ESMT - Interim / Quarterly Report 2021

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. AND SUBSIDIARIES Consolidated Financial Statements and Independent Auditors' Review Report September 30, 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

September 30,2021 and 2020

		Items	Page
I.	Cover		1
II.	Table of Contents		2
III.	Independent Auditors' Report		3 ~ 4
IV.	Consolidated Balance Sheets		5 ~ 6
V.	Consolidated Statements of Comprehensive Income		7
VI.	Consolidated Statements of Changes in Equity		8
VII.	Consolidated Statements of Cash Flows		9 ~ 10
VIII.	Notes to the Consolidated Financial Statements		11 ~ 58
	1.	History and Organization	11
	2.	The Date of Authorization for Issuance of the Consolidated Financial
		Statements and Procedures for Authorization	11
	3.	Application of New Standards, Amendments and Interpretations	11 ~ 12
	4.	Summary of Significant Accounting Policies	13 ~ 16
	5.	Critical Accounting Judgments, Estimates and Key Sources of
		Assumption Uncertainty	16
	6.	Details of Significant Accounts	17 ~ 42
	7.	Related-Party Transactions	43
	8.	Pledged Assets	43
	9.	Significant Contingent Liabilities and Unrecognized Contractual
		Commitments	43
	10.	Significant Disaster Losses	43
	11.	Significant Events after the End of the Balance Sheet Date	43
	12.	Others	44 ~ 56
	13.	Supplementary Disclosures	57
	14.	Operating Segment Information	58

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Report on Review of Interim Financial Information

(2021)Finance-Audit-Letter No.21001796

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 September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the related consolidated statements of changes in equity and of cash flows for the nine 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.

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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$829,090 thousand and NT$526,342 thousand, constituting 4.4% and 4.2% of the consolidated total assets, and total liabilities of NT$107,104 thousand and NT$68,994 thousand, constituting 1.5% and 1.5% of the consolidated total liabilities as at September 30, 2021 and 2020, respectively, and total comprehensive income of NT$42,760 thousand and NT$(10,140) thousand, constituting 2.2% and (4.1%) of the consolidated total comprehensive income for the three months then ended, respectively, and NT$44,530 thousand and NT$(38,091) thousand, constituting 1.1% and (4.4%) of the consolidated total comprehensive income for the nine months then ended, respectively.

Qualified Conclusion

Based on our reviews, 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 September 30, 2021 and 2020, and of its consolidated financial performance for the three-month and nine-month periods then ended and its consolidated cash flows for the nine-month periods 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 October 28, 2021

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets September 30, 2021, December 31, 2020 and September 30, 2020

(The Balance Sheets as of September 30, 2021 and 2020 are unaudited)

Unit: NT$ thousand

Assets	Note	September 30, 2021 Amount % $ 9,216,312 49 370,002 2 111,400 1 382 - 2,160,408 12 6,435 - 5,066,840 27 150,396 1 295 - 17,082,470 92 42,422 - 45,940 - 1,260,013 7 76,803 1 16,974 - 70,183 - 3,502 - 64,200 - 1,580,037 8 $ 18,662,507 100 (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	September 30, 2020	September 30, 2020
		Amount $ 9,216,312 370,002 111,400 382 2,160,408 6,435 5,066,840 150,396 295 17,082,470 42,422 45,940 1,260,013 76,803 16,974 70,183 3,502 64,200 1,580,037 $ 18,662,507 (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 $ 2,265,219 268,643 139,680 232 1,712,482 95,556 6,747,076 132,089 4,999 11,365,976 69,278 33,554 731,206 82,418 17,944 110,723 3,762 27,198 1,076,083 $ 12,442,059	%
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				18 2 1 - 14 1 54 1 -
					91
					1 - 6 1 - 1 - -
					9
					100

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets September 30, 2021, December 31, 2020 and September 30, 2020

(The Balance Sheets as of September 30, 2021 and 2020 are unaudited)

Unit: NT$ thousand

Liabilities and equity	Note	September 30,2021 Amount % $ 1,950,000 11 - - 76,020 1 4,005 - 2,851,896 15 1,570,092 8 578,301 3 12,502 - 8,111 - 7,050,927 38 17,654 - 17,470 - 65,470 - 11,851 - 112,445 - 7,163,372 38 2,861,570 15 167,450 1 1,516,762 8 - - 7,191,497 39 ( 16,878 ) - ( 140,586 ) ( 1) 11,579,815 62 ( 80,680 ) - 11,499,135 62 $ 18,662,507 100	December 31,2020 September 30,2020 Amount % Amount % $ 1,340,000 10 $ 1,094,000 9 149,756 1 99,870 1 5,346 - 7,383 - 2,115 - 3,938 - 2,396,158 19 2,521,962 20 694,001 5 577,512 5 147,948 1 124,809 1 10,356 - 10,998 - 10,478 - 6,010 - 4,756,158 36 4,446,482 36 16,495 - 16,142 - 12,442 - 3,933 - 71,281 1 72,167 1 14,689 - 17,519 - 114,907 1 109,761 1 4,871,065 37 4,556,243 37 2,857,589 22 2,857,589 23 109,677 1 109,709 1 1,409,039 11 1,409,039 11 8,524 - 8,524 - 4,019,327 31 3,771,249 30 5,536 - 9,978 - ( 145,649) ( 1) ( 145,649) ( 1) 8,264,043 64 8,020,439 64 ( 134,760) ( 1) ( 134,623) ( 1) 8,129,283 63 7,885,816 63 $ 13,000,348 100 $ 12,442,059 100
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.

Accounting Manager: Candy Chu

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Comprehensive Income Nine Months Ended September 30, 2021 and 2020

(Unaudited)

Unit: NT$ thousand (Except earnings per share)

Item	Notes	Three months ended September 30,2021 Amount % $ 6,843,255 100 ( 3,813,678) ( 56) 3,029,577 44 ( 153,833 ) ( 2) ( 175,970 ) ( 3) ( 540,034 ) ( 8) - - ( 869,837) ( 13) 2,159,740 31 8,786 - 20,634 1 79,183 1 ( 5,084 ) - 6,551 - 110,070 2 2,269,810 33 ( 312,450) ( 4) $ 1,957,360 29 ($ 4,860) - ($ 4,860) - $ 1,952,500 29 $ 1,904,745 28 $ 52,615 1 $ 1,899,885 28 $ 52,615 1 $ 6.80 $ 6.75	Three months ended September 30,2020 Amount % $ 3,999,177 100 ( 3,367,716)( 85) 631,461 15 ( 71,123) ( 2) ( 64,782) ( 1) ( 234,198) ( 6) 1,839 - ( 368,264)( 9) 263,197 6 3,987 - 16,917 1 5,274 - ( 3,256) - 2,008 - 24,930 1 288,127 7 ( 42,088)( 1) $ 246,039 6 ($ 471) - ($ 471) - $ 245,568 6 $ 237,813 6 $ 8,226 - $ 237,342 6 $ 8,226 - $ 0.85 $ 0.85	Nine months ended September 30,2021 Nine months ended September 30,2020 Amount % Amount % $ 17,989,858 100 $ 10,873,535 100 ( 11,552,371)( 64)( 8,828,409) ( 81) 6,437,487 36 2,045,126 19 ( 354,651 ) ( 2) ( 197,544 ) ( 2) ( 409,944 ) ( 2) ( 222,625 ) ( 2) ( 1,261,821 ) ( 7) ( 690,354 ) ( 6) 5,713 - 1,839 - ( 2,020,703)( 11)( 1,108,684) ( 10) 4,416,784 25 936,442 9 21,934 - 22,572 - 32,634 - 24,497 - 33,095 - ( 4,629 ) - ( 14,849 ) - ( 7,463 ) - 12,057 - 344 - 84,871 - 35,321 - 4,501,655 25 971,763 9 ( 608,585)( 3)( 134,452) ( 1) $ 3,893,070 22 $ 837,311 8 ($ 22,414) - $ 18,502 - ($ 22,414) - $ 18,502 - $ 3,870,656 22 $ 855,813 8 $ 3,843,683 22 $ 829,160 8 $ 49,387 - $ 8,151 - $ 3,821,269 22 $ 847,662 8 $ 49,387 - $ 8,151 - $ 13.72 $ 2.96 $ 13.63 $ 2.94
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	6(19) 6(5) (24) (25) 6(24) (25) 12(2) 6(20) 6(21) 6(22) 6(23) 6(6) 6(26) 6(3) 6(27)
		$	$	$

