ESMT — Interim / Quarterly Report 2021

Nov 30, 2021

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. AND SUBSIDIARIES Consolidated Financial Statements and Independent Auditors' Review Report March 31, 2021 and 2020

(Stock Code: 3006)

(English Translation of a Report Originally Issued in Chinese)

Company Address: No. 23, Industry E. Road IV, Hsinchu Science Park, Hsinchu 30077, Taiwan

Tel: +886-3-578-1970

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Financial Statements and Independent Auditors' Review Report for

March 31, 2021 and 2020

Table of Contents

Items

Page

I. Cover II. Table of Contents III. Independent Auditors' Report IV. Consolidated Balance Sheets V. Consolidated Statements of Comprehensive Income VI. Consolidated Statements of Changes in Equity VII. Consolidated Statements of Cash Flows VIII. Notes to the Consolidated Financial Statements 1. History and Organization 2. The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for Authorization 3. Application of New Standards, Amendments and Interpretations 4. Summary of Significant Accounting Policies 5. Critical Accounting Judgments, Estimates and Key Sources of Assumption Uncertainty 6. Details of Significant Accounts 7. Related-Party Transactions 8. Pledged Assets 9. Significant Contingent Liabilities and Unrecognized Contractual Commitments 10. Significant Disaster Losses 11. Significant Events after the End of the Balance Sheet Date 12. Others 13. Supplementary Disclosures 14. Operating Segment Information

1 2 3 ~ 4 5 ~ 6 7 8 9 ~ 10 11 ~ 53 11 11 11 ~ 12 12 ~ 16 16 16 ~ 38 38 ~ 39 39 39 39 39 39 ~ 52 52 53

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Report on Review of Interim Financial Information

(2021)Finance-Audit-Letter No.21000150 To the Board of Directors and Shareholders of Elite Semiconductor Microelectronics Technology Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of Elite Semiconductor Microelectronics Technology Inc. and its subsidiaries (the“ Group”) as at March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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 International Accounting Standard (IAS) No. 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission (FSC). Our responsibility is to express a conclusion on these interim financial statements based on our reviews and the review reports of other independent accountants.

Scope of Review

Except as explained in the Basis for Qualified Conclusion, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Statements”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As explained in Notes 4(3) and 6(6), the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under the equity method were not reviewed by independent accountants. Those statements reflect total assets of NT$740,792 thousand and NT$687,589 thousand, constituting 5.21% and 5.97% of the consolidated total assets, and total liabilities of NT$95,406 thousand and NT$128,621 thousand, constituting

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1.76% and 3.34% of the consolidated total liabilities as at March 31, 2021 and 2020, respectively, and total comprehensive income of NT$40,897 thousand and NT$(7,245) thousand, constituting 6.43% and (2.15%) of the consolidated total comprehensive income for the three months then ended, respectively.

Qualified Conclusion

Based on our reviews and the review reports of other independent accountants as described in the Other Matter–Review Reports By Other Independent Accountants section of our report, except for the possible effects of the matter described in the Basis for Qualified Conclusion section of our report, nothing has come to our attention that causes us to believe that the accompanying interim financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the “Rules Governing the Preparation of Financial Reports by Securities Issuers” and IAS No. 34, “Interim Financial Reporting” as endorsed by the FSC.

Cheng, Ya-Huei

Li, Tien-Yi

for and on behalf of PricewaterhouseCoopers, Taiwan

May 6, 2021

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets

March 31, 2021, December 31, 2020 and March 31, 2020

(The Balance Sheets as of March 31, 2021 and 2020 are unaudited)

Assets	Note	March 31, 2021 Amount % $ 5,017,168 35 387,753 3 57,070 1 337 - 1,879,847 13 4,269 - 5,420,999 38 149,790 1 937 - 12,918,170 91 57,926 - 36,393 - 933,679 7 83,161 1 17,459 - 106,247 1 3,445 - 55,979 - 1,294,289 9 $ 14,212,459 100 (Continue)	December 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 March 31, 2020 Amount % $ 2,643,373 23 238,207 2 81,608 1 249 - 1,629,180 14 5,180 - 5,746,944 50 161,840 1 10,351 - 10,516,932 91 76,716 1 30,783 - 645,572 6 79,705 1 18,429 - 123,032 1 3,811 - 16,101 - 994,149 9 $ 11,511,081 100
		Amount $ 5,017,168 387,753 57,070 337 1,879,847 4,269 5,420,999 149,790 937 12,918,170 57,926 36,393 933,679 83,161 17,459 106,247 3,445 55,979 1,294,289 $ 14,212,459 (Continue)	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 $ 2,643,373 238,207 81,608 249 1,629,180 5,180 5,746,944 161,840 10,351 10,516,932 76,716 30,783 645,572 79,705 18,429 123,032 3,811 16,101 994,149 $ 11,511,081
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 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1550 Investment accounted for under the equity method 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-current assets 1XXX Total assets	6(1) 6(2) 6(4) 6(5) 8 6(3) 6(6) 6(7) 6(8) 6(9) 6(10) (11) 8

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets

March 31, 2021, December 31, 2020 and March 31, 2020

(The Balance Sheets as of March 31, 2021 and 2020 are unaudited)

Liabilities and equity	Note	March 31, 2021 Amount % $ 1,620,000 11 99,840 1 63,807 - 2,115 - 2,483,518 17 785,909 6 234,545 2 12,428 - 6,866 - 5,309,028 37 16,881 - 12,110 - 71,710 1 13,570 - 114,271 1 5,423,299 38 2,860,999 20 125,596 1 1,409,039 10 8,524 - 4,663,883 33 ( 1,374 ) - ( 145,649 ) ( 1) 8,921,018 63 ( 131,858 ) ( 1) 8,789,160 62 $ 14,212,459 100	Unit: NT$ thousand December 31, 2020 March 31, 2020 Amount % Amount % $ 1,340,000 10 $ 454,000 4 149,756 1 - - 5,346 - 48,361 - 2,115 - 1,900 - 2,396,158 19 2,651,558 23 694,001 5 493,067 4 147,948 1 82,515 1 10,356 - 9,207 - 10,478 - 7,333 - 4,756,158 36 3,747,941 32 16,495 - 15,436 - 12,442 - 2,391 - 71,281 1 71,123 1 14,689 - 17,503 - 114,907 1 106,453 1 4,871,065 37 3,854,394 33 2,857,589 22 2,857,589 25 109,677 1 102,672 1 1,409,039 11 1,359,235 12 8,524 - - - 4,019,327 31 3,597,842 31 5,536 - 17,416 - ( 145,649) ( 1) ( 145,649) ( 1) 8,264,043 64 7,789,105 68 ( 134,760) ( 1) ( 132,418) ( 1) 8,129,283 63 7,656,687 67 $ 13,000,348 100 $ 11,511,081 100
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 income tax liabilities 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current 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-current liabilities 2XXX Total liabilities Equity attributable to owners 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 31XX Total equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity 3X2X Total liabilities and equity	6(12) 6(19) 6(13) 6(16) 6(17) 6(18) 6(16)

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

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2021 and 2020

(Unaudited)

Items

Unit: NT$ thousand (Except earnings per share) Three months ended March 31,2021 Three months ended March 31,2020 Notes Amount % Amount % 6(19) $ 4,971,476 100 $ 3,663,730 100 6(5) (24) (25) ( 3,827,660 ) ( 77)( 2,956,338) ( 81 ) 1,143,816 23 707,392 19 6(24) (25) ( 85,688 ) ( 1) ( 63,379) ( 2 ) ( 94,607 ) ( 2) ( 78,408) ( 2 ) ( 336,185 ) ( 7) ( 228,086) ( 6 ) 12(2) 5,713 - - - ( 510,767 ) ( 10)( 369,873) ( 10 ) 633,049 13 337,519 9 6(20) 5,813 - 11,148 - 6(21) 6,232 - 2,558 - 6(22) 87,973 2 6,144 - 6(23) ( 4,838 ) - ( 2,097) - 6(6) 2,510 - ( 2,427) - 97,690 2 15,326 - 730,739 15 352,845 9 6(26) ( 88,176 ) ( 2)( 41,231) ( 1 ) $ 642,563 13 $ 311,614 8 6(3) ( $ 6,910 ) - $ 25,940 1 ( $ 6,910 ) - $ 25,940 1 $ 635,653 13 $ 337,554 9 $ 644,556 13 $ 311,666 8 ( $ 1,993 ) - ( $ 52) - $ 637,646 13 $ 337,606 9 ( $ 1,993 ) - ( $ 52) - 6(27) $ 2.30 $ 1.11 $ 2.30 $ 1.11

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

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Changes in Equity Three Months Ended March 31, 2021 and 2020

(Unaudited)

