protection measures to prevent sensitive data

from being compromised. Recognizing the

continuously evolving threat landscape, X-FAB IT

further strengthened its security posture by enhancing

its Secure Endpoint Management (SEM) strategy. This

was achieved by identifying critical vulnerabilities and

ensuring timely patches were applied, securing X-FAB

devices against a wide range of cyber threats. In

addition, understanding that employees are the first

line of defense, X-FAB IT launched comprehensive

cybersecurity awareness training programs and

introduced phishing campaigns to ensure employees

remain vigilant and equipped to recognize and avoid

potential phishing attacks. These activities are further

supported and approved by X-FAB management

through a series of IT security and compliance activities

to evaluate sites’ readiness for ISO27001

implementation from 2025 onwards.

6.4.5 Customer support

In line with its EHS policy, X‑FAB continually works on

the reduction of its environmental impact via legal

compliance and also promotes human rights values

among suppliers and customers. It is X‑FAB’s policy to

ensure that all purchased materials are compliant with

current government and safety constraints on

restricted, toxic, and hazardous materials and that all

environmental standards, applicable to the country of

manufacture and sale, are fulfilled.

X‑FAB follows RoHS and meets the requirements of

REACH. X‑FAB thereby confirms that all its products

are halogen-free and do not contain intentionally

introduced lead (Pb), cadmium (Cd), mercury (Hg),

hexavalent chromium (Cr6+), polybrominated biphenyl

(PBB), polybrominated diphenyl ether (PBDE), bis(2-

ethylhexyl) phthalate (DEHP), butyl benzyl phthalate

(BBP), dibutyl phthalate (DBP), or diisobutyl phthalate

(DIBP). Furthermore, RoHS and REACH-conformant

safety data sheets and PFOS/PFOA/PFAS/POPs

declarations are available for all X‑FAB products and

are accessible to every X‑FAB customer on the

Company’s website. Finally, all products do not contain

any of the substances in the ECHA (European

Chemicals Agency) Candidate List of Substances of

Very High Concern (SVHC).

RoHS and REACH

RoHS is the short form of the “Directive 2011/65/EU of the European Parliament and of the Council of June 8, 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment.” It aims to address the global issue of consumer electronics waste. It pertains to manufacturing of various types of electronic and electrical equipment without the use of six different hazardous materials. It is the responsibility of the company that puts the product on the market to comply with the directive. REACH stands for Registration, Evaluation, Authorization, and Restriction of Chemicals. The purpose of this European Union regulation is to address the production and use of chemical substances and their potential impacts on both human health and the environment. Whereas RoHS bans substances that are present in electrical equipment, REACH pertains to all chemicals including those used to make a product. This can include materials, solvents, paints, chemicals, and more.

There is a global procedure in place to control and

avoid negative health and safety impacts, requiring

that every X‑FAB product is tested at every stage of

development. In addition, all X‑FAB products are

inspected annually by an external laboratory for

hazardous substances, and the Company’s customers

are informed about the results by means of product

declarations.

It is part of the Company’s ethics that products are not

sold into countries that are listed on an embargo list for

corresponding products. During 2024, X‑FAB was

compliant with laws in relation to this provision and the

use of X‑FAB products and did not have to pay any

fines for violations.

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6.5 EU taxonomy

The European Green Deal is a set of initiatives by the

European Commission with the overarching objective

for the EU to become climate neutral by 2050. In this

context and in order to channel investments of the

financial sector to more sustainable technologies and

businesses, the EU has developed a common

classification system, referred to as the EU taxonomy,

which is aimed to provide guidance to companies,

investors, and policymakers on which economic

activities can be considered environmentally sustainable.

The Taxonomy Regulation (Regulation (EU)

2020/852) was published in the Official Journal of the

European Union on June 22, 2020, and entered into

force on July 12, 2020. The EU taxonomy defines

specific performance criteria to assess an economic

activity’s contribution towards six environmental

objectives: climate change mitigation, climate change

adaptation, the sustainable use and protection of water

and marine resources, the transition to a circular

economy, pollution prevention and control, and the

protection and restoration of biodiversity and

ecosystems. Technical screening criteria for each

environmental objective are defined through

delegated acts.

The Climate Delegated Act (Commission Delegated

Regulation (EU) 2021/2139 as amended by

Commission Delegated Regulation (EU) 2023/2485)

lays out the technical screening criteria that define

whether an economic activity substantially contributes

to the objective of climate change mitigation or

climate change adaptation. The Environmental

Delegated Act (Commission Delegated Regulation

(EU) 2023/2486) establishes the technical screening

criteria for determining the conditions under which an

economic activity qualifies as contributing substantially

to the sustainable use and protection of water and

marine resources, to the transition to a circular

economy, to pollution prevention and control, or to the

protection and restoration of biodiversity and

ecosystems. These delegated acts include so-called

Do No Significant Harm (DNSH) criteria, to avoid that

contributing activities significantly harm any of the

other environmental objectives. They further include

minimum safeguards relating to human rights,

corruption, taxation and fair competition.

As from January 1, 2024, companies need to report on

the eligibility and alignment of their activities regarding

all six of the the environmental objectives. It is clear

that semiconductors are essential to reach the goals of

the European Green Deal and to reach carbon

neutrality by 2050. It is not clear, however, how to

apply the taxonomy methodology to the

semiconductor industry and, in particular, to the

foundry business in which X-FAB operates. The

following paragraphs describe X‑FAB’s approach

based on the current status of the legislative

framework.

Assessment by X‑FAB

The EU taxonomy currently does not list an activity

that specifically describes X‑FAB’s business. The

activity that most closely describes X‑FAB’s business is

activity 3.6, “Manufacturing of other low carbon

technologies.” In this context, we would like to refer to

the differences between an IDM and a specialty

foundry in a Fabless/foundry model as described in

Chapter 4. As a foundry, X-FAB offers a modular,

highly specialized portfolio of process technologies

and associated design IP, enabling innovative

semiconductor products. X-FAB’s customers design

their products on the basis of these technologies and

contract X-FAB for their manufacturing. X‑FAB does

not always know the end market or end application in

which its products will be used. However, it is clear that

X‑FAB is an enabler of technologies that significantly

reduce energy consumption and greenhouse gas

(GHG) emissions. To determine the eligibility under the

taxonomy regulation, we have therefore made a

classification of the technologies themselves. Our

technologies can contribute substantially to the

stabilization of GHG concentrations consistent with the

long-term temperature goal of the Paris Agreement,

through the avoidance or reduction of GHG emissions

or the increase of GHG removals, including through

process and product innovations. By providing robust

analog/mixed-signal CMOS processes, MEMS, and

wide-bandgap semiconductors, X‑FAB contributes to

the creation of sustainable and energy-efficient

products in various fields, such as mobility and the

energy sector. Sensors and power devices improve the

energy efficiency of electric vehicles and optimize the

energy use of the drivetrain. High-voltage

technologies including silicon carbide support the

transition to renewable energy by enabling the

efficient generation, conversion, and storage of

energy. While it is possible that our customers provide

solutions for any of the other environmental

objectives, based on the classification of our

technologies, we can only assess the contribution to

climate change mitigation. We therefore conclude that

X‑FAB has no taxonomy-eligible economic activities

relating to any of the other five environmental

objectives.

An economic activity is deemed eligible where it

matches the description set out in one of the

delegated acts adopted by the Commission. For an

activity to be eligible for climate change mitigation

under this category, the activity needs to have the

objective of enabling a substantial reduction of GHG

emissions in another sector of the economy.

Semiconductor manufacturing can therefore be a

taxonomy-eligible activity where it enables another

economic activity to make substantial GHG emission

savings.

X‑FAB has analyzed its activities by categorizing its

technologies based on whether they are aimed at

substantially reducing GHG emissions in another sector

of the economy. For example, technologies that

provide superior isolation for high voltages or

technologies that, due to their material properties,

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offer the possibility of developing systems with

maximum energy efficiency (e.g., wide-bandgap

technologies) are deemed by X‑FAB to be eligible

under the taxonomy regulation.

An eligible activity must fulfil four basic criteria to be

classified as aligned.

1. It must substantially contribute to at least one of the

environmental objectives.

To contribute substantially to climate change

mitigation, the economic activity must manufacture

technologies that are aimed at and demonstrate

substantial lifecycle GHG emission savings compared

to the best performing alternative technology/

product/solution available on the market. The GHG

reduction across the lifecycle could be evaluated

based on product lifecycle emissions and applications.

As a pure-play foundry, however, we do not have the

necessary information from the end market to make

such a complete lifecycle assessment. As we cannot

demonstrate substantial lifecycle GHG emission

savings compared to the best performing alternative

technology/product/solution available on the market,

we report 0% alignment.

2. It must not significantly harm any of the other

environmental objectives.

This criterion is put in place to avoid that activities

qualify as environmentally sustainable in cases where

the economic activities that benefit from those

investments cause harm to the environment to an

extent that outweighs their contribution to an

environmental objective.

• Climate change adaptation: as part of its risk

management, X‑FAB regularly assesses the

potential impact of disruptions both at its own or its

suppliers’ operations caused by severe weather

conditions whose occurrence is increasing due to

climate change. Water consumption and water

scarcity is another element related to climate

change adaptation that is being monitored for all of

X‑FAB’s manufacturing sites.

• Sustainable use and protection of water and marine

resources: semiconductor manufacturing requires

large quantities of water, in particular to rinse and

clean the wafers during the manufacturing process

to avoid their contamination with particles. Water is

a valuable resource and X‑FAB seeks to reduce its

water consumption by means of higher tool

efficiency and increased water recycling. Further

details on this can be found in chapter 6.2.2.2.

• Transition to a circular economy: several types of

materials are used in semiconductor manufacturing:

water, gases, as well as chemicals such as solvents,

resists, acids, or metals. The use of those materials

is tightly controlled by material departments and

waste commissioners established at each site. All

waste is separated to reduce the amount of

hazardous or non-recyclable waste. The majority of

the waste is sent for recycling to recover valuable

resources. X‑FAB has an ongoing environmental

objective of reducing waste, reducing the use of

hazardous materials, and increasing the recycling

rate. Further details on this can be found in

chapter 6.2.2.

• Pollution prevention and control: the

semiconductor industry heavily relies on the use of

chemicals. The current wording regarding the

aspect of pollution prevention and control has

given rise to a number of ongoing issues. An

economic activity may not lead to the manufacture,

placing on the market, or use of certain chemicals in

order to be taxonomy aligned. The Climate

Delegated Act refers to other existing EU

legislation that regulates the use of certain

chemicals (such as REACH, Mercury, and RoHS).

X‑FAB is, of course, very familiar with these

legislative requirements and complies with them.

However, the Climate Delegated Act in its current

form does not appear to allow for the existing

exemptions and derogations for the use of certain

chemicals in very specific cases. Several industry

associations have already addressed this issue with

the European Commission.

• Protection and restoration of biodiversity and

ecosystems: the impact on biodiversity is minimized

as all sites are located in industrial areas. None of

the Group’s sites is adjacent to nature reserves or

similarly classified areas.

3. It must be carried out in compliance with certain

minimum safeguards.

