SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Specialized Disclosure Report
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or
(Commission File Number)
(IRS Employer Identification No.)
14 Atir Yeda Street, Kfar
|(Address of principal executive
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:
13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the
reporting period from January 1 to December 31, 2018.
This Specialized Disclosure Report on Form SD ("
Form SD ") of Silicom Ltd. ("
Silicom " or "
we ") for the year ended December 31, 2018 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
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
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
Silicom 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
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 150
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:
During this reporting period, we identified the products below that
we manufactured or contracted to manufacture as
containing necessary conflict minerals:
(A) Server network interface cards with and without bypass (Server
Adapters), which include (i) redirector and switching cards, (ii)
encryption and data compression hardware acceleration cards, (iii)
FPGA (field programmable gate array) based packet processing cards,
and (iv) compute blades, which offer general compute capability in
networking intensive environment;
(B) Intelligent and programmable cards, with features such as
encryption, acceleration, data compression, redirection and
switching, packet processing, time stamping, packet capture
solutions, FPGA based ultra-low latency solutions, other offload
features and/or compute blades (Smart Cards); and
(C) Stand-alone Products, which include (i) Customer-Premises
Equipment, including CPE edge devices for SD-WAN and NFV
deployments, (ii) Networking Targeted Appliances, (iii) Bypass
Switches, and (iv) Intelligent Bypass Switches.
The products detailed above constitute all products and product
lines that we manufactured or sub-contracted to manufacture in the
2018 calendar year. Accordingly, we determined that none of our
products qualified as DRC conflict free in the 2018 calendar
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
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:
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.
provide, and expect its suppliers to cooperate in providing, due
diligence information to confirm the 3TG in its supply-chain is DRC
collaborate with its suppliers and others on industry-wide
solutions to encourage the manufacturing of products that are DRC
commit to transparency in the implementation of this policy by
making available reports on its progress to relevant stakeholders
and the public.
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
Conflict Minerals Disclosure and Report
Description of Reasonable Country of Origin Inquiry
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 2018.
Silicom conducted an analysis of its products and the production
process thereof and found that 3TG are
used in all of its products.
For 2018, 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 who are relevant for the survey were thoroughly chosen
using following process:
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 804.
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.); (d) inactive suppliers and manufacturers (i.e. suppliers and
manufacturers from whom Silicom did not purchase any products in
2018). After such elimination Silicom remained with 250 suppliers
Silicom sent requests to such 250 suppliers and manufacturers that
were active suppliers and manufacturers during 2018.
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
2018. 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'
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
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
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 1.02 is filed as
Exhibit 1.01 to this Form SD.
SECTION 2 – EXHIBITS
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.
/s/ Daniel Cohen
Daniel Cohen, VP Operations
May 23, 2019