Business and
governance
We strive to integrate ESG principles into everything we do.
Lam’s business enables transformative technologies that shape the ways we live and work. Our impact can be felt throughout our company and value chain and by society at large. In our quest for semiconductor breakthroughs, we hold ourselves to the highest standards of responsible and ethical conduct. When the road ahead seems uncertain, our Core Values and robust corporate governance program guide us to do what’s right.
We strive to model sustainable best practices within our organization while catalyzing global change. In 2022, we focused on leading with accountability and strengthening Lam’s ethical culture. We proudly developed our first Human Rights Policy and celebrated our inaugural Ethics & Compliance (E&C) Week. As the year came to a close, we joined thousands of participants working to enhance corporate sustainability through the United Nations Global Compact (UNGC).
Governance1
| Goal | Status | 2022 progress |
|---|---|---|
| Goal: Continue to expand our disclosure and alignment with industry-recognized frameworks and standards |
Status:
|
2022 progress:
|
2022 highlights
Developed a new
global Human
Rights Policy
Celebrated our first
Ethics & Compliance Week
Joined the
UN Global Compact
Conducted an in-depth ESG materiality assessment
- Unless stated otherwise, we aim to complete each of our ESG goals by 2025.
Our ESG mission
We elevate human prosperity and protect the environment in our operations, supply chain, and the products we create.
Our ESG approach
Our ESG strategy supports the success of Lam’s business as we act with purpose for a better world. It provides a framework for meaningful investments, proactive risk management, and globally focused action. Our approach emphasizes engagement, goal setting, and accountability. We aspire to continuously increase transparency and disclosure, in line with industry-recognized frameworks, best practices, and standards.
Our ESG strategy consists of six pillars that reflect areas where Lam can make a significant positive impact. These pillars include:
Our ESG mission
We elevate human prosperity and protect the environment in our operations, supply chain, and the products we create.
Our communities
Be a responsible corporate citizen with programs focusing on transformative learning, resilient communities, and inclusive societies.
Business and governance
Integrate ESG into our business operations and foster ownership and accountability as we advance our ESG strategy and goals.
Products and customers
Innovate with ESG in mind and design for environment principles to be a partner of choice for our customers and support their ESG goals.
Sustainable operations
Minimize our environmental impact through investments in energy, water, waste, and GHG emissions reductions.
Our workplace
Build an inclusive, diverse, and engaged workplace while achieving top performance in health and safety.
Responsible supply chain
Ensure an ethical and responsible business ecosystem focused on human rights and the environment.
Aligning our strategy with the UNGC and United Nations Sustainable Development Goals (SDGs)
Lam is dedicated to the development, implementation, and disclosure of responsible business practices—qualities that are championed by the UNGC. Based on this alignment, we joined the UNGC in 2022 to underscore our commitment to accelerating ESG progress on a global scale. The organization is the world’s largest corporate sustainability initiative, with tens of thousands of participants worldwide. As a member, Lam supports the UNGC’s Ten Principles for labor, environment, anti-corruption, and human rights, as well as the advancement of the UN’s SDGs.
The SDGs represent an international effort to tackle the world’s most pressing issues. As global citizens, we see the framework of the SDGs as another method of measuring Lam’s progress and ensuring our ESG initiatives serve the greater good. We aim to drive progress on the SDGs throughout Lam’s operations and supply chain, including through our workforce, our products, and our new social impact platform. Learn how Lam is working to accelerate progress toward priority SDGs.
Learn more about our ESG strategy 
Leading with accountability
Lam’s Board of Directors (Board) and leaders are committed to strong corporate governance to deliver stakeholder benefits over the long term. We have processes in place for ESG governance, which extend throughout our organization and lead all the way up to our Board. These processes establish clear responsibilities for the oversight, management, and implementation of our ESG strategy.
