Formosa Sumco Technology Corporation and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2016 and 2015 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders Formosa Sumco Technology Corporation

We have reviewed the accompanying consolidated balance sheets of Formosa Sumco Technology Corporation (the “Company”) and subsidiaries as of June 30, 2016 and 2015 and the related consolidated statements of comprehensive income, for the three months ended June 30, 2016 and 2015 and for the six months ended June 30, 2016 and 2015, as well as the consolidated statements of changes in equity and cash flows for the six months ended June 30, 2016 and 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our reviews.

We conducted our reviews in accordance with Statement on Auditing Standards No. 36, “Review of Financial Statements,” issued by the Auditing Standards Committee of the Accounting Research and Development Foundation of the Republic of China. A review consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed by the Financial Supervisory Commission (FSC) of the Republic of China.

August 8, 2016

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(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 22) Other receivables (Notes 4 and 8) Other receivables from related parties (Notes 4, 8 and 22) 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, 22, 23 and 24) Intangible assets (Notes 4, 5, 12 and 22) Deferred tax assets (Notes 4, 5 and 18) Prepayment for equipment (Notes 4 and 24) 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 22) Other payables (Notes 4, 14 and 17) Other payables to related parties (Notes 4, 14 and 22) Current tax liabilities (Notes 4 and 18) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 18) Net defined benefit liabilities - non-current (Notes 4, 5 and 15) Guarantee deposits (Note 4) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 4, 16 and 18) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		June 30, 2016 (Reviewed) Amount % $ 2,982,049 13 300,000 1 1,640,776 7 131,619 1 657 - 1,166,877 5 2,390,108 10 125,767 - 8,737,853 37 284 - 14,320,362 61 548 - 207,878 1 73,231 1 205 - 52,220 - 14,654,728 63 $ 23,392,581 100 $ 507,323 2 177,421 1 1,347,318 6 1,255,217 5 68,206 - 7,452 - 3,362,937 14 - - 309,798 2 597 - 25,496 - 335,891 2 3,698,828 16 7,756,966 33 5,739,080 25 1,225,298 5 4,908,250 21 6,133,548 26 64,159 - 19,693,753 84 $ 23,392,581 100		December 31, 2015 (Audited) Amount % $ 2,787,512 13 300,000 1 1,302,423 6 119,977 1 18,896 - 3,713 - 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 1 511,042 2 354,100 2 189,693 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		June 30, 2015 (Reviewed)
						Amount % $ 3,022,873 14 - - 1,559,998 7 140,103 1 10,305 - 8,214 - 1,844,920 8 204,450 1 6,790,863 31 257 - 14,719,236 67 16,870 - 248,333 1 83,314 1 207 - 65,309 - 15,133,526 69 $ 21,924,389 100 $ 384,527 2 268,783 1 1,221,522 6 52,883 - 111,274 1 9,549 - 2,048,538 10 - - 266,918 1 1,054 - 18,425 - 286,397 1 2,334,935 11 7,756,966 35 5,739,080 26 1,097,493 5 4,992,690 23 6,090,183 28 3,225 - 19,589,454 89 $ 21,924,389 100

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

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

For the Three Months Ended June 30	For the Three Months Ended June 30	For the Six Months	Ended June 30
2016	2015	2016	2015
Amount % $ 2,669,105 100 (2,326,796) (87) 342,309 13 (50,316 ) (2 ) (49,245) (2) (99,561) (4) 242,748 9 5,165 - 78,155 3 (525) - 82,795 3 325,543 12 (82,828) (3) 242,715 9 27,424 1 (16) - 27,408 1 $ 270,123 10 $ 0.31 $ 0.31	Amount % $ 2,720,751 100 (2,198,971) (81) 521,780 19 (39,518 ) (1 ) (43,319) (2) (82,837) (3) 438,943 16 8,634 1 (20,102 ) (1 ) (2,569) - (14,037) - 424,906 16 (92,903) (4) 332,003 12 3,006 - 35 - 3,041 - $ 335,044 12 $ 0.43 $ 0.43	Amount % $ 5,205,022 100 (4,583,157) (88) 621,865 12 (100,077 ) (2 ) (97,554) (2) (197,631) (4) 424,234 8 10,490 - 56,250 1 (956) - 65,784 1 490,018 9 (111,810) (2) 378,208 7 39,374 1 28 - 39,402 1 $ 417,610 8 $ 0.49 $ 0.49	Amount % $ 5,633,647 100 (4,528,723) (81) 1,104,924 19 (99,239 ) (2 ) (86,729) (1) (185,968) (3) 918,956 16 16,413 - (30,271 ) - (5,508) - (19,366) - 899,590 16 (173,779) (3) 725,811 13 3,006 - 34 - 3,040 - $ 728,851 13 $ 0.94 $ 0.94










$	$	$	$

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

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

BALANCE AT JANUARY 1, 2015 Appropriation of the 2014 earnings Legal reserve Cash dividends Net income for the six months ended June 30, 2015 Other comprehensive income for the six months ended June 30, 2015, net of income tax Total comprehensive income for the six months ended June 30, 2015 BALANCE AT JUNE 30, 2015 BALANCE AT JANUARY 1, 2016 Appropriation of the 2015 earnings Legal reserve Cash dividends Net income for the six months ended June 30, 2016 Other comprehensive income for the six months ended June 30, 2016, net of income tax Total comprehensive income for the six months ended June 30, 2016 BALANCE AT JUNE 30, 2016	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 $ 6,140,069 - (775,697) (775,697) 725,811 - 725,811 $ 6,090,183 $ 6,608,606 - (853,266) (853,266) 378,208 - 378,208 $ 6,133,548		Others	Total $ 185 - - - - 3,040 3,040 $ 3,225 $ 24,757 - - - - 39,402 39,402 $ 64,159	Total Equity $ 19,636,300 - (775,697) (775,697) 725,811 3,040 728,851 $ 19,589,454 $ 20,129,409 - (853,266) (853,266) 378,208 39,402 417,610 $ 19,693,753
						Exchange Unrealized Difference on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ - $ 185 - - - - - - - - 3,006 34 3,006 34 $ 3,006 $ 219 $ 24,539 $ 218 - - - - - - - - 39,374 28 39,374 28 $ 63,913 $ 246
			Unappropriated Legal Reserve Earnings $ 988,813 $ 5,151,256 108,680 (108,680) - (775,697) 108,680 (884,377) - 725,811 - - - 725,811 $ 1,097,493 $ 4,992,690 $ 1,097,493 $ 5,511,113 127,805 (127,805) - (853,266) 127,805 (981,071) - 378,208 - - - 378,208 $ 1,225,298 $ 4,908,250

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

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Interest expense Interest income Write-down of inventory Reversal of write-down of inventories Loss on foreign exchange, net Other items Changes in operating assets and liabilities Increase in trade receivables Decrease (increase) in other receivables Increase in inventories Decrease (increase) in prepayments Increase (decrease) in trade payables (Decrease) increase in other payables Increase in other current liabilities Increase in net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Increase in other receivable from related parties Payments for intangible assets Acquisitions of property, plant and equipment Increase in prepayment for equipment Decrease in refundable deposits Increase in other investing activities Net cash used in investing activities		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 490,018 1,040,567 18,799 956 (6,302) 12,623 - 8,462 9 (360,701) 15,395 (115,979) 47,377 47,739 (51,935) 749 3,561 1,151,338 6,302 (69) (189,440) 968,131 (1,160,320) (584) (597,685) (59,592) 12 (13,276) (1,831,445)	2015 $ 899,590 1,017,972 35,881 5,508 (8,716) - (2,201) 5,776 83 (59,297) (8,663) (98,885) (34,536) (41,078) 28,194 3,110 3,865 1,746,603 8,716 (6,691) (156,258) 1,592,370 - - (60,503) (57,035) 58 - (117,480) (Continued)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM FINANCING ACTIVITIES Increase in other payables to related parties Long-term loans refunded Increase (decrease) in guarantee deposits received Decrease in other non-current liabilities Net cash generated from (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		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 1,160,320 - 63 (138) 1,160,245 (102,394) 194,537 2,787,512 $ 2,982,049	2015 $ - (690,916) (558) (331) (691,805) (5,279) 777,806 2,245,067 $ 3,022,873

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

(Concluded)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Formosa Komatsu Silicon Corporation (the “Company”) was established by Formosa Plastics Corporation, Asia Pacific Investment Corporation and Komatsu Electronic Metals Co., Ltd. in November 1995. The Company mainly manufactures and sells electronic materials made from silicon wafer.

