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1、1Make Possiblea Better FutureSUSTAINABILITY REPORT 2023Sustainability Report 20232Table of ContentsIntroduction 3Message from Our CEO 52023 Highlights 62030 Goals and Progress 7Fiscal 2023 Company Overview Highlights 10Corporate Responsibility Materiality Assessment 12 Awards and Recognition 13Membe

2、rships and Affiliations 13Net Zero 2040 Playbook 14A Collaborative Path to Net Zero 15Protect our Planet 22Key Highlights 23Goals and Progress 24Climate and Energy 25Climate and Water Risk Assessment 31Water Management 32Waste Management 33Innovate for Progress 35Key Highlights 36Goals and Progress

3、37Sustainability Systems Center of Exellence 38Promoting the Circular Economy 41Product Safety 43Supply Chain Responsibility 44Invest in People 47Key Highlights 48Goals and Progress 49Human Rights 50Recruiting and Hiring 51Employee Benefits 54Culture of Inclusion 56Pay Equity 62Learning and Developm

4、ent 63Environmental,Health and Safety 67Lead with Purpose 69Key Highlights 71Community Impact 73Corporate Governance 79Ethics&Compliance 81Cybersecurity and Data Protection 83Public Policy 85About this Report 87About this Report 88Third-Party Data Assurance Statement 89Data and Disclosures 90About A

5、pplied Materials 91Environmental Metrics 92Social Metrics 96SASB Index 103TCFD Index 106GRI Index 113Front cover:Applieds Logistics Service Center has one of the largest solar arrays in Austin,Texas,with over 10,000 solar modules that will generate 5.6MW of clean energy.Table of ContentsNET ZERO PLA

6、NETPROGRESSPEOPLEPURPOSEABOUTDATAINTRODUCTIONSustainability Report 2023301Sustainability Report 2023IntroductionMessage from Our CEO2023 Highlights2030 Goals and ProgressFiscal 2023 Company Overview HighlightsCorporate Responsibility Materiality AssessmentAwards and RecognitionMemberships and Affili

7、ationsMessage from Our CEOAs technology transforms our world at an unprecedented pace,it offers almost limitless possibilities to Make Possible a Better Future for everyone.Artificial Intelligence(AI)and the Internet of Things(IoT)are the biggest inflections of our lifetimes,and they are all built u

8、pon semiconductor innovation.Realizing the full potential of these game-changing technologies will require major advances in the performance,power efficiency and cost of chips.At the same time,the semiconductor industry needs to significantly scale up global chip manufacturing capacity while simulta

9、neously finding a path to net zero.These are complex challenges that no single companyor countrycan solve alone.Rather,we must work together across the semiconductor supply chain to define and deploy innovative solutions.Just as AI and IoT will reshape our world,I fully expect deeper and earlier col

10、laboration will reshape our industry in the years to come.”Gary E.Dickerson,President and Chief Executive OfficerSustainability Report 20235Message from Our CEOThere has never been a more exciting time to be working in technology and especially in the semiconductor industry.The digital transformatio

11、n of the global economy is built on semiconductor innovation and that means the semiconductor industry now provides a foundation for virtually every other industry.As a result,we expect the market for semiconductors to approximately double in size by the end of this decade.But this expansive growth

12、cannot come at the expense of our planet.There is consensus within the scientific community that we must limit global warming to 1.5C to avert the most severe impacts of climate change.While advances in semiconductor technology are enabling new solutions that can accelerate global carbon reduction,t

13、he carbon emissions linked to manufacturing those semiconductors are on a path to quadruple by 2030.We cannot solve certain challenges by creating new ones,and it will take the entire industry working together to chart a different path.Our industry has a shared responsibility to deliver the game-cha

14、nging advances in technology the world needs while consuming less energy,generating fewer emissions and extending the functional life of our products.The onus is on us to drive grid decarbonization,create a more efficient,low-carbon supply chain and develop more sustainable solutions in manufacturin

15、g.At Applied Materials,we have set bold Scope 1,2 and 3 carbon reduction targets,which have received validation from the Science Based Targets initiative(SBTi).In this report you will see the progress we are making toward these goals to reduce the emissions produced by our company(Scope 1)and the en

16、ergy we purchase(Scope 2),as well as the emissions from our supply chain and customer use of our products(Scope 3).Ninety-nine percent of our emissions are Scope 3,which means we cannot achieve our aspirations in isolation.We must set common objectives,based on deep collaboration and enduring partne

17、rships up and down our value chain.This is the driving force behind our Net Zero 2040 Playbook,which outlines a collaborative pathway along with detailed,practical plans for us to work together with our co-travelers.Our Net Zero 2040 Playbook encompasses several key initiatives that we launched in 2

18、020 and now have strong momentum.Our 3x30 program focuses on reducing the electricity consumption,chemical consumption and physical footprint of our systems by 30%,averaged over our entire portfolio,by 2030.In July 2023,we launched our first purpose-built,low-carbon platform,which we call Vistara.Th

19、is is Applieds most significant new platform in over a decade,designed for flexibility,intelligence and sustainability.In addition,we have more than 25“eco products and services”that are available for new systems and can be retrofitted to tools in our customers installed base.In parallel,our SuCCESS

20、2030 initiative,which stands for Supply Chain Certification for Environmental and Social Sustainability,provides us with a scalable framework to work with our supply chain partners so they can attain the same standards in the areas of environmental impact,labor practices and diversity and inclusion.

21、Within Applied Materials,we have also deepened our commitment to advance a Culture of Inclusion,which helps define how our leaders lead,and how we engage with our colleagues inside Applied.We are investing time and resources to inspire and strengthen the future talent pipeline,attract and retain emp

22、loyees with diverse experiences,and build a more inclusive supply chain.As we scale our workforce,operations and partnerships to support the exciting era of AI and IoT,I am more certain than ever that deeper and earlier collaboration will be the foundation for the semiconductor industrys future succ

23、ess.None of us can do this alone.But together,we can innovate the way we innovate,align the ecosystem around a common vision and tangible plan to get there,and Make Possible a Better Future for everyone.Gary E.DickersonPresident and Chief Executive OfficerMessage from Our CEOINTRODUCTIONNET ZERO PLA

24、NETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 202362023 HighlightsReleased our Net Zero 2040 Playbook Received SBT i validation for 2030 Scope 1,2 and 3 emissions reduction targetsAnnounced multibillion-dollar investment to establish Equipment and Process Innovation and Commercialization(EP

25、IC)CenterApplied Materials Foundations Board renewed Generation Girl initiative through August 20265.6 MWrooftop solar array installedone of the largest in Austin,TexasEstablished Applied Materials Momentum Fund to support women in completing engineering degreesDeveloped the Responsible Manufacturin

26、g Program(RMP)94%of employees completed Diversity,Equity and Inclusion(DEI)100 and 101 learning modules2023 HighlightsINTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 202372030 Goals and Progress PeopleGoalProgress*UN SDG*StatusAchieve greater than 25%women representati

27、on at Applied globally from 2021 baseline20.3%,representing a 2.2%increase from FY21Achieve greater than 21%executive women representation at Applied globally,with an aspiration to achieve equal global and executive representation of women by 2040from 2021 baseline13.0%,representing a 0.8%increase f

28、rom FY21Achieve greater than 25%underrepresented minority(URM)representation in Applieds U.S.workforce from 2021 baseline19.9%,representing a 3.5%increase from FY21Achieve greater than 10%executive URM representation in Applieds U.S.workforce from 2021 baseline5.9%,representing a 1.1%increase from F

29、Y21PlanetGoalProgress*StatusUN SDG*100%of electricity at Applied globally comes from renewable sources by 2030Goal validated by SBTi70%of electricity at Applied globally,including 100%in the U.S.,came from renewable sources 50%reduction in Scope 1 and 2(market-based)emissions by 2030 from a 2019 bas

30、elineGoal validated by SBTiScope 1 and Scope 2(market-based)emissions decreased by 4%from FY22;2%increase from our 2019 baseline55%reduction per million USD of value added of Scope 3 Category 11 emissions by 2030 from 2019 baseline for semiconductor products*Goal validated by SBTi8%decrease per mill

31、ion USD gross profit of Scope 3 Category 11 emissions from FY21;7%decrease from our 2019 baseline*Not yet startedIn progressOn targetCompleted*Cumulative through fiscal 2023 unless otherwise noted*United Nations Sustainable Development Goals*The target addresses just the direct electricity portion o

32、f Category 11 emissions per SBTi requirements*Category 11 emissions do not include emissions from Applieds Display business(which represented 5%of total net sales in FY2023)nor from refurbished systems2030 Goals and ProgressINTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Repo

33、rt 202382030 Goals and Progress ProgressGoalProgress*UN SDG*StatusReduce equivalent energy consumption per per-wafer pass for semiconductor products by 30%by 2030 from 2019 baselineAverage per-wafer energy use continued to decrease due to changes in the mix of products sold.Incorporating new energy

34、savings developments into our existing and upcoming products keeps us on track to meet or exceed our 3x30 target.Reduce the impact from chemical consumption per per-wafer pass for semiconductor products by 30%by 2030 from 2019 baselineSustainability Systems Center of Excellence team and its engineer

35、ing partners in the product business units continue to pursue development of multiple products that can significantly reduce chemical impact through reduced demand for process chemicals,alternative process chemistries and improved abatement solutions.Some of these initiatives are expected to be mult

36、i-year efforts,but we are on track to meet or exceed the 3x30 target.30%reduction in tool footprint per production unit ratio(sqm/wph)for semiconductor products from 2019 baselineFootprint reduction to date is largely the result of productivity improvements in existing tool architectures.As new prod

37、uct architectures,such as Vistara,begin volume shipments to customers,footprints can be further reduced and are expected to meet or exceed the 3x30 target.$1 billion spend with women-and minority-owned businesses by 2027$594 million spent with certified diverse suppliers in 2023.*Cumulative through

38、fiscal 2023 unless otherwise noted*United Nations Sustainable Development GoalsNot yet startedIn progressOn targetCompleted2030 Goals and ProgressINTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 20239About Applied Materials About Applied MaterialsWe are the leader in ma

39、terials engineering solutions used to produce virtually every new chip and advanced display in the world.Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality.At Applied Materials,our innovations Make Possible a Bet

40、ter Future.Applied Materials has been reporting on social responsibility and environmental matters since 2005.Our Products and ServicesApplied provides manufacturing equipment,services and software to the semiconductor,display and related industries.With our diverse technologies,we deliver products

41、and services that improve device performance,power,yield and cost.Our customers include manufacturers of semiconductor chips,display products,and other electronic devices,and they may use what they manufacture in their own end products or sell the items to other companies for use in electronic produ

