TWSE: 3094

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DAVICOM Semiconductor, Inc.

2022 Annual General Shareholders’ Meeting Handbook (Physical Shareholders’ Meeting)

Meeting Time: 9:00 a.m. on Wednesday, 29[th] June, 2022 Venue: 3F., No.6, Li-Hsin Rd.6, Science Park, Hsinchu, Taiwan (Auditorium)

Notice to readers

This English-version meeting handbook is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

I. Meeting Procedure------------------------------------- P.2

II.Report Agenda---------------------------------------P.3

Call Meeting to Order
Chairman’s Address
Report Item
Approval Item
Discussion Items
Election Items
Other Discussion Items
Extemporary motions
Adjournment

III.Attachments -----------------------------------------P.9

Company’s 2021 Business Report
Audit Committee’s Review Report
CPA Audit Report and 2021 Individual Financial Statements
CPA Audit Report and 2021 Consolidated Financial Statements
2021 List of Remuneration of each Directors
Table of Revised Rules of 2020 Company’s First Repurchase of Treasury Shares for Transferring Shares to its Employee
2021 Annual Profit Distribution Table
Comparison Table of the Amendment to the Articles of Incorporation
Comparison Table of the Amendment to the Operational Procedures for Loaning Funds to Others
10.Comparison Table of the Amendment to the Operational Procedures for Endorsements/Guarantees
11.Candidate List of Directors (including Independent Director)

IV. Appendix-------------------------------------------------P.51

Articles of Incorporation of DAVICOM Semiconductor, Inc.
DAVICOM Semiconductor, Inc. Rules of Procedure for Shareholder Meetings
Rules for Election of Directors and Independent Directors
Table of Shareholdings of Directors

DAVICOM Semiconductor, Inc.

2022 Annual General Shareholders’ Meeting Procedure

1. Call the Meeting to Order

2. Chairman’s Address

3. Report Items

4. Approval Items

5. Discussions Items

6. Election Items

7. Other Discussion Items

8. Extemporary motions

9. Adjournment

DAVICOM Semiconductor, Inc.

2022 Annual General Shareholders’ Meeting Agenda

(Physical Shareholders’ Meeting)

Time: 9:00 a.m., June 29[th] , 2022 (Wednesday)

Place: 3F., No.6, Li-Hsin Rd.6, Science Park, Hsinchu, Taiwan (Auditorium)

Agenda:

1. Call the Meeting to Order

2. Chairman’s Address

3. Report Items

(1) To report the business of 2021 and operating plan of 2022
(2) Audit Committee’s review report of 2021
(3) To report the directors’ remuneration policy and 2021 directors and employees’ compensation distribution
(4) To report Implementation Status of the Company’s Share Buyback in 2020.

4. Approval Items

(1) To approve 2021 Business Report and Financial Statements
(2) To accept the proposal for distribution of 2021 profits

5. Discussion Items

(1) To approve the proposal for cash distribution of 2021 additional paid in capital
(2) To approve amendments to partial provisions of Articles of Incorporation
(3) To approve amendments to partial provisions of Operational Procedures for Loaning Funds to Others and Operational Procedures for Endorsements/Guarantees

6. Election Items

To elect the 10th board of directors (4) and independent directors (3).

7. Other Discussion Items

To approve the proposal of the release of the non-competition restrictions on the 10th new elected directors and independent directors.

8. Extemporary motions

9. Adjournment

Report Items

1. To report the business of 2021 and operating plan of 2022

Explanatory Notes: Please refer to the Attachment 1.

2. Audit Committee’s review report of 2021

Explanatory Notes: Please refer to the Attachment 2.

3. To report the directors’ remuneration policy and 2021 directors and employees’ compensation distribution.

Explanatory Notes:

(1) The pre-tax profits of 2021 are NT$ 90,408,377 and according to the Company’s Articles of Incorporation, the Board has adopted a proposal for distribution of 2021 profit as follows: directors’ compensation is NT$1,808,167 and the profit to employees is NT$ 7,684,712; both shall be paid in cash.
(2) The implementation of the distribution will be conducted after being approved by the shareholders’ meeting.
(3) Please refer to Attachment 5 for the directors’ remuneration policy and the list of compensation for each director.

4. To report Implementation Status of the Company’s Share Buyback in 2020

Explanatory Notes:

(1) The Company’s Share Buyback in 2020: The Company purchased 1,400,000 shares common stock from Mar. 2, 2020 to May. 1, 2020. Total monetary amount of shares buyback was NT$22,758,483. The ratio is 1.68% of cumulative number of own shares held during the buyback period to the total number of the Company’s issued shares.
(2) The board of directors has approved the Revised Rules of 2020 Company’s First Repurchase of Treasury Shares for Transferring Shares to its Employee on 11[th] Apr. 2022, please refer to Attachment 6.

Approval Item

Proposal 1

Proposed by the Board of Directors

Subject ： To accept 2021 Business Report and Financial Statements

Explanatory Notes:

(1) DAVICOM’s 2021 Business Report, Financial Statements, including Balance Sheets, Statement of Comprehensive Income, Statements of Changes in Equity, and Statements of Cash Flows, were audited by independent auditors, Mr. SeKai Lin, and Mr. Chia-Hung Lin, of PricewaterhouseCoopers, Taiwan.
(2) 2021 Business Report, and the aforementioned Financial Statements are attached hereto as Attachments. Please refer to the Attachment 1 ,3 and 4.
(3) Please discuss.

Proposal 2

Proposed by the Board of Directors

Subject ： To approve the proposal for distribution of 2021 earnings

Explanatory Notes:

(1) 2021 net profit after tax is NT$ 69,662,403. To make up the actuarial loss of the pension and to allocate 10% of the statutory surplus reserve, the proposed dividend to shareholders is NT$39,796,222. Each shareholder will be entitled to receive a cash dividend of NT$0.487 per share.
(2) In the event of any change in the number of outstanding shares resulting from executing employee stock options or converting treasury stock to its employees, the dividend ratio must be adjusted. It is proposed to fully authorize the Chairman of Board of Directors of DAVICOM to adjust the dividend ratio and to proceed on the relevant matters.
(3) Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Chairman of Board of Directors of DAVICOM be authorized to resolve the ex-dividend date and other relevant issues.
(4) Please discuss. For the 2021 Annual Profit Distribution Table, please refer to Attachment 7

Discussion Item

Proposal 1

Proposed by the Board of Directors

Subject ： To approve the proposal for additional cash distribution of 2021 from

its reserved surplus earnings.

Explanatory Notes:

(1) Based on the profit allocation proposal, the Company intends to declare cash dividends in the amount of NT$41,920,867 at NT$0.513 per share from its distributable reserved surplus earnings for the year 2021.
Total cash dividends are NT$ 1 (NT$0.487 per share from net profit after tax and NT$0.513 per share from its reserved surplus earnings.)
(2) In the event of any change in the number of outstanding shares resulting from executing employee stock options or converting treasury stock to its employees, the dividend ratio must be adjusted. It is proposed to fully authorize the Chairman of Board of Directors of DAVICOM to adjust the dividend ratio and to proceed on the relevant matters.
(3) Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Chairman of Board of Directors of DAVICOM be authorized to resolve the ex-dividend date and other relevant issues.
(4) Please discuss

Proposal 2

Proposed by the Board of Directors

Subject ： Amendments to partial provisions of Articles of Incorporation

Explanatory Notes:

(1) The revised Rules of Articles of Incorporation, please refer to Attachment 8.
(2) Please discuss.

Proposal 3

Proposed by the Board of Directors

Subject ： To approve amendments to partial provisions of Operational Procedures

for Loaning Funds to Others and Operational Procedures for

Endorsements/Guarantees

Explanatory Notes:

(1) The public company has established an Audit Committee in accordance with Article 14-5 of the Securities and Exchange Act of the terms of reference of the Audit Committee. The setting or revising of the Operational Procedures for Loaning Funds to Others and the Operational Procedures for Endorsements /Guarantees shall be approved by the Audit Committee.
(2) In order to strengthen corporate governance, public companies that have established independent directors and audit committees shall notify independent directors and audit committees in writing of major violations of Loaning Funds or endorsement guarantees; Improvement plans should also be sent to independent directors and the audit committee.
(3) Comparison Table of the Amendment to the Operational Procedures for Loaning Funds to Others and Operational Procedures for Endorsements /Guarantees, please refer to Attachments 9 and 10.

Election Item

Proposal

Proposed by the Board of Directors

Subject ： To elect the 10th board of directors (4) and independent directors (3).

Explanatory Notes:

(1) The Shareholders’ Meeting will elect the 10th board of directors (4) and independent directors (3). The term of the newly elected board of directors is from 2022/06/29 to 2025/06/28 (3 years). The candidate’s nomination system of Company Act 192-1 is adopted by the company for the election of the directors of the company, and the shareholders shall elect the directors from among the nominees listed in the roster of director candidates. Please refer to Attachment 11 for director candidates’ education and work experience.
(2) Please vote.

Other Discussion Item

Proposal

Proposed by the Board of Directors

Subject ： The proposal of the release of the non-competition restrictions on the

10th new elected of directors and independent directors.

Explanatory Notes:

(1) The company would like to release the non-competition restrictions on the 10th new elected of directors and independent directors.
(2) Please approve.

Extemporary motions

Adjournment

Attachment 1

Company’s 2021 Business Report

Dear Shareholders,

I would like to thank you for your continuing support throughout the year. DAVICOM has responded to the changing business climate by adopting an aggressive stance in strengthening our competitiveness. As of the end of December – 2021, our company generated net income of NT $80.91 million on consolidated revenue of NT $283.47 million. Our company has been continuously posting profits for 64 quarters.

The Company has four major product lines: ethernet chip, electronic paper driver chip, video decoder chip and AI chip. Last year’s revenue didn’t grow up as expected due to the impact of COVID19 and China–United States trade war. The upstream and downstream semiconductor manufacturing has raised the price to respond to the increasing demand. The company, therefore, raised the price in Q2 to maintain its profit.

The IC product demand is increased than last year due to customers preparing inventory in advance, therefore the company operation is positive and the revenue and profit reach their climax even the market is continuously changing.