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 Nine Months Ended September 30, 2021 and 2020

(Unaudited)

Unit: NT$ thousand

Notes				Equity attributable	Equity attributable	Equity attributable	to owners of the parent	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	Unappropriated retained earnings
6(18) 6(17) 6(17) 6(17) (28) 6(17) 6(18) 6(17) 6(17) 6(17) 6(17) (28) 6(17) 6(15)(16) (17) 6(17)	$ 2,857,589 - - - - - - - - - - - $ 2,857,589 $ 2,857,589 - - - - - - - - - - - 3,981 - $ 2,861,570	$ 104,305 - - - - - - - 1,146 5,925 ( 1,749 ) 82 $ 109,709 $ 109,677 - - - - - - 26,210 1,146 11,739 ( 27 ) ( 311 ) 18,946 70 $ 167,450		$ 1,359,235 - - - 49,804 - - - - - - - $ 1,409,039 $ 1,409,039 - - - 107,723 - - - - - - - - - $ 1,516,762	$ - - - - - - 8,524 - - - - - $ 8,524 $ 8,524 - - - - - ( 8,524 ) - - - - - - - $ -		$ 3,286,176 829,160 - 829,160 ( 49,804 ) ( 285,759 ) ( 8,524 ) - - - - - $ 3,771,249 $ 4,019,327 3,843,683 - 3,843,683 ( 107,723 ) ( 572,314 ) 8,524 - - - - - - - $ 7,191,497	($ 8,524 ) - 18,502 18,502 - - - - - - - - $ 9,978 $ 5,536 - ( 22,414 ) ( 22,414 ) - - - - - - - - - - ($ 16,878 )	($ 137,321 ) - - - - - - ( 8,328 ) - - - - ($ 145,649 ) ($ 145,649 ) - - - - - - 5,063 - - - - - - ($ 140,586 )	$ 7,461,460 829,160 18,502 847,662 - ( 285,759 ) - ( 8,328 ) 1,146 5,925 ( 1,749 ) 82 $ 8,020,439 $ 8,264,043 3,843,683 ( 22,414 ) 3,821,269 - ( 572,314 ) - 31,273 1,146 11,739 ( 27 ) ( 311 ) 22,927 70 $ 11,579,815		($ 120,681 ) 8,151 - 8,151 - - - ( 11,566 ) ( 10,396 ) - ( 131 ) - ($ 134,623 ) ($ 134,760 ) 49,387 - 49,387 - - - 7,032 ( 7,233 ) - ( 1 ) 4,895 - - ($ 80,680 )	$ 7,340,779 837,311 18,502 855,813 - ( 285,759 ) - ( 19,894 ) ( 9,250 ) 5,925 ( 1,880 ) 82 $ 7,885,816 $ 8,129,283 3,893,070 ( 22,414 ) 3,870,656 - ( 572,314 ) - 38,305 ( 6,087 ) 11,739 ( 28 ) 4,584 22,927 70 $ 11,499,135

Chairman: Hsing-Hai Chen

The accompanying notes are an integral part of these consolidated financial statements. Manager: Ming-Chien Chang ~8~

Accounting Manager: Candy Chu

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2021 and 2020 (Unaudited)

Unit: NT$ thousand

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 gain
Net 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
Dividend income
Gains on disposals of property, plant and
equipment
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 inflow (outflow) generated from
operations
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities

Notes
Nine months ended
September 30,2021
Nine months ended
September 30,2020
$ 4,501,655 $ 971,763
6(7)(8)(9)(24)
291,387
236,148
6(10)(24)
91,203
80,831
12(2)
(
5,713 ) (
1,839 )
6(2)(22)
(
91,138 ) (
17,174 )
6(23)
14,849
7,463
6(20)
(
21,934 ) (
22,572 )
6(6)
(
12,057 ) (
344 )
6(21)
(
18,142 ) (
13,053 )
6(22)
(
10 )
-
6(22)
(
37 ) (
148 )
86,610
1,124
(
382 ) (
198 )
(
519,672 ) (
453,100 )
(
1,030 ) (
605 )
89,300 (
17,630 )
902,490 (
1,774,524 )
(
118,710 ) (
104,645 )
4,902
1,867
1,890
1,957
455,738
296,053
70,674
3,424
958,977
119,981
(
2,791 ) (
70 )
(
2,540 ) (
823 )
6,675,519 (
686,114 )
22,028
27,386
(
13,921 ) (
6,632 )
(
172,893 ) (
50,075 )

6,510,733 (
715,435 )

(Continue)

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2021 and 2020

(Unaudited)

Unit: NT$ thousand

Cash flows from investing activities
Acquisition of financial assets at amortized
cost
Disposal of financial assets at amortized cost
Acquisition of property, plant and equipment
Proceeds from disposal of financial assets at
fair value through profit or loss
Acquisition of intangible assets
Decrease in guarantee deposit paid
Dividends received
Net cash flows from investing activities
Cash flows from financing activities
Increase in short-term borrowings
Increase (decrease) in short-term notes and
bills payable
Lease principal repayment
Decrease in guarantee deposit received
Employee exercised stock options
Cash dividends paid
Subsidiaries paid cash dividends to non-
controlling interests
Subsidiaries received cash dividends from
parent
Disposal of treasury share
Disposal of treasury share – increase of non-
controlling interests
Expired cash dividends
Treasury share acquired
Acquisition of ownership interests from non-
controlling interests
Net cash flows from (used in) financing
activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Notes
Nine months ended
September 30,2021
Nine months ended
September 30,2020
( $ 145,004 ) ( $ 143,133 )

170,308
144,359
6(29)
(
832,708 ) (
283,411 )
10
-
6(10)
(
49,698 ) (
109,961 )
555
869
6(21)
18,142
13,053
(
838,395 ) (
378,224 )
6(29)
610,000
820,000
6(29)
(
149,014 )
100,346
6(29)
(
9,243 ) (
7,695 )
6(29)
(
298 )
-
22,927
-
6(18)
(
572,314 ) (
285,759 )
(
6,087 ) (
9,250 )
6(17)
11,739
5,925
6(17)
31,273
-
7,032
-
6(17)
70
82
- (
19,894 )
6(28)
(
28 ) (
1,880 )
(
53,943 )
601,875

5,618,395 (
491,784 )
6(1)
3,597,917
2,757,003
6(1)
$ 9,216,312 $ 2,265,219

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 Nine Months Ended September 30, 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.

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 October 28, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuance of or amendments to I nternational 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(“IASB”)
Amendments to IFRS 4, “Extension of the temporary exemption from applying IFRS 9”	January 1, 2021

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, January 1, 2021 “Interest Rate Benchmark Reform— Phase 2” Amendment to IFRS 16, “Covid-19-related rent concessions April 1, 2021(Note) beyond 30 June 2021”

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

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

New Standards, Amendments and Interpretations Effective Date by IASB Amendments to IFRS 3, “Reference to the conceptual January 1, 2022 framework” 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 IFRS Standards 2018–2020 January 1, 2022 The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(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:

New Standards,AmendmentsandInterpretations	EffectiveDate byIASB
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 12, “Deferred tax related to assets and	January 1, 2023
liabilities arising from a single transaction”

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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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 consolidation 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.
(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 proce ss 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.

