UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
SILICOM
LTD.
(Exact name of registrant as specified in its charter)
ISRAEL
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000-23288 |
N/A |
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation or organization)
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File Number)
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Identification No.)
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14
Atir Yeda Street, Kfar Sava, Israel
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4464323
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executive offices) |
(Zip
Code) |
Eran Gilad
Telephone: +972-9-764-4555
(Name and telephone number, including area code, of the person to
contact in connection with this report.)
Check the appropriate box to
indicate the rule pursuant to which this form is being filed, and
provide the period to which the information in this form
applies:
☒ Rule 13p-1 under the Securities
Exchange Act (17 CFR 240.13p-1) for the reporting period from
January 1 to December 31, 2019.
This Specialized Disclosure Report
on Form SD ("Form SD") of
Silicom Ltd. ("Silicom" or
"we") for the year ended
December 31, 2019 is presented to comply with Rule 13p-1 under the
Securities Exchange Act of 1934, as amended ("Rule"). The Rule was adopted by the
Securities and Exchange Commission ("SEC") to implement reporting and
disclosure requirements related to "conflict minerals" as directed
by the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 ("Dodd-Frank Act").
Conflict minerals are defined by the SEC as columbite-tantalite
(coltan), cassiterite, gold, wolframite, or their derivatives,
which are limited to tantalum, tin, and tungsten. The Rule
imposes certain reporting obligations on SEC registrants whose
products contain conflict minerals that are necessary to the
functionality or production of their products (such minerals are
referred to as "necessary conflict minerals"). For products which
contain necessary conflict minerals, the registrant must conduct in
good faith a reasonable country of origin inquiry designed to
determine whether any of the conflict minerals originated in the
Democratic Republic of the Congo ("DRC") or an adjoining country,
collectively defined as the "Covered Countries." If, based on such
inquiry, the registrant knows or has reason to believe that any of
the necessary conflict minerals contained in its products
originated or may have originated in a Covered Country and knows or
has reason to believe that those necessary conflict minerals may
not be solely from recycled or scrap sources, the registrant must
conduct due diligence on the necessary conflict minerals’ source
and chain of custody as a method to conclude if the necessary
conflict minerals contained in those products did or did not
directly or indirectly finance or benefit armed groups in the
Covered Countries. Products which do not contain necessary conflict
minerals that directly or indirectly finance or benefit armed
groups in the Covered Countries are considered "DRC conflict free".
In addition, conflict minerals that a registrant obtains from
recycled or scrap sources are also considered "DRC conflict
free."
We use the
term "conflict free" in this Form SD in a broader sense to refer to
suppliers, supply chains, smelters and refiners whose sources of
conflict minerals did not or do not directly or indirectly finance
or benefit armed groups in the Covered Countries.
Company Overview
Silicom Ltd. is an industry-leading
provider of high-performance networking and data infrastructure
solutions. Designed primarily to improve performance and efficiency
in Cloud and Data Center environments, Silicom’s solutions increase
throughput, decrease latency and boost the performance of servers
and networking appliances, the infrastructure backbone that enables
advanced Cloud architectures and leading technologies like NFV,
SD-WAN and Cyber Security. Our innovative solutions for
high-density networking, high-speed fabric switching, offloading
and acceleration, which utilize a range of cutting-edge silicon
technologies as well as FPGA-based solutions, are ideal for
scaling-up and scaling-out cloud infrastructures.
Silicom products are used by major
Cloud players, service providers, Telcos and OEMs as components of
their infrastructure offerings, including both add-on adapters in
the Data Center and stand-alone virtualized/universal CPE devices
at the edge.
Silicom’s long-term, trusted
relationships with more than 170 customers throughout the world,
its more than 400 active Design Wins and more than 300 product SKUs
have made Silicom a "go-to" connectivity/performance partner of
choice for technology leaders around the globe.
