Stewards of our one world

Taking care of our one world is the right thing to do and is also good for business. Our products help transition the world to more energy efficient solid-state storage technology. We leverage our world-class manufacturing partners' extensive investments in environmental sustainability and supply chain management. And, in our offices, we actively recycle and compost and are conscientious in our use of electricity and water. The many operational processes that we follow ensure our customers consistently receive high quality products and services which are provided responsibly.

Fabless business model

The semiconductor industry has evolved from traditional IDMs (integrated device manufacturers) to a disaggregated model where specialists focus on specific parts of the industry food chain, such as design, fabrication or assembly, and are optimized for their specialties. This model allows Silicon Motion, a fabless semiconductor company, to leverage economies of scale, technology leadership and operational excellence, including investments in environmental sustainability and supply chain management of other specialists in the semiconductor industry to whom we outsource. We believe this disaggregated industry model allows for much more efficient and effective supply chain management than if we had to build and manage all the links of the chain ourselves.

As a fabless semiconductor company, Silicon Motion focuses on designing integrated circuits and outsources fabrication, assembly and testing to third party vendors. By focusing on integrated circuit design work, our direct environmental footprint is relatively small. Our significantly larger responsibility is managing our much larger indirect environmental footprint—our supply chain that we primarily outsource to world-class suppliers such as TSMC and ASE/SPIL, which are among the industry leaders in corporate-citizenship best practices. As an example, TSMC, our primary foundry supplier became the first semiconductor company worldwide to join RE100, a commitment and roadmap to source 100% renewable power globally. We work closely with all our suppliers in monitoring their processes, materials and yields and to ensure they meet our corporate social responsibility commitments. We support the goals of our suppliers in reducing water consumption and greenhouse gas emissions.

Responsible sourcing

All our foundry, assembly, testing and key component suppliers comply with the Code of Conduct of the Responsible Business Alliance (RBA). Our primary suppliers have all adopted The International Labour Organization's Declaration on Fundamental Principles and Rights at Work and the United Nations Global Compact. Additionally, we strive for a DRC Conflict-Free supply chain by working closely with our suppliers in using RBA's Conflict Minerals Reporting Template (CMRT) to trace source minerals and ensure conflict minerals are not used in manufacturing our products.

Our foundry suppliers are TSMC and SMIC. Our assembly and testing suppliers are ASE/SPIL and King Yuan Electronics. For our SSD solutions, we primarily use Kioxia and Western Digital NAND flash. All these suppliers are industry leaders in corporate responsibility.

We have adopted a Conflict‐Free Minerals Statement that guides the sourcing of minerals used in our products. (As defined by the Dodd‐Frank Act, Section 1502, conflict minerals include tantalum, tin, tungsten and gold from the Democratic Republic of Congo, or adjoining countries.)

Solid state storage is better for the environment

Our business is focused on designing controllers, specialized integrated circuits that manage NAND flash and turn these semiconductor memory components into different categories of solid state storage devices, from enterprise-grade SSDs increasingly used in data centers to client-grade SSDs already widely used in PCs and eMMC/UFS mobile embedded storage found in most smartphones. Without controllers and NAND flash, smartphones with which we are all very familiar would not exist today. Additionally, according to most studies, SSDs are better for the environment compared to HDDs as they consume significantly less power to operate in both PCs and data centers.

OEMs have been rapidly replacing HDDs with SSDs in PCs and other client devices as SSDs have become increasingly cost effective and furthermore, provide better performance, are smaller in form factor and lighter, are more reliable and help save power and improve battery life. SSDs are highly efficient compared to HDDs and use approximately 5 to 15x less power in terms of MBps (Megabytes per second)-per-watt when transferring files and 8x less power when on stand-by mode. SSDs are more energy efficient because they are solid-state with no mechanical moving parts that lose energy from friction and noise and do not consume power just to boot-up and accelerate to operating speed.

Data centers are a major consumer of electricity world-wide and benefit from using SSDs. Benefits of SSDs include better reliability and performance, but also reduced operating maintenance, occupy less real estate, provide lower total cost of ownership and importantly, use less power to operate and cool.

Product quality assurance

We have been ISO 9001 certified by DNV since 1999 and remain in compliance with the complete ISO 9000 family of quality management systems, which are based on a number of quality management principles that include a strong focus on customer needs and expectations, unity of purpose and direction of company leadership, a process-oriented approach to management and continuous business process improvements. Following ISO helps Silicon Motion ensure that our customers receive consistently high quality products and services.

Our products are free of restricted chemicals and are all RoHS and REACH compliant.

Low impact offices

To minimize waste sent to incinerators or landfills, all our offices actively recycle and compost. We regularly evaluate ways to reduce our electricity and water consumption. Our initiatives relating to reducing our electricity consumption are focused on several key areas: lighting, air conditioning and electronic equipment. Our company PCs now all use SSDs and one of the benefits of this is lower electricity consumption and carbon footprint.

Supply Chain and Environment — Key Metrics