CORPORATE SUSTAINABILITY

Global Warming Change Initiative

Green House Gas Reduction

In 2010, UMC led the industry by implementing the UMC Climate Change Policy as its highest guiding principle. In addition, the company formulated the UMC Low-Carbon Commitment guidelines for carbon reduction plans.
UMC Climate Change Policy

UMC Low-Carbon Commitment

For energy and greenhouse gas management, UMC has recently formulated various environmental protection objectives for various phases and dimensions along with actual implementation plans. These objectives and plans were then jointly discussed with the Corporate Sustainability Committee. Discussion outcomes and resolutions would then be ratified by the Committee Chairperson before implementation.

Climate Change Risk Management

Based on policies and regulations, market and technological changes, reputation, and physical risks, UMC conducts climate change risk analysis and develops response practices to reduce the potential impact.

Risk Dimension

Category

Potential Risks

UMC's Response

Transitional

Policy and Legal

• Greenhouse gas emissions permit and reporting, cap and trade schemes.
• Carbon tax, energy tax
• Product labeling and disclosure.

• Lower carbon emission voluntarily. (As of 2018, UMC has 3.023 million tons of reduction credits approved by the EPA)
• Continue to inventory greenhouse gas emissions and product carbon footprint.

Technology

• Need for low carbon products and services.
• Commitment to investment in new technology.

New fabs meets IEEE (Institute of Electrical and Electronics Engineers) requirements

Market

Products that are less eco-friendly will be eliminated because of changing consumer demands.

Promoting the product life-cycle analysis and certification.
(UMC has passed carbon footprint / water footprint certification, and participated in the LCA to go project to help customers acquire information on their products' carbon footprint with minimal time and resources)

Reputation

• Changes in customer preferences.
• Bad reputation brings about negative feedback.

According to UMC's current status, the company proceeds with current greenhouse gas responses (no significant risks).

Physical

Short-term

The intensity and frequency of natural disasters caused by typhoons and torrential rain prevent employees from going to work, may cause damage to fab facilities, and may disrupt energy supply.

• Incorporate wind loads standard into fab specifications. Wind resistance design of the fab must be 120% of local highest wind speed.
• Install flood gates for specific entrances and exits in Tainan Fab 12A, which is in a flood potential area, and upgrade protection level to the 500-year flood control standard. In the new Fab 12A buildings, the base of the 1st floor is more than 2 meters higher than the perimeter roads to fully protect against flooding risk.
• Promoting business continuity management system. Strengthen resilience and adaptability in climate-related and natural disasters.
• Globalize fabs and supply chains. Establish supplier risk map, decentralized raw material procurement and a 2-month inventory mechanism to avoid material interruption crisis.

Long-term

Rising sea level from global warming may lead to inland flooding, resulting in reduced clean water sources, water shortages and abnormal infrastructure damage to fab facilities.

• Incorporate location considerations into future site selection.
(UMC fabs are not located on coastal areas. The Hsinchu fabs are located on a hilly area with a higher terrain and no flood risk).
• Implementing effective water-saving measures.
• Expanding water recycling and reuse to lower the demand for water.
• Establish a water contingency plan. Implement water conservation and water truck schedule operations according to the extent of water limitation in the Park.

GHG Reduction Target and Plan

According to the product carbon footprint and greenhouse gas emissions inventory results, the major contributor of UMC's product carbon footprint is manufacturing, with the major sources being electricity and fluorinated greenhouse gases (F-GHGs) . UMC has thus formulated plans to reduce electricity consumption and F-GHG emissions in order to reduce its carbon footprint.

The reduction targets and plans are below:

Reduction Goal

2018 Actual Reduction

‧ Compared to 2010, reduce intensity of fluorinated greenhouse gas emissions by 36% in 2020.
‧ Compared to 2010, reduce intensity of fluorinated greenhouse gas emissions by 55% in 2025.

Reduced intensity of fluorinated greenhouse gas emissions by 51%.

‧ Compared to 2015, reduce intensity of electricity consumption by 10% in 2020.
‧ Compared to 2015, reduce intensity of electricity consumption by 15% in 2025.

