Faraday — Interim / Quarterly Report 2021

Nov 10, 2021

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

Address: No. 5 Li-Hsin Road III, Hsinchu Science Park, Hsinchu City, Taiwan, R.O.C. Telephone: 886-3-578-7888

Notice to Readers

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in thousands of New Taiwan Dollars) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2021, December 31, 2020 and June 30, 2020 (June 30, 2021 and 2020 are unaudited)

	Note	As of
Assets		June 30, 2021	December 31, 2020	June 30, 2020
Current assets
Cash and cash equivalents	6(1)	\$ 3,793,475	\$ 3,048,331	\$ 3,069,603
Financial assets at fair value through profit or loss, current	6(2)	29,587	23,497	27,853
Contract assets, current	6(15), 6(16), 7	81,557	137,475	299,045
Notes receivable, net	6(16)	1,232	1,360	699
Accounts receivable, net	6(4), 6(16)	611,707	559,524	662,032
Accounts receivable from related parties, net	6(4), 6(16), 7	171,832	130,254	149,268
Other receivables, net		55,417	113,986	85,811
Inventories, net	6(5)	786,070	500,634	648,932
Other current assets	6(6), 7	184,852	181,234	173,333
Costs to fulfil a contract, current	6(15)	14,845	5,961	1,964
Total current assets		5,730,574	4,702,256	5,118,540
Non-current assets
Financial assets at fair value through other comprehensive income,	6(3)	2,505,576	2,245,962	1,113,771
noncurrent
Financial assets measured at amortized cost, noncurrent	8	15,564	16,433	16,476
Property, plant and equipment	6(8)	516,031	539,322	565,550
Right-of-use assets	6(17)	224,483	234,275	256,035
Intangible assets	6(9), 7	296,380	259,256	395,677
Deferred tax assets	4	31,710	48,775	44,563
Refundable deposits		19,508	11,430	16,560
Other non-current assets	6(10)	175,678	141,447	-
Total non-current assets		3,784,930	3,496,900	2,408,632
Total assets		\$ 9,515,504	\$ 8,199,156	\$ 7,527,172

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES (Expressed in thousands of New Taiwan Dollars) CONSOLIDATED BALANCE SHEETS June 30, 2021, December 31, 2020 and June 30, 2020 (June 30, 2021 and 2020 are unaudited)

Liabilities and Equity Note			As of
		June 30, 2021	December 31, 2020	June 30, 2020
Current liabilities
Financial liabilities at fair value through profit or loss, current	6(2)	\$ 391	\$ 1,504	\$ -
Contract liabilities, current	6(15), 7	764,359	476,604	192,163
Notes payable		3	3	4
Accounts payable		750,356	481,775	867,666
Accounts payable - related parties	7	230,132	162,940	197,536
Payables on equipment		-	-	62
Other payables	6(12)	351,950	392,146	679,403
Current tax liabilities	4	50,460	50,343	54,582
Lease liabilities-current	6(17)	26,790	32,575	40,223
Other current liabilities		19,607	16,195	65,321
Total current liabilities		2,194,048	1,614,085	2,096,960
Non-current liabilities
Deferred tax liabilities	4	7,909	6,810	6,530
Lease liabilities-noncurrent	6(17)	204,329	209,836	225,196
Long-term payables	6(12)	52,097	16,321	50,427
Long-term deferred revenue		1,694	2,715	3,622
Defined benefit liabilities, non-current	4	7,030	8,395	23,096
Total non-current liabilities		273,059	244,077	308,871
Total liabilities		2,467,107	1,858,162	2,405,831
Equity attributable to the parent company
Capital	6(14)
Common stock		2,485,503	2,485,503	2,485,503
Additional paid-in capital	6(14)	731,112	724,574	723,979
Retained earnings	6(14)
Legal reserve		1,510,216	1,510,216	1,510,216
Special reserve		369,710	369,710	369,710
Unappropriated earnings		841,402	491,085	392,415
Other components of equity		960,871	712,849	(409,147)
Equity attributable to the parent company	6(14)	6,898,814	6,293,937	5,072,676
Non-controlling interests	6(14)	149,583	47,057	48,665
Total equity		7,048,397	6,340,994	5,121,341
Total liabilities and equity		\$ 9,515,504	\$ 8,199,156	\$ 7,527,172

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three-month and six-month periods ended June 30, 2021 and 2020 (Expressed in thousands of New Taiwan Dollars, except for earnings per share)

		For the three-month periods ended	June 30,		For the six-month periods ended June 30,
	Note	2021		2020	2021			2020
Net sales	6(15), 7	\$ 1,687,852	\$	1,306,273	\$ 3,222,827		\$	2,571,697
Operating costs	6(5), 6(18), 7	(849,356)		(695,479)	(1,635,597)			(1,342,280)
Gross profit		838,496		610,794	1,587,230			1,229,417
Operating expenses	6(9), 6(18)
Selling expenses		(82,838)		(64,560)	(159,814)			(127,573)
Administrative expenses		(82,918)		(66,053)	(159,970)			(133,886)
Research and development expenses	7	(460,384)		(452,073)	(974,490)			(917,529)
Expected credit gains (losses)	6(16)	8,274		(21,606)	66,433			(1,377)
Total operating expenses		(617,866)		(604,292)	(1,227,841)			(1,180,365)
Operating income		220,630		6,502	359,389			49,052
Non-operating income and expenses
Interest income	6(19)	2,343		3,253		6,605		6,325
Other income	6(19)	9,091		890	80,818			9,860
Other gains and losses	6(19)	(5,710)		172,178	(10,651)			173,034
Finance costs	6(19)	(1,512)		(1,686)		(2,984)		(3,423)
Share of profit or loss of associates and joint ventures	6(7)	-		(17,030)		-		(23,591)
Total non-operating income and expenses		4,212		157,605	73,788			162,205
Income from continuing operations before income tax		224,842		164,107	433,177			211,257
Income tax expense	4, 6(21)	(31,946)		(26,721)	(61,288)			(37,694)
Net income from continuing operations		192,896		137,386	371,889			173,563
Other comprehensive income	6(20)
Item that will not be reclassified subsequently to profit or loss:
Unrealized gains or losses from equity instruments investments
measured at fair value through other comprehensive income		128,524		91,716	259,614			(21,499)
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(18,671)		(12,902)	(11,961)			(19,442)
Share of the other comprehensive income of associates and joint ventures accounted for using equity method
Other comprehensive income (net of income tax)		- 109,853		(166) 78,648	247,653	-		- (40,941)
Total comprehensive income		\$ 302,749	\$	216,034	\$ 619,542		\$	132,622
Net income attributable to:
Stockholders of the parent	6(22)	\$ 180,600	\$	143,424	\$ 350,317		\$	182,719
Non-controlling interests	6(14)	12,296		(6,038)	21,572			(9,156)
		\$ 192,896	\$	137,386	\$ 371,889		\$	173,563
Comprehensive income (loss) attributable to:
Stockholders of the parent		\$ 291,123	\$	222,846	\$ 598,339		\$	143,281
Non-controlling interests		11,626		(6,812)	21,203			(10,659)
		\$ 302,749	\$	216,034	\$ 619,542		\$	132,622
Earnings per share (NTD)	6(22)
Earnings per share-basic		\$ 0.73	\$	0.58	\$	1.41	\$	0.74
Earnings per share-diluted		\$ 0.72	\$	0.58	\$	1.40	\$	0.73

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the six-month periods ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

					Equity Attributable to the Parent Company
				Retained Earnings		Other Components of Equity
							Unrealized Gain or
							Loss on Financial
						Exchange	Assets Measured at Fair Value through
						Differences on	Other
	Common	Additional	Legal	Special	Unappropriated	Translation of	Comprehensive		Non-Controlling
	Stock	Paid-in Capital	Reserve	Reserve	Earnings	Foreign Operations	Income	Total	Interests	Total Equity
Balance as of January 1, 2020	\$ 2,485,503	\$ 724,895	\$ 1,473,678	\$ 512,210	\$ 377,139	\$ (85,537)	\$ (284,172)	\$ 5,203,716	\$ 59,024	\$ 5,262,740
Appropriation and distribution of 2019 retained earnings
Legal reserve	-	-	36,538	-	(36,538)	-	-	-	-	-
Cash dividends	-	-	-	-	(273,405)	-	-	(273,405)	-	(273,405)
Special reserved	-	-	-	(142,500)	142,500	-	-	-	-	-
Net income for the six-month ended June 30, 2020	-	-	-	-	182,719	-	-	182,719	(9,156)	173,563
Other comprehensive income for the six-month ended June 30, 2020	-	-	-	-	-	(17,939)	(21,499)	(39,438)	(1,503)	(40,941)
Total comprehensive income for the six-month ended June 30, 2020	-	-	-	-	182,719	(17,939)	(21,499)	143,281	(10,659)	132,622
Disposal of investments accounted for using equity method	-	(1,531)	-	-	-	-	-	(1,531)	-	(1,531)
Change in subsidiaries' ownership	-	615	-	-	-	-	-	615	300	915
Balance as of June 30, 2020	\$ 2,485,503	\$ 723,979	\$ 1,510,216	\$ 369,710	\$ 392,415	\$ (103,476)	\$ (305,671)	\$ 5,072,676	\$ 48,665	\$ 5,121,341
Balance as of January 1, 2021
	\$ 2,485,503	\$ 724,574	\$ 1,510,216	\$ 369,710	\$ 491,085	\$ (113,671)	\$ 826,520	\$ 6,293,937	\$ 47,057	\$ 6,340,994
Net income for the six-month ended June 30, 2021	-	-	-	-	350,317	-	-	350,317	21,572	371,889
Other comprehensive income for the six-month ended June 30, 2021	-	-	-	-	-	(11,592)	259,614	248,022	(369)	247,653
Total comprehensive income for the six-month ended June 30, 2021	-	-	-	-	350,317	(11,592)	259,614	598,339	21,203	619,542
Change in subsidiaries' ownership	-	6,538	-	-	-	-	-	6,538	81,323	87,861
Balance as of June 30, 2021	\$ 2,485,503	\$ 731,112	\$ 1,510,216	\$ 369,710	\$ 841,402	\$ (125,263)	\$ 1,086,134	\$ 6,898,814	\$ 149,583	\$ 7,048,397

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six-month periods ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