In 2022, we deepened our Board’s engagement around ESG issues and increased the cadence of our leaders’ ESG briefings. Our chief communications officer presents ESG updates via presentations or written reports to the Board or its Nominating & Governance Committee four times per year. Additionally, our vice president of global trade and government affairs (GTGA) now briefs the Board’s Nominating & Governance Committee at each of its meetings. We also tied our executive compensation program to progress on Lam’s ESG goals to ensure that Lam’s executive leaders are accountable for driving ESG progress and are rewarded for their achievements. Human capital management and ESG goals represented 20% of the corporate scorecard used as part of the determination of the annual incentive compensation for our named executive officers.1
Learn more about:
our ESG governance
program
- Refers to our named executive officers for our fiscal year ended June 26, 2022, which was the fiscal year during which annual incentive program payouts for calendar year 2021 were made, as determined in accordance with the rules of the U.S. Securities and Exchange Commission.
Celebrating the legacy of Catherine P. Lego’s leadership at Lam
In 2022, Lam announced the retirement of Catherine P. Lego, who served on our Board for more than 16 years. Throughout her tenure, she was a chair or member of each of the Board’s committees. She has also served on other boards over a span of more than 30 years, including for several other semiconductor and technology companies.
Chairman of the Board Abhijit Y. Talwalkar stated, “Always highly engaged and thoughtful in her guidance, Cathy’s understanding of the semiconductor industry, commitment to accountability, and drive for continuous improvement enabled her to make an incredible and lasting impact at Lam.”
ESG governance at Lam
Oversight
Lam Research Board of Directors
Overall ESG oversight
Nominating and Governance Committee
ESG priorities
Compensation and Human Resources Committee
Workforce-related issues
Audit
Committee
Ethics and compliance and information security
Management
ESG Executive Steering Committee
Guides ESG strategy, approves and supports initiatives, drives accountability
ESG Leadership Team
Proposes goals, develops and executes strategy, and embeds ESG into operations management system
Net Zero Leadership Team
Drives progress towards net zero goal and embeds net zero into operations management system
Implementation
Topic-Specific Working Groups
Execute on key issues
Engaging our global stakeholders
The semiconductor industry is dynamic, presenting new challenges and opportunities each day. Through regular engagement, we stay informed of the issues that matter most to our communities, customers, employees, industry organizations, policymakers, stockholders, and other stakeholders. We tailor our engagement approach to each group, connecting through activities such as industry forums, meetings, and community events.
Learn more about our approach
to stakeholder engagement
Ensuring a focused approach: What we learned from our latest materiality assessment
An effective ESG strategy can’t remain stagnant—it must be agile to address issues as our business, industry, and world evolve. With that in mind, Lam conducts in-depth ESG materiality1 assessments every three to five years or whenever there’s a notable shift in our industry and business. During this process, we engage a diverse group of internal and external stakeholders, whose insights help guide and affirm Lam’s ESG approach.
We conducted our latest assessment in 2022, using a double materiality methodology in line with guidance from the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI). We reviewed topics that are aligned with a variety of standards, frameworks, and rating entities and narrowed them down to identify topics that have the greatest relevance to our business (such as risk mitigation, market presence, innovation, and reputation). In total, we engaged more than 50 global stakeholders, including internal subject matter experts, customers, investors, suppliers, trade associations, and community organizations. Through surveys and interactive interviews, participants rated ESG topics based on their importance and potential internal and external impacts. We also integrated results from an ESG materiality employee survey to further incorporate our employees’ perspectives.
Based on the results, we identified the following topics as being most impactful and strategically important to Lam’s ESG program: climate strategy, product stewardship, employee fulfillment, inclusion and diversity, supplier engagement and environmental performance, and leadership accountability. Other ESG topics indicated on the matrix—such as corporate governance, ethics, labor practices, human rights, and community engagement—are also key to our success and are foundational to our business. Within this ESG report, we discuss the majority of the topics identified through the assessment.
2022 ESG materiality matrix
- Environmental
- Social
- Governance
Building an ethical culture
Do the right thing. The concept sounds simple but putting it into practice requires both dedication and awareness of how to react when challenges arise. This is work we’re committed to, as we know it’s fundamental to maintaining strong internal and external relationships based on honesty, integrity, and trust. Our Global Standards of Business Conduct (GSBC) supports our Core Values and details the behavior we expect of every employee. The GSBC is a cornerstone of our E&C program, which is designed to meet evolving global requirements.
