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Maintaining of Strong Company Management Systems
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a.
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Silicom has adopted and committed to a Conflict Minerals policy for minerals originating from conflict-affected and high-risk areas. More information about Silicom's Conflict Minerals policy can be found in
the RCOI section above.
Our management system includes a Conflict Minerals Qualification Team overseen by the Chief Financial Officer of the Company and run under the supervision of the Company's VP QA & Engineering, and
includes a team of subject matter experts from relevant functions including Operations and Purchasing. Senior management is briefed about the results of our due diligence efforts on a regular basis.
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b.
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In 2019 Silicom became a member of the Responsible Minerals Initiative ("RMI") (formerly the Conflict Free Sourcing Initiative, or CFSI), as a member we participate in
all RMI activities such as smelters audits and other activities.
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c.
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Silicom has implemented a supply chain system of controls and transparency through the use of due diligence software provided by third party software supplier.
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d.
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In the process of engaging with new manufacturers and suppliers, Silicom requests that such suppliers provide it with complete and valid CMRTs as a condition for Silicom's engagement with such manufacturers
and suppliers.
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| e. |
Silicom conducts trainings to suppliers and manufacturers from whom it purchases components used in its products, assists suppliers and manufacturers in
educating their own suppliers, by informing them on the Rule, referring suppliers and manufacturers to the RMI website and online training materials and providing Silicom's Conflict Minerals policy and due diligence procedures. |
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f.
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Silicom documents and maintains a record maintenance mechanism to ensure the retaining of relevant documentation in an electronic database for at least 5 years.
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g.
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Silicom encourages employees, suppliers and manufacturers and stakeholders to report any concerns relating to its conflict minerals program by contacting Silicom on its Conflict Minerals page: http://www.silicom-usa.com/conflict-minerals/.
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| (ii) |
Identification and Assessment of Risk in the Supply Chain
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| (iii) |
Design and Implementation of a Strategy to Respond to Identified Risks
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a.
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We performed reviews of suppliers and manufacturers, smelters, and refiners that could be sourcing or processing Conflict Minerals from the Covered Countries, which could not be from recycled or scrap
sources.
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| b. |
As part of our risk based approach, we decided to focus our risk management actions on suppliers and manufacturers with a spending volume of over US$ 1,000 in 2022. We requested smelter information from all of our direct suppliers and
manufacturers, and prioritized suppliers and manufacturers with a spending volume of over US$ 1,000. In cases where prioritized suppliers and manufacturers did not respond to our initial requests, we attempted to contact them several
additional times in order to obtain the necessary information from them.
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c.
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We monitored and tracked suppliers and manufacturers (as described in RCOI section above), smelters and/or refiners identified as not meeting the requirements (or that defined themselves as "Unknown" or "Undeterminable" or "Sourced from
DRC") set forth in our Conflict Minerals Sourcing Policy or contractual requirements to determine their progress in meeting those requirements.
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| d. |
New suppliers and manufacturers were required to complete RMI declarations in order to qualify as approved suppliers and manufacturers by us.
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e.
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We provided periodic progress reports to our senior management relating to our risk mitigation efforts.
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f.
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In general, supply chain due diligence is a dynamic process and requires on-going risk monitoring. This process is performed twice a year and an updated CMRT is released after completion of each due diligence cycle.
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| g. | Follow up letters were sent to high and medium risk suppliers and manufacturers who were identified as having non-compliant smelters in their supply chain. Non-responsive suppliers and manufacturers were reminded to send their responses several times by e-mails and, if they remained non-responsive thereafter, such suppliers and manufacturers were personally approached by our Sustainability Team or by our Purchasing Team and warned that if they remain non-responsive despite our continued attempts to receive their responses, they will be removed from our approved suppliers and manufacturers list. In cases where such suppliers and manufacturers remained non-responsive nonetheless, we removed them from our approved suppliers and manufacturers list. |
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(iv)
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Carry out Independent Third-Party Audit of Smelter/Refiner’s Due Diligence Practices
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| (v) |
Report on Supply Chain Due Diligence
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Conflict Mineral
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Countries of origin and other sources may include the following
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Gold
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Andorra, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, France, Germany, Ghana, India, Indonesia, Italy, Japan, Kazakhstan, Korea, Republic, Kyrgyzstan, Lithuania,
Malaysia, Mauritania, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Province of China, Thailand, Turkey, Uganda, United Arab
Emirates, United States of America, Uzbekistan.
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Tantalum
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Japan, United States, Brazil, India, Estonia, Russian Federation, Kazakhstan, Mexico, Thailand, Germany, Northern Macedonia, China.
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Tungsten
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Japan, United States, Vietnam, Austria, Germany, Russian Federation, Philippines, Brazil, Korea, Taiwan, China Province.
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Tin
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China, United States of America, Indonesia, Japan, Bolivia (Florin State), Brazil, Poland, Malaysia, Peru, Thailand, Taiwan, Philippines, Vietnam, Belgium, Spain, Rwanda, Myanmar, India, Russian Federation.
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Tin
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68 of 88 (77)%
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Tantalum
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36 of 39 (92)%
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Tungsten
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40 of 50 (80)%
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Gold
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107 of 172 (62)%
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Total
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251 of 349 (72)%
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