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Top Message

CEO & Chairman of the Board

Mayuki Hashimoto
While the COVID-19 pandemic is not fully settled worldwide, higher geopolitical risks including
Russia’s military attack on Ukraine have increased uncertainty in the international affairs and theglobal economy. In this circumstance, economic security is becoming even more important, and thesemiconductor supply chain is attracting more attention. As a company that plays a part in thesemiconductor supply chain, SUMCO is fully committed to fulfilling its responsibility for supplying
silicon wafers so that we can contribute to society and the earth.

1

Aspiring to Serve as a Good Corporate Citizen
Semiconductor devices are used in every facet of our lives, from information terminal devices suchas smartphones and personal computers, communications equipment essential for telework and web
conferences, which have expanded dramatically during the COVID-19 pandemic, data centers thatprocess and store large volumes of electronic data, home appliances including televisions and air
conditioners, medical devices that affect human lives, through to automobiles, trains and othervehicles. Providing the technological base for such devices, silicon wafers can also be considered
critically important as a key material in maintaining today’s standard of living.
Additionally, the SUMCO Group’s silicon wafers are used in power-saving semiconductor devices,
IGBTs for electric vehicles (EV) and hybrid vehicles, and power-management devices for renewableenergy such as solar and wind power generation, all of which is in our specialty field, thereby
supporting to save energy, promote clean energy, and reduce greenhouse gas emissions, which
contributes to resolve social and environmental issues.
At the SUMCO Group, under our philosophy to contribute to the development of industry as well as
to the improvement of people’s quality of life through the production and supply of silicon wafers, we
strive to be a Good Corporate Citizen and engage in CSR and sustainability promotion activities inaccordance with the SUMCO CSR Policy.
We identified the Materiality to be tackled on a priority basis to solve social issues and enhance
corporate value sustainably while responding to the needs of our stakeholders. In 2021, we newly
appointed an Executive Officer responsible for ESG and SDGs (Atsuro Fujii, Managing Executive
Officer) and established the ESG/SDGs Council as an organization to tackle CSR and sustainability
activities across the SUMCO Group under his leadership, thereby further strengthening our CSR andsustainability promotion system.

Corporate Governance
The SUMCO Group endeavors to maintain fairness, efficiency and transparency in its management
by further enhancing its corporate governance.
SUMCO has adopted a Board of Directors structure comprising five directors who are not Audit andSupervisory Committee members (one of whom is an Independent Outside Director) and five
directors who are Audit and Supervisory Committee Members (four of whom are Independent
Outside Directors) since March 2021.

2

Compliance
SUMCO has established and implement the SUMCO Charter, a code of conduct that all officers andemployees must comply with.
The SUMCO Charter broadly covers various social norms that ought to be followed by companies,
such as fair business activities and blocking relationships with anti-social forces, as well ascompliance with laws and regulations.
Similar charters have been established by all companies in the SUMCO Group. Our Group-wide
efforts will continue to ensure that our corporate activities are sound and in accordance with social
norms.

Risk Management
The SUMCO Group has a global market share of approximately 30%. Since the Group supplies highquality silicon wafers to major semiconductor manufacturers around the world, we see the stablesupply of our products as our most critical management challenge and an important social
responsibility.
In addition to managing risks to ensure stable supply, SUMCO takes steps to maintain and improve
its business continuity plans across the entire supply chain.

Environmental Conservation Efforts
The production of silicon wafers requires a great deal of electricity, water and chemical substances.
For this reason, the SUMCO Group has established environmental targets, and strives to reduce its
use of each of these as well as the amount of industrial waste generated.
In April 2021, SUMCO declared our support to the Recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), and in June 2021, we made disclosure in accordance with the
TCFD framework.
Additionally, in September 2021, the SUMCO Group set new goals for carbon neutral in 2050 toward
the realization of a sustainable society.

3Respect for Human Rights and Development and Utilization of Human
Resources
The SUMCO Group regards respect for basic human rights to be an important social responsibility, so
we have implemented various initiatives, such as prohibiting any kind of discrimination andharassment in the workplace, to respect the human rights of all stakeholders associated with the
SUMCO Group, including those in our supply chain.
Furthermore, to develop and utilize human resources to become the “world’s best in technology” asstated in the SUMCO Vision, we promote various measures such as sufficient training programs,
sending for study at universities, etc., in Japan and abroad, and hold presentation and award
ceremonies for research results, creating a company that “develops and values people.”
An important element of human resource development and utilization is diversity and inclusion, thecore of which is to promote women’s active participation. In September 2021, we set a new goal ofincreasing the number of women in management positions and further various measures to recruit,retain and promote more women.

Health and Productivity Management
Based on a commitment to give top priority to the safety and health of our employees, we view theirhealth as a critical management resource and have reinforced measures for health and productivity
management since 2017.
In March 2022, SUMCO was selected as “the 2022 Health & Productivity Stock Selection,” and six
SUMCO Group companies as well as SUMCO were certified as one of the “White 500” corporation
under “the 2022 Certified Health & Productivity Management Outstanding Organization Program” aslarge corporation for the fourth consecutive year.
The SUMCO Group aspires to promote various CSR and sustainability activities while endeavoring tofulfill its social responsibilities to the stakeholders who support us by actively reflecting their views
and wishes, which are grasped through various types of dialog with stakeholders, in ourmanagement activities.

4

Relationships with Stakeholders
SUMCO endeavors to fulfill its responsibilities to stakeholders, who support our business activities.

5

CSR and Sustainability Promotion Structure
Message from the ESG/SDGs Supervisory Board Member
Managing Executive Officer, the ESG/SDGs Supervisory Board Member
Atsuro Fujii

Promoting CSR and ESG/SDGs initiatives
Guided by the SUMCO CSR Policy, the Company has always carried out our business in the view that
CSR (Corporate Social Responsibility), the concept that valuing all stakeholders, including customers,
shareholders, suppliers, employees, and all of society including the global environment, is anecessary condition for sustainable growth of the business.

SUMCO CSR Policy
1. Supported by its cutting edge technology, SUMCO shall steadily provide products andservice with excellent quality, ability and safety, shall win customers' satisfaction and trust,and shall contribute to the sustainable development of society.
2. SUMCO shall produce legitimate profits, grow corporate value, proceed with timely andappropriate disclosure to the public, and aim at returns to its shareholders and investors.
3. SUMCO shall comply with law and regulations, international rules, and social norms, shall
implement risk management, and shall maintain business continuity.
4. SUMCO shall choose its suppliers by fair and rational standards, establish mutual
confidence, and prosper together.
5. SUMCO shall manage environmental activities, make use of resources and energy efficiently,
and control emission.
6. SUMCO shall maintain safe, healthy, comfortable and appropriate workplaces for everybody
working in SUMCO, shall have a high regard for human rights, ability and personality, andshall realize fair and diverse ways of working.
7. SUMCO shall respect various cultures and histories, and shall interact with society and local
communities.

6Based on the belief in valuing and respecting these multiple stakeholders, “ESG” refers to areas ofinvestor demands on corporations, while the “SDGs” set out goals and targets to be aimed for bysociety and the world, the objects of this belief, and ask corporations to contribute proactively totheir realization. Accordingly, engaging with ESG issues and the SDGs can be seen as leading to therealization of CSR, which is aimed at contributing to multiple stakeholders.
Made up of members of Executive Officer level and above, the ESG/SDGs Conference meets (twice ayear in principle) for reporting and deliberation on ESG/SDGs-related activities in each division. It
then reports a summary of the proceedings to the Board of Directors, where lively discussions takeplace involving also the outside directors.

Framework for engagement with ESG/SDGs
SUMCO provides high-quality silicon wafer products of use in solving issues for the environment andsociety, while also conducting ESG activities that address issues for the environment, society, andcorporate governance in our own business processes. In such ways we are devoting efforts to the
SDGs in pursuit of global sustainable growth. Toward further accelerating these ESG/SDGs initiatives,
last year we newly launched the ESG/SDGs Conference and appointed an Officer responsible for ESG
and SDGs, a position I have held since last year.
Made up of members of Executive Officer level and above, the ESG/SDGs Conference meets (twice ayear in principle) for reporting and deliberation on ESG/SDGs-related activities in each division. It
then reports a summary of the proceedings to the Board of Directors, where lively discussions takeplace involving also the outside directors.

7

Structure of the ESG/SDGs Conference

Of the numerous ESG/SDGs activities that are undertaken under this structure, introduced here are
initiatives on behalf of carbon neutrality and in the area of diversity and inclusion, with a special
focus on gender equality.

8

Carbon neutrality: Decoupling economic growth from environmental
degradation
Carbon neutrality can be seen as a prime example of an issue to which contributions are being madeboth in our product provision and on the business process front.
One of the 169 targets included in the SDGs is endeavoring “to decouple economic growth fromenvironmental degradation.” As this implies, the SDGs are based on the philosophy of achieving both
solutions to issues for the environment and society and economic growth, of which carbon neutrality
is a representative undertaking. Today when CO2 emissions are seen as the greatest threat to theenvironment, we are asked not only to reduce the rate of emissions per unit (emission factor) but toreduce the absolute emission amounts, while maintaining economic growth. Having a major role inthe semiconductor industry with its ongoing growth, we are directly confronting this difficult
demand, resolving to go ahead with various initiatives toward carbon neutrality while carrying out
our business processes in a way that does not lead to other environmental issues.
We will also contribute toward carbon neutrality on the business end by providing high-quality
semiconductor silicon wafers essential for power management in electric vehicles and renewableenergy, and for making data centers more energy efficient.

Diversity & Inclusion
The promotion of diversity & inclusion (hiring, training, and promoting the active involvement ofdiverse human talent) is essential to the Company’s growth and continued existence. To meet thedemands of leading-edge semiconductor manufacturers worldwide while continuing to grow, weneed to keep on hiring diverse, outstanding personnel and empower them to make full use of theirabilities. An important element of this, which is also a key goal of the SDGs, is gender equality; andhere we will step up our efforts to achieve this equality in the form of greater involvement of
women. Along with making the Company a better place for women to work in, we will create theopportunities and means for excellent people to shine regardless of gender, aiming for the continued
growth of employees and the Company.

Fulfilling our role
Even more than previous UN initiatives, the SDGs are a call to corporations and individuals tocontribute to the world by becoming more proactively and energetically involved in solving issues forthe environment and society. In our own role, including the supply chain, we will continue being oneof the “good corporate citizens” working to solve these issues. For my own part, I too intend to
devote a maximum effort to this end, together with people inside and outside the Company.

To ESG-oriented Investors

9

SUMCO Vision
SUMCO Strives to be an Excellent Company through the Combined
Power of All its Employees

1. World's Best in Technology
SUMCO's technological capabilities and abilities to ensure stable supply of
products has earned high praise from customers, and has been officiallyrecognized by many semiconductor manufacturers with excellent supplierawards.
In 2021, we received the Excellent Performance Award for the eighthconsecutive year from Taiwan Semiconductor Manufacturing Co., Ltd.
(TSMC), the world’s largest foundry. We also received the 2021 Best in
Value Award from Samsung, the world’s largest semiconductor memory

Excellent Performance

manufacturer. Based on this strong recognition, we will continue toAward from TSMC

promote collaboration with our customers based on long-term
commitment and mutual trust, and focus on further improving our technical capabilities.

2. Deficit-Resistant Even during Economic Downturns
The silicon wafer market is characterizedby major short-term changes in its

Net sales/Operating income/Net income
attributable to owners of the parent

business environment. The SUMCO Grouphas been working to achieve a revenue
structure that avoids deficits even during
economic downturns, and we are striving
to improve our earnings.
Through continuous efforts in cost
reduction, quality improvement andproduct differentiation from competitors,
we will further strive to establish a
corporate structure to ensure higher
earnings.

10

3. Empower Employee
Awareness of Profit
Rather than the chairman, president or executives, it is theemployees that actually manufactures and sells our silicon wafers.
All employees of the SUMCO Group share the SUMCO Vision,
maintain an awareness of profit and cost, and work to identify andsolve issues. To cultivate this awareness among employees, CEO &Chairman of the Board, Vice Chairman and COO & President visit
each plant frequently to hold management briefings in order toshare the management issues facing the Group in the current

Business conditions briefing(by Michiharu Takii, Vice Chairman)

business environment change.
(In 2021, in consideration of COVID-19, presentations for all employees were streamed.)
We also recognize that without high levels of
employee motivation, we will be unable torealize the SUMCO Vision of becoming"World's Best in Technology" and "DeficitResistant Even during Economic Downturns."
The SUMCO Group works to boost employee
motivation by establishing a variety of award
systems to appropriately recognize andreward employees' efforts and achievements.
Moreover, with the aim of cultivating aworkplace in which all employees can work
comfortably, SUMCO has been pursuing

Employees of SUMCO Phoenix Corporation

initiatives to help employees strike a balance between work and child-rearing. As part of these
efforts, SUMCO has established various work styles allowing employees to utilize flexible working
hours to reflect their childcare responsibilities, and has set up an in-house nursery school at the
Kyushu Factory (Imari), our largest manufacturing site.

11

4. Competitiveness in Overseas Markets
In addition to Japan, the SUMCO Group has plants in the United States, Taiwan and Indonesia, as
well as a network of sales offices in various parts of the world, allowing us to supply silicon wafers tosemiconductor manufacturers around the world. Nearly 80% of our sales come from the overseas
market and we are proud to count all of the top 10 global companies in semiconductor sales among
the customers of the SUMCO Group. The solid and longstanding relationships of trust developed withthese customers represent a significant advantage to the SUMCO Group, and to further reinforce thisadvantage, we actively cultivate talented global human resources regardless of nationality.

Sales composition by region

Global top 10 companies in semiconductor
sales (2021)* Excludes Fabless, includes Foundry
Created by SUMCO based on various sources anddatabases

To ESG-oriented Investors

12

SUMCO CSR Policy
1. Supported by its cutting edge technology, SUMCO shall steadily provide products and service withexcellent quality, ability and safety, shall win customers' satisfaction and trust, and shallcontribute to the sustainable development of society.
2. SUMCO shall produce legitimate profits, grow corporate value, proceed with timely andappropriate disclosure to the public, and aim at returns to its shareholders and investors.
3. SUMCO shall comply with law and regulations, international rules, and social norms, shall
implement risk management, and shall maintain business continuity.
4. SUMCO shall choose its suppliers by fair and rational standards, establish mutual confidence, andprosper together.
5. SUMCO shall manage environmental activities, make use of resources and energy efficiently, andcontrol emission.
6. SUMCO shall maintain safe, healthy, comfortable and appropriate workplaces for everybody
working in SUMCO, shall have a high regard for human rights, ability and personality, and shallrealize fair and diverse ways of working.
7. SUMCO shall respect various cultures and histories, and shall interact with society and local
communities.

To ESG-oriented Investors

13

Materiality (Key Issues)
As materialities, SUMCO identifies those issues it will address on a priority basis to solve social issues
and enhance corporate value in a sustainable manner while responding to demands fromstakeholders. SUMCO engages in ESG activities to achieve the materiality targets.

The Materiality Identification Process

14

15

SUMCO Materiality

Environmental (E)Materiality

Social (S)Material Issue

Reasons for Identification

ThemesReduction of

Reducing the environmental impact in our business activities is aenergycorporate responsibility for the future.

Combatting global consumption
warming
intensity
Carbon neutrality
E

Governance (G)Resource

Effective

conservation

utilization ofactivities

water resources

Contributing to
the creation of a

Waste

recycling-oriented

management

society

To ensure that our irreplaceable global environment is passed on to
the next generation, the SUMCO Group has developed anenvironmental management system and obtained ISO 14001
certification for all of its plants.
We also conduct environmentally friendly production activities
including the prevention of global warming, the effective utilization ofwater resources and the reduction of waste and emissions.
To enhance our initiatives preventing global warming, we have added
new targets aimed at achieving carbon neutrality.

Prevention ofoccupational
accidents

Under the principle that "the safety and health of employees take thehighest priority over all," the SUMCO Group is committed to "creatinga safe and pleasant workplace environment supporting good mental
and physical health" through active communication in which allparties participate.

Health, hygiene
and safety
initiatives

Maintenance of

On safety, we work to maintain and improve our occupational safety

health andmanagement system with the aim of creating a safe workplace freeproductivity

from occupational accidents, and with regard to health management,

management

activities are focused on the three issues of mental health, smoking
cessation and lifestyle habits.
To be the "World's Best in Technology" and "Empower Employee

S

Awareness of Profit" as declared in the SUMCO vision, we will
Human resources

Enhancement ofdevelopmenttraining

continue to invest in human resources and make enhancements toour career development program.
We will enhance training opportunities with a multi-faceted approachthat covers everyone from new employees to managers and officers.

Raising thePromotion ofpercentage ofwomen’s active

women inparticipation

management
positions

We have set new medium-term targets for percentage of women in
management positions to increase diversity boost women's active
participation.
We will enhance our initiatives to create a more favorable working
environment for women.

16Materiality

Material Issue

Reasons for Identification

Themes

The source of enhanced corporate value is R&D and technologicalcapabilities that support customer value creation through ourContributions as adevelopment
partner"invisible assets," and as a development partner to customers,
SUMCO enjoys a high global market share in cutting-edge products.
Moreover, we will contribute to the achievement of the SDGs, which
are social issues affecting the entire world, by supporting advances insemiconductors.

R&D andtechnologicalTo continually maintain our "first call" status as a company, we value

capabilities

close communication with customers.

supporting
customer value
creation

By quickly providing customers with the products that meet their
Increasing
customersatisfactionneeds while continuing with performance checks and follow-ups, webuild robust relationships of trust.
We analyze the information customers provide through QCDS
(quality, cost, delivery and service) evaluations, share the insights
with management and relevant departments, direct what we havelearned into improvement activities and strive to improve customer
satisfaction levels.
We believe it is important to share CSR-related societal demands

S

Promoting firmwith our suppliers and jointly tackle issues in the supply chain such

establishment ofas human rights, labor, safety, the environment and ethics.

the CSR

Promoting CSR

Procurement

We share the SUMCO CSR Procurement Policy with suppliers throughPolicybriefing sessions, audits and other activities, and promoteresponsible procurement activities.

procurement andSupply chain risk management is an important issue and a theme tomitigating

which customers also have high levels of interest.

procurement risks
Strengthening
BCP in materials
procurement

SUMCO secures appropriate levels of inventory in line with risks,pursues advance preparations such as ensuring multiple procurement
sources under normal circumstances, and has established thenecessary systems to minimize the impacts on production in theevent of a disaster or accident.
We fully recognize that the timely and appropriate disclosure ofcorporate information to investors forms the basis of a sound stock
market and have adopted the basic policy of continually ensuring theCommunication
with shareholders
and investors

prompt, accurate and fair disclosure of corporate information from
Enhancement of

the perspective of investors.

IR activities
We proactively disclose any information that is beneficial toinvestment decisions, such as medium-to-long-term demand
forecasts for the silicon wafer market based on end product demand
forecasts.

17

Materiality

Material Issue

Reasons for Identification

Themes

The silicon wafer business is a critical industry supporting an ITbased society, and the SUMCO Group is responsible for ensuring thestable supply of silicon wafers to the world's semiconductor device
Enhancing risk

Initiatives tomanagement

develop BCP

manufacturers.
The Business Security Committee (BSC), which is an organization
responsible for risk management, promotes risk management
activities while working to improve business continuity and the ability
to respond in an emergency through periodic training.

G

Ensuring compliance with laws, regulations and social norms to beobserved forms the basis for SUMCO fulfilling its social responsibilities
Ongoing

and is also essential for the sustainable growth of corporate value.

Promotingenhancement ofcompliancecomplianceTraining on topics including the SUMCO Charter of Corporateawareness

Conduct, which prescribes the norms to be observed by employees,
is conducted regularly for all employees as part of ongoing efforts tostrengthen awareness of compliance.

18

SUMCO Materiality Targets

Materiality

Material Issue

Targets

ThemesReduction ofenergyconsumption

Combatting global intensity Note 1
warming
Carbon neutrality

By 2030, reduce energy consumption rate by 14.9% compared with2014 levels (average reduction of 1% every year)

By 2030, reduce CO2 emissions (Scope 1+2) by 33% compared with2014 levels (2.5% annual reduction); and by 2050, reduce by 100%(carbon neutrality)

E
Resource

Effective

conservation

utilization ofactivities

water resourcesHigh and stable water recycling rate

Contributing to
the creation of a

Waste

Conversion of waste into valuable resources and improved recycling

recycling-oriented

managementrate

society
Prevention ofoccupational
Health, hygiene
and safety
initiatives

Accident frequency rate of 0.2 or lower

accidents
Maintenance of
health andMaintaining certification in the Health & Productivity Management

productivity

Outstanding Organization Recognition Program (White 500)

management
Human resources

Enhancement of

Increasing training time compared with the previous year by utilizing

developmenttraining

web-based training

Raising theS

Promotion ofpercentage ofwomen’s active

women inparticipation

management(Japan) Current: 1%→2030: 10%(Consolidated) Current: 6.5%→2030: 12%

positions
R&D andtechnologicalcapabilities
supporting
customer value
creationContributions as adevelopment

Maintaining a worldwide share of over 50% in cutting-edge fields

partner
Increasing
customersatisfaction

Maintaining high evaluation with the leading customer satisfaction
score

Promoting firm
establishment of
Promoting CSR
procurement andmitigatingprocurement risks

the CSR

Holding briefing sessions for suppliers and conducting CSR audits

Procurement
PolicyStrengthening
BCP in materials
procurement

Continuing to maintain multiple procurement sources andimplementing supplier safety training

19

Materiality

Communication
S

G

with shareholders
and investors

Material Issue

Targets

ThemesEnhancement of
IR activities

Enhancing risk

Initiatives tomanagement

develop BCP

Maintaining the number of IR activities for investors

Implementing BCP training

Ongoing
Promotingenhancement ofcompliancecompliance

Implementing compliance education

awareness

20

SUMCO Materiality Initiatives and Achievements in 2021
In pursuit of medium- to long- term targets, SUMCO works on continuous improvement.
Our initiatives and achievements in 2021 are as outlined below.
Materiality

Material Issue

Initiatives and Achievements in 2021

ThemesReduction ofenergyconsumption
intensity Note 1

A 12.7% reduction (from 2014 levels) was achieved in fiscal 2021,
well exceeding the 6.8% target for that year.
The reduction from the previous year was 4.5%.
In September 2021, we set new targets aimed at achieving carbon

Combatting global

neutrality.

warming

In addition to ongoing energy-saving activities, we began considering
Carbon neutrality

the following measures.
✓ Further introduction of renewable energy (solar power
generation, etc.)

E✓ Introduction of non-fossil electricity (J-Credit, Non-Fossil
Certificates, etc.)
Resource

Effective

conservation

utilization ofactivities

water resources

We achieved a water recycling rate of 38.8%, maintaining the samelevel as in previous years.

Contributing to
the creation of a

Waste

We achieved a waste recycling rate of 77.2%, maintaining the same

recycling-oriented

managementlevel as in previous years.

Prevention of

Although we carried out regular safety education and training,

occupational

working to raise safety awareness, the lost work day accident

accidents

frequency rate was 0.37.

society

Health, hygiene
and safety
initiatives

Maintenance of
health andproductivity
management

S

We won recognition as one of the “White 500” as a healthy
enterprise for three consecutive years.
Aware that the good health of employees is a key management
resource, we took initiatives toward maintaining and promoting
health and improving the working environment.
Training time in 2021 was increased over 1,500 hours, or around

Human resources

Enhancement of

8%, from the previous year.

developmenttraining

We sought to make training more effective, with online training as
the norm.

Raising the

In September 2021, we set targets for raising the percentage of

Promotion ofpercentage ofwomen in management positions.

women’s active

women in

Besides offering diverse working arrangements conducive to women’s

participation

management

active participation, we actively promoted mid-career hiring of

positions

women.

21

Materiality

Material Issue

Initiatives and Achievements in 2021

Themes

We maintained a worldwide share of over 50% in the leading-edge
Contributions as a logic chip ﬁeld.
R&D andtechnologicalcapabilities
supporting
customer value
creationdevelopment

As customers continue to invest in this area, we maintained our top

partner

supplier position, winning recognition as a development partner forour high technology development strength and stable quality.
We maintained an overall average rating of no less than 85 points

Increasing(100 point scale) in supplier evaluations by customers.

customer

By sharing the supplier evaluations throughout the Group and using

satisfaction

them for improvement activities in each division, we won high ratingsfrom customers in quality and technology.