42、cts.Semiconductor Systems Design and manufacture the systems used to fabricate semiconductor chips.Applied Global Services Provide integrated solutions including consulting,spare parts,upgrades,services,remanufactured equipment and automation software to improve equipment and fab operation performan

43、ce and productivity.Display and Adjacent Markets Make the products to manufacture liquid crystal displays(LCDs),organic light-emitting diode displays(OLEDs)and other display technologies and customer-oriented devices,and technology used to manufacture solar energy cells.Applied Ventures,LLCApplied V

44、entures,LLC is the venture capital arm of Applied Materials,investing in and collaborating with startups with disruptive technologies.Applied Ventures promotes and drives environmental,social and governance(ESG)-related innovations in the broader semiconductor industry through investments and engage

45、ments with the venture startup ecosystem.In fiscal 2023,Applied Ventures co-organized the second annual Startup for Semiconductor Sustainability pitch event at SEMICON West,providing a platform for startups to showcase their sustainable solutions for the industry.INTRODUCTIONNET ZERO PLANETPROGRESSP

46、EOPLEPURPOSEABOUTDATASustainability Report 202310Fiscal 2023 Company Overview Highlights Fiscal 2023 Company Overview Highlights#1worlds#1 semiconductor and display equipment company$26.5Brevenue$3.1BR&D investment19,600patentsAMATstock listing on NASDAQ34,000employees in 150 cities,24 countriesHead

47、quartered in Californias Silicon ValleyHeadquarters and Key Manufacturing FacilitiesSanta Clara,CaliforniaHeadquartersAustin,TexasSemiconductor Equipment Manufacturing&RemanufacturingGloucester,MassachussettsSemiconductor Equipment ManufacturingRehovot,Israel Semiconductor Equipment ManufacturingSin

48、gaporeSemiconductor Equipment ManufacturingTainan,TaiwanDisplay Equipment ManufacturingEmployees by RegionNorth AmericaAsia-PacificEurope,the Middle East and AfricaFemale 3,409Male 11,395Undeclared 38Total 14,842Female 2,703Male 12,505Undeclared 1Total 15,209Female 840Male 3,437Undeclared 0Total 4,2

49、77INTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 202311ESG Vision and StrategyESG Vision and StrategyOur 1X/100X/10,000X ESG framework considers the social and environmental impacts of our direct operations(1X);how we design solutions to address our industrys impact,i

50、ncluding that of our customers and suppliers(100X);and how our technology can be used in innovation to advance sustainability and equity on a global scale(10,000X).10,000XFOR THE WORLD Lead with PurposeInvest in PeopleProtect our PlanetInnovate for Progress100XFOR THE INDUSTRY 1XFOR OUR BUSINESS INT

51、RODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 202312Corporate Responsibility Materiality AssessmentCorporate Responsibility Materiality AssessmentApplied regularly conducts corporate responsibility materiality*assessments to help us identify the ESG issues most importan

52、t to our stakeholders and where we can have the greatest impact.We also view issues through a double-materiality lens,which assesses the ESG factors likely to affect our business(e.g.,financial impacts)as well as the factors that our activities may affect,both positively and negatively.Our 2023 mate

53、riality assessment,conducted on the Datamaran platform,showed no new issues,though there are small variations in issue prioritization on both the standard and double-materiality assessments.The top material issues continue to be employee health and safety,climate change and GHG emissions,and energy

54、management,and these align with the priority focus areas in Applieds ESG strategy.Employee health and safetyClimate change and GHG emissionsEnergy management*The terms“material”and“materiality”as used in this report and the corporate responsibility materiality assessment and double-materi-ality asse

55、ssment are different than those terms as used in the context of filings with the U.S.Securities and Exchange Commission(SEC).Issues deemed material for the purposes of this report may not be deemed material for SEC reporting purposes.INTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainab

56、ility Report 202313Awards and RecognitionAwards and Recognition Best Workplaces in Taiwan 2023 EPA Green Power Partner Forbes 2023 Worlds Best Employers Micron Supplier Award for Sustainability SIG|Future of Sourcing Awards“Innovation in Governance/Compliance”Winner 3BL 100 Best Corporate Citizens 2

57、023 USA Today Americas Climate Leaders 2023 VETS Indexes Recognized Employer 2023Memberships and Affiliations Alliance for Global Inclusion,Commitment Partner Association of Certified Fraud Examiners(ACFE)Boston College Center for Corporate Citizenship Business Ethics Leadership Alliance(BELA)CEFLEX

58、(Europe)Clean Energy Buyers Association(CEBA)DIGITALEUROPE Diverse Manufacturing Supply Chain Alliance(DMSCA)Houston Minority Supplier Development Council(HMSDC)IEEE International Roadmap for Devices and Systems(IRDS)Community International Association of Privacy Professionals(IAPP)Bronze sponsor In

59、teruniversity of Microelectronics Centre(imec)Sustainable Semiconductor Technologies and Systems(SSTS)National Minority Supplier Development Council(NMSDC)RE100 Reboot Representation Coalition(India)Responsible Business Alliance(RBA)Responsible Minerals Initiative(RMI)SEMI Semiconductor Climate Cons

60、ortium(SCC)Founding member,Governing Council member SIA Semiconductor PFAS Consortium Womens Business Enterprise National Council(WBENC)INTRODUCTIONNET ZERO PLANETPROGRESSPEOPLEPURPOSEABOUTDATASustainability Report 20231402A Collaborative Path to Net ZeroSustainability Report 2023Sustainability Repo

61、rt 202315A Collaborative Path to Net Zero“None of us can do this alone.The only way we can accomplish Net Zero is by working together.”Gary E.Dickerson,President and Chief Executive OfficerAdvances in AI and IoT enable nearly infinite applications that touch every area of our livesincluding business

62、,education,healthcare,logistics and smart mobility.By the end of this year,there are expected to be more than 207 billion1 devices connected to the worldwide IoT network,and increasingly these connected devices are augmented with AI.In 2023,the world witnessed major evolutionary gains with augmented

63、 AI demonstrating impressive capabilities.2 As businesses increasingly integrate artificial intelligence into their operations,this creates unprecedented demand in the semiconductor industry,which is foundational for these technological advances.According to imec,the semiconductor industry is expect

64、ed to double in size this decade,reaching$1 trillion in global revenue by 2030.3 Yet tremendous growth in computing power could come with a potentially high cost to our planet if left unchecked.In fact,total energy usage by electronics and computing systems may grow from about 10%of global electrici

65、ty supply today to more than 30%by 2030.Imec projects our industry is on a path to quadruple its carbon A Collaborative Path to Net Zerofootprint this decade,from about 100 million tons CO2e per year in 2020 to nearly 400 million tons CO2e per year by 2030.At Applied,were committed to shifting this

66、paradigm,together with our customers and partners.We aim to decarbonize in line with the 1.5C pathway as defined by the Paris Agreement,even as we aggressively grow our business.Weve identified a clear strategy to work together to reach our aspiration,transforming the foundation of technology and ac

67、celerating the global clean energy mix.We call it the Net Zero 2040 Playbook.Did You Know?An advanced fab with a capacity of 50,000 wafer starts per month consumes about one terawatt-hour per yearroughly equivalent to the electricity use of a city of 100,000 residents.1 2024 IoT And Smart Device Tre

68、nds:What You Need To Know For The Future()2 The Dawn Of Creation:2023 Rise Of Generative AI()3 Imec USA:accelerating semiconductor innovation|imec(imec-)PLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202316Opportunities Beyond the NumbersApplied Materials has set 2030

69、 science-based goals for Scope 1,2 and 3,which received validation from the Science-Based Targets initiative in 2023.We continue to make progress toward our Scope 1 and Scope 2 goals,which are the emissions that come from running our business and the energy we purchase.We aim to reach net zero for t

70、hese emissions by 2030.The greater challenge comes with Scope 3emissions that are generated upstream in our supply chain and downstream through customers use of our semiconductor system products.Ninety-nine percent of our emissions are Scope 3,so the only way for us to reach our 2040 aspiration is t

71、o work in close,long-term collaboration with our customers and suppliers.For more than a year,a cross-functional Applied team worked together to collect,analyze,model and forecast our projected path to net zero that is rooted in science.Our models forecast that we could generate around 37 million me

72、tric tons of carbon by 2030 and 55 million metric tons by 2040 in a“business as usual”scenario.To hit the 1.5C pathway,we need to reduce our projected emissions to just over one million metric tons by 2040,which represent nearly a 90%absolute reduction from 2019 emissions levels.Total CO2e emissions

73、 will vary year over year as we implement further strategies to address our full carbon footprint.We expect these strategies will take time to implement and deliver steeper reductions in the second half of this decade.In fiscal 2023,Applieds absolute emissions were 22.6 million metric tons CO2e,repr

74、esenting a reduction of 11%over fiscal 2022.The greatest opportunity we see is in working across our industry to drive grid decarbonization,to support our customers to achieve their own net zero goals,to innovate differently to improve our product efficiency and to work with our supply chain to rede

75、sign for a net zero future.These are the building blocks of our Net Zero 2040 Playbook.They arent just the right thing to do for the planet,they are also business opportunities for our company,our customers and our industry.Opportunities Beyond the NumbersPLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INT

76、RODUCTIONDATASustainability Report 202317Accelerating Grid DecarbonizationNearly 70%of our Scope 3 emissions are linked to the energy used to power our products.Advanced fabs consume a significant amount of electricity,so where that power comes from is very important.Of the estimated 40 billion tons

77、 of global carbon dioxide emissions in 2023,nearly 37 billion tons are attributed to fossil fuels.4Using clean energysuch as solar and windhas a much more positive impact on nature and society,including on air and water quality,human health,biodiversity and ecosystems.5It also drives greater semicon

78、ductor demand.Smart grid connectivity increases demand for sensors and power devices.Grid intelligence requires foundry-logic and memory demand.Each megawatt of wind and solar produced requires power chips.Given the environmental,social and business benefits,locating new fabs where there is access t

79、o clean energy should be a major consideration for customers and for governments that provide financial incentives for new fab construction.Yet,regulatory and market barriers impact the availability,accessibility and affordability of renewable energy in many areas around the world.As a business comm

80、unity,we have significant influence in the form of combined buying power to help advance global grid decarbonization.In 2023,Applied joined Intel as the inaugural corporate sponsors of Schneider Electrics Catalyze program,which aims to accelerate access to renewable energy across the global semicond

81、uctor value chain.We also joined the Semiconductor Climate Consortium Energy Collaborative,bringing together the combined purchasing power of semiconductor companies to encourage a faster conversion to clean energy in the Asia-Pacific region.Through active participation in programs like Catalyze and