			For the six-month periods ended		For the six-month periods ended
		June 30,				June 30,
Description	2021		2020	Description	2021		2020
Cash flows from operating activities:				Cash flows from investing activities:
Net income before tax	\$ 433,177		\$ 211,257	Proceeds from principal of financial assets measured at amortized cost upon maturity	\$ 869	\$	15,290
Adjustments for non-cash gain or loss:				Proceeds from disposal of investments accounted for using equity method	24,203		209,489
Depreciation	49,507			51,127 Acquisition of property, plant and equipment	(8,171)		(26,915)
Amortization	162,319			183,440 Disposal of property, plant and equipment	144		-
Expected credit (gains) losses	(66,433)			1,377 Refundable deposits	(8,078)		(9,138)
Gain on financial assets and liabilities at fair value through profit or loss	(7,203)			(5,837) Acquisition of intangible assets	(129,280)		(142,641)
Interest expense	2,984		3,423	Net cash (used in) provided by investing activities	(120,313)		46,085
Interest income	(6,605)		(6,325)
Dividend income	(69,730)			- Cash flows form financing activities:
Share-based payment expenses		-		915 Cash payments for the principal portion of the lease liability	(20,308)		(18,154)
Share of loss of associates and joint ventures accounted for using equity method		-		23,591 Change in non-controlling interests (increase in subsidiary's capital by Cash)	87,861		-
Loss on disposal of property, plant and equipment		-	384	Net cash provided by (used in) financing activities	67,553		(18,154)
Gains on disposal of investments		-		(172,487) Effect of exchange rate changes on cash and cash equivalents	(8,326)		(25,495)
Changes in operating assets and liabilities:
Contract assets	55,918			218,322 Net increase in cash and cash equivalents	745,144		293,548
Notes receivable		128		3,741 Cash and cash equivalents at beginning of period	3,048,331		2,776,055
Accounts receivable	14,250			18,783 Cash and cash equivalents at end of period	\$ 3,793,475	\$	3,069,603
Accounts receivable from related parties	(41,578)		21,657
Other receivables	34,549		(8,295)
Inventories	(285,436)		(14,378)
Prepayments	(44,701)		14,857
Other current assets	(6,576)		(31,986)
Cost to fulfil a contract	(8,884)		(1,964)
Contract liabilities	287,755		(110,861)
Accounts payable	268,581		45,178
Accounts payable - related parties	67,192		(60,896)
Other payables	(77,599)		(94,617)
Other current liabilities	3,412		50,803
Defined benefit liabilities	(1,365)		1,477
Other operating liabilities	(1,021)		(1,134)
Cash generated from operations	762,641		341,552
Interest received	6,422		6,818
Dividend received	69,730		-
Interest paid	(2,984)		(3,423)
Income tax paid	(29,579)		(53,835)
Net cash provided by operating activities	\$ 806,230		\$ 291,112

1. History and Organization

Faraday Technology Corporation (the "Company") was incorporated on June 10, 1993. The Company is a leading fabless ASIC vendor and silicon intellectual property and system platform provider, with products and services of ASIC/SoC Design Services, ASIC/SoC Production Turnkey Services, and ASIC EDA tools.

The Company's shares are listed on the Taiwan Stock Exchange. The address of its registered office and principal place of business is No. 5, Li-Hsin III Road, Hsinchu Science Park, Taiwan.

2. Date and Procedures of Authorization of Financial Statements for Issue

The consolidated financial statements of the Company and its subsidiaries (the "Group") for the six-month periods ended June 30, 2021 and 2020 were authorized for issue in accordance with a resolution of the Board of Directors' meeting on July 27, 2021.

3. Newly Issued or Revised Standards and Interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after January 1, 2021. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which are endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date
		issued by IASB
a	Narrow-scope amendments of IFRS, including Amendments	January 1, 2022
	to IFRS 3, Amendments to IAS 16, Amendments to IAS 37
	and the Annual Improvements

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (a) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements
• A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential "day 2" gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.
• B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

• C. Onerous Contracts Cost of Fulfilling a Contract (Amendments to IAS 37) The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
• D. Annual Improvements to IFRS Standards 2018 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee's leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned amendments that are applicable for annual periods beginning on or after January 1, 2022 have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date
		issued by IASB
a	IFRS 10 "Consolidated Financial Statements" and IAS 28	To be determined
	"Investments in Associates and Joint Ventures" — Sale or	by IASB
	Contribution of Assets between an Investor and its Associate
	or Joint Ventures
b	IFRS 17 "Insurance Contracts"	January 1, 2023
c	Classification of Liabilities as Current or Non-current –	January 1, 2023
	Amendments to IAS 1
d	Disclosure Initiative - Accounting Policies – Amendments to	January 1, 2023
	IAS 1
e	Definition of Accounting Estimates – Amendments to IAS 8	January 1, 2023
f	Deferred Tax related to Assets and Liabilities arising from a	January 1, 2023
	Single Transaction – Amendments to IAS 12

(a) IFRS 10"Consolidated Financial Statements" and IAS 28"Investments in Associates and Joint Ventures" — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 "Consolidated Financial Statements" and "IAS 28 Investments in Associates and Joint Ventures", in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

(b) IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after January 1, 2023 (from the original effective date of January 1, 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after January 1, 2023.

(c) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(d) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

(e) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

(f) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The above-mentioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group's financial statements were authorized for issue, and the local effective dates are to be determined by FSC. The above-mentioned standards and interpretations have no material impact on the Group.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The consolidated financial statements of the Group for the six-month periods ended June 30, 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers ("the Regulations") and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

(2) Basis of Preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars ("NT\$") unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has:

• (a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
• (b) exposure, or rights, to variable returns from its involvement with the investee, and
• (c) the ability to use its power over the investee to affect its returns

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee
• (b) rights arising from other contractual arrangements
• (c) the Company voting rights and potential voting rights

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control of a subsidiary, it:

• (a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
• (b) derecognizes the carrying amount of any non-controlling interest;
• (c) recognizes the fair value of the consideration received;
• (d) recognizes the fair value of any investment retained;
• (e) recognizes any surplus or deficit in profit or loss; and
• (f) reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

			Percentage of ownership (%)
				As of
			June 30,	December	June 30,
Investor	Subsidiary	Main businesses	2021	31, 2020	2020
	The Company Faraday Technology Corporation	Sales representative in	100.00%	100.00%	100.00%
	(USA)	America
	The Company Faraday Technology Japan	Sales representative in	99.95%	99.95%	99.95%
	Corporation	Japan
	The Company Faraday Technology-B.V.I. (B.V.I.)	General investing	100.00%	100.00%	100.00%
	The Company Faraday Technology Vietnam	IC designing service	100.00%	100.00%	100.00%
	Company Limited
	The Company Chih-Hung Investment Corporation	General investing	100.00%	100.00%	100.00%
	(Chih-Hung)
	The Company Sheng Bang Investment Corporation	General investing	100.00%	100.00%	100.00%
	(Sheng Bang)
Chih-Hung	Grain Media Inc.	IC designing, marketing	19.42%	19.42%	19.42%
		and customer service
Chih-Hung	Innopower Technology Corporation	Silicon Intellectual	100.00%	100.00%	100.00%
	(Innopower)	Property designing
Chih-Hung	FaradayTek Solutions India Private	IC designing service	1.00%	1.00%	1.00%
	Limited

Percentage of ownership (%)

			As of
			June 30,	December	June 30,
Investor	Subsidiary	Main businesses	2021	31, 2020	2020
Sheng Bang	Grain Media Inc.	IC designing, marketing and customer service	80.58%	80.58%	80.58%
Sheng Bang	FaradayTek Solutions India Private Limited	IC designing service	99.00%	99.00%	99.00%
Innopower	Bright Capital Group Limited (BCGL)	General investing	100.00%	100.00%	100.00%
BCGL	Faraday Technology Corporation (Suzhou)	IC designing, marketing and customer service	100.00%	100.00%	100.00%
B.V.I.	Faraday Technology Corporation -Mauritius (Mauritius)	General investing	100.00%	100.00%	100.00%
B.V.I.	GrainTech Electronics Limited	IC designing, marketing and customer service	100.00%	100.00%	100.00%
B.V.I.	Faraday Technology Corporation (Samoa)	General investing	100.00%	100.00%	100.00%
B.V.I.	Artery Technology Corporation (Cayman)	General investing	66.42%	67.20%	67.20%
Samoa	United Business Service Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Cayman	Artery Technology Corporation, Ltd.	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Mauritius	Faraday Technology China Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Mauritius	Grain Media Technology (Shenzhen) Co., Ltd. (Note)	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Cayman	Artery Technology Company	IC designing, marketing and customer service	100.00%	100.00%	100.00%
United Business Service Corporation	United Creative Solution Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
United Business Service Corporation	Innopower Technology Corporation (Chongqing)	IC designing, marketing and customer service	100.00%	100.00%	100.00%

We did not review the financial statements of certain subsidiaries, whose statements reflect total assets of NT\$2,975,506 thousand and NT\$1,790,328 thousand as of June 30, 2021 and June 30, 2020, respectively, and total liabilities of NT\$658,778 thousand and NT\$790,352 thousand as of June 30, 2021 and 2020, respectively, total comprehensive income of NT\$147,352 thousand and NT\$104,237 thousand for the three-month periods ended June 30, 2021 and 2020, respectively, and total comprehensive income of NT\$177,933 thousand and NT\$107,484 thousand for the six-month periods ended June 30, 2021 and 2020, respectively.

Notes:

Grain Media Technology (Shenzhen) Co., Ltd. filed for liquidation during the year ended December 31, 2018. The liquidation procedures is still in progress as of the report date.

• (4) Except for the accounting policies listed under Note 4(5) ~ (6), the same accounting policies have been followed in the consolidated financial statements for the six-month periods ended June 30, 2021 as were applied in the preparation of the Company's consolidated financial statements for the year ended December 31, 2020. For the summary of other significant accounting policies, please refer to the consolidated financial statements for the year ended December 31, 2020.
• (5) Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted and disclosed for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.
• (6) Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. The estimated average annual effective income tax rate only includes current income tax. The recognition and measurement of deferred tax follows annual financial reporting requirements in accordance with IAS 12. The Group recognizes the effect of change in tax rate for deferred taxes in full if the new tax rate is enacted by the end of the interim reporting period, by charging to profit or loss, other comprehensive income, or directly to equity.

5. Significant Accounting Judgments, Estimates and Assumptions

The same significant accounting judgments, estimates and assumptions have been followed in the consolidated financial statements for the six-month periods ended June 30, 2021 and 2020 as were applied in the preparation of the Company's consolidated financial statements for the year ended December 31, 2020. Please refer to the consolidated financial statements for the year ended December 31, 2020.

6. Contents of Significant Accounts

(1) Cash and cash equivalents

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Cash
Cash on hand	\$515	\$431	\$364
Checking and savings	2,149,251	1,636,071	1,901,485
Time deposits	1,643,709	1,341,829	1,167,754
Cash equivalents-Commercial
paper with repurchase
agreements	-	70,000	-
Total	\$3,793,475	\$3,048,331	\$3,069,603

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

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Financial assets mandatorily measured at fair value through profit or loss:
Derivatives not designated as hedging instruments	\$-	\$-	\$101
Funds	29,587	23,497	27,752
Total	\$29,587	\$23,497	\$27,853
Current	\$29,587	\$23,497	\$27,853

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Financial liabilities mandatorily
measured at fair value through
profit or loss:
Derivatives not designated as
hedging instruments	\$391	\$1,504	\$-
Current	\$391	\$1,504	\$-

Financial assets at fair value through profit or loss were not pledged.

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

	As of
	June 30, 2021	December 31, 2020	June 30, 2020
Equity instrument investments measured at fair value through other comprehensive income –
Non-current: Unlisted companies stocks	\$2,505,576	\$2,245,962	\$1,113,771

The Group classified certain of its financial assets as financial assets at fair value through other comprehensive income which were not pledged.

