ESMT - Annual Report 2021 | FinancialReports.eu

Stock Code: 3006

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Elite Semiconductor ESMT Microelectronics Technology Inc.

Annual Report 2020

(English Translation of a Report Originally Issued in Chinese)

Published on May 22, 2021

Annual Report is available at http://mops.twse.com.tw/

http://www.esmt.com.tw

Spokesperson

Name: Hong-Gee Wu Title: Special Assistant, President's Office Tel: 886-3-578-1970 Email: [email protected]

Deputy Spokesperson Name: Hsing-Chu Chang Title: Senior Manager Tel: 886-3-578-1970 Email: [email protected]

Address and telephone number of the Company

No. 23 Industrial East Fourth Road, Science Park, Hsinchu City Tel: 886-3-578-1970 Website: http://www.esmt.com.tw

Stock Transfer Agency

Registrar Department, Capital Securities Corp.

B2, No. 97, Section 2, Dunhua South Road, Da’an District, Taipei City

Tel: 886-2-2702-3999

Address: http://www.capital.com.tw

Certified Public Accountant

Name of CPA firm: PricewaterhouseCoopers Taiwan Names of the CPA: Ya-Hui Cheng, Tien-I Li 5/F, No. 2 Industrial East Third Road, Science Park, Hsinchu City Tel: 886-3-578-0205

Website: http://www.pwc.tw

The Company does not issue any overseas securities.

	Contents
	Table of Contents	Page
Letter to Shareholders -------------------------------------------------------------		1
Company Profile
I.	Date of Founding -----------------------------------------------------------------------------	6
II.	Corporate History-----------------------------------------------------------------------------	6
Corporate Governance Report
I.	Corporate Organization ----------------------------------------------------------------------	7
II.	Directors, Supervisors, President, Vice President, Assistant Vice Presidents and
	Managers of Departments and Divisions -------------------------------------------------	10
III.	Implementation of Corporate Governance -----------------------------------------------	21
IV.	Information of Audit Fees-------------------------------------------------------------------	58
V.	Changes of CPAs -----------------------------------------------------------------------------	58
VI.	Company Chairperson, President, or Managerial Officer in Charge of Finance
	or Accounting Matters in the Most Recent Fiscal Year Holding a Position at the
	Company's CPA Accounting Firm or at an Affiliated Enterprise of Such	59
	Accounting Firm ------------------------------------------------------------------------------
VII.	Equity transfer or changes to equity pledge of Directors, Supervisors,
	managerial officers, or shareholders holding more than 10% of shares, in the
	past financial year to the publication date of the Annual Report ---------------------	59
VIII.Relationship information between the 10 largest shareholders -----------------------		60
IX.	The number of shares held by the Company, its Directors, Supervisors,
	managerial officers, and businesses either directly or indirectly controlled by
	the Company as a result of the investment, and the consolidated percentage of	61
	shareholding -----------------------------------------------------------------------------------
Funding Overview
I.	Capital & Shares ------------------------------------------------------------------------------	62
II.	The execution of corporate bonds, preferred shares, global depository receipts,
	and employee stock option certificates, any merger and acquisition activities
	(including mergers, acquisitions, and demergers), and the status of	72
	implementation of capital utilization plans ----------------------------------------------
Business Operations Overview
I.	Business Activities----------------------------------------------------------------------------	75
II.	Analysis of the market as well as production and marketing situation--------------	80
III.	Information on Employees ------------------------------------------------------------------	86

Page

IV.	Disbursements for Environmental Protection -------------------------------------------	86
V.	Labor Relations --------------------------------------------------------------------------------	90
VI.	Important Contracts ---------------------------------------------------------------------------	94
Financial Overview
I.	Condensed Balance Sheet and Income Statement of the Past Five Financial Years ---------------------------------------------------------------------------------------------	95
II.	Financial Analysis for the Past Five Financial Years -----------------------------------	99
III.	The Auditing Committee's Auditing Report on the Financial Report for the Most Recent Year -----------------------------------------------------------------------------------	103
IV.	Financial Statements of Last Financial Year ---------------------------------------------	104
V.	Audited and Certified Company Financial Statements of Last Financial Year ----	179
VI.	The impact of the Financial Difficulties of the Company and its Affiliated
	Companies for the Most Recent Year and as of the Publication Date of the Annual Report on the Company's Financial Condition -------------------------------	248
Review	of Financial Position, Operating Results, and Risk Management
and Risk Assessment
I.	Financial Status --------------------------------------------------------------------------------	249
II.	Financial Performance ------------------------------------------------------------------------	250
III.	Cashflow ----------------------------------------------------------------------------------------	251
IV.	The Impact of Material Capital Expenditures in the Last Financial Year in Financing and Operating Activities --------------------------------------------------------	252
V.	Investment Policy in the Last Financial Year, the Main Reasons for the Profits
	or Losses, Improvement Plans and the Investment Plans for the Coming Year ----	252
VI.	Analysis and the Evaluation of Risk Management --------------------------------------	252
VII.	Other Important Matters ----------------------------------------------------------------------	256
Special	Disclosures
I.	Information on Affiliated Companies ------------------------------------------------------	262
II.	Private Placement of Securities of the Last Financial Year up to the Publication Date of this Annual Report-------------------------------------------------------------------	268
III.	Holding or Disposal of the Company's Shares by the Company's Subsidiaries in the Last Financial Year up to the Date of Publication of this Report -----------------	268
IV.	Other Supplementary Information----------------------------------------------------------	268
V.	Events of Significant Influence on Shareholders’ Equity or Prices of Securities
	as stipulated in Subparagraph 2, Paragraph 2 of Article 36 of the Securities and Exchange Act -----------------------------------------------------------------------------------	268

Letter to the Shareholders

Dear Shareholders,

Despite the significant impact of the COVID-19 pandemic on the global economy in 2020, the overall semiconductor market, benefiting from demand for cloud computing, telework, and learning devices, performed better than expected. According to IDC's Worldwide Semiconductor Applications Forecaster, global semiconductor revenue reached US$442 billion in 2020, an increase of 5.4% from 2019. After underperforming in 2019, the DRAM and NAND markets also recovered in 2020, growing by 4% and 32.9%, respectively. IDC forecasts that the semiconductor market will reach US$476 billion in 2021, growing at an annual rate of 7.7%, as vaccines become prevalent and the economy begins to open up and recover. Looking ahead to 2021, we surmise that the speed of the market recovery will depend on how quickly countries can stabilize the global economy with COVID-19 prevention measures and government stimulus programs, and how much consumer confidence rises and changes with the prevalence of the vaccines. Specific markets, such as 5G cellphones, cloud computing, Smart Edge and wafer foundry, remain in the growth mode, which is critical to the recovery of the semiconductor industry this year. Semiconductor technology plays a key role in the recovery of each industry.

Computing systems, such as PCs and server semiconductors, reached US$152 billion with an annual increase of 10.9% or so in 2020. Working and studying from home boosted purchasing power for PCs in both the corporate and consumer markets. In addition, the decentralization of employees and students from centralized locations has forced cloud service providers, telecoms and corporate IT departments to invest more aggressively in computing infrastructure. IDC forecasts that computing system semiconductor revenue will grow 6.3% to US$161 billion in 2021.

With the unequivocally accelerated growth of 5G cellphones, smartphones were the second most significant demand driver for semiconductor development in 2020. Although cellphone shipments declined by more than 5% in 2020, cellphone semiconductor revenue grew by approximately 3% as the market shifted to higher ASP 5G cellphones, requiring more memory, sensors and RF support for more frequency bands. The year 2021 will be a particularly important for semiconductor vendors, for 5G cellphones will account for 30% of all cellphone shipments and semiconductors for 5G cellphones will account for nearly 54% of the revenue. IDC forecasts that cellphone semiconductor revenue will grow 11.4% to US$128 billion by the end of 2021.

In the automotive and industrial semiconductor markets, automotive OEMs experienced manufacturing disruptions due to production allocations from some semiconductor foundries and shortages of semiconductor capacity, despite the sales growth in the third and fourth quarters of 2020. In 2020, automotive sales, including light commercial vehicles, decline by 14.5% to 71 million units, resulting in an 8.4% decrease in automotive semiconductor revenue to US$37 billion. With the massive demand for semiconductor components from the development of electric vehicles in 2021, non-internal storage automotive semiconductor revenue will grow by 12.6%, rendering the market development worthy of anticipation.

The Memory Business Division expects the market to revive in the first half of 2021, especially for DRAM. The main reason is that the demand for mobile devices and server applications is strong, and that the major memory companies are bullish on the market boom in 2021. Benefiting from the contract price increase in mainstream memory, the price of niche DRAM increased up to 25-30% in January 2021. With the increasing adoption of solid-state drives (SSDs), coupled with the growth of 5G cellphones, the global NAND market will continue to grow in 2021 and in turn spur the demand for and the price of SLC NAND.

~1~

Driven by the multi-fold growth of TWS market demand, NOR Flash has come in the limelight. To support Bluetooth 5.0 and active noise reduction, each TWS must be equipped with NOR Flash to assist computing. With the launch of new TWS products by major brands, the quantity and capacity of accompanying NOR Flash will multiply and the market size will grow year by year. It is estimated that the total volume of TWS shipments will have reached 300 million units by 2022. In addition, AMOLED panels and TDDI chips also require NOR Flash. Specifically, AMOLED panels need to be equipped with 4-32Mb NOR Flash for optical compensation, while TDDI chips require external NOR Flash as an aid for parameter adjustment. As the trend in the terminal market continues, it is estimated that the penetration rate of AMOLED panels and TDDI chips in cellphones is expected to exceed 50% in 2022. However, the recent 50/60nm capacity in NOR Flash foundries is already insufficient, and therefore NOR Flash will be in tight supply in the first half of 2021.

The Company has been engaged in niche memory, including niche DRAM, NOR Flash and SLC NAND. Despite the adverse impact of the COVID-19 pandemic in 2020, the Company's revenue reached a record high of $15.267 billion (consolidated revenue), benefiting from the demand of the stay-at-home economy as a result of the pandemic. The niche memory market will perform well in 2021 thanks to the gradual recovery of the memory market and the demand of the stay-at-home economy, and therefore it will be a year of increased shipments and revenue growth.

As regards power IC and analog IC products, the product line is becoming more and more comprehensive after years of hard work and cultivation. The products have been verified by large customers, and in particular, the market share of audio amplifiers in the TV market has been on the rise. Meanwhile, benefiting from the demand for audio-visual devices in the stay-at-home economy, the smart speaker market expansion has achieved very good results, with related revenue growing by approximately 11.9%. Growth is expected to continue in the TV and smart speaker markets in 2021.

The Company's revenue for 2020 was NT$15,267,139 thousand, an increase of 27.40% from the revenue of NT$11,983,479 thousand in 2019, with an annual gross margin of 17.35% and a net profit before tax of NT$1,253,700 thousand.

I. Operating Results for 2020 (adopted from Consolidated Financial Statements information) 1. Comparison of the operating condition in 2019 and 2018 is as follows:

Unit: NT$1,000

	2020	2019	Increase (Decrease)	Increase (Decrease)%
Revenue	15,267,139	11,983,479	3,283,660	27.40
Gross Profit	2,649,042	1,802,208	846,834	46.99
OperatingExpenses	(1,494,257)	(1,227,265)	(266,992)	(21.75%)
Profit (Loss) from Operations	1,154,785	574,943	579,842	100.85
Net Non-operating Revenue	98,915	1,237	97,678	7,896.36
Net Profit (Loss) Before Tax	1,253,700	576,180	677,520	117.59
Net Profit (Loss) After Tax	1,084,441	505,611	578,830	114.48

~2~

Financial Revenue and Expenses and Profitability Analysis
(1) Financial Revenue and Expenses

			Unit: NT$1,000	Unit: NT$1,000
Item	2020	2019	Increase (Decrease)	Increase (Decrease)%
Cashflow from OperatingActivities	453,348	1,849,420	( 1,396,072)	( 75.49%)
Cash flow from InvestingActivities	( 504,290)	( 324,068)	( 180,222)	( 55.61%)
Cash flow from FinancingActivities	891,856	( 642,177)	1,534,033	238.88%

(2) Profitability

rofitability	rofitability
Item		2020	2019
Return on Assets (%)		9.32	4.94
Return on Equity (%)		14.02	6.93
Percentage of Paid-in Capital (%)	Operating Profit	40.41	20.12
	Net Profit before Tax	43.87	20.16
Net Profit Margin (%)		7.10	4.22
Earnings Per Share (NT$)		3.85	1.78

  - (3) Research and Development: The research and development expense for 2020 was NT$ 940,851 thousand, accounting for approximately 6.16% of the revenue.

II. Summary of 2021 Business Plan
Business Strategy
- (1) Recruit more R&D personnel to improve R&D strength, and increasing R&D equipment expenditure to improve R&D efficiency.
- (2) Expand 25nm low-density niche DRAM memory product lines, e.g. DDR4, DDR3, LP DDR3, DDR2, LP DDR2, etc.
- (3) Accelerate the introduction of 21nm DRAM product development to maintain the competitive advantage of the cost structure.
- (4) Accelerate mass production of 28nm NAND products.
- (5) Accelerate the development and expansion of MCP (NAND+LP DRAM) and eMCP (controller + NAND + LP DRAM) product lines.
- (6) Fully expand the 50nm NOR Flash product line and business.
- (7) Research and develop niche memory for automotive applications.
- (8) Accelerate the development of power IC and analog IC product lines.
- (9) Expand the Company's product lines, such as IoT IC, Motor Drive IC, Sensor IC, etc.
- (10) Maintain a stable financial structure.

~3~

Sales Forecast and its Basis

Benefiting from the demand of the stay-at-home economy, the PC market, which had been in recession for many years, reported a short supply in 2020 and is expected to continue to grow in 2021. Although the smartphone market declined owing to the impact of COVID-19, the vaccines have started to be administered and market confidence will gradually recover. Moreover, as 5G cellphones become more prevalent, the memory capacity of PCs and smartphones will increase significantly in order to improve their performance. In terms of 3D NAND process conversion, yields are gradually stabilizing, supply is returning to normal, and prices are starting to slide. However, the memory capacity of SSDs and cellphones is expected to increase significantly and take up most of the production capacity. In SLC NAND, therefore, prices are starting to rebound as a result of the dramatic increase in demand but limited production capacity. In terms of NOR Flash, although the production capacity in Mainland China is opening up bit by bit, the demand at the application end is increasing, resulting in price rebound. Revenue growth is expected to continue in 2021.

The Company's revenue reached a record high in 2020, benefiting from the demand of the stay-at-home economy, coupled with the fact that Samsung and Hynix had both shifted production capacity from memory to CIS, resulting in a rare boom in the niche memory market, where demand far exceeded supply. Both revenue and profit are expected to continue to grow in 2021.

Important Production and Sales Policies
- (1) Strengthen the partnerships with wafer suppliers and post-production outsourcers to maintain stable production capacity and supply.
- (2) Strengthen the business of KDG, NOR, NAND, and MCP.
- (3) Provide better cost structure and quality than other companies and expand the market share of domestic and foreign markets.
- (4) Strengthen the interactive relationship with distributors and expand the areas of application of new products to increase business sales.
III. Future Development Strategies of the Company

Although global suppliers of DRAM and NAND Flash tend to consolidate, unlike the bloodshed price competition in the past, China has vigorously supported the semiconductor industry in rent years, especially the DRAM and NAND memory industries, and has invested in great variables to the supply of memory in the future. The new memory Fab will be completed and mass-produced after 2020. By then, the memory industry will start a new round of competition and elimination and this will affect the niche memory market. In this macro-environment, improve the technical strength, accelerate new product development, and continue to reduce costs are the only ways to cope with the future competition.

As the application of low-density niche memory is becoming wider, it is an indispensable electronic component for technology products. It is expected that the global demand for niche memory will continue to grow in 2021. The Company will continue to increase the development of new products in response to market demand, in addition to focusing on high-integration, high-speed and low-power memory IC products, KGD, NOR, NAND Flash, and MCP businesses, and accelerate research and development of analog IC, analog-digital mixed IC product line to enhance the competitiveness and meet the various needs of the customers. The Company will actively strengthen the research and development of new products to improve its competitiveness and have a greater foundation in future competition to maximize profits for the Company.

~4~

IV. Impact on the Company Due to Competition, Governmental Regulations, and Overall Operation Environment

The memory market has been reviving since 2020. The demand for semiconductor components in the stay-at-home economy has exceeded expectations, but the increase in production capacity is limited, coupled with Samsung and Hynix both shifting memory capacity to CIS production, so the market price will go up gradually in 2021. Since the outbreak of COVID-19, city closures have continued to expand worldwide, generating demand for cloud computing and remote work and learning devices and resulting in better than expected overall semiconductor market performance. This, coupled with the fact that many countries have begun administering vaccines, will lead to a gradual recovery in consumer confidence. Market research firms now expect smartphone sales to pick up and semiconductor components for cellphones to continue to grow in 2021, which will trigger a severe shortage of foundry capacity and make price increases inevitable.

The COVID-19 pandemic has prompted demand in the stay-at-home economy. The shortage of capacity, materials and labor has been epidemic in the market since the second half of 2020 and is expected to continue in 2021. The trend of upstream original manufacturer-led price increases is still clear, and ensuring production capacity is the paramount issue in 2021. The industry still generally expects price increases in DRAM, NOR and SLC NAND Flash to remain unchanged whereas the impact of geopolitical and economic uncertainties, such as the US-China trade war, is likely to continue.

The Company's current operations are in compliance with the relevant existing laws and regulations of domestic and foreign reinvestment countries. The management team will also continue to pay close attention to any changes in policies and laws that may affect the company's finances and business, as a reference for operations. In addition, the Company also cooperates with professional organizations to pays close attention to the development of relevant laws and regulations, and immediately adjusts its strategies to meet the needs of operations. Therefore, the Company can timely grasp and respond to important domestic and foreign policy and legal changes.

Chairman of the Board:: Hsing-Hai Chen

President: Ming-Chien Chang

~5~

Company Profile

I.
Date of Founding: June 2, 1998.

II. Corporate History: Elite Semiconductor Microelectronics Technology Inc. (hereinafter “the Company”) was established on June 2, 1998 and was listed on the Taiwan Stock Exchange since March 4, 2002. As of December 31, 2020, the Company's authorized capital is NT$ 3,500,000,000 and the paid-in capital is NT$ 2,857,589,250. The main business of the Company includes research and development, production and sales of DRAM/SRAM, Flash Memory, Analog IC, Analog-Digital Mixed IC, and the technical services related to product design and research and development of the Company. With the engineering technology that has been focusing on DRAM/Flash Memory for many years, the Company has launched the Multi-Chip Package (MCP) products that are suitable for various mobile communication systems. To accelerate the expansion of the analog product business, the Company completed the consolidation and merger of Advanic Technologies, Inc. in December 2005 and established the Analog Product Department in August, 2008 to extend the product line to the research and development of analog IC, and analog-digital mixed IC. The Company has completed the consolidation by merger with Eon Silicon Devices, Inc in June, 2016 in order to obtain the synergy effect of the strategic collaboration for the product development resources of Flash Memory. In addition, the main spinout companies indirectly held by the Company are 3R Semiconductor Technology Inc., Canyon Semiconductor Inc., and Elite Silicon Technology Inc., which are engaged in research and development of Power IC and SoC IC, etc. respectively.

~6~

Corporate Governance Report

I. Organizational System

(I) Organizational structure

Product Research and Development Sales and Marketing Department Audit Committee Salary and Rem uneration Committee Nominating Committee	Product Research and Development Sales and Marketing Department Audit Committee Salary and Rem uneration Committee Nominating Committee	Product Research and Development Sales and Marketing Department Audit Committee Salary and Rem uneration Committee Nominating Committee	Product Research and Development Sales and Marketing Department Audit Committee Salary and Rem uneration Committee Nominating Committee	Board of Directors Auditing Division Legal and Intellectual Property Division Information Technology Division Chairm an of the Board/P resident Chairm an of the Board/P resident's Office Annual Shareholders' Meeting Process Components Division Packaging Engineering Division Second Business Unit Business Development Unit Quality Assurance Division Outsourcing and Materials Management Division Engineering Development Operational Engineering Department Finance Division Administration Division Quality System Management Department	Board of Directors Auditing Division Legal and Intellectual Property Division Information Technology Division Chairm an of the Board/P resident Chairm an of the Board/P resident's Office Annual Shareholders' Meeting Process Components Division Packaging Engineering Division Second Business Unit Business Development Unit Quality Assurance Division Outsourcing and Materials Management Division Engineering Development Operational Engineering Department Finance Division Administration Division Quality System Management Department	Board of Directors Auditing Division Legal and Intellectual Property Division Information Technology Division Chairm an of the Board/P resident Chairm an of the Board/P resident's Office Annual Shareholders' Meeting Process Components Division Packaging Engineering Division Second Business Unit Business Development Unit Quality Assurance Division Outsourcing and Materials Management Division Engineering Development Operational Engineering Department Finance Division Administration Division Quality System Management Department



				Engineering Development

Design Division/Layout Engineering Division	Product Research and Development Department	Testing Division	Product Engineering Division	Process Components Division	Packaging Engineering Division	Outsourcing and Materials Management Division

~7~

(II) Major Department Functions

Major Departments	Major Responsibilities and Functions of the Departments
Chairman of the Board/President's Office	Company's Project Promotion/ Coordination and Other Related Operations.
Auditing Division	Establishment, operation, audit and reivew of various internal control systems, operations and management regulations.
Design Division/ Layout Engineering Division	Responsible for circuit design, simulation, layout, detection of memory IC products and assistance in mass production product issue analysis and necessaryconsultation.
Product Research and Development Department	Responsible for memory IC product specification verification, failure mode analysis, mass production condition formulation, yield improvement, new process development and analysis, product practical application verification, and assisting customers to solve product applicationproblems.
Testing Division	Responsible for the establishment and maintenance of memory IC product test programs, calibration of test equipment, evaluation of test outsourcing testers, automatic analysis of product engineering data and evaluation of reliability evaluation of new needle test boards, and verification of actual product application and assisting customers to solve product application problems.
Sales and Marketing Department	Responsible for memory IC product marketing strategy, product sales, customer service and assisting in the promotion of business and new products, new technology markets, specification evaluation, formulation of new product specification, handling of customer complaints, return analysis, product information collection, mass production specification modification, etc.
Business Development Department	Strategic evaluation and development of various new product businesses.
Product Engineering Division/ Packaging Engineering Division	Responsible for engineering evaluation of new product development, packaging production line development, CP/FT test production line development, production line abnormal analysis of ramping, process flow, countermeasure formulation, andpromotion of execution, etc.
Process Components Division	Responsible for memory IC wafer production plan management, process technology definition, process design criteria verification, SPICE MODEL for product design, component process characteristics analysis, and mask makingtape outprocess management,etc.
Outsourcing and Materials Management Division	Responsible for memory IC mass production plan, outsourced production strategy, production plan, materials, warehouse management, bonded and import and export operations, etc.
QualityAssurance	Responsible forproductqualityinspection, qualityassessment and regular

~8~

Major Departments	Major Responsibilities and Functions of the Departments
Division	audit of outsourcers, handling of customer complaints, return analysis, improve countermeasure requirements and effectiveness tracking.
Finance Division	The Company's financial management, accounting, budget management, shareholdingaffairs,etc.
Administration Division	Responsible for Company-wide personnel, payroll, education and training, labor laws, general affairs, factory affairs, labor safety and health, transportation, transactionalprocurement, etc.
Quality and System Management Department	Responsibile in assisting in the establishment and maintenance of Company-wide quality/environmental system operation and audits, outsourcer’s quality system assessment, implementation of control operations such as the establishment, modification, and issuance of documentation, and establishment and maintenance of measurement equipment verification systems
Legal and Intellectual PropertyDivision	Responsible for the Company's legal affairs, patent/trademark applications, etc.
Information Technology Division	Management and maintenance of the Company's OA, MIS system, network and other information related systems.
Second Business Unit	Responsible for the research and development, production and sales of analog, analogand digital mixed-signal ICproducts, etc.
Business Development Unit	Responsible for the strategic evaluation and development of new products and business.

~9~

II. Information of the Company's Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and the Heads of all the Company's Departments and Divisions
(I) Information of Directors and Supervisors
1. Directors and Supervisors

Record date: April 18, 2021

Title	Name	Nationality/Place of Registration	Gender	Date Elected	Te rm (Yea rs)	Date First Elected	Shares Held when Elected	Shares Held when Elected	Shares Currenly Held	Shares Currenly Held	Shares Held by Spouse and Minor Children	Shares Held by Spouse and Minor Children	Shares Held in the Name of Othe r Person(s)	Shares Held in the Name of Othe r Person(s)	Prima ry Professional or Academi c Experience	Position(s) Concurrently Held at the Company and Other Companies	Other Executives, Directors, or Supervisors who are spouses or within the second degree of kinship.	Other Executives, Directors, or Supervisors who are spouses or within the second degree of kinship.	Other Executives, Directors, or Supervisors who are spouses or within the second degree of kinship.	Rema rks
							Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage			Title	Name	Relati onshi p
Chairman of the Board	Hsing-Hai Chen	Republic of China	Male	2019.6.13	3 years	1999.7.06	8,411,629	3.08%	8,411,629	2.94%	1,370,927	0.48%	-	-	Master of Applied Physics, National Tsing Hua University	Note 1	Nil	Nil	Nil	Nil
Director	Ming-Chien Chang	Republic of China	Male	2019.6.13	3 years	1998.5.20	5,523,825	2.02%	5,523,825	1.93%	1,618,785	0.57%	-	-	Master D egree from the Institute of Electronics, National Chiao Tung University	Note 1	Nil	Nil	Nil	Nil
Director	Chih-Hong Ho	Republic of China	Male	2019.6.13	3 years	2004.6.25	628,172	0.19%	628,172	0.22%	-	-	-	-	PhD in Mechanical Engineering, North Carolina State University, USA	Note 1	Nil	Nil	Nil	Nil
Director	Yeong-Wen Daih	Republic of China	Male	2019.6.13	3 years	2016.6.15	571,205	0.17%	581,205	0.20%	75,970	0.02%	-	-	Master D egree from the Institute of Electronics, National Chiao Tung University	Note 1	Nil	Nil	Nil	Nil
Director	Shin Xin Investment Co.,Ltd.	Republic of China		2019.6.13	3 years	2019.6.13	7,000	-%	255,000	0.09%	-	-	-	-
Director Representative	Chia-Neng Huang (Legal Representative of Shin Xin Investment Co., Ltd.)	Republic of China	Male	2019.6.13	3 years	2019.6.13	-	-	-	-	-	-	-	-	Department of Mechanical Engineering, Chung Yuan Christian University	Note 1	Nil	Nil	Nil	Nil
Independent Director	Shan-Jen Chow	Republic of China	Male	2019.6.13	3 years	2003.2.18	-	-	-	-	-	-	-	-	Master of Business Administration, Golden Gate University, California, USA		Nil	Nil	Nil	Nil
Independent Director	Tsin-Fu Jiang	Republic of China	Male	2019.6.13	3 years	2007.6.15	-	-	-	-	-	-	-	-	PhD in Physics, National Tsing Hua University Professor, Institute of Physics, National Chiao Tung University	Note 1	Nil	Nil	Nil	Nil
Independent Director	Cheng-Yan Chien	Republic of China	Male	2019.6.13	3 years	2019.6.13	-	-	-	-	-	-	-	-	Emory University, USA Master of Business Management	Note 1	Nil	Nil	Nil	Nil

~10~

Note 1: Current positions in other companies

Hsing-Hai Chen	Chairm an of the Board, Elite Semiconductor Memory Technology Inc. Chairm an of the Board, 3R Semiconductor Technology Inc. Chairm an of the Board, Elite Silicon Technology Inc. Chairm an of the Board, ESMT Educational Foundation Chairm an of the Board, Jie Yong Investm ent Ltd. Director, Elite Investm ent Services Ltd.	Ming-Chien Chang	Chairm an of the Board, Charng Feng Investment Ltd. Director, Elite Silicon Technology Inc. Director, ESMT Educational Foundation Director, Jie Yong Investm ent Ltd. Director, Elite Investm ent Services Ltd. Director,Eon Silicon Sloution Inc.US A
		Chia-Neng Huang	Representative corporate director of WSP Electrom aterials Ltd. Director, CWE Holding Co., Ltd. Director, Broadwell Worldwide Ltd.
Yeong-Wen Daih	Director, Jie Yong Investm ent Ltd.
Chih-Hong Ho	Director, Elite Innovation Japan Ltd. Legal Representative, Elite Semiconductor M emory Technology (Shenzhen) Inc. Legal Representative, Elite Semiconductor Microelectronics (Shanghai)TechnologyInc.

Major shareholders of the institutional shareholders
(1) Major shareholders of the institutional shareholders as at April 18, 2021

Name of Institutional Shareholders (Note 1)	Major shareholders of the institutional shareholders(Note 2)	Shareholding Percentage
Shin Xin Investment Co., Ltd.	Chia-Neng Huang JunjieHuang	99.995% 0.005%

Note 1: If the Director or Supervisor is a representative of an institutional shareholder, his/her name shall be specified. Note 2: Please fill in the name and the shareholding percentage of the major shareholders of institutional shareholders

(shareholders within the 10 biggest shareholding percentage). If the major shareholders are legal entities, information shall be provided in the following table.

~11~

Note 3: For corporate shareholders who are not under the organization of the Company, the name and shareholding of the shareholders shall be disclosed (i.e. name of the investor or donor and their investment or donation ratio).
(2) Major shareholders of institutional shareholders who are representative of institutional shareholders: None.

3. Professional Qualifications and the Independence of Directors:

Qualification Nam e	Meets one of the following professional qualifications, with at least fiveyears of workingexperience	Meets one of the following professional qualifications, with at least fiveyears of workingexperience	Meets one of the following professional qualifications, with at least fiveyears of workingexperience				Independence Criteria (Note 1)	Independence Criteria (Note 1)	Independence Criteria (Note 1)	Independence Criteria (Note 1)	Independence Criteria (Note 1)	Independence Criteria (Note 1)
	Currently serving as a lecturer or higher position in a private or public college or university in the field of business, law, finance, accounting, or any related field required in business.	Currently serving as a judge, prosecutor, lawyer, accountant, or any other professional practice or technician that must undergo national examinations and specialized license	Work experience in commerce, legal affairs, finance, accounting, or related experience required by business	1	2	3	4	5	6	7	8	9	10	11	12
Hsing-Hai Chen			�				�	�	�	�	�	�	�	�	�
Ming-Chien Chang			�				�	�	�	�	�	�	�	�	�
Chih-HongHo			�			�	�	�	�	�	�	�	�	�	�
Yeong-W en Daih			�			�	�	�	�	�	�	�	�	�	�
Chia-Neng Huang			�	�	�	�	�		�	�	�	�	�	�	�
Shan-Jen Chow		�	�	�	�	�	�	�	�	�	�	�	�	�	�
Tsin-Fu Jiang	�		�	�	�	�	�	�	�	�	�	�	�	�	�
Cheng-Yan Chien			�	�	�	�	�	�	�	�	�	�	�	�	�

Note 1: Please tick "" in the corresponding boxes if the Directors have m et any of the following criteria during the two years prior to being elected or during the term of office.

(1) Not an em ployee of the Company or any of its affiliates.

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(2) Not a Director or Supervisor of the company or any of its affiliates. (Not applicable in cases where the person is an Independent Director of the company, its parent com pany, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).
(3) Not a natural person shareholder who holds more than one percent (1%) of issued shares or is ranked top ten in terms of the total number of shares held, including the shares held in the nam e of the person’s spouse, minor children, or in the nam e of others.
(4) Not a manager listed in (1) or a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship listed in (2) and (3).
(5) Not a director, supervisor or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top five in terms of the number of shares held or is designated as a Director or Supervisor of the Company pursuant to Paragraph 1 or 2, Article 27 of the Company Act (Not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).
(6) Not a director, supervisor, or employee of another company that the majority of its directors or the shares with voting rights are controlled by the sam e person (excluding independent directors appointed by both the Company and its parent company, subsidiary or subsidiaries under the same parent company pursuant to this regulation or the local regulations).
(7) Not a director, supervisor, or employee of another company or an institution who is concurrently a chairman, general m anager, or equivalent position of the Company or a spouse thereof (excluding independent directors appointed by both the Com pany and its parent company, subsidiary or subsidiaries under the same parent company pursuant to this regulation or the local regulations)
(8) Not a director, supervisor, manager, or shareholder holding 5% or more of the shares of a specified company or institution which has a financial or business relationship with the Company (excluding specified companies or institutions holding more than 20% but less than 50% of the total issued shares of the Company, and independent directors appointed by both the Company and its parent company, subsidiary or subsidiaries under the sam e parent company pursuant to this regulation or the local regulations).
(9) Not a professional individual who is an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or institution, or a spouse thereof, that provides comm ercial, legal, financial, accounting services or consultation to the Company or its affiliated companies, or those made an accum ulated profit of less than NT$500,00 over the last 2 years. However, members of the special committee on remuneration, public acquisition review, or merger and acquisition who perform their functions in accordance with the provisions of Securities and Exchange Act or Business M ergers and Acquisitions Act and other relevant regulations shall not be subject to this provision.

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(10) Not a spouse or a relative within the second degree of kinship with any Director.
(11) Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies.
(12) Where the person is not elected in the capacity of the governm ent, a juristic person, or a representative thereof as provided in Article 27 of the Company Act.

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(II) Information of the Presidents, Vice Presidents, Assistant Vice Presidents, and the Heads of all the Company's Departments and Divisions

Record Date: April 18, 2021

Title	Name	Nationality	Gender	Date of Appointmen t	Shareholding	Shareholding	Shares Held by Spouse/Minor Children	Shares Held by Spouse/Minor Children	Shares Held in the Name o f Other Persons	Shares Held in the Name o f Other Persons	Primary Professional or Academic E xperience	Position(s) Concurrently Held at the Company or Other Companies	Managers who are spouses or within the second degree of kinship.	Managers who are spouses or within the second degree of kinship.	Managers who are spouses or within the second degree of kinship.	Rem arks
					Number o f Shares	Shareholdi ng Percentage	Number o f Shares	Shareholdi ng Percentage	Number of Shares	Shareholdin g Percentage			Title	Name	Relati on
Chairman o f the Board	Hsing-Hai Chen	Republic of China	Male	2008.11.03	8,411,629	2.94%	1,370,927	0.48%	-	-	Master of Applied Physics, National Tsing Hua University	Note 1	Nil	Nil	Nil	Nil
President and Chief Technology Officer o f Business Group	Ming-Chien Chang	Republic of China	Male	2008.11.03	5,523,825	1.93%	1,618,785	0.57%	-	-	Master of Electronics, National Chiao Tung University	Note 1	Nil	Nil	Nil	Nil
Senior Vice President and Chief Marketing Officer	Chih-Hong Ho	Republic of China	Male	2005.08.01	628,172	0.22%	-	-	-	-	PhD in Mechanical Engineering, North Carolina State University, USA	Note 1	Nil	Nil	Nil	Nil
President and Chief Operating Officer	Yeong-Wen Daih	Republic of China	Male	2008.11.03	581,205	0.20%	75,970	0.03%	-	-	Master Degree, Institute of Electronics, National Chiao Tung University	Note 1	Nil	Nil	Nil	Nil
Vice President and Second Business Unit	Kuan-Chun Chang	Republic of China	Male	2008.11.03	685,341	0.24%	949	-	-	-	Master Degree, Depart ment of Electrical Engineering, National Cheng Kung University	Note 1	Nil	Nil	Nil	Nil
Senior Director of Finance Division	Candy Chu	Republic of China	Female	2006.09.01	143,000	0.05%	39,490	0.01%	-	-	Department of Accounting and Statistics, Ming Chuan Commercial College	Note 1	Nil	Nil	Nil	Nil

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Note 1: Position(s) concurrently held in other companies is as follows:

Ming-Chien Chang	Chih-Hong Ho	Director, Elite Innovation Japan Ltd. Legal Representative, Elite Semiconductor M emory Technology (Shenzhen) Inc. Semiconductor Microelectronics (Shanghai)TechnologyInc
	Yeong-W en Daih	Director, Jie Yong Investm ent Ltd.
	Candy Chu	Director, ESMT Educational Foundation Supervisor, Elite Silicon Technology Inc. Supervisor, Elite Innovation Japan Ltd.
Kuan-Chun Chang

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(III) Remuneration Paid During in the Most Recent Financial Year to Directors, Supervisors, President, and Vice Presidents Under the Company and All Companies Listed in the Consolidated Statements
Remuneration of Directors (including Independent Directors)

As at December 31, 2020 Unit: NT$ 1,000/share

Title	Name	Directors Re muneration	Directors Re muneration	Directors Re muneration	Directors Re muneration	Directors Re muneration	Directors Re muneration	Directors Re muneration	Directors Re muneration	Ratio of the total of 4 items A, B, C and D to net income after taxes	Ratio of the total of 4 items A, B, C and D to net income after taxes	Relevant remuneration rec eived byd	Relevant remuneration rec eived byd	Relevant remuneration rec eived byd	Relevant remuneration rec eived byd	irectors who are also employees	irectors who are also employees	irectors who are also employees	irectors who are also employees	Proportion of the sum of A, B, C, D, E, and F to net profit after tax	Proportion of the sum of A, B, C, D, E, and F to net profit after tax	Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company
		Remuneration (A)		Severance pay and pension (B)		Remuneration of directors (C)		Business expense (D)				Salary, bonus and special allowance (E)		Pension (F)		Employee’s compensation (G)
		The Company	All compani es listed in this Financial Report	The Compa ny	All companies listed in this Financial Report	The Compa ny	All companie s listed in this Financial Report	The Compa ny	All companie s listed in this Financial Report	The Compa ny	All companie s listed in this Financial Report	The Compa ny	All companie s listed in this Financial Report	The Compa ny	All companie s listed in this Financial Report	The Company		All companies listed in this Financial Report		The Comp any	All companie s listed in this Financial Report
																Cash	Stock	Cash	Stock
Chairman of the Board	Hsing-Hai Chen	-	-	-	-	4,408	4,408	113	113	0.42%	0.42%	4,009	4,009	-	-	-	-	-	-	0.79%	0.79%	Nil
Directors	Ming-Chie n Chang	-	-	-	-	2,204	2,204	-	-	0.20%	0.20%	4,304	4,304	108	108	2,556	-	2,556	-	0.85%	0.85%	Nil
Directors	Chih-Hong Ho	-	-	-	-	2,204	2,204	-	-	0.20%	0.20%	4,099	4,099	108	108	5,630	-	5,630	-	1.11%	1.11%	Nil
Directors	Yeong-We n Daih	-	-	-	-	2,204	2,204	-	-	0.20%	0.20%	3,870	3,870	108	108	5,349	-	5,349	-	1.06%	1.06%	Nil
Directors	Chia-Neng Huang	-	-	-	-	2,204	2,204	-	-	0.20%	0.20%	-	-	-	-	-	-	-	-	0.20%	0.20%	Nil
Independent Director	Shan-Jen Chow	-	-	-	-	-	-	900	900	0.08%	0.08%	-	-	-	-	-	-	-	-	0.08%	0.08%	Nil
Independent Director	Tsin-Fu Jiang	-	-	-	-	-	-	850	850	0.08%	0.08%	-	-	-	-	-	-	-	-	0.08%	0.08%	Nil
Independent Director	Cheng-Yan Chien	-	-	-	-	-	-	850	850	0.08%	0.08%	-	-	-	-	-	-	-	-	0.08%	0.08%	Nil
1. Please illustrate the policies, sy stem s, standards and structure of independent d irectors' rem uneration, as well as the correla According to Article 24-1 of the Com pany s' Articles of Incorporation, based on the profit of the y ear, the Com pany sha rem uneration to Directors. With reference to the Com pany 's overall operating perform ance, industry 's future operating ri Com pany 's perform ance, the Com pany has given reasonable rem uneration. Relevant perform ance evaluation and the rem u 2. Other than disclo sure in the above tab le,Directors rem uneration received by providingservices(e.g.providingcon sulting												tion between their rem uneration and the responsibilities, risks, and tim e invested: ll appropriate no less than 5% of the profit as rem uneration to em ploy ees, and no m ore than 1% of the profit as sks and developm ent trends, and referring to the indiv idual's perform ance achievem ent rate and contribution to the neration rationality shall be approved by the Rem uneration Com m ittee and the Board of Directors. services as a non-employee)to the Companyin the financial report: None.

Note1: The distribution of Directors' and Supervisors' remuneration for the Financial Year 2020 amounted to NT$ 13,225 thousand was approved by the Board o f Directors on February 26, 2021. Since the amount o f distribution has not been confirmed by internal management, the amount is calculated based on the proportion of the Directors' and Supervisors' remuneration in Financial Year 2019.
Note2: The distribution of employees' compensation for the Financial Year 2020 amounted to NT$66,124 thousand was approved by the Board of Directors on February 26, 2021. Since the amount of distribution has not been confirmed by internal management, the amount is calculated based on the proportion of the employees' compensation in 2019.

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2. Remunerations to President and Vice Presidents

								As at	As at	As at	As at	December 31, 2020 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil	December 31, 2020 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil	December 31, 2020 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil
Title	Nam e	Salary (A)		Severance pay and pension (B) (Note 1)		Bonuses and allowances (C)		Employee’s remuneration (D)				Proportion of net profit after tax to the sum o f A, B , C , and D (%)		Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company
		The Company	All companie s listed in this Financial Report	The Company	All companie s listed in this Financial Report	The Company	All companie s listed in this Financial Report	The Co	mpany	All companies listed in this Financial Report		The Company	All companie s listed in this Financial Report
								Cash	Stock	Cash	Stock
Chairman of the Board	Hsing-Hai Chen	3,637	3,637	-	-	372	372	-	-	-	-	0.37%	0.37%	Nil
President	Ming-Chien Chang	3,584	3,584	108	108	720	720	2,556	-	2,556	-	0.64%	0.64%	Nil
Senior Deputy President	Chih-Hong Ho	3,295	3,295	108	108	804	804	5,630	-	5,630	-	0.91%	0.91%	Nil
Deputy President	Yeong-Wen Daih	3,152	3,152	108	108	718	718	5,349	-	5,349	-	0.86%	0.86%	Nil
Deputy President	Kuan-Chun Chang	2,972	2,972	108	108	673	673	5,007	-	5,007	-	0.81%	0.81%	Nil

Note 1: All are recognized contribution

Note 2: 2020 Distribution of employee' co mpensation of NT$66,124 thousand was approved by the Board of Directors on February 26, 2021. Since the amount of distribution has not been confirmed by internal management, the amount is calculated based on the proportion of employee' compensation in 2019.

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3. Managerial officers with the top five highest remuneration amounts

								As at	As at	As at	As at	December 31, 2019 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil	December 31, 2019 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil	December 31, 2019 Unit: NT$ 1,000/share Proportion of net profit after tax to the sum o f A, B , C , and D (%) Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company The Company All companie s listed in this Financial Report 0.37% 0.37% Nil 0.64% 0.64% Nil 0.91% 0.91% Nil 0.86% 0.86% Nil 0.81% 0.81% Nil
Title	Nam e	Salary (A)		Severance pay and pension (B) (Note 1)		Bonuses and allowances (C)		Employee’s remuneration (D)				Proportion of net profit after tax to the sum o f A, B , C , and D (%)		Compensation paid to directors from an invested company other than the Company’s subsidiaries or parent company
		The Company	All companie s listed in this Financial Report	The Company	All companie s listed in this Financial Report	The Company	All companie s listed in this Financial Report	The Co	mpany	All companies listed in this Financial Report		The Company	All companie s listed in this Financial Report
								Cash	Stock	Cash	Stock
Chairman of the Board	Hsing-Hai Chen	3,637	3,637	-	-	372	372	-	-	-	-	0.37%	0.37%	Nil
President	Ming-Chien Chang	3,584	3,584	108	108	720	720	2,556	-	2,556	-	0.64%	0.64%	Nil
Senior Deputy President	Chih-Hong Ho	3,295	3,295	108	108	804	804	5,630	-	5,630	-	0.91%	0.91%	Nil
Deputy President	Yeong-Wen Daih	3,152	3,152	108	108	718	718	5,349	-	5,349	-	0.86%	0.86%	Nil
Deputy President	Kuan-Chun Chang	2,972	2,972	108	108	673	673	5,007	-	5,007	-	0.81%	0.81%	Nil

Note 1: All are recognized contribution

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Names of Managers for Distributing the Employees' Compensation and Distribution Status

Unit: NT$ 1,000

						Unit: NT$ 1,000
	T itle	Name	Shares Amount	Cash Amo unt	Total	Ratio of the Total Amount to Net Profit After Tax (%)
Manager	Chairman of the Board	Hsing-Hai Chen	-	20,653	20,653	1.90%
	President	Ming-Chien Chang
	Senior Vice President	Chih-HongHo
	Senior Vice President	Yeong-Wen Daih
	Vice President	Kuan-Ch un Chang
	Senior Director of Finance Division	Candy Ch u

Note 1: The distribution of employees' co mpensation for the Financial Year 2020 amounted to NT$ 66,124 thousand was approved by the Board of Directors on February 26, 2021. Since the amount o f distribution has not been confirmed by internal management, the amount is calculated based on the proportion of employee' co mpensation in 2019.

(IV) The analysis of the ratio of the total remuneration paid to the Company’s Directors, Supervisors, President and Vice Presidents of the Company and all companies listed in the consolidated financial statements in the most recent two financial years to Net Profit After Tax, and the relevance of remuneration payment policies, standards and combination, procedures determining remuneration, business performance and future risk shall be compared and stated:

Units: NTD 1,000; %

Item	FY	2019	FY	2020
	T he Company	Consolidated Financial Statements	T he Company	Consolidated Financial Statements
Total Directors' Remuneration	5,533	5,533	15,937	15,937
Ratio of Total Directors' Remuneration to Net Profit After Tax (%)	1.09	1.09	1.47	1.47
Total Supervisors' Rem uneration	1,186	1,186	-	-
Ratio of Total Supervisors' Remuneration to Net Profit After Tax(%)	0.23	0.23	-	-
Total Remuneration for the President and Vice Presidents	28,492	28,492	38,901	38,901
Ratio of Total Remuneration for President and Vice Presidents to Net Profit After Tax(%)	5.63	5.63	3.59	3.59

There is no material difference in the ratio against Net Profit After Tax for FY2019 and FY2020.

According to Article 24-1 of the Companys' Articles of Incorporation, based on the profit of the year, the Company shall appropriate no less than 5% of the profit as remuneration to employees, and no more than 1% of the profit as remuneration to

~20~

Directors. However, cumulative loss should be offset, if any. The Company shall also consider its operating results and the contribution to the Company's performance, and provide reasonable remuneration. The policy of remuneration of the President and Vice President is based on the Company's salary structure as fixed salary: basic salary, meal allowance and variable salary: allowance (overtime work, missed meals allowance), bonus (year-end bonus, work bonus), the salary level of the position in the industry, the scope of the position within the Company and the contribution to the Company’s operating goals. The procedures for determining remuneration are based on the Company's overall performance, future business risks and development trends of the Company, as well as the individual's performance achievement rate and contribution to the Company's performance, so as to provide reasonable remuneration. Performance assessment and the reasonableness of remuneration has been reviewed by the Remuneration Committee and the Board of Directors. In addition, the remuneration system is reviewed at any time according to the actual operating conditions and relevant laws and regulations. The Company's policy and procedures for setting directors', supervisors' and general managers' remuneration have taken into account the future operational risks faced by the Company and are positively correlated with its operational performance in order to achieve a balance between sustainable operation and risk control.

III. Implementation of Corporate Governance:

(I) Implementation of the Board of Directors A total of six meetings were held by the Board of Directors in 2020, with the directors' attendance listed as follows:

Title	Nam e	Attendance Count	By Proxy	Attendance Count
Chairm an of the Board	Hsing-Hai Chen	6	-	100%
Director	Ming-Chien Chang	6	-	100%
Director	Chih-Hong Ho	6	-	100%
Director	Yeong-Wen Daih	6	-	100%
Director	Chia-Neng Huang	6	-	100%
Independent Director	Shan-Jen Chow	6	-	100%
Independent Director	Tsin-Fu Jiang	6	-	100%
Independent Director	Cheng-Yan Chien	6	-	100%
Other Matters: I. Where the proceedings of the m eeting of the B oard of Directors include one of the following circumstances, state the date, session, topic discussed, opinions of every Independent Director, and the Company's handling of the Independ Directors' opinions: (I) M atters referred to in Article 14-3 of the Securities and Exchange Act. Date of the Proposals Opinions of All Independent Directors and

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II.	Meeting the Company's Handling of These Opinions The 8th Board 5th Meeting 2020.03.20 1. Approved the resolution to amend the Company’s "Articles of Association". 2. Approved the am endm ent to the Company's "Auditor Committee Organization Charter". 3. Approved the resolution to am end the Company's "P rocedures of the M eetings of the Board of Directors". 4. Approved the resolution to am end the Company's "R emuneration Committee Organization Charter". 5. Approved the resolution to am end the Company's "S elf-Evaluation and Peer-Evaluation of the Board of Directors". 6. Approved the evaluation of the independence of the CPAs and the CPAs' accountingfirm. Approved by all Independent Directors The 8th Board 6th Meeting 2020.05.14 1. Approved the amendments to the Company's "Procedures for the Acquisition and Disposal of Assets". 2. Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors Meetings." 3. Approved the am endm ents to the Company's "Audit Committee's Articles of Association". Approved by all Independent Directors The 8th Board 9th Meeting 2020.11.11 1.Approved the Company's "Rules Governing the Preparation Process of Financial Statements." 2. Approved the Company's "Organizational Rules of the Nomination Committee." Approved by all Independent Directors The 8th Board 10th Meeting 2020.12.23 1. Approved the amendment to the internal control system. Approved by all Independent Directors The 8th Board 11th Meeting 2021.02.26 1.Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal by the Board of Directors" 2. Amended the Company's "Regulations Governing the Organization of the Salary and Remuneration Committee" 3. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. 4. Approved the am endm ent to the Company's "Articles of Incorporation." 5. Approved the evaluation of the independence of the CPAs and their affiliated firm s. Approved by all Independent Directors The 8th Board 12th Meeting 2021.05.06 1. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. Approved by all Independent Directors (II) In addition to the aforem entioned matters, other resolutions resolved by the Board of Directors that are objected to, or expressed reservations with record or declaration in writing by the Independent Directors: None. When any Director recuse him/herself for being a stakeholder in certain proposals, the nam e of the Director(s), the content of the proposals, reasons for recusal and participation in voting shall be stated: Board of Directors Date Nam es of Directors Proposals Reason for Recusal Voting 2020.8.11 Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih The managers' salary adjustm ent of the Company in FY2020 The Person(s) in Conflict with the Proposal The persons recused themselves and did not participate in discussion andvoting.	Meeting the Company's Handling of These Opinions The 8th Board 5th Meeting 2020.03.20 1. Approved the resolution to amend the Company’s "Articles of Association". 2. Approved the am endm ent to the Company's "Auditor Committee Organization Charter". 3. Approved the resolution to am end the Company's "P rocedures of the M eetings of the Board of Directors". 4. Approved the resolution to am end the Company's "R emuneration Committee Organization Charter". 5. Approved the resolution to am end the Company's "S elf-Evaluation and Peer-Evaluation of the Board of Directors". 6. Approved the evaluation of the independence of the CPAs and the CPAs' accountingfirm. Approved by all Independent Directors The 8th Board 6th Meeting 2020.05.14 1. Approved the amendments to the Company's "Procedures for the Acquisition and Disposal of Assets". 2. Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors Meetings." 3. Approved the am endm ents to the Company's "Audit Committee's Articles of Association". Approved by all Independent Directors The 8th Board 9th Meeting 2020.11.11 1.Approved the Company's "Rules Governing the Preparation Process of Financial Statements." 2. Approved the Company's "Organizational Rules of the Nomination Committee." Approved by all Independent Directors The 8th Board 10th Meeting 2020.12.23 1. Approved the amendment to the internal control system. Approved by all Independent Directors The 8th Board 11th Meeting 2021.02.26 1.Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal by the Board of Directors" 2. Amended the Company's "Regulations Governing the Organization of the Salary and Remuneration Committee" 3. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. 4. Approved the am endm ent to the Company's "Articles of Incorporation." 5. Approved the evaluation of the independence of the CPAs and their affiliated firm s. Approved by all Independent Directors The 8th Board 12th Meeting 2021.05.06 1. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. Approved by all Independent Directors (II) In addition to the aforem entioned matters, other resolutions resolved by the Board of Directors that are objected to, or expressed reservations with record or declaration in writing by the Independent Directors: None. When any Director recuse him/herself for being a stakeholder in certain proposals, the nam e of the Director(s), the content of the proposals, reasons for recusal and participation in voting shall be stated: Board of Directors Date Nam es of Directors Proposals Reason for Recusal Voting 2020.8.11 Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih The managers' salary adjustm ent of the Company in FY2020 The Person(s) in Conflict with the Proposal The persons recused themselves and did not participate in discussion andvoting.	Meeting the Company's Handling of These Opinions The 8th Board 5th Meeting 2020.03.20 1. Approved the resolution to amend the Company’s "Articles of Association". 2. Approved the am endm ent to the Company's "Auditor Committee Organization Charter". 3. Approved the resolution to am end the Company's "P rocedures of the M eetings of the Board of Directors". 4. Approved the resolution to am end the Company's "R emuneration Committee Organization Charter". 5. Approved the resolution to am end the Company's "S elf-Evaluation and Peer-Evaluation of the Board of Directors". 6. Approved the evaluation of the independence of the CPAs and the CPAs' accountingfirm. Approved by all Independent Directors The 8th Board 6th Meeting 2020.05.14 1. Approved the amendments to the Company's "Procedures for the Acquisition and Disposal of Assets". 2. Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors Meetings." 3. Approved the am endm ents to the Company's "Audit Committee's Articles of Association". Approved by all Independent Directors The 8th Board 9th Meeting 2020.11.11 1.Approved the Company's "Rules Governing the Preparation Process of Financial Statements." 2. Approved the Company's "Organizational Rules of the Nomination Committee." Approved by all Independent Directors The 8th Board 10th Meeting 2020.12.23 1. Approved the amendment to the internal control system. Approved by all Independent Directors The 8th Board 11th Meeting 2021.02.26 1.Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal by the Board of Directors" 2. Amended the Company's "Regulations Governing the Organization of the Salary and Remuneration Committee" 3. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. 4. Approved the am endm ent to the Company's "Articles of Incorporation." 5. Approved the evaluation of the independence of the CPAs and their affiliated firm s. Approved by all Independent Directors The 8th Board 12th Meeting 2021.05.06 1. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. Approved by all Independent Directors (II) In addition to the aforem entioned matters, other resolutions resolved by the Board of Directors that are objected to, or expressed reservations with record or declaration in writing by the Independent Directors: None. When any Director recuse him/herself for being a stakeholder in certain proposals, the nam e of the Director(s), the content of the proposals, reasons for recusal and participation in voting shall be stated: Board of Directors Date Nam es of Directors Proposals Reason for Recusal Voting 2020.8.11 Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih The managers' salary adjustm ent of the Company in FY2020 The Person(s) in Conflict with the Proposal The persons recused themselves and did not participate in discussion andvoting.	Meeting the Company's Handling of These Opinions The 8th Board 5th Meeting 2020.03.20 1. Approved the resolution to amend the Company’s "Articles of Association". 2. Approved the am endm ent to the Company's "Auditor Committee Organization Charter". 3. Approved the resolution to am end the Company's "P rocedures of the M eetings of the Board of Directors". 4. Approved the resolution to am end the Company's "R emuneration Committee Organization Charter". 5. Approved the resolution to am end the Company's "S elf-Evaluation and Peer-Evaluation of the Board of Directors". 6. Approved the evaluation of the independence of the CPAs and the CPAs' accountingfirm. Approved by all Independent Directors The 8th Board 6th Meeting 2020.05.14 1. Approved the amendments to the Company's "Procedures for the Acquisition and Disposal of Assets". 2. Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors Meetings." 3. Approved the am endm ents to the Company's "Audit Committee's Articles of Association". Approved by all Independent Directors The 8th Board 9th Meeting 2020.11.11 1.Approved the Company's "Rules Governing the Preparation Process of Financial Statements." 2. Approved the Company's "Organizational Rules of the Nomination Committee." Approved by all Independent Directors The 8th Board 10th Meeting 2020.12.23 1. Approved the amendment to the internal control system. Approved by all Independent Directors The 8th Board 11th Meeting 2021.02.26 1.Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal by the Board of Directors" 2. Amended the Company's "Regulations Governing the Organization of the Salary and Remuneration Committee" 3. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. 4. Approved the am endm ent to the Company's "Articles of Incorporation." 5. Approved the evaluation of the independence of the CPAs and their affiliated firm s. Approved by all Independent Directors The 8th Board 12th Meeting 2021.05.06 1. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. Approved by all Independent Directors (II) In addition to the aforem entioned matters, other resolutions resolved by the Board of Directors that are objected to, or expressed reservations with record or declaration in writing by the Independent Directors: None. When any Director recuse him/herself for being a stakeholder in certain proposals, the nam e of the Director(s), the content of the proposals, reasons for recusal and participation in voting shall be stated: Board of Directors Date Nam es of Directors Proposals Reason for Recusal Voting 2020.8.11 Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih The managers' salary adjustm ent of the Company in FY2020 The Person(s) in Conflict with the Proposal The persons recused themselves and did not participate in discussion andvoting.	Meeting the Company's Handling of These Opinions The 8th Board 5th Meeting 2020.03.20 1. Approved the resolution to amend the Company’s "Articles of Association". 2. Approved the am endm ent to the Company's "Auditor Committee Organization Charter". 3. Approved the resolution to am end the Company's "P rocedures of the M eetings of the Board of Directors". 4. Approved the resolution to am end the Company's "R emuneration Committee Organization Charter". 5. Approved the resolution to am end the Company's "S elf-Evaluation and Peer-Evaluation of the Board of Directors". 6. Approved the evaluation of the independence of the CPAs and the CPAs' accountingfirm. Approved by all Independent Directors The 8th Board 6th Meeting 2020.05.14 1. Approved the amendments to the Company's "Procedures for the Acquisition and Disposal of Assets". 2. Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors Meetings." 3. Approved the am endm ents to the Company's "Audit Committee's Articles of Association". Approved by all Independent Directors The 8th Board 9th Meeting 2020.11.11 1.Approved the Company's "Rules Governing the Preparation Process of Financial Statements." 2. Approved the Company's "Organizational Rules of the Nomination Committee." Approved by all Independent Directors The 8th Board 10th Meeting 2020.12.23 1. Approved the amendment to the internal control system. Approved by all Independent Directors The 8th Board 11th Meeting 2021.02.26 1.Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal by the Board of Directors" 2. Amended the Company's "Regulations Governing the Organization of the Salary and Remuneration Committee" 3. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. 4. Approved the am endm ent to the Company's "Articles of Incorporation." 5. Approved the evaluation of the independence of the CPAs and their affiliated firm s. Approved by all Independent Directors The 8th Board 12th Meeting 2021.05.06 1. Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company. Approved by all Independent Directors (II) In addition to the aforem entioned matters, other resolutions resolved by the Board of Directors that are objected to, or expressed reservations with record or declaration in writing by the Independent Directors: None. When any Director recuse him/herself for being a stakeholder in certain proposals, the nam e of the Director(s), the content of the proposals, reasons for recusal and participation in voting shall be stated: Board of Directors Date Nam es of Directors Proposals Reason for Recusal Voting 2020.8.11 Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih The managers' salary adjustm ent of the Company in FY2020 The Person(s) in Conflict with the Proposal The persons recused themselves and did not participate in discussion andvoting.
	Board of Directors Date	Nam es of Directors	Proposals	Reason for Recusal	Voting
	2020.8.11	Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih	The managers' salary adjustm ent of the Company in FY2020	The Person(s) in Conflict with the Proposal	The persons recused themselves and did not participate in discussion andvoting.