Our E&C program is further strengthened by Lam’s E&C Steering Committee, which provides strategic and operational guidance. In 2022, the E&C team enhanced our culture of integrity by forming our first regional E&C Steering Committee in Malaysia, which supports local compliance objectives as well as the agenda of our global E&C Steering Committee. We also launched a global Ethics Ambassador program for which we selected and trained employees outside of E&C about promoting an ethical culture and driving progress on our initiatives in our ambassadors’ respective business units and regions.
Our global E&C team works to promote an organization-wide culture of ethics and compliance. The team is led by our chief compliance officer (CCO), who manages our E&C function. The CCO reports to Lam’s chief legal officer and has dotted-line reporting to the Board’s Audit Committee.
Program focus areas:
procedures
Compliance at Lam is both a strategic enablement and risk management function that focuses on innovation and setting new boundaries. We continue to make investments in people, technology, and resources to support this vision. Our program is based on Lam’s Core Values, which sit at the heart of everything that we do.”
Sangeet Dalliwall
senior director, E&C at Lam
Hosting Lam’s E&C Week
In October, Lam hosted its first-ever E&C Week, which focused on raising awareness of E&C resources, recognizing and celebrating ethical behavior, and reinforcing our ethical values and culture. We connected with employees by holding regional town halls with global leaders and members of our E&C team. We also shared a video in which CEO staff members discussed the importance of our Core Values and building an ethical culture. Employees nominated colleagues for our inaugural Ethics Award, where we celebrated doing the right thing.
Risk management
Assessing internal and external risk on an ongoing basis is essential for Lam’s long-term success. As we face challenges related to our growing global footprint and a shifting regulatory landscape, this work is key to the continuity and resilience of our business.
With this in mind, we further operationalized our E&C global risk assessment program in 2022 by conducting a focused risk assessment; enhancing our third-party risk management program; implementing a gifts, meals, travel, and entertainment monitoring program; and conducting manager workshops.
Policies and procedures
Lam is committed to fair and humane employment practices as a core business principle. In 2022, we developed and published our first corporate-wide Human Rights Policy, which underscores our commitment to respecting human rights and treating our workers and business partners with dignity and respect. Our policy aligns with several internationally recognized standards, including the Universal Declaration of Human Rights, the UN’s Guiding Principles on Human Rights, and the Responsible Business Alliance Code of Conduct. Looking ahead, we intend to build on this policy by developing and implementing a formal human rights program.
Communication
Open communication is a Core Value at Lam and is key to building a successful E&C program. We distribute global bulletins and regional newsletters that focus on relevant topics so our employees can recognize and respond appropriately to potential compliance risks and ethical issues. On a quarterly basis, people managers receive tailored communications on trending E&C risk areas in a company newsletter. We also use multiple channels to solicit employee feedback, including deploying surveys and conducting employee focus groups after delivering in-person and virtual training. Our leadership team plays an important role in raising awareness about our E&C program. In 2022, several of our global leaders participated in town halls and employee meetings to discuss and reinforce the importance of building on Lam’s ethical culture.
Training
Our training program equips and empowers our employees to make ethical and compliant decisions. We deliver training to increase awareness of our policies and processes through a combination of in-person and virtual sessions and online training modules, which we refresh each year. Lam requires employees to complete annual training that reinforces their understanding of selected topics within the GSBC.
We rolled out additional manager resources and mandatory ethical leadership training for our people managers in 2022. Our newly created manager resource center provides our people managers with practical guidance for identifying and handling ethical challenges. We also held in-person manager workshops to provide tips and tools to our managers to encourage ethical behavior and support employees who raise concerns.
Investigations
Lam’s E&C team can’t be everywhere, so we rely on employees to speak up if something doesn’t seem right. All Lam employees have the right and responsibility to raise ethical concerns to their managers, senior management, human resources, or the E&C team. Employees and third parties—including contractors, suppliers, and customers—can make a report through our Ethics Helpline via telephone or online.
2022 GSBC training highlights
employee completion rate1
in-person and virtual targeted training sessions to leadership teams and employees in higher risk roles covering E&C policies and procedures
Learn more about our
Ethics Helpline and
approach to investigations
- Employee completion rate was calculated by excluding: 1) employees who were on leave of absence during the reporting period; and 2) employees who left the company during the reporting period before completing the training. The reporting period was from Oct. 2022 to March 2023.
