Message from Alain Dutheil

Chief Operating Officer and Vice Chairman of the Corporate Executive  Committee

For many years, semiconductor manufacturers have been pushed to transfer a significant part of their production lines to low cost areas in order to cope with the ever decreasing prices of our industry. Globalization has been a reality for us long before other industry segments. Today, with the reduced growth rate forecasted over the next few years in the semiconductor market, the continuing pressure on prices, and the evolution of the euro/USdollar exchange rate, this trend is accelerating. On top of that, more and more customers are based in the wider Asia Pacific region, giving strong additional reasons for extending our presence in these countries.

This increasing presence in emerging countries highlights some problems that were not so visible before, probably because globalization was not at such a high awareness level in the media and the political world. Pollution, Human Rights and social issues – to name a few – are now challenges we face everywhere. Consumers (and we are all consumers) take for granted the fact that the product they buy provides the expected functionality, with the highest quality level. But they will now ask new questions about the way the product is manufactured, the pollution generated throughout the process, the way employees are treated, etc. And their questions will not be limited to what we do in our plants; they will also want to know what happens at our suppliers’, and we will be held accountable for pollution, human rights and related issues in our whole supply chain.

Our approach to Corporate Responsibility has always been exactly the same in each and every country in which we operate. We apply the same standards on environmental parameters; we deploy the same programs for employees’ health; we manage our employees the same way wherever they are located; and we contribute to local development in all countries. We signed the Global Compact in 2000, and we report regularly on our achievements. But this is not enough; the evolution of expectations, including those relating to our supply chain, has led us to participate in the Electronics Industry Code of Conduct Initiative (EICC) since 2005, in order to be more effective and share good practices and results with other companies involved in the electronics industry supply chain.

We know that the recent trends put additional constraints and accountabilities on our shoulders, but we accept them as our responsibility, in line with our Principles for Sustainable Excellence, and as our contribution to sustainable globalization. It is our duty to contribute to the social evolution of the emerging countries where we operate.