S

Promoting firm
establishment of
Promoting CSR
procurement andmitigatingprocurement risks

the CSR
Procurement
PolicyStrengthening
BCP in materials
procurement

Communication
with shareholders
and investors

Enhancement of
IR activities

Although on-site auditing could not be performed in 2021 due to the
COVID-19 pandemic, we conveyed to suppliers our CSR procurement
policy in supplier briefing sessions, seeking to further instill thispolicy.
We sought to diversify our procurement sources as a hedge against
the risk of disasters and accidents.
We held a total of six supplier safety education sessions, for each of
the plants.
In the midst of the pandemic, we held a similar number of IR events
for investors as before the pandemic, relying on web conferences andtelephone conferences.
In 2021, we worked on further developing BCP based on the findingsin the previous year by the Business Security Committee (BSC). We

Enhancing risk

Initiatives toalso held drills to prepare for the loss of headquarter functions in the

management

develop BCP

event of an earthquake directly under Tokyo, as well as conducting
comprehensive disaster prevention drills and BCP drills at each plantG

to prepare for accidents.
Ongoing
Promotingenhancement ofAgain in 2021, we conducted training for all employees on thecompliancecompliance

SUMCO Charter of Corporate Conduct.

awareness

Note 1. Calculations are those made using the “Tool for preparation of periodic reports under the
Act on the Rational Use of Energy,” issued June 29, 2021 by the Energy Efficiency Division,
Energy Efficiency and Renewable Energy Department, the METI Agency for Natural Resources andEnergy.

To ESG-oriented Investors

22

The SUMCO Group's Business Activities and theSustainable Development Goals (SDGs)
Silicon wafer products from SUMCO are not seen first-hand in everyday life, but they are essential tothe manufacturing of the semiconductor devices equipped in all manner of electronic products thatenrich our lives.
To fulfill our responsibilities as one of the companies supporting social infrastructure, SUMCO utilizes
the SDGs as indicators of the medium-to-long-term demands of the international community andmakes every effort to realize a sustainable society.

Main Goals of the SDGs and SUMCO's Initiatives

23

Contributing to the SDGs through our products
SUMCO Products that Support Our Lives
Contributing to the digital infrastructure supporting
our daily lives
Silicon wafers that serve as the basic materials forsemiconductor devices used in a wide range of areas
including communications equipment, automobiles, digitalappliances, medical equipment and urban infrastructure
Creating innovation
Silicon wafers that support the miniaturization ofsemiconductors to usher in an era of industrial andtechnical innovation, and the utilization of big data, through
IoT, AI and robots

Contributing to reduce traffic accidents
Silicon wafers for the automotive semiconductor devices
supporting driver assistance systems such as self-driving
and automatic braking
Contributing to make cities secure and safe
Silicon wafers for security cameras, communication network
tools utilized in smart grid system and various IoT tools

Contributing to improved energy efficiency
Silicon wafers for power-saving devices
Contributing to curb greenhouse gas emissions
Silicon wafers for IGBTs which are utilized for electricvehicles (EV) and hybrid vehicles (HV, PHV)
Silicon wafers for power-management devices which areutilized for renewable energy generation system such as
solar power and wind power24

Contributing to the SDGs through business processes
Promoting eco-friendly corporate activities
Initiatives to combat global warming
Initiatives to reduce waste
Effective utilization of water resources
Participation in local cleaning activities and environmental
conservation initiatives
Publication of an environmental report on the company
websiteSupporting the success of women in the workplace
Establishing an in-house nursery school and improving
the childcare allowance scheme, etc.
Prohibiting discrimination on the basis of gender andclearly stating it in the SUMCO Charter

Promoting a safe and secure working environment
Utilizing and developing a diverse range of humanresources
Initiatives aimed at safety, health and hygiene

Promoting compliance and fair business activities
Initiatives to prevent bribery and other forms ofcorruption
Implementing CSR procurement based on CSR
Procurement Policy in the supply chain

Support activities for welfare institutions and otherfacilities
Support for a vocational facility for people withdisabilities
Participation in emergency drills at welfare institutions

Support for education
Interaction with local educational institutions
Provision of programs
Provision of scholarship programs25About the SDGs
SDGs, or the Sustainable Development Goals, refer to the goals laid at in "Agenda 2030",
which was adopted at the "United Nations Sustainable Development Summit" in September
2015. The SDGs comprise 17 goals and 169 targets to be achieved by the year 2030.
The goals and targets of the SDGs comprehensively deal with the various issues faced in theareas of the economy, industry and society. As the central figures of economic activities,
companies are expected to play a key role as one of the main parties responsible for achieving
the SDGs.
* To learn more about the SDGs, check the appropriate sections on the United Nations".
website, starting with the "Sustainable Development Goals Knowledge Platform

To ESG-oriented Investors

26

(PWFSOBODF$PSQPSBUF(PWFSOBODF ˘˘˘˘˘˘˘˘˘˘˘ $PNQMJBODF ˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘ 
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46.$0(SPVQ5BYBUJPO1PMJDJFT ˘˘˘˘˘˘˘ 
46.$0%91PMJDZ˘˘˘˘˘˘˘˘˘˘˘˘˘˘ Corporate Governance
Why SUMCO Tackles Corporate Governance
SUMCO recognizes that it is a critical management challenge to fulfill its mandate fromshareholders by achieving sustainable growth and improving corporate value in the mediumto-long-term, while building and maintaining positive relationships with other stakeholders.
Based on this recognition, SUMCO pursues a range of measures related to corporate
governance, such as reinforcing the auditing and supervisory functions of the Board of
Directors, ensuring efficiency in how Directors execute their duties and improving internal
controls within the SUMCO Group, in order to achieve swift management decision-making andto ensure transparency and fairness in the execution of business.

Basic Stance on Corporate Governance Structure
SUMCO is organized as a company with an Audit and Supervisory Committee. By adopting thissystem, the effectiveness of supervision and auditing has been enhanced through audits
conducted by Directors who are Audit and Supervisory Committee Members and have voting
rights at Board of Directors meetings. In addition, the effectiveness of internal controls has
been enhanced through audits conducted in cooperation with the Internal Audit Department.

Corporate Governance Structure28

Board of Directors
SUMCO's Board of Directors comprises internal Directors with a proven record of performance intheir respective areas of responsibility and outstanding management abilities, along with Outside
Directors with expert knowledge and extensive experience, based on the basic stance of theCompany to ensure an overall balance and diversity in knowledge, experience and capabilities of the
Directors. The Board of Directors comprises five Directors (except for Directors who are Audit &Supervisory Committee Members; one of whom is an Independent Outside Director) and five
Directors who are members of the Audit & Supervisory Committee (four of whom are Independent
Outside Directors).
In accordance with legal statutes, the Articles of Incorporation and the Rules of the Board of
Directors, the Board of Directors makes decisions on management strategy, management plans, andother such important matters relating to business. It receives reports from every Director on thestatus of the execution of duties and it exercises supervision of compliance, internal controls, risk
management, and important business execution at affiliated companies. With the participation of
Independent Outside Directors, the Board of Directors also engages in the free exchange of opinions
regarding the appropriate evaluation of company performance and related matters, and reflects that
evaluation in the personnel administration of senior management members.
It is also our basic company policy that matters relating to financial results and so on, mattersrelating to management plans, and the execution of other such important operations should be
decided after adequate discussion by the Board of Directors, including the Independent Outside
Directors. For this reason, the Articles of Incorporation do not stipulate that decisions on theexecution of important business can be delegated to each Director.
The effectiveness of the Board of Directors is evaluated each year in order to continually enhance theeffectiveness of corporate governance.
In fiscal year 2021, the Board of Directors met 16 times to discuss important matters concerning
management, address issues identified in the Board of Directors effectiveness evaluation conductedin the previous fiscal year, and discuss the compensation policy and method for determining
compensation of Directors (except for Directors who are Members of the Audit & Supervisory
Committee) and the amount of compensation for individuals.

29

Directors

Skills (expertise, experience, capability, etc.)
possessed by each Director
Human

Position in
the

Name

Company

Corporate

Finance/

Management

Accounting

Legal
Affairs/
Compliance

Sales/

Internationality/

MarketingGlobality

Technology/
Manufacturing/IT

Resources
Management/
Human
Resources
Development

Director*1
Chairmanof theMayuki
Hashimoto

●

●

●

●

●

●

●

Board
Director*1
Director*1
Director*1
Director*2

Michiharu
Takii
Toshihiro
Awa
Jiro
Ryuta
Akane
Kato

●

●

●

●

●

●

●

●

●

●

●
●

●
●

Director
Full-time
Audit and

Fumio

Supervisory Inoue

●

●

●

Committee
memberDirector*2
Audit andSupervisory
Committee

Hitoshi●Tanaka●memberDirector*2
Audit andSupervisory
Committee

Masahiro
Mitomi

●

●

●

●

●

●

memberDirector*2
Audit andSupervisory
Committee

Shinichiro
Ota

●

●

member30

Skills (expertise, experience, capability, etc.)
possessed by each Director
Human

Position in
the

Name

Company

Corporate

Finance/

Management

Accounting

Legal
Affairs/
Compliance

Sales/

Internationality/

MarketingGlobality

Technology/
Manufacturing/IT

Resources
Management/
Human
Resources
Development

Director*2
Audit andSupervisory
Committee

Masahiko

●

Sue

●

●

member*1 Representative Director*2 Independent Outside Director

Independent Outside Directors
SUMCO has appointed five Independent Outside Directors. One is a person with expert knowledge ofhuman resource development and organizational operation as well as experience in corporate
management; one is an attorney; one is a certified public accountant and management consultant
who has considerable knowledge and experience in finance and accounting; one is a person withwide experience and knowledge cultivated through experience in the public sector as well as many
years of experience in corporate management; and one is a person with expert knowledge andexperiences in data science, etc., cultivated through experience in the public sector and education
fields.
Each Outside Director satisfies SUMCO's "Criteria of Independence" established in accordance with
Tokyo Stock Exchange standards on the independence of Independent Directors, and has beenverified to be free of potential conflicts of interest with general shareholders.
In an effort to ensure the sustained growth of the SUMCO Group and increase its corporate value
over the medium-to-long-term, the Independent Outside Directors provide advice on importantmatters related to management based on their own individual knowledge and take the perspectiveof minority shareholders and other stakeholders in supervising management. They participate in theappointment of candidates for Director and other important decision-making by the Board of
Directors, and supervise business execution by the Board of Directors, senior management andothers as well as conflicts of interest between the Company and senior management and others.

31

Audit and Supervisory Committee
The Company's Audit and Supervisory Committee is made up of five Directors who are Audit andSupervisory Committee Members (four, a majority, of whom are Independent Outside Directors). In
order to ensure the effectiveness of Audit and Supervisory Committee activities, permanent Audit
and Supervisory Committee Members are put in place by mutual voting among Audit andSupervisory Committee Members. In addition, it is the Company's basic policy to take steps toensure that at least one Audit and Supervisory Committee Member has considerable knowledge andexperience pertaining to finance and accounting. Currently, this is Mr. Masahiro Mitomi, who is also a
certified public accountant. Additionally, the Company has established the Audit and Supervisory
Committee Office and assigns staff to support the activities of the Committee and facilitate thesmooth performance of its audit and supervisory functions.
The Audit and Supervisory Committee exercises its statutory right of investigation and audits the
Directors' execution of their duties from the viewpoints of appropriateness and conformance withlaws and regulations and the Articles of Incorporation by inspecting and confirming the status ofcompliance with laws and regulations, Articles of Incorporation, and so on, and by monitoring andotherwise supervising the development of and operational status of the system of internal controls,
including the internal control of financial reporting.

32

Nomination and Remuneration Committee
In an effort to further enhance its corporate governance, SUMCO has established a Nomination andCompensation Committee composed of two Representative Directors (Directors Mayuki Hashimotoand Michiharu Takii) and three Independent Outside Directors (Directors Hitoshi Tanaka, Masahiro
Mitomi and Shinichiro Ota) to serve as a discretionary advisory body for the Board of Directors. The
Nomination and Compensation Committee receives requests from the Board of Directors for advice
on the process for selection of candidate Directors and Executive Officers of the Company, their
qualifications, the reasons for their designation, the structure of remuneration for Directors(excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers,
and related matters. The committee deliberates on the appropriateness and other aspects of thematter referred, including the perspectives of gender and other diversity as well as expert
knowledge and experience, and, also taking evaluations of the Company’s performance into account,delivers its advice. The Board of Directors, receiving the findings of the Nomination andCompensation Committee, designates candidate Directors and Executive Officers, and decides on the
remuneration for Directors (excluding Directors who are Audit and Supervisory Committee Members)
and Executive Officers, and related matters.
The Nomination and Compensation Committee convened two times in fiscal year 2021, with full
attendance each time. The main activities undertaken by the Nomination and Compensation
Committee are as follows:

Deliberation over the selection of candidate Directors and personnel matters concerning Executive
Officers
Deliberation over the systems for compensation of Directors (excluding Directors who are Audit
and Supervisory Committee Members) and Executive Officers
Deliberation concerning the individual compensation amounts of Directors (excluding Directors
who are Audit and Supervisory Committee Members)

33

Message from an Outside Director
Outside Director
Akane Kato
Nov. 1984 Joined ALL NIPPON AIRWAYS CO., LTD.
Jul. 1994 Instructor, Inflight Services Training Dept., Inflight Services
Center, ALL NIPPON AIRWAYS CO., LTD.
Jul. 2007 Chief, Training Div., ANA Learning Co., Ltd. (the current ANA
Business Solutions Co., Ltd.)
Apr. 2012 Manager of VIP Service Dept., Tokyo Airport Branch, ALL NIPPON AIRWAYS CO., LTD. (the current
ANA AIRPORTSERVICES CO., LTD.)
Jul. 2014 Representative Director of AKANE IDENTITIES INC. (present post)
Jun. 2016 Outside Director of SAN-EI Corporation
Apr. 2018 Part-time Lecturer of Toho College of Music
Aug. 2019 Registered as a Career Consultant
Mar. 2020 Outside Director of the Company (present post)

Fiscal year 2020, when I was appointed as an outside director, began in an unprecedented
environment in which the first priority was preventing COVID-19 infection. With the effects ofthe pandemic continuing to this day, causing many kinds of uncertainty in the global economy,
employment, and livelihood itself, the semiconductor industry has an important role to play insupporting the “new normal” that life has become.
SUMCO moved quickly to ready the Company for the pandemic. In my judgment, themanagement has united to maximize leading-edge product development, production, andprofitability, steering the Company toward sustainable administration. In such ways theCompany is very much oriented toward the goal in the SUMCO Vision of becoming DeficitResistant Even during Economic Downturns.
At the same time, a close eye needs to be kept on trends in M&A involving the world’s siliconwafer manufacturing companies, and the rapid advance of technology innovation. To continuebuilding a greater competitive advantage, fulfilling the role of the World’s Best in Technology,
management and front-line employees will need to redouble their efforts in close coordination.
During the current fiscal year as well, with the aim of further growth toward Empower
Employee Awareness of Profit on the foundation of mutual understanding, accepting of diverse
work styles and values, I would like to fulfill my role of passing along the voices of
stakeholders.

34

Outside Director
Hitoshi Tanaka
Apr. 1976 Registered as Attorney at Law Joined
Narutomi Law Office (the current Marunouchi Minami Law Office)Oct. 2003 Representative of Narutomi Law Office (present post)
Apr. 2005 Outside Corporate Auditor of the Company
Jun. 2014 Outside Director of TOKYO ENERGY & SYSTEMS INC. (present
post)Mar. 2016 Outside Director (Audit and Supervisory Committee Member) of the Company (present post)

Owing to the COVID-19 pandemic, many meetings including those of the Board of Directors
have had to be held online. With online meetings, if the main screen is used to show
materials, the expressions of the speakers and participants are not readily made out; and if
faces are shown instead, the materials cannot be seen, making for an inconvenient situation.
In face-to-face meetings, mutual understanding is facilitated by being able not only tounderstand what is said, but to pay attention to the expressions on the faces of meeting
participants and to their body language.
Efforts are being made to reduce the inconvenience of online meetings to a certain extent,such as by being sure to send and examine materials in advance and making it easier todiscern the expressions of participants on the screen. To help overcome the deficiency inmutual understanding from not being able to hold face-to-face meetings, monthly sessions areheld for explanations by senior management to outside directors on Company issues andquestions raised by outside directors, ensuring that candid exchanges of views take place.
These sessions are not only useful for communicating views, but are excellent opportunities
for outside directors to learn about the Company’s situation, and I believe are highly effective
in helping us to fulfill our role.
It is my hope that as the number of COVID-19 cases declines and the vaccination program isrolled out, the Company will be better able to carry out its business. For my part, I will bewatching these developments carefully.

35

Board of Directors/Audit & Supervisory Committee Meetings in Fiscal
Year 2021
Board of Directors
Name
Mayuki

Audit & Supervisory Committee

Times Attended/
Times Held

Attendance

Name
Fumio Inoue

16/16

100%

Michiharu Takii

16/16

100%

Tanaka(*1)

Hisashi Furuya

16/16

100%

MasahiroKazuo Hiramoto

16/16

100%

Mitomi(*1)

Akane Kato(*1)

16/16

100%

Fumio Inoue

13/13

100%

16/16

100%

Hashimoto

HitoshiTanaka(*1)
Masahiro
Mitomi(*1)
Shinichiro
Ota(*1)
Akio Fuwa(*1)
Hiroshi
Yoshikawa(*2)
Atsuro Fujii(*2)

Hitoshi

Shinichiro
Ota(*1)
Akio Fuwa(*1)
Hiroshi
Yoshikawa(*2)

16/16

100%

15/16

94%

16/16

100%

3/3

100%

3/3

100%

Atsuro Fujii(*2)(*1) Independent Outside Director(*2) Retired from the position of Director as of March 25, 2021

36

Times Attended/
Times Held

Attendance

10/10

100%

13/13

100%

13/13

100%

12/13

92%

13/13

100%

3/3

100%

3/3

100%

Executive Remuneration

Matters regarding policy regarding amounts of remuneration and otherpayments to officers and determination of calculation method
Details of the Remuneration Policy
The Company employs a system where the remuneration of Directors (excluding non-Executive
Directors) are determined with a view to encouraging them to contribute to the improvement ofbusiness results and the enhancement of corporate value. Remuneration for the Directors are within
the total amount determined by resolution of the General Meeting of Shareholders, and comprises a
fixed remuneration level based on their office and rank, and a factor linked to the Company’s mostrecent business results. The Company regularly reviews the remuneration level to reflect the longterm performance. The Company has not adopted a system of using its stock as a payment of
remuneration for Directors, but pursues management that seeks to urge the Directors to contributeto the improvement of business results and enhancement of the corporate value over the mediumto long-term by encouraging the acquisition and holding of the Company’s stocks through the
Officers Shareholding Association.
SUMCO has judged that it is appropriate to use the semi-annual net-income attributable to ownersof the parent as an index for remuneration linked to the Company’s business results and finalizes theamount in accordance with the calculation method and taking into account the individual
assessment.
In addition, a policy on determination of the ratio of fixed remuneration to performance-linked
remuneration paid to Directors (excluding non-Executive Directors) was resolved at the meeting of
the Board of Directors held on February 19, 2021.
The results of the index pertaining to performance-linked remuneration of Directors (excluding nonExecutive Directors) for fiscal year 2021 are 16,373 million yen in total for the first and second
quarters and 24,747 million yen for the third and fourth quarters.
The Directors who are Audit and Supervisory Committee Members receive only a fixed remunerationfrom the perspective of ensuring the appropriate conduct of their duties such as auditing and thesupervision of the execution of business operations. The remuneration is determined throughdeliberations of the Audit and Supervisory Committee Members within the total amount determinedby resolution of the General Meeting of Shareholders, and takes into account the role and duties ofeach such Director and whether he or she is a full-time or part-time member.

37

Remuneration Determination Process
The amounts of remuneration and other payments to Directors (excluding Directors who are Audit
and Supervisory Committee Members) and their calculation methods are discussed by the
Nomination and Compensation Committee comprising two representative Directors and three
Independent Outside Directors and finalized with the resolution by the Board of Directors. The
Nomination and Compensation Committee, in response to the consultations by the Board of
Directors, discusses the appropriateness of the compensation structure, etc. of the Company’s
Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive
Officers, and submits a report to the Board of Directors also taking into consideration an evaluationof the Company’s business results. Upon receiving the report from the Nomination andCompensation Committee, the Board of Directors determines remuneration and other payments to
Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive
Officers.
In fiscal year 2021, after discussions and considerations by the three Nomination and Compensation
Committee meetings in accordance with the above procedures, the Board of Directors meeting held
on February 19, 2021 resolved on the policy and determination method of remuneration and otherpayments to Directors as recommended by the Nomination and Compensation Committee, and theBoard of Directors meetings held on June 24 and December 24 approved the individual amounts
taking into consideration the semi-annual business results.

38

Amount of remuneration in the recent fiscal year (disclosure by officer
category)
Remuneration for Directors for fiscal year 2021
NumberOfficer categoryofofficers

Total amount of remuneration and otherTotal amount of

payments by type (thousands of yen)
Basic remuneration

remuneration andother payments

Performance-linked(thousands of yen)remuneration

Directors [excluding Directors
who are Audit and Supervisory
Committee Members]

5

268,008

66,819334,827(1)(9,600)(-)(9,600)(of which, Outside Directors)
Directors who are Audit andSupervisory Committee Members(of which, Outside Directors)

7

77,280-77,280(4)(38,400)(-)(38,400)

Total

12

345,288

66,819412,107(of which, Outside Directors)(5)(48,000)(-)(48,000)(Notes)1. The upper limit of the total remuneration for all Directors (excluding Directors who are Audit andSupervisory Committee Members) is 460 million yen annually (excluding employee salary)pursuant to the resolution at the 17th Ordinary General Meeting of Shareholders held on March
29, 2016.
2. The upper limit of the total remuneration for all Directors who are Audit and Supervisory
Committee Members is 110 million yen annually pursuant to the resolution at the 17th Ordinary
General Meeting of Shareholders held on March 29, 2016.
3. As of the end of fiscal year 2021, there were five (5) Directors (excluding Directors who are Audit
and Supervisory Committee Members) and five (5) Directors who are Audit and Supervisory
Committee Members.

To ESG-oriented Investors

39Compliance
Why SUMCO Addresses Compliance
The SUMCO Group recognizes that properly complying with laws, ordinances and expectedsocial norms are critical to the Company fulfilling its social responsibility and essential to thecontinuous enhancement of the Company's corporate value. Based on this belief, SUMCO
strives to promote compliance activities.

SUMCO Charter of Corporate Conduct
For the Group's further growth while fulfilling its social responsibility, the SUMCO Group has
instituted the SUMCO Charter of Corporate Conduct to define the norms that the Group's
employees should uphold, not only in terms of compliance with laws and ordinances, but also
more broadly in terms of CSR in general. The SUMCO Charter of Corporate Conduct ispositioned as the highest level of SUMCO regulations, and is placed above the various in-house
regulations and compliance programs found within the Group.
The SUMCO Group aims to make the SUMCO Charter of Corporate Conduct understood
throughout the Group by preparing it in languages understandable to employees at Group
companies overseas, keeping it available on the corporate intranet at all times, and providing
education on the SUMCO Charter of Corporate Conduct to all employees on a regular basis.
In accordance with the SUMCO Charter of Corporate Conduct, the Company appoints a Chief
Compliance Officer to embody the highest level of responsibility for compliance. The Chief
Compliance Officer monitors the status of compliance with the SUMCO Charter of Corporate
Conduct by means of compliance supervisors in each department and Group company,
regularly reports findings to the Board of Directors, and undergoes review by the Board.
In order to further ensure compliance with laws and ordinances, the Legal Oversight
Regulations appoint departments with primary responsibility for continually overseeing thoselaws and ordinances that are related to the execution of the departments' business. Each
responsible department continuously monitors the enactment, amendment and abolishment ofrelevant laws and ordinances, while the auditing department confirms the status of legal
compliance through internal audits.
In the event a problem related to compliance is discovered, the departments involved act incooperation and under the supervision of the Chief Compliance Officer to immediately
investigate the cause of the problem and prevent its recurrence.

