Reformative Transition & Accelerated Transformation: Formosa Plastics Group Estimates NT$38.6 Billion in Transformation Benefits by 2030

Faced with the significant overflow of petrochemical capacity from China, intensifying low-price market competition, and challenges of margin compression caused by structural imbalances in global supply and demand, Formosa Plastics Group (FPG) is actively driving an all-encompassing transformation strategy. This scope includes products upgrade, the development of new products and businesses, low-carbon energy, and digital transformation. By accelerating the move toward digital governance and sustainable operation, FPG demonstrates its firm commitment to evolving into a resilient, competitive, and green enterprise.

Recently, due to the impact of the U.S.-Iran conflict, which has led to shipping disruptions in the Persian Gulf and global supply chain breakages, the supply of upstream raw materials to FPG has been significantly impacted. Within the group, Formosa Petrochemical Corporation (FPCC) and Formosa Plastics Corporation (FPC) successively declared "Force Majeure" on March 9 and March 10. Consequently, the companies have initiated inventory quota allocations and lead-time adjustments. While crude oil price have fluctuated sharply and customer inquiries remain high due to expectations of further price hikes, midstream and downstream products may suffer margin losses due to a time lag. Currently, FPG is actively adjusting shipping routes and seeking alternative material sources to restore normal supply as soon as possible and lift the Force Majeure status.

113 Transformation Projects: Driving Qualitative Change through Five Strategic Engines and Product Differentiation

FPG’s four major companies have launched a total of 113 transformation projects, which are estimated to generate an annual profit of NT$38.6 billion by 2030. This includes NT$21.3 billion from transformation benefits (with 21 projects already completed, yielding an annual benefit of NT$1.44 billion) and NT$17.3 billion from differentiated product benefits, showcasing both qualitative and quantitative shifts in the group’s comprehensive transformation.

Optimization of Product Structure: Expanding Competitive Advantages in Differentiated Products

FPG is committed to exiting the "low-price, general-purpose grades" commodity market, focusing instead on high-margin differentiated products with high certification barriers. The total proportion of differentiated products for Formosa Plastics Corporation (FPC), Nan Ya Plastics Corporation (NPC), and Formosa Chemicals & Fibre Corporation (FCFC) is expected to rise from 54.1% in 2025 to 56.4% in 2026. This optimization is projected to increase the profit from differentiated products by approximately NT$470 million per month in 2026 compared to 2025.

Digital Governance Achievements: Remarkable Success in AI Implementation

Since the group-wide launch of AI initiatives in 2018, its total investment has reached NT$3.1 billion as of 2025. With 2,145 completed cases, the annual benefit has reached NT$7.8 billion, with 85% of these cases developed in-house. Moving forward, FPG has set a future target of NT$30 billion in annual benefits from AI.

Environmental Commitment: Implementation of Circular Economy

Since 1999, the Mailiao Industrial Complex has implemented 15,908 circular economy improvement projects with a total investment of NT$47.57 billion, yielding an annual return of NT$41.96 billion. Concrete achievements include daily water savings of 317,391 tons, hourly electricity savings of 391.8 thousand kWh, and an annual reduction of 14,732 kilotons of CO2 equivalent emissions, fulfilling our commitment to green production.

Transformation Progress Highlights of the Four Major Companies

FPC is deepening its semiconductor supply chain, advanced materials, and green-digital transformation to meet market demand. It is actively expanding production for electronic-grade chemicals and key semiconductor materials, and is projected that the electronic-grade isopropyl alcohol (IPA) waste liquid recovery project will be completed in 2026, the second-phase expansion of electronic-grade hydrofluoric acid (HF) will commence production in 2027, and production lines for electronic-grade hydrogen and Taiwan's first Atomic Layer Deposition (ALD) ruthenium precursors will be completed in the same year. By 2028, the deployment of electronic-grade sulfuric acid, hydrochloric acid, and photoresist thinner will reach mass production.

Furthermore, frontier materials such as 1-Hexene (C6) and Polyaryletherketone (PAEK) composites are expected to be completed in 2026, while Polyolefin Elastomers (POE) will start production in 2027. Solar PV grid-connected capacity has also reached 16.3 MW this year. FPC will continue to refine its strategies using FormosaGPT to optimize digital governance and deepen global strategic partnerships to ensure long-term sustainability.

