MANAGEMENT PHILOSOPHY

Perform our mission as a socially valued institution
via providing universally beneficial products“Company” is a place where all employees share core values and are able touse the lines of communication as a “dojo” for the mastery of oneself. It is ourstrongest desire that company growth is directly interwoven with employee
happiness – materially and spiritually. In the face of modern society, as thefoundation of a company’s existence, we are expected to continue to provide
universally beneficial products year after year. Our management philosophy
is to harmonize societal goals with employee desires, thereby enabling our
mission to be a valued institution sharing peace, happiness and progress toall of society.
Three key pillars are necessary under this philosophy in order to advancecompany development and ensure the success of our mission: Ability, Integrity and a Fighting Spirit. These pillars are the three sacred treasures thatform the cornerstones of every aspect of life.
When these pillars are indomitable inside our institution, a bright, peacefuland vigorous workplace will naturally emerge. We are confident that withthis workplace as a driving force we will overcome any challenges and thecompany will continue to grow as long as this pioneering spirit is encouraged
each and every single day. Together, let’s take this philosophy to heart andembrace it as our belief, and build a bridge of peace and friendship acrossthe entire corporate landscape while progressing into joyful, healthy lives.

Published in June 1960

The late
Mr. Senju Sato,
Honorary Chairman

As President

June, 1960 - June, 1978

As Chairman

July, 1978 - May, 2008

As Honorary Chairman

June, 2008 - October, 2008

Photo: Senju Sprinkler Co., Ltd. Marumori Factory

Table of Contents

EDITORIAL POLICYManagement Philosophy /Table of Contents / Editorial Policy

01

Message from the President / Materiality

03

Efforts to achieve a Zero-Emission society throughOur Environmental Vision 2050

SMIC Group: Our Vision05

ENVIRONMENTSMIC Group Lifestyle Support Products

07

ENVIRONMENT

21
22

Period Covered

SOCIETY

Low-temperature Soldering Solutions that Contributeto Carbon Neutrality in the Environment, MILATERA

09
13

Special Feature

The Realization of a Stable Supply Chain
for the SMIC Group in the VUCA Era
1

SMIC CSR REPORT 2023

Working with SuppliersWorking with Employees
Activities of Social Contribution

Special Feature

Initiatives to Achieve a Safe Environment for All

Working with Customers

20th Anniversary of Senju System Technology Co., Ltd.

19

27
28
29
34

MANAGEMENT

Governance
Company Profile / Network

The Senju Metal Industry (SMIC) Group strives to report on important issues anditems of high social demand, and identifies materiality. This report is produced inaccordance with the requirements of the GRI Standards and is subject to review andapproval by the Board of Directors, and provides case study results of our efforts tosolve social problems through our business practices.

38
44
45

January 1, 2022 - December 31, 2022
(Includes some information from January 2023 onwards)*In accordance with the change in our accounting period from FY2022, the above will
apply for this report.

Report Scope

25 group companies listed in the list of major affiliated companies(p. 46)(includes non-consolidated subsidiaries and associated companies).
Note that SMIC's environmental initiatives are listed separately.

Key Changes

No change to number of consolidated subsidiaries

Membership

RBA, JWES, JIEP, JAPIA, SEMI, TEA, CCI

Publication History

Current Issue: June 2023 (Previous Issue: October 2022)

Next Issue

June, 2024

Reference Guidelines

GRI Standards, Environmental Reporting Guidelines, ISO26000

DISCLAIMER
This report contains descriptions of plans and strategies pertaining to the future activities of SMIC, as well as predictions andforecasts related to its business performance. Such descriptions
include estimates and forecasts formed with information gathered
and analyzed based on what is available at the time of creation.
In addition, due to a review of data from the past following changes in calculation methods, locations covered, and periods coveredin the report, some parts of the data may differ from past data
disclosures.
Please be aware that SMIC and its related companies assume no
responsibility whatsoever for damages or losses occurring either
directly or indirectly from the use of the information or content
included in this report. Furthermore, the original text of this report
was written in the Japanese language and has been translated
into English and Chinese languages for reference. If there are any
discrepancies between the Japanese version and the English or
Chinese versions, the Japanese version shall supersede the otherversions. Please be aware that SMIC assumes no responsibility
whatsoever for any and all damages occurring from misunderstandings caused by translated versions of this report.

*The GRI standards comparison table will be posted on our CSR website.

SMIC CSR REPORT 2023

2

Message from the President
Our Materiality
ESG

ResilienceⅡ

Transcend
Any Situation with
Flexibility andIntegrity

E

S

President

Materiality

SDGs

Respond to Climate
ChangePractice Resource
Recycling• Promote the collection and recycling of used solder products sold by us• Reuse of solder materials in our manufacturing process

Promote the CSR
Procurement(Responsible Procurementof Minerals)• Prohibit transactions with individuals or organizations engaging in conflict, terrorism, child labor, orother human rights abuses• Use minerals in accordance with the RMI standards

Human Resource
Development• Develop human resources that strive to acquire new knowledge and make rational decisions froma broad perspective

Creating Comfortable
Workplace Environments• Diversity and Inclusion (Create a comfortable work environment that accommodates diverse lifestyles and human resources)• Respect for human rights (Show respect and understanding for all cultures and religions when
conducting global business)• Promote Digital Transformation (DX) internally• Occupational health and safety

Contribute to theRealization of Society
5.0 and DX• Develop highly reliable products enabling the application of the latest technologies such as 5G, IoT,
and autonomous driving• Keep up with and supporting our customers' advanced technologies and promoting partnerships
and the co-creation activities with themRealize Stable Supply• Enhance our readiness for large-scale pandemics and natural disasters such as earthquakes andtyphoons• Strengthen our business continuity plan (BCP) and relevant systems• Enhance our multi-channel procurement system• Introducing automation and IoT to factories

Intellectual Property
Protection, Personal
Information Management, and Other Risk
Management• Strengthen control measures for intellectual property-related risks such as patent infringement
and technology leakage• Enhance information security• Protect the personal information of our company, customers, and business partners

G

We are pleased to present the SMIC Group’s CSR Report for FY2023.

as improving our facilities and in-house infrastructure, in response to

only be accomplished by securing enough revenue to make such ac-less energy for melting, thereby reducing CO₂ emissions.

Although the COVID-19 is steadily being brought under control, thenatural disasters such as floods and earthquakes.

tions feasible. To this end, we believe that our contribution to sustain-

While this material offers advantages, it is extremely rigid and brittle

ability involves continuing to be a company that can flexibly respond to

making it challenging for mass production. Additionally, due to its low

changes in the business environment based on a solid revenue base.

melting point, it is prone to the formation of solder oxides (dross),

We also believe that it is important to properly understand the situation

which has made it historically challenging to implement through sol-problems of wars among nations, civil wars and civil strife due to political instability, soaring raw material prices, and intensifying disasters due to climate change are having a major impact on the social

Creating a workplace where employees feel safe andsecureeconomy. In light of these social conditions, this year's CSR Report willIn the area of health and safety, water-connected sprinklers devel-

and circumstances in order to determine the most effective way to deal

dering devices.

focus on the BCP system and health and safety under the theme of

oped by Senju Sprinkler, a Group company, have been deployed atwith the problem. We will scrutinize the general information aroundWe believe that it is necessary to make such materials easy for cus-

Resilience II - Transcend Any Situation with Flexibility and Integrity as aour manufacturing sites in Japan as a fire prevention measure, andus and take the appropriate action for our company, drawing on our

tomers to use and to ensure a stable supply. We launched MILATERA,

continuation of last year’s report.

we are working to establish evacuation routes and systems that allow

past experience. We will share information on these measures witha solution that contributes to CO₂ emissions reduction through low-

employees to safely evacuate if a fire should break out in the factory.

all employees and promote mutual understanding of their importance.

temperature solder mounting by combining our technological capabili-

Establishment of a BCP system to continue to fulfill
supply responsibilities for our customers

In addition, factories where people must be present at all times havethe potential for high incidences of occupational accidents, we are

Low-temperature soldering solutions that contributeto carbon neutrality in the environment

ties in materials, equipment, and production methods to overcome thechallenges associated with the use of low-temperature solder.

Last year, our manufacturing sites were damaged by the COVID-19

working to improve safety by preventing human error through the au-

lockdown in Shanghai and flooding caused by heavy rains in Malaysia.

tomation of manufacturing equipment, reducing employee workloads

What can we leave behind for the next generation? As a manufactur-socially valued institution.

This made it difficult to supply our customers. However, this did not

and improvements in the workplace environment.

ing company that handles heavy metals, this is the most important

The SMIC Group will continue to engage in business activities to meetquestion we must consider. As we face the global challenges of energy

your needs, while contributing to the realization of a sustainable soci-supply and global warming, we are promoting our business activities

ety. We look forward to your continued support and encouragement.

cause any serious problems because we had a BCP system in place
to cover supply at our manufacturing sites around the world. To ensurethat our customers have peace of mind in the event of a situation like3

Material Topics• Energy conservation and the use of renewable energy in business activities• Development of environmentally friendly products to help customers achieve carbon neutrality• Use of renewable resources for secondary raw materials

Profitability is essential for contributing to sustainability

with low temperature as our keyword. Low-temperature solder with athis occuring in the future, we are strengthening our BCP system forContinuously taking appropriate actions to address various issues intin-bismuth (Sn-Bi) composition has a melting point 80°C lower than

all solder materials and enhancing disaster prevention measures, suchbusiness activities, such as supply chain, BCP, health and safety canthat of lead-free solder (which is commonly used today), and requires

SMIC CSR REPORT 2023

As one of our legacies for the next generation, we intend to serve as a

SMIC CSR REPORT 2023

4

Environmental, Social,
and Corporate Governance toAchieve Sustainable Development

SMIC Group: Our Vision

Achievement of Our
2050 Environmental Vision

The SMIC Group develops ESG (Environment, Society, and Governance) friendly business activities and provides
high quality, reliable products. As socially responsible company, we are also committed to the health and safetyof our employees, collaboration with local communities, and activities that make a social contribution.
With the aim of realizing a sustainable society, we will contribute to the future through our business activities
by reviewing our manufacturing processes and manufacturing and selling products that can contribute to the
reduction of CO 2.

Expanding the significanceof our existence as a sociallyvalued institution

SMIC Group Business Activities
Materiality• Climate change• Resource recycling• Promotion of CSR Procurement(Responsible Mineral Procurement)• Human Resource Development• Creation of a comfortable
work environment• Society 5.0, Contribution torealization of DX• Realization of stable supply• Risk management,

Value Chain

INPUT

OUTPUTOUTCOME• Well-equipped

Research &Development

manufacturing facilities

Solder products• Solder alloys • Alloys and their various forms• Flux-cored solder • Solder paste• Solder preform • Solder balls• Strong collaboration withstakeholders• Establishment of a global network
Purchasing• Continuously evolving

Manufacturing

Realization of resource
recycling and energy savings

Sales

technological capabilities

Flux• Solid financial base

• Post flux • Semiconductor flux

Correcting disparities
through fair trade

Factory automation (FA)equipment

Promotion oftechnological innovations• Strong organization andhuman resources

Quality• Effective use of natural resources

including intellectual property andpersonal information management

Audit

Contribute to carbon
neutrality in the environment• Reflow oven • Flow soldering machine• Spray fluxer • Solder recycle machine

Development of industries
and markets

Bearing products
Business Foundation

Core Competence• Advanced technological capabilities of materials, equipment, and construction methods
and a proven track record• High level of ability to respond to customer requests and resolve their issues
by sincerely listening to customers’ requests• Metal-based plain bearings• Resin-based plain bearings

Development of
automation technologies

Special alloys

Realization ofdiverse lifestyles

Fire sprinkler systems
Metals, environmental andregulated substance analysis• Employees with a high degree of loyalty

Management
Philosophy

A corporate culture thatallows employees’ lives toblossom and come to fruition• Ability, integrity, and fighting spirit• Pioneering spirit that is new day to day

Megatrends• Transition to a decarbonized society • Increased geopolitical and climate risks• Transition to a circular economy • Shift to a more diverse society• Change in workstyles and lifestyles

5

SMIC CSR REPORT 2023

• Improvement of employee engagement

Convert management resource to the next source of value creation• Enhancement of financial base
• Improvement of corporate brand• Improvement of customer trust

SMIC CSR REPORT 2023

6

SMIC Group LifestyleSupport Products

7
7

SMIC Group's products are used everywhere and support every part of our lives, including everyday products such as electronic devices and mobility products, as well as infrastructure suchas wind turbines, base stations, steel towers, and even satellites. SMIC Group will continue topioneer the future of bonding through total solutions, and thus contribute to society.

