DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REVIEW REPORT MARCH 31, 2021 AND 2021

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.

			March 31, 2021		December 31, 2020		March 31, 2020
	Assets	Notes	AMOUNT	%	AMOUNT	%	AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 615,292	52	\$ 680,171	59	\$ 696,139	58
1110	Current financial assets at fair	6(2)
	value through profit or loss		-	-	-	-	26,296	2
1136	Accounts receivable, net	6(3)	91,483	8	-	-	-	-
1150	Notes receivable, net	6(4)	-	-	59	-	-	-
1170	Accounts receivable, net	6(4)	35,548	3	32,612	3	34,366	3
1200	Other receivables		716	-	499	-	5,964	-
130X	Inventories, net	6(5)	24,050	2	25,324	2	35,941	3
1410	Prepayments		3,830	-	4,237	-	6,000	1
1470	Other current assets		-	-	54	-	-	-
11XX	Total Current Assets		770,919	65	742,956	64	804,706	67
	Non-current assets
1510	Financial assets at fair value	6(2)
	through profit or loss - non-current		62,509	5	65,704	6	52,375	4
1600	Property, plant and equipment, net	6(6)	165,823	14	166,738	14	159,266	13
1755	Right-of-use assets	6(7)	61,489	5	61,941	5	63,298	5
1760	Investment property, net	6(9)	99,977	9	100,716	9	102,210	9
1780	Intangible assets		174	-	91	-	165	-
1840	Deferred income tax assets	6(25)	7,528	1	9,144	1	7,102	1
1900	Other non-current assets	6(10)	11,508	1	13,117	1	15,548	1
15XX	Total Non-current Assets		409,008	35	417,451	36	399,964	33
1XXX	Total assets		\$ 1,179,927	100	\$ 1,160,407	100	\$ 1,204,670	100

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

(Continued)

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

				March 31, 2021		December 31, 2020		March 31, 2020
	Liabilities and Equity Current liabilities	Notes		AMOUNT	%	AMOUNT	%	AMOUNT	%
2130	Current contract liabilities		\$	1,077	-	\$ 94	-	\$ -	-
2150	Notes payable			2,944	-	2,223	-	1,691	-
2170	Accounts payable			4,749	1	4,892	1	8,019	1
2200	Other payables	6(11)		24,245	2	26,155	2	22,633	2
2230	Current income tax liabilities	6(25)		2,962	-	775	-	2,370	-
2280	Current lease liabilities	12(2)		1,555	-	1,552	-	1,540	-
2300	Other current liabilities			2,742	-	2,086	-	1,404	-
21XX	Current Liabilities			40,274	3	37,777	3	37,657	3
	Non-current liabilities
2570	Deferred income tax liabilities	6(25)		866	-	512	-	1,044	-
2580	Non-current lease liabilities	12(2)		60,558	5	60,948	5	62,113	5
2600	Other non-current liabilities	6(12)		17,422	2	17,384	2	17,454	2
25XX	Non-current liabilities			78,846	7	78,844	7	80,611	7
2XXX	Total Liabilities			119,120	10	116,621	10	118,268	10
	Equity attributable to owners of
	parent
	Share capital	6(15)
3110	Common stock			846,321	72	846,321	73	846,551	70
	Capital surplus	6(16)
3200	Capital surplus			157,128	13	157,128	13	186,520	15
	Retained earnings	6(17)
3310	Legal reserve			78,569	7	78,569	7	74,393	6
3350	Undistributed earnings			49,568	4	32,727	3	42,955	4
	Other equity interest
3400	Other equity interest		(	19,928)(	2)(	20,108)(	2)(	15,961)(	1)
	Treasury shares	6(14)
3500	Treasury shares		(	50,851)(	4)(	50,851)(	4)(	49,173)(	4)
31XX	Equity attributable to owners
	of the parent			1,060,807	90	1,043,786	90	1,085,285	90
36XX	Non-controlling interest			-	-	-	-	1,117	-
3XXX	Total equity			1,060,807	90	1,043,786	90	1,086,402	90
3X2X	Total liabilities and equity		\$	1,179,927	100	\$ 1,160,407	100	\$ 1,204,670	100

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Expressed in thousands of New Taiwan dollars, except earnings per share) (UNAUDITED)

							Three months ended March 31
				2021			2020
	Items	Notes		AMOUNT	%		AMOUNT	%
4000	Sales revenue	6(18)	\$	67,450	100	\$	49,274	100
5000	Operating costs	6(5)(23)(24)	(	21,766) (	32) (		13,145) (	27)
5900	Net operating margin			45,684	68		36,129	73
	Operating expenses	6(23)(24)
6100	Selling expenses		(	7,058) (	11) (		6,492) (	13)
6200 6300	General and administrative expenses Research and development expenses		( (	9,710) ( 17,145) (	14) ( 26) (		10,298) ( 16,386) (	21) 33)
6000	Total operating expenses		(	33,913) (	51) (		33,176) (	67)
6900	Operating income			11,771	17		2,953	6
	Non-operating income and expenses
7100	Interest income	6(19)		486	1		951	2
7010	Other income	6(20)		12,169	18		6,254	13
7020	Other gains and losses	6(21)	(	3,273) (	5) (		7,388) (	15)
7050	Finance costs	6(22)	(	155)	-	(	160) (	1)
7000	Total non-operating income and expenses			9,227	14	(	343) (	1)
7900	Income from continuing operations
	before income tax			20,998	31		2,610	5
7950	Income tax expense	6(25)	(	4,157) (	6) (		2,147) (	4)
8000	Profit for the year from continuing
	operations			16,841	25		463	1
8200	Profit for the year		\$	16,841	25	\$	463	1
	Other comprehensive income
	Components of other comprehensive income that will be reclassified to
	profit or loss
8361	Financial statement translation
	differences of foreign operations		\$	180	-	\$	785	2
8360	Components of other comprehensive income that will be
	reclassified to profit or loss			180	-		785	2
8300	Total other comprehensive loss for
	the year		\$	180	-	\$	785	2
8500	Total comprehensive income for the
	year		\$	17,021	25	\$	1,248	3
	Profit (loss), attributable to:
8610	Owners of parent		\$	16,841	25	\$	464	1
8620	Non-controlling interest			-	-	(	1)	-
			\$	16,841	25	\$	463	1
	Comprehensive income (loss),
	attributable to:
8710	Owners of parent		\$	17,021	25	\$	1,249	3
8720	Non-controlling interest			-	-	(	1)	-
			\$	17,021	25	\$	1,248	3
	Basic earnings per share	6(26)
9750	Net income		\$		0.21	\$		0.01
9850	Diluted earnings per share Net income	6(26)	\$		0.21	\$		0.01