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B. Subsidiaries included in the consolidated financial statements:

Name of Investor Name of Subsidiary Main Business Activities	Ownership (%) September 30, 2021 December 31, 2020 September 30, 2020 Note
Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Memory Technology Inc. Research and development, production, sales and related consulting services of integrated circuit 100 100 100 Note1 Elite Semiconductor Microelectronics Technology Inc. Charng Feng Investment Ltd. General investment 100 100 100 Note1 Elite Semiconductor Microelectronics Technology Inc. Jie Yong Investment Ltd. General investment 41.86 41.86 41.86 Note1 Note4 Elite Semiconductor Microelectronics Technology Inc. Elite Investment Services Ltd. General investment 100 100 100 Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor (B.V.I.) Ltd. General investment - - 100 Note3 Note5 Elite Semiconductor Microelectronics Technology Inc. Eon Silicon Solutions, Inc. USA Investigation and research of business situation and industrial technology 100 100 100 Note1 Charng Feng Investment Ltd. Elite Memory Technology Inc. Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade 100 100 100 Note1 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 98.10 98.01 97.69 Note1 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 100 100 100 Note1 Charng Feng Investment Ltd. Elite Semiconductor Microelectronics Technology (shenzhen) Inc. Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical consulting and services of integrated circuit, and after - sales service 100 100 100 Note1

Name of
Investor
Name of
Subsidiary
Main Business
Activities

Ownership (%)
September 30,
2021
December 31,
2020
September 30,
2020
Note

Elite
Semiconductor
Microelectronics
Technology Inc.
Elite Semiconductor
Memory Technology
Inc.
Research and
development, production,
sales and related
consulting services of
integrated circuit
100
100
100
Note1
Elite
Semiconductor
Microelectronics
Technology Inc.
Charng Feng
Investment Ltd.
General investment
100
100
100
Note1
Elite
Semiconductor
Microelectronics
Technology Inc.
Jie Yong Investment
Ltd.
General investment
41.86
41.86
41.86
Note1
Note4
Elite
Semiconductor
Microelectronics
Technology Inc.
Elite Investment
Services Ltd.
General investment
100
100
100
Elite
Semiconductor
Microelectronics
Technology Inc.
Elite Semiconductor
(B.V.I.) Ltd.
General investment
-
-
100
Note3
Note5
Elite
Semiconductor
Microelectronics
Technology Inc.
Eon Silicon Solutions,
Inc. USA
Investigation and
research of business
situation and industrial
technology
100
100
100
Note1
Charng Feng
Investment Ltd.
Elite Memory
Technology Inc.
Product design,
wholesale and retail of
electronic materials,
manufacturing of
electronic components,
information software
services and international
trade
100
100
100
Note1
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
98.10
98.01
97.69
Note1
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
100
100
100
Note1
Charng Feng
Investment Ltd.
Elite Semiconductor
Microelectronics
Technology
(shenzhen) Inc.
Trading of goods or
technical services,
develop and sale
products of networking
system, storage, and
peripherals, technical
consulting and services
of integrated circuit, and
after - sales service
100
100
100
Note1

~14~

Ownership (%)

Name of	Name of	Main Business	September 30,	December 31,	September 30,
Investor	Subsidiary	Activities	2021	2020	2020	Note
Charng Feng	Elite Semiconductor	Product design,	100	100	100	Note1
Investment Ltd.	Microelectronics	wholesale and retail of
	(Shanghai)	electronic materials,
	Technology Inc.	information software
		services and international
		trade
Charng Feng	CHI Microelectronics	Trading	100	100	-	Note2
Investment Ltd.	Limited					Note6
Charng Feng	HHHtech Co., Ltd.	Information software	75	-	-	Note2
Investment Ltd.		services, product design,				Note7
		management consultant
		and international trade

Note 1 ： As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as at September 30,2021 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 September 30,2021 were not reviewed by independent auditors.
Note 3 ： As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as at September 30,2020 were not reviewed by independent auditors.
Note 4 ： Elite Semiconductor Microelectronics Technology Inc. accounts for the majority of voting rights of Jie Yong Investment 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 ： 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 7 ： The Company obtained HHHtech Co., Ltd. share interest by 75% through it increased its capital by issuing new shares on March, 2021.Stockholders’ meeting of HHHtech Co., Ltd. approved to execute liquidation process on June 28, 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.

~15~

(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 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 recognized 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 acquisit ion 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 s ince 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.

~16~

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	September 30, 2021 December 31, 2020 September 30, 2020 $ 137 $ 137 $ 152 2,083,930 1,042,489 556,761 7,132,245 2,555,291 1,708,306 $ 9,216,312 $ 3,597,917 $ 2,265,219
		$ 137 2,083,930 7,132,245 $ 9,216,312	$ 137 1,042,489 2,555,291 $ 3,597,917

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.

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

counterparty default is remote. B. Details of the Group's cash and cash equivalents pledged to others as collateral are provided in Note 8. Financial assets at fair value through profit or loss	counterparty default is remote. B. Details of the Group's cash and cash equivalents pledged to others as collateral are provided in Note 8. Financial assets at fair value through profit or loss	counterparty default is remote. B. Details of the Group's cash and cash equivalents pledged to others as collateral are provided in Note 8. Financial assets at fair value through profit or loss	counterparty default is remote. B. Details of the Group's cash and cash equivalents pledged to others as collateral are provided in Note 8. Financial assets at fair value through profit or loss
Item September 30, 2021 December 31, 2020 September 30, 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	$ 576 151,207 8,113 72,382 31,226 - 263,504 106,498 $ 370,002	$ 576 162,911 8,113 72,991 31,226 13,784 289,601 75,873 $ 365,474	$ 576 148,013 23,263 73,590 31,226 14,084
			290,752 ( 22,109)
			$ 268,643

~17~

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 Financial assets mandatorily measured at fair value through profit or loss Equity instruments Debt instruments Beneficiary certificates Total		Three months ended September 30, 2021 2020 $ 35,118 $ 11,337 255 544 ( 334) 2,711 $ 35,039 $ 14,592 Nine months ended September 30, 2021 2020 $ 89,540 $ 14,607 2,302 ( 336) ( 704) 2,903 $ 91,138 $ 17,174
		2021

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

to others. C. Information relating to credit risk is provided in Note 12(2)C(b). Financial assets at fair value through other comprehensive income	to others. C. Information relating to credit risk is provided in Note 12(2)C(b). Financial assets at fair value through other comprehensive income	to others. C. Information relating to credit risk is provided in Note 12(2)C(b). Financial assets at fair value through other comprehensive income	to others. C. Information relating to credit risk is provided in Note 12(2)C(b). Financial assets at fair value through other comprehensive income
Item September 30, 2021 December 31, 2020 September 30, 2020
Non-current items: Equity instruments Unlisted stock Valuation adjustment	$ 59,300 ( 16,878) $ 42,422	$ 59,300 5,536 $ 64,836	$ 59,300 9,978
			$ 69,278

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 $42,422, $64,836 and $69,278 as at September 30, 2021, December 31, 2020, and September 30, 2020, respectively.

~18~

(4) Accounts receivable

Accounts receivable
	September 30,			December 31,	September 30,
	2021			2020	2020
Accounts receivable - general customers	$	2,158,405		$ 1,638,733	$ 1,724,092
Accounts receivable - related parties		2,003		973	846
		2,160,408		1,639,706	1,724,938
Less: Allowance for losses			-	( 5,713)	( 12,456)
	$	2,160,408		$ 1,633,993	$ 1,712,482
A. The ageing analysis of accounts receivable			is	as follows:
September 30,			December 31, September 30,
	2021			2020	2020
Not past due	$ 2,156,881			$ 1,633,993	$ 1,712,482
Past due-within 30 days		3,527		-	-
Past due-31-90 days		-		-	-
Past due-91-180 days		-		-	-
Past due-over 181 days		-		5,713	12,456
	$ 2,160,408			$ 1,639,706	$ 1,724,938
The above aging analysis was	based	on past	due date.