7

5

1

3

7
8

7

4

8
2

8

6

1

3

5

SOLDERING EQUIPMENTREGULATED SUBSTANCE ANALYSIS INSPECTIONSSPRINKLERS

SMIC soldering equipment is used
for the soldering mounting process ofprinted circuit boards and electronic
components in manufacturer factories.

Industrial Analysis Service conducts analysis related to regulated substances
as represented in the EU RoHS Directive.

Senju Sprinkler's fire sprinklers areused in firefighting equipment aroundthe world, including housing, buildings,
underground parking lots, and public
facilities.

MATERIAL ANALYSISINSPECTIONSSOLDER BAR

Industrial Analysis Service does analysis
inspections of harmful substances contained in various materials and products.

SMIC solder bar is used for the circuitboard mounting process, which uses
soldering equipment.

4
2

SOLDER PREFORM
SMIC solder preform are used forin-vehicle mounting in automobiles.

7

7

SMIC CSR REPORT 2023

6

SOLDER BALL,SOLDER PASTE
SMIC solder ball and solder
paste are used in electronics
and appliances such as smartphones and PCs, as well as insolar panels, LED lights, andwind turbines.

8

SPECIAL ALLOYSENVIRONMENTAL
ANALYSIS INSPECTIONS
Industrial Analysis Service does
analysis inspections of contaminantsin water, air, and soil.

SMIC zinc/tin/magnesium alloy is used
for anti-corrosion surface treatment ofcast iron water pipes.

PLAIN BEARINGSSMIC plain bearings are used in
the shock absorbers of automobiles, as well as the undercarriages of construction machines.

SMIC CSR REPORT 2023

8

Low-temperature Soldering
Solutions that Contribute to
Carbon Neutrality in the Environment,
MILATERATo a future leading
to t80°C

Soldering requirements have changed with the times,
and SMIC's low-temperature soldering solution "MILATERA" is the answer.
We provide "MILATERA" to the customers in a three-part system which
includes materials, equipment, and our soldering method.
Solders with a melting point about 80°C lower than conventional solders
allows for low-temperature mounting.
This new carbon-neutral option reduces signiﬁcant burdens, costs, andCO2 emissions throughout the supply chain.
SMIC is aiming for a future where manufacturing is done whileconsidering both people and the environment.
Through our technology and passion, we will pave the way for various
possibilities as partners in ushering in a bright future nurtured over morethan 80 years.
Reducing temperature can reduce other factors and lead to positive
outcomes.
That's why the reduction by SMIC's "MILATERA" will lead to a positive
future.
The warmheartedness of our customers and partners who support thisinitiative will help to lower the earth's temperature.
We want to deliver next-generation mounting technologies that will leadto a brighter future for both companies and society.

Solution

Solution01

Low-temperature Wave Soldering Method

02

Low-Temperature Reflow Soldering Method

Established as the world's first soldering method
for effective CO2 reduction in the circuit board
mounting process (SCOPE2) in 2022.

Widespread usage for components and circuitboards that are heat-sensitive for effective CO2 reductionin the circuit board mounting process (SCOPE2)

Our newly developed wave soldering equipment and post flux helped to establish theworld's first mass production process utilizing the low-temperature wave soldering
method. We were also the first in the world to commercialize the usage of flux coredsolders for repair. This method was used in the manufacturing of rice cookers by thePanasonic Corporation.

We have developed solder alloys with excellent thermal fatigue and drop resistance.
We have a diverse product lineup for paste flux, including products(types) like halogen-free
and thermosetting resin.
This method is used in many companies such as Lenovo Corporation for their laptop,
PCs, and Panasonic Corporation for their camera modules, washing machines, andother products.

Soldering Equipment
Development

Post Flux
Development

Flux Cored Solder
Development

Solder Alloy
Development

Paste Flux
Development

Soldering Equipment
Development

Solution03

Low-Temperature Soldering Materials

CO2 reduction even in SCOPE3
from mineral exploration to refining as observedin the Life Cycle Assessment
We now include sustainability in the Life Cycle Assessment (LCA).
From the customer's perspective, low-temperature soldering can be expected to reduce
CO 2 emissions even in the solder material process from mineral exploration to metal
refining that falls under SCOPE3.
Although tin-bismuth solders can be hard and brittle, we offer products in various forms.

11

SMIC CSR REPORT 2023

SMIC CSR REPORT 2023

12

Safety & HealthSpecial Feature

Initiatives to Achieve a
Safe Environment for All

Special Initiatives
Safety Gatherings
In addition to regular meetings of the Health & Safety Committee, safety gatherings are held three times a year to deepen employees’ understanding of health and safety. Each meeting has a specific theme and is planned as a forum for the exchange of safety information to raise
and maintain employee awareness of health and safety.

We are committed to health and safety, with the goal of achieving Zero Accidents. To achieve this that we do not allow any occupational accidents,
including not only lost time accidents but also unscheduled accidents.

Lifesaving Training

Our Approach to Health and Safety

See p.30

See p.15(7 Installation of AED)

Participants are recruitedfrom each department toattend lifesaving courses
sponsored by the Fire
Department on a regularbasis.
The headquarters received
a letter of appreciationfrom the Senju Fire
Department last November.

(Occupational Health and Safety)

As a result of long-standing efforts to improve employee awareness of health and safety and advances in safety technology for machinery and equipment, the numberof serious harms that lead to lost workdays has decreased and has been minimal in recent years. However, we take the same attitude toward nonwork-related accidents
such as falls and minor injuries, which have been on the rise in recent years, and when they do occur, we strive to prevent their recurrence by identifying and analyzing
the causes and taking countermeasures. Based on the belief that we place the health and safety health of our employees as our top priority, our goal is to prevent
accidents, no matter how small, from occuring.
Regular meetings of the Health & Safety Committee (Headquarters)

Initiatives for Safety Management

Safety and HealthManagement System

Workplace HealthManagement

General Safety and Health Manager(Chairman of Health & Safety Committee)

See p.30

In accordance with laws and regulations, we have put in placea safety and health management system that is appropriate
to the size of our segments. The system for offices with 300
or more employees on a regular basis is shown in the figureon the right. The general safety and health manager, the headof the business office, supervises and manages operations
as the chairman of the Health & Safety Committee. Safety
managers and health managers are appointed from among
those with certain qualifications.

• Health Checkups and Secondary

Vice Chairman

Industrial Physician

Safety Manager

Examinations• Influenza Vaccination Onsite(Headquarters, Tochigi Segment,
Soka Segment)

Health Manager

Health & Safety Committee members (elected by the company)and (elected by Senyukai)
Operations Chief

Hazard Prevention Activities
Hazard Analysis and Assessment

Conducting Risk Assessments

ExamplesThe number of serious accidents has been greatly reduced by eliminating and reducing risks
through hiyari-hatto (near-miss) and kiken yochi(KY) (hazard prediction) activities (identifying hazards before work begins and avoiding them in advance). Currently, we are working on risk reduction, focusing our attention on risk assessments.

Hazards and toxicities at each workplace are
identified, and risks are assessed and prioritizedbased on the extent of occupational accidents
caused by these hazards and the likelihood ofsuch accidents occurring. Countermeasures arerepeatedly reviewed, implemented, and recorded until risks are reduced or eliminated.

The Root Causesof Hazards

DegreeAlmost trippedon the stairs

2

2

Ⅱ

Almost caught
my finger

5

3

Ⅳ

The Gate of No Disaster and Safety Pledge
The Gate of No Disaster and Safety Pledge is installed at the service entrance facing the parking lot of the
Matsuyama Factory of the Tochigi Segment. This gate is designed to raise employee awareness of safety bydisplaying the number of days with no accidents on the gate, along with the words, “By passing through thisgate, I pledge to be safe and healthy,” and “Entrance to a safe work place(space) - be safe today!”

13

SMIC CSR REPORT 2023

Potential

Risk Level• Working Environment Measurement
A working environment measurement engineer conducts sampling and measures theoverall working environment for any potential issues and challenges.

Maintenance of Evacuation Routes in the
Event of an Emergency
Voluntary Installation of Sprinkler Systems and Fire EraseSee p. 16

Water-connected sprinklers
were installed along evacuation routes and in areas
where melting furnaces arelocated in the Matsuyama
Factory of the Tochigi Segment. Fire Erase (fire extinguishing agents) havebeen installed in five draft
chambers at the IAS. Similar
installations are being considered for other locations.

Retrofitting Emergency Exit DoorsIn accordance with RBA (Responsible Business Alliance) standards, the building’s emergency
exits have been renovated withdoors that can be opened with asingle action so that employees
can evacuate safely and quickly inthe event of a disaster. As of May
2023, the renovation has been
completed at SMIC headquarters,
domestic segments, and domestic affiliated. subsidiaries.

See p. 16

Grip ball typeLever TypeSMIC CSR REPORT 2023

14

Safety & Health

Initiatives to Achieve a Safe Environment for All

Special Feature

Safety Measures and Sanitation Initiatives

1 Heat Stroke Prevention

2 Automation andRobotization

ExampleCooling agents

ExamplesAGV (Automated Guided Vehicle)
Solder billet
Automated manufacturing
robots
Unloading robots
Automated packaging robots

安全第一

に
り上と
よ
線 こ
このまない
積

4 Safety Inspection

Each month, the Health & Safety
Committee members conductsafety patrols of each workplace.
They point out areas of insecurity
concern or behavioral concerns
and follow up until they are corrected.

New and refurbished equipment is safety inspected andevaluated prior to use. Physicaldefenses, interlocks, and safety controls are installed where
hazards may occur.

of Sprinklers and Fire
Erase

2
非常

EX 口
IT

消火

4

ト
リフ
ーク
フォ 限速度制

5 Voluntary Installation

and Acceptance

5

栓
走ら危険で
ない す
で下
さい

栓

消火

3

11

EED

M SP

IMU

MAX

走ら危険で
ない す
で下
さい

3

2
20

30 40

2

AED

9

S

T

O

7

50

P

10
0

Signs

9 PersonalProtective
Equipment

ExamplesSafety shoesProtective masks

7 Installation of AED

SMIC CSR REPORT 2023

P

8 Safety

Safety Calls

15

O

10

6 Recitation ofWith the cooperation of the fire department, life-saving training on AED operation and cardiopulmonary resuscitation
is provided on a regular basis.

S

6

T

1

安全第一

8

3 Safety Patrols

AED training for female employees

10 Fall

Prevention

11 Emergency Exit

Door Renovations

ExamplesHandrail
Stairway slip
prevention
Tents to warn offalls
Alerts

SMIC CSR REPORT 2023

16

Safety & Health
Aim a Safe Workplace for All Employees
We have established a Health & Safety Committee at each of its segments, and each committee plays a central role in health and safety efforts.
This time, the three core members of each factory who are promoting health safety are gathered to talk about the future of health and safety.

Initiatives to Achieve a Safe Environment for All

Special Feature

We want
everyone tocontinue
to work insafe andhealthy
work space.

department has been appointed to the committee. We have mid-career
employees actively involved in the process, and we are taking advantage of
their various perspectives by referring to examples and experiences fromtheir previous jobs and taking measures to adapt the way of doing things
to suit the work site.

