SUPPLY CHAIN MANAGEMENT

Teaming with suppliers to advance our sustainability goals.

Achieving meaningful corporate responsibility requires us to include our suppliers in our efforts. For our fabless semiconductor business, we work closely with the semiconductor foundry and assembly suppliers that manufacture our products. We work with suppliers to meet our corporate responsibility expectations, such as respect for human rights, responsible sourcing of minerals, and the conservation of water, energy, and other natural resources.

Qualcomm, as a world leader in wireless communications technologies, has a unique opportunity to help shape supplier sustainability policies. As mobile technologies continue to benefit society in new and often unexpected ways, it is important that companies like ours collaborate with key stakeholders to foster sustainability throughout the supply chain.Kevin Caffey, Vice President, Quality and Reliability

 

Protecting the environment.

Each of our direct semiconductor suppliers is required to have an ISO14001-certified environmental management system and are in compliance with this requirement. We work with these suppliers at multiple stages of design and manufacturing to ensure conformance to applicable environmental laws and various environmental initiatives.

On an annual basis, we assess current and future water risks at a global and local level using the World Resources Institute (WRI) Aqueduct™ tool. The combination of the use of this tool with internal company knowledge and guidance from external consultants has helped us better understand physical water risks in our operations, including our supply chain. We intend to continue our risk assessment on an annual basis.

Many of our direct semiconductor suppliers provide us with information about their greenhouse gas emissions and water use. We use this information to help us set benchmarks for future corporate responsibility strategies. Many of these suppliers also have clear goals for reducing their water consumption and greenhouse gas emissions, and we work with them to help achieve their goals.

We’ve been proactive in removing substances from our products that may harm people or the environment since 1999. Read more about the substances we require our suppliers to avoid using.

Respecting human rights.

As a signatory of the United Nations Global Compact, Qualcomm is committed to upholding human rights in our own operations and the operations of our suppliers. We prohibit child labor, human trafficking and forced labor in our operations, and we expect our suppliers to do the same.

To avoid the exploitation of migrant workers in our supply chains, we encourage our suppliers to use only ethical recruitment agencies that have been audited through the Supplemental Validated Audit Process. 

Sourcing minerals responsibly.

Qualcomm shares international concerns about the conflict in the Democratic Republic of the Congo (DRC) and adjoining countries. We’re working to ensure that the tantalum, tin, tungsten, and gold that end up in our products did not contribute to armed conflict or human rights violations in the region.

We’ve created a strong management system to help source minerals responsibly, identify and assess risk in the supply chain, and design and implement strategies to respond to risk. We designed this system in accordance with the Organization for Economic Co-operation and Development (OECD) due diligence framework. Also, as part of our due diligence efforts, we try to educate our suppliers about our conflict free mineral policy and their role in responsible sourcing of minerals.

We rely on independent third-party suppliers to perform manufacturing, assembly, and most of the testing of our integrated circuit products, based primarily on our proprietary designs and test programs. The majority of our manufacturing and test suppliers are located in the Asia-Pacific region.

2020 Semiconductor Manufacturing Supplier Metrics 1

Suppliers who complete the RBA SAQ

100%

Suppliers with all low-risk manufacturing facilities per RBA SAQ

100%

Suppliers who have completed an RBA VAP audit in the last two years

78%

For supplier RBA VAP audits completed in the last two years, total Non-Conformances Found

  • Priority Nonconformances
  • Major Nonconformances
  • Minor Nonconformances

60

0

33

27

Suppliers who have achieved Gold or Platinum Recognition2

100%

1 Suppliers represent the top 90 percent of total product-related spend.

2Through verified closure of nonconformances identified in RBA VAP audits

Assessing our suppliers for risks and monitoring their performance.

We are mindful of the impacts that the global electronics supply chain can bring to society and the environment. Properly integrating environmental, social, and governance concerns into supply chain management not only minimizes these impacts, but also creates more resilient supply chains. Making appropriate supplier selections, assessing our suppliers for risks, and monitoring their adherence to our Supplier Code of Conduct are integral parts of how we achieve a sustainable supply chain.

We’re a Full Member of the Responsible Business Alliance (RBA) and require all our semiconductor manufacturing suppliers to adopt either the RBA Code of Conduct or a similar code. The RBA Code of Conduct, which serves as our Supplier Code of Conduct and The Qualcomm Way: Our Code of Business Conduct, have been cornerstones of our commitment to the RBA and responsible supply chain management for many years. By leveraging RBA tools and resources to complement our supply chain management program, we can focus on conformance to high standards among all of our suppliers in relation to labor issues, health and safety, the environment, ethics, and management systems.

