Supply Chain Management

Comprehensive implementation of supplier assessment policies to promote sustainable supply chains

Mechanisms of supply chain management

In 2015, MediaTek formally integrated the guidelines and initiatives of the Responsible Business Alliance, the ILO Tripartite Declaration of Principles, and the Universal Declaration of Human Rights from the United Nations into our Supplier Code of Conduct. We require all suppliers respond and adhere to these guidelines and initiatives.

As a leading enterprise in the global semiconductor supply chain, MediaTek will continue to maintain the rights and well-being of industry workers and groups. Our Supplier Code of Conduct covers five major aspects: labor and human rights, health and safety, environmental protection, business ethics, and management systems that encompass 39 corresponding indicators of international sustainability standards. As of the end of 2019, 68% of the company's 31 suppliers had signed the Code of Conduct; the rate is expected to exceed 80% by 2021.

Supplier ESG risk assessment and procurement management

As focus of concern by global customers and even the general public has gradually shifted from price, quality, and service standards to social and environmental standards and legal liabilities of host countries, MediaTek has integrated assessment standards in the three aspects of economy, society, and environment and oversee compliance by suppliers and intensify its fulfillment of corporate social responsibilities in corporate governance, energy conservation and carbon abatement, green production, employee care, and social participation, in order to avoid the risk of damaging the interests of stakeholders by polluted environment, substandard product quality, and shortfall in capacity and manpower, a result of ill management, risks which will disrupt normal shipment, raise cost, and reduce revenue, thereby impairing the company's repute, image, and competitiveness.

Supplier ESG risk assessment method

The following table shows assessment aspects and standards. Those which pass risk assessment ( ≧ 60 points) are listed as priority procurement targets; high-risk suppliers have to pass on-site or paper auditing for ESG conformance before transaction is possible. Transaction will be scaled down or even terminated, should those which fail to pass risk assessment still cannot meet standards after guidance or assistance.

Following proposals made in the “MediaTek Supplier Code of Conduct”, we created online training videos and materials, including an introduction to the RBA (formerly the EICC), an explanation of the current landscape, benefits of participation, audit procedures, and indicators to be used in the five main areas, raising awareness among our suppliers and ensuring implementation of our Code of Conduct in internal management processes. We hope that this information will assist suppliers in developing a clear understanding of the business impact and importance of the RBA, helping them to grasp the actions needed to fulfill each indicator, and helping them to comply with the social responsibility review process conducted by MediaTek. These online courses have already been distributed to suppliers. We intend to follow up on their process and provide regular assistance in order to ensure the implementation of the regulations set out in the Code of Conduct.

MediaTek Supplier Code of Conduct  

MediaTek EICC Code of Conduct

Assessment System of Supplier Corporate Social Responsibilities

Conflict minerals

Protection of human rights is one of MediaTek's core social responsibility missions. Since 2011 we have been conducting conflict mineral inspections, and require our suppliers to provide "Declaration of non-conflict mineral usage" in accordance with the Conflict-Free Smelter Program (CFSP), RBA, and Global e-Sustainability Initiative (GeSI) regulations, thus proving that the materials used in their products come from non-conflict areas.

In addition to 3TG due diligence, the company began using CRT to conduct cobalt inspections for suppliers in 2018. With increasing information from suppliers, the company expects to make detailed smelter information disclosure by 2021.

Local procurement

MediaTek upholds the principle of local procurement, in order to provide job opportunities for local residents and decrease carbon emissions due to reduced material transportation distances. Procurement value in Taiwan exceeds 100 billion NTD a year, accounting for vast majority of the company's procurement of both raw materials and common goods.

Steps to Promote Sustainability among Suppliers

Enabler for sustainable management: Supplier Forum

As an industrial leader bearing the responsibility for pushing sustainable management, in line with UN sustainability goal, MediaTek held a forum on responsible supply chain in 2019, with the themes of SDG 12 and SDG 13 for sustainable energy and climate actions, where opinion leaders and experts/scholars gave talks about international trend and propose suggestions, while suppliers with excellent performance shared with attendees their experience. As a fabless semiconductor company relying on suppliers for raw-materials procurement and manufacturing, MediaTek urged suppliers to carry out action plans for green manufacturing, circular economy, and renewable energy, plus pledge for 2% reduction in greenhouse-gas emission a year.

In view of enthusiastic response to the forum, boasting near 100% attendance rate and heated discussion and exchanges, MediaTek has decided to make it an annual event, in order to realize green manufacturing for sustainable development.