40

Fair Business Activities / Anti-Corruption
SUMCO is committed to promoting fair business activities and preventing bribery and other forms ofcorruption, and the SUMCO Charter of Corporate Conduct clearly provides for legal compliance,
prohibition of unfair competition and improper transactions, comprehensive anti-corruption
measures such as prohibiting any wrongful provision of profits to public servants and other officials,
and prevention of insider trading.
To promote fair business practice and prevent corruption in particular, the Regulations on Handlingthe Grant of Benefits prohibit (1) unlawful political contributions and donations; (2) entertainment or
gifts in connection with the duties of public servants; (3) financial benefits in connection with theexercise of shareholders' rights; (4) excessive entertainment, gifts or other such benefits thatexceed commonly accepted bounds in society; and any unlawful benefits as well as the entire rangeof transactions that are recognized as wrongful or improper in light of what is commonly accepted insociety. The Regulations also define standards for making donations, providing sponsorship, paying
entertainment expenses, giving celebratory or condolence gifts, paying membership dues to externalorganizations, and outsourcing operations and ensure the implementation of them under anappropriate approval process. SUMCO also requires employees to avoid these behaviors whenengaging brokers and other agents.
SUMCO makes the Regulations on Handling the Grant of Benefits available at all times on thecorporate intranet, and seeks to ensure all employees are fully aware of our policies on promoting
fair business practices and preventing corruption. We also provide training on the SUMCO Charter ofCorporate Conduct to thoroughly familiarize all officers and employees with it, and the status ofcompliance with these provisions is regularly reported to the Chief Compliance Officer.
Also note that to date, the SUMCO Group has not paid any fines or made any facilitation payments
stemming from political contributions or corruption, nor has the Group been penalized in any way
relating to corruption.

41

Internal Reporting System
SUMCO has established Internal Reporting Regulations and introduced an internal reporting hotline
for reporting any act in violation of the SUMCO Charter of Corporate Conduct, including conduct inviolation of laws and ordinances, human rights infringements and harassment, comprehensive
corruptive act such as bribery and unfair competition, and improper transactions. SUMCO accepts
internal reports from our suppliers as well as employees.
To ensure that whistle-blowers can make reports with peace of mind, we have set up an in-houseand external (attorney) contact points for internal reports as well as a “suggestion box” that goesstraight to top management. Anonymous reports are accepted and all disadvantageous treatment
including retaliation against whistle-blowers who make reports is strictly forbidden.
Information on how to use the hotline and about contact points for consultation are posted at all
times on the premises of the SUMCO Group, the corporate intranet and our dedicated procurement
website, and these matters are also explained to be known for all employees during training on the
SUMCO Charter of Corporate Conduct which is conducted regularly for all employees.

Export Control
To ensure thorough export control aimed at maintaining international peace and security, SUMCO
has clearly laid out compliance with export control rules in the SUMCO Charter of Corporate Conduct.
The Company has established an appropriate export control system in accordance with the Security
Export Control Rules where it ensures that exports are only executed after the reviews andexaminations of all the requirements to be met, and implemented measures including regulartraining on export control for employees.

42Renouncing Relationships with Antisocial Forces
The SUMCO Charter of Corporate Conduct declares that the Company denounces any kind of
relationship with antisocial forces and rejects unreasonable requests or demands from such forces.
This is thoroughly disseminated among all executives and employees of the Company througheducation and training.

Initiatives on Intellectual Property
As its basic policy, the SUMCO Group attaches importance to intellectual property and utilizes it as a
strategic tool for the Group's business, while at the same time respecting the intellectual property
rights of third parties. Based on this policy, we have set forth rules on how we obtain, maintain andutilize intellectual property and prevent infringements in the SUMCO Charter of Corporate Conduct
and Intellectual Property Regulations, and provide regular education on intellectual property mattersto employees. We also actively and continually pursue efforts to facilitate the effective utilization of
intellectual property, including an inventor commendation scheme designed to encourage invention
and improve the quality of patent applications. Obtained intellectual property rights are also
reviewed periodically to eliminate obsolete intellectual property so as to keep costs at a reasonablelevel.

43

Key Elements of the SUMCO Charter of Corporate Conduct
Based on SUMCO CSR Policy, the SUMCO Charter of Corporate Conduct broadly defines thenorms that the Company's employees should uphold in terms of CSR in general.
Compliance with laws and ordinances, international rules and social norms
In addition to complying with relevant laws and ordinances in Japan and overseas, theCharter holds SUMCO and its employees to more stringent standards with respect to anticorruption, promotion of fair business activities and suchlike. During training on the Charter,
we also cover international CSR requirements such as the RBA (Responsible Business
Alliance) Code of Conduct and require employees to understand thoroughly.
Respecting human rights and maintaining safe, comfortable and appropriate workplaceenvironments
We strive to cultivate a comfortable and appropriate workplace by advancing safety andhealth in accordance with labor standards in Japan and overseas. In an effort to respect thehuman rights, abilities and individuality of all employees, we also strictly prohibit
discrimination on the basis of unreasonable factors including nationality, race, age, genderand religion, as well as various forms of harassment.
Information management and intellectual property protection
In light of the fact that information and intellectual property rights represent the source ofcorporate competitiveness, the Charter specifies proper information storage andmanagement as well as prevention of leakage, and also establishes provisions concerning
the utilization of intellectual property rights while prohibiting conduct that infringes upon theintellectual property rights of others.
Protecting the environment
The Charter also sets forth provisions on how SUMCO should comply with environmental
laws and ordinances while making every effort to reduce waste and pollutants, and also
requires employees to understand this policy and act with an awareness of environmental
conservation on a daily basis.
Improving quality
To improve customer satisfaction and mitigate the risks inherent in product liability, theCharter requires diligent efforts to maintain and improve the quality of our products andservices.

Conflict Minerals
We understand that none of tantalum, tin, gold or tungsten is necessary to the functionality or
production of a product manufactured by us, and that thus our product is not subject to theConflict Mineral regulations under the Dodd-Frank Wall Street Reform and Consumer
Protection Act of the United States of America established in 2010.

To ESG-oriented Investors
44

Risk Management
Why SUMCO Addresses Risk Management
The Silicon wafer business is a critical industry that supports our IT-oriented society, and the
SUMCO Group is responsible for the stable supply of silicon wafers to semiconductor device
manufacturers around the world. For this reason, the SUMCO Group regards business
continuity as a key management concern.
The Business Security Committee (BSC), which is an organization responsible for companywide risk management, identifies, analyzes and assesses risks, implements countermeasuresand promotes risk management activities including the formulation of business continuity plans(BCP), with the aim of predicting risks in advance, preventing them from being realized andminimizing damages when a risk is realized.

Risk Management Basic Policy
SUMCO has set forth basic matters pertaining to risk management in the Basic Rules on Risk
Management, under which we undertake risk management activities.
Our basic approach to responding to risks involves the following two points.
1. Prioritize the handling of risks by likelihood of occurrence and severity of impact from theviewpoints of ensuring optimum allocation of management resources and the effectivenessof risk management.
2. Minimize damage and loss by preventing the suspension or discontinuation of businessactivities to ensure business continuity in the event of an accident or other emergency
situation.

45

SUMCO's Risk Management Framework
1. Risk Assumptions and Identifying Risk
SUMCO analyzes risks that could impact business continuity for SUMCO's departments, plants,
offices, and SUMCO Group companies, identifies the level of impact for each risk, and assigns priority
to each risk in accordance with the Basic Rules on Risk Management mentioned above. Risks whichpose a major threat to business continuity are defined in the Basic Rules on Risk Management.
When taking on a new business as well, we use a same process to analyze business risk and assign
priority.

Major Risks Recognized in the Basic Rules on Risk Management
1. Risks Related to General Management
Examples: Contractual disputes, investment in new businesses
2. Risks Related to Accidents and Disasters
Examples: Earthquakes, wind and flood damage, water and electric power service
interruptions
3. Risks Related to Discontinuation of Business
Examples: Fire, equipment accidents, production impediments, disruptions to raw material
procurement
4. Risks Related to Compliance
Examples: Antitrust violations, violations of laws related to corruption and anti-corruption,
violations of employment and labor standards-related laws and ordinances, violations ofenvironmental regulations
5. Risks Related to Information
Examples: Leaking of trade secrets, network shutdowns
6. Risks Related to Intellectual Property
Examples: Infringing upon intellectual property rights or suffering infringement
7. Risks Related to Human Resources, Employment, and Human Rights
Examples: Labor issues, human rights violations, harassment, occurrence of scandals,
crimes and other incidents
8. Risks Related to Taxation and Accounting
Examples: Funding impediments, rapid exchange rate fluctuations
9. Risks Related to Products and Services
Examples: Quality issues, complaints
10. Risks Related to Safety and Health
Examples: Industrial accidents, outbreak of infectious disease
11. Risks Related to the Environment
Examples: Pollution, environmental accidents
12. Risks Related to Credit
Example: Bankruptcy of a customer46

2. Determining Policy with regards to Risk Countermeasures andReporting the Status of Such Countermeasures
Responsibility for each risk is allocated between departments according to the priority established in(1) above, and the policy on risk countermeasures is determined via discussion within a companywide committee known as the BSC (Business Security Committee). The BSC meets every year, withnot only the Chairman/CEO and other senior management in attendance, but also responsible
members of each department, factory, plant and group companies worldwide. It decides companywide policy regarding risk management, deliberates and determines risk prevention measures,
discusses responses on cross-department risks and new risk phenomenon and exchanges a broad
range of information about risk management in general.
BSC's Structure and Objectives

3. Response to Each Risk
Each department, factory, plant, and SUMCO Group company responds to risk in accordance withthe policy confirmed by the BSC, creates a business continuity plan (BCP; described later) and othernecessary frameworks, and implements training and other regimens designed to improve responsein emergency situations. In this way, we strive to prevent risks from manifesting, minimize damage
and strengthen business continuity. The status of risk countermeasures is reported to the BSC
mentioned above each year and reviewed by the senior management.

47

Ensuring Business Continuity
Our Basic Rules on Risk Management define business continuity as an important management issue,
and we have been working to develop and improve our BCP (business continuity plan) to ensurebusiness continuity.
The details of the BCP, and its state of improvements, the results of trainings and drills, and othermatters are reported on the BSC, and the BSC verifies the effectiveness of the BCP, and determines
policies on future action to be taken. Each department and group company improves the BCP further
according to the policies.
In 2021, we confirmed procedures to transfer head office operations elsewhere, the implementation
status of drills and exercises carried out by each department and issues to be addressed in the
future based on the assumption of a large-scale earthquake beneath the Tokyo metropolitan area
which leads the disfunction of Tokyo Head Office. These efforts were part of activities to further
enhance the BCP readiness of the head office.
In addition, we also regularly conduct integrated emergency response drills at each plant, which
include activities such as evacuation, firefighting, reporting, rescue, emergency relief andtransportation in the event of a disaster such as an earthquake. Continuous improvements are madeby identifying issues and reviewing procedures and other details after conducting the drills. We also
make efforts to stockpile the materials and equipment needed to ensure that production can beswiftly resumed in the event of a disaster.

Integrated Emergency Response Drill

Integrated Emergency Response Drill

48

Improvement in Emergency Response Capability
The SUMCO Group has established a manual to enable speedy response, ensure employee safety,
protect company assets and restart business operations as soon as possible in the event of a largescale earthquake or other disaster/accident. The manual sets out items concerning the preparationof stockpiles for disaster prevention, the initial response to be taken at each site after a disaster has
struck, as well as the establishment and roles of an Emergency Response Team in the event of an
emergency. Additionally, we regularly conduct initial firefighting drills such as the handling of fire
extinguishers and fire hydrants, and training on the employment of lifesaving measures such as CPR
and AED usage, in order to reduce damage in the event of a disaster. We also conduct exercises
such as carrying drills using cloth stretchers to simulate an evacuation by stairs to further enhance
employees' ability to respond in an emergency.
Additionally, at our Kyushu Factory we periodically conduct joint response drills with suppliers thatdeliver chemicals to our sites so that all involved can take safe and smooth action in the event of aleakage of chemicals during delivery.

First Aid Drill

Lifesaving Training

49

Information Management
The Company understands the importance of information in business operations and clearlystipulates the appropriate use and management of trade secrets and all other information in the
SUMCO Charter of Corporate Conduct. We have also established the Rules on Information
Management along with related regulations, guidelines and other materials. We make every effort toappropriately manage and prevent leaks of our trade secrets and confidential information received
from customers, suppliers and other parties by conducting regular training for all employees onthese information management rules and information security.
In an effort to prevent computer system-related leaks and stop information from leaking outside theCompany, the SUMCO also implements a range of measures to address various risks, such asexternal attacks on our computer systems via the internet, the unauthorized use of computer
systems and viruses that target computer systems.
Additionally, SUMCO has established the Rules on Personal Information Management in accordancewith the Act on the Protection of Personal Information to ensure that personal information is
managed appropriately.

Safety Confirmation System
The SUMCO Group has introduced a "Safety Confirmation System" which enables quick conformationof the safety status of employees working in Japan. We think the system also helps speed up postdisaster recovery efforts.

Computer System-related Disaster Countermeasures
The Company has ensured redundancy for mission-critical and peripheral systems used on acompany-wide basis, establishes equivalent backup servers and performs data synchronization inorder to continue business operation even in the event that a server installation location is damaged
by a large-scale disaster such as a major earthquake.
We conduct regular drills on switching to backup servers to confirm our switchover procedures andother details.

50

Measures to Prevent COVID-19 Infections
Referencing infection prevention guidelines from the Ministry of Health, Labour and Welfare, various
academic groups and the Keidanren (Japan Business Federation), SUMCO has formulated the
SUMCO Group Infection Prevention Guidelines to deal with the spread of COVID-19 infections andimplements a range of measures to prevent infections.

Infection Prevention Measures
1. Special leave system for those who feel ill, those who have been vaccinated, and those who haveexperienced side-effects
We have established a new leave system for employees, whether regular or temporary
employees, who feel ill or have other illnesses are asked to stay home and undergo observationby healthcare staff. Employees can take the same leave on the day of vaccination and on
subsequent days in case of side-effects, as we seek early identification of infected persons andstrive to minimize infection risks.
2. Formulation and implementation of infection prevention measures at work
Mandating the wearing of nonwoven fabric masks at work and paying mask allowance
Establishing and enforcing limits on the number in meeting rooms, ventilation rules, anddisinfection rules including cleaning shared PCs and switches, etc.
Installing partitions in break rooms and dining halls (when mask is removed for eating anddrinking); monitoring and managing usage times and seating locations
Temporary closing of smoking areas
3. Utilization of remote meetings and telework
Refraining from business travel and dining opportunities
Conducting all company events, conferences, and training online
Besides holding all company events including presentations and all meetings online, andtraining sessions has been switched from face-to-face to online format.
Implementing remote work at the Tokyo Head Office and sales offices in Osaka and Kyushu

51

VoiceKatsuhito Asahi, Unit Leader
Nagasaki Safety and Disaster Prevention Section, General
Affairs Department, SUMCO TECHXIV Corporation

Q. Please describe the status of implementation and the level of participationin the emergency response drills you conduct at the plant.
For integrated emergency response drills, we envisage a major earthquake measuring upper 6
on the intensity scale having occurred. With the disaster control headquarters comprised of
key executives and managers we mainly confirm the actions taken in the initial response. In
recent years we have focused the drills on confirming the safety of employees, searching for
missing people, conducting rescue and relief activities, providing emergency medical care andselecting multiple safe evacuation routes from the perspective of placing the highest priority
on human life. In fiscal year 2019, more than 400 people in Nagasaki Plant took part in the
drills, a figure which suggests a heightened interest in disaster prevention among employees.
We also conduct late-night emergency response drills for shift workers, envisaging a scenario
in which a major earthquake strikes at night, including coordination with disaster-prevention
centers . Each year when we conduct our emergency response drills, we ask the local Omura
Fire Department to attend. In addition to reviewing the drills overall, the members of the fire
department offer valuable insight and guidance on where we need to improve from theirperspective as professionals. Moving forward, we will share these areas for improvement with
employees through internal meetings, continue to coordinate with the local community withthe aim of further raising our disaster mitigation and prevention levels, and ensure ourcapacity for self-help, cooperation, and public assistance in times of disaster.

To ESG-oriented Investors

52

SUMCO Group Taxation Policies
Basic Approach
Based on the SUMCO Group mission to be the world’s No. 1 silicon wafer supplier by exceeding the
expectation of our customers and stockholders, by recognizing the value of our employees and being
good neighbors in communities, SUMCO Group shall conduct its business activities faithfully inaccordance with law and ethics, and shall fulfill its responsibility to society.
SUMCO Group understands that the proper payment of taxes in accordance with the relevant laws
and regulations of each country contributes to economic growth and development of society in eachcountry, and helps toward living up to the support and trust of all stakeholders.
SUMCO Group shall endeavor, in ways like the following, to achieve timely compliance with revisions
to the taxation system in each country and with trends in international tax frameworks, and toestablish a tax compliance framework that is suitable at all times.

Observance of Tax Laws
SUMCO Group shall always observe tax-related laws and regulations in each of the countries andregions where it does business and fulfill its tax obligations in all countries and regions.

Engagement in International Tax Frameworks
SUMCO Group understands that the OECD BEPS (Base Erosion and Profit Shifting) project and otherinternational initiatives are important undertakings for achieving tax transparency and preventing
international tax avoidance.
Along with observing the tax laws in each country, SUMCO Group shall therefore conduct its tax
affairs in accordance with the intent of international initiatives, endeavoring to ensure tax
transparency.
In transactions with related parties in other countries and regions, SUMCO Group shall consider
Arm's Length Price (ALP), and based on analysis of the functions, assets, and risks both between
countries and between subsidiaries, distribute earnings appropriately according to their contribution.

53

Thinking on Tax Planning
SUMCO Group understands that transactions without a legitimate business purpose or economic
rationality are an impediment to achieving tax transparency, and have the potential to harm theGroup business value and the interests of stakeholders including local communities.
SUMCO Group shall not conduct tax planning aimed at tax avoidance, such as the use of structures
without commercial substance, the transfer of value created to low tax jurisdictions, or the use of
tax havens.

Provision of an Internal Framework for Tax Compliance
SUMCO Group, understanding the importance of instilling and reinforcing awareness of tax
compliance in management and employees for the proper functioning of the tax complianceframework, shall seek to raise such awareness through education, information sharing, andconsultations on proper handling of tax affairs.
Moreover, seeing tax-related risk as a material risk for business administration, SUMCO Group shallidentify and analyze tax-related risk based on the risk management structure, and senior
management shall perform regular annual checks of the status in dealing with issues for risk
mitigation.

54

Establishment of Appropriate Relations with Tax Authorities
SUMCO Group shall comply with the tax administration procedures and tax collection procedures ofeach country. It shall maintain normal, sound relations with tax authorities and shall not provide
improper benefits.
Reference: SUMCO Group Income Taxes by Country

Income Taxes Paid
2019
(Billions of
Yen)

2020
(Billions of

%

Yen)

2021
(Billions of

%

Yen)

%

Japan

7.8

67%

5.4

91%

4.6

77%

Taiwan

3.5

30%

0.4

6%

1.1

18%

US and others

0.4

3%

0.2

3%

0.2

4%

Total

11.7

100%

5.9

100%

5.9

100%

To ESG-oriented Investors

55

Steady Progress in Digital Transformation(DX)
SUMCO established the AI Promotion Division in 2018. Today we are successfully applying AI
technologies to manufacturing activities in system infrastructure areas including production control
and process control. For each stage of the production processes, for example, we are collecting
quality information and process information as Big Data, and associating and analyzing thisinformation toward both greater productivity and higher quality, as we build the capability for realtime prediction. In addition, we are seeking to raise our competitiveness in commodity areas having
the biggest demand, establishing a firm profit base.
Our aim is to be the top company in the area of digital transformation (DX).

Main aims of our digital transformation
We are working to achieve real-time monitoring and automation of production processes and toestablish a production capability and production plans capable of flexibly meeting market demand
fluctuations. We are also seeking to increase the agility of the organization by expanding the areas
where AI is employed. By realizing rapid data analysis in the technology fields of our leading-edge
products, and speeding up the time from development to mass production, we are further boosting
our competitive advantage.

56

DX Promotion Strategy
More efficient manufacturing and development through digital transformation (DX)We are promoting DX based on the know-how and vast data assets we have accumulated over many
years of business activities.

By introducing these technologies, we are seeking to improve productivity and quality, and toachieve stable operation, in such ways further boosting our competitive advantage. Toward
becoming a more agile company, we will further promote digital transformation by introducing AI
technology, enabling us to adapt quickly to changes in the market environment.

57

Successes and extent of achievement to date
Improving productivity at plants based on AI technology, data science, and IoTtechnologies
One of the chief objectives in pursuing DX at SUMCO is to raise the productivity of our plants,
enabling us to meet the voracious demand for semiconductors.
The Production Division and AI Promotion Division worked closely together to tackle productivity
issues, achieving an improvement of more than 10% in total wafers produced at our main 300 mm
wafer plant, where there was no leeway for adding new equipment.
This much improvement is equivalent to more than 30 billion yen saved in capital expenditures andmore than 4 billion yen in additional annual profit.
It was achieved by taking measures like the following.
• Devised the means for real-time acquisition and visualization of operation status andprocessing efficiency for all equipment in the plant.
• Made a detailed quantitative assessment of production line balance and bottlenecks, andimplemented an array of measures focused on raising processing efficiency.
• By means of per-second time chart analysis, reduced operation variability across equipment toan absolute minimum.
• Eliminated logistics waste based on a detailed analysis of actual conveyance data inside theplant.
• Employed machine learning to automate specialized decision-making that had relied on theexpertise of engineers, reducing process stoppage time.
Further, through such steps as linking automated guided vehicles (AGV) and collaborative robots(co-bots) with production equipment, we are actively taking on the challenge of transforming
existing plants into smart factories, as we continue with efforts to raise labor productivity andcreate a better working environment for employees.
Deploying DX tools to promote operation efficiency
DX tools is the general term used at SUMCO for tools that support operation efficiency, including BI
tools,※1 RPA,※2and workflow systems.※3and workflow systems.
The results so far are work savings of more than 50,000 hours a year, and reduction in paper use by
more than 80,000 sheets a year.
By continuing to introduce DX tools of various kinds and making them a regular part of operations,
we will seek to improve product quality along with work efficiency.

58

Adapting flexibly to different work styles in the “new normal” era
Even before the pandemic, we had introduced a secure remote work system from the standpoint of
BCP (business continuity planning). Taking advantage of this system, we switched to a fullteleworking arrangement in the Tokyo region from the beginning of April 2020, ahead of the firststate of emergency declaration.
Meetings to discuss management decisions were also changed to remote ones, and management
has continued to be carried out seamlessly making use of the electronic approval system already inplace.
While adapting to work styles for a new era, we will continue implementing measures aimed atachieving a high level of diversity.
※1 BI tools（BI＝Business Intelligence）
Tools used to collect and analyze various data in support of on-site and management decision
making.
※2 RPA（RPA＝Robotic Process Automation）
Technology for automating computer-based processes and tasks to replace human labor.
※3 Workflow system
A system that computerizes various requests in an organization to make the checking andapprovals process more efficient.

To ESG-oriented Investors

59

&OWJSPONFOUBM&OWJSPONFOUBM.BOBHFNFOU ˘˘˘˘˘˘˘˘˘˘ &OWJSPONFOUBM-PBEPG#VTJOFTT"DUJWJUJFT ˘˘˘˘ $PNCBUJOH(MPCBM8BSNJOH ˘˘˘˘˘˘˘˘˘˘˘ 
3FEVDUJPOPG8BTUF˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘ &FDUJWF6TFPG8BUFS3FTPVSDFT ˘˘˘˘˘˘˘˘ $IFNJDBM4VCTUBODF.BOBHFNFOU ˘˘˘˘˘˘˘˘ Environmental Management
Why SUMCO Addresses Environmental Issues
From energy-saving initiatives to curbing greenhouse gas emissions and reducing waste,
lowering the environmental load by the business activities of companies is a pressing task toensure that the global environment is maintained and protected.
To ensure that the irreplaceable global environment is passed on to future generations, theSUMCO Group has established an environmental management system. We have obtained
ISO14001 certiﬁcation for all of our plants, and pursue initiatives aimed at protecting theenvironment.

