DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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.

			December 31, 2020	December 31, 2019
	Assets	Notes	AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 283,217	25	\$	464,395	38
1150	Notes receivable, net	6(3)	59	-		-	-
1170	Accounts receivable, net	6(3)	31,856	3		31,440	3
1200	Other receivables		170	-		4,773	-
1210	Other receivables - related parties	7	567	-		-	-
130X	Inventories, net	6(4)	23,494	2		24,841	2
1410	Prepayments		3,865	-		5,800	-
11XX	Current Assets		343,228	30		531,249	43
	Non-current assets
1510	Financial assets at fair value through	6(2)
	profit or loss - non-current		39,268	3		30,552	3
1550	Investments accounted for under	6(5)
	equity method		425,601	37		316,777	26
1600	Property, plant and equipment	6(6)	166,738	14		160,142	13
1755	Right-of-use assets	6(7)	61,941	5		63,750	5
1760	Investment property - net	6(9)	100,716	9		102,940	8
1780	Intangible assets		91	-		84	-
1840	Deferred income tax assets	6(24)	9,144	1		8,593	1
1900	Other non-current assets	6(10)	13,117	1		15,291	1
15XX	Non-current assets		816,616	70		698,129	57
1XXX	Total assets		\$ 1,159,844	100	\$	1,229,378	100

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY BALANCE SHEETS (Expressed in thousands of New Taiwan dollars,)

(Continued)

				December 31, 2020		December 31, 2019
	Liabilities and Equity	Notes		AMOUNT	%	AMOUNT	%
	Current liabilities
2130	Current contract liabilities		\$	94	- \$	57	-
2150	Notes payable			2,223	-	5,944	1
2170	Accounts payable			4,850	1	4,856	1
2200	Other payables	6(11)		25,643	2	28,560	2
2230 2280	Current income tax liabilities Current lease liabilities	6(24) 6(27)		775 1,552	- -	2,234 1,537	- -
2310	Advance receipts			2,077	-	1,418	-
21XX	Current Liabilities			37,214	3	44,606	4
	Non-current liabilities
2570	Deferred income tax liabilities	6(24)		512	-	512	-
2580	Non-current lease liabilities	6(27)		60,948	5	62,500	5
2600	Other non-current liabilities	6(12)		17,384	2	17,410	1
25XX	Non-current liabilities			78,844	7	80,422	6
2XXX	Total Liabilities			116,058	10	125,028	10
	Equity
	Share capital	6(15)
3110	Common stock			846,321	73	846,551	69
	Capital surplus	6(16)
3200	Capital surplus			157,128	13	186,520	15
	Retained earnings	6(17)
3310	Legal reserve			78,569	7	74,393	6
3350	Undistributed earnings	6(24)		32,727	3	42,491	3
	Other equity interest
3400	Other equity interest		(	20,108) (	2) (	17,490) (	1)
	Treasury shares	6(15)
3500	Treasury shares		(	50,851) (	4) (	28,115) (	2)
3XXX	Total equity			1,043,786	90	1,104,350	90
	Significant contingent liabilities and	9
	unrecognised contract commitments
3X2X	Total liabilities and equity		\$	1,159,844	100 \$	1,229,378	100

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY BALANCE SHEETS (Expressed in thousands of New Taiwan dollars,)

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME (Expressed in thousands of New Taiwan dollars, except earnings per share

			Year ended December 31
				2020		2019
	Items	Notes		AMOUNT	%	AMOUNT	%
4000	Sales revenue	6(18)	\$	225,872	100	\$ 232,706	100
5000	Operating costs	6(4)(22)(23)	(	70,625) (	31) (	74,576) (	32)
5900	Net operating margin			155,247	69	158,130	68
	Operating expenses	6(22)(23)
6100	Selling expenses		(	23,711) (	11) (	29,762) (	12)
6200	General and administrative expenses		(	41,762) (	18) (	41,559) (	18)
6300	Research and development expenses		(	67,489) (	30) (	74,789) (	32)
6450	Impairment on expected credit gains	6(3) and 12(2)
	(losses)		(	500)	-	100	-
6000	Total operating expenses		(	133,462) (	59) (	146,010) (	62)
6900	Operating income Non-operating income and expenses			21,785	10	12,120	6
7100	Interest income	6(19)		1,050	-	2,426	1
7010	Other income	6(20)		25,959	12	19,537	8
7020	Other gains and losses	6(21)	(	8,179) (	4) (	708)	-
7050	Finance costs	6(22)	(	636)	- (	645)	-
7070	Share of (loss) profit of associates	6(5)
	and joint ventures accounted for
	under equity method		(	2,402) (	1)	12,462	5
7000	Total non-operating income and
	expenses			15,792	7	33,072	14
7900	Income from continuing operations
	before income tax			37,577	17	45,192	20
7950	Income tax expense	6(25)	(	4,124) (	2) (	3,796) (	2)
8000	Profit for the year from continuing
8200	operations Profit for the year		\$	33,453 33,453	15 15	41,396 \$ 41,396	18 18
	Other comprehensive income, net
	Components of other comprehensive income that will not be reclassified to profit or loss
8311	Other comprehensive income, before tax, actuarial gains on defined benefit plans	6(13)	\$	293	-	\$ 458	-
8349	Income tax related to components of other comprehensive income that will not be reclassified to profit or	6(25)
	loss		(	59)	- (	92)	-
8310	Components of other
	comprehensive income that will
	not be reclassified to profit or loss			234	-	366	-
	Components of other comprehensive income that will be reclassified to profit or loss
8361	Financial statement translation
	differences of foreign operations		(	4,849) (	2) (	13,496) (	6)
8360	Components of other comprehensive
	income that will be reclassified to
	profit or loss		(	4,849) (	2) (	13,496) (	6)
8300	Other comprehensive (loss) income for the year, net		(\$	4,615) (	2) (\$	13,130) (	6)
8500	Total comprehensive income for the
	year		\$	28,838	13	\$ 28,266	12
	Basic earnings per share	6(26)
9750	Net income		\$		0.41	\$	0.50
	Diluted earnings per share	6(26)
9850	Net income		\$		0.41	\$	0.49