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	Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih Chia-Neng Huang Shan-JenChow	The Company's Directors and Supervisors' remuneration distribution for FY2019	The Person(s) in Conflict with the Proposal	The persons recused themselves and did not participate in discussion and voting.
	Hsing-Hai Chen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih	The managers' and employees' salaries and bonus of the Com pany for FY2020.	The Person(s) in Conflict with the Proposal	The persons recused themselves and did not participate in discussion and voting.
2020.12.23	Hsing-Hai Chen,	Approved the adjustment of the Directors' salaries and compensations.	The Person(s) in Conflict with the Proposal	The persons recused themselves and did not participate in discussion andvoting.
2021.5.6	Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih	Approved the resolution of the managers' bonus.	The Person(s) in Conflict with the Proposal	The persons recused themselves and did not participate in discussion andvoting.

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operations. 4. Internal relationships and communications. 5. Director of professionalism and continuous training. 6. Internal control.

IV. Targets for strengthening the functions of the Board of Directors (e.g. establishm ent of the Audit Committee, enhancem ent of information transparency) and evaluation of the implementation: After the full re-election of directors and supervisors at the shareholders’ meeting on June 13, 2019, the Com pany established the Audit Committee, convened by Mr. Chou, Shuang-Jen, an independent director, to replace the supervisor’s function and strengthen the functions of the Board of Directors. On March 20, 2020, the Company's Board of Directors approved the "Board of Directors Self-Evaluation or Peer Evaluation Precedures".

Salary and Remuneration:2021.02.26 approved the resolution by the Board of Directors

Evaluation Cycle	Evaluation Period	Evaluation Scope	Evaluation Methods	Evaluation Content	Rating
Conducted Annually	From: Jan. 1, 2020 To: Dec. 31, 2020	Number of Members	Internal self-evaluati on of committee members	1. Participation in the Company's operation 2. Awareness of the duties of the functional committees 3. Improving the decision-making of the functional committees 4. Composition of the functional committees, and election and appointm ent of committee m embers	Superior

2. Audit Committee:2021.02.26 approved the resolution by the Board of Directors

Evaluation Cycle	Evaluation Period	Evaluation Scope	Evaluation Methods	Evaluation Content	Rating
Conducted Annually	From: Jan. 1, 2020 To: Dec. 31, 2020	Number of Members	Internal self-evaluati on of committee members	1. Participation in the Company's operation 2. Awareness of the duties of the functional committees 3. Improving the decision-making of the functional committees 4. Composition of the functional committees, and election and appointm ent of committee m embers 5. Internal control	Superior

(II) Implementation of the Audit Committee or Supervisors’ Participation in meetings of the Board of Directors:

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1. Implementation of the Audit Committee:

The Company established the Audit Committee after the shareholders' meeting on June 13, 2019. The Audit Committee held 5 meetings in FY2020, which the members of the Audit committee attended as follows:

Title	Nam e	Attendance Count	By Proxy	Attendance Count
Independent Director	Shan-Jen Chow	5	-	100%
Independent Director	Tsin-Fu Jiang	5	-	100%
Independent Director	Cheng-Yan Chien	5	-	100%
Other matters: I. The date of the board meeting, the term, content of the proposals, opinion of all Independent Directors, and the handling of the opinion of Independent Directors shall be recorded under the following circumstances: Where the proceedings of the meeting of the Audit Committee include one of the following circumstances, stat session, topic discussed, resolution of the Audit Committee, and the Company's handling of the Audit Committ opinions: (I) Items listed in Article 14-5 of the Securities and Exchange Act Audit Committee Date Proposals (Items listed in Article 14-5 of Securities and Exchange Act) Resolutions not approved by the Audit Committee but approved by over two thirds of all directors 3rd meeting of the 1st session 2020.03.20 1.The Company’s 2019 Annual Final Statement. 2. The Company’s 2019 Earnings Distribution Plan. 3. Conduct self-assessm ent of the Company's internal control system in accordance with regulations. 4. The Company's employee stock option exercised to subscribe for ordinary shares. 5. Assess the independence of CPAs and affiliated accounting firms. None Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present. 4th meeting of the 1st session 2020.05.14 1. The Company's 2020 Q1 financial report. 2. The Company's employee stock option exercised to subscribe for ordinary shares. 3. Amendment to the Company's "Operational Procedures for Acquisition or Disposal of Assets" None

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	Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present.
5rd meeting of the 1st session 2020.08.11	1. The Company's 2020 Q2 financial report. 2. The Company's employee stock option exercised to subscribe for ordinary shares.	None
	Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present.
6th meeting of the 1st session 2020.11.11	1. The Company's employee stock option exercised to subscribe for ordinary shares. 2. Approved the Company's "Rules Governing the Preparation Process of Financial Statem ents." 3. Approved the Company's "Organizational Rules of the Nomination Committee." 4. Approved the appointm ent of the first-term Nomination Committee m embers. 5. The Company's 2020 Q3 financial report. 6. the Company established the Corporate Sustainability Committee on October 7, 2020.	None
	Audit Committee Opinion: No objections or qualified opinion. (Except the recusal of Directors Cheng-Yan Chien, and Shan-Jen Chow from the voting due to conflict of interests.) The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an pon consultation with all the Directors present. (Except the recusal of Directors Cheng-Yan Chien, and Shan-Jen Chow from the voting due to conflict of interests.
7th meeting of the 1st session 2020.12.23	1. Approved the amendment to the internal control system. 2. Approved the audit plan of the Company for 2021.	None
	Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present.

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8th meeting of the 1st session 2021.02.26	1. Approved the Company's 2020 final accounting books and statem ents. 2. Approved the distribution of the Company's 2020 earnings. 3. Approved the self-assessm ent of the Company's internal control system for 2020. 4. The Company's employee stock option exercised to subscribe for ordinary shares. 5. Assess the independence of CPAs and affiliated accounting firms.	None
	Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present.
9th meeting of the 1st session 2021.05.06	1. The Company's 2021 Q1 financial report. 2. The Company's employee stock option exercised to subscribe for ordinary shares.	None
	Audit Committee Opinion: No objections or qualified opinion. The Company's actions in response to the opinions of the Audit Committee: Not applicable. Resolution: Approved by the Chairm an upon consultation with all the Directors present.

The Head of Internal Audit reports the audit report to the individual independent directors for deficiencies and improvement suggestions found in the audit operation on a monthly basis. In addition, the Head of Internal Audit explains and discusses the Company's financial and business conditions from time to time. No material events have occurred. Relevant reporting m atters are reported together in the Audit Committee and the Board of Directors. The period allows the corporate governance unit to fully understand the Company's risk assessm ent and control status. There are no major abnorm alities in the 2020 audit results, and the independent directors have no objections. The previous communication situation is as follows:

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Date of meeting	Nature and discussed issues	Independent Directors' Suggestion
2020.03.20	Report on the internal audit progress. Company's Statem ent of Self-assessm ent of Internal Control System for 2019.	The Independent Directors have no opinions and suggestions.
2020.05.14	Report on the internal audit progress.	The Independent Directors have no opinions and suggestions.
2020.08.11	Report on the internal audit progress.	The Independent Directors have no opinions and suggestions.
2020.11.11	Report on the internal audit progress.	The Independent Directors have no opinions and suggestions.
2020.12.23	Report on the internal audit progress. Discussion on the Company's 2021 audit plan.	The Independent Directors have no opinions and suggestions.

The Company’s CPAs communicate with the governance unit after the quarterly audit or review. In addition, at least two decree announcem ents are held in the Company each year (obtained the Certificate of the Republic of China Securities and Futures Market Developm ent Foundation). The

independent directors and accountants of the Company maintain smooth communication. Communication in 2020 is as follows:

Date of meeting	Nature and discussion topics	Independent Directors' Suggestion
2020.03.20	Communicate with the governance unit after the review of 2019 consolidated financial report and individual financial report Respond and discuss questions raised by participants	The Independent Directors have no opinions and suggestions.
2020.05.14	Communicate with the governance unit after reviewing the consolidated financial report for the first quarter of 2020 Respond and discuss questions raised by participants	The Independent Directors have no opinions and suggestions.
2020.08.11	Communicate with the governance unit after reviewing the consolidated financial report for the second quarter of 2020 Respond and discuss questions raised by participants	The Independent Directors have no opinions and suggestions.
2020.11.11	Communicate with the governance unit after reviewing the consolidated financial report for the third quarter of 2020 Respond and discuss questions raised by participants	The Independent Directors have no opinions and suggestions.

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(III) Implementation of Corporate Governance and the Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and the Reasons Thereof

Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Descriptions
I. Does the Company establish and disclose its Corporate Governance Best Practice Principles based on the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	V		The Company has established the "Code of Corporate Governance Practices", which has been disclosed in the Corporate Governance Section of the MOPS. The Company established the Corporate Sustainability Committee on October 7, 2020.and related to the relevant instructions.	No material departure
II. Shareholding Structure & Shareholders’ Rights (I) Did the Company establish an internal procedures for handling shareholder proposals, inquiries, disputes, and litigation? Are such matters handled according to the internal procedures? (II) Did the Company maintain a register of m ajor shareholders with controlling stake as well as a register of persons with ultimate controls over those major shareholders? (III) Did the Company establish and enforce risk controls and firewall systems with its affiliated companies? (IV) Did the Company stipulate internal rules that prohibit company insiders from trading securities using inform ation not disclosed to the m arket?	V V V V		1. The Company has set up e-mails and telephone lines for the relevant personnel to handle matters relating to shareholders' suggestions and disputes at any time. 2. The Company has set up a Shareholding Affairs Department and a stock service agency that can keep abreast of the major shareholders of the Company and the ultim ate controlling persons of the m ajor shareholders. 3. The financial and accounting matters of all affiliated companies of the Company are carried out independently, and are handled in accordance with the "Guidelines for the Transaction between the Company and Specific Companies, the Group and Related Parties" and the "Guideline for Supervision of Subsidiaries", and the risk controls and firewall mechanisms have been implem ented. 4. The Company has established insider trading guidelines and has told the insiders to strictly abide by the guidelines.The rules are disclosed on the company's website.	No material departure
III. Composition and R esponsibilities of the Board of Directors (I) Has a policy of diversity been established and implemented for the composition of the Board of Directors? (II) In addition R emuneration Committee and Audit Committee established according to law, has the company voluntarily established other functional committees? (III) Has the Company established standards to measure the performance of the Board, and does it implem ent such standards annually? Does the Company report the results of theperform ance evaluation to the BOD	V V	V	1. The Company adopted the "Corporate Governance Code" in the 17th meeting of the 6th Board of Directors on December 18, 2015, and strengthen the functions of the Directors in Chapter 3 by setting a diversity policy to ensure the diversity and independence of the Directors. Please refer to schedule 1 for the director list of 8thterm of the Board. 8 Board m embers have expertise in leadership, operational judgement, business m anagem ent, risk handling, industry knowledge, and point of view in global market. One fem ale director will be added to 9thterm of the Board to more comhensively fulfill the goals. 2. The 8th Board The 9rd m eeting on November 11, 2020, Approved the Company's "Organizational Rules of the NominationCommittee." And	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Descriptions
and use them as a reference for each Director's remuneration and nomination of term renewal? (IV) Did the Company regularly implement assessm ents on the independence of the CPAs?	V		the appointment of the first-term Nomination Committee mem bers. 3. The Company's Rem uneration Committee's organizational rules clearly define the responsibilities of the Remuneration Committee. The Remuneration Committee establishes the relevant policies and regularly evaluates the perform ance of the Board of Directors. Details of Implem entation of the Board of Directors. 4. The Company independently evaluated the independence of its CPA every year, and submitted the evaluation results to the Board of Directors for review and approval on March 20, 2019 and February 26, 2021. After the evaluation, the Company's CPAs are in compliance with the Company's Independent Evaluation Standards (Please refer to Schedule III). Therefore, the independence of the CPAs should be undoubted, and the CPAs' accountingfirm also issued a letter of declaration.
IV. Did the listed company set up or appoint an exclusively (or concurrently) responsible department or personnel to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by the Directors and Supervisors, and handling, in accordance with relevant laws, matters related to the meetings of the Board of Directors and Shareholders’ Meetings, business registration and the amendments to the registration, and for preparing minutes of the meetings of the Board of Directors and Shareholders’ Meetings)?	V		The President's Office is responsible for handling governance related affairs, and the person in charge is responsible for furnishing inform ation requested by the Directors and Supervisors, handling matters related to meetings of the Board of Directors and Shareholders’ Meetings according to the laws, processing company 's registration and the am endm ents to the registration, and preparing minutes of the meetings of the Board of Directors and Shareholder's Meetings.	No material departure
V. Did the Company established a communication channel with stakeholders (including but not limited to the shareholders, employees, customers, and suppliers)? Has a stakeholders’ area been established in the Company’s website? Are major Corporate Social Responsibility (CSR) topics that the stakeholders are concerned with addressed appropriatelybythe company?	V		It is handled by relevant business personnel; interested parties can communicate with the Company at any time if necessary.Contact details of the company's website.	No material departure
VI. Has the Company appointed a professional shareholder service agencyto deal with shareholders' affairs?	V		The company com missioned Capital Securities Corps. to handle shareholders' affairs and Shareholders' Meetings.	No material departure
VII. Inform ation Disclosure (I) Did the Company establish a website to disclose inform ation regardingfinancial operations and	V		1. The Company has set up a Chinese website to disclose relevant inform ation at anytime,and in accordance with the regulations of the	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Descriptions
corporate governance? (II) Does the Company have other inform ation disclosure channels (e.g. establishing an English website, appointing designated people to handle inform ation collection and disclosure, creating a spokesm an system, webcasting investor conferences, etc.)? (III) Did the Company declare annual financial reports two months after the end of fiscal year, and declare Q1, Q2, and Q3 financial reports and monthly operational status before the prescribed deadline?	V V		competent authority to announce and declare various information at MOPS, and set up automatic links for investors to query for relevant inform ation. 2. The Company has appointed designated personnel to collect and disclose various inform ation. The person in charge shall hold irregular corporate briefings from time to time, publicizes the Com pany's operation overview, and em ployed a spokesperson and an acting spokesperson. 3. The Company announces and declares annual financial reports three months after the end of fiscal year, and timely announces and declares Q1, Q2, and Q3 financial reports and monthly operational status before the prescribed deadline.
VIII. Is there any other important information to facilitate a better understanding of the Company’s corporate governance practices (including but not limited to em ployee rights, employee wellness, investor relations, supplier relations, stakeholder rights, Directors’ and Supervisors’ training records, implementation of risk management policies and risk evaluation measures, implem entation of custom er policies, and participation in liability insurance by the Directors and Supervisors)?	V		1. Employees' rights and care: the Com pany upholds the belief of taking good care of its employees, manages em ployees in a hum ane manner, and cooperates with various welfare measures to establish good relationships with the employees. 2. Investor relations, supplier relations, and rights of interested parties: the Company m aintains good relationships with all related parties, and the Company's relevant business personnel comm unicates with each related party to deal with each related party's problems and suggestions. 3. The Independent Directors and Supervisors currently selected by the Company are all professionals who are finance professionals or in the fields related to the Company's business. During the meetings of the Board of Directors, both the Independent Directors and Supervisors can present their opinions and understand the Company's operations situation. 4. Continuing education of the Directors and Supervisors are attached in Schedule II. 5. Implem entation of risk managem ent policies and measurem ent standards: The internal control system and various m easures have been established in accordance with the law, various risk m anagement and evaluations have been carried out, and the Internal Audit Departm ent reviews the implementation of the internal control system regularly and irregularly. Detailed risk assessm ent and policy description of Fulfillment of Corporate Social Responsibility.	No material departure

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	Evaluation Item	Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)
			Yes	No	Descriptions
					6. Implem entation of customer policies: The Company maintains good relationships with its customers, and provides various services to its custom ers in accordance with internal managem ent methods, and takes custom er satisfaction as the highest guiding principle. 7. The Company has purchased liability insurance for its Directors, Supervisors and keyemployees and reported to the Board of Directors.
IX.	Describe improvem ents made according to the corporate governance assessment m ade in the recent financial year by the Corporate Governance C enter of the Taiwan Stock Exchange Corporation (TWSE), and provide prioritized improvements and m easures to be taken for improvem ents that have yet to be carried out. According to the results of the 7th Corporate Governance R eview, the Company's scoreless items priority strengthening and im provement matters are as follows： Improving m easures and description Item It was added in the 2019 annual report 2.2、2.11、2.15、2.24、3.14、4.11、4.12 It was added in the 2020 annual report 2.2、2.11、2.15、4.1、4.11、4.12、1.9、1.10、1.11、1.15、2.9、2.20、2.23 3.5、3.6、3.14、3.17、3.18、3.20、4.6、4.9、4.10、4.14、4.15、4.16、4.17
	Improving m easures and description	Item
	It was added in the 2019 annual report	2.2、2.11、2.15、2.24、3.14、4.11、4.12
	It was added in the 2020 annual report	2.2、2.11、2.15、4.1、4.11、4.12、1.9、1.10、1.11、1.15、2.9、2.20、2.23 3.5、3.6、3.14、3.17、3.18、3.20、4.6、4.9、4.10、4.14、4.15、4.16、4.17

Note 1: Describe briefly in implem entation status colum n whether the result of implementation is "Yes" or "No".

Note 2: The Company's self-evaluation report is conducted in accordance with the Corporate Governance Self-Assessment Program, which is evaluated and explained by the Company, and reported on each evaluation program of the current operation and implem entation of the Company.

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Schedule I: Implementation status of diversification of the members of the Board of Directors

Core projects of diversity Names of directors		Basic composition	Basic composition	Basic composition			Industryexperience	Industryexperience	Industryexperience	Professional capabilities	Professional capabilities	Professional capabilities	Professional capabilities
	Nationalit y	Gende r	Also serve as an employe e of the Compan y	Ag e	Term o f office o f Independen t Director		Ban k	Securit y	Asset Managemen t	Accountin g	La w	Informatio n Technology	Risk Managemen t
				61 to 70	3 to 9 years	More than 9 years
Hsing-Hai Chen	Taiwan	Male	V	V					V			V	V
Ming-Chie n Chang	Taiwan	Male	V	V					V			V	V
Chih-Hong Ho	Taiwan	Male	V	V					V			V	V
Yeong-Wen Daih	Taiwan	Male	V	V					V			V	V
Chia-Neng Huang	Taiwan	Male		V					V			V	V
Shan-Jen Chow	Taiwan	Male		V		V			V	V	V		V
Tsin-Fu Jiang	Taiwan	Male		V		V			V				V
Cheng-Yan Chien	Taiwan	Male		V	V		V	V	V	V			V

Schedule II: Continuing education of the Directors and Supervisors in FY2020 is as follows:

Title	Name	Organizer	Training Courses	Hours of Courses	Compliance with "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies"
Chairman o f the Board	Hsing-Hai Chen	1. Securities and Futures Institute	1.New corporate governance norms and trends and recent case studies in 2020 that directors must know 2. ESG indicators and long-term corporate growth	6H(1, 2)	Yes
Director	Ming-Chien Chang			6H(1, 2)	Yes
Director	Chih-Hong Ho			6H(1, 2)	Yes
Director	Yeong-Wen Daih			6H(1, 2)	Yes
Director	Chia-Neng Huang			6H(1, 2)	Yes
Independent Director	Shan-Jen Chow			6H(1, 2)	Yes
Independent Director	Tsin-Fu Jiang			6H(1, 2)	Yes
Independent Director	Cheng-Yan Chien			6H(1, 2)	Yes

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Schedule III: Evaluation Criteria for the Independence of CPAs is as follows:	Schedule III: Evaluation Criteria for the Independence of CPAs is as follows:
Compliance with Independence	Yes	No	Remarks
Is the CPAs not a Director or Independent Director at the Company or its affiliated companies?	V
Is the CPAs not a shareholder of the Company or its affiliated companies?	V
Is the CPAs not paid by the Company or its affiliated companies?	V
Has the CPAs provided auditing services to the Company for less than seven years?	V
Is it confirmed that the CPAs has complied with his/her accountant firm's CPA independence regulations?	V
Are the former CPAs of the Company from the same firm of the current CPAs, within a year after stepping down, not serving as the Company's Director, manager or any position with substantial impact on audit results?	V

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(IV) Composition, duties, and implementation of the Remuneration Committee:

I. Information regarding the members of the Remuneration Committee:

Identity	Qualification Nam e	Meets one of the following professional qualifications, with at least five years of work experience	Meets one of the following professional qualifications, with at least five years of work experience	Meets one of the following professional qualifications, with at least five years of work experience		Meets the Status	Meets the Status	Meets the Status	of Independence (Note 1)	of Independence (Note 1)	of Independence (Note 1)	of Independence (Note 1)			Number of other public companies where the individual concurrently serves as a member of Remuneratio n Committee	Re mar ks (Not e 2)
		Currently serving as a lecturer or higher position in a private or public college or university in the field of business, law, finance, accounting, or any related field required in business.	Currently serving as a judge, prosecutor, lawyer, accountant, or any other professional practice or technician that must undergo national examinations and specialized license	Work experience in commerce, legal affairs, finance, accounting, or related experience required by business	1	2	3	4	5	6	7	8	9	10
Independent Director	Shan-Jen Chow		�		�	�	�	�	�	�	�	�	�	�	-	NA
Independent Director	Tsin-Fu Jiang	�			�	�	�	�	�	�	�	�	�	�	-	NA
Independent Director	Cheng-Yan Chien			�	�	�	�	�	�	�	�	�	�	�	-	NA

Note 1: Please tick "" in the corresponding boxes if any committee m ember have met any of the following criteria during the two years prior to being elected or during the term o f office.
(1) Not an em ployee of the Company or any of its affiliates.
(2) Not a Director or Supervisor of the company or any of its affiliates. Not applicable in cases where the person is an Independent Director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the registered countries.
(3) Not a natural person shareholder who holds more than one percent (1%) of issued shares or is ranked top ten in terms of the total number of shares held, including the shares held in the nam e of the person’s spouse, minor children, or in the name of others.
(4) Not a manager listed in (1) or a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship listed in (2) and (3).
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the com pany or of a corporate shareholder that ranks am ong the top five in shareholdings (Not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary.).
(6) Not a director, supervisor or employees of another company controlled by the sam e person with more than half of the Company's director seats or voting shares. Not applicable in cases where the person is an independent director of the Com pany, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary.
(7) Not a director, supervisor, or an employee of a company where the chairm an, president or any equavalent position are held by the same person or by his/her spouse seperately. Not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary.
(8) Not a director, supervisor, manager, or shareholder holding 5% or more of the shares of a specified company or institution which has a financial or business relationship with the Company (excluding specified companies or institutions holding more than 20% but less than 50% of the total issued shares of the Company, and

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independent directors appointed by both the Com pany and its parent company, subsidiary or subsidiaries under the same parent company pursuant to this regulation or the local regulations).

(9) Not a professional individual who is an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or institution, or a spous e thereof, that provides comm ercial, legal, financial, accounting services or consultation to the Company or its affiliated com panies, or those m ade an accum ulated profit of less than NT$500,00 over the last 2 years. However, members of the special committee on remuneration, public acquisition review, or m erger and acquisition who perform their functions in accordance with the provisions of Securities and Exchange Act or Business M ergers and Acquisitions Act and other relevant regulations shall not be subject to this provision.
(10) No condition defined in Article 30 of the Company Act has appeared.

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II. Scope of Responsibilities of the Remuneration Committee:
Periodically review this Charter and make recommendations for amendments.
Establish and regularly review the annual and long-term performance targets and remuneration policies, systems, standards, and structures of the Directors, Supervisors, and managers.
Regularly evaluate the performance targets of the Directors, Supervisors, and managers of the Company, and establish the content and amount of their remuneration.
III. Attendance of Members at Remuneration Committee Meetings
(1) The Remuneration Committee of the Company is consist of three members.
(2) Term of office: June 13, 2019 to June 12, 2022. A total of two (2) meetings (A) were conducted by the Remuneration Committee in the most recent financial year, where the qualifications and attendance of the members are as follows:

Title	Nam e	Attendance Count (B)	By Proxy	Rate of Actual Attendance (%) (B/A)
Convener	Shan-Jen Chow	2	-	100%
Member	Tsin-Fu Jiang	2	-	100%
Member	Cheng-Yan Chien	2	-	100%
Other matters: I. If the Board of Directors does not adopt or wishes to am end the proposals of the Remuneration Committee, please state the date and session of the m eeting of the Board of Directors, proposals, resolutions from the Board of Directors, and handling of the Remuneration Committee's opinions (such as the difference between the salary and remuneration approved by the Board of Directors and those proposed by the Rem uneration Committee and the reason therefo): None. II. If the resolutions to which the members of the Remuneration Committee have an objection or reservation are recorded or written, please state the date and session of the meeting of the Remuneration Committee, proposals, opinions of the m embers, and handling of the opinions: None. III. Remuneration Committee meeting and resolution results and the Company's handling of mem bers' opinions in the most recent year: Remuneration Committee Resolution content and results 1st meeting of the 4th session 2020.8.11 1. Adjustment of salaries of the Company's managerial officers for 2020. 2. Distribution of 2019 directors' and supervisers' remuneration 3. Distribution of 2019 employees' compensation and bonus paid to managerial officers. Audit Committee Opinion: No objections or qualified opinion. Resolution results: Except for proposal 2. Members Shan-Jen Chow, Tsin-Fu Jiang and Cheng-Yan Chien are stakeholders (independent directors) of the proposal, they recused themselves individually and the proposal was discussed and approved by other members.

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	The rest were approved without objection by the Chairm an upon consultation with all the Directors present. The Company’s response to the opinions of the Audit Committee: Submitted to the Board m eeting and approved by all the Directors present.
2nd meeting of the 4th session 2020.12.23	Proposal of the annual plan of the Company's Remuneration Committee for 2021.
	Audit Committee Opinion: No objections or qualified opinion. Resolution results: Approved without objection by the Chairm an upon consultation with all the Directors present. The Company's actions in response to the opinions of the Audit Committee: Not applicable.

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(V) Fulfillment of Corporate Social Responsibility and Difference with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and Reasons thereof:

Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Summary (Note 2)
1.Does the Company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk managem ent policies or strategies? disciplinary system?	V		1. The Company has set out the Corporate Social R esponsibility (CSR ) policies and disclosed in the corporate governance section on MOPS. The Company has a long-term care for special education groups and cultural and educational activities, cooperates and supports the operation of the "ESMT Educational Foundation". Combines the strength of relevant groups, it supports children who have lost their relationship, and sponsors cultural, artistic and educational-related public welfare activities. The Company also reviews the effectiveness according to the annual plan. The Company established the Corporate Sustainability Committee on October 7, 2020.and related to the relevant instructions.	No material departure
2. Does the Company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?	V		1. The President's Office of the Com pany is responsible for matters related to the planning, implementation and prom otion of corporate social responsibility, and organizing charity events of the "EMST Educational Foundation."	No material departure
III. Environm ental Issues (1) Does the Com pany establish proper environmental managem ent systems based on the characteristics of its industry? (2) Does the Com pany endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environm ent?	V V		1. The Company is committed to green product design and has obtained Green P artner certifications from multiple custom ers. At present, the Company's products are in compliance with international standards, such as RoHS, REACH, etc. 2. To conduct environm ental management, the Company established an	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Summary (Note 2)
(3) Does the Com pany evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to address clim ate change issues? (4) Has the Company taken inventory of its greenhouse gas emissions, water consumption, and total weight of waste in the last two years, and formulated policies on energy efficiency and carbon dioxide reduction, greenhouse gas reduction, water reduction, or waste management ?	V		environm ental m anagem ent system in 2007 and obtained ISO 14001 certification through verification in January 2008, and has continued to promote programs relating to environm ental improvement ever since. 3. To tackle global clim ate change, reduce and manage greenhouse gas emissions, deliver environm ental justice, and fulfill its responsibility to protect the global environm ent, the Company conducts air conditioning and tem perature control in summ er to achieve efficient energy use and the goal of energy saving and carbon reduction. The Company continues to improve its perform ance in energy saving and carbon reduction in accordance with the IS O 14001 m anagem ent system. 4. The Company actively responds to the Carbon Disclosure Project (CDP ) and voluntarily discloses greenhouse gas emissions according to the "Greenhouse Gas Protocol" (GHG P rotocol) published by the World Business Council for Sustainable Developm ent (WBCSD) and the World Resources Institute (WRI). The results of the inventory are detailed on #page 89# of the annual report.
IV. Social Issues (1) Does the Com pany form ulate appropriate management policies and procedures according to relevant regulations and the International Bill of Hum an Rights? (2) Has the Company established and offered proper em ployee benefits (including com pensation, leave, and other benefits) and reflected	V V		1. Employee selection, training, appointm ent, retention, benefits and retirem ent of the Work Rules established by the Company are in compliance with dom estic labor regulations and the International Bill of Human Rights. 2. The Company has established employee perform ance assessment	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
	Yes	No	Summary (Note 2)
the business performance or results in employee compensation appropriately? (3) Does the Com pany provide a healthy and safe working environm ent and organize training on health and safety for its employees on a regular basis? (4) Does the Com pany provide its employees with effective career developm ent and training sessions? (5) Does the Company comply with relevant laws, regulations and international standards regarding custom er health and safety, custom er privacy, marketing and labeling of products and services, and has a policy and complaint procedure for protecting consum er rights? (6) Has the Company formulated supplier management policies requiring suppliers to comply with relevant laws and regulations related to environm ental protection, occupational safety and health or labor rights and supervised the implem entation?	V V V V		procedures to evaluate em ployees' performance. The salary and remuneration are adjusted according to the evaluation results. Rewards and penalties are stipulated in the "Work Rules" with reference to the requirement of the corporate social responsibility policies. 3. The Company established the Labor Safety and Health Committee in October 2009 to continuously strengthen the hardware and software facilities of work environment safety and personnel protection, in compliance with the relevant dom estic laws and regulations, and successively promote and implem ent the related improvement programs. 4. The Company enrolls employees in various seminars and courses related to career planning according to their career plans. The Company links the growth and development of the Company with the career developm ent of its employees for the em ployer and the employees to grow together. The Company's Welfare Committee allocates subsidies for employee education and training every year. 5. The marketing and labeling of the Company's products and services are in compliance with relevant laws and regulations and international standards, such as the labeling of RoHS compliance on product packaging, The Company values custom er feedback and has a dedicated unit that executes and handles com plaint-related issues in accordance with the "Code of Practice for Handling Custom er Complaints." When the Company signs a contract with a major supplier, the content of the

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Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)
	Yes	No	Summary (Note 2)
			contract should include the terms of compliance with the CSR policy of both parties, and both parties should each try the best to fully understand whether the other party has violated its CSR and incorporate the circumstance into the commercial contract accordingly.
V. Does the Company refer to internationally-used standards or guidelines for the preparation of reports, such as CSR reports, to disclose non-financial information? Have the foregoing reports been verified or guaranteed by a third-party certification body?	V		1. The Company has disclosed the fulfillm ent of social responsibilities on its website and in the report of the Annual Shareholders' Meeting.
VI.If the Company has established the corporate social responsibility best practice principles based on the "Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the Principles and their implementation: To practice corporate social responsibility and achieve sustainable developm ent goals, the Company established "Corporate Social Responsibility Practice Code" with reference to the "Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies" and the internal and external environm ent of the Company, to manage the Company's economic, environm ental and social risks and impacts. The Company also assumes corporate citizenship responsibility, enhances national economic contributions, improves the quality of life of its employees, the communities,and society,andpromotes competitive advantages based on corporate responsibility.
VII. Other important inform ation to facilitate better understanding of the Company's Corporate Social Responsibility practices: 1. Corporate Social Responsibility Promotion Unit The President's Office of the Company is responsible for the planning, implementation and promotion of corporate social responsibility related matters. It integrates corporate social responsibility into the Company's business strategy in a purposeful, system atic and organized long-term manner, and fulfills corporate social responsibility. The Company established the Corporate Sustainability Committee on October 7, 2020.and related to the relevant instructions. 2. Risk Assessm ent and Policy Based on the principle of corporate social responsibility, the Company conducts risk assessm ents on important issues, and form ulates the following risk managem ent policies or strategies based on the assessed risks: Major Issues Assessm ent Item Risk managem ent policy or strategy

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	Evaluation Item	Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)
			Yes	No	Summary (Note 2)
Environmental Sustainability	Environmental Protection	As a member of the global semiconductor product supply chain, ESMT is obligated to take responsibility for the sustainable developm ent of the environment. Through friendly environment, energy-saving and carbon reduction, and the formulation of safety and health policies, all business activities that affect the environm ent, safety and health should comply with legal requirements, reduce the negative impact on the environm ent, safety and health, and aim at increasing resource recycling. In addition, in line with international environm ental protection laws and custom ers' requirements for environmental protection, ESMT has also established a green product management system, making continuous improvem ent through the institutionalized PDCA m anagem ent cycle, and obtained Green Partner certification from major international manufacturers. The products also comply with RoHS, REACH and other regulatory requirem ents. In the future, ESMT's main goal of environm ental sustainability will continue to work hard and improve on green product design, launch more energy-saving and low environm ental load products, and contribute to the sustainable developm ent of the environm ent.
Social Responsibility	Workplace Safety	To prevent occupational disasters and protect the safety and health of employees, ESMT has established an occupational safety and health committee. Through internal and external safety inspections and regular committee meetings, labor safety and health related issues are discussed, various labor safety and health related policies are also implemented. Through education and training, the Company conveys the Company's commitm ent and relevant policy requirem ents, enabling employees and contractors to gain an understanding of the safety and health regulations and policies. The Company continues to improve through the institutionalized PDCA m anagement cycle and implements the em ergency response plan to ensure the achievem ent of safety and health goals and workplace safety.
	Social Care	The Company has long-term care for special education groups and cultural and educational activities, providing resources and manpower, cooperating with the operation of the "ESMT Educational Foundation", combining the strength of related groups, helping children who have lost their families, and sponsoring or organizing culture, art and education, related public welfare activities, and reviewing the effectiveness according to the annual plan, to achieve the goal of caring for the society and giving

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		Evaluation Item	Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)
				Yes	No	Summary (Note 2)
back to the society. Corporate Governance Social-econom y Legal Compliance The Company ensures the achievem ent of the Company's operating efficiency by establishing a governance organization that meets the requirements and implements internal control mechanisms, thereby rewards shareholders, employees, and society. At the sam e time, through the establishment and promotion of relevant systems, the Company ensures that all personnel and operations shall strictly comply with relevant laws and regulations. 3. The Company cooperates and supports the "ESMT Educational Foundation" of the purpose of this Council is to promote public welfare activities such as education, arts and culture, and to encourage lifelong learning and the very nature of life: I. Establish or provide scholarships to encourage study or learning preprofessional skills. II. Promote, sponsor, or organize various public welfare activities and clubs related to education, art and literature, and advocacy of aesthetics. III. Promote, sponsor, or organize various public welfare activities and clubs related to lifelong learning, talent cultivation, occupational com petence training, life education, reform atory education and inspiring growth education. IV. Sponsor high-tech education and talent cultivation. V. Promote, sponsor, or organize various academic activities and interchanges. VI. Provide rewards to cultivation of outstanding talents and participation in various perform ances and com petition. VII. Donate books, tools and m aterials, or equipment for the purpose of public welfare education. VIII. Other education affairs of a public welfare nature that meet the purpose of the founding of this Foundation. The 2020 implem entation plan is as follows: a. Sponsored the fund of Hsinchu Toranado Boxing Education Association. b. Sponsored the operating fund of Hsinchu Symphony Orchestra. c. Sponsored the student sewing hand-m ade course and teacher training project fund of Charity Foundation Hsinchu Catholic Social Welfare Foundation. The rest is omitted			back to the society.
	Corporate Governance	Social-econom y Legal Compliance	The Company ensures the achievem ent of the Company's operating efficiency by establishing a governance organization that meets the requirements and implements internal control mechanisms, thereby rewards shareholders, employees, and society. At the sam e time, through the establishment and promotion of relevant systems, the Company ensures that all personnel and operations shall strictly comply with relevant laws and regulations.

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Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)
	Yes	No	Summary (Note 2)
For the related content, please refer to the website of ESMT Educational Foundation: http://www.esmt.com.tw/foundation/index.asp
I. A clear statement shall be made below if the Corporate Social Responsibilityreport were verified byexternal certification institutions: Not applicable.

In response to the promotion of risk management and corporate sustainability strategy, the Company established the Corporate Sustainability Committee on October 7, 2020. The Chairperson of the Board and the President are the Chairperson and the Deputy Chairperson of the Committee, respectively, convening senior executives to form the Committee, which consists of working groups on "Corporate Governance," "Partnership," "Environmental Sustainability," and "Friendly Workplace and Public Interests of the Society." The aim is to manage business risks in the economic, environmental and social aspects based on the principle of sustainable management, and provide a reference for the senior managers and the Board of Directors to formulate strategic policies and improve management. Details of the Committee's organization and annual operation are shown in the attached chart.

The Company submitted a report on the establishment of the Corporate Sustainability Committee to the Board of Directors at the ninth meeting of the eighth Board (Nov. 11, 2020).

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Organizational Structure of ESMT Corporate Sustainability Committee

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B oard of Directors
Corporate Su stainability Comm ittee
Leadership
Ch airperson : Ch airperson of th e Board
Deputy Ch airperson : Presiden t
E xecutiv e Secreta ry for Promoting CSR Proj ec ts - President's Office
ESG Aspects
Economic Aspect Environmental Social
Corpora te G overnance - Partners hip - QS E nvironm enta l Sus ta ina bility Friendly Work plac e a nd
President's Office Product Qua lity - E nvironm ent and Safety Public I nterests of the
Func ti on of the Boa rd Outsourci ng V endor E nvi ronm enta l Policy Society - HR
Groups Sha rehol der Equi ty M ana gem ent CD P D iscl osure Em ploy ee Remunerations C haritabl e Ac ti vities
I nforma tion Dis closure Custom er Serv ice Safe W orking E nvi ronm ent and Benefits C omm unity Enga gem ent
Internal Control / Interna l Audit Suppli er Ma nagem ent W aste Dis posal La bor H uma n Rights Soci al C are
I nforma tion Sa fety Polic yBusiness I ntegrityLega l Compl ianc e R&D a nd Innova tionM ana gem entPurc hasi ng Ha za rdous Substa nce Process M ana gementMa nagement EA PTra ining Progra msLa bor-Ma nagement C orpora te Im age
Energy Sav ing and Ca rbon Relations /Comm uni cation
G reen and E nvi ronm enta l Reduction La bor H ealth a nd Sa fety
Protection
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P. 1
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Committee Responsibilities

˙Formulate the direction, strategy and goals for the sustainable development of the Company

˙Define the severity of the impact of various issues on the Company

˙Confirm the Company's major issues and the priority of their implementation

˙Assign the executive secretary and group leaders

˙Review the short-, mid- and long-term goals and implementation proposals of major issues prepared by each working group

˙Supervise the working groups implementing plans and programs

˙Track and review the achievement status of each goal and implementation plan

˙Report to the Board of Directors on the effectiveness of implementation and future plans

Risk management policy

Under the principle of corporate sustainable management, the Company conducts risk control in the economic, environmental, and social aspects, and through the promotion of the Corporate Sustainability Committee, the Company assesses risks, formulates strategic policies and carries out work in the

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directions of "corporate governance," "partnership," "environmental sustainability," and "friendly workplace and public interests of the society" in the hope of improving management and achieving sustainable management.

The Company submitted a report on risk management policies to the Board of Directors at the ninth meeting of the eighth Board (Nov. 11, 2020). Responsibilities of the Working Groups

Aspect	Group	Responsibilities
G	Corporate Governance	1. Assist the Board of Directors in fortifying the functions 2. Protect the rights and interests of investors 3. Establish various systems and regulations for corporate governance 4. Ensure the transparency and disclosure of information 5. Comply with relevant laws and regulations
	Partnership	1. Improve the sustainability of the supply chain 2. Build long-term partnerships for co-prosperity regarding product quality, customer service, and delivery and supply in supply chain management.
E	Environmental Sustainability	1. Promote the environmental protection work of the Company to meet the requirements of laws and regulations 2. Promote work on safety and health to meet the requirements of laws and regulations and ensure the safety of the working environment 3. Promote energy saving and carbon reduction to achieve the set goals
S	Friendly Workplace and Public Interests of the Society	1. Plan employee benefits 2. Assist the Company in planning employee career development 3. Uphold employees' rights at work 4. Create a friendly workplace 5. Develop community welfare and give back to the community in line with the Company's core philosophy.

Operation in 2020

Committee Meetings
(1) Oct. 7, 2020 (Committee established)
- Discussed and approved the organization and responsibilities of the Committee and the working groups

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Discussed and approved the appointment of the executive secretary and the group leaders
Reported on promotion plans

(2) Nov. 6, 2020

Discussed and determined stakeholder engagement, impact level, and operational relevance survey process
(3) Nov. 25, 2020
- Discussed and determined the Company's CSR vision, mission and implementation guidelines
Report of the Board of Directors
(1) Nov. 11, 2020 (The ninth meeting of the eighth Board)
- Reported on the establishment of the Committee
- Reported on the organization, responsibilities and personnel appointment of the Committee
- Reported on promotion plans
(1) Dec. 23, 2020 (the tenth meeting of the eighth Board)

Work reports of the Committee and its working groups

(VI) Compliance with ethical corporate management, and Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof:

Evaluation Item			Implem entation Status(Note 1)	Deviations from the Ethical Corporate Management B est Practice Principles for TWSE/TPEx Listed Companies and the reasons thereof
	Yes	No	Descriptions
I.Establishm ent of Ethical Corporate Management Policies and Programs (I) Has the Company form ulated the ethical corporate m anagement policies approved by the Board of Directors and specified in its rules and external docum ents the ethical corporate managem ent policies and practices and the commitment of the Board of Directors and senior managem ent to rigorous	V		1. The Company and the Group of Companies clearly specified in their rules and external docum ents the ethical corporate m anagem ent policies and the commitment by the Board of Directors and the management for rigorous and thorough implem entation of such policies, and carried out the policies in internal management and in com mercial activities. 2. The Directors, managers, and employees of the Company shall not, directly or indirectly, provide, promise, demand or accept any improper benefits or engage in other unethical or illegal acts or breach their fiduciary duties during the course of commercial activities in order to acquire or maintain theirpersonal interest.	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Ethical Corporate Management B est Practice Principles for TWSE/TPEx Listed Companies and the reasons thereof
	Yes	No	Descriptions
and thorough implementation of such policies? (II) Has the Company established a risk assessment m echanism against unethical conduct to analyze and assess on a regular basis business activities within its business scope which are at a higher risk of being involved in unethical conduct, and formulated a prevention program accordingly, which shall at least include those specified in Paragraph 2, Article 7 of the "Ethical Corporate M anagement Best Practice Principles for TWSE/TPEx Listed Companies"? (III) Has the Company defined operational procedures, conduct guidelines, and disciplinary and grievance systems for non-compliance in its prevention program against unethical conduct and implem ented them, and does the Company regularlyreview and revise the foregoing program?	V V		3. When establishing the prevention program, the Company shall analyze business activities within the business scope which m ay be at a higher risk of being involved in an unethical conduct, and strengthen the preventive measures.
II.Implem entation of Ethical Corporate M anagem ent (I) Does the Company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (II) Has the Company set up a dedicated unit under the Board of Directors to prom ote ethical corporate managem ent and regularly (at least once every year) report to the Board of Directors the implem entation of the ethical corporate managem ent policies and prevention programs against unethical conduct? (III) Has the Company established policies to prevent conflicts of interests, provided proper channels of appeal, and enforced these policies and channels accordingly? (IV) Has theCompanyestablished an effective accounting	V V V		1. Prior to any commercial transactions, the Company shall take into consideration the legality of their agents, suppliers, clients, or other trading counterparties and whether any of them are involved in unethical conduct, and shall avoid any dealings with persons so involved. When entering into contracts with its agents, suppliers, clients, or other trading counterparties, the Company shall include in such contracts terms requiring compliance with the integrity managem ent policy. 2. The President's Office of the Company is responsible for the formulation and supervision of the corporate integrity managem ent policy and the implementation of the plan, and reports to the Board of Directors on a regular basis. 3. The Company shall adopt policies for preventing conflicts of interest to identify, monitor, and manage risks potentially resulting from unethical conducts,and shall also offer appropriate means for the Directors,	No material departure

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Evaluation Item			Implem entation Status(Note 1)	Deviations from the Ethical Corporate Management B est Practice Principles for TWSE/TPEx Listed Companies and the reasons thereof
	Yes	No	Descriptions
system and internal control system for the implementation of ethical corporate managem ent, and has the internal audit unit prepared an audit plan based on the assessment results of the risk of unethical conduct and checked the compliance of the prevention program against unethical conduct accordingly, or entrusted a CPA to perform the audit? (V) Does the Company regularly hold internal and external educational trainings on ethical corporate managem ent?	V V		Supervisors, managers, and other stakeholders attending or be present at the meetings of the Board of Directors to voluntarily explain whether their interests would potentially be conflicted with those of the Company. 4. The Company shall establish effective accounting systems and internal control systems for business activities that are potentially at a higher risk of being involved in unethical conducts to prevent from having under-the-table accounts or keeping secret accounts, and conduct reviews regularly to ensure that the design and enforcement of the systems are effective. The Internal Audit Departm ent regularly reviews the compliance of various systems and reports to the Board of Directors. 5. The Company promotes the concept of integrity managem ent at all levels of m anagement m eetings and communication meetings. In addition, there are a variety of communication channels that can be communicated at anytime.
III.Status of Enforcing Whistle-blowing Systems in the Company (I) Has the company established a concrete whistleblowing and rewarding system, and set up accessible m ethods for whistleblowers, and designate appropriate and dedicated personnel to investigate the accused? (II) Has the Company established an SOP for investigation and relevant confidentiality mechanism for all whistleblowing cases? (III) Does the Company take any m easures to protect whistleblowers so that they are safe from mishandling?	V V V		1. The Company has strengthened the prom otion of ethical concepts to employees and established a dedicated hotline and e-mail, where employees can report to the managem ent if they suspected or identified violations of laws and regulations or ethical standards. In addition, a reward and punishm ent system is stipulated in the "Work Rules" and announced to all employees of the Company. 2. The Company has a dedicated complaint hotline and e-mail to provide employees with timely response and opinion. Complaints are handled according to the Company's relevant m easures. To protect whistleblowers, confidentiality terms are stipulated in the procedures. The Company will take appropriate measures depending on the seriousness of the circumstances. Contact details of the company's website. 3. The measures of the Company stipulated protection measures for the whistleblowers to ensure the quality and fairness of the investigation and avoid unfair treatment.	No material departure

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Evaluation Item	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Implem entation Status(Note 1)	Deviations from the Ethical Corporate Management B est Practice Principles for TWSE/TPEx Listed Companies and the reasons thereof
	Yes	No	Descriptions
IV.Enhanced Disclosure of Corporate Social Responsibility Inform ation Has the Company disclosed the content of its integrity operation principles and its result of implem entation on its website and M OPS?	V		1. The Company has established the "Code of Integrity M anagement", which has been disclosed in the Corporate Governance section on MOPS and company's website.	No material departure
V.If the Company has established the Corporate Social Responsibility best practice principles based on the "Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the Principles and their implementation: To establish a corporate culture and sound development of integrity managem ent, the Company refers to the "Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies", and the internal and external environm ent of the Company,and form ulate the "Code of IntegrityManagement" to complywith.
VI.Other important inform ation to facilitate a better understanding of the Company's ethical corporate management policies (e. g. reviews and amendments to its policies). The Company should operate its business in a fair and transparent manner based on the principle of good faith managem ent. Designated people are in place as regular communication channels with the custom ers to keep up with the custom er dynamics at any tim e through a good mechanism to ensure the integrity of both parties. The Company also pays attention to the relevant laws and regulations on integrity management at any time, based on which it reviews and improves the relevant operation standards of the Company and enhances the effectiveness of the Company's integrity managem ent. The Company established the Corporate Sustainability Committee on October 7,2020.and related to the relevant instructions.
Note 1: Describe briefly in implem entation status colum n whether the result of implementation is "Yes" or "No". Note 2: Companies that have com piled CSR reports may specify ways to access the report and indicate the page numbers of the cited pages.

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(VII) Please disclose the access to the Company's corporate governance principles and related rules and regulations:
The Company has established the "Corporate Governance Code" and related regulations, which have been disclosed in the Corporate Governance section of MOPS, which is available for access to the investors (including shareholders).
(VIII) Other important information that is sufficient to enhance the understanding of the operation of corporate governance must be disclosed together: None.
(IX) Status of Internal Control System:
Statement of Internal Control:

Elite Semiconductor Microelectronics Technology Inc

Date: February 26, 2021

This Statement of Internal Control System is issued based on the self-assessment of the Company for the Financial Year 2020.

I. The Company acknowledges that the establishment, implementation, and maintenance of an internal control system is the responsibility of the Board of Directors and managers, and the Company has established an internal control system. The internal control system is designed to provide reasonable assurance for the effectiveness and efficiency of the operations (including profitability, performance and protection of assets), reliability, timeliness, and transparency of reporting, and compliance with applicable laws and regulations.
II. The internal control system has innate limitations. No matter how robust and effective the internal control system, it can only provide reasonable assurance of the achievement of the three aforementioned goals. In addition, the effectiveness of the internal control system may vary due to changes in the environment and conditions. However, the internal control system of the Company has self-monitoring mechanisms in place, and the Company will take corrective action against any defects identified.
III. The Company uses the assessment items specified in the Guidelines Governing Establishment of Internal Control Systems by Public Companies (hereinafter referred to as the "Guidelines") to determine whether the design and implementation of the internal control system are effective. Based on the process of control, the assessment items specified in the Guidelines divide the internal control system into five constituent elements: 1. control environment; 2. risks assessment; 3. control activities; 4. information and communications; and 5. monitoring activities. Each constituent element includes a certain number of items. For more information on such items, refer to the Guidelines.

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IV. The Company has already adopted the aforementioned Guidelines to evaluate the effectiveness of its internal control system design and operating effectiveness.
V. Based on the findings of such evaluation, the Company believes that, on December 31, 2020, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of its subsidiaries), to provide reasonable assurance over the Company's operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws, and regulations.
VI. This statement will constitute the main content of the Company's Annual Report and the Prospectus, which will be disclosed to the public. Any falsehood or concealment with regard to the above contents will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
VII. This statement has been approved by the Company's Board of Directors on February 26, 2021, and out of the 8 members of the Board of Directors in attendance, none had objected to it and all consented to the contents expressed in this statement.

Elite Semiconductor Microelectronics Technology Inc

  - Chairman of the Board: Hsing-Hai Chen Signature and Seal President: Ming-Chien Chang Signature and Seal

Any CPA commissioned to conduct an audit on the Internal Control System shall disclose the CPA’s audit report: None.
(X) The Company and its internal personnel that have been punished according to law in the most recent financial year and up to the date of publication of the Annual Report, and the punishment imposed by the Company on its internal personnel for violating internal control system regulations, and major deficiencies and improvements: None.
(XI) Important resolutions of the Shareholders' Meetings and the meetings of the Board of directors from the most recent financial year up to the date of publication of the Annual Report.

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Board of Directors:

	Board of Directors:
Date	Content of Proposals and Follow-up Actions	Issues specified in Article 14-3 of the Securities and Exchange Act	Objections or Qualified Opinion of the Independent Directors
The 8th Board The 5th meeting. March 20, 2020	(1) Approved the resolution of the distributions of employee bonus and Directors bonus for FY2019.
	(2) Approved the resolution of the Company's Final Statem ent for FY2019.
	(3) Approved the resolution of the Company's earnings distribution for FY2019.
	(4) Approved the Company's Statem ent of Self-assessment of Internal Control System for FY2019.
	(5) Approved the Company's allowance of em ployee stock option to be subscribed for ordinary shares of NT$ 59.20 - 303.40 per share until March 31, 2020. If the employee exercises the stock option, the Chairm an of the Board is authorized to set the actual number of shares issued within the range of 1,000 shares to 543,506 shares. The record date for the issuing of new shares is set at March 31, 2020. The Chairm an of the Board is authorized to amend the date if any change arises.
	(6) Approved the resolution of the business plan and budget plan for FY2020.
	(7) Approved the resolution to am end the Company's "Audit Committee Charter".	V
	(8) Approved the resolution to am end the Company's "Procedures of the Meetings of the Board of Directors".	V
	(9) Approved the resolution to am end the Company's "Remuneration Committee Organization Charter".	V
	(10) Approved the resolution to am end the Company’s "Articles of Association".	V
	(11) Approved the resolution to am end the Company's "Self-Evaluation of the Board of Directors".	V
	(12) Approved the resolution to convene the Com pany's 2020 Annual Shareholders' M eeting.
	(13) Approved the resolution for the period and venue for accepting proposals from the shareholders
	(14) Approved the resolution of the evaluation of the independence of the CPAs and CPAs' accountingfirm.	V
	Opinions of Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution results: All the directorspresent voted in favor of the resolution without anyobjection.
The 8th Board The 6th meeting May 14, 2020	(1) Approved that Company's employee stock option can be exercised to subscribe for ordinary shares at NT$59.2 - 303.4 per share until June 30, 2020. If the employee exercises the stock option, the Chairman is authorized to set the actual number of shares issued range from 1,000 to 543,506 shares. The base date for the issuance of new shares is June 30, 2020. In the event of a change, the Chairman is authorized to change the date.
	(2) Approved the am endm ents to the Company's "Procedures for the Acquisition and Disposal of Assets".	V
	(3) Approved the am endm ents to the Company's "Rules of Procedure for Board of Directors M eetings."	V
	(4) Approved the am endm ents to the Company's "Audit Committee's Articles of Association".	V
	(5) Approved the application for the credit line with various financial institutions in response to the Company's capital needs.
	Opinions of the Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution results: All the directorspresent voted in favor of the resolution without anyobjection.

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Date	Content of Proposals and Follow-up Actions	Issues specified in Article 14-3 of the Securities and Exchange Act
The 8th Board The 7st meeting June 15, 2020	(1) The Chairm an of the Board reported on the Company's 2018 cash dividendpaym ent date and ex-dividend date.
	Opinions of Independent Directors: None.
	The Company's actions in response to the Opinions of the Independent Directors: None.
	Resolution results: All the Directors present voted in favor of the resolution without any objection.
The 8th Board The 8nd meeting August 11, 2020	(1) Approved the resolution that the Company will be subject to the stock price adjustm ent of the employee's stock option of the original Eon Silicon Solution Inc. due to the merger.
	(2) Approved the Company's allowance of em ployee stock option to be subscribed for ordinary shares of NT$ 57.6 - 241.2 per share until Sep 30, 2020. If the em ployee exercises the stock option, the Chairm an of the Board is authorized to set the actual number of shares issued within the range of 1,000 shares to 527,821 shares. The record date for the issuing of new shares is set at September 30, 2020. The Chairman of the Board is authorized to am end the date if anychange arises.
	(3) Approved the application for the credit line with various financial institutions in response to the Company's capital needs.
	(4) Approved the resolution of the managers' remuneration ajustment for FY2020 of the Company.
	(5) Approved the resolution of the Company's remuneration to Directors and Supervisors for FY2019.
	(6) Approved the resolution of m anagers' and employees' compensation and bonus for FY2019 of the Company.
	Opinions of the Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution results:Resolutions 1-3 were approved by all Directors present at the meeting.Resolutions 4 and 6 were approved by all Directors present at the meeting except the recusal of Directors Hsing-Hai Chen, Ming-Chien C hang, Chih-Hong Ho, and Yeong-Wen Daih from the voting due to conflict o f interests. Resolutions 5 was approved by all Directors present at the m eeting except the recusal of Directors Hsing-Hai C hen, Ming-Chien Chang, Chih-Hong Ho, Yeong-Wen Daih, Chia-Neng Huang, and Shan-Jen Chow from the votingdue to conflict of interests.
The 8th Board The 9rd meeting November 11, 2020	(1) Approved the Company's allowance of employee stock option to be subscribed for ordinary shares of NT$57.6-217.4 per share until Dec. 31, 2020. If the employee exercises the stock option, the Chairperson of the Board is authorized to set the actual number of shares issued within the range of 1,000 shares to 518,018 shares. The base date for the issuance of new shares is Dec. 31, 2020. In the event of a change, the Chairperson is authorized to set another date.
	(2) Approved the Company's "R ules Governing the Preparation Process of Financial Statem ents."	V
	(3) Approved the Company's "Organizational Rules of the Nomination Committee."	V
	(4) Approved the appointm ent of the first-term Nomination Committee members.
	(5) Approved to apply to various financial institutions for credit lines in response to the Company's capital requirem ents.
	Opinions of the Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution: All the directorspresent voted in favor of the resolution without anyobjection.
The Eighth Board The Tenth Meeting	(1)Approved the am endm ent to the internal control system.	V
	(2)Approved the auditplan of the Companyfor 2021.
	(3)Approved the adjustm ent of the Directors' salaries and compensations.
	(4)Approved to applyto various financial institutions for credit lines in

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Date	Content of Proposals and Follow-up Actions	Issues specified in Article 14-3 of the Securities and Exchange Act
2020.12.23	response to the Company's capital requirem ents.
	Opinions of the Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution results: All the directorspresent voted in favor of the resolution without anyobjection.
The Eighth Board The Eleventh Meeting 2021.02.26	(1) Amended the Company's "Regulations Governing Self-Appraisal or Peer Appraisal bythe Board of Directors"	V
	(2) Amended the Company's "Regulations Governing the Organization of the Salaryand Remuneration Committee"	V
	(3) Approved the 2020 remuneration distribution for employees and directors.
	(4) Approved the Company's 2020 final accounting books and statem ents.
	(5) Approved the distribution of the Company's 2020 earnings.
	(6) Approved the self-assessment of the Company's internal control system for 2020.
	(7) Approved the Company's allowance of em ployee stock option to be subscribed for ordinary shares of NT$57.6 per share until M ar. 31, 2021. If the employee exercises the stock option, the Chairperson of the Board is authorized to set the actual number of shares issued within the range of 258,915 shares to 412,145 shares. The base date for the issuance of new shares is Mar. 31, 2021. In the event of a change,the Chairperson is authorized to set another date.
	(8) Approved the establishm ent of the operating plan and budget for fiscalyear 2021.
	(9) Approved the am endm ent to the Company's "Rules for Election of Directors" of the Company.	V
	(10) Approved the am endm ent to the Company's "Articles of Incorporation."	V
	(11) Approved the convening of the Company's 2021 Annual General Shareholders' M eeting.
	(12) Approved the designated period and venue for accepting proposals from the shareholders.
	(13) Approved the evaluation of the independence of the CPAs and their affiliated firms.	V
	Opinions of the Independent Directors: None.
	The Company's actions in response to the opinions of the Independent Directors: None.
	Resolution results: All the directorspresent voted in favor of the resolution without anyobjection.
The 8th Board The 12th meeting May 06, 2021	(1) Approved that Company's employee stock option can be exercised to subscribe for ordinary shares at NT$57.6 per share until June 30, 2021. If the employee exercises the stock option, the Chairm an is authorized to set the actual number of shares issued range from 29,607 to 71,174 shares. The base date for the issuance of new shares is June 30, 2021. In the event of a change, the Chairm an is authorized to change the date.
	(2) Approved the am endm ents to the Company's " Rules for Election of Directors "	V
	(3) Approved to apply to various financial institutions for credit lines in response to the Company's capital requirem ents.
	(4) Approved the Addition the Discussions for General Shareholders' Meeting.
	(5) Approved the resolution of the managers' bonus.
	Opinions of independent directors: None.
	The Company's actions in response to the opinions of independent directors: None.
	Resolution: All the directors present voted in favor of the resolution without anydissentingopinion.

