Sustainability: Supply chain accountability:
Conflict Minerals

The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in July 2010, directed the Securities and Exchange Commission (SEC) to issue rules requiring publicly traded companies to disclose publicly the extent to which their products contain so-called "conflict minerals" (i.e., tantalum, tin, tungsten and gold, and otherwise referred to as “3TG”) sourced from conflict mines in the Democratic Republic of the Congo (DRC) or adjoining countries. The concern underlying this requirement is that the use of these metals, derived from minerals mined in the DRC or adjoining countries, has helped to fuel war and human rights abuses in eastern Congo. The SEC issued implementing rules in August 2012 and requires companies to file an annual report on their use of conflict minerals (CMs).

TI understands that the purchase of minerals from illicit mines located in the DRC or adjoining countries is an important concern globally and is committed to ensuring that our products do not contain minerals derived from sources that finance or benefit armed groups in the DRC or adjoining countries. We are working diligently with our supply chain, including subcontracted manufacturers, to determine the mineral source for the materials containing 3TG, so we can identify and eliminate non-compliant sources.

In 2008, the Electronics Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) established a group now known as the Conflict-Free Sourcing Initiative (CFSI). The group is composed of technology companies and suppliers and aims to help advance effective policies that address conflict minerals concerns while taking into account the complexities of the global supply chain. In 2010, TI joined the CFSI. Through TI's participation, we have helped to create and test tools that track the sourcing of the 3TGs, helped conduct smelter outreach and contributed to the CFSI Initial Audit Fund.

TI has established a conflict minerals policy, management systems and due-diligence procedures as a basis for supply chain management and disclosure compliance relating to conflict minerals. We designed this process with the intent to conform in all material respects with the OECD Due Diligence Guidance for Responsible Supply Chain from Conflict-Affected and High-Risk Areas, which requires the establishment of policies, structures and procedures, risk management and communications mechanisms. In addition, we undertook a number of actions with our suppliers requiring them to report to us the sources of the 3TG materials we purchase from them, analyzing that information, comparing it with other information available from the Conflict-Free Smelter Program (CFSP) and reviewing it against other source materials.

Integrated Circuits (“ICs”)1 accounted for approximately 90 percent of TI's revenue in 2016, and we have determined that all of our ICs were conflict-free. Our determination is based on the finding that all the smelters identified to us by our suppliers as being potentially in the supply chain for these ICs in 2016 were supplied exclusively from conflict-free sources.

In 2016, we continued to make progress in our due-diligence efforts with regard to smelters that are not compliant with the CFSI (these smelters may supply CMs to us for products other than ICs). While we primarily relied on information from our first-tier suppliers, when that information was insufficient, we contacted second-tier suppliers for more complete information. These communications have yielded more complete and specific information than in 2015 about the smelters in our supply chain. That information, combined with the information available through the CFSP, has given us greater insight into the conflict status of CMs identified as potentially in our supply chain for 2016 as compared to the prior year.

On May 31, 2017, TI filed its fourth conflict minerals report with the SEC (covering 2016). The filing consists of a "Form SD" and a "Conflict Minerals Report." The report states that TI performed "due diligence" on the origin of conflict minerals in TI products and concluded that:

  • For integrated circuits, which accounted for about 90 percent of TI revenue in 2016, 100 percent of the smelters were verified by a third party to be conflict-free.
  • For TI products overall, 80 percent of the smelters were conflict-free compared to 76 percent for 2015.
  • We identified no source that, to our knowledge, was financing or benefiting armed groups in the DRC or any adjoining country.
  • Because our knowledge about the origin of the conflict minerals in our entire supply chain is incomplete, we are not able to designate all products as conflict-free, but we continue to improve our level of knowledge by partnering with our suppliers to get more complete information.

1 “Integrated circuits” refers to finished semiconductor products that contain chips manufactured by or for TI and packaging subcomponents such as mold compounds, bond wires and lead frames. It excludes DLP® products, semiconductor modules and all other products manufactured by or for TI.

Smelter Status – Overview

IC Supply Chain

Pie chart for conflict minerals - IC Supply Chain - 2015 and 2016

Overall Supply Chain
(including IC's)

Pie chart for conflict minerals - Overall Supply Chain (including IC's) - 2015 and 2016

Smelter Status – By CM
Smelter status bargraphs for conflict minerals 2015 and 2016

TI’s 2017 Conflict Minerals Goals

  • Maintain conflict-free status of all smelters for integrated circuits.
  • Continue to close the gaps in our information and mitigate risk by taking the following supplier actions:
    • Redistribute copies of our conflict minerals policy to suppliers.
    • Emphasize to them our expectation that they respond fully and promptly to our information requests.
    • Instruct them to advise us if they determine that any person or entity in their supply chain is directly or indirectly financing or benefiting armed groups in the DRC or adjoining countries.
    • Encourage them to direct all smelters in their supply chains to participate in the CFSP or a similar third-party audit program.
    • Contact various smelters directly for information if their operating status changed, their CFSI status changed or they have refused to participate in a CFSI audit.