		Share capital		Capital surplus		Retained earnings		Other equity interest
	Notes	Common stock		Additional paid in capital		Restricted stock		Legal reserve		Unappropriated retained earnings		Financial statements translation differences of foreign operations		Other equity - others	Treasury stocks		Total
Year 2019
Balance at January 1, 2019		\$ 846,551	\$	166,782	\$	52,994	\$	70,549	\$	37,829	(\$	1,763 )	(\$	7,214 )	(\$	16,376 )	\$	1,149,352
Profit for the year		-		-		-		-		41,396		-		-		-		41,396
Other comprehensive income (loss)		-		-		-		-		366	(	13,496 )		-		-	(	13,130 )
Total comprehensive income (loss)		-		-		-		-		41,762	(	13,496 )		-		-		28,266
Appropriation and distributed of 2018 earnings	6(17)
Legal reserve		-		-		-		3,844	(	3,844 )		-		-		-		-
Cash dividends		-		-		-		-	(	33,256 )		-		-		-	(	33,256 )
Cash dividends distribution from capital surplus	6(16)(17)	-	(	33,256 )		-		-		-		-		-		-	(	33,256 )
Restricted stocks to employees	6(14)(15)	-		5,355	(	5,355 )		-		-		-		4,983		-		4,983
Treasure share repurchase	6(15)	-		-		-		-		-		-		-	(	11,739 )	(	11,739 )
Balance at December 31, 2019		\$ 846,551	\$	138,881	\$	47,639	\$	74,393	\$	42,491	(\$	15,259 )	(\$	2,231 )	(\$	28,115 )	\$	1,104,350
Year 2020
Balance at January 1, 2020		\$ 846,551	\$	138,881	\$	47,639	\$	74,393	\$	42,491	(\$	15,259 )	(\$	2,231 )	(\$	28,115 )	\$	1,104,350
Profit for the year		-		-		-		-		33,453		-		-		-		33,453
Other comprehensive income (loss)		-		-		-		-		234	(	4,849 )		-		-	(	4,615 )
Total comprehensive income (loss)		-		-		-		-		33,687	(	4,849 )		-		-		28,838
Appropriation and distribution of 2019 earnings	6(17)
Legal reserve		-		-		-		4,176	(	4,176 )		-		-		-		-
Cash dividends		-		-		-		-	(	38,244 )		-		-		-	(	38,244 )
Differences between equity purchase price and carrying amount arising from actual acquisition of subsidiaries		-		-		-		-	(	1,031 )		-		-		-	(	1,031 )
Cash dividends distributed from capital surplus	6(16)(17)	-	(	29,099 )		-		-		-		-		-		-	(	29,099 )
Restricted stocks to employees	6(14)(15)	( 230 )		8,632	(	8,925 )		-		-		-		2,231		-		1,708
Treasure shares repurchased	6(15)	-		-		-		-		-		-		-	(	22,736 )	(	22,736 )
Balance at December 31, 2020		\$ 846,321	\$	118,414	\$	38,714	\$	78,569	\$	32,727	(\$	20,108 )	\$	-	(\$	50,851 )	\$	1,043,786

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of New Taiwan dollars)

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

			Year ended December 31
	Notes		2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	37,577	\$	45,192
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property	6(6)(7)(9)
and right-of-use assets)			8,461		8,422
Amortisation	6(22)		3,179		3,644
Impairment on expected credit (gains) losses	6(3) and 12(2)		500	(	100 )
Cost of restricted stocks to employees	6(14)(15)		1,938		4,983
Deferred charges transferred to research and
experimental expenses			2,081		-
Interest income	6(19)	(	1,050 )	(	2,426 )
Interest expense	6(22)		636		645
Share of profit of associates accounted for	6(5)
under equity method			2,402	(	12,462 )
Net profit on financial assets at fair value	6(2)(21)
through profit or loss		(	8,716 )	(	9,546 )
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable		(	59 )		64
Accounts receivable		(	916 )		8,654
Other receivables		(	27 )		311
Other receivables - related parties		(	567 )		-
Inventories, net			1,347		7,241
Prepayments			1,935	(	4,360 )
Financial assets at fair value through profit or
loss-non-current			-		20,952
Changes in operating liabilities
Current contract liabilities			37		57
Notes payable Accounts payable		( (	3,721 ) 6 )	(	1,257 701 )
Other payables		(	3,147 )	(	399 )
Advance receipts			659		1,028
Net defined benefit liabilities			175		86
Cash inflow generated from operations			42,718		72,542
Interest received			1,186		2,388
Interest paid		(	636 )	(	645 )
Income tax received			4,494		-
Income tax paid		(	6,193 )	(	2,257 )
Net cash flows from operating activities			41,569		72,028

(Continued)

DAVICOM SEMICONDUCTOR , INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

			Year ended December 31
	Notes		2020		2019
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)	(	10,949 )	(	42,202 )
Acquisition of investment property	6(9)	(	75 )		-
Increase (decrease) in refundable deposits			72	(	94 )
Increase in intangible assets		(	186 )	(	120 )
Increase in other assets		(	2,979 )	(	10,315 )
Net cash flows used in investing activities		(	131,223 )	(	52,731 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in guarantee deposits received	6(12)(27)		92		373
Payments of cash dividends	6(17)	(	67,343 )	(	66,512 )
Repayments of principal for lease liabilities	6(7)(27)	(	1,537 )	(	1,522 )
Treasure stock repurchase	6(15)	(	22,736 )	(	11,739 )
Net cash flows used in financing activities		(	91,524 )	(	79,400 )
Net decrease in cash and cash equivalents		(	181,178 )	(	60,103 )
Cash and cash equivalents at beginning of year			464,395		524,498
Cash and cash equivalents at end of year		\$	283,217	\$	464,395

DAVICOM SEMICONDUCTOR, INC. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Davicom Semiconductor, Inc. (the "Company") was incorporated on August, 1996, as a corporation limited by shares and opened in the same year. The Company is primarily engaged in the research, development, production, manufacturing and sales of communications network ICs. The Company's stock has been listed on the Taiwan Stock Exchange since August 6, 2007.

THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These financial statements were authorised for issuance by the Board of Directors on February 26, 2021. 3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

	Effective date by
	International
	Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IAS 1 and IAS 8, 'Disclosure initiative-definition of material'	January 1, 2020
Amendments to IFRS 3, 'Definition of a business'	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS7 ,'Interest rate benchmark reform'	January 1, 2020
Amendment to IFRS 16, 'Covid-19-related rent concessions'	June 1, 2020
Note:Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 4, 'Extension of the temporary	January 1, 2021
exemption from applying IFRS 9'
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,	January 1, 2021
'Interest Rate Benchmark Reform— Phase 2'

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 3, 'Reference to the conceptual framework'	January 1, 2022
Amendments to IFRS 10 and IAS 28, 'Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture'	International Accounting
	Standards Board
IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IAS 1, 'Classification of liabilities as current or	January 1, 2023
non-current'
Amendments to IAS 1, 'Disclosure of accounting policies'	January 1, 2023
Amendments to IAS 8, 'Definition of accounting estimates'	January 1, 2023
Amendments to IAS 16, 'Property, plant and equipment:proceeds	January 1, 2022
before intended use'
Amendments to IAS 37, 'Onerous contracts—cost of fulfilling a	January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers".

