One of the often overlooked elements when purchasing snazzy new gaming hardware is the human cost. No, not the cost of you going to work for hour upon hour, saving up the cash for that svelte new graphics card, but the cost in human lives when obtaining the minerals necessary to manufacture the graphics chips and CPUs. A huge portion of minerals used are obtained from the Democratic Republic of Congo (DRC) and surrounding African countries. Historically this has been a cause for the concern, with the DRC trapped in one world’s worst modern humanitarian crises. The hunt for rare minerals has attracted armed groups and militia, committing human rights abuses in an effort to mine tin, tantalum, tungsten and gold (3TG).
Gold has proven the deadliest resource in modern times. Profits from the sales of minerals in DRC has financed the Second Congo War, propped up armies and rebel groups, and led to the deaths of millions.
Naturally, the big chip manufacturers are keen to avoid controversy on this front. AMD, Nvidia and Intel have all signed various deals in an effort to comply with responsible minerals trade. Avoiding conflict minerals entirely is a tricky process, however, with each of the three companies going to varying degrees to ensure their minerals are obtained from as legitimate a source as possible.
There’s good will to be earned by going conflict-free, no company wants to be tarnished with Conflict Minerals, which carries with it the weight of brutal human rights atrocities, militia groups and murder. It can even be used as the chief selling point, just look at the Fairphone, the world’s first totally ethical smartphone.
AMD - AMD is a founder of the Public-Private Alliance for Responsible Minerals Trade (PPA). This is an organisation dedicated to helping the DRC and surrounding territories break the link between the mineral trade and human rights abuses. AMD is also a member of the Conflict-Free Sourcing Initiative (CFSI), a third-party group which audits smelters and refineries in order to determine whether the minerals have come from conflict-free sources. AMD claims 96% of its smelters or refiners are compliance with CFSP audit protocols, while the remaining 4% are actively in the process of completing the CFSP audit. They may pass, they may not. Interestingly, AMD said all of its “primary silicon wafer foundries are conflict-free”, based on analysis of TSMC and GlobalFoundries as of March 31, 2016.
Intel - Unlike AMD and Nvidia, Intel has its own fabrication plants. Intel goes in quite big on the conflict-free minerals, saying it is “committed to using only Conflict-Free mineral resources, which means greater economic opportunities for miners and their families.” Reading the fine print, Conflict-Free refers to obtaining minerals that, based on Intel’s due diligence, do not benefit or financed armed groups. This doesn’t mean the minerals sourced are guaranteed to be conflict-free, however, Intel would argue it is doing everything within its power to ensure they aren’t, to the best of Intel’s knowledge.
On Intel’s site, they go to great pains to let you know it has created a “responsible supply chain” which is “helping families in the Congo.” The overall impression is of Intel using Conflict-Free minerals across the board, however, digging a little deeper, Intel’s latest Conflict Mineral Report says “Although many of our hardware products contain conflict minerals, we do not purchase ore or unrefined conflict minerals from mines.” And again, later in the document, “We purchase materials used in our products from a large network of supplies; some of those materials contribute necessary conflict minerals to our products. The origin of conflicted minerals cannot be determined with any certainty once the ores are smelted, refined and converted to ingots, bullion or other conflict minerals containing derivatives.” The gist of that being - 3TG is obtained from conflict sources where human rights abuses may be taking place, however, Intel is too far removed in the supply chain to determine for sure, relying on its suppliers to exercise due diligence.
Nvidia - As with AMD, Nvidia is a member of both the PPA and the CSFI. Both of these organisations aim to ensure the traceability of minerals. That is, to determine where and how these minerals turned up. Again, this comes down to a due diligence process. Nvidia has its own team dealing with suppliers, operations, legal issues, sales and marketing, along with 3rd party to support to validate their findings.
Again though, Nvidia’s Specialized Disclosure Report is keen to emphasise that Nvidia is a long way down the supply chain from the source. Nvidia, like AMD, doesn’t manufacture its own chips, relying on supplies for wafer fabrication, assembly, testing and the procurement of the raw materials. This is but just one step in Nvidia distancing itself from the minerals themselves.
“NVIDIA’s supply chain is complex and there are multiple tiers between NVIDIA and the actual mining of the conflict minerals,” reads the report. “Because we utilize a fabless manufacturing strategy, we must rely on our suppliers and component manufacturers, including sub-tier suppliers, to provide us with information on the origin of the conflict minerals contained in our products and product components. We are filing this Conflict Minerals Report pursuant to Rule 13p-1 under the Securities Exchange Act of 1934, as amended, or Rule 13p-1, because we are unable to determine, as of the date of the filing of the Form SD to which this Conflict Minerals Report is an exhibit, the origin of all conflict minerals that were contained in the products we contracted to manufacture during the Reporting Period.”
All in all, the more I explored this topic, the murkier the waters became. Everyone is keen to tout ethical standards and complying with regulations, but the actual task of sourcing and tracking the minerals is next to impossible. Outwardly, AMD seems to impress the most on this front, however, it's a tricky balance between meeting demands and obtaining the minerals through any means necessary.
At the end of the day, all we can do is vote with our wallets, but do you? Despite their best efforts, conflict minerals may still be used in chip fabrication, does this impact what PC hardware you purchase? Let us know!