(4) Accounts receivable, net and accounts receivable from related parties, net

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Accounts receivable	\$652,739	\$666,989	\$744,842
Subtotal (gross carrying amount)	652,739	666,989	744,842
Less:Allowance for doubtful
accounts	(41,032)	(107,465)	(82,810)
Subtotal	611,707	559,524	662,032
Accounts receivable from related
parties, net	171,832	130,254	149,268
Subtotal (gross carrying amount)	171,832	130,254	149,268
Total	\$783,539	\$689,778	\$811,300

Accounts receivable were not pledged.

Accounts receivable are generally on 30- 60 day terms from the date of monthly closing. The gross carrying amount of accounts receivable is amounted to NT\$824,571 thousand, NT\$797,243 thousand, and NT\$894,110 thousand for June 30, 2021, December 31, 2020, and June 30, 2020, respectively. Please refer to Note 6(16) for more details on impairment of account receivable, and Note 12 for credit risk disclosure.

(5) Inventories

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Work in process	\$644,596	\$351,411	\$243,556
Finished goods	141,474	149,223	405,376
Total	\$786,070	\$500,634	\$648,932

The cost of inventories recognized in expenses amounted to NT\$849,356 thousand and NT\$695,479 thousand for the three-month periods ended June 30, 2021 and 2020, respectively, including the loss of NT\$5,041 thousand and NT\$5,414 thousand for the three month periods ended June 30, 2021 and 2020.

The cost of inventories recognized in expenses amounted to NT\$1,635,597 thousand and NT\$1,342,280 thousand for the six-month periods ended June 30, 2021 and 2020, respectively, including the loss of NT\$5,835 thousand and NT\$7,328 thousand for the six month periods ended June 30, 2021 and 2020.

No inventories were pledged.

(6) Other current assets

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Prepayments	\$123,088	\$134,196	\$151,870
Prepaid expenses	52,142	26,512	21,463
Other	9,622	20,526	-
Total	\$184,852	\$181,234	\$173,333

The prepayments were primarily attributable to several agreements which the Group entered into for certain software license and silicon intellectual property license.

(7) Investments accounted for using equity method

There were no investments accounted for using equity method as of June 30, 2021, December 31, 2020, and June 30, 2020.

The Group's disposed shares of Fresco Logic Inc. with proceeds amounting to NT\$235,479 thousand (recognized as other receivables NT\$25,990 thousand) and recognized a gain on disposal of investment in the amount of NT\$172,487 thousand during the six-month period ended June 30, 2020. The Group received NT\$24,203 thousand and recognized foreign exchange loss in the amount of NT\$1,787 thousand during the three-month period ended June 30, 2021.

The Group's investment in Fresco Logic Inc. was not individually material. The aggregated financial information based on the Group's share of Fresco Logic Inc. is as follows:

		Three-month	periods ended		Six-month periods ended
		June 30			June 30
		2021	2020	2021	2020
	Net loss from continuing
	operations	\$-	\$(17,030)	\$-	\$(23,591)
	Other comprehensive income
	(post-tax)	-	-	-	-
	Total comprehensive income	\$-	\$(17,030)	\$-	\$(23,591)
(8)	Property, plant and equipment
			As of
		June 30, 2021		December 31, 2020	June 30, 2020
	Property, plant and equipment
	for own-use	\$516,031	\$539,322		\$565,550

					Office
		Buildings		Computer	furniture and	Miscellaneous
	Land	and facilities	Machinery	equipment	fixtures	equipment	Total
Cost:
As of January 1, 2021	\$33,576	\$580,809	\$40,676	\$164,811	\$22,133	\$1,555	\$843,560
Additions	-	970	6,295	653	253	-	8,171
Disposals	-	-	-	-	(608)	(84)	(692)
Exchange effect	-	(609)	-	(78)	(277)	(8)	(972)
As of June 30, 2021	\$33,576	\$581,170	\$46,971	\$165,386	\$21,501	\$1,463	\$850,067
As of January 1, 2020	\$33,576	\$577,055	\$40,858	\$177,244	\$24,179	\$1,615	\$854,527
Additions	-	8,033	-	14,565	814	-	23,412
Disposals	-	-	-	-	(1,988)	-	(1,988)
Exchange effect	-	(425)	-	(246)	(580)	(16)	(1,267)
As of June 30, 2020	\$33,576	\$584,663	\$40,858	\$191,563	\$22,425	\$1,599	\$874,684
Depreciation and impairment:
As of January 1, 2021	\$-	\$181,473	\$15,262	\$88,710	\$17,874	\$919	\$304,238
Additions	-	7,249	3,622	18,695	1,094	108	30,768
Disposals	-	-	-	-	(548)	-	(548)
Exchange effect	-	(92)	-	(613)	289	(6)	(422)
As of June 30, 2021	\$-	\$188,630	\$18,884	\$106,792	\$18,709	\$1,021	\$334,036
As of January 1, 2020	\$-	\$170,775	\$14,187	\$74,093	\$17,957	\$707	\$277,719
Additions	-	7,226	3,465	21,657	1,363	131	33,842
Disposals	-	-	-	-	(1,604)	-	(1,604)
Exchange effect	-	(160)	-	(215)	(435)	(13)	(823)
As of June 30, 2020	\$-	\$177,841	\$17,652	\$95,535	\$17,281	\$825	\$309,134
Net carrying amount as of:
June 30, 2021	\$33,576	\$392,540	\$28,087	\$58,594	\$2,792	\$442	\$516,031
December 31, 2020	\$33,576	\$399,336	\$25,414	\$76,101	\$4,259	\$636	\$539,322
June 30, 2020	\$33,576	\$406,822	\$23,206	\$96,028	\$5,144	\$774	\$565,550

Note:

• (1) Significant components of buildings are main building structure, air conditioning units and elevators, which are depreciated based on their useful lives over 51 years, 8 years, and 6~16 years, respectively.
• (2) Property, plant and equipment were not pledged.

(9) Intangible assets

		Software
	Six-month period	Six-month period
	ended June 30, 2021	ended June 30, 2020
Cost
Beginning balance	\$964,196	\$1,143,349
Addition-acquired separately	202,459	29,157
Decrease-derecognition	(510,556)	(16,722)
Exchange differences	(3,699)	(2,438)
Ending balance	\$652,400	\$1,153,346
Accumulated Amortization
Beginning balance	\$704,940	\$592,782
Amortization	162,319	183,440
Decrease-derecognition	(510,556)	(16,722)
Exchange differences	(683)	(1,831)
Ending balance	\$356,020	\$757,669
Net carrying amount as of:
June 30, 2021	\$296,380
December 31, 2020	\$259,256
June 30, 2020	\$395,677

The amortization expenses of intangible assets are as follows:

	Three-month periods		Six-month periods
	ended June 30		ended June 30
	2021	2020	2021	2020
Administrative expenses	\$29	\$20	\$53	\$39
Research and development expenses	87,476	94,041	162,266	183,401
Total	\$87,505	\$94,061	\$162,319	\$183,440

(10) Other non-current assets

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Long term prepayments	\$175,678	\$141,447	\$-

The other non-current assets were primarily attributable to several agreements which the Group entered into for certain silicon intellectual property license.

(11) Short-term loans

The Group's credit limit from short-term loans was NT\$1,296,500 thousand, NT\$1,302,250 thousand and NT\$1,337,750 thousand as of June 30, 2021, December 31, 2020, and June 30, 2020, respectively, and all of which was unused.

(12) Long-term payables

The payables were primarily attributable to several agreements which the Group entered into for certain software license. As of June 30, 2021, December 31, 2020, and June 30, 2020, future payments for other long-term payables were as follows:

	As of
Year of payment	June 30, 2021	December 31, 2020	June 30, 2020
2020	\$-	\$-	\$139,600
2021	67,435	93,154	63,859
2022	42,929	15,810	24,406
2023	27,411	511	-
2024	4,652	-	-
Subtotal	142,427	109,475	227,865
Less: Current portion (Recognized
as other payables)	(90,330)	(93,154)	(177,438)
Total	\$52,097	\$16,321	\$50,427

(13)Post-employment benefits

Defined contribution plan

Expenses under the defined contribution plan for the three-month periods ended June 30, 2021 and 2020 are NT\$11,631 thousand and NT\$12,328 thousand, respectively, and expenses under the defined contribution plan for the six-month periods ended June 30, 2021 and 2020 are NT\$23,226 thousand and NT\$24,586 thousand, respectively.

Defined benefit plan

Expenses under the defined benefit plan for the three-month periods ended June 30, 2021 and 2020 are NT\$197 thousand and NT\$1,671 thousand, respectively, and expenses under the defined benefit plan for the six-month periods ended June 30, 2021 and 2020 are NT\$394 thousand and NT\$3,342 thousand, respectively.

(14)Equity

A. Capital stock

The Company's authorized capital was NT\$6,000,000 thousand, NT\$6,000,000 thousand and NT\$5,000,000 thousand, respectively, divided into 600,000 thousand shares, 600,000 thousand shares and 500,000 thousand shares (including 55,000 thousand shares reserved for exercise of employee stock options), respectively, as of June 30, 2021, December 31, 2020, and June 30, 2020, each at a par value of NT\$10.

The Company's issued capital was NT\$2,485,503 thousand, divided into 248,550 thousand shares, as of June 30, 2021, December 31, 2020, and June 30, 2020. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

	As of
	June 30, 2021	December 31, 2020	June 30, 2020
Premiums in excess of par	\$594,782	\$594,782	\$594,782
Change in subsidiaries' ownership	133,764	127,226	126,631
Employee stock option and others	2,566	2,566	2,566
Total	\$731,112	\$724,574	\$723,979

According to the Company Act, the additional paid-in capital shall not be used except for offsetting deficit of the company. When a company does not have deficit, it may distribute the additional paid-in capital derived from the issuance of new shares at premiums in excess of par or income from endowments received by the Company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policies

According to the Company's Articles of Incorporation, current year's earnings, if any, shall be distributed in the following order:

• a. Reserve for tax payments;
• b. Offset accumulated losses in previous years, if any;
• c. Legal reserve, which is 10% of leftover profits.
• d. Allocation or reverse of special reserves as required by law or government authorities;
• e. The remaining net profits and the retained earnings from previous years will be allocated as shareholders' dividend. The Board of Directors will prepare a distribution proposal and submit the same to the shareholders' meeting for review and approval by a resolution.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders' meeting. The Company is in the growth stage, in order to plan for future funding requirement and long-term financial planning, and to satisfy shareholders' need for cash dividend, cash dividends shall not be less than 10% of total dividends for distribution.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to offset the deficit of the Company. When the Company does not have deficit, it may distribute the portion of legal reserve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to "other net deductions from shareholders" equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed from the special reserve.

The FSC on March 31, 2021 issued Order No. Financial-Supervisory-Securities-Corporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

Details of the 2020 and 2019 earnings distribution and dividends per share as approved and resolved by the board of directors' meeting and shareholders' meeting on March 30, 2021 and May 28, 2020, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NT\$)
	2020	2019	2020	2019
Legal reserve	\$41,566	\$36,538	\$-	\$-
Reversal of special reserve	369,710	142,500	-	-
Common stock-cash dividend	248,550	273,405	1.0	1.1

Please refer to Note 6(18) for more details on employees' compensations and the remunerations to directors and supervisors.

