Applied Materials (AMAT) SDConflict minerals disclosure

EXHIBIT 1.01

APPLIED MATERIALS, INC.

CONFLICT MINERALS REPORT

FOR YEAR ENDED DECEMBER 31, 2023

This is the Conflict Minerals Report of Applied Materials, Inc., including its subsidiaries (collectively, “Applied” or the “Company”), prepared in accordance with Rule 13p-1 under the Securities Exchange Act of 1934. Terms used in this report have the meaning specified in Rule 13p-l and/or Form SD issued by the Securities and Exchange Commission, except as otherwise expressly defined herein. Form SD defines “conflict minerals” as cassiterite, columbite-tantalite (coltan) and wolframite (and their derivatives, tin, tantalum and tungsten, respectively), and gold, regardless of the geographic origin of the minerals and whether or not they fund armed conflict. This report pertains to products manufactured from January 1 through December 31, 2023, for which any conflict minerals are necessary to the functionality or production of the product, as described further below.

Company Overview

A global company with a broad set of capabilities in materials engineering, Applied provides manufacturing equipment, services and software to the semiconductor, display, and related industries, and operates under three reportable segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.

Applied Materials is committed to protecting human rights and conducting business in an ethical and responsible manner. Our commitment extends to the responsible sourcing of materials used in our products, as reflected in the Applied Materials Responsible Minerals Sourcing Policy (“Policy”). In addition to the Policy, we outline our expectations for all suppliers and partners with whom we work in our Standards of Business Conduct for Business Partners (“Standards”) and our Human Rights Statement of Principles (“Principles”). The Company contractually requires its direct suppliers to adhere to the Policy, Standards and Principles and to reasonably ensure products they sell to Applied do not contain conflict minerals unless these originated outside the Democratic Republic of the Congo or an adjoining country (collectively, the “DRC”) or from RMI “Conformant” sources within the DRC, as further defined below.

Applied does not directly purchase raw ore or unrefined conflict minerals, nor does it have a direct relationship with any mines of origin or with any smelters or refiners (collectively, “smelters”) that process these minerals. Rather, Applied is a downstream company with an extensive and complex supply chain from which it purchases parts, components and assemblies (collectively, “Parts”). The Company’s manufacturing activities consist primarily of the assembly, testing and integration of various proprietary and commercial Parts that are used to manufacture systems. Applied has a distributed manufacturing model under which manufacturing and supply chain activities are conducted at its facilities, or those of contract manufacturers, located in various countries. Applied’s equipment products, due to their size and complexity, generally consist of thousands of Parts sourced from a multitude of suppliers. Because of Applied’s downstream position in our supply chain, many tiers removed from conflict minerals smelters, any efforts to understand the origin of any conflict minerals in our Covered Products (as defined below) necessarily relies on the cooperation of our direct suppliers and the disclosures by our suppliers of the source of conflict minerals they obtain from lower tier suppliers and smelters.

As detailed in this report, our approach to verifying the source and chain of custody of conflict minerals in our supply chain is designed to conform in all material respects with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition and the related Supplements (“OECD Guidance”).

Products Covered by this Report

Tantalum, tin, tungsten and gold are metals commonly used in the electronics and related industries due to physical properties that make them well-suited for a variety of applications, such as in cables, printed circuit boards, power supplies, capacitors, solder alloys and certain plastics. As a result, all or substantially all of Applied’s equipment products, and many of its spare parts products, manufactured in 2023 include components for which one or more conflict minerals are necessary to the functionality or production of the product and are therefore considered “Covered Products” for purposes of this report. The following is a general description of Covered Products by reporting segment.

Semiconductor Systems. Applied’s Semiconductor Systems segment develops, manufactures and sells a wide range of manufacturing equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs). The Semiconductor Systems segment includes semiconductor capital equipment used for many steps of the chip making process including the transfer of patterns into device structures, transistor and interconnect fabrication, metrology, inspection and review, and packaging technologies for connecting finished integrated circuit (IC) die. The company’s platforms that perform these functions include: the Axcela^TM, Centris^®, Centura^®, Charger^TM, Endura^®, Mirra^®, Nokota^TM, Olympia^TM, P-300BV, Picosun^® Morpher, Producer^®, Raider^®, Radiance, Reflexion^®, Sprinter, Vantage^®, Vistara^TM, and VIISta^® platforms. Applied’s metrology and inspection systems, which include the Enlight^®, PrimeVision^® 10, PROVision^®, SEMVision^®, UVision^®, VeritySEM^® and Aera4^™ Mask Inspection systems, are used to locate, measure and analyze defects and features on the wafer during various stages of the fabrication processes. The majority of Applied’s new equipment sales are to leading integrated device manufacturers and foundries worldwide. The company also provides manufacturing equipment that helps improve performance, power, yield and cost of semiconductor devices that use mature process technologies and serve specialty markets such as the Internet of Things, Communications, Automotive, Power and Sensors. Our Semiconductor Systems equipment is sold to integrated device manufacturers and foundries worldwide.