Additional reduction of 57,127 Mwh of electricity consumption for the year, reaching the annual targeted goal.

F-GHGs Reduction

In addition to carbon reduction each year, UMC established the Fluorinated Greenhouse Gas Reduction Taskforce in 1999 to promote greenhouse gas reduction. Moreover, the company set greenhouse gas reduction goals for the various phases of the program, and currently, the reduction program is in Stage 3. UMC shall continue to implement F-GHGs reduction projects. F-GHGs reduction in 2018 reached 1.285 million tons which was a 51% reduction compared to 2010. Such results showed that UMC managed to achieve Phase 3 objectives ahead of schedule. UMC has already attained the reduction goal for 2020, which is 30% lower than 2010 levels, as stipulated by the World Semiconductor Council. At this stage, UMC has integrated with international trends and has cooperated with national policies to formulate reduction goals for 2025.



Future Action Plans

·

New factories introduce new machines with lower greenhouse gas emissions, such as CVD machines using NF3 gas and RPS (Remote Plasma System) devices, in order to achieve the highest efficiency and lowest emissions.

·

All new equipment shall be installed with a high performance local scrubber for N2O and F-GHGs.


Energy Reduction and Management

UMC's energy consumption mainly relies on purchased electricity, followed by a small amount of natural gas; indirect energy is not used. The largest source of UMC's greenhouse gas emissions is from purchased electricity. Therefore, reducing energy consumption is the effective key to alleviate the environmental impact caused by the greenhouse effect. Through the CS Committee’s company-wide carbon reduction goals and development plans, coordinate/ integrate departmental energy saving and carbon reduction strategies and programs. Hold regular committee meetings to review the implementation outcome, and continue to introduce energy conservation technologies and implement energy efficiency improvement programs in relevant facilities.

Total power savings in 2018

Equivalent CO2 reduction

57,127 Mwh

About 31,648 tons


Total natural gas savings in 2018

Equivalent CO2 reduction

2,882 Mwh

About 567 tons

Aside from UMC’s ongoing energy efficiency improvement efforts, it is also actively setting up renewable energy sources in the fab, and has listed solar energy systems as a new fab standard design and construction project. UMC has completed the installation of the 4,335 KWp solar energy system, which is expected to generate up to 2.8 million KWh of electricity each year. The installation capacity is the highest among Taiwan's wafer industry, thereby fully demonstrating UMC’s commitment to green energy and full support for clean energy.

In October 2018, UMC's two solar power generators in Fab 12A, installed in cooperation with the government's renewable energy policy, were reviewed and approved by government and third-party power survey agencies. UMC continues to pursue renewable energy certifications, and obtained 31 such certifications between October and December 2018.


Solar Energy Output in Recent Years

Furthermore, UMC promotes energy saving programs in the office and public areas, accompanied with promotional activities and training to enhance employees' ideas and habits in energy saving and greenhouse gas reduction.

GHG Reduction Collaboration

Collaborating with other companies and government organizations

UMC and other companies participated in the climate change risk assessment project which gained the support of the Science Park Industrial Association, Science Park Administration, National Science Council, Water Resources Agency, Taipower, and Taiwan Water Corporation to re-evaluate risks caused by climate change and extreme weather, including: interruptions to water supply, power supply, gas supply, transportation and communication, flood damage, wind damage, and drought. these re-evaluations will be used to develop response and improvement programs for implementation in the Science Parks.

Collaborating with supply chain

UMC not only engages in climate change management but also requests and assists suppliers to follow our lead. Our measures are as follows:

·

Carbon risk management- Suppliers are required to collect carbon inventory data in their manufacturing plants, develop a product-based carbon footprint and provide carbon reduction performance data.

·

Water risk water management- Suppliers are required to collect water inventory data in their manufacturing plants to establish a water footprint, and to provide a specific water resource management plan.

·

Other climate change risk management- Due to the increased risk of storms, water shortage, flooding and transportation and communication disruption in recent years resulting from global climate change, UMC requires suppliers to prepare contingency plans, such as support from overseas production, to reduce the impact of such events. Our first-tier suppliers are also required to manage their suppliers.



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