Conflict Minerals Report of SemiLEDs Corporation in Accordance with Rule 13p-1 under the Securities and Exchange Act of 1934
This is the Conflict Minerals Report of SemiLEDs Corporation (“SemiLEDs,” or “we,” or “our,”
or the “Company”) for the calendar year 2013 in accordance with Rule 13p-1 (“Rule 13p-1”)
under the Securities and Exchange Act of 1934 (the “1934 Act”). Please refer to Rule 13p-1,
Form SD and 1934 Act Release No. 34-67716 for definitions of terms used in this Report, unless
otherwise defined herein.
There are two groups of SemiLEDs products that appear to contain necessary columbite-tantalite
(coltan), cassiterite, wolframite, and their derivatives, which are limited to tin, tantalum and
tungsten, and gold (“3TG”).1 First, we manufacture and sell light emitting diode (“LED”) chips
and LED components (collectively, “LED Products”), which are used primarily for general
lighting applications, including street lights and commercial, industrial and residential lighting,
and specialty industrial applications, such as ultraviolet curing of polymers, LED light therapy in
medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications,
architectural lighting and entertainment lighting. Second, our majority owned subsidiary, Ning
Xiang Technology Co., Ltd., manufactures and sells lighting fixtures and systems for general
lighting applications (“Lighting Products”), consisting primarily of LED luminaries and LED
Due Diligence (Instructions 1.01(c)(1))
Overview: As described above, it appears that our LED Products and
Lighting Products likely include necessary 3TG that are necessary to their
functionality, e.g., gold in our LED chips and LED components, and gold and tin
in some of the assembly materials and components for the Lighting Products.
Consequently, we designed and implemented a due diligence exercise that covered
these items (the “In-Scope Products”).
For calendar year 2013, due diligence exercise for the In-Scope Products encompassed:
- a reasonable country of origin inquiry (“RCOI”) regarding the conflict
minerals in the In-
Scope Products that was reasonably designed to determine whether any of the conflict
minerals originated in the Democratic Republic of Congo or an adjoining country
(“Covered Country”) or are from recycled or scrap sources; and
- measures to exercise due diligence on the source and chain of custody of
To oversee our due diligence exercise, we established an internal working group, comprising
representatives from relevant SemiLEDs functions such as procurement, quality control, finance
and legal/compliance. Working group members have expertise with regard to the In-Scope
Products and materials and components used for them.
We designed our due diligence exercise to conform to the Organization for Economic Co-
Operation and Development Due Diligence Guidance for Responsible Supply Chains of
Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”), an internationally
recognized due diligence framework. In accordance with the OECD Guidance, SemiLEDs’ due
diligence exercise included: 1) development of a Conflict Minerals Policy (expected formally to
be approved by July 2014 and disseminated to relevant suppliers of SemiLEDs’ products); 2)
review and assessment of risk in the supply chain; and 3) a strategy to identify and respond to
risks in the supply chain.2
Work with Suppliers: We rely on our direct suppliers to provide information on the origin of the
3TG contained in materials and components supplied to us, including items with 3TG that are
supplied to our direct suppliers from their lower tier suppliers. We adopted an approach to
survey our supply chain based on the nature of materials and components we use in the In-Scope
Products, which indicate that those materials and components are most likely to contain 3TG.
Following this approach, we developed a list of targeted suppliers and conduct a RCOI survey on
these suppliers using the standard EICC-GeSI Conflict Minerals Reporting Template (the
“Template”). We prioritized the list of targeted suppliers based on the risk of having conflict
minerals in the products supplied to us, considering factors such as our annual spend with the
suppliers. We prioritized suppliers who failed to provide a response or provided an insufficient
response as high-risk suppliers for outreach and follow-up communications.
We received responses from approximately 89% of the suppliers surveyed. Some of our
suppliers did not complete the Template, but provided signed declarations confirming that
products they supplied to the Company do not contain 3TG that originated in a Covered Country.
The smelter facilities identified by our suppliers are not located in Covered Countries and many
were identified as being conflict-free (we verified these facilities against the EICC-GeSI conflictfree
smelter compliant list). However, some suppliers, particularly suppliers of assembly
materials and components for the Lighting Products, were unable to identify the smelters that
represented the source of 3TG that went into the materials and components supplied to us or
whether the 3TG were from recycled or scrap sources. A small portion of our suppliers were
also unable to identify with reasonable certainty the country of origin of the 3TG used in the In-
Product Description and Related Matters (Instructions 1.01(c)(2))
Description of the In-Scope Products: The In-Scope Products are the LED Products and the
Lighting Products, which are described above.
Facilities Used to Process Necessary Conflict Minerals in the In-Scope Products: While
SemiLEDs has conducted a thorough due diligence and worked closely with the suppliers to
survey the supply chain (as described above), we were not able to identify with reasonable
certainty facilities used to process necessary conflict minerals in the In-Scope Products. Where
suppliers identified facilities used to process the necessary conflict minerals, such facilities were
not located in the Covered Countries. Many were identified as being part of the CFS (conflictfree
Information About Country of Origin of Necessary Conflict Minerals Used in the In-Scope
Products: While SemiLEDs has conducted a thorough due diligence and worked closely with the
suppliers to survey the supply chain (as described above), we were not able to determine with
reasonable certainty the country of origin of 3TGs used in the In-Scope Products.
Information About Efforts to Determine Mine or Location of Origin: The description of our due
diligence exercise set forth above under the heading “Due Diligence” covers SemiLEDs efforts
to determine the mine or location of origin with the greatest possible specificity.
1 In calendar year 2013, SemiLEDs also sold certain LED components that SemiLEDs procured from a supplier under a buy-and-sell arrangement. Initially (as early as in calendar year 2011), SemiLEDs contracted to manufacture such LED components from this supplier. However, since the latter part of 2012 and throughout 2013, the supplier has been manufacturing the LED components as a standard product and selling it to various purchasers, including SemiLEDs. In calendar year 2013, SemiLEDs did not influence the supplier’s manufacture of such LED components. Given these circumstances, we understand that such LED components should not be covered by this Report.
2 Paragraph 1.01(c)(1)(iii) of the Rule 13p-1 instructions for Form SD requires disclosure of certain types of steps “since the end of the period covered in [the registrant’s] most recent prior Conflict Minerals Report.” SemiLEDs understands that this instruction is inapplicable since there is no prior report.