Article 18 of the taxonomy regulation requires

companies to implement procedures to ensure the

alignment of their activities with the OECD Guidelines

for Multinational Enterprises and the UN Guiding

Principles on Business and Human Rights, including the

principles and rights set out in the eight fundamental

conventions identified in the Declaration of the

International Labour Organization on Fundamental

Principles and Rights at Work and the International Bill

of Human Rights. X‑FAB respects consumer interests

by abiding by regulations that protect consumers, and

by using appropriate sales, marketing, and information

practices in accordance with the ICC International

Code of Advertising Practice and the OECD

Guidelines for Multinational Enterprises. In particular,

X‑FAB rejects corruption and bribery as stated in the

relevant UN Convention against Corruption from

2003, and promotes transparency, trading with

integrity, responsible leadership, and company

accountability. X‑FAB’s company ethics are based on

universally held ethical values and principles, including

respect of human dignity, openness, and non-

discrimination according to the ZVEI Code of Conduct.

Consequently, X‑FAB stands up for human rights as

stated in the Charter of the United Nations.

Chapters 6.3.1, 6.4.1 and 6.4.2 of this Annual Report

describe how X‑FAB makes sure that it carries out its

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economic activities in an honest, responsible, and

respectful way.

1. Turnover

To report turnover under this section, the definition of

turnover in accordance with International Financial

Reporting Standards (IFRS) is used.

Based on the above-described uncertainties and the

current status of the legislation, X‑FAB deems it

prudent to report a 0% alignment.

2. CapEx

The Disclosures Delegated Act (Commission

Delegated Regulation (EU) 2021/2178) defines CapEx.

It covers additions to tangible and intangible assets

during the financial year considered before

depreciation, amortization, and any remeasurements,

including those resulting from revaluations and

impairments, for the relevant financial year and

excluding fair value changes. Of all the CapEx in 2024,

0.5% was taxonomy aligned.

The CapEx can be categorized into two types:

a. Technology CapEx: CapEx that is part of a plan to

expand our taxonomy-eligible economic activities

(type B). The eligibility for the technology CapEx is

based on same criteria used to determine eligibility

for turnover. For the same reasons as above, X‑FAB

deems it prudent to report a 0% alignment.

b. Facilities CapEx: this CapEx relates to individual

measures enabling the target activities to become

low carbon or to lead to greenhouse gas reductions

(type C). It includes the following activities:

i. installation, maintenance, and repair of

charging stations for electric vehicles in

buildings (CCM 7.4);

ii. installation, maintenance, and repair of energy-

efficiency equipment (CCM 7.3); and

iii. renewal of waste water collection and

treatment equipment (CCM 5.4).

3. OpEx

According to the Disclosures Delegated Act, OpEx

covers direct non-capitalized costs that relate to

research and development, building renovation

measures, short-term lease, maintenance and repair,

and any other direct expenditures relating to the day-

to-day servicing of assets of property, plant, and

equipment by the undertaking or third party to whom

activities are outsourced that are necessary to ensure

the continued and effective functioning of such assets.

X‑FAB focuses on research and development costs

since the other costs that could possibly fall within this

definition are likely to be immaterial in comparison.

The proportion of R&D activities determined to be

eligible has been determined under the same approach

used to categorize technologies for determining the

eligibility of turnover. For the same reasons as above,

X‑FAB deems it prudent to report a 0% alignment.

The following tables provide the outcome of the

analysis in the required format.

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1Y: Yes, Taxonomy-eligible and Taxonomy-aligned activity, N: No, Taxonomy-eligible but not Taxonomy-aligned activity

EL: Eligible, Taxonomy-eligible activity, N/EL: Not eligible, Taxonomy-non-eligible activity, n.a.: not applicable

2The revenue for work-in-progress that is recognized over time under IFRS 15 is not included.

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Row	Nuclear energy related activities
1.	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	NO
2.	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	NO
3.	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	NO
	Fossil gas related activities
4.	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	NO
5.	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	NO
6.	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	NO

6.6 Statutory auditor’s limited assurance

report on the consolidated sustainability

information of X-Fab Silicon Foundries SE

To the general meeting

In the context of the legal limited assurance

engagement on the consolidated sustainability

information of X-Fab Silicon Foundries SE (“the

Company”) and its subsidiaries (jointly “the Group”),

we provide you with our report on this engagement.

We were appointed by the general meeting of 25 April

2024, in accordance with the proposal of the board of

directors issued on the recommendation of the audit

committee of the Company to perform a limited

assurance engagement on the consolidated

sustainability information of the Group included in the

Chapter 6. Sustainability of the annual report as of

31 December 2024 and for the year ended on this date

(the “sustainability information”).

Our mandate will expire on the date of the general

meeting deliberating on the annual accounts for the

year ended 31 December 2024. This the first financial

year of the legal limited assurance engagement on

the sustainability information of the Group.

Adverse conclusion

We have performed a limited assurance engagement

on the sustainability information of the Group.

Because of the significance of the matters described in

the 'Basis for adverse conclusion' section of this report,

• the sustainability information of the Group is not

prepared in accordance with the requirements of

articles 3:32/2 of the Companies’ and Associations’

Code, including compliance with the applicable

European standards for sustainability information

(European Sustainability Reporting Standards

(ESRS));

• the process carried out by the Group to identify the

sustainability information (“the Process”) is not in

accordance with the requirements as described in

ESRS 2/IRO-1; and

• the requirements of article 8 of EU Regulation

2020/852 (the “Taxonomy Regulation”) regarding

the disclosure of information have not been

complied with;

Our conclusion on the sustainability information does

not extend to any other information that accompanies

or contains the sustainability information and our

report.

Basis for adverse conclusion

We conducted our limited assurance engagement in

accordance with International Standard on Assurance

Engagements (ISAE) 3000 (Revised), Assurance

Engagements Other Than Audits or Reviews of

Historical Financial Information, issued by the

International Auditing and Assurance Standards Board

(IAASB), as adopted in Belgium.

In chapter 6 "Sustainability" of the consolidated annual

report, the board of directors describes that the

double materiality assessment, as required under

ESRS2/IRO-1, has not yet been completed. As a result,

the board of directors has decided to use standards

other than the ESRS -standards for the preparation of

this sustainability information, which means that the

sustainability information does not comply with the

requirements set out in article 3:32/2 of the

Companies and Associations Code. The board of

directors explains that a standard other than the

applicable European standard for sustainability

information has been used, being the GRI standards,

for the preparation of the sustainability information,

which is not in accordance with the applicable

requirements. In the context of our assurance

assignment, we have not evaluated whether the

sustainability information has been prepared in

accordance with the GRI standards.

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The board of directors has not fully demonstrated to

what extent its economic activity actually belongs to

the classification '3.6 Manufacture of other low-carbon

technologies' as included in Annex 1 of Regulation (EU)

2021/2139, which supplements the Taxonomy

Regulation. The technical screening criteria were also

not tested by the Group. As a result the ecologically

sustainable activities as presented for revenue, capital

expenditures, and operational expenditures under sub-

section 6.5 EU Taxonomy of the sustainability

information is not in accordance with the requirements

of article 8 of the Taxonomy Regulation.

Our responsibilities under this standard are further

described in the “Responsibilities of the statutory

auditor for the limited assurance engagement on

the sustainability information” section of our report.

We have complied with the ethical requirements that

are relevant to our assurance engagement on the

sustainability information in Belgium, including the

independence requirements.

Our firm applies International Standard on Quality

Management (ISQM) 1. This standard requires the firm

to design, implement and operate a system of quality

management, including policies or procedures

regarding compliance with ethical requirements,

professional standards and applicable legal and

regulatory requirements.

We have obtained from the board of directors and the

Company’s officials the explanations and information

necessary for our limited assurance engagement.

We believe that the assurance evidence we have

obtained is sufficient and appropriate to provide a

basis for our adverse conclusion.

Other matter

The scope of our procedures is limited to our limited

assurance engagement on the sustainability

information of the Group. Our limited assurance

engagement does not extend to information relating

to the comparative figures.

Board of directors’ responsibilities for the

preparation of the sustainability information

The board of directors of the Company is responsible

for designing and implementing the Process and for

disclosing this Process in subsection 6.1.3. Impact, risk

of the sustainability information. This responsibility

includes:

• understanding the context in which the Group’s

activities and business relationships take place and

developing an understanding of its affected

stakeholders;

• identifying the actual and potential impacts (both

negative and positive) related to sustainability

matters, as well as risks and opportunities that

affect, or could reasonably be expected to affect,

the Group’s financial position, financial

performance, cash flows, access to finance or cost

of capital over the short-, medium-, or long-term;

• assessing the materiality of the identified impacts,

risks and opportunities related to sustainability

matters by selecting and applying appropriate

thresholds; and

• making assumptions and estimates that are

reasonable in the circumstances.

The board of directors of the Company is further

responsible for the preparation of the sustainability

information, which includes the information

determined by the Process:

• in accordance with the requirements of articles

3:32/2 of the Companies’ and Associations’ Code,

including compliance with the applicable ESRS; and

• in compliance with the requirements of Article 8 of

the Taxonomy Regulation regarding the publication

of the information included in subsection 6.5 EU

Taxonomy;

This responsibility entails:

• designing, implementing and maintaining such

internal controls that the board of directors

determines are necessary to enable the

preparation of the sustainability information such

that it is free from material misstatement, whether

due to fraud or error; and

• selecting and applying appropriate sustainability

reporting methods and making assumptions and

estimates that are reasonable in the circumstances.

The audit committee is responsible for overseeing the

Company’s sustainability information.

Inherent limitations in preparing the sustainability

information

In reporting forward-looking information in accordance

with ESRS, the board of directors of the Company is

required to prepare the forward-looking information

on the basis of disclosed assumptions about events

that may occur in the future and possible future

actions by the Group. The actual outcome is likely to

be different since anticipated events frequently do not

occur as expected and the deviations may be material.

Responsibilities of the statutory auditor for the

limited assurance engagement on the sustainability

information

It is our responsibility to plan and perform the

assurance engagement to obtain limited assurance

about whether the sustainability information is free

from material misstatement, whether due to fraud or

error, and to issue a limited assurance report that

includes our conclusion. Misstatements can arise from

fraud or error and are considered material if,

individually or in the aggregate, they could reasonably

be expected to influence decisions of users taken on

the basis of the sustainability information as a whole.

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As part of a limited assurance engagement in

accordance with ISAE 3000 (Revised), as adopted in

Belgium, we exercise professional judgment and

maintain professional skepticism throughout the

engagement. The work carried out in an engagement

with a view to obtaining a limited degree of assurance,

for which we refer to the section "Summary of the work

performed", are less in extent than for a reasonable

assurance engagement. We therefore do not express a

reasonable assurance conclusion.

As the forward-looking information contained in the

sustainability information and the assumptions on

which it is based, relate to the future, it may be

affected by events that may occur and/or by possible

actions of the Group. The actual outcome is likely to

differ from the assumptions, as the anticipated events

will frequently not occur as expected and the

deviations may be material. Our conclusion is therefore

not a guarantee that the actual outcomes reported will

be consistent with those included in the forward-

looking information included in the sustainability

information.

Our responsibilities in relation to the Process for

reporting the sustainability information, include:

• obtaining an understanding of the Process but not

for the purpose of providing a conclusion on the

effectiveness of the Process, including the

outcome of the Process; and

• designing and performing procedures to evaluate

whether the Process is consistent with the Group’s

description of its Process, as disclosed in

subsection 6.1.3. Impact, risk of the sustainability

information.