On October 18, 2006, Sumco Corporation acquired 51% equity in Komatsu Electronic Metals Co., Ltd. As the result, the Company’s name was changed to Formosa Sumco Technology Corporation in accordance with the resolution passed at the general shareholders’ meeting on December 29, 2006, and this name change was registered with the Ministry of Economic Affairs, Republic of China.

The Company went public on September 12, 2006. The Company’s shares began to be traded on the Emerging Stock Market of the Taiwan GreTai Securities Market on November 23, 2006 and became listed on the Taiwan Stock Exchange on December 10, 2007.

The Company’s parent is Sumco Techxiv Corporation, which held 48.85% of ordinary shares of the Company as of June 30, 2016 and 2015. The Company’s ultimate parent is Sumco Corporation.

The consolidated financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on August 8, 2016.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERNATIONALS

a. International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed by the FSC for application starting from 2017

Rule No. 1050026834 issued by the FSC endorsed the following IFRS, IAS, IFRIC and SIC (collectively, the “IFRSs”) for application starting January 1, 2017.

New, Amended or Revised Standards and Interpretations Effective Date (the “New IFRSs”) Announced by IASB (Note 1) Annual Improvements to IFRSs 2010-2012 Cycle July 1, 2014 (Note 2) Annual Improvements to IFRSs 2011-2013 Cycle July 1, 2014 Annual Improvements to IFRSs 2012-2014 Cycle January 1, 2016 (Note 3) Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities: January 1, 2016 Applying the Consolidation Exception” (Continued)

New, Amended or Revised Standards and Interpretations (the“New IFRSs”) Amendment to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” IFRS 14 “Regulatory Deferral Accounts” Amendment to IAS 1 “Disclosure Initiative” Amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization” Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants” Amendment to IAS 19 “Defined Benefit Plans: Employee Contributions” Amendment to IAS 36 “Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets” Amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” IFRIC 21 “Levies”	Effective Date Announced by IASB (Note 1)
	January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014 (Concluded)

New, Amended or Revised Standards and Interpretations
(the“New IFRSs”)
Amendment to IFRS 11 “Accounting for Acquisitions of Interests in
Joint Operations”
IFRS 14 “Regulatory Deferral Accounts”
Amendment to IAS 1 “Disclosure Initiative”
Amendments to IAS 16 and IAS 38 “Clarification of Acceptable
Methods of Depreciation and Amortization”
Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants”
Amendment to IAS 19 “Defined Benefit Plans: Employee
Contributions”
Amendment to IAS 36 “Impairment of Assets: Recoverable Amount
Disclosures for Non-financial Assets”
Amendment to IAS 39 “Novation of Derivatives and Continuation of
Hedge Accounting”
IFRIC 21 “Levies”

Effective Date
Announced by IASB (Note 1)

January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2014
January 1, 2014
January 1, 2014
(Concluded)

Note 1: Unless stated otherwise, the above New or amended IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
Note 3: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or after January 1, 2016.

Except for the following, the initial application of the above New or amended IFRSs in 2017 would not have any material impact on the Group’s accounting policies:

Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets”

The amendment clarifies that the recoverable amount of an asset or a cash-generating unit is disclosed only when an impairment loss on the asset has been recognized or reversed during the period. Furthermore, if the recoverable amount of an item of property, plant and equipment for which impairment loss has been recognized or reversed is fair value less costs of disposal, the Group is required to disclose the fair value hierarchy. If the fair value measurements are categorized within Level 2/Level 3, the valuation technique and key assumptions used to measure the fair value are disclosed. The discount rate used is disclosed if such fair value less costs of disposal is measured by using present value technique. The amendment will be applied retrospectively.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

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b. New IFRSs in issue but not yet endorsed by the FSC

The Group has not applied the following IFRSs issued by the IASB but not yet endorsed by the FSC.

The FSC announced that the Group should apply IFRS 15 starting January 1, 2018. As of the date the consolidated financial statements were authorized for issue, the FSC has not announced the effective dates of other new IFRSs.

Effective Date New IFRSs Announced by IASB (Note) Amendment to IFRS 2 “Classification and Measurement of January 1, 2018 Share-based Payment Transactions” IFRS 9 “Financial Instruments” January 1, 2018 Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of January 1, 2018 IFRS 9 and Transition Disclosures” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 15 “Revenue from Contracts with Customers” January 1, 2018 Amendment to IFRS 15 “Clarifications to IFRS 15” January 1, 2018 IFRS 16 “Leases” January 1, 2019 Amendment to IAS 7 “Disclosure Initiative” January 1, 2017 Amendments to IAS 12 “Recognition of Deferred Tax Assets for January 1, 2017 Unrealized Losses”

Note: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

The Group believes that the adoption of aforementioned standards or interpretations will not have a significant effect on the Group’s accounting policies, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual financial statements.

b. Basis of consolidation

The detail information of subsidiaries including the percentage of ownership and main business, please see Note 10 and Table 6.

c. Other significant accounting policies

Except for the following, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2015.

1) Defined benefit retirement benefits

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 for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

2) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimates and uncertainty have been followed in these consolidated financial statements as were applied in the preparation of the Company’s financial statements for the year ended December 31, 2015.

6. CASH AND CASH EQUIVALENTS

			December 31,	December 31,
	June 30, 2016			2015	June 30, 2015
Cash on hand	$	-	$	-	$	18
Checking deposits		917		738		607
Demand deposits		31,406		803		252,198
Foreign currency deposits		2,009,506		221,313		462,002
Cash equivalent (investments with original
maturities less than three months)
Commercial papers		108,000		291,851		415,588
Repurchase agreements collateralized by bonds		82,220		1,522,807		1,042,460
Time deposits		750,000		750,000		850,000
	$	2,982,049	$	2,787,512	$	3,022,873

The market rate intervals of cash in bank, commercial papers and repurchase agreement collateralized by bonds at the end of the reporting period were as follows:

		December 31,
	June 30, 2016	2015	June 30, 2015
Demand deposits	0.08%	0.13%	0.17%
Foreign currency deposits	0.01%	0.01%	0.01%
Commercial papers	0.36%	0.45%-0.46%	0.58%-0.61%
Repurchase agreement collateralized by bonds	0.36%	0.45%-0.48%	0.61%-0.64%
Time deposits	0.4%-0.67%	0.65%-0.81%	0.33%-0.87%

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7. DEBT INVESTMENTS WITH NO ACTIVE MARKET

June 30, 2016
December 31,
2015
June 30, 2015
Current
Time deposits with original maturity more than 3
months
$ 300,000
$ 300,000
$ -
Interest rates
0.18%-0.85%
0.37%-1.02%
-
TRADE RECEIVABLES AND OTHER RECEIVABLES
June 30, 2016
December 31,
2015
June 30, 2015
Trade receivables
Trade receivables
$ 1,772,395
$ 1,422,400
$ 1,700,101
Less: Allowance for impairment loss
-
-

-
$ 1,772,395
$ 1,422,400
$ 1,700,101
Other receivables
Tax receivables
$ -
$ 18,109
$ 8,393
Others
657
787

1,912
$ 657
$ 18,896
$ 10,305
Other receivables from related parties
Receivable from loans to related parties - fixed
interest rate
$ 1,160,320
$ -
$ -
Others
6,557
3,713

8,214
$ 1,166,877
$ 3,713
$ 8,214

Trade Receivables

The average credit period on sales of goods was 30-90 days. In determining the recoverability of a trade receivable, the Group considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. The Group recognized an allowance for impairment loss of 100% against all receivables over 180 days because historical experience had been that receivables that are past due beyond 180 days were not recoverable. Allowance for impairment loss were recognized against trade receivables between 1 days and 180 days based on estimated irrecoverable amounts determined by reference to past default experience of the counterparties and an analysis of their current financial position.