							(Unaudited)	(Unaudited)	(Unaudited)
2020 Balance at January 1, 2020 Profit for the period Other comprehensive income for the period Comprehensive income for the period Acquisition of company's share by subsidiary recognized as treasury share Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non-controlling interest Balance at March 31, 2020 2021 Balance at January 1, 2020 Profit for the period Other comprehensive income for the period Comprehensive income for the period Difference between consideration and carrying amount of subsidiaries acquired or disposed Issue new shares due to employee stock options exercised Balance at March 31, 2021	Note						Equity attributable			to	owners of the parent								Non-controlling interest
			Common stock		Capital surplus			R	etained earnings			Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income			Treasury share		Total
							Legal reserve		Special reserve	r	Unappropriated etained earnings
	6(17) (28) 6(17) 6(15) (16) (17)		$ 2,857,589 - - - - - $ 2,857,589 $ 2,857,589 - - - - 3,410 $ 2,860,999		$ 104,305 - - - - ( 1,633 ) $ 102,672 $ 109,677 - - - ( 311 ) 16,230 $ 125,596		$ 1,359,235 - - - - - $ 1,359,235 $ 1,409,039 - - - - - $ 1,409,039		$ - - - - - - $ - $ 8,524 - - - - - $ 8,524		$ 3,286,176 311,666 - 311,666 - - $ 3,597,842 $ 4,019,327 644,556 - 644,556 - - $ 4,663,883		($ 8,524 ) - 25,940 25,940 - - $ 17,416 $ 5,536 - ( 6,910 ) ( 6,910 ) - - ($ 1,374 )		($ 137,321 ) - - - ( 8,328 ) - ($ 145,649 ) ($ 145,649 ) - - - - - ($ 145,649 )		$ 7,461,460 311,666 25,940 337,606 ( 8,328 ) ( 1,633 ) $ 7,789,105 $ 8,264,043 644,556 ( 6,910 ) 637,646 ( 311 ) 19,640 $ 8,921,018		($ 120,681 ) ( 52 ) - ( 52 ) ( 11,566 ) ( 119 ) ($ 132,418 ) ($ 134,760 ) ( 1,993 ) - ( 1,993 ) 4,895 - ($ 131,858 )

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

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows Three Months Ended March 31, 2021 and 2020

(Unaudited)

Cash flows from operating activities Profit before income tax for the period Adjustments Income and expenses having no effect on cash flows Depreciation Amortization Expected credit impairment loss (gain) Net loss (gain) on financial assets at fair value through profit or loss Interest expenses Interest income Share of (loss) profit of associates and joint ventures accounted for under equity method Gains arising from lease modifications 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 Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Other current assets Net changes in liabilities relating to operating activities Notes payable Accounts payable Contract liabilities Other payables Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities

Unit: NT$ thousand Notes Three months ended March 31, 2021 Three months ended March 31, 2020 $ 730,739 $ 352,845 6(7) (8) (9) (24) 81,251 76,822 6(10) (24) 30,659 24,959 12(2) ( 5,713 ) - 6(2) (22) ( 72,730 ) 13,262 6(23) 4,838 2,097 6(20) ( 5,813 ) ( 11,148 ) 6(6) ( 2,510 ) 2,427 6(22) ( 4 ) ( 26 ) 50,451 1,124 ( 337 ) ( 215 ) ( 239,890 ) ( 372,242 ) ( 251 ) - 91,450 76,519 548,331 ( 774,392 ) ( 118,100 ) ( 134,396 ) 4,260 ( 3,485 ) - ( 80 ) 87,360 425,648 58,461 44,402 142,494 67,819 ( 4,036 ) 1,252 ( 821 ) ( 839 ) 1,380,089 ( 207,647 ) 5,924 12,190 ( 4,166 ) ( 1,363 ) ( 1,543 ) ( 739 ) 1,380,304 ( 197,559 )

(Continued)

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows Three Months Ended March 31, 2021 and 2020

(Unaudited)

Cash flows from investing activities Disposal of financial assets at amortized cost Acquisition of financial assets at amortized cost Acquisition of property, plant and equipment (Increase) decrease in prepayments for equipment Acquisition of intangible assets Decrease in guarantee deposit paid Net cash flows from investing activities Cash flows from financing activities Increase in short-term borrowings Decrease in short-term notes and bills payable Lease principal repayment Decrease in guarantee deposit received Employee exercised stock options Treasury share acquired Acquisition of ownership interests in subsidiaries Net cash flows from 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 Three months ended March 31, 2021 Three months ended March 31, 2020 $ 142,008 $ 59,298 ( 62,374 ) - 6(29) ( 285,712 ) ( 61,043 ) 23,232 ( 4,572 ) 6(10) ( 25,218 ) ( 66,398 ) 167 594 ( 207,897 ) ( 72,121 ) 6(29) 280,000 180,000 6(29) ( 49,591 ) - 6(29) ( 2,907 ) ( 2,304 ) 6(29) ( 298 ) - 19,640 - - ( 19,894 ) 6(28) - ( 1,752 ) 246,844 156,050 1,419,251 ( 113,630 ) 6(1) 3,597,917 2,757,003 6(1) $ 5,017,168 $ 2,643,373

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

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Notes to the Consolidated Financial Statements Three Months Ended March 31, 2021 and 2020

(Unaudited)

Unit: NT$ thousand (Unless otherwise indicated)

1. History and Organization

Elite Semiconductor Microelectronics Technology Inc. (the Company) was founded in May 1998 and started operation in December of the same year. The core business of the Company and its subsidiaries (collectively referred herein as “the Group”) include research, development, production, manufacture, and sales of dynamic and static random access memory, flash memory, analog integrated circuit, analog and digital mixed integrated circuit. The Group also provides technical services related to product design 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 Statemen ts

and Procedures for Authorization

The consolidated financial statements were reported to the Board of Directors on May 6, 2021.

3. Application of New Standards, Amendments and Interpretation s

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

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

from 2021 are as follows:
	Effective Date by
	International Accounting
New Standards,AmendmentsandInterpretations	StandardsBoard
Amendments to IFRS 4, “Extension of the temporary
exemption	January 1, 2021
from applying IFRS 9”
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, “Interest Rate Benchmark Reform— Phase 2”	January 1, 2021
Amendment to IFRS 16, “Covid-19-related rent concessions beyond 30 June 2021”	April 1, 2021(Note)

Note ： Earlier application from January 1, 2021 is allowed by FSC

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

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• (2) Effect of New Issuances of or Amendments to IFRSs as Endorsed by the FSC but not yet Adopted by the Company

None.

• (3) Effects of IFRSs Issued by IASB but not yet Endorsed by the FSC

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

	Effective Date by
	International
	Accounting Standards
New Standards,AmendmentsandInterpretations	Board
Amendments to IFRS 3, “Reference to the Conceptual	January 1, 2022
Framework”
Amendments to IFRS 10 and IAS 28, “Sale or Contribution of	To be determined by
Assets between an Investor and its Associate or Joint Venture”	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	January 1, 2023
or Non-current”
Amendments to IAS 1, “Disclosure of accounting policies”	January 1, 2023
Amendments to IAS 8, “Definition of accounting estimates”	January 1, 2023
Amendments to IAS 16, “Property, Plant and Equipment -	January 1, 2022
Proceeds before Intended Use”
Amendments to IAS 37, “Onerous Contracts - Cost of Fulfilling	January 1, 2022
a Contract”
Annual Improvements to IFRSs 2018-2020 Cycle	January 1, 2022
The above standards and interpretations have no significant impact to the
Group's financial condition and financial performance based on the Group's
assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2020, except for the compliance statement, basis of preparation, basis of consolid ation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

• A. These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IAS 34, “Interim Financial Reporting” as endorsed by the FSC.

• B. These consolidated financial statements should be read along with the consolidated financial statements for the year ended December 31, 2020.

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• (2) Basis of preparation

• A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:

  • (a)Financial assets (including derivatives instruments) at fair value through profit or loss.

  • (b)Financial assets at fair value through other comprehensive income.

  • (c)Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.

• B. The preparation of financial statements in conformity with IFRS, IAS, IFRIC Interpretations and SIC Interpretations as endorsed by FSC (collectively referred herein as IFRSs), requires the use of certain critical accounting estimates. It also requires management to exercise 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 estimates are estimates are significant to the consolidated financial statements are disclosed in Note 5.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements

The basis of preparation for the consolidated financial statements applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2020.