SUMCO Environmental Policies
1. Basic Environmental Philosophy
As a manufacturer of high-quality silicon wafers for semiconductors and of quartz
crucibles, SUMCO has established the following action guidelines and is committed toself-initiated and sustained environmental conservation activities to pass on the Earth's
irreplaceable environment to future generations.
2. Environmental Action Guidelines
1. Through our business activities, we shall pursue activities with an emphasis on thefollowing points.
(1) We shall act to conserve electricity and other energies consumed by our businessactivities, thereby curbing emissions of greenhouse gases.
(2) We shall strive to reduce waste and increase recycling and reuse rates.
(3) We shall strive to reduce and recycle water used in our business activities.
(4) We shall strive to reduce chemical substances used in our business activities.
(5) We shall thoroughly manage the harmful chemical substances and waste, thereby
reducing the risks to the environment.
2. We shall abide by environment-related laws and regulations, bylaws, and otheragreed requirements.
3. We shall strive to prevent environmental pollution in our entire business activities andundertake eﬀorts to protect the global environment and coexist in harmony with local
communities.
4. We shall promote green procurement with our suppliers, thereby reducing
environmental load.
5. We shall deﬁne environmental objectives, and by periodically reviewing theseobjectives, shall promote continuous improvement of our environmental management
system.
6. We shall endeavor to consider and conserve biodiversity.

61

May 1, 2021

Environmental Management Structure
The SUMCO Group has established the Environmental Management Structure in which theEnvironmental Management Officer, a member of the Management Conference, appoints theCompany-wide Environmental Manager and the Environmental Managers at site, and defines theirroles, responsibilities and authorities. Thoroughness of instructions and information sharing are
ensured at meetings of the Company-wide Environmental Management Committee and theEnvironmental Management Committee at each site, both of which are convened periodically.
SUMCO's Environmental Management Officer holds chief responsibility for issues related to climatechange and has chief authority regarding those issues. The Environmental Management Officer
convenes meetings of the Environmental Management Committee and monitors SUMCO's efforts toaddress climate change.
Environmental Management Structure

62

Tackling climate change (Goals for Carbon Neutral)
Tackling climate change is one of the goals in SDGs, and delinking of economic growth andenvironmental degradation is strongly required.
The SUMCO Group, which supports the growing semiconductor industry, set new goals for carbon
neutral covering Scope 1+2 in September 2021 toward the realization of a sustainable society.
Target2030 (Mid-term Goal)

Year

2050 (Long-term Goal)

33% reduction from 2014

100% reduction (Carbon Neutral)(2.5% reduction per year)

Goals[in conformity to 2℃ scenario of[in conformity to the declaration aiming carbon neutral by 2050 by theGovernment of Japan]

SBT (※1)]

Continuous energy-conservation activities
Initiatives

Further introduction of more renewable energy (such as Solar power generation, etc.)
Procurement of non-fossil electricity (such as J-Credit and Non-Fossil Certificates), etc.

(※1) Science Based Targets
Reduction targets of greenhouse gas emissions set by companies that comply with the standardsof the Paris Agreement.

Unit energy usage goal
In addition to the goals targeting carbon neutral, we set an unit energy usage goal in 2019.The CO2
emissions related to the unit consumption calculation are the actual emissions of Scope1+2 (nocarbon offset) and we shall strive to reduce CO2 emissions by reducing energy consumption andimproving energy efficiency in our corporate activities.
Target Year
Goal
Initiatives

2030
14.9% reduction from 2014 (1.0% reduction per year)(CO2 emission in 2014 : 821,000 tons-CO2）
Continuous energy-conservation activities

63

Environmental Objectives
The SUMCO Group sets environmental objectives for each of its operating bases based on its
Environmental Policies and the results of environmental load assessments that are conductedperiodically. We implement initiatives at each site to reduce environmental load in accordance withthese objectives, such as reducing CO2 emissions, chemical substances used, industrial waste
generated, and water used. The accomplishments are reported and reviewed semiannually in theEnvironmental Management Committee and the targets are revised as needed. The standard values
are based on the results of the previous year.
2021-2024 Environmental Objectives and 2021 Results
BM*1
Reduction of CO2 emissions
Scope1+2
Reduction of chemical substanceuse

Previous

Reduction of industrial waste

results(reduction of hazardous waste*2
released)
Reduction of water consumption

2021

2022

2023

2024

Objectives

Results

Objectives

Objectives

Objectives

1.0%

1.2%

0.4%

0.4%

0.4%

0.8%

1.0%

0.7%

0.7%

0.7%

year's
1.5%

2.2%

0.8%

0.8%

0.8%

(0.19%)(0.11%)(0.38%)(0.38%)(0.38%)

0.6%

0.7%

0.5%

0.5%

0.5%

*1 BM = Bench Mark- In the fiscal year 2021, our performance exceeded the objective figures in all items. Especially, weachieved major reductions in the amounts of industrial wastes by installing waste liquid
concentrators.
- Evaluating performance for each six-month period, we set target figures for subsequent fiscal
years based on a careful examination of items applicable across each operating site.We set
objective figures for 2022 which is less than that of 2021 due to the start-up of new
manufacturing equipment, etc.
*2 Hazardous waste refers to specially controlled industrial waste as defined in Japan’s Waste
Management and Public Cleansing Act.

64

Reduction Objectives for Each Base of Operations (9 Manufacturing Bases in Japan)
2021
Site

BM

Reduction of CO2
emissionsObjectives Results

Kyushu Factory(Nagahama, Imari)
Kyushu Factory(Kubara, Imari)
Kyushu Factory(Saga)
Yonezawa Plant
Chitose Plant
JSQ Division
SUMCO Technology
Corp. Noda Plant

Previous
year'sresults

Reduction ofchemical substanceuse
Objectives

Reduction of

Reduction of waterindustrial waste

consumption

Results Objectives Results Objectives Results

2.0%

2.5%

0.6%

1.3%

0.3%

0.6%

0.2%

0.3%

0.4%

0.4%

1.2%

1.4%

0.3%

0.4%

0.01%

0.02%

3.6%

3.8%

0.4%

0.4%

0.2%

0.3%

0.3%

0.3%

0.9%

1.0%

4.7%

2.7%

3.3%

2.3%

0.1%

0.1%

0.4%

0.6%

0.03%

0.1%

1.0%

2.4%

0.2%

0.2%

2.1%

2.8%

0.7%

0.7%

0.5%

2.9%

2.7%

3.4%

1.7%

1.8%

0.8%

0.8%

0.0%

0.0%

1.4%

0.7%

0.2%

0.2%

0.2%

0.2%

6.9%

10.3%

2.2%

2.4%

0.5%

0.5%

0.3%

1.0%

0.3%

1.3%

0.4%

0.4%

1.0%

1.2%

0.8%

1.0%

1.5%

2.2%

0.6%

0.7%

SUMCO TECHXIV
Corp. Nagasaki
Plant
SUMCO TECHXIV
Corp. Miyazaki
Plant
Total

As our efforts for reduction in CO2 emissions, we have promoted reducing electricity usage byintegrating and upgrading coolers, among other initiatives.
As our efforts for reduction in use of chemical substances, we have promoted recycling exhaustgas treatment water, and reducing the amount of chemicals introduced in reaction tanks, among
other initiatives.
As our efforts for reduction in industrial waste discharge, we have promoted reducing sludge by
installing waste liquid concentrators, among other initiatives.
As our efforts for reduction in industrial water usage, we have promoted improving recycle ratio ofpure water used in our manufacturing process, and upgrading aging cooling towers sequentially,among other initiatives.

Environmental Risk Management
The SUMCO Group identifies environmental risks in the Basic Rules on Risk Management, including
risk related to climate. Identified risks are incorporated into an initiative plan for environmental risks
such as environmental pollution and extreme weather due to global warmings under the BSC andenvironmental management system. Then, the achievements are reported to the Environmental
Management Officer as well as BSC and reviewed by top management.
65

Environmental Education

Education and Training Targeted at Suppliers to Increase Understandingof the Environmental Policies and Prevent Environmental Accidents
The SUMCO Group provides environmental education to supplier of chemicals and other products
and to industrial waste treatment firms covering SUMCO's Environmental Policies, prevention ofenvironmental accidents and compliance with laws and ordinances.
In 2021, we conducted online group training and document distribution training to prevent infection
due to the COVID-19 pandemic. As for the results of the training, we receive training records fromeach company to confirm the level of understanding.

Contents of Education
1. Requests for vehicle inspections to prevent fuel, oil and other substances from leaking
2. The importance of SUMCO personnel being present at the time of delivery or collection, andrequest that their instructions be followed
3. Request for inspection of industrial waste collection vehicles, particularly to prevent leakage
or dripping of sludge, liquid waste, etc.
4. Introduction to actual environmental accidents that occurred at the Company in the past

66

Environmental Accounting
In accordance with Ministry of the Environment's Environmental Accounting Guidelines 2005, theSUMCO Group calculates the results of our group (Japan) from January 2021 to December 2021.

Environmental Costs(million yen per year)
Investments

1,200

Expenses*1

3,200*1 Internal labor cost, depreciation expenses and energy costs (electric power, fuel, water, etc.)
related to operation are not included.

Environmental Conservation Benefits, Economic EffectEnvironmental Conservation

Economic EffectBenefits

Category (Unit)(million yen per year)*3(2020-2021)*2

Electricity consumption (GWh)(80)

Fuel consumption (crude oil equivalent kL)(310)

Water consumption (Mm3)(1.3)

Chemical substance consumption (t)

179

16

Industrial waste emissions (t)3,300*2 The negative value indicates that the increase in environmental impacts exceeded reductions due
to increases of production volume and trial productions that does not contribute to sales.
*3 Calculated by our original estimating method.

67

Environmental Audits
Through the SUMCO Group, internal environmental audits are conducted by internal auditors, whileenvironmental management system audits are implemented by an outside review organization.

Internal Environmental Audit
Internal environmental audits are annually conducted by internal auditors for all organizations in the
SUMCO Group subject to the Company's environmental management system. The results arereported to the Environmental Management Officer and reflected in the following year's activities toenable continuous improvement of the environmental management system.

Environmental Management System Audit
The SUMCO Group is subject to regular audits conducted every year and a renewal audit conducted
every three years by an external independent auditor. Any nonconformity was not found in the audit
conducted in 2021.

Compliance with Environmental Legislation
The SUMCO Group identifies the requirements of laws, regulations and agreements and verifies
compliance. None of the items which is incompliance with laws and regulations were found in 2021.
We also ensure compliance with overseas chemical substance regulations, namely the Restriction on
Hazardous Substances (RoHS) Directive and Regulation on Registration, Evaluation, Authorization
and Restriction of Chemical Substances (REACH).
State of Compliance with Environmental Laws and Regulations
5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

Violations

0

0

0

0

0

Fines (yen)

0

0

0

0

0

68

Progress of Soil and Groundwater Contamination Countermeasures
Accumulated Amount of Contaminated Substances Recovered Annually from Groundwaterat the Noda Plant

The SUMCO Group conducts soil and groundwater contamination surveys at all facility sites.
In a voluntary survey implemented at the Noda site in 2005, it was found that amounts of volatileorganic compounds (VOC) and fluorine exceeded the soil and groundwater environmental standard
values. We have been pursuing countermeasures in consultation with relevant parties. At present,
we are working to prevent the spread of and recover contaminated substances by using a pumping
well set up near the boundary of the plant grounds.
In fiscal year 2021, there were no new incidents related to industrial water/wastewater across the
SUMCO Group.

ISO 14001 Management System Certificate
ISO 14001 Management System Certificate [3.21MB/3Pages]

To ESG-oriented Investors

69

Environmental Load of Business Activities
The depletion of energy resources, global warming, threats to biodiversity and other environmental
problems are having an increasingly serious impact on the global environment. The SUMCO Groupidentifies forms of energy such as electric power, chemical substances, waste products andwastewater as significant environmental aspects in its production activities and pursues initiatives tomake environmental considerations and reduce the environmental load across all of its businessactivities.
Business Activities and Environmental Load in 2021 (SUMCO Group [Japan])70

List of Boundaries
CO2
Site

Energyusage

emissions
stemmingfrom energy
usage

Water
used/
wastewaterIndustrial
waste
generated

AtmosVOC

PRTR

phericAbbre-

emissions emissions pollutant

viationemissions

Kyushu Factory(Nagahama,

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Yonezawa Plant

〇

〇

〇

〇

—

〇

—

Chitose Plant

〇

〇

〇

〇

〇

〇

—

JSQ Division

〇

〇

〇

〇

—

〇

〇

〇

〇

〇

〇

〇

〇

〇

Imari)
Kyushu Factory(Kubara, Imari)
Kyushu Factory(Saga)
Includes
SUMCO
Group
companies
in Japan

SUMCO

SUMCO TECHXIV
Corp. Nagasaki
Plant

STC

SUMCO TECHXIV
Corp. Miyazaki

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

—

〇

〇

STEC

〇

〇

〇

〇

—

—

〇

SPX

〇

〇

〇

〇

—

—

—

SPTI

〇

〇

〇

〇

〇

〇

〇

FST

Plant
SUMCO
Technology Corp.
Noda Plant
SUMCO Phoenix
Corporation
SUMCO

PT. SUMCO

Group

Indonesia

Companies
Overseas

FORMOSASUMCOTECHNOLOGYCORPORATION* Including all Japan and overseas sites.

71

Environmental Load (Japan)
CO2 emissions (Japan) (thousand tons-CO2 per year)

Water consumption (Japan) (Mm3 per year)72

Environmental Load (Overseas)

CO2 emissions (overseas) (thousand tons-CO2 per year)

Water consumption (overseas) (Mm3 per year)* CO2 emissions of the overseas subsidiaries are calculated using the emission coefficient of eachcountry based on the Greenhouse Gas Protocol Initiative.

73

Environmental Data (SUMCO Group)
Greenhouse Gas Emissions Data(thousand tons-CO2 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

Scope 1 (direct)

23

25

26

25

27

Scope 2 (indirect)

894

877

702

765

812

Scope 3 (other indirect)

4

4

612

694

758

Scope 1&2

917

902

728

790

839

Scope 1, 2&3

921

906

1,340

1,484

1,597

* Numbers of Scope 3 (other indirect) until 2018 include category 4 (upstream transportation anddistribution) only.
Greenhouse Gas Emissions Scope3 Data (Japan)(thousand tons-CO2 per year)

Category

2021

1

Purchased goods and services448

2

Capital goods

132

3

Fuel- and energy-related activities (not in Scope 1 or 2)

105

4

Upstream transportation and distribution

37

5

Waste generated in operations

25

6

Business travel

0.3

7

Employee commuting

11

8

Upstream leased assets

Not applicable9

Downstream transportation and distribution

—*1

10

Processing of sold products

—*1

11

Use of sold products

12End-of-life treatment of sold products

13

Downstream leased assets

Not applicable

14

Franchises

Not applicable

15

Investments

Not applicableNot applicable—*1*1 SUMCO products are potentially intermediate products with many downstream applications. It isdifficult to make an accurate and reliable calculation, and we have determined that the calculation
is not appropriate in terms of reliability.

74

Greenhouse Gas Emissions Data (by Company)(thousand tons-CO2 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

SUMCO

538

524

1,014

1,132

1,228

STC

159

156

112

119

131

FST

152

152

144

165

165

SPX

61

61

58

57

60

SPTI

11

12

12

12

12

Total

921

906

1,340

1,484

1,597

* Greenhouse Gas Emissions Scope3 is aggregated as "SUMCO".
Breakdown of Greenhouse Gas Data (Scope 1)(tons)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

CO2

23,00025,00026,00025,00027,000

CH4

—

—

—

—

—

N2O

—

—

—

—

—

HFC

0.012

0.012

0.012

0.006

0.014

PFC

—

—

—

—

—

SP6

—

—

—

—

—

Other

—

—

—

—

—

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

1,735

1,793

1,707

1,792

1,877

436,979

451,403429,838

451,085

472,505

8,359

8,711

9,054

8,804

9,670

Energy Consumption

Electricity usage (GWh)Electricity (converted topetroleum) (kL)
Fuel (converted topetroleum) (kL)75

Water Supplied(Mm3 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

12.6

13.2

13.5

14.8

15.7

3.5

3.4

3.3

3.2

3.5

Quarry water

—

—

—

—

—

Potable water

1.3

1.3

1.2

1.1

1.3

External drainage water

—

—

—

—

—

Rainwater

—

—

—

—

—

Seawater

—

—

—

—

—

Total

17.4

17.9

18.0

19.1

20.5

Surface water (rivers,
wetland, natural lakes)
Water underground (wellwater)

Water Supplied (by Company)(Mm3 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

SUMCO

9.2

9.4

9.7

10.4

11.1

STC

3.9

4.1

4.1

4.2

4.6

FST

2.5

2.6

2.5

2.8

3.0

SPX

1.4

1.4

1.3

1.3

1.4

SPTI

0.4

0.4

0.4

0.4

0.4

Total

17.4

17.9

18.0

19.1

20.5

* Please refer the page of "Effective Use of Water Resources" for water-stressed area.

76Drainage Water(Mm3 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

7.3

7.7

7.8

8.6

9.1

—

—

—

—

—

—

—

—

—

—

4.8

5.0

5.2

4.7

4.8

Other drainage water

3.4

3.3

3.3

3.1

3.5

Total drainage water

15.5

16.0

16.3

16.4

17.4

Total water drained into the
ocean
Total water drained tosurface water sources
Total water drained tounderground sources/ well
water sources
Total water drained outsideof plants

Drainage Water (by Company)(Mm3 per year)

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

SUMCO

8.1

8.3

8.4

8.9

9.6

STC

3.4

3.7

3.8

3.7

4.0

FST

2.0

2.1

2.1

2.3

2.3

SPX

1.6

1.5

1.6

1.1

1.1

SPTI

0.4

0.4

0.4

0.4

0.4

Total

15.5

16.0

16.3

16.4

17.4

VOC emissions(tons per year)

VOC

5 years prior

4 years prior

3 years prior

2 years prior

Last year(2017)(2018)(2019)(2020)(2021)

8.0

9.3

8.7

8.4

11.3

Note; Chemical Substances have been tabulated based on the PRTR system of the Ministry of
Economy, Trade and Industry since last year.

To ESG-oriented Investors77

Combating Global Warming
To help prevent global warming, the SUMCO Group identifies both external and internal challenges topreventing climate change based on the Company's business goals/Environmental Policies and theneeds and expectations of related stakeholders. In this way, the Group determines risks andopportunities related to these external/internal issues and needs/expectations.
Based on these, we resolve and implement year-long initiatives targeting climate change issues thattake into account the risks and opportunities for each department, report the results to theenvironmental management executive officer, evaluate and analyze the results at meetings of theEnvironmental Management Committee, and as necessary, revise these risks and opportunities.
To look at a specific example: For the production of silicon wafer, the SUMCO Group makes every
effort to streamline production and promote rationalization in order to reduce electric power
consumption. When it comes time to update production and utility facilities, we replace them withenergy-saving and high-efficiency alternatives. In offices, lighting is turned off during lunchtime andother breaks, and air conditioners are set at a reasonable temperature to save energy. At the Imari
Plant, Nagahama Plant and Saga Plant, we cut electric power usage by consolidating and upgrading
coolers, changing over to LED lighting, and other measures.
In Japan, the SUMCO Group takes part in the following initiatives addressing the issues of climatechange.
(1) We are part of an industry group (for Japanese electrical and electronics industries) involved in
activities supporting the Keidanren’s “Commitment to a Low Carbon Society,” an initiative that lists,publishes and implements activities entities themselves can proactively take on to help create a
global low carbon society.
(2) We have registered with the Environmental Reporting Platform Development Pilot Project of the
Ministry of the Environment. This undertaking encourages the disclosure of environmental
information and dialog among parties including companies and investors. It is contributing toward
the creation of a sustainable society by helping to ensure that companies actively engaged inenvironmental activities are properly recognized for their efforts and gain investor funding support asa result.
In 2021, major investment in CO2 reduction totaled 1,104 million yen.

78

CO2 Emissions (Scope 1+2)
(SUMCO Group)

CO2 Emissions per Silicon Wafer (sales)(SUMCO Group)

Cumulative Reduction of CO2 Emissions(SUMCO Group)

Electric Power Consumption(SUMCO Group)

Electric Power Consumption per Silicon
Wafer(sales) (SUMCO Group)79Investment in Clean Technologies
We have installed 2.3MW of solar power generation equipment at our Kyushu Factory (Kubara,
Imari), and we use and sell renewable energy. Upon replacing production or utility equipment, we
also adopt energy-saving or high-efficiency equipment and aim to curtail energy consumption
through LED lighting.

CO2 Reduction through Modal Shift to Ship Transport in the Field ofLogistics
SUMCO used to rely solely on airfreight
for the transportation of silicon wafers
to overseas markets. However, toreduce both CO2 emissions andtransportation costs, we have beenpromoting a modal shift to shiptransport for some of our products since2009, taking into account factors
affected by longer transportation lead

CO2 Reduction through Modal Shift to Ship Transport(t-CO₂)
1,200
900
600

702

709

2017

2018

1,058

1,106

1,101

2019

2020

2021 (year)

300
0time and changes in the transportation environment. We conduct tests before switching to shiptransport to confirm that the quality of products is not affected, as well as consulting withcustomers.

To ESG-oriented Investors

80Reduction of Waste
In Japan, the SUMCO Group is working to
reduce the amount of waste generated as part

Amount of Disposal and Rate of Recycle(SUMCO Group [Japan])of environmental conservation efforts. In
particular, to deal with the large volume ofsludge generated at our plants, the SUMCO
Group is making efforts to optimize thequantity of chemicals injected for wastewater
treatment, and to deal with waste oil, waste
acid, waste alkali, waste plastics and otherwaste, we are focusing on promoting theirrecycling and conversion into valuable resources.

Waste Reduction through the Adoption of Reusable Containers
We are replacing the containers used to ship 300-mm diameter silicon wafers with reusable
alternatives as one of the initiatives to reduce post-shipment waste.
The percentage of reusable containers used for shipment in 2021 was 79.4%.
Before introducing reusable containers, we conduct tests to ensure that the quality of the products is
not affected.

To ESG-oriented Investors81Effective Use of Water Resources
The SUMCO Group recognizes that water is an important resource playing a vital role inmanufacturing silicon wafers. We have set environmental objectives related to reducing water usedby our business, and we are working to use water resources effectively at all of our manufacturingbases.
The SUMCO Group’s water recycling rate hovers at around 39% and was 38.8% in 2021.

Amount of Water Recycled and Rate ofAmount of Water Supplied and Discharged(SUMCO Group [Japan])Amount of Water Consumption by Water
Source (SUMCO Group [Japan])Amount of Water Supplied per Product (Sale)(SUMCO Group [Japan])

Recycle(SUMCO Group [Japan])At our plants in Japan and overseas, we utilize the reject water generated in the water purification
process as cooling water for utility facilities and dilution water for wastewater treatment chemicals.
We are also working to conserve as much water as possible for recycling, such as collecting the rinse
water used to clean silicon wafers.

82

Water Recycle Flow (SUMCO Group)

Cooperation with Stakeholders
Disclosures through CDP (Water Security)
The SUMCO Group disseminates information regarding its ESG efforts to a wide range ofstakeholders.
Starting 2021, we respond to the water security questionnaire conducted by the CDP, which
publishes information on companies’ environmental initiatives according to common measures.

83

Water-stressed Areas
The SUMCO Group investigates water stress using the AQUEDUCT tools provided by the WRI*1. The
following shows the results of the 2021 investigation.
Water stress*2

Operating Base

Includes SUMCO Group
companies in Japan

SUMCO Group Companies
Overseas

Kyushu Factory (Nagahama, Imari)

2

Kyushu Factory (Kubara, Imari)

2

Kyushu Factory (Saga)

2

Kyushu Factory (Nagasaki)

2

Yonezawa Plant

1

Chitose Plant

1

JSQ Division

1

SUMCO TECHXIV Corp. Nagasaki Plant

2

SUMCO TECHXIV Corp. Miyazaki Plant

1

SUMCO Technology Corp. Noda Plant

2

SUMCO Phoenix Corporation

3

PT. SUMCO Indonesia

4

FORMOSA SUMCO TECHNOLOGY CORPORATION

2*1 WRI: The World Resources Institute. A U.S. policy center.
*2 Water stress: Evaluated on a scale of 1-5. The higher the number, the more water-stressed thearea is.

To ESG-oriented Investors

84

Chemical Substance Management
The Act on Confirmation, etc. of Release
Amounts of Specific Chemical Substances inthe Environment and Promotion ofAmount of PRTR-Regulated Substances
Released and Transferred (SUMCO Group[Japan])Improvements to the Management Thereof(Law concerning Pollutant Release andTransfer Register / PRTR Law) requires
businesses to report the amounts of any
designated chemical substances released into
the environment or transferred.
There are 12 substances subject to reporting
under the PRTR Law. The majority of these aresubstances contained in cleaning agents andfuels.