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The aging of trade receivables was as follows:

			December 31,	December 31,
	June 30, 2016			2015	June 30, 2015
0-30 days	$	900,583	$	729,953	$	938,034
31-60 days		577,533		514,237		602,753
61-90 days		268,182		148,168		137,323
91-120 days		26,097		30,042		21,991
	$ 1,772,395		$	1,422,400	$ 1,700,101

The above aging schedule was based on the invoice date.

There are no receivables that were past due but not impaired as of June 30, 2016, December 31, 2015 and June 30, 2015.

9. INVENTORIES

			December 31,	December 31,
	June 30, 2016			2015	June 30, 2015
Raw materials	$	508,346	$	374,589	$	265,916
Supplies		720,903		717,575		653,072
Semi-finished goods		407,923		329,069		287,124
Finished goods		752,802		831,308		608,332
Merchandise inventories		43,044		64,498		54,346
Less: Allowance for inventory devaluation		(42,910)		(30,287)		(23,870)
	$ 2,390,108		$	2,286,752	$ 1,844,920

The cost of inventories recognized as cost of goods sold for the three months and six months ended June 30, 2016, included reversal of net realizable value of inventory of $8,274 thousand which was due to the reducing cost of inventories, inventory write-downs of $12,623 thousand and unamortized fixed manufacturing overhead are both of $9,391 thousand and selling silicon waste income of $8,728 thousand and $18,911 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the three months and six months ended June 30, 2015, included inventory write-downs of $7,698 thousand and reversal of net realizable value of inventory of $2,201 thousand which was due to the reducing cost of inventories, and selling silicon waste income of $11,146 thousand $27,472 thousand.

10. SUBSIDIARIES

Subsidiary Included in the Consolidated Financial Statements

Investor Investee Nature of Activities The Company Japan Formosa Sumco Technology Corporation Manufacturing, selling and other related business of high quality ingot	Proportion of Ownership
	June 30, 2016 December 31, 2015 June 30, 2015 100% (Note) 100% (Note) 100% (Note)

Note: The Company established subsidiary (Japan Formosa Sumco Technology Corporation) in June 2015 and incorporated in the consolidated financial statements from the date of the establishment.

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The investment amount of above subsidiary included in the consolidated financial statements, was calculated and disclosed on the basis of reviewed financial statements as of and for the same reporting periods as the Company.

11. PROPERTY, PLANT AND EQUIPMENT

Freehold Land Cost Balance at January 1, 2016 $ 120,906 Additions - Reclassified - Disposals - Effect of foreign currency exchange differences - Balance at June 30, 2016 $ 120,906 Accumulated depreciation and impairment Balance at January 1, 2016 $ - Disposals - Impairment losses recognized in profit or loss - Depreciation expense - Effect of foreign currency exchange differences - Balance at June 30, 2016 $ - Carrying amounts at January 1, 2016 $ 120,906 Carrying amounts at June 30, 2016 $ 120,906 Cost Balance at January 1, 2015 $ 120,906 Additions - Disposals - Balance at June 30, 2015 $ 120,906 Accumulated depreciation and impairment Balance at January 1, 2015 $ - Disposals - Impairment loss - Depreciation expense - Balance at June 30, 2015 $ - Carrying amounts at June 30, 2015 $ 120,906	Buildings Machinery and Equipment $ 3,896,948 $ 29,457,950 - 43,302 4,695 647,045 - (21 ) - 112,892 $ 3,901,643 $ 30,261,168 $ 1,023,022 $ 18,168,069 - (21 ) - - 54,907 975,238 - 3,617 $ 1,077,929 $ 19,146,903 $ 2,873,926 $ 11,289,881 $ 2,823,714 $ 11,114,265 $ 3,876,154 $ 28,602,295 989 237,606 - (70) $ 3,877,143 $ 28,839,831 $ 912,914 $ 16,273,114 - (70 ) - 83 55,314 955,296 $ 968,228 $ 17,228,423 $ 2,908,915 $ 11,611,408	Other Equipment Equipment Under Installation and Construction in Progress $ 713,825 $ 432,180 14,249 357,556 10,432 (662,256 ) (922 ) - 2,028 37,413 $ 739,612 $ 164,893 $ 633,342 $ - (922 ) - 11 - 10,422 - 175 - $ 643,028 $ - $ 80,483 $ 432,180 $ 96,584 $ 164,893 $ 676,873 $ 13,878 10,824 5,968 (4,404) - $ 683,293 $ 19,846 $ 622,174 $ - (4,404 ) - - - 7,362 - $ 625,132 $ - $ 58,161 $ 19,846	Total $ 34,621,809 415,107 (84 ) (943 ) 152,333 $ 35,188,222 $ 19,824,433 (943 ) 11 1,040,567 3,792 $ 20,867,860 $ 14,797,376 $ 14,320,362 $ 33,290,106 255,387 (4,474) $ 33,541,019 $ 17,808,202 (4,474 ) 83 1,017,972 $ 18,821,783 $ 14,719,236

The above items of property, plant and equipment were depreciated on a straight-line basis over the estimated useful life of the asset:

Building Real estate, dormitory, warehouse, and readiness room 23-35 years Wastewater treatment area and strain tank 15-35 years Machinery and equipment 5-12 years Other equipment 3-12 years

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a. The accumulated impairment losses due to unusable machineries were $17,997 thousand, $18,000 thousand and $12,868 thousand as of June 30, 2016, December 31, 2015 and June 30, 2015, respectively. The impairment losses recognized for $0 thousand, $83 thousand, for the three months and June 30, 2016 and 2015, respectively; and $11 thousand and $83 thousand for the six months ended June 30, 2016 and 2015, respectively, and had been included in profit or loss in the statement of comprehensive income.
b. Please refer to Note 23 for those provided as collateral or security on June 30, 2015.

12. INTANGIBLE ASSETS

			December	December	31,
	June	30, 2016		2015		June 30, 2015
Technical cooperation fee	$	548	$		-	$ 16,870

In September 2014 and May 2015, the Group signed a contract with Sumco Corporation and cost JPY2,000 thousand. Under this contract, Sumco Corporation will provide the Group with technology. In May 2016, the Group paid $584 thousand for technology licensing, which was recognized as intangible assets, and amortized in 32 months in total.

In February 2005, the Group signed a contract with Komatsu Electronic Metals Co., Ltd. (KEMC, now known as Sumco Techxiv Corporation) and cost US$10,000 thousand. Under this contract, KEMC will provide the Company with technology and assistance. On March 24, 2005, the Company paid 306,475 thousand for technology licensing, which was recognized as intangible assets, and amortized in 109 months in total. The intangible assets was amortized completely on December 31, 2015.

The amortized amounts recognized as manufacturing expenses were $36 thousand and $8,435 thousand, for the three months ended June 30, 2016 and 2015, respectively, $36 thousand and $16,869 thousand for the six months ended June 30, 2016 and 2015, respectively.