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Shareholders' Meeting:

	Shareholders' Meeting:
Date June 15,2020	Review of KeyResolutions and Implementation
	Adoption Item 1: Adoption of the Business Report and Financial Statements for FY2019. Resolution: The proposal is voted and resolved as it is.. VotingResults: Number of Votes by AttendingShareholders Approved Votes Disapproved votes Abstained Votes/No Votes 190,396,971 rights 182,677,424 rights 16,017 rights 8,703,530 rights 100% 95.42% 0.00% 4.57%
	Adoption Item 2: Adoption of the Earnings Distribution for FY2019. Resolution: The proposal is voted and resolved as it is. VotingResults: Number of Votes by AttendingShareholders Approved Votes Disapproved votes Abstained Votes/No Votes 190,396,971 rights 182,031,419 rights 33,018 rights 8,332,534 rights 100% 95.60% 0.01% 4.37% Implementation review: The cash ex-dividend date of this Earnings Distribution was July 11, 2020, and the dividend was distributed by remittance and postal cheque on July31,2020
	Discussion Item 1: Proposed resolution to amend the Company's "Articles of Association". Resolution: The proposal is voted and resolved as it is. VotingResults: Number of Votes by AttendingShareholders Approved Votes Disapproved votes Abstained Votes/No Votes 190,396,971 rights 182,042,572 rights 22,024 rights 8,332,375 rights 100% 95.61% 0.01% 4.37% Implementation review: The Company's operating management system documents have been amended, and the relevant "Articles of Association" shall be handled in accordance with this newlyrevisedprovision.

(XII) Major Issues of Record or Written Statements Made by Any Director Objecting to Important Resolutions Passed by the Board of Directors in the most recent recent financial year and up to the date of publication of the Annual Report: None.
(XIII) Resignation or Dismissal of the Chairman of the Board, President, and Heads of Accounting, Finance, Internal Audit and R&D in the most recent recent financial year and up to the date of publication of the Annual Report: None.

IV. Information of Audit Fee

(I) Range of Audit Fee Range:

CPAs' AccountingFirm	Name ofCPAs	Name ofCPAs	AuditPeriod	Remarks
PricewaterhouseCoopers Taiwan	Ya-Huei Cheng	Danie Lee	2020.1.1~2020.12.31

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Range of	Fees Category Fees	Audit Fee	Non-audit fee	Total
1	Under NT $ 2,000 thousand		V
2	NT$2,000 thousand(inclusive)- NT$4,000 thousand
3	NT$4,000 thousand(inclusive)- NT$6,000 thousand
4	NT$6,000 thousand(inclusive)- NT$8,000 thousand	V		V
5	NT $ 8,000, thousand (inclusive) ~ NT $ 10,000 thousand
6	Over NT$10,000 thousand(inclusive)

(II) If the Company is in any one of the following conditions, the following information shall be disclosed:
(1) If the non-audit fees paid to CPAs, the CPA's accounting firm and its affiliates amounted to over one-fourth of the audit fees paid to the CPAs, the amount of audit and non-audit fees and the content of the non-audit services shall be disclosed:

Unit:NT$1,000

CPA Accounting Firm	Nam e of CPAs	Nam e of CPAs	Audit Fee		Non-audit Fee	Non-audit Fee			Audit Period	Remarks
				System Design	Business Registration	Human Resource	Others	Sub-tot al
Pricewaterhouse Coopers Taiwan	Cheng Ya-Hui	Li Tien I	6,380	-	203	-	770	973	2020.1.1~ 2020.12.31	The non-audit fees are mainly the incom e tax exemption application service fee of NT$ 720 and dual-status business entities verification fee of NT$50,etc.

(2) Where the CPA firm was replaced, and the audit fees in the financial year when the replacement was made were less than that in the previous financial year before the replacement, the amount of the audit fees paid before the replacement and reasons for paying said amount shall be disclosed: Not applicable.
(3) Where accounting fee paid has decreased for more than 15% than that of the previous year, the amount, proportion, and reason of the reduction shall be disclosed: None.
V. Changes of CPAs: None.
VI. Any of the Company’s Chairman of the Board, President, or managers in charge of finance or accounting held a position in CPA's accounting firm or its affiliates in the most recent year: None.

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VII. Conditions of shares transfer and changes in equity pledge from the Chairman of the Board, managers, and shareholders who hold more than ten percent (10%) of the total shareholder, from the most recent financial year up to the date of publication of the Annual Report:

(I) Shares changes by Directors, Supervisors, anagers, and major shareholders

Title	Nam e	2020	2020	As at April 18,2021	As at April 18,2021
		Shareholding (Number of Shares) Amount Increased (Decreased)	Shares Pledged Amount Increased (Decreased)	Shareholding (Number of Shares) Amount Increased (Decreased)	Shares Pledged Amount Increased (Decreased)
Chairm an of the Board	Hsing-Hai Chen	-	-	-	-
Director President	Ming-Chien Chang	-	-	-	-
Director Senior Vice President	Chih-Hong Ho	-	-	-	-
Director Vice President	Yeong-Wen Daih	10,000	-	-	-
Director	Shin Xin Investment Co., Ltd.	-	-	-	-
Corporate Representative of Directors	Chia-Neng Huang	-	-	-	-
Independent Director	Shan-Jen Chow	-	-	-	-
Independent Director	Tsin-Fu Jiang	-	-	-	-
Independent Director	Cheng-Yan Chien	-	-	-	-
Senior Director of Finance Departm ent	Candy Chu	-	-	-	-

(II) Equity transfer information: None.
(III) Shares pledged: None.

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VIII. Relationship information between the 10 largest shareholders

Name	Current Shareholding	Current Shareholding	Spouse & Minor Children Children's Shareholding	Spouse & Minor Children Children's Shareholding	Shareholding by Nominees	Shareholding by Nominees	The name and relationship with any one who is a related party or a relative within the second degree of kinship among the ten largest shareholders,	The name and relationship with any one who is a related party or a relative within the second degree of kinship among the ten largest shareholders,
	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Name (or Name)	Relationship
Jie Yong Investment Ltd.	14,154,000	4.95%	-	-	-	-	Hsing-Hai Chen	Chairman of the Board of this company
							Ming-Chie n Chang	Director of this company
Representative of Jie Yong Investment Ltd.: Hsing-HaiChen	8,411,629	2.94%	1,370,927	0.47%	-	-	Jie Yong Investment Ltd.	Chairman of the Board of this company
Hsing-Hai Chen	8,411,629	2.94%	1,370,927	0.47%	-	-	Jie Yong Investment Ltd.	Chairman of the Board of this company
Ming-Chien Chang	5,523,825	1.93%	1,618,785	0.56%	-	-	Jie Yong Investment Ltd.	Director of this company
British Virgin Islands merchant KAHOW LTD.	5,222,985	1.83%	-	-	-	-	Shun Cheng Investment Co.,Ltd.	Subsidiary
Representative of British Virgin Islands merchant KAHOW LTD.: MLChiou	949	-	-	-	-	-	-	-
Shun Cheng Investment Co., Ltd.	4,807,941	1.68%	-	-	-	-	British Virgin Islands merchant KAHOW LTD.	Parent company
Representative of Shun Cheng Investment Co., Ltd.: Ming-Hui Chen	-	-	-	-	-	-	-	-
Chang Wah Electromaterials Inc.	4,350,000	1.52%	-	-	-	-	-	-
Representative of Chang Wah Electromaterials Inc.: Chia-Neng Huang	-	-	-	-	-	-	-	-
J.P. Morgan Is A Special Account Of JP Morgan Securities Co., Ltd.	3,509,359	1.23%
Chase hosts the	3,269,000	1.14%

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==> picture [482 x 202] intentionally omitted <==

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

The name and
relationship with any
Spouse & Minor one who is a related
Name Current Shareholding Children Shareholding by party or a relative Remarks
Children's Nominees within the second
Shareholding degree of kinship
among the ten largest
shareholders,
Van Garde
Group Emerging
Markets Fund
Yang-Jin Huang 3,007,000 1.05%
Chase hosts the
Advanced
Starlight
2,897,717 1.01% - - - - - -
Advanced Total
International
Equity Index.
----- End of picture text -----

IX.Shares held by the Company, its Directors, Supervisors, managers, and businesses directly or indirectly controlled by the Company as a spin-off, and the percentage of consolidated shares held:

Unit: Shares; %

held:					Unit: Shares; %	Unit: Shares; %
Spinoff Company	Investment by the Company		Investment by Directors/Supervisors/managers and by companies directly or indirectly controlled by the Company		Total Investm ent
	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage
Elite Semiconductor Memory Technology Inc.	100,000	100.00%	－	－	100,000	100.00%
CharngFengInvestment Ltd.	50,000,000	100.00%	－	－	50,000,000	100.00%
3R Semiconductor TechnogyINC.	－	－	10,000,000	100.00%	10,000,000	100.00%
Elite Silicon TechnologyInc.	－	－	7,448,960	98.01%	7,448,960	98.01%
Jie YongInvestment Ltd.	3,600,000	41.86%	2,900,000	33.72%	6,500,000	75.58%
Elite Investment Services Ltd.	15	100.00%	－	－	15	100.00%
Elite Innovation Japan Ltd.	－	－	200	100.00%	200	100.00%
Eon Silicon Solution Inc.USA	200,000	100.00%	－	－	200,000	100.00%
Elite Semiconductor Memory Technology (Shenzhen) Inc.	－	－	－	100.00%	－	100.00%
Elite Semiconductor Microelectronics (Shanghai)TechnologyInc.	－	－	－	100.00%	－	100.00%
CHI Microelectronics Limited.			10,000	100.00%	10,000	100.00%
HHHtech CO., Ltd.	－	－	1,500,000	75.00%	1,500,000	75.00%

Note: This docum ent is dated March 31, 2021.

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Capital Overview

I. Capital and Shares

(I) Sources of Capital

Year and Month	Price at Issuance	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks
		Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Sources of Capital	Increase of Capital by Assets Other Than Cash	Others
1998.5	10	30,000	300,000	10,540	105,400	Capital Shares at Founding	Technical Value NT$ 10,540 thousand	Note 1
1999.4	10	30,000	300,000	28,571	285,715	Increase of Capital in Cash NT$ 162,284 thousand	Technical value NT$ 18,031 thousand	Note 2
1999.7	10	30,000	300,000	30,000	300,000	Recapitalization of Retained Earnings NT$ 14,285 thousand	Nil	Note 3
2000.9	10	100,000	1,000,000	55,453	554,530	Recapitalization of Retained Earnings NT$ 254,530 thousand	Nil	Note 4
2001.9	10	100,000	1,000,000	100,000	1,000,000	Recapitalization of Retained Earnings NT$ 445,470 thousand	Nil	Note 5
2002.9	10	150,000	1,500,000	137,500	1,375,000	Recapitalization of Retained Earnings NT$ 375,000 thousand	Nil	Note 6
2003.9	10	180,000	1,800,000	158,125	1,581,250	Recapitalization of Retained Earnings NT$ 206,250 thousand	Nil	Note 7
2004.9	10	210,000	2,100,000	177,891	1,778,906	Recapitalization of Retained Earnings NT$ 197,656 thousand	Nil	Note 8
2005.9	10	260,000	2,600,000	204,574	2,045,742	Recapitalization of Retained Earnings NT$ 266,836 thousand	Nil	Note 9
2006.2	10	260,000	2,600,000	207,833	2,078,325	Increase of Capital by Merger NT$32,583thousand	Nil	Note 10
2006.9	10	260,000	2,600,000	216,665	2,166,654	Recapitalization of Retained Earnings NT$ 88,329 thousand	Nil	Note 11
2007.9	10	260,000	2,600,000	227,365	2,273,654	Recapitalization of Retained Earnings NT$ 107,000 thousand	Nil	Note 12
2008.9	10	260,000	2,600,000	239,007	2,390,071	Recapitalization of Retained Earnings NT$ 116,417 thousand	Nil	Note 13
2008.11	17.65	260,000	2,600,000	241,532	2,415,321	Exercising of Employee Stock Options of NT$ 25,250 thousand	Nil	Note 14
2009.4	17.65	260,000	2,600,000	241,995	2,419,951	Exercising of Employee Stock Options of NT$ 4,630 thousand	Nil	Note 15

~62~

Year and Month	Price at Issuance	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks
		Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Sources of Capital	Increase of Capital by Assets Other Than Cash	Others
2009.5	17.65	260,000	2,600,000	242,251	2,422,519	Exercising of employee stock options NT$ 2,568 thousand	Nil	Note 16
2009.9	17.65	260,000	2,600,000	242,340	2,423,404	Exercising of Employee Stock Options of NT$ 885 thousand	Nil	Note 17
2010.1	16.65	260,000	2,600,000	244,310	2,443,101	Exercising of Employee Stock Options of NT$ 19,697 thousand	Nil	Note 18
2010.4	16.65	260,000	2,600,000	244,683	2,446,834	Exercising of Employee Stock Options of NT$ 3,733 thousand	Nil	Note 19
2010.5	16.65	300,000	3,000,000	245,422	2,454,221	Exercising of Employee Stock Options of NT$ 7,387 thousand	Nil	Note 20
2010.7	16.65	300,000	3,000,000	245,874	2,458,749	Exercising of Employee Stock Options of NT$ 4,528 thousand	Nil	Note 21
2011.1	15.65	300,000	3,000,000	246,035	2,460,351	Exercising of Employee Stock Options of NT$ 1,602 thousand	Nil	Note 22
2011.4	15.65	300,000	3,000,000	246,224	2,462,246	Exercising of Employee Stock Options of NT$ 1,895 thousand	Nil	Note 23
2011.7	15.65	300,000	3,000,000	246,291	2,462,911	Exercising of Employee Stock Options of NT$ 665 thousand	Nil	Note 24
2011.11	14.7 10	350,000	3,500,000	259,777	2,597,774	Exercising of Employee Stock Options of NT$ 1,638 thousand and stock swap of NT$ 133,225 thousand	Nil	Note 25
2012.4	14.7	350,000	3,500,000	260,522	2,605,229	Exercising of Employee Stock Options of NT$7,455 thousand	Nil	Note 26
2012.7	14.7	350,000	3,500,000	260,741	2,607,414	Exercising of Employee Stock Options of NT$ 2,185 thousand	Nil	Note 27
2012.7	-	350,000	3,500,000	266,741	2,667,414	Issuance of New R estricted Employee Shares Amounted NT$ 60,000 thousand	Nil	Note 28
2013.1	14.2	350,000	3,500,000	267,175	2,671,749	Exercising of Employee Stock Options of NT$ 5,285 thousand Cancellation of restricted employee shares of NT$ 950 thousand	Nil	Note 29
2013.6	-	350,000	3,500,000	266,980	2,669,799	Cancellation of Restricted Employee Shares NT$ 1,950 thousand	Nil	Note 30
2013.11	-	350,000	3,500,000	266,873	2,668,729	Cancellation of Restricted Employee Shares NT$ 1,070 thousand	Nil	Note 31

~63~

Year and Month	Price at Issuance	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks
		Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Sources of Capital	Increase of Capital by Assets Other Than Cash	Others
2014.5	-	350,000	3,500,000	266,782	2,667,819	Cancellation of Restricted Employee Shares NT$ 910 thousand	Nil	Note 32
2014.11	24.3	350,000	3,500,000	271,454	2,714,544	Cancellation of Restricted Employee Shares NT$ 600 thousand Exercising of Employee Stock Options of NT$ 47,325 thousand	Nil	Note 33
2015.4	24.3	350,000	3,500,000	272,424	2,724,241	Cancellation of Restricted Employee Shares NT$ 140 thousand Exercising of Employee Stock Options of NT$ 9,837 thousand	Nil	Note 34
2015.10	22.8	350,000	3,500,000	272,514	2,725,144	Exercising of Employee Stock Options of NT$ 903 thousand	Nil	Note 35
2016.1	22.8	350,000	3,500,000	272,834	2,728,344	Exercising of Employee Stock Options of NT$ 3,200 thousand	Nil	Note 36
2016.4	22.8	350,000	3,500,000	273,103	2,731,026	Exercising of Employee Stock Options of NT$ 2,682 thousand	Nil	Note 37
2016.8	22.8	350,000	3,500,000	281,518	2,815,177	Exercising of Employee Stock Options of NT$ 1,415 thousand Stock Issued Pursuant to Acquisitions NT$ 82,736 thousand	Nil	Note 38
2016.10	21.8	350,000	3,500,000	281,924	2,819,239	Exercising of Employee Stock Options of NT$ 4,062 thousand	Nil	Note 39
2017.1	21.8	350,000	3,500,000	282,574	2,825,737	Exercising of Employee Stock Options of NT$ 6,498 thousand	Nil	Note 40
2017.4	21.8	350,000	3,500,000	283,281	2,832,814	Exercising of Employee Stock Options of NT$ 7,077 thousand	Nil	Note 41
2017.7	20.9	350,000	3,500,000	284,025	2,840,252	Exercising of Employee Stock Options of NT$ 7,438 thousand	Nil	Note 42
2017.10	20.9	350,000	3,500,000	284,699	2,846,992	Exercising of Employee Stock Options of NT$ 6,740 thousand	Nil	Note 43
2018.1	20.9	350,000	3,500,000	285,759	2,857,589	Exercising of Employee Stock Options of NT$ 10,597 thousand	Nil	Note 44
2021.1	57.6	350,000	3,500,000	286,099	2,860,999	Exercising of Employee Stock Options of NT$ 3,409 thousand	Nil	Note 45

~64~

Year and Month	Price at Issuance	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks
		Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Number of Shares (Thousand Shares)	Value (NT$ 1,000)	Sources of Capital	Increase of Capital by Assets Other Than Cash	Others
2021.5	57.6	350,000	3,500,000	286,129	2,861,295	Exercising of Employee Stock Options of NT$ 297 thousand	Nil	Note 46

Approval Date and Num ber by FSC Securities and Futures Bureau

Approval Date and Num ber by Science Park Bureau

Note 1 Established in May － 1998 Note 2 Increase of Capital － in April 1999 Note 3 Increase of Capital － in July 1999 Increase of Capital Note 4 Taiwan Financial Securities (1) No. 31221 on April 21, 2000 in September 2000 Increase of Capital Note 5 (2001) Taiwan Financial Securities (1) No. 144603 on July 10, 2001 in September 2001 Increase of Capital Note 6 Taiwan Financial Securities (1) No. 0910139350 on July 16, 2002 in September 2002 Increase of Capital Note 7 Taiwan Financial Securities (1) No. 0920129883 on July 4, 2003 in September 2003 Increase of Capital Note 8 Financial Supervisory Securities (1) No. 0930132757 on July 22, 2004 in September 2004 Increase of Capital Note 9 Financial Supervisory Securities (1) No. 0940129095 on July 20, 2005 in September 2005 Increase of Capital Financial Supervisory Securities (1) No. 0940147723 on Novem ber 1, Note 10 in Februrary 2006 2005 Increase of Capital Note 11 Financial Supervisory Securities (1) No. 0950131360 on July 19, 2006 in September 2006 Increase of Capital Note 12 Financial Supervisory Securities (1) No. 0960036695 on July 16, 2007 in September 2007 Increase of Capital Note 13 Financial Supervisory Securities (1) No. 0970035546 on July 15, 2008 in September 2008 Increase of Capital Note 14 Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006 in Novem ber 2008 Increase of Capital Note 15 Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006 in April 2009

(1998) Park Comm ercial No. 013135 on June 2, 1998 (1999) Park Comm ercial No. 007633 on April 19, 1999 (1999) Park Comm ercial No. 014586 on July 6, 1999 Park Comm ercial No. 019842 on September 15, 2000 (2001 Park Comm ercial No. 023715 on September 20, 2001 Park Comm ercial No. 0910022134 on September 18, 2002 Park Comm ercial No. 0920025611 on September 10, 2003 Park Comm ercial No. 0930025291 on September 20, 2004 Park Comm ercial No. 0940024896 on September 19, 2005 Park Comm ercial No. 0950002485 on February 3, 2006 Park Comm ercial No. 0950024568 on September 21, 2006 Park Comm ercial No. 0960024944 on September 19, 2007 Park Comm ercial No. 0970026074 on September 22, 2008 Park Comm ercial No. 0970032595 on November 21, 2008 Park Comm ercial No. 0980009444 on April 14, 2009

~65~

Approval Date and Num ber by FSC Securities and Futures Bureau

Approval Date and Num ber by Science Park Bureau

Note	16	Increase of Capital in May 2009	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0980012992 on May 13, 2009
Note	17	Increase of Capital in September 2009	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0980025248 on September 10, 2009
Note	18	Increase of Capital in September 2010	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0990002583 on January 28, 2010
Note	19	Increase of Capital in April 2010	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0990009166 on Apil 13, 2010
Note	20	Increase of Capital in May 2010	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0990013413 on May 13, 2010
Note	21	Increase of Capital in July 2010	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 0990018991 on July 7, 2010
Note	22	Increase of Capital in January 2011	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 1000001111 on January 13, 2011
Note	23	Increase of Capital in April 2011	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 1000009811 on April 15, 2011
Note	24	Increase of Capital in July 2011	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No.1000019060 on July 6, 2011
Note	25	Increase of Capital in Novem ber 2011	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006 Financial Supervisory S ecurities Issued No. 1000047861 on October 13, 2011	Park Comm ercial No. 1000035125 on November 28, 2011
Note	26	Increase of Capital in April 2012	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 1010009398 on April 3, 2012
Note	27	Increase of Capital in June 2012	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No.1010020247 on July 9, 2012
Note	28	Increase of Capital in October 2012	Financial Supervisory Securities Issued No. 1010030033 on July 9, 2012	Park Comm ercial No. 1010031715 on October 15, 2012
Note	29	Increase of Capital in January 2013	Financial Supervisory Securities (1) No. 0950128713 on July 6, 2006	Park Comm ercial No. 1020000199 on January 7, 2013
Note	30	Decrease in Capital in June 2013	Financial Supervisory Securities Issued No. 1010030033 on July 9, 2012	Park Comm ercial No. 1020018681 on June 28, 2013
Note	31	Decrease in Capital in Novem ber 2013	Financial Supervisory Securities Issued No. 1010030033 on July 9, 2012	Park Comm ercial No. 1020036135 on November 27, 2013
Note	32	Decrease in Capital in May 2014	Financial Supervisory Securities Issued No. 1010030033 on July 9, 2012	Hsinchu Commercial No. 1030015402 on M ay 29, 2014
Note	33	Increase of Capital in Novem ber 2014	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1030034996 on November 28, 2014

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Approval Date and Num ber by FSC Securities and Futures Bureau

Approval Date and Num ber by Science Park Bureau

		Increase and	Financial Supervisory Securities Issued No. 1010030033 on July 9, 2012
Note	34	Decrease of C apital	Financial Supervisory Securities Issued No. 1000064985 on January 10,	Hsinchu Commercial No. 1040010347 on April 17, 2015
		in April 2015	2012
Note	35	Increase of Capital in October 2015	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1040029657 on October 15, 2015
Note	36	Increase of Capital in January 2016	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1050001500 on January 19, 2016
Note	37	Increase of Capital in April, 2016	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1050009686 on April 13, 2016
Note	38	Increase of Capital in August 2016	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012 Financial Supervisory Securities Issued No. 1050014535 on M ay 4, 2016	Hsinchu Commercial No. 1050021881 on August 5, 2016
Note	39	Increase of Capital in October 2016	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1050028662 on October 18, 2016
Note	40	Increase of Capital in January 2017	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 060001396 on January 19, 2017
Note	41	Increase of Capital in April 2017	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1060009648 on April 14, 2017
Note	42	Increase of Capital in July 2017	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1060019320 on July 18, 2017
Note	43	Increase of Capital in October 2017	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1060028218 on October 16, 2017
Note	44	Increase of Capital in January 2018	Financial Supervisory Securities Issued No. 1000064985 on January 10, 2012	Hsinchu Commercial No. 1070002487 on January 16, 2018
Note	45	Increase of Capital in April 2021	Financial Supervisory Securities Issued No. 1050014535 on M ay 4, 2016	Hsinchu Commercial No. 1100010380 on April 15, 2021
Note	46	Increase of Capital in May 2021	Financial Supervisory Securities Issued No. 1050014535 on M ay 4, 2016	Change registration has not yet been made as of the date of publication.

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(II) Category of Shares

Shareholding record date: April 18, 2021; Unit: Shares

Category of Shares		Authorized Capital	Authorized Capital	Remarks
	Outstanding	Unissued shares	Total
Registered Common	286,129,503	63,870,497	350,000,000	Listed on March 4, 2002

Note: shares of a listed company(Includes 29,607 shares that have not yet been registered for change).

(III) Shareholder Structure

Record date: April 18, 2021

Shareholder Structure Quantity	Government Agencies	Financial Institutions	Other Institutional Shareholders	Domestic Natural Persons	Foreign Institutions and Foreign Natural Persons	Total
Num ber of	2	40	173	47,982	183	48,380
Num ber of Shares	876,000	13,226,139	32,616,010	199,961,056	39,450,298	286,129,503
Shareholding	0.30%	4.62%	11.40%	69.89%	13.79%	100.00%

Note: Percentage of shareholding from China: None.

(IV) Distribution of Equities (nominal value of NT$ 10 per share) 1. Ordinary Shares:

Record Date: April 18, 2021

Range of Shareholding	Num ber of Shareholders	Num ber of Shares Held	Num ber of Shares Held
1 to 999	17,884	1,254,676	0.44
1,000 to 5,000	26,199	45,571,715	15.93
5,001 to 10,000	2,224	17,869,611	6.25
10,001 to 15,000	603	7,762,514	2.71
15,001 to 20,000	362	6,772,637	2.37
20,001 to 30,000	328	8,425,523	2.95
30,001 to 40,000	154	5,626,654	1.97
40,001 to 50,000	125	5,842,765	2.04
50,001 to 100,000	204	14,642,955	5.12
100,001 to 200,000	128	17,765,770	6.21
200,001 to 400,000	72	20,058,140	7.01
400,001 to 600,000	25	12,347,868	4.31
600,001 to 800,000	26	18,206,762	6.36
800,001 to 1,000,000	11	9,564,835	3.34
1,000,001 or more	35	94,417,078	32.99
Total	48,380	286,129,503	100.00

Preferred Shares: None.

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(V)List of Major Shareholders:

Record date: April 18, 2021

Shareholding Shareholder's Name	Number of Shares Held	Percentage (%)
Jie Yong Investment Ltd.	14,154,000	4.95%
Hsing-Hai Chen	8,411,629	2.94%
Ming-Chien Chang	5,523,825	1.93%
British Virgin Islands merchant KAHOW LTD.	5,222,985	1.83%
Shun Cheng Investment Co., Ltd.	4,807,941	1.68%
Chang Wah Electromaterials Inc.	4,350,000	1.52%
J.P. Morgan Is A Special Account Of JP Morgan Securities Co., Ltd.	3,509,359	1.23%
Chase hosts the Van Garde Group Emerging Markets Fund	3,269,000	1.14%
Yang-Jin Huang	3,007,000	1.05%
Chase hosts the Advanced Starlight Advanced Total International Equity Index.	2,897,717	1.01%

(VI)Per Share Market Price, Net Book Value, Earnings and Dividends and Related Information over the Past Two Financial Years

				Unit: NT$	Unit: NT$
Item	Year		2019	2020	As at March 31. 2021
Market Price Per Share	Highest		40.40	66.70	108.00
	Lowest		28.75	23.70	57.20
	Average		32.44	40.00	79.52
Net Book Value Per Share	Before Distribution		26.11	28.92	31.18
	After Distribution		25.11	(Note 1)	N/A
Earnings Per Share	Weighted Average Number of Shares(thousand shares)		280,133	279,909	279,897
	Earnings Per Share	Before Adjustment	1.78	3.85	2.30
		After Adjustment	1.78	(Note 1)	N/A
Dividends Per Share	Cash Dividends		1.00	(Note 1)	N/A
	Free Allotment	Dividends from Retained Earnings	－	(Note 1)	N/A
		Dividends from Capital Reserves	－－	(Note 1)	N/A
	Cumulative Unpaid Dividends		－－	－	－
Investment Return Analysis	Price-Earnings Ratio(Note 2)		18.22	10.39	34.57
	Price-Dividend ratio(Note 3)		32.44	(Note 1)	N/A
	Cash Dividend Yield %(Note 4)		3.08	(Note 1)	N/A

Note 1: Verdict after the resolution of the Annual Shareholders’ Meeting.

Note 2: Price-Earnings ratio = Average per share closing price of the year/earnings per share.

Note 3: Price-Dividend ratio = Average closing price per share of the year/cash dividends per share Note 4: Cash dividend yield %= cash dividend per share/current year average per share closing price.

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(VII)Dividend Policy and Implementation Status
(1) Dividend policy as set out in the Articles of Association:

The Company's industrial life cycle is still in the growth stage. More than 5% of the total dividend distribution of shareholders is planned to be distributed in cash, and the rest will be distributed in the form of shares.

(2) The Company's Board of Directors' plan for reserve distribution and capital reserve allocation for FY2020 is as follows:
1. The surplus distribution of cash dividend of NT$2,000 per thousand shares (rounded off to the nearest dollar), as approved in the 2021 Annual Shareholders' Meeting , authorizes the Chairman of the Board to set a separate ex-dividend date, payment date, and other related matters.
2. Where the dividend distribution rate of NT$2.0 per share is maintained in the proposed appropriation of earnings, if, prior to the ex-dividend date, the number of outstanding shares is affected by any amendment by the competent authorities or by any change in the Company's share capital, such as the conversion of employee stock warrants into common shares, which subsequently results in a change in the earnings distribution, it is intended that the shareholders will authorize the Chairperson of the Board of Directors to exercise his or her full authority to deal with such changes.
(3) Any expected material changes to the dividend policy shall be further explained: The Company's dividend policy shall consider the company's current and future investment environment, capital requirement, domestic and foreign competition conditions, and capital budgets, in order to safeguard the shareholders' interests, maintain a balanced between dividend payouts and long-term financial plan. On an annual basis, the Board of Directors will formulate a distribution plan and report it to the Shareholders' Meeting. If there is a surplus in the Company's annual accounting, the Company shall, in the following order, pay taxes and make up losses, set aside 10% of the statutory surplus reserve and if necessary, allocate a special surplus reserves. At least 20% of the financial year's profits shall be distributed as dividends and bonus after allocating a reasonable amount according to the needs of business operations.
(VIII) The impact on the Company's business performance and Earnings Per Share (EPS) for allotment of free shares proposed at the shareholder's meeting: N/A
(According to the regulations of Financial Supervisory Securities (6) No. 0930005938 “Regulations Governing the Publication of Financial Forecasts of Public Companies” by the Financial Supervisory Commission on December 9, 2004 , the Company does not need to disclose the financial forecast information for 2021)
(IX) Employees' Compensation and Directors' and Supervisors' Remuneration
Quantity or scope of compensation for employees, Directors, and Supervisors as prescribed under the Articles of Incorporation:

~70~

Article 24-1 of the Company's Articles of Association stipulates that the Company shall allocate no more than five percent (5%) of its annual profits for compensations to the Directors and no less than one percent (1%) for compensations to the employees. However, the Company shall set aside a sufficient amount to offset its accumulated losses. The compensation shall be distributed, in shares or in cash, to the employees of the Company or the qualified employees of the affiliated companies.

The profit for the year referred in the first clause is referred to the Profit Before Tax for the year, before deducting employees' compensation, and remuneration to Directors and Supervisors.

The basis for estimating the amount of compensation and remuneration to the employees, Directors, and Supervisors in the current period shall be the basis for calculating of the number of shares to be distributed as employees' remuneration, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure:

The basis for estimating the employees' compensation and the Directors' and Supervisors' remuneration during the current period is detailed in the aforementioned "1. Statement". When the actual number of employees' compensation and the Directors' and Supervisors' remuneration is different from the estimated amount, this shall be an accounting estimates changes and will be adjusted in the profit and loss for the following year.

Information of the proposed employees' comentation approved by the Board of Directors:

djusted in the profit and loss for the following year. formation of the proposed employees' comentation approved by irectors:	the Board of
Remuneration to Directors and Supervisors Cash (NT $)	13,224,899
Employees' Compensation Cash (NT $)	66,124,493
Proposed distribution of employee shares compensation Amount T he ratio of the total Net Profit After Tax and otal employees' compensation for the current period	－－
Estimated Earnings Per Share after proposed allotment of employee remuneration and Directors’ and Supervisors' remuneration: (NT D)	3.85

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Distribution of employee bonus and Directors' and Supervisors' remuneration from the earnings of 2018:

Unit:NT$1,000

	Unit:NT$1,000
	2019
	Actual distributed amount as resolved in the Shareholders' Meeting Proposed distribution by the Board of Directors Discrepancies Reason
I. Distribution 1. Employees' Cash Compensation (NT $ thousand) 2. Employees' Shares Bonus (1) Amount (2) Proportion of total Net Profit After Tax and total employees' compensation for the current period 3. Remuneration for Directors and Supervisors(NT$thousand)	29,970 29,970 －－－－－－－－－－ 5,994 5,994 －－
II. Relevant information on Earnings per Share: 1. Original Earnings Per Share (Note 1) 2. Calculation of Earnings Per Share(Note 2)	NT $1.78 NT $1.78 －－ NT $1.78 NT $1.78 －－

Note 1: The calculation was not adjusted according to the ratio of earning reserves and employee com pensation to the increase of capital in 2020.

Note 2: The calculation of Earnings P er Share = (Net Profit - em ployees' compensation -Directors' and Supervisors' remuneration) / (weighted average number of shares outstanding in the current year)

(X) Shares Buyback: None.

II. The issuance of corporate bonds, preferred shares, overseas depository receipts, employee stock options, and mergers and acquisitions (including mergers, acquisitions, and divestment) and implementation of funds utilization plans.
(I) Issuance of corporate bonds: None.
(II) Issuance of preferred shares: None.
(III) Issuance of overseas depository receipts: None.
(IV) Issuance of employee stock options:

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1. Issuance of employee stock options

As at March 31, 2021 Unit:Share,%,N T$

1. Issuance of employee stock options	As at March 31, 2021 Unit:Share,%,N T$
Category of employee stock options	The Company received the employee stock options of the original Eon Silicon Solution Inc. due to the merger
Declaration Effective Date	May 4, 2016
Date of Issuance(Placem ent)	May4,2016
Number of Options Issued	1,175,443
Ratio of subscribable shares to total issued and outstanding shares	0.41%
Duration of Subscription	Duration till August 18, 2023
Method for Exercising the Options	Issuance of New Shares
Restrictions on the Option Exercise Period and Exercise Ratio (%)	Expiration of 2 years: 50% Expiration of 3 years: 75% Expiration of 42years: 100%
Shares Exercised	340,971
Total Value ofSharesSubcribed byExercising Option	19,639,930
Number of Shares Unsubscribed	71,174
Subscription Price Per Share of the Unsubscribed Shares	NT$ 57.60
Ratio of the Amount of Unsubscribed Options to the Total Number of Issued Shares	0.02%
Impact to Shareholders’ Equity	Limited impact of dilution to the existing ordinary shareholders' equity

Restriction on employees' right to subsribe new shares: None.
3.The names of the managers and top ten employees who obtained the employee stock option certificates, and the status acquisition and subscription:

As at March 31, 2021 Unit:Share,%,N T$

										As at March 31, 2021 Unit:Share,%,N T$	As at March 31, 2021 Unit:Share,%,N T$	As at March 31, 2021 Unit:Share,%,N T$
	Title	Nam e	Shares Option	Ratio of subscribabl e shares to total issued and Shares Option		Shares Exercised				Unsubscribed Share
					Shares Exercised	Subscri ption Price Per Share of the Shares Exercis ed	Total Value of Shares Subcribed by Exercising Option	Ratio of subscribable shares to total issued and Shares Exercised	Num be r of Shares Unsubs cribed	Subscri ption Price Per Share of the Unsubs cribed Shares	Total Value of Shares Unsubscribed	Ratio of subscribable shares to total issued and Num ber of Shares Unsubscribed
Mana ge	NA
Staff	Technical Associate	Cheng, Po Yuan	282,346	0.09868%	225,289	57.6	12,976,646	0.07874%	57,057	57.6	3,286,483	0.01994%
	Technical Associate	Wu Shuqi
	Senior Chief Engineer	Huang Shim in
	Senior Chief Engineer	Tong Ziy un
	Technical m anager	Li Kuiwang
	Technical Associate	Jiang Lanqing
	Technical Associate	Liu Guanhui
	Senior Account Manager	Xu Zijie
	Technical Associate	Huang Jiancheng
	Technical m anager	Chen Boling

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The names of the managers and top ten employees who obtained the new restricted employees' right shares, and the acquisition status: None.
(V) Mergers, acquisitions or issuance of new shares to acquire shares of other companies: None.
(VI) Implementation of capital utilization plan: Up to the quarter preceding the date of publication of the Annual Report, the Company has no incomplete issuance or placement of private securities or completed placement where the benefits of the plan have yet to be realized in the past three years.

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Business Operations Overview

I. Business Activities

(I) Business Scope

The Company is a professional integrated circuit (IC) design company, the main business is research, development, manufacturing, and sales of DRAM, Flash Memory, analog integrated circuit, analog and digital mixed-signal IC and product design related to the Company's business and R & D technical services. The IC revenue in 2020 was NT$15,267,139 thousand, accounted for 100% of the operating ratio.

With the increasingly enhanced functions of terminal electronic products, the easier operation interface and the humanized application interface and functions designed by its application software, such as artificial intelligence (AI), the imminent fifth generation mobile communication generation (5G) and entering of the commercial stage, due to the characteristics of faster transmission, high-frequency bandwidth, high density and low latency, it is conducive to the development of services such as big data, artificial intelligence, and the Internet of Things, which can drive value-added innovative applications such as high-quality audio-visual entertainment, smart medical, smart factories, self-driving cars, drones, and smart cities, as well as various emerging application fields to make memory ICs a key component of electronic products. The relative capacity, operating speed and low power consumption requirements are also becoming stricter. In addition to continuing to focus on the development of high-density, high-speed and low-power memory ICs, the company will also speed up the development of flash memory, analog, analog and digital mixed-signal ICs in response to industry development and market demand. The product line enhances product competitiveness and develops towards product diversification.

(II) Industry Overview

1. Current situation and development of the industry

The TSIA (Taiwan Semiconductor Industry Association) pointed out today that according to WSTS statistics, the global semiconductor market sales in Q4 2020 were US$118.9 billion, an increase of 4.7% from the previous quarter and 9.6% from the same period in 2019. The sales volume reached US$262.0 billion, an increase of 5.2% from the previous quarter and 10.5% from the same period in 2019. The ASP was US$0.454, a decrease of 0.4% from the previous quarter and 0.8% from the same period in 2019.

The global semiconductor market reported total annual sales of US$440.4 billion in 2020, an increase of 6.8% from 2019. The total sales reached US$953.7 billion in 2019, an increase of 2.3% from 2019, whereas the ASP recorded US$0.462 in 2020, an increase of 4.4% from 2019.

In the fourth quarter of 2020, sales in the U.S. semiconductor market reached $26.3 billion, an increase of 9.3% from the previous quarter and 16.4% from the same period in 2019. Sales in Japan's semiconductor market reached US$9.9 billion, an increase of 8.0% from the previous quarter and 8.4% from the same period in 2019. Sales in Europe's semiconductor market reached US$10.2 billion, an increase of 11.7% from the previous quarter and 5.5% from the same period in 2019. China market reached US$39.8 billion, a 1.5% decline from the previous quarter and a 4.0% increase from the same period in 2019. Asia Pacific semiconductor market sales reached US$32.6 billion, an increase of 6.3% from the previous quarter and 13.3% from the same period in 2019.

As regards total annual sales in 2020, the U.S. semiconductor market reached US$95.4 billion, an increase of 21.3% from 2019. Japan's semiconductor market reached US$36.5 billion, an increase of 1.3% from 2019. Europe's semiconductor market recorded US$37.5 billion, a decrease of 5.8% from 2019. Mainland China market reached US$151.5 billion, an

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increase of 4.8% from 2019. Asia Pacific semiconductor market reached US$119.5 billion, an increase of 5.4% from 2019. The global semiconductor annual sales totaled US$440.4 billion in 2020, an increase of 6.8% from 2019.

According to statistics from the Industry, Science and Technology International Strategy Center, Industrial Technology Research Institute (ITRI), Taiwan's IC industry output (including IC design, IC manufacturing, IC packaging, and IC testing) reached NT$881.7 billion (US$29.8 billion) in the fourth quarter of 2020, an increase of 1.7% from the previous quarter and 16.9% from the same period in 2019.

Specifically, the IC design output was NT$247.0 billion (US$8.3 billion), up 1.4% from the previous quarter and 30.6% from the same period in 2019; the IC manufacturing output was NT$493.2 billion (US$16.7 billion), up 2.6% from the previous quarter and 15.7% from the same period in 2019, of which the foundry industry was NT$436.9 billion (US$14.8 billion), up 1.3% from the previous quarter and 13.5% from the same period in 2019. The output of memory and other products was NT$56.3 billion (US$1.9 billion), up 14.7% from the previous quarter and 36.7% from the same period in 2019.

The IC packaging output was NT$98.0 billion (US$3.3 billion), a 1.0% decrease from the previous quarter and a 1.6% increase from the same period in 2019; the IC testing output was NT$43.5 billion (US$1.5 billion), a 1.1% decrease from the previous quarter and a 2.4% increase from the same period in 2019. The exchange rate against the U.S. dollar is calculated at 29.6.

According to statistics from the Industry, Science and Technology International Strategy Center, ITRI, the output value of Taiwan's IC industry reached NT$3,222.2 billion (US$108.9 billion) in 2020, an increase of 20.9% from 2019. Specifically, the IC design reached NT$852.9 billion (US$28.8 billion), an increase of 23.1% from 2019.

The IC manufacturing accounted for NT$1,820.3 billion (US$61.5 billion), up 23.7% from 2019, including NT$1,629.7 billion (US$55.1 billion) for foundries, up 24.2% from 2019, and NT$190.6 billion (US$6.4 billion) for memory and other products, up 19.4% from 2019. The IC packaging accounted for NT$377.5 billion (US$12.8 billion), up 9.0% from 2019, while the IC testing accounted for NT$171.5 billion (US$5.8 billion), up 11.1% from 2019.

The statistical results of Taiwan's IC industry output value from 2017 to 2020

Unit: NT$100million

				Growth Rate		Growth Rate in
	2017	2018	2019		2020
				in 2019		2020

IC IndustryOutput Value	24,623	26,199	26,656	1.7%	32,222	20.9%
IC Design Industry	6,171	6,413	6,928	8.0%	8,529	23.1%
IC ManufacturingIndustry	13,682	14,856	14,721	-0.9%	18,203	23.7%
Wafer Foundry	12,061	12,851	13,125	2.1%	16,297	24.2%
Manufacturing Own Products	1,621	2,005	1,596	20.4%		19.4%
					1,906

IC PackagingIndustry	3,330	3,445	3,463	0.5%	3,775	9.0%
IC TestingIndustry	1,440	1,485	1,544	4.0%	1,715	11.1%
IC Product Output Value	7,792	8,418	8,524	1.3%	10,435	22.4%
Global Semiconductor Growth Rate	21.6%	13.7%	-	-12.1%		6.8%
					-

Source: TSIA ITRI IEK (2021/02)

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2. Semiconductor upstream, middle and downstream correlation diagram

Circuit Design
Logic Circuit design	Wafer Manufacturing	Packaging
Graphic Design Mask Design	Mask Alignment	T esting
Combination Silicon Wafer Production Wafer Cutting Wafer Grindin g	Microview Etching Oxidation, Diffusion, CVD, Ion Implantation Metal Sputtering Photoresist Coating	Wafer Probing Wafer Dicing Die Bondin g Wire Bonding Packaging Final T esting
Oxidation

The following describes the relative industrial characteristics of the abovementioned IC industry upstream, midstream and downstream, as follows:

A. IC Design

IC design company is an integrated circuit product design company. Its main business is to design product sales or design directly entrusted by the customers. It is a brain-intensive industry, it requires much smaller capital than the wafer manufacturing plants. There is a fairly complete semiconductor industry support structure in Taiwan and IC design talents are increasingly abundant, which has prompted many manufacturers to invest in this industry.

B. IC Manufacturing and Foundry

The main business of the IC manufacturing company is to convert the designed circuit into a chip with sophisticated equipment, complex manufacturing processes, and strict quality control. This industry is capital and technology-intensive, and the barriers to entry are quite high. At present, the cost of constructing a 12-inch wafer fab is about NT$ 100 billion, and the subsequent maintenance and research and development costs must continue to be invested to maintain the effective operation of the IC fab.

C. IC Packaging and Testing

However, the barriers to entry for this industry are much lower than those for wafer manufacturing, and its profit comes from the fixed revenue of processing. The key factors that affect its profitability are the equipment utilization rate and personnel costs. The IC design industry is an upstream industry in the industrial value chain. Before the final product is completed, the main processes of photomask, manufacturing, packaging, and testing are required. As far as industrial development trends are concerned, processes such as photomask, packaging, and testing are all directed towards the mode of commissioning production by external professional companies.

Product Development Trends and Competition
A. High Degree of Integration

With the evolution of Windows operating system software and the continuous development of diversification of application software, DRAM products have been developed towards high degree of integration. The current mainstream market is 8 GB (DDR4) and 4 GB (DDR3).

B. High Speed

DRAM and CPU have an apparent gap in data transmission speed for a long time, and it has become the bottleneck of PC's overall system performance. To solve

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this problem, many high-speed DRAM architectures have been proposed, such as DDR3/DDR4 and RAMBUS. In order to adapt to the requirements of network communication products with different performances, such as switches and routers, SRAM (Zero Bus Turnaround SRAM) with high-frequency bandwidth and high-speed operation capability is also introduced due to the mixed reading and writing operations.

C. Low Power Consumption

With the continuous increase of CPU computing speed and the application of portable electronic products, characteristics such as low power consumption and low voltage are necessary to achieve power-saving or avoid the problem of overheating of components.

D. Reduced Crystallite Size

The continuous decline in the price of memory IC products is a characteristic of the industry. To maintain the competitive position and profitability of the products, with the design and process control, the output quantity of a single wafer is increased and the high quality rate is being maintained, only then could the Company effectively reduce product costs and enhance market competitiveness.

Product Competition

The Company's products are mainly based on niche memory. At present, the main domestic and foreign competitors are as follows:

Domestic Competitors	Foreign Competitors
Nan Ya Technology, Etron, Powerchip, Winbond	Samsung, Hynix, Micron

(III) Technology and R&D Overview

(1) Technical aspects of the business activities

The Company is a professional memory IC design company. It owns the core technology of memory IC design. The members of the R&D design team are well-versed in the design profession for many years and possess extensive practical experience. Since the Company can control the development and design technology of memory IC, it can adjust the product combination in time in response to market changes. Since its establishment, tbe Company has continued to develop memory ICs with high integration, high capacity, high speed and high performance by adhering to superb and outstanding design technology.

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(2) Research and development

The Company's development and design of DRAM, Pseudo SRAM, NOR Flash, MCP, analog IC, and analog and digital mixed-signal IC are all focused on mastering "Time-to-Market". The future research and development is directed towards high-end process technology and high-integration product development.

(3) Education and experience of research and development personnel

The Company and its subsidiaries currently have a total of 310 R&D personnel, most of whom have a college degree or above and abundance of experience in R&D. With the pulse of the existing and future markets, they continue to develop new technologies and new products to continue to lead the industry and meet the market needs.

eeds.
			March 31,2021
Item		Education
	PhD	Master	University
Number of Persons	8	217	85
Percentage(%)	2.58%	70.00%	27.42%

(4) R&D expenses and technologies or products successfully developed in the most recent Financial Year:
A. R&D expense in the most recent financial year

inancial Year: R&D expense in the most recent financial year	inancial Year: R&D expense in the most recent financial year
		Unit: NT$ 1,000
Year Item	2020	Q1 2021
R&D Expenses	940,851	336,185
Growth Rate(%)	27.16%	-

  - B. Successfully developed technologies or products

  1. The Company's DRAM product line has completed the development of 16 MB - 2 GB SDRAM, DDR / DDR2 / DDR3 and other products with 12" 38/45/50 / 60nm process technology. The 25nm process has been initially developed and new products will be designed for mass production.

  2. In terms of Flash Memory, the development of 65nm low-capacity 4 MB / 8 MB / 16 MB / 32 MB have been developed, and entered mass production, high-capacity 64 MB and 128 MB have also been completed development and entered mass production with 65nm.

  3. Integrated NAND Flash and LP DRAM product technologies and launched MCP products.

  4. In terms of non-memory products, various power management and IC solutions for Class D/AB power amplifiers have been developed.

(IV) Long-term and Short-term Development Plans
Short-term development plans
- (1) Marketing strategy
- A.Adopt marketing strategies based on product functions and cost-competitive advantages to provide customers with a stable supply.
- B. Strengthen the interactive relationship with agents and distributors, continue to penetrate the domestic market, and actively develop handheld devices, PC-related equipment, and information appliance manufacturers in overseas markets to access direct business opportunities.

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(2) Production strategies
A. Improve the use of process technology to reduce production costs.
B. Establish a good cooperative relationship with the wafer foundry and back-end packaging and testing outsourcers to ensure that production capacity, product delivery and quality can be achieved, and meet the demand for flexible scheduling.
(3) Product development

Use new generation process technology to develop mainstream products to reduce production costs and enhance product competitiveness.

(4) Human resources

Provide humane management and share operating profits with the employees to attract professional talents to join the management team and stabilize the Company's personnel flow, maintaining the Company's leading position in technology and operations.

Long-term plan
(1) Marketing strategy

Maintain revenue sources from proprietary products and design technical services that are functional/cost competitive to ensure the stability of profits.

(2) Production strategies
Ensure the production quality and cycle time of wafer foundry partners, including fabs, packaging and outsourced testing factories
(3) Product development
Continue to develop memory ICs with high integration, high speed, low power and small die size to increase product performance and enhance product competitiveness. Also, use the new generation process technology for the manufacturing of existing products to strengthen cost competitiveness. In addition, in response to industry development and market demand, the company will actively mass produce MCP, analog, analog and digital mixed-signal IC product lines, towards product diversification.

II. Analysis of the market as well as production and marketing situation

(I) Market analysis
(1) Sales of main products (services) by region

The Company's current product combination is mainly based on high-speed and high-integration DRAM/FLASH/analog IC and technical service income. The product sales regions in the past two years are as follows:

Units: Thousand NTD; %

Year Geographical Region	Year Geographical Region	2019		2020	2020	Q1 2021	Q1 2021
		Sales Value	Percent age	Sales Value	Percent age	Sales Value	Percent age
Internal sales		5,153,908	43	6,138,237	40	2,167,660	44
External sales	Asia	6,643,377	55	9,069,729	60	2,781,585	56
	Others	186,194	2	59,173	-	22,231	-
	Sub-total	6,829,571	57	9,128,902	60	2,803,816	56
Total		11,983,479	100	15,267,139	100	4,971,476	100

(2) Market share

The global overall memory market has shrunk significantly in 2020 compared with 2019, resulting in global market size of US$ 65.2 billion. Based on the Company's 2020 revenue calculation, its share of the global market is approximately

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0.82%.

(3) Future market demand and supply status and growth characteristics

The main factor affecting the price trend of DRAM products is the spread between supply and demand. In terms of supply, according to TrendForce's Semiconductor Research Division, after more than two quarters of inventory correction, buyers are expected to start raising inventory levels in 2021 in order to mitigate cost increases caused by expected subsequent price increases, which will result in price support. Overall, the average selling price of DRAM will stop falling and stabilize, and may even rise slightly.

According to TrendForce's Semiconductor Research Division, the DRAM segment, including PC DRAM (13% of total supply bits), Server DRAM (34% of total supply bits), Mobile DRAM (40% of total supply bits), Graphics DRAM (5% of total supply bits) and Consumer DRAM (8% of total supply bits), clearly has much healthier supply and demand dynamics than NAND Flash because of the overall oligopolistic market type. With inventory replenishment, prices will be supported in 2021. Specifically, PC DRAM prices will remain more or less flat due to the strong notebook shipments that have boosted stocking momentum. Moreover, impacted by capacity crowding and Micron's power outage, Server DRAM prices will shift from roughly flat to slightly higher.In terms of demand, DRAM application products can be divided into three categories: the first category is computers and relevant products, such as desktop computers, notebook computers, workstations, servers, printers, scanners, DVD-ROM, tablet computers and mining machines, etc.; the second category is network communication application products, mobile devices, ADSL, router (Switch/Router), Internet of Things, Internet of Vehicles, cloud data center, 5G communication and artificial intelligence (AI), etc.; the third category is consumer applications, such as DVD (Blu-ray) players, digital set-top boxes, digital cameras, iPod music players (MP3 Player), game consoles (PS4, XBOX, Wii), LCD (quantum Point) TV and smart voice assistant. On the demand side, In terms of PC demand, most of the PC OEM brand factories have benefited from this year's strong laptop shipments (20% annual growth), and the PC DRAM inventory level is only 4~5 weeks. Therefore, it is expected that in the short term, the intention of manufacturers to increase inventory will continue to boost demand momentum. In terms of supply, the overall bit supply of the three major DRAM manufacturers, Samsung, SK Hynix and Micron, has not risen significantly in the past two quarters. In addition, thanks to the forceful pull of mobile DRAM, all factories have been shifting their production capacity to this area since the end of Q3 systematically, resulting in the crowding of PC and server DRAM production capacity. In 2021, therefore, the average price of PC DRAM is not likely to fall as demand is supported and supply is not going up markedly

(4) Competitive niche

A. Core competitiveness of design and R&D

The Company's design and development team has accumulated many years of practical experience, and can effectively control the performance and cycle time of product development, so as to fully access the market opportunities. This is proved by the Company's successful design and development of a variety of market-leading product lines.

B. Long-term procurement of outsourced foundry production capacity

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Since the Company's business has grown steadily, it is able to give outsourcing foundries a stable order quantity. At the same time, through product design and technical services, it can still help the fab to use the new generation process to expand the product line and contribute to fab capacity utilization. The establishment of this cooperation model promotes a more stable cooperative relationship between the two parties, which can ensure that the Company's wafers are secured when the OEM production capacity is tight.

C. Competitiveness of cost structure

The Company's operating team, in addition to a strong R&D team, also includes professionals in processing, packaging, and testing. It can assist various professional OEM partners in process improvement and yield improvement, thus establishing an effective reduction of the production cycle and lower product production cost.

D. Good interaction with agency dealers

The R&D capabilities and cost competitiveness cultivated by the Company can launch the products in time as required by the market, and actively integrate with the logic chips represented by the distributors to form a complete turn-key solution to provide to system manufacturers. This will further enhance the value of products/services and establish a long-term and stable mutually beneficial relationship with well-known domestic and international distributors, which will greatly help the sales and promotion of the Company's products.

(5) Advantages, disadvantages and countermeasures of the development prospect: Favorable factors
A.With the global economic boom gradually recovering, the demand for technology products in emerging markets has become the main growth driver of the global technology industry. It is expected that the demand for technology products in emerging markets will continue to grow in 2021.
B. The rapid development of smartphones, personal computers and workstations in emerging markets, coupled with the rise of multimedia product applications and the rise of the Internet (Internet of Things, Internet of Vehicles, Cloud Data Center, 5G, Artificial Intelligence (AI)). In the long-term, the demand for the memory IC market has shown steady growth.
C. The market demand for products is extensive, including computer peripherals, communications and consumer products. In addition to personal computers/workstations, it is also widely used in multimedia and information appliances, such as digital cameras, high-end graphics cards, DVDs, TVs, mobile phones, printers, set-top-Box, MP3, game consoles, ADSL, routers, and routers, mining machines and smart voice assistants.
D. The domestic semiconductor industry has a good development environment, and the industry's vertical division of labor system is perfect. The main raw material suppliers are located in the Hsinchu Science Park. The industry has a high degree of industry concentration, and it has great advantages in timeliness control and cost control.
E. Strong R&D team, high-quality personnel and extensive experience. Able to lead the design of products with high integration, high speed and cost advantage.