Looking forward to the year 2022, with the continued growth of AIoT and its diversified application, we look forward to future opportunities in the communications industry. Additionally, with the development of the 5G industry, Ethernet chips play an important role in increasing communication facilities. We expect that the growing demand for AIoT & 5G market will improve the company’s business opportunities of the year.

Due to the insufficient production capacity and supply of other IC companies, the company grasps the opportunity to enter the market which originally belong to others.

The epidemic hasn’t recovered yet, however most of countries has release the restriction under the consideration of economy. The economic activities have gradually returned. The trend would help company operation development. In the Europe market, for example, the orders so far have increased compared to 2021.

As the situation of the Russia-Ukraine Conflict., China trade war, tech competition and COVID-19 epidemic are still tense. The impact is difficult to quantify, in terms of the overall environment, the trend has gradually taken shape and cannot be underestimated.

In addition, the potential threat of IC design industry in China and the rapid changes of product applications, the market is full of opportunities and risks, the company will remain flexible in the strategy operation to seek the best business opportunities in the market. We will continue the spirit of pragmatic approach to governance. Our management team and all the employees are making strides in achieving our company’s goal – to create the most value for all shareholders – by implementing business plan,

improving cost management and enhancing operating efficiency. Develop high-performance, powersaving, industrial-grade, and diverse interfaces from key core technologies of Ethernet to meet the market requirements of IoT and Industry 4.0 for smart grid, home, medical, security monitoring, automotive, industrial control, etc. The market needs to expand the series of e-paper driver chips for financial smart cards and electronic shelf labels, and actively develop and integrate relevant platforms to provide customers with high-quality and competitive products to stabilize customer relationships and to provide customers with customer-oriented to reach a win-win goal. Davicom gains a deep understanding of market application trends for market opportunities, and work closely with supply chain partners to obtain full support for expecting higher return on investment for shareholders to thank all shareholders for their long-term support.

Last but not the least, we would like to thank you - our shareholders - for your continuous support and belief in our efforts.

We wish you all health and happiness

Sincerest regards,

Chairman President Accounting Supervisor Ting Hao Ting Hao Kuei-Feng Chiu

Attachment 2

Audit Committee’s Review Report

The Company’s 2021 Financial Statements have been agreed by Audit Committee members of the Company and approved by the Board of Directors. The CPA firm of PricewaterhouseCoopers Taiwan was retained to audit the Company’s Financial Statements and has issued an audit report relating to the Financial Statements.

The Board of Directors has prepared the Company’s 2021 Business Report and proposal for allocation of profits. The 2021 Business Report and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of the Company. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.

DAVICOM Semiconductor Inc.

： Independent Director Chang-Yue ,Ueng

Independent Director： Jen-Jyh, Hwang

Independent Director： Niang-Shou, Wei

February 24, 2022

Attachment 3

DAVICOM SEMICONDUCTOR , INC.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

FOR THE YEARS ENDED DECEMBER 31, 2021 AND

2020

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of DAVICOM Semiconductor, Inc.

Opinion

We have audited the accompanying parent company only balance sheets of DAVICOM Semiconductor, Inc. (the “Company”) as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other matter section of our report), the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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The Company’s key audit matters are as follows:

Evaluation of accounts receivable

Description

Please refer to Note 4(7) for accounting policies on accounts receivable recognition and valuation, Note 5 for uncertainty of accounting estimates and assumptions in relation to impairment of accounts receivable, Note 6(3) for details of accounts receivable. The balance of accounts receivable amounted to NT$32,894 thousand as at December 31, 2021.

The Company’s accounts receivable arises from selling goods, and collecting in accordance with the credit period which is determined by the Credit Quality Control Policy of individual customers’ credit quality.

Allowance for uncollectible accounts are based on expected credit losses during its existing period. For the purpose of measurement, underlying receivable should be grouped appropriately and the assumptions should be assessed and analyzed. The aging categories, expected loss ratio and forward-looking information usually include subjective judgement, therefore, we determined the valuation of accounts receivable as one of the key areas of focus for this year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Checked and tested the assumptions of expected credit losses and assessed the reasonableness of the aging categories, including objective evidences used to determine the accuracy of periods and credit terms. Verified whether there are long overdue unrecoverable accounts receivable on the list to assess the adequacy of allowance for uncollectible accounts.
Checked and tested accounts receivable aging schedule which is classified based on customer types, subsequent collections, and discussed with management for its assessment of recoverability of past due receivables.

Evaluation of inventories

Description

Please refer to Note 4(10) for accounting policy on inventory valuation, Note 5 for uncertainty of accounting estimates and assumptions in relation to inventory valuation, Note 6(4) for details of inventory. The balance of inventory and allowance for inventory valuation losses amounted to NT$30,788 thousand and NT$13,181 thousand, respectively, as at December 31, 2021.

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The Company is engaged in research, development, production, manufacturing and sales of local area network chipset. Due to rapid changes in technology, the life cycle of products is short and easily affected by market prices, there is a higher risk of incurring inventory valuation losses or having obsolete inventory. The Company measures inventory for normal sales at the lower of cost or net realisable value method. For inventory aging over certain period, individual inventory valuation losses and obsolete inventory, provision for loss is made through individual identification and measured at net realisable value. As a result of the significant amount, numerous items, and since identifying obsolete and damaged inventory usually involves management judgement, it also belongs to one of the audit scopes involving professional judgement. Therefore, we determined the estimate of inventory valuation losses as one of the key areas of focus for this year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained an understanding of the business, industry, products and inventory aging to assess the provision policy of allowance for inventory valuation losses, verifying whether the related accounting policies are consistent with the last period, and evaluating whether the provision policy is reasonable.
Obtained inventory aging report from management, analyse and compare the different reasons for loss due to market value decline and obsolete and slow-moving inventories to assess the appropriateness of loss for market value decline and obsolete and slow-moving inventory policy.
For summary statement that management uses to valuate loss for market value decline and obsolete and slow-moving inventories, confirming whether it agrees with the statement details generated from system, and verifying that obsolete and slow-moving inventories which were provided valuation losses, has been completely listed in the statement.
Tested book value of ending inventory, through selecting samples and obtaining invoices of last period to verify whether they were measured at the lower of cost or net realizable value method, and recalculating and valuating the reasonableness of changes in allowance for inventory valuation losses.
Participating and observing the year-end physical inventory count to verify the existence and completeness of inventory, and checking the condition of inventory to assess the appropriateness of allowance for inventory valuation losses of obsolete and slow-moving inventories.

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Other matters

Reference to report of the other auditors

The share of profit or loss of related companies recognised under the equity method, which is recognised in the audit report of other auditors for the years ended December 31, 2021 and 2020, is NT($6,637) thousand and NT$(3,888) thousand, respectively. Additionally, the recognised comprehensive income comprising share of other comprehensive income in subsidiaries, were both NT$0 thousand for the abovementioned periods. As of December 31, 2021 and 2020, the balance of the investments accounted for using the equity method was NT$326,491 thousand and NT$333,128 thousand, respectively.

Responsibilities of management and those charged with governance for the Parent Company Only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and for such internal controls as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the Parent Company Only financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China,

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we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the footnote disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the Company’s audit. We remain solely responsible for our audit opinion.

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We communicate with those charged with governance regarding the planned scope and timing of the audit, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Se-Kai Lin Chia-Hung Lin

For and on behalf of PricewaterhouseCoopers, Taiwan February 24, 2022

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

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December 31, 2021 December 31, 2020
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 290,928 25 $ 283,217 25
1150 Notes receivable, net 6(3) 278 - 59 -
1170 Accounts receivable, net 6(3) 32,894 3 31,856 3
1200 Other receivables 163 - 170 -
1210 Other receivables - related parties 7 - - 567 -
130X Inventories, net 6(4) 30,788 3 23,494 2
1410 Prepayments 4,092 - 3,865 -
11XX Current Assets 359,143 31 343,228 30
Non-current assets
1510 Financial assets at fair value through 6(2)
profit or loss - non-current 50,558 4 39,268 3
1550 Investments accounted for under 6(5)
equity method 416,775 36 425,601 37
1600 Property, plant and equipment 6(6) 141,172 12 166,738 14
1755 Right-of-use assets 6(7) 60,133 5 61,941 5
1760 Investment property - net 6(9) 121,665 10 100,716 9
1780 Intangible assets 1,267 - 91 -
1840 Deferred income tax assets 6(25) 10,142 1 9,144 1
1900 Other non-current assets 6(10) 11,938 1 13,117 1
15XX Non-current assets 813,650 69 816,616 70
1XXX Total assets $ 1,172,793 100 $ 1,159,844 100
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(Continued)

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DAVICOM SEMICONDUCTOR , INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

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December 31, 2021 December 31, 2020
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2130 Current contract liabilities $ 287 - $ 94 -
2150 Notes payable 2,685 - 2,223 -
2170 Accounts payable 7,217 1 4,850 1
2200 Other payables 6(11) 27,515 2 25,643 2
2230 Current income tax liabilities 6(25) 9,369 1 775 -
2280 Current lease liabilities 6(27) 1,566 - 1,552 -
2310 Advance receipts 1,210 - 2,077 -
21XX Current Liabilities 49,849 4 37,214 3
Non-current liabilities
2570 Deferred income tax liabilities 6(25) 512 - 512 -
2580 Non-current lease liabilities 6(27) 59,382 5 60,948 5
2600 Other non-current liabilities 6(12) 17,767 2 17,384 2
25XX Non-current liabilities 77,661 7 78,844 7
2XXX Total Liabilities 127,510 11 116,058 10
Equity
Share capital 6(15)
3110 Common stock 846,321 72 846,321 73
Capital surplus 6(16)
3200 Capital surplus 121,172 10 157,128 13
Retained earnings 6(17)
3310 Legal reserve 81,835 7 78,569 7
3350 Undistributed earnings 6(24) 69,517 6 32,727 3
Other equity interest
3400 Other equity interest ( 22,711) ( 2) ( 20,108) ( 2)
Treasury shares 6(15)
3500 Treasury shares ( 50,851) ( 4) ( 50,851) ( 4)
3XXX Total equity 1,045,283 89 1,043,786 90
Significant contingent liabilities and 9
unrecognised contract commitments
3X2X Total liabilities and equity $ 1,172,793 100 $ 1,159,844 100
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The accompanying notes are an integral part of these parent company only financial statements.

