SUSTAINABILITY REPORT - KNS · 2016 Sustainability Report ... Business Continuity Management (BCM)...

2016SUSTAINABILITY REPORT

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2016 Sustainability Report

Kulicke & Soffa

Contents

Sustainabil ity Governance

About Kulicke & Soffa (K&S) Corporate Policies Integrated Management Systems (IMS) Business Continuity Management (BCM) Engaging our Stakeholders

01

Caring for the Environment Environmental Aspects Management

Green Products Resources Conservation Waste Management

02

Labor and Human Rights

Code of Business Conduct & Ethics Occupational Health & Safety (OHS) Workforce Diversity Employee Engagement Conflict Minerals Program

03

Giving back to Community

Environmental and Social Activities

04 In Summary

Commitment to Sustainability Sustainability Performance and Goals

05

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Kulicke & Soffa

Sustainability Governance

Kulicke & Soffa is a Global Technology & Market Leader in Semiconductor Assembly Equipment.

Founded in the US in 1951 and incorporated in 1956

Publicly traded since 1971 on NASDAQ: KLIC

Strong presence in Asia with over 80% sales in Asia

Headquartered in Singapore since 2010

Over 2500 employees worldwide

About Kulicke & Soffa

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Kulicke & Soffa

Products Market Share Ranking

Ball Bonders #1

Wedge Bonders* #1

Wafer Level Bonders #1

Capillaries #2

Dicing Blades #2

*Heavy Wire Source: Gartner, VLSI & K&S internal data

Global Presence

Leadership Positions

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Kulicke & Soffa

Management Team Professional and Passionate People

F u s e n C h e n

President & CEO

J o n a t h a n C h o u

CFO (Finance, IT & Facilities)

L e s t e r W o n g

Legal Affairs & General Counsel

Y i h - N e n g L e e

Global Sales & Services

I r e n e L e e

Global Operations & Chief Quality Officer

D e e p a k S o o d

Global Engineering

N e l s o n W o n g

Ball Bonder Business Line & Strategic Solutions Development

S h u b n e e s h B a t r a

Advance Packaging Business Line

C h a n P i n g C h o n g

AP-Hybrid, Electronics Assy, Wedge Bonder, Capillaries & Blades Business Line

C h e a m T . L .

Corporate Strategy

L i s a L i m

Global Human

Resources

J o yc e L i m

Global Supply Chain

& Customer Operations

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Kulicke & Soffa

Vision & Core Values Vision The Leading Smart Manufacturing Solutions Provider Delivering Exceptional Value to our Customers ONE K&S Core Values

Delight Our Customers

People Matter

Learn, Grow, Excel

Innovate for Success

Make a Difference

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Kulicke & Soffa

Our Products - Equipment

Asterion PowerFusion HL, TL, HLx

Wedge Bonders

Asterion i-Multi

Asterion EV

Software

& Service

iX iFlex

Electronics Assembly

IConn PLUS ConnX PLUS IConn ProCu PLUS

IConn MEM PLUS

Ball Bonders

ConnX-LED PLUS

ATPremier PLUS

Advanced

Packaging

APAMA C2S Hybrid APAMA C2W

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Kulicke & Soffa

Our Products - Consumables

Dicing Blades

Blades for Wafer Dicing

Blades for Package

Singulation

Wedge Tools Wedge Tools Ribbon Tools

Capillaries

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Kulicke & Soffa

Corporate Policies Meeting Customer Expectations & Promoting the EHS

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Kulicke & Soffa

Corporate Policies Sustainability Commitment & Responsible Sourcing

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Kulicke & Soffa

The Netherlands site is certified to ISO 9001 and ISO 14001 by DEKRA. We plan to certify it under K&S Corporate Certification by TUV Rheinland from year 2018.

Integrated Management System .

K&S is certified to the integrated Quality, Environmental and Occupational Health & Safety (QEHS) Management System (MS) enabling the achievement of harmonized objectives worldwide .

