Global Unichip Corp. and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2021 and 2020 and Independent Auditors' Review Report

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

Deloitte & Touche Taipei, Taiwan Republic of China

October 28, 2021

Notice to Readers

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

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

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

	September 30, 2021 (Reviewed)		December 31, 2020 (Audited)		September 30, 2020 (Reviewed)











and 27)	902,682	7	1,150,230	12	789,084	10
Total current liabilities	7,498,512	59	4,892,132	50	4,007,614	49






Total non-current liabilities	456,665	4	366,696	4	338,388	4
Total liabilities	7,955,177	63	5,258,828	54	4,346,002	53
EQUITY (Note 15)
Share capital	1,340,119	10	1,340,119	14	1,340,119	16
Capital surplus	32,641	-	32,618	-	32,618	-
Retained earnings
Appropriated as legal reserve	910,172	7	825,628	8	825,628	10
Appropriated as special reserve	22,153	-	20,745	-	20,745	-
Unappropriated earnings	2,479,190	20	2,290,027	24	1,686,545	21
Others	(38,472)	-	(22,153)	-	(26,603)	-
Total equity	4,745,803	37	4,486,984	46	3,879,052	47

	September 30, 2021 December 31, 2020 (Reviewed) (Audited)			September 30, 2020 (Reviewed)			September 30, 2021 (Reviewed)		December 31, 2020 (Audited)		September 30, 2020 (Reviewed)
ASSETS	Amount	%	Amount	%	Amount	%	LIABILITIES AND EQUITY	Amount	%	Amount	%	Amount	%
CURRENT ASSETS							CURRENT LIABILITIES
Cash and cash equivalents	\$ 4,375,186	34	\$ 3,896,753	40	\$ 2,336,258	28	Contract liabilities (Note 16)	\$ 4,799,931	38	\$ 2,381,778	24	\$ 1,530,205	19
Financial assets at fair value through profit or loss							Accounts payable	711,420	6	682,090	7	883,580	11
(Note 7)	2,132,754	17	730,000	7	630,755	8	Payables to related parties (Note 27)	673,283	5	379,010	4	701,436	8
Contract assets (Note 16)	-	-	-	-	148,248	2	Accrued employees' compensation and remuneration to
Accounts receivable, net (Notes 6 and 16)	1,182,365	9	1,137,071	12	1,155,142	14	directors (Note 23)	195,822	2	145,634	1	33,459	-
Receivables from related parties (Note 27)	26,800	-	37,371	-	8,990	-	Payables on machinery and equipment	16,401	-	4,171	-	-	-
Inventories (Note 8)	2,404,169	19	1,674,466	17	1,933,889	23	Current tax liabilities (Note 21)	137,679	1	95,526	1	15,836	-
Other financial assets	654	-	383	-	408	-	Lease liabilities - current (Notes 10, 24 and 27)	61,294	-	53,693	1	54,014	1
Other current assets (Notes 12 and 27)	1,241,666	10	742,068	8	542,257	7	Accrued expenses and other current liabilities (Notes 13
							and 27)	902,682	7	1,150,230	12	789,084	10
Total current assets	11,363,594	89	8,218,112	84	6,755,947	82
							Total current liabilities	7,498,512	59	4,892,132	50	4,007,614	49
NON-CURRENT ASSETS
Property, plant and equipment (Note 9)	621,819	5	778,354	8	835,186	10	NON-CURRENT LIABILITIES
Right-of-use assets (Note 10)	270,584	2	238,263	3	240,923	3	Deferred income tax liabilities (Note 21)	84,242	1	63,100	1	58,793	1
Intangible assets (Note 11)	383,307	3	443,885	5	321,541	4	Lease liabilities - non-current (Notes 10, 24 and 27)	219,981	2	189,398	2	191,758	2
Deferred income tax assets (Note 21)	9,477	-	20,285	-	23,581	-	Other long-term payables (Note 13)	113,476	1	74,921	1	52,973	1
Prepayments for business facilities	700	-	-	-	-	-	Net defined benefit liabilities (Note 14)	36,024	-	36,320	-	31,839	-
Refundable deposits (Note 27)	29,299	1	24,713	-	25,676	1	Guarantee deposits (Note 24)	2,942	-	2,957	-	3,025	-
Pledged time deposits (Note 28)	22,200	-	22,200	-	22,200	-
							Total non-current liabilities	456,665	4	366,696	4	338,388	4
Total non-current assets	1,337,386	11	1,527,700	16	1,469,107	18	Total liabilities	7,955,177	63	5,258,828	54	4,346,002	53

