ENVIRONMENT

Our innovations enable our customers to provide consumers and businesses with more powerful technologies, while lowering global energy demands. We align our strategies across the industry, including with customers and industry standards, to focus on key areas, including reducing greenhouse gases and water consumption, improving our recycling and reuse of raw materials, and focusing on responsibly designed and operated facilities.

Our ZERO HARM! philosophy drives us to continually improve our environmental performance both in our own operations and in our products, with the aim of reducing our environmental footprint and that of our customers.

Our Environmental policy is a key element of our Corporate Responsibility policy. It establishes our commitment to reduce our environmental impact by continuously improving our management systems and setting the right objectives. We continuously assess the range of aspects we need to identify, and set improvement targets on the most important impacts.

TARGETS

In 2016, we initiated a five-year target cycle for reducing our environmental footprint in key areas that are applicable to our business and aligned with industry standards, including the Sustainability Accounting Standards Board (SASB) standards for the semiconductor industry. In reference to science-based targets, we have normalized our greenhouse gas (GHG) emission reduction and our water consumption reduction objectives to our research and development (R&D) spend. Our R&D operations are responsible for a majority of the utility consumption through equipment installations and supporting facility infrastructure, accounting for more than 75% of electrical consumption and almost 80% of water consumption. In 2018 we significantly surpassed our 2020 water consumption objective, and are resetting that objective to further challenge ourselves.

Our environmental targets for 2016-2020 are now:

• Reduce greenhouse gas emissions by 5% per euro of research and development (R&D) investment below 2015 levels by 2020;
• Reduce water consumption by 45% (up from 10%) per euro of R&D investment below 2015 levels by 2020;
• Divert more than 90% of all waste from landfill through recycle or reuse by 2020; and
• All new construction projects to exceed the energy efficiency standards of local jurisdictions.

These targets are aligned with key initiatives across our business, and is consistent with and managed within our environmental management system which is certified to the ISO 14001 standard.

Over 95% of our realized greenhouse gas emissions are a direct result of Scope 2 purchased electricity. We strive to find ways to reduce our electrical consumption and source power responsibly at our engineering and manufacturing sites. In 2018, we commissioned a third-party energy audit at one of our engineering sites, and are addressing key opportunities identified while evaluating other sites for the same opportunities. We report progress through annual participation in the CDP Report.

Our primary use of water is in the treatment and abatement of R&D process gases. Our efforts to reduce our water consumption needs to balance with the efficiency to abate potential air emissions and compliant with the statutory air emissions limits in the areas in which we operate. In this way, we have taken and continue to look for more measures at our R&D sites to reuse water, with reuse systems and initiatives in place to maximize the efficiency of the systems we have implemented.

We focused our efforts to reduce the landfill of solid waste through the implementation of a crate reuse program. Given the size of the equipment we produce, transporting it safely during the manufacturing cycle means using robust packaging, such as crates. By implementing a reuse program between ASMI and suppliers, we are able to reduce the one-time use of packaging. This program continues to grow as we add products and parts and has the potential to significantly help us reach our objective.

Our new South Korea facility meets all local energy efficiency requirements, and exceeded requirements in areas such as lighting and lab infrastructure control systems. We are in the process of designing a new building for our Singapore manufacturing operations, and are aiming for a top-tier energy rating.

In 2018, there were no material changes to our current operations that alter the way we interface with the ecosystem or manage our on-site surface water at our existing sites. We conduct an impact assessment for every new project, and strive to minimize identified potential impacts, such as through erosion protection, surface water containment, abatement technologies, and water resource management. Our focus and data collection for environmental measures is ongoing, and we maintain a process with individual site accountability for data accuracy. This means employees who are close to the operations and understand the inputs and outputs are also responsible for maintaining the data on a monthly basis. This helps ensure not only accuracy, but the ability to quickly identify opportunities and risks.