1.1 Supply Chain Overview
As a global leader in semiconductor assembly and testing services as well as a key systems and core technology integrator, ATX primarily provides assembly, testing services. We work with suppliers globally to procure raw materials, equipment, facility/engineering services, waste management services, transport, logistics and subcontract services. The supply of raw materials have the most direct impact on ATX's day-to-day operations and manufacturing. Raw material suppliers are classified into two categories according to their attributes; direct material suppliers (suppliers of materials directly related to manufacturing) and indirect/packaging material suppliers (suppliers of packaging materials or materials indirectly related to manufacturing). To ensure efficient resource allocation and management of raw material suppliers, we identify tier-1 suppliers based on their annual procurement value.
Supporting Local Suppliers
ATX endeavors to boost local development through its procurement efforts, and is thus working closely with local suppliers, and helping them develop technological capabilities. Such efforts benefit the supply chain, community by creating local job opportunities and reduce the risk of supply chain. In 2023, procurement from local suppliers accounted for approximately 51.6% of the total procurement amount.
1.2 Supply chain management framework
Purchasing and Supply Chain Development Policy
The ATX Purchasing and Supply Chain Development Policy is published on the company website to communicate ATX's supplier sustainability expectations. We hope to make a positive impact on the global electronic industry supply chain and establish sustainable
supply chains with its suppliers. ATX is also devoted to socially responsible procurement and innovation throughout the supply chain, on top of providing responsible and quality services to our customers.
Supplier Code of Conduct
The supply chain is a major extension of ATX's business operations and we actively foster sustainability throughout our supply chain. ATX's suppliers are expected to comply with our Supplier Code of Conduct which requires them to comply with local laws and regulations where they operate, and conduct business in a manner that meets labor, health and safety, environment, business ethics and management and various corporate compliance standards. The suppliers are also required to drive their suppliers to meet such standards and oversee their compliance status.
Supply Chain Management Strategy
Through stable partnerships with its suppliers, ATX hopes to improve the overall supply chain resilience and implement socially responsible procurement. Supply chain sustainability is a key factor influencing our day-to-day procurement besides cost and quality, and enables our long-term growth with suppliers. From an overall supply chain management perspective, and using a risk and opportunity assessment to analyses our current supply chain status, we developed various programs in recent years focusing on responsible procurement, supply chain diversification and mitigation of supply chain disruption to attain win-win collaboration with our suppliers.
1.3 Supply Chain Sustainability Management
ATX has suppliers around the world, all of which are important partners. Beyond value creation, we also hope to be able to address labor rights and environmental protection issues. ATX adopts the RBA Code of Conduct in the management of labor, environment and ethics. ATX also applies the code to its supply chain management to ensure the provision of a safe work environment, respect for workers, environmental protection and ethical conduct. ATX forbids the use of child labor or forced labor by its suppliers, and shall terminate its relationship with suppliers involved in serious violations although no such instances were found in 2023.
Supplier Sustainability Management Approach
As part of the ATX Procurement and Supply Chain Development Policy and Commitment, we established a four-stage sustainability supply management process that is run repeatedly to ensure supplier compliance and enhance their sustainability performance.
Sustainability Requirement
ATX's raw material suppliers are required to sign the "ATX Supplier Code of Conduct Commitment Letter". The suppliers are also required to complete a sustainability risk assessment questionnaire that covers regulatory compliance, sustainable management, supplier management, conflict mineral management, environmental protection, health and safety, labor rights, human rights, etc. The purpose of the questionnaire is to assess each supplier's sustainability risk and conduct an on-site audit where necessary to ensure conformity to ATX's supplier sustainability standards. In parallel, we encourage suppliers to seek continuous improvement by acquiring internationally recognized certifications such as ISO 9001, IATF 16949, ISO 14001, ISO 45001 and ISO 14064-1.
Sustainability Risk Assessment
To assess the current status of supply chain sustainability development and risk management status, ATX conducts an annual Two-step supplier sustainability risk evaluation and analysis. This allows TX to identify the suppliers that exhibit potentially high social, economic, and environmental risks. Deficient suppliers will have to undergo audits and follow ATX's corrective guidelines to ensure effective mitigation and control of risk.
Risk Assessment 1 (RA 1): Active Risk Assessment
We conduct a preliminary assessment and analysis of potential risks to suppliers based on location, procurement amount, type of product supplied and manufacturing process.
Risk Assessment 2 (RA 2): Sustainability Risk Self-Assessment Questionnaire (SAQ)
To ensure effectiveness in the assessment, we have established various standards and requirements for critical and noncritical suppliers that help ATX develop a more resilient and sustainable supply chain. In 2023, we conducted SAQ and achieved a response rate of more than 98.1% from key suppliers.
2023 Supplier Key Sustainability Findings
Supplier Sustainability Audit Mechanism
We have analysed the results of the questionnaire, and in response to the findings, we plan to confirm the performance status during the next year's assessment and continue to reduce the risks. At the same time, ATX conducts on-site audits of suppliers based on the final score of the assessment.
Sustainable Supply Chain Development Program
ATX continues to support its suppliers by providing education and training, organizing seminars, forums and counseling sessions. These efforts help ASEH stay responsive to an ever changing business landscape and to foster sustainability values throughout the supply chain.