* The figure for each year shows the amount of
released or transferred substances during thepreceding year from April through March.

With regard to the substances subject toreporting under the PRTR Law, the SUMCO Group measures the amounts of such substancestransferred or released into the environment based on a stringent management system and issues
reports without omission.

85

List of Substances Subject to PRTR Reporting (Class 1 Designated Chemical Substances: 1
ton or more per year; Specific Class 1 Designated Chemical Substances: 0.5 tons or more per
year)
Period covered: April 2020 to March 2021
(t per year)

Ordinance

AmountChemical SubstancehandledAtmos-

Publicpherewaters

15.5

-

1.3

No.
20
30

Amount released

Name of Class 1 Designated2-aminoethanol
Linear alkylbenzene sulfonate(LAS)

Amount transferred

Soil

Landfill

Sewerage

Waste

0.0

-

-

-

0.0

-

0.0

-

-

-

-

71

Ferric chloride

6.2

-

-

-

-

-

-

80

Xylene

81.0

1.0

-

-

-

-

0.5

0.7

-

-

-

-

-

0.7

88

Hexavalent chromium
compound296

1,2,4-Trimethylbenzene

87.3

0.1

-

-

-

-

-

300

Toluene

7.6

7.4

-

-

-

-

0.2

1.3

-

-

-

-

-

-

630.9

0.2

0.0

-

-

-

248.2

332
374

Arsenic and its inorganic
compoundHydrogen fluoride and its
water-soluble salts

405

Boron compound

2.1

-

0.0

-

-

-

-

407

Poly (oxyethylene) alkyl ether

22.5

-

0.0

-

-

-

2.9

40.0

-

-

-

-

-

40.0

8.0

0.0

-

-

-

-

-

904.3

8.7

0.1

-

-

-

292.5

410
438

Poly (oxyethylene) nonylphenyl
ether
Methylnaphthalene
Total* The amount handled is not equal to the total amount released and transferred because some
substances were released after decomposition and detoxification.

To ESG-oriented Investors

86

Disclosure Based on TCFD Recommendations
In April 2021, we expressed our support for the TCFD*1 recommendations.
This section discloses our governance, strategy, risk management, and metrics and targets in linewith the TCFD recommendations.
*1 The Task Force on Climate-related Financial Disclosures established by the Financial Stability
Board (FSB)

1. Governance and Risk Management
In SUMCO, the Environmental Management Committee, chaired by an environmental officer who is amember of the Management Conference, reviews the risks and opportunities arising from climatechange, sets environmental objectives (reduction of CO2 emissions, reduction of water consumption,etc.) to be addressed, and manages the status of such efforts.
As regards climate change and other risks, the Business Security Committee (BSC), which is
attended by the Chairman and CEO and other senior management, determines company-wide
policies and deliberates and decides on risk prevention measures.

Environmental Management Committee: Environmental Management Structure
BSC: BSC's Structure and Objectives

2. Strategy
We recognize that the risks and opportunities associated with climate change are among the key
business issues that will affect our future finance.
We therefore forecast and quantified the risks and opportunities that are likely to have a financial
impact and carried out a scenario analysis in line with the TCFD recommendations.

87

(1) Major risks and opportunities related to climate change
Scope: SUMCO Group
Timing of embodiment: short term (1 year or less), medium term (1 to 3 years), medium to longterm (3 to 10 years), long term (over 10 years)
Possibility: small, medium, large
Degree of impact: small (1 billion yen or less), medium (1 to 10 billion yen), large (over 10 billion
yen)Classification

Timing of

Expected result

embodiment

Possibility

Degree ofimpactLoss of sales opportunities and increase inprocurement costs due to intensifying

Medium to long term

Large

Large

Large

MediumLarge

MediumLarge

MediumMedium term

Large

Small

Short term

MediumShort term

MediumLong term

Large

Large

Medium to long term

Large

Large

Medium to long term

Large

Large

Medium to long term

Large

Large

competition in the semiconductor sector
Increase in operating costs due to theintroduction of a carbon tax (carbon pricing)Transition
risk
Risk

Increase in waste disposal costs due to theformation of a recycling-oriented society
Increase in business costs due to theincreased burden of renewable energy levy
Increase in capital costs due to the
expansion of ESG investments
Suspension of business activities due to wind

Physicalrisk

and flood disasters
Supply chain disruptions due to wind andflood disasters

Medium term to
medium to long term
Medium to long term
Short term to
medium to long term

Small tolarge
Small tolarge

Expansion of demand for energy-savingrelated equipment due to the advancementof energy conservation and renewableenergyExpansion of demand for automotive
Opportunity

products due to the spread of Evs
Increase in demand for server-related
equipment due to the spread of telework
Increase in demand for automationequipment due to the spread of automationand digitization88

(2) Scenario analysis
Although all the items identified as risks and opportunities are evaluated as having a significant
impact on SUMCO, three items (blue items in the above list) have been selected for the scenario
analysis in the current fiscal year.

1) Increase in operating costs due to the introduction of a carbon tax (carbon
pricing) [Risk]
Since we emit large amounts of greenhouse gases and there will be a significant impact on ourbusiness if a carbon tax is introduced, we conducted a scenario analysis for the 2°C and 4°C
scenarios.
(i) Assumptions of scenario analysis(1) Total emissions for scopes 1 and 2
Emissions in 2030 are estimated, with emission factors calculated for each country‘s electric utilities
based on the World Energy Outlook (WEO) 2019 of the International Energy Agency (IEA).

Emissions in 2030

2°C

4°C

Sustainable Development Scenario (SDS)Stated Policies Scenario (STEPS)

Approx. 430,000 t-CO2/yr

Approx. 675,000 t-CO2/yr(2) Carbon prices
Carbon prices of each country are set on the basis of the World Energy Outlook (WEO) 2019 of theInternational Energy Agency (IEA).
2°C

4°C

Sustainable Development Scenario (SDS)Stated Policies Scenario (STEPS)

Japan, USA, Taiwan$100/t-CO2 *2$33/t-CO2 *4

Indonesia$75/t-CO2 *3$12/t-CO2 *5*2 The value for advanced economies is adopted.
*3 The value for selected advancing economies is adopted.
*4 The value for EU is adopted.
*5 The lowest value among the values given for different countries in the WEO 2019 is adopted.
(ii) Scenario analysis results

The cost burden will increase by about 2.4 billion yen/yr under the 4°C scenario and about 4.7
billion yen/yr under the 2°C scenario.

89

(iii) Proposed cost reduction initiatives

Since the scenario analysis has indicated that the total cost decreases when the unit cost of
procuring renewable energy is lower than the unit carbon price, we discuss the introduction ofrenewable energy in addition to our current efforts toward energy conservation.
Image of costs associated with carbon tax

2) Expansion of demand for energy-saving-related equipment due to theadvancement of energy conservation and renewable energy [Opportunity]
As we move toward a decarbonized society, demand is expected to increase for power
semiconductors that provide stable and efficient power supply and streamlined, high-precisioncontrol.
We have conducted scenario analysis for representative products that are expected to become morewidespread in the future due to climate-change-related factors and for which both the 2°C and 4°C
climate change scenarios exist and have evaluated changes in the demand for power semiconductors
in each industrial sector.

90

Consumer

Electric

equipment

railcarsectorsectorAutomotive &Energy sector

electronics
sectorInformation &communicationequipment

Industry sector

sectorMarket size of
power

A few

30%

semiconductors inpercent

percentage *6

A few percent

20%

20%

20%

High-voltage
Solar and wind
Products anddevices withsemiconductors
having promising
growth potential

Inverters forand high-power

EVs, quick

homeElectric

generation

charging

appliances,

railcars

equipment,

stations,AC(inverter

power

wireless

adapters,

modules)transmission

power supply

infrastructure,systems, etc.

etc.

current
Server power
supplies, UPS,
etc.

applications,such as motor
control,
inverter
control, andetc.

welding
machinery

Products andequipment
subject toscenario

Solar and wind
Air

Electric

power

conditioners

railcars

generationequipment

analysis
Productionof highefficiency air
conditioners
withinverters is
estimated to
be about
Changes inpower
semiconductor
demand towardachieving thegoal of less than
2°C in 2030

1.3 times
higher thanthat underthe 4°C
scenario(business as
usual). The
production
percentageof airconditioners
withinverters is
also
expected to
rise.

The
demand forrail travel,
whose CO2
emissions
per travel
distance islow, willgrow.
The
productionof railcars
isestimated
to be about
1.2 times
higher,comparedto the 4°C
scenario(business
as usual).

EnergyElectronic

efficiency ofcontrol unit

the entire(ECU)

manufacturing
plantThis sector was

Although it is

not included indifficult tothe analysis

forecast thevolume ofpower

because there
A separate

semiconductors scenario
analysis is
to be installedin power
generationequipment andrelatedproducts, weestimate thatthe amount ofsolar and wind
power to be
introduced
globally will be
about 1.5

conducted forgeneralautomotive

are noappropriate
climate change
scenarios forthe sector, andthe cycle ofsemiconductor products andservices isdevices(see"Expansion ofdemand forautomotive
products dueto the spreadof EVs")shorter than inother sectors,
makingmedium- tolong-term
projectionsdifficult.

Although there
are no climatechangescenarios forindividual
equipment andproducts in this
sector, weestimate thatenergyintensity in the
manufacturingindustry will
decrease by
about 7% incomparison
with the 4°C
scenario(business astimes greaterusual) due tothan in the 4°C

energyscenario

conservation(business as

and improved

usual).

efficiency.

91

Consumer

Electric

equipment

railcarsectorsectorAutomotive &Energy sector

electronics
sectorInformation &communicationequipment

Industry sector

sectorConsidering

Increased

Althoughproduction

the marketof airsize isconditioners

small, wedue toexpect a

globalpositive

Our businesswarming

impact onopportunities in theand greater

demand fortransition toward

extremes ofourachieving the goal

weather is

products asof less than 2°C

expected todemand forhave aelectric

positive

railcars

impact on

increases

demand fordue to a

our

modal

products.

shift.

Although themarket size issmall, we
expect that the
global shift torenewableenergy will
increase theproduction ofpower
conditioners
and otherproducts,
which will havea positive
impact on
demand for our
products.

that there are
A separate
scenario
analysis isconducted forgeneralautomotive

no direct
climate change
factors
affecting thedemand for
products andsemiconductor services in this
sector, we
devices(see"Expansion ofdemand forautomotive
products dueto the spreadof EVs")assess that thedifference indemand for
power
semiconductors
in this sector
between the
2°C and 4°C
scenarios is

We expect thatdemand for
power
semiconductors
will increase
due to suchfactors as
progress inenergyconservationand higher
efficiency infactories,
which will leadto increased
demand for our
products.

small.
Our business
opportunities
with the spreadof nextgeneration
power

The market for next-generation power semiconductors (SiC, GaN, etc.), which are currently
undergoing development, commercialization, and cost reduction, is expected to expand
significantly by 2030. We will therefore continue to monitor the spread of next-generation
power semiconductors, pursue development, and increase our capacity.

semiconductors*6 Based on a research company's forecast data923) Expansion of demand for automotive products due to the spread of EVs[Opportunity]
In forecasting the demand for automotive wafers, we estimated the ratios of future EV/HEV
production as shown in the figure below.
Regarding the right-side graph (New scenario) as the 2°C scenario and the left-side graph as the
4°C scenario (business as usual), we analyzed the trend of silicon wafer demand until 2030 by
multiplying the projected area of silicon wafers for automotive semiconductors by the production
ratio of each vehicle type.
The results indicate that the demand for silicon wafers in 2030 will be more than doubled compared
to 2020 in both the 2°C and 4°C scenarios. When both scenarios are compared, the demand as of2030 under the 2°C scenario is estimated to be about 1.1 times higher than that under the 4°C
scenario.
In the automotive and electronics sector, we expect, as a baseline, increasing demand forautomotive semiconductors due to such trends as automated driving and computerization of display
devices. In addition, we expect that the spread of EVs and PHEVs for decarbonization will have theeffect of further boosting demand, with a positive impact on demand for our products.
We will therefore continue to develop high reliability and durability and increase our capacity.

93* The scenario analysis was conducted with the help of an external research company in collecting
and analyzing external information.

3. Metrics and Targets
Setting the reduction of CO2 emissions as one of our environmental objectives, we are working to
reduce CO2 emissions.
We are also publishing the results of our activities to achieve the objective.

Environmental objectives
Environmental load of business activities

94

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4PDJBM%BUB QFSTPOOFM  ˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘˘ Speedy, Accurate and Fair Disclosure of
Corporate Information
Why SUMCO Addresses Information Disclosure
SUMCO makes every effort to enhance management transparency and earn legitimate
recognition of its corporate value from shareholders and investors by releasing information
including the Company's management vision, the status of its business activities and financial
performance in a speedy, accurate and fair manner. We also undertake activities to continually
improve corporate value by reflecting the feedback received from shareholders and investors in
our management.

Basic Policy on Information Disclosure
SUMCO believes timely and appropriate disclosure of corporate information to investors is acore element in ensuring a sound stock market. The Company shall commit itself to speedy,
accurate and fair disclosure of corporate information while always adopting the perspective ofinvestors. Corporate information that is useful in investor decision-making shall be actively
disclosed even when not mandated by laws and regulations.

Information Disclosure System
The Public Relations & IR Department is responsible for dialogue with shareholders and otherinvestors, under the supervision by executive management, the results of which are reported
to the Board of Directors and executive management as needed. Top management also
provides its own explanations during financial results briefings held quarterly and also takes
part in individual meetings with shareholders and other investors as needed.
When engaged in IR activities, the necessary information is collected from the relevant
departments and coordinated and summarized by the Public Relations & IR Department. The
details of IR activities are also confirmed by top management in advance, with due care inhandling insider information.
Through these activities, SUMCO reflects feedback and requests from shareholders andinvestors in management in an effort to achieve sustained growth and enhance its corporate
value in the long-term.

96

Communication with Shareholders and Investors

General Meeting of Shareholders
SUMCO positions General Meeting of Shareholders as the occasion where important decisions on the
Company's policies and other matters are made as well as an opportunity to have dialogues withshareholders.
We are engaged in early dispatch of the notice of convocation, posting on our website andpreparation for the English translation.
We also effort to provide explanations of the details of business report and answer questions asked
by shareholders during meetings in as clear a manner as possible by utilizing narrated video footage.

IR Activities
The Timely Disclosure Network (TDnet) of theTokyo Stock Exchange is utilized to disclose
information that needs to be disclosed in atimely fashion, and documents are posted bothin Japanese and English simultaneously on our
website to ensure the fair disclosure of
information to shareholders and investors inJapan and overseas. Our Annual Report andMessage to Shareholder

Message to Shareholders are also published toconvey messages from top management andAnnual Report 2021

report on business performance and conditions.

As well as regularly held meetings with institutional investors and securities analysts, SUMCO also
periodically provides company briefings to individual investors and organizes visits to overseas
institutional investors in Europe, North America and Asia to help investors develop a better
understanding of the Company.
While some IR activities for overseas stakeholders were postponed in fiscal year 2021 due to the
COVID-19 pandemic, briefings on financial results led by senior management were held quarterly.
SUMCO also actively participated in domestic and overseas conferences, and held web- and teleconferences with investors.

To ESG-oriented Investors

97

The Pursuit of Quality and Reliability
Why SUMCO Addresses Quality and Reliability
As a company that manufactures silicon wafers that represent the base materials for thesemiconductors installed in all kinds of electronic devices, we see it as a social responsibility of
the highest priority to ensure the safety and reliability of our products while making sure they
comply with all applicable laws, ordinances and regulations.
For this reason, the SUMCO Group makes every effort to implement the stable supply of
products that meet the quality requirements of customers and further boost customer
satisfaction by implementing quality management in an appropriate and effective manner.

The SUMCO Quality Policy
It is the quality policy of the SUMCO Group to deliver world class quality and reliability throughanticipation of future needs; continuously improving products, processes, technology andservice for total customer satisfaction.

Quality Control System
In the SUMCO Group, all sites including affiliate companies in Japan and overseas haveobtained IATF 16949 and ISO 9001 certifications. We strive to ensure stable levels of quality as
well as further enhance it, and have made continuous improvements to our quality
management system.

98

The SUMCO Group Mission Statement, Quality Policy and Targets

99

Quality Education
To enhance product reliability and safety, it isnecessary for not only those in charge but alsoeach worker to have the mindset of a supervisor
and improve their skills.
For this reason, we have developed quality
education programs for each job and level of
employee and assigned instructors for eacheducation program to each production site toprovide necessary education to the humanQuality education at one of the SUMCO seminars

resources that need it whenever required.
In 2021, having taken steps to deal with COVID-19, the SUMCO Group conducted around 330
internal seminars in an effort to enhance the knowledge and awareness of quality control on the partof employees.

Response to Quality Problems
Should a plant become the subject of a

Flow for Sharing Quality Problems

customer complaint, experience an abnormality
or other quality problem, the plant handles the
problem immediately, investigates the cause andtakes measures to prevent recurrence, in orderto minimize the impact on customers.
When complaints or internal abnormalities occur,
we consider the best known method (BKM) to
prevent recurrences and swiftly deploy a
response throughout the entire SUMCO Group as
needed, and build systems to ensure similar
issues do not occur in the future.

100

Initiatives to Improve Customer Satisfaction

Conducting Customer Satisfaction Surveys
To maintain our "first call" status among customers, evaluations received from customers are sharedwith relevant departments each time for continuous improvements, and analyzed from four different
aspects: quality, cost, delivery and service (QCDS).
The results of analysis are shared among management and other relevant departments,
incorporated into the improvement plans of each department, and used to further enhance customer
satisfaction.

Communication with Customers
To further enhance customer satisfaction, we strive to improve the quality of products and services
through two-way communication with customers.
As part of this initiative to promote communication with customers, we proactively hold technicalcommunication meetings both domestically and internationally in order to grasp customer needs
accurately and at an early stage, foster technological development at a rapid pace, and reliably
provide products that match customer needs.
At the technical communication meetings, we make proposals based on our unique technologies, aswell as check and follow up on the performance of our products. We position these technology
conferences as opportunities to win recognition and trust from customers. The feedback anddemands of customers learned from the technical communication meetings are utilized forcontinuous product improvement of our products and are reflected in business plans, such as forformulating technology development roadmaps that accommodate customers' needs for higher
precision and enable product differentiation. By doing so, we strive to gain and maintain a strong
presence among customers.
In recent years, we were unable to hold in-person technical communication meetings due to the
COVID-19 pandemic, but we’ve continued to communicate with customers through web
conferencing systems and other means.
Through these SUMCO Group initiatives to promote close communication with customers, we
endeavor to provide the most appropriate information.

101

Flow for Sharing Customer Satisfaction (CS) Evaluation Information

Ensuring the Safety of ProductsManagement of the Chemical Substances Contained in Products
SUMCO ensures that the chemical substances regulated by law or those that customers have asked
us to eliminate or reduce the use of are managed properly according to internal rules and standards.

Provision of Safety Data Sheets (SDS)
SUMCO makes available safety data sheets (SDS) based on JIS Z7253 to provide information on therelated hazards of chemical substances used by the Company and to give instructions on how tohandle them safely.

To ESG-oriented Investors

102

Supply Chain
Why SUMCO Addresses the Supply Chain
Year after year, stakeholders have been exhibiting a growing interest in companies' social
responsibility through the supply chain in the course of their business activities.
In light of these growing concerns, the SUMCO Group believes it is important to share CSRrelated societal demands with suppliers and to collaborate with them on issues including
human rights, labor, safety, the environment and ethics in the supply chain.

Procurement Policy
In our procurement activities, SUMCO strives to engage in fair and rational trade with all
suppliers, both domestic and overseas *1, based on mutual trust.
With the cooperation of all suppliers, we also actively promote initiatives to fulfill our corporatesocial responsibilities, including compliance with related laws, ordinances and social norms,
and efforts to support global environmental conservation.
<Procurement Policy>
1. Transactions based on partnership
We will develop favorable partnerships with our suppliers based on mutual trust.
2. Fair transactions
We will ensure that our procurement is clean, open and fair.
3. Promotion of value analysis (VA) activities
We will encourage our suppliers to conduct value analysis (VA) activities in order to propose
cost improvement methods, new materials, new technologies and others, and will actively
adopt such proposals.
4. Compliance in procurement activities
We will comply with laws, ordinances and social norms in the course of our procurement
activities.
5. Fulfillment of corporate social responsibilities
We will fulfill our social responsibilities when conducting procurement activities across ourentire supply chain, including our suppliers.
SUMCO CSR Procurement Policy [95KB/3Pages]
6. Green procurement
We promote the procurement of materials with minimum environmental impact.
*1 [Reference] Procurement amount ratio by area in 2021

103

Management System
In addition to procurement departments, the departments at SUMCO responsible for quality
assurance, CSR, environmental management and safety and health coordinate on the selectionof new suppliers, evaluation of existing suppliers, establishment of procurement plans andother supply chain management efforts. Specifically, we issue various questionnaire forms(described later) and collect the responses, conduct written or on-site audits and due
diligences on quality, CSR and the environment respectively and reflect the results obtained
from these efforts in our assessment of suppliers in an effort to develop a more robust supply
chain.

104

CSR Procurement Activities

Basic Stance on CSR Procurement
SUMCO has established the SUMCO CSR Procurement Policy and it promotes responsible
procurement activities to fulfill its social responsibilities across the supply chain. We share various
issues related to the supply chain with all suppliers, both domestic and overseas, and tackle
procurement activities while keeping those issues in mind to ensure that customers can use our
products confidently and to satisfy our stakeholders.
SUMCO CSR Procurement Policy [95KB/3Pages]
Through periodic briefings to suppliers and procurement activities such as those described below, werequest our suppliers to make voluntary efforts to promote CSR management. We also call for theirefforts to respect human rights, protect the environment, comply with corporate ethics, etc. whencontracting with new suppliers.

(1) Briefings on CSR Procurement
We share the SUMCO CSR Procurement Policy with our suppliers at regularly held briefing sessions,and through separate briefing sessions and CSR audits, we explain the SUMCO CSR Procurement
Policy, SUMCO Environmental Policies and RBA (Responsible Business Alliance) Code of Conduct andprovide advice on compliance with these standards. In this way, SUMCO continues to deepen
suppliers' understanding of the Company's labor, safety/health, environment and ethics-focused
efforts towards CSR procurement.

Briefing Sessions for Suppliers
Brieﬁng Sessions for Suppliers (In 2021, same as 2020, we held the session by web-based meeting
due to COVID-19.)
May 18, 2021 (418 people from 231 companies)
November 19, 2021 (445 people from 235 companies)105

(2) Supplier Handbook
To help suppliers understand our approach to procurement activities, we distribute Supplier
Handbook, which includes a section on our procurement policy and requests to suppliers including
items relating to CSR. The Supplier Handbook is posted on our dedicated procurement website used
in SUMCO's daily procurement activities for easy reference at any time by suppliers.
In this handbook, we ask suppliers that comprise our supply chain to promote CSR. As guideline tobe followed in implementing CSR management, we ask suppliers to utilize the RBA Code of Conduct,
and also encourage subcontractors and sub-subcontractors to implement CSR management in asimilar fashion. Furthermore, we request them to develop an environmental management systemthat complies with ISO 14001 by distributing this handbook.

(3) Green Procurement Guidelines
To promote the procurement of products with a minimal environmental impact (green procurement),
we have also posted Green Procurement Guidelines on the dedicated procurement website. The
guidelines summarize relevant laws and ordinances, the RoHS Directive, REACH regulations,prohibited or controlled substances designated in customer requests and other pertinent
information.

(4) Raw Material Surveys
SUMCO's procurement and environmental management departments work together to promote
green procurement by asking suppliers to submit certificates of non-use of prohibited substances aswell as issuing and collecting various questionnaires, in order to confirm that substances specified in
the Green Procurement Guidelines are not being used.

