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Sustainable Supply Chain Management
Customer-centered Distribution Experience
For upstream semiconductor suppliers, the role of semiconductor distributors is to support suppliers' sales of semiconductor components; for downstream product manufacturers, the main function of semiconductor distributors is to assist customers in purchasing semiconductor components that are indispensable to manufacturing. In addition to dealing with various semiconductor components with complex specications that are irreplaceable.
The supplementary service and value proposition cover an even more extensive range that includes financial services, material management, logistics, technical support, etc.
The needs of every partner in the industry chain are important to WPG Holdings while planning for the industry chain ecosystem. Hence, WPG Holdings launched WPGDADAWANT and its 5 sub-platforms WPGDADAJIA and WPGDADABANG, WPGDADAGO, WPGDADATONG, and WPGDADAPIN to visualize existing customers’ usage on cloud platforms, so that the management team, front-end colleagues and systems development team can keep track and evaluate specic real-time data, and plan key follow-up projects, in order to meet different digital empowerment needs of the customers and the engineers as best working partners!
The five sub-platforms in the WPGDADAWANT ecosystem are described in the following figure:
Smart Logistics and Warehousing
WPG Holdings adheres to the concept of “customer-oriented” for its logistics management, continuously improving service quality, and dedicates efforts to provide high-quality logistics services to customers while constantly seeking breakthroughs and development.
WPG Holdings established a transparent platform that connects internal and external information, transferred routine work to the online system, and manually processed variable work items offline, in the hope of creating a collaborative ecosystem with our partners. Smart transportation and smart diversion have significantly increased our warehouse efficiency. Coupled with the integration of real-time information on the management dashboard, all management indicators and equipment status were enhanced and tracked.
Supply Chain Management
WPG Holdings is a semiconductor component distributor. We have 2 types of suppliers:
IDM/Fabless /IC Design Suppliers Assessment
As a distributor/agent in the semiconductor component supply chain, WPG Holdings does not participate in product manufacturing processes. However, as a member of the value chain, WPG Holdings actively keeps track and verifies whether the products we distribute meet environmental and social requirements. Through information disclosure on the Company’s website whether key suppliers comply with environmental regulations, WPG Holdings aims to maximize our impact along the value chain. We aim to strengthen information transparency and consumer awareness along the value chain and jointly create a sustainable global electronics supply chain.
- Chemical Safety Management
Regarding the management and identification of hazardous chemicals and related substances, WPG Holdings’ daily management system is in compliance with global industry standards. In response to Pb Free (Lead Free) environmental protection guidelines that have been implemented in the industry over the past years, and Halogen Free Guidelines (HF) published by the International Electrotechnical Commission. The identification, registration, usage records, and alternative options for chemicals and related substances are implemented in our daily management. WPG Holdings’ warehouses adopt a batch identification management mechanism on a daily basis, recording whether each purchased item meets the aforementioned chemical requirements in the IT system based on suppliers information, so as to provide customers alternative options for chemical substances with very high concern. WPG Holdings ensures the main chemical composition of semiconductor components can be clearly identified along the process from procurement, inventory, to sales management.
Based on our chemicals and related substance management policy, WPG Holdings identified 20 critical suppliers (identified by sales revenue) and concluded 100% compliance with the EU’s Restriction of Hazardous Substances Directive (RoHS), China RoHS, the Halogen Free Guideline (HF) published by the International Electrotechnical Commission, the EU's Registration, Evaluation, Authorization, and Restriction of Chemicals Act (REACH), and the EU's Peruorooctanesulfonic acid Directive (PFOS). Among them, 75% of suppliers adopted RoHS, Mainland China RoHS, HF, REACH, and PFOS standards have been veried. Two of the 20 suppliers do not apply the PFOS standard, and two do not apply the Mainland China RoHS standard, while one supplier contains partial halogen part numbers.