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DAVICOM SEMICONDUCTOR , INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

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Year ended December 31
2021 2020
Items Notes AMOUNT % AMOUNT %
4000 Sales revenue 6(18) $ 273,987 100 $ 225,872 100
5000 Operating costs 6(4)(22)(23) ( 75,042) ( 28) ( 70,625) ( 31)
5900 Net operating margin 198,945 72 155,247 69
Operating expenses 6(22)(23)
6100 Selling expenses ( 24,607) ( 9) ( 23,711) ( 11)
6200 General and administrative expenses ( 43,114) ( 16) ( 41,762) ( 18)
6300 Research and development expenses ( 72,121) ( 26) ( 67,489) ( 30)
6450 Impairment on expected credit gains 6(3) and 12(2)
- - -
(losses) ( 500)
6000 Total operating expenses ( 139,842) ( 51) ( 133,462) ( 59)
6900 Operating income 59,103 21 21,785 10
Non-operating income and expenses
7100 Interest income 6(19) 257 - 1,050 -
7010 Other income 6(20) 33,388 12 25,959 12
7020 Other gains and losses 6(21) ( 4,996) ( 2) ( 8,179) ( 4)
7050 Finance costs 6(22) ( 613) - ( 636) -
7070 Share of loss of associates and joint 6(5)
ventures accounted for under equity
method ( 6,224) ( 2) ( 2,402) ( 1)
7000 Total non-operating income and
expenses 21,812 8 15,792 7
7900 Income from continuing operations
before income tax 80,915 29 37,577 17
7950 Income tax expense 6(25) ( 11,253) ( 4) ( 4,124) ( 2)
8000 Profit for the year from continuing
operations 69,662 25 33,453 15
8200 Profit for the year $ 69,662 25 $ 33,453 15
Other comprehensive income, net
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311 Other comprehensive income, before 6(13)
tax, actuarial gains on defined
benefit plans ($ 235) - $ 293 -
8349 Income tax related to components of 6(25)
other comprehensive income that
will not be reclassified to profit or
loss 47 - ( 59) -
8310 Components of other
comprehensive income that will
not be reclassified to profit or loss ( 188) - 234 -
Components of other comprehensive
income that will be reclassified to
profit or loss
8361 Financial statement translation
differences of foreign operations ( 2,603) ( 1) ( 4,849) ( 2)
8360 Components of other comprehensive
income that will be reclassified to
profit or loss ( 2,603) ( 1) ( 4,849) ( 2)
8300 Other comprehensive loss for the
year, net ($ 2,791) ( 1) ($ 4,615) ( 2)
8500 Total comprehensive income for the
year $ 66,871 24 $ 28,838 13
Basic earnings per share 6(26)
9750 Net income $ 0.85 $ 0.41
Diluted earnings per share 6(26)
9850 Net income $ 0.85 $ 0.41
----- End of picture text -----

The accompanying notes are an integral part of these parent company only financial statements.

~21~

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Year 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation and distribution of 2020 earnings Legal reserve Cash dividends Differences between equity purchase price and carrying amount arising from actual acquisition of subsidiaries Cash dividends distributed from capital surplus Restricted stocks to employees Treasure share repurchased Balance at December 31, 2020 Year 2021 Balance at January 1,2021 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation and distribution of 2021 earnings Legal reserve Cash dividends Cash dividends distributed from capital surplus Balance at December 31, 2021	Notes	Common stock `$ 846,551` `-` `-` `-` `-` `-` `-` `-` `(` `230 )` `-` `$ 846,321` `$ 846,321` `-` `-` `-` `-` `-` `-` `$ 846,321`	Capital	surplus		Retained earnings	Retained earnings	Otherequity interest Financial statements translation differences of foreign operations Other equity - others `($` `15,259 ) ($` `2,231 )` `-` `-` `(` `4,849 )` `-` `(` `4,849 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `2,231` `-` `-` `($` `20,108 )` `$` `-` `($` `20,108 )` `$` `-` `-` `-` `(` `2,603 )` `-` `(` `2,603 )` `-` `-` `-` `-` `-` `-` `-` `($` `22,711 )` `$` `-`	Treasury stocks `($` `28,115 )` `-` `-` `-` `-` `-` `-` `-` `-` `(` `22,736 )` `($` `50,851 )` `($` `50,851 )` `-` `-` `-` `-` `-` `-` `($` `50,851 )`	Total equity `$ 1,104,350` `33,453` `(` `4,615 )` `28,838` `-` `(` `38,244 )` `(` `1,031 )` `(` `29,099 )` `1,708` `(` `22,736 )` `$ 1,043,786` `$ 1,043,786` `69,662` `(` `2,791 )` `66,871` `-` `(` `29,418 )` `(` `35,956 )` `$ 1,045,283`
			Additional paid- in capital `$ 138,881` `-` `-` `-` `-` `-` `-` `(` `29,099 )` `8,632` `-` `$ 118,414` `$ 118,414` `-` `-` `-` `-` `-` `(` `35,956 )` `$` `82,458`	Restricted stock `$` `47,639` `-` `-` `-` `-` `-` `-` `-` `(` `8,925 )` `-` `$` `38,714` `$` `38,714` `-` `-` `-` `-` `-` `-` `$` `38,714`		Legal reserve `$` `74,393` `-` `-` `-` `4,176` `-` `-` `-` `-` `-` `$` `78,569` `$` `78,569` `-` `-` `-` `3,266` `-` `-` `$` `81,835`	Unappropriated retained earnings `$` `42,491` `33,453` `234` `33,687` `(` `4,176 )` `(` `38,244 )` `(` `1,031 )` `-` `-` `-` `$` `32,727` `$` `32,727` `69,662` `(` `188 )` `69,474` `(` `3,266 )` `(` `29,418 )` `-` `$` `69,517`	Financial statements translation differences of foreign operations `($` `15,259 )` `-` `(` `4,849 )` `(` `4,849 )` `-` `-` `-` `-` `-` `-` `($` `20,108 )` `($` `20,108 )` `-` `(` `2,603 )` `(` `2,603 )` `-` `-` `-` `($` `22,711 )`

The accompanying notes are an integral part of these parent company only financial statements.

~22~

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property
and right-of-use assets)
Amortisation
Impairment on expected credit losses
Cost of restricted stocks to employees
Deferred charges transferred to research and
experimental expenses
Interest income
Interest expense
Share of profit of associates accounted for
under equity method
Net profit on financial assets at fair value
through profit or loss
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Other receivables
Other receivables - related parties
Inventories, net
Prepayments
Financial assets at fair value through profit or
loss-non-current
Changes in operating liabilities
Current contract liabilities
Notes payable
Accounts payable
Other payables
Advance receipts
Net defined benefit liabilities
Cash inflow generated from operations
Interest received
Interest paid
Income tax received
Income tax paid
Net cash flows from operating activities Year ended December 31
Notes
2021
2020
$
80,915
$
37,577
6(6)(7)(9)
8,435
8,461
6(22)
4,097
3,179
6(3) and 12(2)
-
500
6(14)(15)
-
1,938
1,297
2,081
6(19)
(
257 ) (
1,050 )
6(22)
613
636
6(5)
6,224
2,402
6(2)(21)
(
7,290 ) (
8,716 )
(
219 ) (
59 )
(
1,038 ) (
916 )
8
(
27 )
567
(
567 )
(
7,294 )
1,347
(
227 )
1,935
(
4,000 )
-
193
37
462
(
3,721 )
2,367
(
6 )
1,872
(
3,147 )
(
867 )
659
147
175
86,005
42,718
256
1,186
(
613 ) (
636 )
-
4,494
(
3,610 ) (
6,193 )
82,038
41,569

(Continued)

~23~

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investments accounted for under	6(5)
equity method			`$`	`-` `($`		`117,132 )`
Dividends received from investments accounted for
using equity method				`-`		`26`
Acquisition of property, plant and equipment	6(6)	`(`		`2,010 ) (`		`10,949 )`
Acquisition of investment property	6(9)			`-` `(`		`75 )`
Increase in refundable deposits				`-`		`72`
Increase in intangible assets		`(`		`1,521 ) (`		`186 )`
Increase in other assets		`(`		`3,870 ) (`		`2,979 )`
Net cash flows used in investing activities		`(`		`7,401 ) (`		`131,223 )`
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in guarantee deposits received	6(12)(27)			`-`		`92`
Payments of cash dividends	6(17)	`(`		`29,418 ) (`		`38,244 )`
Repayments of principal for lease liabilities	6(7)(27)	`(`		`1,552 ) (`		`1,537 )`
Treasure stock repurchase	6(15)			`-` `(`		`22,736 )`
Cash dividends from capital surplus		`(`		`35,956 ) (`		`29,099 )`
Net cash flows used in financing activities		`(`		`66,926 ) (`		`91,524 )`
Net increase (decrease) in cash and cash equivalents				`7,711` `(`		`181,178 )`
Cash and cash equivalents at beginning of year				`283,217`		`464,395`
Cash and cash equivalents at end of year			`$`	`290,928`	`$`	`283,217`

~24~

Attachment 4

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

~25~

DAVICOM Semiconductor, Inc.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2021, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the entity that is required to be included in the consolidated financial statements of affiliates, is the same as the entity required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

Company name: DAVICOM SEMICONDUCTOR, INC. Representative: HAO, TING February 24, 2022

~26~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of DAVICOM SEMICONDUCTOR, INC.

Opinion

We have reviewed the accompanying consolidated balance sheets of DAVICOM Semiconductor, Inc. and its subsidiaries (the “Group”) as at December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other matter section of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~27~

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The Group’s key audit matters are as follows:

Evaluation of accounts receivable

Description

Please refer to Note 4(9) for accounting policies on accounts receivable recognition and valuation, Note 5 for uncertainty of accounting estimates and assumptions in relation to impairment of accounts receivable, Note 6(4) for details of accounts receivable. The balance of accounts receivable amounted to NT$34,078 thousand as at December 31, 2021.