106

(5) CSR Questionnaires and Audits
We distribute and collect CSR questionnaires based on the RBA Code of Conduct to our main
suppliers to review the status of CSR initiatives at each company. The questionnaires are issued tothe suppliers we regard as important because we purchase large amounts from them and they are
essential or irreplaceable to our production activities. There are more than 200 such companies, andSUMCO has managed to secure responses from almost all of them. Based on the results of thesequestionnaires, we conduct regular CSR audits that include field audits of a given number ofsuppliers. Along with providing explanations of our CSR procurement policy and environmental policy
and asking for understanding and cooperation, we verify the state of compliance with each of theitems on the CSR questionnaire such as human rights, safety, environment, ethics, and management
systems, as well as confirming the status of improvements.
The CSR Audit found suppliers who had not conducted training on how to prevent insider trading forseveral years, suppliers who had not adequately managed expiration dates for legally stipulated
safety and environmental qualifications and suppliers who had failed to secure emergency exits andescape routes for employees. SUMCO requested the understanding of suppliers and asked them tocorrect these issues, leading suppliers to improve their operations. Although we did not conduct the
CSR Audit in 2021 due to COVID-19, SUMCO Group will continue to promote CSR management inour supply chain.

107

Major Items in the CSR Questionnaire
1. Human Rights and Labor(1) Freely chosen employment
Examples: Prohibition of forced and bonded labor(2) No use of child labor
Example: Prohibition on child labor, not having young workers engage in dangerous
work(3) Limitation on Working Hours
Example: Compliance with laws and ordinances on working hours and holidays(4) Lawful Wages
Examples: Compliance with laws and ordinances on minimum wages(5) Humane Treatment
Examples: Respect for human rights, prohibiting harassment and establishingdisciplinary mechanisms(6) Non-Discrimination
Examples: Prohibiting discrimination on the basis of race, nationality, gender, age,sexual orientation,religion, disabilities or other traits(7) Freedom of Association
2. Safety and Health(1) Occupational Safety
Examples: Obtaining and renewing permits and licenses, providing personal protective
equipment(2) Preparedness for Emergency
Examples: Setting up appropriate emergency evacuation doors and evacuation routes,
conducting drills(3) Prevention of Occupational Injury and Illness
3. Environment(1) Compliance with Environmental Laws and Ordinances
Examples: Obtaining the necessary licenses and other permits, compliance withenvironmental standards(2) Pollution Prevention and Waste Reduction
Examples: Reducing waste and greenhouse gases, controlling wastewater(3) Reduction in Energy Consumption and Greenhouse Gas Emissions
4. Ethics(1) Compliance with Laws
Examples: Prohibiting bribery and corruption, establishing internal reporting systems(2) Fair Business Activities
Examples: Compliance with laws and ordinances on fair trade, competition andadvertising(3) Information Management
Examples: Appropriate management of customer information and protection of
intellectual property rights
5. Business Continuity(1) Risk Assessment and Risk Management(2) Business Continuity Plan (BCP)
6. Management Systems
108

(6) Training for Procurement Staff
SUMCO's procurement staff also need sophisticated expertise and a compliance-oriented mindset to
conduct the CSR procurement activities listed above. By training staff about the SUMCO Charter ofCorporate Conduct and providing departments in charge of procurement with opportunities to train
themselves regarding laws and regulations every year, the Company aims to increase employee
understanding and awareness regarding the background and meaning of the SUMCO CSR
Procurement Policy, legal compliance, unfair competition and improper transactions, anti-corruption
and respect for human rights.

Risk Management within Procurement Activities
We work to identify the many risks facing the company in its procurement activities, including risk of
instability in procurement of raw materials, risk of corruption, risk of legal violation and risk of use ofcontrolled or prohibited substances. We assess the extent of impact should any of these risksmaterialize, assign priorities to them, and implement management measures according to the levelof each risk. (Refer to the section titled "Risk Management" for details.)
When selecting new suppliers or evaluating existing suppliers, we conduct risk assessment onvarious risks such as disruptions to raw material procurement, comprehensive corruption risk,
violation of laws and risk of using regulated/prohibited substances, asking suppliers with high-risk
items to improve their operations to prevent risks.

109Strengthening of Business Continuity Plans for Material Procurement
SUMCO promotes optimum inventory control and multiple sources for procured materials according
to the level of risk involved.
If a disaster or accident should occur, we will immediately launch an investigation into its impact,
while we take all possible steps for emergency procurement, including finding alternative suppliers
and adopting alternative products, thus ensuring the necessary framework to do all we can tominimize the impact on production.

1. Continuing optimum inventory control based on the characteristics of each procured
material
We will review inventory quantities, storage sites, transportation methods and otheraspects for each type of material whenever necessary.
2. Source investigation and risk response
We will investigate and confirm production sites and sources of major items and respondaccording to the level of risk involved.
3. Maintenance, enhancement and review of business continuity plan for each item procured
We will develop business continuity plans for each major item so that we can properly
respond to the occurrence of any risk.
4. Risk assessment of suppliers
We will periodically conduct checks on our main suppliers with respect to their financial
condition, production systems, business continuity plans and other aspects, and respond
appropriately based on the results.

Initiatives to Reduce Environmental Impact
Through the aforementioned CSR questionnaires and CSR audits, SUMCO strives to reduce
environmental impact across the entire supply chain by incorporating items designed to review
initiatives aimed at reducing the amount of waste generated, curbing greenhouse gas emissions andreducing the use of electricity, water and energy, and by recognizing suppliers implementing
continually concrete reduction activities by setting numerical targets or taking other measures.
Besides getting suppliers to understand the SUMCO Basic Environmental Policy, education andtraining are provided in such areas as environmental accident prevention and legal compliance.

To ESG-oriented Investors

110Respect for Human Rights
SUMCO’s Basic Policy on Human Rights
The SUMCO Group regards respect for basic human rights to be an important social
responsibility. We pursue a number of initiatives to be a company that "values people" andrespects the human rights of all people associated with the SUMCO Group.
The SUMCO Group looks towards international standards such as the Universal Declaration of
Human Rights and the Guiding Principles on Business and Human Rights. In the SUMCO CSR
Policy, we pledge to ensure a safe, health, comfortable and appropriate workplace, maintain astrong respect for human rights, abilities and personalities, and to achieve equal opportunity
employment, ensure the fair treatment of employees and realize diverse ways of working. To
this end, we strive to create a workplace where employees are motivated to work hard.
Based on this policy, SUMCO Group's Code of Corporate Conduct and various regulations
clearly define rules prohibiting workplace harassment (bullying or teasing) and other conduct
in violation of human rights based on illegitimate reasons such as race, religion, gender,
nationality, age, sexual orientation, and disability. In addition to establishing the internalreporting hotline, translating the regulations into various languages and educating to increasehuman rights awareness among all employees of the Group, we have also established humanrights violation and harassment consultation services at each Company site in Japan.
We not only prohibit child labor, but base our business activities on a clearly defined, written
policy which respects the rights of every child and prohibits forced labor. We had no problems
with child labor and forced labor.
In accordance with the labor laws and regulations of each country, we work to build trust
between labor and management while respecting employees’ freedom of association and theirright to organize and engage in collective bargaining. We also offer working conditions
including wages that are appropriate to living standards in light of minimum wages, and strive
to manage working hours appropriately by reducing excessive overtime.
SUMCO develops guidelines based on the above and shares them internally by posting them to
the Company intranet.

111Promotion Framework
The SUMCO Group in Japan annually convenes the Human Rights Awareness and Promotion
Committee, as a framework to promote employee awareness of human rights issues. The
committee confirms the policies and details of human rights awareness initiatives, while eachplant or Group company implements activities in line with this policy. The activities include
invitation of outside experts to give talks and awareness training using audiovisual materials.
In examining new businesses, we look at the laws of the country in question and otherpossible human rights/labor risks, and to ensure there is no discrimination based on factors
unrelated to the legitimate interests of the business, we conduct internal training on the
aforementioned policies.

Major Themes Covered in Human Rights Awareness Training
Respect for diversity (especially gender, sexual orientation, etc.)
Human rights for the elderly
Workplace harassment
Sexual harassment
Harassment related to pregnancy, childbirth, childcare or nursing care leave in theworkplace
Mental health issues in the workplace
Measures based on the number of consultations to the consultation service in theyear, harassment, etc.

Maintaining and Enhancing a Pleasant Working Environment
SUMCO regularly educates for all employees on various forms of harassment, aiming to prevent all
forms of discrimination, and makes every effort to improve awareness of these issues in theworkplace.
In addition, we formulate and implement action plans aimed at improving the working environment
at each workplace by conducting a stress check each year as part of our health management
initiatives and adding items related to employee satisfaction to the stress check.
Seeking to eliminate all forms of employment discrimination, we also actively pursue initiatives suchas attending lectures held by the U.S. Equal Employment Opportunity Commission (EEOC), as well
as ADA (Americans with Disabilities Act) training seminars.
Additionally, as a part of efforts to maintain and enhance a pleasant workplace environment, theSUMCO Group also conducts various in-house recreation activities and deepens exchanges between
employees at each site to revitalize workplace communication.
112

Establishment of a Harassment Consultation Service
SUMCO has established a Harassment Consultation Service to serve as the point of contact for
employees to consult about issues related to human rights violations and harassment. To ensure that
employees can casually seek advice at any time, the consultation services are staffed by both maleand female consultants who work based on three principles: (1) protecting the privacy of employees
seeking consultation; (2) prohibiting disadvantageous treatment of related persons; and (3) dealing
with consultations in a fair manner. In particular, the service accepts consultations by e-mail or
telephone to keep them confidential. Each consultation request received is investigated in therelevant department, measures for rectification and prevention of a recurrence are taken as thesituation calls for, and the results are reported to management, while the consulting party is given
feedback. In addition, the results are shared with the Human Rights Awareness and Promotion
Committee, putting them to Group-wide use in measures for preventing a recurrence.
In 2021, the Harassment Consultation Service handled eleven consultation cases.
Harassment Consultation Service System

113

Harassment Training
We hold harassment training to eradicate harassments for management-level staff in each region. In
2021, a total 808 staff members underwent the training.

Response to Labor Standards Violations
Based on the ILO Labor Principles, the Group strives to comply with the labor standards andregulations of each country. When an administrative directive for a labor standard violation is issued
by a governmental authority, the SUMCO Group submits a report on the directive to the upper
management and members of the Audit and Supervisory Committee, ensures that corrective actionis undertaken throughout the Group, and works to raise awareness of the issue and prevent it fromreoccurring.

Labor-Management Relations
The SUMCO Group grants consideration to and respects the rights of all employees, including
employees' right to freedom of association based on the laws of the countries and regions in which
the SUMCO Group does business. We also aim to strengthen labor-management relations while
respecting employees' right to assembly and collective bargaining.
In Japan, for example, the labor agreement concluded between the Company and workers, inaddition to rules, sets out as a basic policy that issues between labor and management are to beresolved through collective bargaining and discussion based on mutual understanding and trust,
aimed at the perpetual development of the Company and improvement of working conditions, while
recognizing the rights of the labor union to assembly, collective bargaining, and strike.
For that purpose, high-level labor-management meetings are generally held twice a year with theaim of promoting communication between labor and management, and business operations aremanaged with shared information and challenges.
In addition, at production briefings and labor-management meetings held once a month at eachplant, the plant managers and union representatives meet to exchange information and views
concerning the production situation and other matters.
Meanwhile the Labor-Management Study Committee meets regularly throughout the year to discuss
important labor-management issues such as the improvement of working conditions and review ofvarious systems from multifaceted, holistic and long-term perspectives, thus allowing labor andmanagement to work closely together to address various issues. The ratio of labor union members
to the employees of our company and domestic group companies is 88%.
114

Compliance with Fair Wages
Average income per employee for fiscal 2021 was 6,557,000 yen. At SUMCO, we divide thecompensation systems of employees into different courses according to the work they undertake,and based on the basic concept of “equal pay for equal work,” we properly compensate employees
based on their abilities, performance and contribution levels, offering the same treatment
irrespective of gender. The SUMCO Group also follows laws and regulations regarding minimum
wages in each country, and fulfills its obligation to pay employees appropriate wages based on thelocal cost of living and other factors.

Employee Benefits Programs
SUMCO and Group companies in Japan offer employees a wide range of benefits packages as
guarantees for the future. In addition to Japan’s social security system, these include additional
health insurance association payments, and individual options such as enrolment in an employee
shareholding association, TSUMITATE NISA, property accumulation savings, and group life
insurance.

To ESG-oriented Investors

115

Human Resources Development andUtilization
Human Resources Development
As declared in the SUMCO Vision, SUMCO aspires to become the "World's Best in Technology." Toreach this goal, diversified training opportunities are provided to employees at all levels, from new
recruits to managers and executives. We encourage employees to stay abreast of the changing
times, making every effort to foster the development of human resources who will be able to think
and act independently. Each year, up-and-coming engineers are also given the chance to present
their research findings to senior management as a means of enhancing their motivation. In addition,
we dispatch a certain number of engineers to the doctoral program at domestic universities every
year to develop highly specialized technical personnel.
In pursuit of "Empower Employee Awareness of Profit," another element to the SUMCO Vision, theSUMCO CEO AWARD was established as the SUMCO Group's highest award, part of a measure toboost employee awareness of participation. The award is annually presented to individuals andorganizations that have made meaningful contributions to enhancing corporate value. Along with thisaward, the Group also holds presentations by TPM teams annually in order to recognize outstanding
success.
Moreover, to achieve "Competitiveness in Overseas Markets" as declared in the SUMCO Vision, we
are working to cultivate an awareness of understanding and respecting a diverse range of culturesand values within the Group, and are endeavoring to develop globally competitive human resourcesby enhancing programs such as study abroad and foreign language learning schemes.
In 2021, a total 21,817 hours of company-wide training was held by departments in charge ofhuman resources.
Undergoing regular review, the training programs are revised in line with changing needs; moreover,many suggestions received from outside directors with a wealth of experience in training andeducation are incorporated, aimed at making them better programs.

116

Career-formation programs

117

VoiceProcess Planning OfficeMami Kubota

Q. You spent two years doing research work at the State University of New
York. What made you decide to apply for the overseas program?
Ever since joining the Company, I had been thinking about the need to improve mycommunication skills, since the work includes opportunities to give presentations in front ofpeople from abroad. When I heard about the chance to apply for this program, I jumped on it,
eager to take on the challenge.

Q. Looking back at your research experience at an overseas university, was it
different from a Japanese university?
One difference I noticed from Japanese universities is the way American university students
actively offer their opinions, and are good at persuasion. Japanese university students, on theother hand, I feel are better when it comes to carrying out a detailed investigation of theirresearch topic in advance, and are more thorough in setting up experiments. As for
instructors, a big difference is that in the US they tend to leave research up to their students,
mostly staying out of things, whereas instructors at Japanese universities give detailed advice.

Q. How do you plan to put to use what you learned abroad in your company
activities?
Before I went abroad, when conversing with people I often just assumed, “Surely this personshares the same awareness as mine.” After living in the US and talking with people of diverse
backgrounds, however, I changed to the assumption, “The other person’s awareness iscertainly not the same as mine.” From this experience, since returning to Japan I try toconfirm the other person’s understanding of things as much as possible. People in US researchlabs, while being sure to get a solid grasp of the main points of their studies, also value theirprivate life, carrying out their research with a proper work-life balance. Drawing on thisexperience, when I am in a situation where I have to confirm understanding, I make it apractice to stick to the basics and provide balanced guidance.

118

Engineer Presentation Contest

Engineer Presentation Contest

119Diversity and Inclusion
SUMCO believes that the promotion of diversity and inclusion is essential for becoming the strong
company which can grow sustainably. Since our company has three roots: Mitsubishi, Sumitomo,
and Komatsu, we have fostered a culture in which we can bring together and utilize the knowledge
and expertise of each. In addition to this, we work to further enhance our corporate value so thatdiverse talents can work to utilize their ideas and experiences by expanding measures to promotewomen’s career and systems, local hires at our domestic and overseas bases and experienced
workers of other companies, so that diverse talents can work to utilize their ideas and experiences.
We will continue to actively promote diversity and inclusion initiatives to meet our stakeholders’expectations.

Promoting Active Participation of Women
To provide employees who raise children with a more comfortable workplace environment and tosupport their work-life balance, SUMCO has established diverse employment support programs suchas longer child-care leave period than the statutory leave period, a telework system, and a diverse
short working hour system. In 2016, the Company set up SUMCO Nursery School Imari as an inhouse day-care facility at our Kyushu Plant in the Imari area, the largest site across the SUMCO
Group. We also provide a childcare support allowance for employees who are unable to use the
SUMCO Nursery School Imari.
Additionally, as a new form of regional contribution, the facility is also a community day-care service
based on the Japanese government's Comprehensive Support System for Children and Childrearing.
Accordingly, a portion of the capacity is made available to local residents who are not SUMCO
employees.

Support programs for each life event

Enlarge the figure120

Program

Name of policy measure

Description

Childcare leave

Eligible up to time child is 3 years old

Shorter workdays during

Up to time child enters junior high school, choice of 4-hour or 6-hourchildcare

workdays
Up to time child enters junior high school, free arrangement of work

Flexible work hours

times during the day adding up to a normal workday of 7 hours 45
minuteEmployees in a department and work category enabling them toChildcare

Work from home (remote

work from home may choose to work remotely, as theirwork) option

circumstances warrant, at a maximum until child enters junior highsupportschoolUp to time child enters junior high school, in addition to the legallySpecial paid time off

mandated time off for care of an ill child, paid time off can be taken
for the necessary number of days when care for an illness is needed

SUMCO Nursery School

A nursery school on the company premises, available also to children

Imariof employees within access range

Grants toward nurseryschool costs
Family care leave

Employees outside the range of access to SUMCO Nursery School
Imari can receive monthly grants of 10,000 to 20,000 yen up to timechild is 3 years old
Leave for care of a family member can be taken for a total of one
year in up to three installments

Shorter workdays during

A choice of 4-hour or 6-hour workdays (for a total of up to threefamily careyears; can be divided into multiple installments)
Free arrangement of work times during the day adding up to a

Family care

Flexible work hours

normal workday of 7 hours 45 minutes (for a total of up to three
years; can be divided into multiple installments)

supportIn addition to the legally mandated time off for family care, paid time
Special paid time off

off can be taken for the necessary number of days when family careis needed

Work from home (remotework) option

Other support

Employees in a department and work category enabling them towork from home may choose to work remotely, as theircircumstances warrant

Special time off when

When a spouse gives birth, a total of 3 days of paid time off withinspouse gives birth

10 days before and after birth

Return-to-work programfor former employees

Former employees who had to leave their job behind for personalreasons such as childcare or family care, and who wish to return,can do so by following the set procedures

121

PT.SUMCO Indonesia also offers a scholarship program for the children of its employees. We hopethat this scholarship will contribute to the future development of Indonesia.
(Photo: Scholarship program event at PT.SUMCO Indonesia)

SUMCO has been providing employees who raise children with a more comfortable workplaceenvironment. Additionally, we improve support for women employees by developing a new “Retiree
Comeback Program” that allows employees who are forced to leave the company temporarily due tochildcare or other reasons to return to work again. To further increase diversity within the company
and to further promote women’s participation, we have set a medium-term goal of increasing thepercentage of female managers to 10% in Japan and 12% on a consolidated basis (in SUMCO
Group) by 2030, and actively promote regular and experienced female employee hiring.

122

Employment of People with Disabilities
The SUMCO Group is actively working
to employ persons with disabilities, as

Employment Ratio of People with Disabilities (SUMCO
Group [Japan])demonstrated by SUMCO establishing acompany that specifically hires persons
with disabilities in Japan. In 2021,
1.69% of SUMCO Group's workforce
worldwide was comprised of persons
with disabilities. Looking only at Japan,that number comes to 2.32%.
Moving forward, the SUMCO Group willcontinue its efforts to fit the right
person to the right job in order to help
individual employees reach their fullpotential, as well as to provide
employment opportunities andmaintain and improve supportive work
environments for people with* The figure for each fiscal year is the average of theperiod from January to December of the following year.

disabilities.

Employment of Older Workers
We have set up a re-employment system by which employees, if they are well-motivated and wish
to continue working after mandatory retirement at age 60, can continue working until age 65. This
allows them to continue working while leveraging their extensive experience, sophisticated skills andhigh-level abilities.
Additionally, by maintaining the same compensation applied at the time of mandatory retirement
even after a regular employee is re-employed, the system allows employees to contribute with astrong sense of motivation even after reaching mandatory retirement age.

Utilization of Global Talent
The SUMCO Group maintains manufacturing plants in the US, Taiwan and Indonesia, as well as sales
offices around the world. By utilizing local hiring and actively working to hire and utilize talented
global human resources regardless of nationality. Sufficient support including technology transferfrom domestic Group is provided to each overseas base. On the other hand, utilization of IT and
improvement of each workplace is worth learning for domestic Group. The SUMCO Group seeks toachieve even further growth as a global company by improving each other.
123

Number of Employees(People)Item

Consolidated
Total number of

Japan

6,413

Male

7,700

5,583

7,952

5,841

Female

769

512

837

572

Percentage of female

9.1%

8.4%

9.5%

8.9%

791

482

815

508

Male

741

478

759

498

Female

50

4

56

10

6.3%

0.8%

6.9%

2.0%

Percentage of female
Item

Sumco

Total number ofMale

9 As of Dec. 31, 2021

Female1

Percentage of female

10.0%

Total number of69

peopleMale

61 FY2021

Female8

Percentage of female

Average years ofservice (years)

Item

Remarks
10

peopleNew employee

Japan

8,789

peopleBoard member

Consolidated

6,095

Total number ofManagers

As of May 31, 2022

8,469

peopleRegular employees(Reference)

Actual at end of 2021

11.6%

Male

17.5

Female14.1 As of Dec. 31, 2021

Difference

3.4
Regular employees

Temporary employees(As of Dec. 31, 2021)(2021 average)

Sumco

4,168

584

8,469
Consolidated

Japan

6,095

Overseas

2,374

124

1,011

Number of Employees by Region

Breakdown of Employees (Consolidated)(Consolidated)(People)(People)Managers

Number of employees

Region(As of Dec. 31, 2021)

Japan

6,095

North

590

AmericaSoutheast

Generalemployees

Total(As of Dec. 31,
2021)

Male

741

6,959

7,700

Female

50

719

769

Total

791

7,678

8,469

333

Asia
East Asia

1,427

Europe

24

Total

8,469

2021 Data

Number of harassment consultation cases

11

Number of participants in harassment training for management-level employees

808

Resignation rate for personal reasons among permanent employees (graph below shows thechange in the past turnover rate)
Total hours of company-wide training held by
the Human Resources Dept.
Total cost

Human resource development

0.85%
21,817 hours
94 million yen

Percentage of employees who attended the28%

above training
Training hours per employee
Percentage of persons with disabilities
employed

5.2 hours

Global Total

1.69%

Japan Only

2.32%

Change in resignation rate among permanent employees
2017

2018

2019

2020

2021

0.57%

0.66%

0.83%

0.77%

0.85%

Men

0.43%

0.62%

0.73%

0.70%

0.76%

Women

2.53%

1.16%

2.08%

1.60%

1.88%

Resignation rate for
personal reasons

To ESG-oriented Investors
125

Initiatives for Safety and Health
Why SUMCO Addresses Safety and healthIn order for employees to reach their full potential and work with vitality, the SUMCO Groupsees ensuring environment where employees can work at ease as one of its crucial social
responsibilities.
In the SUMCO CSR Policy, the SUMCO Group pledges to "maintain safe, healthy, comfortable
and appropriate workplaces for everybody working in SUMCO, shall have a high regard forhuman rights, ability and personality, and shall realize fair and diverse ways of working." Basedon this, the SUMCO Group promote safety and health initiatives under the following basic
principles and policy.

SUMCO Group Basic Policy on Safety and health
Basic Principle

Under the principle that "the safety and health of employees takes the highest priority
over all," the SUMCO Group is committed to "creating a safe and pleasant workplaceenvironment supportive of good mental and physical health" through leadership by
supervisors and through active communication across the organization.
Basic Policy

1. We will collectively and thoroughly strive to create a workplace where all members
adhere to relevant laws and regulations as well as rules stipulated in manuals andwork procedures.
2. In the event of any work-related accidents, we will collectively and thoroughly analyze
the root causes and implement measures to prevent their recurrence.
3. We will collectively and thoroughly strive to create an open workplace environment,
as well as to maintain and promote their mental and physical health and to prevent
occupational illnesses.
4. We will collectively and thoroughly engage in raising awareness of traffic
consideration and promote traffic safety initiatives as models for society.