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

						Equity attributable to owners of the parent
		Share capital	Capital surplus			Retained earnings		Other equity interest
	Notes	Common stock	Additional paid-in capital	Others	Legal reserve	Undistributed earnings	Exchange differences from translation of foreign operations	Unearned compensation for restricted employee share of stock	Treasury shares	Total	Non controlling interest	Total equity
Three months ended March 31, 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	\$ 1,118	\$ 1,105,468
Profit (loss) for the period		-	-	-	-	464	-	-	-	464	( 1 )	463
Other comprehensive income for the period		-	-	-	-	-	785	-	-	785	-	785
Total comprehensive income (loss)		-	-	-	-	464	785	-	-	1,249	( 1 )	1,248
Restricted stocks to employees	6(14)(15)	-	-	-	-	-	-	744	-	744	-	744
Treasure shares repurchased	6(15)	-	-	-	-	-	-	-	( 21,058 ) (	21,058 )	-	( 21,058 )
Balance at March 31, 2020		\$ 846,551	\$ 138,881	\$47,639	\$ 74,393	\$ 42,955	(\$ 14,474 ) (\$	1,487 ) (\$	49,173 )	\$ 1,085,285	\$ 1,117	\$ 1,086,402
Three months ended March 31, 2021
Balance at January 1, 2021		\$ 846,321	\$ 118,414	\$38,714	\$ 78,569	\$ 32,727	(\$ 20,108 )	\$ -	(\$ 50,851 )	\$ 1,043,786	\$ -	\$ 1,043,786
Profit for the period		-	-	-	-	16,841	-	-	-	16,841	-	16,841
Other comprehensive income for the period		-	-	-	-	-	180	-	-	180	-	180
Total comprehensive income		-	-	-	-	16,841	180	-	-	17,021	-	17,021
Balance at March 31, 2021		\$ 846,321	\$ 118,414	\$38,714	\$ 78,569	\$ 49,568	(\$ 19,928 )	\$ -	(\$ 50,851 )	\$ 1,060,807	\$ -	\$ 1,060,807

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

			Three months ended March 31
	Notes		2021		2020

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax		\$	20,998	\$	2,610
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property and right-of-use	6(6)(7)(9)
assets)			2,120		2,112
Amortisation	6(23)		863		611
Cost of restricted stocks to employees	6(14)(15)		-		744
Interest income	6(19)	(	486 )	(	951 )
Interest expense	6(22)		155		160
Net loss on financial assets at fair value through profit or loss	6(2)(21)		3,195		8,924
Gain on disposal of property, plant and equipment	6(21)		-	(	6 )
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss- current			-	(	28,101 )
Notes receivable			59		-
Accounts receivable		(	2,936 )	(	2,045 )
Other receivables		(	31 )		36
Inventories			1,274	(	8,417 )
Prepayments			407	(	149 )
Other current assets			54		-
Changes in operating liabilities
Current contract liabilities			983	(	57 )
Notes payable			721	(	4,253 )
Accounts payable		(	143 )		598
Other payables Net defined benefit liabilities		(	1,910 ) 38	(	6,329 ) 44
Other current liabilities			656	(	1,407 )
Cash inflow (outflow) generated from operations			26,017	(	35,876 )
Interest received			302		415
Interest paid		(	155 )	(	160 )
Income tax paid			-	(	20 )
Net cash flows from (used in) operating activities			26,164	(	35,641 )
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at amortised cost - current, net		(	91,483 )		-
Acquisition of property, plant and equipment	6(6)	(	14 )	(	54 )
Proceeds from disposal of property, plant and equipment			-		846
Increase in intangible assets		(	128 )	(	128 )
Increase in refundable deposits		(	54 )		-
Decrease (increase) in other assets			845	(	820 )
Net cash flows used in investing activities		(	90,834 )	(	156 )
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of principal portion of lease liabilities	6(7)(27)	(	387 )	(	384 )
Treasury shares repurchased	6(15)		-	(	21,058 )
Net cash flows used in financing activities		(	387 )	(	21,442 )
Effect of foreign exchange rate changes on cash and cash equivalents			178		811
Net decrease in cash and cash equivalents		(	64,879 )	(	56,428 )
Cash and cash equivalents at beginning of period			680,171		752,567
Cash and cash equivalents at end of period		\$	615,292	\$	696,139

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

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

(Unaudited)

1. HISTORY AND ORGANISATION

Davicom Semiconductor, Inc. (the "Company") was incorporated as a corporation under provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the "Group") are primarily engaged in the research, development, production, manufacturing and sales of communications network ICs.

THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were reported to the Board of Directors on April 26, 2021.

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 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 Group's financial condition and financial performance based on the Group's assessment.

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

None.

(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
Amendments to IFRS 16'Covid-19-related rent concessions beyond 30 June 2021'	Standards Board April 1, 2021
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	January 1, 2023
or 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 before	January 1, 2022
intended use'
Amendments to IAS 37, 'Onerous contracts—cost of fulfilling a contract'	January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Accounting standard 34, 'Interim financial reporting' as endorsed by the FSC.

(2) Basis of preparation

A. Except for the following items, the consolidated financial 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs"), requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
- (a) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group 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 Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
- (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- (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 noncontrolling 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 Group loses control of a subsidiary, the Group 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 Group 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.

				Ownership (%)
Name of investor	Name of subsidiary	Main business activities	March 31, 2021	December 31, 2020	March 31, 2020	Description
Davicom Semiconductor, Inc. Medicom Corp.		Manufacturing and designing of IC	100.00	100.00	99.36	Note 1, 3
Davicom Semiconductor, Inc.	Davicom Investment Inc.	Manufacturing and designing of IC	100.00	100.00	100.00
Davicom Semiconductor, Inc. TSCC Inc.		Reinvestment business	100.00	100.00	100.00
Davicom Semiconductor, Inc. Aidialink Corp.		Wireless communication machinery and equipment manufacturing industry.	100.00	100.00	88.50	Note 2, 3
TSCC Inc.	JUBILINK	Reinvestment business	100.00	100.00	100.00

B. Subsidiaries included in the consolidated financial statements:

Note 1: On June 10, 2020, Davicom Semiconductor, Inc. acquired an additional 0.64% of Medicom Corp.'s issued shares for cash. After the acquisition, Davicom Semiconductor, Inc. wholly owned Medicom Corp.

Note 2: On July 31, 2020, Davicom Semiconductor, Inc. acquired an additional 11.5% of Aidialink Corp.'s issued shares for cash. After the acquisition, Davicom Semiconductor, Inc. wholly owned Aidialink Corp.

Note 3: Davicom Semiconductor, Inc. has participated in the subsidiaries's cash capital increase in the third quarter of 2020.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions on fund remittance from subsidiaries to the parent company: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional and the Group's presentation 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 group 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 Group 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.
(5) 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.
(6) 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.

(7) 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 fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(8) Financial assets at amortised cost
A. Financial assets at amortised cost are those that meet all of the following criteria:
- (a) The objective of the Group's business model is achieved by collecting contractual cash flows.
- (b) The assets' contractual cash flows represent solely payments of principal and interest.
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 Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.
D. The Group's time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(9) Accounts and notes receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The Group 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.
(10) Impairment of financial assets

The Group assesses at each balance sheet date including accounts receivable that have a significant financing, the Group 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 Group recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

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

(12) 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.

(13) Investments accounted for using the equity method / associates
A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.
B. The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate's equity do not arise from profit or loss or other comprehensive income of the associate and such changes not do affect the Group's ownership percentage of the associate, the Group recognises change in ownership interests in the associate in 'capital surplus' in proportion to its ownership.
D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but maintains significant influence on the associate, then 'capital surplus' and 'investments accounted for under the equity method' shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group's ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.
G. When the Group disposes its investment in an associate, and losses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
H. When the Group disposes its investment in an associate, and losses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.
(14) 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 Group 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	5 ~ 6 years

(15) Leasing arrangements (lessee)-right-of-use assets/lease liability
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 Group. 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 Group 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.

(16) 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.

(17) 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.

(18) Impairment of non-financial assets

The Group 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.

(19) 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.

(20) Employee benefit

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 expenses in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses 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 Group 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.
iii. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.
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 obligation 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 Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(21) 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 Group 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 Group and the Group must refund their payments on the stocks, the Group 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'.

(22) 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 Group 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.
F. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.
G. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognises the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognised outside profit or loss is recognised in other comprehensive income or equity while the effect of the change on items recognised in profit or loss is recognised in profit or loss.

(23) 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, and is included in equity attributable to the Company's equity holders.

(24) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are approved 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.

(25) Revenue recognition

A. The Group 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.

(26) 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.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group's Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group'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:

(1) Critical judgements in applying the Group's accounting policies
None.
(2) Critical accounting estimates and assumptions
A. Evaluation of accounts receivable

When there is objective evidence showing signs of impairment, the Group 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.

B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group 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

	March 31, 2021	December 31, 2020	March 31, 2020
Cash on hand	\$ 77	\$ 85	\$ 68
Checking accounts and demand deposits	562,817	530,037	301,126
Time deposits	52,398	150,049	394,945
	\$ 615,292	\$ 680,171	\$ 696,139

A. The Group 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 Group has no cash and cash equivalents pledged to others.