- Conict Minerals Management
The U.S. Congress approved the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. According to Article 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. Securities and Exchange Commission announced the “Rule 13p-1 under the Securities Exchange Act of 1934” in August 2012. This Article aims to solve the topic of human rights abuses linked to mining operations in the Democratic Republic of the Congo (DRC), or an adjoining country (collectively, the “Covered Countries”). Minerals mined from this area are called “3TG” including Tin (Sn), Tungsten (W), Tantalum (Ta), and Gold (Au).
As a distributor of semiconductor components, WPG Holdings did not participate in the product manufacturing process. In order to express the requirements regarding conflict minerals, WPG Holdings is committed not to directly or indirectly purchasing any conflict minerals from any source containing conflict minerals from the Covered Countries. In the future, WPG Holdings will continue to conduct supply chain due diligence annually to meet supply chain management targets.
With the aim of implementing the requirements of WPG Holdings on conflict minerals, we tracked the information by regularly reviewing the suppliers’ management policy of conflict minerals, whether they carry out investigations on the country of origin of minerals and other public information; and disclose the results of the investigation to the public, to implement WPG Holdings' commitment to supporting the use of legal, conflict-free minerals.
- WPG Holdings’ Conflict Minerals Management Process is as follows:
- Survey results：
After the disclosure of relevant information on conflict minerals tracked by WPG Holdings, the proportion of critical supplier minerals from non-conflict countries/regions and the proportion of qualified smelters are 70%. Among 14 critical suppliers, 70% (14 out of 20 suppliers) disclosed the proportion of validated smelters and refiners. Among the 14 critical suppliers that disclosed related information, 99.7% of materials used are processed from smelters, and refiners are verified as conflict-free. 2 of the 6 critical suppliers who did not disclose validated smelters and refiners' proportion are RBA members who are declared on the website.
General Affairs Suppliers
- Management of General Affairs Suppliers
Since 2018, in order to effectively implement supplier management, WPG Holdings, and its subsidiaries have formulated WPG Holdings Supplier Code of Conduct in accordance with the Responsible Business Alliance (RBA; formerly known as EICC) Code of Conduct, focusing on five aspects including labor, health, and safety, environment, ethics and management systems.
WPG initiated promotion of "WPG Supplier Code of Conduct" in Taiwan region starting from 2019. Suppliers are encouraged to complete self-evaluation form in accordance with WPG Supplier Code of Conduct.
China region promotion in 2020 through continuous promotion and communication, WPG wishes to raise awareness on various aspects including labor, health and safety, environment, ethics, and management system among our suppliers, and ultimately optimize operations accordingly.
In 2021, "WPG Holdings Supplier Code of Conduct" response rate achieved 80% in Taiwan and 87% in China. "WPG Holdings Supplier Code of Conduct Self-Evaluation Form" response rate achieved 77% both in Taiwan and in China.
- General Affairs Supplier Evaluation
Since 2017, to implement supplier management, WPG continued to perform supplier evaluations covering multiple aspects with the aim to ensure and enhance service quality, and at the same time assist our suppliers identify internal problems and develop relevant improvement measures. In 2021, the supplier evaluation score averaged 3.8 points (total of 5 points), approximately reaching an excellent standard.
- Local and Green Procurement
In terms of procurement and outsourcing policy, WPG Holdings prioritizes local and green procurement. In 2021, local suppliers accounted for 74% of the total general affairs procurement, and 26% of the total IT-related procurement. The proportion of green procurement is 1%.
- Sustainable Supply Chain conferences and training in 2022
To enhance suppliers' awareness of sustainability issues and the ability in responding to risks, WPG Sustainable Supply Chain conferences and training were held online in 2022. Main topics：Risks and challenges for corporate sustainability, Value of sustainable supply chains, WPG Supplier Code of Conduct. We expect to cooperate with its fellow suppliers to advance the development of the "Sustainable Supply Chain" and to convey our management requirements by organizing such events. WPG will continue to hold physical or online supplier conferences and related engagement in the future to strengthen supplier’s sustainability management.