GUC — Audit Report / Information 2023

Oct 26, 2023

Global Unichip Corp.

Parent Company Only Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Global Unichip Corp.

Opinion

We have audited the accompanying parent company only financial statements of Global Unichip Corp. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2023 and 2022, and the parent company only statements of comprehensive income, statements of changes in equity and statements of cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of inventory

Due to the current rapid changes in technology and the high level of competition in the business environment, the prices of products are fluctuating quickly; consequently, the changes in the net realizable value of inventory could have a material impact on the parent company only financial statements. As of December 31, 2023 the carrying amount of inventory was NT$4,850,717 thousand, which accounted for 23% of the total assets in the parent company only balance sheet. Please refer to Notes 4, 5 and 8 to the parent company only financial statements for the details of the information and accounting policy about inventory. The Company’s primary business is rendering of services and producing and selling of products in the semiconductor industry. The rapid technological changes in the semiconductor industry require management to timely estimate possible loss on inventory that is expected to be scrapped or disposed of according to the Company’s inventory control and accounting policy and the clients’ orders. As uncertainty exists in management’s judgment when determining loss on inventory, the valuation of inventory has been identified as a key audit matter.

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Our key audit procedures performed in respect of this area included the following:

1. We obtained an understanding of the design of the key controls over the valuation of inventory.

2. We obtained the inventory aging report, and we verified the accuracy and completeness of the report by agreeing the age interval, quantity, and amount to the supporting documents of inbound inventory. We assessed the reasonableness of allowance for inventory loss by recalculating the amount in accordance with the stated valuation policy for the inventory.

3. We performed a retrospective review of past estimates to determine the reasonableness of the past judgments with reference to actual amounts of inventory loss.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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5. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

6. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

7. Obtain sufficient and appropriate audit evidence on the financial information of components constituting the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with statements that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2023, and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Hui Chen and Su-Li Fang.

Deloitte & Touche Taipei, Taiwan Republic of China

January 31, 2024

Notice to Readers

The accompanying 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 audit such financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying 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’ report and financial statements shall prevail.

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GLOBAL UNICHIP CORP.

PARENT COMPANY ONLY BALANCE SHEETS (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 28) Financial assets at fair value through profit or loss (Note 7) Accounts receivable, net (Notes 6 and 17) Receivables from related parties (Note 28) Inventories (Note 8) Other financial assets (Note 28) Other current assets (Notes 13 and 28) Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Note 9) Property, plant and equipment (Note 10) Right-of-use-assets (Note 11) Intangible assets (Note 12) Deferred income tax assets (Note 22) Prepayments for business facilities Refundable deposits (Note 28) Pledged time deposits (Notes 28 and 29) Total non-current assets TOTAL		December 31, 2023		December 31, 2022 Amount % LIABILITIES AND EQUITY CURRENT LIABILITIES $ 5,192,497 25 Contract liabilities (Notes 17 and 28) Accounts payable 1,780,000 8 Payables to related parties (Note 28) 2,981,616 14 Accrued employees’ compensation and remuneration 18,617 - to directors (Note 24) 6,562,722 31 Payables on machinery and equipment 1,498 - Current tax liabilities (Note 22) 2,267,195 11 Lease liabilities - current (Notes 11, 25 and 28) Accrued expenses and other current liabilities 18,804,145 89 (Notes 14 and 28) Total current liabilities 787,568 4 NON-CURRENT LIABILITIES 628,152 3 Deferred income tax liabilities (Note 22) 143,456 1 Lease liabilities - non-current (Notes 11, 25 and 541,432 3 28) 18,780 - Other long-term payables (Note 14) 1,036 - Net defined benefit liabilities (Note 15) 108,645 - Guarantee deposits (Note 25) 22,200 - Total non-current liabilities 2,251,269 11 Total liabilities EQUITY (Note 16) Share capital Capital surplus Retained earnings Appropriated as legal reserve Appropriated as special reserve Unappropriated earnings Others Total equity $ 21,055,414 100 TOTAL		December 31, 2023		December 31, 2022
		Amount % $ 7,064,578 34 2,080,000 10 1,967,388 9 22,040 - 4,850,717 23 3,428 - 2,808,336 13 18,796,487 89 922,659 4 538,510 2 118,546 1 587,286 3 15,298 - 1,244 - 194,737 1 22,200 - 2,400,480 11 $ 21,196,967 100				Amount % $ 6,250,159 30 1,174,487 6 736,968 3 1,454,645 7 16,416 - 258,361 1 38,073 - 1,237,081 6 11,166,190 53 127,626 1 83,591 - 112,618 - 22,312 - 3,071 - 349,218 1 11,515,408 54 1,340,119 6 32,801 - 1,428,010 7 18,234 - 6,896,402 33 (34,007) - 9,681,559 46 $ 21,196,967 100		Amount % $ 6,349,476 30 1,512,246 7 1,480,285 7 740,818 4 17,452 - 589,288 3 37,853 - 1,846,129 9 12,573,547 60 116,014 1 108,638 - 165,659 1 27,287 - 3,071 - 420,669 2 12,994,216 62 1,340,119 6 32,676 - 1,056,442 5 38,471 - 5,611,724 27 (18,234) - 8,061,198 38 $ 21,055,414 100

The accompanying notes are an integral part of the parent company only financial statements.

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GLOBAL UNICHIP CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET REVENUE (Notes 17 and 28) COST OF REVENUE (Notes 24 and 28) GROSS PROFIT OPERATING EXPENSES Sales and marketing (Notes 24 and 28) General and administrative (Notes 24 and 28) Research and development (Notes 24 and 28) Total operating expenses INCOME FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Notes 18 and 28) Other income (Notes 11 and 19) Other gains and losses (Note 20) Finance costs (Notes 21 and 28) Share of profit of subsidiaries Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 22) NET INCOME OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans (Note 15) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (Note 16) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 23) Basic earnings per share Diluted earnings per share		2023 Amount % $ 26,240,714 100 18,280,005 70 7,960,709 30 409,132 1 482,081 2 3,171,821 12 4,063,034 15 3,897,675 15 92,118 - 6,237 - 14,692 - (1,657) - 122,512 1 233,902 1 4,131,577 16 623,692 3 3,507,885 13 4,291 - (15,773) - (11,482) - $ 3,496,403 13 $ 26.18 $ 26.02		2022
				Amount % $ 23,995,308 100 15,706,539 65 8,288,769 35 396,617 2 553,689 2 3,336,611 14 4,286,917 18 4,001,852 17 39,275 - 15,692 - 143,532 1 (1,776) - 123,410 - 320,133 1 4,321,985 18 611,543 3 3,710,442 15 5,238 - 20,237 - 25,475 - $ 3,735,917 15 $ 27.69 $ 27.47

The accompanying notes are an integral part of the parent company only financial statements.

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GLOBAL UNICHIP CORP.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

BALANCE, JANUARY 1, 2022 Appropriation and distribution of prior year's earnings Legal reserve Special reserve Cash dividends to shareholders - NT$7.00 per share Total Dividends from claims extinguished by prescription Net income in 2022 Other comprehensive income in 2022, net of income tax Total comprehensive income in 2022 BALANCE, DECEMBER 31, 2022 Appropriation and distribution of prior year's earnings Legal reserve Reversal of special reserve Cash dividends to shareholders - NT$14.00 per share Total Donations from shareholders Dividends from claims extinguished by prescription Net income in 2023 Other comprehensive income in 2023, net of income tax Total comprehensive income in 2023 BALANCE, DECEMBER 31, 2023	Share Capital- Common Stock Share (In Thousands) Amount Capital Surplus 134,011 $ 1,340,119 $ 32,641 - - - - - - - - - - - - - - 35 - - - - - - - - - 134,011 1,340,119 32,676 - - - - - - - - - - - - - - 50 - - 75 - - - - - - - - - 134,011 $ 1,340,119 $ 32,801			Retained Earnings			Others Foreign Currency Translation Reserve $ (38,471) - - - - - - 20,237 20,237 (18,234) - - - - - - - (15,773) (15,773) $ (34,007)	Total Equity $ 5,263,329 - - (938,083) (938,083) 35 3,710,442 25,475 3,735,917 8,061,198 - - (1,876,167) (1,876,167) 50 75 3,507,885 (11,482) 3,496,403 $ 9,681,559
	Share (In Thousands) 134,011 - - - - - - - - 134,011 - - - - - - - - - 134,011		Legal Reserve $ 910,172 146,270 - - 146,270 - - - - 1,056,442 371,568 - - 371,568 - - - - - $ 1,428,010	Special Unappropriated Reserve Earnings $ 22,153 $ 2,996,715 - (146,270) 16,318 (16,318) - (938,083) 16,318 (1,100,671) - - - 3,710,442 - 5,238 - 3,715,680 38,471 5,611,724 - (371,568) (20,237) 20,237 - (1,876,167) (20,237) (2,227,498) - - - - - 3,507,885 - 4,291 - 3,512,176 $ 18,234 $ 6,896,402	Total $ 3,929,040 - - (938,083) (938,083) - 3,710,442 5,238 3,715,680 6,706,637 - - (1,876,167) (1,876,167) - - 3,507,885 4,291 3,512,176 $ 8,342,646

The accompanying notes are an integral part of the parent company only financial statements.

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GLOBAL UNICHIP CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation Amortization Gain on financial assets at fair value through profit or loss Finance costs Interest income Share of profit of subsidiaries Loss (gain) on foreign exchange, net Gain on disposal of property, plant and equipment, net Gain on lease modification Changes in operating assets and liabilities: Accounts receivable, net (including related parties) Inventories Other current assets Contract liabilities Accounts payable (including related parties) Accrued employees’ compensation and remuneration to directors Accrued expenses and other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of: Financial assets at fair value through profit or loss Equity interest in subsidiary Property, plant and equipment Intangible assets Proceeds from disposal of: Financial assets at fair value through profit or loss Property, plant and equipment Refundable deposits paid Refundable deposits refunded Interest received Dividends received Net cash used in investing activities	2023 $ 4,131,577 218,936 347,745 (22,551) 1,657 (92,118) (122,512) (29,423) (110) - 1,010,805 1,712,005 (842,600) (99,317) (779,617) 713,827 (653,476) (684) 5,494,144 (939,525) 4,554,619 (2,380,000) (30,602) (91,405) (376,185) 2,102,551 163 (85,299) 2,628 90,188 64,449 (703,512)	2022 $ 4,321,985 279,116 333,986 (10,884) 1,776 (39,275) (123,410) 22,126 - (5) (1,487,183) (3,774,150) (489,916) 1,035,526 942,335 441,323 266,522 (863) 1,719,009 (219,306) 1,499,703 (2,030,000) - (312,698) (359,745) 2,390,884 - (71,278) 2,558 38,463 - (341,816) (Continued)

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GLOBAL UNICHIP CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Repayment of the principal portion of lease liabilities Cash dividends paid Equity interest in subsidiary Interest paid Donations from shareholders Dividends from claims extinguished by prescription reclassified to capital surplus Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR	2023 $ (39,128) (1,876,167) (62,199) (1,657) 50 75 (1,979,026) 1,872,081 5,192,497 $ 7,064,578	2022 $ (35,541) (938,083) - (1,776) - 35 (975,365) 182,522 5,009,975 $ 5,192,497

The accompanying notes are an integral part of the parent company only financial statements.