Trends and Countermeasures for
Occupational Accidents
Egawa: About 30 years ago, a majority of occupational accidents (work-re-

Health & Safety
Committee Members

lated injuries) involved being caught in machinery and burns. Nowadays,
the number of major accidents is decreasing, and the number of occupa-

Leader’s Talktional accidents caused by falls is increasing. We utilize risk assessmentand evolve year by year to minimize damage and risk. In addition to physical injuries, prevention of mental illness is also a focus. As an example,
we feel that the stress check system is an initiative that reflects modern
society emphases on the importance of mental health.
Yamagishi: At the Soka Segment, the ratio of falls has been increasing
in recent years, while ascending and descending stairs, moving, and commuting. These are mostly non-work related incidents. For this reason, we
have been issuing warnings against skipping steps on stairs and running
Soka Segment
Vice Chairman
FA Manufacturing Div.
Production Dept. Manager

Shinji Yamagishi

Tochigi Segment(Matsuyama Factory)
Health Manager

Kansai Segment
Safety Manager

Tochigi Control Div.
General Affairs Dept. Manager

Nishiwaki Factory
Kansai Production Control
Dept. Manager

Masako Egawa

Koji Yamasaki

The Diverse Characteristics of each Segment
Egawa: The Health & Safety Committee at the Tochigi Segment is composed of workplace leaders and above from each department. During safety patrols, they must be in a position to have a certain level of authority, as
they must be able to stop a situation that is seen as dangerous on the spot.
There are several women on the committee, including myself, and their

We utilize input
from various
viewpoints to takemeasures toimprove the site.

lightly. I believe that an emphasis on individual awareness of safety will leadto the prevention of occupational incidents, so it is important to repeatedly

SMIC CSR REPORT 2023

occurred so far, I also believe it is important to continue to raise awarenessamong each and every one of us.

No Workplace Incidents - Aiming for
Zero Incidents
Yamagishi: Work-related injuries often occur when consciousness fades.
Experienced workers are made aware so that they never have to go throughthe same thing again, but the challenge is to make new hires and otherinexperienced workers aware. Alerts and regular awareness activities are
one of the things we continue to do. We are working to visualize safety and

It is important foreach and every
one of us to besafety conscious.

aim for zero occurrence of all occupational incidents.
Yamasaki: With an increasing number of employees and a variety of operations at each location, workers’ compensation cases are changing andopinions are valued. For example, their input was used to install fatigue-re-expanding. Recently, we often see people looking at their phones while

ducing mats and work tables that fit the height of the workers. In 2023, wewalking, and it is necessary to alert people to the fact that such negligent

also conducted an AED training session for women, based on the feedback

behavior may lead to work-related incidents, and to make each one of themthat there is resistance to the use of AEDs for people of the opposite sex,aware of this fact. In addition, we would like to make more effective use

regardless of their gender.

of the committee’s connections with each segment, such as by sharing information on countermeasures adopted in reference to the efforts of otherYamagishi: At the Soka Segment, similar to the Tochigi Segment, Healthoffices with other offices.

& Safety Committee members are appointed by workplace leaders andEgawa: The retirement age will be raised and the number of years worked

above. Safety patrols are effective in checking other workplaces in addition
to their own to discover hazardous areas that they perceive in unfamiliar

remind workers of the importance of safety. In addition, the Soka Segment

will be lengthened. Therefore, we want them to continue to work in goodplaces, and to work on countermeasures and improvements. In addition,

receives announcements and suggestions on safety from our suppliers, so

health and safety, and to retire in good health. We want to promote thebecause our factories are not large, we listen to the opinions of a diversity

we are working on this issue by utilizing a third party’s input as well.

creation of workplaces where people can work for a long time, even thoseof employees, and we are also working on areas related to hygiene, such as

17

to raise the awareness of employees. Although no serious incidents have

who are currently young, because it is their future. In addition, nowadays,

improving cleaning supplies and preventing noise leakage from restrooms,

Yamasaki: At the Kansai Segment, we refer to the efforts of other facto-in addition to protecting the body from equipment and tools, it is also im-so that these areas will lead to a more comfortable workplace.

ries and their measures for dealing with work-related incidents. When aportant for people to be mindful of others’ feelings. That is why everyone

work-related incident occurs, the workplace leader or higher is immedi-

is involved in health and safety. I would like to emphasize that each one

Yamasaki: In the past, the same person served as a Health & Safety

ately notified, and if there are similar hazardous areas, immediate counter-of us plays an important role in establishing a safe work environment it isCommittee member at the Kansai Segment for a long time due to themeasures are taken. I also feel that the head of the business office, whosomething that is important for everyone to work on.

small number of employees, but recently the number of employees at theis also the Chairman of Health & Safety Committee, constantly makes

factory has increased, so at least one person from each workplace andannouncements on health and safety in various situations, which helps

Thank you very much, Everyone.

SMIC CSR REPORT 2023

18

Asia
Tianjin, Shanghai, Huizhou, Hong Kong

AMERICAEUROPEUS andEuropeChicago

Bar

Paste

Flux coredJAPAN

Prague
US: San Jose, Chicago Czech Republic: Prague

Flux

San Jose

Plain bearing

Service

Tianjin

Korea, Taiwan, Philippines, Thailand, Malaysia

Bar

Paste

Flux

Shanghai

Korea

ServiceHong Kong
Bar

Huizhou

Paste

Flux coredTaiwanThailandPhilippines

Special Feature
Malaysia

The Realization of a
Stable Supply Chain for the
SMIC Group in the VUCA Era

Flux

ServiceTochigi: Moka-shi

Saitama: Soka-shi

ASIA

Japan

Iwate: Ichinoseki-shi

Miyazaki : Miyazaki-shi

Aichi: Seto-shi
Hyogo: Himeji-shi
Fukuoka: Onojo-shi

All Main
Products
Flow

In the past few years, we have experienced many challenges such as COVID-19, natural disasters due to earthquakes and climate change,and external conflicts. Manufacturing companies are required to establish a BCP system to ensure a stable supply of products.

Reflow

Service

Hyogo: Nishiwaki-shi, Taka-cho

Ball

Flux

Ball
ServiceToyama: Toyama-shi

The SMIC Group has established a system to ensure a stable supply for its customers in Japan and around the world in order to ensure asolid foundation for a stable supply. In 2022, we faced challenges in manufacturing at our overseas group companies due to flooding andurban lockdown, but we were able to continue supplying our customers thanks to the systems we had in place. We are operating a BCP toensure that we can fulfill our responsibility to supply our customers even in the event of unforeseen circumstances.
Paste

Preform

Flux

Service

Flow

Selective dip
solderingService

Resilience to Environmental Changes
1

2

Torrential Rains in Malaysia (December 2021)

On 18 December 2021, a large area of Malaysia experienced three days of torrential rains, resulting in massive flooding that was described as occurring once in a few
hundred years. In the state of Selangor, where SMIC Malaysia is located, the equivalent of one month’s normal rainfall fell in a single day, flooding waterways and inundatingbuildings. The SMIC Malaysia factory was also inundated by approximately 60cm of water, resulting in extensive damage to the manufacturing facilities, products, raw materials, etc. Some products could not be manufactured or supplied to customers for five months. In order to fulfill our responsibility to supply our customers, we immediately
switched to a supply system from our other manufacturing bases in Japan and other Asian countries.

Lockdown (April 2022)

In April 2022, Shanghai, China, went into lockdown (urban blockade) due to the spread of COVID-19 infection. The lockdown lasted approximately two months and citizens
were prohibited from leaving their residences. SMIC Shanghai employees were also unable to go to work, making it difficult to communicate with customers and suppliers,
and the factory was also unable to operate. In order to fulfill our responsibility to supply our customers, we immediately switched to supply from our manufacturing sites inJapan and other parts of China.

Supply Bases

December 2021 Flood Damage

19

SMIC CSR REPORT 2023

SMIC Philippines

SMIC Thailand

Supply Bases

SMIC, Tochigi Segment

SMIC Huizhou

SMIC Hong Kong

SMIC CSR REPORT 2023

20

Environment

Efforts to achieve a
Zero-Emission society throughOur Environmental Vision 2050
It is important for us that we address global environmental
issues (such as global warming, acid rain, soil pollution, andwater contamination) as critical issues deeply connected to
the very existence of humanity, and a common mission for
all of us. We will realize a zero-emission society andcontribute toward building a sustainable society through ourbusiness activities.

Environmental Policy

Environmental
Vision 2050
THE THREE GOALS IN SOCIETY

1 Attain A LOW CARBON SOCIETY
Taking on the challenge of building a zero-greenhouse gas society
Promoting energy saving in our corporate activities

2 Attain A CYCLICAL SOCIETY
Conserving global resources through recycling

We believe conservation of the global environment is the shared mission of all humanity. Based on our mission and with the
purpose of realizing a sustainable society, we strive to harmonize our business activities with the global environment, andmake every effort to protect our rich nature and diverse ecosystems.

ENVIRONMENTAL
PHILOSOPHY• Environmental Administration Structure• Environmental Risk

We established the Environment Committee as an organization to take measuresnecessary for reducing our burden on the global environment. The committee
deliberates on the formulation and implementation of plans related to pollution
prevention and environmental conservation. Every year at the Management Committee, we identify environmental risks and opportunities, and decide our environmental activity policies based on items identified.

We determine various environmental risks such as climate change problems
and pollution caused by waste, sets strict voluntary administrative standards forpreventing environmental accidents and pollution accidents, and takes various
measures to address these in conducting business. In order to minimize damage
expected in the event of an emergency, we conduct emergency response drills
once per year.
In FY2022, we did not have a single environmental accident or pollution accident.
We will continue to take preventive measures against environmental accidents
in the future.

Environmental Organizational Chart
President

3 Attain a society that lives in
HARMONY WITH NATURE

Conserving biodiversity and endeavoring to realize
a society with zero-use of harmful chemicals thatpose a risk to the environment

Management Committee• Environmental Training

Operating Officer

We conduct various types of environmental training, such as general environmental training (once per year), ISO14001 training (regularly), waste management training (regularly), and emergency response training (during emergency
response drills) to raise employee awareness of the environment and to maintainand improve our environmental management system.

Proposals
Emergency
Reports

OrdersCSR Promotion Headquarters
Environmental Measures Department
Reports

SecondEnvironmental Plan
(FY2020 – FY2030)

Reduce CO2 emissions from level measured
in FY2013 (17,328 t-CO2) by 25% by FY2030

Promote product recycling
Develop products using 100% 3R* materials

Cut use of harmful chemical
substances to zero
Zero usage of chemical substances that impact
the human body or the environment

Requests

Domestic Sites

Overseas Sites
Committee at Each Site

Environment Committee

Health & Safety Committee

Disaster Prevention Committee• Environmental Management System
We defined our environmental philosophy and environmental policy, which serves
as the guiding principles for environmental activities. A total of 17 sites in Japanand overseas have obtained ISO14001. They have formulated their own environmental management systems and have been conducting PDCA accordingly.
With regard to our four priority themes relating to the environment (reducing
greenhouse gases, reducing waste, reducing harmful chemicals, and nature
conservation activities), each site and business unit both in Japan and abroad
set annual goals and action plans, and conduct activities aimed at reducing ourenvironmental footprint.

Compliance evaluators work with managers of related departments to conduct
environmental law compliance evaluations twice a year, in order to check that environment-related measurements and notifications have been carried out properly, that there are no problems, and that measures required by law have beentaken. They also conduct internal audits once a year to confirm the effectivenessof ISO14001.

TOPICS

Efforts towards
a carbon neutral business

Requests• Environmental Audits

Panasonic ECO-VC Award Silver Prize
We submitted our Pb-free low melting point Sn-Bi solder paste, aproduct that can contribute to the realization of carbon neutrality
in the environment, to the Panasonic Group’s ECO-VC Activity, aprocurement activity, and received the Silver Prize, placing 4th outof 264 applications.
The product was evaluated for its ability to reduce CO2 emissions
in both the solder product manufacturing process at the manufacturer (Scope 3) and the
product manufacturing process at Panasonic (Scope 2),
as well as for its expandability, including the use of existing production processes.