Applied Global Services. This segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products.

Display and Adjacent Markets. This segment is comprised primarily of products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies for TVs, monitors, laptops, personal computers (PCs), electronic tablets, smart phones and other consumer-oriented devices. While similarities exist between the technologies utilized in semiconductor and display fabrication, the most significant differences are in the size and composition of the substrate. Substrates used to manufacture display panels and other devices are typically glass, although newer flexible materials are entering the market. The Display and Adjacent Markets segment offers a variety of products and technologies, including: the AKT^® Electron Beam Array Test system for array test, AKT^® PECVD systems for CVD, AKT^® Aristo^™ and PiVot^™ systems for PVD, AKT^® TFE systems for thin-film encapsulation, and the AKT^® Electron Beam Review system for defect review.

Other Products. Applied’s Baccini^® systems are used for fabricating crystalline-silicon (c-Si) solar photovoltaic cells. Applied’s flexible coating systems, which include TopBeam^™, TopMet^™ and SmartWeb^®, utilize physical vapor deposition, thermal evaporation, chemical vapor deposition and e-beam technology to deposit thin layers of metal onto flexible substrates for packaging, flexible electronics and security industries.

Applied’s Conflict Mineral’s Compliance Program and Findings

Applied conducted in good faith a reasonable country of origin inquiry (“RCOI”) that it believes was reasonably designed to determine whether any of the necessary conflict minerals in its Covered Products manufactured in 2023 originated in the Democratic Republic of the Congo or an adjoining country (collectively, the “DRC”), or Conflict Affected High Risk Areas (CAHRAs), or were from recycled or scrap sources. Based on its RCOI, Applied determined it had insufficient information to conclude either (i) that all of its necessary conflict minerals originated outside the DRC or any CAHRAs or from sources within the DRC or any CAHRAs deemed “Conformant” by the Responsible Minerals Initiative (“RMI”), or (ii) that all of its necessary conflict minerals came from recycled or scrap sources.

Applied therefore undertook further due diligence on the source and chain of custody of necessary conflict minerals contained in its Covered Products. Its due diligence approach was designed to conform in all material respects with the OECD Guidance. From 2019 until 2022, Applied worked with Assent Compliance, a third-party service provider, as its partner for conflict minerals due diligence. In 2023, Applied selected SupplierSoft Inc. as its new partner for conflict minerals due diligence.

For calendar year 2023, Applied started with the list of surveyed suppliers for calendar year 2022 (292 suppliers), added two suppliers who informed Applied that the Parts they supply contain conflict minerals and removed seven suppliers who were duplicates due to acquisitions or who ceased supplying Parts to Applied, arriving at the list of suppliers to be surveyed (the “Surveyed Suppliers”) (287 in total). By way of background, Applied previously selected the surveyed suppliers by identifying (i) the top direct (or first-tier) suppliers in terms of total spend, (ii) suppliers who during the past five years were part of the top direct suppliers by spend, and (iii) suppliers considered reasonably likely to provide Parts containing conflict minerals based upon the commodity (e.g., suppliers of sputtering targets and suppliers of gold plating) or based upon prior reporting. In addition, in an effort to reach suppliers with lower spend, Applied directly contacted almost all direct suppliers with a request to provide conflict minerals information. Following our risk-based approach, we then elected to cease outreach to suppliers who consistently stated they did not use conflict minerals in products furnished to Applied and instead focus our efforts on suppliers more likely to have conflict minerals in their products. The Surveyed Suppliers represent approximately 72% of the Company’s actual total expenditures to all direct suppliers for fiscal year 2023.¹ Approximately 98% of the Surveyed Suppliers responded. Of the smelters that were reported by the Surveyed Suppliers, 5.13% used minerals that originated from 100% recycled or scrap sources.