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

Items		March 31, 2021	December 31, 2020		March 31, 2020
Current items:
Financial assets mandatorily measured at fair value through profit or loss
Listed stocks	\$	-	\$ -	\$	28,101
Valuation adjustment		-	-	(	1,805)
	\$	-	\$ -	\$	26,296
Non-current items:
Financial assets mandatorily measured at fair value through profit or loss
Unlisted stocks	\$	34,761	\$ 34,761	\$	34,761
Beneficiary certificates		29,000	29,000		29,000
Subtotal		63,761	63,761		63,761
Valuation adjustment	(	1,252)	1,943	(	11,386)
	\$	62,509	\$ 65,704	\$	52,375

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

		Three months ended March 31,
		2021	2020
Financial assets mandatorily measured at
fair value through profit or loss
Equity instruments	(\$	3,195) (\$	8,924)

B. As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group 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) Financial assets at amortised cost (December 31, 2020 and March 31, 2020: None)

Items	March 31, 2021
Current items:
Time deposits with maturity over three months	\$ 91,483

A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

	Three months ended March 31, 2021
Interest income	\$	177

B. As of March 31, 2021 the Group has no financial assets at amortised cost pledged to others.

C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(4) Notes and accounts receivable

		March 31, 2021	December 31, 2020	March 31, 2020
Notes receivable	\$	-	\$ 59	\$ -
Accounts receivable	\$	37,149	\$ 34,213	\$ 35,467
Less: Allowance for
uncollectible accounts	(	1,601) (	1,601) (	1,101)
	\$	35,548	\$ 32,612	\$ 34,366

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

	March 31, 2021		December 31, 2020					March 31, 2020
	Accounts	Notes		Accounts		Notes		Accounts		Notes
	receivable	receivable		receivable		receivable		receivable		receivable
Not past due	\$ 35,644	\$ -	\$	33,509	\$	59	\$	32,814	\$	-
Up to 30 days	1,503	-		704		-		2,279		-
31 to 90 days	2	-		-		-		374		-
	\$ 37,149	\$ -	\$	34,213	\$	59	\$	35,467	\$	-

The above ageing analysis was based on past due date.

B. As of March 31, 2021 and 2020, accounts receivable were all from contracts with customers. And as of January 1, 2020, the balance of receivables from contracts with customers amounted to \$32,321.
C. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(5) Inventories

			March 31, 2021
			Allowance for
	Cost		valuation loss	Book value
Work in progress	\$ 12,294	(\$	7,608)	\$ 4,686
Finished goods	25,727	(	6,363)	19,364
	\$ 38,021	(\$	13,971)	\$ 24,050
			December 31, 2020
			Allowance for
	Cost		valuation loss	Book value
Work in process	\$ 15,606	(\$	6,795)	\$ 8,811
Finished goods	23,689	(	7,176)	16,513
	\$ 39,295	(\$	13,971)	\$ 25,324
			March 31, 2020
			Allowance for
	Cost		valuation loss	Book value
Work in process	\$ 22,715	(\$	5,391)	\$ 17,324
Finished goods	24,897	(	6,280)	18,617
	\$ 47,612	(\$	11,671)	\$ 35,941

The cost of inventories recognised as expenses for the period:

	Three months ended March 31,
	2021		2020
Cost of goods sold	\$ 21,766	\$	15,445
Gain on reversal of decline in market value	-	(	2,300)
	\$ 21,766	\$	13,145

(6) Property, plant and equipment

						2021
		Buildings and structures		Computer communications Transportation Construction equipment		equipment		in progress		Others	Total
At January 1 Cost	\$	169,044	\$	1,096	\$	-	\$	52,424	\$	570	\$ 223,134
Accumulated depreciation	( \$	55,471) 113,573	( \$	607) 489	\$	- -	\$	- 52,424	( \$	318) ( 252	56,396) \$ 166,738
Opening net book amount as at January 1 Additions	\$	113,573 -	\$	489 -	\$	- -	\$	52,424 -	\$	252 14	\$ 166,738	14
Depreciation charge Closing net book amount as at March 31	( \$	833) 112,740	( \$	63) 426	\$	- -	\$	- 52,424	( \$	33) ( 233	\$ 165,823	929)
At March 31 Cost Accumulated depreciation	\$ (	169,044 56,304)	\$ (	1,096 670)	\$	- -	\$	52,424 -	\$ (	584 351) (	\$ 223,148 57,325)
	\$	112,740	\$	426	\$	- 2020	\$	52,424	\$	233	\$ 165,823
		Buildings and structures		Computer communications Transportation Construction						Others	Total
At January 1				equipment		equipment		in progress
Cost Accumulated depreciation	\$ ( \$	169,884 52,443) 117,441	\$ ( \$	857 358) 499	\$ ( \$	2,325 1,485) 840	\$ \$	41,939 - 41,939	\$ ( \$	679 416) ( 263	\$ 215,684 54,702) \$ 160,982
Opening net book amount as at January 1 Additions	\$	117,441 -	\$	499 33	\$	840 -	\$	41,939 -	\$	263 21	\$ 160,982	54
Disposals		-		-	(	840)		-		-	(	840)
Depreciation charge Closing net book amount as at March 31	( \$	833) 116,608	( \$	55) 477	\$	- -	\$	- 41,939	( \$	42) ( 242	\$ 159,266	930)
At March 31
Cost Accumulated depreciation	\$ (	169,884 53,276)	\$ (	890 413)	\$	- -	\$	41,939 -	\$ (	700 458) (	\$ 213,413 54,147)
	\$	116,608	\$	477	\$	-	\$	41,939	\$	242	\$ 159,266

As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group has no financial assets at fair value through profit or loss pledged to others.

(7) Leasing arrangements-lessee

A. The Group leases assets including land. Rental contracts are made for periods of 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:

	March 31, 2021		December 31, 2020	March 31, 2020
	Carrying amount		Carrying amount	Depreciation charge
Land	\$	61,489	\$ 61,941	\$ 63,298
			Three months ended March 31,
			2021	2020
			Depreciation charge	Depreciation charge
Land			\$ 452	\$ 452

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

	Three months ended March 31,
	2021	2020
Items affecting profit or loss
Interest expense on lease liabilities	\$ 148	\$ 152
Expense on short-term lease contracts	\$ 40	\$ 66
Expense on leases of low-value assets	\$ 27	\$ 23

D.For the three months ended March 31, 2021 and 2020, the Group's total cash outflow for leases were \$602 and \$625, respectively.

