Supplier Code of Conduct

LAST UPDATED: March 20, 2014

It is the intention of PDF Solutions, Inc. to select and retain suppliers (“Suppliers”) who share and embrace the letter and spirit of the Company’s commitment to integrity. The Company’s Code of Ethics (https://www.pdf.com/company/governance) is a general guide to PDF Solutions’ standards of business practices and regulatory compliance. Its requirements apply to PDF Solutions, Inc. and all subsidiaries, and to all directors, officers, and employees of each. All references to “PDF Solutions”, “the Company”, “we”, “us” or “our” include PDF Solutions, Inc. and all subsidiaries unless otherwise specified.

We understand that Suppliers are independent entities; however, the business practices and actions of a Supplier may impact and/or reflect upon PDF Solutions. Because of this, we require all Suppliers and their employees, agents, and subcontractors (Suppliers’ employees, agents, and subcontractors shall hereinafter be referred to collectively as “Representatives”) to adhere to standards of business conduct and compliance while they are conducting business with and/or on behalf of PDF Solutions, similar to what PDF Solutions expects from its own directors, officers, and employees. When used in this document, “Suppliers” includes Suppliers’ Representatives, unless the context indicates otherwise.

The information outlined below is important and should be read carefully. All PDF Solutions’ Suppliers will be required to inform their Representatives about this Supplier Code of Conduct and, when appropriate, train them to ensure they understand and comply with it.

The policies summarized below are not all-inclusive, and there may be other conduct not specifically listed that will be considered unacceptable for a Supplier. PDF Solutions requires that Suppliers conduct themselves in a professional manner at all times while on PDF Solutions property or while conducting business with and/or on behalf of PDF Solutions. Suppliers with questions regarding the Supplier Code of Conduct should contact the Corporate Legal Department (“CLD”) of PDF Solutions at legal.department@pdf.com.

LEGAL AND REGULATORY COMPLIANCE PRACTICES

All Suppliers shall conduct their business activities in full compliance with the applicable laws and regulations of their respective countries and all United States laws applicable to PDF Solutions while conducting business with and/or on behalf of PDF Solutions in a foreign jurisdiction. There are no circumstances that would allow for the disregard of any applicable law or regulatory requirement in the conduct of a Supplier’s business activities and none will be tolerated by PDF Solutions. Suppliers shall promptly notify the CLD of any conflict between U.S. and applicable law as detailed under the “Reporting of Questionable Behavior and/or Possible Violations” section of this Supplier Code of Conduct. In addition to any specific obligations under Supplier’s agreement with PDF Solutions, all Suppliers shall, without limitation:

• Comply with the anti-corruption laws of the countries in which they do business and the United States Foreign Corrupt Practices Act (“FCPA”). Suppliers may not make any direct or indirect payments or promises of payment to foreign government officials for the purpose of inducing the individual to use or misuse his/her position to obtain or retain business.
• Comply with all applicable trade control, export control, import and related laws and regulations.
• Conduct their business in full compliance with antitrust and fair competition laws that govern the jurisdictions in which they conduct business.
• Comply with all applicable environmental laws and regulations regarding the use and preservation of land, air, and water.
• Be honest, direct, and truthful in discussions with regulatory agency representatives and government officials.

BUSINESS PRACTICES

Suppliers shall conduct their business interactions and activities with integrity and in accordance with their obligations under specific agreements with PDF Solutions. While many Suppliers may have their own compliance requirements, business practice standards, and/or codes of business conduct, it is essential that all Suppliers understand and uphold the requirements for acceptable business conduct at PDF Solutions when doing business with and/or on behalf of PDF Solutions. In addition to any specific obligations under Supplier’s agreement with PDF Solutions, all Suppliers shall, without limitation:

1. Honestly and accurately record and report all business information and comply with all applicable laws regarding their completion and accuracy.

2. Create, retain, and dispose of business records in full compliance with all applicable legal and regulatory requirements.

3. Protect and responsibly use both the physical and intellectual assets of PDF Solutions including property, supplies, consumables, and equipment when authorized by PDF Solutions to use such assets.

4. Use PDF Solutions’ provided information technology and systems (including e-mail) only for authorized PDF Solutions business-related purposes. PDF Solutions strictly prohibits Suppliers from using PDF Solutions’ technology and systems to create, access, store, print, solicit, or send any material that is intimidating, harassing, threatening, abusive, sexually explicit or otherwise offensive or inappropriate, and/or sending any false, derogatory, or malicious communications using PDF Solutions provided information assets and systems.

5. Comply with all PDF Solutions’ requirements for maintenance of passwords, confidentiality, security, and privacy procedures as a condition of receiving access to PDF Solutions’ internal corporate network, all systems and buildings. All data stored or transmitted on PDF Solutions owned or leased equipment is not to be considered private and is the property of PDF Solutions. PDF Solutions may monitor all use of the corporate networks and all systems (including e-mail) and/or access all data stored or transmitted using the PDF Solutions network.

6. Comply with the intellectual property ownership rights of PDF Solutions and others including but not limited to copyrights, trademarks, and trade secrets. Use software, hardware and content only in accordance with their associated license or terms of use.