Except for the above-mentioned, the Group did not recognize any additions, disposals and impairment loss of intangible assets for the six months ended June 30, 2016 and 2015.

13. OTHER ASSETS

		December 31,
	June 30, 2016	2015	June 30, 2015
Prepayments (including current and non-current)	$ 125,767	$ 174,338	$ 204,450
Others (including test fee and electricity
subsidies)	52,220	57,703	65,309
	$ 177,987	$ 232,041	$ 269,759
Current	$ 125,767	$ 174,338	$ 204,450
Non-current	52,220	57,703	65,309
	$ 177,987	$ 232,041	$ 269,759

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14. OTHER LIABILITIES

			December 31,	December 31,
	June 30, 2016			2015	June 30, 2015
Other payables-current
Payable for purchase of equipment	$	24,853	$	40,719	$	10,932
Payable for salary and bonus		244,733		327,669		260,104
Payable for insurance		20,590		23,076		27,637
Payable for utilities		48,912		50,233		58,294
Payable dividends		853,384		118		775,697
Others (Note)		154,846		69,227		88,858
	$ 1,347,318		$	511,042	$ 1,221,522
Other payables to related parties-current
Payable for loans - related parties	$ 1,160,320		$	-	$	-
Payable for purchase of equipment - related
parties		36,688		245,967		776
Payable for royalties - related parties		18,804		96,623		52,107
Accrued expenses - related parties		39,405		11,510		-
	$ 1,255,217		$	354,100	$	52,883

Note: The others of other payables - current are mainly payable for project fee, pension cost, employee benefits and taxation.

15. RETIREMENT BENEFIT PLANS

Pension costs in respect of defined benefit plans are calculated by the actuarially determined pension cost rate at the end of the prior financial year and are recognized in each period respectively as follow:

Operating cost Operating expenses	For the Three Months Ended June 30 2016 2015 $ 2,559 $ 2,791 646 514 $ 3,205 $ 3,305	For the Three Months Ended June 30 2016 2015 $ 2,559 $ 2,791 646 514 $ 3,205 $ 3,305		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 2,559 646 $ 3,205		2016 $ 5,122 1,293 $ 6,415	2015 $ 5,636 1,038 $ 6,674

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16. EQUITY

Share Capital

Ordinary shares

		December 31,
	June 30, 2016	2015	June 30, 2015
Numbers of shares authorized (in thousands)	775,697	775,697	775,697
Shares authorized	$ 7,756,966	$ 7,756,966	$ 7,756,966
Number of shares issued and fully paid (in
thousands)	775,697	775,697	775,697
Shares issued	$ 7,756,966	$ 7,756,966	$ 7,756,966

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

Capital Surplus

The capital surplus from shares issued in excess of par may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed in cash or transferred to share capital limited to a certain percentage of the Company’s paid-in capital and once a year.

Retained Earnings and Dividend Policy

In accordance with the amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The shareholders held their regular meeting on June 16, 2016 and, in that meeting, had resolved amendments to the Company’s Articles of Incorporation (the “Articles”), particularly the amendment to the policy on dividend distribution and the addition of the policy on distribution of employees’ compensation.

Under the dividend policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit as well as special reserve if necessary, plus the unappropriated earnings of prior years, and Board of Directors will distribute the dividends on the shareholders meeting. For the policies on distribution of employees’ compensation and remuneration to directors and supervisors before and after amendment, please refer to employee benefits expense in Note 17.

The Company belongs to a high tech capital intensive industry. To ensure the cash needs for the Company’s present and future expansion plans, the Company has three different methods to distribute dividends, including cash dividends, capitalization of retained earnings, and capital surplus, and according to distributable surplus less legal and special reserve, the dividends are distributed to 80% at most. In principle, cash dividends are the priority to distribute, and the aggregate proportion of capitalization of retained earnings and capital surplus may not exceed 50% of total dividends.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate share of the income tax paid by the Company.

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The appropriations of earnings for 2015 and 2014 having been approved in the shareholders’ meetings on June 16, 2016, and June 18, 2015, respectively, were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2015 2014 $ 127,805 $ 108,680 853,266 775,697	Dividends Per Share (NT$)
		For the Year Ended December 31
		2015 2014 $ 1.10 $ 1.00

Others Equity Items

The exchange differences arising on translation of foreign operation’s net assets from its functional currency to the Group’s presentation currency (NTD) are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the exchange differences on translating foreign operations are reclassified to profit or loss on the disposal of the foreign operation.

Unrealized gain/loss on available-for-sale financial assets represents the cumulative gains or losses arising from the fair value measurement on available-for-sale financial assets that are recognized in other comprehensive income, excluding when those available-for-sale financial assets have been disposed of or are determined to be impaired subsequently, the related cumulative gains or losses in other comprehensive income are reclassified to profit or loss.

17. NET INCOME

Other Income

Interest income Others (including commission income)	For the Three Months Ended June 30 2016 2015 $ 2,871 $ 4,815 2,294 3,819 $ 5,165 $ 8,634	For the Three Months Ended June 30 2016 2015 $ 2,871 $ 4,815 2,294 3,819 $ 5,165 $ 8,634		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 2,871 2,294 $ 5,165		2016 $ 6,302 4,188 $ 10,490	2015 $ 8,716 7,697 $ 16,413

Other Gains and Losses

Net foreign exchange gains and (losses) Impairment loss on equipment Others	For the Three Months Ended June 30 2016 2015 $ 78,229 $ (19,938) - (83) (74) (81) $ 78,155 $ (20,102)	For the Three Months Ended June 30 2016 2015 $ 78,229 $ (19,938) - (83) (74) (81) $ 78,155 $ (20,102)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 78,229 - (74) $ 78,155		2016 $ 56,574 (11) (313) $ 56,250	2015 $ (29,986) (83) (202) $ (30,271)

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Finance Costs

Interest on bank loans Other interest expense	For the Three Months Ended June 30 2016 2015 $ - $ 2,463 525 106 $ 525 $ 2,569	For the Three Months Ended June 30 2016 2015 $ - $ 2,463 525 106 $ 525 $ 2,569		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ - 525 $ 525		2016 $ - 956 $ 956	2015 $ 5,388 120 $ 5,508

Depreciation and Amortization

For the Three Months Ended June 30 2016 2015 $ 521,716 $ 508,833 9,418 17,879 $ 531,134 $ 526,712 $ 519,176 $ 506,759 2,540 2,074 $ 521,716 $ 508,833 $ 9,418 $ 17,879 - - $ 9,418 $ 17,879 For the Three Months Ended June 30 2016 2015 $ 11,568 $ 12,372 3,205 3,305 14,773 15,677 322,780 315,969 $ 337,553 $ 331,646 $ 299,060 $ 296,888 38,493 34,758 $ 337,553 $ 331,646	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
	2016 2015 $ 1,040,567 $ 1,017,972 18,799 35,881 $ 1,059,366 $ 1,053,853 $ 1,036,020 $ 1,013,826 4,547 4,146 $ 1,040,567 $ 1,017,972 $ 18,799 $ 35,881 - - $ 18,799 $ 35,881 For the Six Months Ended June 30

2016 $ 11,568 3,205 14,773 322,780 $ 337,553 $ 299,060 38,493 $ 337,553		2016 $ 23,639 6,415 30,054 655,094 $ 685,148 $ 608,327 76,821 $ 685,148	2015 $ 24,085 6,674 30,759 633,617 $ 664,376 $ 594,347 70,029 $ 664,376

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In compliance with the Company Act as amended in May 2015, the shareholders held their meeting and resolved amendments to the Company’s Articles in June 2016; the amendments stipulate distribution of employees’ compensation at the rates no less than 0.05% and no higher than 0.5% of net profit before income tax, and employees’ compensation. For the three months and six months ended June 30, 2016, the employees’ compensation represented 0.05% of the aforementioned net profit before income tax.

