FST — AGM Information 2016

Jun 21, 2016

FORMOSA SUMCO TECHNOLOGY CORPORATION

2016 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

JUNE 16, 2016

Table of Contents

Meeting Procedure ………………………………………………. page 2 Meeting Agenda……………………………..…………………… page 3 Discussion Items (I)……………………………………………… page 4 Report Items……………………………………………………… page 11 Ratification Items………………………………………………… page 18 Discussion Items (II) …………………………………………….. page 20 Appendices……………………………………………………….. page 30

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FORMOSA SUMCO TECHNOLOGY CORPORATION

2016 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

1. Call Meeting to Order

2. Chairman’s Address

3. Discussion Items (I)

4. Report Items

5. Ratification Items

6. Discussion Items (II)

7. Extraordinary Motions

8. Meeting Adjourned

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FORMOSA SUMCO TECHNOLOGY CORPORATION 2016 ANNUAL SHAREHOLDERS’ MEETING AGENDA

Time: 10:30 a.m., Thursday, June 16, 2016

Venue: 2F, Meeting Room at Formosa Building

(No.201, Dun Hua North Road, Taipei, Taiwan)

1. Discussion Items (I)

2. (1)To amend the Articles of Incorporation of the Company, the corresponding comparison table for the current and amended articles is attached. Please discuss and resolve.

2. Report Items

• (1) 2015 Business Report

• (2) Supervisors’ Review Report for 2015

• (3) Distribution of 2015 Employees Compensation

3. Ratification Items

• (1) Please approve the 2015 Business Report and Financial Statements as required by the Company Act.

• (2) Please approve the Proposal for Distribution of 2015 Profits as required by the Company Act.

4. Discussion Items (II)

• (1)To act in concert with Directors and Supervisors election system of the Company, shift to the nomination system. The Company’s “Rules for Election of Directors and Supervisors” shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached. Please discuss and resolve.

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Discussion Items (I) Proposal 1

Proposal: To amend the Articles of Incorporation of the Company, the corresponding comparison table for the current and amended articles is attached. Please discuss and resolve.

	Proposed by theBoard of Directors	Proposed by theBoard of Directors	Proposed by theBoard of Directors	Proposed by theBoard of Directors
Article	Article before Amendment	Article	Article after Amendment	Reason for Amendment
Article 13	The company shall have 9 directors and 2 supervisors,who are elected from among competent shareholders at theshareholders'meeting or by article 27 of Copamy Act.And shall hold the term of office for 3 years and are eligiblefor re-election. The directors to be elected as stated in the preceding paragraph include 2 independent directors.The company adopts a candidate nomination system to elect independent directors.Independent directors shall be elected at the shareholders’ meeting from the nominees listed in the roster of director candidates. Paragraph 2 of this Article shall be conducted in	Article 13	The company shall have 9 directors and 2 supervisors,who shall hold the term of office for 3 years and are eligible for re-election.A candidate nomination system is adopted to elect directors and supervisors.The directors	In order to improve corporate governance, a candidate nomination system for electing directors and supervisors is adopted to facilitate e-voting.
			and supervisors shall be elected by shareholders from the nominees listed
			in the roster of director and supervisor candidates. The directors to be elected as stated in the preceding paragraph include 2 independent directors.The company adopts a candidate nomination system to elect independent directors.Independent directors shall be elected

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Article	Article before Amendment	Article	Article after Amendment	Reason for Amendment
	compliance with Article 183 of the Securities and Exchange Act. The single open-ballot,cumulative election method will be used for election of the directors at the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Such as is the election of the supervisors.		at the shareholders’ meeting from the nominees listed in the roster of director candidates. Paragraph 2 of this Article shall be conducted in compliance with Article 183 of the Securities and Exchange Act. The single open-ballot,cumulative election method will be used for election of the directors at the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Such as is the election of the supervisors.