NPC is adhering to the strategy of "Diversified Layout and Innovative Development,” and expecting to increase differentiated product ratios to rise from 54.9% in 2025 to 58.2% in 2026. The development focus for this year and next will be on three major areas: medical materials, semiconductors, and power systems. In the new medical materials business, 21 development projects have been initiated, including blood bag systems for leukoreduction and high-end anti-adhesion films, covering diagnostics, dental, orthopedic, and cardiovascular fields, as well as regenerative medicine and surgery, with an estimated annual output of NT$1.4 billion. Semiconductor materials include mass-produced process films and six major products under development—pre-electronic grade H2O2, CO2, and fluorinated piping—and are expected to enter production this year or next, with estimated annual output of NT$3 billion. To build a new power system business, in addition to existing products like switchboards, NPC is collaborating with foreign companies to develop H-class (high-temperature resistant) transformers and introducing Korean technology for high-voltage transmission equipment, transitioning from a "single equipment supplier" to a "power system solution provider."

Furthermore, NPC is strengthening competitiveness through industry collaboration, such as expanding the supply of electronic-grade glass yarn and cloth with Nittobo and partnering with Fortune Electric to capture U.S. power infrastructure opportunities, ensuring operational diversity and greater agility to navigate the rapidly changing economic landscape, leading the company toward long-term sustainable development.

FCFC is strengthening its transformation through four task forces: “Digital Transformation, Energy Transition, Circular Economy, and New Business Development.” In digital transformation, a total of 667 AI application cases have been launched as of 2025, successfully shifting management model from traditional passive response to new proactive prediction and real-time optimization. Regarding energy transition, FCFC continues to advocate energy saving and emission reduction, with 244 project improvements completed in 2025, saving 2,290 tons of water daily, 46.9 tons of steam per hour, and 7 thousand kWh of electricity per hour. The circular economy scope includes waste reduction, raw material savings, and green product development. For new business development, besides continuing to develop small-scale hydropower, FCFC will leverage its self-generation capacity to revitalize idle industrial land; this year, it will complete the sale of surplus electricity from the Hsinkang and Longde plants to data center operators. In 2027, it will complete the installation of 5N electronic-grade hydrogen purification facilities and accelerate the development of raw materials such as Silicon Carbide (SiC), Polyimide (PI), and Perovskite for the electronics supply chain.

FCFC's core strategy for existing businesses will focus on "differentiation," by leveraging strengths in customization, high-profit margins, and stringent certification barriers, it aims to expand the proportion of niche products for medical, automotive components, and AI server applications. Through the refinement of production and sales structures, FCFC will strengthen operational foundation and branch into semiconductor materials and energy storage applications.

FPCC is actively outlining new low-carbon profit drivers, focusing its transformation strategy on four dimensions: "Strengthening the Core, New Business Development, Circular Economy, and Energy Transition." To optimize ethylene feedstock cost, the "Ethane Import" project is expected to be completed by the end of 2026 and operational in Q1 2027. In terms of green energy, Sustainable Aviation Fuel (SAF) production exceeded 5,500 tons in 2025, and has obtain international certification, and is now supplied to Taiwan's two major national carriers, resulting in a reduction of 14,118 tons of carbon emissions. In new businesses, beyond its shale gas extraction in Louisiana, FPCC's high-value HSBC (Hydrogenated Styrenic Block Copolymers) plant successfully completed trial production in November 2025, with an estimated annual profit contribution of NT$250 million. Additionally, the small-scale hydropower facility in Yunlin commenced commercial operation in July 2025, providing 2.298 million kWh of green electricity annually. Furthermore, FPCC is accelerating its transition through the Mailiao "coal-to-gas" project, which includes two 1,200 MW combined-cycle gas turbine units and an LNG receiving terminal, demonstrating concrete process in shifting toward low-carbon, high-value, and diversified operations.

Conclusion and Outlook: Reforming Mindsets, Innovating Business, and Leading a Sustainable Future

Upholding the founders' spirit of "Reforming Mindset, Innovating Business," FPG is responding to the shifting global economic and trade landscape by converting "visionary concepts" into concrete transformation "methodologies" and "practices," thereby demonstrating even greater resilience and agility in its operations and management. Looking ahead, FPG will place "Transformation" as the strategic core. By deeply integrating AI digital governance, the circular economy, and green energy initiatives, we will proactively drive the optimization of resources and the circular reuse of materials throughout cross-departments and cross-companies.

Formosa Plastics Group