							EQUITY (Note 15)
							Share capital	1,340,119	10	1,340,119	14	1,340,119	16
							Capital surplus	32,641	-	32,618	-	32,618	-
							Retained earnings
							Appropriated as legal reserve	910,172	7	825,628	8	825,628	10
							Appropriated as special reserve	22,153	-	20,745	-	20,745	-
							Unappropriated earnings	2,479,190	20	2,290,027	24	1,686,545	21
							Others	(38,472)	-	(22,153)	-	(26,603)	-
							Total equity	4,745,803	37	4,486,984	46	3,879,052	47
TOTAL	\$12,700,980	100	\$ 9,745,812	100	\$ 8,225,054	100	TOTAL	\$12,700,980	100	\$ 9,745,812	100	\$ 8,225,054	100

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

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

	Three Months Ended September 30				Nine Months Ended September 30
	2021		2020		2021		2020
	Amount	%	Amount	%	Amount	%	Amount	%
NET REVENUE (Notes 16 and 27)	\$ 3,584,852	100	\$ 3,528,522	100	\$ 10,197,880	100	\$ 9,625,187	100
COST OF REVENUE (Notes 23 and 27)	2,163,831	60	2,653,674	75	6,583,243	65	7,212,350	75
GROSS PROFIT	1,421,021	40	874,848	25	3,614,637	35	2,412,837	25
OPERATING EXPENSES Sales and marketing (Notes 23 and 27)	72,393	2	61,032	2	205,145	2	179,316	2
General and administrative (Notes 23 and 27)	120,316	3	78,018	2	304,487	3	217,123	2
Research and development (Notes 23 and 27)	742,245	21	609,616	17	2,051,577	20	1,756,722	18
Expected credit impairment gain (Note 6)	-	-	-	-	(19,921)	-	-	-
Total operating expenses	934,954	26	748,666	21	2,541,288	25	2,153,161	22
INCOME FROM OPERATIONS	486,067	14	126,182	4	1,073,349	10	259,676	3
NON-OPERATING INCOME AND EXPENSES
Interest income (Note 17)	3,893	-	2,169	-	9,780	-	9,732	-
Other income (Notes 10 and 18)	7,327	-	1,557	-	78,563	1	61,724	-
Other gains and losses (Note 19)	(4,722)	-	(5,615)	-	(23,886)	-	(20,350)	-
Finance costs (Notes 20 and 27)	(1,149)	-	(880)	-	(3,538)	-	(2,777)	-
Total non-operating income and
expenses	5,349	-	(2,769)	-	60,919	1	48,329	-
INCOME BEFORE INCOME TAX	491,416	14	123,413	4	1,134,268	11	308,005	3
INCOME TAX EXPENSE (Note 21)	73,832	2	16,960	1	189,093	2	66,049	-
NET INCOME	417,584	12	106,453	3	945,175	9	241,956	3
OTHER COMPREHENSIVE INCOME (LOSS) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations
(Note 15)	(1,838)	-	2,564	-	(16,319)	-	(5,858)	( 1 )
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	\$ 415,746	12	\$ 109,017	3	\$ 928,856	9	\$ 236,098	2
EARNINGS PER SHARE (Note 22) Basic earnings per share Diluted earnings per share	\$ 3.11 \$ 3.10		\$ 0.80 \$ 0.79		\$ 7.05 \$ 7.03		\$ 1.81 \$ 1.80

