SUMCO Corporation

Fundamental Policy on Corporate Governance < Rev.3 >Chapter 1

General Provisions

Article 1: Purpose
The purpose of the Fundamental Policy on Corporate Governance is to contribute tothe sustained growth of the Company and to enhance corporate value over the medium
to long term by establishing fundamental principles on corporate governance.
Article 2: Basic Stance on Corporate Governance
1. SUMCO is committed to contributing to the development of industries and to theimprovement of people’s living standards by supplying high-quality silicon wafers
used as substrates for semiconductor devices. At the same time, the Company places
importance on responding to the expectations of shareholders by increasing
corporate value as well as establishing and preserving sound relations with all
stakeholders. With this in mind, the Company shall implement a broad range ofcorporate governance measures such as strengthening the audit and supervisory
functions of the Board of Directors, ensuring the efficient execution of the duties ofthe directors, and reinforcing internal control in the SUMCO Group. The principal
aim of these measures is to achieve speedy decision-making and to maintain a highlevel of transparency and fairness in the execution of business operations. As partof this commitment, the Company shall strive to increase management transparency
with timely and appropriate information disclosure.
2. SUMCO believes that, in addition to compliance with applicable laws andregulations, sound corporate activities must be guided by an awareness of social
values and morals. Toward this end, the Company has adopted and is implementing
the SUMCO Charter of Corporate Conduct as a standard of behavior to be upheldby the Company and its officers and employees. All SUMCO employees are united
in the goal of making SUMCO an excellent company. The SUMCO Vision has beenformulated as a means to realizing this goal.
SUMCO Vision
1. World’s Best in Technology
2. Stable Profitability Even During Economic Downturns
3. Empower Employee Awareness of Profit
4. Competitiveness in Overseas Markets
Article 3: Ensuring Shareholder Rights and Equal Treatment
SUMCO believes in substantively equal treatment of all shareholders including
minority and foreign shareholders. To protect shareholder rights and to contribute to1

the proper exercise of such rights, the Company shall commit itself to timely andappropriate information disclosure and an investor friendly environment.
Article 4: Basic Stance on Dialogue with Stakeholders
SUMCO believes sustained growth and medium- to long-term increase in corporate
value require a management approach that pays close attention to investors,
shareholders, business partners, employees, and all other stakeholders. The Company
shall create opportunities for engaging in appropriate dialogue with stakeholders andshall strive to promote the understanding of stakeholders in the Company’s operations.
Article 5: Basic Stance on Corporate Social Responsibility
SUMCO aspires to serve society as a good corporate citizen by playing a leading rolein the development of industries and improvement of living standards through thesupply of silicon wafers used as substrates for semiconductor devices. To be a good
corporate citizen, the Company shall engage in a wide spectrum of Corporate Social
Responsibility (CSR) activities in accordance with the SUMCO CSR Policy.
Article 6: Basic Stance on Information Disclosure
SUMCO believes timely and appropriate disclosure of corporate information toinvestors is a core element in ensuring a sound stock market. The Company shallcommit itself to speedy, accurate, and fair disclosure of corporate information while
always adopting the perspective of investors. Corporate information that is useful ininvestor decision-making shall be actively disclosed even when not mandated by lawsand regulations.
Chapter 2

