In the emerging supply chain environment, supply chain risk management plays a more important role than before. Supply chain management must focus not only on the efficiency of supply chain, but also on the risk of supply chain. If an unexpected event occurs, the entire supply chain members will be affected and the results will cause significant loss. Therefore, the objective of this research proposes an improved failure mode and effects analysis (FMEA) to select new suppliers based on the supply chain risk’s viewpoint. This research considers an IC assembly company as a case study to verify the validation of this proposed supplier selection mechanism. The results show that the case company applies the improved FMEA method which can effectively classify suppliers into different categories. According to the evaluation results, the case company can select the most appropriate supplier as its supply chain partner. Further, the case company can give its feedback to suppliers that fail to pass the evaluation and help them improve their weakness in order to become the case company’s partners in the future.