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SD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM SD

Specialized Disclosure Report

 

 

SILICON MOTION TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands   000-51380   N/A

(State or other jurisdiction of

incorporation or organization)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

8F-1, No.36, Taiyuan St., Jhubei City, Hsinchu County 302; Taiwan
(Address of principal executive offices)   (Zip code)

 

Riyadh Lai   +886 3 552 6888

(Name and telephone number, including area code, of the

person to contact in connection with this report.)

 

 

Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

 

x Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2014.

 

 

 

Section 1 – Conflict Minerals Disclosure

Item 1.01 Conflict Minerals Disclosure and Report

Conflict Minerals Disclosure

Silicon Motion Technology Corporation has filed a Conflict Minerals Report for the year ended December 31, 2014, herewith as Exhibit 1.01, which is also publicly available on our website at www.siliconmotion.com

Item 1.02 Exhibit

The Conflict Minerals Report required by Item 1.01 is filed as Exhibit 1.01 of this Form SD.

Section 2 – Exhibits

Item 2.01 Exhibits

Exhibit 1.02 Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.

 

SILICON MOTION TECHNOLOGY CORPORATION
By: \s\ Riyadh Lai Dated: May 29, 2015
Riyadh Lai
Chief Financial Officer
EX-1.01

Exhibit 1.01

Silicon Motion Technology Corp.

Conflict Minerals Report

For The Year Ended December 31, 2014

Cautionary Note Concerning Forward-Looking Statements: This Conflict Minerals Report contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements include statements concerning Silicon Motion’s objectives for its conflicts mineral policy and compliance initiatives and actions it intends to take relating to conflict minerals. Forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from currently anticipated results. When considering forward-looking statements, you should consider, among other factors, the risk factors described in the reports and other filings that Silicon Motion files with the United States Securities and Exchange Commission, including Silicon Motion’s Annual Report on Form 20-F for the year ended December 31, 2014 and its subsequent Quarterly Reports on Form 6-K. The risk factors included in these filings are not exhaustive, and risks that are not identified therein could materially affect whether Silicon Motion realizes the results anticipated or implied by any forward-looking statements contained in this Conflict Minerals Report. Except as required by law, Silicon Motion disclaims any obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

Introduction

This Conflict Minerals Report (this “Report”) for Silicon Motion Technology Corp. (“Silicon Motion” or “we” or “our”) covers the reporting period from January 1, 2014 to December 31, 2014 and is presented in accordance with Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 13p-1”). This Report is filed as Exhibit 1.01 to our Specialized Disclosure Report on Form SD (the “Form SD”). A copy of this Report and the Form SD are publicly available on our website at

http://www.siliconmotion.com.

In 2010, the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). Section 1502 of the Act relates to conflict minerals and requires companies subject to the Act to file a Form SD annually with the United States Securities and Exchange Commission (“SEC”) to disclose whether the tungsten, tantalum, tin, and gold (referred to as “3TG”) used in their products benefitted, directly or indirectly, armed groups in the Democratic Republic of the Congo and adjoining countries (collectively, the “Covered Countries”). This Report, which is an exhibit to our Form SD, describes the design and implementation of our conflict minerals due diligence measures undertaken in 2014, including a description of how these measures were designed to determine, to our knowledge, the source mines, countries of origin, and processing facilities for 3TG contained in components used in Silicon Motion’s products.

Our Background and Covered Products

We are a fabless semiconductor company that designs, develops and markets high performance, low-power semiconductor solutions to OEMs and other customers in the mobile storage and mobile communications markets. For the mobile storage market, our key products are microcontrollers used in solid state storage devices such as SSDs, eMMCs and other embedded flash applications, as well as removable storage products. For the mobile communications market, our key products are handset transceivers and mobile TV IC solutions. Our products are widely used in smartphones, tablets, and industrial and commercial applications.

Our supply chain is complex, and multiple tiers exist between the mines from which 3TG are extracted and its incorporation into our products. We do not purchase raw ore or unrefined conflict minerals directly and make no purchases in the Covered Countries. As a result and as described more fully below, we rely on our foundries and suppliers to provide information on the origin of the 3TG contained in our products.

For all of our integrated circuits, Silicon Motion has determined that one or more of the 3TG conflict minerals is necessary to the functionality or production of the integrated circuit. As a result, all of Silicon Motion’s marketed integrated circuits are considered “covered products” for purposes of this Report.

Reasonable Country of Origin Inquiry

In accordance with Rule 13p-1 and Form SD, Silicon Motion determined that conflict minerals are necessary to the functionality or production of its integrated circuit products and that conflict minerals are incorporated into its products during the manufacturing process. Accordingly, we undertook a reasonable country of origin inquiry (“RCOI”).