Our other responsibilities in respect of the

sustainability information include:

• obtaining an understanding of the Group’s control

environment, relevant processes and information

systems to the preparation of the sustainability

information but not evaluating the design of

particular control activities, obtaining evidence

about their implementation or testing their

operating effectiveness;

• identifying areas in the sustainability information

where material misstatements are likely to arise,

whether due to fraud or error; and

• designing and performing procedures focused on

disclosures in the sustainability information where

material misstatements are likely to arise. The risk

of not detecting a material misstatement resulting

from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the

override of internal control.

Summary of the work performed

A limited assurance engagement involves performing

procedures to obtain assurance evidence about the

sustainability information. The procedures performed

in a limited assurance engagement vary in nature and

timing from, and are less in extent than for, a

reasonable assurance engagement. Consequently,

the level of assurance obtained in a limited assurance

engagement is substantially lower than the assurance

that would have been obtained had a reasonable

assurance engagement been performed.

The nature, timing and extent of our procedures

depend on our professional judgment, including the

identification of disclosures where material

misstatements are likely to arise, whether due to fraud

or error, in the sustainability information.

In conducting our limited assurance engagement, with

respect to the Process, we have:

• obtained an understanding of the Process by:

– performing inquiries to understand the

sources of the information used by

management; and

– reviewing Group’s internal documentation of

its Process; and

• evaluated whether the assurance evidence

obtained from our procedures about the Process

implemented by the Group was consistent with the

description of the Process set out in subsection

6.1.3. Impact, risk of the sustainability information.

In conducting our limited assurance engagement with

respect to the sustainability information, we have

amongst others:

• obtained an understanding of the Group’s

reporting processes relevant to the preparation of

its sustainability information by, through the

performance of inquiries, obtaining an

understanding of the Group’s control environment,

relevant processes and information systems for the

preparation of the sustainability information;

• evaluated whether material information identified

by the Process is included in the sustainability

information;

• evaluated whether the structure and the

presentation of the sustainability information is in

accordance with the ESRS;

• requested information from relevant personnel to

perform data analysis and substantive assurance

procedures on selected information in the

sustainability information;

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• obtained assurance evidence on the methods for

developing material estimates and forward-looking

information as further described in the

“Responsibilities of the Statutory auditor for the

limited assurance engagement on the sustainability

information” section of our report; and

• obtained an understanding of the process to

identify taxonomy-eligible and taxonomy-aligned

economic activities and the corresponding

disclosures in the sustainability information;

Information about the independence

Our audit firm and our network have not performed

any engagement which is incompatible with the limited

assurance engagement and our audit firm remained

independent of the Group during the term of our

mandate.

Hasselt, 24 March 2025

KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises

Statutory Auditor

Herwig Carmans

Bedrijfsrevisor/ Réviseur d’Entreprises

Mike Boonen

Bedrijfsrevisor/ Réviseur d’Entreprises

118

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7. CORPORATE GOVERNANCE

STATEMENT

The Royal Decree of May 12, 2019 (published in the

Belgian Official Gazette on May 17, 2019) designated

the Belgian Corporate Governance Code 2020 as the

reference code for Belgian listed companies. This

Code is available for download on the website of the

Belgian Corporate Governance Committee

(www.corporategovernancecommittee.be).

In view of the “comply-or-explain” principle of the

Code, section 7.12 gives an overview of the provisions

of the Belgian Corporate Governance Code 2020 that

X‑FAB does not comply with, along with an explanation

of the reasons for non-compliance.

X‑FAB’s Corporate Governance Charter is in alignment

with the 2020 Code on Corporate Governance. The

Corporate Governance Charter can be consulted on

the “Investors” page of the Company’s website.

7.1 Shareholders

X‑FAB seeks to guarantee transparent and clear

communication with its shareholders. Active

participation of the shareholders is encouraged by

X‑FAB.

In order to achieve this goal, shareholders can find

important and relevant information on X‑FAB’s

website. X‑FAB publishes its annual reports, half-year

reports, statutory reports, quarterly results, and

financial calendar on its website in the “Investors”

section. X‑FAB realizes that the publication of these

reports and information benefits its trust-based

relationship with its shareholders and other

stakeholders.

Furthermore, X‑FAB is committed to guaranteeing

shareholder rights.

• At the Shareholders’ Meeting, the Chairman will

lead the meeting in such a manner that there will be

sufficient time to answer questions that

shareholders may have relating to the annual

report, special reports, and/or the items on the

agenda.

• At the latest 30 days prior to the general meeting,

the agenda and other relevant documents are

published in different locations including X‑FAB’s

website and the Belgian Official Gazette.

• Shareholders representing at least 10% of the share

capital have the right to add items and/or

resolution proposals to the agenda.

• During the general meeting, shareholders have the

right to vote on each item on the agenda. If they

cannot attend the general meeting, they have the

right to appoint a proxy.

• The minutes of the general meeting with the voting

results will be kept in a special register after the

general meeting.

The shareholder structure of X‑FAB based on the

transparency notifications received is presented in

chapter 8.

7.2 Management structure

X‑FAB has opted for a “one-tier” governance structure

whereby the Board of Directors is the ultimate decision-

making body, with overall responsibility for the management

and control of the Company. The Board of Directors is

vested with the power to perform all acts that are necessary

or useful for the realization of the Company’s purpose,

except for those actions that are specifically reserved by law

or the Articles of Association to the shareholders’ meeting

or other management bodies. As such, the Board, among

others, defines the general policy orientations, decides on

major strategic, financial, and operational matters, and

oversees the Company’s management.

The Board has established committees (an Audit

Committee and a Remuneration and Nomination

Committee) to analyze specific issues and advise the

Board on those issues. The decision-making power

remains within the responsibility of the Board of

Directors itself.

The daily management of X‑FAB has been delegated

by the Board of Directors to the Chief Executive

Officer, Sensinnovat BV, permanently represented by

Rudi De Winter, who can represent the Company with

his sole signature within and outside the framework of

the daily management. For actions that fall outside the

scope of the daily management, X‑FAB is also validly

represented by two directors acting jointly.

The Chief Executive Officer is the chairman of the

Executive Management. The Executive Management is

responsible for leading X‑FAB in accordance with the

global strategy, values, planning, and budgets as set out

and approved by the Board of Directors. The Executive

Management is also responsible for screening the

various risks and opportunities that the Company might

encounter in the short, medium, or longer term, as well

as for ensuring that systems are in place to identify and

address these risks and opportunities.

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7.3 Board of Directors

Composition

In accordance with Article 15 of X‑FAB’s Articles of

Association, the Board of Directors consists of at least

five members. At least three members should be

independent in accordance with Article 7:87 BCCA. As

of the date of this annual report, the Board of Directors

comprises nine members, three of which are

independent as defined in the Code 2020. At least half

of the Board of Directors consists of non-executive

members, and there is at least one executive member.

Independent directors qualify as non-executive

directors.

The term of office of directors under Belgian law is

limited to six years (renewable) but the Corporate

Governance Code recommends that it be limited to

four years. Directors of X‑FAB are appointed for a

period of four years by the majority of the votes cast at

the general meeting, after having received a

recommendation of the Remuneration and Nomination

Committee. In the same way the general meeting may

revoke a director at any time. There is no age limit for

directors, and directors with an expiring mandate can

be reappointed within the limits stipulated in the BCCA.

The Chief Executive Officer is the only member of the

Board of Directors that has an executive mandate. The Chair

of the Board is Tan Sri Datuk Amar Dr. Hamid bin Bugo.

The composition of the Board of Directors already

takes into account Article 7:86 BCCA which requires

that one third of its members have to be of a different

gender.

The directors of X‑FAB are:

Name	Age	Mandate expires	Position
Dato Sri Dr. Wan Lizozman bin Wan Omar	60	2026	Non-executive director
Sensinnovat BV (Represented by Rudi De Winter)	64	2025	Managing Director, CEO
Roland Duchâtelet	78	2025	Non-executive director
Thomas Hans-Jürgen Straub	70	2025	Non-executive director
Tan Sri Datuk Amar Dr. Hamid bin Bugo	79	2025	Non-executive director (Chair)
Aurore NV (Represented by Christine Juliam)	64	2026	Non-executive and independent director
Christel Verschaeren	60	2025	Non-executive and independent director
Estelle Iacona	52	2025	Non-executive and independent director
Vlinvlin BV (Represented by Ling Qi)	54	2027	Non-executive director

Sensinnovat BV is represented by Rudi De Winter.

Mr. De Winter joined X‑FAB in 2011 as Co-CEO and

became CEO in 2014. Between 1996 and 2011 he

served as the Chief Executive Officer and Managing

Director of Melexis NV. Prior to that date, Mr. De

Winter served as a development engineer at Mietec

Alcatel (Belgium) from 1984 to 1985 and as a

development manager at Elmos GmbH (Germany)

from 1985 to 1989. In 1990, Mr. De Winter became

director together with Mr. Duchâtelet of XTRION NV,

the parent company of X‑FAB until November 14,

2023. Mr. De Winter holds a degree in electronic

engineering from the University of Ghent.

Throughout his career, Roland Duchâtelet has founded

several companies and has organized approximately

50 acquisitions or sales of companies. He has been

active in the internet business since 2000 and was a

member of the Belgian Senate from 2007 to 2010.

Mr. Duchâtelet holds degrees in electrical engineering

and applied economics from the University of Leuven

and obtained an MBA from the same university.

Thomas Hans-Jürgen Straub has more than 30 years

of experience in the management of semiconductor

companies. From 1982 to 1990, Mr. Straub served as

Head of Central Planning at the Kombinat

Mikroelektronik in Erfurt. Thereafter, Mr. Straub was a

member of the managing board of PTC Electronic AG,

a holding company that managed 18 subsidiaries. From

1991 to 1999, Mr. Straub served as president of several

companies, including Mikroelektronik und

Technologie-Gesellschaft mbH, Dresden and Thesys

Gesellschaft für Mikroelektronik mbH, Erfurt. From

1999 to 2014, Mr. Straub served as Chief Executive

Officer of X‑FAB. Mr. Straub holds a diploma in

economics from the Hochschule für Ökonomie Berlin

(Berlin Business School).

Tan Sri Datuk Amar Dr. Hamid bin Bugo has worked as

personnel manager for Malaysia LNG Sdn Bhd, a joint

venture between Petronas, Shell, and Mitsubishi.

He was the first general manager of the Land Custody

and Development Authority, Sarawak, and was

permanent secretary to the Ministry of Resource

Planning, and state secretary of Sarawak. Tan Sri Datuk

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	Annual Report 2024 | Corporate governance statement

Amar Dr. Hamid bin Bugo has also served as a board

member of several corporate and governmental

agencies and charitable organizations. After graduating

with a master’s degree in economics and political

science from the University of Canterbury, New

Zealand, he gained a postgraduate diploma in teaching

from Christchurch Teachers’ College, New Zealand,

and has a certificate in business studies from the

Harvard Institute of Development Studies, USA. Tan Sri

Datuk Amar Dr. Hamid bin Bugo was awarded an

honorary PhD in commerce by Lincoln University,

New Zealand. Currently, he is Chairman of the National

Library Council of Malaysia and Petroleum Sarawak

Berhad.