(2) Basis of preparation
A. Except for the following items, the parent company only statements have been prepared under the historical cost convention:
- (a) Financial assets at fair value through profit or loss.
- (b) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.
(3) Foreign currency translation

Items included in the financial statements of each of the Company's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The parent company only financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within 'other gains and losses'.
B. Translation of foreign operations
(a) The operating results and financial position of all the company entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- iii. All resulting exchange differences are recognised in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.
(4) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
- (b) Assets held mainly for trading purposes;
- (c) Assets that are expected to be realised within twelve months from the balance sheet date;
- (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (a) Liabilities that are expected to be settled within the normal operating cycle;
- (b) Liabilities arising mainly from trading activities;
- (c) Liabilities that are to be settled within twelve months from the balance sheet date;
- (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
(7) Accounts and notes receivable
A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The Company initially measures accounts and notes receivable at fair value and subsequently recognises the amortised interest income over the period of circulation using the effective interest method and the impairment loss. A gain or loss is recognised in profit or loss.
(8) Impairment of financial assets

The Company assesses at each balance sheet date including accounts receivable that have a significant financing, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(9) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(10) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(11) Investments accounted for using equity method / Subsidiaries and associates
A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Company obtains control of the subsidiaries and ceases when the Company loses control of the subsidiaries.
B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
D. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
E. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
F. Accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants", the profit and loss of the parent company only financial report and other comprehensive gains and losses should be the same as the current profit and loss and other comprehensive gains and losses in the financial report prepared on an individual basis, which is the share of the owner of the parent company. The parent company only financial report owner's equity should be included in the financial report prepared on an individual basis. The owners' equity attributable to the parent company is the same.
(12) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings	5~50 years
Computer communications equipment	3 ~ 4 years
Other equipment	4 ~ 6 years

(13) Leasing arrangements (lessee)-right-of-use assets/ lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability. The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.
(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Investment property is depreciated on a straight-line basis over its estimated useful life of 5~50 years.

(15) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 1 to 5 years.

(16) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(17) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial and subsequently amortises the interest expense in profit or loss over the period of circulation using the effective interest method.

(18) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
C. Employees' compensation and directors' and supervisors' remuneration
Employees' compensation and directors' and supervisors' remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees' compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.
(19) Employee share-based payment
A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.
B. Restricted stocks:
- (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.
- (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Company recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.
- (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Company and the Company must refund their payments on the stocks. The Company recognises the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognises the payments from the employees who are expected to be eventually vested with the stocks in 'capital surplus – others'.

(20) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(21) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company's equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company's equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

(22) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(23) Revenue recognition

A. The Company manufactures and sells communications network ICs. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, when the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.
B. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances. No element of financing is deemed present as the sales are made with a credit term of 30 to 75 days, which is consistent with market practice.
C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(24) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

Critical accounting estimates and assumptions

(1) Evaluation of accounts receivable

When there is objective evidence showing signs of impairment, the Company considers future cash flow estimates. The amount of the impairment loss is measured by the difference between the carrying amount of the asset and the estimated future cash flow at the original effective interest rate of the financial asset. If the actual cash flow is less than expected, there may be significant impairment losses.

(2) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1)Cash and cash equivalents

	December 31, 2020	December 31, 2019
Cash on hand	\$ 75	\$ 60
Checking accounts and demand deposits	224,400	205,282
Time deposits	58,742	259,053
	\$ 283,217	\$ 464,395

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

B. The Company has no cash and cash equivalents pledged to others.

(2)Financial assets at fair value through profit or loss

Items	December 31, 2020		December 31, 2019
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Unlisted stocks	\$ 34,761	\$	34,761
Valuation adjustment	4,507	(	4,209)
	\$ 39,268	\$	30,552

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

	Years ended December 31,
	2020	2019
Financial assets mandatorily measured at fair value through profit or loss
Equity instruments	\$ 8,716	\$ 9,546

B. As of December 31, 2020 and 2019, the Company has no financial assets at fair value through profit or loss pledged to others.

C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

(3)Notes and accounts receivable

		December 31, 2020	December 31, 2019
Notes receivable	\$	59	\$
Accounts receivable	\$	33,457	\$	32,541
Less: Allowance for uncollectible accounts	(	1,601)	(	1,101)
	\$	31,856	\$	31,440

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

	December 31, 2020				December 31, 2019
	Accounts receivable		Notes receivable		Accounts receivable	Notes receivable
Not past due Up to 30 days	\$ 32,753 704	\$	59 -	\$	31,144 1,396	\$ - -
31 to 90 days	-		-		1	-
	\$ 33,457	\$	59	\$	32,541	\$ -

The above ageing analysis was based on past due date.

B. As of December 31, 2020 and 2019, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2019, the balance of receivables from contracts with customers amounted to \$40,058.
C. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).
(4)Inventories

			December 31, 2020
			Allowance for
	Cost		valuation loss	Book value
Work in progress	\$ 15,606	(\$	6,795)	\$ 8,811
Finished goods	21,859	(	7,176)	14,683
	\$ 37,465	(\$	13,971)	\$ 23,494
			December 31, 2019
			Allowance for
	Cost		valuation loss	Book value
Work in progress	\$ 14,829	(\$	6,809)	\$ 8,020
Finished goods	23,983	(	7,162)	16,821
	\$ 38,812	(\$	13,971)	\$ 24,841

The cost of the inventories recognised as expense for the period:

	Years ended December 31,
	2020	2019
Cost of goods sold	\$ 70,625	\$	74,576

(5)Investments accounted for using equity method

	December 31, 2020	December 31, 2019
Davicom Investment Inc.	\$ 210,160	\$	212,029
TSCC Inc.	92,473		95,835
Medicom Corp.	44,804		330
Aidialink Corp.	78,164		8,583
	\$ 425,601	\$	316,777

A. The investment (losses) gains recognised by the Company for the years ended December 31, 2020 and 2019 using the equity method are (\$2,402) and \$12,462 respectively, which were recognised based on the investees' financial statements audited by independent auditors in the same periods.

B. For information relating to the subsidiaries of the Company, please refer to Note 4(3) of the 2020 consolidated financial statements of the Company.