Conserve biodiversity
Conserve biodiversity through environmental
conservation activities
21

SMIC CSR REPORT 2023

*3R = Reduce, Reuse,Recycle

SMIC CSR REPORT 2023

22• Environmental Footprint Material Balance• Reduction of Greenhouse Gas Emissions (Scope 1, Scope 2)

INPUT
Raw Materials

12,707t

Water Supply

379,016㎥

Electricity

GHG
3,054t-CO(Scope 1)
Business Activities

37,520MWh

City Gas

3,754t-CO(Scope 2)

A Fuel Oil
Kerosene
Gasoline
Light Oil
Chemical Substances

49t

14kl
94kl

Shipping

657t

Use at the shipping destination

58kl

Drainage

375,225㎥

²

2t
1t

COD
Chemical Substances*PRTR Notification Targets²

6,809t-CO

BOD

35kl

²

Total

1,117k㎥

LPG

The material balance is a simple representation of the environmental impact of the business as a whole by determining the input of
substances and energy (INPUT) and the output of environmentally hazardous substances (OUTPUT) for the entire business activities.
We generate over 1,100 tons of waste as a resultof its business activities, but through various efforts, the company has reduced the final amountof waste to 3.3 tons.

OUTPUT

21t*PRTR Notification Targets

RecoverySold to a recycler
Used for recycledmaterials

Recycling

Total waste

1,120.1t

Final Amount ofWaste Disposed

1,116.8 t

3.3 t

Amount ofmaterial ultimately
disposed of as waste

We have improved workplace efficiency in our factories, upgraded machinery such as air conditioners and transformers, converted to LED lighting in offices and factories, and promoted other activities to save energy.
In FY2022, business activities continued to be as active as in the previous year,
but the promotion of these activities resulted in a reduction of approximately 4%
in energy consumption.

Amount of Energy Use
（Kl）

7,500

7,093
7,000

6,830

Decreased by approximately 4%
7,046
6,665

6,754

6,500

IMPROVEMENTS (Tochigi Segment)

PREDICTED ANNUAL
POWER SAVINGS (t-CO2 /year)

Installation of phase advancecapacitors on fan motors

14.2

Change of air compressor model

2.38

Conversion to LED lighting

11.38

Review of gas boiler operations

90.62*Figures in FY2022

6,000
5,500
0

2018

2020

2021

（FY）

2022

Greenhouse Gas Reductions Achieved（t-CO₂）400

369.12

350

3.3t

2019

304.94300

291.82

270.30245.26250
200
0Greenhouse Gas Reduction

CORE PRINCIPLE

CO2 Emissions Calculation Mechanism
Upstream (8 categories)

23

SMIC CSR REPORT 2023

2021

（FY）

2022

Amount of CO2 Emission（t-CO2）

Decreased by approximately 8%

1,400
1,300
1,200
1,100

1,221.9
1,110.9

1,289.4
1,189.7
1,189.1

1,000
900

700
600

Scope 3

Scope 1

Scope 2

Scope 30

• Switch to Renewable Generated Energy Electricity (Scope 2)①Purchased raw
materials and services⑨Transportationand delivery②Capital goods

Fuel combustion

Electricity usage⑪Product use

We are promoting the switch to electricity derived from renewable energy sources. The switch is being made mainly at manufacturing sites, and in the fourth
quarter of 2022, more than 80% of purchased electricity was switched to renewable energy power. We will continue to promote the switch at the remaining
manufacturing and sales bases to further reduce CO2 emissions.

2018

2019

2020

2021

2022

（FY）

2022 Renewable Energy Switchover Status at Domestic Sites（t-CO2）

Amount of Emissions

6,000

Amount of Switchover

88.5%

Switching Rate of Renewable Energy

88.5%

86.3%

5,000
4,000

（％）

100
80

51.4%

60

3,000
40

2,000

Scope 3Emissions of other companies related to the company’s business activities, suchas raw material procurement, logistics, and sales, that occur in the value chain
other than Scope 1 and 2, which are classified into 15 categories.

We calculate the annual consignment transportation volume of domestic cargo
based on the transportation section and distance by product category, and reports it to CDP as Scope 3 emissions from transportation and delivery. In FY2022,
business activities were as active as in the previous year, but continued efforts toimprove efficiency, including consolidation of trucking operations, resulted in an
approximately an 8% reduction in emissions.
We plan to compile the entire Scope 3 in FY2023, and we will monitor emissions
throughout the entire supply chain.

Downstream (7 categories)

In-house

In-house fuel usage. (e.g., in-house power generation → combustion of heavy
fuel oil, etc.; vehicle use → combustion of gasoline or diesel fuel)Indirect emissions associated with the use of electricity, heat, and other energy purchased by the company. (e.g., electricity usage generated by powercompanies)

2020

800

Scope 1

Scope 22019

• Reduction of Greenhouse Gas Emissions (Scope 3)

We track our energy usage and greenhouse gas emissions by taking quantitatively monitoring and measuring the environmental footprint caused by its business activities, and promote energy conservation and CO2 emissions reduction activities
to prevent or mitigate global warming.

In order to accurately assess the status of CO2 emission reduction activities, it is necessary to accurately determine the current emissions of your company.
This is where the use of scope perspectives comes into play.
The GHG Protocol, an international standard, defines three
types of scopes, depending on the scope of emissions to bemeasured.

2018④Transportationand delivery⑫Product disposal

20

1,000
0

January – March

April - June

July - September October – December

0

SMIC CSR REPORT 2023

24

• SMIC Group’s Solder Recycling System

Waste Reduction / Recycling

CORE PRINCIPLE

We conduct waste reduction and recycling activities based on the principles of 3R (Reduction, Reuse, Recycling).

• Efforts to Reduce Waste Emissions
Domestic Sites: Breakdown of Waste Emissions
Metal Scraps

2022
Total Waste Emissions

1,120.1t

Domestic Sites: Total Waste Emissions and Recycling Rates

57%（631.32 t）

Waste Oil

16%（178.24 t）

Waste Plastic

5% （59.38 t）

1,200

Paper

4% （46.97 t）

1,000

Sludge4% （45.04 t）

Others14%（159.13 t）

99.9

99.4

（%）

99.7

99.9

100
80

600 1,028

1,120.1

967.3

1,071.8

1,260.9 1,297.2

1,126.9

1,149.7 940.6

1,259.7 1,296.3

400

0

99.9

99.9

73.7

800

200

We made efforts to reduce waste emissions since 2013, such as recycling solder, collecting plastic byproducts, and recycling bearing product scraps.We haveachieved a recycling rate of over 99% every year since 2016.

99.9

96.5

1,400

Recycling Rate

Recycling Output

Total Waste Emissions
（t）

757.5
2014

933.1 1,070.7
2015

2016

2018

1,116.8

40

2019

935.4
2020

2021

2022

Reuse

0

（FY）

The 0.3% of the final waste includes bottles, concrete scraps, and grinding stone
scraps. We will continue to select recycling companies that handle these items inorder to further improve the recycling rate.

Recycled Material Usage Rates（％）

Reused Materials

100

Recycled Materials

80
60

40.4%

36.1%

35.3%

Purchase Recycled
Material

52.0%

New Materials
Rate of Recycled
Materials Used

20

• Overseas Site Data and Initiatives

0

January – March

April - June

July - September October – December

Overseas Sites: Total Waste Emissions and Recycling Rates
Total Waste Emissions
（t）

400.0
300.0

367.2
66.7

79.3

322.0
66.2

76.0

326.0
263.0

Reduction of Harmful Chemicals

Recycling Rate

77.7

304.0

（%）

80
60

200.0

40

100.0

20

0

2018

2019

2020

2021

2022

0

（FY）

CORE PRINCIPLE

Our development, purchasing, manufacturing, and environmental departments manage chemical substances based on ourenvironmental management system to protect our health and the environment and to realize safe and secure social life. In
particular, per our plans we are implementing a reduction or prohibition of the use of chemicals that have a large environmental footprint. We also define reduction goals every year and make focused efforts.

• Emissions and Movement of PRTR Law-Specified Chemicals• Soil and Groundwater Pollution Countermeasures• Examples of Waste Reduction Initiatives

We comply with the PRTR law to track the amount of applicable substances we
handle, emit, and transport.

We are taking the following initiatives as soil and groundwater pollution countermeasures. We also work to prevent pollution by conducting emergency response
drills, as well as risk training to prevent leaks of polluted water.

SMIC Shanghai: Reuse of Packaging Materials for Incoming
Shipments

Emissions and Movement of PRTR Law-Specified Chemicals

We have been reusing Styrofoam packing boxes used for receiving materials for
product shipment. 404 boxes were reused during the three-month period from
October to December 2022, and we will continue to promote this initiative.

（kg）

Soil
Chemical Transportation

21,48920,00010,000

When the material is loaded

When the material is discharged

14,846

14,841

15,15010,910Voluntary component analysis (once per year)

Water
quality and
Groundwater

Final drain and groundwater inspections (chlorine residue, pH,
etc. conducted daily)
Component analysis and measurement of drain water andgroundwater (conducted monthly)

Rainwater

Voluntary component analysis (twice per year)

5,000
0

SMIC CSR REPORT 2023

Chemical Emissions

25,00015,00025

Reclamation

20

40

We conduct environmental activities at its overseas sites and domestic sites alikebased on four priority themes related to the environment (reducing greenhousegases, reducing waste, reducing harmful chemicals, and nature conservation
activities). This includes collecting and recycling product containers and packaging, as well as reducing power usage by managing operations of manufacturing
equipment. We hold meetings with each overseas site once annually in order toascertain their annual plan and initiatives, so we can promote initiatives aimed atenvironmental conservation suitable for their region and circumstances.

Recovery

1,125.7
1,148.9201760

In cooperation with TAK-G, our affiliate company, we have been recycling solder for
about 40 years. With the emergence of lead-free solder in the 2000s, an old era
with two elements, tin and lead, into a new era with three elements, tin, silver, andcopper. Today, we use more elements. Because of this development, it was required
to install facilities to deal with multiple elements for recycling solder. As a result, wedeveloped special technology that limited the emergence of hazardous materials tothe absolute minimum and a solder recycling system that could reproduce high-purity
solder in our own refining method. The importance of recycling solder is increasing
nowadays, and the amount of recycling has doubled in the last few years, and this is
expected to continue.
We have assumed responsibility as a material manufacturer prior to the era whenmineral recycling became popular. We will continue to actively promote investment
in human resources and technological innovation toward further development of asystem in which we collect the used solder products of our company and recycle
them and the realization of recycling solder with multiple elements in order to achievea sustainable society with effective utilization of limited mineral resources and thecontrol of air pollution.

0

0

0

0

0

2018

2019

2020

2021

2022

（FY）

SMIC CSR REPORT 2023

26

Working with Customers

Working with Suppliers

Securing the Quality and Safety of Our Products

CORE PRINCIPLE

Procurement Activities

We have defined a Quality & Safety Policy, and in order to enable customers to use our products with peace of mind, we
strive to improve the quality of our products throughout the product lifecycle.
CORE PRINCIPLE

Quality and Safety Policy❶ We shall comply with related laws and regulations as well as customer demands, and improve customer satisfaction by supplying products
and services with consideration for quality and safety.
❷ We shall construct, implement, and maintain a quality management system in accordance with our established quality manuals, and continuously improve the effectiveness of this system.
❸ We shall set quality policies and targets for activities, conduct regular reviews and as necessary, and evaluate opportunities for improvement(intervals, frequency, and circumstances) of the management system.
❹ We shall evaluate the necessity of changes to our quality management system, and if changes are necessary, we shall review our system tomaintain its adequacy in light of our management philosophy.

