Supply Chain Management
▌Responsible Supply Chain Management
As a leading technology provider for the global semiconductor industry, MediaTek is located at the frontend of the value chain. All back-end processes involving raw material procurement, OEM manufacturing, packaging, and testing are carried out by suppliers, which results in the formation of partnerships characterized by professional division of labor and mutual cooperation. Therefore, the supply chain management is MediaTek’s top priority when dealing with the corporate operational risks and climaterelated risks. We are committed to implementing the sustainable development together with our supply chain partners.
Annual and New Supplier Sustainability Risk Assessment Criteria
The scope of issues of concern to global customers and the general public has gradually expanded from price, quality, and service standards to social and environmental laws and standards and legal responsibilities in respective nations. MediaTek has therefore reorganized its supplier evaluation standards in the economic, social, and environmental dimensions. The Company monitors its supply chain to confirm compliance and stepping up of efforts in the field of sustainable development involving corporate governance, energy conservation and carbon reduction, green manufacturing, employee care, and expanded social engagement.
The ultimate goal lies in the prevention of risks that harm stakeholder interests including improper management resulting in environmental pollution, product quality aberrations, and production capacity and manpower shortages at any link of the supply chain. Such risks cause shipping irregularities, rising costs, dropping revenues, and thereby negatively aect the reputation, image, and competitiveness of MediaTek. MediaTek requires all new suppliers to meet this assessment criteria. For existing suppliers, we also continuously track and evaluate their suitability based on this criteria every year.
Key Supplier Management
To strengthen the effectiveness of supplier management, MediaTek established a supplier corporate sustainability scoring criteria. “For key suppliers”, namely suppliers that have a significant impact on the quality of MediaTek’s products and production schedules, or suppliers from whom the Company’s purchase amount and proportion reach the threshold of materiality, we conduct key management in order to improve the quality and stability of procurement and control operational risks.
Compared with the result achieved last year, the supply chain has made significant progress. Apparently, the support from the supply chain for MediaTek’s sustainable actions can help create sustainable results for MediaTek products and keep improving. After the annual announcement of the evaluation results, we recognize and present the Best Sustainability Partner Supplier Award at the Annual Supplier Conference to encourage and thank the suppliers for their close cooperation and proactive implementation of MediaTek’s sustainability goals in the past year so as to build a sustainable value chain together with MediaTek.
Key material risk management
As a front-end service provider of the semiconductor value chain, we harness innovative technologies to minimize the environmental and social impacts of our products, We also conduct risk management for
key materials required for the manufacturing process by implementing requirements and selections (incl. conflict mineral surveys and local procurement) for the supply chain with the goal of realizing corporate
sustainability.
Conflict Minerals
Protection of human rights is one of MediaTek’s core concepts in the field of social responsibility. We have been conducting conflict mineral surveys since 2011. Pursuant to relevant norms and regulations of the “Conflict-Free Smelter Program,” the “Responsible Business Alliance,” and the “Global e-Sustainability Initiative,” we require our suppliers to provide a “conflict-free guarantee” to demonstrate their commitment to refraining from the use of minerals from conflict zones. In addition to 3TG surveys, we have been utilizing the CRT (Cobalt Reporting Template) to conduct cobalt surveys since 2018.
Despite the fact that cobalt is not listed as a conflict mineral officially, all suppliers disclose available information in a conscientious manner. Once cobalt is officially included in the list of conflict minerals, all suppliers will be required to disclose information for all smelters in a detailed manner.
Local Procurement
MediaTek embraces the principle of local procurement to enable local communities to benefit from economic development and to reduce carbon emissions associated with the transportation of raw materials. In 2023, the total value of orders placed with local suppliers in Taiwan exceeded NT$ 170 billion, with local manufacturers accounting for the majority of raw material and general procurements
Actions harnessing influence on suppliers
Our supply chain management vision is inextricably intertwined with our business philosophy. We therefore constantly monitor and abide by International social responsibility-related declarations and standards to foster sustainable growth of the value chain. MediaTek’s responsible supply chain initiatives can be summarized as follows:
Supplier Partnership Initiative
As an industry leader, MediaTek bears significant responsibility as a sustainable management advocate. Following its 2022 announcement supporting the global net-zero emission initiative, MediaTek has launched a Supplier Partnership Initiative. This initiative involves collaboration with supply chain partners on projects like green manufacturing and circular economy initiatives. These efforts aim to reduce environmental impact and demonstrate MediaTek's commitment to the Net Zero Declaration.
Through these steps, we collaborate with suppliers to regularly review performance and make rolling adjustments to strategies and goals. Together, we are committed to achieving energy-saving and carbon reduction targets, and have established a strong collaborative relationship.