82、 the SCC Energy Collaborative,as well as organizations like the CEBA and RE100,we can amplify our industrys combined voice as buyers of energy to improve global accessibility to clean energy options.We encourage our customers and partners to join us in this effort.Did You Know?Applieds Logistics Ser

83、vice Center has one of the largest solar arrays in Austin,Texas,with over 10,000 solar modules that will generate 5.6MW of clean energy.Accelerating Grid Decarbonization4 Global carbon emissions from fossil fuels reached record high in 2023|Stanford Doerr School of Sustainability5 Building a Nature-

84、Positive Energy Transformation|WWF(panda.org)PLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202318Innovating with CustomersOur biggest opportunity to accelerate progress toward net zero is for our customers to set and achieve their own science-based net zero goals.Cur

85、rently,about two-thirds of our customers have scoped net zero goals,contributing to a reduction of about eight million tons of CO2e by 2040.Bringing the additional one-third onto the 1.5C pathway would accelerate adoption by another four million tons of CO2e.These reductions are incremental to the g

86、rid decarbonization discussed above.We are working alongside customers to achieve emissions savings and energy reductions,supporting those that have set net zero goals as well as those that have not yet developed a net zero strategy.Building on our ongoing energy-savings work with Taiwan Semiconduct

87、or Manufacturing Company(TSMC),we have expanded our sustainability engagements with major memory and IoT,Communications,Automotive,Power and Sensors(ICAPS)customers in Europe,Asia and North America,helping reduce greenhouse gas(GHG)emissions and energy consumption of their wafer fab and subfab equip

88、ment.In May 2023,we announced a historic investment to establish the worlds largest and most advanced facility for collaborative semiconductor process technology and manufacturing equipment research and development(R&D),the EPIC Center.Here we will bring together customers,university partners,suppli

89、ers and peers to accelerate innovation and commercialization of energy efficient,next-generation technology.We are also driving solutions alongside our customers through active engagement in the Semiconductor Climate Consortium and imecs SSTS program.Innovating With CustomersGoal8M tonsCO2e by 2040.

90、Two-thirds of customers have scoped net zero goals.PLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202319Improving Product Efficiency About 80%of our Scope 3 emissions comes from our customers use of our products.To achieve our own goals and support our customers in ac

91、hieving theirs on the net zero pathway,we are investing to improve the sustainability of our systems,while offering products and services that help customers reduce their own emissions.Our 3x30 engineering team,established in 2020,focuses on reducing the electricity consumption,chemical impact and p

92、hysical fab footprint of our systems by 30%,averaged across our entire portfolio,by 2030.We use proprietary modeling tools that analyze product design and process recipes and incorporate semiconductor equipment utilization data to pinpoint sustainability improvement opportunities for legacy,in-produ

93、ction and design-stage semiconductor manufacturing tools.Through Applied Global Services(AGS),we work with customers to optimize the eco-efficiency of their existing equipment and fab performance to help lower their cost of ownership,save energy,reduce environmental impacts and meet GHG reporting re

94、gulations.We have 24 eco-focused products and services in our portfolio todayboth new ecoUP innovations and components for existing products.One such product introduced in 2023,Vistara,is the first platform designed to support Integrated Materials Solution recipes using more types and sizes of chamb

95、ers.It optimizes high-energy-consumption subfab components,like pumps,heat exchangers,chillers and gas panels,lowering platform energy consumption by as much as 35%compared to previous platforms.To extend the life of our existing products while advancing environmental performance for customers,we of

96、fer new components,software and solutions through ecoUP Upgrades.EcoTwin,for example,is a digital twin that can monitor and model recipes and operations so chipmakers can drive energy optimization in their fabs.The iSystem Controller,developed in collaboration with TSMC,monitors resource consumption

97、 and GHG emissions and automatically adjusts the energy needs in the subfab based on whats happening within a tool.By utilizing the ecoUP Upgrades and our newest eco-performance-optimized technologies,like the Vistara platform,chipmakers can advance progress toward reducing their Scope 1 and Scope 2

98、 emissions.At the same time,these technologies help us to reduce our own Scope 3 emissions and accelerate progress on our path to net zero.Improving Product EfficiencyFlexibilityIntelligenceSustainabilityChamber types,sizes,combinationsAccelerate time to marketIncrease yieldsReduce energy,materials,

99、footprintSemiconductor Wafer Fabrication PlatformVistaraGoal30%reduction of electricity consumption,chemical impact and physical fab footprint of our systems by 2030PLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202320Transforming Our Supply Chain The fourth component

100、 of our 2040 Net Zero Playbook is significant,not only for our own 1.5C journey and that of our customers,but also for the journey of our entire industrydecarbonizing the semiconductor supply chain.In 2020,we launched our SuCCESS2030 program,a 10-year roadmap for strengthening our ESG supply chain s

101、trategy to support our business.Weve collected GHG goals and data from our top spend suppliers,through which 80 suppliers were able to provide site-level data for Applied supplier sites.We are working with our suppliers on creating a path to reach net zero by 2040,including establishing a GHG emissi

102、ons reduction plan and assisting them in procuring renewable energy.Our supply chain accounts for about 13%of our Scope 3 emissions.At the same time,these partners also supply our customers and peers,which is a call to action for cross-industry collaboration.In June 2023,we announced our collaborati

103、ve engineering center in India that will be focused on critical supply chain technologies for equipment.The center will be designed to bring together Applied engineers,leading global and domestic suppliers,and top research and academic institutions,enabling them to collaborate in one location with a

104、 common goal of accelerating development of energy-efficient semiconductor equipment sub-systems and components.Transforming Our Supply Chain PLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202321Our Journey to Net ZeroWhile we are making good progress toward our 2030

105、goals and have a clear pathway to execute our Net Zero 2040 Playbookwe cannot achieve these aspirations alone.Ninety-nine percent of our emissions are shared with our customers and suppliers,so our success depends on forging strong,long-term partnerships up and down our value chain.By working togeth

106、er to redesign the semiconductor value chain,to decarbonize the grid that powers breakthrough technology and to innovate in new and transformative ways,we believe we can and will solve the great contradictory challenge facing our industry:how to become a$1 trillion market,while simultaneously creati

107、ng a path to net zero carbon emissions.Collaboration is the solution that benefits us all.Our Journey to Net Zero2022Reached 100%renewable electricity in the U.S.,69%globallyInitiated supplier GHG emission surveysJoined Semiconductor Climate Consortium and imec SSTS2024 Installed Tainan PV Solar Sys

108、tem in Taiwan2021Conducted Scope 3 Analysis with third partyAssured climate footprint20302040Net Zero 2040 Playbook2020Announced goals to reach 100%renewable electricity and reduce Scope 1 and Scope 2 emissions by 50%by 2030Committed to Science Based Targets initiative and Task Force on Climate-Rela

109、ted Financial Disclosures2023Announced Net Zero 2040 PlaybookScope 1,Scope 2 and Scope 3 targets validated by Science Based Targets initiativeInstalled one of the largest rooftop solar arrays in Austin,Texas on our Logistics Service CenterReleased Vistara platformNet Zero 2040 Achieve near-term SBTi

110、s 3x30 Goals 100%Renewable Energy GloballyPLANETPURPOSEPROGRESSABOUTPEOPLENET ZERO INTRODUCTIONDATASustainability Report 202303Protect our PlanetKey HighlightsGoals and ProgressClimate and EnergyClimate and Water Risk AssessmentWater ManagementWaste Management22Sustainability Report 202323Our Net Ze

111、ro 2040 Playbook reflects Applieds strategy to decarbonize our value chain on a 1.5C trajectory as we invest in a renewable energy future.With 2023 recording the warmest year in history6and 2024 on pace to exceed that record-breaking rise in the global temperaturescomprehensive action to protect our

112、 planet has never been more urgent.We believe our industry has both the responsibility and a tremendous opportunity to lead the way to a more sustainable future through collaboration and innovation,as outlined in our Net Zero 2040 Playbook.And we are committed to leading by example.With SBTi validat

113、ion of our 2030 Scope 1,2 and 3 emissions reduction targets,we are working to reduce our GHG emissions aligned with the 1.5C pathway as defined by the Paris Agreement.We have formed an internal task force to explore innovative Scope 1 efficiency improvements that will enable us to continue advancing

114、 our reduction targets even as the company expands to meet growing customer demand.For Scope 2,Applied is making significant investments to accelerate clean energy adoption across our global operations as we aim to reach 100%renewable energy for our electricity use by 2030.We made solid progress tow

115、ard increasing our renewable electricity use in 2023,through expansion of on-site solar,utility green energy programs,power purchase agreements(PPA)and renewable energy credits(RECs)to support our operations worldwide.For example,we installed one of the largest rooftop solar arrays in Austin,Texas,a

116、nd signed our first on-shore wind PPA in Taiwan.Just as importantly,we are working alongside our customers,partners and others in the industry to combine our collective purchasing power to accelerate grid decarbonization globally,through active participation in groups like Schneider Electrics Cataly

117、ze Program,the Semiconductor Climate Consortium Energy Collaborative,RE100 and CEBA.As we continue to reduce the emissions produced by our company and the energy we purchase,we remain focused on addressing the largest share of our footprint:Scope 3.Through Sustainability Systems Center of Excellence

118、 innovations aligned with our 3x30 goals and advancements in our SuCCESS2030 10-year roadmap,we are working to drive transformative innovation and practices that help decarbonize the entire semiconductor value chain.Protecting our planet is a daily practice that impacts every choice we make as a bus

119、iness.With our sights set on a net zero pathway,value chain goals aligned with the latest climate science,advancements in clean energy and a focus on expansive collaboration and transformative innovation,we see infinite possibilities to accelerate a low-carbon future for all.Key HighlightsKey Highli

120、ghts for 2023Received validation from the SBTi for Scope 1,2 and 3 emissions reduction targetsReleased a Net Zero 2040 Playbook,identifying a clear strategy to reach Net Zero emissions in collaboration with our partners7%expanded total renewable electricity by 7%year over year Announced our largest

121、on-site renewable generation system covering about 75%of the Austin Logistics Service Center roof7%reduced GHG intensity 7%per employee and per million dollars of revenue12%reduced total water withdrawal 12%,including 9%reduction in water-stressed areasConducted a comprehensive refresh of our Task F

122、orce on Climate-Related Financial Disclosures(TCFD)-aligned Climate Risk AssessmentReached 100%renewable electricity in the U.S.and 70%globallyAustin Solar Array Video6 Sources:National Centers for Environmental Information(NCEI)INTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability

123、 Report 202324Goals and ProgressGoals and Progress2030 GoalsGoalProgress*StatusUN SDGNot yet startedIn progressOn targetCompleted100%of electricity at Applied globally comes from renewable sources by 2030Goal validated by SBTi70%of electricity at Applied globally,including 100%in the U.S.,comes from

124、 renewable sources 50%reduction in Scope 1 and Scope 2 CO2e emissions by 2030 from 2019 baselineGoal validated by SBTiScope 1 and Scope 2(market-based)emissions decreased by 4%from FY22;2%increase from our 2019 baseline55%reduction per million USD of value added of Scope 3 Category 11 emissions by 2

125、030 from 2019 baseline for semiconductor products*Goal validated by SBTi8%decrease per million USD gross profit of Scope 3 Category 11 emissions from FY21;7%decrease from our 2019 baseline*Applied is a member of corporate groups collaborating to reduce the environmental impact of technology.Semicond

126、uctor Climate Consortium(SCC)(Founding Member,Governing Council Member)Schneider Electrics Catalyze Program(Founding Member)SCC Energy Collaborative(Founding Member)imec SSTS program RE100 CEBA*Cumulative through fiscal 2023 unless otherwise noted*The target addresses just the direct electricity por

127、tion of Category 11 emissions per SBTi requirements*Category 11 emissions do not include emissions from Applieds Display business(which represented 5%of total net sales in FY2023)nor from refurbished systemsINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202325Climate

128、and EnergyClimate and EnergyAs we continue to grow to meet the demands of our customers,our commitment to reducing our Scope 1,2 and 3 carbon impacts remains steadfast.We expanded our global renewable electricity by 7%,adding new renewable projects in Taiwan and Xian,as well as in the U.S.,which als

129、o helped us reduce our Scope 2(market-based)emissions 7%year over year.In 2023,SBTi classified Applieds Scope 1 and 2 emissions reduction target ambitions as in line with the 1.5C trajectory,which is currently the most ambitious designation available through the SBTi process.The near-term science-ba

130、sed targets as validated by SBTi that Applied Materials commits to are:Reduce absolute Scope 1 and 2 GHG emissions 50%by fiscal 2030 from a fiscal 2019 base year.Increase active annual sourcing of renewable electricity from 36%in fiscal 2019 to 100%by fiscal 2030.Reduce Scope 3 GHG emissions from us

131、e of sold products 55%per million USD of value added by fiscal 2030 from a fiscal 2019 base year.The validation reflects our commitment to minimize our own carbon footprint and marks a significant step toward our Net Zero 2040 Playbook,as we collaborate with our customers and partners to reduce carb

132、on emissions across the semiconductor industry.The SBTi is a collaboration between CDP,the United Nations Global Compact(UNGC),World Resources Institute(WRI)and World Wide Fund for Nature(WWF)and is one of the We Mean Business Coalition(WMBC)commitments.INTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO

133、 PLANETDATASustainability Report 202326Scope 1:Direct Emissions from our OperationsIn 2023,Applieds Scope 1 emissions totaled 49,053 metric tons of CO2e,representing a 1%increase from FY22.The primary drivers of Applieds Scope 1 emissions are the use of natural gas for facility operations and proces

134、s gases used for equipment testing in R&D labs.To identify the greatest opportunities to drive efficiency in our operations and reduce our Scope 1 footprint,we formed a cross-functional Scope 1 internal task force in fiscal 2023 with representatives from ESG,Environmental,Health and Safety(EHS),Glob

135、al Workplace and Infrastructure(GWI)and Sustainability Systems Center of Excellence.The task force is organized into two working groupsprocess gases and natural gasto address the largest portions of Applieds Scope 1 footprint.Each group is tasked with identifying key strategies and priorities to ens

136、ure Scope 1 emissions stay below the levels required to meet our science-based targets.Outcomes from the recommendations made by the Scope 1 task force will be shared in future Applied Sustainability Reports.We are also working through industry groups,such the SCC and imec,to collaborate and share b

137、est practices for reducing Scope 1 greenhouse gas emissions across the semiconductor value chain.Scope 1 and Scope 2 Emissions by source(MT CO2e)Electricity(market based)67,661 72,933 65,573 77,433 78,677 Stationary 25,103 24,415 24,081 22,022 23,090 Process Emissions*22,302 23,090 16,222 12,360 11,

138、000Refrigerant 1,634 1,114 2,083 2,286 1,125Mobile Combustion 14 14 10 10 9FY23FY22FY21FY20FY19Total Scope 1+Scope 2 (market-based)116,715121,566107,969114,111113,901Emissions Data UpdateWe aligned the methodology for measuring process gases across key R&D facilities in fiscal 2023 to improve the ac

139、curacy and consistency of our data in alignment with our science-based targets.Based on the updated methodology,we have restated our Scope 1 emissions data to enable comparability over time.Climate and EnergyEnergy management Applieds total energy use increased 4%in 2023 from the previous year,in li

140、ne with the expansion of our real estate footprint.At the same time,our greenhouse gas intensity dropped 7%as measured against employee headcount and revenue,as reported in the Environmental Metrics on page 92.Across our global headquarters,semiconductor and display manufacturing,and semiconductor r

141、emanufacturing sites,our facilities groups implemented energy efficiency projects that saved more than 5.7 million kWh,resulting in over 1,203 metric tons of avoided CO2e emissions savings.By continuing to optimize our lighting systems with LED lights at sites around the globe,we saved 2.7 million k

142、Wh of electricity and about 604 metric tons of CO2e emissions.Nearly 2.3 million kWh of the savings came through energy conservation measures and upgrades to our Building Management Systems(BMS)at our sites in Massachusetts and California.Green IT EffortsApplied continued its multi-year effort to in

143、crease efficiency and reduce our data center carbon footprint through optimization efforts and transitioning to cloud computing.In 2023,our efforts included:Santa Clara Co-Location Data Center and Cloud Migration:In 2023,we completed migration of key applications to cloud and a move to a new co-loca

144、tion data center facility.With these moves to modern infrastructure and other improvements,we reduced net power usage by 25kW and moved another 12kW to carbon neutral power sources.Amsterdam Co-Location Data Center and Cloud Migration:In 2023,we completed migration of key applications to cloud and a

145、 move to a new co-location data center facility.This resulted in a reduction of 18kW and we moved an additional 15kW to carbon neutral power sources.*Restated using updated process gas methodologyINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202327Employee teams driv

146、e local impact Employees across the globe help advance Applieds ESG strategy through local impact programs,initiatives and community outreach.Cross-functional Applied Impact Teams in India,Israel,Korea,Southeast Asia(Singapore/Malaysia/Philippines)and Taiwan are united through the Global Applied Imp

147、act Network(GAIN).GAIN is intended to augment and amplify regional ESG performance by connecting the countrys regional teams to share knowledge and to support the companys ESG framework.In the U.S.,our employee-led Green Teams in Austin,Texas and Gloucester and Newburyport,Massachusetts collaborate

148、through the Applied Sustainability Alliance,sharing best practices to help reduce our personal and collective environmental footprints.The teams work to increase awareness of sustainability issues and practices that employees can implement at work,at home and in their local communities.Through speci

149、al speaker events,volunteering activities,environmental projects and other engagement efforts,the teams spark discussions,advance deeper understanding and inspire action among our employees.GAIN and the Sustainability Alliance are supported and sponsored by our Global ESG Team,which helps ensure the

150、 teams efforts complement and support our vision to Make Possible a Better Future.SPOTLIGHTAustin Green Team A group of passionate employees in Austin,Texas holds the honor of being Applieds longest consecutively serving Green Team.First formed in 2009,the Austin Green Team is an active group of sus

151、tainability-invested employees that host regular campus events to engage the broader Austin employee community in living and working with less impact on our planet.One of the largest rooftop solar installations in Austin is at Applied,and the Austin Green Team uses this project to educate employees

152、about the importance and benefits of renewable energy,hosting learning sessions on topics like electric cars and residential rooftop solar.The Team often pairs activities with holidays and global observances,such as an organic farming event timed with Earth Day,and an“upcycle Halloween”event inspiri

153、ng creative costume ideas using otherwise discarded items.In the spring,the Team joined with a local community organization,Austin Creative Reuse,to host an art-inspired workshop to turn wood architectural samples,designer and decorator fabric samples,and traditional household paper-based waste prod

154、ucts,like tissue rolls and egg cartons,into creative art displays,totes and laptop bags,and recycled writing paper.Climate and EnergyINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202328Scope 2:Indirect Emissions From Energy Use Our Scope 2 market-based emissions decr

155、eased 7%from FY 2022,totaling 67,661 metric tons of carbon dioxide equivalent(CO2e)in fiscal 2023,driven in large part by renewable electricity progress in the Asia Pacific region.This represents a 14%decrease from base year fiscal 2019.Renewable Electricity The largest share of our Scope 2 footprin

156、t is traceable to the power needs of our manufacturing sites and labs.Applied Materials is committed to sourcing 100%renewable electricity for our worldwide operations as part of our 2030 Sustainability Goals.Through 2023,we maintained 100%renewable power in the U.S.and reached 70%globally.Our globa

157、l renewable energy strategy includes four key approaches:utility green procurement programs,RECs,virtual power purchase agreements(VPPA)and on-site solar power generation.United States In 2023,Applied announced our largest on-site renewable generation system,a 5.6 megawatt (DC)solar array comprised

158、of over 10,000 state-of-the-art solar modules covering about 75%of the Austin Logistics Service Center roof.This installation,completed in March 2024,is one of the largest rooftop solar arrays in Austin and Central Texas and is expected to begin service in September 2024.The Austin solar array has t

159、he potential to offset about 43%of the buildings electricity consumption and save over 5,400 metric tons of CO2 per year.Its expected to reduce our Logistics Service Center energy costs by about 46%.In addition to Austin,Applied also maintains on-site solar generating capacities at our facilities in

160、 Sunnyvale,California;Singapore;Bangalore,India;and Xian,China.Combined these arrays generated 1,437 MWh of clean power in 2023.We also continue to invest in a VPPA with the White Mesa Wind Project in Texas,which has been operational since October 2021.The White Mesa VPPA represents 51%of our total

161、global renewable energy and 54%of our U.S.renewable energy portfolio.Taiwan Solar Array and PPA Applied signed its first power purchase agreement in Taiwan with Energy Helper TCC Corporation to procure 1.2 MW of onshore wind energy over the next four years(about 3,000,000 kWh/year).The project is an

162、 important first step to supporting the expansion of renewable energy in the Taiwan market.In addition,construction of a 700 kW on-site solar array was completed in March 2024 at our Tainan facility,which will further expand our renewables portfolio in the region.Israel PPA We signed a 15-year contr