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Article	Article	Article before Amendment	Article	Article	Article after Amendment	Reason for Amendment
		(New article added)		Article 28	When allocating the net profits for each fiscal year, the Company shall set aside 0.05% to 0.5% of the balance of pre-tax profit prior to deducting employees compensation as compensation of employees. However, the	The Company amends employees compensation related articles in accordance with the revision of Article 235-1 of the Company Act.
					Company's accumulated losses shall have been covered. The resolution of employees compensation
					pursuant to Article 235-1
					of the Company Act.
	Article 28	Where there isprofitof the annual final account, except for rending all taxes,when allocating the net profits for each fiscal year, the Company shall first offset its lossesin the previous yearsand set aside 10% legal capital reserve and special earning reserve as necessary followed by the dividend. For remaining balance (hereinafter the		Article 29	Where there issurplusof the annual final account, when allocating the net profits for each fiscal year, the Company shall firstpay its income tax and offset itsprior years' accumulatedlosses and set aside 10% legal capital reserve and special earning reserve as necessary followed by the dividend. For remaining surplus	To amend employees compensation related articles, the Company deletes paragraph 4 of Article 28 and adjusts the Article order.

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Article	Article before Amendment	Article	Article after Amendment	Reason for Amendment
	distributable earning after the dividend)incorporated with the accumulative earning in previous years, the Board of Directors shall prepare the proposal concerning the appropriation of net profits and submit the same to the shareholders’ meeting for resolution. Preceding special earning reserves include: 1. The earning reserved recognized for special purpose 2. The investment gain recognized in equity method and unrealized part of the income tax credit which has not been used. After the aforementioned investment gain is realized, nevertheless, it should be entered as the deduction of special reserve. 3. The net evaluated gain recognized because of tradingof financial		incorporated with the accumulative earning in previous years, the Board of Directors shall prepare the proposal concerning the appropriation of net profits and submit the same to the shareholders’ meeting for resolution. Preceding special earning reserves include: 1. The earning reserved recognized for special purpose 2. The investment gain recognized in equity method and unrealized part of the income tax credit which has not been used. After the aforementioned investment gain is realized, nevertheless, it should be entered as the deduction of special reserve. 3. The net evaluated gain recognized because of trading of financial products. When the accumulated number

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Article	Article before Amendment	Article	Article after Amendment	Reason for Amendment
	products. When the accumulated number decreases, nevertheless, the special reserve shall be deducted for the equivalent amount and shall be limited to the number appropriated for such category. 4. Other special earning reserve pursuant to laws and regulations The Company is not obliged to set aside a legal reserve if the total amount of legal reserve allocated is up to the Company’s capital. The Company shall set aside 0.1% to 1% of distributable earning after the dividend as bonus to the employees, while the amount set aside shall be the expenses of current year. The Company is a high technology capital intensive industry and is now in the growing phase. To assure continual		decreases, nevertheless, the special reserve shall be deducted for the equivalent amount and shall be limited to the number appropriated for such category. 4. Other special earning reserve pursuant to laws and regulations The Company is a high technology capital intensive industry and is now in the growing phase. To assure continual growth of the Company, the Company adopts a policy to allocate dividends by three means, i.e., cash dividend, earning converted into capital increase (re-capitalization) and capital reserve converted into capital increase (re-capitalization). The allocable earning of the year after deducting legal reserve and special reserve shall be allocated

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Article	Article before Amendment	Article	Article after Amendment	Reason for Amendment
	growth of the Company, the Company adopts a policy to allocate dividends by three means, i.e., cash dividend, earning converted into capital increase (re-capitalization) and capital reserve converted into capital increase (re-capitalization). The allocable earning of the year after deducting legal reserve and special reserve shall be allocated up to the maximum of 80%. The Company will preferentially allocate cash dividend. The total ratio of the earning converted into capital increase (re-capitalization) and capital reserve converted into capital increase (re-capitalization) shall not exceed the maximum of 50% of the total dividend of thatyear.		up to the maximum of 80%. The Company will preferentially allocate cash dividend. The total ratio of the earning converted into capital increase (re-capitalization) and capital reserve converted into capital increase (re-capitalization) shall not exceed the maximum of 50% of the total dividend of that year.

