EX-1.01 2 txn-ex101_201412316.htm EX-1.01

 

Exhibit 1.01

Conflict Minerals Report of Texas Instruments Incorporated

for the Year Ending December 31, 2014

This Conflict Minerals Report should be read in conjunction with the definitions contained in the Securities and Exchange Commission instructions to Form SD and related rules.  “Conflict minerals” refers to four specific metals regardless of their country of origin or whether they are financing or benefiting armed conflict:  tantalum, tin, tungsten and gold.

We have management systems and due diligence procedures (our “CM Process”) as a basis for supply-chain management and disclosure compliance relating to the conflict minerals necessary to the functionality or production of products manufactured by TI, or contracted by TI to be manufactured, and required to be reported for 2014 (collectively, “CMs”).  We designed the CM Process with the intent to conform in all material respects with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Second Edition).  The design of the CM Process included the following:

·

a conflict minerals policy;

·

an organizational structure and processes intended to ensure that our direct suppliers of CMs and third-party manufacturers of our products that contain CMs (collectively, “Suppliers”) are made aware of TI’s policy on CMs and that information received by TI that is relevant to supply-chain due diligence reaches TI employees who have knowledge of the SEC disclosure requirements;

·

a process, which uses a reporting tool and data gathered by an electronics industry initiative (described below), to achieve control and transparency over our CM supply chain and identify the risk that our products may contain CMs financing or benefiting armed groups in the Democratic Republic of the Congo or any adjoining country (each a “Covered Country”);

·

assessment and management of risks identified through the process described above;

·

a mechanism for Suppliers and others to communicate to TI their concerns with respect to our CM Process;

·

reliance on the electronics industry initiative described below to validate supply chain due diligence; and

·

public reporting of the results of our due diligence.

Our ability to determine the origin and chain of custody of CMs, and whether they directly or indirectly finance or benefit armed groups in any Covered Country (the “Conflict Status”), is limited.  Our supply chain for CMs is complex.  In many cases, we are four or more steps removed from the smelter or the mine, and we depend on information from Suppliers that themselves have incomplete information about the origin of the CMs they supply to us.  

To gain insight into the country of origin, chain of custody and Conflict Status of the CMs in our supply chain, we relied primarily on the findings of the Conflict-Free Smelter Program (“CFSP”).  The CFSP is a voluntary program in which an independent third party evaluates smelters’ and refiners’ procurement and inventory practices and determines whether the smelter or refiner (“Smelter”) has demonstrated that all the materials it processed originated from conflict-free sources.  The CFSP is overseen by the Conflict-Free Sourcing Initiative (“CFSI”), which was established by members of the Electronic Industry Citizenship Coalition (“EICC”) and the Global e-Sustainability Initiative.  TI is a member of EICC and the CFSI.  

The measures we took to exercise due diligence on the source and chain of custody of our CMs were as follows:

·

communicating our CM policy to Suppliers;

·

directing Suppliers to provide information concerning Smelters in their supply chains by completing and sending to us the Conflict Minerals Reporting Template (a tool developed by the CFSI that provides a common means for suppliers to provide their customers with information on the source of conflict minerals);

·

analyzing Suppliers’ Conflict Minerals Reporting Template responses for completeness and internal consistency and following up with Suppliers in an effort to get more information;

·

comparing the information received from Suppliers with the data made available by the CFSP concerning the country of origin and Conflict Status of CMs processed or refined by Smelters; and

·

reviewing other source materials, such as publications of the United Nations, if we were unable to determine, on the basis of the information provided by Suppliers and CFSP data, (i) the facility and country of origin of the CMs supplied to us, (ii) the Conflict Status of the CMs and (iii) whether the CMs were from recycled or scrap sources.

 


 

In 2014, we made progress in our due diligence efforts.  Our communications with Suppliers yielded more complete and specific information than in 2013 about the Smelters in our supply chain.  That information, combined with the expanded information available through the CFSP, has given us greater insight into the Conflict Status of CMs in our supply chain for 2014 as compared to the prior year.  

The number of Smelters we have identified as potentially in our supply chain in 2014 increased by approximately 30 percent.   Of the Smelters identified for 2014, we have determined that the CMs potentially supplied to us by 58 percent of the Smelters were conflict-free, as compared with 36 percent for 2013.  Another 19 percent of the Smelters identified for 2014 have committed to participate in a third-party audit of their Conflict Status.  In no instance did we find CMs in our supply chain to be from a source that, to our knowledge, was directly or indirectly financing or benefiting armed conflict in a Covered Country.

With respect to TI integrated circuits,1 which accounted for approximately 90 percent of TI revenue in 2014, we have determined that all Smelters potentially in our supply chain (1) supplied CMs exclusively from conflict-free sources or (2) have committed to participate in a third-party audit of their Conflict Status.  