B.As at September 30, 2021, December 31, 2020 and September 30, 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 $2,160,408, $1,633,993 and $1,712,482.
C. The collaterals and fair value held by the Group as guarantee for accounts receivable are as follows:

receivable are as follows:
	September 30,	December 31,	September 30,
	2021	2020	2020
Bank guarantee	$ 55,355	$ 33,044	$ 27,230
Pledged certificate of deposit	4,177	4,272	-
Guarantee deposits received (shown
as “other non-current liabilities”)	5,135	5,526	8,548
Letters of credit	924,381	760,162	597,880
Company promissory note/check	667,870	555,221	388,039
	$ 1,656,918	$ 1,358,225	$ 1,021,697

D. Information relating to credit risk is provided in Note 12(2).
E. As at September 30, 2021, December 31, 2020 and September 30, 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.

~19~

F. The Group has no accounts receivable pledged to others as collateral. (5) Inventories

September 30,2021	September 30,2021
Cost	Allowance for valuation loss	Book value
$ 95,687 3,467,615 1,551,219 13,978 $ 5,128,499	($ 1,280) ( 36,587) ( 23,792) - ($ 61,659)	$ 94,407 3,431,028 1,527,427 13,978
		$ 5,066,840

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

September30,2020	September30,2020
Cost	Allowance for valuation loss	Bookvalue
$ 336,580 5,096,116 1,422,114 8,114 $ 6,862,924	($ 4,925) ( 34,370) ( 76,553) - ($ 115,848)	$ 331,655 5,061,746 1,345,561 8,114
		$ 6,747,076

~20~

The Group recognized as expense or loss:

Cost of goods sold Loss on market value decline and obsolete and slow-moving inventories(reversal of allowance) Cost of goods sold Reversal of allowance on market value decline and obsolete and slow-moving inventories		Three months ended September 30, 2021 2020 $ 3,816,946 $ 3,367,229 ( 3,268) 487 $ 3,813,678 $ 3,367,716 Nine months ended September 30, 2021 2020 $ 11,590,186 $ 8,881,757 ( 37,815) ( 53,348) $ 11,552,371 $ 8,828,409	Three months ended September 30, 2021 2020 $ 3,816,946 $ 3,367,229 ( 3,268) 487 $ 3,813,678 $ 3,367,716 Nine months ended September 30, 2021 2020 $ 11,590,186 $ 8,881,757 ( 37,815) ( 53,348) $ 11,552,371 $ 8,828,409
		2021
		$ 3,816,946 ( 3,268) $ 3,813,678 Nine months ended

			2021
		$ 11,590,186 ( 37,815) $ 11,552,371

The reversal of allowance on market value decline and obsolete and slow - moving inventories were recognized because sale of certain inventories which were previously provided with allowance for price decline for the three months and nine months ended September 30, 2021 and 2020.

(6) Investments accounted for under the equity method

		2021	2021			2020
At January 1		$		33,883	$	33,210
Share of profit or loss of investments
accounted for using equity method				12,057		344
At September 30		$		45,940	$	33,554
	September 30,		December 31,			September 30,
		2021		2020		2020
Associates		$ 45,940		$ 33,883		$ 33,554

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:

Three months ended September 30,

		Three months ended Sep
Investee Canyon Semiconductor Inc. Investee Canyon Semiconductor Inc.		2021

		2021
		$ 12,057

~21~

(7) Property, plant and 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	Land Buildings and structures Machinery equipment Testing equipment	Others
$ 9,023 $636,446 $518,018 $287,860 - ( 398,943) ( 375,047) ( 168,256) $ 9,023 $237,503 $142,971 $119,604 $ 9,023 $237,503 $142,971 $119,604 159,745 88,509 116,634 14,321 - - - - - 7,308 13,764 24,693 - ( 27,366) ( 26,449) ( 21,817) $168,768 $305,954 $246,920 $136,801 $168,768 $732,263 $648,416 $326,874 - ( 426,309) ( 401,496) ( 190,073) $168,768 $305,954 $246,920 $136,801 Land Buildings and structures Machinery equipment Testing equipment				$ 1,481,488 (1,213,991) $ 267,497 $ 267,497 338,875 627 - ( 205,429)
				$ 401,570 $ 1,821,007 (1,419,437) $ 401,570 Others
$ 9,023 - $ 9,023 $ 9,023 - - - $ 9,023 $ 9,023 - $ 9,023	$635,941 ( 364,888) $271,053 $271,053 - - ( 25,562) $245,491 $635,941 ( 390,450) $245,491	$429,782 ( 352,626) $ 77,156 $ 77,156 74,027 2,719 ( 15,143) $138,759 $506,528 ( 367,769) $138,759	$249,302 ( 146,396) ( $102,906 $102,906 19,531 1,455 ( 16,836) ( $107,056 $270,280 ( 163,224) $107,056	$ 1,231,048 994,858) $ 236,190 $ 236,190 164,499 - 169,812)
				$ 230,877 $ 1,395,445 (1,164,568) $ 230,877

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

A. For the nine months ended September 30, 2021 and 2020 no interest expense was capitalized on property, plant and equipment in the Group.
B. The Group has no property, plant and equipment pledged to others.

~22~

(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	September 30, 2021 December 31, 2020 September 30, 2020 Bookvalue $ 59,656 $ 62,221 $ 63,076 10,649 15,188 18,093 3,227 3,083 785 3,271 290 464 $ 76,803 $ 80,782 $ 82,418
			Bookvalue
		$ 59,656 10,649 3,227 3,271 $ 76,803	$ 62,221 15,188 3,083 290 $ 80,782

Land Buildings and structures Business vehicles Printers Land Buildings and structures Business vehicles Printers		Threemonths ended September30, 2021 2020 Depreciation charge $ 855 $ 855 1,532 1,736 661 101 155 174 $ 3,203 $ 2,866 Nine months ended September 30, 2021 2020 Depreciation charge $ 2,565 $ 2,565 4,749 4,477 1,819 504 466 522 $ 9,599 $ 8,068





		$ 2,565 4,749 1,819 466 $ 9,599

C. For the nine months ended September 30, 2021 and 2020, the additions to right-of-use assets were $5,702 and $0, respectively.

~23~

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 Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Three months ended September 30,
	2021	2020
	$ 283 $ 285 $ 1,016 $ 2,177 Nine months ended September 30,	$ 285
		$ 2,177
	2021	2020
	$ 886 $ 3,893	$ 897
		$ 6,502

E. For nine months ended September 30, 2021 and 2020, the Group ’s total cash outflow for leases were $14,022 and $15,094, respectively.
(9) Investment property

At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Depreciation charge At September 30 At September 30, 2021 Cost Accumulated depreciation and impairment	Buildings and structures $ 20,369 ( 2,668) $ 17,701 $ 17,701 ( 727) $ 16,974 $ 20,369 ( 3,395) $ 16,974
	(

~24~

Buildings and structures

At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Depreciation charge At September 30 At September 30, 2020 Cost Accumulated depreciation and impairment	$ 20,369 ( 1,698) $ 18,671 $ 18,671 ( 727) $ 17,944 $ 20,369 ( 2,425) $ 17,944

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 Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period			Three months ended	September 30,
			2021	2020
			$ 641 $ 242 Ninemonths ended	$ 584
				$ 242
				September30,
			2021	2020
			$ 1,922 $ 727	$ 1,864 $ 727

B. The fair value of the investment property held by the Group as at September 30, 2021, December 31, 2020 and September 30, 2020 was $8,861, $10,516 and $11,097, respectively, which was valued by income approach. Key assumptions are as follows:

	September 30,	December 31,	September 30,
	2021	2020	2020
Rate of net return on capital
(Note)	16.63%	13.29%	12.34%
Note: Calculated based on the weighted average capital cost of the issuer.