We comply with laws relating to procurement and automotive industry fair trade guidelines set forth by METI (the Japanese
Ministry of Economy, Trade and Industry) in order to define the basic stance of our purchasing policy (practice fair andfaithful procurement with an emphasis on respect for suppliers), as well as our CSR procurement policy when conducting
procurement from suppliers.
Our basic stance toward our suppliers is to request they follow the requirements of IATF16949, ISO9001 and ISO14001, as
well as item 14 of the supply chain assessment guidelines defined by the RBA such as observation of law and social norms
and the promotion of a business continuity and recovery plan in case of emergency.
We will continue to observe procurement compliance and work towards establishing a safe and secure supply chain in order to contribute to society through procurement and build good relationships with our suppliers.

• CSR Sourcing Policy
1 Senju Metal Industry Co., Ltd. "Quality and Safety Policy"
2 Senju Metal Industry Co., Ltd. "Environmental Policy"
3 Senju Metal Industry Co., Ltd. "Purchasing Policy"
4 Senju Metal Industry Co., Ltd. “Basic Stance Toward our Suppliers”• Obtained Quality Management System Certification• Quality Audits

We have obtained the international standards and certificates at our manufacturing sites both in Japan and abroad.

We conduct internal quality audits based on IATF 16949 certification at its domestic manufacturing and sales bases, including group companies, twice a year
for the solder and bearing divisions, respectively. In addition, periodic quality audits are conducted once a year at all domestic and overseas manufacturing sites.
We have also prepared a camera for web audits and conducted process audits
remotely.

* ISO9001 (21 sites)* IATF16949 (17 sites)• Initiatives to Improve Quality
To eliminate defects in our deliveries, processes, and acceptances, SMIC has
formulated annual quality activity plans and requires each business unit to set
its own goals to work towards reducing defects. In case of a defect, we compile
recurrence countermeasures, incorporate analysis results into our improvement
plans for the following year, and make quality improvements continuously according to the PDCA cycle. We also give quality excellence awards to overseas
factories that have made excellent achievements in order to elevate the level ofquality of the entire group.

• Product Chemical Management
We conduct management of chemicals based on our environmental management
system in order to comply with the RoHS directives and REACH rules, which
are European chemical regulation laws made to protect human health and theenvironment.We have laid out a dedicated team system and are complying withchemical inspections of our products.
Per REACH rules, we have completed full registration of the chemicals we handle
and acquired SDS from our suppliers, in order to relay information to customers based on Articles 31 and 32. We supply customers with SDS & GHS labels,
compliant with GHS (Globally Harmonized System of Classification and Labellingof Chemicals).

Our procurement departments and the related development and manufacturing
departments conduct audits of suppliers both in Japan and abroad, according toyearly plans.
In FY2022, as in previous years, our suppliers in Japan and abroad cooperated with our supply chain assessment, and no problems were found.
Even under the negative influence of COVID-19, we conduct online meetings with
suppliers and endeavour to maintain close communication with them.

5 IATF 16949 requirements that must be considered for deliverables• Preventing Quality Defects
We established our affiliate company IAS in 1972 for defect prevention purposes.
IAS, a third-party institution, conducts inspection and analysis processes that are
typically done internally.
We decide pass or failure results based on the results of that analysis, whichhelps to prevent cheating and false pretenses in the inspection process.

• Initiatives to Improve CS
We are striving to drive CS (Customer Satisfaction) through working to improve
our sales activities and technology innovation by making proposals to customers,
engaging in joint development, participating in technology seminars and technology conferences, and exhibiting at exhibitions.Our efforts have been thoroughly
evaluated which resulted in our company receiving the awards shown below in
FY2022.
1• CSR Procurement Initiatives

2

1  Intel Corporation

EPIC Outstanding
Supplier Award

6

Environmental management requirements that must be considered fordeliverables• Basic Stance Toward Our Suppliers
1Compliance with laws and social norms

2

Consideration of human rights and labor3

Consideration of Health & Safety

4Prohibition of bribery and fair trade5

Healthy business management

6

Provide quality, timely delivery, and a steady supply

7

Preparation for emergency and business continuity

8

Consideration for the environment

9

Promotion of responsible mineral procurement

10

Emphasis on VE (Value Engineering) activities

11

Emphasis on provision of information

12

Information security

13

Eliminating relationship with antisocial forces

14

Social contribution• Initiatives in Responsible Mineral Procurement
In January 2011, we joined the RBA (Responsible Business Alliance), and havebuilt close relationships with customers in the electronics industry. Since 2014,
we have been a member of the RMI (Responsible Minerals Initiative), and haveurged our refineries to submit to the RMAP (Responsible Minerals Assurance
Process) and obtain third party certification. In February 2015, all of our supplierrefineries received RMAP certification.
Moving forward, in order to conduct responsible mineral procurement, we will callon all of our supplier refineries to renew their RMAP certification, with the aim ofsustaining a safe and secure supply chain for SMIC products.

2  TDK-Lambda Corporation

Excellent Supplier Award

27

SMIC CSR REPORT 2023

SMIC CSR REPORT 2023

28

Working with Employees
Our Principle on Human Resources

Health & Safety

We consider our employees to be important assets. In light of this, we respect the human rights and personality of each individual employee, and are striving to build workplace environments where a diverse range of human resources can realize
their potential.

CORE PRINCIPLE

We have clearly stated the basic steps necessary to prevent workplace accidents, with the aim of enriching its health andsafety activities. We have also established health and safety management regulations and a Health & Safety Policy, for the
purposes of ensuring the health and safety of our employees, and promoting the formation of comfortable workplace environments.

CORE PRINCIPLE• Respect for Human Rights

Health & Safety Policy

Basic Policy on Human Rights and Labor

Fair Evaluation and Our Personal Statement System

We define our policy and goals for human rights and labor in its Basic CSR Policy
and Practical CSR Goals, respectively. Embracing the principles of Ability, Integrity, and Fighting Spirit noted in our management philosophy, we are striving tobuild an environment where employees can work enthusiastically. Based on the
belief that harassment absolutely must not be tolerated, we conduct harassment
prevention training to better educate our employees.

We conduct human resource evaluations twice a year in order to apply the results to proper guidance for capacity development and human resource training.
Through this process, we fairly and justly evaluate the work performance abilities
of employees, and reflect our findings in promotions, raises, and bonuses. We
have also established a personal statement system with the purpose of improving
our workplace environments. Individual employees answer an annual questionnaire of what they think about and what they want from their jobs and workplaceenvironments. Through these initiatives, we are working to make improvementsthat will enable employees to better fulfill their potential.

• Human Resource Training
We encourage all employees to constantly work to obtain new knowledge, withthe aim of cultivating professionals who are capable of making rational decisions
from a broad perspective. We conduct appropriate training at every level andseparate training for all employees, having examined effective methods basedon the implementation of training regulations.Since FY2020, we have conducted
soldering aptitude tests with the purpose of improving quality and skill of soldering among employees. While such a program exists for employees, we aim
to expand training to include a soldering school for our customers as well, as aneffort to establish the new culture of SMIC Group firmly.

Education Support System

Soldering Aptitude Tests

Rank-Based Training
Distance Training

Manager Training (Advanced)

Capable Manager
Course (New Appointees)

Role Based Training Drills

Theme-Based Self Education

Fieldwork
Training

Upper Management

Middle Management

Manager Training (Beginner)

Capable Manager
Basic Course (NewAppointees)

Lower Management
Mid-Career
Employee Training

Mid-Career Employees

New Hire Employees

29

Evaluator
Training (NewAppointees)

Mid-Career Employee (Advanced)
Mid-Career Employee (Beginner)

New Hire Employee Follow-up Training
New Hire Employee Training

SMIC CSR REPORT 2023

Distance Training for
New Hire Employees❷ The company shall establish a health and safety management system, and actively promote necessary measures though its organizations andmanagerial posts in order to prevent labor accidents.
❸ Employees shall comply with the law and rules established by the company, and work to prevent labor accidents and promote maintenance of health.

• Labor Health & Safety Management• Safety Training

Based on the law, we have established health and safety management systems
proportional to the scale of each site. We prepare annual activity plans that define
activity goals and priority activities, and conduct health and safety activities basedon these plans.

We regularly conduct the following training for employees, so that they can learnknowledge and skills relating to health and safety.
·Training at the time of hiring• Incidence of Serious Labor Accidents·Special training for employees doing hazardous or harmful work

Accident Rate

We have established a scholarship fund and provide grant programs with the
purpose of aiding employees as they advance to undergraduate or graduate
university programs to obtain more advanced and sophisticated knowledge andenhanced skills. In order to encourage employees to engage in voluntary self-improvement and support them as they obtain more sophisticated skills and knowledge, we also offer Assistance for Acquiring Special Skills.

Group Training❶ We shall enrich our health and safety activities based on the Labor Standards Act and Industrial Safety and Health Act of Japan, in order topromote the formation of comfortable workplace environments.

FY2018FY2019FY2020

FY2021

FY2022· Foreman training (including refresher training for employees who
havebeen in-training foreman for five years)

0.49

0

0

0

0.62

·Other health and training for supervisors* Frequency Rate of Labor Accidents: Number of labor accidents (accidents resulting in death, or injuries
causing loss of work for one or more days or loss of partial bodily functions) / Total working hours ×
1,000,000

Salesperson
Training(Beginner)

Soldering Aptitude Teste-learning

Technical
Sales Position
Training

EnglishConversaOverseas
tion
Site
Engineer
Training

OJT· Health and safety training to improve health and safety standards for
employees doing hazardous or harmful work
·Training for qualified personnel (forklift drivers, etc.)• Health MaintenanceWe conduct health examinations and has established a consultation counter inaccordance with the law. In order to reduce the burden of personal injury andillness suffered by employees, we have established a system for employees toenroll in cancer insurance at the company's expense. We also have a system forthe company to bear part of medical expenses incurred at a medical institution for
one month. This helps to relieve the individual burdens for employees.

HealthManagement

At our factories, we supply employees with salt-fortified foods as a preventive
measure against heat stroke in summer, and also milk as a health measure, inorder to maintain their health and to support their ability to work safely.

Details

General Health Examinations
Lifestyle-related Disease Medical Examination

1 time / year
2 time / year

Implementing general health or lifestyle-related disease medical examinations for employees.
Implementing guidance on lifestyle improvements for those who desire it.

Special Health Examination

2 time / year

We conduct health examinations with special items for employees engaged in hazardous work as
stipulated by law

Stress Checks

1 time / year

Complete questionnaires and offer advice to encourage individual mental health care awarenessand lifestyle changes.

Cancer Insurance System

25 years old orolder

The company pays the insurance premiums for employees 25 years of age or older who enroll incancer insurance, thereby reducing the burden of unexpected cancer-related diseases on employees.

WelfareOther

Support Suited to Each Workplace

Frequency / Period

Various Systems
Salesperson
Training(Advanced)·Education and training when responsibilities are changed

Medical Expense Reimbursement System

As needed

Use of Counseling Room

Anytime

The company bears part of the cost of medical insurance required for treatment of illness andinjury suffered by employees in their private lives.
Workplace and job counseling with vocational counselors.

SMIC CSR REPORT 2023

30

Making Worker-Friendly Workplaces

CORE PRINCIPLE

Diversity

We are working to build workplace environments where employees can work energetically, such as by providing support forwork/life balance and conducting activities to improve the welfare and mutual kinship of employees.
In addition, we have taken various measures and made improvements so that employees can work with peace of mind,
such as reducing and managing long working hours by tracking working hours and hours in the office with an employee
attendance system.

CORE PRINCIPLE

We respect the diversity of differences between individual employees, such as ethnicity, gender, work history, age, values,
family structure, and lifestyle. By utilizing these differences, we can effectively adapt to the constantly changing businessenvironment and diversifying needs of customers, and believe in the potential of each individual employee so that they candemonstrate their abilities. In order to make this possible, we are addressing diversity, with the aim of realizing workplaces
where employees feel happy, can stay longer, and do rewarding work with peace of mind.