Despite these efforts, we do not have complete information about the CMs in the entirety of our supply chain.  For 2014, over 40 percent of Suppliers identified Smelters in their supply chains on a company-wide, division or product-line basis, without specifying which Smelters were relevant to products they supplied to TI.  (Accordingly we refer in this Conflict Minerals Report to Smelters as being “potentially” in our supply chain and as CMs “potentially” supplied to TI.)  Industry efforts to collect and verify CM origin information remain incomplete.  Although a significant percentage of our potential Smelters have committed to participate in a third-party audit of their Conflict Status, that status is currently undeterminable because the audits are not complete.  The results of our due diligence, which are summarized in the charts below, reflect these limitations.

Smelter Status – Overview

 

 

 

 

1

“Integrated circuits” refers to finished semiconductor products that contain chips manufactured by or for TI and packaging subcomponents such as mold compound, bond wire and a lead frame.  It excludes DLP® products and semiconductor modules, which also contain other electrical components such as capacitors and resistors.

2


 

Smelter Status – By CM

 

 

The potential Smelters that processed materials of undeterminable origin are identified in the Appendix hereto.

 

On the basis of our due diligence, we found with respect to each of our products that (1) the information we had gathered had failed to clarify the country of origin and Conflict Status of at least one of the CMs contained in the product and (2) no CMs were from a source that, to our knowledge, was directly or indirectly financing or benefiting armed conflict in a Covered Country.  

Our products are in the following categories as described in our annual report on Form 10-K for the year ending December 31, 2014:  Analog products (including High Volume Analog & Logic, Power Management, High Performance Analog and Silicon Valley Analog products); Embedded Processing products (including Processor, Microcontrollers and Connectivity products); and Other products (including DLP products, custom semiconductors known as application-specific integrated circuits and calculators). For further information about our products, please see the description of our products in Item 1 of the Form 10-K, which description is incorporated herein by reference.

Our efforts to determine the mine or location of origin of the CMs consisted of the due diligence measures described above.

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Since the period covered by this Report, we have taken, or will take, the following steps to mitigate the risk that our CMs benefit armed groups in the Covered Countries, including to improve our due diligence:

·

redistribute copies of our CM 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 Covered Countries; and

·

encourage them to direct all Smelters in their supply chains to participate in the CFSP or a similar third-party audit program.

This Conflict Minerals Report and our conflict minerals policy are available on our web site at www.ti.com/conflictminerals.   We are not incorporating by reference the contents of our web site into this Conflict Minerals Report.  

 

 

 

 

 

 

 

 

 

 

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Appendix

 

Listed below are the 95 Smelters we have determined to be potentially in our supply chain for 2014 that have processed CMs of undeterminable origin. “Active” means the Smelter has committed to participate in a third-party audit of its Conflict Status.  As explained above, the presence of a Smelter on the list does not mean that TI products necessarily contained CMs processed by that Smelter.  The location information and “Active” status are as reported by the CFSP as of March 13, 2015.

 

Smelter

Conflict

Mineral

Location

Active

King-Tan Tantalum Industry Ltd.

Tantalum

CHINA

China Tin Group Co., Ltd.

Tin

CHINA

Cooper Santa

Tin

BRAZIL

CV Gita Pesona

Tin

INDONESIA

CV Nurjanah

Tin

INDONESIA

CV Serumpun Sebalai

Tin

INDONESIA

Fenix Metals

Tin

POLAND

Jiangxi Ketai Advanced Material Co., Ltd.

Tin

CHINA

O.M. Manufacturing (Thailand) Co., Ltd.

Tin

THAILAND

PT Artha Cipta Langgeng

Tin

INDONESIA

PT Belitung Industri Sejahtera

Tin

INDONESIA

PT BilliTin Makmur Lestari

Tin

INDONESIA

PT JusTindo

Tin

INDONESIA

PT Karimun Mining

Tin

INDONESIA

PT Mitra Stania Prima

Tin

INDONESIA

PT Panca Mega Persada

Tin

INDONESIA

PT Sumber Jaya Indah

Tin

INDONESIA

PT Tinindo Inter Nusa

Tin

INDONESIA

Rui Da Hung

Tin

TAIWAN

Soft Metais, Ltda.

Tin

BRAZIL

Yunnan Chengfeng Non-ferrous Metals Co., Ltd.

Tin

CHINA

CNMC (Guangxi) PGMA Co. Ltd.

Tin

CHINA

 

CV Makmur Jaya

Tin

INDONESIA

 

Feinhütte Halsbrücke GmbH

Tin

GERMANY

 

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Gejiu Kai Meng Industry and Trade LLC

Tin

CHINA

 

Gejiu Zi-Li

Tin

CHINA

 

Huichang Jinshunda Tin Co. Ltd.

Tin

CHINA

 

Linwu Xianggui Smelter Co.

Tin

CHINA

 

Metallic Resources Inc.