Unfavorable factors and countermeasures

A.Market products change rapidly, and product life cycle is shortened. IC products that meet market and customer needs need to be launched in time.

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Countermeasures

Maintain excellent design and R&D capabilities, shorten product development time and production cycle to meet market demand.

B. There are many competitors in memory products and the price fluctuation is fierce.

Countermeasures

a. Actively develop niche products that meet market needs, develop new processes to reduce product costs, and increase the added value of products to enhance the overall competitiveness of products by establishing a good product quality image.
b. Expansion of non-memory product lines such as analog, analog and digital mixed signal integrated circuits, and the development of product diversification to diversify product concentration risks.
C. When the wafer fab's production capacity is insufficient, the increase in wafer prices will affect the profit margin

Countermeasures

Maintain long-term and stable cooperative relations with wafer foundry manufacturers.

D.Professionals are in short supply and high turnover

Countermeasures

Focus on the building professional image and the deep penetration of R&D technical ability in order to retain the required talents, and to further attract more professionals to join. At the same time, provide a good working environment, and to encourage employee's centripetal force towards the Company through dividends, employee stock options and a suitable and effective reward system design,

(II) Major uses and production process of the primary products
Usage of the main products

Usage of the	mainproducts
Products	Major products	Usage/functions	Product application
Dynamic Random Access Memory (DRAM)	SDRAM, PSRAM, Mobile SDRAM/DDR, DDR1/DDR2/ DDR3/DDR4/ SDRAM Product line	Main mem ory components of various high-end personal computers and peripheral devices. The main function is data storage during system operation.	Consumer products: DVD-Player, Set-Top-Box, Digital Still Camera, Scanner, VGA Card, HDD and Printer Network products: Cable Modem,ADSL, 5GProducts
		The memory elem ent used in portable commodity equipm ent a low-power consumption feature.	Portable device such as mobile phone, PDA and HPC.
		The basic components of various high-end computer display memories. The main function is to store the data of each pixel on the fluorescent screen.	Graphics cards and multimedia video cards, flat panel TV (liquid crystal / plasma TV) and high-end Desktop/notebook PC, servers, workstations and com puter peripherals,etc.

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Products	Usage/functions	Product application
NOR flash memory	It is a non-volatile mem ory elem ent that can be read and written at high speed that can be used to write fixed boot programs in computers or electronic devices, called "Code Flash", or it can be used for wireless cell phone control and data access.	Desktop/notebook PC, server, workstation, and storage and use of boot programs for various computer equipm ent products; or used to write fixed boot programs for consum er electronic devices (such as DVD DVR, etc.), or it can be used for wireless cell phone control and data access.
MCP products	Integrate mem ory ICs such as NAND Flash and LP DRAM for data access of handheld related product systems.	Used in mobile communication data card and other mobile communication related product systems.
Audio processing IC (including Class D audio amplifier, A/D & D/A converter, Codec IC, etc.)	It is a mixed-signal IC product, which is the basic component of audio processing/output of various computers or electronic equipm ent, used for analog/digital conversion and signal amplification processing of various audio. Of that, the Class D audio amplifier has the feature of low-power consumption and high-amplification efficiency because it is a digital amplifier.	It is suitable for audio processing of various electronic products, including audio transmission and amplification output of PC/notebook, TV, mobile phone, MP3, car/home audio.
Power management (Power IC )	It is an analog IC product, which is a key component of power managem ent for various electronic equipm ent system s.	Suitable for various 3C equipment and optical com ponent system power managem ent applications.
Technical service	Technical services for m emory, power m anagement and audio IC product design and development.

2. Production Process

The Company's integrated circuit manufacturing process is mainly divided into the following stages:

Development and design: After determining product specifications, developing design components and selecting design criteria; designing the chip architecture and layout planning of various circuit items on the chip, and then planning circuit design and layout; making this layout file into a photomask .

Wafer manufacturing: Repetitive processes such as photolithography, etching, oxidation, and diffusion are used to design and manufacture the circuit on the photomask layer by layer on a silicon wafer.
Packaging test: The wafer needs to be tested by Probe Card to select the chip with normal function and meet the design requirements, and then to be packaged and shipped.
(III) Supply of primary raw materials

The Company's main raw material is wafers, which are mainly supplied by well-known semiconductor companies at home and abroad. Good cooperative relationships are being maintained currently.

(IV) Names of customers who have accounted for more than 10% of total purchases (sales) in

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any of the most recent two financial years, their purchases and sales amounts and proportions, and reasons for changes: 1. Main sales customers

Unit: NT$1,000

	2019	2019	2019		2021	2021	2021		Q1 2021	Q1 2021	Q1 2021
Item	Name	Amount	Ratio to Net Revenue for the FY (%)	Relati onship with the Issuer	Name	Amount	Ratio to Net Revenue for the FY (%)	Relati onship with the Issuer	Name	Amount	Ratio to Net Revenue for the FY (%)	Relation ship with the Issuer
1	A	2,724,676	23	Nil	A	3,430,386	22	Nil	A	1,340,641	27	Nil
2	Others	9,258,803	77		Others	11,836,753	78		Others	3,630,835	73
	Total	11,983,479	100		Total	15,267,139	100		Total	4,971,476	100

Reasons for Change:

The Company's products are mainly sold through agents, and Company A is the Company's main agent. Due to the increase in business volume in 2020, the revenue of Company A has increased compared with 2019.

2. Main Purchase Suppliers

Unit: NT$1,000

	2019	2019	2019		2020	2020	2020		Q1 2021	Q1 2021	Q1 2021
Item	Name	Amount	Ratio to Net Revenue for the FY (%)	Relati onship with the Issuer	Name	Amount	Ratio to Net Revenue for the FY (%)	Relati onship with the Issuer	Name	Amount	Ratio to Net Revenue for the FY (%)	Relation ship with the Issuer
1	A	5,196,477	59	Nil	A	7,787,121	59	Nil	A	1,587,163	50	Nil
3	B	1,010,349	11	Nil	B	1,413,681	11	Nil	B	461,146	14	Nil
4	Others	2,681,660	30		Others	3,898,378	30		Others	1,142,541	36
	Total	8,888,486	100		Total	13,099,180	100		Total	3,190,850	100

Reasons for Change:

The Company is a professional IC design company. The main cost structure in the production process is wafer raw materials and outsourced processing fees, while wafer selling prices and outsourced processing fees are closely linked to the semiconductor business cycle. In the semiconductor industry in 2020. Due to the slowdown in the global economic climate, the average unit price of wafers and outsourced processing fees have generally declined, however, the electronics industry grew against the trend, so the value and proportion of major purchasers in 2020 have changed compared with 2019.

(V) Production Volume Table for the last two FY

he last two FY	he last two FY
		Unit:1,000;NT$1,000
2019		2020
Production	Production	Production	Production
996,647	5,427,047	2,353,898	7,674,993

Note: The Company's products are outsourced to external professional companies for processing, so no capacity is disclosed.

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(VI) Sales quantity and value for the last two FY

Unit:1 ,000; NT$1,000

uantity and value	for the last two FY	for the last two FY	for the last two FY	for the last two FY	Unit:1,000;NT$1,000	Unit:1,000;NT$1,000	Unit:1,000;NT$1,000	Unit:1,000;NT$1,000
FY Item	2019				2020
	Internal sales		External sales		Internal sales		External sales
	Sales Volum e	Sales Value	Sales Volum e	Sales Value	Sales Volum e	Sales Value	Sales Volum e	Sales Value
Integrated Circuit (IC)	619,608	5,153,908	738,319	6,829,571	1,014,336	6,138,237	978,513	9,128,902
Total	619,608	5,153,908	738,319	6,829,571	1,014,336	6,138,237	978,513	9,128,902

III. Employee information for the most recent two financial year up to the date of publication of the Annual Report

	Year	2019	2020	Until March 31, 2021
No. of employees	Management Personnel	147	132	131
	R&D T echnicians	353	373	379
	Operators	－	－	－
	Total	500	505	510
Average Age		40.65	41.20	41.33
Average Year of Service		8.37	9.30	9.07
Academic Distribution Ratio	PhD	2.0%	2.0%	2.0%
	Master	49.6%	51.9%	52.9%
	University	46.0%	44.0%	42.9%
	High school	2.4%	2.1%	2.2%
	Belo w high school	－	－	－

IV. Disbursements for Environmental Protection

(I) In the financial year 2020 up to March 31, 2021, there has been no penalty arising from environmental pollution or industrial safety incidents or any disciplinary authority.
(II) Countermeasures for environmental protection and industrial safety in the future: The Company has always upheld the spirit of the ISO 14001 environmental management system and is committed to complying with international advanced environmental standards. It is committed to providing and maintaining a working environment that is compliant with laws and regulations and at the same time which is an industrial and practical working environment. The Company also continuously improves in its attempt to eliminate the risk of any predictable causes of environmental pollution. Through the preventive measures of process optimization, the Company will continue to improve in the

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reduction of the emission of hydropower substances and pollutants, and strive to implement the concept of designing for the environment, and become a sustainably developed green enterprise. In order to implement the effectiveness of environmental management, the Company plans to establish the ISO 14001 environmental management system in 2007, and the verification and certificate were obtained in January 2008.

(III) Environmental protection policy and improvement plan
(1) Future quantitative management of energy saving and carbon reduction After the Company introduced the ISO-14001 environmental management system and continued to implement a number of energy-saving and carbon reduction measures, it has achieved significant performance so far; based on the management principle of continuous improvement, the Company set relevant quantitative management goals for improvement, with a view to making further contributions to protecting the global environment, as explained below:
- A. Quantitative management objectives for greenhouse gas reduction, water resources management and waste management:
  1. Greenhouse gas reduction

The Company's quantitative management goals for greenhouse gas reduction are as follows: The per capita greenhouse gas emission decreases by 4% in 2025 compared with 2019.

Water resources management
In response to climate change, stable water supply has become a global issue. To fulfill its social responsibilities and respond to global water shortage issues, the company has set quantitative goals for water resources management as follows: By 2025, the overall per capita water consumption will be reduced by 2% compared with 2019, with a view to taking concrete actions to face the challenges of climate change with global corporates.
Waste reduction

The Company's goal of quantitative management of waste reduction: The personal output of waste in 2025 will be 2% lower than that in 2019.

B. Measures to achieve goals:
Greenhouse Gas Reduction
Evaluation of public area lighting system to be replaced by LED lights
The air-conditioning temperature of the office area is set at 26 ~ 28°C.
Turn off non-essential lighting during meals and breaks.
Promote a paperless policy and import electronic forms to reduce paper consumption.
Use environmentally friendly tableware for dining and encourage employees to bring their own tableware to reduce the use of disposable tableware.
Use green products and select equipment and appliances with energy-saving labels.
Encourage employees to use stairs instead of elevators.
Water Resource Management
Display water-saving slogans to develop the habit of saving water.
Monitor water consumption and address any abnormalities immediately to avoid wasting water resources.
Reduce the amount of environmental cleaning agents and reduce the amount of cleaning water.
Waste Management
Implement a resource recycling classification mechanism.
Promote employee waste reduction.

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Comply with the relevant provisions of environmental regulations and implement environmental policies.
(2) Climate change assessment and countermeasures

The United Nations Intergovernmental Panel on Climate Change (IPCC) pointed out that global warming will exceed 1.5°C in 2030 at the earliest. Climate change has become an issue that should be ignored.

ESMT is of the view that climate change is becoming more and more serious, and there is a high degree of correlation between product production and the supply chain of related industries. In order to continue to strengthen the Company's ability to respond to and combat climate change, the Company will disclose detailed environmental and climate-related measures in an appropriate manner, and disclose the risks and opportunities brought by the climate to the Company's operations with reference to the Task Force on Climate-related Financial Disclosures (TCFD). From the four major aspects of governance, strategy, risk management, and indicators and objectives, the Company will strengthen its governance of climate change in response to the expectations of external stakeholders about the Company's management of climate change.

change.
	Risk Item	Description	Response measures
Climate related risks	Energy price increase	In response to the greenhouse gas reduction requirements, the pressure to increase energy prices and the efficiency of related equipment used has led to an increase in energycosts.	Promote workplace energy saving and carbon reduction measures
			Set annual power saving goals
	Stricter fuel/energy/en vironmental regulations	Increase in operating and manufacturing costs, related fines, litigation cases, and policy changes led to asset impairment	Continue to monitor and identify the impact of changes in regulations
			Communicate with industry association and participate in government regulations courses
			Strengthen awareness on laws and regulations and training
	Increase in frequency of extreme climate events	Extreme weather events will cause loss of property and equipment, and may even cause business interruption	Improve the recovery time of the operation-related support system and shorten the recovery time to normal business operation
			Implement a mechanism for handling major abnormal events
			Continuously supervise suppliers to carry out plans and drills for extreme climate events
			Assess and build backup equipment

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Climate- related opportu nities	Market transformation/ technology development	Develop low-carbon products, encourage suppliers to use low-carbon technology processes, and increase access to relevant markets	Evaluation and development of low-carbon products and markets
			Encourage existing suppliers to use low-carbon technology processes, and prioritize suppliers using low-carbon technology processes

(IV) Information on the implementation of RoHS (Limiting Hazardous Substances in Electronic Motor Equipment) in the EU is as follows:
(1) The Company's management measures
- 1.Process changes are subject to EU RoHS and customer green production specifications.
- 2.Notify suppliers of environmentally friendly green production practices and request relevant supporting documentation.
- Audit suppliers from time to time and coach them to establish a green supply chain.
(2)The Company's products comply with the RoHS specifications related to the restrictions on the use of hazardous substances, so does not affect the company's products market sales.
(V) Annual greenhouse gas emissions, water consumption and the total weight of waste in the past two years
- In response to global climate change, the Company reduced and managed greenhouse gas emissions, implemented environmental justice, and fulfilled the responsibility to jointly protect the global environment. In addition, the Company actively responds to the Carbon Disclosure Project (CDP), and voluntarily disclosed its investigation in greenhouse gas emissions according to the World Business Sustainable Development Association (WBCSD) and the GHGProtocol issued by the Resource Research Institute (WRI). The results of the investigation are shown in the table below.

Table - Annual greenhouse gas emissions

Year	Greenhouse gas emissions(year)	Greenhouse gas emissionsper capita	%
2019	3,191.78	7.69
2020	3,336.88	7.87	4.54

Unit (CO2 equivalent)

Table - Water Consumption

Table -	Water Consumption
Year	Water Consumption	Water consumption per capita(degrees)	%
2019	16,947	40.84
2020	19,169	45.10	13.1

Unit (M3)

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Table - Total waste

Year	Total Waste	Individual output	%
2019	10.76	25.93 kg
2020	18	42.45 kg	67.29

Unit (Ton)

In 2020, the Company implemented necessary measures to prevent the spread of the COVID-19 pandemic, such as the disinfection of the environment, the enhancement of personal hygiene and the change of dining at the cafeteria to meal boxes in individual seats, and as a result, the Company was unable to achieve the originally planned environmental improvement objectives. It is expected that after the pandemic has subsided, the environmental performance will be improved again. Therefore, we do not anticipate any losses due to labor disputes at present or in the future.

V. Labor Relations

(I) The systems and implementation status of the Company's employee welfare policies, continuing education, training, and retirement, as well as the agreements between the employees and employer, and employees’ rights and interests:
(1) Employee welfare policy

The Company provides a friendly and supportive working environment, allowing employees to achieve balance and harmony between work, family and life.

Measures and benefits related to work-life balance: Work:

a. Flexible working hours and two days off a week that allow employees to arrange working hours flexibly to take care of their family or health.
b. Provide employees with annual leave better than the Labor Standards Act.
c. Provide employees with festival and birthday giftcard and festival bonuses.
d. Organize the year-end party and give senior colleagues awards and bonuses to encourage them.
e. In addition to labor, health insurance and group insurance, the Company also provides travel insurance for employees on business trips.
Family:
a. Friendly maternal protection measures including setting up breastfeeding rooms in the health center, and providing unlimited breastfeeding time.
b. Arrange one-on-one consultation with on-site physicians for employees after pregnancy and childbirth.
c. Provide various subsidies for employee birth and education.
d. Assist in the evaluation of special nursery centers, kindergartens and provide health education information related to childcare.
e. Handle parent-child communication and other related courses and lectures.
f. Organize activities such as parent-child travel for employees and their families to provide opportunities for communication and interaction between parents and children.
g. Provide group insurance for employees and their families, and provide professional on-site services and consultation.
Health: Staff assistance programs and health promotion activities provide employees with physical and mental health and safety

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a. Provide regular labor health checks that are better than that required by regulations.
b. Established a health center to provide staff health management, health inspection and health education and consultation, and care for specific targets and arrange health consultations with on-site physicians.
c. Established fitness centers, basketball courts, badminton courts, music classrooms and other sports fitness and leisure spaces to encourage employees to maintain a healthy body.
d. The Employee Welfare Committee regularly handles various national and international travel, birthday celebrations and afternoon tea activities to adjust the physical and mental health of employees, strengthen employee communication and mutual interaction and connection.
e. Provide various subsidies for employees' marriage, bereavement, illness, childbirth and education.
f. Organize self-growth and stress relief related courses and lectures.
g. Provide meal subsidies for dining staff, and the Company has a staff restaurant that provides buffet, pasta or light meals and other diverse options and calorie information.
(2) Continuous education, training and the implementation thereof

Depending on the needs of each employee's job capacity, future personal development, and the requirement of the Company's operational expansion, the Company formulates individual refresher training programs, and each department regularly formulates and implements its annual training plans every year. If requirements arise in the financial year, each department may, from time to time, submit an "Education and Training Requirement Questionnaire" to add the required training items , which should effectively achieve the purpose of enhancing objectives of the employees' work functions.

(3) Retirement System

In December 1998, the Company set up a special account for labor pension preparation in the Central Trust Bureau, which was allocated at 2% of the total monthly salary. The standard and method of payment of the pension application shall be handled in accordance with the provisions of the Labour Standards Act. Since the beginning of the implementation, no employees have applied for retirement. Since 1999 and in accordance with the Pension Bulletin No. 18, a qualified actuary is hired to conduct actuarial pension assessment. In addition, the Company has solicited the wishes of employees, and since July 1, 2005, according to the regulations of the new labor pension regulations, a retirement fund has been allocated to each employee ’s pension account. Regarding the handling of employee retirement-related matters, it is understood to be handled in accordance with relevant regulations.

(4) Agreements between the employer and employees

The Company has set up labor management meetings in accordance with relevant laws and regulations to negotiate labor management issues through regular discussions. At the same time, through the operation of the employee welfare committee, the Company and the welfare committee cooperated to promote the improvement of employee welfare. In addition, the Company values humane management and recognizes the coexistence and co-prosperity of labor capital as a whole. Therefore, the two-way coordination and communication are adopted in the communication of labor and management issues, so that both parties can understand each other better to achieve the same goals.

(5) Measures to protect employees' rights and interests:

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The Company handles all employee rights and welfare measures in accordance with the relevant laws and regulations to fulfill its maintenance responsibilities, and should be able to reasonably and fully protect employees' rights and interests.

(6) Work environment and protection for the physical safety of workers:

The Company spares no effort in workplace safety and health, and will continue to work on the safety and health prevention in the future, to prevent the injury of the workplace and the personal safety of employees through continuous improvement. The Company's occupational safety and health implementation results are as follows: Occupational safety and health implementation results

1. Labor Operating Environment Monitoring

To understand the actual condition of the working environment in the labor workplace and assess the worker's exposure to the working environment, for which the Company conducts planning, sampling, measurement and analysis accordingly. To protect workers from harmful substances in the workplace and provide workers with a healthy and comfortable working environment, regular environmental monitoring is carried out every year to gradually understand the actual degree of hazards the workers are exposed to, thereby improving the on-site environment and preventing occupational disasters.

Table - Work Safety Performance

able - Work Safety Performance	able - Work Safety Performance
Workplace safetyinspection
Workspace safetyinspection	Dailyinspection
Management by walking around	First level supervisor once a quarter
Work safety inspection in construction site	Conducted from time to time as needed

2. Labor Safety and Health Committee

To prevent occupational disasters and ensure the safety and health of employees, ESMT has an internal occupational safety and health committee. It holds regular meetings every quarter to discuss labor safety and health related matters and promote various labor safety and health related businesses.

3. Personnel Safety and Health Training

Through education and training, ESMT enables employees to understand environmental, safety and health regulations, policies and the Company's environmental, safety and health commitments, enhances the Company's awareness on environmental impact, safety and health risks, and emergency contingency plans to fulfill environmental, safety and health goals and comply with environmental, safety and health.

The Administration Department is responsible for surveying the training needs of various safety, health and environmental protection related courses and organizing training plans. Each department participates in training as needed, and arranges relevant personnel to organize relevant safety and health education and training. In addition, contractors are also required to provide and participate in relevant training in accordance with the "Contractor Management Measures" to ensure the safety and health of the personnel in the Company.

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Table - Work Safety Education Training and Promotion

Year	Training participants	Average trainingman hour
2019	172	413
2020	149	332.5

Table - Professional Work Safety Management Personnel

able - Work Safety Education Training and Promotion Year Training participants Average trainingman hour 2019 172 413 2020 149 332.5 able - Professional Work Safety Management Personnel	able - Work Safety Education Training and Promotion Year Training participants Average trainingman hour 2019 172 413 2020 149 332.5 able - Professional Work Safety Management Personnel

Work safety personnel withprofessional license
Type A Occupational Safetyand Health Manager	1
Occupational SafetyManager	1
Occupational Safetyand Health Manager	1
Operators of Forklift Over 1 Ton	9
Oxygen-Deficient Operations Supervisor	1
High-pressure Gas-specific Equipment Operators	1
High-Pressure Gas Container Operator	1
Radiation SafetyCertificate for Operator	5
First Aid Personnel	9
Healthcare Personnel for Labor Health Services	1
Ionizingradiation	3
Other	3

4. Statistics of Disability due to Occupational Disasters

ESMT is committed to providing colleagues with a safe working environment. For accidents, the parties or surrounding personnel will notify the supervisor and the administrative department as soon as possible, and the work safety and nursing staff will provide assistance.

According to the Occupational Accident and Disability Certification of the Occupational Safety and Health Administration of the Ministry of Labor, traffic accidents beyond the Company are excluded. For occasion traffic contingency, ESMT held quarterly to explain the occurrence of the incident and the new personnel occupational safety and health course to conduct case publicity to prevent similar accidents from happening again through the occupational safety and health committee.

Table - Company's Work Safety Performance in the Past Two Years - Statistics of Employee Disability Injury

Year	Fatal accident	Disabilityaccident
2019	Male: 0 Female: 0	Male: 0 Female: 0
2020	Male: 0 Female: 0	Male: 0 Female: 0

5. Measures for the Prevention and Management of Diseases Caused by Abnormal Workload

ESMT is a professional IC design company with a simple office environment. According to the provisions of Article 6 of the Occupational Safety and Health Act, to ensure the work safety of employees and their physical and mental health, employers should avoid overwork diseases caused by shifts, night work, long hours or other workload factors. "Only a safe

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and healthy workforce can ensure the competitiveness of the Company"; Labor is an important asset of a company. Based on the principle that prevention is better than cure, the provisions of the Occupational Safety and Health Act are implemented, and relevant measures to promote the physical and mental health of the workers are adopted to create a more friendly and healthy workplace environment for workers, and ensure their rights and interests. ESMT has established the “Measures for the Prevention and Management of Diseases Promoted by Abnormal Workloads” and adopted disease prevention measures and related management to ensure the physical and mental health of employees and prevent employees from causing diseases due to abnormal workloads. Nursing staff regularly evaluates and interviews with specialist doctors in the occupational medicine department, and makes follow-up recommendations and measures based on the interview records of physicians.

(II) Specify losses arising from labor disputes in the most recent year up to the publication date of this Annual Report, and disclose potential losses in the current and future periods as well as and countermeasures:

To uphold the belief of perfect care for the employees, the Company has a vacation and retirement system, and also a variety of welfare measures. Therefore, employees have a high degree of centripetal force to the Company. A harmonious relationship between labor and management is maintained, and thus, there was no loss arising from by labor disputes.

VI. Important Contracts

Nature of Contract	Counterparty	Term	Salient terms	Restrictions
Lease Contract	Science Park Bureau	March 1, 2001 to December 31, 2020	Land Lease	Nil
Lease Contract	Science Park Bureau	August 6, 2010 to December 31, 2020	Land Lease	Nil
Lease Contract	Science Park Bureau	August 27, 2014 to December 31, 2033	Land Lease	Nil

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Financial Overview

I. Balance Sheet and Profit and Loss Statement Summary for the 5 most recent financial years
(1) Balance Sheet Summary - Adopted International Financial Reporting Standards
1. Consolidated Balance Sheet Summary - Adopted of International Financial Reporting Standards (IFRS)

Unit: NT$ 1,000

						Unit:	NT$ 1,000
Financial Year Item		2016	2017	2018	2019	2020	Financial Data as at March 31, 2021
Current assets		7,800,779	8,499,324	9,206,455	9,497,077	11,832,047	12,918,170
Property, plant, and equipm ent		778,433	891,701	799,062	696,328	776,598	933,679
Intangible assets		121,694	154,069	133,975	81,593	111,688	106,247
Other assets		505,175	71,821	149,820	205,322	280,015	254,363
Total assets		9,206,081	9,616,915	10,289,312	10,480,320	13,000,348	14,212,459
Current liabilities	Before distribution	2,296,257	2,412,330	3,011,680	3,025,945	4,756,158	5,309,028
	After distribution	2,701,059	3,052,777	3,440,318	3,311,704	Undistributed	N/A
Non-current liabilities		34,173	34,444	33,194	113,596	114,907	114,271
Total liabilities	Before distribution	2,330,430	2,446,774	3,044,874	3,139,541	4,871,065	5,423,299
	After distribution	2,735,232	3,087,221	3,473,512	3,425,300	Undistributed	N/A
Equity attributable to parent company		6,981,488	7,277,594	7,355,348	7,461,460	8,264,043	8,921,018
Share capital		2,825,737	2,857,589	2,857,589	2,857,589	2,857,589	2,860,999
Capital reserves	Before distribution	256,073	116,645	59,072	104,305	109,677	125,596
	After distribution	79,266	47,716	59,072	104,305	Undistributed	N/A
Retained profits	Before distribution	3,995,965	4,635,058	4,576,008	4,645,411	5,436,890	6,081,446
	After distribution	3,767,970	4,063,540	4,147,370	4,359,652	Undistributed	N/A
Minorityinterest		41,034	(194,377)	-	(8,524)	5,536	(1,374)
Treasuryshares		(137,321)	(137,321)	(137,321)	(137,321)	(145,649)	(145,649)
Non-controllinginterest		(105,837)	(107,453)	(110,910)	(120,681)	(134,760)	(131,858)
Total equity	Before distribution	6,875,651	7,170,141	7,244,438	7,340,779	8,129,283	8,789,160
	After distribution	6,470,849	6,529,694	6,815,800	7,055,020	Undistributed	N/A

Note 1: The financial inform ation of the Company has been reviewed or audited by accountants.

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Balance Sheet Summary of the Company - Adopted of International Financial Reporting Standards (IFRS)

Unit: NT$ 1,000

Financial Year Item	Financial Year Item	2016	2017	2018	2019	2020
Current assets		6,120,413	7,086,882	8,013,401	8,346,065	10,623,102
Property, plant, and equipm ent		769,948	883,532	792,823	695,067	776,013
Intangible assets		115,272	150,772	132,628	81,177	111,688
Other assets		2,191,299	1,503,040	1,396,296	1,356,424	1,494,414
Total assets		9,196,932	9,624,226	10,335,148	10,478,733	13,005,217
Current liabilities	Before distribution	2,180,922	2,311,832	2,946,250	2,912,373	4,630,790
	After distribution	2,585,724	2,952,279	3,374,888	3,198,132	Undistributed
Non-current liabilities		34,522	34,800	33,550	104,900	110,384
Total liabilities	Before distribution	2,215,444	2,346,632	2,979,800	3,017,273	4,741,174
	After distribution	2,620,246	2,987,079	3,408,438	3,303,032	Undistributed
Equity attributable to parent company		6,981,488	7,277,594	7,355,348	7,461,460	8,264,043
Share capital		2,825,737	2,857,589	2,857,589	2,857,589	2,857,589
Capital reserves	Before distribution	256,073	116,645	59,072	104,305	109,677
	After distribution	79,266	47,716	59,072	104,305	Undistributed
Retained profits	Before distribution	3,995,965	4,635,058	4,576,008	4,645,411	5,436,890
	After distribution	3,767,970	4,063,540	4,147,370	4,359,652	Undistributed
Other equity interest		41,034	( 194,377)	-	( 8,524)	5,536
Treasury stock		( 137,321)	( 137,321)	( 137,321)	( 137,321)	( 145,649)
Non-controlling interest		-	-	-	-	-
Total equity	Before distribution	6,981,488	7,277,594	7,355,348	7,461,460	8,264,043
	After distribution	6,576,686	6,637,147	6,926,710	7,175,701	Undistributed

Note 1: The financial inform ation of the Company has been reviewed or audited by the CPAs.

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3. Consolidated Comprehensive Profit and Loss Summary - Adopted International Financial Reporting Standards (IFRS)

				Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Year Item	2016	2017	2018	2019	2020	Financial data as at March 31, 2021
Revenue	9,300,534	10,456,519	11,555,124	11,983,479	15,267,139	4,971,476
Gross profit	1,421,717	2,056,683	2,128,927	1,802,208	2,649,042	1,143,816
Operating profit (loss)	309,551	731,398	806,415	574,943	1,154,785	633,049
Non-operating incom e and expenses	360,091	243,341	41,845	1,237	98,915	97,690
Net profit before tax	669,642	974,739	848,260	576,180	1,253,700	730,739
Net profit fro m continuing operations	581,339	862,058	716,194	505,611	1,084,441	642,563
Loss from discontinued operations	-	-	-	-	-	-
Profit (loss) for the year	581,339	862,058	716,194	505,611	1,084,441	642,563
Other comprehensive income(net, after tax)	( 319,950)	( 233,490)	337	( 7,888)	14,872	( 6,910)
Total comprehensive incom e	261,389	628,568	716,531	497,723	1,099,313	635,653
Net profit attributable to the parent company	597,835	865,167	706,508	497,405	1,076,426	644,556
Net profit attributable to non-controllinginterest	( 16,496)	( 3,109)	9,686	8,206	8,015	( 1,993)
Total co mprehensive profit attributable to parent company	277,885	631,677	706,845	489,517	1,091,298	637,646
Total co mprehensive profit attributable to non-controllinginterest	( 16,496)	( 3,109)	9,686	8,206	8,015	( 1,993)
Earnings per share (NT$)	2.19	3.11	2.52	1.78	3.85	2.30

Note 1: The financial inform ation of the Company has been reviewed or audited by the CPAs.

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4. Company's Comprehensive Profit and Loss Summary - Adopted International Financial Reporting Standards (IFRS)

		Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Year Item	2016	2017	2018	2019	2020
Revenue	9,255,474	10,415,576	11,491,609	11,964,770	15,252,723
Gross profit	1,371,678	2,002,960	2,053,252	1,745,049	2,577,636
Operating profit (loss)	416,592	803,092	855,921	578,899	1,101,133
Non-operating incom e and expenses	250,915	156,582	( 20,130)	( 15,466)	141,956
Net profit before tax	667,507	959,674	835,791	563,433	1,243,089
Net profit from continuing operations	597,835	865,167	706,508	497,405	1,076,426
Loss from discontinued operations	-	-	-	-	-
Profit (loss) for the year	597,835	865,167	706,508	497,405	1,076,426
Other comprehensive profit (net, after tax)	( 319,950)	( 233,490)	337	( 7,888)	14,872
Total comprehensiveprofit	277,885	631,677	706,845	489,517	1,091,298
Earnings per share (NT$)	2.19	3.11	2.52	1.78	3.85

Note 1: The financial inform ation of the Company has been reviewed or audited by the CPAs.

(2) Names of CPAs in the five most recent financial years and audit opinions

Year	Nam e of the CPA	Nam e of CPAs	Audit opinion	Rema
FY 2016	~~ti~~ ~~fi~~ PricewaterhouseCoopers Taiwan	Yu-Kuan, Lin & Danie Lee	Unqualified opinion	~~k~~
FY 2017	PricewaterhouseCoopers Taiwan	Ya-Huei Cheng & Danie Lee	Unqualified opinion	Note
FY 2018	PricewaterhouseCoopers Taiwan	Ya-Huei Cheng & Danie Lee	Unqualified opinion
FY 2019	PricewaterhouseCoopers Taiwan	Ya-Huei Cheng & Danie Lee	Unqualified opinion
FY 2020	PricewaterhouseCoopers Taiwan	Ya-Huei Cheng & Danie Lee	Unqualified opinion

Note: The Company appointed PricewaterhouseCoopers Taiwan to attest the financial statem ent. Due to the rotation of internal work functions of the CPA accounting firm, the CPA was changed.

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II. Financial analysis for the five most recent financial years

(1) Financial analysis - Adopted International Financial Reporting Standards (IFRS)
Consolidated Financial Analysis - Adopted International Financial Reporting Standards (IFRS)

Item	Year	Year	2016	2017	2018	2019	2020	Financial data as of March 31,2021
Financial structure	Debts to total assets ratio(%)		25.31	25.44	29.59	29.96	37.47	38.16
	Long-term capital to PPE ratio (%)		887.66	807.96	910.77	1,070.53	1,061.58	953.59
Debt service ability	Current ratio (%)		339.72	352.33	305.69	313.85	248.77	243.32
	Quick ratio (%)		186.51	197.54	111.39	148.39	122.58	138.38
	Interest coverage ratio (times)		49,924.55	70,478.27	17,457.48	6,617.87	10,976.20	15,204.15
Operating ability	Accounts receivable turnover rate(times)		9.09	9.43	10.32	10.06	10.49	11.30
	Average collection days(days)		41	39	35	37	35	32
	Inventory turnover rate (times)		2.10	2.29	1.93	1.82	2.25	2.64
	Payables turnover rate (times)		4.67	4.71	5.14	4.94	5.46	6.28
	Average inventory turnover days(days)		174	159	189	201	163	138
	Turnover rate for PPE (times)		12.15	12.52	13.67	16.03	20.73	23.25
	Total asset turnover rate(times)		1.04	1.11	1.16	1.15	1.30	1.46
Profit ability	Return on	assets (%)	6.52	9.17	7.24	4.94	9.32	4.75
	Return on	equity (%)	8.57	12.27	9.94	6.93	14.02	7.60
	Ratio to paid-in Capital (%)	Operating profit margin(%)	10.95	25.59	28.22	20.12	40.41	22.13
		Net profit before tax margin(%)	23.70	34.11	29.68	20.16	43.87	25.54
	Netprofit margin(%)		6.25	8.24	6.20	4.22	7.10	12.92
	Earnings per share (NT$)		2.19	3.11	2.52	1.78	3.85	2.30
Cash flow	Cash flow ratio (%)		49.03	39.41	-	61.12	9.53	26.00
	Cash flow adequacy ratio(%)		65.09	62.35	17.02	28.20	57.56	63.41
	Cash reinvestm ent ratio(%)		11.56	8.95	-	15.60	1.72	12.70
Leverage	Operating leverage		4.08	2.58	2.58	3.30	2.20	1.59
	Financial leverage		1.00	1.00	1.01	1.02	1.01	1.01

~99~

Analysis of financial ratio differences for the last two years:

T he debt to assets ratio rose while the current ratio fell, mainly due to an increase in short-term borrowin gs durin g the year.
T he interest coverage multiple rose, mainly due to a significant increase in income tax expenses as a result of an increase in profit during the year.
T he inventory turnover ratio rose, mainly due to a significant increase in cost of goods sold. Ho wever, the increase in the inventory at the end of the period was not as significant as the increase in the cost.
T he return on assets, return on equity, operating income/net income before income taxes to paid-in capital ratio, net income ratio and earnings per share rose, mainly due to the sluggish glo bal economy caused by the COVID-19 pandemic. Ho wever, the electronics industry grew against the trend, and the Company's operating profit increased from the previous year.
T he cash flow ratio and the cash reinvestment ratio rose, mainly due to the growth in revenu e durin g the year. However, the operating cash flow decreased significantly from the previous year due to an increase in the inventory as a result of the projected future sales.
T he cash flow adequacy ratio rose, mainly because the average operating cash flow increased significantly from the previous year.
The degree of operating leverage fell, mainly due to the sluggish global economy during the year. How ever, the electronics industry grew against the trend, and the Company's operating incom e increased sig nificantly from the previous year.

2. Financial Analysis of the Company - Adopted International Financial Reporting Standards (IFRS)

	Standards (IFRS)	Standards (IFRS)
Item	Year		2016	2017	2018	2019	2020
Financial structure	Debts to total assets (%)		24.09	24.38	28.83	28.79	36.46
	Long-term capital to PPE ratio (%)		911.23	827.63	931.97	1,088.58	1,079.16
Debt service ability	Current ratio (%)		280.63	306.55	271.99	286.57	229.40
	Quick ratio (%)		119.81	146.57	73.71	114.99	99.87
	Interest coverage ratio (times)		49,765.70	69,742.53	17,223.36	6,565.09	11,093.00
Operating ability	Accounts receivable turnover rate(times)		9.58	10.07	10.80	10.69	11.36
	Average collection days (days)		39	36	34	35	33
	Inventory turnover rate (times)		2.11	2.30	1.93	1.83	2.26
	Payables turnover rate (times)		4.71	4.81	5.30	5.12	5.74
	Average inventory turnover days(days)		173	159	189	200	162
	Turnover rate for PPE (times)		12.19	12.60	13.71	16.08	20.74
	Total asset turnover rate (times)		1.03	1.11	1.15	1.15	1.30
Profit ability	Return on assets (%)		6.69	9.21	7.12	4.85	9.25
	Return on equity (%)		8.69	12.13	9.66	6.71	13.69
	Ratio to paid-in Capital (%)	Operating profit margin (%)	14.74	28.10	29.95	20.26	38.53
		Net profit before tax margin(%)	23.62	33.58	29.25	19.72	43.50
	Net profit margin (%)		6.46	8.31	6.15	4.16	7.06

~100~

Item	Year	2016	2017	2018	2019	2020
	Earnings per share (NT$)	2.19	3.11	2.52	1.78	3.85
Cash flow	Cash flow ratio (%)	58.30	38.24	-	66.94	9.63
	Cash flow adequacy ratio (%)	70.20	65.11	19.60	34.46	60.02
	Cash reinvestm ent ratio (%)	13.04	7.96	-	16.49	1.55
Leverage	Operating leverage	3.32	2.45	2.52	3.26	2.26
	Financial leverage	1.00	1.00	1.01	1.02	1.01

Analysis of financial ratio differences for the last two financial years:

T he debt to assets ratio rose while the current ratio fell, mainly due to an increase in short-term borrowin gs durin g the year.
T he interest coverage multiple rose, mainly due to a significant increase in income tax expenses as a result of an increase in profit during the year.
T he inventory turnover ratio rose, mainly due to a significant increase in cost of goods sold. Ho wever, the increase in the inventory at the end of the period was not as significant as the increase in the cost.
T he return on assets, return on equity, operating income/net income before income taxes to paid-in capital ratio, net income ratio and earnings per share rose, mainly due to the sluggish glo bal economy caused by the COVID-19 pandemic. Ho wever, the electronics industry grew against the trend, and the Company's operating profit increased from the previous year.
T he cash flow ratio and the cash reinvestment ratio rose, mainly due to the growth in revenu e durin g the year. However, the operating cash flow decreased significantly from the previous year due to an increase in the inventory as a result of the projected future sales.
T he cash flow adequacy ratio rose, mainly because the average operating cash flow increased significantly from the previous year.
The degree of operating leverage fell, mainly due to the sluggish global economy during the year. However, the electronics industry grew against the trend, and the Company's operating income increased significantly from the previous year.

The formulas for calculating the financial ratios are as follows:

1. Financial structure

(1) Liability to asset ratio = total liabilities / total assets.
(2) Long-term capital PPE = (total equities + non-current liabilities) / net value of PP&E.
Debt service ability
(1) Current ratio = current assets / current liabilities
(2) Quick ratio = (current assets - inventory - prepaid expenditures) / current liabilities.
(3) Interest coverage ratio = profit before interest and tax / interest expenditures for this year.
Operating ability
(1) Accounts receivable (including accounts receivable and notes receivable resulting from operation) turnover = net revenue / balance of average accounts receivable (including accounts receivable and notes receivable resulting from operation).
(2) Average collection days = 365 / receivables turnover rate.
(3) Inventory turnover = cost of goods sold / average inventory value.
(4) Payable turnover rate (including bills payable resulting from accounts payable and business operations) = cost of goods sold / average accounts payable in various periods (including bills payable resulting from accounts payable and business

~101~

operations).

(5) Average sales days = 365 / inventory turnover ratio.
(6) PPE turnover ratio = net sale / average PPE value.
(7) Total asset turnover ratio = Net revenue / average total PPE value.
Profitability
(1) Return on assets ＝ [net profit after taxes + interest expense (1 – tax rate)] / average total assets.
(2) Equity remuneration rate = net profit (loss) after tax / average total equity value.
(3) Net profit margin = net profit (loss) after tax / net revenue.
(4) Earnings per share (EPS) = (Profit (loss) attributable to the parent company - dividend for preferred shares) / weighted average of issued shares
Cash flow
(1) Cash flow ratio = net cash from business activities / current liabilities.
(2) Net cash flow adequacy ratio = net cash flow for business activities for the last 5 years / (capital expenses + additional inventory sum + cash dividend) for the past 5 financial years.
(3) Cash re-investment ratio = (net cash flow from business activities - cash dividend) / (gross amount of PPE + long-term investments + other non-current assets + working capital).
Leverage:
＝－
(1) Operating leverage (net revenue variable operating cost and expense)／operating income
(2) Financial Leverage = operating profit / (operating profit - interest expense).

~102~

III. Audit Committee's Audit Report for the Most Recent Fiscal Year

Elite Semiconductor Microelectronics Technology Inc.

Audit Committees' Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements, and proposal for allocation of earnings. The CPA firm of PricewaterhouseCoopers was retained to audit the ESMT’s Financial Statements and have issued an audit report relating to the Finacial Statements. The Business Report, Financial Statements, and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee of the Elite Semiconductor Microelectronics Technology Inc. According to the relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.

To: Elite Semiconductor Microelectronics Technology Inc. 2021 Annual Shareholders' Meeting

Elite Semiconductor Microelectronics Technology Inc.

Convener of the Audit Committee: Shan-Jen, Chow

February 26, 2021

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IV. Financial Statements for the Most Recent Financial Year

Independent Auditors’ Report

(2021) Finance-Audit-Letter No.20003747

To the Board of Directors and Shareholders of Elite Semiconductor Microelectronics Technology Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Elite Semiconductor Microelectronics Technology Inc. and its subsidiaries (the“ Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and Generally Accepted Auditing Standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~104~

Key audit matters

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

Key audit matters for the Group’s consolidated financial statements of the current period are stated as follows:

Evaluation of inventories

Description

The Group is primarily engaged in research, development, production, manufacture, and sales of integrated circuit. The Group evaluates inventories stated at lower of cost and net realizable value. Since the evaluation of net realizable value of the inventories exceed specific period and obsolete inventories is subject to management’s judgment and uncertainty of estimations. Consequently, we consider the evaluation of inventories as a key audit matter.

How our audit addressed the matter

We have performed primary audit procedures for the above key audit matter included assessed the rationality of policy and procedure on allowance for inventory valuation loss based on our understanding of the Group’s operations and industry, the historical data of product marginalization in the market and judged the rationality of obsolete inventories. We inspected the appropriateness of inventory aging report to confirm the consistency of report and policy, selected samples to compare the historical data of product marginalization in the market which determine the net realizable value of the obsolete inventories and net realizable value of the obsolete inventories to assessed the rationality of the allowance for inventory valuation loss.

~105~

Other matter–Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Elite Semiconductor Microelectronics Technology Inc. as at and for the years ended December 31, 2020 and 2019.

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

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

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

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

~106~

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

~107~

entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Cheng, Ya-Huei

Li, Tien-Yi

for and on behalf of PricewaterhouseCoopers, Taiwan

February 26, 2021

~108~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Assets	Notes 6(1) 6(2) 6(4) 6(5) 8 6(3) 6(6) 6(7) 6(8) 6(9) 6(10)(11) 6(26) 8	Decem ber 31,2020 Amount % $ 3,597,917 28 365,474 3 136,704 1 - - 1,633,993 12 95,830 1 5,969,330 46 27,602 - 5,197 - 11,832,047 91 64,836 - 33,883 - 776,598 6 80,782 1 17,701 - 111,688 1 3,813 - 79,000 1 1,168,301 9 $ 13,000,348 100	Unit: NT$ thousand Decem ber 31,2019 Amount % $ 2,757,003 26 252,593 3 140,906 1 34 - 1,256,938 12 82,741 1 4,972,552 48 27,444 - 6,866 - 9,497,077 91 50,776 - 33,210 - 696,328 7 86,367 1 18,671 - 81,593 1 4,174 - 12,124 - 983,243 9 $ 10,480,320 100
		Amount $ 3,597,917 365,474 136,704 - 1,633,993 95,830 5,969,330 27,602 5,197 11,832,047 64,836 33,883 776,598 80,782 17,701 111,688 3,813 79,000 1,168,301 $ 13,000,348	Amount $ 2,757,003 252,593 140,906 34 1,256,938 82,741 4,972,552 27,444 6,866 9,497,077 50,776 33,210 696,328 86,367 18,671 81,593 4,174 12,124 983,243 $ 10,480,320
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepaym ents 1470 Other current assets 11XX Total curren t assets Non-current assets 1517 Financial assets at fair value through other comprehensive incom e - non-current 1550 Investment accounted for under the equity m ethod 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-cu rrent assets 1XXX Total assets

(Continued)

~109~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Liabilities and equity	Decem ber 31,2020 Notes Amount % 6(12) $ 1,340,000 10 149,756 1 6(19) 5,346 - 2,115 - 2,396,158 19 6(13) 694,001 5 147,948 1 10,356 - 10,478 - 4,756,158 36 16,495 - 6(26) 12,442 - 71,281 1 6(14) 14,689 - 114,907 1 4,871,065 37 6(16) 2,857,589 22 6(17) 109,677 1 6(18) 1,409,039 11 8,524 - 4,019,327 31 5,536 - 6(16) ( 145,649) ( 1)	Unit: NT$ thousand Decem ber 31,2019 Amount % $ 274,000 3 - - 3,959 - 1,981 - 2,225,909 21 462,523 5 40,046 - 11,447 - 6,080 - 3,025,945 29 15,083 - 4,731 - 75,440 1 18,342 - 113,596 1 3,139,541 30 2,857,589 27 104,305 1 1,359,235 13 - - 3,286,176 31 ( 8,524) - ( 137,321) ( 1)
		Amount $ 274,000 - 3,959 1,981 2,225,909 462,523 40,046 11,447 6,080 3,025,945 15,083 4,731 75,440 18,342 113,596 3,139,541 2,857,589 104,305 1,359,235 - 3,286,176 ( 8,524) ( 137,321)
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current incom e tax liabilities 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total curren t liabilities Non-current liabilities 2550 Provisions - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities – non-current 2600 Other non-current liabilities 25XX Total non-cu rrent liabilities 2XXX Total liabilities Equity attributable to own ers of the parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury shares

(Continue)

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~110~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

31XX Total equity attributable to owners of the parent 8,264,043 64 36XXNon-controlling interest ( 134,760) ( 1) 3XXX Total equity 8,129,283 63 Significant Events after the End of the Balance Sheet Date 11 3X2X Total liabilities and equity $ 13,000,348 100	Unit: NT$ thousand 7,461,460 71 ( 120,681) ( 1) 7,340,779 70 $ 10,480,320 100

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~111~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of Com prehensive Income Years ended December 31, 2020 and 2019

Items	Notes 6(19) 6(5) (24) (25) 6(24) (25) 12(2) 6(20) 6(21) 6(22) 6(23) 6(6) 6(26) 6(14) 6(3) 6(27)	2020
4000 Operating revenue 5000 Operating costs 5950 Gross profit Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain (loss) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains or losses 7050 Financial costs 7060 Share of profit (loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expenses 8200 Profit for the period Other comprehensive income (loss) - net Items not reclassified to profit or loss 8311 Gain on remeasurements of defined benefit plans 8316 Unrealized gain (loss) on valuation of equity instruments at fair value through other comprehensive income 8300 Other comprehensive income (loss) - net 8500 Total comprehensive income for the period Profit (loss) attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share
		$

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~112~

Elite Sem iconductor Microelectronics Technology Inc. and Subsidiaries Conso lidated Statem ents of Changes in Equ ity Years ended Decem ber 31, 2020 and 2019

Unit: NT$ thousand

Note				Equity attributable	Equity attributable	Equity attributable	to owners of the pa	to owners of the pa	rent	rent					Non-controlling interest	Non-controlling interest	Total equity
	Common stock	Capital surplus			R	etained earnings			Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income			Treasuryshare		Total
				Legal rese rve		Special reserve	Unappropriated retained earnings
6(18) 6(17) 6(17) (28) 6(17) (28) 6(17) 6(17) 6(17) 6(18) 6(17) 6(17) 6(17) (28) 6(17)	$ 2,857,589 - - - - - - - - - - - - $ 2,857,589 $ 2,857,589 - - - - - - - - - - - $ 2,857,589	( (	$ 59,072 - - - - - - 1,146 35,475 8,438 180 39 45 ) $ 104,305 $ 104,305 - - - - - - - 1,146 5,925 1,781 ) 82 $ 109,677	$ 1,288,584 - - - 70,651 - - - - - - - - $ 1,359,235 $ 1,359,235 - - - 49,804 - - - - - - - $ 1,409,039	(	$ 194,377 - - - - - 194,377 ) - - - - - - $ - $ - - - - - - 8,524 - - - - - $ 8,524	( ( ( ( (	$ 3,093,047 497,405 636 498,041 70,651 ) 428,638 ) 194,377 - - - - - - $ 3,286,176 $ 3,286,176 1,076,426 812 1,077,238 49,804 ) 285,759 ) 8,524 ) - - - - - $ 4,019,327		$ - - ( 8,524 ) ( 8,524 ) - - - - - - - - - ($ 8,524 ) ($ 8,524 ) - 14,060 14,060 - - - - - - - - $ 5,536	( ( ( ( (	$ 137,321 ) - - - - - - - - - - - - $ 137,321 ) $ 137,321 ) - - - - - - 8,328 ) - - - - $ 145,649 )	( ( ( ( ( (	$ 7,355,348 497,405 7,888 ) 489,517 - 428,638 ) - 1,146 35,475 8,438 180 39 45 ) $ 7,461,460 $ 7,461,460 1,076,426 14,872 1,091,298 - 285,759 ) - 8,328 ) 1,146 5,925 1,781 ) 82 $ 8,264,043	( ( ( ( ( ( ( ( (	$ 110,910 ) 8,206 - 8,206 - - - 15,444 ) 2,533 ) - - - - $ 120,681 ) $ 120,681 ) 8,015 - 8,015 - - - 11,566 ) 10,396 ) - 132 ) - $ 134,760 )	$ 7,244,438 505,611 ( 7,888 ) 497,723 - ( 428,638 ) - ( 14,298 ) 32,942 8,438 180 39 ( 45 ) $ 7,340,779 $ 7,340,779 1,084,441 14,872 1,099,313 - ( 285,759 ) - ( 19,894 ) ( 9,250 ) 5,925 ( 1,913 ) 82 $ 8,129,283

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~113~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows

Years ended December 31, 2020 and 2019

							Unit: NT$ thousand
	Notes			2020			2019
Cash flows from operating activities
Profit before incom e tax for the period			$	1,253,700		$	576,180
Adjustments
Income and expenses having no effect on cash
flows
Depreciation	6(7)(8)(9)(24)			312,334			398,674
Amortization	6(10)(24)			111,556			85,108
Expected credit impairm ent loss (gain)	12(2)	(		8,582 )			10,006
Net loss (gain) on financial assets at fair
value through profit or loss	6(2)(22)	(		132,628 )			8,727
Interest expenses	6(23)			11,527			8,840
Interest incom e	6(20)	(		27,412 )	(		49,666 )
Share of (loss) profit of associates and joint
ventures accounted for under equity method	6(6)	(		673 )			13,194
Dividend income	6(21)	(		13,053 )	(		26,570 )
Impairment loss	6(10)(11)(22)			25,352			12,057
Gains arising from lease modifications	6(22)	(		211 )			-
Changes in assets/liabilities relating to
operating activities
Net changes in assets relating to operating
activities
Financial assets at fair value through profit
and loss				19,747	(		18,850 )
Notes receivable				34	(		34 )
Accounts receivable		(		367,741 )	(		161,164 )
Accounts receivable - related parties		(		732 )			-
Other receivables		(		16,458 )	(		15,256 )
Inventories		(		996,778 )			795,104
Prepayments		(		158 )			52,384
Other current assets		(		2,300 )	(		3,946 )
Net changes in liabilities relating to operating
activities
Notes payable				134	(		764 )
Accounts payable				170,249			331,538

(Continue)

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows Years ended December 31, 2020 and 2019

Contract liabilities Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities	Unit: NT$ thousand Notes 2020 2019 1,387 388 142,077 ( 54,781 ) 4,398 1,742 395 384 486,164 1,963,295 30,782 50,064 ( 10,313 ) ( 7,837 ) ( 53,285 ) ( 156,102 ) 453,348 1,849,420

(Continued)

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows

Years ended December 31, 2020 and 2019

Cash flows from investing activities
Acquisition of financial assets at am ortized
cost
Disposal of financial assets at amortized cost
Proceeds from disposal of financial assets at
fair value through profit or loss
Acquisition of investm ents accounted for
under the equity method
Acquisition of property, plant and equipment
(Increase) decrease in prepaym ents for
equipm ent
Acquisition of intangible assets
Cash outflows from disposal of subsidiaries
(Increase) Decrease in guarantee deposit paid
Dividends received
Net cash flows from investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Increase (decrease) in short-term notes and
bills payable
Lease principal repaym ent
(Decrease) Increase in guarantee deposit
received
Cash dividends paid
Subsidiaries paid cash dividends to minority
share interests
Subsidiaries received cash dividends from
parent
Expired cash dividends
Payments of expired cash dividends
Treasury share acquired
Acquisition of ownership interests in
subsidiaries
Net cash flows from (used in) financing

Unit: NT$ thousand
Notes
2020
2019
( $ 140,157 )
( $ 140,906 )
144,359
-
-
63,905
-
(
2,387 )
6(29)
(
291,635 )
(
268,041 )
(
62,673 )
52,996
6(10)
(
167,003 )
(
44,783 )
-
(
11,607 )
(
234 )
185
6(21)
13,053
26,570
(
504,290 )
(
324,068 )
6(29)
1,066,000
(
96,000 )
6(29)
150,476
(
99,417 )
6(29)
(
10,575 )
(
12,525 )
6(29)
(
3,236 )
269
6(18)
(
285,759 )
(
428,638 )
(
9,250 )
(
14,298 )
6(17)
5,925
8,438
6(17)
82
39
6(17)
-
(
45 )
(
19,894 )
-
6(28)
(
1,913 )
-
891,856
(
642,177 )

(Continue)

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows

Years ended	December 31, 2020 and 2019	December 31, 2020 and 2019	December 31, 2020 and 2019
						Unit: NT$ thousand
		Notes		2020		2019
activities
Net (decrease) increase in cash and cash equivalents				840,914		883,175
Cash and cash equivalents at beginning of period	6(1)			2,757,003		1,873,828
Cash and cash equivalents at end of period	6(1)		$	3,597,917	$	2,757,003

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor M icroelectronics Technology Inc. and Subs idiaries Notes to the Consolidated Financial Statements Years Ended December 31, 2020 and 2019

Unit: NT$ thousand (Unless otherwis e indicated)

1.His tory and Organization

Elite Semiconductor M icroelectronics Technology Inc. (the Company) was founded in M ay 1998 and s tarted operation in December of the same year. The core bus iness of the Company and its subs idiaries (collectively referred herein as “the Group”) include research, development, production, manufacture, and s ales of dynamic and static random access memory, flash memory, analog integrated circuit, analog and digital mixed integrated circuit. The Group also provides technical s ervices related to product des ign and R&D.

The Company merged with Ji Xin Technology Co., Ltd. On December 5, 2005, and merged with Eon Silicon Solution Inc. on June 8, 2016, and the Company is the surviving company.

2.The Date of Authorization for Issuance of the Consolidated Financial Statements and

Procedures for A uthorization

The consolidated financial statements were reported to the Board of Directors on February 26, 2021.

3.A pplication of New Standards , A mendments and Interpretations

(一)Effect of the adoption of new issuance of or amendments to International Financial Reporting Standards (“ IFRS” ) as endorsed by the Financial Supervisory Commiss ion (“ FSC” )

New standards , interpretations and amendments endors ed by the FSC effective from 2020 are as follows :

Effective Date by International Accounting New Standards, Amendments and Interpretations Standards Board Amendments to IAS 1 and IAS 8, “Disclosure Initiative - Definition of Material” January 1, 2020 Amendments to IFRS 3, “Definition of a Business” January 1, 2020 Amendments to IFSR 9, IAS 39, and IFRS 7, “Interest rate benchmark reform” January 1, 2020 Amendments to IFRS 16, “Covid-19-Related Rent Concessions” June 1, 2020 (Note) Note: Earlier application from January 1, 2020 is allowed by FSC.

The above s tandards and interpretations have no s ignificant impact to the Group's financial condition and financial performance based on the Group's ass ess ment.

(2) Effect of New Iss uances of or A mendments to IFRSs as Endors ed by the FSC but not yet Adopted by the Company

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

from 2021 are as follows :
	Effective Date by
	International
	Accounting Standards
New Standards,Amendments and Interpretations	Board
Amendments to IFRS 4, “Extension of the Temporary Exemption from Applying IFRS 9”	January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
“Interest Rate Benchmark Reform— Phase 2”	January 1, 2021

The above standards and interpretations have no s ignificant impact to the Group's financial condition and financial performance bas ed on the Group's ass ess ment.