D. Non-controlling interests

	Six-month periods ended June 30
	2021	2020
Beginning balance	\$47,057	\$59,024
Gains (losses) attributable to non-controlling
interests	21,572	(9,156)
Other comprehensive income (losses) attributable
to non-controlling interests, net of tax:
Exchange differences on translation of foreign
operations	(369)	(1,503)
Change in subsidiaries' ownership	-	300
Non-controlling interests(Cash capital increase in
subsidiaries)	81,323	-
Ending balance	\$149,583	\$48,665

(15)Sales revenue

Analysis of revenue from contracts with customers for the six-month periods ended June 30, 2021 and 2020 is as follows:

(1) Disaggregation of revenue

Three-month periods ended		Six-month periods ended
		June 30
2021	2020	2021	2020
\$1,033,539	\$816,300	\$1,957,247	\$1,581,915
492,390	379,951	929,309	782,279
161,923	110,022	336,271	207,503
\$1,687,852	\$1,306,273	\$3,222,827	\$2,571,697
\$1,175,781	\$912,130	\$2,260,516	\$1,765,633
512,071	394,143	962,311	806,064
\$1,687,852	\$1,306,273	\$3,222,827	\$2,571,697
		June 30

(2) Contract balances

A. Contract assets – current

	As of
	June 30,	December 31,	June 30,	January 1,
	2021	2020	2020	2020
Rendering of services	\$81,557	\$137,475	\$299,045	\$517,367

The significant changes in the Group's balances of contract assets for the six-month periods ended June 30, 2021 and 2020 are as follows:

	Six-month periods ended June 30
	2021	2020
The opening balance transferred to accounts
receivable	\$114,068	\$440,553
Change in the progress of completion	50,920	228,592
Exchange rate changes	7,230	(6,361)

B. Contract liabilities – current

	As of
	June 30,	December 31,	June 30,	January 1,
	2021	2020	2020	2020
Sales of goods	\$565,739	\$296,266	\$187,814	\$161,139
Rendering of services	197,323	177,463	3,275	141,623
Silicon intellectual
property license	1,297	2,875	1,074	262
Total	\$764,359	\$476,604	\$192,163	\$303,024

The significant changes in the Group's balances of contract liabilities for the six-month periods ended June 30, 2021 and 2020 are as follows:

	Six-month periods ended June 30
	2021	2020
The opening balance transferred to revenue	\$358,842	\$191,894
Increase in receipts in advance during the period
(netting the amount incurred and transferred to
revenue during the same period)	646,597	81,033

(3) Transaction price allocated to unsatisfied performance obligations

As of June 30, 2021 and June 30, 2020, there is no need to provide relevant information of the unsatisfied performance obligations as the contract terms with customers about the sales of goods are all shorter than one year. Besides, the summarized amount of transaction price allocated to unsatisfied performance obligations about rendering of services and silicon intellectual property license is NT\$1,173,073 thousand and NT\$1,241,770 thousand, respectively. The Group will recognize revenue based on the stage of completion of the contracts. Those contracts are expected to complete within the next 1 to 1.5 years.

(4) Assets recognized from costs to fulfil a contract

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Costs to fulfill a contract, current	\$14,845	\$5,961	\$1,964

The costs to fulfill a contract are the costs incurred by the Group for non-recurring engineering projects, and will be recognized as operating costs when the performance obligations are satisfied.

For the three-month periods ended June 30, 2021 and 2020, amortization expenses amounted to NT\$1,380 thousand and NT\$5,037 thousand are recognized as operating costs, respectively, and for the six-month periods ended June 30, 2021 and 2020, amortization expenses amounted to NT\$3,681 thousand and NT\$5,869 thousand are recognized as operating costs, respectively.

(16)Expected credit gains (losses)

	Three-month periods ended June 30		Six-month periods ended June 30
	2021	2020	2021	2020
Operating expenses – Expected credit gains (losses)
Account receivables	\$8,274	\$(21,606)	\$66,433	\$(1,377)

Please refer to Note 12 for more details on credit risk.

The Group measures the loss allowance of its contract assets and trade receivables (including note receivables and account receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group's loss allowance as of June 30, 2021, December 31, 2020, and June 30, 2020 is as follows:

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

i. the loss allowance of contract assets is measured at an amount equal to lifetime expected credit losses, details are as follow:

	As of
June 30, 2021	December 31, 2020	June 30, 2020
\$90,696	\$146,614	\$308,184
0%~100%	0%~100%	0%~100%
(9,139)	(9,139)	(9,139)
\$81,557	\$137,475	\$299,045

ii. the Group considers the grouping of trade receivables by counterparties' credit rating, by geographical region and by industry sector, and its loss allowance is measured by using a provision matrix, details are as follow:

2021.06.30

Group 1	Not yet due	Overdue
	(note)	<=30 days	31-60 days	61-90 days	91-120 days	>=121 days	Total
Gross carrying
amount	\$618,969	\$67,067	\$14,234	\$5,653	\$-	\$37,756	\$743,679
Expected credit loss
rates	-%	-%	2%	10%	50%	100%
Lifetime expected
credit losses	-	-	285	566	-	37,756	38,607
Subtotal	\$618,969	\$67,067	\$13,949	\$5,087	\$-	\$-	\$705,072

Group 2	Overdue
	Not yet due	<=120	121-150	151-180	181-270	271-300	>=301
	(note)	days	days	days	days	days	days	Total
Gross carrying
amount	\$29,682	\$28,186	\$-	\$24,256	\$-	\$-	\$-	\$82,124
Expected credit loss
rates	-%	-%	2%	10%	50%	80%	100%
Lifetime expected
credit losses	-	-	-	2,425	-	-	-	2,425
Subtotal	\$29,682	\$28,186	\$-	\$21,831	\$-	\$-	\$-	\$79,699
Carrying amount								\$784,771

2020.12.31

Group 1	Not yet due		Overdue
	(note)	<=30 days	31-60 days		61-90 days		91-120 days	>=121 days	Total
Gross carrying amount	\$529,047	\$78,439	\$7,389		\$-		\$6,592	\$92,137	\$713,604
Expected credit loss rates	-%	-%		2%	10%		50%	100%
Lifetime expected credit losses	-	-		147	-		3,296	92,137	95,580
Subtotal	\$529,047	\$78,439	\$7,242		\$-		\$3,296	\$-	\$618,024
Group 2	Not yet due	<=120	121-150	151-180	Overdue 181-270		271-300	>=301
	(note)	days	days	days	days		days	days	Total
Gross carrying amount	\$24,256	\$19,511	\$-	\$21,827	\$19,405		\$-	\$-	\$84,999
Expected credit loss rates	-%	-%	2%	10%		50%	80%	100%
Lifetime expected credit losses	-	-	-	2,183		9,702	-	-	11,885
Subtotal	\$24,256	\$19,511	\$-	\$19,644	\$9,703		\$-	\$-	\$73,114
Carrying amount									\$691,138
2020.06.30
Group 1	Not yet due				Overdue
	(note)	<=30 days	31-60 days		61-90 days		91-120 days	>=121 days	Total
Gross carrying amount	\$711,576	\$48,512	\$19,794		\$23,309		\$1,242	\$90,376	\$894,809
Expected credit loss rates	-%	-%	0%~2%		0%~10%		2%~50%	10%~100%
Lifetime expected
credit losses	-	-		396	425		633	81,356	82,810
Subtotal	\$711,576	\$48,512	\$19,398		\$22,884		\$609	\$9,020	\$811,999

Note: All of the Group's note receivables are not yet due.

The movement in the provision for impairment of accounts receivables for the six-month periods ended June 30, 2021 and 2020 is as follows:

	Contract	Accounts
	assets	receivables
As of January 1, 2021	\$9,139	\$107,465
Reversal for the current period	-	(66,433)
As of June 30, 2021	\$9,139	\$41,032
As of January 1, 2020	\$9,139	\$81,433
Increase for the current period	-	1,377
As of June 30, 2020	\$9,139	\$82,810

(17)Leases

A. The Group as lessee

The Group leases various properties, including real estate such as land and buildings, transportation equipment and office equipment. These leases have terms between 2 and 38 years.

The effect that leases have on the financial position, financial performance and cash flows of the Group are as follows:

• a. Amounts recognized in the balance sheet
• (a) Right-of-use asset

The carrying amount of right-of-use assets

		As of
	June 30, 2021	June 30, 2020
Land	\$188,867	\$191,527	\$194,188
Buildings and facilities	35,551	42,044	60,505
Transportation equipment	-	583	1,166
Office equipment	65	121	176
Total	\$224,483	\$234,275	\$256,035

During the six-month periods ended June 30, 2021 and 2020, the additions to rightof-use assets of the Group amounted to NT\$ 9,734 thousand and NT\$19,905 thousand, respectively.

(b) Lease liability

		As of
	June 30, 2021	December 31, 2020	June 30, 2020
Lease liability	\$231,119	\$242,411	\$265,419
Lease liability-current	\$26,790	\$32,575	\$40,223
Lease liability-noncurrent	204,329	209,836	225,196
Total	\$231,119	\$242,411	\$265,419

Please refer to Note 6 (19) for the interest on lease liability recognized during the six-month periods ended June 30, 2021 and 2020, and refer to Note 12 (5) for the maturity analysis for lease liabilities as of June 30, 2021, December 31, 2020 and June 30, 2020.

b. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

	Three-month	periods ended	Six-month periods ended June 30
	June 30
	2021 2020		2021	2020
Land	\$1,330	\$1,330	\$2,660	\$2,660
Buildings and facilities	8,459	7,328	15,440	13,986
Transportation equipment	291	291	583	583
Office equipment	28	28	56	56
Total	\$10,108 \$8,977		\$18,739	\$17,285

c. Income and costs relating to leasing activities

	Three-month	periods ended	Six-month periods ended
	June 30		June 30
	2021 2020		2021	2020
The expense relating to
short-term leases	\$419	\$995	\$848	\$2,304

d. Cash outflow relating to leasing activities

During the six-month periods ended June 30, 2021 and 2020, the Group's total cash outflow for leases amounted to NT\$24,028 thousand and NT\$23,805 thousand, respectively.

e. Other information relating to leasing activities

Extension option

Some of the Group's property rental agreement contain extension options. In determining the lease terms, the non-cancellable period for which the Group has the right to use an underlying asset, together with period covered by an option to extend the lease if the Group is reasonably certain to exercise that option. The options are used to maximize operational flexibility in terms of managing contracts. The majority of extension options held are exercisable only by the Group. After the commencement date, the Group reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Group is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

(18)Summary statement of employee benefits, depreciation and amortization expenses by function during the three-month periods and six-month periods ended June 30, 2021 and 2020:

	Three-month periods ended June 30
		2021		2020
	Operating	Operating		Operating	Operating
	costs	expenses	Total	costs	expenses	Total
Employee benefits expense
Salaries	\$11,655	\$370,799	\$382,454	\$9,720	\$322,199	\$331,919
Labor and health insurance	863	28,706	29,569	796	22,219	23,015
Pension	342	11,486	11,828	586	13,413	13,999
Others	264	7,119	7,383	260	5,904	6,164
Depreciation	244	25,130	25,374	223	26,147	26,370
Amortization	-	87,505	87,505	-	94,061	94,061

	Six-month periods ended June 30
		2021		2020
	Operating	Operating		Operating	Operating
	costs	expenses	Total	costs	expenses	Total
Employee benefits expense
Salaries	\$23,580	\$753,784	\$777,364	\$20,611	\$658,025	\$678,636
Labor and health insurance	1,736	57,544	59,280	1,605	48,374	49,979
Pension	873	22,747	23,620	1,180	26,748	27,928
Others	523	14,266	14,789	520	11,717	12,237
Depreciation	500	49,007	49,507	445	50,682	51,127
Amortization	-	162,319	162,319	-	183,440	183,440

According to the Company's Article of Incorporation, no less than 10% of profit of the current year is distributable as employees' compensation and no more than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, before distributing employees' compensation and remuneration to directors and supervisors, the Company's profit should offset its accumulated losses, if any. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition, thereto a report of such distribution is submitted to the shareholders' meeting. Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors and supervisors can be obtained from the "Market Observation Post System" on the website of the TWSE.