(8) Leasing arrangements lessor
A. The Group leases 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 three months ended March 31, 2021 and 2020, the Group recognised rent income in the amounts of \$6,361 and \$6,152, respectively, based on the operating lease agreement, which do not include variable lease payments.
C. Gain arising from operating lease agreements for the three months ended March 31, 2021 and 2020 are as follows:

	Three months ended March 31,
	2021	2020
Rent income	\$ 6,361	\$ 6,152

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

	March 31, 2021	December 31, 2020	March 31, 2020
2020	\$ -	\$ -	\$ 17,590
2021	20,737	24,188	17,146
2022	8,899	8,823	1,838
2023	5,719	5,719	34
	\$ 35,355	\$ 38,730	\$ 36,608

(9) Investment property

	Three months ended March 31,
		2021		2020
At January 1
Cost	\$	149,907	\$	148,907
Accumulated depreciation	(	49,191)	(	45,967)
	\$	100,716	\$	102,940
Opening net book amount as at January 1	\$	100,716	\$	102,940
Depreciation charge	(	739)	(	730)
Closing net book amount as at March 31	\$	99,977	\$	102,210
At March 31
Cost	\$	149,907	\$	148,907
Accumulated depreciation	(	49,930)	(	46,697)
	\$	99,977	\$	102,210

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

		Three months ended March 31,
		2021	2020
Rental income from investment property	\$	6,613	\$ 6,152
Direct operating expenses arising from the
investment property that generated rental income	(\$	1,088) (\$	1,290)
during the period

B. The fair value of the investment property held by the Group as at March 31, 2021, December 31, 2020 and March 31, 2020 was \$151,749, \$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 interest rate	Ratio of salvage value
Cost approach		1.605%~1.835%	5.00%
			Capitalisation rate
Income approach			8.3%~8.35%
(10) Other non-current assets
	March 31, 2021	December 31, 2020	March 31, 2020
Deferred charges	\$ 11,352	\$ 10,263	\$ 12,622
Guarantee deposits paid	156	102	174
Restricted assets	-	2,752	2,752
	\$ 11,508	\$ 13,117	\$ 15,548

Details of the Group's financial assets pledged to others as collateral are provided in Note 8.

(11) Other payables

	March 31, 2021	December 31, 2020	March 31, 2020
Wages and bonus payable	\$ 16,810	\$ 18,919	\$ 15,478
Processing fees payable	2,363	2,761	2,311
Others	5,072	4,475	4,844
	\$ 24,245	\$ 26,155	\$ 22,633
(12) Other non-current liabilities
	March 31, 2021	December 31, 2020	March 31, 2020
Net defined benefit liability	\$ 14,027	\$ 13,989	\$ 14,151
Guarantee deposits received	3,395	3,395	3,303
	\$ 17,422	\$ 17,384	\$ 17,454

(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 be qualified for retirement next year, the Company will make contributions to cover the deficit by next March.

(b) For the aforementioned pension plan, the Group recognised pension costs to \$43 and \$50 for the three months ended March 31, 2021 and 2020, respectively.
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 Group for the three months ended March 31, 2021 and 2020 were \$1,094 and \$1,103, respectively.

(14) Share-based payment

A. For the years ended December 31, 2020 and 2019, the Group's share-based payment arrangements were as follows:

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

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 wasset 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 three months ended March 31, 2021 and 2020, the compensation fees arising from restricted stocks to employees is \$0 and \$744, 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 \$846,321 with a par value of \$10 (in dollars) per share. All proceeds from shares issued have been collected.
B. The shareholders' 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. The Board of Directors at their meeting on August 10, 2020 adopted a resolution to reacquire 23 thousand employee restricted ordinary shares of non-vesting conditions amounting to 230 thousand dollars. The record date for capital decrease was set on August 21, 2020. Relevant regulator's approval has been obtained and related registration processes have been completed.
D. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company's treasury shares are as follows:

		March 31, 2021
Name of company		Number of shares
holding the shares	Reason for reacquisition	(share in thousands) Carrying amount
The Company	To be reissued to employees	2,915	\$ 50,851
		December 31, 2020
Name of company		Number of shares
holding the shares	Reason for reacquisition	(share in thousands) Carrying amount
The Company	To be reissued to employees	2,915	\$ 50,851
		March 31, 2020
Name of company		Number of shares
holding the shares	Reason for reacquisition	(share in thousands)	Carrying amount
The Company	To be reissued to employees	2,812	\$ 49,173

(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 five-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 capitalized 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 April 26, 2021, the Bord of Directors proposed the distribution of cash of \$35,956 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 April 26, 2021. Details are follows:

	Year ended December 31, 2020
		Dividends per share
	Amount	(in dollars)
Legal reserve	\$ 3,266
Cash dividends	29,418	\$ 0.36

On April 26, 2021, the Board of Directors proposed the distribution of cash of \$35,956 from capital surplus. Abovementioned appropriation of earnings and distribution of cash from capital surplus has not been resolved by the shareholders.

(18) Operating revenue

	Three months ended March 31,
	2021	2020
Revenue from contracts with customers	\$ 67,450	\$ 49,274

Disaggregation of revenue from contracts with customers.