2020

(6)Property, plant and equipment

			Computer communications	Construction
		Buildings	equipment	in progress		Others	Total
At January 1
Cost	\$	169,884	\$ 857	\$ 41,939	\$	\$ 679	213,359
Accumulated depreciation	(	52,443) (	358)	-	(	416) (	53,217)
	\$	117,441	\$ 499	\$ 41,939	\$	\$ 263	160,142
Opening net book amount as at January 1	\$	117,441	\$ 499	\$ 41,939	\$	\$ 263	160,142
Additions		85	239	10,485		140	10,949
Reclassifications	(	639)	-	-		( -	639)
Depreciation charge	(	3,314) (	249)	-	(	151) (	3,714)
Closing net book amount as at
December 31	\$	113,573	\$ 489	\$ 52,424	\$	\$ 252	166,738
At December 31
Cost	\$	169,044	\$ 1,096	\$ 52,424	\$	\$ 570	223,134
Accumulated depreciation	(	55,471) (	607)	-	(	318) (	56,396)
	\$	113,573	\$ 489	\$ 52,424	\$	\$ 252	166,738

				2019
		Buildings	Computer communications equipment	Construction in progress		Others	Total
At January 1
Cost	\$	170,034	\$ 708	\$ -	\$	735	\$ 171,477
Accumulated depreciation	(	49,249) (	275)	-	(	320) (	49,844)
	\$	120,785	\$ 433	\$ -	\$	415	\$ 121,633
Opening net book amount as at January 1	\$	120,785	\$ 433	\$ -	\$	415	\$ 121,633
Additions		-	239	41,939		24	42,202
Depreciation charge	(	3,344) (	173)	-	(	176) (	3,693)
Closing net book amount as at December 31	\$	117,441	\$ 499	\$ 41,939	\$	263	\$ 160,142

At Deember 31
Cost	\$	169,884	\$ 857	\$ 41,939	\$	679	\$ 213,359
Accumulated depreciation	(	52,443) (	358)	-	(	416) (	53,217)
	\$	117,441	\$ 499	\$ 41,939	\$	263	\$ 160,142

(7)Leasing arrangements-lessee

A. The Company leases various assets including land. Rental contracts are typically made for periods for 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

	December 31, 2020			December 31, 2019
		Carrying amount		Carrying amount
Land	\$	61,941	\$	63,750
	Years ended December 31,
	2020			2019
		Depreciation charge		Depreciation charge
Land	\$	1,809	\$	1,809

C. The information on profit and loss accounts relating to lease contracts is as follows:

	Years ended December 31,
	2020			2019
Items affecting profit or loss
Interest expense on lease liabilities	\$	602	\$	616
Expense on short-term lease contracts	\$	83	\$	189
Expense on leases of low-value assets	\$	97	\$	100

D. For the years ended December 31, 2020 and 2019, the Company's total cash outflow for leases was \$2,319 and \$2,427, respectively.

(8)Leasing arrangements – lessor

A. The Company leases various assets including buildings. Rental contracts are typically made for periods of 1 and 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. For the years ended December 31, 2020 and 2019, the Company recognised rent income in the amounts of \$24,865 and \$18,065, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. Gain arising from operating lease agreements for the years ended December 31, 2020 and 2019 are as follows:

	Years ended December 31,
	2020		2019
Rent income	\$ 24,865	\$	18,065

D. The maturity analysis of the lease payments under the operating leases is as follows:

	December 31, 2020		December 31, 2019
2020	\$	\$ -	23,630
2021	24,188		17,545
2022	8,823		1,443
2023	5,719		-
	\$ 38,730	\$	42,618

(Following blank)

(9)Investment property

Building

		Years ended December 31,
		2020	2019
At January 1
Cost	\$	148,907	\$ 148,907
Accumulated depreciation	(	45,967) (	43,047)
	\$	102,940	\$ 105,860
Opening net book amount as at January 1	\$	102,940	\$ 105,860
Additions		75	-
Reclassifications		639	-
Depreciation charge	(	2,938) (	2,920)
Closing net book amount as at December 31	\$	100,716	\$ 102,940
At December 31
Cost	\$	149,907	\$ 148,907
Accumulated depreciation	(	49,191) (	45,967)
	\$	100,716	\$ 102,940

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

	Years ended December 31,
		2020	2019
Rental income from investment property	\$	24,865	\$	18,065
Direct operating expenses arising from the investment
property that generated rental income during the period	(\$	4,962) (\$		4,583)

B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was \$151,749 and \$150,720, respectively, which was valued by independent valuers. Valuations were made using the cost approach and income approach for each approach which is categorised within Level 3 in the fair value hierarchy. Key assumptions are as follows:

	Overall capital	Ratio of
	interest rate	salvage value
Cost approach	1.605%~1.835%	5.00%
		Capitalisation
		rate
Income approach		8.3%~8.35%

(10)Other non-current assets

	December 31, 2020	December 31, 2019
Deferred charges	\$ 10,263	\$	12,365
Guarantee deposits paid	102		174
Restricted assets	2,752		2,752
	\$ 13,117	\$	15,291
(11)Others payables
	December 31, 2020		December 31, 2019
Wages and bonus payable	\$ 18,708	\$	20,290
Processing fees payable	2,761		2,966
Others	4,174		5,304
	\$ 25,643	\$	28,560
(12)Other non-current liabilities
	December 31, 2020		December 31, 2019
Net defined benefit liability	\$ 13,989	\$	14,107
Guarantee deposits received	3,395		3,303
	\$ 17,384	\$	17,410

(13)Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualified for retirement next year, the Company will make contributions to cover the deficit by next March.
(b) The amounts recognised in the balance sheet are as follows:

	December 31, 2020	December 31, 2019
Present value of defined benefit obligations (\$	36,276) (\$	39,619)
Fair value of plan assets	22,287	25,512
Net defined benefit liability	(\$ 13,989) (\$	14,107)

		Present value of		Fair value of
		defined benefit		plan		Net defined
		obligations		assets		benefit liability
Year ended December 31, 2020
Balance at January 1	(\$	39,619)	\$	25,512	(\$	14,107)
Current service cost	(	101)		-	(	101)
Interest (expense) income	(	277)		179	(	98)
	(	39,997)		25,691	(	14,306)
Remeasurements:
Return on plan assets
(excluding amounts included in		-		844		844
interest income or expense)
Change in financial assumptions	(	289)		-	(	289)
Experience adjustments	(	262)		-	(	262)
	(	551)		844		293
Pension fund contribution		-		24		24
Paid pension		4,272	(	4,272)		-
Balance at December 31	(\$	36,276)	\$	22,287	(\$	13,989)
		Present value of		Fair value of
		defined benefit		plan		Net defined
		obligations		assets		benefit liability
Year ended December 31, 2019
Balance at January 1	(\$	38,769)	\$	24,382	(\$	14,387)
Current service cost	(	101)		-	(	101)
Interest (expense) income	(	271)		170	(	101)
	(	39,141)		24,552	(	14,589)
Remeasurements:
Return on plan assets
(excluding amounts included in		-		936		936
interest income or expense)
Experience adjustments	(	478)		-	(	478)
	(	478)		936		458
Pension fund contribution		-		24		24
Balance at December 31	(\$	39,619)	\$	25,512	(\$	14,107)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company's and domestic subsidiaries' defined benefit pension plan in accordance with the Fund's annual investment and utilisation plan and the "Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund" (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.
(e) The principal actuarial assumptions used were as follows:

	Years ended December 31,
	2020	2019
Discount rate	0.50%	0.70%
Future salary increases	2.00%	2.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

	Discount rate				Future salary increases
			Increase 0.5% Decrease 0.5% Increase 0.5% Decrease 0.5%
December 31, 2020
Effect on present value of
defined benefit obligation	(\$	714)	\$	741	\$	636	(\$	619)
December 31, 2019
Effect on present value of
defined benefit obligation	(\$	832)	\$	865	\$	751	(\$	730)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2021 amount to \$171.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 2 years. The analysis of timing of the future pension payment was as follows:

Within 1 year	(\$	24,095)
1-5 year(s)	(	10,741)
Over 5 years	(	1,440)
	(\$	36,276)

B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The pension costs under defined contribution pension plans of the company for the years ended December 31, 2020 and 2019, were both \$4,374.
(14)Share-based payment
A. For the years ended December 31, 2020 and 2019, the Company's share-based payment arrangements were as follows:

			Contract	Vesting
Type of arrangement	Grant date	Quantity granted	period	conditions
Restricted stocks to	2017.09.29	1,400	3 years	1~3 years' service
employees		(share in thousands)

B. The Board of Directors at their meeting on May 26, 2017 adopted a resolution to issue employee restricted ordinary shares for 2,000 thousand shares and granted 1,400 thousand shares on September 29, 2017. The record date for the capital increase through issuance of employee restricted ordinary shares was set on October 2, 2017 and the subscription price is \$10 (in dollars) per share. From the day of grant, percentage of vesting are 20%, 30%, and 50%, respectively, in sequence from 1 to 3 years.
C. For the years ended December 31, 2020 and 2019, the compensation fees arising from restricted stocks to employees is \$1,938 and \$4,983, respectively.

(15)Share capital

A. As of December 31, 2020, the Company's authorized capital was \$1,200,000, consisting of 120,000 thousand shares of ordinary stock (including 18,000 thousand shares reserved for employee stock options and 400 thousand shares reserved for convertible bonds issued by the Company), and the paid-in capital was \$846,551 with a par value of \$10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number of the Company's ordinary shares outstanding are as follows:

		2020	2019
At January 1		84,655	84,655
Retirement of restricted stock	(	23)	-
At December 31		84,632	84,655

B. The Board of Directors at their meeting on May 26, 2017 adopted a resolution to issue employee restricted ordinary shares for 2,000 thousand shares with the effective date set on August 8, 2017, granted 1,400 thousand shares on September 29, 2017 and the subscription price is \$10 (in dollars) per share. The record date for capital increase of employee restricted ordinary shares was set on October 2, 2017. As at December 31, 2020, the receipts for share capital was \$14,000 and the capital surplus was \$17,850.

C. Treasury shares

(a) Reason for share reacquisition and movements in the number of the Company's treasury shares are as follows:

		December 31, 2020
Name of company holding	Number of shares
the shares	Reason for reacquisition	(share in thousand)	Carrying amount
The Company	To be reissued to employees	2,915	\$	50,851
		December 31, 2019
Name of company holding		Number of shares
the shares	Reason for reacquisition	(share in thousand)	Carrying amount
The Company	To be reissued to employees	1,515	\$	28,115

(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company's issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company's credit rating and the stockholders' equity should be retired within six months of acquisition.

(16)Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. On June 10, 2020 and June 12, 2019, the distribution of cash dividends from capital surplus was approved by the shareholders and amounted to \$29,099 and \$33,256, respectively. On February 26, 2021, the Board of Directors proposed the distribution of cash of \$35,138 from capital surplus.

(17)Retained earnings

A. Under the Company's Articles of Incorporation, the current year's earnings shall first be used to pay all taxes and offset prior years' operating losses and 10% of the remaining amount shall be set aside as legal reserve, then set aside or reverse special reserve in accordance with related regulations. The appropriation of the remainder along with the earnings in prior years shall be proposed by the Board of Directors and resolved at the stockholders' meeting. The Company shall appropriate all the current distributable earnings, taking into consideration the Company's financials, business and operations. Dividends to shareholders can be distributed in the form of cash or shares and cash dividends to shareholders shall account for at least 30% of the total dividends to shareholders.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
D. The appropriation of 2019 and 2018 earnings was resolved by the shareholders on June 10, 2020 and June 12, 2019, respectively. Details are as follows:

	Year ended December 31, 2019		Year ended December 31, 2018
	Dividends				Dividends
	per share						per share
	Amount	(in dollars)			Amount		(in dollars)
Legal reserve	\$ 4,176			\$	3,844
Cash dividends	38,244	\$	0.46		33,256	\$	0.40

On June 10, 2020 and June 12, 2019, the distribution of cash dividends from capital surplus was approved by the shareholders and amounted to \$29,099 and \$33,256, respectively. The abovementioned appropriation of earnings of 2019 and 2018 was in agreement with those amounts proposed by the Board of Directors on February 27, 2020 and March 11, 2019, respectively.

E. The details of the appropriation of 2020 earnings was proposed by the Board of Directors on February 26, 2021. Details are follows:

	Year ended December 31, 2020
			Dividends
			per share
	Amount (in dollars)
Legal reserve	\$ 3,369
Cash dividends	30,235	\$	0.37

On February 26, 2021, the Board of Directors proposed the distribution of cash of \$35,138 from capital surplus. Abovementioned appropriation of earnings and distribution of cash from capital surplus has not been resolved by the shareholders.