(Concluded)

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NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

GLOBAL UNICHIP CORP.

1. GENERAL

Global Unichip Corp. (the “Company”), a Republic of China (R.O.C.) corporation, was incorporated on January 22, 1998. The Company is engaged mainly in researching, developing, producing, testing and selling of embedded memory and logic components for various application ICs, cell libraries for various application ICs, and EDA tools for various application ICs. On November 3, 2006, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE). The address of its registered office and principal place of business is No. 10 Li-Hsin 6[th ] Rd., Hsinchu Science Park, Taiwan.

2. APPROVAL OF FINANCIAL STATEMENTS

The parent company only financial statements were approved and authorized by the Audit Committee and the Board of Directors for issue on January 31, 2024.

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

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the Company’s accounting policies:

Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”

The amendments introduce a temporary exception to the requirements in IAS 12 by stipulating that the Company should neither recognize nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The amendments also require the Company to disclose that it has applied the exception and separately disclose its current tax expense (income) related to Pillar Two income taxes. In addition, for periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, the Company should disclose qualitative and quantitative information that helps users of financial statements understand the Company’s exposure to Pillar Two income taxes. The requirement that the Company apply the exception and the requirement to disclose that fact are applied immediately and retrospectively upon issuance of the amendments. The remaining disclosure requirements apply for annual reporting periods beginning on or after January 1, 2023, but not for any interim period ending on or before December 31, 2023.

• b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2024

New, Amended and Revised Standards and Interpretations Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	Effective Date Announced by IASB (Note 1)
	January 1, 2024 (Note 2) January 1, 2024

(Continued)

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Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB (Note 1) Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024 Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements” January 1, 2024 (Note 3) (Concluded)

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

• Note 3: The amendments provide some transition relief regarding disclosure requirements.

• c. New IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 21 “Lack of Exchangeability”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025 (Note 2)

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The Company shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the Company recognizes any effect as an adjustment to the opening balance of retained earnings. When the Company uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

As of the date the parent company only financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of above standards and interpretations will have on the Company’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

For the convenience of readers, the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. 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 parent company only financial statements shall prevail.

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Material accounting policies are summarized as follows:

Statement of Compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of Preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for assets.

When preparing these parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using equity method, the share of profit or loss of subsidiaries and the related equity items, as appropriate, in these parent company only financial statements.

Foreign Currencies

In preparing the parent company only financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

For the purposes of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

Classification of Current and Non-current Assets and Liabilities

Current assets include:

• a. Assets held primarily for the purpose of trading;

• b. Assets expected to be realized within twelve months after the reporting period; and

• c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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Current liabilities include:

• a. Liabilities held primarily for the purpose of trading;

• b. Liabilities due to be settled within twelve months after the reporting period; and

• c. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

Cash Equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

All regular way purchases or sales of financial assets are recognized and derecognized on a settlement date basis.

• a. Measurement category

Financial assets are classified into the following categories: Financial assets at fair value through profit or loss (FVTPL) and financial assets at amortized cost.

• 1) Financial assets at FVTPL

Financial assets at FVTPL include financial assets that are mandatorily classified as at FVTPL, which include investments in equity instruments which are not designated as at fair value through other comprehensive income (FVOCI) and debt instruments that do not meet the amortized cost criteria or the FVOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 27: Financial Instruments.

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• 2) Financial assets at amortized cost

Financial assets that meet the following 2 conditions are subsequently measured at amortized cost:

• a) The financial asset is held within a business model whose objective is collecting contractual cash flows; and

• b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost (including cash and cash equivalents, notes and accounts receivable (including related parties) and other receivables), are measured at amortized cost, which equals gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

• b. Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable) and contract assets.

The Company always recognizes lifetime Expected Credit Losses (ECLs) for accounts receivable. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For poor credit rating customers that have accounts receivable balances past due over 90 days, the Company recognizes loss allowance at full amount.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

• c. Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

Financial Liabilities and Equity Instruments

• a. Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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b. Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

c. Financial liabilities

Financial liabilities are subsequently measured at amortized cost using effective interest method.

Financial liabilities other than those held for trading purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.

• d. Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Inventories

Inventories consist of raw materials, supplies, finished goods and work-in-process. Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made on an item-by-item basis, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and necessary selling costs. Inventories are recorded at the weighted-average cost on the balance sheet date.

Investments Accounted for Using Equity Method

The Company uses the equity method to account for its investments in subsidiaries. A subsidiary is the entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes its share of the changes in the equity items of the subsidiary.

Profits or losses resulting from downstream transactions with subsidiaries are eliminated in full in the parent company only financial statements. Profits and losses resulting from upstream transactions with subsidiaries and transactions between subsidiaries are recognized in the parent company only financial statements only to the extent of interests in the subsidiaries that are not related to the Company.

Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental costs that are directly attributable to the construction or acquisition of the item of property, plant and equipment.

Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method over the following estimated useful lives:

Buildings	50 years
Machinery and equipment	7 years
Research and development equipment	4 years
Transportation equipment	4 to 5 years
Office equipment	5 to 10 years
Miscellaneous equipment	2 to 10 years

• 14 -

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

• a. The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Company subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Company, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

b. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheets.

• 15 -

Intangible Assets

Intangible asset with definite useful life is initially recorded at the purchase cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized using the straight-line method over the following estimated useful lives:

Software Patents

2 to 5 years Economic lives of the patents

The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Expenditure on research activities is recognized as an expense when incurred. An internally-generated intangible asset arising from development activities is capitalized and then amortized on a straight-line basis over its useful life if the recognition criteria for an intangible asset have been met; otherwise, the development expenditure is recognized as an expense when incurred.

Impairment of Tangible and Intangible Assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount should not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Revenue Recognition

The Company identifies the contract with the customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied. Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Revenue from sale of goods

Revenue is recognized when a customer obtains control of promised goods, at which time the goods are delivered to the customer’s specific location and performance obligation is satisfied.

• 16 -

- Rendering of Non Recurring Engineering (NRE) services

Revenue is recognized when the NRE service is completed and the qualifications in the contract with the customer have been met. If each performance obligation can be measured reasonably by completion stages, the contract is restricted for another use, and the customer would compensate the company to recover the costs incurred plus a reasonable profit margin whenever the contract is terminated by the customer, revenue from the contract service is recognized over time.

Retirement Benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost and net interest on the net defined benefit liability are recognized as employee benefits expense in the period they occur. Remeasurement is recognized in other comprehensive income in the period in which it occurs, and it is reflected in retained earnings immediately and will not be reclassified to profit or loss.

Net defined benefit liability represents the actuarial deficit in the Company’s defined benefit plan.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

According to the Income Tax Act, an additional income tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, provided it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and such temporary differences are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. The deferred tax assets which were originally not recognized are also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

• 17 -

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company has applied the exception from the recognition and disclosure of deferred tax assets and liabilities related to Pillar Two income taxes. Accordingly, the Company neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes.

Current tax and deferred tax for the period

Current tax and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the Company’s accounting policies, which are described in Note 4, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

When developing material accounting estimates, the Company considers the possible impact of climate change and related government policies and regulations on the cash flow projection, growth rates, discount rates, profitability and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

MATERIAL ACCOUNTING JUDGMENTS

Revenue recognized at gross or net amount

The Company determines whether the nature of its performance obligation is to provide the specified goods or services itself (i.e. the Company is a principal) or to arrange for the other party to provide those goods or services (i.e. the Company is an agent) based on the transaction model and its economic substance. The Company is a principal if it controls a promised good or service before it transfers the good or service to a customer. The Company recognizes revenue at gross amount of consideration to which it expects to be entitled in exchange for those goods or services transferred. The Company is an agent if its performance obligation is to arrange for the provision of goods or services by another party. The Company recognizes revenue at the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the other party to provide its goods or services.

Timing of revenue recognition

The Company evaluates whether its performance obligation is satisfied over time or at a point in time in accordance with the respective contract with a customer and applicable regulation when the conditions described in Note 4 are satisfied.

The Company also records a provision for estimated future allowance in the same period the related revenue is recorded. Provision for estimated sales allowance is generally made and adjusted based on management judgment, historical experience and any known factors that would significantly affect the allowance; the management periodically reviews the adequacy of the allowance.

• 18 -

KEY SOURCES OF ESTIMATION AND UNCERTAINTY

Impairment of Financial Assets

The provision for impairment of accounts receivable is based on assumptions about probability of default and loss given default. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s historical experience, existing market conditions as well as forward looking estimates at the end of each reporting period. Please refer to Note 6 for the details of the key assumptions and inputs used. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

Realization of Deferred Income Tax Assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realizability of deferred tax assets requires the Company’s subjective judgment and estimation, including the future revenue growth and profitability, tax holidays, the amount of tax credits that can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to deferred tax assets.

Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value. The Company estimates the net realizable value of inventory at the end of each reporting period.

Due to the rapid technological changes, the Company estimates the net realizable value of inventory for obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of inventory is mainly determined based on assumptions of future demand within a specific time horizon.

Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, a risk-free rate for the same currency and relevant duration is selected as a reference rate, and the lessee’s credit spread adjustments and lease specific adjustments (such as asset type, secured position, etc.) are also taken into account.

6. ACCOUNTS RECEIVABLE, NET

At amortized cost Accounts receivable		**December 31 **	**December 31 **
		2023 $ 1,967,388	2022 $ 2,981,616

In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month the invoice is issued.