The Group’s accounts receivable arises from selling goods, and collecting in accordance with the credit period which is determined by the Credit Quality Control Policy of individual customers’ credit quality. Allowance for uncollectible accounts are based on expected credit losses during its existing period. For the purpose of measurement, underlying receivable should be grouped appropriately and the assumptions should be assessed and analyzed. The aging categories, expected loss ratio and forwardlooking information usually include subjective judgement, therefore, we determined the valuation of accounts receivable as one of the key areas of focus for this year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Checked and tested the assumptions of expected credit losses and assessed the reasonableness of the aging categories, including objective evidences used to determine the accuracy of periods and credit terms. Verified whether there are long overdue unrecoverable accounts receivable on the list to assess the adequacy of allowance for uncollectible accounts.
Checked and tested accounts receivable aging schedule which is classified based on customer types, subsequent collections, and discussed with management for its assessment of recoverability of past due receivables.

~28~

Evaluation of inventories

Description

Please refer to Note 4(12) for accounting policy on inventory valuation, Note 5 for uncertainty of accounting estimates and assumptions in relation to inventory valuation, Note 6(5) for details of inventory. The balance of inventory and allowance for inventory valuation losses amounted to NT$34,821 thousand and NT$13,181 thousand as at December 31, 2021, respectively.

The Group is engaged in research, development, production, manufacturing and sales of local area network chipset. Due to rapid changes in technology, the life cycle of products is short and easily affected by market prices, there is a higher risk of incurring inventory valuation losses or having obsolete inventory. The Group measures inventory for normal sales at the lower of cost or net realisable value method. For inventory aging over certain period, individual inventory valuation losses and obsolete inventory, provision for loss is made through individual identification and measured at net realizable value. As a result of the significant amount, numerous items, and since identifying obsolete and damaged inventory usually involves management judgement, it also belongs to one of the audit scopes involving professional judgement. Therefore, we determined the estimate of inventory valuation losses as one of the key areas of focus for this year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained an understanding of the business, industry, products and inventory aging to assess the provision policy of allowance for inventory valuation losses, verifying whether the related accounting policies are consistent with the last period, and evaluating whether the provision policy is reasonable.
Obtained inventory aging report from management, analyse and compare the different reasons for loss due to market value decline and obsolete and slow-moving inventories to assess the appropriateness of loss for market value decline and obsolete and slow-moving inventory policy.

~29~

For summary statement that management uses to valuate loss for market value decline and obsolete and slow-moving inventories, confirming whether it agrees with the statement details generated from system, and verifying that obsolete and slow-moving inventories which were provided valuation losses, has been completely listed in the statement.
Tested book value of ending inventory, through selecting samples and obtaining invoices of last period to verify whether they were measured at the lower of cost or net realizable value method, and recalculating and valuating the reasonableness of changes in allowance for inventory valuation losses.
Participating and observing the year-end physical inventory count to verify the existence and completeness of inventory, and checking the condition of inventory to assess the appropriateness of allowance for inventory valuation losses of obsolete and slow-moving inventories.

Other matters

Reference to report of the other auditors

We did not audit the financial statements of a wholly-owned consolidated subsidiary that are included in the financial statements. Total assets of the subsidiary amounted to NT$327,076 thousand and NT$334,257 thousand as at December 31, 2021 and 2020, constituting 27.87% and 28.81% of consolidated total assets, respectively. Operating income of the subsidiary amounted to NT$9,483 thousand and NT$7,669 thousand, for the years ended December 31, 2021 and 2020, constituting 3.35% and 3.28% of consolidated total operating income, respectively. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other auditors.

Parent company only financial reports

We have audited and expressed an unqualified opinion including an Other Matter paragraph on the parent company only financial statements of DAVICOM Semiconductor, Inc. as at and for the years ended December 31, 2021 and 2020.

~30~

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal controls as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the financial statements

~31~

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the footnote disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.

~32~

matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Se-Kai Lin Chia-Hung Lin

For and on behalf of PricewaterhouseCoopers, Taiwan February 24, 2022

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors' report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

~33~

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

==> picture [518 x 474] intentionally omitted <==

----- Start of picture text -----

(Expressed in thousands of New Taiwan dollars)
December 31, 2021 December 31, 2020
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 678,988 58 $ 680,171 59
1150 Notes receivable, net 6(4) 278 - 59 -
1170 Accounts receivable, net 6(4) 34,078 3 32,612 3
1200 Other receivables 192 - 499 -
130X Inventories, net 6(5) 34,821 3 25,324 2
1410 Prepayments 4,466 - 4,237 -
1470 Other current assets - - 54 -
11XX Total Current Assets 752,823 64 742,956 64
Non-current assets
1510 Financial assets at fair value through 6(2)
profit or loss - non-current 74,185 6 65,704 6
1600 Property, plant and equipment, net 6(6) 141,172 12 166,738 14
1755 Right-of-use assets 6(7) 60,133 5 61,941 5
1760 Investment property, net 6(9) 121,665 11 100,716 9
1780 Intangible assets 1,267 - 91 -
1840 Deferred income tax assets 6(25) 10,142 1 9,144 1
1900 Other non-current assets 6(10) 11,992 1 13,117 1
15XX Total Non-current Assets 420,556 36 417,451 36
1XXX Total assets $ 1,173,379 100 $ 1,160,407 100
----- End of picture text -----

(Continued)

~34~

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

==> picture [522 x 588] intentionally omitted <==

----- Start of picture text -----

December 31, 2021 December 31, 2020
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2130 Current contract liabilities $ 287 - $ 94 -
2150 Notes payable 2,686 - 2,223 -
2170 Accounts payable 7,349 1 4,892 1
2200 Other payables 6(11) 27,959 2 26,155 2
2230 Current income tax liabilities 6(25) 9,369 1 775 -
2280 Current lease liabilities 12(2) 1,566 - 1,552 -
2300 Other current liabilities 1,219 - 2,086 -
21XX Current Liabilities 50,435 4 37,777 3
Non-current liabilities
2570 Deferred income tax liabilities 6(25) 512 - 512 -
2580 Non-current lease liabilities 12(2) 59,382 5 60,948 5
2600 Other non-current liabilities 6(12) 17,767 2 17,384 2
25XX Non-current liabilities 77,661 7 78,844 7
2XXX Total Liabilities 128,096 11 116,621 10
Equity attributable to owners of
parent
Share capital 6(15)
3110 Common stock 846,321 72 846,321 73
Capital surplus 6(16)
3200 Capital surplus 121,172 10 157,128 13
Retained earnings 6(17)
3310 Legal reserve 81,835 7 78,569 7
3350 Undistributed earnings 69,517 6 32,727 3
Other equity interest
3400 Other equity interest ( 22,711) ( 2) ( 20,108) ( 2)
Treasury shares 6(14)
3500 Treasury shares ( 50,851) ( 4) ( 50,851) ( 4)
31XX Equity attributable to owners of
the parent 1,045,283 89 1,043,786 90
36XX Non-controlling interest - - - -
3XXX Total equity 1,045,283 89 1,043,786 90
3X2X Total liabilities and equity $ 1,173,379 100 $ 1,160,407 100
----- End of picture text -----

The accompanying notes are an integral part of these consolidated financial statements.

~35~

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

==> picture [525 x 588] intentionally omitted <==

----- Start of picture text -----

Year ended December 31
2021 2020
Items Notes AMOUNT % AMOUNT %
4000 Sales revenue 6(18) $ 283,470 100 $ 233,542 100
5000 Operating costs 6(5)(23)(24) ( 81,903)( 29)( 76,765)( 33)
5900 Net operating margin 201,567 71 156,777 67
Operating expenses 6(23)(24)
6100 Selling expenses ( 28,706)( 10)( 25,810)( 11)
6200 General and administrative
expenses ( 43,621)( 15)( 42,746)( 18)
6300 Research and development
expenses ( 72,716)( 26)( 67,488)( 29)
6450 Impairment on expected credit 6(4) and 12(2)
losses - - ( 500) -
6000 Total operating expenses ( 145,043)( 51)( 136,544)( 58)
6900 Operating income 56,524 20 20,233 9
Non-operating income and
expenses
7100 Interest income 6(19) 1,874 1 2,671 1
7010 Other income 6(20) 31,887 11 26,206 11
7020 Other gains and losses 6(21) ( 8,757)( 3)( 10,914)( 5)
7050 Finance costs 6(22) ( 613) - ( 636) -
7000 Total non-operating income
and expenses 24,391 9 17,327 7
7900 Income from continuing
operations before income tax 80,915 29 37,560 16
7950 Income tax expense 6(25) ( 11,253)( 4)( 4,124)( 2)
8000 Profit for the year from
continuing operations 69,662 25 33,436 14
8200 Profit for the year $ 69,662 25 $ 33,436 14
----- End of picture text -----

(Continued)

~36~

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

==> picture [525 x 585] intentionally omitted <==

----- Start of picture text -----

Year ended December 31
2021 2020
Items Notes AMOUNT % AMOUNT %
Other comprehensive income
8311 Other comprehensive income,
before tax, actuarial gains on
defined benefit plans ($ 235) - $ 293 -
8349 Income tax related to
components of other
comprehensive income that will
not be reclassified to profit or
loss 47 - ( 59) -
Components of other
comprehensive income that will
be reclassified to profit or loss
8361 Financial statement translation
differences of foreign operations ( 2,603)( 1)( 4,849)( 2)
8360 Components of other
comprehensive income that
will be reclassified to profit or
loss ( 2,603)( 1)( 4,849)( 2)
8300 Total other comprehensive loss
for the year ($ 2,791)( 1)($ 4,615)( 2)
8500 Total comprehensive income for
the year $ 66,871 24 $ 28,821 12
Profit (loss), attributable to:
8610 Owners of parent $ 69,662 25 $ 33,453 14
8620 Non-controlling interest - - ( 17) -
$ 69,662 25 $ 33,436 14
Comprehensive income (loss),
attributable to:
8710 Owners of parent $ 66,871 24 $ 28,838 12
8720 Non-controlling interest - - ( 17) -
$ 66,871 24 $ 28,821 12
Basic earnings per share 6(26)
9750 Net income $ 0.85 $ 0.41
Diluted earnings per share 6(26)
9850 Net income $ 0.85 $ 0.41
----- End of picture text -----

The accompanying notes are an integral part of these consolidated financial statements.