~25~

C. For the nine months ended September 30, 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 2021 At January 1 Additions Amortization charge At September 30 At September 30, 2021 Cost Accumulated depreciation and impairment At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Amortization charge At September 30 At September 30, 2020 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 49,698 ( 91,203) $ 70,183 $ 546,789 ( 476,606) $ 70,183 Total $ 330,088 ( 248,495) $ 81,593 $ 81,593 109,961 ( 80,831) $ 110,723 $ 440,049 ( 329,326) $ 110,723
	$ 34,478 $ 11,000 ( 30,654) ( 11,000) $ 3,824 $- $ 3,824 $ - - - ( 3,824) - $- $- $ 34,478 $ 11,000 ( 34,478) ( 11,000) $- $- Patents and Customer Technical skill Relationship			$ 80,758 ( 62,456) $ 18,302 $ 18,302 - - $ 18,302 $ 80,758 ( 62,456) $ 18,302 Goodwill	$ 370,855 ( 281,293) $ 89,562 $ 89,562 49,698 ( 87,379) $ 51,881 $ 420,553 ( 368,672) $ 51,881 Others
		$ 34,478 ( 25,556) $ 8,922 $ 8,922 - ( 3,824) $ 5,098 $ 34,478 ( 29,380) $ 5,098	$ 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 $ 29,017 109,961 ( 77,007) $ 61,971 $ 313,813 ( 251,842) $ 61,971

~26~

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

Three months ended September 30,

		Threemonths ende
Operating costs Selling expenses Administrative expenses Research and development expenses Operating costs Selling expenses Administrative expenses Research and development expenses		2021

		2021
		$ 3,824 259 1,272 85,848 $ 91,203

B. For the nine months ended September 30, 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 September 30, 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.

(12)Short -term borrowings

Type ofborrowings September30,2021 Interest raterange Collateral Bank borrowings Credit loans $ 1,950,000 0.75%`～`0.92% None Type ofborrowings December31,2020Interest raterange Collateral	Type ofborrowings September30,2021 Interest raterange Collateral Bank borrowings Credit loans $ 1,950,000 0.75%`～`0.92% None Type ofborrowings December31,2020Interest raterange Collateral
Bank borrowings Credit loans $ 1,340,000 0.75%`～`1.05% None Type of borrowings September 30, 2020 Interest rate range Collateral
Bank borrowings Credit loans	$ 1,094,000 0.88%`～`1.76% None

~27~

Interest expense recognized in profit or loss amounted to $4,315, $2,378, $12,057 and $5,023 for the three months and nine months ended September 30 ,2021 and 2020, respectively.

(13)Other payable

her payable
Salary and bonus payables Payable on employees and director remuneration Payable on equipment Others	September 30, 2021 December 31, 2020 September 30, 2020 $ 1,134,637 $ 381,089 $ 396,181 282,887 80,658 61,363 63,421 146,904 52,787 89,147 85,350 67,181 $ 1,570,092 $ 694,001 $ 577,512
		$ 1,134,637 282,887 63,421 89,147 $ 1,570,092	$ 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 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 $92, $136, $289 and $405 for the three months and nine months ended September 30, 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.

~28~

(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 upper 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 Microelectronics Technology (shenzhen) Inc. and Elite Semiconductor Microelectronics (Shanghai) Technology Inc., have a defined contribution plan. Monthly co ntributions 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 and nine months ended September 30, 2021 and 2020, were $9,164, $7,976, $26,965 and $23,897, respectively.

(15)Share- based payment

A. For the nine months ended September 30, 2021 and 2020, the Group ’s share-based payment arrangements were as follows:

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

~29~

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 forfeited Options exercised Options expired Options outstanding at September 30 Options exercisable at September 30	2021 2020	2021 2020	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 - - ( 398) 57.6 ( 106) 217.4 14 $ 57.6 14	543 $ 59.2~303.4 ( 4) 217.4 - - ( 12) 295.4 527 $ 57.6~241.2 527

C. The weighted-average stock price of stock options at exercise dates for the nine months ended September 30, 2021 was $85.2. No options exercised for the nine months ended September 30, 2020.
D.As of September 30, 2021, December 31, 2020 and September 30, 2020, the range of exercise prices of stock options outstanding was $57.6, $57.6~$217.4 and $57.6~$241.2 (in dollars), respectively; the weightedaverage remaining contractual period was 1.89 years, 2.64 years and 2.89 years, respectively.
E. Expenses incurred on share-based payment transactions for the three months and nine months ended September 30, 2021 and 2020, were all $0.

(16)Share capital

A. As of September30, 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 $2,861,570 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

are as follows:	Shares: thousand shares	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 September 30 Treasury shares at the end of the period Shares issued at September 30 Shares outstanding at January 1	2021 2020
	271,605 272,320 398 - -( 715) 492 - 272,495 271,605 13,662 14,154 286,157 285,759
		271,605 14,154
		285,759

~30~

B. Treasury shares

The Company's shares held by the Company's subsidiary, Jie Young Investment Ltd., as of September 30, 2021, December 31, 2020 and September 30, 2020 due to the parent company's business strategy, were13,662 thousand shares, 14,154 thousand shares and 14,154 thousand shares, respectively, with carrying amounts of $335,847, $347,942 and $347,942, respectively; the average book value per share were $24.58, and the fair value per share were $131.00, $64.70 and $37.25.

(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 t o 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.

	2021	2021	2021	2021
Share premium	Treasury Changes in Employee share ownership interests stock transactions in subsidiaries options Others
$ - - - - 20,162 - - $ 20,162	$ 1,661 $ 100,239 - 1,146 - 11,739 - ( 27) - - - - 26,210 - - ( 311) $ 27,871 $ 112,786	$ 3,913 $3,864 - - - - - - - 70 ( 1,216) - - - -
			$ 2,697	$3,934

~31~

2020	2020	2020
Treasury Changes in Employee share ownership interests stock transactions in subsidiaries options			Others
$ 1,661 - - - - $ 1,661	$ 94,949 1,146 5,925 ( 1,749) - $ 100,271	$ 3,913 - - - -	$ 3,782 - - - 82 $ 3,864
		$ 3,913

(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%.

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

~32~

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 $107,72 3 and cash dividend $2(in dollars) per share. Aforementioned appropriations had been approved by stockholders’ meeting on July 12, 2021.
(19)Operating revenue

Revenue from contracts with customers Revenue from contracts with customers		Three months ended September 30, 2021 2020 $ 6,843,255 $ 3,999,177 Nine months ended September 30, 2021 2020 $ 17,989,858 $ 10,873,535
		2021

		$ 17,989,858

A. Disaggregation of revenue from contracts with customers

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

Domestic	Asia	Others
$ 3,519,799 Domestic	$ 3,277,149 Asia	$ 46,307
		Others
$ 1,650,530 Domestic	$ 2,280,266 Asia	$ 68,381
		Others
$ 8,648,532 Domestic	$ 9,250,491 Asia	$ 90,835 Others

$ 4,632,098	$ 6,099,479	$ 141,958

~33~

B. Contract liabilities

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

liabilities:
Contract liabilities- advance sales receipts	September 30, 2021		December 31, 2020	September 30, 2020	January 1, 2020 $ 3,959
		$ 76,020	$ 5,346	$ 7,383

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

Three months ended September 30,

		Three months ende
Contract liabilities- advance sales receipts Contract liabilities- advance sales receipts		2021

		2021
		$ 5,269

(20)Interest revenue

Three months ended September 30,

Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income		2021	2020 $ 3,719 174 94 $ 3,987
		$ 8,669 75 42 $ 8,786

Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income		Nine months ended September 30, 2021 2020 $ 21,572 $ 21,024 188 1,012 174 536 $ 21,934 $ 22,572
		2021
		$ 21,572 188 174 $ 21,934

~34~

(21)Other income

Three months ended September 30,

	Three months ende
Rent income Dividend income Other income, others Rent income Dividend income Other income, others	2021
	2021
	$ 4,096 18,142 10,396 $ 32,634

(22)Other gains and losses

r gains and losses
Gains on disposals of property, plant and equipment Gains on disposals of investments Gains arising from lease modifications Foreign exchange gains (losses) Gains on financial assets at fair value through profit or loss Miscellaneous disbursements Gains on disposals of property, plant and equipment Gains on disposals of investments Gains arising from lease modifications Foreign exchange losses Gains on financial assets at fair value through profit or loss Miscellaneous disbursements		Threemonths ended September30, 2021 2020 $ - $ - 36,403 - 33 122 8,648 ( 9,198) 35,039 14,592 ( 940) ( 242) $ 79,183 $ 5,274 Nine months ended September 30, 2021 2020 $ 10 $ - 36,403 - 37 148 ( 93,068) ( 21,224) 91,138 17,174 ( 1,425) ( 727) $ 33,095 ($ 4,629)
		2021
		$ - 36,403 33 8,648 35,039 ( 940)
		$ 79,183
		2021
		$ 10 36,403 37 ( 93,068) 91,138 ( 1,425)
		$ 33,095