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

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

Others Foreign

		Share Capital - Common Stock		Retained Earnings				Foreign Currency
	Share (In Thousands)	Amount	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Total	Translation Reserve	Total Equity
BALANCE, JANUARY 1, 2020	134,011	\$ 1,340,119	\$ 32,578	\$ 762,708	\$ 8,636	\$ 2,189,678	\$ 2,961,022	\$ (20,745)	\$ 4,312,974
Appropriation and distribution of prior year's earnings Legal reserve Special reserve	- -	- -	- -	62,920 -	- 12,109	(62,920) (12,109)	- -	- -	- -
Cash dividends to shareholders - NT\$5.00 per share	-	-	-	-	-	(670,060)	(670,060)	-	(670,060)
Total	-	-	-	62,920	12,109	(745,089)	(670,060)	-	(670,060)
Dividends from claims extinguished by prescription	-	-	40	-	-	-	-	-	40
Net income for the nine months ended September 30, 2020	-	-	-	-	-	241,956	241,956	-	241,956
Other comprehensive loss for the nine months ended September 30, 2020, net of income tax	-	-	-	-	-	-	-	(5,858)	(5,858)
Total comprehensive income (loss) for the nine months ended September 30, 2020	-	-	-	-	-	241,956	241,956	(5,858)	236,098
BALANCE, SEPTEMBER 30, 2020	134,011	\$ 1,340,119	\$ 32,618	\$ 825,628	\$ 20,745	\$ 1,686,545	\$ 2,532,918	\$ (26,603)	\$ 3,879,052
BALANCE, JANUARY 1, 2021	134,011	\$ 1,340,119	\$ 32,618	\$ 825,628	\$ 20,745	\$ 2,290,027	\$ 3,136,400	\$ (22,153)	\$ 4,486,984
Appropriation and distribution of prior year's earnings Legal reserve Special reserve Cash dividends to shareholders - NT\$5.00 per share	- - -	- - -	- - -	84,544 - -	- 1,408 -	(84,544) (1,408) (670,060)	- - (670,060)	- - -	- - (670,060)
Total	-	-	-	84,544	1,408	(756,012)	(670,060)	-	(670,060)
Dividends from claims extinguished by prescription	-	-	23	-	-	-	-	-	23
Net income for the nine months ended September 30, 2021	-	-	-	-	-	945,175	945,175	-	945,175
Other comprehensive loss for the nine months ended September 30, 2021, net of income tax	-	-	-	-	-	-	-	(16,319)	(16,319)
Total comprehensive income (loss) for the nine months ended September 30, 2021	-	-	-	-	-	945,175	945,175	(16,319)	928,856
BALANCE, SEPTEMBER 30, 2021	134,011	\$ 1,340,119	\$ 32,641	\$ 910,172	\$ 22,153	\$ 2,479,190	\$ 3,411,515	\$ (38,472)	\$ 4,745,803

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

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

	Nine Months Ended September	30
	2021	2020
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 1,134,268	\$ 308,005
Adjustments for:
Depreciation	278,501	277,058
Amortization	225,201	228,912
Expected credit impairment gain	(19,921)	-
Gain on financial assets at fair value through profit or loss	(2,754)	(2,159)
Finance costs	3,538	2,777
Interest income	(9,780)	(9,732)
Loss (gain) on foreign exchange, net	3,742	(4,446)
Gain on lease modification	(462)	-
Changes in operating assets and liabilities:
Contract assets	-	176,717
Accounts receivable (including related parties)	(14,802)	235,831
Inventories	(729,703)	(155,405)
Other current assets	(486,464)	2,160
Contract liabilities	2,418,153	421,163
Accounts payable (including related parties)	312,099	69,803
Accrued employees' compensation and remuneration to directors	50,188	(47,232)
Accrued expenses and other current liabilities	(197,502)	68,807
Net defined benefit liabilities	(296)	(265)
Cash generated from operations	2,964,006	1,571,994
Income tax paid	(116,491)	(87,805)
Net cash generated from operating activities	2,847,515	1,484,189
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial assets at fair value through profit or loss	(1,800,000)	(2,750,000)
Property, plant and equipment	(61,765)	(143,895)
Intangible assets	(179,741)	(201,277)
Proceeds from disposal of:
Financial assets at fair value through profit or loss	400,000	2,121,404
Refundable deposits paid	(7,317)	(8,010)
Refundable deposits refunded	1,550	3,079
Interest received	9,509	9,666
Net cash used in investing activities	(1,637,764)	(969,033)
		(Continued)