Dato Sri Dr. Wan Lizozman bin Wan Omar is the State

Financial Secretary of Sarawak. Before that he served

as Deputy State Financial Officer and formerly as

Permanent Secretary in the Ministry of Urban

Development and Natural Resources as well as the

Ministry of Housing Sarawak. Besides his role as State

Financial Secretary, Dato Sri Dr. Wan Lizozman bin Wan

Omar is chairman of two Malaysian state

government‑linked companies as well as a director of

various state‑owned companies. In addition, he is a

board member of the Sarawak Economic

Development Corporation (SEDC) and the Sarawak

Timber Industry Development Corporation (STIDC).

His academic qualifications include a certificate in

Southeast Asian studies from Columbia University,

New York City, USA, a bachelor of science degree in

economic and political science from the University of

Northern Illinois, USA, followed by a master’s degree in

international affairs (economic development) from the

School of International & Public Affairs, Columbia

University, New York City, USA. In 2014, he was

awarded a PhD in business studies from UNIMAS

(University Malaysia Sarawak).

Aurore NV is represented by Christine Juliam.

She started her career in clinical research at MSD in

Belgium before moving into product management, and

subsequently into sales, marketing, and business

planning responsibilities. In July 1996, she started to

work for Abbott Belgium as director of its

pharmaceutical product division and joined Nycomed

as Managing Director Belgium/Luxembourg in 2006.

From 2011 onwards she was Region Head for France,

the Netherlands, Belgium, and Luxembourg for

Nycomed, which was acquired by Takeda in the same

year. Subsequently, Ms. Juliam managed Takeda Italy

and France as country manager between 2013 and

2017 and became divestment lead until 2020. Between

2021 and 2022, Ms. Juliam worked as general manager

at Orifarm. Christine Juliam has a doctor of medicine

degree from the University of Ghent, a license in

marketing from St. Aloysius College in Brussels, a

master’s in management from Solvay Commercial

School in Brussels, and an MBA from Northwestern

University.

Christel Verschaeren served for 29 years at IBM.

She held different technical positions as well as

commercial leadership positions in general business,

channel sales, and inside sales. She led business

operations for IBM Belgium/Luxembourg for three

years. In 2005, she became Director of Business

Transformation and IT for IBM Europe. From 2010 until

2012 she served as Director Global Organizational

Change Management. From 2012 until 2016 she was

the VP of CIO Services in EMEA. Ms. Verschaeren

holds a master’s in economics from the University of

Antwerp.

Estelle Iacona is professor in physics of

CentraleSupélec. She was a director of EM2C

laboratory (CNRS, École Centrale Paris) from 2008 to

2012 after which she became Dean and Vice-President

Research of the École Centrale Paris and of

CentraleSupélec. She served as Executive

Vice‑President for Academic Affairs at

CentraleSupélec from 2016 to 2019. She was also a

member of the board of École Centrale Casablanca.

In 2020, Estelle Iacona was elected as Senior

Vice‑President at Paris‑Saclay University. Currently she

is President at Paris‑Saclay University. Ms. Iacona holds

an engineering degree and a master of science from

the University of Nantes (Polytech’Nantes) and a PhD

in physics of transfer from the École Centrale Paris.

Vlinvlin BV is represented by Ling Qi. Ling Qi has more

than 20 years of international business management

experience in China. After winning an English language

competition from a field of one thousand competitors,

she organized international trade fairs and trade

missions for the city government of Shenyang and was

the personal translator for the mayor of Shenyang. She

left politics to host a weekly TV program with news and

interviews of foreign expats in China. In 1996, she

became vice-president of the animation film company

OHY in charge for the Company’s business in the US. In

2000, Ling Qi married Belgian director Wouter Dierickx

with whom she founded Sophie Animation Ltd.

Currently, she is CEO of two multimedia and animation

film companies. Alongside this, Ling Qi has been

consulting for foreign invested companies in China and

is a board member of a Belgian private bank. She holds

a degree in international trade and English from the

University of Liaoning and obtained a certificate of

Dutch at University of Antwerp.

Appointment and replacement of directors

The Articles of Association (Article 16) and the X‑FAB

Corporate Governance Charter contain specific rules

concerning the (re)appointment, the induction, and the

evaluation of directors. Directors are appointed for a

term not exceeding four years by the general meeting

of shareholders, who can also revoke their mandate at

any time. An appointment or dismissal requires a simple

majority of the votes cast.

If and when a position of a director prematurely

becomes vacant within the Board, the remaining

directors have the right to temporarily appoint a new

director until the next general meeting which shall

confirm such appointment. Said appointment will then

be included in the agenda of the next general meeting.

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	Annual Report 2024 | Corporate governance statement

The Remuneration and Nomination Committee makes

recommendations to the Board with regard to the

appointment of directors, the CEO, and the other

members of the Executive Management. The

Committee will consider proposals made by the

members of the Board or other relevant parties.

Functioning of the Board

The internal regulation of the Board is part of the

Corporate Governance Charter. In principle, the Board

of Directors meets on a quarterly basis. Additional

meetings may be called with appropriate notice at any

time to address specific needs of the business. A

meeting of the Board of Directors must in any event be

convened if requested by at least two directors.

The Board convened eight times in 2024 and

discussed, among others, the following topics:

• the financial results of the Group;

• the business plan and capital expenditure;

• the budget for the financial year 2025; and

• financing activities.

Dato Sri Dr. Wan Lizozman bin Wan Omar was excused

for one meeting and was represented by proxy at

three other meetings of the Board. Estelle Iacona was

represented by proxy at one meeting and Aurore NV

was represented by proxy at two meetings. Other than

that, all Board members attended all meetings.

Under the lead of the Chairman, the Board regularly

evaluates its scope, composition, and performance and

that of its committees, as well as the interaction

with the Executive Management. In 2023, the Board

conducted an evaluation via an anonymous survey

complemented by an open discussion of the results.

No issues have been identified and the Board was

satisfied with its composition and functioning.

7.4 Committees

Audit Committee

The Audit Committee advises the Board of Directors

on accounting, audit, and internal control matters as

further detailed in the Company’s Corporate

Governance Charter. The Audit Committee also assists

the Executive Management in its assessment and

follow-up of the auditor’s recommendations.

The Audit Committee is composed of four non-

executive members: Aurore NV, represented by

Christine Juliam, independent director and Chair;

Christel Verschaeren, independent director; Tan Sri

Datuk Amar Dr. Hamid bin Bugo, non-executive

director; and Estelle Iacona, independent director.

According to Article 7:99 BCCA the members of the

Audit Committee maintain a collective expertise in the

field of the Company’s activities. At least one of them

shall have accounting and audit expertise. Given his

education as well as extensive experience as a board

member for a number of different companies, Tan Sri

Datuk Amar Dr. Hamid bin Bugo complies with this

requirement.

In 2024, the Audit Committee met four times. During

these meetings the audit plan and key audit matters

were discussed with the external auditor. Other topics

covered were the requirements on ESG reporting,

revenue recognition and deferred tax assets. All

members of the Audit Committee as well as the

external auditor attended all meetings.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee advises

the Board of Directors principally on matters regarding

the appointment and remuneration of directors and

members of the Executive Management.

The Remuneration and Nomination Committee is

composed of five non-executive members: Christel

Verschaeren, Chair; Aurore NV, represented by

Christine Juliam, independent director; Dato Sri Dr.

Wan Lizozman bin Wan Omar, non-executive director;

Tan Sri Datuk Amar Dr. Hamid bin Bugo, non-executive

director; and Estelle Iacona, independent director.

As no new appointments to the board of directors and

the executive management were made in 2024, only

one meeting of the Remuneration and Nomination

Committee was held. During this meeting the

remuneration of the Executive Management was

discussed. All members of the Remuneration and

Nomination Committee attended the meeting.

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	Annual Report 2024 | Corporate governance statement

7.5 Executive Management

Composition

The Executive Management is composed of the following members:

Name	Age	Position
Rudi De Winter	64	Chief Executive Officer
Alba Morganti	56	Chief Financial Officer
Jörg Doblaski	46	Chief Technology Officer
Damien Macq	58	Chief Operations Officer
Lee Boon Chun	55	Chief Executive Officer, X-FAB Sarawak
Dr. Gabriel Kittler	46	Chief Executive Officer, X-FAB Erfurt
Dr. Sébastien Daveau	50	Chief Executive Officer, X-FAB France
Rico Tillner	42	Chief Executive Officer X-FAB Texas
Michael Woittennek	44	Chief Executive Officer, X-FAB Dresden

Functioning

The Executive Management Team is composed of the

CEO, the CFO, the CTO, the COO, and the site

managers of X‑FAB France, X‑FAB Sarawak, X‑FAB

Texas, X‑FAB Erfurt, and X‑FAB Dresden. The

members are appointed and removed by the Board of

Directors after having received the advice of the CEO

and the Remuneration and Nomination Committee.

The Executive Management Team exercises the duties

assigned to it by the Board of Directors and the CEO,

under the ultimate supervision of the Board of Directors.

The CEO leads the Executive Management Team,

within the framework established by the Board of

Directors and under its ultimate supervision. The CEO

chairs the Executive Management Team.

7.6 Diversity policy

The Remuneration Committee and the Board of Directors

ensure that diversity criteria such as age, gender, and

background are taken into consideration in its selection

processes and management of succession planning.

At the end of the reporting year, four of the nine

members of the Board were female, thereby reaching

the best possible equilibrium in terms of gender

diversity. The composition of the Board is in line with

the requirements of the BCCA on diversity. The

Executive Management Team also consists of a

diverse team in terms of age, background, and gender.

7.7 Remuneration report

The remuneration of the directors and the Executive

Management is governed by X‑FAB’s remuneration

policy which can be found at www.xfab.com/investors.

The remuneration policy was approved by the

Shareholders’ Meeting on April 29, 2021 and will be up

for approval at the Shareholders’ Meeting on April 24,

2025. This remuneration report has been prepared in

accordance with Article 3:6, §3 BCCA as introduced by

law on April 28, 2020.

Total remuneration

The application of the remuneration policy during

2024 for the directors and executives led to the

effective remuneration as shown in the table on the

next page.

The non-executive and independent directors receive

a compensation for their mandate as director. Such

compensation consists of a fixed annual amount of

EUR 15,000. The remuneration of directors takes into

account their membership(s) in any of the board

committees; for each membership in a board

committee, directors receive an additional fixed

amount of EUR 5,000 per committee. Such

compensation is independent from their participation

rate in board or board committee meetings.

Roland Duchâtelet waived his right to receive any

remuneration as a non-executive Board member.

In 2024 Vlinvlin BV (represented by Ling Qi) received

additional remuneration of USD 15,129 for consultancy

services provided to the Strategy department above

and beyond her work as director of the Company.

Hans-Jürgen Straub received an additional USD 10,814

for his mandate on the supervisory board of X‑FAB

Semiconductor Foundries GmbH.

Members of the Executive Management who are

employed by X‑FAB Group companies under an

employment contract also benefit from group

insurance policies in their respective home countries

providing various pension, life insurance, disability, and

medical insurance benefits, all of which are defined

contribution schemes. All these group insurance

elements are in line with home country market

practices and only represent a minor portion of their

respective remuneration packages. The base salary for

members of the Executive Management who are

employees does not include the employer

contributions.