The Articles before the amendment stipulated to distribute bonus to employees at the rate 0.1% of distributable earnings deducting dividends and legal reserve. For the three months and six months ended June 30, 2015, the bonus to employees represented the Articles before the amendment respectively, of the base net income.

Employees’ compensation Remuneration to directors and supervisors	For the Three Months Ended June 30 2016 2015 $ 162 $ 174 $ - $ -	For the Three Months Ended June 30 2016 2015 $ 162 $ 174 $ - $ -		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 162 $ -		2016 $ 244 $ -	2015 $ 433 $ -

If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.

The appropriations of employees’ compensation and remuneration to directors and supervisors for 2015 were resolved by the board of directors on March 16, 2016, and the appropriations of bonus to employees and remuneration to directors and supervisors for 2014 were approved in the shareholders’ meeting on June 18, 2015. The amounts of the employees’ compensation/bonus and remuneration to directors and supervisors are disclosed on the table below. After the amendments to the Articles had been resolved in the shareholders’ meeting held on June 16, 2016, the appropriations of the employees’ compensation and remuneration to directors and supervisors for 2015 were reported in the shareholders’ meeting.

Employees’ compensation/bonus to employees Remuneration of directors and supervisors and supervisors	For the Year Ended December 31	For the Year Ended December 31
	2015 Cash Bonus Share Bonus $ 768 $ - - -	2014
		Cash Bonus Share Bonus $ 1,580 $ - - -

There was no difference between the amounts of the bonus to employees and the remuneration to directors and supervisors resolved by the Company’s board of directors on March 16, 2016, and approved in the shareholders’ meetings on June 18, 2015, respectively, and the amounts recognized in the financial statements for the year ended December 31, 2015 and 2014.

Information on the employee’s compensation and remuneration to directors and supervisors resolved by the Company’s board of directors in 2016 and bonus to employees, directors and supervisors approved in the shareholders’ meetings in 2105 is available on the Market Observation Post System website of the Taiwan Stock Exchange.

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Gain or Loss on Foreign Currency Exchange

Foreign exchange gains Foreign exchange losses Net gain (loss)	For the Three Months Ended June 30 2016 2015 $ 107,971 $ 18,141 (29,742) (38,079) $ 78,229 $ (19,938)	For the Three Months Ended June 30 2016 2015 $ 107,971 $ 18,141 (29,742) (38,079) $ 78,229 $ (19,938)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 107,971 (29,742) $ 78,229		2016 $ 171,450 (114,876) $ 56,574	2015 $ 28,079 (58,065) $ (29,986)

18. INCOME TAX

Income Tax Recognized in Profit or Loss

The major components of tax expense were as follows:

For the Three Months Ended June 30 For the Six Months Ended June 30 2016 2015 2016 2015 Current tax In respect of the current period $ 15,704 $ 32,115 $ 41,838 $ 90,605 Income tax expense of unappropriated earnings 26,316 20,669 26,316 20,669 Adjustments for prior periods 636 - 636 179 Deferred tax In respect of the current period 40,172 40,119 43,020 62,326 Income tax expense recognized in profit or loss $ 82,828 $ 92,903 $ 111,810 $ 173,779 Integrated Income Tax June 30, 2016 December 31, 2015 June 30, 2015 Unappropriated earnings Generated before January 1, 1998 $ - $ - $ - Generated on and after January 1, 1998 4,908,250 5,511,113 4,992,690 $ 4,908,250 $ 5,511,113 $ 4,992,690 Imputation credits accounts $ 592,814 $ 640,599 $ 562,432		For the Six Months Ended June 30

The creditable ratio for distribution of earnings of 2015 and 2014 was 11.64% (estimate) and 10.57%, respectively.

Income Tax Assessments

The tax authorities have examined income tax returns of the Company through 2014.

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19. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per shares were as follows:

Net income Weighted average number of ordinary shares in computation of basic earnings per share (in thousands) Effect of potentially dilutive ordinary shares Bonus issue to employees or employees’ compensation (in thousands) Weighted average number of shares outstanding used for the earnings per share computation (in thousands)	For the Three Months Ended June 30 2016 2015 $ 242,715 $ 332,003 775,697 775,697 26 46 775,723 775,743	For the Three Months Ended June 30 2016 2015 $ 242,715 $ 332,003 775,697 775,697 26 46 775,723 775,743		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 242,715 775,697 26 775,723		2016 $ 378,208 775,697 17 775,714	2015 $ 725,811 775,697 49 775,746

Since the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

20. NON-CASH TRANSACTIONS

The cash dividends approved in the shareholders’ meetings were not yet distributed as of June 30, 2016 and 2015, respectively (refer to Notes 14 and 16).

21. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

a. Fair value of financial instruments not carried at fair value

Management believes the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

b. Fair value measurements recognized in the balance sheets

The available-for-sale financial assets the Group invested on June 30, 2016, December 31, 2015 and June 30, 2015 are mainly stocks of listed company in Taiwan. The stocks are measured by fair value on recurring basis of Level 1. There were no transfers between Levels 1 and 2 for the three months and six months ended June 30, 2016 and 2015, respectively.

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Categories of Financial Instruments

		December 31,
	June 30, 2016	2015	June 30, 2015
Financial assets
Loans and receivables (a)	$ 6,222,183	$ 4,514,629	$ 4,733,307
Available-for-sale financial assets	284	256	257
Financial liabilities
Measured at amortized cost (b)	3,027,555	1,158,275	1,652,426

a. The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalent, debt investments with no active market, trade and other receivables (excluding tax receivables), and refundable deposits.
b. The balances included financial liabilities measured at amortized cost, which comprise trade and other payables (excluding payable for salary, bonus, pension cost, and taxation), and guarantee deposits.

Financial Risk Management Objectives and Policies

The Group’s major financial instruments include equity investments, trade receivable, trade payables, and bank borrowings. The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

a. Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (1) below) and interest rates (see (2) below).

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

1) Foreign currency risk

The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 25.

Sensitivity analysis

The Group was mainly exposed to the Currency USD and Currency JPY.

The following table details the Group’s sensitivity to a 10% increase and decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 10% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit associated with New Taiwan

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dollars weakening 10% against the relevant currency. For a 10% strengthening of New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative.

Profit or loss	Currency USD Impact For the Six Months Ended June 30 2016 2015 $ 205,704 (a) $ 173,087 (a)	Currency JPY Impact
		For the Six Months Ended June 30
		2016 2015 $ 105,968 (b) $ (3,118) (c)

a) This was mainly attributable to the exposure outstanding on Currency USD cash, receivables and payables, which were net assets and not hedged at the end of the reporting period.
b) This was mainly attributable to the exposure to outstanding on Currency JPY cash, receivables and payables, which were net assets and not hedged at the end of the reporting period.
c) This was mainly attributable to the exposure outstanding on Currency JPY cash, receivables and payables, which were net liabilities and not hedged at the end of the reporting period.

The Group’s sensitivity to foreign currency increased during the current period mainly due to the increased bank deposits of Currency USD and JPY for the six months ended June 30, 2016.

2) Interest rate risk

The Group was exposed to interest rate risk because the Group borrowed funds at floating interest rates.

The Group also borrowed funds at fixed interest rates, and there is no exposure to interest rate risk because those are short-term.

