Supplier Management

Supply Chain Framework

The ChipMOS's main product lines are Memory IC, Display Driver IC, Logic & Mixed-Signal Products. Raw materials purchased from upstream suppliers for our manufacturing process are subjected to IC Assembly, IC testing, and Wafer Bumping at the Company before providing the products for downstream module applications or customers. ChipMOS operates on a win-win philosophy: "Good for Employee, Good for Shareholder, Good for Vender Team." We actively manage all aspects of our business to maintain long-term relationships with our employees, shareholders, customers, and suppliers. Our Supplier Management Committee oversees the supply chain, addressing ESG topics and conducting regular audits. This ensures our vendors meet our high standards for product quality, environmental performance, and human rights. Beyond business goals, we actively drive our suppliers to reduce carbon emissions and save energy, creating a more competitive and sustainable supply chain for everyone.

Driving Suppliers' Green Competitiveness

Regularly survey suppliers on climate change and water security management

Starting from 2022, ChipMOS has more effectively managed and grasped suppliers' environmental actions through the climate change/water security questionnaire. Over the past three years (2022-2024), the scope of supplier questionnaires has expanded annually. In 2024, the survey covered 121 Tier-1 suppliers (including direct/indirect materials/equipment categories and expense categories) that accounted for 85% of total procurement spending, including the top 20 GHG-emitting suppliers. Additionally, ChipMOS began surveying Tier-2 suppliers in 2024 to gradually grasp environmental impacts associated with the supply chain. The questionnaire surveyed seven major issues: climate governance, climate initiatives and actions, applicable laws or related drivers, adoption of international standards, goal setting for management, corporate GHG emission inventories, and corporate water security assessments. 

Note: Tier-2 suppliers are the primary upstream suppliers of our Tier-1 suppliers.

ChipMOS SCM Platform to Promote Climate Change Information

We promote awareness of ChipMOS stance and direction on climate issues among all suppliers through the SCM platform, encouraging them to assess their investment in relevant plans and enhance their green competitiveness. Adhering to ChipMOS Biodiversity and No Deforestation Policy, valuing natural environmental ecological issues. Suppliers should accelerate their preparations and commit to climate issues, with the commitment direction as follows:

Local Sourcing Strategy

By enhancing the local sourcing strategy, ChipMOS reduces the supply chain risks, as well as the carbon emission in the overall supply chain and creates the local jobs. The term “local supplier” refers to the manufacturing plants of suppliers locate at the same area as the production bases of ChipMOS. For instance, if a manufacturing plant of a supplier locates in Taiwan, this is a local supplier to ChipMOS’ plants in Taiwan. In 2024, 71% of the procurement expenditure came from local suppliers. In recent years, the proportion of local procurement has shown an upward trend. In 2024, due to factors such as changes of metal price/exchange rate and rising price of some raw materials, the order amount in Taiwan was increased. Looking to the future, we will insist the local sourcing strategy and spirit, to select quality suppliers in Taiwan, and increase the proportion of local sourcing, while expecting to bring more jobs to Taiwan, and further enhance the development of overall local industries.

Supplier Management Committee

ChipMOS complies with the code of conducts of the Responsible Business Alliance (RBA) and applies such as the policy and guidelines to manage the suppliers in terms of environment and human rights, and clearly specifies the five management scopes for suppliers, including labor, health and safety, environment, professional ethics and management system.

ChipMOS has established the “Supplier Management Committee” consisting of five groups, namely engineering, subcontracting, production and material management, procurement, and quality. The Committee works in a cross-function way to implement the supplier management scopes together, including new supplier selection, supplier audit, and supplier appraisals, to be committed to conform to the standards of RBA’s code of conducts, and work with the suppliers to grow together, and operate sustainably.

Supplier Code of Conduct

Supplier Ethical Management Policy

To ensure that suppliers understand ChipMOS's adherence to honest and integrity in all business activities, we require for additional clauses regarding Regulations Governing Professional Moral Conduct when signing procurement contract with suppliers. In case of illegal conduct from ChipMOS's employees or relevant suppliers, the incident can be reported via our whistleblowing mailbox at Audit_Committee@chipmos.com. To collectively bear the responsibility of ethical practices with our suppliers, ChipMOS will investigate and punish the illegal conduct, while keeping the identity of the whistleblower confidential and to adopt proper protection measures.

Supplier's CSR Statement

Since 2014, ChipMOS have been asking its suppliers of raw materials, equipment and specific services (including human resource agencies, janitors, security personnel, resident employees of vendors, catering personnel and so forth) to sign the Declaration of Corporate Social Responsibility, which clearly requires the partners in the supply chain to fulfill the corporate social responsibilities together. 

Selection of New Suppliers

ChipMOS has built a set of new supplier selection process. When the unit in need request for new suppliers, the Supplier Management Committee will evaluate, including for major dimensions: engineering technical capability, quality management system, price, service (including capacity and promise of delivery time), as well as the industrial history from the supplier's existing customers, to evaluate the risks of introducing the supplier in a holistic manner.

ChipMOS expects the suppliers agree with our philosophy of the sustainable operation, and the requirement of ensuring product quality. We adopt the highest reviewing criteria for the evaluation; for the new suppliers of the key materials, their certifications of international quality systems are verified, e.g. ISO 9001, ISO 14001, IATF 16949, and ISO 45001; implementation of the process management, green product, Responsible Business Alliance (RBA) and health and safety management are reviewed, to ensure the suppliers meeting the requirements in terms of environment and labor practices, including product quality, prohibition of hazardous substances, and employee protection. The selection process of new suppliers is as the following figure. These who pass the evaluation will be registered in ChipMOS’ Approval Vendor List (“AVL”) for subsequent daily management.

Supplier Appraisal

Supplier Audit

ChipMOS Suppliers Audit Focus and Implementation

▪ 2024 Supplier audit focus and audit results

Coaching and training suppliers

By correcting the defects found during the appraisal and audit, ChipMOS insists a positive and open attitude to discuss with the suppliers, plus promotions and training from various aspects, to learn from each other while growing together, and ensuring no ecurrence of defects. If suppliers obtain certification of international standards, it is a plus for audit and evaluation. ChipMOS will keep on coaching suppliers to obtain various certification of international standards.

Actively coaching supply chain partners to pass automotive specification verification

To improve the quality and competitiveness of our suppliers, we have been working to ensure they meet international standards. To support our growing automotive business, ChipMOS is not only IATF 16949 certified but has also strengthened its supplier quality control. We now include automotive requirements in our annual quality questionnaires and conduct VDA 6.3 process audits for suppliers of automotive products. Through these efforts, we've helped our suppliers better understand automotive standards and obtain certification.