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	Article	Article before Amendment		Article	Article after Amendment	Reason for Amendment
	Article 29	The internal organization of the Corporation and the detailed procedures of business operation shall be determined at the meeting of the Board of Directors..		Article	The internal organization of the Corporation and the detailed procedures of business operation shall be determined at the meeting of the Board of Directors..	To amend employees compensation related articles, the Company adjusts the Article order.
				30
	Article 30	In regard to all matters not provided for in these Articles of Incorporation, the Company Law of the Republic of China shall govern.		Article	In regard to all matters not provided for in these Articles of Incorporation, the Company Law of the Republic of China shall govern.	To amend employees compensation related articles, the Company adjusts the Article order.
				31
	Article 31	(Omitted)		Article 32	Add “the 17stAmendment on June 16, 2016” to the existing Article.	To amend employees compensation related articles, the Company adjusts the Article order and encloses the date of the 17st amendment.

Resolution:

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Report Items

• 1.About the Company’s business operation condition of 2015, please refer to Business Report for further details (on page 12 of the Handbook.)

• 2.The Company’s Supervisors reviewed the 2015 Business Report and Financial Statements and issued their Review Report according to the applicable laws. Please refer to Supervisors’ Review Report (on page 17 of the Handbook.)

• Distribution of 2015 Employees Compensation Pursuant to newly amended Article 28 of the Articles of Incorporation of the Company, the Board of Directors approved to set aside 0.05% of the 2015 pre-tax profit prior to deducting employees compensation distributable as employees compensation on March 16, 2016. The form of employees compensation will be in cash, i.e. a total amount of NT $767,692.

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FORMOSA SUMCO TECHNOLOGY CORPORATION 2015Business Report

I. 2015 Annual Business Report

The consolidated operating revenue of our company in 2015 was US$323,900,453 (a decrease of 6% from US$344,256,135 in 2014), achieving 94% of the target revenue US$344,594,492. The consolidated profit before tax of our company in 2015 was US$47,393,976 (an increase of 19% (US$7,693,853) from US$39,700,122 in 2014), achieving 94% of the target profit US$50,431,159, with a shortfall of only US$3,037,183.

Put in a boarder context, although the global semiconductor market exhibited a certain degree of prosperity in the first three quarters of 2015, the entire industry faced a drastic economic downturn, stagnant end-product sales, and customer inventory adjustments after the end of the third quarter in 2015. In response to these new challenges, our company has adopted several countermeasures to ensure sufficient end-product sales. Despite our best efforts, annual 8-inch silicon wafer sales dropped 10% from 2014, while annual 12-inch silicon wafer sales dropped 2% from 2014. Nevertheless, by implementing several cost-reducing strategies and reducing our raw material costs, our company has significantly lowered overall costs. In summary, despite the fact that our company’s consolidated operating revenue is US$20,376,499 less than that achieved in 2014, our company’s consolidated profit before tax is US$7,693,853 more than that achieved in 2014.

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Despite the growing pretax profit, our company continues to face an external environment full of threats and challenges. Therefore, the company must be constantly vigilant and guard against external threats to ensure a sustainable business operation. By upholding the founding philosophy of diligence and frugality, our company is dedicated to promoting equipment automation, technological advancements, process enhancement, and quality improvement in order to increase overall production capacity while reducing operating costs. As we receive stricter demands from our customers, we will respond by providing them with the best products with a proactive attitude. We hope to become a supplier that our customers can trust and rely on.

With regard to environmental protection, our company has always put equal emphasis on industrial development and environmental protection. Since our establishment, we have made constant improvements to overall pollution control, such as adopting the best manufacturing process technologies, installing the most advanced pollution control systems, and enacting the most demanding pollution control policies. Despite the fact that all our pollutant treatments are well above the national control standards, environmental standards are quickly developing due to the rising environmental awareness these days. In response to higher environmental standards, our company will continue to further improve our manufacturing processes and environmental protection efforts in order to reach our ultimate goal of “zero pollution”.

The silicon wafer production and marketing status of our company

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in 2015 is summarized below:

1. Silicon Wafer Production and Marketin Status: g

Product	Production Volume	Sales Volume
Silicon Wafer (thousand)	6,602	6,353

The total sales amount of our company in 2015 was US$323,780,490, with domestic sales accounting for 93% (US$299,839,330) and foreign sales accounting for the remaining 7% (US$23,941,159) of the entire sales amount.

