CORPORATE RESPONSIBILITY

For over 50 years we have helped the industry create smaller and more powerful microchips. Our focus is on continuing to help our customers achieve critical technology and productivity improvements responsibly by striving to reduce our impact on the environment and positively contributing to society.

ASMI has been at the forefront of delivering innovative solutions within the deposition segment that deliver some of the highest productivity per unit fab space.

For example ASMI’s production-proven XP8 architecture allows us to configure as many as 16 reactors within a single tool, resulting in superior wafer processing per unit fab space. Optimizing reactor volume allows superb control of the deposition process, resulting in superior film properties, while also reducing chemical and energy consumption. Another example of ASMI’s commitment to optimizing reactor volume, with a focus on reducing energy consumption and effluent emissions, is our Intrepid EPI product which provides significantly reduced reactor volume and fab footprint. These advances are evidence of ASMI’s commitment to sustainable innovation.

Our research and development (R&D) investments are critical to creating value for our stakeholders and shareholders. We partner with our customers, as well as leading universities, industry groups, and our key suppliers to deliver new materials and process technologies to market safely and responsibly. These partnerships are also integral to our Corporate Responsibility (CR) strategy.

The United Nations’ Sustainable Development Goals (SDGs) reflect the priorities of global society, and our CR strategy aligns with and makes significant contributions to a number of these important goals:

Our relevant SDGS

We contribute to five Sustainable Development Goals (SDGs) that we have identified as being most relevant for us. Below we provide examples about the steps we took in 2018 to contribute to these goals.

• You can read more about our gender equality results in the People and Society chapter.
• More information on how we promote sustainable growth is available in the Environment chapter.
• You can find examples of how we contribute to SDG 9 in our Mission, vision, strategy and focus area chapter.
• More information on how we ensure sustainable consumption and production can be found in the Corporate Responsibility chapter and the Environment chapter.
• Information on the steps we are taking to combat climate change can be found in the Environment chapter.

SAFETY FIRST!

No matter what we do, we put safety first, to improve the safety of ASMI’s global operations as well as the operational safety of the ASMI equipment in our own and our customer’s work environments. We closely partner with customers and other stakeholders to ensure that their work environment and manufacturing operations are as safe as we can collectively make them. From our innovative Safety Leadership Collaborations with customers, to our focus on delivering safe products, we are always striving for a Safety First! approach in what we do.

STRENGTHEN R&D AND INNOVATION

Our investments in R&D and our breakthroughs in bringing technological advances to the marketplace enable us to make substantial contributions to several aspects of SDG 9: Industries, Innovation and Infrastructure; as our innovations deliver high performance computing and communications to people around the world. For example, ASMI’s ALD technology for depositing high-k gate dielectrics is a critical capability for advanced transistors to operate at lower power. This capability allows mobile devices to operate at lower voltages with extended battery life.

MANAGE ALL ASPECTS OF OUR BUSINESS RESPONSIBLY

Our key corporate responsibility philosophy is ZERO HARM! We strive to prevent harm to people, reduce our impact on the environment, and make positive contributions to society.

Our CR policy lays out our commitment to and expectations with regard to, health and safety, the environment, labor, ethics, and supply chain management. Each of these areas is further supported by policies, programs, systems, and metrics to ensure that we meet our long-term objectives. The full text of our CR policy is available on our website.

The Responsible Business Alliance (RBA) Code of Conduct (the Code) has been adopted by ASMI and many of our customers and suppliers. The Code evolves constantly to cover the most recent developments in responsible business practices. Currently, the Code references and follows multiple international expectations and standards, including:

• The OECD Guidelines for Multinational Enterprises;
• The Universal Declaration of Human Rights; and
• The ILO International Labor Standards and International Organization for Standardization (ISO).

We use the Code, its supporting documentation, and engagement with the RBA and member customers to drive continuous improvement within the company and our supply chain. We routinely assess and maintain alignment with the Code through self-assessments and audits.

However, responsibility is more than codes and standards. Responsibility is also about understanding stakeholder priorities, our material aspects, and integrating responsible business practices into our objectives, strategies, and processes. It is about finding new ways to develop, manufacture, and support our products with less risk to people and the environment. Employees are encouraged to contribute to this at ASMI, helping to strengthen our ZERO HARM! vision.

Hold critical suppliers to the same standards

We require our critical and strategic suppliers to follow the RBA Code of Conduct to ensure alignment with the policies and expectations of ASMI.