~35~

(23)Financial costs

Three months ended September 30,

	Threemonths ende
Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others	2021
	2021
	$ 12,057 1,158 886 14,101 748 $ 14,849

(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 September 30, 2021 2020 $ 833,775 $ 287,988 $ 107,856 $ 76,018 $ 3,203 $ 2,866 $ 242 $ 242 $ 29,838 $ 29,071
	2021
	$ 833,775 $ 107,856 $ 3,203 $ 242 $ 29,838

~36~

Nine months ended September 30,

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		2021	2020 $ 892,581 $ 227,353 $ 8,068 $ 727 $ 80,831
		$ 1,874,425 $ 281,061 $ 9,599 $ 727 $ 91,203

(25)Employee benefit expense

Three months ended September 30,

Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses		2021	2020
		$ 780,402 $ 259,470 13,661 11,489 9,256 8,112 25,067 3,616 5,389 5,301 $ 833,775 $ 287,988 Ninemonths ended September30,	$ 259,470 11,489 8,112 3,616 5,301
			$ 287,988
		2021	2020
		$ 1,733,222 41,470 27,254 52,503 19,976 $ 1,874,425	$ 801,903 35,889 24,302 12,161 18,326
			$ 892,581

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 and nine months ended September 30, 2021 and 2020, employees’ compensation was accrued at $116,868, $14,769, $235,739 and $51,136, respectively; while directors’ remuneration was accrued at $23,374, $2,954, $47,148 and $10,227, respectively. The aforementioned amounts were recognized in salary expenses.

~37~

The employees’ compensation and directors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit for the nine months ended September 30, 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.
(26)Income tax
A. Income tax expense
- (a) Components of income tax expense:

			Threemonths ended September30,	Threemonths ended September30,
			2021	2020
Current tax:
Current tax on profits for
the period		$	299,140	$	43,664
Prior year income tax
underestimation			1,492		-
Total current tax			300,632		43,664
Deferred tax:
Origination and reversal of
temporary differences			11,818	(	1,576)
Income tax expense		$	312,450	$	42,088
			Ninemonths ended September30,
			2021	2020
Current tax:
Current tax on profits for
the period		$	605,003	$	139,434
Prior year income tax
overestimation	(		1,758)	(	4,596)
Total current tax			603,245		134,838
Deferred tax:
Origination and reversal of
temporary differences			5,340	(	386)
Income tax expense		$	608,585	$	134,452
(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 2019 have been assessed and approved by the Tax Authority.

~38~

(27)Earnings per share

Threemonths ended September30,2021	Threemonths ended September30,2021	Threemonths ended September30,2021
Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars)
$ 1,904,745 $ 1,904,745	280,287 9 1,800 282,096	$ 6.80
		$ 6.75

Threemonths ended September30,2020	Threemonths ended September30,2020	Threemonths ended September30,2020
Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars)
$ 237,813 $ 237,813	279,834 1,373 281,207	$ 0.85
		$ 0.85

~39~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employee stock options Employees’ compensation Diluted earnings per share Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 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		Ninemonths ended September30,2021 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 3,843,683 280,126 $ 13.72 7 1,952 $ 3,843,683 282,085 $ 13.63 Nine months ended September 30, 2020 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (share in thousands) share (in dollars) $ 829,160 279,934 $ 2.96 1,738 $ 829,160 281,672 $ 2.94	Ninemonths ended September30,2021 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (sharein thousands) share (indollars) $ 3,843,683 280,126 $ 13.72 7 1,952 $ 3,843,683 282,085 $ 13.63 Nine months ended September 30, 2020 Weighted average number of ordinary Earnings per Amount after tax shares outstanding (share in thousands) share (in dollars) $ 829,160 279,934 $ 2.96 1,738 $ 829,160 281,672 $ 2.94



		$ 829,160 $ 829,160	279,934 1,738 281,672

Note: The employee stock options not calculate for three months and nine months ended September 30, 2020 due to the effect of anti-dilution.

~40~

(28)Transactions with non-controlling interest

A. On August 25, 2021, the Group acquired an additional shares of its subsidiary-Elite Silicon Technology Inc. for a total cash consideration of $28. The carrying amount of non-controlling interest in Elite Silicon Technology Inc. was $1 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $27.

The effect of changes in interests in Elite Silicon Technology Inc. on the equity attributable to owners of the parent for the nine months ended September 30, 2021 is shown below:

September 30, 2021 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		2021 $ 1 ( 28) ($ 27)

B. On March 30, 2020 and April 28, 2020, the Group acquired an additional shares of its subsidiary-Elite Silicon Technology Inc. for a total cash consideration of $1,752 and $128. The carrying amount of noncontrolling interest in Elite Silicon Technology Inc. was $119 and $12 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $1,633 and $116.

The effect of changes in interests in Elite Silicon Technology Inc. on the equity attributable to owners of the parent for the nine months ended September 30, 2020 is shown below:

September 30, 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		2020 $ 131 ( 1,880) ($ 1,749)

~41~

(29)Supplemental cash flow information

A. Investing activities with partial cash payments:

							Ninemonths ended September	Ninemonths ended September	Ninemonths ended September	Ninemonths ended September	30,	30,
							2021			2020
		Purchase of property, plant and
		equipment
		(including amount of transfer)					$		763,849	$		262,231
		Add:	Ending balance of
			prepayments for
			equipment						53,911			21,804
		Less:	Opening balance of
			prepayments for
			equipment				(		68,535)	(		5,863)
		Add:	Opening balance of
			payable on equipment						146,904			58,026
		Less:	Ending balance of
			payable on equipment				(		63,421)	(		52,787)
		Cash	paid during the period				$		832,708	$		283,411
	B. Changes in liabilities			from financing				activities:
						Short-term				Guarantee	Liabilities from
			Short-term		notes and bills				Lease	deposits		financing
			borrowings				payable		liabilities	received	activities-gross
At January 1, 2021			$ 1,340,000		$		149,756	$	81,637	$ 6,635	$	1,578,028
Changes in cash		flow from
financing activities			610,000			(	149,014)		( 9,243)	( 298)		451,445
Interest paid				-			-		( 886)	-	(	886)
Interest expense				-			-		886	-		886
Changes in other non-cash items				-		(	742)		5,702	-		4,960
Changes from	lease modifications			-			-	(	124)	-	(	124)
At September	30, 2021		$ 1,950,000		$		-	$	77,972	$ 6,337	$	2,034,309
						Short-term				Guarantee	Liabilities from
			Short-term		notes and bills				Lease	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			820,000				100,346	(	7,695)	-		912,651
Interest paid				-			-	(	897)	-	(	897)
Interest expense				-			-		897	-		897
Changes in other non-cash items				- (			476)		7,906	-		7,430
Changes from	lease modifications			-			-	(	3,933)	-	(	3,933)
At September	30, 2020		$ 1,094,000		$		99,870	$	83,165	$ 9,871	$	1,286,906

~42~

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Arima Lasers Corporation Canyon Semiconductor Inc.

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

(2) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Total Salaries and other short-term employee benefits Post-employment benefits Total		Threemonths ended September30,	Threemonths ended September30,
		2021	2020
		$ 68,472 $ 12,897 108 108 $ 68,580 $ 13,005 Ninemonths ended September30,	$ 12,897 108
			$ 13,005
		2021	2020
		$ 143,968 324 $ 144,292	$ 42,001 324
			$ 42,325

8. Pledged Assets

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

Assetsitem			Bookvalue December 31, 2020 September 30, 2020 Purpose	Bookvalue December 31, 2020 September 30, 2020 Purpose
		September 30, 2021
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 Date

None.

~43~

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 adjus t the amount of dividends paid to shareholders, issue new shares or pay cash to shareholders, or repurchase shares.