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	Annual Report 2024 | Corporate governance statement

in U.S. dollars
Name, position	1. Fixed remuneration			2. Variable remuneration
	Base salary	Fees	Other benefits	One-year variable	Multi-year variable
Roland Duchâtelet, Non- executive director	—	—	—	—	—
Thomas Hans-Jürgen Straub, Non-executive director	16,235.00	—	10,814.00	—	—
Tan Sri Datuk Amar Dr. Hamid bin Bugo, Non-executive director	27,058.00	—	—	—	—
Dato Sri Dr. Wan Lizozman bin Wan Omar, Non-executive director	21,646.00	—	—	—	—
Aurore NV (Represented by Christine Juliam), Independent director	27,058.00	—	—	—	—
Christel Verschaeren, Independent director	27,058.00	—	—	—	—
Estelle Iacona, Independent director	27,058.00	—	—	—	—
Vlinvlin BV (Represented by Ling Qi), Non-executive director	16,235.00	—	15,129.00	—	—
Sensinnovat BV, permanently represented by Rudi De Winter, Executive, CEO	395,047.00	—	—	26,369.37	49,381.00
Executive Management excl. Sensinnovat BV	1,462,991.76	—	140,957.08	227,424.91	—

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	Annual Report 2024 | Corporate governance statement

in U.S. dollars
Name, position	3. Extra- ordinary items	4. Pension expense	5. Total remuneration	6. Proportion of fixed and variable remuneration
Roland Duchâtelet, Non- executive director	—	—	—	Fixed:	100%
Thomas Hans-Jürgen Straub, Non-executive director	—	—	27,058.00	Fixed:	100%
Tan Sri Datuk Amar Dr. Hamid bin Bugo, Non-executive director	—	—	27,058.00	Fixed:	100%
Dato Sri Dr. Wan Lizozman bin Wan Omar, Non-executive director	—	—	21,646.00	Fixed:	100%
Aurore NV (Represented by Christine Juliam), Independent director	—	—	27,058.00	Fixed:	100%
Christel Verschaeren, Independent director	—	—	27,058.00	Fixed:	100%
Estelle Iacona, Independent director	—	—	27,058.00	Fixed:	100%
Vlinvlin BV (Represented by Ling Qi), Non-executive director	—	—	31,363.00	Fixed:	100%
Sensinnovat BV, permanently represented by Rudi De Winter, Executive director, CEO	—	—	470,797.02	Fixed:	84%
				Variable:	16%
Executive Management excl. Sensinnovat BV	—	94,427.82	1,925,801.57	Fixed:	88%
				Variable:	12%
			2,584,897.59

Application of the performance criteria

CEO

The variable remuneration for the CEO is a cash bonus

that is capped at 50% of the annual base salary. It

contains short, medium and long-term elements:

• short term: 50% of the variable remuneration is

based on performance criteria measured over one

financial year;

• medium term: 25% is based on performance criteria

measured over two financial years; and

• long term: 25% is based on performance criteria

measured over three financial years.

The cash bonus for the CEO is calculated by reference

to yearly established targets to reflect global business

performance criteria, which are measured on an X‑FAB

Group consolidated basis. Where financial indicators

are used these are based on reported figures

determined in accordance with IFRS accounting

standards. The targets are as follows:

• 50% of the cash bonus (the short-term element)

depends on the achievement of the target EBIT of

X‑FAB measured over the performance year in

order to link the bonus to the operational result of

X‑FAB; and

• 50% of the cash bonus (the medium and long-term

element) is dependent on X‑FAB generating

revenue growth that outperforms the industry

average over the last one or two years, whereby the

industry reference growth is determined by

reference to the McClean Report 2024 by

TechInsights. The forecasts for optoelectronics,

sensors and actuators, and discrete (O-S-D)

devices is used as a reference value.

Short-term cash bonus (one-year variable)

The results for performance year 2024 are shown in

the table below. In 2024 the EBIT was USD 85.5 million.

This means that 26.7% of the short-term cash bonus

will be paid out.

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	Annual Report 2024 | Corporate governance statement

in U.S. dollars
Performance criteria	a)	Minimum threshold performance	a)	Maximum performance	a)	Measured performance
	b)	Corresponding remuneration	b)	Corresponding remuneration	b)	Actual remuneration outcome
Global business performance	a)	50,000,000	a)	182,800,000	a)	85,542,000
Relative weighting 50%	b)	0	b)	98,762	b)	26,369
Total bonus		0		98,762		26,369

Medium and long-term cash bonus (two and three-

year variable)

The two and three-year variable remuneration of the

CEO depends on X‑FAB generating revenue growth

over the last one or two years exceeding the industry

average using the statistics for the optoelectronics,

sensors and actuators, and discrete (O-S-D) devices

market published in The McClean Report 2024 by

TechInsights as a reference value.

The results for performance year 2024 are shown in

the table below. In 2024, revenue decreased by 7.64%

compared to 2023. The industry average only

decreased by 6.41%. The revenue growth compared to

2022 was 11.08% while the industry averaged a

decrease of 6.26%. This results in the bonus calculation

as depicted in the following table.

in U.S. dollars
Performance criteria	a)	Threshold performance	a)	Measured performance
	b)	Corresponding remuneration	b)	Actual remuneration outcome
Revenue growth over the last year	a)	Revenue growth >-6.41%	a)	-7.64%
	b)	49,381	b)	0
Revenue growth over the last two years	a)	Revenue growth >-6.26%	a)	11.08%
	b)	49,381	b)	49,381
Total bonus		98,762		49,381

Other members of the Executive Management

The variable remuneration for the other members of

the Executive Management consists of a short-term

cash bonus expressed as a fixed amount:

• 50% is based on a global business performance

measured through the achievement of the target

EBIT of the Company in order to link the bonus to

the operational result of the Company; and

• 50% is based on an assessment of individual,

department, or site performance measured

through achievement of pre-established targets

within the criteria determined by the CEO.

Currently no long-term incentives are foreseen for

members of the Executive Management.

The results for performance year 2024 are shown in

the table below. In 2024 the EBIT was USD 85.5 million.

This means that 26.7% of the short-term cash bonus

that is linked to the operational result of the Company

will be paid out.

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	Annual Report 2024 | Corporate governance statement

in U.S. dollars
Performance criteria	a)	Minimum threshold performance	a)	Maximum performance	a)	Measured performance
	b)	Corresponding remuneration	b)	Corresponding remuneration	b)	Actual remuneration outcome
Global business performance	a)	50,000,000	a)	182,800,000	a)	85,542,000
Relative weighting 50%	b)	0	b)	227,183	b)	60,590
Individual/team performance	a)	Determined individually	a)	Determined individually	a)	Determined individually
Relative weighting 50%	b)	0	b)	227,183	b)	166,835
Total bonus		0		454,366		227,425

Share-based remuneration

The remuneration policy of X‑FAB does not provide

for share-based remuneration for directors or

executives.

Annual change in remuneration

The table below provides an overview of the annual

change in total remuneration, developments and

performance of X‑FAB, and the average remuneration

of employees.

Non-financial performance criteria are not linked to

remuneration and are therefore not reported. We refer

to chapter 6 of this annual report for an overview of

non-financial topics. To ensure comparability, the

annual change in remuneration is only reported since

the implementation of Directive (EU) 2017/828 as

regards the encouragement of long-term shareholder

engagement.

Name	2020	2021	2022	2023	2024
Annual change of remuneration (Executive management)
• Fixed remuneration	—	-4.1%	4.2%	24.1%	4.5%
• Variable remuneration	—	+100%	-33.4%	133.4%	-51.1%
• Total remuneration	—	21.3%	-2.5%	38.3%	-9.2%
Annual change in the developments and performances (in thousands of U.S. dollars)
• Performance criteria (EBIT)	-14,617	77,192	57,335	157,675	85,542
• Net profit	13,530	83,640	52,491	161,895	61,525
Annual change in the average remuneration of employees on consolidated basis*	0.91%	8.39%	-1.58%	7.98%	-0.62%

*The average employee remuneration was calculated with the numbers as reported in notes 6.6 and 13.3 (wages and salaries) in

this annual report (personnel expenses and average number of employees). Social security, pension, and benefit costs are

excluded.

In 2024 the ratio between the highest and lowest

remuneration was 87.0 to 1. The highest remuneration

used for this comparison includes the total

remuneration of a member of the Executive

Management. The lowest remuneration includes the

base salary, variable pay as well as other benefits such

as insurance, pension contributions.

All figures are presented on an X‑FAB Group

consolidated basis in the above table.

Severance payments

No severance payments were made in 2024.

Use of clawback provisions

No clawbacks were applied in 2024.

Vote of the shareholders

The remuneration report for the financial year ended

December 31, 2023, was approved at the annual

Shareholders’ Meeting held on April 25, 2024, with a

94% majority of the 76.7% validly votes cast. The

remuneration report was approved with a large

majority and X‑FAB still believes in the principles

included therein. X‑FAB will, however, request that the

Shareholders’ Meeting on April 24, 2025 re-approve

the Remuneration Policy with minor updates as it has

now been in place for four years.

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	Annual Report 2024 | Corporate governance statement

7.8 Policy on certain transactions

Terms and conditions of transactions with related

parties

All related party transactions were made on terms

equivalent to those that prevail in arm’s length

transactions.

Conflicts of interest of the Board of Directors

According to Article 7:96 BCCA a member of the

Board of Directors is required to inform the other

directors about any item on the agenda of the Board

that will cause a direct or indirect conflict of interest of

a financial nature to him/her. In this event, the

respective director may not participate in the

deliberation and voting on this agenda item.

Pursuant to Article 7:97 BCCA, companies listed on the

stock exchange must follow a special procedure

before decisions are taken or operations are executed

concerning (i) the relations of the listed company with

an affiliated company, except its subsidiaries, and (ii)

the relations between a subsidiary of the listed

company and an affiliated company of the subsidiary,

other than a subsidiary of the subsidiary. Prior to the

decision or transaction, a committee composed of

three independent directors, if deemed necessary

assisted by one or more independent experts, must

prepare written advice for the Board of Directors.

The auditor delivers an opinion regarding the accuracy

of the information contained in the committee advice

and in the minutes of the Board of Directors’ decision.

The advice of the committee, an excerpt from the

minutes of meetings of the Board of Directors, and the

opinion of the auditor have to be recorded in the

annual report of the Company.

In 2024, there have been no conflicts of interest for

which the procedure of Articles 7:96 or 7:97 BCCA

needed to be applied.

Other transactions with directors and Executive

Management

As determined by section 6 of the X‑FAB Corporate

Governance Charter, members of the Board of

Directors should arrange their personal and business

affairs in such a way as to avoid conflicts with X‑FAB.

Moreover, the members of the Board of Directors and

the Executive Management are not permitted to enter,

either directly or indirectly, into agreements with

X‑FAB or any of its subsidiaries for the provision of

paid services or goods, unless explicitly authorized by

the Board of Directors. Such agreements must always

be at arm’s length. Please refer to note 12 on related

party transactions.

In 2024, there were no transactions between the

Company and its directors or Executive Managers

involving a conflict of interest.