TUV Rheinland Certificates

http://www.kns.com/en-us/Pages/Quality.aspx

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Kulicke & Soffa

Business Continuity

K&S’ BCM provides a framework for building organizational resilience with the capability for an effective response that safeguards the interests of K&S’ key stakeholders, reputation, brand and value-creating activities.

Designed to facilitate the resumption of our business operations arising from a disaster scenario which impacts the business operations through the activation of the Business Continuity Plans (BCP) unique to each K&S location.

Disaster scenarios accessed for BCP mitigation:

• Denial of access or loss of key Facilities • Prolonged unavailability of computing services, voice or data

communications • Labour shortages, epidemics or pandemics • Unavailability of key internal or external suppliers

The BCP is maintained regularly by reviewing existing processes, conducting BCP exercises and continually improving the processes.

Business Continuity Management

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Engaging our Stakeholders .

K&S plans to improve engagement through proactive Materiality Assessment.

Stakeholders

Communication Channels

All hands meeting, email, intranet, notice board, training, employee suggestions, and employee survey

Key Concerns

Employees

Customer service department, customer Portal, focus team, customer satisfaction survey, emails

Cust omer s

Surveys, on site audits, training and awareness programs, emails, quarterly business review

Suppl ier s

Annual reports, shareholders’ meeting, release of information in company website

Shar eholder s

Industry and technology conference and involvement in the policy making process for key initiatives

G over nment

Corporate internet, publicity conference, forums, volunteer and public relations initiatives

NG Os/NPOs

Participate in industry, technlogy and standards meetings, involve in the policy for key initiatives

Indust r ies & Assoc iat ions

• Benefits and training • Health and safety

• Human rights

• Supply chain management • Operational management • Sustainable business

• • Supply chain management • Operational risks

• Corporate Governance • Financial Results

• Green products • Environmental protection • Sustainable business

• Community Involvement • Environmental protection

• Carbon emission • Resources management

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Kulicke & Soffa

Environmental Aspects .

K&S assesses the Environment Aspects and Impacts of our activities, products or services which can interact with the environment .

K&S has processes in place to:

• Ident i fy environmental aspects of our act iv i t ies , products and serv ices .

• Evaluate s ignif icance to environmental impacts based on the aspects identi f ied .

• Set object ives and targets to manage and improve the s ignif icant envi ronmental impacts .

Environmental Aspects are rev iewed periodical ly or when there are new, or changes in materials , product s , processes , leg is lat ions and/or s i te faci l i ty moves.

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Green Products

K&S understands that the reduction on the use of hazardous materials is an important worldwide concern and we are actively evaluating our product content against the EU RoHS, WEEE and REACH banned substances with the intent of achieving compliance in the future.

Restriction of Hazardous Substances (RoHS)* is the European Union (EU) Directive 2011/65/EU governing the export of electronics & electrical products containing hazardous substances that are harmful to the environment and health.

K&S aims to use only materials that are RoHS compliant in the design and launch of our next generation equipment

* K&S Equipment is RoHS exempted being classified as LSIT (Large Scale Stationary Industrial Tools)

2016 Status: Identified about 2% of non-RoHS items in K&S baseline products and ongoing actions to replace with alternative RoHS items in new products

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Kulicke & Soffa

Paper Goal: Reduce paper usage by 3% per year

* Data normalized by Net Revenue

2015 2016

36.1 MWh*

30.7 MWh*

2015 2016

45.0 Kg* 38.4 Kg*

Energy Goal: Reduce electricity consumption by 2% per year

Resource Conservation

2 0 1 6 i n i t i a t i v e s • E n e r g y E f f i c i e n c y C o m m i t t e e • O p t i m i z e E q u i p m e n t e n e r g y u s a g e • R e d u c e f a c t o r y e l e c t r i c i t y u s e