1. Operating Status: The consolidated operating revenue of our company in 2015 was $323,396,093, which is US$20,323,985 less than the consolidated operating revenue of our company in 2014, which was US$343,720,078. After deducting the consolidated operating cost of US$265,588,042 and the consolidated management cost of US$11,824,023 from the consolidated operating revenue, the consolidated operating profit becomes US$45,984,027. By adding the non-operating revenue of US$1,855,105 to and deducting the non-operating expenditure of US$518,955 from the consolidated operating profit, the consolidated pretax profit of our company in 2015 becomes US$47,320,176.

II.2016 Business Plan Overview, Future Corporate Development

Strategies, and Impacts Generated from the External Competitive Environment, Legislative Environment, and Overall Business Environment

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Because of stagnant semiconductor market growth, the economic prospects for the semiconductor industry is not promising for 2016. Faced with continual inventory adjustments in the first six months in addition to falling DARM prices, a harsh external environment, and a shrinking semiconductor manufacturing process, the entire silicon wafer industry is expected to meet stricter silicon wafer demands from its customers. In order to provide our customers with the best products, our company will continue to be devoted to putting the following activities into real practice. By implementing these strategies, we hope to secure our share of revenue and profit in the ever-changing semiconductor market. Above all, we look forward to improving our competitiveness, in order to achieve high business performance.

1. Continue to improve the semiconductor manufacturing process and implement TPM (total production maintenance) activities. By jointly carrying out stabilized production, quality control measures, and manufacturing equipment management, production site quality can be further improved so that we can provide our customers with the best products on the premise of “stabilized production” and “best quality”.

2. Faced with stricter customer demands, we must ensure that future technologies are developed while making constant improvements to our production site.

3. Continue to ensure and improve customer satisfaction, reach a larger demographic, increase the frequency of visits, assign technicians to provide additional technical services, and sign long term contracts with important customers; by doing so, we can expand our sales to secure our leading market position in the domestic semiconductor market. In addition to expanding sales in such foreign countries as mainland

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China, we must seek new client bases to increase foreign sales.

1. In response to customer demands, we must make improvements with regard to quality, costs, delivery, and service. We must become the best company, one that our customers can trust and rely on.

2. Optimize domestic advantages of streamline production, sales, and technical services to improve corporate competitiveness in areas other than price.

3. Implement business continuity management (BCM) to prevent the occurrence of potential risks.

4. Combine excellent Japanese SUMCO / SUMCO TECHXIV production technologies with the excellent Formosa Plastics Group management system to optimize business performance.

In order to establish the most complete corporate system and raise corporate competitiveness, our 2016 business guidelines are listed below:

1. Make qualitative improvements to the 12-inch manufacturing process to realize brand positioning.

2. Perform thorough management of the 8-inch manufacturing process equipment to stabilize production.

3. Improve production and minimize costs based on TPM (total production management).

4. Carry out sales, technical services, and production according to our clients’ feedback to raise customer satisfaction.

5. Follow established laws and regulations to secure “zero disasters” and “zero accidents”.

6. Promote a talent nurturing program to cultivate future leaders.

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FORMOSA SUMCO TECHNOLOGY CORPORATION Supervisors’ Review Report

The Board of Directors has prepared the Company’s 2015 Business Report, Proposal for Profits Distribution, and Financial Statements audited by the Deloitte. We as the Supervisors of the Company have examined the aforementioned documents and found no unconformities. According to Article 219 of Company Act, we hereby submit this report. Please be advised accordingly.

Submitted to:

The Company’s 2016 Annual Shareholders’ Meeting

Supervisors: Sheng-Guan Lin Fumio Inoue

March 23, 2016

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Ratification Items Proposal 1

Proposal: For approval of the 2015 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors

Explanation:

1. The preparation of the Company’s 2015 Consolidated and Individual Financial Statements were completed and the same were approved at the 1st meeting of the Board in 2016 and audited by independent auditors, Miss Yang Ching-Ting and Mr. Jery Gung, of Deloitte. The aforesaid Financial Statements together with the Business Report were reviewed by the supervisors, which the Supervisors’ Review Report is presented.

2. For the aforementioned Business Report, please refer to page 12 through page 16 of the Meeting Handbook. As for the Financial Statements, please refer to page 23 through page 28 of the Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

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Ratification Items Proposal 2

Proposal: For Approval of the Proposal for Distribution of 2015 Profits as required by the Company Act.