We conduct an assurance process for our critical and strategic suppliers and set objectives for Code acknowledgment, self-assessment, auditing, and corrective action processes that are consistent with RBA requirements.

We also go beyond the Code to partner with customers to map our contract manufacturer labor sourcing process to prevent forced and bonded labor (FLBL) and encourage diversity in supply.

By focusing on responsible business practices in our supply chain, we expand our impact and our contribution to relevant SDGs.

CR STRATEGY AND GOVERNANCE

Our CR management system is embedded in our corporate governance framework.

The Corporate Vice President of Human Resources, who is also Chairperson of the ASMI Ethics Committee, and the Corporate Vice President of Operational Excellence, who is directly responsible for Environmental, Health, Safety, and Corporate Responsibility are key CR leaders for the company and are integral to CR governance. These leaders and their respective organizations define ASMI’s objectives and strategy for labor and ethics, environmental performance, and employee health and safety, which are subject to approval by the Management Board. The implementation and control of economic and financial aspects is overseen with reviews conducted quarterly, by the Management Board.

STAKEHOLDER ENGAGEMENT METHODS

We regularly engage with appropriate stakeholders to improve and mature as a business. Their feedback helps us shape objectives, strategy, and policy making in relevant areas of corporate responsibility.

KEY STAKEHOLDER ENGAGEMENT METHODS AND BENEFITS

The above table lists only a few examples of how we consider stakeholder input and feedback, which we use to further improve our strategies, targets, and ultimately our performance.

We also engage with sustainable development organizations such as the CDP (formerly the Carbon Disclosure Product) a not-for profit charity that help companies and cities document and disclose their environmental impacts. We also engage with the Vereniging van Beleggers voor Duurzame Ontwikkeling (Dutch Association of Investors for Sustainable Development, VDBO). We participate in the Transparency Benchmark, a biennial assessment on the content and quality of corporate social responsibility reports of Dutch companies, which is used by the Dutch Ministry of Economic Affairs to assess and drive adoption of sustainable investment best practices. In 2017, when the last assessment took place, ASMI placed in the top-third of this benchmark.

MATERIALITY

In 2015, we introduced our materiality assessment process. The process provides us with the opportunity to continually assess if our strategic objectives, actions, and initiatives are aligned with our stakeholders and overall importance to our business. The process has remained constant since then, following the sustainability materiality steps and matrix based on the Global Reporting Initiative’s (GRI) G4 Sustainability Reporting Framework, and represents the internal and external stakeholders we have identified.

The aspects in the top-right segment of the above chart are referred to as 'primary aspects' in this report. Primary aspects are considered strategic to our business.

Resource priority decisions are made regularly, with priority given to those which are of high importance to ASMI and our stakeholders.

R&D investment, which results in patents and intellectual property, are assets protected by legal agreements and information security systems. Protecting these investments helps drive company financial health through product development and customer confidence.

All aspects in the materiality assessment are rated with respect to current and future risks and global trends. For example, we recognize that climate change, resource conservation, and water management are critical aspects of preserving Natural Capital. Their inclusion means that we continue to strive for improvements with a positive environmental impact. In parts of the world where natural resources such as water are in limited supply, conservation efforts to preserve such resources are vital. One example of this is the implementation of a water reuse system at our Phoenix facility, which in 2018 reduced on-site water consumption by 35% compared to 2017.

The table above provides an overview of the primary aspects and their related strategies.

For more information on each aspect, please refer to the following sections of this report:

CIRCULAR ECONOMY

We recognize the inherent value of a circular economic framework for product stewardship. We partner with customers in the deployment, operation, and ongoing maintenance of our equipment and processes in their facilities. We develop system improvements and offer upgrades to improve deposition performance, yield, and productivity, and refurbishment services to extend the useful working life of the equipment. We refurbish and redeploy products such as the A400 and are piloting a process to recover and reuse product shipment packaging materials. A pilot reuse of shipment packaging was implemented on two product platforms in 2018, and we plan to expand this to five platforms in 2019. Such processes and practices are consistent with a circular economic product model to increase the value, performance, and the working life of ASMI's products and services.

TAX PRINCIPLE

Taxes are determined and paid in accordance with all relevant rules and regulations in the countries in which we operate. We do not use artificial tax structures aimed at tax avoidance. We aim to follow both the letter as well as the spirit of the law.

We apply the arm’s length principle to determine transfer prices in accordance with domestic and international rules and standards, such as the OECD Guidelines for Multinational Enterprises. Our disclosures are made in accordance with the relevant local and/or international regulations.