126

Safety and health Initiatives

Promotion Framework
For the purpose of maintaining and enhancing the Group's levels of safety and health, the SUMCO
Group annually convenes the Company-wide Safety and Health Committee in which report on thestatus of safety and health-related initiatives and information sharing are made. The committee,
attended by the Chief Health Officer and other executives, reports on Group-wide activities related tosafety and health management as well as major work-related accidents, and also reviews andapproves safety and health-related issues and targets to be addressed in the following fiscal year.
Additionally, each plant shares safety and health information and improve safety and health issues,and engages in daily activities to achieve safety and health objectives, through operating site safety
and health committees, workplace safety and health committees and small group workplace safety
meetings.
Company-wide Safety, Health and Hygiene Promotion Structure127

Meetings and Committees (Communication) Related to Safety, Health and Hygiene
Level

Meeting

Frequency

Main Participants

Functions

Chairman, officers, presidents ofaffiliate companies, plant generalCompany-wide
Safety and HealthCommittee

managers, department

Review and discussion of SUMCO

Once amanagers, labor union executive

Group safety, hygiene and healthyear

board, industrial physicians,

management policies andcompany-wide and operating sitemeasuressafety and health administrative
offices
Chief Safety and Health Officer /Executive Officer in Charge,
Production Division
Safety and HealthCommittee

Once ayear

executive officers, plant general

Review and discussion ofmanagers, industrial physicians,

Production Division health,company-wide and operating site

hygiene and safety measuressafety and health administrative
officesLabor union executive board

LaborManagement
Safety Round-Table
Company-

Twice ayear

Meetingand Health
Personnel
Overseas Affiliate
Company Safety
Liaison Meeting

Once amonth
Six times
a year at
eachcompany

Workplace Safety
and Health
Promotion
Personnel

Disaster Prevention
Department
Inspections

Group (domestic) safety, hygiene

company-wide safety and healthand health measures

Company-wide and operating site Review and discussion of SUMCO
safety and health administrative

Group (domestic) safety, hygiene

officesand health measures

Overseas affiliate company

Explanation of SUMCO Group

presidents and safety and health(domestic) safety and healthadministrative offices, company-

measures, and exchange ofwide safety and healthinformation on domestic andadministrative officeoverseas activities

Workplace safety and healthOnce apromotion personnel, company-

monthwide safety and healthadministrative office

Exchange Meeting
Safety andReview and discussion of SUMCO

board, union branch manager),administrative officewide
Meeting of Safety(three highest ranks of the

Explanation of SUMCO Group(domestic) safety and healthmeasures, and exchange of
information on activities between
operating sites

Managers of each department,

Confirmation and discussion on

Nine

workplace safety and healththe implementation status oftimes apromotion personnel, company-

SUMCO Group (domestic) safety,

year

wide and operating site safety

hygiene and health-related

and health administrative offices

measures

General safety and healthmanager, plant general

Review and discussion of

Safety and HealthOnce amanagers, labor union branch

operating site safety, hygiene

Committeemonthmanagement, industrial

and health-related policies andphysicians, operating site safetymeasures

Operatingand health administrative offices

Site

Workplace Safety
Promotion
Committee

Workplace safety and healthOnce apromotion personnel, workplace

Detailed review and discussion ofmonthsafety and health administrative

operating site measuresoffices128

LevelMeeting

Frequency

Main Participants

Functions

Department and section
Workplace Safety

Once aand HealthOperatingmonthCommittee

leaders, workplace safety andhealth promotion personnel,
contractor managers

Site

Small Group

Once aWorkplace SafetymonthMeetings
Safety Cooperation
Contractor

managers, group leaders, unit

Association
Meeting (Kyushu
Factory)

Review and discussion of
departmental safety, hygiene andhealth-related policies andmeasuresGroup leaders, unit leaders,Review and discussion of

workplace safety and healthprocess-level safety, hygiene andpromotion personnel

health-related measures

Three

Representatives fromtimes acontractors, SUMCO (advisors,

year

Facility Engineering Department)

Discussion occupational accident
prevention at operating sites

Occupational Safety and Health Initiatives
The SUMCO Group has introduced an Occupational Safety and Health Management System (OSHMS)
and obtained certification from outside certification bodies, chiefly ISO 45001 certification, and has
implemented the system with the aim of achieving zero accidents in the workplace.
Under the system, the management defines a sequence of "Plan - Do - Check - Act" (PDCA) actions
to manage safety and health on a regular and voluntary basis, with the help of employees. This is asafety and health management framework designed to prevent work-related accidents, advance
employee health, promote the formation of a pleasant workplace environment and raise the level ofsafety and health in the workplace. We also work to quantify employee safety awareness throughperiodic safety awareness surveys, reflect the findings in the occupational safety and healthmanagement system, and make efforts to raise awareness of safety.
Status of Occupational Safety and Health Management System Certification
Total
Category

NumberNumber ofof

Certified

OperatingOperating Sites

Certification

Remarks

Rate (%)

Sites
Group (Domestic /Overseas)

12

10

83%

ISO 45001 certification: 8 operating sites

Group (Domestic)

9

8

89%

Sites planning to undergo ISO 45001
certification review in 2022: 1 operatingsite

Group (Overseas)

3

2

67%

ISO 45001 certification: 1 operating site
SMK3 certification: 1 operating site** Certification provided by Indonesian National Standard (equivalent to OHSAS18001)

129

Major Initiatives to Prevent Work-Related and Traffic Accidents
The SUMCO Group conducts annual system audits (internal audits) and management reviews of all
operating sites in accordance with its Occupational Safety and Health Management System. The
SUMCO Group also endeavors to maintain and enhance safety management levels by seeking toprevent work-related accidents through promoting voluntary safety and health initiatives andencouraging the advancement of health and the formation of a pleasant workplace environment.
Additionally, when workers notice a potential hazard, they are obligated to report on it as a near
miss case. Through the case reports and risk assessments, the risk factors at each operating site are
identified. We try to avert accidents by implementing countermeasures to these risks based on
hazard levels, and reducing the degree of risk posed accordingly. Information on these risks and thecorresponding countermeasures are shared across the entire SUMCO Group through Company-wide
meetings attended by the safety and health personnel at each operating site, safety exchange
meetings attended by the workplace safety and health promotion personnel at each operating site,and safety and health committee meetings at each operating site.
Additionally, through safety patrols conducted at each operating site and other regular safety andhealth patrols of each operating site by the Safety and Disaster Prevention Department, labor
unions, industrial physicians, etc., we carry out inspections and other guidance on the state of safety
and health management initiatives at the workplace as part of efforts to attain high levels of safety
and health.

Safety and Health Education and Training Initiatives
The SUMCO Group focuses on employee education and training with the aim of preventing workrelated and traffic accidents. In terms of matters related to safety and health, we strive to prevent
accidents and minimize any damages or injuries caused by accidents. We achieve this by raising
employees' awareness while also having them learn about what actions to take in the event of an
emergency, not only through tiered safety and health education, but through small group workplacesafety meetings, risk prediction training (KYT), the viewing of movies produced in-house forprevention of chemical injury and disaster of being caught and drawn, other safety-related DVDs andefforts to enhance sensitivity to danger by establishing "safety dojos" to simulate hazards at all of
our operating sites.
Preventing traffic accidents is another key challenge, and the SUMCO Group strives to prevent traffic
accidents by providing traffic accident prevention training along with the viewing of DVDs on traffic
accident prevention, and KYT using videos of traffic accidents, and by providing driving analysis andguidance based on drive recorders installed in vehicles.

130

Main Education and Training Activities
Category

Name of Training
Induction training

Trainees
New employees

Frequency
Once amonth

Instructors
Company-wide and operatingsite safety and healthadministrative offices

General Safety and HealthTraining for newly
appointed safety managers

Manager appointees
Departmental and Sectional
Safety and Health Manager

Upon
selection

appointees
Statutory
Training

Unit leaders safety training

Newly appointed unit

Once aleadersyear

Outside instructor

When
Various special training,

Employees engaged in theengaging

courses for various

relevant work Supervisors

in thelicenses, skills training, etc.

of the relevant work

relevant
work

Various skills improvement

Qualification holder (everyOnce aQualified in-house employee ortraining

5 years)year

outside instructor

Once aCompany-wide Safety and

year

Health Administrative Office

Training for newly
appointed managers
Group leader safety

Newly appointed group

Once aCompany-wide Safety andtraining

leaders

year

Health Administrative Office

Training for employees who

Employees who has been

has been working in theworking in the company forOnce aCompany-wide Safety andCompany for 10 years.

10 years.

year

Health Administrative OfficeInternal auditor

Newly appointed internal

development training

auditors

Internal auditor skills
improvement trainingGroup
Training

Newly appointed managers

All internal auditors

Each time
Once aCompany-wide Safety and

year

Health Administrative Office

Safety training for risk

Workplace safety andOnce aassessment, etc.

health promotion personnel

year

OSHMS self-awarenesstraining (e-Learning)
Traffic accident prevention
training (e-Learning)
Safety confirmation drills
General disaster prevention
drillsLate-night evacuation drills

Once aAll employees

year
Once aAll employees

year
Four times

All employees
Employees and contractors
Shift workers

131

Outside instructor

Outside instructor
Planned by Company-wide
Safety and HealthAdministrative OfficePlanned by Company-wide
Safety and HealthAdministrative Office
Use of safety confirmationa yearsystemOnce aOperating site safetyyearadministrative officeOnce aOperating site safetyyearadministrative officeExperiencing a simulated hazard (body parts crushed byExperiencing hazards (electric shock, overcurrent,or caught in machinery) at a "safety dojo"

tracking) at a "safety dojo"

Status of Occupational Accident Occurrences
During fiscal 2021, five lost-time
accidents occurred (two more than in

Change in the Accident Frequency Rate*(Domestic SUMCO Group)

the previous fiscal year), most of whichwere daily life type accidents or due toindividual health conditions. SUMCO isconducting a thorough review of risk
management and strengthening
education to prevent such accidents
from occurring in the future.
For the SUMCO Group and contractors,
the number of deaths due tooccupational accidents from 2017 to
2021 was zero.
Aiming for zero occupational accidents,* Accident Frequency Rate = Number of workers killed or
injured in occupational accidents (lost time injuries) /total number of working hours × 1,000,000

the Group is working to enhance the effectiveness of existing activities while actively engaging in
new initiatives, including broad introduction of the lockout-tagout (LOTO) safety procedure. Having
acquired ISO 45001 certification last year for its occupational health and safety management
systems, the Group is further developing and enhancing these systems, while carrying out safety
awareness-raising activities based on employee survey results. In these and other ways, the Groupis endeavoring to create a favorable workplace environment, one that is safe, healthy, and pleasant
to work in.

132

Occupational Safety and Health Data
Indicator
Number of lost time
injuries

Number of accidents(lost time + non-losttime)

Number ofoccupational illnesses

Lost time injury
frequency rate

Accident frequency
rate (lost time andnon-lost time)

Occupational injury
frequency rate (OIFR)

TargetGroup (Domestic /Overseas)
Contractors
Group (Domestic /Overseas)
Contractors
Group (Domestic /Overseas)
Contractors
Group (Domestic /Overseas)
Contractors
Group (Domestic /Overseas)
Contractors
Group (Domestic /Overseas)
Contractors

Unit

2018

2019

2020

2021

cases

2

2

3

5

cases

0

0

0

0

cases

18

17

17

21

cases

0

0

0

1

cases

0

1*

0

2*

cases

0

0

0

0

-

0.12

0.18

0.17

0.27

-

0.00

0.00

0.00

0.00

-

1.06

1.01

0.98

1.15

-

0.00

0.00

0.00

3.83

-

0.00

0.06*

0.00

0.11*

-

0.00

0.00

0.00

0.00

* Backache (backache resulting from work-related accident)- Lost time accident frequency rate = Number of workers killed or injured in occupational accidents(lost time injuries) / total number of working hours × 1,000,000- Accident frequency rate (lost time + non-lost time) = Number of workers killed or injured in
occupational accidents (lost time + non-lost time) / total number of working hours × 1,000,000- Occupational injury frequency rate = Number of workers killed or injured in occupational accidents(occupational injuries) / total number of working hours × 1,000,000

133Participation in Traffic Safety Initiatives
The Kyushu Plant is engaged in traffic safety
initiatives as a member of the Shiroishi
district's Safe Driving Supervisors Committee,
including annual participation in the "Traffic
Mirror Cleaning Initiative (March)" for mainly
local elementary and junior high schools and"Early Headlight Lighting Initiative (November)to encourage drivers to turn on theirheadlights before it gets dark.

Early Headlight Lighting Initiative

SUMCO Technology Corporation also improves the traffic safety environment in the industrial park
where it is located and runs environmental beautification activities around its operating site as chairof the Noda City Sothern Factory Liaison Council.
Safety and Health/Disaster Prevention Awards Received (in the past five years)
Year & monthAward

October 2017

Yamagata Labor Bureau Director's Commendation

October 2017
December 2017
June 2018
September
2018
October 2018
February 2019Awarded site

Letter of Appreciation from Miyazaki Fire
Prevention Committee
Letter of Appreciation from Japanese Red Cross
Society (Blood donation)
Hazardous Material Safety Awards from Japan
Association for Safety of Hazardous Materials
Driving Management from the Miyazaki Prefecture
Silver Order of Merit from Japan Red Cross Society
Ministry of Health, Labour and Welfare Class 3 No
Accident Record (15.8 million hours)
Commendation for Business Operators with
Excellent Traffic Safety

November 2020
October 2021

Chitose Plant, SUMCO Corp.
SUMCO Technology Corp.

Miyazaki Plant, SUMCO TECHXIV Corp.

Police Headquarters

2019

October 2020

Miyazaki Plant, SUMCO TECHXIV Corp.

Commendation as Model Business Site for Safe

September

October 2019

Yonezawa Plant, SUMCO Corp.

Ministry of Health, Labour and Welfare Class 1 No
Accident Record (7.5 million hours)
Commendation from the Hokkaido Labor Bureau(Award for Excellence in Safety and Health)
Letter of Appreciation from Japanese Red Cross
Society (Blood donation)
Commendation for Business Operators Cooperatingwith the Local Fire Brigade.

To ESG-oriented Investors
134

SUMCO Technology Corp.
Kyushu Factory (Saga), SUMCO Corp.
Miyazaki Office, SUMTEC Service Corp.
Kyushu Factory (Kubara), SUMCO Corp.
Chitose Plant, SUMCO Corp.
Kyushu Factory, SUMCO Corp.
Kyushu Factory (Nagahama), SUMCO Corp.

Health and Productivity Management
Initiatives
Promotion of Health

The SUMCO Group's Approach to Employees' Health
Under the principle that “the safety and health of employees take the highest priority over all,” theSUMCO Group strives to create a bright, lively and fulfilling workplace. The Group has announced the
SUMCO Group Health Declaration both internally and externally, and strategically promotes various
health advancement activities as investment in health.

SUMCO Group Health Declaration
The SUMCO Group considers employee's health to be an important management resource andstrives to be a group in which all employees work energetically by supporting the voluntary
health promotion by each employee, as well as implementing active organizational initiatives.

135

Health Promotion Framework
The Company-wide Health Committee

Health-related Meetingsand Health Promotion Meeting areconvened regularly. These bodies
report on the status of initiatives andattainment level of health objectives(KPIs) for each site, and reflect finding
in the planning of new measures andimprovement activities. As expert
knowledge is important to promotethese improvements, working primarily
through the supervising industrial
physician in the Health Promotion
Section under the Human Resources
Department, industrial physicians, fulltime public health nurses and regularnurses (13 full-time, 2 part-time) have been assigned to each site of the SUMCO Group to offer
Group employees individual health guidance, meetings and smoking cessation support, as well as topromote health and productivity management including efforts to improve the workplaceenvironment through stress checks, mental health training, and other services.

Health and Productivity Management Initiatives
We promote initiatives to maintain andimprove the health of each employee as acompany through various well-planned
company-wide initiatives.
SUMCO was selected by the Ministry of
Economy, Trade and Industry (METI) and theTokyo Stock Exchange (TSE) as a company
that excels in health management under “the 2022 Health & Productivity Stock Selection,” where
one company from one industry category was generally selected from among the listed companies.
Additionally, SUMCO Group has been certified as one of the “White 500” corporations under “the2022 Certified Health & Productivity Management Outstanding Organization Recognition Program”
sponsored by the METI and The Nippon Kenko Kaigi for the fourth consecutive year from 2019.

136

Our health management challenges
We focus on three health management issues: "1. mental health," "2. smoking cessation," and "3.
lifestyle-related diseases," set target values, create medium- to long-term plans, and carry out
activities.

1. Mental Health
SUMCO believes that maintaining good mental health among employees leads to the development ofa workplace environment where employees meet the high demands of customers, be highly
productive and work with vitality. As a part of the primary prevention of mental health issues, since2003 SUMCO has been operating and assessing workplace environment improvement activities aspart of its occupational safety and health management system (OSHMS).
In addition, based on the results of stress checks conducted regarding workplace environment
improvements at each workplace, we have each employee exchange feedback aimed at
improvements to be made within the workplace, decide on and implement action items, and postcollections of effective initiatives as good practices on the company intranet site.
Main Action Items

Mental health training (stratified training, e-learning) and consultation framework for counselors
and other staff
Workplace environment improvement activities based on stress check results

Results of Activities

Results of Activities 1. Workplace Environment Improvements Based on Stress Check Results*1 General health risk is calculated from the stress check using a work stress determination chart.
*2 ERI-adjusted general health risk is calculated using general health risk and an effort reward
imbalance model.
137

Results of Activities 2. Workplace Environment Improvements Based on Stress Check Results(Examples of Good Practices)
The SUMCO Group has conducted a fact-finding survey of the departments whose stress check
results show higher loads in the analysis, and encourages the departments to implement initiatives
to reform work styles. Specifically, the leader of each operational group in each department preparesand executes a Fault Tree Analysis (FTA) and reviews the results to confirm the countermeasureeffectiveness. One example of the efforts is the posting of messages on workplace bulletin boards toencourage employees to reduce overtime hours, as well as monitoring the percentage of them who
leave work on time, which has resulted in earlier leaving times and reduced overtime. In addition tothese efforts, the SUMCO Group promotes initiatives that respect the employees’ work-life balance,such as tracing the annual paid leave utilization rates and encouraging them to take annual leave.

2. Activities to Encourage Smoking Cessation
In January 2020, a survey on smoking was conducted among all Group employees. Trend analysis
was conducted on factors such as smoking frequency and number of smoking sessions by employees
who are smokers, and as a result of conducting smoking cessation training and individual healthguidance in light of the various traits and age groups, the smoking rate among the Group employees
has gradually trended downward, from 46% in 2018, to 38.2% in 2019, 36.6% in 2020, and 31.9%
in 2021.
Additionally, to coincide with the closure of all smoking areas within SUMCO Group premises as ameasure related to the nationwide spread of COVID-19, we reviewed our system to allow outpatient
treatment for smoking cessation without co-payments as part of efforts to promote smoking
cessation.
Main Action Items

Trend analysis based on results of survey of all employees on smoking
Smoking cessation training based on the results of the above survey and encouraging the use ofsmoking cessation treatment through individual health guidance (Free company-subsidized
smoking cessation treatment)
Workplace anti-smoking challenge race
Continued closure of smoking areas on company-premises as a COVID-19 related measure138

3. Measures to Address Lifestyle-related Disease, Other Initiatives
The results of periodic medical checkups show that the percentage of employees with metabolic
syndrome increases between the ages of 30 and 40. We therefore offer health classes and healthguidance to employees before the age of 40 to improve their lifestyles. We also hold health classes
for employees aged 39 with the cooperation of external managerial dietitians, and verify theeffectiveness of these classes to improve guidance for the following year.
To promote exercise habits, our Kyushu Plant (Saga Prefecture) has conducted a walking activity
using SAGATOCO, a walking application developed by Saga Prefecture. As a result of the effort, ourKyushu Plant was awarded the 2021 Saga Saiko Grand Prize in the health management category.
Additionally, due to the advancing age structure of the workforce, we assume that incidents of falls
and trips will increase. To address this, we have assessed the motor functions of employees in a joint
initiative with the Department of Sports Science at Fukuoka University to develop the SUMCO Fall
Prevention Exercises and implement them in-house.
Main Action Items

Health education for employees at age 39
Walking activities
Individual health guidance following regular medical checkups (including guidance to improveblood pressure and blood glucose levels)
SUMCO fall prevention exercises

4. Results and Medium-term Targets for Mental Health, Smoking Cessation andLifestyle-related Disease Issues
Medium-Term
Assessment Item2018 Results

2019 Results

2020 Results

2021 Results

Targets(2025)

ERI-adjusted general health risk

106.0

100.0

99.0

103.0

100 or lower

Current smoker

40.6%

38.2%

36.6%

31.9%

20.0%

26.3%

26.9%

28.6%

29.4%

25.0%

24.2%

25.4%

28.4%

27.6%

35.0%

38.9%

32.6%

31.7%

33.5%

24.0%

Percentage of Employees with
Metabolic Syndrome
Exercising for 30 minutes or more /week
Percentage of employees not feelingrefreshed after a night’s sleep

139Comprehensive Indicators of SUMCO’s Health and Productivity
Management and Their Development into a Strategic Map of Each
Initiative
By working on health and productivity management, SUMCO believes that health and productivity
management help solving the ultimate goal of our health strategy map, which is to create highcreativity by ensuring a workforce that works with vitality, and to prevent the possibility of poor
health, injury or illness to reduce productivity. Therefore, we quantify comprehensive indicators tovisualize these status and apply each initiative to our health strategy map to achieve results bystrategically systematizing each initiative as a health investment. This allows us to conduct
evaluations each year, leading to the necessary measures being implemented in the future.

Comprehensive Indicators
Reduced productivity indicators: presenteeism (reduced productivity when attending work despite
poor health or physical condition), absenteeism (missing work due to poor health or physicalcondition)
Indicators of vitality level: work engagement (positive perception and emotion for work), job
fulfillment, job satisfaction

Results of Activities
Results of Activities 1. Presenteeism and
Absenteeism (From Employee Questionnaire
Survey)Results of Activities 2. Work Engagement(From Employee Questionnaire Survey)* Work Engagement: average points from
employee questionnaire on nine items
regarding work (7-grade evaluation from 0 to
6 points)

140

Results of Activities 3. Employee Satisfaction
and Job Fulfillment (From Employee
Questionnaire Survey)*1 satisfaction: the percentage of employees
who responded that they were “satisfied” or“somewhat satisfied” with their job*2 Employee Satisfaction of Job fulfillment: thepercentage of employees who responded“yes” or “somewhat yes” as to whether they
are in a fulfilling job

Creation of the SUMCO Health and Productivity Management Strategy Map
Supervising Industrial Physician
Minako Iyadomi

Through the health and productivity management strategy map, we now have a clearer picture of
the items to be added in the annual safety and health plan, indicators related to employees’ healthsuch as mental health, lifestyle-related disease and smoking, final indicators, and how issues inhealth and productivity management lead to be solved. As a next step, we have started to examine
the costs and benefits of each initiative with our accounting system.

To ESG-oriented Investors

141

Community-based Social Contribution
Activities
Why SUMCO Addresses the Local Community
The SUMCO Group sees existing in harmony with the local community and contributing to theregion as one of the corporate social responsibilities.
In SUMCO CSR Policy, the SUMCO Group declares that "SUMCO shall respect various culturesand histories, and shall interact with society and the local communities." We take into accountlocal communities' expectations for SUMCO and focus on the following in particular, in an effort
to be a company that can contribute to the local community as a good corporate citizen.
1. Activities aimed at the local environment, safety, and disaster prevention
2. Activities aimed at providing education, culture promotion and sports promotion to the local
community
3. Activities to support persons with disabilities
Due to the impact of COVID-19 in fiscal year 2020 and 2021, there were activities we wereunable to perform to the same extent as regular years, including having to cancel some
activities altogether, but for its part the SUMCO Group hopes to continue to focus oncommunity-based social contribution activities going forward.