The carrying amount of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

		December	31,
	June 30, 2016	2015		June 30, 2015
Fair value interest rate risk
Financial assets	$ 2,100,540	$ 2,564,658		$	2,308,045
Financial liabilities	1,160,320		-		-
Cash flow interest rate risk
Financial assets	2,340,912	522,121			714,200
Financial liabilities	-		-		-

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. An 1% basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

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If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the six months ended June 30, 2016 would increase/decrease by $11,705 thousand, which was mainly attributable to the Group’s exposure to interest rates on its variable-rate bank deposits.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the six months ended June 30, 2015 would increase/decrease by $3,571 thousand, which was mainly attributable to the Group’s exposure to interest rates on its variable-rate bank deposits.

The Group’s sensitivity to interest rates increased mainly due to the increase in the interest rates on its variable-rate bank deposits for the six months ended June 30, 2016.

b. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is exposed to credit risk from operating activities, primarily trade receivables.

In order to minimize credit risk, management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Group’s credit risk was significantly reduced.

The Group did not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics, except for the clients with trade receivables accounting for 10% of total monetary assets. The Group defines counterparties as having similar characteristics if they are related entities. The receivables from the clients with trade receivables accounting for 10% of total monetary assets were all amounted to $0 thousand as of June 30, 2016, December 31, 2015 and June 30, 2015.

c. Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents, highly liquid marketable securities, and sufficient bank borrowings deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows.

1) Liquidity and interest risk rate table

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

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June 30, 2016

Non-derivative financial liabilities Non-interest bearing Fixed interest rate liabilities December 31, 2015 Non-derivative financial liabilities Non-interest bearing June 30, 2015 Non-derivative financial liabilities Non-interest bearing	1-6 Months $ 2,126,959 1,160,352 $ 3,287,311 1-6 Months $ 1,498,946 1-6 Months $ 1,927,715	6 Months to 1 Year $ - - $ - 6 Months to 1 Year $ - 6 Months to 1 Year $ -	1-3 Years $ - - $ - 1-3 Years $ - 1-3 Years $ -	3+ Years $ - -
				$ -
				3+ Years $ -
				3+ Years $ -

The following table details the Group’s expected maturity for some of its non-derivative financial assets. The tables below had been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

June 30, 2016

Non-derivative financial assets Non-interest bearing Variable interest rate assets Fixed interest rate assets	1-6 Months $ 1,780,526 2,340,912 2,100,572 $ 6,222,010	6 Months to 1 Year $ - - - $ -

25 -

December 31, 2015

Non-derivative financial assets Non-interest bearing Variable interest rate assets Fixed interest rate assets June 30, 2015 Non-derivative financial assets Non-interest bearing Variable interest rate assets Fixed interest rate assets	1-6 Months $ 1,445,747 522,116 2,564,658 $ 4,532,521 1-6 Months $ 1,719,245 714,200 2,308,048 $ 4,741,493	6 Months to 1 Year $ - - - $ - 6 Months to 1 Year $ - - - $ -

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

22. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and its related parties are disclosed below.

Related parties and their relationships with the Group:

Related Party Categories and Related Party Relationship with the Group

Sumco Corporation Ultimate parent company Sumco Techxiv Corporation Parent company Formosa Plastic Corporation Associate (equity-method investor holds 29.06% of the Company Formosa Technologies Corporation Others (a director is the chairman of the Company) Asia Pacific Investment Corporation Others (a director is the chairman of the Company) Formosa Daikin Advanced Chemicals Co., Ltd. Others (same chairman)

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Operating Transaction

Sales of goods Parent company	For the Three Months Ended June 30 2016 2015 $ 212,170 $ 200,944	For the Three Months Ended June 30 2016 2015 $ 212,170 $ 200,944		For the Six Months Ended June 30
		2016 $ 212,170		2016 2015 $ 396,854 $ 361,629

The transaction prices are based on mutual agreement. The credit term is 60 days from the day the related party confirms the sale.

Purchases of goods Ultimate parent company Parent company Associate Others (same chairman or a director is the chairman of the Company)	For the Three Months Ended June 30 2016 2015 $ 217,826 $ 312,993 9,397 4,954 4,566 5,250 3,894 3,912 $ 235,683 $ 327,109	For the Three Months Ended June 30 2016 2015 $ 217,826 $ 312,993 9,397 4,954 4,566 5,250 3,894 3,912 $ 235,683 $ 327,109		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 217,826 9,397 4,566 3,894 $ 235,683		2016 $ 512,998 11,790 10,027 7,202 $ 542,017	2015 $ 682,284 9,250 10,850 7,569 $ 709,953

The transaction prices are based on mutual agreement. Payments are due within the following number of days from the receipt of the Group’s goods: (a) 30 to 70 days - parent company; (b) 60 to 120 days - ultimate parent company; (c) immediately upon delivery - others.

Receivables from Related Parties (Excluding Loans to Related Parties)

			December 31,	December 31,
	June	30, 2016		2015	June	30, 2015
Parent company	$	131,619	$	119,977	$	140,103
Payables to Related Parties (Excluding Loans from Related Parties)
			December 31,
	June	30, 2016		2015	June	30, 2015
Ultimate parent company	$	175,520	$	256,496	$	266,347
Parent company		227		7,326		97
Associate		1,412		1,824		1,953
Others (same chairman or a director is the
chairman of the Company)		262		240		386
	$	177,421	$	265,886	$	268,783

The outstanding trade payables to related parties are unsecured and will pay by cash. The outstanding trade receivables from related parties are unsecured. For the six months ended June 30, 2016 and 2015, no impairment loss was recognized for trade receivables from related parties.

27 -

Commission and Other Receivables - Related Parties

For the Three Months Ended June 30 For the Six Months Ended June 30 2016 2015 2016 2015 Ultimate parent company (commission, other revenue, deduction of operating cost) $ 5,533 $ 5,455 $ 10,257 $ 13,191 June 30, 2016 December 31, 2015 June 30, 2015 Ultimate parent company (other receivables from related parties) $ 6,557 $ 3,713 $ 8,214 Loans to Related Parties June 30, 2016 December 31, 2015 June 30, 2015 Other receivables - related parties Associate $ 1,160,320 $ - $ -		For the Six Months Ended June 30

The Company provided the associate with short-term financing of loans at rate 1%, which were unsecured on June 30, 2016.

For the three months and six months ended June 30, 2016, interest income on the loans to the associate were both $32 thousand.

Loans from Related Parties

		December	31,
	June 30, 2016	2015		June 30, 2015
Other payables - related parties
Associate	$ 1,160,320	$	-	$	-

The Japan Formosa Sumco Technology obtained loans at rate 1% from the associate, which were unsecured on June 30, 2016.

For the three months and six months ended June 30, 2016, interest expense on the loans from the associate were both $26 thousand.

Compensation of Key Management Personnel

Short-term employee benefits Post-employment benefits Other long-term employee benefits	For the Three Months Ended June 30 2016 2015 $ 1,894 $ 1,575 34 34 5 5 $ 1,933 $ 1,614	For the Three Months Ended June 30 2016 2015 $ 1,894 $ 1,575 34 34 5 5 $ 1,933 $ 1,614		For the Six Months Ended June 30	For the Six Months Ended June 30
		2016 $ 1,894 34 5 $ 1,933		2016 $ 3,792 68 8 $ 3,868	2015 $ 3,161 68 10 $ 3,239

28 -

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

Other Transactions with Related Parties

a. Endorsements and guarantees

There are no endorsements and guarantees provided by related parties as of June 30, 2016 and December 31, 2015.

Sumco Techxiv Corporation, Formosa Plastics Corporation and Asia Pacific Investment Corporation provided endorsement and guarantees for the long-term loans, amounting to $3,455,837 thousand, $1,614,164 thousand and $1,680,999 thousand as of June 30, 2016. The Company has repaid the entire long-term borrowings on June 16, 2015.

b. Manufacturing expense and accrued expense - related parties

The repairs and maintenance expenses of Formosa Technologies Corporation were $6,117 thousand, $7,230 thousand, $12,426 thousand and $14,828 thousand for the three months and six months ended June 30, 2016 and 2015, respectively. The transaction amounts are based on mutual agreement, and will be paid upon completion.