The gearing ratios at September 30, 2021, December 31, 2020 and September 30, 2020 were as follows:

30, 2020 were as follows:
Total assets Total liabilities Total equity Equity to asset ratio	September 30, 2021 December 31, 2020 September 30, 2020 $ 18,662,507 $ 13,000,348 $ 12,442,059 ( 7,163,372) ( 4,871,065) ( 4,556,243) $ 11,499,135 $ 8,129,283 $ 7,885,816 62% 63% 63%
		$ 18,662,507 ( 7,163,372) $ 11,499,135 62%	$ 13,000,348 ( 4,871,065) $ 8,129,283 63%

~44~

(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”) 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		September 30, 2021	December 31, 2020	September 30, 2020 $ 268,643 $ 69,278 $ 2,265,219 139,680 232 1,712,482 95,556 3,969 5,392 $ 4,222,530 September 30, 2020 $ 1,094,000 99,870 3,938 2,521,962 577,512 9,871 $ 4,307,153 $ 83,165
		$ 370,002	$ 365,474
		$ 42,422	$ 64,836
		$ 9,216,312 111,400 382 2,160,408 6,435 3,969 6,320 $ 11,505,226	$ 3,597,917 136,704 - 1,633,993 95,830 3,969 6,495
			$ 5,474,908
		September 30, 2021	December 31, 2020
		$ 1,950,000 - 4,005 2,851,896 1,570,092 6,337 $ 6,382,330	$ 1,340,000 149,756 2,115 2,396,158 694,001 6,635
			$ 4,588,665
		$ 77,972	$ 81,637

~45~

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 liquidity 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.
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)).

~46~

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
(Foreign currency:
functional
currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
Financial liabilities
Monetary items
USD:NTD
JPY:NTD
(Foreign currency:
functional
currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
Financial liabilities
Monetary items
USD:NTD

September 30, 2021
Foreign currency
amount
(In thousands)
Exchange
rate
Book value
(NTD in
thousands)
$ 367,407
27.850
$10,232,285
198,372
4.305
853,991
$ 61,722
27.850
$ 1,718,958
December31,2020
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
September30,2020
Foreign currency
amount
(In thousands)
Exchange
rate
Book value
(NTD in
thousands)
$ 109,816
29.100
$ 3,195,646
187,002
4.269 798,312
$ 55,734
29.100
$ 1,621,859

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V. The total exchange losses, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three months and nine months ended September 30, 2021 and 2020, amounted to $8,648, ($9,198), ($93,068) and ($21,224), respectively.
VI. Analysis of foreign currency market risk arising from significant foreign exchange variation:

Nine months ended September 30, 2021

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	Sensitivity analysis Degree of variation Effect on profitor loss Effect on other comprehensive income 1% $ 102,323 $ - 1% 8,540 - 1% ($ 17,190) $ - Ninemonths ended September30,2020 Sensitivityanalysis Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 31,956 $ - 1% 7,983 - 1% ($ 16,219) $ -

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

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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 nine months ended September 30, 2021 and 2020 would have increased/decreased by $37,000 and $26,864, 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 $4,242 and $6,928, 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.

(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 befor e 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.

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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.
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 September 30, 2021, December 31, 2020 and September 30, 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 September 30		2021 2020 Accounts receivable $ 5,713 $ 14,295 ( 5,713) ( 1,839) $- $ 12,456

		$ 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 operational needs.

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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 amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
September 30, 2021 Short-term borrowings Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities:None.	Less than 1 year Between 1 and 5 years Over 5 years
	$ 1,950,000 $ - $ - 4,005 - - 2,851,896 - - 1,570,092 - - 13,558 23,610 49,818 - - 6,337

Non-derivative financial liabilities:

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

Non-derivative financial liabilities:

Non-derivative financial liabilities:
September 30, 2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities:None.	Less than 1 year Between 1 and 5 years Over 5 years
	$ 1,094,000 $ - $ - 99,870 - - 3,938 - - 2,521,962 - - 577,512 - - 11,689 27,942 53,628 - - 9,871

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(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 as sets 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 prov ided in Note 6(9).
B. Fair value information of investment property at cost is prov ided in Note
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, 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:
September 30, 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.	Level 1	Level 2	Level 3 Total
	$ 235,989 91,033 39,658 -	$ - - - -	$ 3,322 $ 239,311 - 91,033 - 39,658 42,422 42,422
	$ 366,680	$-	$ 45,744	$ 412,424

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Level 1	Level 2	Level 3	Total $222,347 91,737 51,390 64,836 $430,310 Total
$ 214,924 91,737 51,390 -	$ 2,506 - - -	$ 4,917 - - 64,836
$ 358,051 Level 1	$ 2,506 Level 2	$ 69,753
		Level 3
$ 85,669 87,758 48,900 - $ 222,327	$ 2,839 - - - $ 2,839	$ 43,477 - - 69,278	$ 131,985 87,758 48,900 69,278 $ 337,921
		$ 112,755

(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.

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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.
E. For the nine months ended September 30, 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 nine months ended September 30, 2021 and 2020:

eptember 30, 2021 and 2020:
At January 1 Valuation adjustment At September 30	Equity securities
	2021	2020
	$ 69,753 (24,009) $ 45,744	$ 85,953 26,802 $ 112,755

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.

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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	Fair value at		Significant
	September 30,		Valuation	unobservable	Range		Relationship of
		2021	technique	input	(weighted average)		inputs to fair value
Non-derivative	equity instrument:
Unlisted shares	$ 3,322		Market -	Discount for	30%	the higher the
			comparable	lack of			discount for lack of
			companies	marketability			marketability, the
							lower the fair value
Unlisted shares		42,422	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
	Fair value at			Significant
	September 30,		Valuation	unobservable	Range		Relationship of inputs
		2020	technique	input	(weighted average)		to fair value
Non-derivative	equity instrument:
Unlisted shares	$ 28,327		Market -	Discount for	30%	the higher the discount
			comparable	lack of			for lack of
			companies	marketability			marketability, the
							lower the fair value
Unlisted shares		69,278	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

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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:

Input Change	September 30, 2021	September 30, 2021	September 30, 2021	September 30, 2021
	Recognized in profit or loss Recognized in other comprehensive income
	Favorable change Unfavorable change Favorable change Unfavorable change
Discount for lack of marketability ±10%	$ 142	($ 142)	$ 3,471	($ 3,471)

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

Input Change	September30,2020	September30,2020	September30,2020	September30,2020
	Recognized in profit or loss Recognized in other comprehensive income
	Favorable change Unfavorable change Favorable change Unfavorable change
Discount for lack of marketability ±10%	$ 1,214	($ 1,214)	$ 4,618	($ 4,618)

(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 nine months ended September 30, 2021. However, the Company will continue to pay attention to the development of the COVID - 19 and its impact on the overall economic environment.

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13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid -in capital
or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.
H. Receivables from related parties reaching $100 million or 20% of pa id-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 o f investee companies (not including investees in Mainland China): Please refer to table 2.

(3) Information on investments in Mainland China

Basic information: Please refer to table 3.
Significant transactions, either directly or indirectly through a thir d area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

As of September 30, 2021, the Company did not have any shareholders with a shareholding ratio more than 5%.

