Intel’s Approach to Supply Chain and CSR

1. Intel’sApproach toSupply Chain and CSR Bob Leet Supplier HR/EHS Program Manager

2. Agenda • Intel Background • Overview of Current Supply Chain CSR Program • Philosophy on Future Program Direction • Vision in Action

3. Intel Snapshot Intel is the world's leading innovator in advanced silicon technology, with more than 35 years of leadership in computing and communications. • Year founded: 1968 • Number of employees: 78,000 • Revenues: $30.1 Billion (2003) • Products and services: over 450 • Stock symbol: INTC • Worldwide offices and facilities: 294

4. Intel Employees Around the World • 78,000 employees (as of July 1, 2003) • 48,000 in the U.S. • 30,000 internationally • Intel has employees in 48 countries worldwide with large sites in Ireland, Israel, India, China, Malaysia, Philippines, Costa Rica and the U.S. Diversity is valued: different people bring a variety of thinking to business and technical solutions

5. Intel’s High Volume Fabrication and Assembly/Test Sites Washington Ireland IFO China Shanghai A/T Colorado Fab 23 Israel Fab 8/18 China Chengdu A/T (announced) Mass. Fab 17 Oregon F15, F20, D1 California D2 Costa Rica San Jose A/T Arizona Fab12/22 New Mexico Fab 7/11/11X Malaysia Penang A/T Kulim A/T Philippines Cavite A/T

6. Intel as Industry Leader… • Fortune 500 ranking: 58 - 2003 • Fortune Global 500 ranking: 155 - 2003 • Top 50 Fortune “Best Companies to Work For” list • Fortune Most Admired Companies: #1 in industry group • Computerworld "100 Best Places to Work in IT 2003" • Fortune selected Intel Ireland as one of "10 Great Companies to Work for in Europe." - 2003 • Intel was named Sector Leader in the Dow Jones Sustainability Group Index for the third year in a row. • Key component of Domini, Citizens, NASDAQ, FTSE4Good, Calvert and other social indexes

7. Intel’s Strategic Direction: Convergence of Computing and Communications

8. Intel’s Current Supply Chain CSR Program • The program starts at the top: • Intel Corporate Business Principles (CBP) include Supplier HR/EHS Expectations • At the supplier engagement level: • Contracts include the Intel Corp. Business Principles key Supplier HR/EHS points • Supplier HR/EHS Expectation document given to each new supplier in most business units • Intel Commodity Managers attend required trained • Supplier selection audits include HR/EHS criteria in most business units • Continuous engagement activities: • Supplier continuous improvement assessments (SSQA) • Annual Supplier End-of-Year Communication • Annual “Supplier Day” Event

9. Intel’s Current Supply Chain EHS Program • Supplier End-of-Year Communication: • More than 3,500 letters sent out refreshing our HR\EHS Supplier Expectations in 2003 • Supplier HR\EHS Assessment Results: • More than 650 assessments cumulative worldwide • 173 in 2003 – 100% of planned • All 2002 issues closed, all 2003 issues closed or in progress • Findings dispersed across Asia and the U.S. • Mainly obvious EHS issues or program document/deployment of HR programs.

10. Philosophy on Future Program Direction • Company Program Developed • Passion • Motivated • Learning International Standards Established & Accepted What Happens In Here? ~8-10 ~5 0 Years You Are Here

11. Philosophy on Future Program Direction • Industry / • Sector Harmonization • Common Suppliers • Common Customers • Efficiency Gains • Company Program Developed • Passion • Motivated • Learning International Standards Established & Accepted ~8-10 ~5 0 Years You Are Here

12. Philosophy on Future Program Direction • Intel has had great success in the past both leading and contributing to Industry–wide programs • ECMA • Intel launched an initiative to develop voluntary industry design for environment standards, ECMA 341 is the result of this effort • ECMA 341 principles have been integrated into Intel's DfE program • I300I • Program to define the detailed needs of the next generation of Semiconductor processing tools (200mm => 300mm wafers). • Included Byproducts and Natural Resources consumption targets. • S2 • Equipment safety & health standards program developed to ensure that new tools meet semiconductor manufacturers expectations • Developed through Sematech with SEMI • SSQA • Standardized Supplier Quality Assessment is a common checklist used to assess the level of supplier quality performance • Includes ISO 9001, Baldrige (including HR & EHS), Motorola QSR • Intel’s standard roadmap supplier assessment tool

13. Vision in Action • Intel continues to learn, so it can improve further • Comparative Analysis / Benchmarking • Implementing some of these learning’s into the existing program • Refining where biggest Risks are • Non-major first-tier suppliers • Geographies • Industry/Sector wide • Working with some sector players to identify areas for mutual improvement • Future may include an industry collaboration of some sort

14. Challenges • Intel sees one of the biggest challenges as determining the appropriate level of management oversight for contract manufacturing suppliers • Higher Risk potential than first-tier suppliers • Greater engagement can mean greater resources necessary • Balance between partnership and “dictatorship” • Another challenging area is the level of engagement over small suppliers (e.g. office supplies) • Return on resource investment

15. Thank you. Bob Leet Supplier HR/EHS Program Manager 5000 W. Chandler Blvd., M/S:CH3-113 Chandler, AZ 85254 USA (480) 554-8667 bob.e.leet@intel.com