The Company measures the loss allowance for accounts receivable at an amount equal to lifetime expected credit losses. The expected credit losses on accounts receivable are estimated using a provision matrix prepared by reference to the past account aging records of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtor and an assessment of the gross domestic product growth rate, unemployment rate and industrial indicators at the reporting date. The Company estimates expected credit losses based on the number of days that receivables are past due. As the Company’s historical credit losses experience does not show significantly different loss patterns for

• 19 -

different customer segments, the provision for losses based on past due status of receivables is not further distinguished between the Company’s different customer base; poor credit rating customers that have accounts receivable balances past due over 90 days are provided with full amount of loss allowance.

The Company writes off an account receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profit or loss.

Aging analysis of accounts receivable

No past due Past due Past due within 1-30 days Past due within 31-60 days		**December 31 **	**December 31 **
		2023 $ 1,590,921 319,825 56,642 $ 1,967,388	2022 $ 2,672,067 299,538 10,011 $ 2,981,616

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds		December 31	December 31
		2023 $ 2,080,000	2022 $ 1,780,000

8. INVENTORIES

Finished goods Work in process Raw materials		December 31	December 31
		2023 $ 1,030,815 2,643,946 1,175,956 $ 4,850,717	2022 $ 455,658 4,842,177 1,264,887 $ 6,562,722

Write-down of inventories to net realizable value was included in the cost of revenue; the amounts were as follows:

Write-down of inventories		Years Ended December 31	Years Ended December 31
		2023 $ 17,192	2022 $ 2,398

• 20 -

9. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

The carrying amount and percentage of ownership of subsidiaries accounted for by using the equity method were as follows:

Establishment and Name of Investee Main Businesses and Products Operating Location Global Unichip (Nanjing) Ltd. (GUC-Nanjing) Products consulting, design and technical support service Nanjing, China Global Unichip Corp.-NA (GUC-NA) Products consulting, design and technical support service U.S.A. Global Unichip Japan Co., Ltd. (GUC-Japan) Products consulting, design and technical support service Japan Global Unichip (Shanghai) Company, Limited (GUC-Shanghai) Products consulting, design and technical support service Shanghai, China Global Unichip Vietnam Company Limited (GUC-Vietnam) Products consulting, design and technical support service Vietnam Global Unichip Corp. Europe B.V. (GUC-Europe) Products consulting, design and technical support service Netherlands Global Unichip Corp. Korea (GUC-Korea) Products consulting, design and technical support service Korea		Carrying A	mount r31 2022 $ 478,834 160,113 72,570 54,273 - 14,355 7,423 $ 787,568	Percentage of Ownership
		Decembe		**December 31 **
		2023 $ 557,194 170,925 80,820 59,392 30,457 16,401 7,470 $ 922,659		2023 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% Note 100% 100% 100% 100%

Note: Upon the approval of the Board of the Directors on October 27, 2022, GUC-Vietnam was established by the Company in February 2023.

10. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2023 Additions Disposals Balance at December 31, 2023 Accumulated depreciation Balance at January 1, 2023 Depreciation Disposals Balance at December 31, 2023 Carrying amount at December 31, 2023 Cost Balance at January 1, 2022 Additions Disposals Balance at December 31, 2022 Accumulated depreciation Balance at January 1, 2022 Depreciation Disposals Balance at December 31, 2022 Carrying amount at December 31, 2022	Buildings Machinery and Equipment $ 242,923 $ 109,805 - 2,280 - - $ 242,923 $ 112,085 $ 87,628 $ 39,558 4,766 15,973 - - $ 92,394 $ 55,531 $ 150,529 $ 56,554 $ 242,923 $ 98,467 - 11,338 - - $ 242,923 $ 109,805 $ 82,862 $ 24,393 4,766 15,165 - - $ 87,628 $ 39,558 $ 155,295 $ 70,247	Research and Development Equipment Transportation Equipment $ 1,828,982 $ 1,375 63,116 1,450 (118,338) - $ 1,773,760 $ 2,825 $ 1,503,829 $ 1,220 131,806 276 (118,285) - $ 1,517,350 $ 1,496 $ 256,410 $ 1,329 $ 1,569,977 $ 1,375 299,304 - (40,299) - $ 1,828,982 $ 1,375 $ 1,347,841 $ 955 196,287 265 (40,299) - $ 1,503,829 $ 1,220 $ 325,153 $ 155	Office Equipment $ 21,898 902 (2,212) $ 20,588 $ 20,962 632 (2,212) $ 19,382 $ 1,206 $ 21,668 530 (300) $ 21,898 $ 20,051 1,211 (300) $ 20,962 $ 936	Miscellaneous Equipment $ 421,022 22,388 (13,880) $ 429,530 $ 344,656 26,272 (13,880) $ 357,048 $ 72,482 $ 412,423 13,587 (4,988) $ 421,022 $ 324,430 25,214 (4,988) $ 344,656 $ 76,366	Total $ 2,626,005 90,136 (134,430) $ 2,581,711 $ 1,997,853 179,725 (134,377) $ 2,043,201 $ 538,510 $ 2,346,833 324,759 (45,587) $ 2,626,005 $ 1,800,532 242,908 (45,587) $ 1,997,853 $ 628,152

• 21 -

11. LEASE ARRANGEMENTS

a. Right-of-use assets

Land Buildings Cost Balance at January 1, 2023 $ 59,238 $ 213,205 Additions - 12,722 Lease expired - - Balance at December 31, 2023$ 59,238 $ 225,927 Accumulated depreciation Balance at January 1, 2023 $ 6,456 $ 125,972 Depreciation 1,620 36,359 Lease expired - - Balance at December 31, 2023$ 8,076 $ 162,331 Carrying amount at December 31, 2023 $ 51,162 $ 63,596 Cost Balance at January 1, 2022 $ 58,995 $ 198,380 Additions 243 18,433 Lease expired - (3,608) Lease modification - - Balance at December 31, 2022$ 59,238 $ 213,205 Accumulated depreciation Balance at January 1, 2022 $ 4,838 $ 96,166 Depreciation 1,618 33,414 Lease expired - (3,608) Lease modification - - Balance at December 31, 2022$ 6,456 $ 125,972 Carrying amount at December 31, 2022 $ 52,782 $ 87,233 Income from the subleasing of right-of-use assets (presented in other income)	Transportation Equipment Total $ 5,934 $ 278,377 1,579 14,301 (1,627) (1,627) $ 5,886 $ 291,051 $ 2,493 $ 134,921 1,232 39,211 (1,627) (1,627) $ 2,098 $ 172,505 $ 3,788 $ 118,546 $ 3,475 $ 260,850 3,840 22,516 - (3,608) (1,381) (1,381) $ 5,934 $ 278,377 $ 2,254 $ 103,258 1,176 36,208 - (3,608) (937) (937) $ 2,493 $ 134,921 $ 3,441 $ 143,456 Years Ended December 31	Transportation Equipment Total $ 5,934 $ 278,377 1,579 14,301 (1,627) (1,627) $ 5,886 $ 291,051 $ 2,493 $ 134,921 1,232 39,211 (1,627) (1,627) $ 2,098 $ 172,505 $ 3,788 $ 118,546 $ 3,475 $ 260,850 3,840 22,516 - (3,608) (1,381) (1,381) $ 5,934 $ 278,377 $ 2,254 $ 103,258 1,176 36,208 - (3,608) (937) (937) $ 2,493 $ 134,921 $ 3,441 $ 143,456 Years Ended December 31	Transportation Equipment Total $ 5,934 $ 278,377 1,579 14,301 (1,627) (1,627) $ 5,886 $ 291,051 $ 2,493 $ 134,921 1,232 39,211 (1,627) (1,627) $ 2,098 $ 172,505 $ 3,788 $ 118,546 $ 3,475 $ 260,850 3,840 22,516 - (3,608) (1,381) (1,381) $ 5,934 $ 278,377 $ 2,254 $ 103,258 1,176 36,208 - (3,608) (937) (937) $ 2,493 $ 134,921 $ 3,441 $ 143,456 Years Ended December 31
		2023 $ 300	2022 $ 149

• 22 -

b. Lease liabilities

Carrying amount Current Non-current		December 31	December 31
		2023 $ 38,073 $ 83,591	2022 $ 37,853 $ 108,638

Range of discount rates for lease liabilities was as follows:

Land Buildings Transportation equipment	December 31
	2023 2022 1.62% 1.62% 0.589%-1.524% 0.589%-1.387% 0.671%-1.57% 0.589%-0.925%

c. Material leasing activities and terms

The Company leases land and buildings for the use of plants and offices with lease terms of 1 to 37 years. The lease contract for land located in the R.O.C. specifies that lease payments will be adjusted on the basis of changes in announced land value prices and other factors at any time. The Company does not have bargain purchase option to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Company is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d. Subleases

The other sublease transaction is set out below.

Sublease of right-of-use assets

The Company subleased its leasehold parking lot under operating lease with lease term of 1 year and 6 months.

The maturity analysis of lease payments receivable under operating subleases was as follows:

Year 1 Year 2		December	31
		2023 $ 150 - $ 150	2022 $ 300 150 $ 450

e. Other lease information

Expenses relating to short-term leases Total cash outflow for leases		Years Ended December 31	Years Ended December 31
		2023 $ 2,980 $ (43,881)	2022 $ 3,008 $ (40,506)

• 23 -

The Company’s leases for certain buildings and miscellaneous equipment qualify as short-term leases and leases for certain office equipment and miscellaneous equipment qualify as low-value asset leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

12. INTANGIBLE ASSETS

Cost Balance at January 1, 2023 Additions Disposals Balance at December 31, 2023 Accumulated amortization Balance at January 1, 2023 Amortization Disposals Balance at December 31, 2023 Carrying amount at December 31, 2023 Cost Balance at January 1, 2022 Additions Disposals Balance at December 31, 2022 Accumulated amortization Balance at January 1, 2022 Amortization Disposals Balance at December 31, 2022 Carrying amount at December 31, 2022	Software $ 1,161,887 393,599 (299,567) $ 1,255,919 $ 620,455 347,745 (299,567) $ 668,633 $ 587,286 $ 1,048,981 557,530 (444,624) $ 1,161,887 $ 731,103 333,976 (444,624) $ 620,455 $ 541,432	Patents $ 519 - - $ 519 $ 519 - - $ 519 $ - $ 519 - - $ 519 $ 509 10 - $ 519 $ -	Total $ 1,162,406 393,599 (299,567) $ 1,256,438 $ 620,974 347,745 (299,567) $ 669,152 $ 587,286 $ 1,049,500 557,530 (444,624) $ 1,162,406 $ 731,612 333,986 (444,624) $ 620,974 $ 541,432

13. OTHER CURRENT ASSETS

Prepayment for purchases Prepaid license fees VAT tax receivable Prepaid expenses		December 31	December 31
		2023 $ 2,244,765 363,190 172,615 27,766 $ 2,808,336	2022 $ 1,654,328 330,000 254,689 28,178 $ 2,267,195

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14. OTHER LIABILITIES

Current License fees payable Payable for salaries and bonuses Payable for royalties Others Non-current License fees payable		December 31	December 31
		2023 $ 283,380 227,143 23,043 703,515 $ 1,237,081 $ 112,618	2022 $ 238,952 837,208 30,235 739,734 $ 1,846,129 $ 165,659

The license fees payable is primarily attributable to several agreements that the Company entered into for certain technology license and software.

15. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The pension mechanism under the Labor Pension Act is deemed a defined contribution retirement plan. Pursuant to the Act, the Company makes monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Accordingly, the Company recognized expenses of NT$53,597 thousand and NT$50,185 thousand in the parent company only statements of comprehensive income for the years ended December 31, 2023 and 2022, respectively.

b. Defined benefit plans

The Company has a defined benefit plan under the Labor Standards Act, which provides benefits based on an employee’s length of service and average monthly salary of the last six months prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to a pension fund (the Fund), which is administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Fund. If the amount of the balance in the Fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the parent company only balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		**December **	**31 **
		2023 $ 75,873 (53,561) $ 22,312	2022 $ 77,747 (50,460) $ 27,287

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Movements in net defined benefit liabilities were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liabilities
Balance at January 1, 2022	$ 78,457	$ (45,069)	$ 33,388
Service cost
Current service cost	940	-	940
Net interest expense (income)	508	(298)	210
Recognized in profit or loss	1,448	(298)	1,150
Remeasurement
Return on plan assets	-	(3,441)	(3,441)
Actuarial loss - changes in demographic
assumptions	155	-	155
Actuarial gain - changes in financial
assumptions	(6,426)	-	(6,426)
Actuarial loss - experience adjustments	4,474	-	4,474
Recognized in other comprehensive (income)
loss	(1,797)	(3,441)	(5,238)
Contributions from the employer	-	(2,013)	(2,013)
Benefits paid	(361)	361	-
Balance at December 31, 2022	77,747	(50,460)	27,287
Service cost
Current service cost	987	-	987
Net interest expense (income)	1,043	(689)	354
Recognized in profit or loss	2,030	(689)	1,341
Remeasurement
Return on plan assets	-	(387)	(387)
Actuarial loss - changes in demographic
assumptions	(240)	-	(240)
Actuarial gain - changes in financial
assumptions	407	-	407
Actuarial loss - experience adjustments	(4,071)	-	(4,071)
Recognized in other comprehensive (income)
loss	(3,904)	(387)	(4,291)
Contributions from the employer	-	(2,025)	(2,025)
Balance at December 31, 2023	$ 75,873	$ (53,561)	$ 22,312

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

plans is as follows:
General and administrative expenses		Years Ended December 31
		2023 $ 1,341	2022 $ 1,150

Through the defined benefit plan under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 26 -

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of salary increase Turnover rate	December 31
	2023 2022 1.30% 1.35% 3.00% 3.00% 1.77% 1.82%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease Turnover rate 10% increase 10% decrease		**December **	**31 **
		2023 $ (1,990) $ 2,067 $ 2,024 $ (1,960) $ (290) $ 302	2022 $ (2,133) $ 2,221 $ 2,177 $ (2,103) $ (381) $ 394

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		**December **	**31 **
		2023 $ 2,203 10 years	2022 $ 2,168 11 years

The maturity analysis of undiscounted pension benefit is as follows:

Later than 1 year and not later than 5 years Later than 5 years		**December **	**31 **
		2023 $ 12,116 74,436 $ 86,552	2022 $ 14,008 75,526 $ 89,534

• 27 -

16. EQUITY

a. Share capital

Authorized Issued		**December 31 **	**December 31 **
		2023 $ 1,800,000 $ 1,340,119	2022 $ 1,800,000 $ 1,340,119

As of December 31, 2023 and 2022, the Company was authorized to issue 180,000 thousand shares, respectively, with par value of $10; each share is entitled to the right to vote and to receive dividends, and a total of 134,011 thousand shares have been paid and issued.

• b. Capital surplus

From merger Additional paid-in capital Donations Dividends from claims extinguished by prescription		**December **	**31 **
		2023 $ 16,621 13,232 2,710 238 $ 32,801	2022 $ 16,621 13,232 2,660 163 $ 32,676

Under the Company Law, the capital surplus generated from the excess of the issuance price over the par value of capital stock (including the stock issued for new capital and mergers) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be appropriated as cash dividends or stock dividends, which are limited to a certain percentage of the Company’s paid-in capital. The capital surplus recognized from dividends with claims extinguished by prescription may be used to offset a deficit.

c. Retained earnings and dividend policy

According to the Company’s Articles of Incorporation when allocating the net profits of each fiscal year, the Company shall first offset its losses in previous years before making appropriations to the following items:

• 1) Legal reserve at 10% of the remaining profit. However, when the legal reserve amounts to the authorized capital, this shall not apply;

• 2) Special reserve in accordance with the resolution in the shareholders’ meeting;

• 3) Any balance remaining shall be allocated to shareholders according to the resolution in the shareholders’ meeting.

The Articles of Incorporation provide the policy about employee’ compensation and remuneration to directors; refer to Note 24.

The Company’s profit distribution, the proportion of cash dividends shall not be lower than 60% of the total dividends, depending on future expansion plans and needs for cash.

• 28 -

The appropriation for legal reserve shall be made until the reserve equals the Company’s paid-in capital. The reserve may be used to offset a deficit, or be distributed as dividends and bonuses to the extent that the portion exceeds 25% of the paid-in capital if the Company incurs no loss.

A special reserve equivalent to the net debit balance of other components of shareholders’ equity, such as exchange differences on the translation of foreign operations, shall be made from unappropriated earnings. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses.

The appropriations of earnings for 2022 and 2021 had been approved in the meetings of the shareholders of the Company held on May 18, 2023 and May 19, 2022, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve (reversal of special reserve) Cash dividends Cash dividends per share (NT$)		Appropriation of Earnings	Appropriation of Earnings
		For the Years Ended **December 31 **
		2022 $ 371,568 $ (20,237) $ 1,876,167 $ 14.00	2021 $ 146,270 $ 16,318 $ 938,083 $ 7.00

The appropriations of earnings for 2023 had been proposed by the Board of Directors of the Company on January 31, 2024. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per	Dividends Per
	of	Earnings	Share	(NT$)
Legal reserve	$	351,217
Special reserve		15,773
Cash dividends to shareholders		1,876,167	$	14.00
	$	2,243,157

The appropriations of earnings for 2023 are to be resolved in the meeting of the shareholders of the Company which is expected to be held on May 16, 2024.

d. Others

Changes in foreign currency translation reserve were as follows:

Balance, beginning of year Exchange differences on translation of foreign operations Balance, end of year		Years Ended December 31	Years Ended December 31
		2023 $ (18,234) (15,773) $ (34,007)	2022 $ (38,471) 20,237 $ (18,234)

The exchange differences on translation of foreign operation’s net assets from its functional currency to the Company’s presentation currency are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve.

• 29 -

17. NET REVENUE

The analysis of the Company’s net revenue was as follows:

Revenue from customer contracts Net revenue from sale of goods Net revenue from NRE service		**Years Ended December 31 **	**Years Ended December 31 **
		2023 $ 18,980,971 7,259,743 $ 26,240,714	2022 $ 16,880,240 7,115,068 $ 23,995,308

Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. The Company estimates and recognizes refund liabilities based on historical experience and the consideration of varying contractual terms; refund liabilities are classified under accrued expenses and other current liabilities.

a. Contract balances

December 31, 2023 December 31, 2022 Accounts receivable, net $ 1,967,388 $ 2,981,616 Contract liabilities - current $ 6,250,159 $ 6,349,476	January 1, 2022 $ 1,507,550 $ 5,313,950

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment.

For the years ended December 31, 2023 and 2022, the Company recognized revenue of NT$4,530,696 thousand and NT$3,398,472 thousand, respectively, from the beginning balance of contract liability.

• b. Disaggregation of revenue from contracts with customers

Production Wafer product NRE Others Region China United States Korea Taiwan Japan Europe		Years Ended December 31	Years Ended December 31
		2023 2022 $ 18,980,971 $ 16,880,240 6,763,015 6,493,956 496,728 621,112 $ 26,240,714 $ 23,995,308 Years Ended December 31
		2023 $ 8,111,720 6,736,886 5,842,269 2,483,555 2,121,318 944,966 $ 26,240,714	2022 $ 8,214,655 5,442,147 3,581,597 4,046,174 1,844,207 866,528 $ 23,995,308

The Company categorized net revenue mainly based on the country of sales region.

• 30 -

Application Type Digital Consumer Networking Industry AI/ML Others Customer Type System House Fabless Resolution 5-nanometer 7-nanometer 16-nanometer 28-nanometer and above Others	Year Ended December 31, 2023	Year Ended December 31, 2023	Year Ended December 31, 2023		**Years Ended December 31 **	**Years Ended December 31 **	**Years Ended December 31 **
					2023 2022 $ 11,917,365 $ 9,877,645 6,254,088 5,295,651 2,892,247 4,038,443 2,007,702 2,782,193 3,169,312 2,001,376 $ 26,240,714 $ 23,995,308 Years Ended December 31
					2023 2022 $ 18,060,718 $ 15,362,243 8,179,996 8,633,065 $ 26,240,714 $ 23,995,308 Year Ended December 31, 2022 Net Revenue from NRE Service Net Revenue from Sale of Goods $ 809,543 $ - 2,566,738 1,337,274 1,555,027 6,132,767 1,562,648 9,410,199 621,112 - $ 7,115,068 $ 16,880,240
		Net Revenue from NRE Service $ 2,279,545 2,290,424 1,019,824 1,173,222 496,728 $ 7,259,743	Net Revenue from Sale of Goods $ - 4,439,926 6,891,367 7,649,678 - $ 18,980,971			Net Revenue from NRE Service $ 809,543 2,566,738 1,555,027 1,562,648 621,112 $ 7,115,068	Net Revenue from Sale of Goods $ - 1,337,274 6,132,767 9,410,199 - $ 16,880,240

18. INTEREST INCOME

Bank deposits Repurchase agreements collateralized by bonds		Years Ended December 31	Years Ended December 31
		2023 $ 91,958 160 $ 92,118	2022 $ 39,049 226 $ 39,275