Tin

UNITED STATES

 

Novosibirsk Integrated Tin Works

Tin

RUSSIAN FEDERATION

 

PT Alam Lestari Kencana

Tin

INDONESIA

 

PT Babel Surya Alam Lestari

Tin

INDONESIA

 

PT Bangka Kudai Tin

Tin

INDONESIA

 

PT Bangka Timah Utama Sejahtera

Tin

INDONESIA

 

PT Fang Di MulTindo

Tin

INDONESIA

 

PT HP Metals Indonesia

Tin

INDONESIA

 

PT Koba Tin

Tin

INDONESIA

 

PT Pelat Timah Nusantara Tbk

Tin

INDONESIA

 

PT Seirama Tin Investment

Tin

INDONESIA

 

PT Tommy Utama

Tin

INDONESIA

 

PT Yinchendo Mining Industry

Tin

INDONESIA

 

A.L.M.T. Tungsten Corp.

Tungsten

JAPAN

Chenzhou Diamond Tungsten Products Co., Ltd.

Tungsten

CHINA

Chongyi Zhangyuan Tungsten Co., Ltd.

Tungsten

CHINA

Dayu Weiliang Tungsten Co., Ltd.

Tungsten

CHINA

Fujian Jinxin Tungsten Co., Ltd.

Tungsten

CHINA

Ganzhou Non-ferrous Metals Smelting Co., Ltd.

Tungsten

CHINA

Guangdong Xianglu Tungsten Co., Ltd.

Tungsten

CHINA

H.C. Starck GmbH

Tungsten

GERMANY

H.C. Starck Smelting GmbH & Co. KG

Tungsten

GERMANY

Hunan Chenzhou Mining Group Co., Ltd.

Tungsten

CHINA

Jiangxi Xinsheng Tungsten Industry Co., Ltd.

Tungsten

CHINA

Kennametal Fallon

Tungsten

UNITED STATES

6


 

Kennametal Huntsville

Tungsten

UNITED STATES

Wolfram Bergbau und Hütten AG

Tungsten

AUSTRIA

Xinhai Rendan Shaoguan Tungsten Co., Ltd.

Tungsten

CHINA

Jiangxi Minmetals Gao'an Non-ferrous Metals Co., Ltd.

Tungsten

CHINA

 

Jiangxi Richsea New Materials Co., Ltd.

Tungsten

CHINA

 

Tejing (Vietnam) Tungsten Co., Ltd.

Tungsten

VIETNAM

 

Wolfram Company CJSC

Tungsten

RUSSIAN FEDERATION

 

Aida Chemical Industries Co. Ltd.

Gold

JAPAN

Asaka Riken Co. Ltd.

Gold

JAPAN

Cendres + Métaux SA

Gold

SWITZERLAND

Sabin Metal Corp.

Gold

UNITED STATES

SOE Shyolkovsky Factory of Secondary Precious Metals

Gold

RUSSIAN FEDERATION

Yamamoto Precious Metal Co., Ltd.

Gold

JAPAN

Yokohama Metal Co. Ltd.

Gold

JAPAN

Almalyk Mining and Metallurgical Complex (AMMC)

Gold

UZBEKISTAN

 

Bangko Sentral ng Pilipinas (Central Bank of the Philippines)

Gold

PHILIPPINES

 

Caridad

Gold

MEXICO

 

Chugai Mining

Gold

JAPAN

 

Daejin Indus. Co. Ltd.

Gold

KOREA, REPUBLIC OF

 

Do Sung Corporation

Gold

KOREA, REPUBLIC OF

 

Doduco

Gold

GERMANY

 

Faggi Enrico Spa

Gold

ITALY

 

FSE Novosibirsk Refinery

Gold

RUSSIAN FEDERATION

 

Guangdong Jinding Gold Limited

Gold

CHINA

 

Hwasung CJ Co. Ltd.

Gold

KOREA, REPUBLIC OF

 

Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited

Gold

CHINA

 

Jiangxi Copper Company Limited

Gold

CHINA

 

JSC Uralelectromed

Gold

RUSSIAN FEDERATION

 

7


 

Korea Metal Co. Ltd.

Gold

KOREA, REPUBLIC OF

 

Kyrgyzaltyn JSC

Gold

KYRGYZSTAN

 

Lingbao Jinyuan Tonghui Refinery Co. Ltd.

Gold

CHINA

 

Moscow Special Alloys Processing Plant

Gold

RUSSIAN FEDERATION

 

Navoi Mining and Metallurgical Combinat

Gold

UZBEKISTAN

 

OJSC Kolyma Refinery

Gold

RUSSIAN FEDERATION

 

Prioksky Plant of Non-Ferrous Metals

Gold

RUSSIAN FEDERATION

 

Samwon Metals Corp.

Gold

KOREA, REPUBLIC OF

 

So Accurate Group, Inc.

Gold

UNITED STATES

 

The Great Wall Gold and Silver Refinery of China

Gold

CHINA

 

Tongling Nonferrous Metals Group Co., Ltd.

Gold

CHINA

 

Torecom

Gold

KOREA, REPUBLIC OF

 

Zhongyuan Gold Smelter of Zhongjin Gold Corporation

Gold

CHINA

 

Zijin Mining Group Co. Ltd.

Gold

CHINA

 

 

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