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

	Three months ended March 31,
	2021	2020
China	\$ 44,808	\$ 31,888
Taiwan	12,809	7,188
USA	1,483	1,146
Other	8,350	9,052
	\$ 67,450	\$ 49,274

(19) Interest income

	Three months ended March 31,
	2021	2020
Interest income from bank deposits	\$ 42	\$ 943
Interest income from financial assets measured
at amortised cost	177	-
Other interest income	267	8
	\$ 486	\$ 951

(20) Other income

	Three months ended March 31,
	2021	2020
Rent income	\$ 6,361	\$ 6,152
Dividend income	5,636	-
Other income, others	172	102
	\$ 12,169	\$ 6,254

(21) Other gains and losses

	Three months ended March 31,
		2021	2020
Net currency exchange gains	\$	\$ 1,010	2,820
Net loss on financial assets at fair value through profit or loss	(	3,195) (	8,924)
Gains on disposal of property, plant and equipment		-	6
Other losses	(	1,088) (	1,290)
	(\$	3,273) (\$	7,388)
(22) Finance costs

		Three months ended March 31,
	2021	2020
Interest expense	\$ 155	\$	160

(23) Expenses by nature

	Three months ended March 31,
	2021	2020
Changes in finished goods, work-in-process and raw materials inventory	\$ 10,720	\$ 5,161
Employee benefit expense	27,741	26,589
Depreciation charges on property, plant and equipment (including right-of-use assets)	1,381	1,382
Amortisation charges	863	611
Product testing fees	6,207	4,261
Other costs and expenses	8,767	8,317
Operating costs and expenses	\$ 55,679	\$ 46,321

(24) Employee benefit expense

	Three months ended March 31,
	2021	2020
Wages and salaries	\$ 23,040	\$ 22,546
Labour and health insurance fees	2,104	1,887
Pension costs	1,137	1,153
Directors' remuneration	712	284
Other personnel expenses	748	719
	\$ 27,741	\$ 26,589

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 three months ended March 31, 2021 and 2020, employees' compensation was accrued at \$1,994 and \$100, respectively; directors' and supervisors' remuneration was accrued at \$469 and \$24, 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.

Employees' compensation and directors' and supervisors' remuneration of 2020 as resolved by the meeting of the Board of Directors were in agreement with those amounts recognised in the 2020 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:

	Three months ended March 31,
	2021	2020
Current tax:
Current tax on profits for the period	\$ 2,188	\$ 124
Total current tax	2,188	124
Deferred tax:
Origination and reversal of
temporary differences	1,969	2,023
Income tax expense	\$ 4,157	\$ 2,147

B. The Company's income tax returns through 2019 have been assessed and approved by the Tax Authority.

(26) Earnings per share

	Three months ended March 31, 2021
			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	\$	16,841	81,717	\$	0.21
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$	16,841	81,717
Assumed conversion of all dilutive potential ordinary shares
Employees' bonus		-	205
Profit attributable to shareholders
of the parent plus assumed conversion of all dilutive potential ordinary shares	\$	16,841	81,922	\$	0.21

				Three months ended March 31, 2020
				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		\$	464		82,613	\$ 0.01
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent		\$	464		82,613
Assumed conversion of all dilutive
potential ordinary shares
Employees' bonus			-		176
Profit attributable to shareholders
of the parent plus assumed		\$	464		82,789	\$ 0.01
conversion of all dilutive potential
ordinary shares
(26) Changes in liabilities from financing activities
				Three months ended March 31, 2021
						Liabilities from
				Guarantee		financing activities
		Lease liability		deposits received		gross
At January 1	\$	62,500	\$	3,395	\$	65,895
Changes in cash flow from
financing activities	(	387)		-	(	387)
At March 31	\$	62,113	\$	3,395	\$	65,508
				Three months ended March 31, 2020
						Liabilities from
				Guarantee		financing activities
		Lease liability		deposits received		gross
At January 1	\$	64,037	\$	3,303	\$	67,340
Changes in cash flow from
financing activities	(	384)		-	(	384)
At March 31	\$	63,653	\$	3,303	\$	66,956
7. RELATED PARTY TRANSACTIONS
Key management compensation

				Three months ended March 31,
				2021		2020
Salaries and other short-term employee benefits				\$	3,290	\$ 2,197

8. PLEDGED ASSETS

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

			Book value
Pledged asset	March 31, 2021		December 31, 2020	March 31, 2020	Purpose
Time deposits(shown as other non-current assets) Guarantee deposits paid(shown as	\$	-	\$ 2,752	\$ 2,752	Performance guarantee Performance
other non-current assets)	\$	54 54	\$ -	\$ -	guarantee
			2,752	2,752

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

12. OTHERS

(1) Capital risk management

The Group's objectives when managing capital are to safeguard the Group'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 Group 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

	March 31,	December 31,	March 31,
	2021	2020		2020
Financial assets
Financial assets measured at fair value
through profit or loss
Financial assets mandatorily measured
at fair value through profit or loss	\$ 62,509	\$ 65,704	\$	78,671
Financial assets at amortised cost
Cash and cash equivalents	\$ 615,292	\$ 680,171	\$	696,139
Financial assets at amortised cost	91,483	-		-
Notes receivable	-	59		-
Accounts receivable	35,548	32,612		34,366
Other accounts receivable	716	499		5,964
Guarantee deposits paid	156	156		174
Other non-current assets	-	2,752		2,752
	\$ 743,195	\$ 716,249	\$	739,395
Financial liabilities
Financial liabilities at amortized cost
Notes payable	\$ 2,944	\$ 2,223	\$	1,691
Accounts payable	4,749	4,892		8,019
Other accounts payable	24,245	26,155		22,633
Guarantee deposits received	3,395	3,395		3,303
	\$ 35,333	\$ 36,665	\$	35,646
Lease liability	\$ 62,113	\$ 62,500	\$	63,653