~37~

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2020 Balance at January 1, 2020 Profit (loss) for the year Other comprehensive (loss) income for the year Total comprehensive (loss) income Differences between equity purchase price and carrying amount arising from actual acquisition of subsidiaries Change of non-controlling interests Appropriation and distribution of 2019 earnings Legal reserve Cash dividends Cash dividends distributed from capital surplus Restricted stocks to employees Treasure shares repurchased Balance at December 31, 2020 Year ended December 31, 2021 Balance at January 1, 2021 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation and distribution of 2020 earnings Legal reserve Cash dividends Cash dividends distributed from capital surplus Balance at December 31, 2021	Notes 6(17) 6(16)(17) 6(14)(15) 6(15) 6(17) 6(16)(17)						Equity attr	ib	utableto owners	of the parent
		Common stock `$` `846,551` `-` `-` `-` `-` `-` `-` `-` `-` `(` `230 )` `-` `$` `846,321` `$` `846,321` `-` `-` `-` `-` `-` `-` `$` `846,321`			Capitalsurplus		Retaine	d	earnings	Otherequity interest Exchange differences from translation of foreign operations Unearned compensation for restricted employee share of stock `($ 15,259 )` `($` `2,231 )` `-` `-` `(` `4,849 )` `-` `(` `4,849 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `2,231` `-` `-` `($ 20,108 )` `$` `-` `($ 20,108 )` `$` `-` `-` `-` `(` `2,603 )` `-` `(` `2,603 )` `-` `-` `-` `-` `-` `-` `-` `($ 22,711 )` `$` `-`	Treasury shares `($` `28,115 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `22,736 )` `($` `50,851 )` `($` `50,851 )` `-` `-` `-` `-` `-` `-` `($` `50,851 )`
				Additional paid-in capital `$` `138,881` `-` `-` `-` `-` `-` `-` `-` `(` `29,099 )` `8,632` `-` `$` `118,414` `$` `118,414` `-` `-` `-` `-` `-` `(` `35,956 )` `$` `82,458`		Others `$ 47,639` `-` `-` `-` `-` `-` `-` `-` `-` `(` `8,925 )` `-` `$ 38,714` `$ 38,714` `-` `-` `-` `-` `-` `-` `$ 38,714`	Legal reserve `$ 74,393` `-` `-` `-` `-` `-` `4,176` `-` `-` `-` `-` `$ 78,569` `$ 78,569` `-` `-` `-` `3,266` `-` `-` `$ 81,835`	Undistributed earnings `$` `42,491` `33,453` `234` `33,687` `(` `1,031 )` `-` `(` `4,176 )` `(` `38,244 )` `-` `-` `-` `$` `32,727` `$` `32,727` `69,662` `(` `188 )` `69,474` `(` `3,266 )` `(` `29,418 )` `-` `$` `69,517`		Exchange differences from translation of foreign operations `($ 15,259 )` `-` `(` `4,849 )` `(` `4,849 )` `-` `-` `-` `-` `-` `-` `-` `($ 20,108 )` `($ 20,108 )` `-` `(` `2,603 )` `(` `2,603 )` `-` `-` `-` `($ 22,711 )`

The accompanying notes are an integral part of these consolidated financial statements.

~38~

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax			`$`	`80,915`		`$`	`37,560`
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property and right-of-use assets)	6(6)(7)(9)			`8,435`			`8,461`
Amortisation	6(23)			`4,097`			`3,179`
Impairment on expected credit loss	12(2)			`-`			`500`
Deferred charges transferred to research and experimental expenses				`1,297`			`2,081`
Cost of restricted stocks to employees	6(14)(15)			`-`			`1,938`
Interest income	6(19)	`(`		`1,874 )`	`(`		`2,671 )`
Interest expense	6(22)			`613`			`636`
Net loss on financial assets at fair value through profit or loss	6(2)(21)	`(`		`4,481 )`	`(`		`6,973 )`
Gain on disposal of property, plant and equipment	6(21)			`-`	`(`		`6 )`
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss- current				`-`			`763`
Notes receivable		`(`		`219 )`	`(`		`59 )`
Accounts receivable		`(`		`1,466 )`	`(`		`791 )`
Other receivables				`10`	`(`		`27 )`
Inventories		`(`		`9,497 )`			`2,200`
Prepayments		`(`		`229 )`			`1,614`
Other current assets				`54`	`(`		`54 )`
Financial assets at fair value through profit or loss- non-current		`(`		`4,000 )`			`-`
Changes in operating liabilities
Current contract liabilities				`193`			`37`
Notes payable				`463`	`(`		`3,721 )`
Accounts payable				`2,457`	`(`		`2,529 )`
Other payables				`1,804`	`(`		`3,037 )`
Net defined benefit liabilities				`147`			`175`
Other current liabilities		`(`		`867 )`	`(`		`725 )`
Cash inflow generated from operations				`77,852`			`38,551`
Interest received				`2,171`			`3,084`
Interest paid		`(`		`613 )`	`(`		`636 )`
Income tax received				`-`			`4,591`
Income tax paid		`(`		`3,610 )`	`(`		`6,232 )`
Net cash flows from operating activities				`75,800`			`39,358`
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment	6(6)	`(`		`2,010 )`	`(`		`10,949 )`
Proceeds from disposal of property, plant and equipment				`-`			`846`
Acquisition of investment property				`-`	`(`		`75 )`
Increase in intangible assets		`(`		`1,521 )`	`(`		`186 )`
(Increase) decrease in refundable deposits		`(`		`54 )`			`72`
Increase in other assets		`(`		`3,870 )`	`(`		`2,979 )`
Net cash flows used in investing activities		`(`		`7,455 )`	`(`		`13,271 )`
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in guarantee deposits received				`-`			`92`
Payments of cash dividends	6(16)(17)	`(`		`29,418 )`	`(`		`38,244 )`
Repayment of principal portion of lease liabilities	6(7)(27)	`(`		`1,552 )`	`(`		`1,537 )`
Acquisition of ownership interests in subsidiaries				`-`	`(`		`2,132 )`
Treasury shares repurchased	6(15)			`-`	`(`		`22,736 )`
Cash dividends from capital surplus	6(16)(17)	`(`		`35,956 )`	`(`		`29,099 )`
Net cash flows used in financing activities		`(`		`66,926 )`	`(`		`93,656 )`
Effect of foreign exchange rate changes on cash and cash equivalents		`(`		`2,602 )`	`(`		`4,827 )`
Net decrease in cash and cash equivalents		`(`		`1,183 )`	`(`		`72,396 )`
Cash and cash equivalents at beginning of year				`680,171`			`752,567`
Cash and cash equivalents at end of year			`$`	`678,988`		`$`	`680,171`

Attachment 5 2021 List of Remuneration of each Directors

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Remuneration Remuneration Ratio of Total Relevant Remuneration Received by Directors Who are Also Employees Compensation Ratio of Total
Compensation (A) and Pensions (B)Severance Pay DirectorsBonus to (C) Allowances (D) Net Income (%)(A+B+C+D) to Salary, Bonuses, and Allowances and Pensions (F)Severance Pay Profit Sharing- EmployeeBonus (G) (A+B+C+D+E+F+G) to Net Income
(E) (%)
Title Name From All
The company Consolidated
Entities
Chairman Ting Hao 0 0 0 0 323 323 15 15 0.48 0.48 3,982 3,982 0 0 347 0 347 0 6.70 6.70 N/A
Goodyears
Investments
Director Ltd.(Representative 0 0 0 0 323 323 13 13 0.48 0.48 0 0 0 0 0 0 0 0 0.48 0.48 N/A
person: Wen-Chen
Lin )
Tzay Hua Ltd.
Director (Representative 0 0 0 0 323 323 15 15 0.48 0.48 1,808 1,808 95 95 157 0 157 0 3.44 3.44 N/A
person: Cheng-Feng
Chiu)
Director Yun-Ping Lin 0 0 0 0 323 323 8 8 0.47 0.47 0 0 0 0 0 0 0 0 0.47 0.47 N/A
Independentdirector Chang-Yue Ueng 0 0 0 0 172 172 312 312 0.70 0.70 0 0 0 0 0 0 0 0 0.70 0.70 N/A
Independentdirector Jen-Jyh Hwang 0 0 0 0 172 172 315 315 0.70 0.70 0 0 0 0 0 0 0 0 0.70 0.70 N/A
Independent
Niang-Shou Wei 0 0 0 0 172 172 312 312 0.70 0.70 0 0 0 0 0 0 0 0 0.70 0.70 N/A
director
Entities From All Entities From All Entities From All Entities From All Entities From All Entities From All Entities From All Entities From All from Non-consolidated
The company Consolidated The company Consolidated The company Consolidated The company Consolidated The company Consolidated The company Consolidated The company Consolidated Cash Stock Cash Stock The company Consolidated Affiliates or Parent Company Compensation Paid to Directors
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Directors’ Remuneration Policy: The remuneration policy for directors of the Company is as follows:

(1) According to the Articles of Incorporation, whether company's income gain or loss, the company should pay remuneration to directors when they fulfill their responsibility. The remuneration shall be paid according to the directors’ contribution and value to company’s operation, and authorize the board of directors to pay the compensation according to the general pay levels in the industry.

(2) The payment standard of directors’ travelling expense and monthly compensation is set by the company's remuneration committee and the board of directors:

(A) Attendance fee for directors and independent directors per meeting is NTD 2,500 (once a day)

(B) Since all independent directors serve as members of functional committees (such as the nomination committee, remuneration committee and audit committee), they are responsible for participating in discussions and resolutions at committee meetings, so they have a monthly allowance of NTD25,000 for the fulfillment of business operations. General directors do not have this allowance.