163、act with Enlight Renewable Energy,which finances,develops and constructs solar power plants,to provide renewable electricity to Applied Materials in Israel.Since March 2024,Applied Israels energy is being sourced from Enlights solar and storage facilities in growing percentages,with the intent to re

164、ach 100%by 2030.Xian,China A contract was signed with Beijing Electricity Trade Center to provide renewable electricity to Applied Materials in Xian,China.From March through October 2023 the agreement has delivered over seven million kWhs of green power,representing 44%of total electricity used at t

165、he Xian campus in fiscal 2023.These global on-site power installations,PPAs and VPPAs,in combination with RECs and utility green procurement programs in Santa Clara and San Jose,California;Austin,Texas;and Alzenau,Germany,enabled us to expand our total renewable electricity by 7%year over year to 34

166、1,562 MWh of renewable power in 2023.Climate and EnergyRenewable Electricity by Type(MWh)FY23FY22FY21FY20Utility Green Procurement 134,512 102,883 95,080 87,128 RECs 60,548 32,536 64,252 65,332 VPPA 145,065*183,604 63,888On-site Renewables 1,437 157 309 375*Actual VPPA generation in fiscal 2023 was

167、higher,exceeding our total U.S.electricity consumption.The total quantity was capped to match our electricity use for the year and residual RECs will be retired in the following reporting yearINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202329Scope 3:Value Chain Emi

168、ssions*Our Scope 3 emissions dropped 12%year over year,driven in large part by production adjustments in 2023 that followed record-breaking production in 2022 to address a significant order backlog caused by COVID-19-related supply chain disruptions.Among the 15 categories defined by the Greenhouse

169、Gas Protocol,Category 11,Use of Sold Products,represents the largest share(80%in 2023)of our Scope 3 emissions.Category 11 covers both emissions from the electricity used to power the equipment in customer fabs during its estimated 10-year lifespan and the chemicals and gases used during the chipmak

170、ing process.Our Category 11 emissions dropped 4%in 2023,driven primarily by our product mix.Because of the outsized influence of Category 11 on our overall carbon footprintand our customers footprintsour Sustainability Systems Center of Excellence and dedicated 3x30 engineering team are focused on r

171、educing the energy consumption,chemical impact and fab footprint of our systems by 30%this decade.Applieds systems are designed for durability,supporting upgrades,repairs,refurbishment and reuse,and Applied Global Services(AGS)focuses on optimizing our equipment and fab performance and productivity

172、with the lowest feasible environmental footprint.Climate and EnergySPOTLIGHTMassachusetts Green TeamThe Massachusetts Green Team,including campuses in Gloucester and Newburyport,focused its efforts in 2023 on strengthening its internal network,including uniting with representatives of EHS,facilities

173、,logistics,and various engineering disciplines,to learn,collaborate and act together to advance more sustainable lifestyle and work practices.In 2024,the team is collaborating with EHS and Facilities to improve the current recycling program across our local campuses,including working with local wast

174、e management partners.Among its efforts,the Team led the construction of outdoor vegetable and pollinator gardens.The on-campus garden spots provide relaxing spaces for employees to gather during breaks and the opportunity to pick and enjoy fresh vegetables.By planting a mix of vegetables and pollin

175、ating plants,the gardens have invited wildlife that promote healthy bee populations.Blackberry bushes were also also planted at each site to encourage foraging and to help make the campuses greener places to work.To further support education on local food generation,the Team has contracted with a be

176、ekeeping service,The Best Bees Company,a Certified LGBT Business Enterprise,to monitor and manage our hives,collect the honey and educate our teams on healthy beekeeping practices.In 2023,20 pounds of honey were collected and sold at the Fight Against Hunger auction in Gloucester,extending the posit

177、ive impact from the beehives to help address food insecurity.The Team is also building a sustainability tool library,which will offer,for loan,tools that help advance sustainability at Applied and at home.The first tool purchased for the tool library is a thermal camera,used to inspect homes and bui

178、ldings for sources of heat loss.The camera will be used in campus buildings to confirm insulation efficiency and can be checked out by employees for use at home.*Applied Materials Scope 3 measurements do not include our display businessINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustain

179、ability Report 202330Category 1,Purchase of Goods and Services,which estimates our upstream supply chain emissions,represents the second largest share of our Scope 3(about 13%)emissions.In 2023,our Category 1 emissions dropped about 27%,based on our supplier spend,which correlates to our adjusted pr

180、oduction in 2023 following the post-pandemic backlog in 2022.Applied is working with our suppliers to collect GHG emission goals and data,from which we can collaborate on creating a plan for a pathway to net zero by 2040.We anticipate being able to integrate primary supplier data into our GHG invent

181、ory in the near future and are working with suppliers to improve the quality of the data being reported.Applied continues to review the methodology annually to refine its calculations,emissions factors,data,estimates and underlying assumptions.In alignment with this review process,we have adjusted t

182、he historic data for Category 1 in fiscal 2021 and 2022,as well as Category 4,Upstream Transportation and Distribution,for fiscal 2019,2021 and 2022 in the Data and Disclosures section.The adjustment does not materially impact our overall Scope 3 calculations for those years.See the Data and Disclos

183、ures section for complete 2019-2023 Scope 3 emissions reporting.Scope 3 Emissions(Million MT CO2e)FY23FY22FY21FY19BaselineCategory 11(Use of sold products)18.0 18.8 16.4 10.2 Category 1(Purchased goods and services)2.9 3.9 3.2 1.9Category 4(Upstream transportation and services)1.0 2.0 1.3 0.6All oth

184、er categories 0.6 0.7 0.5 0.5Fiscal 2020 not included due to abnormal business operations related to COVID-19 pandemicBiodiversity ConservationApplied recognizes that we cannot collectively reach our net zero aspirations without the protection and restoration of nature.Although Applied has minimal e

185、xposure to biodiversity impacts through its business operations,we are actively evaluating opportunities to invest in nature-based restoration projects,which benefit biodiversity,climate and communities.Climate and EnergyINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report

186、202331Climate and Water Risk AssessmentClimate and Water Risk AssessmentApplied monitors emerging climate-and water-related risks on an annual basis,and every two years,we do a more comprehensive risk assessment to evaluate key physical climate and water risks across our value chain as well as trans

187、ition risks and opportunities for our business.In 20232024,Applied engaged a third party to conduct a comprehensive refresh of our climate risk assessment.The assessment included a scenario analysis across high-carbon and low-carbon pathways for physical and transitional risks.It was modeled from 20

188、20 to 2040 to align with our Net Zero 2040 Playbook.The assessment included engagement from a broad cross-function of internal stakeholders.The assessment identified and prioritized seven climate-related risks and opportunities for further analysis:exposure from extreme and chronic weather events,wa

189、ter risk,carbon pricing,regulations on process chemicals,R&D pressure,product deselection and customer demandwhich is both a risk and an opportunity.Applied has teams dedicated to global emergency response,crisis management and business continuity,including at local facilities,that ensure our busine

190、ss is prepared to respond and recover quickly from climate-related events and effectively support our customers and suppliers operations.We participate in efforts to inform policymakers about issues and challenges critical to our business and industry,including advancing next-generation technology.W

191、e are prioritizing the elimination of per-and polyfluoroalkyl substances(PFAS)where technically and commercially feasible,and the development of non-PFAS alternatives where needed,as part of our“PFAS Responsible”approach to process chemicals.Applied is well positioned to meet increasing customer dem

192、and through its portfolio of eco-advantaged products and continues to develop purpose-built technologies that enable customers to meet their own current and future environmental obligations to stakeholders.We see increasing opportunities for our ICAPS business in advancing decarbonization across the

193、 world by enabling key technologies,such as electric vehicles(EVs)and smarter,more efficient electrical grids.See the TCFD Index in the Data and Disclosures section.In 2023,Applied Materials earned an A-score from CDP on its Climate Change list and a B score on CDPs Water Security list.See our Clima

194、te Change and Water Security disclosures.INTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202332Water ManagementWater ManagementAbsolute water withdrawal decreased 12%and water withdrawal in water-stressed areas decreased 9%in fiscal 2023,primarily due to a reduction in

195、 irrigation,especially in water-stressed regions,improvements in facility and equipment water efficiency,and post-pandemic supply chain stabilization.Applieds operations are not high-volume water consumers relative to the broader semiconductor industry,yet we strive to optimize our water use across

196、our facilities.Ninety percent of water use is in our labs or mixed-use buildings,with our R&D labs having the highest consumption of ultrapure water.Most of our tools require cooling water,which runs in a closed-loop process and is negligible in terms of water consumption.Our water conservation effo

197、rts include:Water recycling and reuse for non-potable applications,especially cooling and landscape irrigation Rainwater collection at certain sites for use in landscaping or non-production needs Drought-tolerant landscaping and smart irrigation to reduce the number of watering daysFacility groups a

198、re responsible for on-site water use management,with oversight from the companys EHS organization.For example,in Singapore,our facility group began channeling HVAC condensate to top off the cooling tower water,saving 43,800 cubic meters of water in fiscal 2023.Our Vice President of Global EHS is res

199、ponsible for ensuring that water-related risks and minimization opportunities are assessed as appropriate.Water reduction is covered under our EHS policy and ISO 14001 EHSMS,which call for our business operations to identify opportunities,make continual improvements on environmental preservation and

200、 natural resource conservation,and meet or exceed all relevant regulatory requirements.Water Withdrawal(Thousand m3)FY23FY22FY21FY20FY19City water purchase2,0772,2212,1492,0881,990Groundwater1.31381001626INTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202333Waste Manag

201、ementApplied is committed to minimizing waste across our global locations and logistics operations,with a special focus on eliminating non-recyclable,landfill-found waste.Waste reduction,reuse and recycling programs are managed and monitored at the site level.In 2023,Applied decreased our total wast

202、e 2%year over year,and increased our landfill/incineration diversion rate to 73%,up 1%over 2022.A few of our site-based projects included:Installing wood augers to recycle wood crates in Austin,Texas,repurposing over five million pounds of wooden crates into engineered wooden products,such as orient

203、ed strand board(OSB),achieving an 85%waste diversion rate.In Israel,an industrial symbiosis project,established by the Ministry of Economics and Ministry of Environmental Protection,provides a platform for businesses across industries to repurpose and reuse items.Through this platform connection,App

204、lied diverted about 30 tons of potential waste(packages,electrical and mechanical items,furniture,cables,pipes,pumps),enabling new uses in the market.Composting cafeteria waste in Singapore.Hazardous waste accounted for less than 6%of our annual waste output in 2023,up from 3%in 2022 due to the addi