Supporting Work / Life Balance

Promoting Advancement of Women

Employment of Disabled People

We provide childcare leave and postnatal childcare leave at birth, paternity leavesystems and nursing care leave system based on the Child Care and Family
Care Leave Act, so that employees can maintain work/life balance and work withpeace of mind.We have also taken measures to reduce prescribed working hours
at the request of employees. This system is in fact used by employees who havesmall children so that they can balance childcare with their career

We have formulated a general entrepreneur action plan based on the Act on
Promotion of Women's Participation and Advancement in the Workplace, and is
working to promote the advancement of women.

We have long worked to employ disabled people, and has developed workplaceenvironments where people with disabilities can work enthusiastically and withpeace of mind.

Training & Seminars
We regularly host training and seminars according to the needs and circumstances to promote the ambition of our employees.

Welfare and Social Interaction for Employees
Our in-house organization Senyukai holds group and recreational activities withthe purpose of encouraging social interaction among employees. In addition to
the Health & Safety Committee, a Labor Relations Committee has been established to represent employees and raise issues such as improvement of the workplace environment and workplace safety with the company, and to contribute to
the realization of a safe and comfortable workplace and the development of thecompany.

Hosting Diversity Study Groups

Trout Fishing Event by the Recreation TeamTOPICS

Utilization of Paternity Leave (case studies)
In accordance with the paternity leave (childcare leave at birth) system following the revision of the Child Care and Family Care Leave Act enforced in October
2022, the SMIC Group is reviewing its childcare leave system and establishing a consultation service regarding childcare leave and paternity leave to createa workplace environment where both men and women can balance their work and childcare responsibilities.

■ After Taking a Paternity Leave.

At diversity study groups, we set themes each time with a focus on differencesamong employees and have the participants speak with each other about theirexperiences and circumstances. This allows participants to share their own ideas,
advice, and efforts, so they can make new discoveries. These study groups alsooffer a chance to build more worker-friendly environments and allow for deeper
mutual understanding between employees and between the company and employees.
A total of five study sessions were held in FY2022. The follow-up study sessions
are held every year after a new employees completes its first six months of theirassignment. In addition to sharing awareness of their anxieties and expectations
when they join the company, they also actively share their opinions on how tostay motivated and maintain a positive attitude toward work after being assigned,
thereby confirming each other's growth and encouraging further stimulation andawareness.
For the first time, group companies such as Industrial Analysis Service and Senju
Giken Co. also participated in the study session. We became aware of each other's various regional colors and strengths, the high pride and corporate valuesof the employees working at each company, and felt a strong sense of unity as
members of the SMIC Group.
Diversity Study Groups

Masataka Fujimoto, Production Dept, Nishiwaki Factory, Kansai Segment

From His Workplace Leader

The ratio of male employees taking childcare leave will increase in the future, even during the busy season, we will be conscious of the need to enhance thecompetence of individual section members in the workplace so that when employees take leave their workload is covered.

31

SMIC CSR REPORT 2023

TOPICS

Our third child was born last December. When the company informed me about the postpartum father childcare leave, I took 4 weeks of childcare leave from December to January,
at my wife’s request. During the leave, my wife took care of our newborn, while I took careof the older children and mainly did housework such as preparing meals, laundry, andshopping. It was more challenging than I had imagined, I realized that things did not go
as planned when raising a child and doing unfamiliar household chores. Although I usually
have limited time to spend with my children, I feel it was a great experience to be able
to spend more time with them. There had never been a case of a male employee taking
childcare leave at my workplace before, but I am grateful that the company pleasantly
accepted my application for childcare leave.

Assistance to Employees During Lockdown
Due to the Shanghai lockdown in April 2022, SMIC Shanghai employees were prohibitedfrom leaving their residences. As all logistics were suspended and basic livelihood could
not be guaranteed for employees, SMIC Shanghai’s administration department independently
searched for suppliers who could deliver food and other daily commodities to the employees
and had them distributed. In addition, online trainings and communications were conductedto help alleviate employees’ feelings of anxiety and impatience caused by the prolonged
lockdown.

SMIC CSR REPORT 2023

32

Activities of Social Contribution
Employee Data
FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

Employees
1,731

1,747

1,761

1,626

1,638

Male

1,177

1,168

1,164

1,113

1,115 (1)Female

554

579

597

513

523 (55)

Overseas *Number of part-time employees in parentheses

627

631

596

622

566

Male

333

336

310

320

285 (0)Female

294

295

286

302

281 (0)Total *Numbers in parentheses are the ratio of women

2,358 (36.0%)

2,378 (36.8%)

2,357 (37.5%)

2,248 (36.3%)

2,204 (36.5%)

In Japan *Number of part-time employees in parentheses

Culture / Education / Community OutreachWork experience study at a junior high school in Tokyo
Headquarters | 2022.7.11 ～ 7.13

Nakamura Hachimangu Shrine Festival Yabusame horseback archery dedication
Tochigi Segment | 2022.9.18

Number of Full-time Employees
1,213

1,259

1,293

1,314

1,341

Male

919

949

956

971

978

Female

294

310

337

343

363

589

516

438

576

539

Male

314

293

245

300

275

Female

275

223

193

276

264

Total *Numbers in parentheses are the ratio of women

1,802 (31.6%)

1,775 (30.0%)

1,731 (30.6%)

1,890 (32.8%)

1,880 (33.4%)

518

488

468

312

297

Male

258

219

208

142

137

Female

260

269

260

170

160

38

115

158

46

27

Male

19

43

65

20

10

In Japan

Overseas

Number of Contract Employees
In Japan

Overseas
Female

19

72

93

26

17

Total *Numbers in parentheses are the ratio of women

556 (50.2%)603 (56.6%)

626 (56.4%)

358 (54.7%)

324 (54.6%)

-

-

-

-

232

Winter vacation factory tour and environmental study
session for parents and children

Cleanup of Okitama Shrine
Kansai Segment | 2022.5.20 / 2022.9.28 | 113 people

Tochigi Segment | 2022.12.27

Number of Temporary Employees
In JapanManagement Positions
111

123

128

184

196

Male

105

116

119

167

177

Female

6

7

9

17

19

5.41%

5.69%

7%

9.2%*1

9.7%

-

116

85

97

86

In Japan

Ration of Women
Overseas

74

47

55

46

Male

-

Female

-

42

38

42

40

Ration of Women-

36.21%

44.7%

43.3%

46.5%

Male

79

47

23

60

45

Female

23

18

19

25

30

Total

102

65

42

85

75

15.6%

16.9%

17.59%

13.5%

10.5%

Weeding and cleaning of waterways around the factory

Kodomo 110-ban no Ie (Children’s Emergency Home) activities

Kansai Segment | 2022.9.29 | 24 people

Tohoku District Sales Office | 2022

Donation of recycled materials to schools

Support for work at food bank organizations

Senju Solder (Phils.) Inc. | 2022.12.19

Senju Electronic (Taiwan) Co., Ltd. ｜ 2022.4.15 / 2022.9.23 ｜ 27 people

Recruiting Situation

Turnover (3 years
after hiring)
Various Leave Systems (non-consolidated)

9.8

8.5

9.08

11.1

13.6

62.63%

62.49%

58.2%

56.85%

77.02％

12

10

22

14

24 (8) *3

91.7%

100%

100%

93%

100%

Ratio of Male Employees Taking Childcare Leave, etc.*2

-

-

-

-

10.52%

Number of Employees Taking Nursing Care Leave

1

0

1

1

3 (2) *3

100%

100%

100%

100%

100%

15.6

14.4

9.03

11.5

11.22

17

16

16

17

14

2.2% (2.2%)

2.1% (2.2%)

2.02% (2.3%)

2.2% (2.3%)

1.9% (2.3%)

Average Days of Paid Leave Taken / Year (days)
Average Rate of Paid Leave Taken
Number of Employees Taking Childcare Leave
Ratio of Employees Returning toWork After Taking Childcare Leave

Return Rate of Nursing Care Leave
Working Hours (non-consolidated)
Average Overtime Hours / Month (hours)
Employment of Persons with Disabilities (non-consolidated)
Number of Disabled Employees
Ratio of Disabled Employees* Numbers in parentheses are the legal employment ratios*1 The ratio of women in management positions in Japan in FY2021 has been corrected due to an error in calculation. *2 The ratio of childcare leave taken from 1 January to 31 December 2022 (the number of male employees who took childcare leave /the number of male employees whose spouses gave birth) is calculated. *3 Figures in parentheses for the number of employees who took childcare leave and nursing care leave from 1 April to 31 December 2022.

33

SMIC CSR REPORT 2023

SMIC CSR REPORT 2023

34

Culture / Education / Community OutreachNatural Environment Protection

Community cleanup activities

Community cleanup activities

Activities of Arakawa Waterside Supporters

Senju Metal Korea Co., Ltd. | 2022.12.31 | 10 people

Senju Metal (Shanghai) Co., Ltd. | 2022.11.10 | 8 people

Headquarters / Soka Segment / Industrial Analysis Service | 2022.11.5 | 15 people

Activities of the Moka Environmental Partnership Conference
Tochigi Segment | 2022.11.6 | 112 people

Community cleanup activities

Soldering classes for municipal junior high schools in Tokyo

Guardrail cleaning

Release of landlocked salmon fry into the Satetsu River

Senju Manufacturing Europe s.r.o. | 2022.6.30 | 18 people

Headquarters | 2022.7.14

Senju Electronic Corp. | 2022.6.18 | 90 people

Senju Electronic Corp. | 2022.10.1 | 12 people

Participation in the Mori wa Umi no Koibito (The Forest is
the Ocean’s Sweetheart) Tree-Planting Festival

Participation in the Tateyama Midagahara Vegetation
Restoration ProjectSenju Sprinkler Co., Ltd. ｜ 2022.6.5 ｜ 4 people

Senju System Technology Co., Ltd. ｜ 2022.7 ｜ 1 people

Sponsorship of the Koriyama Uneme Festival
Koriyama Sales Office | 2022.8.4 ～ 8.6

Donation to Kumano Shrine in Fuchu-cho
Senju System Technology Co., Ltd. | 2022.7

Sekido Museum of Art
Sekido Museum of Art inside the SMIC headquarters
building was established by the Sato Art Craft Research &Scholarship Foundation in April 2006, with the purposes ofpromoting cultural exchange and mutual understanding between countries and refining culture in Japan, both througharts and crafts. Works in the museum's possession werebuilt up from the collection of the late Honorary Chairman
Senju Sato, and the museum's name Sekido is in fact thealias of Mr. Sato himself.
This year, the 51st Annual Traditional Japanese Metal Crafts
Exhibition was held from 20 May to 8 June 2023. We also
held the Traditional Some-tsuke Exhibition in three parts,
with Part I held from 15 January to 31 March 2023. Futureplans call for Part II to be held from 1 September to 30
November 2023, and Part III from 16 January to 31 March
2024. In addition, Concert in Museum performances areavailable on YouTube, a video distribution service.

35

SMIC CSR REPORT 2023

1

2

Donation Activities
3

Donations

1  Traditional Some-tsuke Exhibition

2  Inside the Museum

3  Concert in Museum

Time

Location

Donation to poverty-stricken areas

Senju Metal (Tianjin) Co., Ltd.

2022

Donations to Ukrainian Refugees

Senju Metal Industry Co., Ltd. Kaohsiung Branch2022.4.1

Donations to organizations for people with disabilities

Senju Electronic (Taiwan) Co., Ltd.

2022.5.3

Donation to organization supporting women

Senju Electronic (Taiwan) Co., Ltd.

2022.10.14

Donations to food pantries

Senju Comtek Corp. / Senju America Inc.

2022.11.18

SMIC CSR REPORT 2023

36

Governance
Natural Environment Protection

Corporate GovernanceParticipation in the Ishizaki Beach Cleanup

Cleanup activities in the forest reserve

Senju Giken Co., Ltd. | 2022.12.3 | 9 people

Senju Comtek Corp. / Senju America Inc. | 2022.7.16 | 9 people

We will develop and operate its management system and construct its corporate governance system, while maintaining
sound, fair, and highly transparent management, and adapting to the changing times. The basic policy of the group is to fulfill its explanation responsibilities by disclosing information in a fair manner to all stakeholders.