(3) Effects of IFRSs Issued by IA SB but not yet Endors ed by the FSC

New standards , interpretations and amendments iss ued by IA SB but not yet included in the IFRSs as endorsed by the FSC are as follows :

	Effective Date by
	International
	Accounting
New Standards,Amendments and Interpretations	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
between an Investor and its Associate or Joint Venture”	by IASB
IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IAS 1, “Classification of Liabilities as Current or	January 1, 2023
Non-current”
Amendments to IAS 1, “Disclosure of accounting policies”	January 1, 2023
Amendments to IAS 8, “Definition of accounting estimates”	January 1, 2023
Amendments to IAS 16, “Property, Plant and Equipment -Proceeds	January 1, 2022
before Intended Use”
Amendments to IAS 37, “Onerous Contracts - Cost of Fulfilling a	January 1, 2022
Contract”
Annual Improvements to IFRSs 2018-2020 Cycle	January 1, 2022

The above s tandards and interpretations have no s ignificant impact to the Group's financial condition and financial performance based on the Group's ass ess ment.

4.Summary of Significant A ccounting Policies

The principal accounting policies applied in the preparation of these consolidated financial s tatements are s et out below. These policies have been cons is tently applied to all the periods presented, unless otherwis e stated.

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(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”, International Financial Reporting Standards , International Accounting Standards , IFRIC Interpretations , and SIC Interpretations as endors ed by the FSC (collectively referred herein as the “IFRSs ”).

(2)Bas is of preparation

A . Except for the following items , thes e consolidated financial statements have been prepared under the his torical cos t convention:
(a) Financial assets (including derivatives instruments ) at fair value through profit or loss .
(b) Financial ass ets at fair value through other comprehens ive income.
(c) Defined benefit liabilities recognized based on the net amount of pens ion fund assets less present value of defined benefit obligations .
B. The preparation of financial s tatements in conformity with IFRSs , requires the use of certain critical accounting estimates . It als o requires management to exercis e its judgment in the process of applying the Group’s accounting policies . The areas involving a higher degree of judgment or complexity, or areas where assumptions and es timates are estimates are s ignificant to the consolidated financial statements are disclosed in Note 5.

(3)Bas is of consolidation

A . Bas is for preparation of consolidated financial statements
(a) A ll s ubs idiaries are included in the Group’s consolidated financial statements . Subs idiaries are all entities (including structured entities ) controlled by the Group. The Group controls an entity when the Group is expos ed, 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 s ubs idiaries begins from the date the Group obtains control of the subs idiaries and ceases when the Group loses control of the subs idiaries .
(b) Inter-company transactions , balances and unrealized gains or losses on transactions between companies within the Group are eliminated. A ccounting policies of subs idiaries have been adjusted where necess ary to ensure cons is tency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehens ive income are attributed to the owners of the parent and to the non-controlling interests . Total comprehens ive income is attributed to the owners of the parent and to the non-controlling interests even if this res ults in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interes t in a subs idiary that do not result in the parent los ing control of the subs idiary (transactions with non-controlling interests ) are accounted for as equity trans actions , 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 cons ideration paid or received is recognized

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directly in equity.

B. Subs idiaries included in the consolidated financial s tatements :

directly in equity. . Subs idiaries included in the consolidated	financial s tatements :
Name o f Investor Name o f Subsidiary Main Business Activities	Ownership(%) December 31,2020 December 31,2019 Note
Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Memory Technology Inc. Research and development, production, sales and related consulting services of integrated circuit 100 100 Elite Semiconductor Microelectronics Technology Inc. Charng Feng Investment Ltd. General investment 100 100 Elite Semiconductor Microelectronics Technology Inc. Jie Yong Investment Ltd. General investment 41.86 41.86 Note 1 Elite Semiconductor Microelectronics Technology Inc. Elite Investment Services Ltd. General investment 100 100 Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor (B.V.I.) Ltd. General investment - 100 Note 2 Elite Semiconductor Microelectronics Technology Inc. Eon Silicon Solutions, Inc. USA Investigation and research of business situation and industrial technology 100 100 Charng Feng Investment Ltd. 3R Semiconductor Technology Inc. Product design, wholesale and retail of electronic materials, manu facturing of electronic components, information software services and international trade 100 100 Charng Feng Investment Ltd. Elite Silicon Technology Inc. Product design, wholesale and retail of electronic materials, manu facturing of electronic components, information software services and international trade 98.01 79.37 Charng Feng Investment Ltd. Elite Innovation Japan Ltd. Product design, wholesale and retail of electronic materials, manu facturing of electronic components, information software services and international trade 100 100 Ownership(%) Name o f Investor Name o f Subsidiary Main Business Activities December 31,2020 December 31,2019 Note
Charng Feng Investment Ltd. Elite Semiconductor Microelectronics Technology (Shenzhen) Inc. Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical	100 100

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		consulting and services
		of integrated circuit, and
		after - sales service
Charng Feng	Elite Semiconductor	Product design,	100	-	Note 3
Investment Ltd.	Microelectronics	wholesale and retail of
	(Shanghai)	electronic materials,
	Technology Inc.	information software
		services and international
		trade
Charng Feng	CHI Microelectronics	Trading	100	-	Note 4
Investment Ltd.	Limited

Note 1: Elite Semiconductor M icroelectronics Technology Inc. accounts for the majority of voting rights of Jie Yong Investment Ltd. and have same management. It is evaluated to have subs tantial control, so it was included in the consolidated financial statements .
Note 2: Elite Semiconductor (B.V.I.) Ltd. obtained a liquidated certificate from local regulatory authority on February 9, 2021, and obtained a liquidated letter from Inves tment Commis s ion of M inistry of Economic A ffairs (M OEA ) on February 20, 2021.
Note 3: Elite Semiconductor M icroelectronics (Shanghai) Technology Inc. was established on November 27, 2019. The Company's subs idiary, Charng Feng Inves tment Ltd., obtained the investment amount of USD 200,000 approved by the Inves tment Commis s ion of M OEA on M ay 20, 2020.
Note 4: CHI M icroelectronics Limited. was es tablis hed on August 31, 2020. The Company's subs idiary, Charng Feng Inves tment Ltd., obtained the investment amount of HKD 100,000 approved by the Investment Commiss ion of M OEA on December 11, 2020. It has not yet operated as of December 31, 2020.
C. Subs idiaries not included in the consolidated financial statements : None.
D. A djustments for s ubs idiaries with different balance s heet dates : Not applicable.
E. S ignificant res trictions : None.
F. Subs idiaries that have non-controlling interests that are material to the Group: None.

(4)Foreign currency trans lation

Items included in the financial s tatements of each of the Group’s entities are measured us ing 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.

Foreign currency trans actions and balances

A . Foreign currency transactions are trans lated into the functional currency us ing the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses

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  - resulting from the settlement of such transactions  are recognized in profit or loss  in the period in which they arise.

B. M onetary ass ets and liabilities denominated in foreign currencies at the period end are retrans lated at the exchange rates prevailing at the balance sheet date. Exchange differences aris ing upon re-trans lation at the balance sheet date are recognized in profit or loss .
C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-trans lated at the exchange rates prevailing at the balance sheet date; their trans lation differences are recognized in profit or loss . Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehens ive income are re-trans lated at the exchange rates prevailing at the balance s heet date; their trans lation differences are recognized in other comprehens ive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are trans lated us ing the historical exchange rates at the dates of the initial transactions .
D. A ll foreign exchange gains and losses are presented in the s tatement of comprehens ive income within ‘other gains and losses ’
(5)Class ification of current and non -current items
A . Assets that meet one of the following criteria are class ified as current ass ets ; otherwis e they are class ified as non-current ass ets :
- (a)Assets aris ing from operating activities that are expected to be realized, or are intended to be s old or consumed within the normal operating cycle;
- (b)Assets held mainly for trading purposes ;
- (c)Assets that are expected to be realized within twelve months from the balance s heet date;
- (d)Cash and cash equivalents , excluding res tricted 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 class ified as current liabilities ; otherwis e they are class ified as non-current liabilities : (a)Liabilities that are expected to be s ettled within the normal operating cycle;
- (b)Liabilities aris ing mainly from trading activities ;
- (c)Liabilities that are to be s ettled 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, res ult in its s ettlement by the iss ue of equity instruments do not affect its class ification.

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(6)Cas h equivalents

Cash equivalents refer to s hort-term, highly liquid inves tments that are readily convertible to known amounts of cas h and which are s ubject to an ins ignificant ris k of changes in value. Time depos its that meet the definition above and are held for the purpos e of meeting s hort-term cash commitments in operations are class ified as cash equivalents .

(7)Financial ass ets at fair value through profit or loss

A . Financial ass ets at fair value through profit or loss are financial ass ets that are not measured at amortized cost or fair value through other comprehens ive income.
B. On a regular way purchase or s ale bas is , financial ass ets at fair value through profit or loss are recognized and derecognized us ing trade date accounting.
C. A t initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss . The Group subs equently meas ures the financial ass ets at fair value, and recognizes the gain or loss in profit or loss .
D. The Group recognizes the dividend income when the right to receive payment is es tablis hed, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(8)Financial ass ets at fair value through other comprehens ive income

A . Financial assets at fair value through other comprehens ive income comprise equity s ecurities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehens ive income and debt instruments which meet all of the following criteria:
(a)The objective of the Group’s bus iness model is achieved both by collecting contractual cash flows and selling financial ass ets ; and
(b) The assets ’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or s ale bas is , financial ass ets at fair value through other comprehens ive income are recognized and derecognized us ing trade date accounting.
C. A t initial recognition, the Group measures the financial assets at fair value plus trans action costs . The Group subsequently measures the financial assets at fair value:
The changes in fair value of equity inves tments that were recognized in other comprehens ive income are reclass ified to retained earnings and are not reclass ified to profit or loss following the derecognition of the inves tment. Dividends are recognized as revenue when the right to receive payment is es tablished, future economic benefits ass ociated with the dividend will flow to the Group and the amount of the dividend can be meas ured reliably.

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(9)Financial ass ets at amortized cost

A . Financial assets at amortized cost are those that meet all of the following criteria:
- (a)The objective of the Group’s bus iness model is achieved by collecting contractual cash flows .
- (b)The ass ets ’ contractual cash flows represent s olely payments of principal and interest.
B. On a regular way purchase or s ale bas is , financial ass ets at amortized cost are recognized and derecognized us ing trade date accounting.
C. A t initial recognition, the Group measures the financial assets at fair value plus trans action cos ts . Interest income from these financial assets is included in finance income us ing the effective interes t method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.
D. The Group’s time depos its which do not fall under cash equivalents are thos e with a short maturity period and are measured at initial inves tment amount as the effect of dis counting is immaterial.
(10)A ccounts and notes receivable
A . Accounts and notes receivable entitle the Group a legal right to receive cons ideration in exchange for trans ferred goods or rendered s ervices .
B. The short-term accounts and notes receivable without bearing interest are subs equently measured at initial invoice amount as the effect of discounting is immaterial.

(11)Impairment of financial assets

For financial ass ets at amortized cos t, at each reporting date, the Group recognizes the impairment provis ion for 12 months expected credit loss es if there has not been a s ignificant increase in credit ris k s ince initial recognition or recognizes the impairment provis ion for the lifetime expected credit loss es (ECLs ) if s uch credit ris k has increas ed s ince initial recognition after taking into cons ideration all reas onable and verifiable information that includes forecas ts . On the other hand, for accounts receivable that do not contain a s ignificant financing component, the Group recognizes the impairment provis ion for lifetime ECLs .

(12)Derecognition of financial assets

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

(13)Inventories

Inventories are stated at the lower of cost and net realizable value. Cos t is determined us ing the weighted-average method. The cost of finis hed goods and work in progress comprises raw materials , direct labor, other direct cos ts and related production overheads . It excludes borrowing cos ts . The item by item approach is used in applying the lower of cos t and net realizable value. Net realizable value is the estimated selling price in the ordinary course of bus iness , less the es timated cos t of completion and applicable variable selling expens es .

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(14)Inves tments accounted for us ing equity method / associates

A . Associates are all entities over which the Group has s ignificant influence but not control. In general, it is presumed that the investor has s ignificant influence, if an investor holds , directly or indirectly 20 percent or more of the voting power of the inves tee. Investments in associates are accounted for us ing the equity method and are initially recognized at cos t.
B. The Group’s s hare of its associates ’ post-acquis ition profits or loss es is recognized in profit or loss , and its share of post-acquis ition movements in other comprehens ive income is recognized in other comprehens ive income. When the Group’s share of losses in an ass ociate equals or exceeds its interest in the associate, including any other unsecured receivables , the Group does not recognize further losses , unless it has incurred legal or cons tructive obligations or made payments on behalf of the associate.
C. W hen changes in an associate’s equity do not aris e from profit or loss or other comprehens ive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the Group’s share of change in equity of the associate in ‘capital s urplus ’ in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates . Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset trans ferred. Accounting policies of associates have been adjusted where necessary to ensure cons is tency with the policies adopted by the Group.
E. In the cas e that an ass ociate issues new shares and the Group does not subs cribe or acquire new shares proportionately, which res ults in a change in the Group’s owners hip percentage of the associate but maintains s ignificant influence on the associate, then ‘capital surplus ’ and ‘investments accounted for under the equity method’ shall be adjus ted for the increase or decrease of its s hare of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the ass ociate, in addition to the above adjus tment, the amounts previous ly recognized in other comprehens ive income in relation to the associate are reclass ified to profit or loss proportionately on the same bas is as would be required if the relevant assets or liabilities were dispos ed of.
F. Upon loss of s ignificant influence over an associate, the Group remeas ures any investment retained in the former associate at its fair value. A ny difference between fair value and carrying amount is recognized in profit or loss .
G. W hen the Group dispos es its inves tment in an associate and loses s ignificant influence over this associate, the amounts previous ly recognized in other comprehens ive income in relation to the associate, are reclass ified to profit or loss , on the same bas is as would be required if the relevant ass ets or liabilities were disposed of. If it retains s ignificant influence over this associate, the amounts previous ly recognized in other comprehens ive income in relation to the associate are reclass ified to profit or loss proportionately in accordance with the aforementioned approach.

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(15)Property, plant and equipment

A . Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the cons truction period are capitalized.
B. Subs equent cos ts are included in the ass et’s carrying amount or recognized as a separate ass et, 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 derecognized. A ll other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cos t model and are depreciated us ing the straight-line method to allocate their cost over their estimated us eful lives . Each part of an item of property, plant, and equipment with a cost that is s ignificant in relation to the total cos t of the item mus t be depreciated separately.
D. The ass ets ’ res idual values , useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets ’ res idual values and useful lives differ from previous es timates or the patterns of consumption of the assets ’ future economic benefits embodied in the assets have changed s ignificantly, any change is accounted for as a change in es timate under IA S 8, ‘A ccounting Policies , Changes in Accounting Es timates and Errors ’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows :
Buildings and s tructures 3~20 years M achinery and equipment 3~8 years Tes ting equipment 3~8 years Other 3~10 years

(16) Leas ing arrangements (less ee)－ right -of-use ass ets/ leas e liabilities

A . Leas es are recognized as a right-of-us e asset and a corresponding lease liability at the date at which the leased ass et is available for use by the Group. For short-term leases or leases of low value ass ets , leas e payments are recognized as an expense on a straight-line bas is over the lease term.
B. Leas e liabilities include the net present value of the remaining lease payments at the commencement date, discounted us ing the incremental borrowing interes t rate. Lease payments are compris ed of Fixed payments , less any lease incentives receivable. The Group subs equently measures the lease liability at amortized cos t us ing the interest method and recognizes interest expens e over the lease term.
Starting from the lease date, the Group ass esses whether it can reasonably determine its option to extend the leas e or purchase the underlying ass et, or not to terminate the leas e. The Group cons iders all relevant facts and circumstances that will generate economic incentives to exercis e or not exercis e the options . Such circumstances include all e xpected changes in facts and s ituations from the start of the lease to the day when the option is exercis ed. Main factors to cons ider include contractual terms and conditions within the period of options and the importance of the underlying ass et to the less ee’s operations , etc. The lease term will be reass essed if a

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s ignificant change or a major change in circumstances occurs within the Company's control range.

The leas e liability is remeasured and the amount of remeas urement is recognized 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. A t the commencement date, the right-of-us e asset is s tated at cost. The cost is the amount of the initial meas urement of lease liability. The right-of-us e ass et is measured subs equently us ing the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s us eful life or the end of the leas e term. When the leas e liability is remeasured, the amount of remeas urement is recognized as an adjustment to the right-of-us e ass et.
(17)Inves tment property

An investment property is s tated initially at its cos t and measured subs equently us ing the cost model. Investment property is depreciated on a straight-line bas is over its estimated useful life of 20 years . (18)Intangible assets

A . Patent and technical s kill, customer relationship Separately acquired patent is stated at his torical cos t. Patent and technical s kill, customer relations hip acquired in a bus iness combination are recognized at fair value at the acquis ition date and amortized on a straight-line bas is over their estimated useful lives of 3 years .
B. Goodwill
- Goodwill aris es in a bus iness combination accounted for by applying the acquis ition method.
C. Other intangible assets , mainly computer s oftware, are s tated at cost and amortized on a s traight-line bas is over their estimated useful lives of 1 ~ 3 years .
(19)Impairment of non -financial ass ets
A . The Group assess es at each balance sheet date the recoverable amounts of thos e assets where there is an indication that they are impaired. An impairment loss is recognized 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. Except for goodwill, when the circums tances or reas ons for recognizing impairment loss for an ass et in prior years no longer exis t or diminis h, the impairment loss is revers ed. The increas ed carrying amount due to reversal should not be more than what the depreciated or amortized his torical cos t would have been if the impairment had not been recognized.
B. The recoverable amount of goodwill is evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previous ly recognized in profit or loss shall not be revers ed in the following years .
C. For the purpose of impairment testing, goodwill acquired in a bus iness

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combination is allocated to each of the cas h-generating units , or groups of cash-generating units , that is/are expected to benefit from the synergies of the bus iness combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purpos es . Goodwill is monitored at the operating s egment level.

(20)Borrowings

Borrowings are short-term bank borrowings . Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subs equently stated at amortized cost; any difference between the proceeds (net of transaction cos ts ) and the redemption value is recognized in profit or loss over the period of the borrowings us ing the effective interest method. (21)Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or s ervices that have been acquired in the ordinary cours e of bus iness from s uppliers . They are recognized initially at fair value and s ubs equently meas ured at amortized cost us ing the effective interest method. However, for short-term accounts payable without bearing interest, as the effect of discounting is ins ignificant, they are measured s ubsequently at original invoice amount.

(22)Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires . (23)Provis ions

Provis ions of decommiss ioning are recognized when the Group has a present legal or constructive obligation as a result of pas t events , and it is probable that an outflow of economic resources will be required to s ettle the obligation and the amount of the obligation can be reliably estimated. Provis ions are measured at the pres ent value of the expenditures expected to be required to settle the obligation on the balance s heet date, which is dis counted us ing a pre-tax dis count rate that reflects the current market ass ess ments of the time value of money and the ris ks specific to the obligation. W hen dis counting is us ed, the increas e in the provis ion due to passage of time is recognized as interest expens e. Provis ions are not recognized for future operating loss es . (24) Employee benefits

A . Short-term employee benefits
Short-term employee benefits are measured at the undis counted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expens e in that period when the employees render s ervice.
B. Pens ions
(a)Defined contribution plans

For defined contribution plans , the contributions are recognized as pens ion expens e when they are due on an accrual bas is . Prepaid contributions are recognized as an ass et to the extent of a cash refund or a reduction in the

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future payments .

(b)Defined benefit plans

I. Net obligation under a defined benefit plan is defined as the present value of an amount of pens ion benefits that employees will receive on retirement for their s ervices with the Group in current period or prior periods . The liability recognized in the balance s heet in respect of defined benefit pens ion plans is the present value of the defined benefit obligation at the balance s heet date less the fair value of plan ass ets . The net defined benefit obligation is calculated annually by independent actuaries us ing the projected unit credit method. The rate us ed to dis count is determined by us ing interes t rates of government bonds at the balance sheet date of a currency and term cons is tent with the currency and term of the employment benefit obligations .
II. Re measurements aris ing on defined benefit plans are recognized in other comprehens ive income in the period in which they aris e and are recorded as other equity.
III. Pas t s ervice costs are recognized immediately in profit or loss .
C. Employees ’ compensation and directors ’ and supervisors ’ remuneration Employees ’ compensation and directors ’ and s upervis ors ’ remuneration are recognized as expens e and liability, provided that such recognition is required under legal or constructive obligation and thos e amounts can be reliably estimated. Any difference between the resolved amounts and the subs equently actual dis tributed amounts is accounted for as changes in es timates . If employee compens ation is paid by shares , the Group calculates the number of shares bas ed on the clos ing price at the previous day of the board meeting resolution.
(25) Employee share based payment

For the equity-settled s hare-bas ed payment arrangements , the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compens ation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted s hall reflect the impact of market ves ting conditions and non-ves ting conditions . Compensation cost is subject to adjustment based on the s ervice conditions that are expected to be s atis fied and the estimates of the number of equity ins truments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compens ation cost recognized is bas ed on the number of equity instruments that eventually ves t.

(26)Income tax

A . The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss , except to the extent that it relates to items recognized in other comprehens ive income or items recognized directly in equity, in which cas es the tax is recognized in other comprehens ive income or equity.
B. The current income tax expens e is calculated on the bas is of the tax laws subs tantively enacted at the balance s heet date in the countries where the

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Company and its s ubs idiaries operate and generate taxable income. M anagement periodically evaluates pos itions taken in tax returns with respect to s ituations in accordance with applicable tax regulations . It es tablishes provis ions where appropriate bas ed 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 recognized, us ing the balance sheet liability method, on temporary differences aris ing between the tax bas es of assets and liabilities and their carrying amounts in the cons olidated balance sheet. However, the deferred tax is not accounted for if it aris es from initial recognition of goodwill or of an asset or liability in a transaction other than a bus iness combination that at the time of the transaction affects neither accounting nor taxable profit or loss . Deferred tax is provided on temporary differences aris ing on investments in subs idiaries , 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 us ing tax rates and laws that have been enacted or s ubstantially enacted by the balance sheet date and are expected to apply when the related deferred tax ass et is realized or the deferred tax liability is settled.
D. Deferred tax ass ets are recognized only to the extent that it is probable that future taxable profit will be available agains t which the temporary differences can be utilized. A t each balance s heet date, unrecognized and recognized deferred tax assets are reass essed.
E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquis itions of equipment or technology, research and development expenditures and equity investments to the extent that it is poss ible that future taxable profit will be available against which the unused tax credits can be utilized.
F. If a change in tax rate is enacted, the Group recognizes the effect of the change immediately in the interim period in which the change occurs . The effect of the change on items recognized outs ide profit or loss is recognized in other comprehens ive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss .

(27)Share capital

A . Ordinary shares are class ified as equity. Incremental costs directly attributable to the issue of new s hares or stock options are shown in equity as a deduction, net of tax, from the proceeds .
B. W here the Company repurchas es the Company’s equity share capital that has been iss ued, the cons ideration paid, including any directly attributable incremental cos ts (net of income taxes ) is deducted from equity attributable to the Company’s equity holders . W here such shares are subsequently reissued, the difference between their book value and any cons ideration received, net of any directly attributable incremental trans action costs and the related income tax effects , is included in equity attributable to the Company’s equity holders .

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(28)D ividends

Dividends are recorded in the Company’s financial s tatements in the period in which they are resolved by the Company’s s hareholders . Cash dividends are recorded as liabilities ; stock dividends are recorded as stock dividends to be distributed and are reclass ified to ordinary shares on the effective date of new shares issuance.

(29)Revenue recognition

A . The Group manufactures and sells integrated circuit. Sales are recognized when control of the products has trans ferred, being when the products are delivered to the cus tomer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products . Delivery occurs when the products have been shipped to the specific location, the ris ks of obsolescence and loss have been trans ferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satis fied.
B. The Group accepts sales orders from customers . Sales revenue is recognized according to the contract price, and the Group trans fers the promis ed goods or s ervices to cus tomers . Since the cus tomer's payment period does not exceed one year, the Group has not adjusted the monetary time value of the transaction price.
C. A receivable is recognized when the goods are delivered as this is the point in time that the cons ideration is unconditional because only the passage of time is required before the payment is due.

(30)Operating s egments

Operating segments are reported in a manner cons istent with the internal reporting provided to the chief operating decis ion maker. The Group’s chief operating decis ion maker, who is respons ible for allocating resources and ass ess ing performance of the operating segments .

5.Critical A ccounting Judgements , Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial s tatements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events . Assumptions and es timates may differ from the actual res ults and are continually evaluated and adjusted based on his torical experience and other factors . Such assumptions and es timates have a s ignificant ris k of caus ing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is address ed below:

(1) Critical judgements in applying the Group ’s accounting policies

None.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are s tated at the lower of cos t and net realizable value, the

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Group must determine the net realizable value of inventories on balance s heet date us ing judgements and es timates . Due to the rapid technology innovation, the Group evaluates the amounts of obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally bas ed on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2020, the carrying amount of inventories was $5,969,330.

6.Details of Significant Accounts

(1)Cas h and cas h equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits		December 31,2020	December 31,2019
		$ 137 1,042,489 2,555,291 $ 3,597,917	$ 171 394,658 2,362,174
			$ 2,757,003

A . The Group associates with a variety of financial ins titutions all with high credit quality to dis pers e credit ris k, so it expects that the probability of counterparty default is remote.
B. Details of the Group's cash and cas h equivalents pledged to others as collateral are provided in Note 8.

(2)Financial ass ets at fair value through profit or loss

Item	December 31,2020	December 31,2019
Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stock Emerging stocks Unlisted stock Beneficiary certificates Bonds Preference share Subtotal Valuation adjustment Total	$ 576 162,911 8,113 72,991 31,226 13,784 289,601 75,873 $ 365,474	$ 1,567 148,013 23,263 74,442 31,226 14,510
		293,021 ( 40,428)
		$ 252,593

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A . A mounts recognis ed in profit or loss in relation to financial ass ets at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Equity instruments Debt instruments Beneficiary certificates Total		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 123,592 2,465 6,571 $ 132,628	($ 14,498) 3,115 2,656
			($ 8,727)

B. The Group has no financial assets at fair value through profit or loss pledged to others .
C. Information relating to credit ris k is provided in Note 12(2)C(b).
(3)Financial ass ets at fair value through other comprehens ive income

Item	December 31,2020	December 31,2019
Non-current items: Equity instruments Unlisted stock Valuation adjustment	$ 59,300 5,536 $ 64,836	$ 59,300 ( 8,524)
		$ 50,776

The Group has elected to class ify equity investments that are cons idered to strategic inves tments as financial assets at fair value through other comprehens ive income. The fair value of such investments amounted to $64,836 and $50,776 as at December 31, 2020 and 2019, res pectively. (4)A ccounts receivable

December 31,2020	December 31,2019	December 31,2019
$ 1,638,733 973 1,639,706 ( 5,713) $ 1,633,993	$ 1,270,992 241
	1,271,233 ( 14,295)
		$ 1,256,938

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A . The ageing analys is of accounts receivable is as follows :

Not past due Past due-within 30 days Past due-31-90 days Past due-91-180 days Past due-over 180 days		December 31,2020	December 31,2019
		$ 1,633,993 - - - 5,713 $ 1,639,706	$ 1,256,700 238 - - 14,295
			$ 1,271,233

The above aging analys is was bas ed on past due date.

B. A s at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements , the maximum hedge to credit ris k in respect of the amount that best represents the Group’s accounts receivable were $1,633, 993 and $1,256,938, res pectively.
C. The collaterals and fair value held by the Group as guarantee for accounts receivable are as follows :

receivable are as follows :
Bank guarantee Pledged certificate of deposit Guarantee deposits received (shown as “other non-current liabilities”) Letters of credit Company promissory note/check	December 31,2020	December 31,2019
	$ 33,044 4,272 5,526 760,162 555,221 $ 1,358,225	$ 43,494 7,500 8,794 546,672 366,621
		$ 973,081

D. Information relating to credit ris k is provided in Note 12(2).
E. A s at December 31, 2020 and 2019, accounts receivable were all from contracts with cus tomers . As at January 1, 2019, the balance of receivables from contracts with customers amounted to $1,105,913.
F. The Group has no accounts receivable pledged to others as collateral.

(5)Inventories

December 31,2020	December 31,2020
Cost	Allowance for valuation loss	Book value
$ 138,104 4,724,556 1,199,604 6,540 $ 6,068,804	($ 10,726) ( 20,266) ( 68,482) - ($ 99,474)	$ 127,378 4,704,290 1,131,122 6,540
		$ 5,969,330

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December 31,2019	December 31,2019
Cost	Allowance for valuation loss	Book value
$ 158,670 4,013,286 965,399 4,393 $ 5,141,748	($ 9,794) ( 70,663) ( 88,739) - ($ 169,196)	$ 148,876 3,942,623 876,660 4,393
		$ 4,972,552

The Group recognized as expens e or loss :

Cost of goods sold Reversal of allowance on market value decline and obsolete and slow-moving inventories	Year ended December 31,	Year ended December 31,
	2020	2019
	$ 12,687,819 ( 69,722) $ 12,618,097	$ 10,266,729 ( 85,458)
		$ 10,181,271

The reversal of allowance were recognized due to sale of certain inventories which were previous ly provided with allowance for price decline. (6)Investments accounted for under the equity method

nvestments accounted for under the equity method	uity method
2020 2019 At January 1 $ 33,210 $ - Addition of investments accounted for using equity method(Note) - 46,404 Share of profit or loss of investments accounted for using equity method 673 ( 13,194) At December 31 $ 33,883 $ 33,210 December 31,2020 December 31,2019 Associates $ 33,883 $ 33,210	2020	2019
		$ - 46,404 13,194)
		$ 33,210

Note: The Group held 7,795 thous and shares or NT$77,950 in its subs idiary, Canyon Semiconductor Inc. (collectively referred herein as “Canyon Semiconductor”).As the Group did not participate in Canyon Semiconductor Inc.’s capital increas e by the issuance of s hares for cash on March 4, 2019, the s hareholding ratio of the Group decreas ed from 77.95% to 38.21%. In addition, Charng Feng Inves tment Ltd. purchased shares of Canyon Semiconductor Inc. in December 2019, increas ing its percentage of shareholding from 38.21% to 40.93%. Though the Group no longer controls Canyon Semiconductor, it has still s ignificant influences on the subs idiary.

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A . Associates

(a) The bas ic information of the ass ociates that are material to the Group is as follows :

sociates The bas ic information of the ass ociates that are material to the Group is as follows :	sociates The bas ic information of the ass ociates that are material to the Group is as follows :
Companynam e Principal place of business Shareholdingratio Nature of relationship Method of measurement
Canyon Semiconductor Inc. Taiwan	Decem ber 31, 2020 Decem ber 31, 2019 40.93% 40.93% Holding over 20% of voting rights Equity method

(b) The summarized financial information of the associates that are material to the Group is as follows :
Balance sheet

Canyon Semiconductor Inc.

Current assets Non-current assets Current liabilities Total net assets Share in associate's net assets Carrying amount of the associate Revenue Profit (loss) for the period from continuing operations Total comprehensive income (loss)		December 31,2020	December 31,2020

		Year ended December 31,
		2020	2019
		$ 149,872 $ 1,642 $ 1,642	$ 21,440 ($ 33,589)
			($ 33,589)

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(7)Property, plant and equipment

	Land Buildings and structures Machinery equipm ent Testing equipm ent	Land Buildings and structures Machinery equipm ent Testing equipm ent	Land Buildings and structures Machinery equipm ent Testing equipm ent	Others		Total
$9,023 $635,941 $429,782 $249,302 - ( 364,888) ( 352,626) ( 146,396) $9,023 $271,053 $ 77,156 $102,906 $9,023 $271,053 $ 77,156 $102,906 - 505 85,605 38,058 - - 2,719 1,455 - ( 34,055) ( 22,509) ( 22,815) $9,023 $237,503 $142,971 $119,604 $9,023 $636,446 $518,018 $287,860 - ( 398,943) ( 375,047) ( 168,256) $9,023 $237,503 $142,971 $119,604 Land Buildings and structures Machinery equipm ent Testing equipm ent				$1,231,048 ( 994,858) $ 236,190 $ 236,190 252,171 - ( 220,864) $ 267,497 $1,481,488 (1,213,991) $ 267,497 Others		$2,555,096 ( 1,858,768)
						$ 696,328
					$ 696,328 376,339 4,174 ( 300,243)
						$ 776,598
						$2,932,835 ( 2,156,237)
						$ 776,598
						Total
$9,023 - $9,023 $9,023 - - - - $9,023 $9,023 - $9,023	$615,250 ( 332,185) $283,065 $283,065 5,496 15,195 - ( 32,703) ( $271,053 $635,941 ( 364,888) $271,053	$393,874 ( 313,959) $ 79,915 $ 79,915 35,908 - - ( 38,667) $ 77,156 $429,782 ( 352,626) $ 77,156	$188,647 ( 134,215) $ 54,432 $ 54,432 10,070 59,205 336) ( 20,465) $102,906 $249,302 ( 146,396) $102,906	$1,081,083 ( 708,456) $ 372,627 $ 372,627 159,093 - ( 2,843) ( 292,687) $ 236,190 $1,231,048 ( 994,858) $ 236,190		$2,287,877 ( 1,488,815)
						$ 799,062
					$ 799,062 210,567 74,400 ( 3,179) ( 384,522)
						$ 696,328
						$2,555,096 ( 1,858,768)
						$ 696,328

Note: Trans ferred from prepayments for equipment (shown as “other non-current ass ets ”).

A . For the years ended December 31, 2020 and 2019 no interest expens e was

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capitalized on property, plant and equipment in the Group.

B. The Group has no property, plant and equipment pledged to others .
(8)Leas ing arrangements -lessee
A . The Group leases various ass ets including land, buildings and s tructures , bus iness vehicles , printers . Rental contracts are typically made for periods of 2 to 20 years . Lease terms are negotiated on an individual bas is and contain a wide range of different terms and conditions . Short-term leas es with a lease term of 12 months or less compris e bus iness vehicles and staff dormitory.
B. The carrying amount of right-of-us e assets and the depreciation charge are as follows :

as follows :
Land Buildings and structures Business vehicles Printers	December 31,2020 December 31,2019
	Book value
	$ 62,221 15,188 3,083 290 $ 80,782	$ 65,641 19,270 470 986
		$ 86,367

Land Buildings and structures Business vehicles Printers		Year ended December 31,	Year ended December 31,
		2020	2019
		Depreciation	charge
		$ 3,420 6,294 711 696 $ 11,121	$ 3,420 7,334 1,732 696
			$ 13,182

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use ass ets were $10,410 and $0, respectively.
D. The information on profit and loss accounts relating to lease contracts is as follows :

follows :
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Year ended December 31,
	2020	2019
	$ 1,203 $ 7,855	$ 1,191
		$ 9,052

E. For years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $19,633 and $22,909, res pectively.
(9)Investment property

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Buildings and structures

	Buildings and structures	uildings and structures
At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Depreciation charge At December 31 At December 31, 2020 Cost Accumulated depreciation and impairment At January 1, 2019 Cost Accumulated depreciation and impairment 2019 At January 1 Depreciation charge At December 31 At December 31, 2019 Cost Accumulated depreciation and impairment	$ 20,369 ( 1,698) $ 18,671 $ 18,671 ( 970) $ 17,701 $ 20,369 ( 2,668) $ 17,701 Buildings and structures	$ 20,369 ( 1,698)
		$ 18,671
		$ 18,671 970)
		$ 17,701
		$ 20,369 ( 2,668)
		$ 17,701
		$ 20,369 ( 728)
		$ 19,641 $ 19,641 ( 970)
		$ 18,671 $ 20,369 ( 1,698)
		$ 18,671

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

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 2,470 $ 970	$ 2,436 $ 970

B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $10,516 and $10,538, res pectively, which was valued by income approach. Key assumptions are as follows :

Rate of net return on capital (Note)		December 31,2020	December 31,2019
		13.29%	13.86%

Note: Calculated based on the weighted average capital cos t of the issuer.

C. For the years ended December 31, 2020 and 2019 no interes t expens e was capitalized on inves tment property in the Group.
D. The Group has no investment property pledged to others .

(10)Intangible assets

Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Goodwill	Others	Total
$ 34,478 ( 25,556) $ 8,922 $ 8,922 - ( 5,098) - $ 3,824 $ 34,478 ( 30,654) $ 3,824	$ 11,000 ( 11,000) $ - $ - - - - $ - $ 11,000 ( 11,000) $ -	$ 80,758 ( 37,104) $ 43,654 $ 43,654 - - ( 25,352) $ 18,302 $ 80,758 ( 62,456) $ 18,302	$ 203,852 ( 174,835) $ 29,017 $ 29,017 167,003 ( 106,458) - $ 89,562 $ 370,855 ( 281,293) $ 89,562	$ 330,088 ( 248,495)
				$ 81,593
				$ 81,593 167,003 ( 111,556) ( 25,352)
				$ 111,688 $ 497,091 ( 385,403)
				$ 111,688

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Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Goodwill	Others	Total
$ 34,478 ( 16,596) $ 17,882 $ 17,882 - ( 8,960) - $ 8,922 $ 34,478 ( 25,556) $ 8,922	$ 11,000 ( 9,473) $ 1,527 $ 1,527 - ( 1,527) - $ - $ 11,000 ( 11,000) $ -	$ 80,758 ( 25,047) $ 55,711 $ 55,711 - - ( 12,057) $ 43,654 $ 80,758 ( 37,104) $ 43,654	$ 159,069 ( 100,214) $ 58,855 $ 58,855 44,783 ( 74,621) - $ 29,017 $ 203,852 ( 174,835) $ 29,017	$ 285,305 ( 151,330)
				$ 133,975
				$ 133,975 44,783 ( 85,108) ( 12,057)
				$ 81,593
				$ 330,088 ( 248,495)
				$ 81,593

A . Details of amortization on intangible assets are as follows :

Operating costs Selling expenses Administrative expenses Research and development expenses		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 5,098 176 909 105,373 $ 111,556	$ 8,405 1,864 711 74,128
			$ 85,108

B. For the years ended December 31, 2020 and 2019 no interest expens e was capitalized on intangible assets in the Group.

C. Impairment information about the intangible assets is provided in 6(11).

D. The Group has no intangible assets pledged to others .

(11)Impairment of non -financial assets

The Group performs impairment tests on the recoverable amount of goodwill on the balance sheet date. The recoverable amount of cash-generating units has been determined based on value-in-us e calculations . Thes e calculations us e cash flow projections approved by the management covering a five-year period as the bas is for es timation. The relevant dis count rates for 2020 and 2019 were 13.29% and 13.86%, respectively. The value-in-us e us ed by the Group to calculate cash-generating units is derived from historical

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information on estimated future revenue growth rates , gross profit margins , and operating expens e ratios , with reference to future industrial economic trends . The recoverable amount calculated bas ed on the above key ass umptions is lower than the book value of goodwill. Thus , the Group recognized impairment losses of $25,352 and $12,057 in 2020 and 2019, respectively.

(12)Short -term borrowings

respectively. ort-term borrowings
Type of borrowings Bank borrowings Credit loans Type of borrowings Bank borrowings Credit loans	December 31, 2020 Interest rate range Collateral
	$ 1,340,000 0.75%～1.05% None December 31, 2019 Interest rate range Collateral
	$ 274,000 0.98%～1.90% None

Interes t expens e recognized in profit or loss amounted to $8,184 and $5,340 for the years ended December 31,2020 and 2019, res pectively. (13)Other payables

Salary and bonus payables Payable on employees and director remuneration Payable on equipment Others	December 31,2020 $ 381,089 80,658 146,904 85,350 $ 694,001	December 31,2019
		$ 295,252 36,191 58,026 73,054 $ 462,523

(14)Pens ions

A .(a) The Company and its domes tic subs idiaries have a defined benefit pens ion plan in accordance with the Labor Standards A ct, covering all regular employees ’ service years prior to the enforcement of the Labor Pens ion A ct on July 1, 2005 and service years thereafter of employees who chos e to continue to be s ubject to the pens ion mechanis m under the Labor Standards A ct. Under the defined benefit pens ion plan, two units are accrued for each year of service for the firs t 15 years and one unit for each additional year thereafter, s ubject to a maximum of 45 units . Pens ion benefits are bas ed on the number of units accrued and the average monthly s alaries and wages of the las t 6 months prior to retirement. The Company and its domestic subs idiaries contribute monthly an amount equal to 2% of the employees ’ monthly salaries and wages to the retirement fund depos ited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. A ls o, the Company and its domes tic subs idiaries would assess the

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balance in the aforementioned labor pens ion reserve account by December 31, every year. If the account balance is insufficient to pay the pens ion calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subs idiaries will make contributions for the deficit by next M arch.

(b) The amounts recognized in the balance s heet are as follows :

Present value of defined benefit obligations Fair value of plan assets Unadjusted amount for the period Net liability recognized in the balance sheet		December 31,2020	December 31,2019
		$ 14,033 ( 2,663) 11,370 ( 850)	$ 12,739 ( 2,409)
			10,330 ( 21)
		$ 10,520	$ 10,309

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability
($ 12,739) ( 314) ( 88) ( 13,141) - ( 524) ( 368) ( 892) - - ($ 14,033)	$ 2,409 - 18 2,427 80 - - 80 156 - $ 2,663	($ 10,330) ( 314) ( 70)
		( 10,714) 80 ( 524) ( 368)
		( 812)
		156 850
		($ 10,520)

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Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability
($ 11,614) ( 299) ( 116) ( 12,029) - ( 385) ( 325) ( 710) - - ($ 12,739)	$ 2,164 - 21 2,185 74 - - 74 150 - $ 2,409	($ 9,450) ( 299) ( 95)
		( 9,844) 74 ( 385) ( 325)
		( 636)
		150 21
		($ 10,309)

(d) The Bank of Taiwan was commis s ioned to manage the Fund of the Company’s and domes tic subs idiaries ’ defined benefit pens ion plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues , Expenditures , Safeguard and Utilization of the Labor Retirement Fund” (A rticle 6: The s cope of utilization for the Fund includes depos it in domes tic or foreign financial ins titutions , investment in domes tic or foreign lis ted, over-the-counter, or private placement equity securities , inves tment in domestic or foreign real estate s ecuritization products , etc.). With regard to the utilization of the Fund, its minimum earnings in the annual dis tributions on the final financial s tatements shall be no less than the earnings attainable from the amounts accrued from two-year time depos its with the interest rates offered by local banks . If the earnings is less than aforementioned rates , government s hall make payment for the deficit after being authorized by the Regulator. The Company and domestic subs idiaries have no right to participate in managing and operating that fund and hence the Company and domestic subs idiaries are unable to disclos e the class ification of plan ass ets fair value in accordance with IA S 19 paragraph 142. The compos ition of fair value of plan ass ets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

~145~

(e)The principal actuarial assumptions used were as follows :

Year ended December 31,

Discount rate Future salary increases		2020	2019
		0.30% 3.00%	0.70%
			3.00%

Assumptions regarding future mortality experience are s et based on the fifth life e xperience table in Taiwan for the years ended 2020 and 2019.

Becaus e the main actuarial ass umption changed, the present value of defined benefit obligation is affected. The analys is was as follows :

December 31, 2020 Effect on present value of defined benefit obligation December 31, 2019 Effect on present value of defined benefit obligation	Discount rate Future salaryincreases	Discount rate Future salaryincreases	Discount rate Future salaryincreases	Discount rate Future salaryincreases	Discount rate Future salaryincreases
	Increase 0.25%Decrease 0.25%Increase 0.25%Decrease 0.25%
		($ 330) ($ 322)	$ 341 $ 332	$ 296 $ 292	($ 289) ($ 285)

The s ens itivity analys is above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analys ing sens itivity and the method of calculating net pens ion liability in the balance s heet are the same.

The methods and types of ass umptions us ed in preparing the sens itivity analys is did not change compared to the previous period.

(f) Expected contributions to the defined benefit pens ion plans of the Group for the year ending December 31, 2021 amount to $158.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 10 years . The analys is of timing of the future pens ion payment was as follows :

retirement plan is 10 years . The analys is of pens ion payment was as follows :	timing of the fut
Within 1 year 1-2 years 2-5 years Over 5 years	$ 147 145 3,201 6,458
	$ 9,951

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B.(a) Effective July 1, 2005, the Company and its domestic subs idiaries have es tablished a defined contribution pens ion plan (the “New Plan”) under the Labor Pens ion A ct (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domes tic subs idiaries contribute monthly an amount based on 6% of the employees ’ monthly s alaries and wages to the employees ’ individual pens ion accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s s ubs idiaries , Eon Silicon Solutions , Inc. USA es tablished a 401(K) plan bas ed on the US Government’s National Tax Regulation 401(K), and local employees can allocate a certain amount of s alary to the pens ion account each month within the upper limit; the Company may cooperate with the allocation according to its policy of rewarding or comforting employees .
(c) The Company’s mainland China subs idiaries , Elite Semiconductor M icroelectronics Technology (Shenzhen) Inc. and Elite Semiconductor M icroelectronics (Shanghai) Technology Inc., have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pens ion regulations in the People’s Republic of China (PRC) are bas ed on certain percentage of employees ’ monthly salaries and wages . Other than the monthly contributions , the Group has no further obligations .
(d) The pens ion costs under defined contribution pens ion plans of the Group for the years ended December 31, 2020 and 2019, were $31,867 and $31,323, res pectively.

(15)Share -based payment

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

			Contract	Vesting
Type of arrangement	Grant date	Quantity granted	period	condition
Succeed to 2010 Eon	August 10, 2010,	4,000 thousand shares	10 years	Note 1
Silicon Solution Inc.’s	October 15, 2010 and	(Note 2)
employee stock options	January 13, 2011
Succeed to 2013 Eon	August 19, 2013	7,500 thousand shares	10 years	Note 1
Silicon Solution Inc.’s		(Note 2)
employee stock options

Note 1: The accumulative proportion of the new s hares that can be obtained after the two-year, three-year and four-year service expirations are 50%, 75% and 100%, respectively.

Note 2: The number of grants given by the Company to the Eon Silicon Solution Inc. employee stock option plan is the amount given on the original plan grant date. A fter the merger, Eon Silicon Solution Inc.'s 2010 and 2013 employee stock option plans have 219 thousand shares and 688 thous and shares in circulation.

A mong the share-bas ed payment arrangements above are settled by equity.

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B. Details of the share-bas ed payment arrangements are as follows : Succeed to Eon Silicon Solution Inc.’s employee stock options :

Options outstanding at January 1 Options forfeited Options expired Options outstanding at December 31 Options exercisable at December 31	2020 2019	2020 2019
	Weighted-average Weighted-average No. of options exercise price (in dollars) No. of options exercise price (in dollars)
		543 $ 59.2~303.4 621 $ 62.3~319.0 ( 4) 217.4 ( 78) 59.2~303.4 ( 21) 241.2~295.4 - - 518 $ 57.6~217.4 543 $ 59.2~303.4 518 543

C. No options exercis ed for the years ended December 31, 2020 and 2019, respectively.
D. A s of December 31, 2020 and 2019, the range of exercis e prices of s tock options outs tanding was $57.6~$217.4 and $59.2~$303.4 (in dollars ), respectively; the weighted-average remaining contractual period was 2.64 years and 3.64 years , respectively.
E. Expens es incurred on share-based payment transactions for the years ended December 31, 2020 and 2019, were all $0.

(16)Share capital

A . As of December 31, 2020, the Company’s authorized capital was $3,500,000, cons isting of 350,000 thousand shares of ordinary stock (including 20,000 thousand shares res erved for employee s tock options ), and the paid-in capital was $2,857,589 w ith a par value of $10 (in dollars ) per share.

Movements in the number of the Company’s ordinary shares outs tanding are as follows :

are as follows :
Shares outstanding at January 1 Subsidiary acquired parent company's shares is regarded as treasury shares transaction Shares outstanding at December 31 Treasury shares at the end of the period Shares issued at December 31	Shares : 2020	thousand shares 2019
	272,320 ( 715) 271,605 14,154 285,759	272,320 -
		272,320 13,439
		285,759

B. Treasury shares

~148~

thous and shares , with carrying amounts of $347,942 and $328,048, respectively; the average book value per s hare were $24.58 and $24.41, and the fair value per share were $64.70 and $38.90.

(17)Capital s urplus

Purs uant to the R.O.C. Company A ct, capital surplus aris ing from paid-in capital in excess of par value on issuance of common s tocks and donations can be used to cover accumulated deficit or to issue new s tocks or cash to shareholders in proportion to their s hare ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange A ct requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus s hould not be used to cover accumulated deficit unless the legal res erve is insufficient.

2020	2020	2020	2020
Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options				Others	Total
	$ 1,661 - - - - $ 1,661	$ 94,949 1,146 5,925 ( 1,781) - $ 100,239	$ 3,913 - - - - $ 3,913	$ 3,782 - - - 82 $ 3,864	$104,305 1,146 5,925 ( 1,781) 82
					$109,677

~149~

2019

2019	2019	2019	2019	2019
Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options At January 1 $ 1,661 $ 49,710 $ 3,913 Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries - 1,146 - Disposal of subsidiaries - 35,475 - Adjustment of capital reserve due to cash dividends that subsidiaries received from parent - 8,438 - Change in associates and joint ventures accounted for under equity method - 180 - Expired cash dividends transferred to capital surplus - - - Adjustment of payments of expired cash dividends - - - At Decem ber 31 $ 1,661 $ 94,949 $ 3,913	Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options				Others Total
		$ 1,661 - - - - - - $ 1,661	$ 49,710 1,146 35,475 8,438 180 - - $ 94,949	$ 3,913 - - - - - - $ 3,913	$ 3,788 $ 59,072 - 1,146 - 35,475 - 8,438 - 180 39 39 ( 45) ( 45)
						$ 3,782 $104,305

(18)Retained earning
A . Under the Company’s A rticles of Incorporation, the current year’s earnings , if any, s hall be appropriated in the following order:
- (a) Payment of all taxes and dues .
- (b) Offs et against prior years ’ operating loss es , if any.
- (c) Set as ide 10% of remaining amount as legal res erve.
- (d) Setting as ide a s pecial res erve when necessary.
- (e) The remainder shall be stockholders ’ bonus , which will be appropriated in proportion or be retained shall be resolved by the stockholders at the stockholders ’ meeting.
B. Dividend policy

The Company is s till in the growth stage, the appropriation of s tockholders ’ bonus will be appropriated as cash, the remainder will be appropriated as shares when over 5%.

C. Except for covering accumulated deficit or iss uing new stocks or cash to shareholders in proportion to their share ownership, the legal res erve shall not be us ed for any other purpose. The use of legal res erve for the issuance of stocks or cash to s hareholders in proportion to their share ownership is permitted, provided that the distribution of the res erve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D.(a) In accordance with the regulations , the Company s hall set as ide special

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reserve from the debit balance on other equity items at the balance s heet date before distributing earnings . When debit balance on other equity items is reversed s ubsequently, the revers ed amount could be included in the dis tributable earnings .

(b) The amounts previous ly s et as ide by the Company as special res erve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities -Corporate1010012865, dated A pril 6, 2012, s hall be reversed proportionately when the relevant ass ets are us ed, dispos ed of or reclass ified subsequently. Such amounts are revers ed upon dis posal or reclass ified if the assets are inves tment property of land, and revers ed over the use period if the ass ets are inves tment property other than land.
E. A s approved by Board of Directors on March 18, 2019, the appropriations of 2018 earnings would be legal res erve $70,651 and cash dividend $428,638, constituting $1.5(in dollars ) per s hare. A forementioned appropriations had been approved by s tockholders ’ meeting on June 13, 2019.
F. A s approved by Board of Directors on M arch 20, 2020, the appropriations of 2019 earnings would be legal reserve $49,804 and cash dividend $285,759, cons tituting $1(in dollars ) per share. A forementioned appropriations had been approved by stockholders ’ meeting on June 15, 2020.
G. A s approved by Board of Directors on February 26, 2021, the appropriations of 2020 earnings would be legal reserve $107,724 and cash dividend $2(in dollars ) per s hare. A forementioned appropriations had not yet been approved by s tockholders ’ meeting.

(19)Operating revenue

erating revenue
Revenue from contracts with customers	Years ended December 31,
	2020	2019
	$ 15,267,139	$ 11,983,479

A . Disaggregation of revenue from contracts with customers

The Group derives revenue from the trans fer of goods at a point in time in the following geographical regions :

Domestic	Domestic	Asia	Others	Total
$ 6,138,237 Domestic		$ 9,069,729 Asia	$ 59,173 Others	$15,267,139
				Total
	$ 5,153,908	$ 6,643,377	$ 186,194	$11,983,479

B. Contract liabilities

The Group has recognis ed the following revenue-related contract liabilities :

~151~

Contract liabilities-advance sales receipts	December 31, 2020	December 31, 2019	January 1, 2019
	$ 5,346	$ 3,959	$ 3,710

Revenue recognised that was included in the contract liability balance at the beginning of the period:

the beginning of the period:
Contract liabilities-advance sales receipts	Years ended	December 31,
	2020	2019
	$ 3,888	$ 3,536

(20)Interes t revenue

Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 25,594 1,207 611 $ 27,412	$ 45,955 2,420 1,291
			$ 49,666

(21)Other income

r income
Rent income Dividend income Other income, others	Years ended December 31,
	2020	2019
	$ 5,460 13,053 7,992 $ 26,505	$ 5,427 26,570 8,503
		$ 40,500

(22)Other gains and losses

Gains arising from lease modifications Foreign exchange losses Gains (Losses) on financial assets at fair value through profit or loss Impairment loss Miscellaneous disbursements		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 211 (, 50,665) 132,628 (, 25,352) ( 970) $ 55,852	$ - ( 45,141) ( 8,727) ( 12,057) ( 970)
			($ 66,895)

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(23)Financial costs

cial costs
Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others	Years ended December 31,
	2020	2019
	$ 8,184 1,412 1,203 10,799 728 $ 11,527	$ 5,340 1,291 1,191
		7,822
		1,018
		$ 8,840

(24) Expens es by nature

ns es by nature
Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortization charges on intangible assets	Years ended December 31,
	2020	2019
	$ 1,183,477 $ 300,243 $ 11,121 $ 970 $ 111,556	$ 943,207
		$ 384,522
		$ 13,182
		$ 970 $ 85,108

(25) Employee benefit expens e

oyee benefit expens e
Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses	Years ended December 31,
	2020	2019
	$ 1,061,353 49,276 32,408 17,232 23,208 $ 1,183,477	$ 839,534 48,285 31,872 7,549 15,967
		$ 943,207

A . In accordance with the A rticles of Incorporation of the Company, the profit before income tax of the current year, before covering employees ’ compensation and directors ’ remuneration, shall be dis tributed as employees ’ compens ation and directors ’ remuneration. The ratio shall not be lower than 5% for employees ’ compens ation and 1% for directors ’

~153~

remuneration.

B. For the years ended December 31, 2020 and 2019, employees ’ compensation was accrued at $66,124 and $29,970, res pectively; while directors ’ remuneration was accrued at $13,225 and $5,994, respectively. The aforementioned amounts were recognized in s alary expens es .
- The employees ’ compensation and directors ’ remuneration were es timated and accrued bas ed on 5% and 1% of dis tributable profit for the years ended December 31, 2020.
- For the years ended December 31, 2020 and 2019, employees ’ compensation of subs idiaries was accrued at $14 and $4, res pectively; while directors ’ remuneration of subs idiaries was accrued at $1,294 and $223, respectively. The aforementioned amounts were recognized in salary expens es .
C. The employees ’ compensation and directors ’ remuneration of 2019 as resolved by the Board of Directors were in agreement with those amounts recognis ed in the 2019 financial s tatements .
D. Information about employees ’ compensation and directors ’ remuneration of the Company as resolved by the Board of Directors will be pos ted in the “M arket Obs ervation Post System” at the webs ite of the Taiwan Stock Exchange.
(26)Income tax
A . Income tax e xpense
- (a) Components of income tax expens e:

ome tax e xpense Components of income	tax expens e:	tax expens e:
Current tax: Current tax on profits for the period Tax on undistributed earnings Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	Years ended December 31,
	2020	2019
	$ 154,162 - 7,025 161,187 8,072 $ 169,259	$ 55,223 10,378 316
		65,917 4,652
		$ 70,569

(b) The income tax charge relating to components of other comprehens ive income: None.
(c) The income tax charged to equity during the period: None.

~154~

B. Reconciliation between income tax expens e and accounting profit:

Years ended December 31,

			2020		2019
Tax calculated based on profit
before tax and statutory tax
rate (note)		$		276,096	$	108,571
Tax exempt income by tax
regulation	(		,	23,866)	(	1,276)
Prior year income tax
underestimation				7,025		316
Temporary differences not
recognized as deferred tax
assets	(	,		25,963)	(	14,855)
Taxable loss not recognized as
deferred tax assets				1,058		-
Effect from investment tax
credits	(		,	65,059)		-
Change in assessment of
realization of deferred tax
assets	(			23)		-
Not exceed the starting point of
income tax	(			9)		-
Effect from tax exempt income				-	(	36,435)
Effect from Alternative
Minimum Tax				-		3,870
Tax on undistributed earnings				-		10,378
Income tax expense		$		169,259	$	70,569

Note: The bas is for computing the applicable tax rate are the rates applicable in the res pective countries where the Group entities operate.

~155~

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

2020	2020	2020
Recognized in Recognized in other January1 profit or loss comprehensive income Decem ber 31
$ 48 153 1,688 61 2,224 4,174 ( 4,731) - ( 4,731) ($ 557)	$ - $ - 195 - ( 700) - 20 - 124 - ( 361) - ( 3,202) - ( 4,509) - ( 7,711) - ($ 8,072) $ - 2019	$ 48 348 988 81 2,348
		3,813
		( 7,933) ( 4,509)
		( 12,442)
		($ 8,629)

$ 48 60 2,545 ( 57 2,464 ( 5,174 ( 1,078) ( 1,078) $ 4,096	$ - 93 857) 4 240) ( 1,000) ( 3,653) ( 3,653) ($ 4,653)

~156~

D. The amounts of deductible temporary difference that are not recognized as deferred tax ass ets are as follows :

December 31, 2020 December 31,2019 Deductible temporary differences $ 362,221 $ 381,968

E. The Company has not recognized taxable temporary differences ass ociated with inves tment in subs idiaries as deferred tax liabilities . As of December 31, 2020 and 2019, the amounts of temporary difference unrecognized as deferred tax liabilities were $0.
F. The Company’s products qualify for “Regulations for Encouraging M anufacturing Enterpris es and Technical Service Enterpris es in the Newly Emerging, Important and Strategic Industries ” and the Company is entitled to the income tax exe mption for 5 cons ecutive years (ends on December, 2019).
G. The Company’s income tax returns through 2018 have been assess ed and approved by the Tax A uthority.
(27) Earnings per share

Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020
Amount after tax	Weighted average number of ordinary Earnings per shares outstanding (share in thousands) share (in dollars)
$ 1,076,426	279,909 1,295 281,204	$ 3.85 $ 3.83
$ 1,076,426

~157~

Year ended December 31,2019 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (share in thousands) share (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent $ 497,405 280,133 $ 1.78 Assumed conversion of all dilutive potential ordinary shares (Note) Employees’ compensation 1,057 Diluted earnings per share Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 497,405 281,190 $ 1.77	Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2019
	Amount after tax	Weighted average number of ordinary Earnings per shares outstanding (share in thousands) share (in dollars)
	$ 497,405	280,133 1,057 281,190	$ 1.78 $ 1.77

Note: The employee stock options not calculate for years ended December 31, 2020 and 2019 due to the effect of anti-dilution. (28)Trans actions with non -controlling interest

A . On M arch 30, 2020, A pril 28, 2020 and November 13,2020 the Group acquired an additional shares of its subs idiary-Elite Silicon Technology Inc. for a total cash cons ideration of $1,752, $128 and $33. The carrying amount of non-controlling interes t in Elite Silicon Technology Inc. was $119, $12 and $1 at the acquis ition date. This trans action resulted in a decreas e in the equity attributable to owners of the parent by $1,633, $116 and $32.

