We are pleased to present the SMIC Group’s CSR Sustainability Report for FY2024.
We have been publishing our CSR Report to inform our stakeholders about our social and environmental initiatives. Today, we face a rapidly changing world shaped by the global climate, pandemics, climate change, and natural disasters. To navigate these turbulent times, we believe that it's not enough to simply report on our initiatives and achievements—we must also create new value and indicate the direction we aim to take in the future. For this reason, we have adopted the title of CSR Sustainability Report.
In the various areas we are involved in, such as electronics, electrical devices, semiconductors, infrastructure, and mobility, there is an increasing demand for eco-friendly products that can be provided for the same cost as existing products. Technological innovation is essential to create such products, and I believe that it is crucial not to just rely on the technologies we have inherited, but also to keep challenging ourselves and evolving.

BCP measures to continue fulfilling our responsibility to supply customers

In recent years, there has been a significant increase in the frequency and severity of natural disasters, such as earthquakes and floods. That is BCP measures have become an important policy for our company.
Regarding manufacturing-related BCP measures, we have further decentralized our manufacturing sites. This ensures that if one manufacturing site is unable to operate, other sites in Japan or international sites can step in, creating a backup system for all our solder materials. Looking ahead, we plan to address the BCP for material inventories by decentralizing the storage of key raw materials, such as metal ingots, with the introduction of automated warehouses to multiple manufacturing sites.
Additionally, to ensure continuous production even in the event of a natural disaster, we are promoting automation and the use of robots, such as automated solder billet manufacturing robots, automated packaging robots, and AGVs (Automated Guided Vehicles). These advancements are helping to reduce reliance on human labor for these tasks.
For BCP measures at our headquarters, we’ve taken measures to mitigate flood risks from the nearby Arakawa River, a class-A river, as in the event of flooding depths are expected to reach up to 5 meters. Furthermore, we have relocated key infrastructure, such as power supply systems, to the upper floors. In addition, we are also in the process of installing flood protection measures, including floodproof doors and shutters.
Further, we are implementing a teleworking system that allows employees to do the same work from home as they can in the office. This is to ensure that business operations can continue, even in the event of a situation where employees are unable to come into the office.

Creating a workplace where employees work with peace of mind

I believe that to create a sustainable organization it is essential to create a workplace where employees work with peace of mind as the company grows. Regarding workplace safety, in addition to the public-water-supply-connected sprinklers installed at our manufacturing sites in Japan, we have also installed environmentally friendly foam fire suppression systems developed in collaboration between Senju Metal Industry and Senju Sprinkler. These systems are to ensure that employees can evacuate safely in an emergency.
Regarding employee benefits, in addition to annual raises and bonuses, in 2024, we provided a base salary increase and special bonuses based on the previous year's profits. We also issued a special dividend, separate from the regular dividends paid to our employee stock ownership program. Moving forward, we will continue to explore appropriate ways to fairly distribute profits to employees and ensure that they are equitably rewarded.

Eco-friendly SMIC Group business activities

As a manufacturing company that uses natural resources as raw materials, we continuously consider what we can leave for future generations. We are advancing environmentally conscious business activities that address global issues such as carbon neutrality and the circular economy.
In terms of carbon neutrality, we are promoting the shift to renewable energy for the electricity used at our manufacturing sites in Japan, including our group companies. Currently, nearly 100% of the electricity we purchase has been converted to renewable energy. Additionally, as part of our efforts to generate energy, we are introducing hydrogen power generation equipment that utilizes hydrogen produced from ammonia, a technology we have long used in the production of sintered materials.
In the area of circular economy activities, we have been increasing the use of reused and recycled materials in our solder recycling processes. This includes both materials recycled internally and those purchased from smelters, and we plan to further expand this in the future.
As for environmentally friendly products, we have developed a new PFAS-free foam fire extinguishing agent. Some foam fire extinguishing agents used to combat petroleum-based fires, such as gasoline fires, contain specific PFAS compounds that are considered carcinogenic and harmful to the environment and human health and are now subject to regulatory restrictions. Addressing this issue has been a priority for us at the SMIC Group as we are committed to addressing environmental issues. As a result, we have successfully developed a PFAS-free general-purpose foam extinguishing agent in collaboration with group company, Senju Sprinkler.
Furthermore, we have released eco-friendly products, such as MILATERA, a low-temperature soldering solution that helps reduce CO₂ emissions. Moving forward, we aim to continue performing our mission as a socially valued institution.
The SMIC Group will engage earnestly in business activities to meet your needs while contributing to the realization of a sustainable society. We look forward to your continued support and encouragement.

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