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

	Nine Months Ended September 30
		2021		2020
CASH FLOWS FROM FINANCING ACTIVITIES
Guarantee deposits received	\$	67	\$	51
Guarantee deposits refunded		(17)		(13)
Repayment of the principal portion of lease liabilities		(42,823)		(42,308)
Cash dividends paid		(670,060)		(670,060)
Interest paid		(3,538)		(2,777)
Dividends from claims extinguished by prescription reclassified to
capital surplus		23		40
Net cash used in financing activities		(716,348)		(715,067)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(14,970)		(5,459)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS		478,433		(205,370)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		3,896,753		2,541,628
CASH AND CASH EQUIVALENTS, END OF PERIOD	\$	4,375,186	\$	2,336,258

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) (Reviewed, Not Audited)

1. GENERAL

Global Unichip Corp. (GUC), a Republic of China (R.O.C.) corporation, was incorporated on January 22, 1998. GUC 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, GUC'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 6th Rd., Hsinchu Science Park, Taiwan. GUC together with its consolidated subsidiaries are hereinafter referred to collectively as the "Company".

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were agreed by the Audit Committee and reported to the Board of Directors for issue on October 28, 2021.

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 "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company's accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2022

New IFRSs	Effective Date Announced by IASB
"Annual Improvements to IFRS Standards 2018-2020"	January 1, 2022 (Note 1)
Amendments to IFRS 3 "Reference to the Conceptual Framework" Amendments to IAS 16 "Property, Plant and Equipment - Proceeds	January 1, 2022 (Note 2) January 1, 2022 (Note 3)
before Intended Use" Amendments to IAS 37 "Onerous Contracts - Cost of Fulfilling a Contract"	January 1, 2022 (Note 4)

Note 1: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 "Agriculture" are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 "First-time Adoptions of IFRSs" are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs	Effective Date Announced by IASB (Note 1)
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture"	To be determined by IASB
IFRS 17 "Insurance Contracts"	January 1, 2023
Amendments to IFRS 17	January 1, 2023
Amendments to IAS 1 "Classification of Liabilities as Current or	January 1, 2023
Non-current"
Amendments to IAS 1 "Disclosure of Accounting Policies"	January 1, 2023 (Note 2)
Amendments to IAS 8 "Definition of Accounting Estimates"	January 1, 2023 (Note 3)
Amendments to IAS 12 "Deferred Tax related to Assets and	January 1, 2023 (Note 4)
Liabilities arising from a Single Transaction"

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the consolidated 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 SIGNIFICANT ACCOUNTING POLICIES

For the convenience of readers, the accompanying consolidated 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 consolidated financial statements shall prevail.

Significant accounting policies are summarized as follows:

Statement of Compliance

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

Basis of Preparation

These interim consolidated 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.

Basis of Consolidation

Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of GUC and entities controlled by GUC (its subsidiaries). Control is achieved where GUC has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies consistent with those used by GUC.

All intercompany transactions, balances, income and expenses are eliminated in full upon consolidation.

The subsidiaries in the consolidated financial statements and relevant information

		Main Businesses and Products	Establishment and Operating Location
Name of Investor	Name of Investee			September 30, 2021	Percentage of Ownership December 31, 2020	September 30, 2020	Remark
GUC	Global Unichip Corp.-NA (GUC-NA)	Products consulting, design and technical support service	U.S.A.	100%	100%	100%	Note
	Global Unichip Japan Co., Ltd. (GUC-Japan)	Products consulting, design and technical support service	Japan	100%	100%	100%	Note
	Global Unichip Corp. Europe B.V. (GUC-Europe)	Products consulting, design and technical support service	Netherlands	100%	100%	100%	Note
	Global Unichip Corp. Korea (GUC-Korea)	Products consulting, design and technical support service	Korea	100%	100%	100%	Note
	Global Unichip (Nanjing) Ltd. (GUC-Nanjing)	Products consulting, design and technical support service	Nanjing, China	100%	100%	100%	Note
	Global Unichip (Shanghai) Company, Limited (GUC-Shanghai)	Products consulting, design and technical support service	Shanghai, China	100%	100%	100%	Note