• B. Subsidiaries included in the consolidated financial statements:

Name of Investor Name of Subsidiary Main Business Activities

Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note

Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Memory Technology Inc. Research and development, production, sales and related consulting services of integrated circuit Elite Semiconductor Microelectronics Technology Inc. Charng Feng Investment Ltd. General investment Elite Semiconductor Microelectronics Technology Inc. Jie Yong Investment Ltd. General investment Elite Semiconductor Microelectronics Technology Inc. Elite Investment Services Ltd. General investment Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor (B.V.I.) Ltd. General investment Elite Semiconductor Microelectronics Technology Inc. Eon Silicon Solutions, Inc. USA Investigation and research of business situation and industrial technology

100 100 100 Note1 100 100 100 Note1 41.86 41.86 41.86 Note1 Note4 100 100 100 - - 100 Note3 Note5 100 100 100 Note1

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Name of Investor Name of Subsidiary Main Business Activities

Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note

Charng Feng Investment Ltd. 3R Semiconductor Technology Inc. Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade Charng Feng Investment Ltd. Elite Silicon Technology Inc. Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade Charng Feng Investment Ltd. Elite Innovation Japan Ltd. Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade Charng Feng Investment Ltd. Elite Semiconductor Memory Technology (shenzhen) Inc. Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical consulting and services of integrated circuit, and after - sales service Charng Feng Investment Ltd. Elite Semiconductor Microelectronics (Shanghai) Technology Inc. Product design, wholesale and retail of electronic materials, information software services and international trade Charng Feng Investment Ltd. CHI Microelectronics Limited Trading Charng Feng Investment Ltd. HHHtech Co., Ltd. Information software services, product design, management consultant and international trade

100 100 100 Note1 98.01 98.01 96.44 Note1 100 100 100 Note1 100 100 100 Note1 100 100 - Note2 Note6 100 100 - Note2 Note7 75 - - Note2 Note8

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  - Note 1: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as at March 31,2021 and 2020 were not reviewed by independent auditors.

  - Note 2: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as at March 31,2021 were not reviewed by independent auditors.

  - Note 3: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as at March 31,2020 were not reviewed by independent auditors.

  - Note 4: Elite Semiconductor Microelectronics Technology Inc. accounts for the majority of voting rights of Jie Yong Inve stment Ltd. and have same management. It is evaluated to have substantial control, so it was included in the consolidated financial statements.

  - Note 5: Elite Semiconductor (B.V.I.) Ltd. obtained a liquidated certificate from local regulatory authority on February 9, 2021, and obtained a liquidated letter from Investment Commission of Ministry of Economic Affairs (MOEA) on February 20, 2021.

  - Note 6: Elite Semiconductor Microelectronics (Shanghai) Technology Inc. was established on November 27, 2019. The Company's subsidiary, Charng Feng Investment Ltd., obtained the investment amount of USD 200,000 approved by the Investment Commission of MOEA on May 20, 2020.

  - Note 7: CHI Microelectronics Limited. was established on August 31, 2020. The Company's subsidiary, Charng Feng Investment Ltd., obtained the investment amount of HKD 100,000 approved by the Investment Commission of MOEA on December 11, 2020.

  - Note 8: The Company obtained HHHtech Co., Ltd. share interest by 75% through it increased its capital by issuing new shares on March, 2021.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: Not applicable.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business

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combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any noncontrolling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date.

• (5) Employee Benefits

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one -off events. And, the related information is disclosed accordingly.

• (6) Income tax

The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

5. Critical Accounting Judgments, Estimates and Key Sources of Assumption Uncertainty

There was no significant change in the reporting period. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020.

6. Details of Significant Accounts

• (1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits		March 31, 2021 December 31, 2020		March 31, 2020
		$ 162 975,849 4,041,157 $ 5,017,168	$ 137 1,042,489 2,555,291 $ 3,597,917	$ 171 359,305 2,283,897
				$ 2,643,373

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

• B. Details of the Group's cash and cash equivalents pledged to others as collateral are provided in Note 8.

~16~

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

Item	March 31, 2021 December 31, 2020	March 31, 2021 December 31, 2020	March 31, 2020
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	$ 576 160,768 8,113 73,044 31,226 - 273,727 114,026 $ 387,753	$ 576 162,911 8,113 72,991 31,226 13,784 289,601 75,873 $ 365,474	$ 576 148,013 23,263 74,678 31,226 14,629
			292,385 ( 54,178)
			$ 238,207

• A. Amounts recognised in profit or loss in relation to financial assets 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		Threemonths endedMarch31, 2021 2020 $ 72,541 ($ 7,317) 735 ( 5,705) ( 546) ( 240) $ 72,730 ($ 13,262)	Threemonths endedMarch31, 2021 2020 $ 72,541 ($ 7,317) 735 ( 5,705) ( 546) ( 240) $ 72,730 ($ 13,262)
			$ 72,730

• B. The Group has no financial assets at fair value through profit or loss pledged to others.

• C. Information relating to credit risk is provided in Note 12(2)C(b).

• (3) Financial assets at fair value through other comprehensive income

Item	March 31, 2021 December 31, 2020	March 31, 2021 December 31, 2020	March 31, 2020
Non-current items: Equity instruments Unlisted stock Valuation adjustment	$ 59,300 ( 1,374) $ 57,926	$ 59,300 5,536 $ 64,836	$ 59,300 17,416
			$ 76,716

~17~

The Group has elected to classify equity investments that are considered to strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $57,926, $64,836 and $76,716 as at March 31, 2021, December 31, 2020, and March 31, 2020, respectively.

(4) Accounts receivable

2020, respectively. Accounts receivable
Accounts receivable - general customers Accounts receivable - related parties Less: Allowance for losses		March 31, 2021 December 31, 2020		March 31, 2020 $ 1,642,716 759 1,643,475 ( 14,295) $ 1,629,180
		$ 1,878,623 1,224 1,879,847 - $ 1,879,847	$ 1,638,733 973 1,639,706 ( 5,713) $ 1,633,993

• A. The ageing analysis 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			March 31, 2021 December 31, 2020	March 31, 2021 December 31, 2020	March 31, 2020 $ 1,592,791 36,389 - - 14,295 $ 1,643,475
			$ 1,879,637 210 - - - $ 1,879,847	$ 1,633,993 - - - 5,713 $ 1,639,706

The above aging analysis was based on past due date.

• B. As at March 31, 2021, December 31, 2020 and March 31, 2020, without taking into account any collateral held or other credit enhancements, the maximum hedge to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,879,847, $1,633,993 and $1,629,180.

• 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		March 31, 2021 December 31, 2020		March 31, 2020 $ 41,568 7,500 8,863 615,599 426,977 $ 1,100,507
		$ 42,061 4,280 5,251 861,243 645,432 $ 1,558,267	$ 33,044 4,272 5,526 760,162 555,221 $ 1,358,225

~18~

• D. Information relating to credit risk is provided in Note 12(2).

• E. As at March 31, 2021, December 31, 2020 and March 31, 2020, accounts receivable were all from contracts with customers. As at January 1, 2020, the balance of receivables from contracts with customers amounted to $1,256,938.

• F. The Group has no accounts receivable pledged to others as collateral.

• (5) Inventories

Raw materials Work in process Finished goods Inventory in transit			March31,2021
		Cost	Allowance for valuation loss	Bokvalue
		$ 163,600 4,094,604 1,234,212 16,922 $ 5,509,338	($ 1,503) ( 34,929) ( 51,907) - ($ 88,339)	$ 162,097 4,059,675 1,182,305 16,922
				$ 5,420,999

Raw materials Work in process Finished goods Inventory in transit Raw materials Work in process Finished goods Inventory in transit		December 31, 2020	December 31, 2020
		Cost	Allowance for valuation loss	Bok value
		$ 138,104 4,724,556 1,199,604 6,540 $ 6,068,804	($ 10,726) ( 20,266) ( 68,482) - ($ 99,474) March 31, 2020	$ 127,378 4,704,290 1,131,122 6,540
				$ 5,969,330
		Cost	Allowance for valuation loss	Bok value
		$ 184,174 4,637,738 978,613 74,209 $ 5,874,734	($ 7,729) ( 63,169) ( 56,892) - ($ 127,790)	$ 176,445 4,574,569 921,721 74,209
				$ 5,746,944

~19~

The Group recognized as expense or loss:

Cost of goods sold Reversal of allowance on market value decline and obsolete and slow-moving inventories		Threemonths endedMarch31,	Threemonths endedMarch31,	Threemonths endedMarch31,
		2021	2020
		$ 3,838,795 ( 11,135) $ 3,827,660	$ 2,997,744 ( 41,406)
				$ 2,956,338

The reversal of allowance on market value decline and obsolete and slowmoving inventories were recognized because sale of certain inventories which were previously provided with allowance for price decline for the three months ended March 31, 2021 and 2020.