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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 Revenue from external customers Segment income before income tax Segment assets Segment liabilities		Three months ended September 30, 2021 2020 $ 6,843,255 $ 3,999,177 $ 2,269,810 $ 288,127 Ninemonths ended September30, 2021 2020 $ 17,989,858 $ 10,873,535 $ 4,501,655 $ 971,763 September 30, 2021 September 30, 2020 $ 18,662,507 $ 12,442,059 $ 7,163,372 $ 4,556,243
		2021
		$ 6,843,255 $ 2,269,810 Ninemonths ended
		2021
		$ 17,989,858 $ 4,501,655 September 30, 2021
		$ 18,662,507 $ 7,163,372

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

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Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Holding of marketable securities at the end of the period

September 30, 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 September 30, 2021	As of September 30, 2021	As of September 30, 2021	As of September 30, 2021
				Number of shares	Book value (Note 1)	Ownership (%)	Fair value (Note 1)
Elite Semiconductor Microelectronics Technology Inc.	Arima Lasers Corporation stock	Note 2	Financial assets at fair value through profit or loss	3,001,000	99,333	10.65	99,333
Elite Semiconductor Microelectronics Technology Inc.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	410	0.00	410
Elite Semiconductor Microelectronics TechnologyInc.	HSBC FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	1,000,000	26,423	Not applicable	26,423
Elite Semiconductor Microelectronics Technology Inc.	ANZ FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	500,000	13,235	Not applicable	13,235
Elite Semiconductor Microelectronics Technology Inc.	BGF RENMINBI BOND FUND	None	Financial assets at fair value through profit or loss	127,986	58,314	Not applicable	58,314
Elite Semiconductor Microelectronics Technology Inc.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	21,211	8.06	21,211
Elite Investment Services Ltd.	HSBC ALL CHINA BOND FUND - AC (2802)	None	Financial assets at fair value through profit or loss	600,000	32,719	Not applicable	32,719
Charng Feng Investment Ltd.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	410	0.00	410
Charng Feng Investment Ltd.	Arima Lasers Corporation stock	Note 3	Financial assets at fair value through profit or loss	907,000	30,022	3.22	30,022
Charng Feng Investment Ltd.	M2 Communication Inc. stock	None	Financial assets at fair value through profit or loss	400,000	3,322	4.46	3,322
Charng Feng Investment Ltd.	Powerchip Semiconductor Manufacturing Corporation	None	Financial assets at fair value through profit or loss	1,630,426	105,814	0.05	105,814
Charng Feng Investment Ltd.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	21,211	8.06	21,211
Jie Yong Investment Ltd.	Elite Semiconductor Microelectronics Technology Inc. stock	Parent company	Financial assets at fair value through other comprehensive income	13,662,000	1,789,722	4.77	1,789,722

Note 1: Valuation adjustment of financial assets and cumulative translation differences are included. Note 2: The Company’s subsidiary is this company’s director Note 3: Charng Feng Investment Ltd. is this company’s director

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Information on investees (exclude investee in Mainland China)

Nine months ended September 30, 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 September 30,2021	Shares held as at September 30,2021	Shares held as at September 30,2021	Net income (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognized by the Company for the nine months ended September 30, 2021
				Balance as at September 30, 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	$ 24,960	$ 9,466	$ 9,466
Elite Semiconductor Microelectronics Technology Inc.	Charng Feng Investment Ltd.	Taiwan	General investment	500,000	500,000	50,000,000	100	552,910	52,325	53,426
Elite Semiconductor Microelectronics Technology Inc.	Elite Investment Services Ltd.	British Virgin Islands	General investment	417,750	417,750	15	100	612,019	( 8,480)	( 8,480)
Elite Semiconductor Microelectronics Technology Inc.	Jie Yong Investment Ltd.	Taiwan	General investment	270,000	270,000	3,600,000	41.86	174,785	90,652	2
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	1,518	2,928	2,928
Charng Feng Investment Ltd.	Elite Memory 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	21,719	( 233)	( 233)
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	61,229	61,201	7,455,860	98.10	584	57	56

Table 2	Table 2	Table 2	Table 2	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated	Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Information on investees (exclude investee in Mainland China) Nine months ended September 30, 2021 Expressed in thousands of New Taiwan dollars, except as otherwise indicated
Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as at September 30, 2021			Net income (loss) of the investee for the nine months ended September 30,2021	Investment income (loss) recognized by the Company for the nine months ended September 30,2021	Footnote
				Balance as at September 30,2021	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	45,940	29,457	12,057
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	2,064	2,064	200	100	1,262	( 934)	( 934)
Charng Feng Investment Ltd.	CHI Microelectronics Limited	Hong Kong	Trading	358	358	10,000	100	375	7	7
Charng Feng Investment Ltd.	HHHtech Co., Ltd.	Taiwan	Information software services, product design, management consultant and international trade	15,000	-	1,500,000	75	4,665	( 13,365)	( 10,024)	Note 2

Note 1: The foreign investment amount translated at the exchange rate as of September 30, 2021.

Note 2: The Company obtained HHHtech Co., Ltd. share interest by 75% through it increased its capital by issuing new shares on March, 2021. Stockholders’ meeting of HHHtech Co., Ltd. approved to execute liquidation process on June 28, 2021.

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries

Information on investments in Mainland China

Nine months ended September 30, 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 nine months ended September 30,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine months ended September 30,2021	Accumulated amount of remittance from Taiwan to Mainland China as at September 30, 2021	Net income (loss) of the investee for the nine months ended September 30, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the nine months ended September 30, 2021 (Note 2)	Book value of investments in Mainland China as at September 30,2021	Accumulated amount of investment income remittance back to Taiwan as at September 30, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Elite Semiconductor Microelectronics 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	$ 70,725	(1)	$ 2,493	$ 68,232	$ -	$ 70,725	($ 3,414)	100	($ 3,414)	$ 73,627	$ -	Note 5
Elite Semiconductor Microelectronics (Shanghai) Technology Inc.	Product design, wholesale and retail of electronic materials, information software services and international trade	5,570	(1)	5,570	-	-	5,570	1,150	100	1,150	7,783	-	Note 6
Company name Accumulated amount of remittance from Taiwan to Mainland China as at September 30, 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. $ 76,295 $ 76,295 $ 300,000
Company name	Accumulated amount of remittance from Taiwan to Mainland China as at September 30, 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.	$ 76,295	$ 76,295	$ 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 September 30, 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

AI assistant

ESMT — Interim / Quarterly Report 2021

52243_rns_2021-11-30_be5259fe-5761-4425-980c-6b9553f480c7.pdf

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

September 30,2021 and 2020

Table of Contents

Report on Review of Interim Financial Information

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets September 30, 2021, December 31, 2020 and September 30, 2020

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Balance Sheets September 30, 2021, December 31, 2020 and September 30, 2020

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Comprehensive Income Nine Months Ended September 30, 2021 and 2020

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Changes in Equity Nine Months Ended September 30, 2021 and 2020

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows

Elite Semiconductor Microelectronics Technology Inc. and Subsidiaries Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2021 and 2020

(Unaudited)

1. History and Organization

3. Application of New Standards, Amendments and Interpretations

4. Summary of Significant Accounting Policies

(1) Compliance statement

B. Subsidiaries included in the consolidated financial statements:

(4) Business combinations

(5) Employee Benefits

(6) Income tax

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

6. Details of Significant Accounts

(1) Cash and cash equivalents

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

(4) Accounts receivable

(7) Property, plant and equipment

(8) Leasing arrangements- lessee

(10)Intangible assets

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

(11)Impairment of non- financial assets

(12)Short -term borrowings

(13)Other payable

(14)Pensions

(15)Share- based payment

(16)Share capital

B. Treasury shares

(17)Capital surplus

(18)Retained earnings

B. Contract liabilities

Three months ended September 30,

(20)Interest revenue

(21)Other income

Three months ended September 30,

(22)Other gains and losses

(24)Expenses by nature

(25)Employee benefit expense

(27)Earnings per share

(28)Transactions with non-controlling interest

(29)Supplemental cash flow information

A. Investing activities with partial cash payments:

7. Related Party Transactions

(1) Names of related parties and relationship

(2) Key management compensation

8. Pledged Assets

9. Significant Contingent Liabilities and Unrecognized Contract Commitments

10. Significant Disaster Loss

11. Significant Events after the Balance Sheet Date

12. Others

(1) Capital management

(2) Financial instruments

A. Financial instruments by category

Foreign exchange risk

Price risk

Cash flow and fair value Interest rate risk

(3) Fair value information

(4) Others

13. Supplementary Disclosures

(1) Significant transactions information

(2) Information on investees

(3) Information on investments in Mainland China

(4) Major shareholders information

14. Operating Segment Information

(1) General information

ESMT Interim / Quarterly Report 2021