Exhibit 1.02
LAM RESEARCH CORPORATION
CONFLICT MINERALS REPORT
For the reporting period from January 1, 2013 through December 31, 2013
This Conflict Minerals Report (this “Report”) of Lam Research Corporation (including its consolidated subsidiaries, the “Company,” the “Registrant,” “we,” “us” or “our”) has been prepared pursuant to Rule 13p-1 and Form SD promulgated under the Securities Exchange Act of 1934 for the reporting period January 1, 2013 through December 31, 2013 (the “Reporting Period”).
Rule 13p-1, through Form SD, requires the disclosure of certain information if a company manufactures or contracts to manufacture products for which certain “Conflict Minerals” (as defined below) are necessary to the functionality or production of such products. Form SD defines “Conflict Minerals” as: (i)(a) columbite-tantalite (or coltan), (b) cassiterite, (c) gold and (d) wolframite, or their derivatives, which are currently limited to tantalum, tin and tungsten; or (ii) any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”). The Registrant’s operations, including the operations of its consolidated subsidiaries, may at times manufacture, or contract to manufacture, products for which Conflict Minerals are necessary to the functionality or production of those products (collectively, its “products” and, individually, a “product”). As required by Form SD, the Registrant has conducted a good faith reasonable country of origin inquiry regarding the Conflict Minerals included in its products during the Reporting Period, which are referred to in this Form SD as the “Covered Minerals,” to determine whether any of such Covered Minerals originated in the Covered Countries and/or whether any of such Covered Minerals may be from recycled or scrap sources. Where applicable, the Registrant has conducted additional due diligence regarding the sources of the Covered Minerals. The results of the Registrant’s reasonable country of origin inquiry regarding the Covered Minerals, as well as its additional due diligence regarding the sources of the Covered Minerals, are contained in this Report.
I. | Reasonable Country of Origin Inquiry (“RCOI”) |
A. | Leading up to and during the Reporting Period, the Registrant took the following measures, based on the Organization for Economic Cooperation and Development’s (“OECD”) due diligence framework, including resources provided by the Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative (together, the “EICC-GeSI”), such as the EICC-GeSI Reporting Template, to determine the source and chain of custody for the Covered Minerals. |
1. | The Registrant sent out a letter during 2011 to its direct-spend suppliers setting forth its expectation that such suppliers cooperate with a variety of compliance matters, including the conflict mineral rules proposed by the U.S. Securities and Exchange Commission (the “SEC”). |
1
2. | The Registrant sent out a letter during 2012 to its direct-spend suppliers, notifying such suppliers of the effectiveness of the SEC’s rules regarding Conflict Minerals for calendar year 2013 and thereafter, educating them about the requirements associated therewith and requesting the appropriate contact information for the relevant representatives with whom to correspond on the subject. |
3. | The Registrant sent out a letter in late 2012/early 2013 to its direct-spend suppliers which the Registrant believed could provide materials containing Covered Minerals (collectively, the “Covered Suppliers”) requesting them to: (a) determine whether they supplied the Registrant with Covered Minerals; (b) using resources provided by the EICC-GeSI, identify smelters in their supply chain that supply Covered Minerals; and (c) download, complete and return the EICC-GeSI Reporting Template to the Registrant. |
4. | The Registrant subsequently: (a) filed and logged received responses; (b) followed up with Covered Suppliers that provided incomplete information, conflicting information or a response requiring clarification; and (c) continued to engage Covered Suppliers that did not respond to the Registrant’s requests for information through various channels of communication. |
B. | After taking the measures described in A. above, the Registrant was unable to determine whether the products it manufactures or contracts to be manufactured contain Covered Minerals from the Covered Countries. |
II. | Due Diligence and Risk Mitigation |
The Registrant’s due diligence process, which significantly overlaps the Registrant’s RCOI process described above, is based on the OECD Guidelines. In addition to the RCOI, the Registrant has done the following since the start of 2013 to determine the mine or location of origin for the Covered Minerals included in its products:
1. | Establish Company Management Systems |
a. | Educate Affected Stakeholders on the Regulation |
The Registrant set up trainings regarding conflict minerals regulation and the impact thereof on the Company for the following groups of individuals: (i) supply chain business managers; (ii) representatives of the customer account teams; (iii) directors of the environmental health and safety group; (iv) senior management of the supplier engineering team; and (v) senior management of the supply chain group. The Registrant also provided reports and briefings on the requirements and implications to members of senior management.