As part of our risk-based approach, we require all our semiconductor manufacturing suppliers to complete the RBA Self-Assessment Questionnaire (SAQ) at least annually. These SAQ results have indicated that all our semiconductor manufacturing suppliers (representing the top 90 percent of total product-related spend) have been consistently identified as low risk for Code of Conduct violations.

In addition to completing the SAQ, our suppliers also receive RBA Validated Audit Process (VAP) audits and/or Customer Managed Audits (CMAs). Our supply chain management team has RBA Lead Auditor trained personnel who conduct on-site audits of selected suppliers for their adherence to our Supplier Code of Conduct and other corporate responsibility requirements, including product environmental governance and conflict minerals. The assessments have revealed that those assessed suppliers conform to our Supplier Code of Conduct requirements.

Breakdown of Nonconformances by Category

The chart to the right breaks down nonconformances found in FY2019-2020 by the five categories of the RBA Code of Conduct: Labor, Health and Safety, Environment, Management Systems, and Ethics. Examples of nonconformances include: providing some worker contracts in a language other than the workers’ native language, which was remedied by providing and reviewing the contracts in the appropriate language; and, having furniture block access to fire hydrants, which was reconfigured to allow unobstructed access to the fire hydrants.

Correcting deficiencies and building sustainability capacity.

Our semiconductor manufacturing suppliers have shown effectiveness in many areas of corporate responsibility, especially in product environmental governance. To ensure their continued effectiveness, we’ve designed corrective action processes that include potential removal of deficient suppliers from Qualcomm’s supply chain.

We believe helping our suppliers build greater knowledge of corporate responsibility issues, such as human rights, responsible minerals sourcing, and selecting less harmful substances for manufacturing, can create and improve the corporate responsibility of all our supply chains. We share our knowledge through on-site visits, business meetings, emails, and other efforts.

In 2020, we launched the Qualcomm Taiwan Sustainability Collaboration Project in partnership with SPIL and 10 small and medium sized companies (SMEs) based in Taiwan. The overall goal of the project is to promote renewable energy development across the semiconductor supply chain. The companies in the Qualcomm Taiwan Sustainability Collaboration Project are part of our supply chain and are committed to advancing the use of renewable energy and reduce their greenhouse gas emissions. We had also worked with SPIL in prior years to increase its water recycling efficiency which resulted in recovering 72 percent of process wastewater for reuse.

Our primary semiconductor manufacturing suppliers include:
  • Advanced Semiconductor Engineering
  • Amkor Technology
  • Global Foundries Inc.
  • Samsung Electronics Co. Ltd.
  • Semiconductor Manufacturing International Corporation
  • Siliconware Precision Industries
  • JCET
  • Taiwan Semiconductor Manufacturing Company
  • United Microelectronics Corporation

Incorporating supply chain management into our strategy and governance structure.

Qualcomm’s 2030 Vision is our roadmap to inform big picture thinking on corporate responsibility issues that are most important to us. As part of this vision, we’re collaborating with our suppliers to create better solutions while striving to achieve specific goals. Guidance from the Qualcomm Sustainability Leadership Committee helps shape our sustainable supply chain efforts.

Our 2025 supply chain goal is to ensure 100 percent of primary semiconductor manufacturing suppliers are audited every 2-years for conformance to the Supplier Code of Conduct.

Maintaining adherence to our Supplier Code of Conduct within our extended supply chain.

Ensuring that respect for human rights is integrated into all key business decisions.

Ensuring sustainable and transparent management of climate and water impacts across our value chain.

Increasing diversity among our suppliers.

We’re are also working to increase the diversity of our suppliers. We’re reaching out to small, disadvantaged, and minority-owned businesses; businesses owned by women, veterans, or people with disabilities; and businesses situated in historically underutilized business zones. Including such businesses in our supply chain makes us a stronger company. We benefit from the variety of capabilities and perspectives and gain the value of unique, entrepreneurial, customized services that many of these suppliers provide. Contracting with such suppliers also helps support local economies.

Documents

Addressing concerns about our supply chain management.

We encourage anyone who has concerns about Qualcomm’s supply chain management to contact our ethics hotline. The business conduct hotline is publicly available 24/7 to everyone, including employees of suppliers and you can also contact us directly using the contact form. 

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