Based on profit of the six-month period ended June 30, 2021, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$52,297 thousand and NT\$248 thousand, respectively, which were recognized as payroll expenses. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$26,954 thousand and NT\$0 thousand for the three-month periods ended June 30, 2021, respectively. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$52,297 thousand and NT\$248 thousand for the six-month periods ended June 30, 2021, respectively. Based on profit of the six-month period ended June 30, 2020, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$26,499 thousand and NT\$216 thousand, respectively, which were recognized as payroll expenses. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$20,773 thousand and NT\$0 thousand for the three-month period ended June 30, 2020, respectively. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$26,499 thousand and NT\$216 thousand for the six-month period ended June 30, 2020, respectively.

A resolution was approved in a meeting of the Board of Directors held on February 23, 2021 to distribute NT\$ 39,970 thousand and NT\$ 248 thousand in cash as employees' compensation and remuneration to directors, respectively. There were no differences between the aforementioned approved amounts and the amounts charged against earnings in 2020.

A resolution was approved in a meeting of the Board of Directors held on February 13, 2020 to distribute NT\$51,662 thousand and NT\$216 thousand in cash as employees' compensation and remuneration to directors, respectively. There were no differences between the aforementioned approved amounts and the amounts charged against earnings in 2019.

(19)Non-operating income and expenses

A. Interest income

	Three-month	periods ended	Six-month periods ended
		June 30	June 30
	2021 2020		2021	2020
Interest income
Financial assets measured
at amortized cost	\$2,343	\$3,253	\$6,605	\$6,325

B. Other income

	Three-month	periods ended	Six-month periods ended
	June 30		June 30
	2021 2020		2021	2020
Dividend income	\$-	\$-	\$69,730	\$-
Other income-other	9,091	890	11,088	9,860
Total	\$9,091	\$890	\$80,818	\$9,860

C. Other gains and losses

	Three-month June 30	periods ended	Six-month periods ended June 30
	2021 2020		2021	2020
Losses on disposal of property,
plant and equipment	\$-	\$(384)	\$-	\$(384)
Gains on disposal of
investments	-	172,487	-	172,487
Foreign exchange gains(losses)	3,927	(850)	3,569	1,155
Gains on financial assets at fair
value through profit or loss	2,967	5,755	7,203	5,838
Others	(12,604)	(4,830)	(21,423)	(6,062)
Total	\$(5,710)	\$172,178	\$(10,651)	\$173,034

D. Finance costs

	Three-month June 30	periods ended	Six-month periods ended June 30
	2021	2020	2021	2020
Interest expenses on lease liabilities	\$1,512	\$1,686	\$2,984	\$3,423

(20)Components of other comprehensive income

For the three-month period ended June 30, 2021

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$128,524	\$-	\$128,524	\$-	\$128,524
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(18,671)	-	(18,671)	-	(18,671)
Total of other comprehensive income	\$109,853	\$-	\$109,853	\$-	\$109,853

For the three-month period ended June 30, 2020

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during	adjustments	comprehensive	of other	income,
	the period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$91,716	\$-	\$91,716	\$-	\$91,716
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(12,902)	-	(12,902)	-	(12,902)
Share of other comprehensive
income of associates and joint
ventures accounted for using the
equity method	(166)	-	(166)	-	(166)
Total of other comprehensive income	\$78,648	\$-	\$78,648	\$-	\$78,648

For the six-month period ended June 30, 2021

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during	adjustments	comprehensive	of other	income,
	the period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$259,614	\$-	\$259,614	\$-	\$259,614
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(11,961)	-	(11,961)	-	(11,961)
Total of other comprehensive income	\$247,653	\$-	\$247,653	\$-	\$247,653

For the six-month period ended June 30, 2020

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during	adjustments	comprehensive	of other	income,
	the period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$(21,499)	\$-	\$(21,499)	\$-	\$(21,499)
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(19,442)	-	(19,442)	-	(19,442)
Total of other comprehensive income	\$(40,941)	\$-	\$(40,941)	\$-	\$(40,941)

(21)Income tax

The major components of income tax expense are as follows:

Income tax expense (income) recognized in profit or loss

	Three-month periods ended		Six-month periods ended
		June 30	June 30
	2021	2020	2021	2020
Current income tax expense:
Current income tax payable	\$27,375	\$30,983	\$43,201	\$39,335
Adjustments in respect of
current income tax of
prior periods	(77)	-	(77)	88
Deferred tax expense (income):
Deferred tax expense relating
to origination and reversal
of temporary differences	4,648	(4,262)	18,164	(1,729)
Total income tax expense	\$31,946	\$26,721	\$61,288	\$37,694

The assessment of income tax returns

As of June 30, 2021, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2018
Chih Hung Investment Co.	Assessed and approved up to 2019
Sheng Bang Investment Co.	Assessed and approved up to 2019
Grain Media Inc.	Assessed and approved up to 2019
Innopower Technology Corporation	Assessed and approved up to 2018
Artery Technology Company	Assessed and approved up to 2019

(22)Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year plus the weighted-average number of ordinary shares that would be issued assuming all the dilutive potential ordinary shares were converted into ordinary shares.

	Three-month June 30	periods ended	Six-month periods ended June 30
	2021	2020	2021	2020
(a) Basic earnings per share
Profit attributable to ordinary equity owners of the
parent (in thousand NT\$)	\$180,600	\$143,424	\$350,317	\$182,719
Weighted average number of ordinary shares outstanding for basic earnings per share (in
thousands)	248,550	248,550	248,550	248,550
Basic earnings per share (NT\$)	\$0.73	\$0.58	\$1.41	\$0.74

	Three-month periods ended June 30		Six-month periods ended June 30
	2021	2020	2021	2020
(b) Diluted earnings per share Profit attributable to ordinary equity owners of the parent (in thousand NT\$)	\$180,600	\$143,424	\$350,317	\$182,719
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)	248,550	248,550	248,550	248,550
Effect of dilution:
Employee compensation (in thousands)	1,282	650	1,097	773
Weighted-average number of ordinary shares outstanding after
dilution (in thousands)	249,832	249,200	249,647	249,323
Diluted earnings per share	\$0.72	\$0.58	\$1.40	\$0.73

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

7. Related Party Transactions

Information of the related parties that had transactions with the Group during the financial reporting years is as follows:

Name and nature of relationship of the related parties
Name of the related parties	Nature of relationship of the related parties
United Microelectronics Corporation	Entity with joint control or significant
	influence over the Company
Fresco Logic Inc. (Note)	Associates
United Semiconductor Japan Co., Ltd.	Other related parties
HeJian Technology (Suzhou) Co., Ltd.	Other related parties
Wavetek Microelectronics Corporation	Other related parties
United Semiconductor (Xiamen) Co., Ltd.	Other related parties

Note: The Group disposed of Fresco Logic Inc. in June 2020, which ceased to be a related party since that day.

Significant transactions with the related parties

(1) Sales

	Three-month periods ended		Six-month periods ended
	June 30		June 30
	2021 2020		2021	2020
United Microelectronics
Corporation	\$154,076	\$148,496	\$294,360	\$303,807
Other related parties	9,603	6,603	17,652	15,158
Associates	-	9,198	-	19,039
Total	\$163,679	\$164,297	\$312,012	\$338,004

The Group's sales terms were 30~60 days from the date of monthly closing for non-related parties, while 60 days for related-parties. Selling prices for related parties were different from each other and a direct comparison was impractical since the products or services were customized based on each order.

(2) Purchases

	Three-month periods ended		Six-month periods ended
	June 30		June 30
	2021	2020	2021	2020
United Microelectronics
Corporation	\$417,709	\$343,122	\$870,646	\$522,485
United Semiconductor
(Xiamen) Co., Ltd.	135,356	-	189,450	-
HeJian Technology (Suzhou)
Co., Ltd	17,747	185,066	29,074	377,050
Other related parties	1,152	16,628	1,337	52,917
Total	\$571,964	\$544,816	\$1,090,507	\$952,452

The purchase price to the related parties above was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are 45~60 days.

(3) Research expense, other

	Three-month	periods ended		Six-month periods ended
		June 30	June 30
	2021	2020	2021	2020
Entity with joint control or
significant influence over
the Company	\$1,905	\$11,286	\$1,945	\$11,286
Other related parties	215	-	13,458	-
Total	\$2,120	\$11,286	\$15,403	\$11,286

The payment terms from the related party suppliers are 45~60 days.

(4) Research expense, testing expense

	Three-month periods ended June 30		Six-month periods ended June 30
	2021	2020	2021	2020
Entity with joint control or
significant influence over
the Company	\$-	\$1,824	\$2,846	\$1,824
Other related parties	288	-	288	-
Total	\$288	\$1,824	\$3,134	\$1,824

The payment terms from the related party suppliers are 45~60 days.