(6) Investments accounted for under the equity metho d

2021 At January 1 $ 33,883 $ Share of profit or loss of investments accounted for using equity method 2,510 ( At March 31 $ 36,393 $ March 31, 2021 December 31, 2020 Associates $ 36,393 $ 33,883	2021 At January 1 $ 33,883 $ Share of profit or loss of investments accounted for using equity method 2,510 ( At March 31 $ 36,393 $ March 31, 2021 December 31, 2020 Associates $ 36,393 $ 33,883		2021	2021		2020
			$	33,883 2,510	$ (	33,210 2,427)
			$	36,393	$	30,783
						March 31, 2020 $ 30,783
	$ 36,393			$ 33,883

A. Associates

• (a) The basic information of the associates that are material to the Group is as follows:

as follows:
Company name Principal place of business	Shareholding ratio Nature of relationship Method of measurement
Canyon Semiconductor Inc. Taiwan	March 31, 2021 December 31, 2020 March 31, 2020 40.93% 40.93% 40.93% Holding over 20% of voting rights Equity method

~20~

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

• Balance sheet

to the Group is as follows: Balance sheet
		CanyonSemiconductor Inc.
	March 31,		December 31,	March 31,
		2021	2020		2020
Current assets	$	102,128	$ 109,740	$	101,874
Non-current assets		3,726	1,299		1,192
Current liabilities	(	15,279)	( 28,258)	(	27,858)
Non-current liabilities	(	1,660)	-		-
Total net assets	$	88,915	$ 82,781	$	75,208
Share in associate's net assets	$	36,393	$ 33,883	$	30,783
Carrying amount of the
associate	$	88,915	$ 82,781	$	75,208
			CanyonSemiconductor	Inc.
		Three months ended March 31,
		2021		2020
Revenue		$	29,193 $		15,278
Profit (loss) for the period from
continuing operations		$	6,133 ($		5,932)
Total comprehensive income (loss)		$	6,133 ($		5,932)

• B. The above investments accounted for under the equity method is based on the company's evaluation of financial statements that have not been reviewed by individual auditors during the same period. The recognition of profit or loss of investments is as follows:

Investee Canyon Semiconductor Inc.	Threemonths endedMarch31,	Threemonths endedMarch31,
	2021	2020
	$ 2,510	($ 2,427)

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(7) Property, plant and equipment

Land Buildings and structures Machinery equipment Testing equipment At January 1, 2021 Cost $9,023 $636,446 $518,018 $287,860 Accumulated depreciation and impairment - ( 398,943) ( 375,047) ( 168,256) $9,023 $237,503 $142,971 $119,604 2021 At January 1 $9,023 $237,503 $142,971 $119,604 Additions - 66,220 11,226 9,898 Change in consolidated entity - - - - Transfer (Note) - - 9,894 24,693 Depreciation charge - ( 8,486) ( 7,569) ( 6,577) At March 31 $9,023 $295,237 $156,522 $147,618 At March 31, 2021 Cost $9,023 $702,666 $539,138 $322,451 Accumulated depreciation and impairment - ( 407,429) ( 382,616) ( 174,833) $9,023 $295,237 $156,522 $147,618 Land Buildings and structures Machinery equipment Testing equipment At January 1, 2020 Cost $9,023 $635,941 $429,782 $249,302 Accumulated depreciation and impairment - ( 364,888) ( 352,626) ( 146,396) $9,023 $271,053 $ 77,156 $102,906 2020 At January 1 $9,023 $271,053 $ 77,156 $102,906 Additions - - 3,600 6,056 Depreciation charge - ( 8,530) ( 4,690) ( 5,439) At March 31 $9,023 $262,523 $ 76,066 $103,523 At March 31, 2020 Cost $9,023 $635,941 $433,382 $255,358 Accumulated depreciation and impairment - ( 373,418) ( 357,316) ( 151,835) $9,023 $262,523 $ 76,066 $103,523		Land Buildings and structures Machinery equipment Testing equipment	Land Buildings and structures Machinery equipment Testing equipment	Land Buildings and structures Machinery equipment Testing equipment	Land Buildings and structures Machinery equipment Testing equipment	Others
						$1,481,488 (1,213,991) $ 267,497 $ 267,497 112,499 627 - ( 55,344) $ 325,279 $1,594,633 (1,269,354) $ 325,279 Others
		$9,023 - $9,023 $9,023 - - $9,023 $9,023 - $9,023	$635,941 ( 364,888) $271,053 $271,053 - ( 8,530) $262,523 $635,941 ( 373,418) $262,523	$429,782 ( 352,626) $ 77,156 $ 77,156 3,600 ( 4,690) $ 76,066 $433,382 ( 357,316) $ 76,066	$249,302 ( 146,396) $102,906 $102,906 6,056 ( 5,439) $103,523 $255,358 ( 151,835) $103,523	$1,231,048 ( 994,858) $ 236,190 $ 236,190 13,734 ( 55,487) $ 194,437 $1,244,782 (1,050,345) $ 194,437

Note: Transferred from prepayments for equipment (shown as “other noncurrent assets”).

• A. For the three months ended March 31, 2021 and 2020 no interest expense was capitalized on property, plant and equipment in the Group.

~22~

• B. The Group has no property, plant and equipment pledged to others.

• (8) Leasing arrangements- lessee

• A. The Group leases various assets including land, buildings and structures, business vehicles, printers. Rental contracts are typically made for periods of 2 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Short-term leases with a lease term of 12 months or less comprise business vehicles and staff dormitory.

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

as follows:
Land Buildings and structures Business vehicles Printers Land Buildings and structures Business vehicles Printers			March 31, 2021 December 31, 2020
				Book value
			$ 855 1,525 497 156 $ 3,033

• C. For the three months ended March 31, 2021 and 2020, the additions to right - of-use assets were $5,702 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		Threemonths endedMarch31, 2021 2020 $ 303 $ 311 $ 1,819 $ 1,550
		2021
		$ 303 $ 1,819

• E. For three months ended March 31, 2021 and 2020, the Group’s total cash outflow for leases were $5,029 and $4,165, respectively.

~23~

(9) Investment property

At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Depreciation charge At March 31 At March 31, 2021 Cost Accumulated depreciation and impairment At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Depreciation charge At March 31 At March 31, 2020 Cost Accumulated depreciation and impairment	Buildings and structures $ 20,369 ( 2,668) $ 17,701 $ 17,701 ( 242) $ 17,459 $ 20,369 ( 2,910) $ 17,459 Buildings and structures $ 20,369 ( 1,698) $ 18,671 $ 18,671 ( 242) $ 18,429 $ 20,369 ( 1,940) $ 18,429
	(

~24~

• A. Rental income from investment property and direct operating expenses arising 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		Threemonths endedMarch31, 2021 2020 $ 641 $ 652 $ 242 $ 242
		2021
		$ 641 $ 242

• B. The fair value of the investment property held by the Group as at March 31, 2021, December 31, 2020 and March 31, 2020 was $9,897, $10,516 and $10,533, respectively, which was valued by income approach. Key assumptions are as follows:

assumptions are as follows:
Rate of net return on capital (Note)	March 31, 2021 December 31, 2020 March 31, 2020
		14.42%	13.29%	13.64%

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

C. For the three months ended March 31, 2021 and 2020 no interest expense was capitalized on investment property in the Group.

• D. The Group has no investment property pledged to others.

• (10) Intangible assets

At January 1, 2021 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Amortization charge At March 31 At March 31, 2021 Cost Accumulated depreciation and impairment	Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Goodwill	Others	Total $ 497,091 ( 385,403) $ 111,688 $ 111,688 25,218 ( 30,659) $ 106,247 $ 522,309 ( 416,062) $ 106,247
		$ 34,478 ( 30,654) $ 3,824 $ 3,824 - ( 1,275) $ 2,549 $ 34,478 ( 31,929) $ 2,549	$ 11,000 ( 11,000) $- $ - - - $- $ 11,000 ( 11,000) $-	$ 80,758 ( 62,456) $ 18,302 $ 18,302 - - $ 18,302 $ 80,758 ( 62,456) $ 18,302	$ 370,855 ( 281,293) $ 89,562 $ 89,562 25,218 ( 29,384) $ 85,396 $ 396,073 ( 310,677) $ 85,396

~25~

Patents and Customer Technical skill Relationship At January 1, 2020 Cost $ 34,478 $ 11,000 Accumulated depreciation and impairment ( 25,556) ( 11,000) $ 8,922 $- 2020 At January 1 $ 8,922 $ - Additions - - Amortization charge ( 1,275) - At March 31 $ 7,647 $- At March 31, 2020 Cost $ 34,478 $ 11,000 Accumulated depreciation and impairment ( 26,831) ( 11,000) $ 7,647 $-	Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Patents and Customer Technical skill Relationship	Goodwill	Others	Total $ 330,088 ( 248,495) $ 81,593 $ 81,593 66,398 ( 24,959) $ 123,032 $ 396,486 ( 273,454) $ 123,032
		$ 34,478 ( 25,556) $ 8,922 $ 8,922 - ( 1,275) $ 7,647 $ 34,478 ( 26,831) $ 7,647	$ 11,000 ( 11,000) $- $ - - - $- $ 11,000 ( 11,000) $-	$ 80,758 ( 37,104) $ 43,654 $ 43,654 - - $ 43,654 $ 80,758 ( 37,104) $ 43,654	$ 203,852 ( 174,835) $ 29,017 $ 29,017 66,398 ( 23,684) $ 71,731 $ 270,250 ( 198,519) $ 71,731

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

Operating costs Selling expenses Administrative expenses Research and development expenses		Three months ended March 31, 2021 2020 $ 1,275 $ 1,275 76 92 416 170 28,892 23,422 $ 30,659 $ 24,959
		2021
		$ 1,275 76 416 28,892 $ 30,659

• B. For the three months ended March 31, 2021 and 2020 no interest expense 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 goodwill is tested annually for impairment. The recoverable amount has been determined based on value-in-use calculations. The assumptions of evaluation of impairment change immaterial as at March 31, 2021. The evaluation of goodwill impairment is provided in 6(11) in the consolidated financial statements for the year ended December 31, 2020.The goodwill is tested annually for impairment. The recoverable amount has been determined based on value-in-use calculations.