Note: The subsidiaries are not significant subsidiaries, their financial statements have not been reviewed or audited, except for GUC-NA and GUC-NJ.

Foreign Currencies

The financial statements of each individual consolidated entity were expressed in the currency, which reflected its primary economic environment (functional currency). The functional currency of GUC and the presentation currency of the consolidated financial statements are both New Taiwan Dollars (NT\$). In preparing the consolidated financial statements, the operating results and financial position of each consolidated entity are translated into NT\$.

In preparing the financial statements of each individual consolidated entity, 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 consolidated 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.

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 26: Financial Instruments.

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 trade receivables) and contract assets.

The Company always recognizes lifetime Expected Credit Losses (ECLs) for trade receivables. 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.

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.

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	4 to 7 years
Research and development equipment	3 to 5 years
Transportation equipment	5 years
Office equipment	3 to 5 years
Miscellaneous equipment	2 to 10 years

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 consolidated 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 consolidated balance sheets.

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 2 to 5 years Patents 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.

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.

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period's pre-tax income the tax rate that would be applicable to expected total annual earnings. The effect of a change in tax rate resulting from a change in tax law is recognized consistently with the accounting for the transaction itself which gives rise to the tax consequence, and is recognized in profit or loss in full in the period in which the change in tax rate occurs.

Current tax

According to the Income Tax Law, 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.

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.

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.

Government Grants

Government grants are recognized when the Company complies with the conditions attached to them and that the grants will be received.

5. CRITICAL 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.

The Company considers the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates in cash flow projections growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. The COVID-19 did not have material impact on the Company's accounting estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period, or in the period of the revisions and future periods if the revisions affect both current and future periods.

CRITICAL ACCOUNTING JUDGMENTS

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 judgement, historical experience and any known factors that would significantly affect the allowance; the management periodically reviews the adequacy of the allowance.

KEY SOURCES OF ESTIMATION AND UNCERTAINTY

Impairment of Financial Assets

The provision for impairment of trade receivables 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

	September 30,	December 31,	September 30,
	2021	2020	2020
At amortized cost accounts receivable Gross carrying amount Less: Allowance for credit loss	\$ 1,182,365 -	\$ 1,156,992 (19,921)	\$ 1,175,063 (19,921)
	\$	\$	\$
	1,182,365	1,137,071	1,155,142

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 trade receivables at an amount equal to lifetime expected credit losses. The expected credit losses on trade receivables 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 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 a trade 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 trade receivables 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

	September 30, 2021	December 31, 2020	September 30, 2020
No past due	\$ 1,078,158	\$ 1,098,680	\$ 1,086,560
Past due
Past due within 1-30 days	98,663	24,149	47,901
Past due within 31-60 days	5,544	15,738	21,776
Past due over 180 days	-	18,425	18,826
Less: Loss allowance	-	(19,921)	(19,921)
	\$ 1,182,365	\$ 1,137,071	\$ 1,155,142

The movement of the loss allowance of accounts receivable was as follows:

	Nine Months Ended September 30
	2021	2020
Balance at January 1 Add: Net remeasurement of credit loss allowance	\$ 19,921 (19,921)	\$ 19,921 -
Balance at September 30	\$ -	\$ 19,921

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	September 30,	December 31,	September 30,
	2021	2020	2020
Financial assets mandatorily classified as at FVTPL Non-derivative financial assets
Mutual funds	\$	\$	\$
	2,132,754	730,000	630,755