Proposed by the Board of Directors

Attachment:

Please refer to page 29 of the Handbook for the Statement of Profits Distribution.

Resolution:

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Discussion Items (II) Proposal 1

Proposal: To act in concert with Directors and Supervisors election system of the Company, shift to the nomination system. The Company’s “Rules for Election of Directors and Supervisors” shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached. Please discuss and resolve.

Proposed by the Board of Directors

Article		Original Article		Amended Article
Article 5		According to the Articles of Incorporation of the company,theindependent directorsof the company shall be elected by shareholders from the nominees listed in the roster of independent directorcandidates. Independent directors and non-independent directors shall be elected at the same time and the number of elected independent directors and non-independent directors shall be calculated separately in accordance with Article 4. If the company has an audit committee, one of the elected independent directors shall specialize in accounting or finance. Prior to the date on which the share transfer registration is suspended before the convention of a regular shareholders' meeting, the company shall announce the period of receiving		According to the Articles of Incorporation of the company,thecandidate nomination systemshall be adopted for the election of directors/supervisorsand shall be elected by shareholders from the nominees listed in the roster ofdirectors/ supervisorscandidates. Independent directors and non-independent directors shall be elected at the same time and the number of elected independent directors and non-independent directors shall be calculated separately in accordance with Article 4.If the company has an audit committee, one of the elected independent directors shall specialize in accounting or finance. Prior to the date on which the share transfer registration is suspended before the convention of a regular shareholders'meeting, the

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		nomination ofindependent directorcandidates, the number ofindependent directorsto be elected, the place where nominations are being received,and any other necessary matters.The period for receiving nomination shall not be less than 10 days. The board of directors and shareholders holding more than 1% of the issued shares of the company may nominate independent director candidates,but the number of nominated candidates shall not exceed the number of independent directorsto be elected. The name,education, experience of the candidate, a statement issued by the candidate promising to serve as anindependent director if he or she is elected, a declaration stating that no circumstance provided in Article 30 of the Company Act has occurred, and other relevant supporting documents shall be attached to the list of the candidates recommended by a shareholder or the board of directors. The board of directors or the convener of the shareholders’ meeting shall examine the independent director		company shall announce the period of receiving nomination of directors/supervisors candidates, the number of independent directors to be elected, the place where nominations are being received,and any other necessary matters.The period for receiving nomination shall not be less than 10 days. The board of directors and shareholders holding more than 1% of the issued shares of the company may nominate directors/supervisors candidates, but the number of nominated candidates shall not exceed the number of directors/supervisorsto be elected. The name, education, experience of the candidate, a statement issued by the candidate promising to serve as an independent director if he or she is elected, a declaration stating that no circumstance provided in Article 30 of the Company Act has occurred, and other relevant supporting documents shall be attached to the list of the candidates recommended by a shareholder or the board of directors.Nominees are corporate shareholders or on

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	candidates that have been nominated. The nominated independent director candidates shall be recorded in the list of independent director candidates, except in the case that (1) the candidate is nominated by a shareholder beyond the period of receiving nomination; (2) the nominating shareholder holds less than 1% of the issued shares of the company at the time when the share transfer registration is suspended by the company in accordance with Article 165 (2) or (3) of this Company Act; (3) the number of nominated candidates exceeds the number ofindependent directorsto be elected; or (4) the relevant supporting documents stated in the preceding paragraph are not attached		behalf of the shareholders shall submit shareholder register basic information and the amount of shares held documents. The board of directors or the convener of the shareholders’ meeting shall examine the directors/supervisors candidates that have been nominated. The nominated independent director candidates shall be recorded in the list of directors/supervisors candidates, except in the case that (1) the candidate is nominated by a shareholder beyond the period of receiving nomination; (2) the nominating shareholder holds less than 1% of the issued shares of the company at the time when the share transfer registration is suspended by the company in accordance with Article 165 (2) or (3) of this Company Act; (3)the number of nominated candidates exceeds the number ofdirectors / supervisors tobe elected; or (4) the relevant supporting documents stated in the preceding paragraph are notattached