BASIC POLICY• Corporate Governance System
We are working to augment our governance through our meetings of shareholders and board of directors based on the law, as well as by assigning corporate auditors,
inspectors, and tax auditors, and by developing the CSR Promotion Headquarters, Management Committee, and Strategy Committee.

Beach cleanup activities

Coral planting and sea turtle release

Senju Electronic (Taiwan) Co., Ltd. / Senju Metal Industry Co., Ltd. KaohsiungBranch | 2022.4.17 | 33 people

Senju（Thailand）Co., Ltd. | 2022.7.9 | 30 people

Senju Holdings Co., Ltd.
General Meeting of
Shareholders
Appointment/Dismissal*1: Includes operation of subsidiaries*2: Includes monitoring of subsidiaries

Disclosure of Information

Senju Metal Industry Co., Ltd.

Auditors
Audits

Inspectors

Board of Directors

Decision Making in Management

Information Disclosure
Guidelines

Conservation of Satoyama [ an area where farmland meets the forest ] Volunteer
Kansai Segment | 2022.6.26 / 2022.10.30 | 14 people

ReportPresident

Code of Ethics

CSR Promotion Division

Appointment
Proposal

DirectChallenge Proposals
ReportManagement Committee*1

Proposal

CSR Promotion Committee

Approval

Other Committees

Operating Officer

Health and Safety
Committee

Planning and Executionof Management Policy
Direction/
Supervision

Myoko Cafe37

Tax Audit(External)

Submission and Reportingof Important Matters

Disaster Prevention
Committee
Environment
Committee

DirectThe Adachi-ku organization for people with disabilities Yu-Ai Kai* operates
cafés and shops at various facilities in Adachi-ku, Tokyo and provides people
with disabilities with places to work every day.
Myoko Café located in a corner of the main office of SMIC is one of them
accepting people with intellectual disabilities using the Adachi-ku welfare facilities for people with disabilities.
We provide them with opportunities to connect with society through work. The
Jobs at Myoko Café increases their opportunities to move around on public
transport for themselves. We support them in fostering positive and independent characteristics by doing each and every detailed operation such as exchanging messages over the telephone, café operations, and bread sales andto acquire more sophisticated social skills.
SMIC affirms the activities. Since 2005 when the former mail office building
was rebuilt into the current one, we have been supporting their activities by
providing the café space, paying for their utility costs, and ordering drinks
when we have internal meetings.

Domestic Affiliates

Industrial Analysis
Service Ltd.

Senju Sprinkler Co., Ltd.

Senju Electronic Corp.

Senju Giken Co., Ltd.

Senju System Technology
Co., Ltd.

* This is an organization established about 40 years ago. Its aims are for groups of families of those who have
impaired eyesight, hearing impairment, trouble in arms and legs, intellectual disabilities, and who became disabledin the middle of their lives due to accidents or illnesses come together to understand each other’s disabilities, topromote sociability, and to provide places to work.

Overseas Affiliates

EuropeNorth America

China

Southeast Asia

Other Asian Regions

SMIC CSR REPORT 2023

Strategy Committee
Sales Committee

DirectInformation System
Division

CSR Division

Business
Departments

Solder Department

Industrial Machinery
Department

Semiconductor
Division

Special ProductsTechnology Division

Quality Assurance
Department

General Affairs
Department

Labor Committee
Training Committee

Execution of BusinessDirection/
Supervision

Submission and Reportingof Important Matters

International Business
Department

AuditsResearch &Gate TechnicalDevelopment Division Development Division

AuditsBearing Division

Accounting
Department

Other Guidelines

Quality Audit Office *2
DirectBusiness Audit Office *2

AuditsSafety Assurance Export Management OfficeDirectSubmission and Reporting of Important Matters

Direction/Supervision

SMIC CSR REPORT 2023

38

• Company Officers❺

Risk Management

⓫

❾

❽

❼

➓

President

Inspector❶ Ryoichi Suzuki❻ Kazutoshi Sakaguchi

Representative Director

Counselor❷ Tomohide Hasegawa❼ Motoyuki Ohtake

Executive Director❽ Setsuo Tanaka❸ Yuji Kawamata
Board of Director❹ Yuka Sato
❺ Tetsuya Okuno

PRINCIPLE ANDRISK MANAGEMENTSYSTEM

Yasuhiro Ishii*

Deputy Director❾ Toshimaru Sumiyashiki➓ Satoru Akita⓫ Makoto Imai

Possible Risks•N atural disasters such as earthquakes and typhoons• Information security risks such as Information leaks and unauthorized access• Intellectual property risks such as patent infringement andtechnology leakage

Corporate Auditor (External)

Shoju Sato*

❻

❸

❶

❷

❹

Taking responsibility as a company located upstream in the supply chain, the SMIC Group has established specialized departments and committees to deal with the following possible risks and has implemented measures toprevent risks and minimize losses.

*Concluded due to personal reasons at the time of filming• Board of Directors and Business Execution System• Audit Supervision System• Initiatives Toward Business Continuity

Board of Directors

Auditors and Inspectors

They consist of five directors, one corporate auditor, and one inspector. As thehighest and final decision-making body of SMIC management and administration,
it is chaired by the Chairman of the Board (or President) and is responsible for theappointment and dismissal of operating officers and the resolution and approvalof important matters such as submissions from the Management Committee, in
accordance with the provisions of related laws and regulations and the Articles ofIncorporation. A separate Code of Ethics and Disclosure Rules have been estab-

We have appointed one auditor and one inspector. These officers carry out auditsof daily management activities, including the execution of duties by directors.
Corporate auditors and inspectors attend the Board of Directors, where they fulfill
their duty to prevent illegal or exceedingly unjust resolutions from being made, as

Various risks are assessed, analyzed and countermeasures are applied to establish a risk management system to minimize damage and increase business continuity capacity. This includes a production back-up system for a stable supply, a
promotion system for the early restoration of the production system and an action
plan, including the Disaster Recovery Implementation Plan for Facilities etc. We
are also augmenting our backup system, so that when there is a site experiencing
extreme difficulty with production due to a disaster or other emergency, we cancontinue production in collaboration with other sites in Japan and overseas.

lished as indicators of the Board’s deliberations and decisions.

well as to ensure the conduct of activities according to the law.

• Introduction to Directors, Auditors, and Operating Officers

Operating Officer System

Appointment of Officers
Board of Director
Corporate Auditor
Inspector
Operating Officer
Counselor/Deputy Director

Term of office
1 year
4 years
1 year *1 year−Method of appointment
Appointed at the General Meeting of
Shareholders
Appointed at the Board of Directors

NameOperating
Officer

We conduct evacuation drills, firefighting drills, and first aid courses (AED courses) with guidance from fire departments and security companies, in order to protect the life and limb of employees from disasters such as earthquakes and fires.
We also participate in comprehensive fire drills conducted by fire departmentswith jurisdiction, in an effort to strengthen collaboration with local communities.

Area ofresponsibility

President

Ryoichi Suzuki

Representative Director

Tomohide Hasegawa

◦

Sales

Executive Director

Yuji Kawamata◦

Development

Board of Director

Yuka Sato

Board of Director

Tetsuya Okuno◦

Manufacturing

Corporate Auditor(External)

Shoju Sato

Inspector

Kazutoshi SakaguchiCounselor

Motoyuki Ohtake◦

General Affairs

Counselor

Yasuhiro Ishii◦

Accounting, CSR

Customer

Certification

Domestic Manufacturing Sites

Product Supply

Overseas Manufacturing Sites

SMIC
Group
Evacuation Drills

Counselor

Setsuo Tanaka◦

Environmental
facilities

Deputy Director

Toshimaru Sumiyashiki◦

Industrial Machinery

Deputy Director

Satoru Akita◦

Deputy Director

Makoto Imai◦

TOPICS

We have introduced an operating officer system, and the operating officer generalmanagers appointed by the Board of Directors manage the division of duties
among departments they are in charge of. Based on the business plan of thecompany, they formulate and execute the business plan of the departments they
are in charge of. As officers in charge, they give direct orders on important matters in guidance of the department they are in charge of.

Regular Emergency Drills

Production Backup System to Ensure Stable Supply

Management Committee
The Management Committee consists of directors and operating officers. It deliberates on legal matters and determines or approves important matters in theexecution of business. It also submits matters related to business execution to theBoard of Directors that are important to be deliberated or decided on by the Boardof Directors. We have established various other regulations, BCP management
regulations, crisis management regulations, and information security regulations,which are defined separately as indicators for deliberations and decisions by theManagement Committee.

• Risks concerning human rights and labor rights such as harassment• Infectious diseases such as the novel influenza and COVID-19• Export management risks including safety assurance trade• Environmental risks such as climate change problems and waste
contamination, etc.

Measures in Response to the Torrential Rains in Malaysia
Torrential rains in Malaysia in December 2021, resulted in the flooding of SMIC Malaysia factory with approximately 60cm of water. It took approximately 8 hours for the water to start receding after the rains stopped,
and approximately 16 hours for the water to start receding before the factory could be accessed. In light ofthis damage, SMIC Malaysia installed watertight walls around the factory site, watertight panels at entrancesand exits, and drainage pumps to prevent flooding and enable rapid recovery in future weather events.

Appointed at the Management Committee*By appointment of the President, he or she may remain in office one year at a time

39

SMIC CSR REPORT 2023

SMIC CSR REPORT 2023

40

• Safety Assurance Export Management• Intellectual Property• Corporate Secret Management / Personal Information Protection• Information Security

We acknowledge issues such as the proliferation of weapons of mass destruction, preventing excess accumulation of conventional weapons, and trade wars
between countries. In response, we have placed restrictions on exports to maintain order in states of tension and comply with laws for maintaining international
peace and safety, as well as upholding the Foreign Exchange and Foreign Trade
Act by the Japanese government. In order to properly implement export management, we have appointed the president of the company as the person in
charge of export management from a national security perspective and established the Safety Assurance Export Management Office directly under his purview. In addition, self-checks and face-to-face audits of individual departments
have been conducted since FY2020 as a measure that was implemented during
the COVID-19 pandemic.

Many inventions, know-how, trademarks, etc. are produced by the SMIC Group
from its research and development,
manufacturing and public relations departments. In order to protect and utilize
these intellectual properties, the intellectual property rights system is being effectively used to protect and anonymize therights. We also focus on developing ourown technologies while respecting the intellectual property rights of others. These
intellectual property activities support the
SMIC Group’s business and continue tocontribute to the realization of the sus-

We have established Corporate Secret Management Regulations and Personal
Information Management Regulations, and is working to prevent leaks of confidential information by managing personal information held by the company, as
well as the information of customers and suppliers.
Also, we act appropriately to laws and regulations including the EU GDPR (European Union General Data Protection Regulation).

In light of damages suffered due to cyber attacks in recent years, we are further
augmenting management and operation of information security. Our Information
System Department has developed a basic action plan to improve its ability tocontain and detect threats in the event of damage and to recover quickly. Methods of cyber attacks change on a daily basis, so we conduct regular training
about rules and threats for employees, and raise awareness of the importanceof information security.

CLASSIFICATIONThe Development Department classifies items by checking against a cargo list
(export regulation list) regulated by export control-related laws including theForeign Exchange and Foreign Trade Act.

Compliancetainable of our society.

Intellectual Property Education

CORE PRINCIPLE

We holds study groups and lectures on each theme of patents, trademarks andcopyrights, and works on rights acquisition, know-how management and rights
protection for enhanced management protection against development, manufac-

We consider our philosophy of management to be essential to compliance, and so has defined its basic compliance policy and practical goals based on the Basic CSR Policy. We have also explicitly stated the importance of compliance in our
employee work rules. Employees faithfully follow these policies, goals, and rules, and work to maintain order within thecompany. The SMIC Group's Basic CSR Policy and Practical CSR Goals serve operate our companies in compliance with fairtrade ethical principles.

turing and sales risks.

