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I Understand
Enterprise Risk Management
Risk Management Policy and Organization
Risk Management Areas and Operation Mechanism
Key Risks and Countermeasures
Business Continuity Management
Hazard Risk Control

Sustainable development is UMC’s highest priority, and robust risk management and appropriate crisis management are the major cornerstones to ensure sustainable operation. In order to reduce the negative impact and loss caused by major risk events, protect the rights and interests of stakeholders and maintain the company's image, UMC actively performs enterprise risk management, pre-crisis prevention and practice drills to facilitate timely and appropriate response capabilities for any possible crisis.

 

 

Enterprise Risk Management Policies

Through risk management methods and organizations, UMC effectively prevents and controls enterprise risks, comprehensively implements them in daily operations, shapes and deepens risk culture, and establishes transparent and smooth risk communication to maintain steady operations.

 

Enterprise Risk Management Policies

Effectively Prevent and Control Enterprise Risks

Reduce corporate risk and achieve corporate goals

Comprehensive Implementation

Comprehensive risk management and implementation of operational procedures

Shape and Deepen The Risk Culture

Improved risk awareness and perception

Complete Communication

Complete and transparent risk communication, including with shareholders, employees and stakeholders

 

 

Enterprise Risk Management Organization

Under the guidance of the enterprise risk management policy, the Enterprise Risk Management Committee coordinates relevant departments of the company to jointly review the internal and external risks that the company faces, facilitates risk response measures for company-wide major risks, and reports regularly to the board of directors. It also incorporates internal auditing and control functions to ensure that the risks associated with operations have been effectively controlled.

 

 

Enterprise Risk Management Areas 

The Enterprise Risk Management Committee consolidates risks in the areas of strategy, operation, finance and hazard.

 

 

 

 

Enterprise Risk Management Operation Mechanism

For above areas, evaluates the possibility and severity of their occurrence, defines the priority order and risk level of the risk items, and determines response actions. The committee periodically reviews possibility and severity of risks for changes over time to grasp the effectiveness of risk management plans and related control operations.

 

 

UMC targets strategic, operational, financial and hazard risk areas, identifies key risks and formulates countermeasures, including environment, social, corporate governance and emerging global risks related to the company's operations. For detailed response measures, please refer to "CSR Report 2-4 Risk and Crisis Management".

Business Continuity Management System

UMC recognizes that sustainable business operations have to provide its valued customers and important stakeholders with uninterrupted services. To maintain customer satisfaction in terms of variety, quality and continuity is the biggest objective of the company’s business continuity management. UMC has developed a site level-business continuity plan since 1999. Furthermore, in 2012 the company implemented its business continuity management system following ISO 22301 to ensure the highest possible operating level and further protect the interests of customers and stakeholders during a disaster.

 

 

BCM Framework

UMC follows the ISO22301 standard to establish, implement, monitor and maintain BCMs, with continual improvement of the system, to ensure that business operations continue during incidents or disasters, and to realize the goal of non-interrupted operation.


All UMC fabs and functional departments have deployed emergency response and recovery plans for specific events such as earthquake, fire, chemical spill, power disruption, water shortage and material shortage. BCP Exercise are conducted every year in order to continually improve emergency response and recovery procedures.

 

 

 

 

Stage 1. Incident management

Stabilize the effect of incidents or disasters as per the emergency response plan.

 

 

Stage 2. Business continuity

Achieve minimum operational goals within the recovery time objective, RTO, as per the business continuity plan.

 

 

Stage 3. Business recovery

Recovery at the affected fab to restore its production capability back to normal within maximum acceptable downtime as per business recovery plan.

 

 

Operation of Business Continuity Management

In 2013, UMC, a leading global semiconductor foundry, received ISO 22301 certification for its business continuity management system and became the first foundry worldwide to achieve ISO 22301 certification. In 2016, certification was extended to UMC’s Fab 12i in Singapore to compelte the company goal of certifying all of its 12-inch fabs, reaffirming to customers UMC’s commitment to providing uninterrupted foundry services.

 

To this day, UMC continues to maintain and review the effectiveness of our BCM system by third party* every year to ensure that when disasters occur, UMC can maintain the minimum operating level and continue to recover, thus protecting the best interests of customers and stakeholders.

 

In addition to yearly BCP exercises using different scenario, we also conduct an MT level drill once every 3 years. The drill is convened by President Chien and related executive members including CFO, CHO, the 12-inch manufacturing vice president, manufacturing resource integration vice president, etc. We practice stakeholder’s communication tactics in various aspects, including employees, suppliers, customers, investment banks and social media. In addition, production allocation plans between different fabs are also adopted. It demonstrates UMC’s resilience in business continuity.

 

* The third party audit and revisit was executed by BSI (British Standard Institution).

As a global manufacturing leader, UMC is well aware of the numerous disasters that may affect or impact its operations and employees. UMC follows strict engineering safety procedures, enforces safety codes and standards, and adhered to detailed industry safety guidelines to reach Highly Protected Risk (HPR) status. By improving physical protection, enhancing emergency response abilities, constructing natural hazard early warning systems and exercising business continuity strategies, we can achieve continuous operation. The accomplishments of Hazard risk control in 2019 were as follows:

 

 

2019 achievements

Improved the ability to protect against water damage in the cleanroom

Combined with emergency response drill to revisit and upgrade all the waterstop at liquid pipe penetration ; and expansion join between buildings.

 

 

Upgraded power supply system reliability

Employed a third party expert to find improvement opportunities and increase the supply resilience of electricity system. For example, we can discover abnormalities and solve problems in the early stages through on-line partial discharge.

 

 

Updated the loss control guideline in line with international standards

Considered other industry’s loss experience and upgraded the guideline to add environmental sprinklers for new central scrubbers.

 

 

Develop climate change assessment tool

We developed the risk assessment tool suitable for the semiconductor industry in response to climate change risk. We assessed the risk of extreme climate (warming, torrential rain, drought, etc.), and planned the adjustment and response for the mid/long term.

 

 

Work highlight: Methodology of UMC climate change risk and opportunity assessment

UMC is actively attuned to the risks and new impact that climate change may bring under global climate change and the transition of low carbon market. UMC has constructed the UMC Climate Change Risk and Opportunity Assessment based on multiple data points: the Fifth Assessment Report (AR5) published by the Intergovernmental Panel on Climate Change (IPCC), ISO 14090 Adaptation to Climate Change, and the assessment procedure in the UK Climate Impact Programme (UKCIP). Based on the aspects such as policies, regulations, transition of market and technology, reputation and physical risk by related responsible departments, UMC conducted the risk and opportunity analysis and developed strategies of adaptation and mitigation, respectively. With the participation of MT level and connection of corporate green process technology development roadmap, the opportunities were converted to specific benefit of carbon reduction and financial contribution. Finally, the sustainable development and climate resilience of UMC will be disclosed by referring to the frame of TCFD (Task Forced on Climate-related Financial Disclosures).

 

For further information please click the links below in the 2019 CSR Report.

 

 

 

 

Scenario Projection Compilation

Scenarios are collected from IPCC-AR5 and corresponding data simulated by the government.

 

 

Tool Construction

The ISO 14090, UKCIP, and TCFD were used as reference for constructing the assessment tool.

 

 

Execute Assessment

Related departments are joined the workshop to identify top 3 risks, and develop response strategy. Meanwhile, considering the low carbon market demand to develop UMC’s green process technology development roadmap.

 

 

Results Approval

The results were approved by President Chien and will disclosure to public in the next year.

 

 

Monitor Continuously

Countermeasures will be reviewed in the ERM committee periodically.

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