Resolution:

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Debt investments with no active market ‐ current (Notes 4 and 7) Accounts receivable, net (Notes 4 and 8) Accounts receivables from related parties, net (Notes 4, 8 and 23) Other receivables (Notes 4, 8 and 23) Inventories (Notes 4, 5 and 9) Prepayments (Notes 4 and 13) Total current assets NON‐CURRENT ASSETS Available‐for‐sale financial assets ‐ non‐current (Note 4) Property, plant and equipment (Notes 4, 5, 11, 23,24 and 25) Intangible assets (Notes 4, 5, 12 and 23) Deferred tax assets (Notes 3, 4, 5 and 19) Prepayment for equipment (Note 4 and 25) Refundable deposits (Note 4) Other non‐current assets (Notes 4 and 13) Total non‐current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Trade payables (Note 4) Trade payables to related parties (Notes 4 and 23) Other payables (Notes 4, 14, 18 and 23) Current tax liabilities (Notes 4 and 19) Current portion of long‐term borrowings (Notes 4, 16, 23 and 24) Other current liabilities Total current liabilities NON‐CURRENT LIABILITIES Long‐term borrowings (Notes 4, 15, 23 and 24) Deferred tax liabilities (Notes 4 and 19) Net defined benefit liabilities ‐ non‐current (Notes 3, 4, 5 and 16) Guarantee deposits (Note 4) Other non‐current liabilities Total non‐current liabilities Total liabilities EQUITY (Notes 3, 4, 17, 19 and 21) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2015 Amount % $ 2,787,512 13 300,000 1 1,302,423 6 119,977 1 22,609 ‐ 2,286,752 10 174,338 1 6,993,611 32 256 ‐ 14,797,376 67 ‐ ‐ 251,515 1 57,354 ‐ 217 ‐ 57,703 ‐ 15,164,421 68 $22,158,032 100 $ 367,918 2 265,886 1 865,142 4 189,693 1 ‐ ‐ 6,703 ‐ 1,695,342 8 ‐ ‐ 876 ‐ 306,237 1 534 ‐ 25,634 ‐ 333,281 1 2,028,623 9 7,756,966 35 5,739,080 26 1,097,493 5 5,511,113 25 6,608,606 30 24,757 ‐ 20,129,409 91 $22,158,032 100		2014 (Audited after Restated)
				Amount % $ 2,245,067 10 ‐ ‐ 1,521,887 7 113,384 ‐ 9,856 ‐ 1,743,834 8 136,052 1 5,770,080 26 223 ‐ 15,481,904 71 33,739 ‐ 310,659 1 256,049 1 265 ‐ 117,711 1 16,200,550 74 $21,970,630 100 $ 440,002 2 251,395 1 506,550 2 155,607 1 345,458 2 6,439 ‐ 1,705,451 8 345,458 2 ‐ ‐ 263,053 1 1,612 ‐ 18,756 ‐ 628,879 3 2,334,330 11 7,756,966 35 5,739,080 26 988,813 5 5,151,256 23 6,140,069 28 185 ‐ 19,636,300 89 $21,970,630 100

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2016)

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET REVENUE (Notes 4,23 and 28) COST OF REVENUE (Notes3, 9, 12, 16, 18 and 23) GROSS PROFIT OPERATING EXPENSES (Notes 3,16, 18 and 23) Marketing Administrative Total operating expenses INCOME FROM OPERATIONS NON‐OPERATING INCOME AND EXPENSES (Notes 4, 11, 18 and 23) Other income Other gains and losses Finance costs Total non‐operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 3, 4, 5 and 19) NET INCOME OTHER COMPREHENSIVE INCOME (LOSS) (Notes 3,4,16,17 and 19) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange difference on translating foreign operations Unrealized gain (loss) on available‐for‐sale financial assets		2015 Amount % $10,487,897 100 (8,612,895) (82) 1,875,002 18 (201,166) (2) (184,396) (2) (385,562) (4) 1,489,440 14 29,460 1 21,968 ‐ (5,776) ‐ 45,652 1 1,535,092 15 (257,041) (3) 1,278,051 12 (40,744) ‐ 6,927 ‐ 24,539 ‐ 33 ‐		2014 (Audited after Restated)
				Amount % $ 11,147,014 100 (9,596,398) (86) 1,550,616 14 (155,700) (1) (167,867) (2) (323,567) (3) 1,227,049 11 37,380 ‐ 38,482 1 (17,421) ‐ 58,441 1 1,285,490 12 (198,555) (2) 1,086,935 10 4,929 ‐ (837) ‐ ‐ ‐ (43) ‐ (Continued)