(3) The company's annual director's remuneration shall be set aside not more than 2% of the current year's pre-tax earnings in accordance with the company's articles of incorporation. If the amount of directors' remuneration is more than NTD 600,000, it will be allocated to each of the 4 directors with NTD 150,000, and the excess amount will be shared equally by all directors and independent directors. If the director's compensation amount is less than NTD 600,000, the Director's remuneration is divided equally among the four directors.

Attachment 6

DAVICOM 2020 First Repurchase of Treasury Shares for Transferring Shares to Employee

2022.04.11

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Article after
Article Article before amendment Description
amendment
In accordance with these Rules, the In accordance with these Rules, the Amended in accordance with Article 28-2 of
repurchased shares are proposed to fully
authorize the Chairman of the Board of repurchased shares are proposed to fully the Securities and Exchange Act
Directors of DAVICOM to transfer to authorize the Chairman of the Board of
Article 3 employees in a single transfer or multiple Directors of DAVICOM to transfer to
transfers within three (3) years from the date
of the shares repurchased. employees in a single transfer or multiple
transfers within five (5) years from the date
of the shares repurchased.
The number of shares to which employees The number of shares to which employees Delete The number of shares subscribed by
may subscribe will be determined based on may subscribe will be determined based on each employee at a time shall not exceed 10%
employees' rank, seniority, and performance employees' rank, seniority, and performance of the total number of shares transferred at
evaluations, and approved by the Chairman evaluations, and approved by the Chairman of that time.
Article 5 of the Board. the Board.
The number of shares subscribed by each
employee at a time shall not exceed 10% of
the total number of shares transferred at that
time.
After the repurchased shares are being After the repurchased shares are being In accordance with Article 167-3 of the
transferred and registered under employees' transferred and registered under employees' Company Act, employees will be restricted
names, unless otherwise specified, the rights names, from transferring within two years.
and obligations of the shares are the same as In accordance with Article 167-3 of the
Article 8 the ordinary common shares. Company Act, employees will be restricted
from transferring within two years, the rights
and obligations of the shares are the same as
the ordinary common shares.
These Rules will be adopted and take effect These Rules will be adopted and take effect Add date of amendment
subject to a resolution of the Board of subject to a resolution of the Board of
Article 10 Directors, and may be amended by Directors, and may be amended by
submission to be Board of Directors for a submission to be Board of Directors for a
resolution. resolution. 1 [st] amendment at 2022.04.11
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Attachment 7

DAVICOM ANNUAL PROFIT DISTRIBUTION TABLE Year 2021

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Items Subtotal (NTD) Total (NTD)
Beginning unappropriated retained earnings $ 43,436
Add: Net profit after tax of 2021 69,662,403
Less: Retained Earnings (188,502)
Less: Legal reserve (6,947,390)
Less: Special Reserve (22,710,497)
Distributable net profit 39,816,014 39,859,450
Distributable items:
Dividend to shareholders--NT$0.487 per share (39,796,222)
Unappropriated retained earnings $ 63,228
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Chairman: Ting, Hao President: Ting, Hao Accounting Supervisor: Kuei Feng, Chiu

Attachment 8

Comparison Table of The Amendment to the Articles of Incorporation.

Please refer to page 34 of the Chinese version Meeting Handbook

Attachment 9 Operational Procedures for Loaning Funds to Others

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Article after
Article Article before amendment Note
amendment
Information Disclosure Information Disclosure 1. Add the monthly
----- End of picture text -----

Attachment 9 Operational Procedures for Loaning Funds to Others	Attachment 9 Operational Procedures for Loaning Funds to Others	Attachment 9 Operational Procedures for Loaning Funds to Others	Attachment 9 Operational Procedures for Loaning Funds to Others
Article Article after amendment Article before amendment Note
	Information Disclosure	Information Disclosure	1. Add the monthly
Article 15	A public company shall announce and report the previous month's loan balances of its head office and subsidiaries by the 10th day of each month. A public company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1.The aggregate balance of loans to others by the public company and its subsidiaries reaches 20 percent or more of the public company's net worth as stated in its latest financial statement. 2.The balance of loans by the public company and its subsidiaries to a single enterprise reaches 10 percent or more of the public company's net worth as stated in its latest financial statement. 3.The amount of new loans of funds by the public company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the public company's net worth as stated in its latest financial statement. The public company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 3 of the preceding paragraph. `“`Date of occurrence” in these operational procedures means the date of contract signing, date of payment, dates of boards of directors resolutions, or other dates that can confirm the counterparty of loan of funds and monetary amount, whichever date is earlier.	A public company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1.The aggregate balance of loans to others by the public company and its subsidiaries reaches 20 percent or more of the public company's net worth as stated in its latest financial statement. 2.The balance of loans by the public company and its subsidiaries to a single enterprise reaches 10 percent or more of the public company's net worth as stated in its latest financial statement. 3.The amount of new loans of funds by the public company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the public company's net worth as stated in its latest financial statement. The public company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 3 of the preceding paragraph. `“`Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other dates that can confirm the counterparty and monetary amount, whichever date is earlier.	reporting period for the balance of funds loaned to others. 2. Specify the time when the funds will be loaned and announced to others.

Article 18	Audit The public company's internal auditors shall audit the Operational Procedures for Loaning Funds to Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify independent directors and audit committee in writing of any material violation found. Improvement plans should also be sent to independent directors and the audit committee.	Audit The public company's internal auditors shall audit the Operational Procedures for Loaning Funds to Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify each audit committee in writing of any material violation found.	In order to strengthen corporate governance, for major violations and improvement plans of capital loans to others, it should notify independent directors in writing.
Article 20	The procedures shall require the approval of one-half or more of all audit committee members, and furthermore shall be submitted for a resolution by the board of directors. If the approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the Operational Procedures may be implemented if approved by two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions. For discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinion. If an independent director expresses anyconsent or	After passage by the board of directors, submit the Procedures to audit committee and submit them for approval by the shareholders' meeting; where any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the dissenting opinion to each audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendments to the Procedures. For discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinion. If an independent director expresses any consent or dissent, it shall be noted in the minutes of the board of directors meeting.	According to Article 14-5 of the Securities and Exchange Act of the terms of reference of the Audit Committee. The setting or revising of the Operational Procedures for Loaning Funds to Others shall be approved by the Audit Committee.

dissent, it shall be noted in the minutes of the board of directors meeting. After this operating procedure is The procedure is established on Added amendment date approved by the board of 2003/2/27 for submission to directors, it shall be submitted to Amendments: shareholders meeting the shareholders' meeting for 1[st] :2007/01/10 2[nd] :2009/06/10 approval, and the same shall 3[rd] :2010/06/25 apply to any amendments. 4[th] :2013/06/10 Article The procedure is established on 21 2003/2/27 Amendments: 1[st] :2007/01/10 2[nd] :2009/06/10 3[rd] :2010/06/25 4[th] :2013/06/10 5[th] :2022/6/29

Attachment 10 Operational Procedures for Endorsements/Guarantees

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Article after
Article Article before amendment Note
amendment
Information Disclosure Information Disclosure Add the period for
----- End of picture text -----

Attachment 10 Operational Procedures for Endorsements/Guarantees	Attachment 10 Operational Procedures for Endorsements/Guarantees	Attachment 10 Operational Procedures for Endorsements/Guarantees	Attachment 10 Operational Procedures for Endorsements/Guarantees
Article Article after amendment Article before amendment Note
	Information Disclosure	Information Disclosure	Add the period for
Article 10	The company shall announce and report the previous month's balance of endorsements/guarantees of itself and its subsidiaries by the 10th day of each month. The company whose balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of endorsements/guarantees by the public company and its subsidiaries reaches 50 percent or more of the public company's net worth as stated in its latest financial statement. 2. The balance of endorsements/guarantees by the public company and its subsidiaries for a single enterprise reaches 20 percent or more of the public company's net worth as stated in its latest financial statement. 3. The balance of endorsements/guarantees by the company and its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, carrying a long-term investment in, and balance of loans to, such enterprise reaches 30 percent or more of public company's net worth as stated in its latest financial statement. 4. The amount of new endorsements/guarantees made by the public company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the public company's net worth as stated in its latest financial statement. The public company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters	The company whose balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of endorsements/guarantees by the public company and its subsidiaries reaches 50 percent or more of the public company's net worth as stated in its latest financial statement. 2. The balance of endorsements/guarantees by the public company and its subsidiaries for a single enterprise reaches 20 percent or more of the public company's net worth as stated in its latest financial statement. 3. The balance of endorsements/guarantees by the company and its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, carrying a long-term investment in, and balance of loans to, such enterprise reaches 30 percent or more of public company's net worth as stated in its latest financial statement. 4. The amount of new endorsements/guarantees made by the public company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the public company's net worth as stated in its latest financial statement. The public company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.	monthly declaration of endorsement guarantee.

	that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.
Article 12	Audit The public company's internal auditors shall audit the Operational Procedures for Endorsements/Guarantees for Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the independent directors and audit committee in writing of any material violation found. Improvement plans should also be sent to independent directors and the audit committee.	Audit The public company's internal auditors shall audit the Operational Procedures for Endorsements/Guarantees for Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the supervisors in writing of any material violation found.	In order to strengthen corporate governance, independent directors shall be notified in writing of major violations of endorsement guarantees and improvement plans
Article 13	Others 1. "Subsidiary" and "parent company" as referred to in these Regulations shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 2.The term "announce and report" as used in these Regulations means the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC). 3. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the	Others 1. "Subsidiary" and "parent company" as referred to in these Regulations shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 2.The term "announce and report" as used in these Regulations means the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC). 3. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the

	requirements of these Regulations, or the amount of endorsement/guarantee exceeds the limit, a public company shall adopt rectification plans and submit the rectification plans to all the supervisors, and shall complete the rectification according to the timeframe set out in the plan. 4. “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other dates that can confirm the counterparty and monetary amount of endorsement/guarantee, whichever date is earlier.	requirements of these Regulations, or the amount of endorsement/guarantee exceeds the limit, a public company shall adopt rectification plans and submit the rectification plans to all the supervisors, and shall complete the rectification according to the timeframe set out in the plan. 4. “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other dates that can confirm the counterparty and monetary amount, whichever date is earlier.
Article 14	The procedures shall require the approval of one-half or more of all audit committee members, and furthermore shall be submitted for a resolution by the board of directors. If the approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the Operational Procedures may be implemented if approved by two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" and "all directors" in the preceding paragraph shall be counted as the actual number of	After passage by the board of directors, submit the Procedures to audit committee and submit them for approval by the shareholders' meeting; where any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the dissenting opinion to each audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendments to the Procedures. For discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinion. If an independent director expresses any consent or dissent,	According to Article 14-5 of the Securities and Exchange Act of the terms of reference of the Audit Committee. The setting or revising of the Operational Procedures for Endorsements/Guarantees shall be approved by the Audit Committee.