~26~

(12) Short -term borrowings

Type ofborrowings March31,2021 Interest raterange Collateral	Type ofborrowings March31,2021 Interest raterange Collateral
Bank borrowings Credit loans $ 1,620,000 0.75%～0.97% None Type of borrowings December 31, 2020 Interest rate range Collateral
Bank borrowings Credit loans Type ofborrowings	$ 1,340,000 0.75%～1.05% None March31,2020 Interest raterange Collateral
Bank borrowings Credit loans	$ 454,000 0.95%～1.90% None

Interest expense recognized in profit or loss amounted to $3,818 and $1,341 for the three months ended March 31, 2021 and 2020, respectively.

(13) Other payable

ther payable
Salary and bonus payables Payable on employees and director remuneration Payable on equipment Others		March 31, 2021 December 31, 2020		March 31, 2020 $ 331,801 58,715 20,373 82,178 $ 493,067
		$ 492,004 127,422 95,622 70,861 $ 785,909	$ 381,089 80,658 146,904 85,350 $ 694,001

(14) Pensions

• A.(a) The Company have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees ’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company a would assess the balance in the aforementioned labor pension reserve acc ount

~27~

by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.

• (b) For the aforementioned pension plan, the Group recognized pension costs of $105 and $135 for the three months ended March 31, 2021 and 2020, respectively.

• B.(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The Company’s subsidiaries, Eon Silicon Solutions, Inc. USA established a 401(K) plan based on the US Government ’s National Tax Regulation 401(K), and local employees can allocate a certain amount of salary to the pension account each month within the upp er limit; the Company may cooperate with the allocation according to its policy of rewarding or comforting employees.

• (c) The Company’s mainland China subsidiaries, Elite Semiconductor Memory Technology (shenzhen) Inc. and Elite Semiconductor Microelectronics (Shanghai) Technology Inc., have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• (d) The pension costs under defined contribution pension plans of the Group for the three months ended March 31, 2021 and 2020, were $8,755 and $7,902, respectively.

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(15) Share- based payment

• A. For the three months ended March 31, 2021 and 2020, the Group’s sharebased payment arrangements were as follows:

			Contract	Vesting
Type of arrangement	Grantdate	Quantity granted	period	condition
Succeed to 2010 Eon	August 10, 2010,	4,000 thousand	10 years	Note 1
Silicon Solution Inc.’s	October 15, 2010	shares
employee stock options	and January 13,	(Note 2)
	2011
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 shares 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. After the merger, Eon Silicon Solution Inc.'s 2010 and 2013 employee stock option plans have 219 thousand shares and 688 thousand shares in circulation.

Among the share-based payment arrangements above are settled by equity.

• B. Details of the share-based payment arrangements are as follows:

• Succeed to Eon Silicon Solution Inc. ’s employee stock options:

Options outstanding at January 1 Options exercised Options expired Options outstanding at March 31 Options exercisable at March 31	2021 2020 Weighted-average Weighted-average No. of options exercise price (in dollars) No. of options exercise price (in dollars) 518 $ 57.6~217.4 543 $ 59.2~303.4 ( 341) 57.6 - - ( 106) 217.4 - - 71 $ 57.6543 $ 59.2~303.4 71 543	2021 2020 Weighted-average Weighted-average No. of options exercise price (in dollars) No. of options exercise price (in dollars) 518 $ 57.6~217.4 543 $ 59.2~303.4 ( 341) 57.6 - - ( 106) 217.4 - - 71 $ 57.6543 $ 59.2~303.4 71 543
		518 $ 57.6~217.4 ( 341) 57.6 ( 106) 217.4 71 $ 57.6 71

• C. The weighted-average stock price of stock options at exercise dates for the three months ended March 31, 2021 was $75.41. No options exercised for the three months ended March 31, 2020.

• D. As of March 31, 2021, December 31, 2020 and March 31, 2020, the range of exercise prices of stock options outstanding was $57.6, $57.6~$217.4 and $59.2~$303.4 (in dollars), respectively; the weighted-average remaining contractual period was 2.39 years, 2.64 years and 3.39 years, respectively.

• E. Expenses incurred on share-based payment transactions for the three months ended March 31, 2021 and 2020, were all $0.

~29~

(16) Share capital

• A. As of S March 31, 2021, the Company’s authorized capital was $3,500,000, consisting of 350,000 thousand shares of ordinary stock (including 20,000 thousand shares reserved for employee stock options), and the paid -in capital was $2,860,999 with a par value of $10 (in dollars) per share.

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

Shares: thousand shares

Shares outstanding at January 1 Employee stock options exercised Acquisition of company's share by subsidiary recognized as treasury share Shares outstanding at March 31 Treasury shares at the end of the period Shares issued at March 31		2021	2020 272,320 - ( 715) 271,605 14,154 285,759
		271,605 341 - 271,946 14,154 286,100

B. Treasury shares

The Company's shares held by the Company's subsidiary, Jie Young Investment Ltd., as of March 31, 2021, December 31, 2020 and March 31, 2020 due to the parent company's business strategy, were 14,154 thousand shares, with carrying amounts of $347,942; the average book value per share were $24.58, and the fair value per share were $104.00, $64.70 and $28.30.

(17) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid -in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

~30~

2021 Changes in Share Treasury share ownership interests in Employee stock premium transactions subsidiaries options Others At January 1 $ - $ 1,661 $ 100,239 $3,913 $3,864 Issue new shares due to employee stock options exercised 17,272 - - ( 1,042) - Difference between consideration and carrying amount of subsidiaries acquired or disposed - - ( 311) - - At March 31 $17,272 $ 1,661 $ 99,928 $2,871 $3,864 2020 Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options Others At January 1 $ 1,661 $ 94,949 $ 3,913 $ 3,782 Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non-controlling interest - ( 1,633) - - At March 31 $ 1,661 $ 93,316 $ 3,913 $ 3,782		2021	2021	2021	2021	2021	2021	2021	2021	2021
		Changes in Share Treasury share ownership interests in Employee stock premium transactions subsidiaries options									Others	Total
		$ - 17,272 - $17,272			$ 1,661 - - $ 1,661		$ 100,239 - ( 311) $ 99,928 2020		$3,913 ( 1,042) -		$3,864 - -	$109,677 16,230 ( 311)
									$2,871		$3,864		$125,596
		Changes in Treasury share ownership interests in Employee stock transactions subsidiaries options								Others
			$ 1,661 - $ 1,661			$ 94,949 ( 1,633) $ 93,316		$ 3,913 - $ 3,913		$ 3,782 - $ 3,782

(18) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year ’s earnings, if any, shall be appropriated in the following order:

• (a) Payment of all taxes and dues.

• (b) Offset against prior years’ operating losses, if any.

• (c) Set aside 10% of remaining amount as legal reserve.

• (d) Setting aside a special reserve 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 still in the growth stage, the appropriation of stockholders ’ bonus will be appropriated as cash, the remainder will be appropriated as shares when over 5%.

~31~

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareho lders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D.(a) In accordance with the regulations, the Company shall set aside spec ial reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. FinancialSupervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. As approved by Board of Directors on March 20, 2020, the appropriations of 2019 earnings would be legal reserve $49,804 and cash dividend $285,759, constituting $1(in dollars) per share. Aforementioned appropriations had been approved by stockholders’ meeting on June 15, 2020.

• F. As 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 share. Aforementioned appropriations had not yet been approved by stockholders’ meeting.