TRADE INSPECTIONSThe Sales Department checks applications and end users of exported cargo

SHIPMENT MANAGEMENT
When shipping using logistics, we check that classification and trade inspections are complete, and confirm that cargo upon deliery matches the shippingcargo and leave documentation.

Patent Holdings
We actively applies for and obtains rights to domestic and overseas patents.

Number of domestic
registrations

518

registrations

Number of International
registrations

1922

registrations(As of December 2022)

By making notifications on regulations and training, and conducting internal
audits once pear year, we maintain regulatory compliance, and have achieved
recognition from METI (Ministry of Economy, Trade and Industry) as a company
that has developed a voluntary management system for safety assurance trade
management.
*From "Official Announcement of Companies Producing Export Management Internal Regulations"
https://www.meti.go.jp/policy/anpo/compliance_programs_pdf/20230403_kouhyougenkou.pdf(Latest version at the time of publication)

Safety Assurance Export Management Training
We conduct classification and trade inspections, as well as training on safety assurance export management for employees in charge of shipment management.
(FY2022: Conducted at 48 business units.)
We also conduct trainings for top management, produce training materials thateasily explain relevant laws, and provide trainings to various business units.

41

SMIC CSR REPORT 2023

• Promotion of a Multi-Purchasing System in Raw Materials
In order to comply with the BCP, we have also established a multiple purchasingsystem for chemical synthetics raw materials (e.g. flux), multiple purchases werepreviously considered challenging for our company in the past.
For raw materials for existing products, we have secured multiple purchasing
channels after repeated careful research and performance verification.
For new products, a system for stable supply has been established by selecting
raw materials for which multiple purchasing is possible from the product design
stage.

• Status of Compliance Activities
We conduct various types of trainings (CSR training, environmental training,procurement policy for supplier training, safety assurance export management
training), as well as internal audits and audits of suppliers in order to comply withvarious laws relating to our business activities.
In our internal audits, the Business Audit Department conducts safety assurance export audits in accordance with the Foreign Exchange and Foreign Trade
Act, with the aim of maintaining sound corporate compliance, CSR internal audits based on the RBA Code of Conduct, which uses the CSR basic policy andpractical targets as audit criteria, and information security audits regarding thehandling of confidential internal and external information for all domestic andoverseas sites. From FY2020, we introduced documentation-based remote audit
at domestic locations in Japan (including group companies) in response to the
COVID-19 pandemic. In FY2022, face-to-face audits were conducted only in theheadquarters area (Headquarters and Soka Segment). Corrective actions thatwere required based on each audit are promptly addressed by each department,
leading to continuous improvement of the management system. As a result of
these trainings and audits, no serious legal violations occurred in FY2022.
Audit Results in FY2022

We have established a dedicated internal reporting hotline (Smile Mail) to discover misconducts and take corrective actions early on, which enables employees toanonymously report and consult about problems involving all employees’ humanrights (harassment, etc.) and problems involving compliance (violations of laws
and internal regulations, problems with corporate ethics and social norms, etc.).
In addition, we have set up an inquiry desk on our website where stakeholders
can submit their opinions, requests, and complaints.

Proposals

Complaints

Requests

Opinions

Consultation

Information

Bullying

Harassment

MembersandInquirers(Unit: number of cases)

Business
AuditsSafety Assurance
ExportSpecified
Shippers

Senju Metal Industry

15

33

19

Group Companies (in Japan)

13

3

3

Group Companies (overseas)

0

0

0

Committees, etc.

0

0

0

Total

28

36

22

Audit Target

Internal Reporting Contact System (Smile Mail) andEstablishment of a Contact Point for Inquires

Raising
IssuesIssue
Resolutions

Consultation desk ／ email

Duty of confidentiality and protection of
the inquirer as top priority
Members have a confidentiality obligation
with respect to information obtained.

Corresponding Department ／ Director in Charge

Utmost care shall be taken to ensurethat the inquirer is not disadvantaged.

Third Party ／ CSR Promotion Committee

If we determine that disclosure to a third
party is necessary, we will respect thewill of the inquirer and consult them first.

SMIC CSR REPORT 2023

42

20th Anniversary of Senju System Technology Co., Ltd.

Original Technological
Developments Leading
to the Creation of New Value• CSR Audits
CSR audits in our company include RBA-VAP audits, customer CSR audits and internal CSR audits. By conducting audits based on customer requirements and RBA standards, we have established a system to ensure that global standards in labor, health and safety, environment, ethics and management systems are maintained.
Frequency

Target sites

Content

RBA-VAP audits

Every 2 years

Priority target locations based on themedium-term plan

VAP (Validated Assessment Program) audits by RBA

CSR audits by customers

Upon customer request

Locations requested by customers

Conducted in accordance with customer audit standards

Internal CSR audits

Every year

All sites including Group companies

Basic CSR policy and practice targets based on the RBA Code of Conduct are
implemented by the Business Audit Department as audit standards.

Senju System Technology Co., Ltd., located in Toyama
Prefecture, Japan, has been producing original products
as an automatic soldering equipment manufacturer since
its establishment in 2003 as part of the SMIC Group, andwill celebrate its 20th anniversary in 2023.
More than 10 patents have been granted so far. Based on
this solid development capability and the technologicalstrength cultivated over many years, in recent years SMIC
has been offering customers a trinity of low-temperaturesoldering solution materials, methods and our equipment
technology under the keyword MILATERA, which seeks topursue low-temperature soldering equipment that enables
low power consumption, and works diligently every day topropose unique and original automatic soldering
equipment.

Independent Third-Party Assurance Report

SOLZEUS Continues to Evolve with Solid Technical Capabilities.
SOLZEUSThe name SOLZEUS is a coined word combining SOLDER and ZEUS, the main
god in Greek mythology, and represents the god of soldering.
The unique continuous flow pump, created in 2000 after approximately two
years of development, achieves a stable continuous jet. It has succeeded indramatically improving soldering quality. Twenty years after its release, theproduct is now used in the automotive electronics industry, where it is known
for its extremely high quality, and has achieved many other results.
Based on this solid technology, the company now offers two series: the MPF
for localized soldering and the LPD for full surface dips using a pallet jig.
It will continue to evolve and contribute to the electrification andelectrification of vehicles.

MPF Series

SOLZEUSLPD Series

History of Senju System Technology Co., Ltd.
1990
Founding of the predecessor Keck Technology Co.

1990

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SMIC CSR REPORT 2023

2003
The company name was changed to Senju System Technology Co., Ltd. (abbreviated SST)
and became a group company of SMIC in the same year. SST also became responsible forresearch and development and the manufacturing of soldering equipment. In the same year,
development and sales of the MPF-2003 localized soldering machine with digital control,
XY-Fluxer, pre-heat and intermittent piston jet method begins.

2010

2000

2020

1995

2004

2006

2017/10Company namechangedto KTT Co.

Development of the MPF-2003ST
with improved productivity througha continuous jet system.

Became a wholly
owned subsidiaryof SMICThe new building was completed
and the headquarters relocated toits present day location.

SMIC CSR REPORT 2023

44

COMPANY PROFILE / NETWORKEUROPE5locations
Of which are manufacturing
sites: 1 locationJAPAN

AMERICA

19

8

locationslocations

Of which are manufacturing
sites: 3 locations

Of which are manufacturing
sites: 12 locations

ASIA

21

SENJU METAL INDUSTRY CO., LTD.
Segments in Japan
Tochigi Segment (Moka-shi, Tochigi)
Matsuyama Factory / Kinugaoka Factory
Soka Segment (Soka-shi, Saitama)
Chubu Segment (Seto-shi, Aichi)
Seto Factory
Kansai Segment (Nishiwaki-shi,Hyogo / Taka-cho,
Hyogo)
Nishiwaki Factory / Naka Factory

locations

Domestic Sales Locations

Of which are manufacturing
sites: 11 locations

Tohoku District Sales Office (Sendai-shi, Miyagi)
Kitakami Sales Office / Koriyama Sales Office
Chubu District Sales Office (Seto-shi, Aichi)
Matsumoto Sales Office / Toyama Sales OfficeKansai District Sales Office (Kusatsu-shi, Shiga)
Himeji Sales Office / Kansai Special Sales Development Dept (within Naka Factory, Hyogo)
Kyushu District Sales Office (Onojo-shi, Fukuoka)*Beginning with this yearʼs report, the method for counting the number of sites has been revised.

COMPANY PROFILE

LIST OF MAJOR AFFILIATED COMPANIESSENJU METAL INDUSTRY CO., LTD. / SMIC GROUPJAPAN

DUNS# 690663091

BUSINESS PORTFOLIOESTABLISHEDHEADQUARTERS ADDRESSPRESIDENT• Smelting, alloying, casting, and expansion of metals, manufacture andsale of processed goods

April 15, 1938
23 Senjuhashidocho, Adachi-ku, Tokyo
120-8555
Ryoichi Suzuki• Manufacture and sale of metal powders and bearings• Manufacture and sale of solvents and adhesives for soldering• Manufacture and sale of soldering equipment

BUSINESS SCALEREVENUE(CONSOLIDATED)• Manufacture and sale of fire extinguishing equipment (affiliated company business)

Industrial Analysis Service Ltd.
Senju Sprinkler Co., Ltd.
Senju Electronic Corp.
Senju Giken Co., Ltd.
Senju System Technology Co., Ltd.

AMERICAEUROPE (GERMANY, CZECHIA)
Senju Metal Europe GmbH
Senju Manufacturing Europe s.r.o.

ASIA
Senju (Malaysia) Sdn. Bhd.
Senju Trading (M) Sdn. Bhd.
Senju (Thailand) Co., Ltd.
Senju Solder (Phils.) Inc.
Beijing Senju Fire Fighting Equipment Co., Ltd.
Senju Metal (Tianjin) Co., Ltd.

Tianjin Senju Electronics Co., Ltd.
Shanghai Senju Business Management Consulting Co., Ltd.
Senju Metal (Shanghai) Co., Ltd.
Senju Metal (Huizhou) Co., Ltd.
Senju Metal (Hong Kong) Limited
Senju Electronic Materials (Hong Kong) Co., Ltd.
Senju Electronic (Taiwan) Co., Ltd.
Senju Metal Industry Co., Ltd. Kaohsiung Branch
Senju Metal Korea Co., Ltd.

CAPITAL (SIMPLE)EMPLOYEES (CONSOLIDATED)¥96,846 million(April 1, 2022 - December 31, 2022)¥400,000,000
2,204 (As of December 31, 2022)

Headquarters

Segments in Japan

Editor's Postscript

Tochigi Segment Matsuyama Factory Tochigi Segment Kinugaoka FactoryThank you for reading the SMIC CSR REPORT 2023. This report has been published since 2012 with the aim of providing stakeholders with anunderstanding of the SMIC Groupʼs operations and initiatives.
This issueʼs special feature highlights examples of how global BCP systems have enabled supply continuity in the face of difficult-to-predict
environmental changes such as natural disasters and pandemics. We would be delighted if the introduction of such initiatives leads to thereassurance and trust of our stakeholders.
In this issue, we have also completely revised the SMIC Groupʼs Goals (p. 5) to provide a systematic understanding of the Group by expressing
in more concrete terms the positioning and importance of our philosophy, initiatives and business activities. We will continue to contribute toa sustainable society through our environmental, social and governance (ESG) initiatives, including the Environmental Vision 2050 set out for2020. We look forward to your continued support of SMIC Group.

• Manufacture and sale of machinery related to the above businesses• Internal dispatch business

Soka Segment

Chubu Segment Seto Factory

Kansai Segment Nishiwaki Factory

Affiliated Companies in Japan

Senju America Inc.
Senju Comtek Corp.
Senju Fire Protection Corp.

SMIC GroupCSR Division of Senju Metal Industry Co., Ltd.
Industrial Analysis Service Ltd.

45

Senju Sprinkler Co., Ltd.

SMIC CSR REPORT 2023

Senju Electronic Corp.

Senju Giken Co., Ltd.

Senju System Technology Co., Ltd.

We created an official
Instagram account.

SMIC CSR REPORT 2023

46