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Other comprehensive income for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD EARNINGS PER SHARE (Note 20) Basic earnings per share Diluted earnings per share		2015 Amount % (9,245) ‐ $ 1,268,806 12 $ 1.65 $ 1.65		2014 (Audited after Restated)
				Amount % 4,049 ‐ $ 1,090,984 10 $ 1.40 $ 1.40

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2016) (Concluded)

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)
BALANCE AT JANUARY 1, 2014 Effect of retrospective application BALANCE AT JANUARY 1, 2014 AS RESTATED Appropriations of 2013 earnings Legal reserve Cash dividends to shareholders Net income in 2014 Other comprehensive income in 2014 Total comprehensive income in 2014 BALANCE AT DECEMBER 31, 2014 AS RESTATED Appropriations of 2014 earnings Legal reserve Cash dividends to shareholders Net income in 2015 Other comprehensive income in 2015 Total comprehensive income in 2015 BALANCE AT DECEMBER 31, 2015	Share Capital Capital Surplus $ 7,756,966 $ 5,739,080 ‐ ‐ 7,756,966 5,739,080 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,756,966 5,739,080 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ $ 7,756,966 $ 5,739,080	**Retained Earnings **	Total $ 5,284,460 (2,709) 5,281,751 ‐ (232,709) (232,709) 1,086,935 4,092 1,091,027 6,140,069 ‐ (775,697) (775,697) 1,278,051 (33,817) 1,244,234 $ 6,608,606	Others	Total $ 228 ‐ 228 ‐ ‐ ‐ ‐ (43) (43) 185 ‐ ‐ ‐ ‐ 24,572 24,572 $ 24,757	Total Equity $ 18,780,734 (2,709) 18,778,025 ‐ (232,709) (232,709) 1,086,935 4,049 1,090,984 19,636,300 ‐ (775,697) (775,697) 1,278,051 (9,245) 1,268,806 $ 20,129,409
				Exchange Unrealized Difference on Gain (Loss) on Translating Available‐for‐ Foreign sale Financial Operations Assets $ ‐ $ 228 ‐ ‐ ‐ 228 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (43) ‐ (43) ‐ 185 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 24,539 33 24,539 33 $ 24,539 $ 218
		Unappropriate d Legal Reserve Earnings $ 957,405 $ 4,327,055 ‐ (2,709) 957,405 4,324,346 31,408 (31,408) ‐ (232,709) 31,408 (264,117) ‐ 1,086,935 ‐ 4,092 ‐ 1,091,027 988,813 5,151,256 108,680 (108,680) ‐ (775,697) 108,680 (884,377) ‐ 1,278,051 ‐ (33,817) ‐ 1,244,234 $ 1,097,493 $ 5,511,113

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2016)

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Interest expense Interest income Dividend income Write‐down of inventory Reversal of write‐down of inventories Impairment loss recognized on property, plant and equipment Gain on foreign exchange, net Other items Changes in operating assets and liabilities (Increase) decrease in trade receivables (Increase) decrease in other receivables (Increase) decrease in inventories (Increase) decrease in prepayments Decrease in trade payables Increase in other payables Increase in other current liabilities Increase in net defined benefit liabilities Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of debt investment with no active market Acquisitions of property, plant and equipment Increase in prepayment for equipment Decrease in refundable deposits (Increase) decrease in other investing activities items Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short‐term borrowings Repayments of long‐term borrowings Refund of guarantee deposits received Increase in other non‐current liabilities