19. OTHER INCOME

Past due over 2 years’ contract liabilities transferred to income Rental income Other income		Years Ended December 31	Years Ended December 31
		2023 $ 2,305 300 3,632 $ 6,237	2022 $ 8,164 149 7,379 $ 15,692

• 31 -

20. OTHER GAINS AND LOSSES

Gain on financial assets at fair value through profit or loss Gain on disposal of property, plant and equipment, net Gain on lease modification Foreign exchange gain (loss), net		Years Ended December 31	Years Ended December 31
		2023 $ 22,551 110 - (7,969) $ 14,692	2022 $ 10,884 - 5 132,643 $ 143,532

21. FINANCE COSTS Interest on lease liabilities		Years Ended December 31	Years Ended December 31
		2023 $ 1,657	2022 $ 1,776

22. INCOME TAX

a. Income tax expense recognized in profit or loss Income tax expense consisted of the following:

Current income tax expense Current tax expense recognized in the current period Adjustments to income tax of prior years Deferred income tax expense Temporary differences Income tax expense recognized in profit or loss		Years Ended December 31	Years Ended December 31
		2023 $ 610,369 (1,771) 608,598 15,094 $ 623,692	2022 $ 591,483 (71) 591,412 20,131 $ 611,543

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

Income before tax Income tax expense at the statutory rate Tax effect of adjusting items: Nondeductible items in determining taxable income Investment tax credits used Additional income tax expense on unappropriated earnings Adjustments to income tax of prior years Income tax expense recognized in profit or loss		Years Ended December 31	Years Ended December 31
		2023 $ 4,131,577 $ 826,315 (1,912) (261,587) 62,647 (1,771) $ 623,692	2022 $ 4,321,985 $ 864,397 711 (271,595) 18,101 (71) $ 611,543

• 32 -

b. Deferred income tax

The analysis of deferred income tax assets and liabilities in the parent company only balance sheets was as follows:

Deferred income tax assets Temporary differences Write-down of inventory Others Deferred income tax liabilities Temporary differences Share of profit of subsidiaries accounted for using equity method		**December 31 **	**December 31 **
		2023 $ 5,091 10,207 $ 15,298 $ (127,626)	2022 $ 1,793 16,987 $ 18,780 $ (116,014)

Movements of deferred income tax assets and deferred income tax liabilities were as follows:

Year ended December 31, 2023

Deferred income tax assets Temporary differences Write-down of inventory Others	Balance, Beginning of Year Recognized in Profit or Loss Balance, End of Year $ 1,793 $ 3,298 $ 5,091 16,987 (6,780) 10,207 $ 18,780 $ (3,482) $ 15,298

Year ended December 31, 2022

Deferred income tax assets Temporary differences Write-down of inventory Others	Balance, Beginning of Year Recognized in Profit or Loss Balance, End of Year $ 5,366 $ (3,573) $ 1,793 8,863 8,124 16,987 $ 14,229 $ 4,551 $ 18,780

• 33 -

Year ended December 31, 2023

Deferred income tax liabilities Temporary differences Share of profit of subsidiaries accounted for using equity method Year ended December 31, 2022 Deferred income tax liabilities Temporary differences Share of profit of subsidiaries accounted for using equity method	Balance, Beginning of Year Recognized in Profit or Loss Balance, End of Year $ (116,014) $ (11,612) $ (127,626) Balance, Beginning of Year Recognized in Profit or Loss Balance, End of Year $ (91,332) $ (24,682) $ (116,014)

• c. Deductible temporary differences for which no deferred tax assets have been recognized in the parent company only balance sheets

As of December 31, 2023 and 2022, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$6,801 thousand and NT$3,647 thousand, respectively.

• d. Tax expense (income) related to pillar two income taxes.

Since Taiwan has not enacted the Pillar Two income taxes, as of December 31, 2023, the Company has no relevant current income tax impact.

• e. Income tax examination

The tax authorities have examined the income tax returns of the Company through 2021.

23. EARNINGS PER SHARE

Basic EPS Diluted EPS		Years Ended December 31	Years Ended December 31
		2023 $ 26.18 $ 26.02	2022 $ 27.69 $ 27.47

• 34 -

EPS is computed as follows:

Year ended December 31, 2023 Basic EPS Net income available to common shareholders Effect of dilutive potential common stock Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock) Year ended December 31, 2022 Basic EPS Net income available to common shareholders Effect of dilutive potential common stock Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock)

Number of Shares Amounts (Denominator) (Numerator) (In Thousands) EPS (NT$) $ 3,507,885 134,011 $26.18 - 806 $ 3,507,885 134,817 $26.02 $ 3,710,442 134,011 $27.69 - 1,083 $ 3,710,442 135,094 $27.47

The Company may settle the employees’ compensation in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are 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.

24. ADDITIONAL INFORMATION OF EXPENSES BY NATURE

Net income included the following items:

a. Depreciation expense Depreciation of property, plant and equipment Recognized in cost of revenue Recognized in operating expenses Depreciation of right-of-use assets Recognized in cost of revenue Recognized in operating expenses		Years Ended December 31	Years Ended December 31
		2023 $ 23,484 156,241 179,725 4,752 34,459 39,211 $ 218,936	2022 $ 21,404 221,504 242,908 4,597 31,611 36,208 $ 279,116

• 35 -

b. Amortization of intangible assets Recognized in cost of revenue Recognized in operating expenses c. Research and development costs expensed as incurred d. Employee benefits expense Post-employment benefits (Note 15) Defined contribution plans Defined benefit plans Other employee benefits Employee benefits expense summarized by function Recognized in cost of revenue Recognized in operating expenses		**Years Ended December 31 **	**Years Ended December 31 **
		2023 $ 19,819 327,926 $ 347,745 $ 3,171,821 $ 53,597 1,341 54,938 2,642,044 $ 2,696,982 $ 406,735 2,290,247 $ 2,696,982	2022 $ 11,936 322,050 $ 333,986 $ 3,336,611 $ 50,185 1,150 51,335 2,895,752 $ 2,947,087 $ 374,389 2,572,698 $ 2,947,087

• e. Employees’ compensation and remuneration to directors

The Company shall allocate employees’ compensation and remuneration to directors no less than 2% and no more than 2%, respectively, of net income before tax and before the employees’ compensation and remuneration to directors. Directors who also serve as executive officers of the Company are not entitled to receive the remuneration to directors. The Company shall first offset its losses in previous years before allocating for employees’ compensation and remuneration to directors. The Company may issue stock or cash compensation to employees of an affiliated company upon meeting the conditions set by the Board of Directors.

For 2023 and 2022, the employees’ compensation and remuneration to directors were approved in the meetings of the Board of Directors held on January 31, 2024 and February 2, 2023, respectively. The approved amounts were as follows:

Employees’ compensation Remuneration to directors	Years Ended December 31
	2023 2022 $ 1,271,103 $ 668,274 45,000 45,000

There was no difference between the employees’ compensation approved for 2023 and 2022 and the amounts reported as expenses in 2023 and 2022. The remuneration to directors approved for 2023 was the same as the amount reported as expenses in 2023. The remuneration to directors approved for 2022 differed from the amount reported as expenses in 2022; the differences were adjusted to profit and loss for 2023.

• 36 -

	Year Ended
	December 31,
	2022
The approved amounts by the Board of Directors	$ 45,000
The amounts recognized in the consolidated financial statements	$ 72,544

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

The employees’ compensation and remuneration to directors of the Company in the amounts of NT$271,773 thousand and NT$27,722 thousand in cash for 2021 were approved by the Board of Directors in their meeting held on January 26, 2022. The aforementioned approved amounts did not have any difference with the amounts recognized in the parent company only financial statements for the year ended December 31, 2021.

The information about appropriations of employees’ compensation and remuneration to directors of the Company is available at the Market Observation Post System website.

25. CASH FLOW INFORMATION

Movements of liabilities with cash flows and non-cash changes:

Balance as of January 1, 2023 Cash Flows Guarantee deposits $ 3,071 $ - Lease liabilities 146,491 (39,128) Balance as of January 1, 2022 Cash Flows Guarantee deposits $ 2,768 $ - Lease liabilities 159,965 (35,541)	Non-cash Changes Lease Additions Lease Termination Foreign Exchange Movement Balance as of December 31, 2023 $ - $ - $ - $ 3,071 14,301 - - 121,664 Non-cash Changes Lease Additions Lease Termination Foreign Exchange Movement Balance as of December 31, 2022 $ - $ - $ 303 $ 3,071 22,516 (449) - 146,491

26. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company are able to operate sustainability while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company engages in the semiconductor design services, which is closely tied with customer demand. Business is influenced by the cyclical nature of the semiconductor industry but not significantly. In consideration of the industry dynamics, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months. Through capital management, the Company is capable of coping with changes in the industry, striving for improvement, and ultimately creating shareholder value.

• 37 -

27. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2023 Financial assets at FVTPL Mutual funds December 31, 2022 Financial assets at FVTPL Mutual funds	Level 1 $ 2,080,000 Level 1 $ 1,780,000	Level 2 $ - Level 2 $ -	Level 3 $ - Level 3 $ -	Total $ 2,080,000 Total $ 1,780,000

There were no transfers between Levels 1 and 2 in the current and prior years.

• b. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Amortized cost Cash and cash equivalents Accounts receivable, net (including related parties) Other financial assets Refundable deposits Pledged time deposits Financial liabilities Amortized cost Accounts payable (including related parties) Payables on machinery and equipment Accrued expenses and other current liabilities Other long-term payables Guarantee deposits		**December 31 **	**December 31 **
		2023 $ 2,080,000 7,064,578 1,989,428 3,428 188,049 22,200 $ 11,347,683 $ 1,911,455 16,416 716,756 395,998 3,071 $ 3,043,696	2022 $ 1,780,000 5,192,497 3,000,233 1,498 101,338 22,200 $ 10,097,766 $ 2,992,531 17,452 756,714 404,611 3,071 $ 4,174,379

• 38 -

• c. Financial risk management objectives and policies

The Company’s objectives in financial risk management are to manage its exposure to market risk, credit risk and liquidity risk related to the operating activities. To reduce the related financial risks, the Company engages in identifying, assessing and avoiding the market uncertainties with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by the Audit Committee and the Board of Directors in accordance with procedures required by relevant regulations and internal controls. During the implementation of such plans, the treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

• d. Market risk

Foreign currency risk

The Company’s operating activities are mainly denominated in foreign currency and exposed to foreign exchange risk. To protect against the volatility of future cash flows arising from changes in foreign exchange rates, the Company maintains a balance of net foreign currency assets and liabilities in hedge.

