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Supply Chain Sustainability Management

ASEH has suppliers around the world, all of which are important partners. Beyond value creation, we also hope to be able to address labor rights and environmental protection issues by joining the Responsible Business Alliance (RBA) and actively participating in its annual conference.

Supplier Sustainability Management Approach

As part of the ASEH Procurement and Supply Chain Development Policy and Commitment, we established a four-stage sustainability supply management process that is run repeatedly to ensure supplier compliance and enhance their sustainability performance.

Supplier Sustainability Requirement

ASEH's raw material suppliers are required to sign the "ASEH Supplier Code of Conduct Commitment Letter". The suppliers are also required to complete a sustainability risk assessment questionnaire that covers regulatory compliance, sustainable management, supplier management, conflict mineral management, environmental protection, health and safety, labor rights, human rights, etc. The purpose of the questionnaire is to assess each supplier's sustainability risk and conduct an on-site audit where necessary to ensure conformity to ASEH's supplier sustainability standards.

Supplier Sustainability Risk Assessment

To assess the current status of supply chain sustainability development and risk management status, ASEH conducts an annual three-step supplier sustainability risk evaluation and analysis. This allows ASEH to identify the suppliers that exhibit potentially high social, economic, and environmental risks. Deficient suppliers will have to undergo audits and follow ASEH's corrective guidelines to ensure effective mitigation and control of risk.

Supplier Sustainability Risk Assessment Targets and Procedures

Risk Assessment 1: Active risk assessment

Targets: All suppliers

  • We conduct an initial risk assessment of suppliers based on the manufacturing location, manufacturing processes, and procurement amount.
Risk Assessment 2: Sustainability Risk Assessment Questionnaire (SAQ)

Targets: All tier-1 suppliers

  • Critical suppliers: ASEH SAQ/RBA SAQ
  • Non-critical suppliers: ASEH SAQ
Risk Assessment 3: On-site audit/RBA VAP/RBA SAQ

Target: High-risk suppliers

  • High-risk critical suppliers: On-site audit/ RBA VAP
  • High-risk non-critical suppliers: RBA SAQ

Sustainability Risk Assessment Factors

Economic
  • Flexibility, Quality, Cost, Service and Technology
  • Sustainability Management Policies and Organization
  • Risk Management
  • Business Ethics
  • Information Security
  • Conflict Minerals Management
  • Supply Chain Management
Environmental
  • Environmental Management System
  • Carbon Management
  • Water Management/li>
  • Waste Management
Social
  • Occupational Health and Safety Management System
  • Emergency Preparedness
  • Labor Rights
  • Labor Management System
  • Human Rights
  • Social Involvement

Supplier Sustainability Audit Mechanism

ASEH established a supplier sustainability audit system to carry out routine and ad hoc audits on-site, through document submissions, and through appointing third-party agencies or the RBA VAP. Deficient suppliers are required to draw up corrective action plans and rectify them within a given time frame. We will then review the results of their corrective action plans, followed by another assessment on the status the following year.

In 2019, we conducted on-site audits/RBA VAP on 115 raw material suppliers, including high-risk critical suppliers. All audited suppliers completed the corrective actions within the given time frame; and after evaluation, no supplier was terminated for non-compliance.

Type of Raw Material Suppliers Audits in 2019
2019 Supplier Sustainability Audit Findings by Category

Sustainable Supply Chain Development Program

ASEH continues to support its suppliers by providing education and training, organizing seminars, forums and counseling sessions. These efforts help ASEH stay responsive to an ever changing business landscape and to foster sustainability values throughout the supply chain.

Supply Chain Greenhouse Gas Inventory Guidance Program
To counter impacts and risks arising from climate change, ASEH has invested significant resources to assist suppliers in establishing greenhouse gas management systems that are compliant with regulatory requirements. We commissioned a consulting company in Taiwan to launch a two-year (2018-2019) Supplier Guidance Project for the Implementation of ISO 14064-1 Greenhouse Gas Inventory Social Return on Investment (SROI). As of the end of 2019, we have provided on-site support for over 20 suppliers in ensuring ISO 14064- 1 compliance for their greenhouse gas management systems. The project has allowed them to control their greenhouse gas emissions, acquire external verification for ISO 14064-1 compliance, develop capacity for supply chain carbon disclosure, and increase their level of competitiveness.

Risk of Foreign Forced/Bonded Labor in Supply Chain Corrective Action Project
ASEH is committed to the protection of the dignity and the rights of workers. In 2018, we collaborated with suppliers to review and conduct due diligence on the hiring process of foreign workers, and explore ways to improve the process. The aim is to eliminate any practice of forced or indentured labor, and to make up for the inadequacy in local labor law protection and/or complex hiring procedures within our supply chain.

Supplier Sustainability Education and Training
ASEH continues to invest resources enhance the sustainability performance of its supply chain risks. We have organized various sustainability education and training, and conducted guidance outreach at multiple facilities to communicate our supply chain management requirements. In 2019, we conducted 7 seminars/consulting globally, with 575 people attendees from more than 350 suppliers attended.

  • We organized 3 supplier sustainability seminars at our facilities in Chungli, Shanghai and Suzhou. A total of 68 people from 26 suppliers attended the seminar.
  • Through the seminars, we strengthened suppliers' sustainability management through the communication of ASEH's supply chain sustainability management standards and RBA requirements, as well as our boundaries on regulating conflict minerals.

  • We organized 3 supplier sustainability seminars in Taiwan, Shanghai and Shenzhen. A total of 222 people from 179 suppliers participated in the seminars.
  • We discussed the USI Administrative Strategies for Sustainable Development Goals, the implementation of the RBA Code of Conduct and VAP, conflict minerals management and the latest updates to international environmental regulations (e.g., RoHS and REACH) and regulatory trends. This ensures that suppliers understand USI's sustainability management requirements and helps them gain a deeper insight into USI's sustainable development policies and system.

  • We organized a Supplier Day in Taiwan. A total of 285 people from 151 suppliers participated in the seminars.
  • At our annual Suppliers Day, besides the sharing of developing trends in the semiconductor assembly and testing industry to our suppliers, we have also included an overview of ASEH member company, SPIL’s sustainable procurement requirements. In recognition and appreciation of our suppliers for their outstanding contributions, we have also presented them with our annual supplier awards.

ASE Best Supplier Awards Ceremony

ASE is a socially responsible company that is fully committed to building a more sustainable supply chain. In 2017, the company established the supplier sustainability award to recognize outstanding sustainability performance among its suppliers. Last year, we evaluated a group of suppliers who have worked closely with ASE on sustainability over the past three years, and narrowed the list to 9 suppliers for the prestigious award. We presented three of them with the Sustainability Excellence Award, and six with the Sustainability Partnership Award. Recognizing the efforts of our suppliers in sustainability through the awards will encourage them to increase their commitment to sustainable corporate development and encourage more suppliers to be proactive in advancing a sustainable future for the semiconductor industry. Going forward, we plan to establish a corporate level ASEH supplier sustainability award program by combining the resources of all the three subsidiary companies.

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