(5) Accounts receivable from related parties, net

		As of
	June 30, December 31, June 30,
	2021	2020	2020
United Microelectronics
Corporation	\$171,832	\$130,254	\$149,268

(6) Other current assets

	As of
	June 30, December 31, June 30,
	2021	2020	2020
Entity with joint control or
significant influence over the
Company	\$262	\$263	\$51
Other related parties	9,453	3,679	294
Total	\$9,715	\$3,942	\$345

(7) Intangible assets

	As of
	June 30,	December 31,	June 30,
	2021	2020	2020
Entity with joint control or
significant influence over the
Company	\$-	\$-	\$787

(8) Contractual liabilities, current

	As of
	June 30, December 31, June 30,
	2021	2020	2020
Entity with joint control or
significant influence over the
Company	\$-	\$427	\$-

(9) Accounts payable to related parties, net

		As of
	June 30,	December 31,	June 30,
	2021	2020	2020
United Microelectronics
Corporation	\$178,740	\$113,330	\$104,618
United Semiconductor (Xiamen)
Co., Ltd.	45,843	49,094	20,814
HeJian Technology (Suzhou) Co.,
Ltd.,	5,169	132	71,701
Other related parties	380	384	403
Total	\$230,132	\$162,940	\$197,536

(10)Key management personnel compensation

	Three-month periods ended		Six-month periods ended
		June 30	June 30
	2021	2020	2021	2020
Short-term employee benefits	\$24,975	\$13,106	\$55,799	\$42,621
Post-employment benefits	324	324	648	659
Total	\$25,299	\$13,430	\$56,447	\$43,280

8. Assets Pledged as Collateral

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

		Carrying amount
Assets pledged for security	2021.06.30	2020.12.31	2020.06.30	Secured liabilities
Financial assets measured at				Custom clearance
amortized cost	\$15,028	\$15,028	\$15,000	deposit
Financial assets measured at				Office rental deposit
amortized cost	536	1,405	1,476
Total	\$15,564	\$16,433	\$16,476

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

9. Commitments and contingencies

None.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Financial assets

		As of
	June 30,	December 31,	June 30,
	2021	2020	2020
Financial assets at fair value
through profit or loss:
Financial assets mandatorily
measured at Fair value
through profit or loss	\$29,587	\$23,497	\$27,853
Financial assets at fair value
through other comprehensive
income	2,505,576	2,245,962	1,113,771
Financial assets measured at
amortized cost (Note )	4,668,220	3,880,887	4,000,085
Total	\$7,203,383	\$6,150,346	\$5,141,709

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial liabilities

		As of
	June 30,	December 31,	June 30,
	2021	2020	2020
Financial liabilities at fair value
through profit or loss:
Financial liabilities mandatorily
measured at Fair value
through profit or loss	\$391	\$1,504	\$-
Financial liabilities at amortized
cost:
Payables (including related
parties)	980,491	644,718	1,065,268
Other payables	351,950	392,146	679,403
Long-term payables	52,097	16,321	50,427
Lease liabilities	231,119	242,411	265,419
Total	\$1,616,048	\$1,297,100	\$2,060,517

Note : Including cash and cash equivalents (exclude cash on hand), notes receivable, accounts receivable, other receivable, refundable deposit and financial assets measured at amortized cost, non-current.

(2) Financial risk management objectives and policies

The Group's principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on the Group's policy and risk exposures.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity instruments).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables; there are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

The Group has certain foreign currency receivables denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is achieved. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group's foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB. The information of the sensitivity analysis is as follows:

When NTD strengthens/weakens against USD by 10%, the profit for the six-month periods ended June 30, 2021 and 2020 would decrease / increase by NT\$11,067 thousand and NT\$5,839 thousand, respectively.

When NTD strengthens/weakens against RMB by 10%, the profit for the six-month periods ended June 30, 2021 and 2020 would decrease / increase by NT\$163,039 thousand and NT\$111,535 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's short-term deposits at variable interest rates. Therefore, interest rate risk is low.

Equity price risk and other investment risk

The Group's listed and unlisted equity securities and other investments are susceptible to market price risk arising from uncertainties about future values of the investment objectives. The Group's listed equity securities, unlisted equity securities and other investment are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Group manages the equity price risk through diversification. Reports on the equity portfolio are submitted to the Group's top management for reviews and approvals on a regular basis.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for contract assets, accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group's established policy, procedures and control relating to credit risk management. Credit limits are established for all trading partners based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group's internal rating criteria and etc. Certain trading partners' credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment.

As of June 30, 2021, December 31, 2020 and June 30, 2020, accounts receivable from top ten customers represented 63%, 58% and 49% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group's treasury in accordance with the Group's policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

The Group adopted IFRS 9 to assess the expected credit losses. The measurement indicators of the Group are described as follows:

		Measurement		Carrying amount
		method for			As of
Level of		expected credit		June 30,	December 31,	June 30,
credit risk	Indicator	losses	Loss rate	2021	2020	2020
		Lifetime
Simplified	Not	expected credit
method (Note)	applicable	losses	0%~100%	\$916,499	\$945,217	\$1,202,993

Note: The Group adopted simplified method (lifetime expected credit loss) to measure credit risk. It includes contract asset, notes receivables and account receivables.

(5) Liquidity risk management

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, and bank borrowings. The table below summarizes the maturity profile of the Group's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amounts include the contractual interest.

Non-derivative financial instruments

	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of June 30, 2021
Payables (including
related parties)	\$980,491	\$-	\$-	\$-	\$980,491
Other payables	351,950	-	-	-	351,950
Long-term payables	-	52,097	-	-	52,097
Lease liabilities	28,163	27,618	17,214	242,612	315,607
As of December 31, 2020
Payables (including
related parties)	\$644,718	\$-	\$-	\$-	\$644,718
Other payables	392,146	-	-	-	392,146
Long-term payables	-	16,321	-	-	16,321
Lease liabilities	33,240	30,865	19,152	246,589	329,846
As of June 30, 2020
Payables (including
related parties)	\$1,065,268	\$-	\$-	\$-	\$1,065,268
Other payables	679,403	-	-	-	679,403
Long-term payables	-	50,427	-	-	50,427
Lease liabilities	44,205	43,326	21,839	250,567	359,937

Derivative financial instruments

	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of June 30, 2021
Inflows	\$43,382	\$-	\$-	\$-	\$43,382
Outflows	(43,773)	-	-	-	(43,773)
Net	\$(391)	\$-	\$-	\$-	\$(391)
As of December 31, 2020
Inflows	\$21,494	\$-	\$-	\$-	\$21,494
Outflows	(22,998)	-	-	-	(22,998)
Net	\$(1,504)	\$-	\$-	\$-	\$(1,504)
As of June 30, 2020
Inflows	\$104,817	\$-	\$-	\$-	\$104,817
Outflows	(104,716)	-	-		- (104,716)
Net	\$101	\$-	\$-	\$-	\$101

The table above contains the undiscounted net cash flows of derivative financial instruments.

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for six-month period ended June 30, 2021:

	Lease liabilities
As of January 1, 2021	\$242,411
Arising during the period	9,734
Cash flows	(20,308)
Foreign exchange movement	(718)
As of June 30, 2021	\$231,119

Reconciliation of liabilities for six-month period ended June 30, 2020:

	Lease liabilities
As of January 1, 2020	\$265,341
Arising during the period	19,488
Cash flows	(18,154)
Foreign exchange movement	(1,256)
As of June 30, 2020	\$265,419

• (7) Fair values of financial instruments
• a. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

• i. The carrying amount of cash and cash equivalents, notes receivables and accounts receivables, other receivables, payables and other payables approximate their fair value due to their short maturities.
• ii. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and funds) at the reporting date.
• iii. Fair value of equity instruments (including unlisted equity securities) without active market and market quotations cannot be reliably measured. Its amount is measured by cost net of impairment loss.
• iv. The financial assets measured at amortized cost, long-term payables and lease liabilities are determined by discounted cash flow analysis. The Group estimates the fair value based on book value due to the insignificant difference between the fair value from discounted cash flow analysis and carrying amount.
• v. The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using the option pricing model.
• b. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Group.

(8) Derivative financial instruments

The Group's derivative financial instruments include forward currency contracts. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of June 30, 2021, December 31, 2020, and June 30, 2020 is as follows:

Forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items (by contract)	Notional Amount	Contract Period
As of June 30, 2021
Forward currency contract	Sell foreign currency	From 2021.06.08 to
	USD 12,800 thousand	2021.07.15
Forward currency contract	Sell foreign currency	From 2021.06.16 to
	RMB 10,000 thousand	2021.07.02
As of December 31, 2020
Forward currency contract	Sell foreign currency	From 2020.12.07 to
	USD 5,000 thousand	2021.01.25
Forward currency contract	Sell foreign currency	From 2020.12.23 to
	RMB 5,000 thousand	2021.01.28
As of June 30, 2020
Forward currency contract	Sell foreign currency	From 2020.06.18 to
	USD 3,000 thousand	2020.07.20
Forward currency contract	Sell foreign currency	From 2020.06.04 to
	RMB 25,000 thousand	2020.07.08

(9) Fair values measurement hierarchy

(a) Fair value measurement hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date
• 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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Group's assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group's assets and liabilities measured at fair value on a recurring basis is as follows:

As of June 30, 2021:

	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through profit or loss
Funds	\$-	\$-	\$29,587	\$29,587
Financial assets at fair value
through other comprehensive
income
Equity instruments measured
at fair value through other
comprehensive income	-	-	2,505,576	2,505,576
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Forward currency contract	\$-	\$391	\$-	\$391

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of December 31, 2020: Level 1 Level 2 Level 3 Total Financial assets at fair value: Financial assets at fair value through profit or loss Funds \$- \$- \$23,497 \$23,497 Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income - - 2,245,962 2,245,962 Financial liabilities at fair value: Financial liabilities at fair value through profit or loss Forward currency contract \$- \$1,504 \$- \$1,504 As of June 30, 2020: Level 1 Level 2 Level 3 Total Financial assets at fair value: Financial assets at fair value through profit or loss Forward currency contract \$- \$101 \$- \$101 Funds - - 27,752 27,752 Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income \$- \$- \$1,113,771 \$1,113,771

Transfers between Level 1 and Level 2 during the period

During the six-month periods ended June 30, 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

Movements of fair value measurement in level 3 on recurring basis

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

		Assets
			At fair value through other
	At fair value through		comprehensive
	profit or loss		income
	Stocks	Funds	Stocks	Total
As of January 1, 2021	\$-	\$23,497	\$2,245,962	\$2,269,459
Total gains and losses
recognized for the six
month period ended June
30, 2021:
Amount recognized in profit
or loss ("other profit or
loss")	-	6,090	-	6,090
Amount recognized in other
comprehensive income
("Unrealized gains
(losses) from equity
instruments investments
measured at fair value
through other
comprehensive income)	-	-	259,614	259,614
As of June 30, 2021	\$-	\$29,587	\$2,505,576	\$2,535,163

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		Assets
			At fair value through other
	At fair value through		comprehensive
	profit or loss		income
	Stocks	Funds	Stocks	Total
As of January 1, 2020	\$-	\$21,812	\$1,135,270	\$1,157,082
Total gains and losses recognized for the six month period ended June 30, 2020: Amount recognized in profit
or loss ("other profit or loss")	-	5,940	-	5,940
Amount recognized in other comprehensive income ("Unrealized gains (losses) from equity instruments investments measured at fair value through other
comprehensive income)	-	-	(21,499)	(21,499)
As of June 30, 2020	\$-	\$27,752	\$1,113,771	\$1,141,523

Recognized as profit (loss) above, the profit (loss) from financial assets still held by the Group as of June 30, 2021 and June 30, 2020 was NT\$6,090 thousand and NT\$5,940 thousand, respectively.

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of June 30, 2021

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other
comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$3,496 thousand
Preferred Stocks	Option pricing	Discount for lack of	28%~36%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$1,003 thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest would
		interest		stocks	result in decrease/ increase in the
					Group's equity by NT\$235,518
					thousand
Preferred Stocks	Market	Discount for lack of	20%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$10,541 thousand

As of December 31, 2020

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$2,471 thousand
Preferred Stocks	Option pricing	Discount for lack of	28%~36%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$1,112 thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest
		interest		stocks	would result in decrease/ increase
					in the Group's equity by
					NT\$209,613 thousand
Preferred Stocks	Market	Discount for lack of	20%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$11,400 thousand

As of June 30, 2020

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other
comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease / increase
				stocks	in the Group's equity by
					NT\$2,546 thousand
Preferred Stocks	Option pricing	Discount for lack of	17%~25%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$1,133 thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest would
		interest		stocks	result in decrease/ increase in the
					Group's equity by NT\$99,726
					thousand
Preferred Stocks	Market	Discount for lack of	19%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$7,971 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group's Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices.