The Company’s sensitivity analysis to foreign currency risk mainly focuses on the foreign currency monetary items at the end of the reporting period. Assuming a 10% strengthening of New Taiwan Dollars against the relevant currencies, the net income before tax for the years ended December 31, 2023 and 2022 would have increased by NT$28,680 thousand and decreased by NT$24,453 thousand, respectively.

e. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from operating activities, primarily accounts receivable, and from investing activities primarily deposits with banks. Credit risk is managed separately for business related and financial related exposures. As of the balance sheet date, the Company’s maximum credit risk exposure is mainly from the carrying amount of financial assets recognized in the parent company only balance sheet.

Business related credit risk

The Company has considerable accounts receivable from its customers worldwide. Majority of the Company’s outstanding accounts receivable are not covered by collateral or credit insurance. While the Company has procedures to monitor and limit exposure to credit risk on accounts receivable, there can be no assurance such procedures will effectively limit its credit risk and avoid losses.

As of December 31, 2023 and 2022, the Company’s ten largest customers accounted for 54% and 59% of accounts receivable, respectively.

Financial credit risk

The Company monitors and reviews the transaction limit applied to counterparties and adjusts the concentration limit according to market conditions and the credit standing of the counterparties regularly. The Company mitigates its exposure by selecting financial institution with high credit rating.

f. Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business requirements. The Company manages its liquidity risk by maintaining adequate cash and banking facilities.

• 39 -

As of December 31, 2023 and 2022, the unused financing facilities of the Company amounted to NT$1,600,000 thousand.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Non-derivative Financial Liabilities December 31, 2023 Accounts payable (including related parties) Payables on machinery and equipment Accrued expenses and other current liabilities Lease liabilities Other long-term payables Guarantee deposits	Less Than 1 Year $ 1,911,455 16,416 716,756 39,471 283,380 - $ 2,967,478	2-3 Years $ - - - 38,261 112,618 - $ 150,879	4+ Years $ - - - 59,466 - 3,071 $ 62,537	Total $ 1,911,455 16,416 716,756 137,198 395,998 3,071
				$ 3,180,894

Additional information about the maturity analysis of lease liabilities:

Lease liabilities Non-derivative Financial Liabilities December 31, 2022 Accounts payable (including related parties) Payables on machinery and equipment Accrued expenses and other current liabilities Lease liabilities Other long-term payables Guarantee deposits	Less than 4 Year 4-10 Years 10-15 Years 15-20 Years $ 77,732 $ 13,106 $ 10,740 $ 10,740 Less Than 1 Year 2-3 Years 4+ Years $ 2,992,531 $ - $ - 17,452 - - 756,714 - - 39,444 62,349 61,576 238,952 165,659 - - - 3,071 $ 4,045,093 $ 228,008 $ 64,647	$	20+ Years $ 24,880 Total 2,992,531 17,452 756,714 163,369 404,611 3,071 4,337,748
		$

Additional information about the maturity analysis of lease liabilities:

Lease liabilities	Less than 4 Year $ 101,793	4-10 Years 10-15 Years 15-20 Years $ 13,069 $ 10,740 $ 10,739	20+ Years $ 27,028

g. Fair value of financial instruments

The carrying amounts of the Company’s financial assets and financial liabilities measured at amortized cost at the end of financial reporting period recognized in the parent company only financial statements approximate their fair values. Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• 40 -

28. RELATED PARTY TRANSACTIONS

Besides information disclosed elsewhere in the other notes, details of transactions between the Company and its related parties are disclosed below:

• a. Related party name and category

Related Party Name Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) TSMC North America (TSMC-NA) TSMC Europe B.V. (TSMC-EU) VisEra Technologies Co., Ltd. (VisEra) Vanguard International Semiconductor Corporation (VIS) Bank SinoPac GUC - NA GUC - Japan GUC - Europe GUC - Korea GUC - Nanjing GUC - Vietnam GUC - Shanghai	Related Party Category
	An investor that accounts for its investment by using the equity method A subsidiary of TSMC A subsidiary of TSMC A subsidiary of TSMC An associate of TSMC Affiliate of GUC president’s spouse Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

• b. Operating transactions

Related Party Name and Line Item Category Net revenue from sale Investors and subsidiaries with significant influence over the Company Purchases Investors and subsidiaries with significant influence over the Company TSMC TSMC-NA Other related parties Manufacturing overhead Subsidiaries GUC-Nanjing Investors and subsidiaries with significant influence over the Company TSMC TSMC-NA VisEra		Years Ended December 31	Years Ended December 31
		2023 $ 309,393 $ 6,395,587 2,495,246 8,890,833 - $ 8,890,833 $ 332,449 1,048,797 1,020,541 - $ 2,401,787	2022 $ 242,634 $ 8,761,346 2,021,946 10,783,292 77,802 $ 10,861,094 $ 781,102 858,894 763,387 1,164 $ 2,404,547

(Continued)

• 41 -

Related Party Name and Years Ended December 31 Line Item Category 2023 2022 Operating expenses Subsidiaries $ 839,274 $ 776,071 Investors and subsidiaries with significant influence over the Company 38,310 24,055 $ 877,584 $ 800,126 (Concluded) The following balances were outstanding at the end of the reporting period: Related Party Name and December 31 Line Item Category 2023 2022 Receivables from related parties Investors and subsidiaries with significant influence over the Company TSMC $ 22,040 $ 18,617 Other current assets Investors and subsidiaries with significant influence over the Company TSMC $ 1,976,424 $ 108,130 TSMC-NA - 976,397 $ 1,976,424 $ 1,084,527 Refundable deposits Investors and subsidiaries with significant influence over the Company VisEra $ 3,304 $ 2,832 Contract liabilities Investors and subsidiaries with significant influence over the Company $ - $ 4,497 Payables to related parties Subsidiaries GUC-Nanjing $ 223,314 $ - Investors and subsidiaries with significant influence over the Company TSMC 470,622 1,299,352 TSMC-NA 43,032 180,387 VisEra - 12 513,654 1,479,751 Other related parties - 534 $ 736,968 $ 1,480,285 Accrued expenses and other current liabilities Subsidiaries $ 77,892 $ 54,071		**Years Ended December 31 **
		2023 2022 $ 22,040 $ 18,617 $ 1,976,424 $ 108,130 - 976,397 $ 1,976,424 $ 1,084,527 $ 3,304 $ 2,832 $ - $ 4,497 $ 223,314 $ - 470,622 1,299,352 43,032 180,387 - 12 513,654 1,479,751 - 534 $ 736,968 $ 1,480,285 $ 77,892 $ 54,071

• 42 -

The terms of sales to related parties were not significantly different from those of sales to third parties. For other related party transactions, the terms of transactions were determined in accordance with mutual agreement because there were no comparable terms for third-party transactions. The payment term granted to related parties is due 30 days from the invoice date or 30 days from the end of the month when the invoice is issued, while the payment term granted to third parties is due 30 days from the invoice date or 75 days from the end of the month when the invoice is issued.

• c. Lease arrangements

Related Party Name and Line Item Category Lease liabilities - current Investors and subsidiaries with significant influence over the Company VisEra Lease liabilities - non-current Investors and subsidiaries with significant influence over the Company VisEra Related Party Name and Line Item Category Finance costs Investors and subsidiaries with significant influence over the Company VisEra		**December **	**31 **
		2023 2022 $ 19,520 $ 19,325 $ 19,717 $ 39,237 Years Ended December 31
		2023 $ 499	2022 $ 600

The Company leased server room from related parties. The lease terms and prices were determined in accordance with mutual agreements. The rental expense was paid monthly.

• d. Bank deposits and interest income

Related Party Name and Line Item Category Bank deposits Substantive related parties Bank SinoPac Other financial assets Substantive related parties Bank SinoPac Pledged time deposits Substantive related parties Bank SinoPac Range of interest rates for bank deposits was as follows: Related Party Name and Line Item Category Bank deposits Substantive related parties Bank SinoPac Pledged time deposits Substantive related parties Bank SinoPac		December 31
		2023 2022 $ 955,794 $ 1,963,705 $ 141 $ 390 $ 20,000 $ 20,000 December 31
	2023 2022 0.001%-2.850% 0.001%-1.900% 0.4575%-0.8828% 0.3180%-0.4575%

• 43 -

Related Party Name and Line Item Category Interest income Substantive related parties Bank SinoPac		**Years Ended December 31 **	**Years Ended December 31 **
		2023 $ 18,142	2022 $ 7,176

• e. Compensation of key management personnel:

The remuneration to directors and other key management personnel were as follows:

Short-term employee benefits Post-employment benefits		**Years Ended December 31 **	**Years Ended December 31 **
		2023 $ 196,525 596 $ 197,121	2022 $ 234,493 585 $ 235,078

The remuneration to directors and other key management personnel were determined by the Compensation Committee of the Company in accordance with the individual performance and the market trends.

29. PLEDGED OR MORTGAGED ASSETS

As of December 31, 2023 and 2022 the Company provided pledged time deposits of NT$20,000 thousand as collateral for customs clearance and also provided pledged time deposits of NT$2,200 thousand as collateral for lease of a parcel of land from the Science Park Administration (SPA).

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

The Company has entered into license agreements with several companies that own intellectual property rights. According to the agreements, the Company shall pay specific amounts of money to obtain licenses of their intellectual property rights or shall pay royalties at specific percentages of sales amount of identified products. Under the agreements, the Company shall pay at least US$4,000 thousand, US$8,200 thousand and US$4,000 thousand to the counterparty in the period from April 2022 to April 2025, from July 2023 to July 2026 and from February 2024 to January 2027, respectively.

Under the agreement, the Company shall pay at least US$1,500 thousand to the counterparty in the period from June 2022.

Under the agreement, the Company shall pay at least US$1,500 thousand to the counterparty in the period from August 2023.

Under the agreement, the Company shall pay at least US$2,100 thousand to the counterparty in the period from December 2023 to December 2026.

The Company has entered into a long-term material supply agreement with the counterparty. The contract period is from June 2021 to March 2028, and the Company should pay US$4,060 thousand as security deposits to ensure the capacity supply in accordance with the contract. If the contract cannot be performed owing to fall short of the agreed purchase or supply quantities, the parties will pay compensation for the other side in accordance with the contract.