The manufacturing expenses of ultimate parent company were $70,784 thousand and $111,217 thousand for the three months and six months ended June 30, 2016. The unpaid amount has been recognized as accrued expenses - related parties for $39,405 thousand as of June 30, 2016 and will be paid until August 2016.

The manufacturing expense of ultimate parent company were $11,510 thousand, which has been recognized as accrued expenses - related parties on December 31, 2015, and has been paid in February 2016.

c. Acquisitions of equipment and payable for purchase of equipment - related parties

For the three months and six months ended June 30, 2016, the Group purchased Pulling Machine from ultimate parent company with a contract price of $95,339 thousand and $349,260 thousand (before tax). After deducting the paid amount, the unpaid amount has been recognized as payable for purchase of equipment - related parties for $36,688 thousand as of June 30, 2016 and will be paid after check and acceptance.

For the year ended December 31, 2015, the Group purchased HG Furance, Pulling Machine and other equipments from ultimate parent company. The unpaid amount has been recognized as payable for purchase of equipment - related parties for $245,967 thousand as of December 31, 2015 has been paid after check and acceptance until March 31, 2016.

For the three months and six months ended June 30, 2015, the Group purchase of HG Furance from ultimate parent company with a contract price of $3,888 thousand (before tax). After deducting the paid amount, the unpaid amount has been recognized as payable for purchase of equipment - related parties from $776 thousand as of June 30, 2015 and will be paid after check and acceptance.

d. Other transactions

In September 2014 and May 2015, the Company signed a contract with ultimate parent company. Under this contract, ultimate parent company will provide the Company with technology in manufacturing silicon wafer semiconductors and with a contract price of JPY2,000 thousand. In May 2016, the Company paid $584 thousand for technology licensing, which recognized as intangible assets (Note 12).

29 -

In February 2005, the Company signed a contract with parent company. Under this contract, parent company will provide the Company with technology and assistance in manufacturing silicon wafer semiconductors. On March 24, 2005, the Company paid US$10,000 thousand ($306,475 thousand) for technology licensing, which was recognized as intangible assets (Note 12).

Under another contract, the Company should pay royalty to parent company regularly starting in 2003. The royalty was recognized as selling expenses. The unpaid amount on June 30, 2016 and 2015 was recognized as payable for royalties - related parties (other payables) and will be paid in February 2017 and 2016, respectively.

In August 2010, the Company signed a contract with the ultimate parent company. Under this contract, the ultimate parent company will provide the Company with technology and assistance in manufacturing silicon wafer semiconductors. The Company should pay royalty to the ultimate parent company regularly starting in 2010. The royalty was recognized as selling expenses. The unpaid amount on June 30, 2016 and 2015 was recognized as payable for royalties - related parties (other payables) and will be paid in February 2017 and 2016, respectively.

The above-mentioned selling expenses and payable for royalties - related parties (other payables) resulted from transactions with related parties are summarized as follows:

For the Three Months Ended June 30 For the Six Months Ended June 30 2016 2015 2016 2015 Selling expenses Parent company $ 7,819 $ 11,025 $ 14,847 $ 41,591 Ultimate parent company 2,153 5,232 3,957 10,516 $ 9,972 $ 16,257 $ 18,804 $ 52,107 June 30, 2016 December 31, 2015 June 30, 2015 Payable for royalties - related parties (other payables) Parent company $ 14,847 $ 76,297 $ 41,591 Ultimate parent company 3,957 20,326 10,516 $ 18,804 $ 96,623 $ 52,107		For the Six Months Ended June 30

23. PLEDGED ASSETS

The following assets were provided as collateral for bank borrowings:

					December	31,
		June	30,	2016	2015		June 30, 2015
Buildings		$		-	$	-	$ 1,847,074
Machinery	and equipment, net			-		-	1,167,524
		$		-	$	-	$ 3,014,598

The above pledged assets have been registered the deletion of collateral in August 2015.

30 -

24. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of June 30, 2016 were as follows:

a. As of June 30, 2016, unused letters of credit for purchased of raw materials and equipment amounted to approximately $15,497 thousand.
b. The newly purchased machinery and equipment are exempt from tariff. Under the “estimated useful lives of fixed assets” enacted by Executive Yuan, if there’s any capital reduction or other way to transfer the usage of the machinery, equipment or components mentioned above to third party, except those transfer to permitted business, the Company should make a supplementary import duties of the fixed assets.
c. The Group entered into a contract to purchase equipment with a contract price of $1,300,186 thousand (before tax). As of June 30, 2016, the Group has already paid $1,263,497 thousand and recognized as machinery, equipment under installation, and prepayment for equipment. The unpaid amount was $36,689 thousand.

25. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the group entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

June 30, 2016

Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 80,381 32.286 (USD:NTD) JPY 3,784,198 0.3136 (JPY:NTD) Financial liabilities Monetary items USD 14,270 32.286 (USD:NTD) USD 2,383 103.580 (USD:JPY) JPY 405,114 0.3136 (JPY:NTD)	Carrying Amount $ 2,595,170 1,186,725 $ 3,781,895 $ 460,722 77,412 127,044 $ 665,178

31 -

December 31, 2015

Foreign
Currencies
Exchange Rate
Financial assets
Monetary items
USD
$ 49,551
33.066 (USD:NTD)
JPY
12,805
0.2736 (JPY:NTD)

Financial liabilities
Monetary items
USD
12,912
33.066 (USD:NTD)
USD
799
120.855(USD:JPY)
JPY
270,041
0.2736 (JPY:NTD)

June 30, 2015
Foreign
Currencies
Exchange Rate
Financial assets
Monetary items
USD
$ 69,284
31.070 (USD:NTD)
JPY
37,311
0.2519 (JPY:NTD)

Financial liabilities
Monetary items
USD
13,575
31.070 (USD:NTD)
JPY
161,094
0.2519 (JPY:NTD)

Carrying
Amount
$ 1,638,460
3,503
$ 1,641,963
$ 426,949

26,436
73,883
$ 527,268
Carrying
Amount
$ 2,152,658
9,399
$ 2,162,057
$ 421,789
40,580
$ 462,369

The Group is mainly exposed to USD and JPY. The significant realized and unrealized foreign exchange gains (losses), please see Note 17.

26. DISCLOSED ITEMS

Information about significant transactions and investees:

a. Financing provided to others. (Table 1)
b. Endorsements/guarantees provided. (None)
32 -
c. Marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities). (Table 2)
d. Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (None)
e. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)
f. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)
g. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)
h. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)
i. Trading in derivative instruments. (None)
j. Intercompany relationships and significant intercompany transactions. (Note 22 and Table 5)
k. Information on investees. (Table 6)

Information on Investments in Mainland China

None.

27. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods. The Group’s reportable segment is only the silicon wafer segment because the Group is mainly manufacturing and selling the silicon wafer electronic products. The accounting policy of reportable segment is the same as the Note 4 “summary of significant accounting policies”.

Segment Revenues and Results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment.

Silicon wafer segment Miscellaneous income Miscellaneous expense Profit before tax		Segment Revenue For the Six Months Ended June 30 2016 2015 $ 5,205,022 $ 5,633,647		Segment Profit	Segment Profit
				For the Six Months Ended June 30
		2016 $ 5,205,022		2016 $ 486,143 4,188 (313) $ 490,018	2015 $ 892,095 7,697 (202) $ 899,590

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales during the six months ended June 30, 2016 and 2015.

33 -

Segment profit represents the profit earned by silicon wafer segment without allocation of miscellaneous income and expense and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

Segment Total Assets and Liabilities

The liabilities information is not reported to chief management decision maker on a regular basis. Therefore, all the assets and liabilities are not allocated to the reportable segment.

