In recent years, international concern has grown regarding mining operations controlled by warring militias in the Democratic Republic of the Congo and neighboring countries (collectively, the “DRC”) who are financing armed conflict with profits from these mines. To address these concerns, the U.S. adopted legislation under Section 1502 of the Dodd-Frank Wall Street Reform Act pertaining to certain minerals or derivatives, including tin, tantalum, tungsten and gold, used in electronics and many other products. The Act defines these as “conflict minerals” regardless of the geographic origin of the minerals and whether or not they fund armed conflict. As specified under the Act, the SEC issued Rule 13p-1 and related Form SD under the Securities Exchange Act of 1934, which require companies whose products contain conflict minerals to make specialized disclosures and conduct related supply chain diligence.
Applied Materials is committed to the responsible sourcing of materials used in our products. The company has an extensive and varied supply chain. Like other companies in the electronics industry, we purchase certain parts that include these minerals. Applied Materials does not directly purchase these minerals, nor do we have any direct relationship with mines or smelters that process these minerals.
We are working diligently with our suppliers to address this important issue, focusing initially on our top suppliers by spend and certain others considered reasonably likely to provide parts containing conflict minerals. Along with other members of the Electronics Industry Citizenship Coalition (EICC), we are involved in the collaborative activities of the Conflict-Free Sourcing Initiative (CFSI) to understand and determine how best to mitigate the complex issue of conflict minerals. Through participation in these industry efforts, Applied supports refinement and expansion of CFSI’s list of Compliant smelters, including CFSI’s Conflict-Free Smelter Program, which uses independent third-party audits to identify smelters with systems in place to assure sourcing of only DRC conflict-free materials.
For information about these activities, including the results of our investigation regarding products manufactured in 2015, please see Applied Materials’ Form SD and Conflict Minerals Report filed with the SEC on May 27, 2016, available here.