(19) Operating revenue

Revenue from contracts with customers A. Disaggregation of revenue from		Three months ended March 31, 2021 2020 $ 4,971,476 $ 3,663,730 contracts with customers
		2021

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

Three months ended March 31, 2021 Integrated circuits Three months ended March 31, 2020 Integrated circuits	Three months ended March 31, 2021 Integrated circuits Three months ended March 31, 2020 Integrated circuits	Three months ended March 31, 2021 Integrated circuits Three months ended March 31, 2020 Integrated circuits		Domestic		Asia	Others	Total $ 4,971,476 Total $ 3,663,730
			$ 2,167,660 Domestic	$ 2,167,660		$ 2,781,585 Asia	$ 22,231 Others
			$ 1,678,728			$ 1,944,753	$ 40,249

~32~

B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

liabilities:
Contract liabilities- advance sales receipts		March 31, 2021 December 31, 2020		March 31, 2020	January 1, 2020 $ 3,959
		$ 63,807	$ 5,346	$ 48,361

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		Threemonths endedMarch31, 2021 2020 $ 5,241 $ 3,809
		2021
		$ 5,241

(20) Interest revenue

Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income		Three months ended March 31, 2021 2020 $ 5,684 $ 10,203 61 698 68 247 $ 5,813 $ 11,148	Three months ended March 31, 2021 2020 $ 5,684 $ 10,203 61 698 68 247 $ 5,813 $ 11,148
		2021
		$ 5,684 61 68 $ 5,813

(21) Other income

Three months ended March 31,

Rent income Other income, others		2021	2020 $ 1,389 1,169 $ 2,558
		$ 1,378 4,854 $ 6,232

~33~

(22) Other gains and losses

Gains arising from lease modifications Foreign exchange gains Gains (Losses) on financial assets at fair value through profit or loss Miscellaneous disbursements ncial costs Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others		Threemonths endedMarch31,	Threemonths endedMarch31,
		2021	2020
		$ 4 $ 26 15,481 19,622 72,730 ( 13,262) ( 242) ( 242) $ 87,973 $ 6,144 Three months ended March 31, 2021 2020 $ 3,818 $ 1,341 386 353 303 311 4,507 2,005 331 92 $ 4,838 $ 2,097	$ 26 19,622 ( 13,262) ( 242)
		2021
		$ 3,818 386 303
		4,507
		331
		$ 4,838

(23) Financial costs

(24) Expenses 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		Three months ended March 31, 2021 2020 $ 420,387 $ 300,020 $ 77,976 $ 74,146 $ 3,033 $ 2,434 $ 242 $ 242 $ 30,659 $ 24,959
		2021
		$ 420,387 $ 77,976 $ 3,033 $ 242 $ 30,659

~34~

(25) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses		Threemonths endedMarch31, 2021 2020 $ 377,747 $ 268,476 15,171 13,413 8,860 8,037 9,632 4,390 8,977 5,704 $ 420,387 $ 300,020
		2021
		$ 377,747 15,171 8,860 9,632 8,977 $ 420,387

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

• B. For the three months ended March 31, 2021 and 2020, employees’ compensation was accrued at $38,970 and $18,770, respectively; while directors’ remuneration was accrued at $7,794 and $3,754, respectively. The aforementioned amounts were recognized in salary expenses.

The employees’ compensation and directors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit for the three months ended March 31, 2021.

• C. The employees’ compensation and directors’ remuneration of 2020 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2020 financial statements.

• D. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

~35~

(26) Income tax

A. Income tax expense

• (a) Components of income tax expense:

Current tax: Current tax on profits for the period Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense		Three months ended March 31,	Three months ended March 31,
		2021	2020
		$ 88,140 88,140 36 $ 88,176	$ 43,208
			43,208 ( 1,977)
			$ 41,231

• (b) The income tax charge relating to components of other comprehensive income: None.

• (c) The income tax charged to equity during the period: None.

• B. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

(27) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares (Note) Employees’ compensation Diluted earnings per share Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Threemonths endedMarch31,2021 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 644,556 279,897$ 2.30 837 $ 644,556 280,734 $ 2.30	Threemonths endedMarch31,2021 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 644,556 279,897$ 2.30 837 $ 644,556 280,734 $ 2.30
	$ 644,556 $ 644,556	279,897 837 280,734

~36~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares (Note) Employees’ compensation Diluted earnings per share Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares		Threemonths endedMarch31,2020 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 311,666 280,133$ 1.11 1,771 $ 311,666 281,904 $ 1.11	Threemonths endedMarch31,2020 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 311,666 280,133$ 1.11 1,771 $ 311,666 281,904 $ 1.11
		$ 311,666 $ 311,666	280,133 1,771 281,904

Note: The employee stock options not calculate for three months ended March 31, 2021 and 2020 due to the effect of anti-dilution.

(28) Transactions with non-controlling interest

On March 30, 2020 the Group acquired an additional shares of its subsidiaryElite Silicon Technology Inc. for a total cash consideration of $1,752. The carrying amount of non-controlling interest in Elite Silicon Technology Inc. was $119 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $1,633.The effect of changes in interests in Elite Silicon Techno logy Inc. on the equity attributable to owners of the parent for the three months ended March 31, 2020 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	Three months ended March 31, 2020	Three months ended March 31, 2020
		$ 119 ( 1,752)
		($ 1,633)

~37~

(29) Supplemental cash flow informatio n

A. Investing activities with partial cash payments:

					Threemonths endedMarch	Threemonths endedMarch	Threemonths endedMarch	Threemonths endedMarch	Threemonths endedMarch	31,
					2021				2020
	Purchase of property, plant and
	equipment
	(including amount of transfer)			$		234,430		$			23,390
	Add: Opening balance of
	payable on equipment					146,904					58,026
	Less: Ending balance of payable
	on equipment			(		95,622)		(			20,373)
	Cash paid during the period			$		285,712		$			61,043
B.Changes in liabilities from financing activities:
		Short-term								Liabilities from
	Short-term notes and bills				Lease		Guarantee deposits		financing activities-
	borrowings		payable		liabilities		received				gross
At January 1, 2021 $ 1,340,000		$		149,756	$	81,637	$	6,635		$	1,578,028
Changes in cash	flow from financing
activities	280,000	(		49,591)	(	2,907)	(	298)			227,204
Interest paid	-			-	(	303)		-		(	303)
Interest expense	-			-		303		-			303
Changes in other non-cash items -		(		325)		5,702		-			5,377
Changes from lease modifications -				-	(	294)		-		(	294)
At March 31, 2021 $ 1,620,000		$		99,840	$	84,138	$	6,337		$	1,810,315
		Short-term								Liabilities from
	Short-term	notes and bills			Lease		Guarantee deposits			financing
	borrowings			payable	liabilities		received			activities-gross
At January 1, 2020 $ 274,000		$		-	$	86,887	$	9,871		$	370,758
Changes in cash	flow from
financing activities 180,000				-	(	2,304)			-		177,696
Interest paid	-			-	(	311)			-	(	311)
Interest expense	-			-		311			-		311
Changes from lease modifications -				-	(	4,253)			-	(	4,253)
At March 31, 2020 $ 454,000		$		-	$	80,330	$	9,871		$	544,201

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Arima Lasers Corporation Canyon Semiconductor Inc.

Relationship with the Company

The Company’s subsidiary is this company’s director Investee indirectly accounted for under equity method

~38~

(2) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Total		Three months ended March 31,	Three months ended March 31,
		2021	2020
		$ 27,154 108 $ 27,262	$ 14,877 108
			$ 14,985

8. Pledged Assets

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

Assets item			Book value	March 31, 2020 Purpose
		March 31, 2021	December 31, 2020
Time deposits (shown as “other current assets and other non- current assets ”)		$ 3,969	$ 3,969	$ 3,969 Guarantee deposits for lease of land

9. Significant Contingent Liabilities and Unrecognized Contract Commitments None.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Dat e

None.

12. Others

(1) Capital management

Considering 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, so as to promote shareholder value in the long-term.

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

~39~

The gearing ratios at March 31, 2021, December 31, 2020 and March 31, 2020 were as follows

2020 were as follows
Total assets Total liabilities Total equity Equity to asset ratio		March 31, 2021 December 31, 2020		March 31, 2020 $ 11,511,081 ( 3,854,394) $ 7,656,687 67%
		$ 14,212,459 ( 5,423,299) $ 8,789,160 62%	$ 13,000,348 ( 4,871,065) $ 8,129,283 63%

(2) Financial instruments

A. Financial instruments by category

0 Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortized cost Cash and cash equivalents Financial assets at amortized cost - current Notes receivable Accounts receivable Other receivables Time deposits (shown as “other current assets and other non-current assets”) Guarantee deposits paid (shown as “other non-current assets”)		March 31, 2021 December 31, 2020	March 31, 2021 December 31, 2020	March 31, 2020 $ 238,207 $ 76,716 $ 2,643,373 81,608 249 1,629,180 5,180 3,969 5,667 $ 4,369,226
		$ 387,753 $ 57,926 $ 5,017,168 57,070 337 1,879,847 4,269 3,969 6,708 $ 6,969,368	$ 365,474 $ 64,836 $ 3,597,917 136,704 - 1,633,993 95,830 3,969 6,495 $ 5,474,908

~40~

Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other accounts payable Guarantee deposits received (shown as “other non-current liabilities”) Lease liability		March 31, 2021 December 31, 2020	March 31, 2021 December 31, 2020	March 31, 2020 $ 454,000 - 1,900 2,651,558 493,067 9,871 $ 3,610,396 $ 80,330
		$ 1,620,000 99,840 2,115 2,483,518 785,909 6,337 $ 4,997,719 $ 84,138	$ 1,340,000 149,756 2,115 2,396,158 694,001 6,635 $ 4,588,665 $ 81,637

• B. Financial risk management policies

• (a) The Group adopt comprehensive system of risk management and control to identify, measure and control all categories of risk, including market risk, credit risk, liquidity risk, and risk of cash flow, to make sure management is able to control and measure market risk, credit risk, liquidity risk, and risk of cash flow effectively.

