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132.2 The Relationship between Upstream, Midstream, and Downstream in the Industry2.2.1 Industry OverviewWith the widespread adoption of big data mining and AI analysis, manufacturers are increasingly leveraging accumulated health data and clinical insights to develop various medical AI technologies. National policies aim to promote the development of digital healthcare by building on the existing strengths and foundation of the ICT industry. In Taiwan, the focus of digital healthcare development is categorized into five key areas: digital prevention, digital diagnosis, digital treatment, telemedicine, and medical information systems. As a medical consumables manufacturer, Bondt is actively seeking collaboration with local service providers in these areas to explore the corresponding consumable product opportunities.In 2022, as the world gradually entered the post-COVID-19 era, the easing of the pandemic led to a decrease in severe cases and death rates, with countries lifting restrictions and resuming economic and social activities. The revival of various medical procedures also resumed, affecting the demand for certain medical device products, as reflected in the shifts in the types of devices sold.The medical device industry is highly regulated due to its direct impact on public health and well-being. Health authorities in every country closely monitor and regulate this sector, as it is both a matter of national responsibility and an extension of national sovereignty. This role is manifested through various regulatory frameworks, which significantly influence the development of the medical device industry.%u2022 Upstream Medical-grade polymer materials and relatedsubstances or materials, all of which must undergovalidation and comply with relevant regulations.%u2022 Midstream: Medical device manufacturers, such asBioteque, responsible for the core design, production,and manufacturing of the products.%u2022 Downstream: Domestic and international distributorsand agents, who deliver the products to end users, suchas hospitals, through these partners.2.2.3. Product Development TrendsTaking hemodialysis products as an example, the global dialysis population is growing at a rate of 7% annually. As the quality of dialysis products and technologies improves, the mortality rate among dialysis patients is decreasing. In other words, the demand for dialysis consumables is continuously increasing. This trend leads to a steady rise in the consumption of medical supplies year by year.Stricter regulations are becoming a global trend. In Taiwan, the Medical Device Management Act was announced in May 2021, separating the management of pharmaceuticals and medical devices in the country. This law harmonizes Taiwan's regulations with international standards while considering local conditions, aligning Taiwan's medical device management with global practices. At the same time, in Europe, the EU has upgraded its regulations with the stricter Medical Device Regulation (MDR). The increasing regulatory rigor presents a challenge that all medical device manufacturers worldwide must address.2.2.2 The Relationship between Upstream, Midstream, and Downstream in the IndustryBBIOTEQUE CORPORATION 2023 Sustainability Report