142

Participation in Local Cleaning Activities andEnvironmental Conservation Initiatives
SUMCO’s Chitose Plant implements a clean-up
program on approximately 1.5 km of
sidewalks along the main roads of the Chitose
Industrial Complex where the plant is located.
Plant members pick up empty cans and trashthat have been discarded, as well as fallen
leaves and other refuse.
SUMCO's JSQ Division participates annually in
the Omono River Basin Joint Clean-up
organized by Akita City with the participationof local residents and nearby companies.
SUMCO's Yonezawa Plant actively engages in

Clean-up activities on the groundsof the Chitose Industrial Complex

various local environmental activities as amember of the Hachimanpara Corporate Council made up of companies located in the Hachimanpara
Industrial Park. The activities include cleaning up areas inside the park and along major roads.
At the Nagasaki Plant of SUMCO TECHXIV Corporation, many employees and their families
participate each year in the cleanup of the Omura Bay coastal area organized by the Omura Bay
Cleanup Project, while we refrained from the participation in 2021 due to the COVID-19 pandemic.
Additionally in November 2020, member of the Miyazaki Plant of SUMCO TECHXIV Corporation took
part in tree thinning operations with the aim of preserving pine forests in the Hitotsuba Coast area ofMiyazaki City.
SUMCO Technology Corporation regularly takes part in cleanup operations along nearby municipal
roads and sidewalks, and also engages in cleanup activities within the industrial park where its plant
is located. Although activities were paused in 2020 due to the COVID-19 pandemic, SUMCO
Technology Corporation participates annually in the Edogawa Clean Campaign organized by the
Edogawa River Office of the Ministry of Land, Infrastructure, Transport and Tourism and 13 othermunicipalities around Noda City as a member of the Southern Plant Liaison Council. The activities
include collecting discarded cans and bottles, etc. and performing cleanup activities on the riverbed,
embankments and side ditches along the Edogawa River.
In September 2021, SUMCO Taiwan Technology Corporation supported and participated in theInternational Coastal Cleanup (ICC) program of the environmental organization Ocean Conservancy,
joining 80 local university students to pick up more than 800 kilograms of trash around Nanliaobeike
Park, Taiwan.

143

Omura Bay coastal area joint clean-up

International Coastal Cleanup at Taiwan

Thinning operations in the Hitotsuba Coast area

Greening Initiatives
At the Chitose Plant, in June each year, weenter the "Flower-Filled Contest" hosted by
Chitose City's greening promotion foundation(Chitose Environment and Greenery
Foundation) and plant colorful flowers in thegreen belt on roads around the plant, aiming
environmental beautification.
At the Noda Operation Department of SUMCO
Support Corporation*, we conduct "Flower
Project" initiatives including the voluntary
creation of flower beds and planting of seeds
and seedlings, thereby delighting visitors toGreening promotion activities at the Chitose Plant

the Noda area and employees alike.
* SUMCO Support Corporation is a special subsidiary company of SUMCO that was established withthe purpose of employing persons with disabilities.
144

Participation in Emergency Drills at Welfare Institutions
At the Nagasaki Plant of SUMCO TECHXIV
Corporation, we have organized an external
rescue team, and joint rescue drills under theguidance of members of the Omura Fire
Department are conducted every year toprepare the team for fire disasters at nearby
welfare institutions.

Emergency drill at a welfare institution

Interaction with local educational institutions
At the Nagasaki Plant of SUMCO TECHXIV
Corporation, we have maintained a relationshipwith local high schools since the establishmentof the plant. Every year, we host study tours to
inspect the production process or the extra highvoltage monitoring room for the power intake
facility, as well as providing internships.
Responding to requests from local high schools,
we also send employees to give lectures on

Dispatching employee instructors to local high schools

semiconductors.
Each year, PT. SUMCO Indonesia works with local high schools, universities and graduate colleges tooperate apprenticeship programs that run from 12 to 24 weeks, giving students the opportunity todevelop their future careers.

Scene from the apprenticeship program

Scene from the apprenticeship program145

Participation and Sponsorship of Sports Events
SUMCO participates in and sponsors local sports events. The SUMCO Kyushu Factory co-sponsors the
IMARI HALF-MARATHON every year.
In 2022 the event was held online as a challenge due to COVID-19, and around 2,000 participantsfrom around Japan entered.
Additionally, the SUMCO Imari Road Relay Race Team fielded by the Kyushu Factory took part in the74th Tozai Matsuura Relay Race Competition (sponsored by Saga Shimbun) held in January 2022,
winning in the 2nd place. While this event was postponed in order to prevent the spread of COVID19 pandemic in 2021, the event was held with shortened course in 2022. We will keep daily
practicing aiming for the 1st place next race.

Activities with Non-Profit Organizations
In 2019, SUMCO donated total amount of 300,000 yen to Seacare and the Japan Heart Foundation,in support of the work done by these NPOs.
SUMCO’s Chitose Plant (Chitose-shi, Hokkaido) supplies an emergency stock of food to the "FoodBank Network Mottainaiwa Chitose," and Miyazaki Plant of SUMCO TECHXIV Corporation provides an
emergency stock of food to the "Children's Cafeteria Network Support Project" being promoted byMiyazaki City. We will continue our efforts to support the activities.
SUMCO Europe Sales Plc has a positive impact on the local community by way of helping theactivities of local charity organisations through donations, totalling £2,500 in 2021, to charitableorganizations selected by the employees, such as Shelter, NSPCC, Breast Cancer UK, WFP, Mind andCrisis.

146

VoiceIchiro Omura
Director
Next Gen. Power Electronics Research Center
Professor
Graduate School of Life Science and Systems Engineering
Department of Biological Functions Engineering
Kyushu Institute of Technology

Q1. What are you working on in the SUMCO joint research course, and how
significant is it?
Kyushu Institute of Technology, we launched a research course inside the department on a
joint basis with SUMCO in fiscal year 2017. Under the theme of high-quality power
semiconductor wafer evaluation methods, we have conducted a number of joint research
projects with SUMCO researchers and researchers at our Next Generation Power Electronics
Research Center. In particular, we share trends in power semiconductor-related technologies
and pursue research that prioritizes the development of high-precision wafer quality evaluation
technologies and the application of simulation technologies. Through establishment of joint
research courses, issues can be shared between companies and universities, and excellent
result-focused outcomes can be produced.

Q2. SUMCO has been pursuing coordination between industry and academia
along with initiatives to contribute to local communities. What do you think
about these activities?
In fiscal year 2018, the Next Generation Power Electronics Research Center received theMinster of the Environment Award for Global Warming Prevention Activity for its research into
power semiconductors. Moreover, SUMCO is a top global producer of high-quality wafers thatare essential in the manufacturing of power semiconductors that contribute to lower CO2
emissions. By having both of us coordinate with one another from a long-term perspective, I
think we are bringing greater sophistication to semiconductor technologies and low-carbon
technologies in the Kyushu area, strongly promoting the development of human resources in
the field, and making significant contributions to the social challenges of preventing global
warming and utilizing electricity effectively.
(This interview was conducted in April 2019.)

147

Participation in Local Events
Each year at the Uesugi Snow Lantern Festival, a famous winter festival that takes place inYonezawa, SUMCO's Yonezawa Plant produces snow lanterns, a winter tradition in Yonezawa, in aneffort to vitalize the local area. (The event was canceled in 2021 and 2022 due to the COVID-19
pandemic)
In order to bring excitement to local events as a company that has established business sites in
Imari City, SUMCO's Kyushu Factory participates yearly in the Imari Autumn Festival - Imari Dance in
All as a means of contributing to local revitalization. (The event was canceled in 2020 and 2021 dueto the COVID-19 pandemic)
PT. SUMCO. Indonesia actively participates in local contribution activities such as a program toprovide food assistance to the neighboring indigent and support activities for orphans during Eid alAdha Holiday* every year.
* Islamic holidays

Participates in an annual event, the "Imari Autumn

Performance for the JSQ Division

Festival–Imari Dance in All"

Support activities for orphans at PT. SUMCO Indonesia

To ESG-oriented Investors

148

SUMCO Group Basic Policy on Safety and
Health
1. Basic Principle
Under the principle that "the safety and health of employees takes the highest priority over all″, theSUMCO Group is committed to "creating a safe and pleasant workplace environment supportive ofgood mental and physical health″ through leadership by supervisors and through active
communication across the organization.

2. Basic Policy
1. We will collectively and thoroughly strive to create a workplace where all members adhere to
relevant laws and regulations as well as rules stipulated in manuals or work procedures.
2. In the event of any work-related accidents, we will collectively and thoroughly analyze the root
cause and implement measures to prevent their recurrence.
3. We will collectively and thoroughly strive to create an open workplace environment, as well as tomaintain and promote their mental and physical health and to prevent occupational illnesses.
4. We will collectively and thoroughly engage in raising awareness of traffic consideration andpromote traffic safety initiatives as models for society.

SUMCO Group Health Declaration
The SUMCO Group considers employee's health to be an important management resource andstrives to be a group in which all employees work energetically by supporting voluntary healthpromotion by each employee, as well as implementing active organizational initiatives.

149

Support Raising Next-Generation Children
to implement the Act on Advancement of Measures to Support Raising Next-Generation Children

SUMCO Action Plan
We have established our Action Plan in a bid to enable employees to perform fully to their ability by
developing child-care support arrangements under which employees with small children balance
their work and child-rearing and by enhancing comfortable and pleasant working environment for all
employees.

1. Time Period
From April 1, 2019 to March 31, 2024 (five years)

2. PlanGoal 1
Promotion of understanding of our child-care support system and increase in number of
employees utilizing the system.

Action1. Enhancing our child-care support system by promoting and improving convenience of our intracompany nursery school, etc.
2. Fully disseminating our child-care support system by posting necessary and useful information on
our intranet, etc.
3. Reviewing utilization status of our child-care support system annually, and promoting awarenessbuilding activities to improve utilization ratio.

150

Goal 2
Continuous review and consideration of various measures for materialization of work-lifebalance.

Action1. Continuously reviewing and considering effective and practicable measures to materialize worklife-balance.

Goal 3
Overtime reduction and encouragement to take paid leave in a bid to help employees withsmall children balance their work and child-rearing.

Action1. Maintaining proper overtime management and further improving management awareness ofovertime.
2. Reviewing and considering effective measures to increase the rate of taking annual paid leave in
addition to the minimum five days paid leave per year under the Labor Standard Act.

151

Social Data (personnel)
Number of Employees

item

Employee

Value

Segment

Remarks

Total workfoce

8,469

Consolidated

As of Dec. 31, 2021

Men

7,700

Consolidated

Women

769

Consolidated

9.1%

Consolidated

Total Number

791

Consolidated

Men

741

Consolidated

Women

50

Consolidated

6.3%

Consolidated

Total directors

10

SUMCO

Men

9

SUMCO

Women

1

SUMCO

10.0%

SUMCO

Total Number

69

SUMCO

Men

61

SUMCO

Women

8

SUMCO

11.6%

SUMCO

Men

17.5

SUMCO

Women

14.1

SUMCO

3.4 years

SUMCO

Percentage ofwomen employees

Number of senior
management

As of Dec. 31, 2021

Percentage ofwomen in senior
management

Number of directors
on board

As of Dec. 31, 2021

Percentage ofwomen directors
on the board

Newly Hired
Employees

Percentage ofwomen employees
in new hires

Average years
employed

Difference inaverage152

As of 2021

Site Data (2021 results)
2021 data on the acquisition status of ISO 14001 certification for the SUMCO Group's businesssites/plants and regulated substances discharged from each site/plant to the surrounding air andwater.

Kyushu Factory (Nagahama)/Kyushu Factory (Kubara)/Kyushu Factory(Saga)Name of business site/plant

Kyushu Factory

Kyushu Factory(Nagahama)(Kubara)Design, development

Scope of business

Status of acquisition of
ISO 14001:2015

Design, development

Design, development

and manufacture ofand manufacture ofand manufacture of

monocrystalline siliconmonocrystalline siliconsilicon wafers

ingots and siliconingots and siliconwaferswafersExamining

Japan Quality

Japan Quality

Japan Quality

organization

Assurance Organization

Assurance Organization

Assurance Organization

January 11, 1999

January 11, 1999

January 11, 1999

January 11, 2023

January 11, 2023

January 11, 2023

Date ofacquisition

certification

Kyushu Factory (Saga)

Date ofrenewalAir

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)ppm

Boiler 94 (150)

Boiler 54 (150)

Boiler ND (110)

Sulfur oxides (SOx)m3N/hBoiler ND (0.44-0.85)

Boiler ND (1.15)/

Soot and dust

g/m3N

/

/

Boiler ND (0.001)

153

Regulation

Water

value

Measure-Measure-

ment

ment

result(Maximum

Regulation
value

value)
Biological oxygen

result(MaximumMeasureRegulation
value

value)

ment
result(Maximumvalue)

mg/ℓ

/

/

/

/

10

6

mg/ℓ

30

9

30

8

/

/

Suspended solids (SS)

mg/ℓ

30

14

30

8

25

4

N-hexane extract

mg/ℓ

5

ND

5

ND

3

ND

Iodine consumption

mg/ℓ

/

/

/

/

/

/

mg/ℓ

8

4.9

8

3.3

3

0.8

80

17

80

18

100

11

demand (BOD*1)
Chemical oxygen
demand (COD*2)

Fluorine and its
compounds
Ammoniac nitrogen

mg/ℓ

Nitrate nitrogen

mg/ℓ

Nitrite-nitrogen

mg/ℓ

Nitrogen content (T-N)

mg/ℓ

120

42

120

22

60

17

Chromium content (T-Cr)

mg/ℓ

0.2

ND

0.2

ND

0.2

ND

Phosphorus content (T-P) mg/ℓ

12

0.2

12

0.1

8

0.5

Arsenic

mg/ℓ

0.05

ND

0.05

ND

0.1

ND

mg/ℓ

0.1

ND

0.1

ND

0.1

ND

Trichloroethylene*1 In case of discharging treated wastewater into the river, the drainage restriction of biologicaloxygen demand (BOD) applies.
*2 In case of discharging treated wastewater into the sea, the drainage restriction of chemical
oxygen demand (COD) applies.
*

Numbers list the maximum annual figures.
"/" denotes non-applicability"-" denotes an unmeasured item as the regulated substance is not used.
"ND" denotes non-detection

154

Noda Office/Yonezawa Plant

Name of business site/plant

Noda Office

Yonezawa Plant

Manufacture of silicon wafers

manufacture of monocrystalline

Design, development andScope of businesssilicon ingots

Status of acquisition of
ISO 14001:2015

Examining

Japan Quality Assurance

Japan Quality Assuranceorganization

Organization

Organization

January 11, 1999

January 11, 1999

January 11, 2023

January 11, 2023

Date ofacquisition

certification

Date ofrenewalAir

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)ppm

Boiler 76 (260)/

Sulfur oxides (SOx)m3N/hBoiler 0.03 (0.32)/

Soot and dust

g/m3N

Boiler 0.0 (0.3)/

155Measurement
Water

Regulation value

result (Maximum

Measurement
Regulation value

value)
Biological oxygen

result (Maximum
value)

mg/ℓ

25

13

600

22

mg/ℓ

20*1

11

/

/

Suspended solids (SS)

mg/ℓ

50

15

600

49

N-hexane extract

mg/ℓ

3

ND

5

1

Iodine consumption

mg/ℓ

/

/

220

2

mg/ℓ

8

5.0

8*2

1.8

100

7

380

154

demand (BOD)
Chemical oxygen
demand (COD)

Fluorine and its
compounds
Ammoniac nitrogen

mg/ℓ

Nitrate nitrogen

mg/ℓ

Nitrite-nitrogen

mg/ℓ

Nitrogen content (T-N)

mg/ℓ

30

18

/

/

Chromium content (T-Cr)

mg/ℓ

1

ND

0.5

ND

Phosphorus content (T-P) mg/ℓ

2

0.2

/

/

Arsenic

mg/ℓ

0.05

ND

0.1

ND

Trichloroethylene

mg/ℓ

0.1

ND

/

/

*1 At the Noda office, since Tokyo Bay pollutant load restrictions apply, it is also subject to chemical
oxygen demand (COD) restrictions.
*2 At the Yonezawa Plant, treated wastewater is discharged into public sewerage systems and isthus subject to the Sewerage Act. (Destination of treated waste water outflowing from seweragetreatment site: river) Accordingly, the regulation value for fluoridation compound is 8 mg/ℓ.

156

Chitose Plant/JSQ Division

Name of business site/plant

ISO 14001:2015

Design, development and

Design, development andmanufacture of quartz crucibles

Examining

Japan Quality Assurance

Japan Quality Assuranceorganization

Organization

Organization

January 11, 1999

January 11, 1999

January 11, 2023

January 11, 2023

Date ofacquisition

certification

JSQ Division

manufacture of silicon wafers

Scope of business

Status of acquisition of

Chitose Plant

Date ofrenewalAir

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)

ppm

/

/

Sulfur oxides (SOx)

m3N/h

/

/

Soot and dust

g/m3N

/

Firing furnace 0.17 (0.2)

157

Measurement
Water

Regulation value

result (Maximum

Measurement
Regulation value

value)
Biological oxygen

result (Maximum
value)

mg/ℓ

600

23

160

10

mg/ℓ

/

/

/

/

Suspended solids (SS)

mg/ℓ

600

8

200

32

N-hexane extract

mg/ℓ

5

1

5

ND

Iodine consumption

mg/ℓ

/

/

/

/

mg/ℓ

8*

5.2

8

0.3

/

/

100

4

demand (BOD)
Chemical oxygen
demand (COD)

Fluorine and its
compounds
Ammoniac nitrogen

mg/ℓ

Nitrate nitrogen

mg/ℓ

Nitrite-nitrogen

mg/ℓ

Nitrogen content (T-N)

mg/ℓ

/

/

120

5

Chromium content (T-Cr)

mg/ℓ

2

ND

2

ND

Phosphorus content (T-P) mg/ℓ

/

/

16

0.2

Arsenic

mg/ℓ

/

/

0.1

ND

Trichloroethylene

mg/ℓ

/

/

0.1

ND

* At the Chitose Plant, treated wastewater is discharged into public sewerage systems and is thus
subject to the Sewerage Act. (Destination of treated wastewater out flowing from seweragetreatment site: river) Accordingly, the regulation value for fluoridation compound is 8 mg/ℓ.

158

SUMCO TECHXIV Corporation Nagasaki Plant/SUMCO TECHXIV
Corporation Miyazaki Plant

Name of business site/plant

ISO 14001:2015

Miyazaki Plant

Design, development and

Design, development andmanufacture of monocrystalline

silicon ingots and silicon wafers

silicon ingots and silicon wafers

Examining

Japan Quality Assurance

Japan Quality Assuranceorganization

Organization

Organization

January 11, 1999

January 11, 1999

January 11, 2023

January 11, 2023

Date ofacquisition

certification

SUMCO TECHXIV Corporation (STC)

Nagasaki Plant
manufacture of monocrystalline

Scope of business

Status of acquisition of

SUMCO TECHXIV Corporation (STC)

Date ofrenewalAir

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)ppm

Boiler 68 (260)

Boiler 72 (150)

Sulfur oxides (SOx)m3N/hBoiler ND (1.43-2.41)/

Soot and dust

g/m3N

Boiler ND (0.3)

Boiler ND (0.1)*2

159

Water
Biological oxygen

Regulation value

Measurement
resultRegulation value

Measurement
result

mg/ℓ

600

62

25

8

mg/ℓ

/

/

/

/

Suspended solids (SS)

mg/ℓ

600

35

30

2

N-hexane extract

mg/ℓ

5

ND

5

ND

Iodine consumption

mg/ℓ

/

/

/

/

mg/ℓ

15*1

7.9

8

1.0

380

50

100

6

demand (BOD)
Chemical oxygen
demand (COD)

Fluorine and its
compounds
Ammoniac nitrogen

mg/ℓ

Nitrate nitrogen

mg/ℓ

Nitrite-nitrogen

mg/ℓ

Nitrogen content (T-N)

mg/ℓ

240

70

120

7

Chromium content (T-Cr)

mg/ℓ

2

ND

0.2

ND

Phosphorus content (T-P) mg/ℓ

32

0.2

16

0.0

Arsenic

mg/ℓ

0.1

0.002

/

/

Trichloroethylene

mg/ℓ

0.1

ND

/

/

*1 At STC Nagasaki plant, treated wastewater is discharged into public sewerage systems and isthus subject to the Sewerage Act. (Destination of treated wastewater outflowing from seweragetreatment site: the sea) Accordingly, the regulation value for fluoridation compound is 15 mg/ℓ.
*2 The frequency of atmospheric soot and dust measurements at STC Miyazaki was revised to once
every five years (the next measurement will be taken in 2023).

160

SUMCO Phoenix Corporation Albuquerque Plant/SUMCO Phoenix
Corporation Phoenix Plant

Name of business site/plant

SUMCO Phoenix Corporation (SPX)SUMCO Phoenix Corporation (SPX)

Albuquerque Plant

Phoenix Plant

Design, development andScope of business

manufacture of silicon wafers
Examiningorganization

Status of acquisition of
ISO 14001:2015

Date ofacquisition

certification

Date ofrenewalAir

Design, development andmanufacture of monocrystalline
silicon ingots and silicon wafers

DNV

DNV

June 19, 2000

June 19, 2000

June 30, 2024

June 30, 2024

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)ton/y1.6 (3.84)

13.5 (24.6)

Sulfur oxides (SOx)ton/y0.008 (0.024)

0.49 (1.25)

PM10 (Particulate Matter) ton/y

0.132 (0.3)

0.78 (2.5)

161

Water
Biological oxygen

Regulation value

Measurement
result*Measurement
Regulation value

result (Maximum
value)

mg/ℓ

/

/

/

/

mg/ℓ

/

/

/

/

Arsenic

mg/ℓ

2.09

/

0.13

0.03

Cadmium

mg/ℓ

/

/

0.047

0.002

Copper

mg/ℓ

/

/

1.5

0.1

Cyanide

mg/ℓ

0.5

/

2

0.0

mg/ℓ

36

/

/

/

Lead

mg/ℓ

1.0

/

0.41

0.01

Mercury

mg/ℓ

0.004

/

0.00230.0002

Molybdenum

mg/ℓ

2.0

/

/

/

Selenium

mg/ℓ

0.46

/

0.1

0.01

Silver

mg/ℓ

5.0

/

1.2

0.0

Zinc

mg/ℓ

2.2

/

3.5

0.1

Suspended solids (SS)

mg/ℓ

/

/

/

/

demand (BOD)
Chemical oxygen
demand (COD)

Fluorine and its
compounds* At the Albuquerque Plant, only pH and water flow rate measurements are required, and the City of
Albuquerque periodically takes wastewater measurements.

162

PT. SUMCO Indonesia、FORMOSA SUMCO TECHNOLOGY CORPORATIONName of business site/plant

PT. SUMCO Indonesia
Design, development andScope of business

manufacture of silicon wafers
Examiningorganization

Status of acquisition of
ISO 14001:2015

Date ofacquisition

certification

Date ofrenewalAir

FORMOSA SUMCO TECHNOLOGYCORPORATION
Design, development andmanufacture of monocrystalline
silicon ingots and silicon wafers

SGS

Lloyd's Register

April 22, 2005

May 13, 2019

April 22, 2023

May 12, 2025

Measurement results maximum value (regulation value)

Nitrogen oxides (NOx)ton/y

2.8 (22.0)

19.4 (40.5)

Sulfur oxides (SOx)ton/y2.6 (17.6)/

PM10 (Particulate Matter) ton/y

4.3 (7.7)

1.38 (1.82)

163

Measurement
Water

Regulation value

result (Maximum

Measurement
Regulation value

value)
Biological oxygen

result (Maximum
value)

mg/ℓ

200

67

/

/

mg/ℓ

400

224

100

10

Arsenic

mg/ℓ

0.2

ND

0.35

ND

Cadmium

mg/ℓ

0.1

ND

0.02

ND

Copper

mg/ℓ

4

ND

1.5

0.0

Cyanide

mg/ℓ

0.1

ND

1

ND

mg/ℓ

4

2.2

15

4.3

Lead

mg/ℓ

0.2

ND

0.5

ND

Mercury

mg/ℓ

0.004

0.001

0.005

ND

Molybdenum

mg/ℓ

/

/

0.6

0.0

Selenium

mg/ℓ

0.1

ND

/

/

Silver

mg/ℓ

/

/

/

/

Zinc

mg/ℓ

10

0.1

3.5

0.1

Suspended solids (SS)

mg/ℓ

400

11

30

3

demand (BOD)
Chemical oxygen
demand (COD)

Fluorine and its
compounds* At PT.SUMCO Indonesia, wastewater is drained to the sewerage.
* At FORMOSA SUMCO TECHNOLOGY CORPORATION, wastewater is drained into the ocean.

164Inquiries:
Legal & CSR Office, General Affairs Department
SUMCO Corporation
Seavans North, 1-2-1 Shibaura, Minato-ku, Tokyo 105-8634
E-mail：sumco-csr @sumcosi.com