The effect of changes in interests in Elite Silicon Technology Inc. on the equity attributable to owners of the parent for the years ended December 31, 2020 and 2019 is shown below:

December 31, 2020 and 2019 is shown below:
Carrying amount of non-controlling interest acquired Consideration paid to non-controlling interest Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount	Year ended December 31,2020
		$ 132 ( 1,913)
		($ 1,781)

B. The Group’s subs idiary, Canyon Semiconductor Inc., increased its capital by issuing new shares on M arch 4, 2019. The Group did not acquire shares proportionally to its interest. As a result, the Group decreased its share interest by 39.74%. And the Group acquired an additional s hares of its subs idiary - Canyon Semiconductor Inc. on December 6,2019. The transactions above decreased non-controlling

~158~

interest by $2,533 and increased the equity attributable to owners of parent by $35,475.

(29)Supplemental cas h flow information

A . Investing activities with partial cash payments :

interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :	interest by $2,533 and increased the equity attributable to owners of parent by $35,475. mental cas h flow information Investing activities with partial cash payments :
Year ended December 31, 2020 2019 Purchase of property, plant and equipment (including amount of transfer) $ 380,513 $ 284,967 Add: Opening balance of payable on equipment 58,026 41,100 Less: Ending balance of payable on equipment ( 146,904) ( 58,026) Cash paid during the period $ 291,635 $ 268,041 Changes in liabilities from financing activities : Short-term borrowings Short-term notes and bills payable Lease liabilities Guarantee deposits received Liabilities from financing activities-gross At January 1, 2020 $ 274,000 $ - $ 86,887 $ 9,871 $ 370,758 Changes in cash flow from financing activities 1,066,000 150,476 ( 10,575) ( 3,236) 1,202,665 Interest paid - - ( 1,203) - ( 1,203) Interest expense - - 1,203 - 1,203 Changes in other non-cash items - ( 720) 10,410 - 9,690 Changes from lease modifications - - ( 5,085) - ( 5,085) At Decem ber 31,2020 $ 1,340,000 $ 149,756 $ 81,637 $ 6,635 $ 1,578,028 Short-term borrowings Short-term notes and bills payable Lease liabilities Guarantee deposits received Liabilities from financing activities-gross At January 1, 2019 $ 370,000 $ 99,932 $ 105,090 $ 9,601 $ 584,623 Changes in cash flow from financing activities ( 96,000) ( 99,932) ( 12,525) 270 ( 208,187) Interest paid - - ( 1,332) - ( 1,332) Interest expense - - 1,191 - 1,191 Changes in other non-cash items - - 229 - 229 Changes from lease modifications - - ( 5,766) - ( 5,766) At Decem ber 31,2019 $ 274,000 $ - $ 86,887 $ 9,871 $ 370,758
		2020
				380,513 58,026 146,904) 291,635 activities : Lease liabilities
	$ 274,000 $ - 1,066,000 150,476 - - - - - ( 720) - - $ 1,340,000 $ 149,756			( ( (	$ 86,887 10,575) 1,203) 1,203 10,410 5,085)	$ 9,871 $ 370,758 ( 3,236) 1,202,665 - ( 1,203) - 1,203 - 9,690 - ( 5,085) $ 6,635 $ 1,578,028 Guarantee deposits received Liabilities from financing activities-gross
			$ 149,756		$ 81,637		$ 1,578,028
	Short-term borrowings		Short-term notes and bills payable		Lease liabilities	Guarantee deposits received	Liabilities from financing activities-gross
	$ 370,000 ( 96,000) - - - - $ 274,000		$ 99,932 ( 99,932) - - - -		$ 105,090 ( 12,525) ( 1,332) 1,191 229 ( 5,766)	$ 9,601 270 - - - -	$ 584,623 ( 208,187) ( 1,332) 1,191 229 ( 5,766)
			$ -		$ 86,887	$ 9,871	$ 370,758

B. Changes in liabilities from financing activities :

~159~

7.Related Party Transactions

(1)Names of related parties and relations hip

Names of related parties Relationship with the Company Arima Lasers Corporation T he Company’s subsidiary is this company’s director Canyon Semiconductor Inc. Investee indirectly accounted for under equity method

(2)Key management compensation

ey management compensation
Salaries and other short-term employee benefits Post-employment benefits Total	Year ended December 31,
	2020	2019
	$ 54,409 432 $ 54,841	$ 36,572 432
		$ 37,004

一、 Pledged Assets

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

Assets item	Book value December 31,2020 December 31,2019 Purpose	Book value December 31,2020 December 31,2019 Purpose
	December 31,2020
Time deposits (shown as “other current assets and other non-current assets ”)	$ 3,969	$ 3,969 Guarantee deposits for lease of land

9.Significant Contingent Liabilities and Unrecognized Contract Commit ments

None.

10.Significant Disas ter Loss

None.

11.Significant Events after the Balance Sheet Date

Information about the appropriations of earnings of the Company which had been approved by Board of Directors on February 26, 2021 is provided in Note 6(18). 12.Others

(1)Capital management

Cons idering the industrial characteristics , future development, and changes in the environment, the Group plans the demand of working capital, research and development expenses and dividends to safeguard the Group’s ability to continue as a going concern, to provide returns for shareholders , to take care of the benefit of other related parties , and to maintain an optimal capital structure, s o as to promote s hareholder value in the long-term.

To maintain or adjus t the capital structure, the Company may adjus t the amount of dividends paid to shareholders , issue new shares or pay cash to shareholders , or repurchase shares .

~160~

The gearing ratios at December 31, 2020 and 2019 were as follows :

December 31,2020 Total assets $ 13,000,348 Total liabilities ( 4,871,065) ( Total equity $ 8,129,283 Gearing ratio 60% inancial ins truments A . Financial ins truments by category 0 December 31,2020 Financial assets Financial assets mandatorily measured at fair value through profit or loss $ 365,474 Financial assets at fair value through other comprehensive income Designation of equity instrument $ 64,836 Financial assets at amortized cost Cash and cash equivalents $ 3,597,917 Financial assets at amortized cost - current 136,704 Notes receivable - Accounts receivable 1,633,993 Other receivables 95,830 Time deposits (shown as “other current assets and other non-current assets”) 3,969 Guarantee deposits paid (shown as “other non-current assets”) 6,495 $ 5,474,908	December 31,2020	December 31,2019 $ 10,480,320 3,139,541) $ 7,340,779 43% December 31,2019
A
	$ 365,474	$ 252,593 $ 50,776 $ 2,757,003 140,906 34 1,256,938 82,741 3,969 6,261 $ 4,247,852
	$ 64,836
	$ 3,597,917 136,704 - 1,633,993 95,830 3,969 6,495
	$ 5,474,908

(2)Financial ins truments

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Financial liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Guarantee deposits received (shown as “other non-current liabilities”) Lease liability		December 31,2020	December 31,2019
		$ 1,340,000 149,756 2,115 2,396,158 694,001 6,635	$ 274,000 - 1,981 2,225,909 462,523 9,871
		$ 4,588,665 $ 81,637	$ 2,974,284 $ 86,887

B. Financial ris k management policies
(a) The Group adopt comprehens ive system of ris k management and control to identify, measure and control all categories of ris k, including market ris k, credit ris k, liquidity ris k, and ris k of cas h flow, to make s ure management is able to control and measure market ris k, credit ris k, liquidity ris k, and ris k of cas h flow effectively.
(b) In order to control all management objectives of market ris k effectively, achieve optimal level of ris k, maintain appropriate level of liquidity and collectively manage all market ris ks , the Group will take factors s uch as cons ideration for the overall economic environment, status of competition and market value ris ks .
C. Significant financial ris ks and degrees of financial ris ks
(a) M arket ris k

Foreign exchange ris k

I. The Group operates internationally and is expos ed to foreign exchange ris k aris ing from the various currency, primarily with respect to the USD and RM B. Foreign exchange ris k arises from future commercial transactions and recognized assets and liabilities .
II. M anagement has set up a policy to require group companies to manage their foreign exchange ris k agains t their functional currency. The companies are required to hedge their entire foreign exchange ris k exposure with the Group treasury. The companies adopt forward foreign exchange contracts through the Group treasury to manage the foreign exchange ris k from future commercial trans actions and recognized assets and liabilities . The foreign exchange ris k will exis t when future commercial transactions and recognized ass ets and liabilities us e the currency different from the functional currency of the companies .

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III. The Group has certain investments in foreign operations , whos e net assets are exposed to foreign currency trans lation ris k. Currency expos ure aris ing from the net ass ets of the Group’s foreign operations is managed primarily through depos its denominated in the relevant foreign currencies (see Note 6(1)).
IV. The Group’s bus inesses involve s ome non-functional currency operations (the Company’s and certain subs idiaries ’ functional currency: NTD). The information on ass ets and liabilities denominated in foreign currencies whos e values would be materially affected by the exchange rate fluctuations is as follows :

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	December 31,2020
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
	$ 154,117 28.480 $ 4,389,252 181,116 4.377 792,745 $ 50,522 28.480 $ 1,438,867 67,255 0.276 18,583 December 31,2019
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
	$ 120,486 29.980 $ 3,612,170 56,049 4.305 241,291 $ 47,708 29.980 $ 1,430,286

V. The total exchange loss , including realized and unrealized, aris ing from s ignificant foreign exchange variation on the monetary items held by the Group for the years ended December 31 ,2020 and 2019, amounted to $50,665 and $45,141, respectively.

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VI. A nalys is of foreign currency market ris k aris ing from s ignificant foreign exchange variation:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	Year ended December 31,2020
	Sensitivityanalysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income
	1% $,,43,893$ - 1% 7,927 - 1% ($ 14,389)$ - 1% (,186) - Year ended December 31,2019
	Sensitivityanalysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income
	1% $ 36,127 $ - 1% 2,413 - 1% ($ ,14,303)$ -

Price ris k

I. The Group’s equity s ecurities , which are exposed to price ris k, are the held financial assets at fair value through profit or loss and financial ass ets at fair value through other comprehens ive income. To manage its price ris k aris ing from investments in equity securities , the Group divers ifies its portfolio. Divers ification of the portfolio is done in accordance with the limits s et by the Group.
II.The Group’s investments in equity s ecurities compris e s hares and open-end funds issued by the domes tic and foreign companies . The prices of equity s ecurities would change due to the change of the future value of inves tee companies . If the prices of thes e equity

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securities had increas ed/decreas ed by 10% with all other variables held constant, pos t-tax profit for the years ended December 31, 2020 and 2019 would have increas ed/decreas ed by $36,547 and $25,259, res pectively, as a result of gains /loss es on equity securities class ified as at fair value through profit or loss . Other components of equity would have increased/decreased by $6,484 and $5,078, res pectively, as a res ult of other comprehens ive income class ified as equity inves tment at fair value through other comprehens ive income.

Cash flow and fair value Interes t rate ris k

The Group’s main interes t rate ris k aris es from short-term borrowings and s hort-term notes and bills payable. Borrowings with floating rates expos e the Group to cas h flow interes t rate ris k, but the majority of ris k offset by cas h and cash equivalents with floating rates . Borrowings with fixed rates expos e the Group to fair value interest rate ris k. The Group doesn’t have s ignificant ris k of change of interest rate due to borrowings with floating rates are all shorter than one year. (b) Credit ris k

I. Credit ris k refers to the ris k of financial loss to the Group aris ing 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 bas ed on the agreed terms , and the contract cash flows of financial instruments stated at amortized cost and debt instruments at fair value through profit or loss .
II. The Group manages their credit ris k taking into cons ideration the entire group’s concern. For banks and financial ins titutions , only thes e with high rating are accepted. A ccording to the Group’s credit policy, each local entity in the Group is respons ible for managing and analyzing the credit ris k for each of their new clients before standard payment and delivery terms and conditions are offered. Internal ris k control ass esses the credit quality of the customers , cons idering their financial pos ition, past experience and other factors . Individual ris k limits are s et bas ed on internal or external ratings in accordance with limits set by the Board of Directors . The utilization of credit limits is regularly monitored.
III. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are pas t due over 90 days .
IV. The Group adopts following assumptions under IFRS 9 to assess whether there has been a s ignificant increase in credit ris k on that instrument s ince initial recognition:
If the contract payments were pas t due over 30 days bas ed on the terms , there has been a s ignificant increas e in credit ris k on that instrument s ince initial recognition.
V. The following indicators are used to determine whether the credit impairment of debt ins truments has occurred:

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(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The dis appearance of an active market for that financial asset becaus e of financial difficulties ;
(iii) Default or delinquency in interest or principal repayments ;
(iv) Advers e changes in national or regional economic conditions that are expected to cause a default.
VI. The Group wrote-off the financial assets , which cannot be reas onably expected to be recovered, after initiating recours e procedures . However, the Group will continue executing the recours e procedures to s ecure their rights .
VII. The financial assets at amortized cost including time depos its , repurchas e bonds and res tricted time depos its . The banks are with high rating and don’t pas t due before. In addition to the above, the whole economic environment doesn’t change s ignificant, so the ris k of credit ris k is low and the effect to financial s tatement is ins ignificant.
VIII. The information about ageing analys is and collaterals of accounts receivable is provide in Note6(4). The Group request s ignificant clients provide collaterals and other right of guarantee, therefore, the Group class ifies customer’s accounts receivable in accordance with the nature of collaterals . The applies the s implified approach us ing loss rate methodology to estimate expected credit loss . In s ummary, the allowance for losses which the Group s hould recognize is minor at December 31, 2020 and 2019.
IX. M ovements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable is as follows :

follows :
At January 1 Provision for impairment Reversal of impairment At December 31	2020	2019
	$ 14,295 - ( 8,582) $ 5,713	$ 4,289 10,006 - $ 14,295

(c) Liquidity ris k

I. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs .
II. Surplus cash held by the operating entities over and above balance required for working capital management should invest s urplus cash in interes t bearing current accounts , time depos its and marketable securities , choos ing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as

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determined by the above-mentioned forecasts .

III. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross -s ettled derivative financial liabilities into relevant maturity groupings bas ed on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities . The amounts disclos ed in the table are the contractual undis counted cash flows .

Non-derivative financial liabilities:

		Less than	Between 1
Decem ber 31, 2020		1year	and 5years	Over 5years
Short-term borrowings		$ 1,340,000 $		- $	-
Short-term notes and bills payable		149,756		-	-
Notes payable		2,115		-	-
Accounts payable		2,396,158		-	-
Other payables		694,001		-	-
Lease liability		12,224	26,569		52,635
Guarantee deposits received		-		-	6,635
Derivative financial liabilities:	None.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
Decem ber 31, 2019 Short-term borrowings Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities: None.	Less than 1year Between 1 and 5years Over 5years
	$ 274,000 $ - $ - 1,981 - - 2,225,909 - - 462,523 - - 12,685 28,440 56,605 - - 9,871

(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 ass ets 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 ass et or liability take place with sufficient frequency and volume to provide pricing information on an ongoing bas is . The fair value of the Group’s investment in lis ted stocks , beneficiary certificates and debt s ecurities 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

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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(9).
C. Financial ins truments not measured at fair value of the Group including cash and cash equivalents , time depos it (over 3 months ), notes receivable, accounts receivable, other receivables , guarantee depos its paid, short-term borrowings , short-term notes and bills payable, notes payable, accounts payable and other payables , lease liabilities (current and non-current) and guarantee depos its received are approximate to their fair values .
D. The related information of financial and non-financial instruments measured at fair value by level on the bas is of the nature, characteristics and ris ks of the assets and liabilities is as follows :
(a) The related information of natures of the assets and liabilities is as follows :

follows :
Decem ber 31, 2020 Assets Recurring fair value measurem ents Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None. Decem ber 31, 2019 Assets Recurring fair value measurem ents Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None.	Level 1 Level 2 Level 3					Total
	$214,924 91,737 51,390 - $358,051 Level 1	$ 2,506 - - - $ 2,506 Level 2		$ 4,917 - - 64,836 $ 69,753 Level 3		$222,347 91,737 51,390 64,836 $430,310 Total $118,503 84,404 49,686 50,776 $303,369
	$ 81,109 84,404 49,686 - $215,199		$ 2,217 - - - $ 2,217		$ 35,177 - - 50,776 $ 85,953

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(b) The methods and assumptions the Group us ed to measure fair value are as follows :
I. The ins truments the Group used market quoted prices as their fair values (that is , Level 1) are lis ted below by characteristics :

Market quoted price	Listed shares Open-end fund
	Closing price Net asset value

II. Except for financial ins truments with active markets , the fair value of other financial instruments is measured by us ing valuation techniques or by reference to counterparty quotes . The fair value of financial instruments meas ured by us ing valuation techniques can be referred to current fair value of instruments with s imilar terms and characteris tics in subs tance, dis counted cas h flow method or other valuation methods , including calculated by applying model us ing market information available at the consolidated balance sheet date.
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 us ing valuation model is adjusted accordingly with additional inputs , for example, model ris k or liquidity ris k and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models us ed for fair value measurement, management believes adjustment to valuation is necess ary 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 .
E. For the years ended December 31, 2020 and 2019, there was no trans fer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

December 31, 2020 and 2019:
At January 1 Acquired in the period Transfers out from level 3 Valuation adjustment At December 31	Equitysecurities
	2020	2019
	$ 85,953 - ( 26,157) 9,957 $ 69,753	$ 66,115 18,850 - 988
		$ 85,953

G. Becaus e M 3 Technology Inc. and Powerchip Semiconductor

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M anufacturing Corporation started their transaction in Emerging Stock M arket from November,2020 and December,2020, and there is sufficient observable market information available, the Group has trans ferred the fair value from Level 3 into Level 1 at the end of the month when the event occurred.

H. A ccounting segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments . Such ass ess ment 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 repres ented as the exercis able price, and frequently calibrating valuation model, performing back-tes ting, updating inputs us ed to the valuation model and making any other necess ary adjustments to the fair value.
I. The following is the qualitative information of s ignificant unobservable inputs and sens itivity analys is of changes in s ignificant unobs ervable inputs to valuation model used in Level 3 fair value measurement:

	Fair value at		Significant
	Decem ber 31,	Valuation	unobservable		Range		Relationship of
	2020	technique	input	(weighted average)		inputs to fair value
Non-derivative	equity instrum ent:
Unlisted shares	$ 4,917	Market -	Discount for		30%	the higher the
		comparable	lack of			discount for lack of
		companies	marketability			marketability, the
						lower the fair value
Unlisted shares	64,836	Market -	Discount for		40%	the higher the
		comparable	lack of			discount for lack of
		companies	marketability			marketability, the
						lower the fair value
	Fair value at		Significant
	Decem ber 31,	Valuation	unobservable		Range		Relationship of inputs
	2019	technique	input		(weighted average)		to fair value
Non-derivative	equity instrum ent:
Unlisted shares	$ 20,027	Market -	Discount for		30%		the higher the discount
		comparable	lack of				for lack of
		companies	marketability				marketability, the
							lower the fair value
Unlisted shares	50,776	Market -	Discount for		40%		the higher the discount
		comparable	lack of				for lack of
		companies	marketability				marketability, the
							lower the fair value
Unlisted shares	15,150	Most recent	Not applicable		Not applicable		Not applicable
		deal price

J. The Group has carefully ass essed the valuation models and assumptions us ed to measure fair value. However, use of different valuation models or assumptions may result in different meas urement. The following is the effect of profit or loss or of other comprehens ive income from financial ass ets and liabilities categorized within Level 3 if the inputs used to

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valuation models have changed:

Input Change	December 31,2020	December 31,2020	December 31,2020	December 31,2020	December 31,2020
	Recognized in profit or loss Recognized in other comprehensive income
	Favorable change Unfavorable change Favorable change Unfavorable change
Discount for lack of marketability ±10% Input Change		$ 211	($ 211) $ 4,322 December 31,2019		($ 4,322)

		Recognized in profit or loss Recognized in other comprehensive income
	Favorable change Unfavorable change Favorable change Unfavorable change
Discount for lack of marketability ±10%		$ 858	($ 858)	$ 3,384	($ 3,384)

(4)Others

As of the reported date, the Company has assess ed that COVID-19 has no adverse impact on the Company’s overall operating activities and financial statements . However, the Company will continue to pay attention to the development of the COVID-19 and its impact on the overall economic environment.

13.Supplementary Disclosures

(1)Significant transactions information

A . Loans to others : None.
B. Provis ion of endors ements and guarantees to others : None.
C. Holding of marketable s ecurities at the end of the period (not including subs idiaries , associates and joint ventures ): Pleas e refer to table 1.
D. A cquis ition or s ale of the s ame security with the accumulated cos t exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. A cquis ition of real es tate reaching $300 million or 20% of paid-in capital or more: None.
F. Dis pos al of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or s ales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods : None.
J. Significant inter-company trans actions during the reporting periods :

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Please refer to table 2.

(2)Information on inves tees

Names , locations and other information of investee companies (not including inves tees in M ainland China): Please refer to table 3.

(3)Information on inves tments in M ainland China

A . Inves tee accounted for under the equity method of the Company, Elite Semiconductor (B.V. I.) Limited, which has been approved to establish Shanghai offices in Mainland China by Investment Commis s ion of M OEA on June 18, 2009. The Shanghai office indirectly establis hed by the Company was approved for cancellation by the Investment Commis s ion of M OEA on November 17, 2020.
B. Bas ic information: Please refer to table 4.
C. Significant trans actions , either directly or indirectly through a third area, with inves tee companies in the Mainland A rea: None.

(4)M ajor s hareholders information

As of December 31, 2020, the Company did not have any shareholders with a shareholding ratio more than 5%.

14.Operating Segment Information

(1) General information

The Group operates bus iness only in a s ingle indus try. The chief operating decis ion-maker who allocates res ources and ass esses 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 decis ion-maker for the reportable segments is as follows :

Revenue from external customers Segment income before income tax Segment assets Segment liabilities		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 15,267,139 $ 1,253,700 December 31,2020	$ 11,983,479
			$ 576,180
			December 31,2019
		$ 13,000,348 $ 4,871,065	$ 10,480,320
			$ 3,139,541

(3)Reconciliation for s egment income (loss ): None.

(4)Information on products and s ervices

As of December 31, 2020 and 2019 the net operating revenue of integrated circuit and electronic materials is $15,267,139 and $11,983,479.

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(5) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows :

Years ended December 31,	Years ended December 31,	Years ended December 31,	Years ended December 31,
2020		2019
Revenue	Non-current assets	Revenue Non-current assets
$ 6,138,237 9,069,729 59,173 $ 15,267,139	$ 1,046,111 - 9,194 $ 1,055,305	$ 5,153,908 6,643,377 186,194 $ 11,983,479	$ 874,235 - 14,587
			$ 888,822

(6)M ajor cus tomer information

A Company	Years ended December 31,
	2020 2019
	Revenue Segment Revenue Segment
	$ 3,430,386 The Group $ 2,724,676 The Group

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Elite Sem iconductor Microelectronics Technology Inc. and Subsidiaries

Holding of m arketable securities at the end of the period

Decem ber 31, 2020

Table 1

Expressed in th ousands of New Taiwan dollars, except as o therwise indicated

Securities held by	Nam e and category of m arketable securities	Relationship w ith the securities issuer	General ledger account	As of Decem ber 31, 2020	As of Decem ber 31, 2020	As of Decem ber 31, 2020	As of Decem ber 31, 2020
				Num ber of shares	Boo k value (Note)	Ownership(%)	Fair value (Note)
Elite Sem iconductor Microelectronics Technology Inc.	Arim a Lasers Corporation stoc k	The Com pany ’s subsid iary is this com pany ’s director	Financial assets at fair value through profit or loss	3,4 55,000	$ 7 2,209	12.26	$ 72,209
Elite Sem iconductor Microelectronics TechnologyInc.	King Yuan Electronics Corporation stoc k	None	Financial assets at fair value through profit or loss	10,000	348	0.00	348
Elite Sem iconductor Microelectronics TechnologyInc.	HSBC FRN PERPETUAL bo nd	None	Financial assets at fair value through profit or loss	1,0 00,000	25,192	Not applicable	25,192
Elite Sem iconductor Microelectronics TechnologyInc.	ANZ FRN PE RPETUAL bond	None	Financial assets at fair value through profit or loss	5 00,000	11 ,895	Not applicable	11 ,895
Elite Sem iconductor Microelectronics TechnologyInc.	BGF RENMIN BI BOND FUND	None	Financial assets at fair value through profit or loss	1 27,986	58,904	Not applicable	58,904
Elite Sem iconductor Microelectronics Technology Inc.	Turning Point Lasers L td. preferred stoc k	None	Financial assets at fair value through other com prehensive incom e	1,0 00,000	32,418	8. 06	32,418
Elite Investm ent Services Ltd.	HSBC HLDG S PLC 6.2 0 PCT PREF SHARE SE RIES A	None	Financial assets at fair value through profit or loss	20,000	14,303	Not applicable	14,303
Elite Investm ent Services Ltd.	HSBC ALL CHINA BOND FUND - AC (2802)	None	Financial assets at fair value through profit or loss	6 00,000	32,833	Not applicable	32,833
Charng Feng Investm ent Ltd.	King Yuan Electronics Corporation stoc k	None	Financial assets at fair value through profit or loss	10,000	348	0.00	348
Charng Feng Investm ent Ltd.	Arim a Lasers Corporation stoc k	None	Financial assets at fair value through profit or loss	9 07,000	18,956	3.22	18,956
Charng Feng Investm ent Ltd.	Ushine Photon ics Corporation stoc k	None	Financial assets at fair value through profit or loss	115 ,519	797	0.41	797
Charng Feng Investm ent Ltd.	Brighte k Op toelectronic Corporation L td. stoc k	None	Financial assets at fair value through profit or loss	65,601	1,709	0.15	1,709
Charng Feng Investm ent Ltd.	M3 Technolo gy Inc. stock	None	Financial assets at fair value through profit or loss	4 33,000	48,063	1.18	48,063
Charng Feng Investm ent Ltd.	M2 Com m unication Inc. stoc k	None	Financial assets at fair value through profit or loss	2,0 00,000	4,917	7.89	4,917
Charng Feng Investm ent Ltd.	Powerchip Sem iconductor ManufacturingCorporation	None	Financial assets at fair value through profit or loss	1,5 00,000	75,000	0.05	75,000
Charng Feng Investm ent Ltd.	Turning Point Lasers L td. preferred stoc k	None	Financial assets at fair value through other com prehensive incom e	1,0 00,000	32,418	8.06	32,418
Jie Yong Investm ent Ltd .	Elite Sem iconductor Microelectronics Technology Inc. stoc k	Parent com pany	Financial assets at fair value through other com prehensive incom e	14,1 54,000	9 15,764	4.95	9 15,764

Note: Valuation adjustm ent of financial assets and cum ulative translatio n differences are included.

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Table 2

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Significant inter-company transactions during the reporting periods

Year ended December 31, 2020

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

Number (Note 1)	Companynam e	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	Elite Semiconductor Microelectronics TechnologyInc.	Eon Silicon Solutions,Inc.USA	(1)	Research and developm ent expenses	$ 76,375	Note 4	0.50%
0	Elite Semiconductor Microelectronics TechnologyInc.	Elite Semiconductor M emory TechnologyInc.	(1)	Other revenue	48,000	Note 4	0.31%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is “ 0”.
(2) The subsidiaries are numbered in order starting from “ 1”.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories:
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction am ount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statem ent accounts.

Note 4: The transaction term s are decided by the two parties through negotiation. Note 5: Only transactions with related parties of NT$25 million or more are disclosed, and transactions with related parties will not be disclosed separately. Note 6: The transaction between parent company to subsidiary and subsidiaries were elminated when preparing consolidated financial statements.

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Elite Sem iconductor Microelectronics Technology Inc. and Subsidiaries

Inform ation on investees (exclude investee in Mainland Ch ina)

Year ended Decem ber 31, 2020

Table 3

Expressed in thou sands of New Taiwan do llars, except as otherwise indicated

Investor	Investee	Location	Main business activities	Initial in vest	m ent am ount	Shares held	as at Decem	ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31, 2020	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31, 2020	Foot note
				Balance as at Decem ber 31, 2020	Balance as at Decem ber 31, 2019	Num ber of shares	Ownership (%)	Boo k value
Elite Sem iconductor Microelectronics Technology Inc.	Elite Sem iconductor Mem ory Technology Inc.	Taiwan	Research and developm ent, production, sales and related consulting services of integrated circuit	$ 272	$ 272	100 ,000	100	$ 2 4,236	$ 9,712	$ 9,712
Elite Sem iconductor Microelectronics TechnologyInc.	Charng Feng Investm ent Ltd.	Taiwan	General investm ent	500,000	500,000	50,000, 000	100	511, 029	112, 211	111,110	Note 2
Elite Sem iconductor Microelectronics Technology Inc.	Elite Investm ent Services Ltd.	British Virg in Islands	General investm ent	427,200	427,200	15	100	62 0,500	( 7,2 22)	( 7,2 22)
Elite Sem iconductor Microelectronics Technology Inc.	Elite Sem iconductor (B.V.I.) Ltd.	British Virg in Islands	General investm ent	-	142,400	-	-	-	( 7,2 20)	( 7,2 20)	Note 3
Elite Sem iconductor Microelectronics TechnologyInc.	Jie Yong Investm ent Ltd .	Taiwan	General investm ent	270,000	270,000	3,600, 000	41.86	13 6,983	1 3,823	( 138)
Elite Sem iconductor Microelectronics Technology Inc.	Eon Silicon Solu tion s, Inc.USA	U.S.A.	Investigation and research of business situation and industrial technology	13,304	13,304	200 ,000	100	( 1,41 1)	( 240)	( 240)
Charng Feng Investm ent Ltd.	3R Sem iconductor Technology Inc.	Taiwan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	69,407	69,407	10,000, 000	100	2 1,953	( 567)	( 567)
Charng Feng Investm ent Ltd.	Elite Silicon Technology Inc.	Taiwan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	61,201	59,288	7,448, 960	98.01	528	( 154)	( 154)
Charng Feng Investm ent Ltd.	Cany on Sem iconductor Inc.	Taiwan	International trade, m anufacturing of electronic com ponents, product design and inform ation software services	80,337	80,337	8,350, 000	40.93	3 3,883	1,642	673

~176~

Investor	Investee	Location	Main business activities	Initial in vestm ent am ount	Initial in vestm ent am ount	Shares held as at Decem ber 31, 2020	Shares held as at Decem ber 31, 2020	Shares held as at Decem ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31, 2020	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31, 2020	Foot note
				Balance as at Decem ber 31, 2020	Balance as at Decem ber 31, 2019	Num ber of shares	Ownership (%)	Boo k value
Charng Feng Investm ent Ltd.	Elite Innovation Japan Ltd.	Japan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	$ 2,111	$ 2,111	$ 200	100	2,195	$ 116	$ 116
Charng Feng Investm ent Ltd.	CHI Microelectronics Lim ited	Hong Kong	Trading	3 67	-	10,000	100	36 7	( 4)	( 4)	Note 4

Note 1: The foreign investm ent am ount translated at the exchange rate as of Decem ber 31, 2020.

Note 2: The investm ent incom e/loss has been adjusted the unrealized gain /loss of upstream transactions.

Note 3: Elite Sem iconductor (B.V.I.) Ltd. ob tained a liq uidated certificate from local regulatory authority on February 9, 2021, and obtained a liq uidated letter from Investm ent Com m ission of MOEA on February 20, 2021.

Note 4: CHI Microelectronics Lim ited. was established on August 31, 202 0. The Com pany 's subsid iary, Charng Feng Investm ent L td., ob tained the in vestm ent am ount of HKD 100,000 approved by the Investm ent Com m ission of MOEA on Decem ber 11, 2020.

~177~

Elite Sem iconductor Microelectronics Technology Inc. and Subsidiaries

Inform ation on investm ents in Main land Ch ina

Year ended Decem ber 31, 2020

Table 4

Expressed in thou sands of New Taiwan do llars, except as otherwise indicated

Investee in Mainland China	Main business activities	Paid-in capital (Note 4)	Investm ent m ethod (Note 1)	Accum ulated am ount of rem ittance from Taiwan to Mainland China as at January 1, 2020	Am ount rem itted from Taiwan to Mainland China/Am oun t rem itted back to Taiwan for the y ear ended Decem ber 31, 2020	Am ount rem itted from Taiwan to Mainland China/Am oun t rem itted back to Taiwan for the y ear ended Decem ber 31, 2020	Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31, 2020	Ownersh ip held by the Com pan y (direct or indirect)	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31, 2020 (Note 2)	Boo k value of investm ents in Mainland China as at Decem ber 31, 2020	Accum ulated am ount of investm ent incom e rem ittance back to Taiwan as at Decem ber 31, 2020	Foot note
					Rem itted to Mainland China	Rem itted back to Taiwan
Elite Sem iconductor Microelectronics Technology (Shenzhen) Inc.	Trading of goods or techn ical services, develop and sale products of networking sy stem , storage, and peripherals, technical consulting and services of integrated circuit, and after - sales service	$ 2, 549	(1)	$ -	$1,424	$ -	$ 1,4 24	$ 1,22 4	100	$ 1,224	$ 4,619	$ -
Elite Sem iconductor Microelectronics (Shanghai) Technology Inc.	Product design, who lesale and retail of electronic m aterials, inform ation software services and international trade	5, 696	(1)	-	5,696	-	5,6 96	58 1	100	581	6,633	-	Note 6
Companynam e Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31,2020 Investm ent am ount approved by the Investm ent Com m ission of MOEA(Note 5) Ceilin g of investm ents in Mainland Ch ina im posed by the Investm ent Com m ission of MOEA Charng Feng Investm ent Ltd. $ 7,1 20 $ 78, 021 $ 300 ,000
Companynam e	Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31,2020	Investm ent am ount approved by the Investm ent Com m ission of MOEA(Note 5)	Ceilin g of investm ents in Mainland Ch ina im posed by the Investm ent Com m ission of MOEA
Charng Feng Investm ent Ltd.	$ 7,1 20	$ 78, 021	$ 300 ,000

Note 1: The m ethods for engaging in in vestm ent in Mainland China include the following :

(1) Direct investm ent in Main land Ch ina.

(2) Indirect investm ent in Main land Ch ina throug h com panies registered in a third region.

(3) Other m ethods.

Note 2: Investm ent incom e (loss) was recognized based on financial statem ent prepared by each com pany which were audited by independent auditors.

Note 3: The am ount of the statem ent should show as New Taiwan Do llars.

Note 4: Paid-in capital translated at the exchange rate as of Decem ber 31, 2020.

Note 5: The Com pany 's subsid iary, Charng Feng Investm ent L td., ob tained the revised investm ent am ount of U SD 39,48 5.42 and U SD 2,50 0,000 approved by the Investm ent Com m ission , MOEA on February 6, 2020 and July 10, 202 0. Note 6: Elite Sem iconductor Microelectronics (Shanghai) Technology Inc. was established o n Novem ber 27, 2019. The Com pany 's subsidiary, Charng Feng Investm ent Ltd., ob tained the in vestm ent am ount of USD 200,000 approved by the Investm ent Com m ission of MOEA on May 20, 2020.

~178~

V. Financial Report of the Company audited and attested by CPAs for the most recent financial year.

Independent Auditors’ Report

(2021) Finance-Audit-Letter No.20003729

To the Board of Directors and Shareholders of Elite Semiconductor Microelectronics Technology Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and Generally Accepted Auditing Standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of Elite Semiconductor Microelectronics Technology Inc. in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the audit reports of other independent accountants, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~179~

Key audit matters

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

Key audit matters for Elite Semiconductor Microelectronics Technology Inc. parent company only financial statements of the current period are stated as follows: Evaluation of inventories

Description

Refer to Note 4 (13) for the accounting policies on the evaluation of inventories, Note 5 (2) for the uncertainty of accounting estimations and assumptions for evaluation of inventories, Note 6 (5) for the Details of inventory. As at December 31,2020, the inventory and allowance for inventory valuation loss amounted to NT$6,068,415 thousand and NT$98,771 thousand. Elite Semiconductor Microelectronics Technology Inc is primarily engaged in research, development, production, manufacture, and sales of integrated circuit. Elite Semiconductor Microelectronics Technology Inc evaluates inventories stated at lower of cost and net realizable value. Since the evaluation of net realizable value of the inventories exceed specific period and obsolete inventories is subject to management’s judgment and uncertainty of estimations. Consequently, we consider the evaluation of inventories as a key audit matter.

How our audit addressed the matter

We have performed primary audit procedures for the above key audit matter included assessed the rationality of policy and procedure on allowance for inventory valuation loss based on our understanding of Elite Semiconductor Microelectronics Technology Inc.’s operations and industry, the historical data of product marginalization in the market and judged the rationality of obsolete inventories. We inspected the appropriateness of inventory aging report to confirm the consistency of report and policy, selected samples to compare the historical data of product marginalization in the market which determine the net realizable value of the obsolete inventories and net realizable value of the obsolete inventories to assessed the rationality of the allowance for inventory valuation loss.

~180~

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

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

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

Those charged with governance, including audit committee, are responsible for overseeing Elite Semiconductor Microelectronics Technology Inc.’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

G. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

~181~

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

H. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Elite Semiconductor Microelectronics Technology Inc.’s internal control;
I. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
J. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Elite Semiconductor Microelectronics Technology Inc.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Elite Semiconductor Microelectronics Technology Inc. to cease to continue as a going concern;
K. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and
L. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Elite Semiconductor Microelectronics Technology Inc. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of parent company only audit. We remain solely responsible for our audit opinion.

~182~

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

Cheng, Ya-Huei

Li, Tien-Yi

for and on behalf of PricewaterhouseCoopers, Taiwan

February 26, 2021

~183~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

							Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
				Decem ber31,2020			Decem ber31,2019
	Assets	Notes		Amount	%		Amount	%
	Current assets
1100	Cash and cash equivalents	6(1)	$	2,719,155	21	$	1,817,377	17
1110	Financial assets at fair value
	through profit or loss - current	6(2)		168,548	1		150,841		2
1136	Financial assets at amortized cost
	- current			136,704	1		140,906		1
1150	Notes receivable, net			-	-		34		-
1170	Accounts receivable, net	6(4)		1,505,780	12		1,160,173	11
1200	Other receivables	7(2)		94,611	1		79,745		1
130X	Inventories	6(5)		5,969,644	46		4,968,524	48
1410	Prepaym ents			23,477	-		21,863		-
1470	Other current assets	8		5,183	-		6,602		-
11XX	Total curren t assets			10,623,102	82		8,346,065	80
	Non-current assets
1517	Financial assets at fair value
	through other comprehensive
	incom e - non-current	6(3)		32,418	-		25,388		-
1550	Investment accounted for under
	the equity m ethod	6(6)		1,291,337	10		1,225,036	12
1600	Property, plant and equipment	6(7)		776,013	6		695,067		6
1755	Right-of-use assets	6(8)		72,090	-		72,798		1
1760	Investment property, net	6(9)		17,701	-		18,671		-
1780	Intangible assets	6(10)(11)		111,688	1		81,177		1
1840	Deferred income tax assets	6(26)		3,813	-		4,174		-
1900	Other non-current assets	8		77,055	1		10,357		-
15XX	Total non-cu rrent assets			2,382,115	18		2,132,668	20
1XXX	Total assets		$	13,005,217	100	$	10,478,733	100

(Continued)

~184~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Liabilities and equity

Unit: NT$ thousand
Decem ber31,2020
Decem ber31,2019
Notes
Amount
%
Amount
%
6(12)
$ 1,340,000
10
$ 270,000
3

149,756
1
-
-
6(19)
5,336
-
3,949
-
2,115
-
1,890
-
2,281,658
18
2,134,680
20
6(13)
688,630
5
450,874
4
147,677
1
39,960
1
6,368
-
6,695
-
9,250
-
4,325
-
4,630,790
35
2,912,373
28
16,495
-
15,083
-
6(26)
12,442
-
4,731
-
66,561
1
66,540
1
6(14)
14,886
-
18,546
-
110,384
1
104,900
1
4,741,174
36
3,017,273
29
6(16)

2,857,589
22
2,857,589
27
6(17)

109,677
1
104,305
1
6(18)
1,409,039
11
1,359,235
13
8,524
-
-
-
4,019,327
31
3,286,176
31
5,536
- (
8,524)
-
6(16)
(
145,649) (
1) (
137,321) (
1)
8,264,043
64
7,461,460
71
11

Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2130
Contract liabilities - current
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current incom e tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total curren t liabilities
Non-current liabilities
2550
Provisions - non-current
2570
Deferred income tax liabilities
2580
Lease liabilities – non-current
2600
Other non-current liabilities
25XX
Total non-cu rrent liabilities
2XXX
Total liabilities
Equity
Share capital

3110
Common stock

Capital surplus

3200
Capital surplus

Retained earnings

3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury shares

3XXX
Total equity
Significant Events after the End

(Continue) The acco mpanying notes are an integral part of these parent company only financial statements.

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~185~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

of the Balance Sheet Date

3X2X Total liabilities and equity

Unit: NT$ thousand $ 13,005,217 100 $ 10,478,733 100

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang Accounting Manager: Candy Chu

~186~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Parent Company Only Statements of Comprehensive Income Years ended December 31, 2020 and 2019

Items	Notes 6(19) 7(2) 6(5) (24) (25) 7(2) 6(24) (25) 7(2) 7(2) 12(2) 6(20) 6(21) 7(2) 6(22) 6(23) 6(6) 6(26) 6(14) 6(3) 6(27) 6(27)	2020
4000 Operating revenue 5000 Operating costs 5900 Gross profit 5950 Gross profit - net Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain (loss) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains or losses 7050 Financial costs 7070 Share of profit (loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expenses 8200 Profit for the period Other comprehensive income (loss) - net Items not reclassified to profit or loss 8311 Gain on remeasurements of defined benefit plans 8316 Unrealized gain (loss) on valuation of equity instruments at fair value through other comprehensive income 8330 Share of other co mprehensive income (loss) of associates and joint ventures accounted for under equity method - items not reclassified to profit or loss 8300 Other comprehensive income (loss) - net 8500 Total comprehensive income for the period Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share
		$

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~187~

Years ended Decem ber 31, 2020 and 2019

Elite Sem iconductor Microelectronics Technology Inc. and Subsidiaries Parent Com pany Only Statem ents of Changes in Equity

Unit: NT$ thousand

2019 Balance at January 1, 2019 Profit for the period Other comprehensive income for the period Comprehensive income for the period Distribution of 2018 earnings Legal reserve appropriated Cash dividends of ordinary share Reversal of special reserve Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries Disposal of subsidiaries Adjustment of capital reserve due to cash dividends that subsidiaries received from paren Change in associates and joint ventures accounted for under equity method Expired cash dividends transferred to capital surplus Adjustment of payments of expired cash dividend Balance at December 31, 2019 2020 Balance at January 1, 2020 Profit for the period Other comprehensive income for the period Comprehensive income for the period Distribution of 2019 earnings Legal reserve appropriated Cash dividends of ordinary share Special reserve appropriated Acquisition of company's share by subsidiary recognized as treasury share Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries Adjustment of capital reserve due to cash dividends that subsidiaries received from parent Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non-controlling interest Expired cash dividends transferred to capital surplus Balance at December 31, 2020	Note		Common stock		Capital surplus $ 59,072 - - - - - - 1,146 35,475 8,438 180 39 ( 45 ) $ 104,305 $ 104,305 - - - - - - - 1,146 5,925 ( 1,781 ) 82 $ 109,677				Retained earnings			Unrealized gain (loss) on financial assets measured at fa ir value through other comprehensive income	Unrealized gain (loss) on financial assets measured at fa ir value through other comprehensive income		Treasuryshare		Total equity
							Legal rese rve		Special reserve		Unappropriated retained earnings
	6(18) 6(17) 6(17) t 6(17) 6(17) 6(17) s6(17) 6(18) 6(17) 6(17) 6(17) 6(17)		$ 2,857,589 - - - - - - - - - - - - $ 2,857,589 $ 2,857,589 - - - - - - - - - - - $ 2,857,589				$ 1,288,584 - - - 70,651 - - - - - - - - $ 1,359,235 $ 1,359,235 - - - 49,804 - - - - - - - $ 1,409,039		$ 194,377 - - - - - ( 194,377 ) - - - - - - $ - $ - - - - - - 8,524 - - - - - $ 8,524		$ 3,093,047 497,405 636 498,041 ( 70,651 ) ( 428,638 ) 194,377 - - - - - - $ 3,286,176 $ 3,286,176 1,076,426 812 1,077,238 ( 49,804 ) ( 285,759 ) ( 8,524 ) - - - - - $ 4,019,327		$ - - ( 8,524 ) ( 8,524 ) - - - - - - - - - ($ 8,524 ) ($ 8,524 ) - 14,060 14,060 - - - - - - - - $ 5,536		($ 137,321 ) - - - - - - - - - - - - ($ 137,321 ) ($ 137,321 ) - - - - - - ( 8,328 ) - - - - ($ 145,649 )		$ 7,355,348 497,405 ( 7,888 ) 489,517 - ( 428,638 ) - 1,146 35,475 8,438 180 39 ( 45 ) $ 7,461,460 $ 7,461,460 1,076,426 14,872 1,091,298 - ( 285,759 ) - ( 8,328 ) 1,146 5,925 ( 1,781 ) 82 $ 8,264,043

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

Chairm an: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

~188~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows

Years ended December 31, 2020 and 2019

							Unit: NT$ thousand
	Notes			2020			2019
Cash flows from operating activities
Profit before incom e tax for the period			$	1,243,089		$	563,433
Adjustments
Income and expenses having no effect on cash
flows
Depreciation	6(7) (8) (9) (24)			306,407			392,093
Amortization	6(10) (24)			111,401			84,226
Expected credit impairm ent loss (gain)	12(2)	(		8,582 )			10,006
Net loss (gain) on financial assets at fair
value through profit or loss	6(2) (22)	(		17,707 )			19,145
Interest expenses	6(23)			11,308			8,715
Interest incom e	6(20)	(		17,540 )	(		27,979 )
Dividend income	6(21)	(		3,473 )	(		11,498 )
Impairment loss	6(10) (11) (22)			25,352			12,057
Share of (loss) profit of associates and joint
ventures accounted for under equity method		(		106,002 )			30,257
Gains arising from lease modifications	6(22)	(		91 )			-
Changes in assets/liabilities relating to
operating activities
Net changes in assets relating to operating
activities
Financial assets at fair value through profit
and loss				-			40,915
Notes receivable				34	(		34 )
Accounts receivable		(		337,025 )	(		110,776 )
Other receivables		(		15,468 )	(		6,889 )
Inventories		(		1,001,120 )			796,007
Prepayments		(		1,614 )			52,706
Other current assets		(		2,550 )	(		3,844 )
Net changes in liabilities relating to operating
activities
Notes payable				225			90
Accounts payable				146,978			283,737
Contract liabilities - current				1,387			1,509

(Continue)

~189~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows Years ended December 31, 2020 and 2019

Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities	Unit: NT$ thousand Notes 2020 2019 148,355 ( 53,299 ) 4,925 509 386 392 488,675 2,081,478 18,142 27,053 ( 10,093 ) ( 7,388 ) ( 50,874 ) ( 151,522 ) 445,850 1,949,621

(Continued)

~190~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statem ents of C ash Flows

Years ended December 31, 2020 and 2019

Cash flows from investing activities
Acquisition of financial assets at am ortized
cost
Disposal of financial assets at amortized cost
Proceeds from capital withdrawal from
liquidation of subsidiaries
Acquisition of property, plant and equipment
(Increase) decrease in prepaym ents for
equipm ent
Acquisition of intangible assets
(Increase) Decrease in guarantee deposit paid
Dividends received
Net cash flows from investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Increase (decrease) in short-term notes and
bills payable
Lease principal repaym ent
(Decrease) Increase in guarantee deposit
received
Cash dividends paid
Expired cash dividends
Payments of expired cash dividends
Net cash flows from (used in) financing
activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Unit: NT$ thousand
Notes
2020
2019
( $ 140,157 )
( $ 140,906 )
144,359
-
19,408
42,782
6(28)
(
291,692 )
(
268,048 )
(
62,673 )
52,996
6(10)
(
167,264 )
(
44,832 )
(
56 )
340
27,760
32,538
(
470,315 )
(
325,130 )
6(28)
1,070,000
(
100,000 )
6(28)
150,476
(
99,932 )
6(28)
(
5,320 )
(
7,956 )
6(28)
(
3,236 )
110
6(18)
(
285,759 )
(
428,638 )
6(17)
82
39
6(17)
-
(
45 )
926,243
(
636,422 )
901,778
988,069
6(1)
1,817,377
829,308
6(1)
$ 2,719,155
$ 1,817,377

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

Manager: Ming-Chien Chang

Chairm an: Hsing-Hai Chen

Accounting Manager: Candy Chu

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Elite Semiconductor M icroelectronics Technology Inc. Notes to the Parent Company Only Financial Statements Years Ended December 31, 2020 and 2019

Unit: NT$ thousand (Unless otherwise indicated)

1.His tory and Organization

Elite Semiconductor M icroelectronics Technology Inc. (the Company) was founded in M ay 1998 and s tarted operation in December of the same year. The core bus iness of the Company includes res earch, development, production, manufacture, and s ales of dynamic and s tatic random access memory, flash memory, analog integrated circuit, analog and digital mixed integrated circuit. The Group also provides technical services related to product des ign and R&D.

The Company merged with Ji Xin Technology Co., Ltd. On December 5, 2005, and merged with Eon Silicon Solution Inc. on June 8, 2016, and the Company is the surviving company.

2.The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for A uthorization

The consolidated financial statements were reported to the Board of Directors on February 26, 2021.

3.A pplication of New Standards , A mendments and Interpretations

(1)Effect of the adoption of new issuance of or amendments to International Financial Reporting Standards (“ IFRS” ) as endorsed by the Financial Supervisory Commiss ion (“ FSC” )

New standards , interpretations and amendments endors ed by the FSC effective from 2020 are as follows :

from 2020 are as follows :
	Effective Date by
	International Accounting
New Standards,Amendments and Interpretations	Standards Board
Amendments to IAS 1 and IAS 8, “Disclosure Initiative - Definition of Material”	January 1, 2020
Amendments to IFRS 3, “Definition of a Business”	January 1, 2020
Amendments to IFSR 9, IAS 39, and IFRS 7, “Interest rate benchmark reform”	January 1, 2020
Amendments to IFRS 16, “Covid-19-Related Rent Concessions”	June 1, 2020 (Note)

Note: Earlier application from January 1, 2020 is allowed by FSC.

The above s tandards and interpretations have no s ignificant impact to the Company's financial condition and financial performance based on the Company's assess ment.

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(2)Effect of New Iss uances of or A mendments to IFRSs as Endors ed by the FSC but not yet Adopted by the Company

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

from 2021 are as follows :
	Effective Date by
	International
	Accounting Standards
New Standards,Amendments and Interpretations	Board
Amendments to IFRS 4, “Extension of the Temporary Exemption from Applying IFRS 9”	January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
“Interest Rate Benchmark Reform— Phase 2”	January 1, 2021

The above s tandards and interpretations have no s ignificant impact to the Company’s financial condition and financial performance bas ed on the Company's assess ment.

(3)Effects of IFRSs Issued by IA SB but not yet Endors ed by the FSC

New standards , interpretations and amendments iss ued by IA SB but not yet included in the IFRSs as endorsed by the FSC are as follows :

	Effective Date
	by International
	Accounting
New Standards,Amendments and Interpretations	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
between an Investor and its Associate or Joint Venture”	determined by
	IASB
IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IAS 1, “Classification of Liabilities as Current or	January 1, 2023
Non-current”
Amendments to IAS 1, “Disclosure of accounting policies”	January 1, 2023
Amendments to IAS 8, “Definition of accounting estimates”	January 1, 2023
Amendments to IAS 16, “Property, Plant and Equipment -Proceeds	January 1, 2022
before Intended Use”
Amendments to IAS 37, “Onerous Contracts - Cost of Fulfilling a	January 1, 2022
Contract”
Annual Improvements to IFRSs 2018-2020 Cycle	January 1, 2022

The above s tandards and interpretations have no s ignificant impact to the Company's financial condition and financial performance based on the Company's assess ment.

4.Summary of Significant A ccounting Policies

The principal accounting policies applied in the preparation of thes e parent

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company only financial statements are s et out below. Thes e policies have been cons is tently applied to all the periods pres ented, unless otherwise s tated. (1)Compliance statement

The parent company only financial s tatements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2)Bas is of preparation

A . Except for the following items , thes e parent company only financial statements have been prepared under the his torical cost convention:
(a) Financial assets (including derivatives instruments ) at fair value through profit or loss .
(b) Financial ass ets at fair value through other comprehens ive income.
(c) Defined benefit liabilities recognized based on the net amount of pens ion fund assets less present value of defined benefit obligations .
B. The preparation of financial statements in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers ”, International Financial Reporting Standards , International A ccounting Standards , IFRIC Interpretations , and SIC Interpretations as endors ed by the FSC (collectively referred herein as the “IFRSs ”), requires the use of certain critical accounting estimates . It also requires management to exercise its judgment in the process of applying the Company’s accounting policies . The areas involving a higher degree of judgment or complexity, or areas where ass umptions and es timates are estimates are s ignificant to the cons olidated financial s tatements are disclos ed in Note 5.

(3)Foreign currency trans lation

Items included in the financial s tatements of each of the Company’s entities are measured us ing the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are pres ented in New Taiwan dollars , which is the Company’s functional and pres entation currency. Foreign currency trans actions and balances

A . Foreign currency transactions are trans lated into the functional currency us ing 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 recognized in profit or loss in the period in which they arise.
B. M onetary ass ets and liabilities denominated in foreign currencies at the period end are retrans lated at the exchange rates prevailing at the balance sheet date. Exchange differences aris ing upon re-trans lation at the balance sheet date are recognized in profit or loss .
C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-trans lated at the exchange rates prevailing at the balance sheet date; their trans lation differences are recognized in profit or loss . Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other

~194~

comprehens ive income are re-trans lated at the exchange rates prevailing at the balance sheet date; their trans lation differences are recognized in other comprehens ive income. However, nonmonetary ass ets and liabilities denominated in foreign currencies that are not measured at fair value are trans lated us ing the his torical exchange rates at the dates of the initial transactions .

D. A ll foreign exchange gains and losses are pres ented in the s tatement of comprehens ive income within ‘other gains and losses ’.
(4)Class ification of current and non -current items
A . Assets that meet one of the following criteria are class ified as current ass ets ; otherwis e they are class ified as non-current ass ets :
- (a) Ass ets aris ing from operating activities that are expected to be realized, or are intended to be s old or consumed within the normal operating cycle;
- (b) Ass ets held mainly for trading purpos es;
- (c) Assets that are expected to be realized within twelve months from the balance s heet date;
- (d) Cash and cas h equivalents , excluding restricted cash and cash equivalents and thos e 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 class ified as current liabilities ; otherwis e they are class ified as non-current liabilities :
- (a) Liabilities that are expected to be settled within the normal operating cycle;
- (b) Liabilities aris ing mainly from trading activities;
- (c) Liabilities that are to be s ettled 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, res ult in its s ettlement by the iss ue of equity instruments do not affect its class ification.

(5)Cas h equivalents

(6)Financial ass ets at fair value through profit or loss

A . Financial ass ets at fair value through profit or loss are financial ass ets that are not measured at amortized cost or fair value through other comprehens ive income.
B. On a regular way purchase or s ale bas is , financial ass ets at fair value through profit or loss are recognized and derecognized us ing trade date

~195~

accounting.

C. A t initial recognition, the Group measures the financial assets at fair value and recognizes the trans action cos ts in profit or loss . The Company subs equently meas ures the financial ass ets at fair value, and recognizes the gain or loss in profit or loss .
D. The Company recognizes the dividend income when the right to receive payment is es tablis hed, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(7)Financial ass ets at fair value through other comprehens ive income
A . Financial assets at fair value through other comprehens ive income comprise equity s ecurities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehens ive income and debt instruments which meet all of the following criteria:
- (a) The objective of the Group’s bus iness model is achieved both by collecting contractual cash flows and selling financial ass ets ; and
- (b) The assets ’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or s ale bas is , financial ass ets at fair value through other comprehens ive income are recognized and derecognized us ing trade date accounting.
C. A t initial recognition, the Company measures the financial ass ets at fair value plus transaction cos ts . The Company subs equently measures the financial assets at fair value:
The changes in fair value of equity inves tments that were recognized in other comprehens ive income are reclass ified to retained earnings and are not reclass ified to profit or loss following the derecognition of the inves tment. Dividends are recognized as revenue when the right to receive payment is es tablished, future economic benefits ass ociated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
(8)Financial ass ets at amortized cost
A . Financial assets at amortized cost are those that meet all of the following criteria:
- (a) The objective of the Group’s bus iness 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 s ale bas is , financial ass ets at amortized cost are recognized and derecognized us ing trade date accounting.
C. A t initial recognition, the Company measures the financial ass ets at fair value plus transaction costs . Interest income from thes e financial ass ets is included in finance income us ing the effective interes t method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.
D. The Company’s time depos its which do not fall under cash equivalents are

~196~

thos e with a short maturity period and are measured at initial inves tment amount as the effect of dis counting is immaterial.