Insider trading

In compliance with the 2020 Belgian Code on

Corporate Governance and EU regulation on market

abuse (EU No 596/2014) the X‑FAB Insider Trading

Policy was updated and approved by the Board of

Directors in February 2025.

X‑FAB complies with the Belgian provisions on insider

trading and market abuse. In this respect a list is kept

up to date of all people with managerial responsibilities

as well as all other people who have access to sensitive

information which could have an effect on the share

price.

The purpose of the X‑FAB Insider Trading Policy is to

prevent the abuse of inside information. Before trading

any company shares, the members of the Board and

the Executive Management have to receive the green

light from the Compliance Officer and have to report

back once the transaction has been completed.

Furthermore, the members of the Board and the

Executive Management as well as their closely

associated persons have to notify all their transactions

above a certain threshold in X‑FAB shares to the

Belgian Financial Services and Markets Authority, which

will publish these notices on its website.

Compliance with the X‑FAB Insider Trading Policy will

be supported and verified by the Compliance Officer.

7.9 Internal control and risk assessment

procedures in relation to financial reporting

The internal control and risk assessment procedures in

relation to the process of financial reporting are

coordinated by the CFO. Such procedures are in place

to ensure that the financial reporting is based on

reliable information and that the continuity of the

financial reporting in conformity with the IFRS

accounting principles is guaranteed.

The process of internal control in relation to the

financial reporting is based on the following principles:

• Data on transactions or use of assets of the

Company are registered accurately and saved in an

automated global enterprise resource planning

(ERP) system by the different X‑FAB business

units.

• Accounting transactions are registered in globally

standardized operating charts of accounts.

• The financial information is prepared and reported

in first instance by the accounting teams in the

different legal entities of X‑FAB worldwide.

• Consequently, the finance managers at the

different X‑FAB sites will review the prepared and

reported local financial information before sending

it to the Global Finance Department.

• In the Global Finance Department, the financial

information will receive its final review before it is

included in the consolidated financial statements.

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	Annual Report 2024 | Corporate governance statement

X‑FAB is validly represented by the sole signature of

the CEO for all aspects within and outside the daily

management of the Company. Specific powers are

granted to members of the Executive Management to

represent X‑FAB in matters that relate to the

functional area for which they are responsible.

For actions that fall outside the scope of the daily

management, the Company is validly represented by

two directors acting together.

In the event of the detection of certain deficiencies,

this will be reported to the Executive Management to

determine which appropriate measures can be taken.

The risk assessment in connection with the financial

reporting is based on the following principles:

• Risks that the Company is confronted with are

detected and monitored by the responsible

persons of the different departments of the

Company.

• The automated ERP system provides the

responsible persons of the departments with

permanent access to the financial information

relevant to the business activities of their functional

area for monitoring, controlling, and directing

purposes.

• Closing the accounts at the end of every month

warrants that the financial consequences of the

identified risks are monitored closely to be able to

anticipate to possible adverse evolutions.

• The financial results are also reviewed monthly on a

global level.

• A data protection system based on antivirus

software, internal and external backup of data, and

the controlling of access rights to information

protects the Company’s information and

guarantees the continuity of the financial reporting.

The adequacy and integrity of these IT systems and

procedures are reviewed regularly.

• X-FAB has internal controls in place to assess the

financial reporting and the risk management of the

Company.

7.10 Description of certain information from

the Articles of Association and elements

pertinent to a takeover bid

Capital structure

The registered capital of X‑FAB amounts to

EUR 657,456,850.68 and is represented by

130,781,669 equal shares without par value.

The shares are in registered or dematerialized form.

Restrictions on the transfer of securities

The Articles of Association contain no restrictions on

the transfer of the shares. The Board of Directors is

furthermore not aware of any restrictions imposed by

law on the transfer of shares by any shareholder,

except in the framework of market abuse regulations.

Restrictions on the exercise of voting rights

Each share entitles the holder to one vote. The Articles

of Association contain no restrictions on the voting

rights and each shareholder can exercise their voting

rights provided they are validly admitted to the general

meeting and their rights have not been suspended.

Pursuant to Article 11 of the Articles of Association the

Company is entitled to suspend the exercise of the

rights attaching to securities belonging to several

owners until one person is appointed towards the

Company as representative of the security.

No one can vote at the general meeting using voting

rights attached to securities that have not been

reported in due time in accordance with the Articles of

Association and with the law.

The Board is not aware of any other restrictions

imposed by law on the exercise of voting rights.

Agreements among shareholders

XTRION NV and Sarawak Technology Holdings Sdn.

Bhd. entered into a shareholders’ agreement as

shareholders of X‑FAB (the “Shareholders’

Agreement”). This Shareholders’ Agreement was

terminated by mutual consent on November 20, 2023.

The Shareholders’ Agreement addressed certain

matters relating to the governance of X‑FAB as well as

the transfer of shares in X‑FAB held by the parties to

this Shareholders’ Agreement.

Pursuant to the terms of the Shareholders’ Agreement,

XTRION NV and Sarawak Technology Holdings Sdn.

Bhd. each had the right to appoint two directors on the

Board of Directors. The Shareholders’ Agreement

furthermore provided for certain restrictions on the

ability of XTRION NV and Sarawak Technology

Holdings Sdn. Bhd. to transfer their shares in X‑FAB.

No new shareholder agreements have been

concluded, meaning that at the moment no

shareholder agreements are place.

Amendments to the Articles of Association

Matters involving special legal quorum requirements

include, among others, amendments to the Articles of

Association, issues of new shares, convertible bonds, or

warrants, and decisions regarding mergers and

demergers, which require at least 50% of the share

capital to be present or represented. If the quorum is

not reached, a second meeting may be convened at

which no quorum shall apply.

Matters involving special majority requirements

include, among others, decisions regarding mergers

and demergers, which require a majority of at least 75%

of the votes cast.

130

	Annual Report 2024 | Corporate governance statement

Authorities of the Board to issue, buy back, or

dispose of own shares

The Articles of Association foresee that the Board of

Directors may increase the registered capital of the

Company in one or several times by a (cumulated)

amount of maximum EUR 657,456,850.68. Such

authorization may be renewed in accordance with the

relevant legal provisions. The Board of Directors may

exercise this power for a period of five (5) years as

from the date of publication in the Annexes to the

Belgian State Gazette of the amendment to these

Articles of Association approved by the Shareholders’

Meeting on April 28, 2022.

The Board of Directors is further authorized by

Article 13 of the Articles of Association to acquire own

shares in the Company, either directly, by a person

acting in his/her own name on behalf of the Company,

or by a direct subsidiary within the meaning and the

limits set out by Article 7:221 BCCA, under the following

conditions:

• This authorization applies for a number of own

shares, profit-sharing certificates, or associated

certificates that is at most equal to that which, after

acquisition, results in a total number of own shares

held by the Company equal to the set limit of 20%

as stipulated in Article 5 of the SE Regulation juncto

Articles 7:215 ff. BCCA.

• Under this authorization a share should be acquired

at a price that will respect the legal requirements,

but that will in any case not be more than 10% below

the lowest closing price in the last 30 trading days

preceding the transaction and not more than 5%

above the highest closing price in the last 30

trading days preceding the transaction.

• This authorization is valid for five years from

April 28, 2022.

By resolution of the Shareholders’ Meeting held on

April 28, 2022, the Board of Directors is authorized to

divest itself of part of or all the Company’s shares,

profit-sharing certificates, or associated certificates.

• This can be done at any time and at a price it

determines, on or outside the stock market or in the

framework of its remuneration policy, to personnel

within the meaning of article 1:27 BCCA or to

prevent any serious and imminent harm to the

Company.

• The authorization covers the divestment of the

Company’s shares, profit-sharing certificates, or

associated certificates by a direct subsidiary within

the meaning of Article 7:221 BCCA.

• The authorization is valid without any time

restriction, except when the divestment is to

prevent any serious and imminent harm, in which

case the authorization is valid for three (3) years

from the date of publication of the authorization in

the Annexes to the Belgian State Gazette (May 2,

2022).

Authorities of the Board to proceed with a capital

increase

As per the Articles of Association, the Board of

Directors was expressly empowered to proceed with a

capital increase in any and all forms, including but not

limited to a capital increase accompanied by the

restriction or withdrawal of the preferential

subscription rights, even after receipt by the Company

of a notification by the Financial Services and Markets

Authority (FSMA – “Autoriteit voor Financiële Diensten

en Markten”/“Autorité des Services et Marchés

Financiers”) of a takeover bid for the Company‘s

shares. Where this is the case, however, the capital

increase must comply with the additional terms and

conditions laid down in Article 5 of the SE Regulation

juncto Article 7:202 BCCA. The powers conferred on

the Board of Directors remain in effect for a period of

three (3) years from the date of the amendment to the

Articles of Association approved by Shareholders’

Meeting held on April 28, 2022. These powers may be

renewed for a further period of three years by

resolution of the Shareholders’ Meeting, deliberating

and deciding in accordance with applicable rules. If the

Board of Directors decides upon an increase of

authorized capital pursuant to this authorization, this

increase will be deducted from the remaining part of

the authorized capital.

Other elements

The Company has not issued securities with special

control rights.

No agreements have been concluded between the

Company and its directors or employees providing for

compensation if, as a result of a takeover bid, the

directors should resign or are made redundant without

valid reason or if the employment of the employees is

terminated.

7.11 Auditor

KPMG Bedrijfsrevisoren BV, whose registered office is

situated at 1930 Zaventem, Luchthaven, Brussel

Nationaal 1K, was appointed as statutory auditor of the

Company. Mr. Herwig Carmans, auditor, was appointed

as the permanent representative of the auditor.

The audit fee for the audit of the consolidated financial

statements amounted to USD 617,355, excluding

value-added taxes. Additional fees were charged in

2024 for other services amounting to USD 82,365,

excluding value-added taxes. Non-audit related

services mainly relate to certification engagements

and tax compliance services. An additional fee of

USD 108,232 was charged for the limited assurance

engagement in the context of CSRD.

131

	Annual Report 2024 | Corporate governance statement

7.12 Compliance with the 2020 Belgian Code

on Corporate Governance

X‑FAB complies with the principles of the Code 2020.

In view of the “comply-or-explain” principle of the

Code the following overview sets out those provisions

of the Code that X‑FAB does not comply with, along

with an explanation of the reasons for non-compliance:

• Contrary to recommendation 7.9 of the Code

2020, the members of the Executive Management

are not required to hold a minimum threshold of

shares in the Company. Further, the Company does

not grant shares, options, or other rights to acquire

shares to its members of the Executive

Management. However, it should be noted that the

CEO is an important shareholder of the Company.

The Board of Directors believes that the stock price

of a company does not always correctly reflect the

performance of that company since there are many

external factors that also have an influence on the

price of a financial instrument.

The financial numbers that impact the level of the

business component of the variable remuneration,

i.e. the EBIT target, are a more important element

driving the valuation of the Company. As such, the

directors believe there is a clear alignment between

shareholders on the one hand and management on

the other.

• Contrary to recommendation 7.6 of the Code 2020

for non-executive directors, the directors do not

receive shares in the Company as part of their

remuneration. The purpose of the recommendation

is to better align the interests of non-executive

directors with regard to long-term shareholder

interest. At X‑FAB, that long-term shareholder

perspective is sufficiently represented on the

Board of Directors since the CEO as well as one

director are important (indirect) shareholders of

the Company.