8. INVENTORIES

	September 30,	December 31,	September 30,
	2021	2020	2020
Finished goods Work in process Raw materials	\$ 159,775 1,840,216 404,178	\$ 122,300 1,380,771 171,395	\$ 75,737 1,629,700 228,452
	\$	\$	\$
	2,404,169	1,674,466	1,933,889

Write-down of inventories to net realizable value and reversal of inventory valuation losses were included in the cost of revenue, the amounts were as follows:

		Three Months Ended September 30	Nine Months Ended September 30
	2021	2020	2021	2020
Reversal of write-down of
inventories (write-down of inventories)	\$ 920	\$ (72,956)	\$ 54,098	\$ (65,389)

9. PROPERTY, PLANT AND EQUIPMENT

	Buildings	Machinery and Equipment	Research and Development Equipment	Transportation Equipment	Office Equipment	Miscellaneous Equipment	Total
Cost
Balance at January 1, 2021 Additions Disposals Effect of exchange rate changes	\$ 242,923 - - -	\$ 56,136 28,745 - -	\$ 1,560,939 23,334 (2,197) (223 )	\$ 1,375 - - -	\$ 29,450 3,811 - (324 )	\$ 429,300 17,227 (991 ) (1,288)	\$ 2,320,123 73,117 (3,188) (1,835)
Balance at September 30, 2021	\$ 242,923	\$ 84,881	\$ 1,581,853	\$ 1,375	\$ 32,937	\$ 444,248	\$ 2,388,217 (Continued)

	Buildings	Machinery and Equipment	Research and Development Equipment	Transportation Equipment	Office Equipment	Miscellaneous Equipment	Total
Accumulated depreciation
Balance at January 1, 2021 Depreciation Disposals Effect of exchange rate changes	\$ 78,096 3,574 - -	\$ 14,608 6,618 - -	\$ 1,106,091 192,178 (2,197) (157 )	\$ 689 199 - -	\$ 23,897 1,950 - (180 )	\$ 318,388 24,558 (991 ) (923 )	\$ 1,541,769 229,077 (3,188) (1,260)
Balance at September 30, 2021	\$ 81,670	\$ 21,226	\$ 1,295,915	\$ 888	\$ 25,667	\$ 341,032	\$ 1,766,398
Carrying amount at January 1, 2021 Carrying amount at September 30, 2021	\$ 164,827 \$ 161,253	\$ 41,528 \$ 63,655	\$ 454,848 \$ 285,938	\$ 686 \$ 487	\$ 5,553 \$ 7,270	\$ 110,912 \$ 103,216	\$ 778,354 \$ 621,819
Cost
Balance at January 1, 2020 Additions Disposals Effect of exchange rate changes	\$ 242,923 - - -	\$ 24,741 31,395 - -	\$ 1,506,119 42,392 (4,939) (326 )	\$ 1,375 - - -	\$ 29,728 1,454 (996 ) (126 )	\$ 430,306 9,879 - (474 )	\$ 2,235,192 85,120 (5,935) (926 )
Balance at September 30, 2020	\$ 242,923	\$ 56,136	\$ 1,543,246	\$ 1,375	\$ 30,060	\$ 439,711	\$ 2,313,451
Accumulated depreciation
Balance at January 1, 2020 Depreciation Disposals Effect of exchange rate changes	\$ 73,330 3,575 - -	\$ 8,560 4,070 - -	\$ 847,771 197,769 (4,939) (178 )	\$ 424 199 - -	\$ 23,338 1,725 (996 ) (76 )	\$ 299,282 24,833 - (422 )	\$ 1,252,705 232,171 (5,935) (676 )
Balance at September 30, 2020	\$ 76,905	\$ 12,630	\$ 1,040,423	\$ 623	\$ 23,991	\$ 323,693	\$ 1,478,265
Carrying amount at January 1, 2020 Carrying amount at September 30, 2020	\$ 169,593 \$ 166,018	\$ 16,181 \$ 43,506	\$ 658,348 \$ 502,823	\$ 951 \$ 752	\$ 6,390 \$ 6,069	\$ 131,024 \$ 116,018	\$ 982,487 \$ 835,186 (Concluded)