(9)A ccounts and notes receivable

A . A ccounts and notes receivable entitle the Company a legal right to receive cons ideration in exchange for trans ferred goods or rendered s ervices .
B. The short-term accounts and notes receivable without bearing interest are subs equently measured at initial invoice amount as the effect of discounting is immaterial.
(10)Impairment of financial ass ets

For financial assets at amortized cos t, at each reporting date, the Company recognizes the impairment provis ion for 12 months expected credit loss es if there has not been a s ignificant increas e in credit ris k s ince initial recognition or recognizes the impairment provis ion for the lifetime expected credit losses (ECLs ) if s uch credit ris k has increased s ince initial recognition after taking into cons ideration all reas onable and verifiable information that includes forecas ts . On the other hand, for accounts receivable or contract assets that do not contain a s ignificant financing component, the Company recognizes the impairment provis ion for lifetime ECLs .

(11)Derecognition of financial ass ets

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

(12)Operating leas es (lessee)

Rental income under an operating lease (net of any incentives received from the lessor) are recognized in profit or loss on a straight-line bas is over the lease term.

(13)Inventories

(14)Inves tments accounted for us ing equity method / subs idiaries and associates

A . Subs idiaries are entities controlled by the Company (including s tructured entities ). The Company controls the entity when the Company is expos ed, 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.
B. A ll unrealized profit or loss resulting from trans actions between the Company and its subs idiaries have been eliminated in full. A ccounting policies of subs idiaries have been adjusted when necess ary in order to be cons is tent with thos e of the Company.
C. The Company’s share of profit or loss in subs idiaries after acquis ition is recognized in profit or loss , whereas its s hare of other comprehens ive income in subs idiaries after acquis ition is recognized in other

~197~

comprehens ive income. If the Company’s share of loss in a s ubs idiary exceeds its share of equity in such a subs idiary, the Company continues to recognize losses in its s hareholding percentage.

D. If a change in shareholding in a subs idiary does not result in a loss of control (i.e. trans actions with non-controlling interests ), such a change is accounted for as an equity trans action, that is , a trans action with owners in their capacity as owners . Any difference between the amount by which the non-controlling interes ts are adjus ted and the fair value of the cons ideration paid or received is recognized directly in equity.
E. A ssociates are all entities over which the Company has s ignificant influence but not control. In general, it is presumed that the investor has s ignificant influence, if an investor holds , directly or indirectly 20 percent or more of the voting power of the investee. Inves tments in ass ociates are accounted for us ing the equity method and are initially recognized at cost.
F. The Company’s share of its associates ’ pos t-acquis ition profits or losses is recognized in profit or loss , and its share of pos t-acquis ition movements in other comprehens ive income is recognized in other comprehens ive income. When the Company’s s hare of losses in an ass ociate equals or exceeds its interes t in the ass ociate, including any other unsecured receivables , the Group does not recognize further losses , unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
G. W hen changes in an associate’s equity do not aris e from profit or loss or other comprehens ive income of the associate and such changes do not affect the Company’s owners hip percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus ’ in proportion to its owners hip.
H. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interes t in the ass ociates . Unrealized losses are also eliminated unless the trans action provides evidence of an impairment of the ass et trans ferred. A ccounting policies of ass ociates have been adjus ted where necessary to ensure cons is tency with the policies adopted by the Company.
I. In the case that an associate issues new s hares and the Company does not subs cribe or acquire new s hares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains s ignificant influence on the associate, then ‘capital surplus ’ and ‘investments accounted for under the equity method’ shall be adjus ted for the increase or decrease of its share of equity interes t. If the above condition causes a decreas e in the Company’s ownership percentage of the ass ociate, in addition to the above adjustment, the amounts previous ly recognized in other comprehens ive income in relation to the associate are reclass ified to profit or loss proportionately on the same bas is as would be required if the relevant assets or liabilities were dispos ed of.
J. Upon loss of s ignificant influence over an ass ociate, the Company remeasures any inves tment retained in the former associate at its fair value. Any difference between fair value and carrying amount is

~198~

recognized in profit or loss .

K. W hen the Company disposes its investment in an associate and loses s ignificant influence over this associate, the amounts previous ly recognized in other comprehens ive income in relation to the associate, are reclass ified to profit or loss , on the s ame bas is as would be required if the relevant assets or liabilities were disposed of. If it retains s ignificant influence over this associate, the amounts previous ly recognized in other comprehens ive income in relation to the associate are reclass ified to profit or loss proportionately in accordance with the aforementioned approach.
L. A ccording to Regulations Governing the Preparation of Financial Reports by Securities Issuers , the profit or loss of the period and other comprehens ive income presented in parent company only financial statements shall be the s ame as the allocations of profit or loss of the period and of other comprehens ive income attributable to owners of the parent pres ented in the financial s tatements prepared on a cons olidated bas is , and the owners ' equity presented in the parent company only financial statements shall be the s ame as the equity attributable to owners of the parent presented in the financial s tatements prepared on a consolidated bas is .

(15)Property, plant and equipment

A . Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the cons truction period are capitalized.
B. Subs equent cos ts are included in the ass et’s carrying amount or recognized as a separate ass et, as appropriate, only when it is probable that future economic benefits ass ociated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. A ll other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cos t model and are depreciated us ing the straight-line method to allocate their cost over their estimated us eful lives . Each part of an item of property, plant, and equipment with a cost that is s ignificant in relation to the total cos t of the item mus t be depreciated separately.
D. The ass ets ’ res idual values , useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets ’ res idual values and us eful lives differ from previous es timates or the patterns of consumption of the ass ets ’ future economic benefits embodied in the assets have changed s ignificantly, any change is accounted for as a change in estimate under IA S 8, ‘A ccounting Policies , Changes in Accounting Es timates and Errors ’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows
Buildings and s tructures 3~20 years M achinery and equipment 3~8 years Tes ting equipment 3~8 years Other 3~10 years

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(16) Leas ing arrangements (less ee)－ right -of-use ass ets/ leas e liabilities

A . Leas es are recognized as a right-of-us e asset and a corresponding lease liability at the date at which the leased ass et is available for use by the Company. For s hort-term leases or leas es of low value ass ets , leas e payments are recognized as an expens e on a straight-line bas is over the lease term.
B. Leas e liabilities include the net present value of the remaining lease payments at the commencement date, discounted us ing the incremental borrowing interes t rate. Lease payments are compris ed of Fixed payments , less any lease incentives receivable. The Group subs equently measures the lease liability at amortized cos t us ing the interest method and recognizes interest expens e over the lease term.
- Starting from the lease date, the Group ass esses whether it can reasonably determine its option to extend the leas e or purchase the underlying ass et, or not to terminate the leas e. The Group cons iders all relevant facts and circumstances that will generate economic incentives to exercis e or not exercis e the options . Such circumstances include all e xpected changes in facts and s ituations from the start of the lease to the day when the option is exercis ed. Main factors to cons ider include contractual terms and conditions within the period of options and the importance of the underlying ass et to the less ee’s operations , etc. The lease term will be reass essed if a s ignificant change or a major change in circumstances occurs within the Company's control range.
- The leas e liability is remeasured and the amount of remeas urement is recognized 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. A t the commencement date, the right-of-us e asset is s tated at cost. The cost is the amount of the initial meas urement of lease liability. The right-of-us e ass et is measured subs equently us ing the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s us eful life or the end of the leas e term. When the leas e liability is remeasured, the amount of remeas urement is recognized as an adjustment to the right-of-us e ass et.
(17)Inves tment property

(18)Intangible assets
A . Patent and technical s kill, customer relationship
- Separately acquired patent is stated at his torical cos t. Patent and technical s kill, customer relations hip acquired in a bus iness combination are recognized at fair value at the acquis ition date and amortized on a straight-line bas is over their estimated useful lives of 3 years .
B. Goodwill
- Goodwill aris es in a bus iness combination accounted for by applying the acquis ition method.
C. Other intangible ass ets , mainly computer software, are stated at cos t and amortized on a s traight-line bas is over their es timated useful lives of 1 ~ 3

~200~

years .

(19)Impairment of non -financial ass ets

A . The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the ass et’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cos ts to s ell or value in us e. Except for goodwill, when the circums tances or reasons for recognizing impairment loss for an ass et in prior years no longer exis t or diminis h, the impairment loss is revers ed. The increased carrying amount due to revers al s hould not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.
B. The recoverable amount of goodwill is evaluated periodically. A n impairment loss is recognized for the amount by which the ass et’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previous ly recognized in profit or loss s hall not be reversed in the following years .
C. For the purpose of impairment tes ting, goodwill acquired in a bus iness combination is allocated to each of the cash-generating units , or groups of cash-generating units , that is/are expected to benefit from the synergies of the bus iness combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes . Goodwill is monitored at the operating s egment level.

(20)Borrowings

(21)Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or s ervices that have been acquired in the ordinary cours e of bus iness from suppliers . They are recognized initially at fair value and subsequently measured at amortized cost us ing the effective interest method. However, for short-term accounts payable without bearing interest, as the effect of dis counting is ins ignificant, they are measured s ubsequently at original invoice amount.

(22)Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires .

(23)Provis ions

~201~

settle the obligation on the balance sheet date, which is discounted us ing a pre-tax dis count rate that reflects the current market assess ments of the time value of money and the ris ks specific to the obligation. When discounting is us ed, the increas e in the provis ion due to passage of time is recognized as interest expens e. Provis ions are not recognized for future operating loss es .

(24) Employee benefits
A . Short-term employee benefits
- Short-term employee benefits are measured at the undis counted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expens e in that period when the employees render s ervice.
B. Pens ions
- (a) Defined contribution plans
  - For defined contribution plans , the contributions are recognized as pens ion expens e when they are due on an accrual bas is . Prepaid contributions are recognized 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 pens ion benefits that employees will receive on retirement for their services with the Group in current period or prior periods . The liability recognized in the balance sheet in respect of defined benefit pens ion plans is the pres ent value of the defined benefit obligation at the balance sheet date less the fair value of plan ass ets . The net defined benefit obligation is calculated annually by independent actuaries us ing the projected unit credit method. The rate us ed to dis count is determined by us ing interes t rates of government bonds at the balance sheet date of a currency and term cons is tent with the currency and term of the employment benefit obligations .
  - II. Re measurements aris ing on defined benefit plans are recognized in other comprehens ive income in the period in which they aris e and are recorded as other equity.
  - III. Pas t s ervice costs are recognized immediately in profit or loss .
C. Employees ’ compensation and directors ’ and supervisors ’ remuneration Employees ’ compensation and directors ’ and s upervis ors ’ remuneration are recognized as expens e and liability, provided that such recognition is required under legal or constructive obligation and thos e amounts can be reliably estimated. Any difference between the resolved amounts and the subs equently actual dis tributed amounts is accounted for as changes in es timates . If employee compens ation is paid by shares , the Group calculates the number of shares bas ed on the clos ing price at the previous day of the board meeting resolution.

- (25) Employee share based payment

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conditions and non-ves ting conditions . Compensation cost is subject to adjustment based on the s ervice conditions that are expected to be s atis fied and the estimates of the number of equity ins truments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compens ation cost recognized is bas ed on the number of equity instruments that eventually ves t.

(26)Income tax
A . The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss , except to the extent that it relates to items recognized in other comprehens ive income or items recognized directly in equity, in which cas es the tax is recognized in other comprehens ive income or equity.
B. The current income tax expens e is calculated on the bas is of the tax laws subs tantively enacted at the balance s heet date in the countries where the Company operate and generate taxable income. M anagement periodically evaluates pos itions taken in tax returns with respect to s ituations in accordance with applicable tax regulations . It establishes provis ions where appropriate bas ed 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 expens e in the year the s tockholders resolve to retain the earnings .
C. Deferred tax is recognized, us ing the balance sheet liability method, on temporary differences aris ing between the tax bas es of assets and liabilities and their carrying amounts in the cons olidated balance sheet. However, the deferred tax is not accounted for if it aris es from initial recognition of goodwill or of an asset or liability in a transaction other than a bus iness combination that at the time of the transaction affects neither accounting nor taxable profit or loss . Deferred tax is provided on temporary differences aris ing on investments in subs idiaries , 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 us ing tax rates and laws that have been enacted or s ubstantially enacted by the balance sheet date and are expected to apply when the related deferred tax ass et is realized or the deferred tax liability is settled.
D. Deferred tax ass ets are recognized only to the extent that it is probable that future taxable profit will be available agains t which the temporary differences can be utilized. A t each balance s heet date, unrecognized and recognized deferred tax assets are reass essed.
E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquis itions of equipment or technology, research and development expenditures and equity investments to the extent that it is poss ible that future taxable profit will be available against which the unused tax credits can be utilized.
F. If a change in tax rate is enacted, the Group recognizes the effect of the change immediately in the interim period in which the change occurs . The effect of the change on items recognized outs ide profit or loss is recognized in other comprehens ive income or equity while the effect of the change on

~203~

items recognized in profit or loss is recognized in profit or loss . (27)Share capital

A . Ordinary shares are class ified as equity. Incremental costs directly attributable to the issue of new s hares or stock options are shown in equity as a deduction, net of tax, from the proceeds .
B. W here the Company repurchas es the Company’s equity share capital that has been iss ued, the cons ideration paid, including any directly attributable incremental cos ts (net of income taxes ) is deducted from equity attributable to the Company’s equity holders . W here such shares are subsequently reissued, the difference between their book value and any cons ideration received, net of any directly attributable incremental trans action costs and the related income tax effects , is included in equity attributable to the Company’s equity holders .
(28)D ividends

(29)Revenue recognition
- A . The Group manufactures and sells integrated circuit. Sales are recognized when control of the products has trans ferred, being when the products are delivered to the cus tomer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products . Delivery occurs when the products have been shipped to the specific location, the ris ks of obsolescence and loss have been trans ferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satis fied.
- B. The Group accepts sales orders from customers . Sales revenue is recognized according to the contract price, and the Group trans fers the promis ed goods or s ervices to cus tomers . Since the cus tomer's payment period does not exceed one year, the Group has not adjusted the monetary time value of the transaction price.
C. A receivable is recognized when the goods are delivered as this is the point in time that the cons ideration is unconditional because only the passage of time is required before the payment is due.
5.Critical A ccounting Judgements , Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events . Assumptions and es timates may differ from the actual res ults and are continually evaluated and adjusted bas ed on his torical experience and other factors . Such ass umptions and es timates have a s ignificant ris k of caus ing a material adjustment to the carrying amounts of ass ets and liabilities within the next financial year; and the related information is addressed below:

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(1)Critical judgements in applying the Group ’s accounting policies

None.

(2)Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are s tated at the lower of cos t and net realizable value, the Group must determine the net realizable value of inventories on balance s heet date us ing judgements and es timates . Due to the rapid technology innovation, the Group evaluates the amounts of obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally bas ed on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2020, the carrying amount of inventories was $5,969,644.

6.Details of Significant Accounts

(1)Cas h and cas h equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December 31,2020 December 31,2019	December 31,2020 December 31,2019	December 31,2020 December 31,2019
		$ 115 879,139 1,839,901 $ 2,719,155	$ 115 343,791 1,473,471
			$ 1,817,377

A . The Group associates with a variety of financial ins titutions all with high credit quality to dis pers e credit ris k, so it expects that the probability of counterparty default is remote.
B. Details of the Group's cash and cas h equivalents pledged to others as collateral are provided in Note 8.

(2)Financial ass ets at fair value through profit or loss

Item December 31,2020 December 31,2019	Item December 31,2020 December 31,2019	Item December 31,2020 December 31,2019
Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stock Emerging stocks Beneficiary certificates Bonds Subtotal Valuation adjustment Total	$ 286 115,673 45,465 31,226 192,650 ( 24,102) $ 168,548	$ 286 115,673 45,465 31,226
		192,650 ( 41,809)
		$ 150,841

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A . A mounts recognis ed in profit or loss in relation to financial ass ets at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Equity instruments Debt instruments Beneficiary certificates Total	Year ended December 31,	Year ended December 31,
	2020	2019
	$ 9,300 2,991 5,416 $ 17,707	($ 24,397) 2,750 2,502 ($ 19,145)

B. The Company has no financial assets at fair value through profit or loss pledged to others .
C. Information relating to credit ris k is provided in Note 12(2)C(b).
(3)Financial ass ets at fair value through other comprehens ive income

Item	December 31,2020	December 31,2019
Non-current items: Equity instruments Unlisted stock Valuation adjustment	$ 29,650 2,768 $ 32,418	$ 29,650 ( 4,262) $ 25,388

The Company has elected to class ify equity investments that are cons idered to strategic inves tments as financial assets at fair value through other comprehens ive income. The fair value of s uch investments amounted to$32,418 and $25,388 as at December 31, 2020 and 2019, res pectively.

(4)A ccounts receivable

December 31,2020 December 31,2019 $ 1,510,520 $ 1,174,227 973 241 1,511,493 1,174,468 ( 5,713) ( 14,295) $ 1,505,780 $ 1,160,173	December 31,2020 December 31,2019 $ 1,510,520 $ 1,174,227 973 241 1,511,493 1,174,468 ( 5,713) ( 14,295) $ 1,505,780 $ 1,160,173	December 31,2020 December 31,2019 $ 1,510,520 $ 1,174,227 973 241 1,511,493 1,174,468 ( 5,713) ( 14,295) $ 1,505,780 $ 1,160,173
$ 1,510,520 973 1,511,493 ( 5,713) $ 1,505,780	$ 1,174,227 241
	1,174,468 ( 14,295)
		$ 1,160,173

A . The ageing analys is of accounts receivable is as follows :

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Not past due Past due-within 30 days Past due-31-90 days Past due-91-180 days Past due-over 180 days	December 31,2020 December 31,2019	December 31,2020 December 31,2019	December 31,2020 December 31,2019	December 31,2020 December 31,2019
			$ 1,505,780 - - - 5,713 $ 1,511,493	$ 1,159,935 238 - - 14,295
				$ 1,174,468

The above aging analys is was bas ed on past due date.

B. A s at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements , the maximum hedge to credit ris k in respect of the amount that best represents the Group’s accounts receivable were$1,505,780 and $1,160,173, respectively.
C. The collaterals and fair value held by the Group as guarantee for accounts receivable are as follows :

receivable are as follows :
Bank guarantee Pledged certificate of deposit Guarantee deposits received (shown as “other non-current liabilities”) Letters of credit Company promissory note/check	December 31,2020 December 31,2019
		$ 33,044 4,272 5,526 760,162 555,221 $ 1,358,225	$ 43,494 7,500 8,794 546,672 366,621
			$ 973,081

D. Information relating to credit ris k is provided in Note 12(2).
E. A s at December 31, 2020 and 2019, accounts receivable were all from contracts with cus tomers . As at January 1, 2019, the balance of receivables from contracts with customers amounted to $1,059,404.
F. The Group has no accounts receivable pledged to others as collateral.
(5)Inventories

December 31,2020	December 31,2020
Cost	Allowance for valuation loss	Book value
$ 138,104 4,724,546 1,199,284 6,481 $ 6,068,415	($ 10,726) ( 20,266) ( 67,779) - ($ 98,771)	$ 127,378 4,704,280 1,131,505 6,481
		$ 5,969,644

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December 31,2019	December 31,2019
Cost	Allowance for valuation loss	Book value
$ 156,518 4,013,286 963,140 4,342 $ 5,137,286	($ 9,794) ( 70,663) ( 88,305) - ($ 168,762)	$ 146,724 3,942,623 874,835 4,342
		$ 4,968,524

The Group recognized as expens e or loss :

Cost of goods sold Reversal of allowance on market value decline and obsolete and slow-moving inventories		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 12,745,078 ( 69,991) $ 12,675,087	$ 10,305,310 ( 85,589)
			$ 10,219,721

The revers al of allowance were recognized due to sale of certain inventories which were previous ly provided with allowance for price decline. (6)Investments accounted for under the equity method

nvestments accounted for under the equity method	ty method
December 31,2020 Subsidiaries: Elite Semiconductor Memory Technology Inc. $ 24,236 Charng Feng Investment Ltd. 511,029 Elite Investment Services Ltd. 620,500 Elite Semiconductor (B.V.I.) Ltd. - Jie Yong Investment Ltd. 136,983 Eon Silicon Solution Inc. USA ( 1,411) $ 1,291,337	December 31,2020	December 31,2019
		$ 30,179 394,670 627,721 26,627 147,009 ( 1,170) $ 1,225,036

Information about s ubs idiaries of the Company is provided in Note 4(3) in 2020 consolidated financial statements .

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(7)Property, plant and equipment

Land Buildings and structures Machinery equipm ent Testing equipm ent	Land Buildings and structures Machinery equipm ent Testing equipm ent	Land Buildings and structures Machinery equipm ent Testing equipm ent	Land Buildings and structures Machinery equipm ent Testing equipm ent	Others	Total
$ 9,023 $635,941 $429,694 $250,644 - ( 364,888) ( 352,538) ( 148,491) $ 9,023 $271,053 $ 77,156 $102,153 $ 9,023 $271,053 $ 77,156 $102,153 - 505 85,605 38,091 - - 2,719 1,455 - ( 34,055) ( 22,509) ( 22,333) $ 9,023 $237,503 $142,971 $119,366 $ 9,023 $636,446 $518,018 $284,731 - ( 398,943) ( 375,047) ( 165,365) $ 9,023 $237,503 $142,971 $119,366 Land Buildings and structures Machinery equipm ent Testing equipm ent				$1,228,482 ( 992,800) $ 235,682 $ 235,682 252,195 - ( 220,727) $ 267,150 $1,480,677 ( 1,213,527) $ 267,150 Others	$2,553,784 ( 1,858,717) $ 695,067
					$ 695,067 376,396 4,174 ( 299,624)
					$ 776,013
					$2,928,895 ( 2,152,882) $ 776,013
					Total
$ 9,023 - $ 9,023 $ 9,023 - - - $ 9,023 $ 9,023 - $ 9,023	$615,250 ( 332,185) $283,065 $283,065 5,496 15,195 ( 32,703) $271,053 $635,941 ( 364,888) $271,053	$393,787 ( 313,872) $ 79,915 $ 79,915 35,908 - ( 38,667) $ 77,156 $429,694 ( 352,538) $ 77,156	$181,379 ( 128,711) $ 52,668 $ 52,668 10,059 59,205 ( 19,779) $102,153 $250,644 ( 148,491) $102,153	$1,069,371 ( 701,219) $ 368,152 $ 368,152 159,111 - ( 291,581) $ 235,682 $1,228,482 ( 992,800) $ 235,682	$2,268,810 ( 1,475,987) $ 792,823
					$ 792,823 210,574 74,400 ( 382,730)
					$ 695,067
					$2,553,784 ( 1,858,717) $ 695,067

~209~

Note: Trans ferred from prepayments for equipment (shown as “other non-current ass ets ”).
A . For the years ended December 31, 2020 and 2019 no interest expens e was capitalized on property, plant and equipment in the Company.
B. The Group has no property, plant and equipment pledged to others .
(8)Leas ing arrangements -lessee
A . The Company leases various assets including land, buildings and s tructures , bus iness vehicles , printers . Rental contracts are typically made for periods of 2 to 20 years . Lease terms are negotiated on an individual bas is and contain a wide range of different terms and conditions . Short-term leas es with a lease term of 12 months or less comprise bus iness vehicles .
B. The carrying amount of right-of-us e assets and the depreciation charge are as follows :

as follows :
Land Buildings and structures Business vehicles Printers	December 31,2020 December 31,2019
		Book value
		$ 62,221 6,496 3,083 290 $ 72,090	$ 65,641 5,701 470 986
			$ 72,798

Land Buildings and structures Business vehicles Printers		Year ended December 31,	Year ended December 31,
		2020	2019
		Depreciation	charge
		$ 3,420 986 711 696 $ 5,813	$ 3,420 2,545 1,732 696
			$ 8,393

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use ass ets were $10,410 and $0, respectively.
D. The information on profit and loss accounts relating to lease contracts is as follows :

follows :
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Year ended December 31,
	2020	2019
	$ 1,046 $ 1,436	$ 1,075 $ 1,232

E. For years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $7,802 and $10,263, respectively.

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(9)Investment property

nvestment property
At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Depreciation charge At December 31 At December 31, 2020 Cost Accumulated depreciation and impairment At January 1, 2019 Cost Accumulated depreciation and impairment 2019 At January 1 Depreciation charge At December 31 At December 31, 2019 Cost Accumulated depreciation and impairment		Buildings and structures
	(	$ 20,369 ( 1,698)
		$ 18,671
		$ 18,671 970)
		$ 17,701
		$ 20,369 ( 2,668)
		$ 17,701
		Buildings and structures
		$ 20,369 ( 728)
		$ 19,641 $ 19,641 ( 970)
		$ 18,671 $ 20,369 ( 1,698)
		$ 18,671

~211~

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

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 2,470 $ 970	$ 2,436
			$ 970

B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $10,516 and $10,538, res pectively, which was valued by income approach. Key assumptions are as follows :

Rate of net return on capital (Note)	December 31,2020 December 31,2019
	13.29% 13.86%

Note: Calculated based on the weighted average capital cos t of the issuer.

C. For the years ended December 31, 2020 and 2019 no interest expens e was capitalized on inves tment property in the Group.
D. The Group has no investment property pledged to others .

(10)Intangible assets

Intangible assets	s	s	s	s
Patents and Customer Technical skill Relationship Goodwill At January 1, 2020 Cost $ 34,478 $ 11,000 $ 80,758 Accumulated depreciation and impairm ent ( 25,556) ( 11,000) ( 37,104) $ 8,922 $ - $ 43,654 2020 At January 1 $ 8,922 $ - $ 43,654 Additions - - - Amortization charge ( 5,098) - - Impairment loss - - ( 25,352) At Decem ber 31 $ 3,824 $ - $ 18,302 At Decem ber 31, 2020 Cost $ 34,478 $ 11,000 $ 80,758 Accumulated depreciation and impairm ent ( 30,654) ( 11,000) ( 62,456) $ 3,824 $ - $ 18,302	Patents and Customer Technical skill Relationship Goodwill				Others	Total
		$ 34,478 ( 25,556) $ 8,922 $ 8,922 - ( 5,098) - $ 3,824 $ 34,478 ( 30,654) $ 3,824	$ 11,000 ( 11,000) $ - $ - - - - $ - $ 11,000 ( 11,000) $ -	$ 80,758 ( 37,104) $ 43,654 $ 43,654 - - ( 25,352) $ 18,302 $ 80,758 ( 62,456) $ 18,302	$ 367,844 ( 339,243) $ 28,601 $ 28,601 167,264 ( 106,303) - $ 89,562 $ 535,108 ( 445,546) $ 89,562	$ 494,080 ( 412,903)
						$ 81,177
						$ 81,177 167,264 ( 111,401) ( 25,352)
						$ 111,688 $ 661,344 ( 549,656)
						$ 111,688

~212~

Patents and Customer Technical skill Relationship Goodwill	Patents and Customer Technical skill Relationship Goodwill	Patents and Customer Technical skill Relationship Goodwill	Others	Total
$ 34,478 ( 16,596) $ 17,882 $ 17,882 - ( 8,960) - $ 8,922 $ 34,478 ( 25,556) $ 8,922	$ 11,000 ( 9,473) $ 1,527 $ 1,527 - ( 1,527) - $ - $ 11,000 ( 11,000) $ -	$ 80,758 ( 25,047) $ 55,711 $ 55,711 - - ( 12,057) $ 43,654 $ 80,758 ( 37,104) $ 43,654	$ 323,012 ( 265,504) $ 57,508 $ 57,508 44,832 ( 73,739) - $ 28,601 $ 367,844 ( 339,243) $ 28,601	$ 449,248 ( 316,620)
				$ 132,628 $ 132,628 44,832 ( 84,226) ( 12,057)
				$ 81,177
				$ 494,080 ( 412,903)
				$ 81,177

A . Details of amortization on intangible assets are as follows :

Operating costs Selling expenses Administrative expenses Research and development expenses		Year ended December 31,	Year ended December 31,
		2020	2019
		$ 5,098 21 909 105,373 $ 111,401	$ 8,404 1,528 711 73,583
			$ 84,226

B. For the years ended December 31, 2020 and 2019 no interest expens e was capitalized on intangible assets in the Company.

C. Impairment information about the intangible assets is provided in 6(11).

D. The Company has no intangible assets pledged to others .

(11)Impairment of non -financial assets

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2019 were 13.29% and 13.86%, respectively. The value-in-us e us ed by the Group to calculate cash-generating units is derived from historical information on estimated future revenue growth rates , gross profit margins , and operating expens e ratios , with reference to future industrial economic trends . The recoverable amount calculated bas ed on the above key ass umptions is lower than the book value of goodwill. Thus , the Group recognized impairment losses of $25,352 and $12,057 in 2020 and 2019, respectively.

(12)Short -term borrowings

Type of borrowings Bank borrowings Credit loans Type of borrowings Bank borrowings Credit loans		December 31, 2020 Interest rate range Collateral
		$ 1,340,000 0.75%～1.05% None December 31, 2019 Interest rate range Collateral
		$ 270,000 0.98%～1.00% None

Interes t expens e recognized in profit or loss amounted to $8,122 and $5,340 for the years ended December 31,2020 and 2019, res pectively.

(13)Other payables

Salary and bonus payables Payable on equipment Payable on employees and director remuneration Others	December 31,2020	December 31,2019
	$ 376,625 146,904 79,349 85,752 $ 688,630	$ 288,090 58,026 35,964 68,794 $ 450,874

(14)Pens ions

A .(a) The Company and its domes tic subs idiaries have a defined benefit pens ion plan in accordance with the Labor Standards A ct, covering all regular employees ’ service years prior to the enforcement of the Labor Pens ion A ct on July 1, 2005 and service years thereafter of employees who chose to continue to be s ubject to the pens ion mechanis m under the Labor Standards A ct. Under the defined benefit pens ion plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, s ubject to a maximum of 45 units . Pens ion benefits are bas ed on the number of units accrued and the average monthly s alaries and wages of the las t 6 months prior to retirement. The Company and its domestic subs idiaries contribute monthly an amount equal to 2% of the employees ’ monthly salaries and

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wages to the retirement fund depos ited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. A ls o, the Company and its domestic subs idiaries would assess the balance in the aforementioned labor pens ion reserve account by December 31, every year. If the account balance is insufficient to pay the pens ion calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subs idiaries will make contributions for the deficit by next M arch.

(b) The amounts recognized in the balance s heet are as follows :

Present value of defined benefit obligations Fair value of plan assets Unadjusted amount for the period Net liability recognized in the balance sheet		December 31,2020	December 31,2019
		$ 14,033 ( 2,663) 11,370 ( 850) $ 10,520	$ 12,739 ( 2,409)
			10,330 ( 21)
			$ 10,309

M ovements in net	defined benefit liabilities are as follows :	defined benefit liabilities are as follows :	defined benefit liabilities are as follows :	defined benefit liabilities are as follows :
2020 At January 1 Current service cost Interest (expense) incom e Remeasurem ents: Return on plan assets (excluding amounts included in interest incom e or expense) Change in financial assumptions Experience adjustm ents Pension fund contribution Unadjusted amount for the period At Decem ber 31	Present value of defined benefit obligations Fair value ofplan assets Net defined benefit liability
		($ 12,739) ( 314) ( 88) ( 13,141) - ( 524) ( 368) ( 892) - - ($ 14,033)	$ 2,409 - 18 2,427 80 - - 80 156 - $ 2,663	($ 10,330) ( 314) ( 70)
				( 10,714) 80 ( 524) ( 368)
				( 812)
				156 850
				($ 10,520)

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Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability
($ 11,614) ( 299) ( 116) ( 12,029) - ( 385) ( 325) ( 710) - - ($ 12,739)	$ 2,164 - 21 2,185 74 - - 74 150 - $ 2,409	($ 9,450) ( 299) ( 95)
		( 9,844) 74 ( 385) ( 325)
		( 636)
		150 21
		($ 10,309)

(d) The Bank of Taiwan was commis s ioned to manage the Fund of the Company’s and domes tic subs idiaries ’ defined benefit pens ion plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues , Expenditures , Safeguard and Utilization of the Labor Retirement Fund” (A rticle 6: The s cope of utilization for the Fund includes depos it in domes tic or foreign financial ins titutions , investment in domes tic or foreign lis ted, over-the-counter, or private placement equity securities , inves tment in domestic or foreign real estate s ecuritization products , etc.). With regard to the utilization of the Fund, its minimum earnings in the annual dis tributions on the final financial s tatements shall be no less than the earnings attainable from the amounts accrued from two-year time depos its with the interest rates offered by local banks . If the earnings is less than aforementioned rates , government s hall make payment for the deficit after being authorized by the Regulator. The Company and domestic subs idiaries have no right to participate in managing and operating that fund and hence the Company and domestic subs idiaries are unable to disclos e the class ification of plan ass ets fair value in accordance with IA S 19 paragraph 142. The compos ition of fair value of plan ass ets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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(e) The principal actuarial assumptions used were as follows :

Discount rate Future salary increases	Year ended December 31,	Year ended December 31,
	2020	2019
	0.30% 3.00%	0.70%
		3.00%

Assumptions regarding future mortality experience are s et based on the fifth life e xperience table in Taiwan for the years ended 2020 and 2019.

Becaus e the main actuarial ass umption changed, the present value of defined benefit obligation is affected. The analys is was as follows :

defined benefit obligation is affected. The analys is was as follows :	obligation is affected. The analys is was as follows :	obligation is affected. The analys is was as follows :	obligation is affected. The analys is was as follows :	obligation is affected. The analys is was as follows :	obligation is affected. The analys is was as follows :
Discount rate Future salaryincreases Increase 0.25%Decrease 0.25%Increase 0.25%Decrease 0.25% December 31, 2020 Effect on present value of defined benefit obligation ($ 330) $ 341 $ 296 ($ 289) December 31, 2019 Effect on present value of defined benefit obligation ($ 322) $ 332 $ 292 ($ 285)	Discount rate Future salaryincreases
	Increase 0.25%Decrease 0.25%Increase 0.25%Decrease 0.25%
		($ 330) ($ 322)	$ 341 $ 332	$ 296 $ 292	($ 289) ($ 285)

The methods and types of ass umptions us ed in preparing the sens itivity analys is did not change compared to the previous period.

(f) Expected contributions to the defined benefit pens ion plans of the Group for the year ending December 31, 2021 amount to $158.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 10 years . The analys is of timing of the future pens ion payment was as follows :

pens ion payment was as follows :
Within 1 year 1-2 years 2-5 years Over 5 years	$ 147 145 3,201 6,458
	$ 9,951

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B.(a) Effective July 1, 2005, the Company and its domestic subs idiaries have es tablished a defined contribution pens ion plan (the “New Plan”) under the Labor Pens ion A ct (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domes tic subs idiaries contribute monthly an amount based on 6% of the employees ’ monthly s alaries and wages to the employees ’ individual pens ion accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The pens ion costs under defined contribution pens ion plans of the Company for the years ended December 31, 2020 and 2019, were $30,121 and $28,097, res pectively.

(15)Share -based payment

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

				Vesting
Type of arrangement	Grant date	Quantity granted	Contract period	condition
Succeed to 2010 Eon	August 10, 2010,	4,000 thousand	10 years	Note 1
Silicon Solution Inc.’s	October 15, 2010 and	shares
employee stock options	January 13, 2011	(Note 2)
Succeed to 2013 Eon	August 19, 2013	7,500 thousand	10 years	Note 1
Silicon Solution Inc.’s		shares
employee stock options		(Note 2)

Note 1: The accumulative proportion of the new s hares that can be obtained after the two-year, three-year and four-year service expirations are 50%, 75% and 100%, respectively.
Note 2: The number of grants given by the Company to the Eon Silicon Solution Inc. employee s tock option plan is the amount given on the original plan grant date. A fter the merger, Eon Silicon Solution Inc.'s 2010 and 2013 e mployee stock option plans have 219 thous and shares and 688 thousand shares in circulation.
A mong the share-bas ed payment arrangements above are settled by equity.
B. Details of the share-bas ed payment arrangements are as follows :

Succeed to Eon Silicon Solution Inc.’s employee stock options :

Options outstanding at January 1 Options forfeited Options expired Options outstanding at December 31 Options exercisable at December 31	2020 2019
	Weighted-average Weighted-average No. of options exercise price (in dollars) No. of options exercise price (in dollars)
	543 $ 59.2~303.4 621 $ 62.3~319.0 ( 4) 217.4( 78) 59.2~303.4 ( 21) 241.2~295.4 - - 518 $ 57.6~217.4 543 $ 59.2~303.4 518 543

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C. No options exercis ed for the years ended December 31, 2020 and 2019, respectively.
D. A s of December 31, 2020 and 2019, the range of exercis e prices of s tock options outs tanding was $57.6~$217.4 and $59.2~$303.4 (in dollars ), respectively; the weighted-average remaining contractual period was 2.64 years and 3.64 years , respectively.
E. Expens es incurred on share-based payment transactions for the years ended December 31, 2020 and 2019, were all $0.
(16)Share capital
A . As of December 31, 2020, the Company’s authorized capital was $3,500,000, cons isting of 350,000 thousand shares of ordinary stock (including 20,000 thousand shares res erved for employee s tock options ), and the paid-in capital was $2,857,589 w ith a par value of $10 (in dollars ) per share.

Movements in the number of the Company’s ordinary shares outs tanding are as follows :

Shares: thousand shares

2020 Shares outstanding at January 1 272,320 Subsidiary acquired parent company's shares is regarded as treasury shares transaction ( 715) Shares outstanding at December 31 271,605 Treasury shares at the end of the period 14,154 Shares issued at December 31 285,759	2020	2019
		272,320 - 272,320 13,439 285,759

B. Treasury shares

The Company's s hares held by the Company's subs idiary, Jie Young Inves tment Ltd., as of December 31, 2020 and 2019 due to the parent company's bus iness strategy, were 14,154 thous and shares and 13,439 thous and shares , with carrying amounts of $347,942 and $328,048, respectively; the average book value per share were $24.58 and $24.41, and the fair value per share were $64.70 and $38.90.

(17)Capital s urplus

~219~

2020

Changes in Treasury share ownership interests in transactions subsidiaries	Changes in Treasury share ownership interests in transactions subsidiaries	Changes in Treasury share ownership interests in transactions subsidiaries	Employee stock options	Others Total	Others Total
	$ 1,661 - - - - $ 1,661	$ 94,949 1,146 5,925 ( 1,781) -	$ 3,913 - - - -	$ 3,782 $ 104,305 - 1,146 - 5,925 - ( 1,781) 82 82
		$ 100,239	$ 3,913	$ 3,864	$ 109,677
		2019
Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options				Others	Total
	$ 1,661 - - - - - - $ 1,661	$ 49,710 1,146 35,475 8,438 180 - -	$ 3,913 - - - - - - $ 3,913	$ 3,788 - - - - 39 ( 45) $ 3,782	$ 59,072 1,146 35,475 8,438 180 39 ( 45)
		$ 94,949			$ 104,305

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(18)Retained earning

A . Under the Company’s A rticles of Incorporation, the current year’s earnings , if any, s hall be appropriated in the following order: (a) Payment of all taxes and dues .
(b) Offs et against prior years ’ operating loss es , if any.
(c) Set as ide 10% of remaining amount as legal res erve.
(d) Setting as ide a s pecial res erve when necessary.
(e) The remainder shall be stockholders ’ bonus , which will be appropriated in proportion or be retained shall be resolved by the stockholders at the stockholders ’ meeting.
B. Dividend policy
The Company is s till in the growth stage, the appropriation of s tockholders ’ bonus will be appropriated as cash, the remainder will be appropriated as shares when over 5%.
C. Except for covering accumulated deficit or iss uing new stocks or cash to shareholders in proportion to their share ownership, the legal res erve shall not be us ed for any other purpose. The use of legal res erve for the issuance of stocks or cash to s hareholders in proportion to their share ownership is permitted, provided that the distribution of the res erve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D.(a) In accordance with the regulations , the Company s hall set as ide special reserve from the debit balance on other equity items at the balance s heet date before distributing earnings . When debit balance on other equity items is reversed s ubsequently, the revers ed amount could be included in the dis tributable earnings .
(b) The amounts previous ly s et as ide by the Company as special res erve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities -Corporate1010012865, dated A pril 6, 2012, s hall be reversed proportionately when the relevant ass ets are us ed, dispos ed of or reclass ified subsequently. Such amounts are revers ed upon dis posal or reclass ified if the assets are inves tment property of land, and revers ed over the use period if the ass ets are inves tment property other than land.
E. A s approved by Board of Directors on March 18, 2019, the appropriations of 2018 earnings would be legal res erve $70,651 and cash dividend $428,638, constituting $1.5(in dollars ) per s hare. A forementioned appropriations had been approved by s tockholders ’ meeting on June 13, 2019.
F. A s approved by Board of Directors on M arch 20, 2020, the appropriations of 2019 earnings would be legal reserve $49,804 and cash dividend $285,759, cons tituting $1(in dollars ) per share. A forementioned appropriations had been approved by stockholders ’ meeting on June 15, 2020.
G. A s approved by Board of Directors on February 26, 2021, the appropriations of 2020 earnings would be legal reserve $107,724 and cash dividend $2(in dollars ) per s hare. A forementioned appropriations had not yet been approved by s tockholders ’ meeting.

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(19)Operating revenue

Revenue from contracts with customers	Years ended December 31,	Years ended December 31,
	2020	2019
	$ 15,252,723	$ 11,964,770

A . Disaggregation of revenue from contracts with customers The Group derives revenue from the trans fer of goods at a point in time in the following geographical regions :

Domestic	Asia	Others	Total
$6,133,005 Domestic	$9,061,325 Asia	$ 58,393 Others	$15,252,723
$5,145,958 recognis ed the December 31, 2020
$ 5,336	$ 3,949

B.Contract liabilities

The Group has recognis ed the following revenue-related contract liabilities :

Revenue recognised that was included in the contract liability balance at the beginning of the period:

the beginning of the period:
Contract liabilities-advance sales receipts	Years ended	December 31,
	2020	2019
	$ 3,888	$ 2,405

(20)Interes t revenue

s t revenue
Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income	Years ended December 31,
	2020	2019
	$ 15,722 1,207 611 $ 17,540	$ 24,706 1,982 1,291
		$ 27,979

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(21)Other income

1)Other income
Rent income Dividend income Other income, others	Years ended	December 31,
	2020	2019
	$ 6,341 3,473 55,126	$ 6,532 11,498 32,688
	$ 64,940	$ 50,718

(22)Other gains and losses

Gains arising from lease modifications Foreign exchange losses Gains (Losses) on financial assets at fair value through profit or loss Impairment loss Miscellaneous disbursements		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 91 ( 26,694) 17,707 ( , 25,352) ( 970) ($ 35,218)	$ - ( , 23,019) ( , 19,145) ( ,12,057) ( 970)
			($ 55,191)

(23)Financial costs

Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 8,122 1,412 1,046 10,580 728 $ 11,308	$ 5,340 1,291 1,075
			7,706
			1,009
			$ 8,715

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(24) Expens es by nature

4)Expens es by nature
Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortization charges on intangible assets	Years ended December 31,
	2020	2019
	$ 1,085,436	$ 841,063
	$ 299,624	$ 382,730
	$ 5,813	$ 8,393
	$ 970	$ 970
	$ 111,401	$ 84,226

(25) Employee benefit expens e

5)Employee benefit expens e
Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses	Years ended December 31,
	2020	2019
	$ 975,203 48,483 30,662 15,938 15,150 $ 1,085,436	$ 744,290 46,474 28,641 7,326 14,332 $ 841,063

A . In accordance with the A rticles of Incorporation of the Company, the profit before income tax of the current year, before covering employees ’ compensation and directors ’ remuneration, shall be dis tributed as employees ’ compens ation and directors ’ remuneration. The ratio shall not be lower than 5% for employees ’ compens ation and 1% for directors ’ remuneration.
B.For the years ended December 31, 2020 and 2019, employees ’ compensation was accrued at $66,124 and $29,970, res pectively; while directors ’ remuneration was accrued at $13,225 and $5,994, respectively. The aforementioned amounts were recognized in salary expens es . The employees ’ compens ation and directors ’ remuneration were es timated and accrued bas ed on 5% and 1% of distributable profit for the years ended December 31, 2020.
C. The employees ’ compensation and directors ’ remuneration of 2019 as resolved by the Board of Directors were in agreement with those amounts recognis ed in the 2019 financial s tatements .
D. Information about employees ’ compensation and directors ’ remuneration of the Company as resolved by the Board of Directors will be pos ted in the “M arket Obs ervation Post System” at the webs ite of the Taiwan Stock Exchange.

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(26)Income tax

A . Income tax e xpense
(a) Components of income tax expens e:

Current tax: Current tax on profits for the period Tax on undistributed earnings Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense		Years ended December 31,	Years ended December 31,
		2020	2019
		$ 151,804 - 6,787 158,591 8,072 8,072 $ 166,663	$ 50,682 10,378 316
			61,376
			4,652
			4,652
			$ 66,028

(b) The income tax charge relating to components of other comprehens ive income: None.
(c) The income tax charged to equity during the period: None.
B. Reconciliation between income tax expens e and accounting profit:

Tax calculated based on profit before tax and statutory tax rate Tax exempt income by tax regulation Prior year income tax underestimation Temporary differences not recognized as deferred tax assets Effect from investment tax credits Effect from Alternative Minimum Tax Effect from tax exempt income Tax on undistributed earnings Income tax expense		Years ended December 31,	Years ended December 31,
		2020 2019
		$ 248,618 $ 112,686 ( 16,824) ( 1,479) 6,787 316 ( 6,859) ( 23,013) ( 65,059) - - 3,870 - ( 36,730) - 10,378 $ 166,663 $ 66,028
			$ 66,028

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

	2020	2020	2020	2020
	Recognized in Recognized in other January1 profit or loss comprehensive income Decem ber 31
r	$ 48 153 1,688 61 2,224 4,174 ( 4,731) - ( 4,731) ($ 557)	$ - 195 ( 700) 20 124 ( 361) ( 3,202) ( 4,509) ( 7,711) ($ 8,072)	$ - - - - - - - - - $ - 2019	$ 48 348 988 81 2,348 3,813 ( 7,933) ( 4,509)
				( 12,442)
				($ 8,629)

	$ 48 60 2,545 ( 57 2,464 ( 5,174 ( 1,078) ( 1,078) $ 4,096	$ - 93 857) 4 240) ( 1,000) ( 3,653) ( 3,653) ($ 4,653)

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D. The amounts of deductible temporary difference that are not recognized as deferred tax ass ets are as follows :

Deductible temporary differences	December 31,2020	December 31,2019
	$ 362,221	$ 381,969

E. The Company’s products qualify for “Regulations for Encouraging M anufacturing Enterpris es and Technical Service Enterpris es in the Newly Emerging, Important and Strategic Industries ” and the Company is entitled to the income tax exe mption for 5 cons ecutive years (ends on December, 2019).
F. The Company’s income tax returns through 2018 have been assess ed and approved by the Tax A uthority.
(27) Earnings per share

Year ended December 31,2020 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (share in thousands) share (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent $1,076,426 279,909 $ 3.85 Assumed conversion of all dilutive potential ordinary shares (Note) Employees’ compensation 1,295 Diluted earnings per share Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $1,076,426 281,204 $ 3.83	Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020
	Amount after tax	Weighted average number of ordinary Earnings per shares outstanding (share in thousands) share (in dollars)
		279,909 1,295 281,204	$ 3.85 $ 3.83

Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares (Note) Employees’ compensation	Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2019
	Amount after tax	Weighted average number of ordinary Earnings per shares outstanding (share in thousands) share (in dollars)
	$ 497,405	280,133 1,057	$ 1.78

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Diluted earnings per share

Profit attributable to ordinary

shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 497,405 281,190 $ 1.77

Note: The employee stock options not calculate for years ended December 31, 2020 and 2019 due to the effect of anti-dilution.

(28)Supplemental cas h flow information
A . Investing activities with partial cash payments :

Purchase of property, plant and equipment (including amount of transfer) Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period	Year ended December 31,	Year ended December 31,
	2020	2019
	$ 380,570 58,026 ( 146,904) $ 291,692	$ 284,974 41,100 ( 58,026) $ 268,048

B. Changes in liabilities from financing activities :

Short-term borrowings Short-term notes and bills payable	Lease liabilities Guarantee deposits received Liabilities from financing activities-gross	Lease liabilities Guarantee deposits received Liabilities from financing activities-gross
$ 270,000 $ - $ 73,235 $ 10,067 $ 353,302 1,070,000 150,476 ( 5,320) ( 3,236) 1,211,920 - - ( 1,046) -( 1,046) - - 1,046 - 1,046 ( 720) 10,410 - 9,690 - - ( 5,396) - ( 5,396) $ 1,340,000 $149,756 $ 72,929 $ 6,831 $ 1,569,516 Short-term borrowings Short-term notes and bills payable Lease liabilities Guarantee deposits received Liabilities from financing activities-gross $ 370,000 $ 99,932 $ 81,191 $ 9,957 $ 561,080 ( 100,000) ( 99,932)( 7,956) 110 ( 207,778) - -( 1,075) - ( 1,075) - - 1,075 - 1,075 $ 270,000 $ - $ 73,235 $ 10,067 $ 353,302	$ 10,067 ( 3,236) -( - - - (	$ 353,302 1,211,920 1,046) 1,046 9,690 5,396)

		$ 353,302

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7.Related Party Transactions

(1)Names of related parties and relations hip

ed Party Transactions (1)Names of related parties and relations hip
	Relationship with the
Names of relatedparties	Company
Elite Semiconductor Memory Technology Inc.	Subsidiary
CML Inc. (Note 1)	＂
Charng Feng Investment Ltd.	＂
Jie Yong Investment Ltd.	＂
Elite Investment Services Ltd.	＂
Elite Semiconductor (B.V.I.) Ltd. (Note 4)	＂
Eon Silicon Solution (Samoa) Inc. (Note 2)	＂
Eon Silicon Solutions Inc. USA	＂
3R Semiconductor Technology Inc.	Sub-subsidiary
Elite Silicon Technology Inc.	＂
Elite Innovation Japan Ltd.	＂
Elite Semiconductor Microelectronics Technology (Shenzhen) Inc.	＂
Elite Innovation (B.V.I.) Ltd. (Note 3)	＂
Elite Semiconductor Microelectronics (Shanghai) Technology Inc. (Note 5)	＂
CHI Microelectronics Limited (Note 6)	＂
	T he Company’s subsidiary is
Arima Lasers Corporation	this company’s director
	Investee indirectly accounted
Canyon Semiconductor Inc.	for under equity method

Note 1: This company had been liquidated in May 2020. Note 2: This company had been liquidated in September 2019. Note 3: This company had been liquidated in March 2020. Note 4: This company began liquidation process in November 2020. Note 5: This company had been established on November 27, 2019. Note 6: This company had been established on August 31, 2020.

(2)Significant transactions and balances with related parties

A . Operating revenue

. Operating revenue
Sales of goods: -Subsidiaries -Associates	Year ended December 31,
	2020	2019
	$ - 6,021 $ 6,021	$ 71 5,789 $ 5,860

Goods are sold bas ed on the price lis ts in force and terms that would be available to third parties .

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B. Purchases

Purchases
Purchases of goods: -Subsidiaries	Year ended December 31,
	2020 2019
	$ 3,828 $ -

Goods are purchased from subs idiaries on normal commercial terms and conditions .

C. Others

Others
Other income-support service -Subsidiaries Research and development expenses: -Subsidiaries Selling expenses: -Subsidiaries . Other receivables Other receivables-related party: -Subsidiaries	Year ended December 31, 2020 2019 $ 48,178 $ 25,177 $ 76,375 $ 65,336 $ 46,797 $ - December 31,2020 December 31,2019
	2020
	$ 48,178 $ 76,375 $ 46,797 December 31,2020
	$ -	$ 296

D. Other receivables

(3)Key management compensation

3)Key management compensation
Salaries and other short-term employee benefits Post-employment benefits	Year ended December 31,
	2020	2019
	$ 54,409 432 $ 54,841	$ 36,572 432
		$ 37,004

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8.Pledged Assets

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

Assets item		Book value December 31,2020 December 31,2019 Purpose	Book value December 31,2020 December 31,2019 Purpose

Time deposits (shown as “other current assets and other non-current assets ”)		$ 3,969	$ 3,969 Guarantee deposits for lease of land

9.Significant Contingent Liabilities and Unrecognized Contract Commit ments

None.

10.Significant Disas ter Loss

None.

11.Significant Events after the Balance Sheet Date

Information about the appropriations of earnings of the Company which had been approved by Board of Directors on February 26, 2021 is provided in Note 6(18). 12.Others

(1)Capital management

To maintain or adjus t the capital structure, the Company may adjus t the amount of dividends paid to shareholders , issue new shares or pay cash to shareholders , or repurchase shares .

The gearing ratios at December 31, 2020 and 2019 were as follows :

Total assets Total liabilities Total equity Gearing ratio	December 31,2020 December 31,2019	December 31,2020 December 31,2019	December 31,2020 December 31,2019
		$ 13,005,217 ( 4,741,174) $ 8,264,043 57%	$ 10,478,733 ( 3,017,273)
			$ 7,461,460
			40%

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(2)Financial ins truments

A . Financial ins truments by category

inancial ins truments . Financial ins truments by category	gory	gory	gory
December 31,2020 December 31,2019 Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss $ 168,548 $ 150,841 Financial assets at fair value through other comprehensive income Designation of equity instrument $ 32,418 $ 25,388 Financial assets at amortized cost Cash and cash equivalents $ 2,719,155 $ 1,817,377 Financial assets at amortized cost - current 136,704 140,906 Notes receivable - 34 Accounts receivable 1,505,780 1,160,173 Other receivables 94,611 79,745 Time deposits (shown as “other current assets and other non-current assets”) 3,969 3,969 Guarantee deposits paid (shown as “other non-current assets”) 4,551 4,494 $ 4,464,770 $ 3,206,698 Financial liabilities Financial liabilities at amortized cost Short-term borrowings $ 1,340,000 $ 270,000 Short-term notes and bills payable 149,756 - Notes payable 2,115 1,890 Accounts payable 2,281,658 2,134,680 Other payables 688,630 450,874 Guarantee deposits received (shown as “other non-current liabilities”) 6,831 10,067 $ 4,468,990 $ 2,867,511 Lease liability $ 72,929 $ 73,235	December 31,2020 December 31,2019
		$ 168,548 $ 32,418 $ 2,719,155 136,704 - 1,505,780 94,611 3,969 4,551 $ 4,464,770 $ 1,340,000 149,756 2,115 2,281,658 688,630 6,831 $ 4,468,990 $ 72,929	$ 150,841
			$ 25,388
			$ 1,817,377 140,906 34 1,160,173 79,745 3,969 4,494
			$ 3,206,698 $ 270,000 - 1,890 2,134,680 450,874 10,067
			$ 2,867,511 $ 73,235

B. Financial ris k management policies

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(a) The Company adopt comprehens ive sys tem of ris k management and control to identify, measure and control all categories of ris k, including market ris k, credit ris k, liquidity ris k, and ris k of cas h flow, to make s ure management is able to control and measure market ris k, credit ris k, liquidity ris k, and ris k of cas h flow effectively.
(b) In order to control all management objectives of market ris k effectively, achieve optimal level of ris k, maintain appropriate level of liquidity and collectively manage all market ris ks , the Company will take factors s uch as cons ideration for the overall economic environment, status of competition and market value ris ks .
C. Significant financial ris ks and degrees of financial ris ks
(a) M arket ris k

Foreign exchange ris k

I. The Company operates internationally and is expos ed to foreign exchange ris k aris ing from the various currency, primarily with respect to the USD and RM B. Foreign exchange ris k arises from future commercial trans actions and recognized assets and liabilities .
II. M anagement has s et up a policy to require the Company to manage the foreign exchange ris k agains t the functional currency. The Company is required to hedge the entire foreign exchange ris k expos ure with the Company treasury. The Company adopts forward foreign exchange contracts through the Company treasury to manage the foreign exchange ris k from future commercial transactions and recognized assets and liabilities . The foreign exchange ris k will e xis t when future commercial trans actions and recognized assets and liabilities us e the currency different from the functional currency of the Company.
III. The Company’s bus inesses involve some non-functional currency operations (the Company’s and certain subs idiaries ’ functional currency: NTD). The information on ass ets and liabilities denominated in foreign currencies whos e values would be materially affected by the exchange rate fluctuations is as follows :

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD	December 31,2020
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
	$ 132,416 28.480 $ 3,771,208 125,949 4.377 551,279 $ 47,030 28.480 $ 1,339,414 62,800 0.276 17,352

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(Foreign currency: functional currency)	December 31,2019
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
Financial assets Monetary items USD:NTD Financial liabilities Monetary items USD:NTD	$ 97,806 29.980 $ 2,932,224 $ 45,751 29.980 $ 1,371,615

IV. The total exchange loss , including realized and unrealized, aris ing from s ignificant foreign exchange variation on the monetary items held by the Group for the years ended December 31 ,2020 and 2019, amounted to $26,694 and $23,019, respectively.
V. A nalys is of foreign currency market ris k aris ing from s ignificant foreign exchange variation:

(Foreign currency: functional currency)	Year ended December 31,2020
	Sensitivityanalysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income
Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD (Foreign currency: functional currency)	1% $ 37,712 $ - 1% 5,513 - 1% ($ 13,394) $ - 1% ( 174) - Year ended December 31,2019
	Sensitivityanalysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income
Financial assets Monetary items USD:NTD Financial liabilities Monetary items USD:NTD	1% $ 29,322 $ - 1% ($ 13,716) $ -

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Price ris k

I. The Company’s equity securities , which are expos ed to price ris k, are the held financial assets at fair value through profit or loss and financial ass ets at fair value through other comprehens ive income. To manage its price ris k aris ing from investments in equity securities , the Company divers ifies its portfolio. Divers ification of the portfolio is done in accordance with the limits s et by the Company.
II. The Company’s investments in equity s ecurities compris e shares and open-end funds issued by the domes tic and foreign companies . The prices of equity s ecurities would change due to the change of the future value of inves tee companies . If the prices of these equity securities had increas ed/decreased by 10% with all other variables held constant, pos t-tax profit for the years ended December 31, 2020 and 2019 would have increas ed/decreas ed by $16,855 and $15,084, res pectively, as a result of gains /losses on equity securities class ified as at fair value through profit or loss . Other components of equity would have increased/decreased by $3,242 and $2,539, res pectively, as a result of other comprehens ive income class ified as equity inves tment at fair value through other comprehens ive income.

Cash flow and fair value Interes t rate ris k

The Company’s main interest rate ris k aris es from short-term borrowings and short-term notes and bills payable. Borrowings with floating rates expose the Company to cash flow interes t rate ris k, but the majority of ris k offset by cas h and cas h equivalents with floating rates . Borrowings with fixed rates expos e the Company to fair value interest rate ris k. The Company doesn’t have s ignificant ris k of change of interes t rate due to borrowings with floating rates are all shorter than one year.