Corporate Governance Structure

Article 7: Basic Stance on Corporate Governance Structure
SUMCO is organized as a company with an audit and supervisory committee. The
Company believes the effectiveness of audit and supervision can be enhanced throughaudits conducted by directors who are Audit and Supervisory Committee members andhave voting rights at Board of Directors meetings. The Company also believes theeffectiveness of internal controls can be enhanced through audits conducted with thesupport of the Internal Audit Department.
Article 8: Roles of the Board of Directors
1. The Board of Directors shall, in accordance with laws, regulations, the Article ofIncorporation, and the Rules of the Board of Directors, make decisions on businessstrategies, management plans, and other important matters pertaining to themanagement of the Company; receive reports from individual directors on the2execution of their duties; and supervise affiliated companies in the execution ofimportant business matters, compliance, internal control, and risk management
operations. The Board of Directors shall, with the participation of outside directors,
appropriately assess the performance and other factors of the Company through thefree exchange of their views, and shall appropriately reflect its assessments inpersonnel affairs of senior management.
2. Matters to be submitted for deliberation by the Board of Directors are stipulated in
the Rules of the Board of Directors. The Company is committed to the basic stanceof making decisions on the execution of important business matters—such asmatters pertaining to the General Meeting of Shareholders, the settlement ofaccounts, management plans, and internal control—after thorough deliberation by
the Board of Directors with the participation of independent outside directors. For
this reason, the Articles of Incorporation does not provide for the delegation ofdecisions on the execution of important business matters to directors.
3. Independent outside directors shall perform the following duties with an aim torealize the SUMCO Group’s sustained growth and to enhance corporate value overthe medium to long term: Based on their knowledge and experience, independent
outside directors shall provide advice and counsel on management policies andbusiness improvement; shall supervise management from the perspective ofminority shareholders and other stakeholders; shall participate in decision-making
by the Board of Directors on the appointment and dismissal of directors and otherimportant matters; shall supervise the Board of Directors and senior managementin the execution of business operations; and shall monitor conflicts of interest
between the Company and senior management.
4. SUMCO believes that responding appropriately to social and environmental
problems is essential to achieving sustained business growth. As part of its
environmental initiative, including tackling to climate change, and contribution tolocal communities, the Company implements initiatives to reduce theenvironmental impact in our business activities and preserve the environment,
including combatting global warming, promotion of resource conservation
activities and contributing to the creation of a recycling-oriented society, and social
contribution activities, including activities aimed at the safety and disasterprevention, activities aimed at providing education, culture promotion and sports
promotion and activities to support persons with disabilities. These activities arereported to the Board of Directors and regularly published in Sustainability Reports
and other publications.
Article 9: Composition of the Board of Directors
1. SUMCO’s Board of Directors shall have not more than fourteen (14) directors(excluding directors who are Audit and Supervisory Committee members) and not
more than six (6) directors who are Audit and Supervisory Committee members, as
stipulated in the Articles of Incorporation. The basic stance of the Company is thatthe Board of Directors must be comprised of appropriate persons, while taking into
account a proper balance of knowledge concerning the operations of the Company,experience, capabilities, and other factors.
32. SUMCO’s Board of Directors shall be comprised of inside directors with a provenrecord of performance in their respective areas of responsibility and outstanding
management abilities, and outside directors with expert knowledge and abundant
experience, with a view to achieving an overall balance and diversity in theknowledge, experience, and capabilities of the Board of Directors.
Article 10: Qualifications of Candidates for Director and Nomination Policy
1. The Board of Directors shall select candidates for director from a broad and diverse
range of individuals in possession of the following qualifications:(1) Individuals with abundant knowledge and experience pertaining to themanagement control and business operations of the SUMCO Group.
(2) Individuals with sufficient understanding of the social responsibilities andmission of the Company’s businesses, and the capacity to fairly andappropriately execute management control and business operations based onstrict self-discipline.
2. Notwithstanding the provisions of the preceding paragraph, candidates for outside
director shall be selected from a broad and diverse range of individuals inpossession of the following qualifications:(1) Individuals who satisfy the criteria for independence as defined by theCompany (see Appendix) in accordance with the criteria for the independence
of independent directors/auditors as determined by the Tokyo Stock Exchange,
and are judged not to have a conflict of interest with general shareholders.
(2) Individuals who appreciate the Company’s mission statement and vision, andwho have sufficient understanding of the social responsibilities and roles of theSUMCO Group.
(3) Individuals with sufficient awareness of the role of outside director, and thecapacity to supervise the Company’s directors and management, and to provide
appropriate and precise advice and counsel based on their expert knowledge
and experiences in the areas of corporate management, economics, law,accounting, taxation, auditing, etc.
Article 11: Policies Related to Determination of Remuneration of Directors
The Company’s basic policy for Executive Director remuneration aims to align theinterests and risks of Executive Directors and shareholders and provide an incentive toimprove business performance and medium- to long-term corporate value. To this end,
Executive Director remuneration comprises basic remuneration, performance-linked
monetary remuneration based on short-term performance, and performance-linked
stock remuneration based on medium- to long-term corporate value, depending on each4