2
b. | Establish Appropriate Corporate Organizational Structure |
The Registrant evaluated and confirmed that its current organizational structure was adequate to handle any matters associated with the conflict minerals legislation. This includes processes for handling requests for information, escalations to management regarding any issues or problems, surveying of suppliers and documentation of any responses and red flags associated therewith.
The Registrant also created an inter-disciplinary working team to help address any questions associated with the legislation, reasonable country of origin inquiry and/or due diligence process. This team was comprised of members of the legal department, finance, supply chain, engineering, customer account team and environmental health and safety.
c. | Develop and Adopt Conflict Mineral Policy |
The Registrant has implemented a Conflict Minerals Policy Statement reflecting that it takes its corporate responsibility seriously and that it is the Registrant’s goal to use only tantalum, tin, tungsten and gold in its products that are sourced responsibly. A copy of the Policy is publicly available athttp://www.lamresearch.com/company/corporate-social-responsibility/supply-chain. The content on any web site referred to in this Report is not incorporated by reference into this Report unless expressly noted.
d. | Internal Process Improvements Associated with Covered Minerals |
The Registrant is currently evaluating the various process improvements that are available to it at different points in the supply chain life cycle to enhance the transparency of Covered Mineral usage and disclosure.
i. | Revised Purchase Order Terms and Conditions |
For example, the Registrant has included a standard provision in the Terms and Conditions of its Purchase Orders providing that the supplier will promptly provide accurate, complete and timely information and documentation to assist the Registrant as it may request to comply with Rule 13p-1 and Form SD, including disclosing whether any of its deliverables contain Covered Minerals and if so to provide such information as the Registrant may request to allow the Registrant to determine whether such Covered Minerals are DRC conflict free (as such term is defined in Form SD).
2. | Identify and Assess Risks in the Supply Chain |
The Registrant’s methods for identifying and assessing risks in the supply chain are set forth above in the Reasonable Country of Origin Inquiry.
3
3. | Design and Implement Strategy to Respond to Risks |
a. | Devise Risk Management Plan |
The Registrant has prepared a risk management plan to respond to situations involving Covered Minerals sourced from the Covered Countries, which includes understanding the products impacted by any supplied materials containing Covered Minerals, the extent of the Registrant’s reliance on such materials and working with the Registrant’s suppliers to ensure that any Covered Minerals are sourced responsibly wherever possible.
b. | Reporting of Conflict Minerals Surveying Results to Management |
The Registrant has apprised members of senior management of the status and results of the inquiry and due diligence process to allow for any appropriate feedback and guidance.
c. | Continued Supplier Engagement |
The Registrant continues to work with its Suppliers to educate them about Conflict Minerals and to encourage responsible sourcing and usage of independently certified conflict-free smelters and refiners.
4. | Independent Third-Party Audit of Smelter’s / Refiner’s Due Diligence Practices |
Where possible, the Registrant has relied on third party assurances and certifications. For example, the Registrant accepts as reliable any smelter that is a member of the EICC-GeSI Conflict Free Smelter program. To the extent that other audited supplier certifications are provided to the Registrant, the Registrant may consider reliance on a case-by-case basis.
5. | Report Annually on Supply Chain Due Diligence |
This Report is publicly available athttp://investor.lamresearch.com/sec.cfm and meets the OECD recommendation to report annually on supply chain due diligence.
III. | Product Description |
The following products are within the scope of Rule 13p-1 and Form SD.