	persons currently holding those positions. For discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinion. If an independent director expresses any consent or dissent, it shall be noted in the minutes of the board of directors meeting.	it shall be noted in the minutes of the board of directors meeting.
Article 15	After this operating procedure is approved by the board of directors, it shall be submitted to the shareholders' meeting for approval, and the same shall apply to any amendments. The procedure is established on 2003/2/27 Amendments: 1st:2007/01/10 2nd:2009/06/10 3rd:2010/06/25 4th:2013/06/10 5th:2022/6/29	The procedure is established on 2003/2/27 Amendments: 1st:2007/01/10 2nd:2009/06/10 3rd:2010/06/25 4th:2013/06/10	Added amendment date for submission to shareholders meeting

Attachment 11

List of candidates of Directors (including Independent Directors)

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Current
Current
Type Name Education Experiences Shareholding
occupation
(Unit: Shares)
Chairman of
DAVICOM
Doctor, Business Management, Chairman of Semiconductor,
Victoria University DAVICOM Inc.
Master , EECS, UC Berkeley
Director Ting Hao Bachelor , Electrical and Control Semiconductor, Independent 1,844,000
Inc. Director of United
Engineering, National Chiao Tung
Integrated Service
University Co.
Director of
Goodyears Director of
DAVICOM
Director Investments - DAVICOM 3,982,475
Semiconductor,
Ltd. Semiconductor,Inc. Inc.
Director of Director of
DAVICOM DAVICOM
Director Tzay Hua Ltd. - 1,480,652
Semiconductor, Semiconductor,
Inc. Inc.
Owner of Sane Owner of Sane
Way Enterprises Way Enterprises
Executive Master of Business Co..Ltd. Co.. Ltd.
Director Yun-Ping, Lin, Administration (EMBA), Owner of Crown Owner of Crown 900,000
National Chung Hsing University Star International Star International
Investment Co., Investment Co.,
Ltd. Ltd.
CFO, Sonavox Finance manager
Electronic Co., of
Ph.D. of Statistics, Colorado State Ltd. Kwo Ger Metal
University, USA Technology Inc.
Independent Chang-Yue,
Master of Business CFO& 150,000
Director Ueng Administration, National Taiwan Administration VP
University of ICHIA
Technologies, Inc.
Independent Adjunct Associate
Director of JG Professor of Dept.
Ph.D,Dept. of Mechanical Environmental of Mechanical and
Engineering, The Pennsylvania Technology Electro-
State University, USA Mechanical
Jen-Jyh, Master of Engineering, Associate Engineering
Independent Hwang Dept. of Power Mechanical Professor of Dept. National Sun- 0
Director Engineering, National Tsing-Hua of Mechanical and Yatsen University
University, Taiwan, ROC Electro-
Department of Mechanical Mechanical Independent
Engineering,National Chung Engineering Director of JG
Hsing University National Sun- Environmental
Yatsen University Technology
Director of Independent
Production and Director of
Executive Master of Business Operations Center DAVICOM
Independent Niang-Shou,
Administration (EMBA), Shanghai Fanfeng Semiconductor, 4,000
Director Wei
National Tsing Hua University Vacuum Inc.
Machinery Co.,
Ltd.
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Appendix 1 Articles of Incorporation of DAVICOM Semiconductor, Inc.

Please refer to page 39-42 of the Chinese version Meeting Handbook

Appendix 2 DAVICOM Semiconductor, Inc. Rules of Procedure for Shareholder Meetings

Rules of Procedure for Shareholder Meetings

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To establish a strong governance system and sound supervisory capabilities for this Corporation's shareholders meetings, and to strengthen
Article 1 management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM
Listed Companies.
Article 2 The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by law, regulation, or the articles of
incorporation, shall be as provided in these Rules.
(Convening shareholders meetings and shareholders meeting notices)
Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.
This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials
relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and
upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days
before the date of a special shareholders meeting. This Corporation shall prepare electronic versions of the shareholders meeting agenda and
supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15
days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation
shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders
at any time. The meeting agenda and supplemental materials shall also be displayed at this Corporation and the professional shareholder services
agent designated thereby as well as being distributed on-site at the meeting place.
The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the
addressee, the meeting notice may be given in electronic form.
Election or dismissal of directors or supervisors, amendments to the articles of incorporation, reduction of capital, application for the approval of
ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares,
reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph
1 shall be set out and the essential contents explained in the notice of the reasons for convening the shareholders meeting. None of the above
Article 3 matters may be raised by an extraordinary motion; the essential contents may be posted on the website designated by the competent authority in
charge of securities affairs or the corporation, and such website shall be indicated in the above notice.
Where re-election of all directors and supervisors as well as their inauguration date is stated in the notice of the reasons for convening the
shareholders meeting, after the completion of the re-election in said meeting such inauguration date may not be altered by any extraordinary
motion or otherwise in the same meeting.
A shareholder holding one percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion
at a regular shareholders meeting. The number of items so proposed, however, is limited to one only, and no proposal containing more than one
item will be included in the meeting agenda, provided a shareholder proposal for urging the corporation to promote public interests or fulfill its
social responsibilities may still be included in the agenda by the board of directors.. In addition, when the circumstances of any subparagraph of
Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the
agenda.
Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce its acceptance of shareholder
proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals
may not be less than 10 days.
Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting
agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion
of the proposal.
Prior to the date for issuance of notice of a shareholders meeting, this Corporation shall inform the shareholders who submitted proposals of the
proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders
meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.
For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation
and stating the scope of the proxy's authorization.
Article 4 A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to
this Corporation before five days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest
shall prevail unless a declaration is made to cancel the previous proxy appointment.
After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the meeting in person or to exercise voting rights
by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation before two business days before
the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.
Article 5 (Principles determining the time and place of a shareholders meeting)
The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a
shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of
the independent directors with respect to the place and time of the meeting.
(Preparation of documents such as the attendance book)
This Corporation shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the
place to register for attendance, and other matters for attention.
The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes
Article 6 prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number
of suitable personnel assigned to handle the registrations.
Shareholders and their proxies (collectively, "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other
certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend
presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.
This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in
lieu of signing in.
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This Corporation shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips,
and other meeting materials. Where there is an election of directors or supervisors, pre-printed ballots shall also be furnished.
When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When
a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.
(The chair and non-voting participants of a shareholders meeting)
If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson
of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson;
if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the
chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed
to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves
one person to serve as chair.
Article 7 When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or director shall be one
who has held that position for six months or more and who understands the financial and business conditions of the company. The same shall be
true for a representative of a juristic person director that serves as chair.
It is advisable that shareholders meetings convened by the board of directors be chaired by the chairperson of the board in person and attended by
a majority of the directors, at least one supervisor in person, and at least one member of each functional committee on behalf of the committee.
The attendance shall be recorded in the meeting minutes.
If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the
meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.
This Corporation may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a
non-voting capacity.
(Documentation of a shareholders meeting by audio or video)
Article 8 This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording
of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.
The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to
Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.
Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated
according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised
by correspondence or electronically.
he chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of
the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined
Article 9 total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less
than one third of the total number of issued shares, the chair shall declare the meeting adjourned.
If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or
more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all
shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within one month.When, prior to
conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative
resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.
(Discussion of proposals)
If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be cast on
each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The
meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.
The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that
is not the board of directors.
Article 10 he chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs
(including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of
the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in
accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the
meeting.
The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary
motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the
chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.
(Shareholder speech)
Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or
attendance card number), and account name. The order in which shareholders speak will be set by the chair.
A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content
Article 11 of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.
Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5
minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.
When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the
chair and the shareholder that has the floor; the chair shall stop any violation.
When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so
appointed may speak on the same proposal.
After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.
(Calculation of voting shares and recusal system)
Voting at a shareholders meeting shall be calculated based the number of shares.
With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as
part of the total number of issued shares.
Article 12 When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the
interests of this Corporation, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.
The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting
rights represented by attending shareholders.
With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is
concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed three percent of the
voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall
not be included in the calculation.
Article 13 A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under
Article 179, paragraph 2 of the Company Act.
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When this Corporation holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting
rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in
the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended
the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that
meeting; it is therefore advisable that this Corporation avoid the submission of extraordinary motions and amendments to original proposals.
A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written
declaration of intent to this Corporation before two days before the date of the shareholders meeting. When duplicate declarations of intent are
delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.
After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the
shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be
made known to this Corporation, by the same means by which the voting rights were exercised, before two business days before the date of the
shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic
means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to
attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.
Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an
affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or
a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a
poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of
votes for and against and the number of abstentions, shall be entered into the MOPS.
When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original
proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed
rejected, and no further voting shall be required.
Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall
be shareholders of this Corporation.
Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately
after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-
site at the meeting, and a record made of the vote.
(Election of directors and supervisors)
The election of directors or supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules
adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and
Article 14 supervisors and the numbers of votes with which they were elected.
The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper
custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained
until the conclusion of the litigation.
Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or
sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting
minutes may be produced and distributed in electronic form.
Article 15 This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.
The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions
were adopted, and a summary of the deliberations and their voting results (including the number of voting rights), and disclose the number of
voting rights won by each candidate in the event of an election of directors or supervisors. The minutes shall be retained for the duration of the
existence of this Corporation.
(Public disclosure)
On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares
Article 16 obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at
the place of the shareholders meeting.
If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock
Exchange Corporation (or GreTai Securities Market) regulations, this Corporation shall upload the content of such resolution to the MOPS within
the prescribed time period.
(Maintaining order at the meeting place)
Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.
The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help
Article 17 maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."
At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by
this Corporation, the chair may prevent the shareholder from so doing.
When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop,
the chair may direct the proctors or security personnel to escort the shareholder from the meeting.
(Recess and resumption of a shareholders meeting)
When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule
Article 18 the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.
If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda
have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.
A resolution may be adopted at a shareholders meeting to defer or resume the meeting within five days in accordance with Article 182 of the
Company Act.
These Rules shall take effect after having been submitted to and approved by a shareholders meeting. Subsequent amendments thereto shall be
effected in the same manner.
Amendments:
Article 19 1st :2007/01/10
2nd:2011/06/24
3rd :2013/06/10
4th :2021/06/07
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Appendix 3 DAVICOM Semiconductor, Inc. Rules for Election of Directors and Independent Directors