Executive Director’s office and rank, within the total amount determined by resolutionof the General Meeting of Shareholders.
Article 12: Nomination and Remuneration Committee
1. SUMCO shall have a Nomination and Remuneration Committee as an optional
advisory body to the Board of Directors for the purpose of reinforcing corporate
governance. The majority of the Nomination and Remuneration Committee
members shall be independent outside directors.
2. Matters such as the selection process, qualifications, and reasons for nomination ofcandidates for director and executive officers, and remuneration systems fordirectors (excluding directors who are Audit and Supervisory Committee members)
and executive officers, shall be submitted by the Board of Directors to theNomination and Remuneration Committee for deliberation. The Nomination andRemuneration Committee shall examine the appropriateness of the above mattersin light of its assessment of the Company’s performance and other factors,
including the perspectives of gender and other diversity as well as expert knowledge
and experience, and thereupon report its conclusions to the Board of Directors.
3. Membership of the Nomination and Remuneration Committee shall be comprisedof representative directors and independent outside directors, and its deliberations
and reports shall be undertaken with the appropriate participation and advice ofindependent outside directors.
4. The Board of Directors shall make decisions on such matters as the nomination ofcandidates for director and executive officers, and remuneration for directors(excluding directors who are Audit and Supervisory Committee members) after
receiving the report of the Nomination and Remuneration Committee.
Article 13: Composition of the Audit and Supervisory Committee
1. Independent outside directors shall account for the majority of Audit andSupervisory Committee members. In order to ensure the effectiveness of theactivities of the Audit and Supervisory Committee, full-time Audit and Supervisory
Committee members shall be elected by the Committee members from among
themselves.
2. Efforts shall be made to ensure that at least one Audit and Supervisory Committee
member has considerable knowledge and experience pertaining to finance andaccounting.
3. The Board of Directors shall obtain the consent of the Audit and Supervisory
Committee when making a decision on a candidate for director who is an Audit andSupervisory Committee member.

5Article 14: Roles of the Audit and Supervisory Committee
1. The Audit and Supervisory Committee shall exercise its statutory powers ofinvestigation to inspect and confirm the status of compliance with laws, regulations,
the Articles of Incorporation, and other rules, and to monitor the status andmanagement of internal control systems, including internal controls over financial
reporting. In so doing, the Audit and Supervisory Committee shall conduct auditsto confirm that the directors are executing their duties appropriately in compliancewith laws, regulations, and the Articles of Incorporation.
2. The Audit and Supervisory Committee shall determine criteria for the evaluation,and guidelines for dismissal and non-reappointment, of Accounting Auditors. The
Audit and Supervisory Committee shall evaluate Accounting Auditors inconformity with these criteria to confirm that an Accounting Auditor possesses therequired independence and expertise. Based on such evaluations, the Audit andSupervisory Committee shall make decisions as needed on the dismissal or nonreappointment of Accounting Auditors.
3. The full-time Audit and Supervisory Committee members shall attend Management
Conference and other important meetings to grasp the status of management
execution, and shall share information on important matters with other Audit andSupervisory Committee members.
Article 15: Support System for the Audit and Supervisory Committee
1. An Audit and Supervisory Committee Office shall be established and staff shall beassigned to support the activities of the Audit and Supervisory Committee and tofacilitate the smooth conduct of audit.
2. The staff of the Audit and Supervisory Committee Office shall abide by theinstructions of Audit and Supervisory Committee members and the Audit andSupervisory Committee. Changes in staff members shall be subject to the priorconsent of the Audit and Supervisory Committee. Personnel evaluation of staff
members shall be conducted by the full-time Audit and Supervisory Committee
members.
Article 16: Remuneration of Directors Who Are Audit and Supervisory Committee
Members
The directors who are Audit and Supervisory Committee members shall receive only
fixed remuneration from the perspective of ensuring the appropriate conduct of theirduties such as auditing and the supervision of the execution of business operations. The
remuneration shall be determined through the deliberations of the Audit andSupervisory Committee members within the total amount determined by resolution of
the General Meeting of Shareholders, and shall take into account the role and duties ofeach such director and whether he or she is a full-time or part-time member.