Silicon Motion’s RCOI consisted principally of submitting to its suppliers the conflict minerals reporting template prepared by the Electronic Industry Citizenship Coalition and Global e-Sustainability (“EICC/GeSI”) initiative with smelters and refiners, referred to as the Conflict-Free Sourcing Initiative (“CFSI”). We submitted the EICC/GeSI template to all of our contract manufacturers. We reviewed all responses for completeness, reasonableness, and consistency, and we followed up for corrections and clarifications as we determined appropriate.

Based on our RCOI, we were unable to determine that the 3TG used in our products did not originate in Covered Countries. Such 3TG therefore continue to be “Conflict Undeterminable”.

Our Due Diligence Process

Silicon Motion’s due diligence measures were designed to conform, in all material respects, with the framework in the Organisation for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD Framework”). The objectives of our diligence initiative were to determine, to the best of our ability, the source and chain of custody of the 3TG materials necessary for the functionality and/or production of our products; whether any such 3TG materials originated in the Covered Countries; and where such 3TG materials were determined to have originated in Covered Countries, whether armed groups directly or indirectly benefitted from such 3TG materials.

Due diligence measures that we implemented included, but were not limited, to the following:

1. Establishment of Internal Management Systems

 

a. Conflict Minerals Policy. In 2013, Silicon Motion adopted and communicated to its foundries and suppliers a written policy relating to the use of conflict minerals in its supply chain. A copy of our policy, our Conflict-Free Minerals Statement is publicly available at http://www.siliconmotion.com/assets/statfiles/Conflict-Free%20Minerals%20Statement.pdf.

 

b. Internal Management to Support Supply Chain Due Diligence. Silicon Motion has established an internal compliance team with members from its operations, finance, and legal functions, and these individuals are charged with the development and implementation of our conflict minerals program.

 

c. Controls and Transparency. As described above, Silicon Motion undertook an RCOI with respect to conflict minerals in our supply chain by providing the CFSI template to each of our contract manufacturers to gather information about their use of 3TG, the smelters and refiners in their supply chain that are included in our products, and the countries of origin for 3TG used in our products.

 

d. Supplier Engagement. Silicon Motion continues to engage actively with its contract manufacturers to strengthen its relationship with them. We have communicated to our foundries and other suppliers our commitment to source 3TG in a manner that does not, directly or indirectly, benefit armed groups in the Covered Countries, and we have communicated that we will consider alternative arrangements with other manufacturers or suppliers who are unable to cooperate in our due diligence efforts.

 

e. Grievance Mechanism. Silicon Motion’s code of conduct includes procedures for reporting violations, and we provide mechanisms for anonymous reporting of violations or concerns about the conduct of our business, including our implementation and enforcement of our Conflict Minerals Policy.

 

2. Identification and Assessment of Risks in the Supply Chain

Because of our position within our supply chain, identifying actors upstream from our contract manufacturers is difficult. As discussed above, we identified our foundries and suppliers and relied on them to provide the necessary information about the source of conflict minerals contained in the products that we contract to have manufactured. Similarly, our foundries and suppliers rely on information provided by their suppliers to provide information regarding the country of origin of 3TG included in our products.

3. Designing and Implementing a Strategy to Respond to Identified Risks

We are in the process of developing a formal risk management plan through which our conflict minerals program will be implemented, managed, and monitored. During calendar year 2013 and continuing into 2015, where foundries or suppliers were unable to provide us with complete or reliable responses to the EICC-GeSI template, we considered these matters internally. To date, we have not identified any circumstances where we concluded that it was necessary to terminate any contract or relationship or find a replacement manufacturer or supplier as a result of conflict minerals matters.

 

4. Carrying Out Independent Third-Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain

We do not have a direct relationship with any smelters or refiners in our supply chain. As a result, we do not and cannot conduct any audits directly. Instead, we support the development and implementation of independent third party audits of smelters such as the CFSI’s Conflict Free Smelter Program (“CFSP”) by encouraging our foundries and other suppliers to purchase materials from audited smelters that have been validated as conflict-free under the CFSP.

 

5. Reporting on Supply Chain Due Diligence

In May 2015, we publicly filed the Form SD and this Report with the SEC. A copy of this Report and the Form SD are publicly available at www.siliconmotion.com. This Report includes information about the RCOI methodology utilized by the Company, the design of our due diligence process in conformance with the OECD Framework and a description of our products that incorporate conflict minerals necessary to the functionality or production of such products.