2015 2014 (Audited after Restated) $ 1,535,092 $ 1,285,490 2,039,012 2,025,554 71,513 79,153 5,776 17,421 (16,467) (4,161) (3) (8) 4,216 ‐ ‐ (36,737) 7,657 10,438 (16,989) (8,371) (53) 1,981 220,380 (33,211) (12,753) 12,565 (547,134) 331,689 (3,656) 72,803 (61,794) (24,035) 119,453 70,355 264 480 2,440 2,620 3,346,954 3,804,026 16,467 4,161 3 8 (6,807) (18,933) (157,256) (71,334) 3,199,361 3,717,928 (300,000) ‐ (851,591) (120,183) (55,658) (244,591) 48 213 (11,104) 53 (1,218,305) (364,508) ‐ (605,400) (690,916) (345,458) (1,078) (299) 6,878 4,662 (Continued)

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FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(In Thousands of New Taiwan Dollars)

Cash dividends Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	2015 2014 (Audited after Restated) (775,652) (232,709) (1,460,768) (1,179,204) 22,157 (1,166) 542,445 2,173,050 2,245,067 72,017 $ 2,787,512 $ 2,245,067

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2016) (Concluded)

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Formosa SUMCO Technology Corporation Statement of Profits Distribution For the year of 2015

Unit ： NT$

				Unit：NT$
Items	Amount	Items	Amount	Explanation
Available for Distribution: (1)Unappropriated retained earnings of previous years (2) Effect of retrospective application of the 2013 version of IFRS is adjusted to retained earnings at the beginning of the year (3) Remeasurement of defined benefit plans is recognized immediately in retained earnings (4) Net profit after tax of current year	4,269,629,306 (2,750,000) (33,817,520) 1,278,051,023	Distribution Items: (1) Appropriation of legal reserve (10% of the after-tax profit ) (2)Distribution of dividends and bonus in cash ( $1.1 per share) (3) Unappropriated retained earnings carried forward to next year	127,805,102 853,266,258 4,530,041,449	1.Capital :NT$7,756,965,990 Number of shares:775,696,599 2. The Company plans to distribute dividends of $1.1 per share for current year (among which, $0.459 will be distributed as dividends and $0.641 will be distributed as bonus); all of which are cash dividends. 3. The Company distributes dividends and bonus for a total of $853,266,258; all of which are from net profit after tax of 2015. 4. While the distribution of cash dividends to each individual shareholder is less than 1 dollar, the distribution will be rounded to the nearest dollar.
Total	5,511,112,809	Total	5,511,112,809

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Formosa SUMCO Technology Corporation Current Shareholdings of Directors/Supervisors

Title	Name	Shareholding (share)
Chairman	Jian-Nan Lin Representative of Formosa Plastics Corporation	225,414,929
Vice chairman	Michiharu Takii	0
Director	William Wang	0
Director	Susan Wang	0
Director	Kazuo Hiramoto	0
Director	Takashi Fukushima	0
Director	Mitsuru Ikenoue
Independent Director	Zhi-GangWang	0
Independent Director	Norikazu Hatanaka	0
Supervisor	Sheng-Guan Lin Representative of Asia- Pacific Investment Corporation	129,158,292
Supervisor	Fumio Inoue Representative of SUMCO TECHXIV Corporation	378,900,698

Note: According to Article 26 of Securities and Exchange Act, the minimum

shareholdings of the Company’s Directors/Supervisors are

248,22,292/2,482,230 shares. As of April 18, 2016, the actual shareholdings of the Company’s Directors/Supervisors are 225,414,929/508,058,990 shares.

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Information regarding the Proposed Employees and Directors/ Supervisors’ Compensation to Adopted by the Board of Directors of the Company:

**the Company: **	**the Company: **
1. Amounts of employees’ cash compensation, stock compensation, and Directors’ compensation:
Employees Cash Compensation	NT$767,692
Employees Stock Compensation	NT$0
Directors/ Supervisors Cash Compensation	NT$0
2. Share amount of the employees’ stock compensation and the percentage of the share amount to that of all stock dividend:
Share amount of employees’ stock compensation	0 share
Percentage of the share amount to that of all stock dividend	0%

The above-listed amount of employees’ cash compensation is consistent with the proposed amount adopted by the Board of Directors of the Company.

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2016 Annual Shareholders’ Meeting:

Not applicable since the Company does not propose the stock dividend distribution at the 2016 Annual Shareholders’ Meeting and does not required to prepare financial forecast information.

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