The Group analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group's accounting policies at each reporting date.

(c) Fair value measurement hierarchy of the Group's assets and liabilities not measured at fair value but for which the fair value is disclosed

June 30, 2021

None.

December 31, 2020

None.

June 30, 2020

None.

(10) Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

		As of June 30, 2021
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$38,458	27.86	\$1,071,428
RMB	382,627	4.31	1,649,122
Financial liabilities
Monetary items:
USD	34,485	27.86	960,755
RMB	4,347	4.31	18,737

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		As of December 31, 2020
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$32,409	28.09	\$910,359
RMB	285,810	4.317	1,233,844
Financial liabilities
Monetary items:
USD	28,596	28.09	803,272
RMB	10,875	4.317	46,949
		As of June 30, 2020
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$33,731	29.51	\$995,395
RMB	268,737	4.189	1,125,741
Financial liabilities
Monetary items:
USD	31,752	29.51	937,008

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

Because there are several types of functional currencies within the Group, it is not practical to disclose the exchange gains and losses of monetary financial assets and liabilities by each significant asset and liability denominated in foreign currencies. The group foreign exchange gain (loss) was NT\$3,927 thousand and NT\$(850) thousand for the three-month periods ended June 30, 2021 and 2020, respectively, and the foreign exchange gain was NT\$3,569 thousand and NT\$1,155 thousand for the six-month periods ended June 30, 2021 and 2020, respectively.

(11) Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information related to significant transactions

Additional disclosures for information of the Group for the six-month period ended June 30, 2021:

• (a) Financing provided to others for the six-month period ended June 30, 2021: None.
• (b) Endorsement/Guarantee provided to others for the six-month period ended June 30, 2021: None.
• (c) Securities held as of June 30, 2021: Please refer to Attachment 1.
• (d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2021: None.
• (e) Acquisition of individual real estate with amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2021: None.
• (f) Disposal of individual real estate with amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2021: None.
• (g) Related party transactions for purchases and sales amounts exceeding the lower of NT\$100 million or 20 percent of the capital stock for the six-month period ended June 30, 2021: Please refer to Attachment 2.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (h) Receivables from related parties with amount exceeding the lower of NT\$100 million or 20 percent of the capital stock for the six-month period ended June 30, 2021: Please refer to Attachment 3.
• (i) Financial instruments and derivative transactions: Please refer to Note 12.
• (j) Other: Significant intercompany transactions between consolidated entities: Please refer to Attachment 4.
• (2) Information on investees

Information on investees which significant influenced or controlled by the Group: Please refer to Attachment 5.

• (3) Information on investments in Mainland China
• (a) Investee company name, main business and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 6.
• (b) Significant transaction to investee company in Mainland China for the six-month period ended June 30, 2021:
  • i. Purchases amount and percentage, and related ending balance and percentage of payables: None.
  • ii. Sales amount and percentage, and related ending balance and related ending balance and percentage of receivables: Please refer to Attachment 4.
  • iii. Property transaction amount and occurred gain (loss): None.
  • iv. Ending balance and purpose of endorsement/guarantee provided for notes or collateral: None.
  • v. Highest balance, ending balance, interest rate interval and total interest amount in current period of financing: None.
  • vi. Other transactions with significant influence on current period income or financial position: Please refer to Attachment 4.

(4) Major shareholder information

Please refer to Attachment 7.

14. Segment information

The products of the Company and its subsidiaries are all related to integrated circuit design products and the chief operating decision maker reviews the Group's operating results as a whole to make decisions about resources to be allocated and assess its performance; therefore, the Group is considered a single segment. The preparation basis of the segment is the same with the preparation of this financial statements, and the policies are the same with those mentioned in Note 4, Summary of Significant Accounting Policies.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

ATTACHMENT 1 (Securities held as of June 30, 2021) (Excluding subsidiaries and associates)

Faraday Technology Corporation

					As of June 30, 2021
					Carrying amount	Percentage of	Fair value/
Type of securities	Name of securities	Relationship	Financial statement account	Units/shares	(thousand)	ownership (%)	Net assets value	Note
Common Stock	SHIEH YONG Investment Co., Ltd.	-	Financial assets at fair value through other	194,944,689	\$2,154,058	12.12%	\$2,154,058	-
			comprehensive income, noncurrent
Common Stock	Unitech Capital Inc.	-	Financial assets at fair value through other	2,500,000	91,277	5.00%	91,277	-
			comprehensive income, noncurrent

Chih-Hung Investment Corporation

					As of June 30, 2021
Type of securities	Name of securities	Relationship	Financial statement account	Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value	Note
Preferred stock	Aviacomm Ltd.	-	Financial assets at fair value through profit or	14,600,000	-	12.60%	-	-
Common Stock			loss, noncurrent	1,714,285
Common Stock	Innostor Technology Corporation	-	Financial assets at fair value through profit or loss, noncurrent	59,167	-	0.70%	-	-
Common Stock	apm Communication, Inc.	-	Financial assets at fair value through profit or loss, noncurrent	12,600	-	0.13%	-	-
Common Stock	Storm Semiconductors, Inc.	-	Financial assets at fair value through profit or loss, noncurrent	2,115,000	-	8.01%	-	-
Common Stock	SanJet Technology Corporation	-	Financial assets at fair value through other comprehensive income, noncurrent	3,000,000	34,964	9.53%	34,964	-
Preferred stock	Gear Radio Limited	-	Financial assets at fair value through other comprehensive income, noncurrent	1,200,000	10,030	4.64%	10,030	-
Preferred stock	NeuroSky	-	Financial assets at fair value through other comprehensive income, noncurrent	44,312,575	-	7.76%	-	-
Preferred stock	Floadia	-	Financial assets at fair value through other comprehensive income, noncurrent	1,818	105,406	8.70%	105,406	-
Common Stock	Hsun Chieh Capital Corp.	-	Financial assets at fair value through other comprehensive income, noncurrent	3,000,000	74,187	15.00%	74,187	-

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

ATTACHMENT 1 (Securities held as of June 30, 2021) (Excluding subsidiaries and associates)

Sheng Bang Investment Corporation

					As of June 30, 2021
Type of securities	Name of securities	Relationship	Financial statement account	Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value	Note
Fund	IB FUND SPC -RCM Auto Parts Industry Fund Segregated Portfolio	-	Financial assets at fair value through profit or loss, current	10,000	\$29,587	-	\$29,587	-
Common Stock	Storm Semiconductors, Inc.	-	Financial assets at fair value through profit or loss, noncurrent	641,000	-	2.43%	-	-
Common Stock	Sifotonics Technology Co., Ltd.	-	Financial assets at fair value through other comprehensive income, noncurrent	800,000	-	1.52%	-	-
Common Stock	Ascent Venture Capital	-	Financial assets at fair value through other comprehensive income, noncurrent	3,000,000	22,934	19.67%	22,934	-
Capital	Jian Rui Venture Capital (translated from Chinese)	-	Financial assets at fair value through other comprehensive income, noncurrent	-	12,720	8.50%	12,720	-

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

ATTACHMENT 2 ( Related party transactions for purchases and sales amounts exceeding the lower of NT\$100 million or 20 percent of capital stock for the six-month period ended June 30, 2021)

Faraday Technology Corporation

				Notes and accounts receivable (payable)
Counter-party	Relationship	Purchases (Sales)	Amount	Percentage of total purchases (sales)	Term	Details of non-arm's length transaction	Balance	Percentage of total receivables (payable)	Note
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Purchases	\$869,473	80.37%	Month-end 60 days	-	\$177,588	18.11%	-
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Sales	293,877	9.12%	Month-end 60 days	-	171,629	21.87%	-
United Semiconductor (Xiamen) Co.,Ltd.	Other related parties	Purchases	144,043	13.32%	Month-end 60 days	-	12,612	1.29%	-

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 3 ( Related party transactions for receivables of NT\$100 million or 20 percent of capital stock for the six month period ended June 30, 2021)

Faraday Technology Corporation

					Overdue
		Ending Balance of Notes/Trade					Allowance for
Counter-party	Relationship	Receivables from Related Party (Note1)	Turnover Rate	Amount	Action Taken	Amount Received in Subsequent Period	Doubtful Debts
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	\$171,629	3.90	\$-	\$-	\$11,634	\$-

Note 1: Please fill in accounts receivable from related parties, notes receivable, other receivables, respectively. Note 2: The capital stock is the parent's capital stock.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2021

						Transactions
No.			Relationship with the Company				Percentage of consolidated operating revenues or consolidated total assets
(Note 1)	Related Party	Counterparty	(Note 2)	Account	Amount	Term	(Note 3)
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Sales	\$248,134	Note 4	7.70%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Research expense	40,718	According to the contract	1.26%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts receivable	174,826	Month-end 60 days	1.84%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Other receivable	3,617	Month-end 60 days	0.04%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts payables	40,718	Month-end 60 days	0.43%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Sales	201,557	Note 4	6.25%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Accounts receivable	47,954	Month-end 60 days	0.50%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Contract liabilities	19,839	According to the contract	0.21%
0	Faraday Technology Corporation	FaradayTek Solutions India Private Limited	1	Other payables	2,669	Month-end 60 days	0.03%
0	Faraday Technology Corporation	FaradayTek Solutions India Private Limited	1	Research expense	12,479	According to the contract	0.39%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Sales	99,833	Note 5	3.10%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Accounts receivable	16,289	Month-end 60 days	0.17%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Sales	16,007	Note 5	0.50%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Contract assets	103,539	According to the contract	1.09%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Accounts receivable	1,502	Month-end 60 days	0.02%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Other receivable	10,164	Month-end 60 days	0.11%

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2021

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Term	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Accounts payables	\$132	Month-end 60 days	-
0	Faraday Technology Corporation	GrainTech Electronics Limited	1	Sales	2,442	Note 5	0.08%
0	Faraday Technology Corporation	GrainTech Electronics Limited	1	Accounts receivable	915	Month-end 60 days	0.01%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Sales	218,458	Note 5	6.78%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Contract assets	21,174	According to the contract	0.22%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Accounts receivable	23,617	Month-end 60 days	0.25%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Contract liabilities	6,042	According to the contract	0.06%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Sales	105,212	Note 5	3.26%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Accounts receivable	101,470	Month-end 60 days	1.07%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other receivable	2,000	Month-end 60 days	0.02%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other payables	302	Month-end 60 days	-
0	Faraday Technology Corporation	Artery Technology Company	1	Sales	19,811	Note 5	0.61%
0	Faraday Technology Corporation	Artery Technology Company	1	Accounts receivable	6,350	Month-end 60 days	0.07%
0	Faraday Technology Corporation	Artery Technology Company	1	Other receivable	243	Month-end 60 days	-
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Research expense	18,507	According to the contract	0.57%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Accounts payables	9,165	Month-end 60 days	0.10%

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2021

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Term	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Other current assets	\$3,720	Month-end 60 days	0.04%
1	Faraday Technology Corporation (Suzhou)	Faraday Technology China Corporation	3	Sales	7,385	Note 5	0.23%
1	Faraday Technology Corporation (Suzhou)	Faraday Technology China Corporation	3	Accounts receivable	19,715	Month-end 60 days	0.21%
2	United Business Service Corporation	United Creative Solution Corporation	3	Sales	1,905	Note 5	0.06%
2	United Business Service Corporation	Faraday Technology China Corporation	3	Sales	1,081	Note 5	0.03%
3	Artery Technology Corporation, Ltd.	Artery Technology Company	3	Research expense	752	According to the contract	0.02%

Note 1: Faraday Technology Corporation and its subsidiaries are coded as follows:

1. Faraday Technology Corporation is coded "0".

2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: Transactions are categorized as follows:

1. The holding company to subsidiary.

2. Subsidiary to holding company.

3. Subsidiary to subsidiary.

Note 3: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end.