• In reference to recommendation 4.14 of the Code

2020, we acknowledge the importance of

establishing an independent internal audit function

considering X-FAB’s nature, size, and complexity.

While other functions in X-FAB are responsible for

controlling the financial reporting, or managing the

framework of internal control and risk management,

in 2024, we did not have a separate independent

internal audit function. We are actively engaged in

identifying the right profile to formally fill this

function.

132

	Annual Report 2024 | Shareholder information

8. SHAREHOLDER

INFORMATION

Shareholder structure

	NUMBER OF SHARES	SHARE IN %
Elex NV	32,672,778	25.0
Sensinnovat BV	32,572,329	24.9
Sarawak Technology Holdings Sdn. Bhd.	14,948,655	11.4
Public	50,587,907	38.7
TOTAL	130,781,669	100.0

Total number of voting shares: 130,781,669

Share information

First day of listing:	April 6, 2017
Stock exchange:	Euronext Paris
Ticker:	XFAB
ISIN:	BE0974310428
Number of shares outstanding on December 31, 2024:	130,781,669
Market capitalization on December 31, 2024:	EUR 657,831,795.07

133

	Annual Report 2024 | Shareholder information

Financial calendar

April 24, 2025

Publication of Q1 2025 results

Annual shareholders’ meeting

July 31, 2025

Publication of Q2 2025 results

September 2, 2025

Publication of Half-Year Report 2025

October 30, 2025

Publication of Q3 2025 results

Contact information

X‑FAB Silicon Foundries SE

Investor Relations

Transportstraat 1

3980 Tessenderlo-Ham

Belgium

Phone: +32 1361 3627

E-mail: ir@xfab.com

Web: www.xfab.com

134

	Annual Report 2024 | X-FAB SE statutory accounts

9. X-FAB SILICON FOUNDRIES

SE STATUTORY ACCOUNTS

The separate financial statements of X‑FAB Silicon

Foundries SE, the Group’s parent, have been audited in

accordance with Belgian statutory requirements. The

auditor’s report is unqualified and certifies that the

financial statements have been prepared in

accordance with Belgian GAAP, and that they give a

true and fair view of the financial position and results of

X‑FAB Silicon Foundries SE in accordance with all legal

and regulatory requirements.

The separate financial statements, together with the

separate management report of the board of directors

to the general assembly of shareholders as well as the

auditor’s report thereon, will be filed with the National

Bank of Belgium in accordance with the relevant

statutory filing due dates. In addition, they are available

on the Company’s website or can also be obtained on

request at the registered office of the Company at

Transportstraat 1, 3980 Tessenderlo.

The separate financial statements are reproduced

below in condensed form.

The condensed statutory financial statements of

X‑FAB Silicon Foundries SE are presented in

thousands of EUR as the functional currency of the

statutory accounts is the EUR.

Participations in affiliated companies are recognized at

their acquisition cost.

Condensed non-consolidated statement of profit and loss

For the year ended December 31

in thousands of EUR	2024	2023
Operating income
Turnover	20,074	16,022
Operating charges
Cost of services and other expenses	(19,159)	(16,511)
Wages and salaries, social security costs and pension costs	(291)	(228)
Depreciation	(9)	(4)
Operating profit	615	(721)
Finance income
Income from financial fixed assets	15,510	135,146
Income from current assets	1,020	725
Other financial income	2,083	—
Finance costs
Debt charges	(222)	—
Other financial charges	—	(2,449)
Net financial result	18,391	133,422
Profit before taxes	19,006	132,701
Income tax	(349)	—
Profit for the period	18,657	132,701

135

	Annual Report 2024 | X-FAB SE statutory accounts

Condensed non-consolidated statement of financial position

in thousands of EUR	December 31, 2024	December 31, 2023
ASSETS
Fixed assets
Loan issue expenses	2,157	—
Other equipment	28	1
Financial assets
Affiliated companies
Investments in affiliates	1,137,750	1,034,250
Loans issued to affiliated companies	—	—
Total fixed assets	1,139,935	1,034,251
Current assets
Amounts receivable within one year
Other receivables	36,971	60,067
Cash and cash equivalents	19,296	53,932
Accruals and deferred income	66	38
Total current assets	56,333	114,037
Total assets	1,196,268	1,148,288
EQUITY AND LIABILITIES
Equity
Capital
Share capital – issued	657,457	657,457
Share premium	92,902	92,902
Reserves
Legal reserves	20,775	19,842
Reserve for treasury shares	562	562
Accumulated profits	393,992	376,267
Total equity	1,165,688	1,147,030
Current liabilities
Amounts payable within one year
Financial debt	6,535	—
Trade payables	500	510
Other current liabilities	23,443	682
Taxes	102	66
Accrued charges and deferred income	—	—
Total current liabilities	30,580	1,258
Total equity and liabilities	1,196,268	1,148,288

136

	Annual Report 2024 | Risk factors

10. RISK FACTORS

An investment in shares involves risks and

uncertainties. Prior to making a decision to invest in

shares of X‑FAB, the information provided in this

annual report and, in particular, the risks and

uncertainties described below should be read and

considered carefully. The occurrence of any of these

risks could adversely affect the Company’s business,

results of operations, and/or financial condition.

Risks relating to X‑FAB’s business and the

semiconductor industry

Structural trends in the markets for the end-user

products produced by X‑FAB’s customers, or

material volatility in demand for these products,

may limit X‑FAB’s ability to maintain or increase

sales and profit levels.

A significant portion of X‑FAB’s revenues is derived

from customers who use ICs manufactured by the

Group as components for the production of a wide

range of products including automotive, industrial,

medical, and communications devices. If consumer

demand for these products is volatile, or past and

expected structural growth trends in these industries

do not continue, it may lead to reduced demand for

X‑FAB’s analog/mixed-signal ICs.

A global systemic economic or financial crisis,

increased political uncertainty, or increased

economic protectionism could negatively affect

X‑FAB.

X‑FAB’s business is subject to inherent and indirect

risks arising from general and sector-specific economic

conditions in the markets in which it operates. In recent

years, several major systemic economic and financial

crises and events leading to political uncertainty have

negatively affected global business conditions, the

semiconductor industry, and a variety of consumer and

industrial markets. X‑FAB’s protection against

downturns is limited, since a substantial majority of

customer contracts do not contain minimum order

requirements, and as a result any decline or slow GDP

growth, whether caused by political uncertainty,

changes in trade regulation, or broader economic

conditions, which leads to reduced consumer and

industrial spending, may adversely impact X‑FAB’s

customers and result in lower demand for its analog/

mixed-signal ICs.

A significant portion of X‑FAB’s revenue comes

from a relatively limited number of customers.

X-FAB’s largest customer, Melexis, accounted for 44%

of the Group’s revenue in 2024, while the Group’s top

three customers accounted for 52% of revenue and its

top five customers accounted for 60% of revenue

during the year. None of X‑FAB’s customers are

prohibited by contract from purchasing from other

semiconductor suppliers. In the past, customers have

switched to other semiconductor suppliers with little or

no notice, or have notified the Group that they would

source semiconductors for new end-user products

from other semiconductor manufacturers. Changes in

X‑FAB’s relationships with its top customers, the loss of

one or more of these customers, or a change in the

competitive position of any of these customers could

have a material adverse impact on X‑FAB.

Due to X‑FAB’s relatively fixed-cost structure, its

ability to grow profitability is dependent on its

ability to maintain appropriate utilization levels.

The profitability of X‑FAB’s operations is closely tied to

its level of utilization. X‑FAB’s ability to improve or

maintain utilization levels depends, among other things,

on the general economic environment, the success of

its major customers, and its ability to offer the

technologies and processes required for it to stay

competitive. Failure to maintain or improve utilization

levels could have a material adverse impact on X‑FAB.

X‑FAB faces difficulties in forecasting demand and

may therefore be unable to match its production

capacity to demand.

Difficulties in projecting future business levels make it

more difficult to reach and to maintain optimal

utilization levels and adequately predict capacity needs

across X‑FAB’s operations. Because customers usually

place orders on a short-term basis, X‑FAB may face

difficulties to predict demand accurately. Significant

capacity problems or inability or delay in shifting

production to another fab could harm X‑FAB’s

relationships with its customers and lead to lost sales.

Furthermore, small changes in sales at the OEMs may

trigger inventory corrections throughout the supply

chain. As it can take about ten months from placing an

order at X‑FAB to assembling the final product at the

OEM, a small variation in sales combined with a

negative or positive market segment growth could

cause overreactions in the supply chain that amplify

the effects on X‑FAB’s operations, since X‑FAB is at

the end of the supply chain.

X‑FAB may be unsuccessful in its attempts to

increase its production capacity and capabilities.

As part of its strategy to expand capacity, X‑FAB

intends to expand capabilities and capacity at the

Group’s existing sites. This depends on the timely

availability of equipment as well as the ability to install

and qualify such new equipment on a timely basis.

Although X‑FAB does not have any current targets for

future acquisitions, the Group may acquire additional

companies or production sites over the medium term.

X‑FAB may also seek to grow its production capacity

through the development of new manufacturing sites.

Failure to integrate any acquired company, fab, or

technology successfully, or to achieve desired

synergies, may inhibit X‑FAB’s future expansion.

137

	Annual Report 2024 | Risk factors

X‑FAB may not realize all the anticipated benefits

from its acquisition of Altis’ core business.

X‑FAB acquired the Altis assets in 2016, including a fab

located in Corbeil-Essonnes, France. The integration

process includes a series of technology introductions,

capacity enhancements, adoptions of Group-wide

systems, and implementation of cost-efficiency

measures. X‑FAB may encounter delays or

interruptions in this integration process, among others

due to delays in customer qualifications in the fab or a

need to make additional capital expenditures. There

can be no assurance that this integration will be

successful, that X‑FAB will meet targeted synergies or

financial returns at the new facility, or that X‑FAB will

be able to keep all existing customers to secure

satisfactory fab utilization during the business

transition.

X‑FAB’s expectations of an increase in market

share by foundries might not occur.

A key component of X‑FAB’s strategy is its belief that

the market for foundries will grow, due to increased

outsourcing of specialty technologies by IDMs and

increasing prevalence of fabless companies. Although

this trend has been prevalent in the digital IC market, it

may not develop to the same extent in the market for

specialty technologies. If increasing market growth for

foundries were to slow or reverse, it could have a

material adverse impact on X‑FAB.

X‑FAB may face increasing competition.

Although X‑FAB operates in a narrow market segment

within the broader semiconductor manufacturing

industry, the Group faces competition from other

semiconductor producers, some of which have greater

manufacturing, financial, research and development,

and marketing resources than X‑FAB does. In the long

term, these competitors may win a higher portion of

new customers than X‑FAB, or win existing customers

from X‑FAB. If X‑FAB cannot provide the same level of

design and engineering support, capacity, or advanced

capabilities as competitors, it may have a material

adverse effect on X‑FAB.

X‑FAB may face competitive pricing pressures.

Competitors may have an impact on X‑FAB’s selling

prices and demand for its services. Although X‑FAB

has not experienced significant pricing pressure in the

past, there can be no assurance this will be the case in

the future. Significant declines in average selling prices

(ASPs) could have a material adverse effect on X‑FAB.