• 44 -

The Company has entered into a long-term advanced packaging capacity agreement with the counterparty. The contract service period is from July 2026 to December 2035. The Company should pay US$37,500 thousand as security deposits to ensure the advanced packaging capacity supply in accordance with the contract, and the Company has paid US$10,000 thousand as of December 31, 2023. The amount of the security deposits refund will be calculated based on the annual production capacity utilization rate with the contract. However, if the certain level of production capacity utilization rate will not be achieved, the security deposits will not be refunded.

31. EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The significant foreign-currency financial assets and liabilities were as follows:

(Unit: Foreign Currency in Thousands)

		Foreign	Exchange Rate	Carrying
		Currency	(Note)	Amount
December 31, 2023
Monetary item - financial assets
USD	$	76,125	30.705 $	2,337,404
Non-monetary item -financial assets
RMB		142,497	4.3270	616,586
USD		5,567	30.705	170,925
JPY		372,098	0.2172	80,820
VND		24,365,844	0.00125	30,457
EUR		483	33.980	16,401
KRW		312,420	0.02391	7,470
Monetary item - financial liabilities
USD		83,425	30.705	2,561,565
JPY		193,573	0.2172	42,044
RMB		3,779	4.3270	16,354
VND		2,563,828	0.00125	3,205
December 31, 2022
Monetary item - financial assets
USD		134,001	30.71	4,115,157
Non-monetary item -financial assets
RMB		120,941	4.4080	533,107
USD		5,214	30.71	160,113
JPY		312,264	0.2324	72,570
EUR		439	32.72	14,355
KRW		302,120	0.02457	7,423
Monetary item - financial liabilities
USD		124,745	30.71	3,830,930
JPY		82,781	0.2324	19,238
RMB		4,212	4.4080	18,569

Note: Exchange rate represents the amount of NT$ that can be exchanged to one unit of foreign currency.

• 45 -

The significant (realized and unrealized) foreign exchange gains (losses) were as follows:

Foreign Currency VND KRW EUR JPY RMB USD	Years Ended	December 31
	2023 Exchange Rate Net Foreign Exchange Gain (Loss) 0.00129 (VND:NTD) $ 128 0.02407 (KRW:NTD) 12 33.6972 (EUR:NTD) (196) 0.2221 (JPY:NTD) (201) 4.3954 (RMB:NTD) (1,009) 31.1548 (USD:NTD) (6,703) $ (7,969)	2022
		Exchange Rate Net Foreign Exchange Gain (Loss) - (VND:NTD) $ - 0.02330 (KRW:NTD) (6) 31.3596 (EUR:NTD) (108) 0.2275 (JPY:NTD) 1,518 4.4219 (RMB:NTD) (1,309) 29.8044 (USD:NTD) 132,548 $ 132,643

32. OPERATING SEGMENT INFORMATION

The Company operates in a single industry and viewed by the Company’s chief operating decision maker as one segment when reviewing information in order to allocate resources and assess performance. The basis for the measurement of the operating segment profit (loss), assets and liabilities is the same as that for the preparation of financial statements. Refer to the consolidated financial statements for the years ended December 31, 2023 and 2022.

33. ADDITIONAL DISCLOSURES

• a. Significant transactions and b. Related information of reinvestment

• 1) Financing provided: None;

• 2) Endorsements/guarantees provided: None;

• 3) Marketable securities held (excluding investments in subsidiaries, associates and jointly controlled entities): See Table 1 attached;

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: See Table 2 attached;

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None;

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None;

• 7) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 3 attached;

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;

• 9) Information about the derivative instruments transaction: None;

• 46 -

• 10) Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in Mainland China): See Table 4 attached;

• c. Information on investment in Mainland China

• 1) The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, net income (losses) of the investee, investment income (losses), ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 5 attached.

• 2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial reports: See Table 6 attached.

• d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: See Table 7 attached.

• 47 -

TABLE 1

GLOBAL UNICHIP CORP.

MARKETABLE SECURITIES HELD DECEMBER 31, 2023 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Holding Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		December 31, 2023	December 31, 2023		Note
				Shares/Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
The Company	Mutual funds Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Fuh Haw Money Market Fund Prudential Financial Money Market Fund Yuanta Wan Tai Money Market Fund Class B common share (non-voting) eTopus Capital Partners (Cayman) Limited	- - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current	47,854,731 38,013,269 18,662,918 6,762,057 12,301,106 12,859,090 1,515,151	$ 730,000 530,000 320,000 100,000 200,000 200,000 -	- - - - - - 34.88	$ 730,000 530,000 320,000 100,000 200,000 200,000 -	Note

Note: As of December 31, 2023, 1,515,151 preferred shares of eTopus Technology (Cayman) Holding Limited originally held by the Company, representing an ownership percentage of 2.6%, were converted into 1,515,151 Class B common shares of eTopus Capital Partners (Cayman) Limited with an ownership percentage of 34.88% due to organizational restructuring. Since the Company holds Class B common shares with non-voting rights, the Company does not have significant influence or control over eTopus Capital Partners (Cayman) Limited. Therefore, this investment is still classified as a non-current financial asset measured at fair value through profit or loss.

• 48 -

TABLE 2

GLOBAL UNICHIP CORP.

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending Balance	Ending Balance
					Units	Amount	Units	Amount	Units	Amount	Carrying Amount	Gains on Disposal	Units	Amount
The Company	Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Prudential Financial Money Market Fund Yuanta Wan Tai Money Market Fund	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss	- - - - -	- - - - -	48,438,039 38,502,891 18,883,289 6,224,092 -	$ 730,000 530,000 320,000 100,000 -	47,854,731 38,013,269 18,662,918 18,467,057 25,750,340	$ 730,000 530,000 320,000 300,000 400,000	48,438,039 38,502,891 18,883,289 12,390,043 12,891,250	$ 738,898 536,827 323,779 201,446 200,500	$ 730,000 530,000 320,000 200,000 200,000	$ 8,898 6,827 3,778 1,446 500	47,854,731 38,013,269 18,662,918 12,301,106 12,859,090	$ 730,000 530,000 320,000 200,000 200,000

• 49 -

TABLE 3

GLOBAL UNICHIP CORP.

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023 (Amounts in Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Company	TSMC TSMC-NA	TSMC is an investor that accounts for its investment by using equity method TSMC-NA is a subsidiary of TSMC	Sales Purchases Purchases	$ 309,393 6,395,587 2,495,246	1 70 27	30 days after monthly closing 30 days after invoice date 30 days after invoice date	Note 28 Note 28 Note 28	Note 28 Note 28 Note 28	$ 22,040 (470,622) (43,032)	1 (25) (2)

• 50 -

TABLE 4

GLOBAL UNICHIP CORP.

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE YEAR ENDED DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance	as of December 31, 2023	as of December 31, 2023	Net Income (Losses) of the Investee	Investment Income (Losses)	Note
				December 31, 2023 (Foreign Currencies in Thousands)	December 31, 2022 (Foreign Currencies in Thousands)	Shares	Percentage of Ownership (%)	Carrying Amount
The Company	GUC-NA GUC-Japan GUC-Europe GUC-Korea GUC-Vietnam	U.S.A. Japan Netherlands Korea Vietnam	Products consulting, design and technical support service Products consulting, design and technical support service Products consulting, design and technical support service Products consulting, design and technical support service Products consulting design and technical support service	$ 40,268 (US$ 1,264) 15,393 (YEN 55,000) 8,109 (EUR 200) 5,974 (KRW 222,545) 30,602 (VND23,670,000)	$ 40,268 (US$ 1,264) 15,393 (YEN 55,000) 8,109 (EUR 200) 5,974 (KRW 222,545) -	800,000 1,100 - 44,000 -	100 100 100 100 100	$ 170,925 80,820 16,401 7,470 30,457	$ 10,980 13,260 1,475 250 905	$ 10,980 13,260 1,475 250 905	Note 1 Note 2 Note 2 Note 2 Notes 2 & 3

Note 1: Investment income (loss) was determined based on audited financial statements.

Note 2: Investment income (loss) was determined based on unaudited financial statements.

Note 3: Upon the approval of the Board of the Directors on October 27, 2022, GUC-Vietnam was established by the Company in February 2023.

• 51 -

TABLE 5

GLOBAL UNICHIP CORP.

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2023 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (US$ in Thousands)	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2023 (US$ in Thousands)	Accumulated Outflow of Investment from Taiwan as of January 1, 2023 (US$ in Thousands)	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2023 (US$ in Thousands)	Net Income (Losses) of the Investee	Percentage of Ownership	Investment Income (Losses)	Carrying Amount as of December 31, 2023	Accumulated Inward Remittance of Earnings as of December 31, 2023
							Outflow	Inflow
GUC-Nanjing GUC-Shanghai	Products consulting, design and technical support service Products consulting, design and technical support service		$ 180,332 (US$ 6,000) 31,165 (US$ 1,000)	(Note 1) (Note 1)	$ 118,133 (US$ 4,000) 31,165 (US$ 1,000)		$ 62,199 (US$ 2,000) -	$ - -	$ 180,332 (US$ 6,000) 31,165 (US$ 1,000)	$ 89,432 6,210	100% 100%	$ 89,432 (Note 2) 6,210 (Note 3)	$ 557,194 59,392	$ 64,449 -
Accumulated Investment in Mainland China as of December 31, 2023 (US$ in Thousands)			Investment Amounts Authorized by Investment Commission, MOEA (US$ in Thousands)				Upper Limit on	Investment
$ 211,497 (US$ 7,000)			$ 211,497 (US$ 7,000)				$ 5,808,935 (Note 4)

Note 1: The Company invested the investee directly.

Note 2: Investment income (loss) was determined based on audited financial statements.

Note 3: Investment income (loss) was determined based on unaudited financial statements.

Note 4: Subject to 60% of net asset value of the Company according to the revised “Guidelines Governing the Approval of Investment or Technical Cooperation in Mainland China” issued by the Investment Commission.

• 52 -

TABLE 6

GLOBAL UNICHIP CORP.

SIGNIFICANT INTERCOMPANY TRANSACTIONS WITH INVESTEE IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2023 (Amounts in Thousands of New Taiwan Dollars)

No.	Company Name	Counter Party	Nature of Relationship (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statement Account	Amount	Terms (Note 2)	Percentage to Net Revenue or Total Assets
0	The Company	GUC-Shanghai GUC-Nanjing	1 1	Operating expenses Accrued expenses and other current liabilities Manufacturing overhead Operating expenses Payables to related parties Accrued expenses and other current liabilities	$ 117,390 7,320 332,449 146,224 223,314 9,034	- - - - - -	- - 1% 1% 1% -

Note 1: No. 1 represents the transactions from parent company to subsidiary.