7. Not distribute or cause to be distributed, any form of literature, materials or other information on PDF Solutions owned or leased property (such as brochures, publications, advertisements, surveys, announcements, or flyers) unrelated to PDF Solutions business in PDF Solutions work areas (such as offices, cubicles, copy rooms, and/or conference rooms) at any time. Distribution of such materials using the PDF Solutions network or e-mail system is also strictly prohibited.

8. Speak to the press on PDF Solutions’ behalf only if Supplier is expressly authorized in writing to do so by PDF Solutions.

9. Use good judgment, discretion, and moderation when offering gifts or entertainment to PDF Solutions’ employees. In doing so, Suppliers will refrain from giving PDF Solutions’ employees an individual gift or a combination of gifts with a value greater than $200.00 and never offer a bribe, kickback, bartering arrangement for goods or services, and/or any other incentive to a PDF Solutions’ employee in order to obtain or retain PDF Solutions’ business.

10. Avoid the appearance of or actual improprieties and/or conflicts of interests. Suppliers shall not deal directly with any PDF Solutions’ employee whose spouse, domestic partner, or other family member or relative holds a significant financial interest in the Supplier. Dealing directly in the course of negotiating the Supplier agreement or performing the Supplier’s obligations with a spouse, domestic partner, or other family member or relative who is employed by PDF Solutions is also prohibited.

11. Avoid insider trading by buying or selling PDF Solutions’ or PDF Solutions’ clients’ stock when in possession of information about PDF Solutions or such client company that is not available to the investing public and that could influence an investor’s decision to buy or sell stock.

EMPLOYMENT PRACTICES

PDF Solutions expects its Suppliers to share its commitment to diversity, equal employment opportunity, and a safe and harassment free workplace. Suppliers shall conduct their employment practices in full compliance with all applicable laws, and regulations in all of their global operations. In addition to any specific obligations under Supplier’s agreement with PDF Solutions, all Suppliers shall, without limitation:

1. Cooperate with PDF Solutions’ commitment to a workforce free of harassment and unlawful discrimination.

2. Provide a safe and healthy work environment and fully comply with all applicable safety and health regulations and practices.

3. Prohibit the use, possession, distribution, and/or sale of alcohol and/or illegal drugs while on PDF Solutions owned or leased property.

4. Use only voluntary labor. The use of forced labor whether in the form of indentured labor, bonded labor, or prison labor by a Supplier and/or its subcontractors is prohibited.

5. Comply with all minimum age laws and requirements and not employ child labor.

6. Comply with all applicable laws governing compensation and working hours. In those countries where there is no applicable standard, overtime shall be paid, at a minimum, at the rate equal to the employee’s regular wages. In those instances where housing is provided by Suppliers, assure Representatives’ housing meets all applicable laws and regulations.

RESPONSIBLE SOURCING OF MINERALS

All Suppliers shall have a policy to reasonably ensure that the tantalum, tin, tungsten and gold in components, parts or products they supply to, or manufacture for, PDF Solutions do not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses in the Democratic Republic of the Congo or an adjoining country as defined in, and according to, Section 1502 of the Dodd-Frank Act. Further, Suppliers shall exercise due diligence on the source and chain of custody of these minerals in the components, parts or products they source and in components, parts or products supplied to them, and make their due diligence measures available to PDF upon request.

ENFORCEMENT OF, AND VERIFICATION OF, COMPLIANCE WITH THE SUPPLIER CODE OF CONDUCT

Each Supplier will conduct audits and inspections to insure their compliance with this Supplier Code of Conduct and applicable legal and contractual standards. PDF Solutions will whether to engage in future business with any Supplier that fails to reasonably comply with this Supplier Code of Conduct. All Suppliers may periodically be asked, as a condition for maintaining an active Supplier relationship with PDF Solutions, to acknowledge their obligation to comply with this Supplier Code of Conduct.

In addition to self audit and inspection and as part of PDF Solutions’ verification of Suppliers’ compliance, PDF Solutions may utilize internal and/or external (third-party) monitors to conduct, unannounced, on-site audits of Suppliers and their facilities. Audits may include but not be limited to inspections of physical facilities, record and document review, and interviews with Representatives.

In addition to any other rights PDF Solutions may have under its agreement with Supplier, PDF Solutions may request the immediate removal of any Representative that behaves in a manner that is unlawful or inconsistent with this Supplier Code of Conduct, any other applicable PDF Solutions’ policy, or that is otherwise deemed unacceptable to PDF Solutions.

REPORTING OF QUESTIONABLE BEHAVIOR AND/OR POSSIBLE VIOLATIONS

If you wish to report a questionable behavior or possible violation of the Supplier Code of Conduct, PDF Solutions has a variety of resources available to assist you. You are encouraged to work with your PDF Solutions contact in resolving a business practice or compliance concern. However, PDF recognizes that there may be a time when this is not possible or appropriate. In such instances, contact any of the following:

1. The PDF Solutions’ Code of Conduct Hot Line toll free at 855-208-8579.

2. Contact CLD, by email at legal.department@pdf.com, by mail/courier at PDF Solutions, Inc., attention: Legal Department, 2858 De La Cruz Blvd, Santa Clara, CA 95050 (USA), or by confidential fax at +1-408-938-4435.

PDF Solutions will not tolerate any retribution or retaliation taken against any individual who has, in good faith, sought out advice or has reported questionable behavior and/or a possible violation.