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Article 17: Basic Stance on Education of Directors
1. With regard to directors, SUMCO shall promote the acquisition of necessary
knowledge and understanding of the role and responsibilities of directors by holding
training sessions as appropriate, led by outside experts or departments in charge, on
the Companies Act and other matters depending on current business conditions anddevelopments, and by creating opportunities for participating in outside training
sessions and exchange meetings. With regard to directors who are Audit andSupervisory Committee members, the Company shall promote the acquisition ofnecessary knowledge and understanding of the role and responsibilities of Auditand Supervisory Committee members by providing opportunities to participate inoutside training sessions and exchange meetings as deemed necessary.
2. In addition to the provisions of the preceding paragraph, SUMCO shall distributecopies of the Articles of Incorporation and other basic materials pertaining to theCompany to newly appointed directors when taking office, and shall hold study
sessions to promote their understanding of the role and responsibilities of directors.
When outside directors take office, the Company shall provide them withinformation on the current conditions of the SUMCO Group, including the statusof business operations, finance, and organization, and promote their understandingof the Group businesses through inspection tours of the Company’s plants or othermeans as deemed necessary. The Company shall continue to provide opportunities
for regular explanation of the Company’s management issues, etc., as well as
opportunities for presentation of reports, explanations, etc., as deemed necessary tooutside directors after they have taken office.
Chapter 3

Measures to Protect Stakeholder Rights

Article 18: Mechanism to Control Related-Party Transactions
1. The engagement of SUMCO directors in competition transactions or conflict-ofinterest transactions shall be subject to the deliberation and resolution of the Boardof Directors.
2. With the exception of transactions that are obviously being conducted on the sameterms that apply to transactions in general, the engagement of the Company intransactions with close relatives of directors or with major shareholders, etc., shallbe submitted to the Board of Directors for prior review and approval, to ensure thatsuch transactions do not undermine the interest of the Company and the common
interest of its shareholders.
Article 19: Basic Stance on Policy-Oriented Holding of Listed Stocks
1. SUMCO shall make decisions on policy-oriented acquisition and policy-oriented
holding of listed stocks based on a comprehensive evaluation of business strategiesand relations with the business partners, and confirmation that the holding of suchstocks contributes to enhancing the Group’s corporate value over the medium tolong term.
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2. The Board of Directors shall regularly every year review principal holdings of listed
stocks acquired or held in accordance with the provisions of the preceding
paragraph (hereinafter referred to as “policy-oriented stock holdings”) to verify themedium- to long-term economic rationale, future outlook for such holdings, and theeffect of such holdings as examined from the perspective of maintaining andstrengthening overall relations with the business partners.
3. In exercising its voting rights pertaining to policy-oriented stock holdings, SUMCO
shall base its decisions on the criteria of whether a proposed agenda will contributeto enhancing the Group’s corporate value over the medium to long term, andwhether the proposed agenda will not undermine the purpose of the Company’s
holding of the stock.
Article 20: Whistle-Blowing System
1. SUMCO shall develop and maintain a whistle-blowing system. A report on thestatus of the whistle-blowing system shall be submitted to the Board of Directors
regularly every year.
2. To facilitate both open and anonymous whistle-blowing, SUMCO shall maintainan internally located contact office for receiving internal reports and an externallylocated contact office situated in an outside law firm as well as a ” SUMCO
suggestion box”.
3. The Company rules shall protect whistle-blowers by explicitly prohibiting
disadvantageous treatment by reason of having engaged in whistle-blowing.
Chapter 4