205、tion of a new Chemical Mechanical Planarization(CMP)tool and its associated waste.We contract with licensed third parties to transport waste,including hazardous waste,for off-site disposal,consistent with applicable laws and regulations.Our EHS organization oversees the process and verifies all disp

206、osal sites and methods meet regulatory requirements.We evaluate potential vendors via the CHWMEG Facility Review Program,which provides environmental,operational and financial information on waste treatment,disposal,recycling and storage facilities.Waste ManagementDiversion Rate 80706050403020100201

207、9202020212022202375%67%73%72%73%PercentageYearYear-Over-Year Waste PerformanceFY23FY22FY21FY20FY19(Thousand Mt)Non-haz recycled12.913.912.510.48.9Non-haz composted0.20.20.10.10.4Non-haz incineration0.10.30.71.30.5Non-haz landfill14.14.74.82.32.1Total haz waste1.10.50.50.40.5INTRODUCTIONPURPOSEPROGRE

208、SSABOUTPEOPLENET ZERO PLANETDATASustainability Report 202334Applied Materials Taiwan Driving Environmental Efficiency Applied Materials Taiwan implemented a variety of environmental efficiency initiatives in 2023,driving solid reductions in electricity,waste and water use across our campuses.For exa

209、mple:425,607 kWh of electricity saved through office lighting optimization with LED light retrofits,another 6,076 kWh saved through sensor-controlled LED landscape lighting,and 9,720 kWh saved by optimizing office air conditioning and wall lamps use outside of business hours 3,155 kg CO2 emissions s

210、aved by converting to Green Label and Forest Stewardship Council(FSC)-certified products,including hand and dish soap,bath tissue and paper towels 21,000 kg CO2 emissions saved by repurposing wood packaging waste to create a wooden pathway on campus 16.2 tons of plastic waste was reused(between July

211、November 2023)to produce Solid Recovered Fuel for power generation and garbage bag production 1,092 tons of water saved by optimizing deionized water usage through recycling Waste ManagementApplied strives to reduce the negative impacts of wastewater produced by our operations,monitoring to ensure s

212、ufficient removal of solids and adherence to permitted parameters,such as ph and fluoride content,before discharge to publicly owned treatment works.Each Applied site is responsible for wastewater monitoring.Concerns are escalated to site management and applicable corporate staff for immediate corre

213、ction.SPOTLIGHTINTRODUCTIONPURPOSEPROGRESSABOUTPEOPLENET ZERO PLANETDATASustainability Report 2023Innovate for Progress04Key HighlightsGoals and ProgressSustainability Systems Center of ExcellencePromoting the Circular EconomyProduct SafetySupply Chain Responsibility35Sustainability Report 202336In

214、an era of hyper-accelerated innovation,progress toward sustainability cannot be incremental.Applied is taking a system-view approach,together with our customers and business partners,to fundamentally transform our industry on a pathway to net zero.The digital transformation that is redefining our ec

215、onomy and impacting every aspect of our lives is also impacting our planet at an expedited pace.The semiconductor industrythe very foundation of tech innovationis uniquely positioned to solve this challenge.But it wont happen in isolation.Applied is committed to collaborating across the semi ecosyst

216、em to drive energy-efficient computing and create a pathway to global carbon reduction.Were building the worlds largest and most advanced facility for collaborative semiconductor process technology and manufacturing equipment R&D in Silicon Valley and planning a collaborative engineering center in B

217、angalore,India,to fundamentally transform how innovation happens,from concept to commercialization.Working alongside our customers,were innovating the way we innovatecreating purpose-driven products and advancing the environmental performance of existing productsto significantly reduce the energy,ch

218、emical and physical footprints of fabs as we drive progress toward our ambitious 3x30 goals.Through a growing portfolio ofand continuing investments ineco-advantaged products and upgrades,and with more than a third of our installed systems under service agreements,were enabling our customers to opti

219、mize the life of their equipment,boost their efficiency and lower emissions,while maximizing the value of their capital investment.Upstream in our value chain,our suppliers play an essential role in our systems-view approach.Our strategic 10-year roadmap,SuCCESS2030,guides our progress toward creati

220、ng a more sustainable supply chain aligned with our business values and standards.Through these collaborations with our customers,suppliers and the broader technology ecosystem,we see a clear pathway to accelerate the energy-efficient computing roadmap as we aspire to achieve net zero semiconductor

221、manufacturing.Key Highlights for 2023Announced a landmark investment to build the EPIC Center,accelerating innovation and commercialization of energy-efficient,next-generation technologyKey Highlights24eco-advantaged products and services in our portfoliowith a pipeline of new developments and ecoUP

222、 components for existing productsReleased Vistara,Applieds first platform designed to support Integrated Materials Solution recipes using more types and sizes of chambersIntroduced Sculpta Pattern-Shaping Systeman industry-first patterning technology that eliminates an entire EUV mask layer from a w

223、afer process flow6,000crates eliminated from outbound shipments and 70%reduction in supplier inbound extra-large shipments through packaging optimization initiative 69supplier audits conducted in alignment with the RBA audit protocolRecognized with the Intel EPIC Program Outstanding Supplier Award w

224、ith Supplier Diversity DistinctionReceived Microns Supplier Award for Outstanding Performance in SustainabilitySetting New Goals to Advance SustainabilityNET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATA37Goals and ProgressGoals and Progress3x30 GoalsGoalProgress*StatusUN SDGReduce equivalen

225、t energy consumption per-wafer pass for semiconductor products by 30%by 2030 from 2019 baselineAverage per-wafer energy use continued to decrease due to changes in the mix of products sold.As we incorporate new energy savings developments into our existing and upcoming products,we are on track to me

226、et or exceed our 3x30 target.Reduce the impact from chemical consumption per-wafer pass for semiconductor products by 30%by 2030 from 2019 baselineSustainability Systems Center of Excellence team and its engineering partners in the product business units continue to pursue development of multiple pr

227、oducts that can significantly reduce chemical impact through reduced demand for process chemicals,alternative process chemistries and improved abatement solutions.Some of these initiatives are expected to be multi-year efforts,but we are on track to meet or exceed the 3x30 target.30%reduction in too

228、l footprint per production unit ratio(sqm/wph)for semiconductor products from 2019 baselineFootprint reduction to date is largely the result of productivity improvements in existing tool architectures.As new product architectures,such as Vistara,begin volume shipments to customers,footprints can be

229、further reduced and are expected to meet or exceed the 3x30 target.SuCCESS2030 GoalsGoalProgress*StatusUN SDGCollect GHG data from top suppliers and partner on reduction targetsConducted GHG surveys with over 80 suppliers in fiscal 2023Drive compliance with RBA Code of Conduct and Applied Materials

230、Standards of Business Conduct(SBC)Conducted audits of over 50 top-tier suppliers in 2023Increase the percentage of spend with,and representation of,women-and minority-owned businesses by 2024,aiming to reach$1 billion in diverse spend by 2027Met our interim goal of increasing diverse spend to 3.8%of

231、 total global supplier spend,spending$594 million with certified diverse suppliers in 2023Transition the supply chain to recyclable content packaging,with a target of 80%by year-end 2023Through 2023,an estimated 80%of Applied packaging materials were made from recyclable materialsNot yet startedIn p

232、rogressOn targetCompleted*Cumulative through fiscal 2023 unless otherwise notedNET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202338Sustainability Systems Center of ExcellenceSustainability Systems Center of ExcellenceAs the semiconductor industry continues to deliver

233、 better performance per bit,chip structures are becoming more intricate and wafer production is becoming orders of magnitude more complex.This complexity requires more process steps that increase direct emissions,energy use and supply requirements.At the same time,growing demand for current and lega

234、cy generation chips to support the sectors,including the Internet-of-Things,communications,automotive,power electronics and sensors(ICAPS),lead to compounding increases in GHG emissions from chipmakers.A key element of our Net Zero 2040 Playbook is driving efficiencies in our products so they use le

235、ss electricity and process chemistry and emit fewer emissions for each wafer processed.By improving the sustainability of our products,we can help our customersmany of whom have set their own aggressive net zero emissions targetsreduce emissions from their own operations.Our 3x30 engineering team,es

236、tablished in 2020,is focused on reducing the energy consumption,chemical impact and fab footprint of our systems by 30%this decade.The team fosters a culture that prioritizes sustainable design principles in the earliest stages of product development to create systems that consume fewer resources an

237、d supports end-to-end deployment and adoptions of purpose-built sustainability products by our customers.Our comprehensive sustainable design approach encompasses three core elements:Sustainability Systems Center of Excellence,which supports our product engineeringdesign teams in developing more sus

238、tainabletechnologies products and processes;theresults can be seen in our expanding portfolio ofpurpose-driven products and services for faband subfab.A proprietary modeling tool that quantifies theenergy,chemical impact and footprint of past,present and future tool designs,to providecontinuous meas

239、ure and ensure progress towardour 3x30 goals.Customer partnerships to innovate efficienciesin our tools and processes,boost industry-widesustainability and deliver broad benefits tothe planet.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202339Next-Generation Platfor

240、ms and Systems Vistara is one of our most significant new equipment platforms in a decade,reimagined for a new,more-sustainable era of chipmaking.Vistara is our first purpose-built platform,designed to support Integrated Materials Solution recipes using more types and sizes of chambers.It combines a

241、nd co-optimizes multiple process steps within a single tool,resulting in an estimated 35%reduction in platform energy consumption and about 30%reduction in chemical footprint for etch applications.The design increases throughput density by as much as 30%,allowing chipmakers to build smaller fabs and

242、 potentially save one million metric tons of carbon for every 100,000 wafer-starts-per-month fab built.Applieds Sculpta Pattern-Shaping System features industry-first patterning technology that eliminates an entire EUV mask layer from a wafer process flow.In addition to significant capital and manuf

243、acturing cost savings,Sculpta enables tremendous energy savings of more than 15 kWh per wafer,direct GHG emissions reduction of more than 0.34 kg of CO2e per wafer and water savings of about 15 liters per wafer.ecoUP Upgrades and Purpose-Built ProductsApplied has 24 eco-focused products and services

244、 in our portfolio todaynew ecoUP innovations and components for existing products.This is a pipeline of new upgrades engineered for our existing products that help customers meet their sustainability targets.Applied offers new components,software and solutions that advance environmental performance.