2 0 1 7 p l a n • O p t i m i z e a i r c o m p r e s s o r

e f f i c i e n c y • E x p l o r e e n e r g y s a v i n g l i g h t i n g

a n d t e c h n o l o g y

2 0 1 6 i n i t i a t i v e s • P a p e r R e d u c t i o n C o m m i t t e e • C o m m u n i c a t e a w a r e n e s s • M o n i t o r p a p e r u s e b y d e p a r t m e n t • I m p l e m e n t e d p a p e r l e s s p r o c e s s e s

2 0 1 7 p l a n • P a p e r l e s s m a n u f a c t u r i n g • R e d u c e o f f i c e p r i n t e r s a n d

i m p r o v e p r i n t e r u s a g e r e p o r t i n g f o r c o n t r o l

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Kulicke & Soffa

2015 2016

43 % 35 %

Waste Recycling Goal: Achieve waste recycling above 40%

Waste Management

2 0 1 6 i n i t i a t i v e s • W a s t e R e c y c l i n g C o m m i t t e e • I m p l e m e n t e d r e c y c l i n g b i n s a t a l l a r e a s • C o m m u n i c a t e p r o p e r r e c y c l i n g w a s t e s e g r e g a t i o n

2 0 1 7 p l a n • M o n i t o r a n d i m p r o v e w a s t e r e c y c l i n g • P r o c e s s o p t i m i z a t i o n t o r e d u c e / r e c y c l e w a s t e q u a n t i t y • E n c o u r a g e e m p l o y e e i n v o l v e m e n t

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Kulicke & Soffa

SIMTech – Singapore Institute of Manufacturing Technology PE – Precision Engineering WSQ – Workforce Skills Qualifications

K&S in the media K&S featured in SIMTech Newsletter Jan’15

“Kulicke & Soffa has embarked on a

sustainability journey by participating

in PE WSQ Carbon Management

Programme conducted by SIMTech.

Through this programme, Kulicke &

Soffa has identified hotspots for

improvement, and could potentially

achieve 20% of carbon footprint

reduction”.

Awarded SIMTech Best Industry

Partner 2015 in active collaboration

on sustainability initiatives

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Kulicke & Soffa

Code of Business Conduct & Ethics .

K&S Code of Business Conduct provides a general ethical and legal framework for business practices and conduct which all employees, officers and directors must adhere to.

All K&S employees are expected to use their common sense, act prudently and with clarity of intention and seek to avoid even the appearance of improper behaviour in their daily interactions with colleagues and K&S’s customers, suppliers, and other business associates.

K&S will not tolerate or permit retaliation of any kind for good faith reports of ethical violations.

Employee Code of Business Conduct

K&S expects our Suppliers to endorse and adhere to the Supplier Code of Business Conduct and Ethics and we encourage their sub-tiers to do likewise.

The Code seeks to ensure our suppliers offer safe working conditions, treat workers with respect & dignity and the business operations are environmentally responsible.

The Code highlights areas of ethical risks, sets out guidance in recognizing & dealing with ethical issues and establishes a mechanism to report unethical conduct.

Supplier Code of Business Conduct & Ethics

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Kulicke & Soffa

Occupational Health & Safety

K&S top priority is to create and maintain a safe

and healthy work environment

We recognize that a workplace free of potential Occupational Health & Safety (OHS) hazards is essential in enhancing the quality of our products and services.

A Safety Committee is formed in each of K&S facilities to oversee the workplace safety and health of our employees. The committee regularly reviews the safety training and audit results, hazard risks, legal compliance, emergency preparedness and safety performance for improvements.

Workplace Safety & Health Committee

For 2 years since 2015, the annual CEO OHS Challenge was launched by our Executive Leadership Team (ELT) to encourage the best OHS performance across all sites. Based on the sites’ annual OHS results, the ELT will endorse and award the winning site with a recognition plaque and the site gets to display the challenge trophy for a year.