B. Financial risk management policies

(a) The Group'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 treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group'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 Group'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:

				March 31, 2021
	Foreign				Sensitivity analysis
	currency						Effect on other
	amount		Book value	Degree of	Effect on		comprehensive
	(In thousands)	Exchange rate	(NTD)	variation	profit or loss		income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD	\$ 14,460	28.54	\$ 412,688	1%	\$ 4,127		\$ -
RMB:NTD	14	4.34	61	1%		1	-
HKD:NTD	2,326	3.67	8,536	1%	85		-
Financial liabilities
Monetary items
USD:NTD	\$ 117	28.54	\$ 3,339	1%	\$ 33		\$ -
				December 31, 2020
	Foreign				Sensitivity analysis
	currency						Effect on other
	amount		Book value	Degree of	Effect on		comprehensive
	(In thousands)	Exchange rate	(NTD)	variation	profit or loss		income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD	\$ 14,049	28.48	\$ 400,116	1%	\$ 4,001	\$	-
RMB:NTD	14	4.38	61	1%	1		-
HKD:NTD	2,326	3.67	8,536	1%	85		-
Financial liabilities
Monetary items
USD:NTD	\$ 170	28.48	\$ 4,842	1%	\$ 48	\$	-

	March 31, 2020
	Foreign				Sensitivity analysis
	currency amount (In thousands)	Exchange rate	Book value (NTD)	Degree of variation	Effect on profit or loss	Effect on other comprehensive income
(Foreign currency:
functional currency)
Financial assets Monetary items
USD:NTD	\$ 9,374	30.23	\$ 283,376	1%	\$ 2,834	\$ -
RMB:NTD	2,145	4.26	9,138	1%	91	-
HKD:NTD	2,325	3.90	9,068	1%	91	-
Financial liabilities Monetary items
USD:NTD	\$ 241	30.23	\$ 7,285	1%	\$ 73	\$ -

ii. The total exchange loss including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2021 and 2020 amounted to \$1,010 and \$2,820, respectively.

Price risk

i. The Group'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 Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group'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 three months ended March 31, 2021 and 2020, other components of equity would have increased/decreased by \$625 and \$787, respectively.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group 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 Group manages their credit risk taking into consideration the entire group's concern. For banks and financial institutions, only independent rated parties with a minimum rating are accepted. According to the Group's credit policy, each local entity in the Group is responsible for managing and analyzing 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 utilization of

credit limits is regularly monitored.

iii. The Group adopts assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
iv. The Group classifies customers' accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.
v. The Group 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 March 31, 2021, December 31, 2020 and March 31, 2020, the provision matrix are as follows:

	Group A	Group B	Total
March 31, 2021
Expected loss rate	0.03%	3.80%~8.77%
Total book value	\$ 24,238	\$ 12,911	\$ 37,149
Loss allowance	\$ 7	\$ 1,594	\$ 1,601
	Group A	Group B	Total
December 31, 2020
Expected loss rate	0.03%	4.09%~4.14%
Total book value	\$ 24,486	\$ 9,727	\$ 34,213
Loss allowance	\$ 7	\$ 1,594	\$ 1,601
	Group A	Group B	Total
March 31, 2020
Expected loss rate	0.03%	3.71%~89.04%
Total book value	\$ 19,455	\$ 16,012	\$ 35,467
Loss allowance	\$ 6	\$ 1,095	\$ 1,101

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

	Three months ended March 31,
	2021	2020
At January 1	\$ 1,601	\$ 1,101
Provision for impairment	-	-
Reversal of impairment loss	-	-
At March 31	\$ 1,601	\$ 1,101

According to the above method, the allowance loss on the account as of March 31, 2021, December 31, 2020 and March 31, 2020, should be \$493, \$410 and \$1,358, respectively, which is not significantly different from the amount of allowance loss on the current account. For the three months ended March 31, 2021 and 2020, there was no impairment loss arising from customers' contracts.

(c) Liquidity risk
i Cash flow forecasting is performed by Group treasury. Group treasury monitors rolling forecasts of the Group'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 Group'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. Except for notes payable, accounts payable and other payables, the amount of undiscounted contractual cash flows is approximately at its carrying amount and is due within one year. The amount of undiscounted contractual cash flows of the remaining financial liabilities is as follows:

Non-derivative financial liabilities:	Less			Between		Between	Over
March 31, 2021		than 1 year		1 and 2 years		2 and 5 years		5 years
Lease liability	\$	2,138	\$	2,138	\$	6,415	\$	62,016
Other financial liabilities (shown as other non-current liabilities)		2,483		-		912		-
Non-derivative financial liabilities:		Less	Between		Between		Over
December 31, 2020		than 1 year		1 and 2 years		2 and 5 years		5 years
Lease liability	\$	2,138	\$	2,138	\$	6,415	\$	62,551
Other financial liabilities		1,583		900		912		-
(shown as other non-current
liabilities)

Non-derivative financial liabilities:		Less	Between		Between	Over
March 31, 2020	than 1 year		1 and 2 years	2 and 5 years		5 years
Lease liability	\$	2,138	\$ 2,138	\$	6,415	\$	64,154
Other financial liabilities (shown as other non-current liabilities)		838	948		1,517		-

(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 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 Group'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(8).
C. Financial instruments not measured at fair value

The Group's financial instruments not measured at fair value including cash and cash equivalents, notes and accounts receivable, other receivables, Guarantee deposits paid, notes and accounts payable, other payable and lease liability(includes current and non-current) approximate to their fair values.