Dialogue with Shareholders and Others

Article 21: Basic Stance on Constructive Dialogue with Shareholders and Others
1. SUMCO’s Public Relations & IR Department led by the officer in charge of Public
Relations & IR Department shall be responsible for engaging in dialogue withinvestors including shareholders. The content and outcome of such dialogue shallbe reported to the Board of Directors and senior management as deemed necessary.
Senior management shall make presentations at quarterly financial briefings, andshall participate in one-on-one meetings as deemed necessary.
2. Information necessary for IR activities shall be collected from the Sales andMarketing Division, Corporate Planning Department, Accounting & Budget
Control Department, Finance Department, Purchasing Department, General Affairs
Department, and other relevant sections of the Company, and arranged andsummarized by the Public Relations & IR Department. The contents of IR activities
shall be reviewed and confirmed in advance by senior management, and due
attention shall be paid to the proper control of insider information.

83. Through these activities, SUMCO shall pursue sustained growth and enhancementof corporate value over the medium to long term by reflecting the views andrequests of shareholders and investors in corporate management.
Chapter 5

Miscellaneous Matters

Article 22: Revision and Repeal
Revision and repeal of the Fundamental Policy on Corporate Governance shall be
subject to resolution of the Board of Directors. However, simple modifications pursuant
to changes made in the names and titles of organizations and posts, etc., may be carriedout upon approval of the chairman of the Board of Directors.
Supplementary Rules< Enactment > The Fundamental Policy on Corporate Governance shall come intoeffect on March 29, 2016.
< Rev.1 > The Fundamental Policy on Corporate Governance shall come into effect on
November 30, 2021.
< Rev.2> The Fundamental Policy on Corporate Governance shall come into effect onJanuary 4, 2023.
< Rev.3> The Fundamental Policy on Corporate Governance shall come into effect on
March 29, 2023.

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Appendix
Criteria for Independence
In addition to the criteria for independence determined by the Tokyo Stock Exchange,
SUMCO deems a person who falls under any of the following definitions notindependent:
1. A person who currently meets any of the definitions listed in (1)–(7) below.
(1) A major shareholder of SUMCO (shareholder with 10 percent or more of total
voting rights in SUMCO), or an executive of the same.
(2) An executive of a major lender of funds to SUMCO (lender of amounts
equivalent to 2 percent or more of SUMCO’s consolidated total assets).
(3) An executive of a securities company acting as SUMCO’s lead managing
underwriter.
(4) An executive of a business partner of SUMCO (business partner that accounts
for 1 percent or more of SUMCO’s consolidated net sales, or for which
SUMCO accounts for 1 percent or more of its consolidated net sales).
(5) A partner to SUMCO’s Accounting Auditor, or an employee of the same whois engaged in auditing SUMCO.
(6) An expert or consultant in law, accounting, taxation, etc., receiving
remuneration in excess of 5 million yen per year from SUMCO, excluding
remuneration received as a director (provided that, when the entity receiving
the said remuneration is a juridical person, a partnership, or other form oforganization, an executive of the entity receiving such remuneration in excessof the smaller of 10 million yen or 1 percent of the entity’s total annual revenue).
(7) An executive of an organization receiving donations in excess of 5 million yen
per year from SUMCO.
2.

A person who fell under any of the definitions listed in (1)–(7) above at any time
during the past three years.

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