Corporate Environmental Report

Waste

Achieve 100% treatment of waste at level 1 to level 4 of Ladder Concept preferability, with a half life improvement goal of less than one year.

LANDFILL
Landfill is considered to be an extreme solution, especially in the light of legislation that will limit landfill only to "ultimate waste" that cannot be recycled. More and more, at ST's sites around the world there are separate collections in homogeneous categories of waste. To date, some 30 categories have been identified. At present, this is the main means for minimizing disposal to landfill and to improve its reuse and recycling. There are several aspects to this point: waste may pose a threat to the environment, it is subject to legislation, and can also be turned into a source of revenue.

NEW Landfill: reduce the amount of landfilled waste below 5% of our total waste by 2005.

The best approach, however, is the elimination of waste during the design phase and not at the process end - thus emphasizing prevention (see Ladder Concept in Appendix 4). ST's efforts have met with great success. The landfill waste has decreased by a factor of almost three from 1994 to 1999.

MANUFACTURING
Experience has shown that recycling waste is less expensive than discarding it. The graph opposite shows the achievement obtained in manufacturing waste reuse/recycling at Corporate level.

NEW Reuse or recycle at least 80% of our manufacturing and packing waste by end 1999, and 95% by end 2005.

Sludges
The sludges produced by the physical-chemical treatment of the waste water, a by-product of our activities, are, in effect, raw materials for other industries: the cement and brick industry, for example.

Sending sludges, typically containing calcium fluoride and calcium sulphate to such industries is the best approach to waste management. It revalorizes, recycles and minimizes landfill.

At Toa Payoh, waste water treatment sludge which contains toxic heavy metals is generated at an average rate of 150 kg per month. With effect from January 1999, the plant sludge is recycled off site into civil work material for road construction and the recovered metals are recycled in foundries. Recycling the sludge prevented landfilling which poses environmental issues such as soil and groundwater contamination. This project required no capital funding. Similar initiatives are running in several other ST sites.

Moulding Resin waste
At the moment, this waste is landfilled at ST's back-end sites. It has become evident, however, that it would be a serious problem to reach the Decalogue target of reusing and recycling 80% of manufacturing waste.

A research program between the ST site at Ain Sebaa and the University of Casablanca aimed at finding a recycling solution for this type of waste. Two possible applications were identified: resin-based paving slabs; and film-based insulation. Another possibility currently under investigation is the use of this waste to replace peat-coke, a heating source in cement factory kilns.

Deflashing waste
Two deflashing media exist in our product assembly sites: brass powder and glass beads. Brass powder is used in Ain Sebaa, Morocco, in Muar, Malaysia and in Shenzhen in China. In all cases the powders are sent out and any precious metals are recuperated.

	The ST Singapore and Malta sites use glass media and although the material itself is recyclable, for the moment there is little interest from recycling companies.
	Wherever possible, the Company favors a laser deflashing that offers greater integration and facilitates automation, does not use any deflashing media such as brass powder or glass beads and no waste is generated since the resin flash is burned by laser.

WAFER RECYCLING
Today, all gold plated wafers are sent for precious metal recovery.
Non-gold plated wafers are either sent to metal foundries or landfilled at the Company's expense.

Discussions have started with two wafer recycling companies to establish a worldwide collection and recycling program. The end users of this program are photovoltaic solar panel manufacturers who could buy this waste.

PACKING WASTE

In some regions, ST and other semiconductor manufacturers in the area have contacted recycling companies where the customers can send used packing tubes as long as this packing material is not mixed and is clean. As long as these companies can resell the by-product of their recycling, no cost will arise - either for ST or for the customer. In wafer packing, our approach relies on reuse and recycling. Single wafer containers are designed to be reusable after cleaning. At present, the total of reused and recycled packing waste is stable at about 85% - exceeding the Decalogue goal by about 10%.

ST is also experimenting with a new approach for its inter-company wafer shipments by reusing the suppliers' new wafer packing. The adoption of this practice by our Catania facility, involving a production volume of 250,000 silicon wafers per year has reduced the weight of the total goods shipped by 29% and the packing waste produced from 10,7 tons to 1.2 tons. In addition, this has avoided the purchasing of 10 tons of new packing.

Consistent with the increasing sentiment regarding the responsibility of the manufacturer and product take-back, some customers request whether the Company has a collection program for the dessicant bags used in shipment boxes. The volume of these bags is quite significant (6 million bags per year at a unit cost of $0.10). Trials were made to evaluate the possible reuse of these bags and the results demonstrated that the bag can withstand 10 cycles of reuse without any degradation of its moisture absorption capacity. To embark on a reuse program with any success would require the setting up of a collection program involving our external customers. This item is under evaluation.

CUSTOMERS / SUPPLIERS INITIATIVES
The growing Producers' Responsibility concept means that more and more customers are demanding detailed product content data. This places the burden on the manufacturer for the potential environmental impact of the product, starting from the materials supplied through the lifetime of the product. A manufacturing company must therefore stay in close contact with suppliers and strictly monitor these points with suppliers.

In helping its customers to obtain the best Design for Environment (DFE) for their electronic equipment, detailed information on all ST products is given to customers and a technical report entitled Chemical Content of Semiconductor Packaging describing the chemical and physical characteristics of ST packages has been available since 1998.