1. | Etch Products |
A series of wafer fabrication products that selectively remove materials from the wafer to create features and patterns of a device and to remove the photoresist mask:
a. | 2300® Kiyo® product family |
b. | 2300® Versys® Metal product family |
c. | 2300® Flex™ product family |
d. | 2300 Syndion® product family |
e. | G400®, GxT®, G3D® |
f. | TCP® 9400DSiE product family |
4
2. | Deposition Products |
A series of high-productivity thin film deposition systems that form a device’s sub-microscopic layers of conducting (metal) or insulating (dielectric) materials:
a. | SABRE® product family |
b. | ALTUS® product family |
c. | VECTOR® product family |
d. | SPEED® product family |
e. | SOLA® product family |
3. | Clean Products |
A series of single-wafer wet and plasma-based wafer cleaning products that remove particles and residues from the wafer surface before and after adjacent processes:
a. | DV-Prime® |
b. | Da Vinci® |
c. | SP Series |
d. | 2300® Coronus® |
4. | Legacy Products |
Multiple series of refurbished and newly built previous-generation products from Lam, as the original equipment manufacturer (“OEM”), for applications that do not require the most advanced wafer processing capability.
IV. | Smelter / Refiner and Country of Origin |
Based solely on information that was provided by the Covered Suppliers (as described above), some of which was on an entity level without specification as to application with respect to the specific Covered Minerals the Registrant purchased, and without independent verification, the Registrant believes that the facilities that were used to process the Covered Minerals included the EICC-GeSI and/or Conflict Free Smelter Initiative recognized smelters and/or refiners listed below:
Smelter / Refiner Facility Names
Allgemeine Gold- und Silberscheideanstalt A.G. Allied Material (A.L.M.T) Corp Almalyk Mining and Metallurgical Complex (AMMC) AngloGold Ashanti Mineração Ltda Argor-Heraeus SA Asahi Pretec Corp | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. ATI Metalworking Products Aurubis AG Bangko Sentral ng Pilipinas (Central Bank of the Philippines) Boliden AB Caridad Cendres & Métaux SA Chaozhou Xianglu Tungsten Industry Co Ltd | Chimet SpA China Minmetals Corp. Chongyi Zhangyuan Tungsten Co Ltd Chugai Mining Co., LTD Codelco Cookson CV DS Jaya Abadi CV Duta Putra Bangka CV JusTindo |
5
CV Makmur Jaya CV Nurjanah CV Prima Timah Utama CV United Smelting CV. Serumpun Sebalai Dowa Eco-System Recycling Co., LTD. EM Vinto Exotech F&X FSE Novosibirsk Refinery Fujian Jinxin Tungsten Co., LTD Gannon & Scott Ganzhou Grand Sea W & Mo Group Co Ltd Ganzhou Huaxing Tungsten Co. Ltd. Ganzhou Nonferrous Metals Smelting Co Ltd. Gejiu Non-Ferrous Metal Processing Co. Ltd. Gejiu Zi-Li Metallurgy Co., Ltd. Global Advanced Metals Global Tungsten & Powders Corp Gold Bell Group Guangxi Pinggui PGMA Co. Ltd. H.C. Starck GmbH HC Starck GmbH Heimerle + Meule GmbH Heraeus Ltd Hong Kong Heraeus Precious Metals GmbH & Co. KG Hi-Temp Hunan Chun-chang Non-ferrous Smelting & Concentrating Co., Ltd. Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited Ishifuku Metal Industry Co., Ltd. Istanbul Gold Refinery Japan Mint Jiangxi Copper Company Limited Jiangxi Nanshan Jiangxi Rare Earth Metals Tungsten Group Corp Jiangxi Tungsten Industry Group Co Ltd | Jiujiang Jinxin Nonferous Metals Co., Ltd Johnson Matthey JSC Ekaterinburg Non-Ferrous Metal Processing Plant JSC Uralectromed JX Nippon Mining & Metals Co., Ltd Kazzinc Ltd Kemet Blue Powder Kojima Chemicals Co.,Ltd Kyrgyzaltyn JSC L’ azurde Company For Jewelry LBMA Liuzhou China Tin LS-Nikko Copper Inc Malaysia Smelting Corp Materion Advanced Metals Matsuda Sangyo Co. Ltd Metallo Chimique Metalor Technologies (Hong Kong) Ltd Metalor Technologies SA Metalor USA Refining Corporation Met-Mex Peñoles, S.A. Mineração Taboca S.A. Minsur Moscow Special Alloys Processing Plant Nadir Metal Rafineri San. Ve Tic. A.Ş. Navoi Mining and Metallurgical Combinat Ningxia Orient Tantalum Industry Co., Ltd. Niotan Ohio Precious Metals OJSC Kolyma Refinery OMSA PAMP SA Plansee Prioksky Plant of Non-Ferrous Metals PT Alam Lestari Kencana PT Aneka Tambang (Persero) Tbk PT Artha Cipta Langgeng PT Babel Inti Perkasa PT Babel Surya Alam Lestari PT Bangka Kudai Tin PT Bangka Putra Karya PT Bangka Timah Utama Sejahtera | PT Belitung Industri Sejahtera PT BilliTin Makmur Lestari PT Bukit Timah PT Eunindo Usaha Mandiri PT Fang Di MulTindo PT HP Metals Indonesia PT Koba Tin PT Mitra Stania Prima PT Putra Karya PT Refined Banka Tin PT Sariwiguna Binasentosa PT Stanindo Inti Perkasa PT Sumber Jaya Indah PT Tambang Timah PT Timah Nusantara PT Tinindo Inter Nusa PT Yinchendo Mining Industry PX Précinox SA Rand Refinery (Pty) Ltd RFH Royal Canadian Mint Schone Edelmetaal SEMPSA Joyeria Plateria SA Shandong Zhaojin Gold & Silver Refinery Co., Ltd Sichuan Metals & Materials Imp & Exp Co SOE Shyolkovsky Factory of Secondary Precious Metals Solar Applied Materials Technology Corp. Solikamsk Metal Works Sumitomo Metal Mining Co., Ltd. Telex Thaisarco The Great Wall Gold and Silver Refinery of China The Refinery of Shandong Gold Mining Co., Ltd Tokuriki Honten Co., Ltd Toyo Smelter & Refinery of Sumitomo Metal Mining Co., Ltd Ulba Umicore Brasil Ltda Umicore SA Business Unit Precious Metals Refining Valcambi SA Western Australian Mint trading as The Perth Mint Wolfram Bergbau und Hütten AG Wolfram Company CJSC |
6
Xiamen Tungsten (H.C.) Co., Ltd.
Xstrata Canada Corporation
Yunnan Chengfeng Non-Ferrous Metals Co., LTD
Yunnan Tin Company Limited
Zijin Mining Group Co. Ltd
7
As the Registrant’s engagement with the supply chain for its products evolves and matures, this list may change to reflect improvements in the quality of information provided to the Registrant. The remaining facilities are not currently known by the Registrant as being recognized smelters and/or refiners.
Based solely on information that was provided by the Covered Suppliers (as described above), some of which was on an entity level without specification as to application with respect to the specific Covered Minerals the Registrant purchased, and without independent verification, the Registrant believes that the countries of origin of the Covered Minerals for the above listed facilities include:
Australia Austria Belgium Bolivia Brazil Canada Chile China Germany Hong Kong Indonesia | Italy Japan Kazakhstan Republic of Korea Republic of Kyrgyzstan Malaysia Mexico Netherlands Peru Philippines Poland | Russian Federation Saudi Arabia South Africa Spain Sweden Switzerland Taiwan Thailand Turkey United States Uzbekistan |
As the Registrant’s engagement with the supply chain for its products evolves and matures, this list may change to reflect improvements in the quality of information provided to the Registrant. The remaining countries of origin are not currently known by the Registrant.
8