245、For example:EcoTwin is a digital twin that can monitor and model recipes and operations so chipmakers can drive energy optimization in their fabs.EcoTwin Eco-Efficiency Software automatically generates detailed reports of carbon footprint and related consumption parameters from both the fab and subf

246、ab to help customers identify opportunities to reduce consumption.iSystem Controller monitors resource consumption and GHG emissions and automatically adjusts the energy needs in the subfab based on whats happening within a tool.The small footprint iSystem controller can support up to four tools and

247、 is easily installed on both Applied and non-Applied Materials process tools.Aeris-G is a pre-pump plasma abatement solution that uses less energy by treating the actual process gas volume.The Aeris-G system can be installed within the pump footprint of each chamber and requires only power,nitrogen,

248、oxygen,cooling water and ultrapure water connections.For new tool installations,Aeris-G saves subfab space,reduces utility and exhaust connections and minimizes installation costs while improving abatement efficiency of greenhouse gases.There are more than 20and growingfield-application specific upg

249、radable products in our ecoUP portfolio to help customers optimize the performance of their existing tools while reducing energy consumption and GHG emissions,including shared heat-exchangers between chambers,low-power systems,thermal control and equivalent energy utilities savings components.Sustai

250、nability Systems Center of ExcellenceIndia Sustainability Systems Center of Excellence TeamThe India Sustainability Systems Center of Excellence team develops many of our ecoUP Upgrades in collaboration with Applieds business units,with the specific purpose of improving the performance of our existi

251、ng equipment.The team conducts modeling and testing to validate the performance improvement of the ecoUP upgrades and works to find new ways to reduce and eliminate use of certain types of materials.For example,the team developed upgrade kits to decrease evaporation loss on heat transfer fluids,whic

252、h reduces the amount of GHG emissions and PFAS that is released by certain thermal management systems used widely in the semiconductor industry.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202340SPOTLIGHTAccelerating Semiconductor Collaboration and InnovationTo meet

253、 the explosive demand and growing complexity of technology,the semiconductor industry needs to fundamentally transform its model of collaboration and feedback to increase the speed and lower the cost of innovation.In May 2023,Applied announced a landmark investment to build the worlds largest and mo

254、st advanced facility for collaborative semiconductor process technology and manufacturing equipment R&D,the EPIC Center.Located at an Applied campus in Silicon Valley,the multibillion-dollar EPIC facility will include more than 180,000 square feetmore than three American football fieldsof state-of-t

255、he-art cleanroom for collaborative innovation with chipmakers,universities and ecosystem partners.The new EPIC Center is expected to reduce the time it takes the industry to bring a technology from concept to commercialization by several years,while simultaneously increasing the commercial success r

256、ate of new innovations and the return on R&D investments for the entire semiconductor ecosystem.The EPIC platform will provide university researchers with access to the full range of industrial-scale capabilities to validate their ideas.University researchers can perform research alongside industry

257、professionals,and Applied can collaborate with academic partners to build a network of industrial-quality satellite labs at university facilities.In July 2023,Applied and Arizona State University(ASU)announced such a satellite lab.Aided by the Arizona Commerce Authority,the Materials-to-Fab(MTF)Cent

258、er will be a world-class shared R&D and prototyping facility designed to accelerate the transfer of innovations from ideation to fab prototype.Students and faculty will have the opportunity for hands-on learning and research using the same equipment used in leading production fabs.To build an inclus

259、ive talent pipeline,Applied also intends to launch an endowment fund that will provide scholarships to first-generation and/or underrepresented minority students in the ASU Ira A.Fulton Schools of Engineering.Sustainability Systems Center of ExcellenceEPIC Center LaunchAddressing PFAS in the Semicon

260、ductor Industry As part of Applied Materials commitment to minimize the environmental impact of our operational footprint and supply chain,we have adopted a“PFAS Responsible”approach.We are prioritizing both the elimination of per-and polyfluoroalkyl substances where technically and commercially fea

261、sible,and the development of non-PFAS alternatives where needed.In critical applications where no current line of sight exists to suitable non-PFAS alternatives,Applied will drive environmental and commercial risk mitigation and work with our suppliers and customers to ensure the most responsible us

262、e of PFAS.Limited and responsible use of PFAS will require industry-wide collaboration.Applied is actively participating in industry groups that are sharing information about the use of PFAS throughout the semiconductor industry,including serving as a leading member of SIAs Semiconductor PFAS Consor

263、tium and SEMIs PFAS Initiative.For more information,please see Applied Materials Statement on P F A S.Applied Materials received Microns 2023 Supplier Award for Outstanding Performance in Sustainability.Applied collaborated with Micron to achieve about 15k MTCO2e emissions savings,17M kWh of energy

264、reduction and 120k m3 of DIW usage reduction in 2023.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202341Promoting the Circular EconomyPromoting the Circular EconomyApplieds customers need to run their equipment at maximum capacity,often 24 hours a day,seven days a w

265、eek.This can put big demands on their electricity use and increase process chemistry and carbon emissions.Applied Global Services(AGS)provides integrated solutions to optimize equipment and fab performance and productivity.Through its corrective and preventive service contracts,AGS ensures Applieds

266、installed equipment is working at its optimal performance with the lowest environmental footprint.AGS works with our customers to understand their sustainability goals and manufacturing expectations,and deploys diagnostic systems and tools,powered by AI,to fully understand how the equipment is perfo

267、rming.The team combines that insight with deep product knowledge to recommend software and/or hardware upgrades to help optimize performance and minimize emissions.For example,Applieds Total Kit Management(TKM)program provides a customized kit of certified spares with best-in-class cleaning and coat

268、ing services to reduce total cost of ownership.For our CMP equipment,the HeadSmart TKM solution offers offsite head rebuilds,which saves the customer valuable floor space while keeping the CMP polishing head in use longer.Applied has rebuilt more than 276,000 heads through the HeadSmart solution.App

269、lied operates regional TKM processing facilities,which help reduce transportation costs and time.By carefully monitoring key dimensions on the parts,we are able to best determine when parts have achieved end of life.Our Forecast Parts Management(FPM)leverages Applied Materials global supply chain in

270、frastructure and inventory to offer parts support specifically tailored to our customers operational needs.The FPM allows greater supply assurance by placing the right inventory closer to fabs,which provides savings to our customers while reducing the carbon footprint.By the Numbers16,600276,000111,

271、468Systems under service agreementsHeads rebuilt through the HeadSmart solutionKits per year are recycled in our chambers following TKM processingDid You Know?AGS supports more than 48,000 installed Applied semiconductor,display and other manufacturing systems worldwide through a global distribution

272、 system in more than 195 locations and trained service engineers and recycling facilities located in close proximity to customer sites.Operating Amid Electricity Constraints AGS is working with a customer located in a region where access to electricity is at risk.Optimizing the efficiency of their e

273、quipment isnt just about cost efficiencyits about operating at the greatest capacity with the lowest possible energy footprint.Using a system of diagnostic data collection and analysis,AGS is able to prioritize actions,parts and eco upgrades to keep the equipment operating at optimal output aligned

274、with the environmental constraints faced by this customer.Applied Global ServicesNET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202342Keeping Systems and Parts in Use LongerApplieds systems are designed for long life,supported by upgrades,repairs,refurbishment and reu

275、se.All newly manufactured parts are engineered for greater repairability,and where possible,Applied uses refurbished parts to repair and remanufacture systems and parts.As part of its work supporting customers in the field,AGS recovers parts and assemblies from our equipment for potential reconditio

276、ning and reuse.Applied has the capability to repair about 10,000 unique parts.Applied maintains one of the industrys largest global inventories of spare parts,with recovered parts searchable in our inventory management system and ready to be selected for cleaning and repair.Each recovered part goes

277、through an exacting process of inspection,cleaning,refurbishment and repair.These recovered parts are certified by AGS as“like new”for reuse,with a full warranty and the same service level as a new part.Repaired parts are used to support Applied equipment in the field.Packaging Reduction and ReuseAp

278、plieds precision products require strong,durable packaging to avoid damage and absorb vibration during transport.Our Design for Distribution task force works to meet those stringent demands while reducing materials use,improving recyclability and increasing reusability.In 2023,about 80%of our packag

279、ing materials were made from recyclable materials(polyethylene,polypropylene,corrugated fiberboard,steel and wood),up from 70%in 2022.Our supplier packaging specifications prohibit all non-recyclable material,except laminated plastic bags used for moisture barrier protection,for which there is curre

280、ntly no viable alternative.We are working with our suppliers to report packaging materials data.Together with our major packaging partner,TransPak,we are establishing a baseline of our total use of lumber,plywood and foam for packaging used to ship products to customers,which will enable us to set t

281、angible reduction targets informed by data.In fiscal 2023,TransPak and Applied calculated wood content savings based on selected designs.This initial project was done as a proof of concept to validate our measurement approach.Through this targeted effort,Applied reports a savings of about 1.2 millio

282、n pounds of wood content in 2023.Applied offers an ever-expanding portfolio of eco-focused products and services.Using fiscal 2023 as a baseline,supported with a validated measurement methodology,we aim to achieve a target reduction of 5%in 2024.This will be calculated through a macro approach of me

283、asuring board feet of lumber,square feet of plywood and square feet of foam for packaging across our portfolio.Award-winning Design for Distribution In 2023,more than 100 representatives from our manufacturing engineering,procurement,logistics,sourcing,packaging engineering,operations and multiple b

284、usiness units embarked on a project to rethink processes,redesign packaging and reimagine sourcing and shipping logistics to solve for rising end-to-end transportation costs and heavy,inefficient packaging designs.Applied has traditionally relied on wood crates to safely and securely ship our semico

285、nductor manufacturing products to customers.In fiscal 2022,Applied used 108,000 wood crates,which is the equivalent of about 80 acres of forest or 20,000 trees.The crates,generally single use,are not optimized based on content,leaving excess,non-functional“air space”that costs more to ship,takes up

286、more space in transit and uses more materials than necessary to protect the products.The cross-functional team set out to solve these issues,implementing a company-wide program to reduce waste and excessive spend on packaging materials and freight by integrating logistics into product design.The pro

287、gram includes both incoming and outgoing materials,covering everything that we buy,integrate,make and sell.The team uses modeling and simulations to ensure we are optimizing both the packaging and logistics.Among the improvements the team realized in 2023 include:Redesigning shipping crates and impl

288、ementing flat packaging and packaging densification to better match the packaging with the product or products being shipped;the packaging optimization resulted in a 70%reduction in supplier inbound extra-large shipments and a 21%reduction in wasted“air space”in the packaging Implementing a collapsi

289、ble crate design to reduce storage and transportation costs Reusing inbound crates for outbound shipments to customers Replacing wood with FSC-certified fiberboard where possible,which also reduces the weight of shipments Providing crate recycling where beneficial Carting to enable mode shift from a

290、ir to ocean,as well as aggressively negotiating freight ratesThe project reduced outbound shipments by about 6,000 crates(equivalent of saving about 5,300 trees),reduced the consumption of wood and plastics,lessened the cost and carbon footprint of logistics operations through smaller,lighter and fe