• (b) In order to control all management objectives of market risk effectively, achieve optimal level of risk, maintain appropriate level of l iquidity and collectively manage all market risks, the Group will take factors such as consideration for the overall economic environment, status of competition and market value risks.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• I. The Group operates internationally and is exposed to foreign exchange risk arising from the various currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities .

• II. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. The companies adopt forward foreign exchange contracts through the Group treasury to manage the foreign exchange risk from future commercial transactions and recognized assets and liabilities. The foreign exchange risk will exist when future commercial transactions and recognized assets and liabilities use the currency different from the functional currency of the companies.

~41~

• III. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily through deposits denominated in the relevant foreign currencies (see Note 6(1)).

• IV. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose 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	March31,2021 Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands) $ 203,847 28.535 $ 5,816,774 194,119 4.344 843,253 $ 49,502 28.535 $ 1,412,540 32,019 0.258 8,261

(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) $ 154,117 28.480 $ 4,389,252 181,116 4.377 792,745 $ 50,522 28.480 $ 1,438,867 67,255 0.276 18,562

~42~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	March31,2020
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
	$ 117,744 30.225 $ 3,558,812 136,468 4.255 580,671 $ 51,882 30.225 $ 1,568,133

• V. The total exchange gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2021 and 2020, amounted to $15,481 and $19,622, respectively.

• VI. Analysis of foreign currency market risk arising from significant foreign exchange variation:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD	Three months ended March 31, 2021
	Sensitivity analysis
	Degree of variation Effect on profitor loss Effect on other comprehensive income
	1% $ 58,168 $ - 1% 8,433 - 1% ($ 14,125) $ - 1% ( 83) -

~43~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	Three months ended March 31, 2020
	Sensitivityanalysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income
	1% $ 35,588 $ - 1% 5,807 - 1% ($ 15,681) $ -

Price risk

• I. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• II. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the Three months ended March 31, 2021 and 2020 would have increased/decreased by $38,775 and $23,821, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $5,793 and $7, 672, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

The Group’s main interest rate risk arises from short-term borrowings and short-term notes and bills payable. Borrowings with floating rates expose the Group to cash flow interest rate risk, but the majority of risk offset by cash and cash equivalents with floating rates. Borrowings with fixed rates expose the Group to fair value interest rate risk. The Group doesn’t have significant risk of change of interest rate due to borrowings with floating rates are all shorter than one year.

~44~

• (b)Credit risk

• I. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, 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 risk taking into consideration the entire group’s concern. For banks and financial institutions, only these with high rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, considering their financial position, past experience and other factors. Individual risk limits are set based 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 past due over 90 days.

• IV. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

  • If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• V. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties ;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii) Default or delinquency in interest or principal repayments;

  • (iv) Adverse 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 reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• VII. The financial assets at amortized cost including time deposits and restricted time deposits. The banks are with high rating and don ’t past due before. In addition to the above, the whole economic environment doesn’t change significant, so the risk of credit risk is low and the effect to financial statement is insignificant.

~45~

• VIII. The information about ageing analysis and collaterals of accounts receivable is provide in Note6(4). The Group request significant clients provide collaterals and other right of guarantee, therefore, the Group classifies customer’s accounts receivable in accordance with the nature of collaterals. The applies the simplified approach using loss rate methodology to estimate expected credit loss. In summary, the allowance for losses which the Group should recognize is minor at March 31, 2021, December 31, 2020 and March 31, 2020.

• IX. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable is as follows:

follows:
At January 1 Reversal of impairment At March 31		2021 2020 Accounts receivable $ 5,713 $ 14,295 ( 5,713) - $- $ 14,295
		$ 5,713 ( 5,713) $-

• (c) Liquidity risk

• 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 operatio nal needs.

• II. Surplus cash held by the operating entities over and above balance required for working capital management should invest surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

• III. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based 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 amou nts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
	Less than		Between 1
March 31, 2021	1 year		and 5 years	Over 5 years
Short-term borrowings	$	1,620,000	$	- $	-
Short-term notes and bills payable		99,840		-	-
Notes payable		2,115		-	-
Accounts payable		2,483,518		-	-
Other payables		785,909		-	-
Lease liability		13,568	28,052		52,123
Guarantee deposits received		-		-	6,337
Derivative financial liabilities:None.

~46~

Non-derivative financial liabilities:

Non-derivative financial liabilities:
	Less than	Between 1
December 31, 2020	1 year	and 5 years	Over 5 years
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:
	Less than Between 1
March 31, 2020	1 year and 5 years Over 5 years
Short-term borrowings	$ 454,000 $ - $ -
Notes payable	1,900 - -
Accounts payable	2,651,558 - -
Other payables	493,067 - -
Lease liability	10,360 24,823 55,612
Guarantee deposits received	- - 9,871
Derivative financial liabilities:None.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates and debt securities 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).

~47~

• C. Financial instruments not measured at fair value of the Group including cash and cash equivalents, time deposit (over 3 months), notes receivable, accounts receivable, other receivables, guarantee deposits 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 deposits 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 basis of the nature, characteristics and risks of the assets and liabilities is as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

follows:
March 31, 2021 Assets Recurring fair value measurements 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. December 31, 2020 Assets Recurring fair value measurements 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
		$247,423 91,190 37,942 - $376,555 Level 1	$ 4,486 - - - $ 4,486 Level 2	$ 6,712 - - 57,926 $ 64,638 Level 3	$258,621 91,190 37,942 57,926
					$445,679
					Total
		$214,924 91,737 51,390 - $358,051	$ 2,506 - - - $ 2,506	$ 4,917 - - 64,836 $ 69,753	$222,347 91,737 51,390 64,836
					$430,310

~48~

March 31, 2020 Assets Recurring fair value measurements 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 $110,060 84,040 44,107 76,716 $314,923
		$ 65,380 84,040 44,107 - $193,527	$ 1,938 - - - $ 1,938	$ 42,742 - - 76,716 $119,458

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

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

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

• II. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• III. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

~49~

• E. For the three months ended March 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the three months ended March 31, 2021 and 2020:

March 31, 2021 and 2020:
At January 1 Valuation adjustment At March 31			Equity securities
			2021	2020
			$ 69,753 (5,115) $ 64,638	$ 85,953 33,505 $ 119,458

• G. Accounting 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 assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Fair value at		Significant
March 31,	Valuation	unobservable		Range	Relationship of
2021	technique	input	(weighted average)		inputs to fair value
Non-derivative equity instrument:
Unlisted shares $ 6,712	Market -	Discount for		30%	the higher the
	comparable	lack of			discount for lack of
	companies	marketability			marketability, the
					lower the fair value
Unlisted shares 57,926	Market -	Discount for		45%	the higher the
	comparable	lack of			discount for lack of
	companies	marketability			marketability, the
					lower the fair value
Fair value at		Significant
December 31,	Valuation	unobservable		Range	Relationship of
2020	technique	input		(weighted average) inputs to fair value
Non-derivative equity instrument:
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

~50~

	Fair value at	Fair value at		Significant
		March 31,	Valuation	unobservable	Range	Relationship of inputs
		2020	technique	input	(weighted average) to fair value
Non-derivative	equity instrument:
Unlisted shares	$ 27,592		Market -	Discount for	30%	the higher the discount
			comparable	lack of		for lack of
			companies	marketability		marketability, the
						lower the fair value
Unlisted shares		76,716	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	Not applicable	Not applicable
			deal price	applicable

• I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

March 31, 2021

		March 31, 2021	March 31, 2021	March 31, 2021	March 31, 2021	March 31, 2021	March 31, 2021	March 31, 2021
Financial assets Equity instrument Financial assets Equity instrument Financial assets Equity instrument	Input Change	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		$ 288		($ 288) $ 4,739 December 31, 2020			($ 4,739)
		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) March 31,		$ 4,322 2020	($ 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%			$ 1,183		($ 1,183)	$ 5,114	($ 5,114)

~51~

(4) Others

As of the reported date, the Company has assessed that COVID-19 has no adverse impact on the Company’s overall operating activities and financial statements for the three months ended March 31, 2021. 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. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.

• D. Acquisition or sale of the same security with the accumulated cost

• exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid -in capital

• or more: None.

• F. Disposal of real estate reaching $300 millio n or 20% of paid-in capital or

• more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.

• H. Receivables from related parties reaching $100 million or 20% of paid -in

• capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: None.

(2) Information on investees

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

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 3.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders informatio n

As of March 31, 2021, the Company did not have any shareholders with a shareholding ratio more than 5%.