The table below summarizes certain information pertaining to smelters identified by Surveyed Suppliers. The Responsible Minerals Initiative (“RMI”), of which Applied is a member, defines “Conformant” smelters as those smelters that are conformant with the Responsible Minerals Assurance Process (“RMAP”) assessment protocols. “Active” smelters and refiners are participants in the RMAP who have agreed in writing to undergo a third-party audit or are participating in one of the cross-recognized certification programs, signed an “Agreement for the Exchange of Confidential Information” and submitted a due diligence checklist. The classification of smelters considered Conformant or Active is current as of May 16, 2024.

Attached as Appendix A is a list of the smelters identified by the Surveyed Suppliers as the facilities that process conflict minerals necessary to their products as communicated in their Conflict Minerals Reporting Template (“Template”). The majority of the Surveyed Suppliers reported smelter information at the company level, not at the product level, and did not identify the specific smelters providing conflict minerals that were incorporated in a particular Part sold to Applied. Both company level and product level disclosures are overinclusive due to the nature of how the information disclosed is collected and distributed. Because the Surveyed Suppliers did not identify the specific smelter that processed conflict minerals contained in a particular Part, inclusion of a smelter or refiner in Appendix A does not necessarily mean that any minerals, including any conflict minerals, from any listed smelter are contained in any Part or included in a Covered Product. Further, we lack sufficient information to confirm the specific countries or mines of origin of the conflict minerals processed by those smelters.

Certain Surveyed Suppliers reported potential sourcing from two gold smelters in the DRC (CID003185 - African Gold Refinery and CID002567 - Sudan Gold Refinery). These two smelters have not been assessed by the RMI. Information about these smelters lacked a chain of custody and therefore were insufficient to tie gold from one or more of these smelters to products supplied to Applied. Further, Applied found no direct evidence that minerals from these two smelters were incorporated into its Covered Products. Thus, we have no reason to believe that these smelters supply minerals that are contained in the Covered Products, and Applied has no contractual or direct business relationship with such smelters.

The Company has instructed the affected Surveyed Suppliers to remove these two smelters from their supply chains and to require their relevant sub-tier suppliers to request the smelters to participate in the RMAP. However, our Surveyed Suppliers have no direct relationship with the smelters and are merely reporting information they received from their suppliers, who in turn rely on information from the sub-tier supply chain, often 8-10 levels deep. Therefore, the Company’s Responsible Minerals Sourcing Compliance Team is contacting these smelters directly, as well as other smelters reported by the Surveyed Suppliers that are not RMI Conformant or Active; the Company is also contacting the smelters via working groups within the RMI, urging them to submit to an RMI assessment and conform to the RMAP. Finally, Applied is supporting the RMI with efforts to release formal audit documents in order to improve the implementation of the RMAP program.

The Surveyed Suppliers did not identify the specific smelters providing conflict minerals that were incorporated in a Part sold to Applied. Further, for many smelters reported by the Surveyed Suppliers, there is inadequate information available to assess the source or country of origin of the conflict minerals they process. Therefore, for Covered Products manufactured in 2023, Applied concluded in good faith that it lacks sufficient information to trace the chain of custody of any conflict minerals contained in its Covered Products up through the supply chain to a specific smelter or, in turn, to a country or mine of origin.

Applied’s Due Diligence Process

Applied’s due diligence approach on the source and chain of custody of its necessary conflict minerals was designed to conform in all material respects with the OECD Guidance. The OECD Guidance is an internationally recognized due diligence framework consisting of a multi-step, risk-based process, certain aspects of which differ depending in part on the position of a company in the supply chain. Applied is a “downstream” company, which refers to supply chain participants from the smelter to the retailer, in contrast to those “upstream,” that is, from the mine to the smelter.

As a downstream provider of finished products, Applied does not have direct relationships with smelters and does not perform or specify audits of such entities upstream in its supply chain. Through its membership and participation in the RBA, RMI and related working groups, Applied believes that seeking reliable information about smelters in its supply chain from its direct suppliers represents a reasonable and cost-effective approach to determine the mines or other locations of origin of conflict minerals in its products.

Company Management System

Applied established a cross-functional Responsible Minerals Sourcing Compliance Team, which is responsible for implementing the Company’s Responsible Minerals Sourcing program and briefing senior management about the results of these due diligence efforts.

The Company requires its direct suppliers to have programs and procedures in place to ensure that any conflict minerals used in the production of products sold to Applied conform to the requirements of the RMI. This means that products must not contain conflict minerals that directly or indirectly finance or benefit armed groups in the DRC. In addition, as a member of the RBA, Applied requires its suppliers to conform to the RBA Code of Conduct, which includes requirements pertaining to the responsible sourcing of conflict minerals. Such requirements, along with a requirement that suppliers provide completed Conflict Minerals Reporting Templates at Applied’s request, also are reflected in supplier contracts. If Applied learns that a Surveyed Supplier does not meet the Company’s requirements, Applied pursues appropriate corrective action.