(18)Operating revenue

	Years ended December 31,
		2020		2019
Revenue from contracts with customers	\$	225,872	\$	232,706

Disaggregation of revenue from contracts with customers

The Company derives revenue at a point in time in the following geographical regions:

	Years ended December 31,
		2020		2019
China	\$	162,575	\$	160,470
Taiwan		26,631		30,374
USA		2,626		4,760
Others		34,040		37,102
	\$	225,872	\$	232,706

(19)Interest income

	Years ended December 31,
		2020		2019
Interest income from bank deposits	\$	1,017	\$	2,398
Other interest income		33		28
	\$	1,050	\$	2,426

(20)Other income

	Years ended December 31,
		2020		2019
Rent income	\$	24,865	\$	18,065
Other income, others		1,094		1,472
	\$	25,959	\$	19,537

(21)Other gains and losses

	Years ended December 31,
		2020	2019
Net currency exchange loss	(\$	11,932) (\$	5,671)
Net profit on financial asssets at fair value
through profit or loss		8,716	9,546
Other losses	(	4,963) (	4,583)
	(\$	8,179) (\$	708)

(22)Finance costs

	Years ended December 31,
		2020	2019
Interest expense	\$	\$ 636	645

(23)Expenses by nature

	Years ended December 31,
	2020	2019
Change in finished goods, work-in-process and raw materials inventory	\$ 33,340	\$	34,122
Employee benefit expense	103,157		113,185
Product testing fees	20,288		22,488
Amortisation charges	3,179		3,644
Depreciation charges on property,
plant and equipment
(including right-of-use assets)	5,523		5,502
Other costs and expenses	38,600		41,645
Operating costs and expenses	\$ 204,087	\$	220,586

(24)Employee benefit expense

	Years ended December 31,
		2020		2019
Wages and salaries	\$	86,451	\$	96,250
Labour and health insurance fees		7,378		7,520
Pension costs		4,573		4,576
Directors' remuneration		1,845		1,807
Other personnel expenses		2,910		3,032
	\$	103,157	\$	113,185

As of December 31, 2020 and 2019, the number of employees of the Company were both 77 and the number of directors who were not concurrently employees were both 2.

For the years ended December 31, 2020 and 2019, average employee benefits were \$1,420 and \$1,485, respectively; average employee salary were \$1,222 and \$1,283, respectively. The average employee salary decreased by (4.75%) year over year.

A. According to the Articles of Incorporation of the Company, a ratio of gain on current pre-tax profit before deduction of employees' compensation and directors' remuneration, after covering accumulated losses, shall be distributed as employees' compensation and directors' remuneration. The ratio shall not be lower than 8.5% for employees' compensation and shall not be higher than 2% for directors' remuneration. A company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. Directors' remuneration shall be distributed in cash. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive employees' compensation in the form of stock or cash are set by the Board of Directors.

B. For the years ended December 31, 2020 and 2019, employees' compensation was accrued at \$3,569 and \$4,308, respectively; directors' and supervisors' remuneration was accrued at \$838 and \$1,010, respectively. The aforementioned amounts were recognised in salary expenses.

The employees' compensation and directors' and supervisors' remuneration were estimated and accrued based on 8.5% and 2% of distributable profit of current year as of the end of reporting period. The employees' compensation and directors' and supervisors' remuneration resolved by the Board of Directors were \$3,569 and \$838, respectively, and the employees' compensation will be distributed in the form of cash.

Employees' compensation and directors' and supervisors' remuneration of 2019 as resolved by the meeting of the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements.

Information about employees' bonus and directors' and supervisors' remuneration of the Company as approved by the meeting of Board of Directors and resolved by the shareholders will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(25)Income tax

A. Income tax expense
(a) Components of income tax expense:

		Years ended December 31,
		2020	2019
Current tax:
Current tax on profits for the year	\$	4,321	\$ 4,450
Additional income tax imposed on
unappropriated earnings		-	36
Prior year income tax underestimation		413	534
Total current tax		4,734	5,020
Deferred tax:
Origination and reversal of temporary
differences	(	610) (	1,224)
Income tax expense	\$	4,124	\$ 3,796

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

	Years ended December 31,
		2020	2019
Remeasurement of defined benefit obligations	(\$	59) (\$	92)

				B. Reconciliation between income tax expense and accounting profit

	Years ended December 31,
		2020	2019
Tax calculated based on profit before tax and statutory tax rate	\$	\$ 7,515	9,087
Effect from items disallowed by tax regulation	(	2,007) (	874)
Effect from temporary difference	(	199) (	3,200)
Effect from tax credits of investment	(	1,598) (	1,787)
Additional tax on undistributed earnings		-	36
Prior year income tax underestimation		413	534
Income tax expense	\$	\$ 4,124	3,796

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

					Year ended December 31, 2020
					Recognised
					in other
			Recognised		comprehensive
		January 1	in profit or loss		income		December 31
Deferred tax assets:
–Temporary differences:
Inventory retirement losses	\$	814	\$ -	\$	-	\$	814
Loss for market value decline
and obsolete and		2,794	-		-		2,794
slow-moving inventories
Unrealised exchange loss		1,030	519		-		1,549
Unused compensated absences		1,375	56		-		1,431
Other		2,580	35	(	59)		2,556
Subtotal	\$	8,593	\$ 610	(\$	59)	\$	9,144
Deferred tax liabilities:
–Temporary differences:
Currency temporary differences	(\$	512)	\$ -	\$	-	(\$	512)
Subtotal	(\$	512)	\$ -	\$	-	(\$	512)
Total	\$	8,081	\$ 610	(\$	59)	\$	8,632

		January 1		Recognised in profit or loss		Recognised in other comprehensive income		December 31
Deferred tax assets:
–Temporary differences:
Inventory retirement losses	\$	814	\$	-	\$	-	\$	814
Loss for market value decline
and obsolete and		2,794		-		-		2,794
slow-moving inventories
Unrealised exchange loss		-		1,030		-		1,030
Unused compensated absences		1,252		123		-		1,375
Other		2,661		11	(	92)		2,580
Subtotal	\$	7,521	\$	1,164	(\$	92)	\$	8,593
Deferred tax liabilities:
–Temporary differences:
Currency temporary differences	(\$	603)	\$	91	\$	-	(\$	512)
Unrealised exchange loss		31	(	31)		-		-
Subtotal	(\$	572)	\$	60	\$	-	(\$	512)
Total	\$	6,949	\$	1,224	(\$	92)	\$	8,081

Year ended December 31, 2019

D. The Company's income tax returns through 2018 have been assessed and approved by the Tax Authority.

(26)Earnings per share

		Year ended December 31, 2020
		Weighted average
		number of ordinary	Earnings per
		shares outstanding	share
	Amount after tax	(share in thousands)	(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	\$ 33,453	82,032	\$ 0.41
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent Assumed conversion of all dilutive	\$ 33,453	82,032
potential ordinary shares
Employees' bonus	-	178
Profit attributable to ordinary
shareholders of the parent plus	\$ 33,453	82,210	\$ 0.41
assumed conversion of all dilutive
potential ordinary shares
		Year ended December 31, 2019
		Weighted average
		number of ordinary shares outstanding	Earnings per share
	Amount after tax	(share in thousands)	(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	\$ 41,396	83,190	\$ 0.50
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent	\$ 41,396	83,190
Assumed conversion of all dilutive potential ordinary shares
Employees' bonus	-	488
Profit attributable to ordinary
shareholders of the parent plus	\$ 41,396	83,678	\$ 0.49
assumed conversion of all dilutive
potential ordinary shares