~52~

14. Operating Segment Information

(1) General information

The Group operates business only in a single industry. The chief operating decision-maker who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Revenue from external customers Segment income before income tax Segment assets Segment liabilities			Three months ended March 31, 2021 2020 $ 4,971,476 $ 3,663,730 $ 730,739 $ 352,845 March31,2021 March31,2020	Three months ended March 31, 2021 2020 $ 4,971,476 $ 3,663,730 $ 730,739 $ 352,845 March31,2021 March31,2020	Three months ended March 31, 2021 2020 $ 4,971,476 $ 3,663,730 $ 730,739 $ 352,845 March31,2021 March31,2020
			2021
			$ 4,971,476 $ 730,739 March31,2021
			$ 14,212,459 $ 5,423,299		$ 11,511,081
					$ 3,854,394

(3) Reconciliation for segment income (loss): None.

~53~

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Holding of marketable securities at the end of the period

March 31, 2021

Table 1

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

Securities held by	Name and category of marketable securities	Relationship with the securities issuer	General ledger account	As of March 31, 2021	As of March 31, 2021	As of March 31, 2021	As of March 31, 2021	Footnote
				Number of shares	Book value (Note)	Ownership (%)	Fair value (Note)
Elite Semiconductor Microelectronics Technology Inc.	Arima Lasers Corporation stock	The Company’s subsidiary is this company’s director	Financial assets at fair value through profit or loss	3,391,000	$ 88,505	12.04	$ 88,505
Elite Semiconductor Microelectronics Technology Inc.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	412	0.00	412
Elite Semiconductor Microelectronics TechnologyInc.	HSBC FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	1,000,000	25,268	Not applicable	25,268
Elite Semiconductor Microelectronics Technology Inc.	ANZ FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	500,000	12,674	Not applicable	12,674
Elite Semiconductor Microelectronics Technology Inc.	BGF RENMINBI BOND FUND	None	Financial assets at fair value through profit or loss	127,986	58,433	Not applicable	58,433
Elite Semiconductor Microelectronics Technology Inc.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	28,963	8.06	28,963
Elite Investment Services Ltd.	HSBC ALL CHINA BOND FUND - AC (2802)	None	Financial assets at fair value through profit or loss	600,000	32,757	Not applicable	32,757
Charng Feng Investment Ltd.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	412	0.00	412
Charng Feng Investment Ltd.	Arima Lasers Corporation stock	None	Financial assets at fair value through profit or loss	907,000	23,673	3.22	23,673
Charng Feng Investment Ltd.	Ushine Photonics Corporation stock	None	Financial assets at fair value through profit or loss	77,227	1,317	0.41	1,317
Charng Feng Investment Ltd.	Brightek Optoelectronic Corporation Ltd. stock	None	Financial assets at fair value through profit or loss	65,601	3,169	0.11	3,169
Charng Feng Investment Ltd.	M3 Technology Inc. stock	None	Financial assets at fair value through profit or loss	174,000	24,621	0.47	24,621
Charng Feng Investment Ltd.	M2 Communication Inc. stock	None	Financial assets at fair value through profit or loss	400,000	6,712	4.46	6,712
Charng Feng Investment Ltd.	Powerchip Semiconductor Manufacturing Corporation	None	Financial assets at fair value through profit or loss	1,500,000	109,800	0.05	109,800
Charng Feng Investment Ltd.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	28,963	8.06	28,963
Jie Yong Investment Ltd.	Elite Semiconductor Microelectronics Technology Inc. stock	Parent company	Financial assets at fair value through other comprehensive income	14,154,000	1,472,016	4.95	1,472,016

Note: Valuation adjustment of financial assets and cumulative translation differences are included.

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Information on investees (exclude investee in Mainland China)

Three months ended March 31, 2021

Table 2

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

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March 31,2021	Shares held as at March 31,2021	Shares held as at March 31,2021	Net income (loss) of the investee for the three months ended March 31, 2021	Investment income (loss) recognized by the Company for the three months ended March 31, 2021	Footnote
				Balance as at March 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Elite Semiconductor Microelectronics Technology Inc.	Elite Semiconductor Memory Technology Inc.	Taiwan	Research and development, production, sales and related consulting services of integrated circuit	$ 272	$ 272	100,000	100	$ 37,391	$ 13,155	$ 13,155
Elite Semiconductor Microelectronics Technology Inc.	Charng Feng Investment Ltd.	Taiwan	General investment	500,000	500,000	50,000,000	100	558,838	50,819	51,576	Note 2
Elite Semiconductor Microelectronics Technology Inc.	Elite Investment Services Ltd.	British Virgin Islands	General investment	428,025	428,025	15	100	620,781	281	281
Elite Semiconductor Microelectronics Technology Inc.	Jie Yong Investment Ltd.	Taiwan	General investment	270,000	270,000	3,600,000	41.86	136,980	( 8)	( 3)
Elite Semiconductor Microelectronics Technology Inc.	Eon Silicon Solutions, Inc.USA	U.S.A.	Investigation and research of business situation and industrial technology	13,304	13,304	200,000	100	1,964	3,375	3,375
Charng Feng Investment Ltd.	3R Semiconductor Technology Inc.	Taiwan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	69,407	69,407	10,000,000	100	21,845	( 108)	( 108)
Charng Feng Investment Ltd.	Elite Silicon Technology Inc.	Taiwan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	61,201	61,201	7,448,960	98.01	498	( 31)	( 31)

				Initial investment amount	Initial investment amount	Shares held as at March 31, 2021	Shares held as at March 31, 2021	Shares held as at March 31, 2021	Net income (loss) of the investee for the three months ended March 31, 2021	Investment income (loss) recognized by the Company for the three months ended March 31, 2021	Footnote
Investor	Investee	Location	Main business activities	Balance as at March 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Charng Feng Investment Ltd.	Canyon Semiconductor Inc.	Taiwan	International trade, manufacturing of electronic components, product design and information software services	80,337	80,337	8,350,000	40.93	36,393	6,133	2,510
Charng Feng Investment Ltd.	Elite Innovation Japan Ltd.	Japan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	2,115	2,115	200	100	2,209	14	14
Charng Feng Investment Ltd.	CHI Microelectronics Limited	Hong Kong	Trading	367	367	10,000	100	367	-	-
Charng Feng Investment Ltd.	HHHtech Co., Ltd.	Taiwan	Information software services, product design, management consultant and international trade	15,000	-	1,500,000	75	8,678	( 8,014)	( 6,010)	Note 3

Note 1: The foreign investment amount translated at the exchange rate as of March 31, 2021.

Note 2: The investment income/loss has been adjusted the unrealized gain/loss of upstream transactions. Note 3: The Company obtained HHHtech Co., Ltd. share interest by 75% through it increased its capital by issuing new shares on March, 2021

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Information on investments in Mainland China

Three months ended March 31, 2021

Table 3

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

Investee in Mainland China	Main business activities	Paid-in capital (Note 4)	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as at January 1, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the three months ended March 31, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the three months ended March 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as at March 31, 2021	Net income (loss) of the investee for the three months ended March 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the three months ended March 31, 2021 (Note 2)	Book value of investments in Mainland China as at March 31, 2021	Accumulated amount of investment income remittance back to Taiwan as at March 31, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Elite Semiconductor Memory Technology (shenzhen) Inc.	Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical consulting and services of integrated circuit, and after-sales service	$ 72,464	(1)	$ 1,424	$ 69,911	$ -	$ 71,335	($ 3,371)	100	($ 3,371)	$ 73,670	$ -	Note 5
Elite Semiconductor Microelectronics (Shanghai) Technology Inc.	Product design, wholesale and retail of electronic materials, information software services and international trade	5,707	(1)	5,696	-	-	5,696	246	100	246	6,879	-	Note 6
Company name Accumulated amount of remittance from Taiwan to Mainland China as at March 31, 2021 Investment amount approved by the Investment Commission of MOEA (Note 5) Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA Charng Feng Investment Ltd. $ 69,911 $ 78,171 $ 300,000
Company name	Accumulated amount of remittance from Taiwan to Mainland China as at March 31, 2021	Investment amount approved by the Investment Commission of MOEA (Note 5)	Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA
Charng Feng Investment Ltd.	$ 69,911	$ 78,171	$ 300,000

Note 1: The methods for engaging in investment in Mainland China include the following:

• (1) Direct investment in Mainland China.

• (2) Indirect investment in Mainland China through companies registered in a third region.

• (3) Other methods.

Note 2: Investment income (loss) was recognized based on financial statement prepared by each company which were unreviewed by independent auditors.

Note 3: The amount of the statement should show as New Taiwan Dollars.

Note 4:Paid-in capital translated at the exchange rate as of March 31, 2021.

Note 5: The Company's subsidiary, Charng Feng Investment Ltd., obtained the revised investment amount of USD 39,485.42 and USD 2,500,000 approved by the Investment Commission, MOEA on February 6, 2020 and July 10, 2020.

Note 6: Elite Semiconductor Microelectronics (Shanghai) Technology Inc. was established on November 27, 2019. The Company's subsidiary, Charng Feng Investment Ltd., obtained the investment amount of USD 200,000 approved by the Investment Commission of MOEA on May 20, 2020.