291、wer crates per shipment and saved Applied$164 million dollars in fiscal 2023.The project also inspired an awareness and greater understanding of the positive environmental impact Applied employees can drive together.The Design for Distribution Program received the top score for the Applied 2023 Pres

292、idents Quality Award.The annual award,presented by Applied CEO Gary E.Dickerson and VP Global Quality Vinjay Sinha,focuses on recognizing teams that are strengthening our Culture of Quality by applying quality processes and data-driven decision-making to deliver impactful enhancements to our product

293、s and services or sustainable,systemic improvements in our operations.Promoting the Circular EconomyNET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202343Product SafetyProduct SafetyApplied Materials develops and implements comprehensive product design,manufacturing,la

294、beling and testing policies and programs to ensure our products are safe to use and comply with applicable legal requirements and conform with relevant industry standards and guidelines.Third-party assessments validate that our products meet applicable safety requirements.Applieds product release pr

295、ocess draws upon applicable consensus standards,including SEMI S2.Our risk assessment process follows the applicable SEMI S10 Safety Guideline for Risk Assessment and Risk Evaluation Process on identifying,estimating and evaluating the lifecycle risks of semiconductors.Our Product Safety group partn

296、ers with other company functions to oversee the design of products and services,monitors their safety during the products lifecycle and drives compliance with our product safety policy and procedures.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202344Supply Chain Re

297、sponsibilitySupply Chain ResponsibilitySuCCESS2030 is our 10-year roadmap for creating a more sustainable supply chain.The effort builds on our foundation of supporting ethical labor practices,environmentally responsible operations,responsible minerals sourcing and international human rights standar

298、ds.Through SuCCESS2030,our assessments of supplier performance and capabilities require shared commitments across core ESG focus areasincluding environmental impact;labor practices;and diversity,equity and inclusionmost of which include defined performance targets.We hold our supply chain partners t

299、o the same high standards as we hold ourselves.Applieds Supplier ESG Requirements document is incorporated into our Global Supplier Agreements and other agreements with direct and indirect suppliers.These requirements are also included in the terms and conditions for logistics suppliers and all purc

300、hase order transactions and are enumerated in our most commonly used agreements for indirect services.Our SuCCESS2030 Office oversees metrics and compliance audits and conducts training and coordination with participating suppliers.Applied is committed to protecting human rights and conducting busin

301、ess in an ethical and responsible manner.Learn more about our commitment to human rights and Applieds Responsible Manufacturing Program.Supplier Audits,Risk Assessment and RemediationTo best assess the working conditions of the employees within our supplier factories,Applied conducts third-party aud

302、its to the RBA audit protocol,which includes labor and working conditions,environment,health and safety,and ethics.The RBA audit program requires at least three data points,including worker interviews,to validate conformance to the audit criteria,ensuring a thorough review of working conditions.The

303、RBA includes hundreds of member companies aligned to one code,one audit protocol and one audit result,enabling suppliers to leverage their audit reports across multiple customers to help reduce audit fatigue and free up time to focus on remediation and capacity improvement.With thousands of supplier

304、 factories around the world,we prioritize supplier sites based on spend.For other facilities,we include our medium-to high-risk sites,according to regional risk,as assessed by the RBA Risk Assessment tool.For our suppliers,these on-site audits typically take four to 10 days.It is required that there

305、 is no interference by the supplier site management.Worker interviews must be conducted without management present and interviews are not recorded.In 2023,Applied had zero instances of management interference.Once the audit is completed and the findings are agreed upon,the suppliers work with our Su

306、CCESS2030 team to close issues.In the event of a life-threatening priority finding,audit firms are required to notify Applied within 24 hours,though these types of priority findings are typically reported at the time of discovery.At Applied,we require our suppliers to close their priority and major

307、findings within the recommended RBA timeline through additional on-site,third-party audits.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATASustainability Report 202345To support our suppliers in closing their findings,we have secured services from an independent consulting firm to work dire

308、ctly with our suppliers to create corrective action plans.Our audit reports go through a quality review,and the suppliers are given a post-audit survey on their audit experience throughout the entire cycle.This helps ensure high quality and consistency across auditors and firms and enables us to wor

309、k with individual auditors to improve their processes and capacity,as needed.Supplier sites that are under consideration by Applied go through a shortened,second-party audit.An Applied engineer reviews audit criteria,such as forced labor,young workers,working hours,environment,health and safety,and

310、ethics.All Applied engineers who conduct these condensed working-condition assessments have taken the RBA auditor course.Potential suppliers who fail to close the gaps in these assessments are not approved to be Applied suppliers.2023 Supplier AuditsInitial Audits ConductedClosure Audits ConductedTo

311、tal Audits Conducted511869Capability BuildingWe offer our suppliers a structured program of webinars and training on responsible factories,product compliance and other topics to help them close any gaps across our ESG focus areas.In addition,our SuCCESS2030 Office meets one-on-one with each tier 1 s

312、upplier,at least once a year,to go through the SuCCESS2030 requirements and answer any questions.Suppliers can also meet with the head of SuCCESS2030 using a public scheduling link.GHG DataIn fiscal 2023,we announced our Net Zero 2040 Playbook.To prepare Applied suppliers for this initiative,we coll

313、ected GHG goals and data from all our top spend suppliers,through which 80 suppliers were able to provide site-level data for Applied supplier sites.In 2024,we are continuing to collect supplier site data for all our top suppliers,by spend,and to drive adoption of GHG reduction goals for at least 11

314、0 suppliers.Our survey includes source data for us to collaborate with our suppliers on creating an emissions reduction plan to reach net zero by 2040,including establishing a reduction plan and assisting them in procuring renewable energy.As part of this effort,Applied Materials became an inaugural

315、 corporate sponsor of Schneider Electrics Catalyze partnership program,which aims to accelerate the adoption of renewable energy and reduce carbon emissions throughout the global semiconductor value chain.We also joined the Semiconductor Climate Consortium Energy Collaborative,bringing together the

316、combined purchasing power of semiconductor companies to encourage a faster conversion to clean energy in the Asia-Pacific region.Through active participation in programs like Catalyze and SCC Energy Collaborative,as well as through organizations like CEBA and RE100,we are building on our SuCCESS2030

317、 efforts to instill sustainability best practices among our suppliers and intend,in the future,to accelerate supply chain decarbonization and drive higher output of clean energy for the semiconductor industry.Responsible Minerals SourcingApplied Materials is committed to the responsible sourcing of

318、minerals used in our products.Key to this commitment is our policy around tantalum,tin,tungsten and gold(3TG),also known as conflict minerals for their frequent origin in the Democratic Republic of Congo(DRC)and adjoining countries affected by conflict and human rights abuses.For more than five year

319、s,Applied has worked with third-party service providers to assist in conducting outreach to suppliers regarding their sourcing of 3TG intentionally added to products furnished to Applied,and evaluating their responses.Applied is a member of the RMI,and we work to validate that our suppliers conform

320、with Responsible Minerals Assurance Process(RMAP)standards.In 2023,our SuCCESS2030 team worked directly with approximately 11 smelters or refiners to ensure their continued participation in the RMI RMAP program.Our SuCCESS2030 lead is the co-chair for the RMI Smelter Engagement Team(SET),which overs

321、ees the different smelter engagement teams,and three Applied employees serve in a voluntary capacity.In addition,an Applied SuCCESS2030 program manager leads a second-level SET team,which oversees re-audits as part of the RMAP program to maintain the RMAP conformance rate.Supply Chain Responsibility

322、In addition to 3TG,we also collect data on cobalt and will begin our due diligence for aluminum,steel and iron in fiscal 2024.We are one of the founding members of Copper Mark,to ensure a responsible supply chain within the copper industry.For more information about our 3TG due diligence,please see

323、our Conflict Minerals Report.Supplier DiversityWe met our goal to achieve greater than$500 million spending with certified diverse or pending certified diverse suppliers39%with minority-owned,56%with women-owned and 5%with veteran-owned businessesreaching$594 million in 2023.Our goal is to reach$1 b

324、illion in spend with diverse suppliers by 2027.All suppliers,regardless of certification or ownership status,must meet the same procurement standards,participate in the same audits and go through the same rigorous onboarding process.To ensure all Applied suppliers are accountable to the same quality

325、 standards,there is no special consideration or weighting based on diverse supplier status.We are also active in the supplier diversity space beyond Applied,including being a:Founding member of SEMIs Manufacturing Ownership Diversity(MOD)working group,which brings together semiconductor manufacturer

326、s,original equipment manufacturers(OEMs),material suppliers,certified diverse suppliers and diverse supplier organizations to build collective understanding,remove barriers and create growth opportunities that advance a more diverse manufacturing supply chain.Corporate member of the Diverse Manufact

327、uring Supply Chain Alliance(DMSCA),which is the only U.S.non-profit membership organization focused exclusively on the development of small-and medium-sized U.S.-based diverse manufacturers.DMSCA helps diverse manufacturers assess and mitigate performance risk and address operational readiness,inclu

328、ding environmental sustainability factors,to support emerging technologies,like IoT and AI.Corporate member of the National Minority Supplier Development Council(NMSDC),which,in addition to being a certifying agency,provides minority business enterprises(MBEs)with resources,such as business classes,

329、pitch coaching and connections to potential corporate buyers.In fiscal 2023,Applied joined a regional NMSDC chapter,through which we collaborate across multiple industries to increase efficiencies and advocacy in the supplier diversity space.NET ZERO INTRODUCTIONPURPOSEABOUTPLANETPEOPLEPROGRESSDATAS

330、ustainability Report 202346Applied Materials earned the exclusive Intel EPIC Program Outstanding Supplier Award with Supplier Diversity Distinction for 2023.The award recognizes the highest level of achievement in the Intel global supply chain and is an ongoing realization of continuous improvement

331、within the high-performing Intel supplier ecosystem.Of the thousands of Intel suppliers around the world,only a few hundred qualify to participate in the EPIC Supplier Program.Applied is one of only six companies recognized by Intel in 2023.Intel honored Applieds unwavering commitment to quality,dri

332、ve for excellence and dedication to technology innovation.Supply Chain ResponsibilityFostering Diverse Supplier TalentApplied is working to grow the pipeline of talent across our supply chain.In addition to working closely with our existing suppliers to secure applicable diversity certifications,we

333、are committed to helping strengthen both the capabilities and capacity of suppliers to grow with Applied and the semiconductor industry.This includes helping strengthen the pipeline of talent with essential vocational skills,like welding and electrical,as well as science,technology,engineering,arts and math(STEAM)skills to support our supply chain.Applied is working to establish a vocational and S