CEO OHS Challenge

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Kulicke & Soffa

AFR = (Total accidents / Total employee work hours) x 1 million ASR = (Total man-days lost / Total employee work hours) x 1 million

2015 2016

1.65 1.40

2015 2016

7.08 11.7

Accident Frequency Rate (AFR)

Goal: Achieve AFR below 2

Occupational Health & Safety

Accident Severity Rate (ASR)

Goal: Achieve ASR below 10

Accident is a non-fatal injury or illness that causes

time loss from work beyond a day or shift.

• 2 0 1 6 s a w a n i n c r e a s e i n m a n - d a y s l o s t f r o m i n j u r i e s c a u s e d b y f a l l s a n d c u t s .

• I n v e s t i g a t i o n r e s u l t s w i t h c o r r e c t i v e a c t i o n s w e r e p r o m p t l y c o m m u n i c a t e d t o a l l e m p l o y e e s .

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Kulicke & Soffa

Women in Global Workforce

Goal: Maintain above 35%

2015 2016

35.6 % 36.2 %

Workforce Diversity

Employees by Region

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Kulicke & Soffa

2015 2016

71.0 % 77.6 %

“Voice of K&S” employee engagement survey

K&S employees’ opinions and input relating to working at K&S are important to build a workplace where people will Learn, Grow and Excel.

We believe that an environment with creative projects and opportunities is fundamental to our long term success.

The “Voice of K&S” employee engagement survey is conducted periodically to gather feedback from K&S worldwide employees.

Every employee voice matters. In 2016, 95% of K&S employees worldwide participated in the survey, exceeding the average rate of 85%. This is also an improved 4% from the survey conducted in 2015.

The results of the survey are communicated to all employees and all managers focused efforts to improve across a wide array of dimensions especially in areas of key concerns.

Employee Engagement

Employee Engagement score

Goal: Achieve above 80%

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Kulicke & Soffa

Conflict Minerals

K&S supports the SEC Conflict Minerals rule in preventing armed groups from benefitting from the illegal sourcing of 3TG in the DRC region

Our process is aligned with OECD Due Diligence Guidelines:

Since Reporting Year 2013, K&S has filed Conflict Minerals Report to SEC annually

Conflict Minerals Report

3 T G – T i n , T u n g s t e n , T a n t a l u m a n d G o l d D R C – D e m o c r a t i c R e p u b l i c o f C o n g o O E C D – O r g a n i z a t i o n f o r E c o n o m i c C o - o p e r a t i o n & D e v e l o p m e n t R C O I – R e a s o n a b l e C o u n t r y o f O r i g i n I n q u i r y C M R T – C o n f l i c t M i n e r a l s R e p o r t i n g T e m p l a t e I P S A – I n d e p e n d e n t P r i v a t e S e c t o r A u d i t C F S P – C o n f l i c t F r e e S m e l t e r P r o g r a m

http://investor.kns.com/secfiling.cfm?filingID=56978-16-178&CIK=56978

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Kulicke & Soffa

Employee Sustainability Actions

Singapore East Coast Beach Cleaning – collected 75kg of trash in 1.5hours

Giving back to the Community .

Festive Bazaar – profit from employee sales were donated to Club Rainbow

Visit to KWSH – employees and families performed and interacted with hospital residents for 4hours

EHS Campaign Week – Employees donated large amount of usable items to MINDS

C l u b R a i n b o w ( S i n g a p o r e ) i s a n o n - p r o f i t o r g a n i s a t i o n w i t h a m i s s i o n t o s u p p o r t a n d e m p o w e r c h i l d r e n w i t h c h r o n i c i l l n e s s e s & t h e i r f a m i l i e s .

K W S H ( K w o n g W a i S h i u H o s p i t a l ) i s a c h a r i t a b l e o r g a n i z a t i o n p r o v i d i n g h e a l t h c a r e t o t h e n e e d y a n d l o w e r - i n c o m e f a m i l i e s i n S i n g a p o r e .