For more information, please
visit: www.silicom.co.il
Our products are comprised
of:
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(A)
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Server network
interface cards (Server Adapters);
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(B)
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Smart Cards:
Intelligent and/or programmable cards, with features such as
encryption, acceleration, data compression, redirection and
switching, packet processing, time stamping, packet capture
solutions, ultra-low latency solutions, other offloading features;
and
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(C)
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Stand-alone
Products: Customer-Premises Equipment, including virtualized
Customer-Premises Equipment (vCPE) and universal Customer-Premises
Equipment (uCPE) (together, "CPE"), edge devices for SD-WAN and NFV
deployments (together with the CPE, "EDGE"), Networking Targeted
Appliances, Bypass Switches and Intelligent Bypass Switches.
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The products detailed above
constitute all products and product lines that we manufactured or
sub-contracted to manufacture in the 2019 calendar year.
Accordingly, we determined that none of our products qualified as
DRC conflict free in the 2019 calendar year.
Overview of
Silicom's Conflict Minerals Program
As a product manufacturer, we are
knowledgeable about the design of our products, including the
materials needed to construct them. We design the manufacturing
processes to build those products and in some cases, design the
detailed materials to manufacture those products. As a result, we
know that conflict minerals (tantalum, tin, tungsten and gold, also
referred to as "3TG") are
necessary to the functionality or production of all of our
products. Conflict minerals are obtained, via our direct suppliers,
from sources worldwide, and our desire is not to eliminate those
originating in the Covered Countries but rather to obtain conflict
minerals from sources that do not directly or indirectly finance or
benefit armed groups in the Covered Countries.
Conflict
Minerals Sourcing Policy
Silicom's policy with respect to
the sourcing of conflict minerals is as follows: Silicom expects
its suppliers to have in place policies and due diligence measures
that will enable it to reasonably assure that products and
components supplied to it containing conflict minerals are DRC
conflict free. Silicom expects its suppliers to comply with the
Global e-Sustainability Initiative and with the Responsible
Minerals Initiative ("RMI")
(formerly the Conflict Free Sourcing Initiative, or CFSI) and
conduct their business in alignment with Silicom's supply chain
responsibility expectations.
In support of
this policy, Silicom will:
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exercise due
diligence with relevant suppliers consistent with the OECD Due
Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas and will encourage our
suppliers to do likewise with their suppliers.
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provide, and
expect its suppliers to cooperate in providing, due diligence
information to confirm the 3TG in its supply-chain is DRC conflict
free.
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collaborate
with its suppliers and others on industry-wide solutions to
encourage the manufacturing of products that are DRC conflict
free.
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commit to
transparency in the implementation of this policy by making
available reports on its progress to relevant stakeholders and the
public.
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The full text of Silicom's Conflict
Minerals Sourcing Policy is available at
http://www.silicom-usa.com/conflict-minerals/. The
content of any website referred to in this Form SD is included for
general information only and is not incorporated by reference in
this Form SD.
Supply Chain
Description
Although
Silicom's hardware products contain conflict minerals, Silicom does
not purchase any conflict minerals directly from mines and is many
steps removed in the supply chain from the mining of the conflict
minerals. Silicom purchases materials used in its products from its
suppliers and some of those materials contribute necessary conflict
minerals to its products and/or production process. The origin of
conflict minerals cannot be determined with any certainty once the
ores are smelted, refined and converted to ingots, bullion or other
conflict minerals containing derivatives. The smelters and refiners
(sometimes referred to as "facilities") are consolidating points
for ore and are in the best position in the total supply chain to
know the origin of the ores. Silicom relies on its direct
suppliers to assist with its reasonable country of origin inquiry
and due diligence efforts, including the identification of smelters
and refiners, for the conflict minerals contained in the materials
which they supply.
During the
past several years, we have asked our potential suppliers to
provide evidence of being conflict-free, and the presentation of
such evidence has become a major consideration in our engagement
process with new suppliers.
Silicom has
well established and structured the process of new supplier
approval, when information about conflict minerals is necessary for
supplier approval.
SECTION 1 –
CONFLICT MINERALS DISCLOSURE
Item
1.01 Conflict
Minerals Disclosure and Report
Description of Reasonable Country of Origin
Inquiry ("RCOI")
Efforts
Below is a
description of Silicom's efforts to determine whether any of the
necessary conflict minerals in its products originated in the
Covered Countries during 2019.
Silicom
conducted an analysis of its products and the production process
thereof and found that 3TG are used in all of its
products.