For profit or loss items, cumulative balances are used as basis.

Note 4: The sales price to the above related parties was determined through mutual agreement in reference to resale price.

Note 5: As the sale of product or service is individually designed based on requirement of customers, they could not be compared directly.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of June 30, 2021)

Faraday Technology Corporation

			Initial Investment			Investment as of June 30, 2021
Investee company	Address	Main businesses and products	June 30, 2021	December 31, 2020	Number of shares	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Faraday Technology Corporation (USA)	USA	Sales representive in America	\$436,907	\$436,907	Common stock 118,580 thousand shares and preferred stock 2,000 thousand shares	Common stock owned 100.00% and preferred stock owned 100.00%	\$410,701	\$3,475	\$1,700
Faraday Technology - B.V.I	British Virgin Islands	General investing	855,770	706,792	Common stock 23,031 thousand shares	100.00%	605,439	142,505	142,712
Faraday Technology Japan Corporation	Japan Tokyo	Sales representive in Japan	29,320	29,320	Common stock 2 thousand shares	99.95%	82,273	5,940	5,937
Chih-Hung Investment Corporation	Taiwan	General Investing	620,000	620,000	Common stock 62,000 thousand shares	100.00%	615,479	45,239	45,239
Sheng Bang Investment Corporation	Taiwan	General Investing	222,020	222,020	Common stock 22,202 thousand shares	100.00%	209,376	7,663	7,663
Faraday Technology Vietnam Company Limited	Vietnam	IC design services	9,287	9,287	-	100.00%	12,772	543	563

Chih-Hung Investment Corporation

			Initial Investment			Investment as of June 30, 2021
						Percentage of ownership	Carrying	Net income (loss) of investee company	Investment income (loss) recognized
Investee company	Address	Main businesses and products	June 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Grain Media Inc.	Taiwan	IC designing, marketing and customer service	\$1,456	\$1,456	Common stock 146 thousand shares	19.42%	\$1,138	\$(25)	\$(5)
Innopower Technology Corporation	Taiwan	Silicon Intellectual Property designing	80,000	80,000	Common stock 14,942 thousand shares	100.00%	252,449	46,877	46,877
FaradayTek Solutions India Private Limited	India	IC design services	45	45	Common stock 10 thousand shares	1.00%	83	1,414	14

Sheng Bang Investment Corporation

			Initial Investment			Investment as of June 30, 2021
						Percentage of ownership	Carrying	Net income (loss) of investee company	Investment income (loss) recognized
Investee company	Address	Main businesses and products	June 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Grain Media Inc.	Taiwan	IC designing, marketing and customer service	\$6,044	\$6,044	Common stock 604 thousand shares	80.58%	\$4,720	\$(25)	\$(20)
FaradayTek Solutions India Private Limited	India	IC design services	4,462	4,462	Common stock 990 thousand shares	99.00%	8,240	1,414	1,400

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of June 30, 2021)

Innopower Technology Corporation
				Initial Investment			Investment as of June 30, 2021
Investee company	Address	Main businesses and products		June 30, 2021	December 31, 2020	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Bright Capital Group Limited	Samoa	General investing		\$68,593	\$68,593	Common stock 2,301 thousand shares	100.00%	\$274,646	\$39,040	\$39,040
Faraday Technology - B.V.I				Initial Investment			Investment as of June 30, 2021
							Percentage of ownership	Carrying	Net income (loss) of investee company	Investment income (loss) recognized
Investee company Faraday Technology Corporation Mauritius	Address Mauritius	Main businesses and products General investing	USD	June 30, 2021 \$12,859,205 USD	December 31, 2020 \$12,859,205	Number of shares (thousand) Common stock 12,804 thousand shares	(%) 100.00%	amount (Note) \$121,278	(Note) \$54,558	(Note) \$54,558
GrainTech Electronics Limited	Hong Kong	IC designing, marketing and customer service	USD	100,000 USD	100,000	Common stock 100 thousand shares	100.00%	5,056	(6)	(6)
Faraday Technology Corporation Samoa	Samoa	General investing	USD	4,715,067 USD	4,715,067	Common stock 4,715 thousand shares	100.00%	181,374	43,890	43,890
Artery Technology Company-Cayman	Cayman	General investing	USD	9,809,000 USD	4,460,000	Common stock 5,192 thousand shares	66.42%	295,870	65,650	44,078

Artery Technology Corporation - Cayman

			Initial Investment			Investment as of June 30, 2021
						Percentage of		Net income (loss) of	Investment income
						ownership	Carrying	investee company	(loss) recognized
Investee company	Address	Main businesses and products	June 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Artery Technology Company	Taiwan	IC designing, marketing and customer service	67,930	\$25,897	Common stock 6,793 thousand shares	66.42% (Note 2)	25,399	116	75

Note 1: USD are expressed in dollars.

Note 2: The Company owns 100% of Faraday Technology-B.V.I. and Faraday Technology-B.V.I. owns 66.42% in Artery Technology Corporation-Cayman.The Artery Technology Corporation-Cayman owns 100% of Artery Technology Company; therefore, the Group's share of profit or loss of Artery Technology Company is 66.42%.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 6 (Investment in Mainland China as of June 30, 2021)

							Investment Flows									dollars
Investee company	Main Businesses and Products		Total Amount of Paid-in Capital	Method of Investment		Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Outflow	Inflow			Accumulated Outflow of Investment from Taiwan as of June 30, 2021	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of June 30, 2021	Accumulated inward remittance of earnings as of June 30, 2021
Faraday Technology China Corporation	IC designing, marketing and customer service	(USD	\$167,160 6,000,000)	Note 1 Note 3	(USD	\$167,160 6,000,000)	\$-		\$-	(USD	\$167,160 6,000,000)	\$54,574	100.00%	\$54,574	\$118,776	\$-
Faraday Technology Corporation (Suzhou)	IC designing, marketing and customer service	(USD	161,588 5,800,000)	Note 4	(USD	161,588 5,800,000)	-		-	(USD	161,588 5,800,000)	39,040	100.00%	39,040	274,646	-
Grain Media Technology (Shenzhen) Co., Ltd.	IC designing, marketing and customer service	(USD	111,463 4,000,814)	Note 1 Note 5	(USD	111,463 4,000,814)	-		-	(USD	111,463 4,000,814)	-	100.00%	-	447	-
United Business Service Corporation	IC designing, marketing and customer service	(RMB	129,300 30,000,000)	Note 1 Note 6		129,300 (RMB 30,000,000)	-		-	(RMB	129,300 30,000,000)	43,890	100.00%	43,890	181,373	-
Artery Technology Corporation, Ltd.	IC designing, marketing and customer service		333,206	Note 1 Note 7		124,256	42,732		-		166,988	66,554	66.42%	44,687	183,480	-
United Creative Solution Corporation	IC designing, marketing and customer service	(USD (RMB	11,960,000) 21,550 5,000,000)	Note 8 -	(USD	4,460,000) (USD -	1,533,815) -		-	(USD	5,993,815) -	8,429	100.00%	8,429	32,302	-
Innopower Technology Corporation (Chongqing)	IC designing, marketing and customer service	(RMB	4,310 1,000,000)	-		-	-		-		-	-	100.00%	-	4,310	-

Unit:New Taiwan Dollars in thousands, USD and RMB in

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 6 (Investment in Mainland China as of June 30, 2021)

Accumulated investment in Mainland China as of	Investment amounts authorized by Investment
June 30, 2021	Commission, MOEA	Upper limit on investment
\$738,560 (Note 2)	\$825,928 (Note 2)
(USD 26,509,696)	(USD 29,645,650)	\$4,139,288

Note 1: Indirectly investment in Mainland China through subsidiaries of Faraday Technology-B.V.I. (registered in a third region) such as Faraday Technology Corporation-Mauritius, Faraday Technology Corporation- Samoa, and Artery Technology Corporation-Cayman.

• Note 2: Amounts denominated in foreign currency is translated into New Taiwan Dollars by using exchange rate on June 30, 2021.
• Note 3: As of June 30, 2021, Investment Commission, MOEA approved the total investment amount USD 6,000 thousand. The Company had remitted investment amounted to USD 5,500 thousand, and Faraday Technology Corporation-Mauritius had remitted investment amounted to USD 500 thousand from its owned capital.
• Note 4: On May 19, 2010, Investment Commission, MOEA approved Innopower Technology Corporation acquired the 100% of ownership of Faraday Technology Corporation (Suzhou) (Mainland China company owned by Faraday Technology Corporation- Mauritius, which owned by Faraday Technology- B.V.I.) with USD 602,182 through Brigtht Capital Group Capital Limited. Before the transaction, Investment Commission, MOEA had approved the total investment amount USD 5,800 thousand , and USD 5,800 thousand had been remitted.
• Note 5: As of June 30, 2021, Investment Commission, MOEA approved the total investment amount USD 4,112 thousand , and the Company had remitted USD 4,001 thousand for the investment.
• Note 6: As of June 30, 2021, Investment Commission, MOEA approved the total investment amount RMB 30,000 thousand , and the Company had remitted RMB 30,000 thousand for the investment.
• Note 7: As of June 30, 2021, Investment Commission, MOEA approved the total investment amount USD 7,033 thousand , and the Company had remitted USD 5,994 thousand for the investment.
• Note 8: The Company owns 100% of Faraday Technology-B.V.I. and Faraday Technology-B.V.I. owns 66.42% in Artery Technology Corporation-Cayman.The Artery Technology Corporation-Cayman owns 100% of Artery Technology Corporation, Ltd; therefore, the Group's share of profit or loss of Artery Technology Corporation, Ltd is 66.42%.

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ATTACHMENT 7 (The information of main shareholders )

Number of ordinary shares
Name of major shareholders	Number of shares held (shares)	Percentage of ownership
United Microelectronics Corporation	34,240,213	13.77%

If the Company applies to the Taiwan Depository & Clearing Corporation to obtain the information in this form, the following items may be explained in the note of this form. Explanation:

• Note 1: The main shareholder information in this table is calculated by the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter. The total number of ordinary shares and special shares held by the shareholders who have completed the delivery of the Company without physical registration (including treasury shares) is more than 5%. As for the share capital recorded in the Company's financial report and the number of shares actually delivered by the Company without physical registration, the calculation basis may be different or inconsistent.
• Note 2: If the above data is number of trusted shares, it is disclosed by accounts of trustee. The report of shareholders who holding more than 10% ownership according to Securities and Exchange Act, includes the shares held by shareholders and trusted assets with right to use. Please refer to Market Observation Post System.