We at SK hynix are fully committed to fair and free competition to help establish fair trade practices in the semiconductor supply chain and hereby declare that we will comply with all applicable laws and regulations on fair trade voluntarily.

1. With the full understanding that fair trade practices ingrained in our business dealings are the true source of our competitiveness, we will put fair trade ahead of everything in our management.
2. We will not be involved in any unfair business dealings to help ensure that fair trade practices are established in all fields and areas. We will consult with our trading partners on an equal footing.
3. We will offer training for all our members to help them fully understand, and comply with, all fair trade related laws and regulations.
4. We will reinforce our supervision and monitoring system by appointing a person responsible for our compliance with all fair trade related laws and regulations.
5. We will run a voluntary system for compliance to prevent any violation and impose our own sanctions on any violation identified.

A Compliance Program is an internal compliance system that companies adopt to ensure that fair trade related laws and regulations are fully followed. It provide clear standards by which their members should act, allowing companies to prevent violations and identify any violation as early as possible for prompt response. Our Compliance Program is designed and implemented based on the laws and regulations applicable in the jurisdictions we operate around the world, applicable international conventions, customer requirements as well as the unique aspects of the semiconductor industry.

First, key compliance risks and global standards to be followed by a world class company are identified. Then a five step process (principles setting - training - inspection - verification of improvement - reporting to management) is applied repeatedly.

• Principles of running our Compliance Program

• Step 1

  Policy Making

• Step 2

  Training

• Step 3

  Audit

• Step 4

  Correction

• Step 5

  Report

For substantive and effective compliance, we have compliance regulations in place and appoint a person to support compliance (Compliance Officer) who is responsible for supervising our compliance with all the applicable laws and regulations. Our compliance performance is reported to the Board of Directors annually.
We also publish different sets of guidelines containing highlights of applicable laws and regulations that our employees should know on their jobs and offer them training to keep all our members on the alert for compliance.

As part of our efforts to comply with applicable laws, we keep track of developments in the relevant regulatory frame including the proposal of new bills and thus have built an internal review process to ensure that fair trade provisions are fully reflected in our business process.

We pursue shared growth and co-existence through cooperation in our business dealings with our trading partners. To better protect the rights of our small and medium sized partners, we ensure that all applicable laws and regulations are fully followed prior to starting a contract and that our employees involved are fully aware of what must be followed on their jobs during the contract.

We offer a wide range of legal training to facilitate compliance across our entire organization, including regular sessions for the management team and employees regarding fair trade practices and contracting. This helps all our members have a higher awareness of the importance of complying with fair trade related laws and regulations. Every training session is mandatory for those directly responsible for the relevant jobs or occupiers of relevant positions. This is also offered to our subsidiaries, furthering the rollout of fair trade practices.

Our inspection and implementation system consists of the setting up of internal regulations related to the antitrust laws, regular training and interviews, ex-ante and ex-post inspection, monitoring, internal audit, prevention of recurrence and other relevant steps. Before commencing any work that may have a risk of violating the antitrust law, an employee must access the GCP system to understand what is contained in the checklist, avoid anything that would lead to the violation of the antitrust law and check ex-post that the checklist has been followed to completion to identify any violation as early as possible.

We have expanded the scope of what we should do and how, under the GCP initiative year after year. Key activities include:

• Commitment to, and support for, voluntary compliance by C-level officers

  Our C-level officers have made public their commitment to compliance with the antitrust law and given instructions that the company’s commitment to GCP implementation are fully incorporated in the key performance index. They are regularly updated on what has been done and how, under the GCP initiative, and participate in activities to drive GCP culture across the organization.

• Standards and procedures for GCP and continuous updates

  We have guidance in place concerning how the GCP should be run under what procedures and keep it updated in line with the changes in our business environment and the antitrust regulatory framework. Amendments to the applicable laws and regulations are communicated to our members. Training sessions are also offered to help them fully understand the implications of such amendments. Updates on the GCP are shared through various means including our website and email so that all details are communicated in full to all our members.

• Compliance Officer and devoted organization

  The Compliance Officer has responsibilities and power in connection to the GCP including planning, supervision and performance reporting. He/she carries out his/her duties under full independence as provided for by the relevant guidance. He/she must not engage in anything that may conflict with any of his/her roles and/or duties. We also run an overseas compliance team devoted to ensuring compliance with the antitrust law.

• Use of Compliance Guidelines (Handbook)

  We give our members specific instructions on how our compliance should be checked using guidelines created based on findings from regular/extraordinary audits and instructions from competent antitrust authorities. They allow our members to fully understand the boundaries within which they should perform their jobs. The guidelines are available in various forms including electronic files and paper and are thus easily accessible anytime by different users. We ensure that the guidelines are updated in a timely manner so that any latest developments in the antitrust regulatory framework and relevant policies as well as changes in the market and technology are fully included.

• Continuous and well-organized training on the antitrust law

  We ensure that training on antitrust law is offered in a continuous and well-organized manner. When designing the training, we ensure that it offers differentiated content depending on the functions of the department or the legal entity.

• Regular self-checking and risk assessment

  Every year our overseas compliance team conducts a regular or extraordinary audit on the head office and our overseas legal entities either online or onsite to identify any sales activity or any other non-compliant act in violation of any antitrust law. As part of the audit, select members are interviewed, and forensic business data are reviewed. We have a standard in place by which GCP related risks can be assessed. (The assessment helps us survey our activities to identify those likely to violate the law, determine the possibility of actual violation and take preventive measures based on assessment result.) The assessment consists of at least two steps. If any risk of a medium level or higher is identified, actions to mitigate said risk are taken. Actions taken to mitigate the risk of violation of the antitrust law are reviewed in terms of their appropriateness and effectiveness. Findings from the review are used as input during the update of the assessment standard.

• Participation by external professionals

  In addition to self-checking, external legal advisors and consultants are involved independently to provide objective assessment and feedback about our checking activities and GCP.

• System for reporting contact with a competitor(s)

  We have a system in place for our members to report any contact with any of our competitors before or after it happens so that no meeting, conversation, information exchange or other similar incident that may lead to any act of concern should occur.

• Prior job consultation

  We require that the Compliance Officer or the relevant department should be contacted for consultation when any act that might lead to a violation of the antitrust law is reviewed. We have a standard in place concerning how the prior consultation should take place and who should be involved. We also ensure that such consultation is fully recorded (in the form of, for example, minutes, decision making report, job checklist). The mechanism of prior consultation helps our members, among other things, avoid any act that may lead to violation of the antitrust law.

• Internal reporting system

  We have an internal reporting system in place whereby any of our members can report any violation of the antitrust law. The internal reporting system is accessible by any of our members from inside and outside the organization. We ensure that the rights of an individual making an internal report (i.e. no retaliation, anonymity) are fully protected and that he/she will not put to any disadvantage for having made such a report.