34 -

TABLE 1

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 2016 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Note 3)	Actual Borrowing Amounts	Interest Rate	Nature for Financing	Business Transaction Amounts	Reason for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Borrower	Total Financing Amount Limits
													Item	Value
1	Formosa Sumco Technology Corporation	Formosa Plastic Corporation	Receivables from related parties	Yes	$ 1,500,000	$ 1,160,320	$ 1,160,320	1%	The need for short-term financing	$ -	Operating capital	$ -	None	$ -	$ 4,923,438 (Note 1)	$ 9,846,877 (Note 1)
2	Formosa Sumco Technology Corporation	Japan Formosa Samco Technology Corporation	Receivables from related parties	Yes	1,680,000	1,680,000 (Note 4)	- (Note 6)	1%	The need for short-term financing	-	Operating capital	-	None	-	1,969,375 (Note 2)	9,846,877 (Note 2)
3	Formosa Sumco Technology Corporation	Japan Formosa Samco Technology Corporation	Receivables from related parties	Yes	1,680,000	1,680,000 (Note 5)	-	1%	The need for short-term financing	-	Operating capital	-	None	-	1,969,375 (Note 2)	9,846,877 (Note 2)

Note 1: For short-term financing requirements, the financing limits for each borrowing company should not exceed 25% of Formosa Sumco Technology Corp’s net worth. The maximum total financing provided should not exceed 50% of Formosa Sumco Technology Corp’s net worth.

Note 2: For short-term financing requirements, the financing limits for each borrowing company should not exceed 10% of Formosa Sumco Technology Corp’s net worth. The maximum total financing provided should not exceed 50% of Formosa Sumco Technology Corp’s net worth.

Note 3: The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

Note 4: Financing was provided from July 1, 2015 to June 30, 2016.

Note 5: Financing will be provided from July 1, 2016 to June 30, 2017.

Note 6: The Company had received the amount provided to Japan Formosa Samco Technology Corporation as of June 30, 2016.

35 -

TABLE 2

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 2016

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	June 30, 2016	June 30, 2016	June 30, 2016	June 30, 2016	Note
				Shares	Carrying Value	Percentage of Ownership (%)	Fair Value
Formosa Sumco Technology Corporation	Stock Formosa Petrochemical Corporation	-	Available-for-sale financial asset - non-current	3,247	$ 284 (Note)	-	$ 284

Note: The carrying value equals the original cost of $38 pluses year-end evaluation of $246.

36 -

TABLE 3

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2016

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Formosa Sumco Technology Corporation Japan Formosa Sumco Technology Corporation	Sumco Corporation Japan Formosa Sumco Technology Corporation Sumco Techxiv Corporation Formosa Sumco Technology Corporation	Ultimate parent company of Formosa Sumco Technology Corp. Subsidiary company of Formosa Sumco Technology Corp. Parent company of Formosa Sumco Technology Corp. Parent company of Formosa Sumco Technology Corp.	Purchase Purchase Sale Sale	$ 494,776 250,465 396,854 250,465	19 9 8 100	60 to 120 days from the receipt of the Company’s goods 70 days from the receipt of goods Net 60 days from the end of the month of when invoice is issued 70 days from the receipt of goods	No significant difference No significant difference No significant difference No significant difference	No significant difference No significant difference No significant difference No significant difference	$ (173,271) (114,612) 131,619 114,612	(25) (17) 7 100	1 1

Note 1: The amount was eliminated upon consolidation.

37 -

TABLE 4

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2016

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Nature of Relationships	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Actions Taken
Formosa Sumco Technology Corporation	Sumco Techxiv Corporation Formosa Plastic Corporation	Parent company of Formosa Sumco Technology Corp. Associate of Formosa Sumco Technology Corp.	$ 131,619 1,160,320	6.31 Not applicable	$ - -	- -	$ - -	$ - -

38 -

TABLE 5

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2016 (Amounts in Thousands of New Taiwan Dollars)

No.	Company Name	Counterparty	Relationship	Transactions Details	Transactions Details	Transactions Details	Transactions Details
				Financial Statement Accounts	Amount (Note 2)	Payment Terms	% to Total Sales or Assets (Note 1)
0	The Company	Japan Formosa Sumco Technology Corporation 〃〃	Subsidiary 〃〃	Purchases of goods Interest income Trade payables Interest receivable	$ 250,465 3,949 114,612 3,949	General terms 〃〃	4.81 0.07 0.49 0.02

Note 1: For assets and liabilities, amount is shown as a percentage to consolidated total assets as of June 30, 2016, while revenues, costs and expenses are shown as a percentage to consolidated total operating revenues for the six months ended June 30, 2016.

Note 2: The amount was eliminated upon consolidation.

39 -

TABLE 6

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 2016 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of June 30, 2016	As of June 30, 2016	As of June 30, 2016	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				June 30, 2016	December 31, 2015	Shares	%	Carrying Amount
Formosa Sumco Technology Corporation	Japan Formosa Sumco Technology Corporation	Japan	Manufacture, selling and other related business of high quality ingot	JPY 998,000 (NT$ 248,390)	JPY 998,000 (NT$ 248,390)	9,980	100	JPY 985,958 (NT$ 309,147)	JPY 31,441 (NT$ 9,387)	JPY (317) (NT$ -72)	Notes 1 and 2

Note 1: Carrying amount and share of profits (loss) is calculated from the financial statement reviewed by independent accountant and the percentage of ownership of investor company.

Note 2: The share of profits (losses) of investee includes the effect of unrealized gross profit on intercompany transaction.

Note 3: Intercompany balances and transactions between investor company and investee company have been eliminated upon consolidation.

40 -

AI assistant

FST — Interim / Quarterly Report 2016

52338_rns_2016-11-17_f6303252-fc77-4d47-b69b-3a04d76943a1.pdf

Formosa Sumco Technology Corporation and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Notice to Readers

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERNATIONALS

Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1) Defined benefit retirement benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. DEBT INVESTMENTS WITH NO ACTIVE MARKET

Trade Receivables

9. INVENTORIES

10. SUBSIDIARIES

Subsidiary Included in the Consolidated Financial Statements

11. PROPERTY, PLANT AND EQUIPMENT

12. INTANGIBLE ASSETS

13. OTHER ASSETS

14. OTHER LIABILITIES

15. RETIREMENT BENEFIT PLANS

16. EQUITY

Share Capital

Ordinary shares

Capital Surplus

Retained Earnings and Dividend Policy

Others Equity Items

17. NET INCOME

Other Income

Other Gains and Losses

Finance Costs

Depreciation and Amortization

Gain or Loss on Foreign Currency Exchange

18. INCOME TAX

Income Tax Recognized in Profit or Loss

Income Tax Assessments

19. EARNINGS PER SHARE

20. NON-CASH TRANSACTIONS

21. FINANCIAL INSTRUMENTS

Categories of Financial Instruments

Financial Risk Management Objectives and Policies

a. Market risk

1) Foreign currency risk

Sensitivity analysis

Sensitivity analysis

b. Credit risk

c. Liquidity risk

1) Liquidity and interest risk rate table

June 30, 2016

June 30, 2016

December 31, 2015

22. TRANSACTIONS WITH RELATED PARTIES

Related Party Categories and Related Party Relationship with the Group

Operating Transaction

Receivables from Related Parties (Excluding Loans to Related Parties)

Commission and Other Receivables - Related Parties

Loans from Related Parties

Compensation of Key Management Personnel

Other Transactions with Related Parties

d. Other transactions

23. PLEDGED ASSETS

24. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

25. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

December 31, 2015

26. DISCLOSED ITEMS

FST Interim / Quarterly Report 2016