For 2019,
Silicom conducted a supply chain survey with all the suppliers and
manufacturers from whom it purchases components used in its
products in order to obtain country of origin information for the
necessary conflict minerals in its products using the Conflict
Minerals Reporting Template ("CMRT"), an industry standard template
for conflict minerals reporting designed by the RMI. However, as a
result of the complexity of Silicom's products and the
constant evolution of its supply chain, it is difficult to identify
sub-tier suppliers downstream from the direct suppliers and
manufacturers from whom Silicom purchases components used in its
products ("Suppliers").
Suppliers who
are relevant for the survey were thoroughly chosen using following
process:
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1.
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A list of all
suppliers and manufacturers from whom Silicom purchases its
products was generated from Silicom's ERP system. The total number
of Suppliers was 888.
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2.
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Irrelevant suppliers and
manufacturers were then eliminated from the list mentioned above.
Irrelevant suppliers and manufacturers are defined as those who (a)
do not provide goods, but rather provide services, office supplies,
infrastructure services, etc.; (b) do not provide goods that are
part of Silicom's products (i.e. packaging); (c) supply components
or materials that do not, by their nature, contain 3TG materials
(i.e. paper labels, glue, etc.); and (d) inactive suppliers and
manufacturers (i.e. suppliers and manufacturers from whom Silicom
did not purchase any products in 2019). After such elimination
Silicom remained with 202 suppliers and manufacturers.
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3.
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Silicom sent
requests to such 202 suppliers and manufacturers that were active
suppliers and manufacturers during 2019.
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Silicom
requested such suppliers and manufacturers to complete a conflict
minerals survey, based on the CMRT.
All received
CMRTs were checked and verified against a list of active and
complaint smelters published by the RMI. In the case of
non-conformance in the answers delivered by the suppliers and
manufacturers in the CMRTs, Silicom contacted suppliers and
manufacturers in order to receive updated valid CMRTs.
The supply
chain survey requested information from the direct suppliers and
manufacturers in order to identify the smelters and refiners and
countries of origin of the conflict minerals in products they
supply to Silicom. Silicom received responses from its suppliers
and manufacturers, representing over 99.9% of its total direct
spend with its suppliers and manufacturers during 2019. Silicom
compared the smelters and refiners identified in the surveys
against the lists of facilities that have received a "conflict
free" designation by the RMI. Those designations provide country of
origin information on the conflict minerals sourced by such
facilities (such as third party software providers'
databases).
In the case of
non-responsive suppliers and manufacturers, Silicom, through its
Sustainability Team, attempted to contact such suppliers and
manufacturers by email and telephone at least three times.
Suppliers' and
manufacturers' responses were examined and the quality and
relevance of their answers were verified when required, including
by validation of all CMRTs that were provided to Silicom. The goal
of data validation was to increase the accuracy of the responses
that were provided to Silicom and identify any discrepancies and
contradictory answers in the CMRTs.
When a smelter or refiner in
Silicom's supply chain was not listed as having received a
"conflict free" designation, Silicom asked its suppliers and
manufacturers to proactively contact such facility and requested
country of origin information for the necessary conflict minerals
that it processed. In addition, Silicom is taking all measures that
it deems fit in order to replace such suppliers and manufacturers
with others who are declared as conflict-free. Silicom documented
country of origin information for the smelters and refiners
identified by the supply-chain survey.
There is a
significant overlap between Silicom's RCOI efforts and its due
diligence measures performed. Silicom's due diligence measures
performed were based on the findings of RCOI and are discussed
further in the Conflict Minerals Report filed as Exhibit 1.02
hereto.
Conflict
Minerals Disclosure
This Form SD
and the Conflict Minerals Report, filed as Exhibit 1.02 hereto, are
publicly available
at http://www.silicom-usa.com/conflict-minerals/ as
well as the SEC’s EDGAR database at www.sec.gov.
The Conflict
Minerals Report required by Item 1.01 is filed as Exhibit 1.02 to
this Form SD.
SECTION 2 –
EXHIBITS
Item
2.01 Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the duly authorized undersigned.
Silicom Ltd.
(Registrant)
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/s/ Daniel Cohen
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May 18, 2020
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By:
Daniel Cohen, VP Operations
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(Date) |