X‑FAB may face price increases from its suppliers.

X‑FAB manufactures analog/mixed-signal ICs, utilizing

proprietary process technologies and third-party

silicon wafers and other raw materials. Changes in the

availability or prices of such wafers, raw materials,

electricity, spare parts, etc. can have an effect on the

operating margin if the additional costs cannot be

included in the prices for X‑FAB’s own customers.

In 2024, raw wafer costs accounted for 14% of total

cost of sales. For most raw wafer types, X‑FAB uses

more than one supplier to secure availability of

required volumes but also to remain flexible. However,

having several suppliers per wafer type also means a

greater effort to acquire the necessary qualifications

for these suppliers.

X‑FAB may be subject to penalties if it fails to meet

the terms of long-term contracts with customers

and suppliers.

X‑FAB has concluded long-term agreements with a

number of customers and suppliers. Long-term

contracts with customers include take-or-pay

arrangements which specify agreed wafer quantities

and prices for a customer’s business with X‑FAB over a

period of three years. Such arrangements provide

X‑FAB with a better overview of its future business

levels. However, should X‑FAB be unable to deliver the

agreed quantities of wafers on time, it will be subject to

penalty payments. In a similar manner, long-term

procurement contracts with suppliers include take-or-

pay arrangements and X‑FAB may be subject to

penalties if it does not purchase the agreed quantities

from suppliers under such contracts.

X-FAB's operations could be disrupted by an

unreliable or insufficient power supply.

Reliable power supply is essential to maintain a wafer

fabrication facility. Unscheduled interruptions can

cause significant damage to work in progress (WIP)

and equipment. In addition, in times of increased

geopolitical tensions and global competition for scarce

resources, the energy supply in some regions may

become inadequate.

X‑FAB is subject to risks associated with currency

fluctuations.

X‑FAB records its financial results in U.S. dollars but

receives revenues and incurs costs in a variety of

currencies, including euros and Malaysian ringgit.

Changes in the exchange rate of the U.S. dollar to the

euro or Malaysian ringgit could result in translational

losses in a given year, as compared to prior operating

periods, or in a mismatch between local currency

expenses and U.S. dollar revenues. X‑FAB strives for a

natural hedging of the business, which would make

X‑FAB’s profitability development largely independent

from exchange rate fluctuations; however, this may not

be effective in preventing exchange rate losses.

Price, credit, liquidity, and cash flow risks and risks

associated with the use of financial instruments are

described in note 10 to the X‑FAB consolidated

financial statements in chapter 5.

138

	Annual Report 2024 | Risk factors

X‑FAB is subject to risks associated with any form

of cyber criminality.

X‑FAB’s operations may be disrupted due to the

unauthorized use or theft of critical data as well as

sabotage, viruses, or any other malicious activity

targeted at the Company’s IT infrastructure. This could

have an impact on the confidentiality, integrity, and

availability of data and/or IT systems of the Company.

X‑FAB has taken measures to make the Company’s IT

infrastructure robust and secure and has implemented

state-of-the-art security and control frameworks and

technology. Any significant interruption or failure of

X‑FAB’s IT systems or any significant breach of

security could have an adverse effect on the

Company’s business, operational results, financial

condition, and cash flows.

X‑FAB is also subject to the following risks:

• X‑FAB depends on successful technological

advances.

• X‑FAB depends on successful materials, machinery,

and component procurement for its manufacturing

processes.

• X‑FAB’s business may temporarily be negatively

impacted due to disruptions in the supply chain or

market demand caused by a pandemic or epidemic.

• X‑FAB may be unable to recruit or retain the

personnel required for its growth strategy.

• X‑FAB may be affected by reductions in

government subsidies and grants and could fail to

comply with the conditions and obligations under

such subsidy programs.

• Industry studies, forecasts, and growth rates

relating to the semiconductor market as a whole

may not be indicative of X‑FAB’s operations within

the analog/mixed-signal semiconductor market.

• X‑FAB’s ability to compete successfully and

achieve future growth will depend, in part, on its

ability to protect its proprietary technology.

• X‑FAB may be subject to claims for alleged

infringement of third parties’ intellectual property

rights.

• X‑FAB depends on intellectual property rights of

third parties, and failure to maintain or acquire

licenses could harm the Group’s business.

• X‑FAB could be adversely affected by

manufacturing interruptions.

• X‑FAB’s business could be adversely affected by

changes in export control regulations, trade

restrictions, and economic sanctions.

• If X‑FAB experiences difficulty in achieving

acceptable device yields or process performance

as a result of manufacturing problems, it could

result in delayed deliveries.

• X‑FAB’s insurance coverage may not be adequate

to compensate for any interruptions or loss of

business.

• X‑FAB’s operations may be impacted by

disruptions both at its own or its suppliers’

operations caused by severe weather conditions

whose occurrence is increasing due to climate

change.

• X‑FAB could incur material costs to comply with

regulation, including environmental and health and

safety laws, especially as a result of climate change.

Changes in such regulations could require

significant changes in the production process or

could even require purchasing additional

equipment.

• X‑FAB may be subject to litigation, disputes, or

other legal proceedings.

• X‑FAB carries a significant amount of deferred tax

assets on its balance sheet.

• Low or negligible employee motivation as well as

the occurrence of accidents due to human failure

may negatively impact X‑FAB’s business.

• Cultural differences may lead to misalignment

among X‑FAB sites, negatively impacting X‑FAB’s

business.

• X‑FAB may be subject to penalty payments if labor

rights or environmental provisions are being

violated.

• X‑FAB’s public image may be adversely affected

based on the impact of its business on the

environment.

Risks related to the shares

• Future sales of substantial amounts of X‑FAB’s

ordinary shares, or the perception that such sales

could occur, could adversely affect the market

value of the shares.

• X‑FAB may not be able to pay dividends.

• Investors with a reference currency other than

euros will become subject to foreign exchange rate

risk when investing in shares.

• Any sale, purchase, or exchange of shares may

become subject to financial transaction tax.

• Certain provisions of the Belgian Companies and

Associations Code and the Articles of Association

may affect potential takeover attempts and may

affect the market price of the shares.

139

	Annual Report 2024 | Risk factors

Forward-looking information

This annual report may include forward-looking

statements. Forward-looking statements are

statements regarding or based upon management’s

current intentions, beliefs, or expectations relating to,

among other things, X‑FAB’s future results of

operations, financial condition, liquidity, prospects,

growth, strategies, or developments in the industry in

which it operates. By their nature, forward-looking

statements are subject to risks, uncertainties, and

assumptions that could cause actual results or future

events to differ materially from those expressed or

implied thereby. These risks, uncertainties, and

assumptions could adversely affect the outcome and

financial effects of the plans and events described

herein.

Forward-looking statements contained in this annual

report regarding trends or current activities should not

be taken as a report that such trends or activities will

continue in the future. We undertake no obligation to

update or revise any forward-looking statements,

whether as a result of new information, future events,

or otherwise, unless legally required. You should not

place undue reliance on any such forward-looking

statements, which speak only as of the date of this

annual report.

The information contained in this annual report is

subject to change without notice. No re-report or

warranty, express or implied, is made as to the fairness,

accuracy, reasonableness, or completeness of the

information contained herein, and no reliance should

be placed on it.

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11. GLOSSARY

AEC	Automotive Electronics Council
AI	Artificial intelligence
AIM	Automotive, industrial, medical
AlN	Aluminium nitride
Analog M/S	Analog mixed-signal
ASIC	Application-specific integrated circuit
BCCA	Belgian Code on Companies and Associations
BCD	Bipolar-CMOS-DMOS
Belgian Companies Code	The Belgian Act of May 7, 1999 containing the Companies Code as amended from time to time
Belgian GAAP	Belgian generally accepted accounting principles, which refers to the financial reporting framework applicable in Belgium
BMS	Battery management system
CAGR	Compound annual growth rate
CCC	Consumer, communications, computer
CDA	Clean dry air
CMOS	Complementary metal-oxide-semiconductor
Company	X-FAB Silicon Foundries SE
DBO	Defined benefit obligation
DNA	Deoxyribonucleic acid
DTI	Deep trench isolation
EBIT	Earnings before net finance cost and income taxes, which is equivalent to operating profit, as presented in the historical financial information
EBITDA	Earnings before net finance cost, income taxes, depreciation, and amortization.
ECL	Expected credit loss
EFRAG	European Financial Reporting Advisory Group
EHS	Environmental, Health and Safety
ERP	Enterprise resource planning
ESEF	European Single Electronic Format
ESG	Environmental, social, governance
EU	The European Union
EUR, euros, or €	The common currency of the EU member states that are part of the Eurozone

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Fab	Wafer fabrication facility
FSMA	The Belgian Financial Services and Market Authority
FTE	Full-time equivalent
FVOCI	Fair value through other comprehensive income
FVTPL	Fair value through profit or loss
GDP	Gross domestic product
GHG	Greenhouse gases
GRI	Global Reporting Initiative
GVG	X-FAB Dresden Grundstücks-Vermietungsgesellschaft mbH & Co. KG
GWh	Gigawatt hours
IAASB	International Auditing and Assurance Standards Board
IATF	International Automotive Task Force
IC	Integrated circuit
ICC	International Chamber of Commerce
IDM	Integrated device manufacturer
IFRS	International Financial Reporting Standards as adopted by the European Union
IoT	Internet of things
IP	Intellectual property
IPCEI	Important Projects of Common European Interest
ISAs	International Standards on Auditing
KW	Kilowatt
LiDAR	Light imaging, detection, and ranging
LTA	Long-term agreement
MEMS	Micro-electro-mechanical systems
MES	Manufacturing execution system
MFI	X-FAB MEMS Foundry Itzehoe GmbH
M-MOS	M-MOS Semiconductor Sdn. Bhd.
MW	Megawatt
NRE	Non-recurring engineering
NVM	Non-volatile memory
OCI	Other comprehensive income
OECD	Organization for Economic Cooperation and Development
OEM	Original equipment manufacturer
PCM	Process control monitoring

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REACH	Registration, Evaluation, Authorization, and Restriction of Chemicals
PFC	Perfluorinated carbons
RoHS	Restriction of the use of certain hazardous substances
SCAR	Supplier corrective action request
SDG	UN Sustainability Development Goals
SE Regulation	Council Regulation (EC) No 2157/2001 of October 8, 2001 on the Statute for a European company (SE)
SiC	Silicon carbide
SOI	Silicon-on-insulator
STEM	Science, technology, engineering and mathematics
UPW	Ultra pure water
VDA	German Association of the Automotive Industry
WSPM	Wafer starts per month
X-FAB SE, or the Company	X-FAB Silicon Foundries SE
X-FAB SE Group, or the Group	X-FAB Silicon Foundries SE together with its subsidiaries
X-FAB GmbH	X-FAB Semiconductor Foundries GmbH
X-FAB Dresden	X-FAB Dresden GmbH & Co. KG and X-FAB Dresden Verwaltungs-GmbH
X-FAB France	X-FAB France SAS
X-FAB Texas	X-FAB Texas Inc.
X-FAB Sarawak	X-FAB Sarawak Sdn. Bhd.
X-FAB Japan	X-FAB Japan K.K.
XMF	X-FAB MEMS Foundry GmbH
ZVEI	Electrical Industry Association, Germany