Note 2: The intercompany transactions, prices and terms are determined in accordance with mutual agreements and no other similar transactions could be used for comparison.

• 53 -

TABLE 7

GLOBAL UNICHIP CORP.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2023

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Taiwan Semiconductor Manufacturing Co., Ltd.	46,687,859	34.83

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual trustor. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

• 54 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM

STATEMENT INDEX

MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND
EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT	Note 33 a. 3)
OR LOSS
STATEMENT OF ACCOUNTS RECEIVABLE, NET	2
STATEMENT OF INVENTORIES	3
STATEMENT OF OTHER CURRENT ASSETS	Note 13
STATEMENT OF CHANGES IN INVESTMENTS	4
ACCOUNTED FOR USING EQUITY METHOD
STATEMENT OF CHANGES IN PROPERTY, PLANT AND	Note 10
EQUIPMENT
STATEMENT OF CHANGES IN ACCUMULATED	Note 10
DEPRECIATION AND ACCUMULATED IMPAIRMENT
OF PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN RIGHT-OF-USE-ASSETS	Note 11
STATEMENT OF CHANGES IN ACCUMULATED	Note 11
DEPRECIATION AND ACCUMULATED IMPAIRMENT
OF RIGHT-OF-USE-ASSETS
STATEMENT OF CHANGES IN INTANGIBLE ASSETS	Note 12
STATEMENT OF DEFERRED INCOME TAX ASSETS	Note 22
STATEMENT OF ACCOUNTS PAYABLE	5
STATEMENT OF CONTRACT LIABILITIES	6
STATEMENT OF ACCRUED EXPENSES AND OTHER	Note 14
CURRENT LIABILITIES
STATEMENT OF LEASE LIABILITIES	Note 11
STATEMENT OF DEFERRED INCOME TAX LIABILITIES	Note 22
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF NET REVENUE	7
STATEMENT OF COST OF REVENUE	8
STATEMENT OF OPERATING EXPENSES	9
STATEMENT OF EMPLOYEE BENEFITS EXPENSES,	10
DEPRECIATION AND AMORTIZATION BY FUNCTION

• 55 -

STATEMENT 1

GLOBAL UNICHIP CORP.

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Description Cash Cash in banks Time deposits From 2023.6.18-2024.7.25 to, interest rates at 0.545%-1.575% Checking accounts and demand deposits Foreign currency deposits Including US$4,908 thousand @30.705, EUR12 thousand @33.98, JPY312 thousand @0.2172, and RMB19 thousand @4.327 Petty cash Less: Pledged time deposits As collateral for customs clearance As collateral for leasing a parcel of land from the Science Park Administration (SPA). Total

Amount $ 6,454,750 480,585 151,263 180 7,086,778 20,000 2,200 $ 7,064,578

• 56 -

STATEMENT 2

GLOBAL UNICHIP CORP.

STATEMENT OF ACCOUNTS RECEIVABLE, NET DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Client C Client D Client E Client F Others (Note) Total	Amount $ 330,653 247,711 181,811 180,061 139,482 131,387 756,283 $ 1,967,388

Note: The amount of individual client in others does not exceed 5% of the account balance.

• 57 -

STATEMENT 3

GLOBAL UNICHIP CORP.

STATEMENT OF INVENTORIES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Finished goods Work in process Raw materials Total		Amount
		Cost Net Realizable Value (Note) $ 1,030,815 $ 1,273,762 2,643,946 3,351,371 1,175,956 1,490,199 $ 4,850,717 $ 6,115,332

Note: Net realizable value is the estimated selling price of inventories less all estimated costs of completion and necessary selling costs.

• 58 -

STATEMENT 4

GLOBAL UNICHIP CORP.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

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

Investees GUC-Nanjing GUC-NA GUC-Japan GUC-Shanghai GUC-Vietnam GUC-Europe GUC-Korea Total	Balance, January 1, 2023	Balance, January 1, 2023	Additions in Investment	Additions in Investment	Exchange Share of Differences on Decreases in Investment Profit or Translation of (Note 1) Loss of Foreign Shares Amount Subsidiaries Operations - $ 64,449 $ 89,432 $ (8,822) - - 10,980 (168) - - 13,260 (5,010) - - 6,210 (1,091) - - 905 (1,050) - - 1,475 571 - - 250 (203) $ 64,449 $ 122,512 $ (15,773)	Balance, December 31, 2023 Shares % Amount - 100 $ 557,194 800,000 100 170,925 1,100 100 80,820 - 100 59,392 - 100 30,457 - 100 16,401 44,000 100 7,470 $ 922,659	Net Equity Value $ 557,194 170,925 80,820 59,392 30,457 16,401 7,470
	Shares - 800,000 1,100 - - - 44,000	Amount $ 478,834 160,113 72,570 54,273 - 14,355 7,423 $ 787,568	Shares - - - - - - -	Amount $ 62,199 - - - 30,602 - - $ 92,801	Shares - - - - - - -	Shares % - 100 800,000 100 1,100 100 - 100 - 100 - 100 44,000 100
							$ 922,659

Note 1: Cash dividends were received from subsidiaries.

Note 2: The amounts of investments in subsidiaries were not pledged as collateral.

• 59 -

STATEMENT 5

GLOBAL UNICHIP CORP.

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Vendor Name Siliconware Precision Industries Co., Ltd. King Yuan Electronics Co., Ltd. SK hynix America Inc. Advanced Semiconductor Engineering, Inc. Others (Note) Total	Amount $ 262,270 248,632 140,015 59,634 463,936 $ 1,174,487

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

• 60 -

STATEMENT 6

GLOBAL UNICHIP CORP.

STATEMENT OF CONTRACT LIABILITIES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Client Name Client I Client II Client III Client IV Client V Others (Note) Total	Amount $ 1,545,116 1,431,775 514,286 483,373 359,040 1,916,569 $ 6,250,159

Note: The amount of individual client in others does not exceed 5% of the account balance.

• 61 -

STATEMENT 7

GLOBAL UNICHIP CORP.

STATEMENT OF NET REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Quantity Wafer product 187,843,688 NRE Others Total	Amount $ 18,980,971 6,763,015 496,728 $ 26,240,714

• 62 -

STATEMENT 8

GLOBAL UNICHIP CORP.

STATEMENT OF COST OF REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Raw materials, beginning of year Raw material purchased Raw materials, end of year Others Raw materials used Manufacturing overhead Manufacturing cost Work in process, beginning of year Work in process, end of year Cost of finished goods Finished goods, beginning of year Finished goods, end of year Others Total	Amount $ 1,264,887 9,093,972 (1,175,956) (9,961) 9,172,942 9,182,452 18,355,394 4,842,177 (2,643,946) 20,553,625 455,658 (1,030,815) (1,698,463) $ 18,280,005

• 63 -

STATEMENT 9

GLOBAL UNICHIP CORP.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Professional service fee Salaries Depreciation Repair and maintenance expense Amortization Others (Note) Total	Sales and Marketing Expenses General and Administrative Expenses Research and Development Expenses $ 191,234 $ 33,499 $ 727,577 171,199 316,057 1,598,723 1,023 14,599 175,078 - 32,098 36,202 - 9,731 318,195 45,676 76,097 316,046 $ 409,132 $ 482,081 $ 3,171,821

Note: The amount of each item in others does not exceed 5% of the account balance.

• 64 -

STATEMENT 10

GLOBAL UNICHIP CORP.

STATEMENT OF EMPLOYEE BENEFITS EXPENSES, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

Employee benefits expenses (Note) Salaries Labor and health insurance Pension Remuneration to directors Others Depreciation Amortization	Year Ended December 31, 2023	Year Ended December 31, 2023	Year Ended December 31, 2023	Year Ended December 31, 2022	Year Ended December 31, 2022	Year Ended December 31, 2022
	Classified as Cost of Revenue $ 371,210 17,033 8,645 - 9,847 $ 406,735 $ 28,236 $ 19,819	Classified as Operating Expenses $ 2,085,979 91,664 46,293 18,193 48,118 $ 2,290,247 $ 190,700 $ 327,926	Total $ 2,457,189 108,697 54,938 18,193 57,965 $ 2,696,982 $ 218,936 $ 347,745	Classified as Cost of Revenue $ 344,033 14,591 7,548 - 8,217 $ 374,389 $ 26,001 $ 11,936	Classified as Operating Expenses $ 2,324,740 81,446 43,787 79,093 43,632 $ 2,572,698 $ 253,115 $ 322,050	Total $ 2,668,773 96,037 51,335 79,093 51,849 $ 2,947,087 $ 279,116 $ 333,986

Note 1: For the years ended December 31, 2023 and 2022, the Company had 702 and 688 monthly average number of employees, respectively, which included 8 non-employee directors for both years.

Note 2: Average labor cost for the years ended December 31, 2023 and 2022 was NT$3,860 thousand and NT$4,218 thousand, respectively.

Note 3: Average amount of salary and bonus for the years ended December 31, 2023 and 2022 was NT$3,541 thousand and NT$3,925 thousand, respectively.

Note 4: The average salary and bonus decreased by 10% year over year.

Note 5: The Company has established the Audit Committee, and the remuneration of independent directors has been incorporated into the remuneration to directors.

Note 6: Compensation and Remuneration Policy

• a. Remuneration to Directors is paid at prevailing rates according to Directors’ Remuneration Policy of the Company. Guided by the established compensation and remuneration policy in the profit of the Company, compensation and remuneration to directors is accrued and reviewed by the Compensation Committee and the Board of Directors. The compensation arrangement shall be reported in the shareholders’ meeting. Directors who also serve as executive officers will receive compensation based on the following rules b & c.

• b. The compensation and remuneration of the President and Vice Presidents of the Company is guided in accordance with Performance Management Policy. Executives’ compensation packages are based on individual performance and their contribution to the Company’s overall performance with benchmarking to market compensation surveys. The Compensation Committee shall review the KPIs and measurements, followed by performance appraisal, and consequently reward the Executives with the approval of the Board of Directors.

• c. Compensation and Remuneration Policy of the Company is based on individual competence, contribution, and performance appraisal results, which shows positive relation to the Company’s overall performance. The combination of compensation and remuneration are base salary, incentive & profit sharing, and benefits. Base salary is determined by roles & responsibilities and employees’ working experiences and also benchmarked with compensation market surveys. Incentives & profit sharing are in relation to individuals’ contribution, achievements of departmental targets or the Company’s performance. Benefits are not intended to only meet regulations and requirements but also designed to meet individuals’ needs and for mutual good of all employees.

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