Protecting data and intellectual property
As we fuel our innovation pipeline, we are committed to keeping the intellectual property and data of our company, employees, customers, and suppliers safe. Lam holds International Organization for Standardization (ISO) 27001 certification for information security at our corporate headquarters and engages an independent, third-party expert to evaluate security capabilities against the National Institute of Standards and Technology (NIST) Cyber Security Framework (CSF). As we continued to mature our information security processes in 2022, we improved our scores across the five pillars of the NIST CSF: identify, protect, detect, respond, and recover.
Learn more about our
information security program
Innovation Spotlight
Mindful care of our valuable assets
In an industry facing unprecedented supply chain pressures, balancing the need for business agility and security can be a challenge. One employee who understands this well is Nivedita (Niv) Kamat, a program manager with Lam’s Governance, Risk, and Compliance Information Security group.
As part of Lam’s Sensitive Information Protection program, Niv runs an initiative to safeguard thousands of critical drawings. After discovering that one of the program’s safety protocols stood in the way of business agility, she met with several internal and external stakeholders to develop new processes to meet the program’s goals.
This led to the creation of a Supplier Tier Management application that enables Lam to secure its drawings while granting access to authorized users. Launched in 2022, with full implementation planned for 2023, the solution makes Lam even more nimble while keeping the company’s files safe and secure.
Engaging policymakers and
complying with global taxation
Our company and industry exist within a dynamic regulatory environment. Lam’s Global Trade and Government Affairs group is responsible for Lam’s strategic engagement with Congress, the U.S. executive branch, and other regulatory bodies at the local, state and federal levels, as well as internationally, to help inform sound public policy in support of our industry and business. We pursue a collaborative approach to policy engagement, working alongside our customers, suppliers, and industry peers with a focus on the following issues:
- Business operations
- Export controls and trade policy
- Research and development
- Tax policy
Our lobbying and political activities are governed by our GSBC, as well as our Political Activity and Government Affairs Policy.
Learn more about our policies
and governance approach
In 2022, the GTGA group remained focused on addressing issues such as supply chain resiliency and trade compliance in the local economies in which we operate. The group played a central role in helping Lam navigate new export controls issued by the U.S. Department of Commerce’s Bureau of Industry and Security in October. The controls restrict the export of advanced U.S. chipmaking equipment to the People’s Republic of China.1 These controls directly impact our industry and business, so the group worked closely with Lam’s leadership and Board to ensure a compliant, proactive response.
Externally, the GTGA group played a leading role in industry consortia to amplify Lam’s voice in the wafer fabrication equipment industry and larger semiconductor ecosystem. In November, Lam joined the Semiconductor Climate Consortium as a founding member to advocate for semiconductor industry climate action on a global scale. Lam has also established its political action committee, Leading American Microelectronics Political Action Committee (LAMPAC), as another means of engagement and advocacy.
Learn more about our
approach to global taxation
Ensuring compliance with
global taxation
Our approach to global taxation is to comply with all legal, regulatory, and internal control requirements.
Supporting U.S. semiconductor competitiveness
Recent challenges related to the pandemic, as well as geopolitical conflicts, have highlighted the importance of semiconductor manufacturing within the U.S. Headquartered in Fremont, California—with manufacturing sites in California, Ohio, and Oregon—Lam has long represented the strength of American manufacturing and innovation on a global stage.
In 2022, Lam’s president and CEO, Tim Archer, testified before the U.S. Senate Committee on Commerce, Science, and Transportation. During the hearing, entitled “Developing Next Generation Technology for Innovation,” he discussed opportunities to bolster American competitiveness and address key challenges that industry leaders continue to face.
He focused on three areas that could benefit from the committee’s consideration: leveraging existing infrastructure, such as the National Labs; enabling shared innovation, including through the establishment of the National Semiconductor Technology Center; and taking an “all-of-ecosystem” approach.
U.S. leadership in semiconductor manufacturing technology remains strong because of the innovation, drive, and resourcefulness of American workers across the semiconductor ecosystem. I am proud of the role that Lam Research and our employees have played for more than four decades in setting the pace for innovation and in maintaining U.S. leadership in the global market.”
Tim Archer
president and CEO at Lam