D. 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 natures of the assets and liabilities is as follows:

March 31, 2021	Level 1	Level 2		Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
Equity securities	\$ 26,006	\$	-	\$ 36,503	\$ 62,509

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	\$	26,436	\$	-	\$ 39,268	\$ 65,704
March 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	\$	50,149	\$	-	\$ 28,522	\$ 78,671

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

i. The instruments the Group 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 consolidated 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 Group'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 Group'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 Group 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 Group's credit quality.
D. For the three months ended March 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.
E. The following chart is the movement of Level 3 for the three months ended March 31, 2021 and 2020:

		Three months ended March 31,
		2021	2020 Non-derivative equity instrument
		Non-derivative equity instrument
At January 1	\$	39,268	\$	30,552
Losses recognised in profit or loss
Recorded as non-operating income and expenses	(	2,765)	(	2,030)
At March 31	\$	36,503	\$	28,522

F. For the three months ended March 31, 2021 and 2020, 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	Valuation	Significant	Range	Relationship of
	March 31, 2021	technique	unobservable input	(weighted average)	inputs to fair value
Non-derivative equity instrument:
Unlisted shares	\$ 36,503	Net asset value	Not applicable -	Not applicable
	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	Valuation	Significant	Range	Relationship of
	March 31, 2020	technique	unobservable input	(weighted average)	inputs to fair value
Non-derivative equity instrument:
Unlisted shares	\$ 28,522	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 NT\$300 million or 20% of the Company's paid-in capital: None.
E. Acquisition of real estate reaching NT\$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT\$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT\$100 million or 20% of paidin capital or more: None.
H. Receivables from related parties reaching NT\$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.

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry and is mainly engaged in distribution of communications Network ICs or related services. The Chief Operating Decision-Maker who allocates resources and assesses performance of the Group as a whole has identified that the Group has only one reportable operating segment.

(2) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Three months ended March 31,
	2021	2020
\$	67,450	\$	49,274
	2,983		2,723
	4,157		2,147
	16,841		463
	1,179,927		1,204,670
	142		182
	119,120		118,268

(3) Reconciliation for segment income (loss)

The revenue from external customers, profit or loss, assets and liabilities reported to the Chief Operating Decision-Maker is measured in manner consistent with that financial statements. Thus, reconciliation is not required.

DAVICOM Semiconductor, Inc. and subsidiaries

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

March 31, 2021

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

	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	\$ 36,503	2.00%	\$ 36,503
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	26,006	-	26,006

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. and subsidiaries

Information on investees(not including investees in Mainland China)

March 31, 2021

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

				Initial investment amount		Shares held as at March 31, 2021		Net profit (loss) of the	Investment income(loss) recognised by the Company
			Main business	Balance	Balance				investee for the three months	for the three months ended
Investor The Company	Investee TSCC Inc.	Location Samoa	activities General	as at March 31, 2021 \$ 143,224	as at December 31, 2020 \$ 143,224	Number of shares 4,400,000	Ownership (%) 100	Book value \$ 92,829	ended March 31, 2021 \$ 175	March 31, 2021 \$ 175	Footnote -
			investment
The Company	Davicom Investment Inc.	Taiwan	General investment	222,000	222,000	21,200,000	100	209,937	( 222)	( 222)	-
The Company	Medicom Corp.	Taiwan	Designing and	62,036	62,036	5,000,000	100	44,591	( 213)	( 213)	-
			manufacturing of IC
The Company	Aidialink Corp.	Taiwan	Wireless	81,070	81,070	8,000,000	100	77,355	( 809)	( 809)	-
			communication machinery and
			equipment manufacturing
TSCC Inc.	Jubilink Ltd.	British	industry General		- -	22,775,207	100	-	-		- -
		Virgin Islands	investment

DAVICOM Semiconductor, Inc. and subsidiaries

Major shareholders information

March 31, 2021

Table 3

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

As of March 31, 2021, the company has no shareholders holding more than 5% of the shares.

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DAVICOM — Audit Report / Information 2021

52295_rns_2021-12-16_a3c6139f-25ae-4464-9fdc-55f0d7002039.pdf

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REVIEW REPORT MARCH 31, 2021 AND 2021

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Expressed in thousands of New Taiwan dollars, except earnings per share) (UNAUDITED)

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of New Taiwan dollars)

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES

DAVICOM SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

1. HISTORY AND ORGANISATION

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Basis of preparation

B. Subsidiaries included in the consolidated financial statements:

(9) Accounts and notes receivable

(16) Investment property

(18) Impairment of non-financial assets

(20) Employee benefit

(22) Income tax

(23) Share capital

(24) Dividends

(25) Revenue recognition

(26) Government grants

(27) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(5) Inventories

(6) Property, plant and equipment

(7) Leasing arrangements-lessee

(9) Investment property

(11) Other payables

(13) Pensions

(14) Share-based payment

(16) Capital surplus

(17) Retained earnings

(19) Interest income

(21) Other gains and losses

(23) Expenses by nature

(24) Employee benefit expense

(25) Income tax

(26) Earnings per share

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS None.

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT SUBSEQUENT EVENTS

12. OTHERS

(1) Capital risk management

(2) Financial instruments

B. Financial risk management policies

Foreign exchange risk

Price risk

(3) Fair value information

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

14. SEGMENT INFORMATION

(2) Segment information

(3) Reconciliation for segment income (loss)

DAVICOM Semiconductor, Inc. and subsidiaries

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

March 31, 2021

DAVICOM Semiconductor, Inc. and subsidiaries

Information on investees(not including investees in Mainland China)

March 31, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

DAVICOM Semiconductor, Inc. and subsidiaries

Major shareholders information

More from DAVICOM

DAVICOM Audit Report / Information 2021