(27)Changes in liabilities from financing activities

			Year ended December 31, 2020
			Guarantee deposits		Liabilities from financing activities
		Lease liability	received		gross
At January 1	\$	64,037	\$ 3,303	\$	67,340
Changes in cash flow from
financing activities	(	1,537)	92	(	1,445)
At December 31	\$	62,500	\$ 3,395	\$	65,895
			Year ended December 31, 2019
					Liabilities from
			Guarantee deposits		financing activities
		Lease liability	received		gross
At January 1	\$	65,559	\$ 2,930	\$	68,489
Changes in cash flow from			373
financing activities At December 31	( \$	1,522) 64,037	\$ 3,303	( \$	1,149) 67,340

7. RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship
Names of related parties			Relationship with the Company
Aidialink Corp.			Subsidiary
(2) Significant related party transactions
A. Receivables from related parties:
			December 31, 2020		December 31, 2019
Other receivables:
Aidialink Corp.			\$ 567	\$	-
B. Other revenue:
			Years ended December 31,
			2020		2019
Management consulting
(shown as other non-current assets)
Aidialink Corp.			\$ 540	\$	540
(3) Key management compensation
			Years ended December 31,
			2020		2019
Salaries and other short-term employee benefits			\$ 10,259	\$	10,108

8. PLEDGED ASSETS

The Company's assets pledged as collateral are as follows:

Pledged asset		December 31, 2020	December 31, 2019	Purpose
Time deposits				Performance
(shown as other non-current assets)	\$	2,752	\$ 2,752	guarantee
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT
COMMITMENTS
None.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
None.
12. OTHER
(1) Capital management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(Following blank)

(2) Financial instruments

A. Financial instruments by category

	December 31, 2020	December 31, 2019
Financial assets
Financial assets at fair value through profit or loss
Financial assets mandatorily measured at fair
value through profit or loss	\$ 39,268	\$	30,552
Financial assets at amortised cost
Cash and cash equivalents	\$ 283,217	\$	464,395
Notes receivable	59		-
Accounts receivable	31,856		31,440
Other receivables	170		4,773
Guarantee deposits paid	102		174
Other financial assets	2,752		2,752
	\$ 318,156	\$	503,534
Financial liabilities
Financial liabilities at amortised cost
Notes payable	\$ 2,223	\$	5,944
Accounts payable	4,850		4,856
Other accounts payable	25,643		28,560
Guarantee deposits received	3,395		3,303
	\$ 36,111	\$	42,663
Lease liability	\$ 62,500	\$	64,037

B. Financial risk management policies

(a) The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.
(b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The management provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Company's businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

				December 31, 2020
			Sensitivity analysis
	Foreign currency			Book	Degree		Effect on		Effect on other
	amount	Exchange		value	of		profit or		comperehersive
	(In thousands)	rate		(NTD)	variation		loss		income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD	\$ 10,421	28.480		\$ 296,790	1%	\$	2,968	\$	-
RMB:NTD	14	4.377	\$	61	1%		1		-
Investments accounted
for using equity method
USD:NTD	\$ 3,247	28.480		\$ 92,473	1%	\$	-	\$	925
Financial liabilities
Monetary items
USD:NTD	\$ 170	28.480	\$	4,842	1%	\$	48	\$	-
				December 31, 2019
							Sensitivity analysis
	Foreign currency			Book	Degree		Effect on		Effect on other
	amount	Exchange		value	of		profit or		comperehersive
	(In thousands)	rate		(NTD)	variation		loss		income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD	\$ 7,560	29.98		\$ 226,649	1%	\$	2,266	\$	-
RMB:NTD	2,073	4.31		8,935	1%		89		-
Investments accounted
for using equity method
USD:NTD	\$ 3,197	29.98		\$ 95,835	1%	\$	-	\$	958
Financial liabilities
Monetary items
USD:NTD	\$ 152	29.98	\$	4,557	1%	\$	46	\$	-

ii. The total exchange loss, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to (\$11,932) and (\$5,671), respectively.

Price risk

i. The Company's equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.
ii. The Company's investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, for the years ended December 31, 2020 and 2019, other components of equity would have increased/decreased by \$393 and \$306, respectively.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.
ii. The Company manages their credit risk taking into consideration the entire company's concern. For banks and financial institutions, only independent rated parties with a minimum rating are accepted. According to the Company's credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external rating in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
iv. The Company classifies customers' accounts receivable in accordance with credit rating of customer. The Company applies the simplified approach to estimate expected credit loss under the provision matrix basis.
v. The Company used the forecast ability of Taiwan Institute of Economic Research report to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2020 and 2019, the provision matrix, loss rate methodology is as follows:

	Group A		Group B		Total
December 31, 2020
Expected loss rate		0.03%		4.09%~4.14%
Total book value	\$	23,730	\$	9,727	\$ 33,457
Loss allowance	\$	7	\$	1,594	\$ 1,601
		Group A		Group B	Total
December 31, 2019
Expected loss rate		0.03%		3.63%~83.86%
Total book value	\$	22,200	\$	10,341	\$ 32,541
Loss allowance	\$	7	\$	1,094	\$ 1,101

vi. Movement in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable is as follows:

		Years ended December 31,
	2020	2019
At January 1	\$	1,101	\$	1,201
Provision for impairment		500		-
Reversal of impairment loss		-	(	100)
At December 31	\$	1,601	\$	1,101

According to the above method, the allowance loss on the accounts receivable as of December 31, 2020 and 2019, should be \$410 and \$601, respectively, which is not significantly different from the amount of allowance loss on the current account. For the years ended December 31, 2020 and 2019, there was no impairment loss arising from customers' contracts.

(c) Liquidity risk
i. Cash flow forecasting is performed by Company treasury. Company treasury monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements, for example, currency restrictions.
ii. Surplus cash held by the operating entities over and above balance required for working capital management will be invested in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.
iii. The table below analyses the Company's non-derivative financial liabilities based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

		Between		Between
Non-derivative	Less	1 and 2		2 and 5		Over
financial liabilities:	than 1 year	years		years			5 years
December 31, 2020
Lease liability	\$ 2,138	\$ 2,138	\$	6,415	\$	62,550
Other financial liabilities (shown as other non-current liabilities)	1,583	900		912		-
		Between		Between
Non-derivative	Less	1 and 2		2 and 5		Over
financial liabilities:	than 1 year	years		years		5 years
December 31, 2019
Lease liability	\$ 2,138	\$ 2,138	\$	6,415		64,689
Other financial liabilities (shown as other non-current liabilities)	\$ 838	\$ 48	\$	2,417		-

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company's investment in listed stocks and emerging stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company's investment in equity investment without active market is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(9).
C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:
(a) The related information of nature of the assets and liabilities is as follows:

December 31, 2020	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
Equity securities	\$ -	\$ -	\$ 39,268	\$ 39,268
December 31, 2019	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss

(b)The methods and assumptions the Company used to measure fair value are as follows:

i. The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

	Listed shares	Emerging stocks
Market quoted price	Closing price	Last transaction price

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).
iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company's financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company's management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
iv.The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company's credit quality.
D. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
E. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

			Years ended December 31,
		2020	2019
	Non-derivative equity instrument		Non-derivative equity instrument

At January 1	\$	30,552	\$	27,088
Gains and losses recognised in profit or loss
Recorded as non-operating income and expenses		8,716		3,464
At December 31	\$	39,268	\$	30,552

F. For the years ended December 31, 2020 and 2019, there was no transfer into or out from Level 3.

G. Finance department is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently updating inputs and making any other necessary adjustments to the fair value.
H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

	Fair value at December 31, 2020	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Non-derivative equity instrument:
Unlisted shares	\$ 39,268	Net asset value	Not applicable	-	Not applicable
	Fair value at			Range	Relationship of
	December 31,	Valuation	Significant	(weighted	inputs to
	2019	technique	unobservable input	average)	fair value
Non-derivative equity instrument:
Unlisted shares	\$ 30,552	Net asset value	Not applicable	-	Not applicable

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information
A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.
D. Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital: None.
E. Acquisition of real estate reaching \$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching \$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching \$100 million or 20% of paid-in capital or more: None.
H. Receivables from related parties reaching \$100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: None.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China):Please refer to table 2.

(3) Major shareholders information

Major shareholders information: Please refer to table 3.

SEGMENT INFORMATION

Not application.

(Following blank)

DAVICOM Semiconductor, Inc.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

				As of December 31, 2020
	Marketable securities	Relationship with the	General			Book value			Footnote
Securities held by	(Note 1)	securities issuer (Note 2)	ledger account	Number of shares		(Note 3)	Ownership (%)	Fair value	(Note 4)
The Company	Unitech Capital Inc.	-	Financial assets at fair value through profit or loss - non current	1,000,000	\$	39,268	2.00%	\$ 39,268
Davicom Investment Inc.	Global Mobile Corp.	-	Financial assets at fair value through profit or loss - non current	892,458		-	0.32%	-
Davicom Investment Inc.	MTECH Corporation	-	Financial assets at fair value through profit or loss - non current	200,000		-	0.93%	-
Davicom Investment Inc.	Schroder fund	-	Financial assets at fair value through profit or loss - non current	2,900,000		26,436		26,436

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

DAVICOM Semiconductor, Inc.

Information on investees

December 31, 2020

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

Investment income(loss)

					Initial investment amount	Shares held as at December 31, 2020		Net profit (loss) of the	recognised by the Company
			Main business	Balance	Balance				investee for the year ended	for the year ended
Investor	Investee	Location	activities	as at December 31, 2020	as at December 31, 2019	Number of shares	Ownership (%)	Book value	December 31, 2020	December 31, 2020	Footnote
The Company	TSCC Inc.	Samoa	General investment	\$ 143,224	\$ 143,224	4,400,000	100	\$ 92,473	\$ 1,486	\$ 1,486	-
The Company	Davicom Investment Inc.	Taiwan	General investment	222,000	222,000	21,200,000	100	210,160	( 1,843) (	1,843)	-
The Company	Medicom Corp.	Taiwan	Designing and manufacturing of IC	62,036	17,004	5,000,000	100	44,804	( 528) (	528)	-
The Company	Aidialink Corp.	Taiwan	Wireless communication machinery and equipment manufacturing industry	81,070	8,970	8,000,000	100	78,164	( 1,534) (	1,517)	-
TSCC Inc.	Jubilink Ltd.	British Virgin Islands	General investment		-	- 22,775,207	100		- -	-	-

DAVICOM Semiconductor, Inc.

Major shareholders information

December 31, 2020

Table 3

Name of major shareholders Number of shares Shareholding Percentage (%)

As of December 31, 2020, the company has no shareholders holding more than 5% of the shares.

DAVICOM SEMICONDUCTOR , INC. CASH DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Summary		Footnote
	\$ 75

	1,755
	14,681
7,299.98	207,904	Exchange rate 28.48
13.79	60	Exchange rate 4.377
	58,742
	\$ 283,217
		Amount

DAVICOM SEMICONDUCTOR , INC. ACCOUNTS RECEIVABLE, NET DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

A	Amount		Footnote
A	\$	9,438
C		9,096
B		9,002
E		2,250	The balance of each client
Others		3,671	is less than 5% of this account.
		33,457
Less: Allowance for
uncollectible accounts	(	1,601)
	\$	31,856

DAVICOM SEMICONDUCTOR , INC. INVENTORIES DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

			Amount Net Realizable
Items	Summary	Cost		Value		Footnote
Work in process		\$	15,606	\$	12,982	The net realizable value of work in process and finished
Finished goods			21,859		17,301	is the market price.
			37,465	\$	30,283
Less: Allowance for valuation loss and
obsolescence		(	13,971)
		\$	23,494

DAVICOM SEMICONDUCTOR , INC. SALES REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items	Quantity	Amount
Sales revenue
Network control chipset	6,250,355 PCS	\$ 203,783
Electronic paper	953,716 PCS	7,540
Video Decoder	306,910 PCS	13,833
Data processor chipset	4,800 PCS	498
Others	3,630 PCS	218
		\$ 225,872

DAVICOM SEMICONDUCTOR , INC. OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items	Amount
Purchase in this period	\$	30,771
Less: Engineering experiment pick up	(	1,244)
Raw materials used in this period		29,527
Manufacturing expense		37,286
Manufacturing cost		66,813
Add: Beginning work in process		14,829
Engineering experiment pick up return		1
Less: Ending work in progress	(	15,606)
Cost of finished goods		66,037
Add: Beginning finished goods		23,983
Purchase in this period		2,562
Less: Ending finished goods	(	21,859)
Engineering experiment pick up	(	98)
Operating cost	\$	70,625

DAVICOM SEMICONDUCTOR , INC. OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Item	Amount
Selling expenses
Salary expenditure	\$	15,367
Insurance expenses		1,520
Other expenses		6,824
Subtotal		23,711
General & administrative expenses
Salary expenditure		21,366
Miscellaneous expenses		3,639
Labor expenses		2,845
Other expenses		13,912
Subtotal		41,762
Research and development expenses
Salary expenditure		45,569
Research experiment fees		4,823
Insurance expenses		3,918
Other expenses		13,179
Subtotal		67,489
Impairment on expected credit profit		500
	\$	133,462