Violations or grievances related to conflict minerals can be reported at the industry level to the RMI at http://www.responsiblemineralsinitiative.org/ or at a company level to our 24-hour ethics helpline that is run by an independent third party at helpline.appliedmaterials.com.

Applied retains relevant documentation for a period of five years, including Templates completed by the Surveyed Suppliers.

Risk Identification and Assessment

In light of the complexity of its supply chain, Applied used a risk-based approach in designing the scope of its RCOI and due diligence process. As previously noted, the Company focused on direct suppliers who previously indicated the products they provide to Applied contain conflict minerals to arrive at the target list of Surveyed Suppliers. Applied’s Responsible Minerals Sourcing Compliance Team conducted the outreach to the Surveyed Suppliers and compared information they provided to RMI data concerning the RMAP audit status of the applicable smelter.

The Conflict Minerals Reporting Template (the “Template”) version 6.3.1 developed by the RMI was used to collect information on the conflict minerals that may be in Covered Products manufactured in 2023. The Template was designed to facilitate a supplier’s disclosure of information regarding conflict minerals contained in the supplier’s products, including the country of origin and the name and location of the smelters that process the conflict minerals. Thus, by asking Surveyed Suppliers to complete the Template Applied conducted a country-of-origin due diligence reasonably designed to determine whether any of the necessary conflict minerals in its Covered Products originated in the DRC or a CAHRA.

Risks at the supplier level may include non-responsive suppliers, incomplete Templates or Templates that are submitted at the company level and are not directly relevant to products manufactured by Applied. Applied received wholly or partially completed Templates from 97.5% of its Surveyed Suppliers. The majority of the responding Surveyed Suppliers provided data at a company or “user defined” level, rather than at a part number level, a permitted option under the Template.

Applied assessed the status of smelters and refiners identified in the supply chain by the Surveyed Suppliers who listed mineral processing facilities in their Templates. Each identified smelter or refiner of a conflict mineral is assessed according to red-flag indicators defined in the OECD Guidance. These factors include geographic proximity to the DRC, known mineral source country of origin, RMAP audit status, credible evidence of unethical or conflict sourcing and peer assessments conducted by credible third-party sources. Such smelters are labeled smelters of interest. Applied then used RMI status to determine which smelter required further engagement.

Applied was not required to, and it did not, obtain an independent private sector audit of its due diligence approach.

Risk Mitigation Strategy and Future Due Diligence

Applied intends to continue to enhance its ability to identify suppliers reasonably likely to provide Parts containing conflict minerals as well as its ability to link the smelter information its suppliers report to specific products they supply to Applied by requiring suppliers to provide product level Templates for tantalum target, gold plating and special process parts. Applied further has undertaken to report relevant smelter information it obtains to RMI, and to encourage its suppliers to reach out (or to encourage their own suppliers to reach out) to upstream smelters that provide them with conflict minerals and require that such smelters obtain a “conflict-free” designation from an industry program such as the RMAP.

The Company is a co-chair of the Responsible Minerals Initiative (RMI) Smelter Engagement Team, which contacts smelters and assists them with undergoing RMAP assessments to validate the smelters’ company-level management processes for responsible minerals procurement. The co-chair oversees the RMI Smelter Engagement Team sub-groups and acts as a liaison between the RMI and the sub-group members, which include the Single Point of Contacts (SPOC) for each eligible (as defined by the RMI) conflict minerals smelter. We recognize that our extensive and complex supply chain makes it challenging for us to influence conflict minerals sourcing decisions. Therefore, we have decided to work through the RMI directly with the smelters and their respective SPOCs to ensure the smelters have the necessary resources they need to undergo an RMAP audit and achieve Conformant status. Further, in 2023, the Company was the SPOC for and supported approximately 11 smelters undergoing RMI assessments to retain their “Conformant” status.

Forward-Looking Statement Disclaimer

This report includes forward-looking statements, including but not limited those regarding Applied’s expected future supplier due diligence and engagement efforts and development of related processes. These statements and their underlying assumptions are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: regulatory changes and judicial developments relating to conflict minerals disclosure; changes in our supply chain, components and parts, or products; industry developments relating to supply chain diligence, disclosure and other practices; and other risks and uncertainties described in our SEC filings, including our recent Forms 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

Appendix A

Section 1: Smelters and Refiners Identified by Surveyed Suppliers