Rules for Election of Directors and Independent Directors

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Unless otherwise provided in the Company Law or the Articles of Incorporation of this Company, the directors and independent directors of this
Article 1 Company shall be elected in accordance with the rules specified herein.
The company adopts the candidate nomination system. The company shall, prior to the share transfer suspension date dedicated before the meeting
date of a shareholders’ meeting, announce in a public notice, the period for accepting the nomination of director and independent directors
candidates, the quota of directors and independent director to be elected, the place designated for accepting the roster of director candidates
nominated, and other necessary matters. The length of the period for accepting the nomination of director candidates shall not be shorter than ten
(10) days.
Any shareholder holding 1% or more of the total number of outstanding shares issued by the company may submit to the company in writing a
roster of director and independent director candidates, provided that the total number of director candidates so nominated shall not exceed the
quota of the directors and independent directors to be elected. This restrictive condition shall also be applicable to the roster of director and
independent director candidates nominated by the board of directors of the company.
The roster of director candidates submitted by a shareholder as prescribed in the preceding Paragraph shall describe the name, education
background and past work experience, Letter of Commitment for Willing to Be a Director and Independent Director after being elected, a statement
of the absence of the circumstances stipulated in Article 30 of the Company Act and other relevant supporting documents of the director and
independent director candidates.
If the nominee is a legal person shareholder or its representative, the basic information on the registration of the legal person shareholder and the
certificate of the number of shares held shall be attached.
The board of directors or other authorized conveners of shareholders’ meetings shall examine and/or screen the data and information of each
Article 1-1 director and independent director candidate nominated; and shall, unless under any of the following circumstances, include all qualified director
candidates in the final roster of director candidates accordingly:
1. Where the roster of director and independent director candidates is submitted by the nominating shareholder beyond the deadline fixed for
accepting such candidates roster;
2. Where the number of shares of the company being held by the nominating shareholder is less than 1% of the total number of outstanding shares
of the company at the time when the share transfer registration is suspended by the company in accordance with the provisions set out in Paragraph
II or Paragraph III, Article 165 of this Act;
3. Where the number of director and independent director candidates nominated exceeds the quota of the directors to be elected; or
4. Relevant supporting documents specified in Paragraph 4 are not attached.
The process of reviewing directors and independent director candidate should be recorded for a minimum period of at least one year. However, if
a shareholder files a lawsuit against the election of directors and independent directors, it shall be kept until the end of the lawsuit.
The company shall, no later than 40 days prior to the scheduled meeting date of a regular shareholders’ meeting or no later than 25 days prior to
the scheduled meeting date of a special shareholders’ meeting, have the roster of director and independent directors candidates and their education
background, work experience, shareholdings and the government or corporate juristic person they represent and other relative information
published in a public notice; Inform the review result to nominating shareholder. To state the reason for nominees who is not on the slate of
directors and independent director candidate.
The cumulated voting with single name registered on the ballot will be used for the election of directors.
Article 2 Each share has the number of exercisable votes same as the number of directors to be elected, and the total number of votes per share may be
consolidated for election of one candidate or may be split for election of two or more candidates set forth on the list of candidates of directors.
Independent directors and non-independent directors shall be elected at the same time but the number of the elected independent directors and
Article 2-1 non-independent directors and ballots shall be separately calculated.
In the election of directors of this Company, candidates who acquire more votes should win the seats of directors. If two or more persons acquire
Article 3 the same number of votes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shall draw
lots to decide who should win the seats available, and the Chairman shall draw lots on behalf of the candidate who is not present.
Article 4 When the election commences, the chairperson of the meeting shall appoint ballot supervisor(s) and from among the shareholders present.
The ballots shall be prepared by the board of directors, numbered according to the
Article 5 attendance card numbers and fill up with the number of voting rights of the shareholders
Article 6 The ballot box used for voting shall be prepared by this Company and checked in public by the person to check the ballots before voting.
The electors shall fill in the name and the shareholder's number or number of its identification certificate of such candidate in the column of
"Candidate" of the ballot.
Article 7 If the candidate is a government agency or a legal entity, either the full name of the government agency or the legal entity or the full name of the
government agency or the legal entity and the name(s) of their representative(s) should be filled in the column of candidate.
Ballots shall be deemed void under the following conditions:
(1) Ballots not placed in the ballot box;
(2) Ballots not prepared by this Company;
(3) Blank ballots not completed by the voter;
(4) If the candidate is a shareholder of the Company, the name and the
shareholder's number of such candidates is not corresponding to the shareholders' roster;
If the candidate is not a shareholder of the Company, the name or the number of the identification certificates of the candidate is not corresponding.
Article 8 (5) There are other written characters or symbols in addition to the name, shareholder's
number of the candidate on the ballot.
(6) Writing is illegible or has been altered by the voter;
(7) One of the filled-in information (the name, shareholder's a number and the number of votes) of candidates has been altered.
(8) The name of a candidate filled in on the ballot is same as another shareholder's name
but the respective shareholder's numbers or numbers of identification certificates are
not indicated to distinguish them;
The ballots should be calculated during the meeting right after the vote casting and the results of the election should be announced by the Chairman
Article 9 at the meeting.
Article 10 This Company shall issue notifications to the directors elected.
Matters not provided in these Rules shall be handled in accordance with the Company Act and
relevant laws and regulations, the Articles of Incorporation of the Company and the relevant
Article 11 provisions of the Rules Governing the Procedure of Shareholders Meeting of the Company.
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These Rules and any revision thereof shall become effective after approval at the shareholders' meeting Amendments: 1st :2007/01/10 Article 12 2nd:2011/06/24 3rd :2017/05/26

Appendix 4 Current shareholding of Directors and Independent Directors

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Record Date: May 1, 2022
Title Name Current shareholding Shareholding ratio
Chairman Ting Hao 1,844,000 2.22%
Director Goodyears Investments Ltd. 3,982,475 4.79%
Director Tzay Hua Ltd. 1,480,652 1.78%
Director Yun-Ping Lin 900,000 1.08%
Independent
Chang-Yue Ueng 150,000 0.18%
Director
Independent
Jen-Jyh Hwang 0 0.00%
Director
Independent
Niang-Shou Wei 4,000 0.00%
Director
Total Shares of Directors Hold 8,361,127 10.05%
Total Shares of Supervisors Hold Not Applicable
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DAVICOM Total Issued Shares: 83,117,089shares
Total Shares of Directors Required: 6,649,368 shares
Total Shares of Directors Hold:8,207,127 shares (Not including Independent Director).
The company has set up an audit committee, so there is no application of the number of shares that the supervisor is legally required to hold.

AI assistant

DAVICOM — AGM Information 2022

52295_rns_2022-07-06_47ac7770-12b2-4108-bd77-8a10c7e1ecb1.pdf

DAVICOM Semiconductor, Inc.

2022 Annual General Shareholders’ Meeting Handbook (Physical Shareholders’ Meeting)

Notice to readers

Table of Contents

I. Meeting Procedure------------------------------------- P.2

II.Report Agenda---------------------------------------P.3

III.Attachments -----------------------------------------P.9

IV. Appendix-------------------------------------------------P.51

DAVICOM Semiconductor, Inc.

DAVICOM Semiconductor, Inc.

2022 Annual General Shareholders’ Meeting Agenda

(Physical Shareholders’ Meeting)

Agenda:

6. Election Items

7. Other Discussion Items

Report Items

1. To report the business of 2021 and operating plan of 2022

2. Audit Committee’s review report of 2021

3. To report the directors’ remuneration policy and 2021 directors and employees’ compensation distribution.

Explanatory Notes:

4. To report Implementation Status of the Company’s Share Buyback in 2020

Explanatory Notes:

Approval Item

Proposal 1

Subject ： To accept 2021 Business Report and Financial Statements

Explanatory Notes:

Proposal 2

Subject ： To approve the proposal for distribution of 2021 earnings

Explanatory Notes:

Discussion Item

Proposal 1

Subject ： To approve the proposal for additional cash distribution of 2021 from

its reserved surplus earnings.

Explanatory Notes:

Proposal 2

Subject ： Amendments to partial provisions of Articles of Incorporation

Explanatory Notes:

Proposal 3

Subject ： To approve amendments to partial provisions of Operational Procedures

for Loaning Funds to Others and Operational Procedures for

Endorsements/Guarantees

Explanatory Notes:

Election Item

Proposal

Subject ： To elect the 10th board of directors (4) and independent directors (3).

Explanatory Notes:

Other Discussion Item

Proposal

Subject ： The proposal of the release of the non-competition restrictions on the

10th new elected of directors and independent directors.

Explanatory Notes:

Extemporary motions

Adjournment

Attachment 1

Company’s 2021 Business Report

Attachment 2

Audit Committee’s Review Report

Attachment 3

DAVICOM SEMICONDUCTOR , INC.

STATEMENTS AND INDEPENDENT AUDITORS’

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Evaluation of accounts receivable

Description

How our audit addressed the matter

Evaluation of inventories

Description

How our audit addressed the matter

Other matters

Reference to report of the other auditors

Responsibilities of management and those charged with governance for the Parent Company Only financial statements

Auditors’ responsibilities for the audit of the Parent Company Only financial statements

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

DAVICOM SEMICONDUCTOR , INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

DAVICOM AGM Information 2022