Procurement
The high-value manufacturing that the Tokyo Electron Group strives for is based on the functions of
all materials and components that make up the products and the pursuit of high quality. We valuecommunications with suppliers and seek to grow manufacturing on a global scale with our suppliers basedon ongoing trusting relationships.

Supply Chain Communication

Conflict Minerals❷ Support recovery
efforts and takeprocurement measures(Procurement BDR2)❸ Establish BCP systemwith suppliers❹ Build relationship with suppliers
based on mutual trust andrespect12

Speed & accuracy❶ Investigate damageand evaluate impact(Procurement BER1)

Minimize risks

Post-disaster measures

Procurement BCP scheme

Together with suppliers, the TEL Group has prepared a disaster protocol on an ongoingbasis. A database of the location map of procurement sources plays a major role
when crises arise. Every year we update the database so that we can promptly identify
damage and quickly take steps for recovery following a disaster. In fiscal year 2015,
we updated about 14,000 locations and checked on the impact caused by the threedisaster cases that occurred during the year.
We have also conducted an annual survey on BCP system readiness to reducerisk in business continuity with our suppliers. In fiscal year 2015, we conducted aprocurement BCP survey with key suppliers, who together account for more than 80%
of our procurement by amount, and identified that 41% of them had improved from theprevious year. We provided the suppliers with feedback on survey results for future
improvement activities.

Initiatives for procurement BCP

Pre-disastermeasures

Procurement BCP

TEL Partners Day held in fiscal year 2015

Procurement BCP

In addition to daily communications, the TEL Group holds the Production Update
Briefing and TEL Partners Day as platforms for enhancing relationships with suppliers.
At these events, we introduce CSR initiatives and honor outstanding suppliers. In ourprocurement policy, meanwhile, we call for the cooperation of our suppliers regarding
compliance with labor-related laws, such as prohibitions against child labor and forcedlabor, and respect for fundamental human rights. This policy is published on our website.
Our specific activities include regularly conducting Supplier Total Quality
Assessment (STQA) audits with critical suppliers. In fiscal year 2015, we conducted oursecond supplier CSR survey, with key suppliers accounting for more than 80% of ourprocurement by amount. The survey, which conforms with the EICC® Code of Conduct,
identified improvements made in 25% of suppliers’ CSR activities compared to theprevious year. We provided the suppliers with feedback on the survey results to maketwo-way improvement efforts.
In June 2015, the TEL Group joined the EICC® to continue to promote EICC®compliant supply chain CSR.

BER: Business Emergency Response. First response
taken immediately after a disaster.
BDR: Business Disaster Recovery. Recovery
effort that is made according to the findings of thedamage investigation.

Conflict mineral type

The TEL Group plans to eliminate the use of raw materials and components containing
conflict minerals from the Democratic Republic of the Congo, or its neighboring
countries, which form a source of funds for armed groups and give rise to human rights
violations and poor working conditions.
In fiscal year 2015, we conducted a survey on countries of origin and smelters ofconflict minerals in CFSI3 format. The survey identified 117 CFSP4-certified smelters related
to products that we procure. We will conduct the survey every year to make joint efforts
with our suppliers to improve the response rate, survey method, and data accuracy.
CFSI: Conflict-Free Sourcing Initiative. Founded by members of the EICC® and GeSI (Global e-SustainabilityInitiative) to inspect and certify conflict material smelters to see whether or not they are being used for thebenefit of the Democratic Republic of the Congo or its neighboring countries, which provide funds for armed
groups.
4
CFSP: Conflict-Free Smelter Program. The CFSP is promoted and led by the CFSI.
321Conflictmineral name

Usage example

Tantalum

Electrolytic capacitor, IC, andrefractory metal

Tin

Solder, plating, and reducing agentsTungsten

Cemented carbide and electronic
components and mechanisms

GoldIC, plating and connectors