An Overview of Supply Chain

Businesses selecting local suppliers can not only fulfill their social responsibility to the community but also reduce the environmental impact resulting from transportation and distribution over long distances. In 2023, more than 94% of GIGABYTEʼs first-tier suppliers were located in Asia, of which 92% were in the areas where our main manufacturing bases are situated. GIGABYTE adheres to local procurement in order to maintain productivity and continuity of operations as well as improve local economic development.

Local Procurement Rate in the Past 5 Years

[Note 1] Local：The sites where materials are produced are in the areas where GIGABYTEʼs main manufacturing bases are located.

[Note 2] Procurement amount：calculate based on the purchase amount of the year.

Supply Chain Management Policy and Risk Management

In 2018, GIGABYTE officially issued the “GIGABYTE Sustainable Procurement Guidelines” which applies to the Headquarters, Nanping Factory, two factories in China, and the subsidiaries with substantial influence in Taiwan. We reference with the “Code of Conduct for Responsible Business Alliance” issued by the Responsible Business Alliance (RBA) as the highest guiding principle. 4 major management aspects (including 15 sub-goals) and 4 zero tolerance regulations are set to assess the risk of a supplier. When selecting suppliers, other than the basic requirements like quality, delivery, service, cost, etc., we also conduct investigations and regulations for environmental management systems, occupational safety and health systems, corporate social responsibility, hazardous substances, etc., to ensure that the chosen suppliers are in compliance with sustainable procurement standards.

4 Management

Product quality, production and manufacturing ability, service, deliver time, price.

ISO 14001, legal compliance, environment management measures.

GIGABYTE Hazardous Substances Management, international standards and regulations of chemicals management

Sustainable supply chain evaluation management system, labor human right, conflict minerals, ISO 45001, corporate ethics.

4 Zero Tolerance Regulations

  • Child labor
  • Forced labor / prison labor

  • Discharge of untreated toxic and hazardous substances or materials

  • Behaviors that cause immediate injury to employees

Download the GIGABYTE Sustainable Procurement Guidelines

Tiered Supplier Management

GIGABYTE adopts tiered management for existing and new suppliers through evaluation in accordance with the “Supplier Quality Management Practices”. After several internal discussions since 2022, the tiered supplier management system has finally incorporated into the Enterprise Resource Planning (ERP) system. In addition to the existing criteria such as supplier contracts (CMRT, RBA) and material rating (quality, delivery, cost, and service), it also integrates the supplier sustainability assessment system which has been promoted and implemented since 2012. The new system enables the grading and rating to fully reflect the overall sustainability performance of GIGABYTEʼs suppliers. Moreover, a high CSR-related risk assessment is conducted quarterly, and suppliers rated as D-level will be weeded out. The strategic assessment of suppliersʼ sustainability performance provides assurance of the quality and stability of the suppliers and reduces supply chain risks.

In 2023, GIGABYTE audited 58 suppliers for RoHS, quality, and CSR. The audit identified 14 suppliers with moderate risk and 5 suppliers with high risk, with quality system audits being the most common problem. The suppliers were put on a registry by GIGABYTE, and 1 vendor had improved and been re-rated as low risk after the repeat audit. We will continue to track the situation with these suppliers in the future. In terms of CSR, suppliers were assessed against the Responsible Business Alliance (RBA) Code of Conduct in 2023 and around 90% of cases were good (scored above 85). The overall average score was 94.39. We will continue to promote related initiatives and projects in the future so that we can lead our supply chain partners in embracing sustainability.

The Ratio of 1-tier Suppliers by Level and the Composition of Key Suppliers in 2024

Supplier Audit

GIGABYTE has established a supplier quality system audit and RBA risk tracking model in response to requirements relating to Group operating risk, stakeholder concern, and sustainability disclosure. The system is being progressively rolled out to BUs and subsidiaries. The results of supplier audits are periodically compiled and reported. An annual audit plan is devised by GIGABYTE and suppliers selected for auditing. Supplier transactions and quality are reviewed on a monthly basis and rolling adjustments made to the audit plan.

2024 supplier audit findings

Follow-up improvement and tracking of moderate risk suppliers:

  • Major deficiencies: The two moderate risk suppliers were both found to have omissions in their SOP and labels in the “Process Aspect.”
  • Improvement and follow-up: Deficiencies were immediately recorded and corrective action required after the first audit. The two moderate risk suppliers were found to have taken corrective action upon re-inspection. Adherence to SOP by operators on the floor improved safety in the work environment. The suppliers were re-classified as low risk after the re-inspection.

High CSR Risk Assessment Mechanism

GIGABYTE conducts supplier high-risk assessments on the four aspects of society, environment, governance, and business every quarter based on the tiered supplier management system. Particular emphasis is placed on sanctions over labor, environment, financial transactions and conflict minerals among level 1 and 2 key suppliers (accounting for 32% of all suppliers in 2024); corporate governance evaluation, scope of ESG disclosure, and positive/negative media coverage are also added to the weighted matrix to identify and screen high-risk suppliers for that quarter. The outcomes are provided to the relevant personnel at each BU and subsidiary to ask for supplier improvements. In 2024, the proportion of high risk suppliers dropped from 31% in Q1 to 1% in Q4. Suppliers that made improvements accounted for 62.9% of all suppliers.

2024 supplier risk assessment result