M I N D S ( M o v e m e n t f o r t h e I n t e l l e c t u a l l y D i s a b l e d o f S i n g a p o r e ) i s a v o l u n t a r y w e l f a r e o r g a n i s a t i o n t h a t p r o v i d e s s e r v i c e s f o r t h e i n t e l l e c t u a l l y d i s a b l e d .

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Kulicke & Soffa


Ronald McDonald House – Employees cooked breakfast for sick children at St. Christopher’s Children’s Hospital


Adopt-A-Family for the Holiday – Fulfilled wishes of 5 families and 30 individuals with USD$1,000 donations and more than 100 gifts

Blood donation – Employees donated blood drive, each pint of blood will save up to 3 lives

Spark of Love – employees donated toys in December

Foster Care Donation – Employees donated clothes, toys, schooling supplies to the children

F o s t e r c a r e i s a s y s t e m i n w h i c h a m i n o r h a s b e e n p l a c e d i n t o a w a r d , g r o u p h o m e , o r p r i v a t e h o m e o f a s t a t e - c e r t i f i e d c a r e g i v e r

R o n a l d M c D o n a l d H o u s e C h a r i t i e s ( R M H C ) i s a n o n - p r o f i t o r g a n i z a t i o n w h o s e m i s s i o n i s t o c r e a t e , f i n d , a n d s u p p o r t p r o g r a m s t h a t d i r e c t l y i m p r o v e t h e h e a l t h a n d w e l l b e i n g o f c h i l d r e n

S p a r k o f L o v e a n n u a l c a m p a i g n c o l l e c t s n e w , u n w r a p p e d t o y s a n d s p o r t s e q u i p m e n t f o r u n d e r s e r v e d c h i l d r e n a n d t e e n s i n S o u t h e r n C a l i f o r n i a

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Books Donations – from employees to Yunnan province school in the mountain


Donation Drive – Sent groceries packages to needy families during Passover

Winter Clothing Donations – from employees to poor families in Tibet

Leket Israel – employees harvest vegetables from a farm, filing 4 large containers and donated to needy families

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Kulicke & Soffa

ENVIRONMENT

HEALTH

& SAFETY

LABOR

ETHICS

MANAGEMENT

SYSTEM

Towards EICC Code of Conduct

• Permits & Reporting • Pollution Prevention & Resource Reduction • Hazardous Substances • Wastewater & Solid waste • Air Emissions • Materials Restrictions • Storm Water Management

• Energy Consumption & Greenhouse Gas Emissions

Protec t the Env i ronment

• Occupational Safety • Emergency Preparedness • Occupational Injury & Illness • Industrial Hygiene • Physically Demanding Work • Machine Safeguarding • Sanitation, Food & Housing

• Health & Safety Communication

Evaluate & Contro l exposure to Hazards

• Freely Chosen Employment • Young Workers • Working Hours • Wages and Benefits • Humane Treatment • Non-Discrimination

• Freedom of Association

Treat Employees wi th Dign i ty & Respect

• Business Integrity • No Improper Advantage • Disclosure of Information • Intellectual Property • Fair Competition • Protection of Identity & Non-Retaliation • Responsible Sourcing of Minerals

• Privacy

Uphold the h ighest Standards

• Company Commitment, Management Responsibility • Legal & Customer Requirements • Risk Assessment & Management • Improvement Objectives • Training, Communication, Worker Participation • Audits & Assessments, Corrective Action Process • Documentation & Records • Supplier Responsibility

Management System to dr i ve Susta inabi l i ty

IMS CSR

ISO 14001

COC, CM

OHSAS 18001

COC, CM

K&S In i t ia t ives

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Kulicke & Soffa

Sustainability Results & Goals

Key Sustainability indicators of K&S global facilities

K&S is committed to sustainable growth over time

© 2017 Kulicke & So�a Industries, Inc.The K&S logo, and Kulicke & So�a are trademarks of Kulicke & So�a Industries, Inc.

Kulicke & So�a Global Corporate Headquarters23A Serangoon North Avenue 5, K&S Corporate Headquarters

Singapore 554369

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