(b) Credit ris k
I. Credit ris k refers to the ris k of financial loss to the Company aris ing 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 bas ed on the agreed terms , and the contract cash flows of financial instruments stated at amortized cost and debt instruments at fair value through profit or loss .
II. The Company manages their credit ris k taking into cons ideration the entire company’s concern. For banks and financial institutions , only thes e with high rating are accepted. A ccording to the Company’s credit policy, each local entity in the Company is respons ible for managing and analyzing the credit ris k for each of

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their new clients before s tandard payment and delivery terms and conditions are offered. Internal ris k control assesses the credit quality of the cus tomers , cons idering their financial pos ition, past experience and other factors . Individual ris k limits are s et based on internal or external ratings in accordance with limits s et by the Board of Directors . The utilization of credit limits is regularly monitored.

III. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are pas t due over 90 days .
IV. The Company adopts following assumptions under IFRS 9 to ass ess whether there has been a s ignificant increase in credit ris k on that instrument s ince initial recognition:
If the contract payments were past due over 30 days based on the terms , there has been a s ignificant increas e in credit ris k on that instrument s ince initial recognition.
V. The following indicators are used to determine whether the credit impairment of debt ins truments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The dis appearance of an active market for that financial asset becaus e of financial difficulties ;
(iii) Default or delinquency in interest or principal repayments ;
(iv) Advers e changes in national or regional economic conditions that are expected to cause a default.
VI. The Company wrote-off the financial ass ets , which cannot be reas onably expected to be recovered, after initiating recours e procedures . However, the Company will continue executing the recours e procedures to s ecure their rights .
VII. The financial assets at amortized cost including time depos its , repurchas e bonds and res tricted time depos its . The banks are with high rating and don’t pas t due before. In addition to the above, the whole economic environment doesn’t change s ignificant, so the ris k of credit ris k is low and the effect to financial s tatement is ins ignificant.
VIII. The information about ageing analys is and collaterals of accounts receivable is provide in Note6(4). The Company request s ignificant clients provide collaterals and other right of guarantee, therefore, the Company class ifies customer’s accounts receivable in accordance with the nature of collaterals . The applies the s implified approach us ing loss rate methodology to estimate expected credit loss . In summary, the allowance for loss es which the Company should recognize is minor at December 31, 2020 and 2019.

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XI. M ovements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable is as follows :

follows :
At January 1 Provision for impairment Reversal of impairment At December 31	2020	2019
	$ 14,295 - ( 8,582) $ 5,713	$ 4,289 10,006 - $ 14,295

(c) Liquidity ris k
I. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs .
II. Surplus cash held by the operating entities over and above balance required for working capital management should invest s urplus cash in interes t bearing current accounts , time depos its and marketable securities , choos ing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts .
III. The table below analys es the Company’s non-derivative financial liabilities and net-settled or gross -s ettled derivative financial liabilities into relevant maturity groupings bas ed on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities . The amounts disclos ed in the table are the contractual undis counted cash flows .

Non-derivative financial liabilities:

Non-derivative financial liabilities:
Decem ber 31, 2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities: None.	Less than 1year Between 1 and 5years Over 5years
	$ 1,340,000 $ - $ - 149,756 - - 2,115 - - 2,281,658 - - 688,630 - - 7,405 22,554 52,635 - - 6,831

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Non-derivative financial liabilities:

Non-derivative financial liabilities:
Decem ber 31, 2020 Short-term borrowings Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities: None.	Less than 1year Between 1 and 5years Over 5years
	$ 270,000 $ - $ - 1,890 - - 2,134,680 - - 450,874 - - 7,760 19,411 56,605 - - 10,067

(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 ass ets 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 ass et or liability take place with sufficient frequency and volume to provide pricing information on an ongoing bas is . The fair value of the Group’s investment in lis ted stocks , beneficiary certificates and debt s ecurities 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(9).
C. Financial ins truments not measured at fair value of the Group including cash and cash equivalents , time depos it (over 3 months ), notes receivable, accounts receivable, other receivables , guarantee depos its paid, short-term borrowings , short-term notes and bills payable, notes payable, accounts payable and other payables , lease liabilities (current and non-current) and guarantee depos its received are approximate to their fair values .
D. The related information of financial and non-financial instruments measured at fair value by level on the bas is of the nature, characteristics and ris ks of the assets and liabilities is as follows :

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(a) The related information of natures of the assets and liabilities is as follows :

follows :
Decem ber 31, 2020 Assets Recurring fair value measurem ents Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None. Decem ber 31, 2019 Assets Recurring fair value measurem ents Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None.	Level 1	Level 2	Level 3	Total $ 72,557 58,904 37,087 32,418 $ 200,966 Total
	$ 72,557 58,904 37,087 - $ 168,548 Level 1	$ - - - - $ - Level 2	$ - - - 32,418
			$ 32,418
			Level 3
	$ 63,257 53,488 34,096 - $ 150,841	$ - - - - $ -	$ - - - 25,388		$ 63,257 53,488 34,096 25,388
			$ 25,388		$ 176,229

(b) The methods and assumptions the Group us ed to measure fair value are as follows :
I. The ins truments the Group used market quoted prices as their fair values (that is , Level 1) are lis ted below by characteristics :

	Listed shares	Open-end fund
Market quoted price	Closing price	Net asset value

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II. Except for financial ins truments with active markets , the fair value of other financial instruments is measured by us ing valuation techniques or by reference to counterparty quotes . The fair value of financial instruments meas ured by us ing valuation techniques can be referred to current fair value of instruments with s imilar terms and characteris tics in subs tance, dis counted cas h flow method or other valuation methods , including calculated by applying model us ing market information available at the consolidated balance sheet date.
III. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments . Therefore, the estimated value derived us ing valuation model is adjusted accordingly with additional inputs , for example, model ris k or liquidity ris k and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions .
E. For the years ended December 31, 2020 and 2019, there was no trans fer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

December 31, 2020 and 2019:
At January 1 Valuation adjustment At December 31	Equitysecurities
	2020	2020
	$ 25,388 7,030 $ 32,418	$ 29,650 ( 4,262) $ 25,388

G. A ccounting segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments . Such ass ess ment 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 repres ented as the exercis able price, and frequently calibrating valuation model, performing back-tes ting, updating inputs us ed to the valuation model and making any other necess ary adjustments to the fair value.

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H. The following is the qualitative information of s ignificant unobservable inputs and sens itivity analys is of changes in s ignificant unobs ervable inputs to valuation model used in Level 3 fair value measurement:

			Significant
	Fair value at	Valuation	unobservable	Range	Relationship of
	Decem ber 31,2020	technique	input	(weighted average)	inputs to fair value
Non-derivative	equity instrum ent:
Unlisted shares	$ 32,418	Market -	Discount for	40%	the higher the
		comparable	lack of		discount for lack of
		companies	marketability		marketability, the
					lower the fair value
	Fair value at		Significant
	Decem ber 31,	Valuation	unobservable	Range	Relationship of
	2019	technique	input	(weighted average)	inputs to fair value
Non-derivative	equity instrum ent:
Unlisted shares	$ 25,388	Market -	Discount for	40%	the higher the
		comparable	lack of		discount for lack of
		companies	marketability		marketability, the
					lower the fair value

(4)Others

13、 Supplementary Dis clos ures

(1)Significant transactions information

A . Loans to others : None.
B. Provis ion of endors ements and guarantees to others : None.
C. Holding of marketable s ecurities at the end of the period (not including subs idiaries , associates and joint ventures ): Pleas e refer to table 1.
D. A cquis ition or s ale of the s ame security with the accumulated cos t exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. A cquis ition of real es tate reaching $300 million or 20% of paid-in capital or more: None.
F. Dis pos al of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or s ales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods : None.
J. Significant inter-company trans actions during the reporting periods : Please refer to table 2.

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(2)Information on inves tees

Names , locations and other information of investee companies (not including inves tees in M ainland China): Please refer to table 3.

(3)Information on inves tments in M ainland China

A . Inves tee accounted for under the equity method of the Company, Elite Semiconductor (B.V. I.) Limited, which has been approved to establish Shanghai offices in Mainland China by Investment Commis s ion of M OEA on June 18, 2009. The Shanghai office indirectly establis hed by the Company was approved for cancellation by the Investment Commis s ion of M OEA on November 17, 2020.
B. Bas ic information: Please refer to table 4.
C. Significant trans actions , either directly or indirectly through a third area, with inves tee companies in the Mainland A rea: None.
(4)M ajor s hareholders information

As of December 31, 2020, the Company did not have any shareholders with a shareholding ratio more than 5%.

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Elite Sem iconductor Microelectronics Technology Inc.

Holding of m arketable securities at the end of the period

Decem ber 31, 2020

Table 1

Expressed in thou sands of New Taiwan d ollars, except as otherwise indicated

Securities held by	Nam e and category of m arketable securities	Relationship w ith the securities issuer	General ledger account	As of Decem ber 31, 2020	As of Decem ber 31, 2020	As of Decem ber 31, 2020	As of Decem ber 31, 2020
				Num ber of shares	Boo k value (Note)	Ownership(%)	Fair value (Note)
Elite Sem iconductor Microelectronics TechnologyInc.	Arim a Lasers Corporation stoc k	The Com pany ’s subsid iary is this company’s director	Financial assets at fair value through profit or loss	3,4 55,000	$ 72,209	12.26	$ 72 ,209
Elite Sem iconductor Microelectronics TechnologyInc.	King Yuan Electronics Corporation stoc k	None	Financial assets at fair value through profit or loss	10,000	348	0.00	348
Elite Sem iconductor Microelectronics TechnologyInc.	HSBC FRN PERPETUAL bo nd	None	Financial assets at fair value through profit or loss	1,0 00,000	25,192	Not applicable	25,192
Elite Sem iconductor Microelectronics TechnologyInc.	ANZ FRN PE RPETUAL bond	None	Financial assets at fair value through profit or loss	5 00,000	11 ,895	Not applicable	11,895
Elite Sem iconductor Microelectronics TechnologyInc.	BGF RENMIN BI BOND FUND	None	Financial assets at fair value through profit or loss	1 27,986	58,904	Not applicable	58,904
Elite Sem iconductor Microelectronics Technology Inc.	Turning Point Lasers L td. preferred stoc k	None	Financial assets at fair value through other com prehensive incom e	1,0 00,000	32,418	8. 06	32,418
Elite Investm ent Services Ltd.	HSBC HLDG S PLC 6.2 0 PCT PRE F SHARE SE RIES A	None	Financial assets at fair value through profit or loss	20,000	14,303	Not applicable	14,303
Elite Investm ent Services Ltd.	HSBC ALL CHINA BOND FUND - AC (2802)	None	Financial assets at fair value through profit or loss	6 00,000	32,833	Not applicable	32,833
Charng Feng Investm ent Ltd.	King Yuan Electronics Corporation stoc k	None	Financial assets at fair value through profit or loss	10,000	348	0.00	348
Charng Feng Investm ent Ltd.	Arim a Lasers Corporation stoc k	None	Financial assets at fair value through profit or loss	9 07,000	18,956	3.22	18,956
Charng Feng Investm ent Ltd.	Ushine Photon ics Corporation stoc k	None	Financial assets at fair value through profit or loss	115 ,519	797	0.41	797
Charng Feng Investm ent Ltd.	Brighte k Op toelectronic Corporation Ltd. stoc k	None	Financial assets at fair value through profit or loss	65,601	1,709	0.11	1,709
Charng Feng Investm ent Ltd.	M3 Technolo gy Inc. stock	None	Financial assets at fair value through profit or loss	4 33,000	48,063	1.18	48,063
Charng Feng Investm ent Ltd.	M2 Com m unication Inc. stoc k	None	Financial assets at fair value through profit or loss	2,0 00,000	4,917	7.89	4,917
Charng Feng Investm ent Ltd.	Powerchip Sem iconductor ManufacturingCorporation	None	Financial assets at fair value through profit or loss	1,5 00,000	75,000	0.05	75,000
Charng Feng Investm ent Ltd.	Turning Point Lasers L td. preferred stoc k	None	Financial assets at fair value through other com prehensive incom e	1,0 00,000	32,418	8.06	32,418
Jie Yong Investm ent Ltd .	Elite Sem iconductor Microelectronics Technology Inc. stoc k	Parent com pany	Financial assets at fair value through other com prehensive incom e	14,1 54,000	9 15,764	4.95	915 ,764

Note: Valuation adjustm ent of financial assets and cum ulative translatio n differences are included.

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Table 2

Elite Semiconductor Microelectronics Technology Inc.

Significant inter-company transactions during the reporting periods

Year ended December 31, 2020

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

Number (Note 1)	Companynam e	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	Elite Semiconductor Microelectronics TechnologyInc.	Eon Silicon Solutions,Inc.USA	(1)	Research and developm ent expenses	$ 76,375	Note 4	0.50%
0	Elite Semiconductor Microelectronics TechnologyInc.	Elite Semiconductor M emory TechnologyInc.	(1)	Other revenue	48,000	Note 4	0.31%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is “ 0”.
(2) The subsidiaries are numbered in order starting from “ 1”.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction am ount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statem ent accounts.

Note 4: The transaction term s are decided by the two parties through negotiation.

Note 5: Only transactions with related parties of NT$25 million or more are disclosed, and transactions with related parties will not be disclosed separately.

Note 6: The transaction between parent company to subsidiary and subsidiaries were elminated when preparing consolidated financial statements.

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Elite Sem iconductor Microelectronics Technology Inc.

Inform ation on investees (exclude investee in Mainland Ch ina)

Year ended Decem ber 31, 2020

Table 3

Expressed in thou sands of New Taiwan do llars, except as otherwise indicated

Investor	Investee	Location	Main business activities	Initial in vest	m ent am ount	Shares held	as at Decem	ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31,2020	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31,2020	Foot note
				Balance as at Decem ber 31, 2020	Balance as at Decem ber 31, 2019	Num ber of shares	Ownership (%)	Boo k value
Elite Sem iconductor Microelectronics Technology Inc.	Elite Sem iconductor Mem ory Technology Inc.	Taiwan	Research and developm ent, production, sales and related consulting services of integrated circuit	$ 272	$ 272	100 ,000	100	$ 2 4,236	$ 9,712	$ 9,712
Elite Sem iconductor Microelectronics TechnologyInc.	Charng Feng Investm ent Ltd.	Taiwan	General investm ent	500,000	500,000	50,000, 000	100	511, 029	112, 211	111,110	Note 2
Elite Sem iconductor Microelectronics Technology Inc.	Elite Investm ent Services Ltd.	British Virg in Islands	General investm ent	427,200	427,200	15	100	62 0,500	( 7,2 22)	( 7,2 22)
Elite Sem iconductor Microelectronics Technology Inc.	Elite Sem iconductor (B.V.I.) Ltd.	British Virg in Islands	General investm ent	-	142,400	-	-	-	( 7,2 20)	( 7,2 20)	Note 3
Elite Sem iconductor Microelectronics TechnologyInc.	Jie Yong Investm ent Ltd .	Taiwan	General investm ent	270,000	270,000	3,600, 000	41.86	13 6,983	1 3,823	( 138)
Elite Sem iconductor Microelectronics Technology Inc.	Eon Silicon Solu tion s, Inc.USA	U.S.A.	Investigation and research of business situation and industrial technology	13,304	13,304	200 ,000	100	( 1,41 1)	( 240)	( 240)
Charng Feng Investm ent Ltd.	3R Sem iconductor Technology Inc.	Taiwan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	69,407	69,407	10,000, 000	100	2 1,953	( 567)	( 567)
Charng Feng Investm ent Ltd.	Elite Silicon Technology Inc.	Taiwan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	61,201	59,288	7,448, 960	98.01	528	( 154)	( 154)
Charng Feng Investm ent Ltd.	Cany on Sem iconductor Inc.	Taiwan	International trade, m anufacturing of electronic com ponents, product design and inform ation software services	80,337	80,337	8,350, 000	40.93	3 3,883	1,642	673
				(Continue)

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Investor	Investee	Location	Main business activities	Initial in vestm ent am ount	Initial in vestm ent am ount	Shares held as at Decem ber 31, 2020	Shares held as at Decem ber 31, 2020	Shares held as at Decem ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31,2020	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31,2020	Foot note
				Balance as at Decem ber 31, 2020	Balance as at Decem ber 31, 2019	Num ber of shares	Ownership (%)	Boo k value
Charng Feng Investm ent Ltd.	Elite Innovation Japan Ltd.	Japan	Product design, who lesale and retail of electronic m aterials, m anufacturing of electronic com ponents, inform ation software services and international trade	$ 2,111	$ 2,111	$ 200	100	2,195	$ 116	$ 116
Charng Feng Investm ent Ltd.	CHI Microelectronics Lim ited	Hong Kong	Trading	367	-	10 ,000	100	367	( 4)	( 4)	Note 4

Note 1: The foreign investm ent am ount translated at the exchange rate as of Decem ber 31, 2020.

Note 2: The investm ent incom e/loss has been adjusted the unrealized gain /loss of upstream transactions.

Note 4: CHI Microelectronics Lim ited. was established on August 31, 202 0. The Com pany 's subsid iary, Charng Feng Investm ent L td., ob tained the in vestm ent am ount of HKD 100,000 approved by the Investm ent Com m ission of MOEA on Decem ber 11, 2020.

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Elite Sem iconductor Microelectronics Technology Inc.

Inform ation on investm ents in Main land Ch ina

Table 4

Year ended Decem ber 31, 2020 Expressed in thou sands of New Taiwan do llars, except as otherwise indicated

Investee in Mainland China	Main business activities	Paid-in capital (Note 4)	Investm ent m ethod (Note 1)	Accum ula ted am ount of rem ittanc e from Taiwan to Mainland China as at January 1, 2020	Am ount rem itted from Taiwan to Mainland China/Am oun t rem itted back to Taiwan for the y ear ended Decem ber 31, 2020	Am ount rem itted from Taiwan to Mainland China/Am oun t rem itted back to Taiwan for the y ear ended Decem ber 31, 2020	Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31, 2020	Net incom e (loss) of the investee for the y ear ended Decem ber 31, 2020	Ownershi p held by the Com pany (direct or indirect)	Investm ent incom e (loss) recognized by the Com pany for the y ear ended Decem ber 31, 2020 (Note 2)	Boo k value of investm ents in Mainland China as at Decem ber 31, 2020	Accum ulated am ount of investm ent incom e rem ittance back to Taiwan as at Decem ber 31, 2020	Footn ote
					Rem itted to Mainland China	Rem itte d back to Taiwan
Elite Sem iconductor Microelectronics Technology (Shenzhen) Inc.	Trading of goods or techn ical services, develop and sale products of networking sy stem , storage, and peripherals, technical consulting and services of integrated circuit, and after - sales service	$ 2,549	(1)	$ -	$1,424	$ -	$ 1,4 24	$ 1,22 4	100	$ 1,224	$ 4,619	$ -
Elite Sem iconductor Microelectronics (Shanghai) Technolo gy Inc.	Product design, who lesale and retail of electronic m aterials, inform ation software services and international trade	5,696	(1)	-	5,696	-	5,6 96	581	100	581	6,633	-	Note 6
Companynam e Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31, 2020 Investm ent am ount approved by the Investm ent Com m ission of MOEA (Note 5) Ceilin g of investm ents in Mainland China im posed by the Investm ent Com m ission of MOEA Charng Feng Investm ent Ltd. $ 7,1 20 $ 78,021 $ 300 ,000
Companynam e	Accum ulated am ount of rem ittance from Taiwan to Mainland China as at Decem ber 31, 2020	Investm ent am ount approved by the Investm ent Com m ission of MOEA (Note 5)	Ceilin g of investm ents in Mainland China im posed by the Investm ent Com m ission of MOEA
Charng Feng Investm ent Ltd.	$ 7,1 20	$ 78,021	$ 300 ,000

Note 1: The m ethods for engaging in in vestm ent in Mainland China include the following :

(1) Direct investm ent in Main land Ch ina.

(2) Indirect investm ent in Main land Ch ina throug h com panies registered in a third region.

(3) Other m ethods.

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Note 2: Investm ent incom e (loss) was recognized based on financial statem ent prepared by each com pany which were audited by

independent auditors.

Note 3: The am ount of the statem ent should show as New Taiwan Do llars.

Note 4: Paid-in capital translated at the exchange rate as of Decem ber 31,

Note 6: Elite Sem iconductor Microelectronics (Shanghai) Technology Inc. was established o n Novem ber 27, 2019. The Com pany 's subsidiary, Charng Feng Investm ent Ltd., ob tained the in vestm ent am ount of USD 200,000 approved by the Investm ent Com m ission of MO EA on May 20, 2020.
VI. If the Company or its affiliates have experienced financial difficulties in the most recent financial year or during the current financial year up to the date of publication of the
Annual Report, the manner in which the difficulties will affect the Company ’s financial situation shall be explained: None.

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Review of Financial Position, Operating Results, and Risk Management

I. Financial Status

Major reasons for changes in assets, liabilities, and shareholders' equity, as well as related effects in the most recent two financial years. If such effects are material, response measures should be elaborated:

Comparative Analysis of Financial Position

Unit: NT$1,000

			Unit: NT$1,000	Unit: NT$1,000
Year Item	2020	2019	Difference
			Amount	%
Current assets	11,832,047	9,497,077	2,334,970	24.59
Financial assets at fair value through comprehensiveprofit or loss - non-current	64,836	50,776	14,060	27.69
Investment accounted for using equity method	33,883	33,210	673	2.03
Property, plant and equipment	776,598	696,328	80,270	11.53
Right-of-use assets	80,782	86,367	( 5,585)	( 6.47)
Net investment assets	17,701	18,671	( 970)	( 5.20)
Intangible assets	111,688	81,593	30,095	36.88
Other assets	82,813	16,298	66,515	408.12
Total assets	13,000,348	10,480,320	2,520,028	24.05
Current liabilities	4,756,158	3,025,945	1,730,213	57.18
Non-current liabilities	114,907	113,596	1,311	1.15
Total liabilities	4,871,065	3,139,541	1,731,524	55.15
Equity attributable to the parent company	8,264,043	7,461,460	802,583	10.76
Share capital	2,857,589	2,857,589	-	-
Capital reserves	109,677	104,305	5,372	5.15
Retained profits	5,436,890	4,645,411	791,479	17.04
Minority interest	5,536	( 8,524)	14,060	164.95
Treasury shares	( 145,649)	( 137,321)	( 8,328)	( 6.06)
Non-controlling interest	( 134,760)	( 120,681)	( 14,079)	( 11.67)
Total equity	8,129,283	7,340,779	788,504	10.74
Descriptions: 1.Current assets: mainly due to a significant increase in the inventory as a result of a continued increase in the inventory during the year in response to future sales. 2. Financial assets at fair value through other comprehensive income - non-current and other equity: mainly due to a significant increase in the end-term valuation gain on financial assets at fair value through other comprehensive income during the year. 3. Intangible assets: mainly due to an increase in the acquisition of software. 4. Other assets: mainly due to an increase in the prepayment for equipment during the year. 5. Current liabilities: mainly due to a significant increase in the accounts payable as a result of a continued increase in the inventory during the year in response to future sales. 6. Future plans for significant impact: As mentioned in 1. to 5. above, the reasons for the differences are not significant to the Company.

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II. Financial Performance

The main reasons for the significant changes in operating revenue, operating profit and net profit before tax for the most recent two financial years, and the expected sales volume and its basis, and the possible impact on the Company's financial operations, and the response plans thereof:

Comparative Analysis of Financial Performance

Unit: NT$1,000

			Increased
Item	2020	2019	(Decreased)	Percentage
			Amount	Change
Operating Revenue	15,267,139	11,983,479	3,283,660	27.40
Gross profit	2,649,042	1,802,208	846,834	46.99
Operating Profit (Loss)	1,154,785	574,943	579,842	100.85
Non-operating income and expenses	98,915	1,237	97,678	7,896.36
Net profit before tax	1,253,700	576,180	677,520	117.59
Net gain (loss) from continuing operations in the currentperiod	1,084,441	505,611	578,830	114.48
Loss from discontinued operations	-	-	-	-
Net Profit (Loss)	1,084,441	505,611	578,830	114.48
Other comprehensive income (net, after tax)	14,872	( 7,888)	22,760	288.54
Total comprehensive income	1,099,313	497,723	601,590	120.87
Net income attributable to parent company	1,076,426	497,405	579,021	116.41
Total comprehensive income attributable to parent company	1,091,298	489,517	601,781	122.93
Descriptions:

Operating income and gross profit: The following table provides an analysis of the changes in gross profit.
Operating income (loss): mainly due to a significant increase in the Company's operating profit from the previous year as a result of the growth of the electronics industry against the trend during the year.
Non-operating income and expenses: mainly due to a significant increase in the end-term valuation gain on financial assets at fair value through other comprehensive income during the year.
Net income before tax: The combined effect of 1. and 3. above resulted in an increase of approximately 117.59% in net income before tax .
Other comprehensive income: mainly due to a significant increase in the end-term valuation gain on financial assets at fair value through other comprehensive income during the year.

6.Total comprehensive income and loss, net income attributable to owners of the parent company, and total comprehensive income and loss attributable to owners of the parent company: This is mainly due to the significant increase in the Company's operating profit due to the growth of the electronics industry in the current year compared to the previous year.

The possible impact of expected sales volume and its basis on the Company's future financial operations and the Company's response plans: Please refer to "Sales Volume Forecast and Its Basis" on #page 4# for the expected sales volume and its basis. Please refer to "Future Company Development Strategy" on #page 4# for the possible impact on the Company's future financial operations and the response plans.

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Analysis table of operating margin changes

Unit: NT$1,000

Product Type	The number of changes in the previous and late periods	Price difference	Cost price difference	Sales mix difference	Quantity difference
Integrated circuit	846,834	(2,182,502)	(2,229,089)	172,941	627,306
Other(Technical service income)	－	－	－	－	－
Total	846,834	(2,182,502)	(2,229,089)	172,941	627,306
Description: The severe COVID-19 pandemic slo wed do wn the global economic gro wth durin g the year. However, the electronics industry grew against the trend. T he Company's revenue also showed significant gro wth. As a result, the Company's revenue and earnin gs performance was better than that of 2019.

Description: The severe COVID-19 pandemic slo wed do wn the global economic gro wth durin g the year. However, the electronics industry grew against the trend. T he Company's revenue also showed significant gro wth. As a result, the Company's revenue and earnin gs performance was better than that of 2019.

III. Cash flow

(I) Analysis of changes in cash flow in the most recent financial year

Unit: NT$1,000

				Unit: NT$1,000	Unit: NT$1,000
Initial cash balance	Net cash flow from operating activities of the year	Cash outflow of the year	Cash Balance (Deficit)	Remedial measures for cash deficit
				Investment plan	Financial plan
2,757,003	453,348	387,566	3,597,917	－	－

(II) Liquidity analysis for the most recent financial year

Year Item	2020	2019	Percentage Increase (Decrease)
Cash Flow Ratio (%)	9.53	61.12	( 84.41%)
Cash flow Sufficiency Ratio (%)	57.56	28.20	104.11%
Cash Reinvestment Ratio (%)	1.72	15.60	( 88.97%)
Description: 1. T he cash flow ratio and the cash reinvestment ratio rose, mainly due to the growth inrevenue durin g the year. However, the operating cash flow decreased significantly fromthe previous year due to an increase in the inventory as a result of the projected future sales. 2. T he cash flow adequacy ratio rose, mainly because the average operating cash flow i ncreased significantly from the previous year.

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(III) Analysis of the cash liquidity of the coming year:

Unit: NT$1,000

				Unit: NT$1,000	Unit: NT$1,000
Initial cash balance	Net cash flow from operating activities of the year	Cash outflow of the year	Cash Balance (deficit)	Remedial measures for
				~~h d ~~ Investment plan	~~fi i~~ Financial plan
3,597,917	671,512	( 571,737)	3,697,692	－	－
1: Analysis of cash flow change in 2020: (1) Operating activities: In this year, due to the expected improvement in business conditions, net cash flow from operating activities is a net inflow. (2) Investment activities: Mainly due to the increase in new investment and increased photomask required to purchase R&D equipment and new products. (3) Financing activities: Mainly, cash outflow caused by the issuance of cash dividends. 2. Remedial measures for cash deficit and liquidity analysis: None.

IV. Major capital expenditures in the most recent financial year and their impact on the Company's finances: none
V. Investment policy in the most recent financial year, main causes for profit or loss, improvement plans and the investment plans for the coming year: None.

VI. Risk Analysis and Assessment

(I) The impact of interest rate, exchange rate fluctuations and inflation on corporate profits and losses and future countermeasures:
(1) Impact on the Company's profit/loss:

Unit: NT$1,000

		Unit: NT$1,000
Item	2020	2019
Net interest income or expense	15,885	40,826
Exchange Gain (Loss)	( 50,665)	( 45,141)

In terms of inflation, with the decrease in oil prices and the recovery of natural resource prices, the global economy is facing low inflation, which will inevitably affect the cost of purchasing raw materials needed for production. However, the production of the Company is outsourced, and the cost of raw materials and processing costs are mainly determined by the capacity allocation of outsourced processing plants based on the business cycle and market supply and demand. Therefore, it is expected that inflation will have a limited impact on the Company's profit and loss.

(2) Future response measures:

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1. Fluctuation of interest rates

The Company maintains close contact with banks and pays attention to changes in the market in order to obtain more favorable borrowing rates from banks. Another major capital expenditure will be to raise funds by issuing corporate bonds to obtain lower capital costs.

2. Fluctuation of exchange rates

The Company's products are mainly priced in US dollars. Recently, the exchange rate of the New Taiwan dollar against the US dollar has fluctuated volatilely, resulting in profit on exchange. In view of this, the Company will strengthen its ability to manage foreign exchange risks. In addition to continuously collecting exchange rate information and fully grasping the exchange rate trends, the bank will be invited to provide professional advice and suggestions to decide when to convert the New Taiwan dollar or keep it in the foreign exchange account. In addition, in terms of the management of foreign exchange positions, funds are dispatched and used to meet foreign exchange expenditures with their own foreign exchange income to effectively reduce exchange risk.

3. Inflation

The Company established a good cooperative relationship with the wafer foundry and back-end packaging and testing plants to ensure that the production capacity can be obtained and obtain stable processing prices, and through the provision of technical services for product design, actively develop cooperation with other domestic and foreign foundries Besides, the Company obtained more diversified resources of wafer foundry manufacturers, thereby reducing the impact of inflation.

(II) Policies of engaging in high-risk, high-leverage investments, loans to others, providing endorsements/guarantees and derivatives transactions, main reasons for the profits and losses generated thereby and future response measures to be undertaken:

The Company has not engaged in high-risk, high-leveraged investment and derivative financial commodity transactions in the most financial recent year and up to the date of publication of the prospectus. The object of loan and endorsement guarantee of funds is limited to the subsidiaries, and it is handled in accordance with the provisions of the "Operational Procedures for Loaning Funds to Others" and "Procedures of Provision of Endorsements/Guarantees". As of the date of publication of the public statement in 2018 and 2019 of the Company, there was no loan to others.

(III) Future R&D plans and expected investments in R&D:
(1) The products operated by the Company are highly changing industries. Therefore, it is necessary to leverage on market opportunities, launch new products, and develop new processes to reduce costs.
(2) The competitiveness of the Company is sustained by its research and development capabilities. The Company will continue to invest in research and development expenditures, and continue to recruit and train outstanding talents to achieve this goal and create a good business performance for the Company.
(3) Expected R&D investments

) Expected R&D investments
Main R&D projects / new products	Key success factors for R&D projects
xMB SDRAM 2Xnm product development project	Existing experience in SDRAM technology

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xMB DDR2 SDRAM 3Xnm product development project	Existing experience in DDR SDRAM technology
xGB DDR3 SDRAM 2Xnm product development project	Existing experience in DDR2 SDRAM technology
xGB DDR4 SDRAM 2Xnm product development project	Existing experience in DDR3 SDRAM technology
xMB FLASH 5Xnm product development project	Existing experience in Flash technology
T Power IC, analog IC product development project	Existing experience in IC, analog IC technology
Development of new products	Strong R&D performance and experience

estimated R&D expenditure for 2021 is approximately NT$ 800 million.

(IV) The impact of changes in important domestic and foreign policies and laws adopted on the Company's financial operations, and the countermeasures thereof:
(1) The Company's management team has been paying close attention to any policies and laws that may affect the Company's finances and business. In addition, the Company has also cooperated with professional institutions to continue to pay close attention to the development of relevant laws and regulations and to adjust immediately to meet the needs of operations.
(2) Countermeasures

The Company's current operations are in compliance with the relevant existing laws and regulations of domestic and foreign reinvestment countries. The management team will also continue to pay close attention to any changes in policies and laws that may affect the Company's finances and business, as a reference for operations. In addition, the Company also cooperates with professional organizations to pays close attention to the development of relevant laws and regulations, and immediately adjusts its strategy to meet the needs of operations. Therefore, the Company can timely manage and respond to important domestic and foreign policy and legal changes.

(V) Impact of technological and market changes on the Company’s finances and business, and the countermeasures thereof:
(1) Impact on the Company's finance and business due to technological and industrial changes, and the countermeasures thereof

The company is one of the leading manufacturers in its industry. Technology R&D and innovation are the indispensable elements of the Company's operations, and it is also the Company's main competitive niche. Therefore, technological

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changes have a positive effect on the Company's financials.

(2) Countermeasures

The Company will continue to strengthen its research and development capabilities, pay attention to domestic and foreign technology and market development directions at all times, and strengthen cash flow management and maintain a stable financial structure in order to diversify operating risks in response to the Company's operational needs.

(VI) The impacts of the change of corporate image on the enterprise crisis management, and the countermeasures thereof:

The Company focuses on its business operation and has achieved outstanding performance, and it is committed to distributing the business results back to the shareholders. The corporate image has always been good, and the Company publishes all messages through a spokesperson or agent spokesperson, who can provide timely explanations in regards to reports and news that could affect the Company's image, so there is no threat to the corporate image. In the future, while pursuing the maximization of shareholders’ interests, the Company will continue to fulfill its corporate social responsibilities and improve the corporate image.

(VII) The expected benefits and possible risks to engage in mergers and acquisitions (M&A), and the countermeasures thereof: None.
(VIII) Expected benefits, possible risks and countermeasures for the expansion of plants: The Company currently has no plans to expand the plants.
(IX) Risks associated with over-concentration in procurement and sales, and the countermeasures thereof:
(1) Risk of concentrated procurement

The Company is a professional IC design company. The main raw materials in the production process are wafers and lead frames. The wafers are produced by wafer foundries. Since China is the world's largest wafer foundry production area, meanwhiles there are only few wafer foundries in domestic industry. Therefore, domestic IC design companies generally in the industry tends to have their purchasing concentrated in a certain wafer foundry. In addition to continuing to establish good cooperative relations with wafer foundries to ensure production capacity, the Company actively develops cooperative relations with other domestic and foreign wafer foundries by providing technical services for product design to diversify the concentration of incoming purchases.

(2) Risk of concentrated sales

Based on the consideration of professional division of labor and emphasis on efficiency, most products are mainly sold through agents. In recent years, sales of

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goods have gradually deviated from focusing on the few particular customers. In response to the growing trend of the company and industry in the future, the Company will further diversify appropriately and diversify its future sales targets to maintain a more balanced and stable operating result, which is the goal of the Company's continuous efforts.

(X) Impact and risks resulted from major equity transfer or replacement from the Directors, Supervisors, or major shareholders holding more than 10% of the Company's shares, and the countermeasures thereof:
(XI) The effect upon and risk to the Company associated with any change in governance personnel or top management and response measures being or to be taken: None.
(XII) If there has been any substantial impact upon shareholders' equity or prices for the Company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the Company that was finalized or remained pending, the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case up to the publication date of this Annual Report shall be disclosed: None.
(XIII) Other material risks and countermeasures: None

VII. Other important matters:

Information Security Policy and Management Plan

1. Information Security Management Framework

The Information Technology Department is responsible for information security and formulating and implementing information security policies. Every three months, the information security implementation plan and implementation status are reported to the management to ensure the continuous and effective operation of the internal security management mechanism.

The Internal Audit Department is the audit unit of the Information Technology Department. If the audit discovers any discrepancies, the department shall require the audit unit to propose relevant improvement plans and regularly track the improvement results to reduce internal security risks.

The organization's operation mode adopts PDCA (Plan-Do-Check-Act) circular management to build a complete security management system to effectively prevent the occurrence of information security incidents, ensure the achievement of information security goals, and continue to optimize and improve.

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2. Information Security Policy

This policy is to protect the security of all information assets of Elite Semiconductor Microelectronics Technology Inc., and to prevent internal or external, intentional or accidental threats and destruction that may result in business failure or information tampering, fetching or damage, so as to fulfill our goal of sustainability operation.

1. Definition of Information Security

Protect the Company's information and information systems from unauthorized entry, use, disclosure, destruction, modification, inspection, recording and destruction, and maintain the availability of existing information systems.

II. Information Security Objective

Ensure the confidentiality of business-related information and protect company confidentiality.
Ensure the integrity and availability of business-related information. 3. Improve Information Security Protection Capabilities.

3. Scope of Information Security

This policy applies to various information systems within the Company, internal colleagues, and vendors and third-party personnel who have access to business information or provide services.

3. Information Security Management Solution

The Company has invested in hardware equipment electronic insurance for business assets, such as information systems, network equipment and other information equipment, and avoids equipment being stolen or malicious damage through security monitoring operations. In view of the fact that information security is an emerging type of insurance, considering the comprehensive effect of topics such as insurance coverage, claims coverage, claims identification, and qualifications of identification institutions, the Company will not purchase information security insurance for the time being after evaluation. However, in response to the challenges faced by information security, such as APT advanced persistent attacks, DDos attacks, ransomware, social engineering, and stolen funds and other security issues, the following strategies have been adopted: Keep track of the changes in the information environment in accordance with the Company ’s information security policy, and develop information security protection mechanisms and solutions with reference to technical information. Join ISAC to obtain the latest attack information and take appropriate defensive countermeasures. Conduct regular safety inspections, information security and health consultations, social security and information

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security drills, strengthen the Company ’s colleagues’ awareness on security crisis and their responsiveness, in order to prevent in advance and effectively identify and prevent proliferation immediately.

4. Information Security Management Measures, including:

4. Information SecurityManagement Measures,including:	4. Information SecurityManagement Measures,including:	4. Information SecurityManagement Measures,including:

	Information Security Management
Type	Description	Relevant Operation
Access control	Management m easures for personnel account, authority managem ent and system operation behavior	� Personnel account permission managem ent and review � Periodic check of personnel account permissions
Access control	Control measures for personnel to access internal and external systems and data transmission channels	� Internal/external access control measures � Confidential inform ation leakage control � Operation behavior track record
External threat	Potential internal weaknesses, poisoning pipelines and protective m easures	� Host/com puter weakness protection and update measures � Virus protection and malware detection � Network threat monitoring
System availability	System availability and measures to deal with service interruption	� System/network availability monitoring and notification mechanism � Contingency m easures for service interruption � Inform ation backup m easures, local/offsite backup m echanism � Regular disaster recovery drills

Intelligent Property Management Plan

With the continuous advancement of technology, the Company has been increasing its investment in R&D costs year by year. To strengthen the competitiveness of the Company's business operations and maintain the state-of-the-art technologies obtained through the hard

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work of the R&D staff, the Company's intellectual property management combines the Company's operational objectives and R&D resources to establish an operation model that creates corporate value and intangible assets through intellectual property rights. The business management model that combines corporate product strategy, R&D strategy and intellectual property strategy bolsters the utilization of the Company's intellectual property, not only to protect the Company's freedom of operation and strengthen its competitiveness, but also to help the Company make profits.

1. Patent Protection Measures

To enhance the competitiveness of intellectual property, the Company's patent application strategy includes not only patent placement for existing and future products, but also patent placement for specific technologies in a strategic or walled mode. The Company has dedicated staff for intellectual property management, from relevant literature search, technical discussion and patent map preparation for specific technologies before product development to the maintenance of the patent after application, to keep the quality of patent technologies under strict control. In the meantime, the Company monitors the patent application profiles of its competitors to learn the development trend of their products and technologies and whether there are any concerns about patent infringement.

The Company also pays attention to the patent transfer and patent trading market. Whenever various trading platforms (such as ITRI, AS, TWTM, etc.) hold patent transfer or matchmaking activities, the Company will select and evaluate whether there are opportunities for such technologies to be transferred or matched, so as to revitalize the value of the Company's patents. The Company has a patent evaluation committee consisting of senior executives, experienced technical executives who are familiar with the technology field, and expert consultants to enhance the quality of patents through a graded review process. The Company has also established an appropriate patent incentive system to encourage employees to actively file patent applications, and through unscheduled education and training related to patent technology to raise employees' awareness of professional technology and patent protection.

2. Protection of Trade Secrets

The protection of trade secrets is crucial to the Company's competitive advantages, such as technological leadership, manufacturing excellence and customer trust, and is even more crucial to the Company as an IC design company with its own product development and design.

The Company has formulated internal rules and regulations for the management of trade secrets. The Company regularly conducts training courses for new recruits on the protection of trade secrets, and from time to time, makes internal announcements to inform employees of

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its policy on trade secrets protection. All employees are required to sign a written non-disclosure agreement upon their arrival at and departure from the Company, which is to ensure that they fulfill their duties and obligations of confidentiality to the Company's confidential information. The Company has established a document control system and has set up a Document Control Center (DCC) dedicated to managing and maintaining important technical information of the Company. The Company also attaches great importance to information security, and has established information security management regulations and implemented relevant measures to prevent improper leakage of company information that could harm the interests of the Company. The Company also organizes training on trade secrets from time to time to raise employees' professional awareness of the protection of company secrets and related laws and regulations.

3. Management of Trademark Rights

Since its establishment, the Company has been actively engaged in trademark placement in countries where the Company's products are mainly sold to obtain protection of trademark rights. The Company has designated personnel to handle pre-application trademark searches, management of trademark cases and trademark databases, as well as trademark rights enforcement matters, so that the Company can market its products worldwide under its own brand name.

4. Copyright Management

To protect the Company's confidential information and patent technology rights, if the Company's product technology needs to be published or made public through journals, papers, seminars, etc., the Company will first review and manage it, and establish control and review methods to ensure the implementation of internal review mechanisms to prevent the improper disclosure of important technical information.

Implementation Status

The Company submitted a report on matters related to intellectual property to the Board of Directors at the tenth meeting of the eighth Board (Dec. 23, 2020) and proposed improvement measures in response to the Directors' recommendations.

Since its establishment, the Company has been committed to building a sound intellectual property management system step by step. In the recent years, the Company has implemented the following:

Since 2006, the Company has invited renowned scholars and the head of the Legal and Intellectual Property Division of the Company to give lectures to our employees on the protection of trade secrets and the basic concepts related to the acquisition of patent technologies and patent rights.

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Since 2011, the Company has participated in the Intellectual Property Office's corporate intellectual property promotion activities and invited renowned lawyers and scholars to the Company to provide education and training for its employees on topics and practical discussions related to patents, trademarks, copyrights and trade secrets.
In 2013, the Company updated its patent application procedures and implemented a tiered patent examination system.
In 2014, the Company established a mechanism for request for and review of public disclosure of the Company's information.
In 2015, the Company established and implemented patent technology placement and analysis strategy for new products to match the technology areas in which the development of new products is involved.
In 2017, the Company updated and established a complete intellectual property information management system to enhance the management of various applications and rights protection information, and further updated the intellectual property protection strategy and patent evaluation system to support new business development and operation.
In 2018, the Company invited Professor of the Law Department of Soochow University and Director of the Intellectual Property Law Research Center to give lectures on copyright protection and fair use. In addition, the head of the Company's patent department organized special educational training for the R&D staff to analyze patent technical issues.
In 2019, the Company investigated the classification standards for important information and evaluated patent licensing companies and patent insurance.
In 2020, the Company evaluated the feasibility of introducing the Taiwan Intellectual Property Management System (TIPS).
The current list of intellectual property acquisition are as follows.
(1) Patents: By December 2020, the total number of patents granted worldwide had accumulated over 419, of which 32 domestic and foreign patents were granted in 2020 alone.
(2) Trademarks: By December 2020, the Company had obtained a total of 36 registered trademarks in major target countries for its presence and operation.

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Special Disclosures

I. Information about the Company’s Affiliated Companies 1. Organization Structure of Affiliated Companies

==> picture [483 x 301] intentionally omitted <==

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2. Basic Information of Affiliated Companies

Unit: NT$

				Unit: NT$
Name	Date of Incorporati on	Address	Actual Paid-in Capital	Primary Business
Elite Semiconductor Memory Technology Inc.	1992.11.05	1/F, No. 13, Lane 24, Minxiang 1st Street, East District, Hsinchu City	NT$ 1,000,000	Research and development, production, sales and related consulting services of integrated circuit
Charng Feng Investment Ltd.	200.05.22	1/F, No. 13, Lane 24, Minxiang 1st Street, East District, Hsinchu City	NT$ 500,000,000	General investment
Elite Investment Services Ltd.	2006.07.04	Citio Building P.O.Box 662,Road Town Tortola, British Virgin Islands	US$ 15,000,000	General investment
Jie Yong Investment Ltd.	2009.01.16	2/F, No. 13, Lane 24, Minxiang 1st Street, East District, Hsinchu City	NT$ 86,000,000	General investment
3R Semiconductor Technology Inc.	2004.11.22	1/F, No. 13, Lane 24, Minxiang 1st Street, East District, Hsinchu City	NT$ 100,000,000	Electronic component manu facturing, information software services, product design, other business services, other consulting services and international trade
Elite Silicon Technology Inc.	2005.04.07	5/F, No. 24-2, Gongye East 4th Road, East District, Hsinchu City	NT$ 76,000,000	Information software services, product design, other business services, other consultancy services, and international trade
Canyon Semiconductor Inc.	2013.06.26	3/F, No. 19-1, Gongye East 4th Road, East District, Hsinchu City	NT$ 204,000,000	Integrated circuit design and manu facturing of electronic components
Elite Innovation Japan Ltd.	2011.12.16	4-8-11 Takanawa, Minato-ku, Tokyo	JPY 10,000,000	Electronic component manu facturing, information software services, product design, other business services, other consulting services and international trade
Eon Silicon Solutions Inc. USA	2003.02.01	4699 Old Ironsides Drive, Suite 300 Santa Clara, CA95054 USA	US$ 100,000	FLASH product design, development and testing
Elite Semiconductor Memory Technology (Shenzhen)Inc.	2011.08.09	Unit A, Tian'an Digital City I, Futian District, Shenzhen	US$ 200,000	Technical consultation and service, after-sales service
Elite Semiconductor Microelectronics (Shanghai) Technology Inc	2019.11.27	Room 2515, No. 18 Xinjinqiao Road, China (Shanghai) Pilot Free Trade Zone	CNY$ 1,406,000	Product design, wholesale and retail of electronic materials, information software services and international trade
CHI Microelectronics Limited.	2020.8.31	15/F Boc Grouplife Assurance Tower 136 Des Voeux RD Central HK	HKD$ 100,000	Trading

Note 1: The foreign currency investment amount is converted based on the exchange rate on December 31, 2020.

Information on the same shareholders of companies that are considered to have a controlling and subordinate relation: None.

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The affiliated companies' business and operations, the industries they cover, and their correspondence and division of labor:

Name	Division of Labor in Interaction
Elite Semiconductor Memory Technology Inc.	IC production, sales and related consulting services
Charng Feng Investment Ltd.	General investment industry: Not applicable
Elite Investment Services Ltd.	General investment industry: Not applicable
Jie YongInvestment Ltd.	General investment industry: Not applicable
3R Semiconductor Technology Inc.	R&D, production, sales an d related consulting services of MEM S
Elite Silicon Technology Inc.	So C IC R&D, production, sales and related consulting services
Canyon Semiconductor Inc.	Power IC R&D, production, sales and related consulting services
Elite Innovation Japan Ltd.	IC sales and related consultingservices
Eon Silicon Solutions Inc. USA	FLASHproduct design,development and testing
Elite Semiconductor Memory Technology (Shenzhen)Inc.	Technical consultation and service, after-sales service
Elite Semiconductor Microelectronics (Shanghai)TechnologyInc.	Technical consultation and service, after-sales service
CHI Microelectronics Limited.	Trading

Information of Directors, Supervisors and Presidents in all affiliated companies:

Decem ber 31, 2019

					Decem ber 31,201
Nam e	Title	Nam e or Representative	Shareholding Number of Shares Percentage of Shareholding		Remarks
Elite Semiconductor Memory TechnologyInc.	Chairm an of the Board and President	Hsing-Hai Chen	100,000	100.00%	Representative of Elite Semiconductor Microelectronics TechnologyInc.
Charng Feng Investment Ltd.	Chairm an of the Board and President	Ming-Chien Chang	50,000,000	100.00%	Representative of Elite Semiconductor Microelectronics TechnologyInc.
Elite Investment					Representative of
Services Ltd.	Director	Hsing-Hai Chen	15	100.00%	Elite Semiconductor Microelectronics
					Technology Inc.
					Representative of
	Director	Ming-Chien Chang	15	100.00%	Elite Semiconductor Microelectronics
					TechnologyInc.
Jie Yong Investment Ltd.	Chairm an of the Board and	Hsing-Hai Chen	800,000	9.30%
	President
	Director Director	Ming-Chien Chang Kuan-Chun Chang	400,000 500,000	4.65% 5.81%
	Director	Yeong-Wen Daih	200,000	2.33%
	Supervisor	Show-RongPeng	200,000	2.33%
3R Semiconductor Technology Inc.	Chairm an of the Board and President	Hsing-Hai Chen	10,000,000	100.00%	Representative of Charng Feng Investment
Elite Silicon Technology Inc.	Chairm an of the Board	Hsing-Hai Chen	7,448,960	98.01%	Representative of Charng Feng Investment

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Nam e Title Nam e or Representative	Shareholding Remarks Number of Shares Percentage of Shareholding
Director Ming-Chien Chang Director Jennifer Feng Supervisor CandyChu	7,448,960 98.01% Representative of Charng Feng Investment 7,448,960 98.01% Representative of Charng Feng Investment 0 0.00%
Canyon Semiconductor Inc. Chairm an of the Board Kuan-hsi Chen Director Ernest Shyh Yuh Lin Director Sam Chen Director Sam Chen Director Evan Yu Director and President William Yang Director and President William Yang Supervisor Patricia Hwang Supervisor Hong-Gee Wu	7,795,000 38.21% Representative of Charng Feng Investment 10,400,000 50.98% Representative of Diodes Holding B.V. (the Netherlands) 7,795,000 38.21% Representative of Charng Feng Investment 75,000 0.37% 10,400,000 50.98% Representative of Diodes Holding B.V. (the Netherlands) 10,400,000 50.98% Representative of Diodes Holding B.V. (the Netherlands) 450,000 2.21% 0 0% 0 0%
Elite Innovation Japan Ltd. Director Yajim a Masaharu Director Chih-Hong Ho Director Hong-Gee Wu Supervisor Candy Chu	200 100.00% Representative of Charng Feng Investment 200 100.00% Representative of Charng Feng Investment 200 100.00% Representative of Charng Feng Investment 200 100.00% Representative of Charng Feng Investment
Eon Silicon Solutions Inc. USA Directors Ming-Chien Chang	200,000 100.00% Representative of Elite Semiconductor Microelectronics TechnologyInc.
Elite Semiconductor Memory Technology (Shenzhen)Inc. Legal Representative Chih-Hong Ho	- 100.00% Representative of Charng Feng Investment
Elite Semiconductor Microelectronics (Shanghai) TechnologyInc. Legal Representative Chih-Hong Ho	- 100.00% Representative of Charng Feng Investment
CHI Microelectronics Limited. Legal Representative Kun-R en Chang	10,000 100.00% Representative of Charng Feng Investment

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6. Operations Overview of Affiliated Companies

							December 31,	2020 Unit: NT$1,000
Name	Capital	T otal Asset	T otal liabilities	Net Value	Revenue	Operating Profit (Loss)	Profit (Loss) of the FY	Earnings Per Share (NT $)
Elite Semiconductor Memory Technology Inc.	1,000	138,616	114,381	24,235	381,336	12,492	9,712	97.12
Charng Feng Investm ent Ltd.	500,000	513,426	1,295	512,131	－	( 1,607)	112,211	2.24
Elite Investment Services Ltd.	427,200	620,499	－	620,499	－	( 16)	( 7,222)	( 481,445.47)
Jie Yong Investm ent Ltd.	86,000	918,198	201	917,997	－	( 381)	13,823	1.61
3R Semiconductor Technogy Inc.	100,000	22,004	51	21,953	－	( 642)	( 567)	( 0.06)
Elite Silicon Technology Inc.	76,000	2,623	2,084	539	18,275	( 33)	( 154)	( 0.20)
Canyon Semiconductor Inc.	204,000	111,040	28,258	82,782	149,872	2,474	1,642	0.08
Elite Innovation Japan Ltd.	2,111	3,426	1,231	2,195	7,198	231	116	578.99
Eon Silicon Solution Inc. USA	13,304	13,473	14,884	( 1,411)	75,853	( 723)	( 240)	( 1.20)
Elite Semiconductor Memory Technology (Shenzhen) Inc.	2,549	6,454	1,834	4,619	23,111	1,318	1,224	-
Elite Semiconductor Microelectronics (Shanghai) Technology Inc.	5,696	10,272	3,639	6,633	15,025	846	581	-
CHI Microelectronics Limited.	367	367	-	367	-	-	( 4)	( 0.45)

Consolidated financial statements of affiliated companies: Please refer to #page 104#.

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(English Translation of a Report Originally Issued in Chinese)

Elite Semiconductor Microelectronics Technology Inc

Declaration of Consolidated Financial Statements of Affiliated Companies

The entities that are required to be included in the consolidated financial statements of Elite Semiconductor Microelectronics Technology Inc. for the year ended December 31, 2020 (January 1 to December 31, 2020), under the Criteria Governing the Preparation of Affiliated Enterprise Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises, are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, the Company and its Subsidiaries do not prepare a separate set of consolidated financial statements.

Hereby declared by

Company Name: Elite Semiconductor Microelectronics Technology Inc

Person-in-charge: Hsing-Hai Chen

February 26, 2021

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II. Private placement of securities for the most recent financial year until the date of the publication of the Annual Report: None.
III. Holding or disposal of shares in the Company by the Company's subsidiaries during the most recent financial year or during the current financial year up to the date of the publication of the annual report:

Unit: NT$1,000; 1,000share; %

Nam e of Subsidiaries	Actual Paid-in Capital	Source of Funding	Shareholding Percentage of the Company	Date of Acquisiti on or Disposal	Number and Value of Shares Acquired	Number and Value of Shares Dispose d	Gain (Loss) from Invest ment	Number and Value of Shares Held until the publication of the Annual Report	Conditi on of Setting the Pledges	Amount of Endorse ment Made for the Subsidiar ies	Amount Loaned to the Subsidiaries
				March 26,	715	-		14,154
			41.86%	2020~ March 31, 2020	19,894	-	-	347,942	-	-	-
Jie Yong Investment	86000	Internally Generated	Current financial year		-	-		-	-	-	-
Ltd.	,	Funds	up to the publication date of the Annual Report		-	-	-	-

IV. Other Necessary Supplements: None.
V. In the most recent financial year up the date of publication of the Annual Report, if there an issue of significant impact on shareholders' equity or securities prices as stipulated in Article 36, paragraph 2, subparagraph 2 of the securities exchange Act: None.

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Elite Semiconductor Microelectronics Technology Inc.

Chairman of the Board: Hsing-Hai Chen

President: Ming-Chien Chang

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AI assistant

ESMT — Annual Report 2021

52243_rns_2021-07-15_b46175ee-7c36-4c88-81f5-56a597c71f2c.pdf

Elite Semiconductor ESMT Microelectronics Technology Inc.

Annual Report 2020

Certified Public Accountant

Contents

Table of Contents

Letter to the Shareholders

Dear Shareholders,

(2) Profitability

Company Profile

Corporate Governance Report

I. Organizational System

3. Professional Qualifications and the Independence of Directors:

(II) Information of the Presidents, Vice Presidents, Assistant Vice Presidents, and the Heads of all the Company's Departments and Divisions

2. Remunerations to President and Vice Presidents

3. Managerial officers with the top five highest remuneration amounts

2. Audit Committee:2021.02.26 approved the resolution by the Board of Directors

1. Implementation of the Audit Committee:

Schedule I: Implementation status of diversification of the members of the Board of Directors

(IV) Composition, duties, and implementation of the Remuneration Committee:

I. Information regarding the members of the Remuneration Committee:

Committee Responsibilities

Risk management policy

Elite Semiconductor Microelectronics Technology Inc

Elite Semiconductor Microelectronics Technology Inc

Board of Directors:

Shareholders' Meeting:

Capital Overview

I. Capital and Shares

(I) Sources of Capital

(X) Shares Buyback: None.

1. Issuance of employee stock options

Business Operations Overview

I. Business Activities

(I) Business Scope

(II) Industry Overview

1. Current situation and development of the industry

2. Semiconductor upstream, middle and downstream correlation diagram

B. High Speed

(1) Technical aspects of the business activities

(2) Research and development

II. Analysis of the market as well as production and marketing situation

(2) Market share

(3) Future market demand and supply status and growth characteristics

(4) Competitive niche

Unfavorable factors and countermeasures

Countermeasures

Countermeasures

Countermeasures

Countermeasures

2. Production Process

Reasons for Change:

2. Main Purchase Suppliers

Reasons for Change:

(V) Production Volume Table for the last two FY

(VI) Sales quantity and value for the last two FY

III. Employee information for the most recent two financial year up to the date of publication of the Annual Report

IV. Disbursements for Environmental Protection

V. Labor Relations

1. Labor Operating Environment Monitoring

2. Labor Safety and Health Committee

3. Personnel Safety and Health Training

4. Statistics of Disability due to Occupational Disasters

5. Measures for the Prevention and Management of Diseases Caused by Abnormal Workload

VI. Important Contracts

Financial Overview

3. Consolidated Comprehensive Profit and Loss Summary - Adopted International Financial Reporting Standards (IFRS)

4. Company's Comprehensive Profit and Loss Summary - Adopted International Financial Reporting Standards (IFRS)

II. Financial analysis for the five most recent financial years

2. Financial Analysis of the Company - Adopted International Financial Reporting Standards (IFRS)

1. Financial structure

Elite Semiconductor Microelectronics Technology Inc.

Audit Committees' Review Report

IV. Financial Statements for the Most Recent Financial Year

Independent Auditors’ Report

(2021) Finance-Audit-Letter No.20003747

Opinion

Basis for opinion

ESMT Annual Report 2021