10. LEASE ARRANGEMENTS

a. Right-of-use assets

			Transportation
	Land	Buildings	Equipment	Total
Cost
Balance at January 1, 2021 Additions Lease expired Lease modification Effect of exchange rate changes	\$ 58,995 - - - -	\$ 288,970 87,477 (1,437) (14,719) (7,632)	\$ 4,957 341 (478) (1,345) -	\$ 352,922 87,818 (1,915) (16,064) (7,632)
Balance at September 30, 2021	\$ 58,995	\$ 352,659	\$ 3,475	\$ 415,129
Accumulated depreciation
Balance at January 1, 2021 Depreciation Lease expired Lease modification Effect of exchange rate changes	\$ 3,225 1,210 - - -	\$ 109,013 47,331 (1,437) (14,156) (2,670)	\$ 2,421 883 (478) (797) -	\$ 114,659 49,424 (1,915) (14,953) (2,670)
Balance at September 30, 2021	\$ 4,435	\$ 138,081	\$ 2,029	\$ 144,545
Carrying amounts at January 1, 2021 Carrying amounts at September 30, 2021	\$ 55,770 \$ 54,560	\$ 179,957 \$ 214,578	\$ 2,536 \$ 1,446	\$ 238,263 \$ 270,584 (Continued)

		Land		Buildings		Transportation Equipment		Total
	Cost
	Balance at January 1, 2020 Additions Effect of exchange rate changes	\$ 58,995 - -	\$	239,159 37,277 (87)	\$	4,957 - -	\$	303,111 37,277 (87)
	Balance at September 30, 2020	\$ 58,995	\$	276,349	\$	4,957	\$	340,301
	Accumulated depreciation
	Balance at January 1, 2020 Depreciation Effect of exchange rate changes	\$ 1,612 1,210 -	\$	51,968 42,764 (293)	\$	1,204 913 -	\$	54,784 44,887 (293)
	Balance at September 30, 2020	\$ 2,822	\$	94,439	\$	2,117	\$	99,378
	Carrying amounts at January 1, 2020 Carrying amounts at	\$ 57,383	\$	187,191	\$	3,753	\$	248,327
	September 30, 2020	\$ 56,173	\$	181,910	\$	2,840	\$	240,923 (Concluded)
		Three Months Ended	September 30			Nine Months Ended	September 30
		2021		2020		2021		2020
	Income from the subleasing of right-of-use assets (presented in other income)	\$ 75	\$	75	\$	224	\$	224
b.	Lease liabilities
				September 30, 2021		December 31, 2020		September 30, 2020
	Carrying amount
	Current Non-current		\$ \$	61,294 219,981	\$ \$	53,693 189,398	\$ \$	54,014 191,758
	Range of discount rates for lease liabilities was as follows:
				September 30,		December 31,		September 30,

	2021	2020	2020
Land	1.62%	1.62%	1.62%
Buildings	0.589%-4.75%	0.642%-4.75%	0.654%-4.75%
Transportation equipment	0.589%-0.825%	0.825%	0.825%

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 3 years and with an option to extend for an additional 1 year.

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

	September 30,	December 31,	September 30,
	2021	2020	2020
Year 1	\$	\$	\$
	299	299	299
Year 2	75	299	299
Year 3	-	-	74
	\$	\$	\$
	374	598	672

e. Other lease information

	Three Months Ended September 30				Nine Months Ended September 30
	2021		2020		2021		2020
Expenses relating to short-term leases	\$	1,569	\$	1,375	\$	4,221	\$	4,998
Expenses relating to low-value asset leases	\$	7	\$	12	\$	24	\$	23
Total cash outflow for leases					\$	(50,778)	\$	(50,127)

The Company's leases for certain buildings, transportation equipment 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.

11. INTANGIBLE ASSETS

	Software	Patents	Total
Cost
Balance at January 1, 2021 Additions Effect of exchange rate changes	\$ 1,059,356 164,624 (4)	\$ 519 - -	\$ 1,059,875 164,624 (4)
Balance at September 30, 2021	\$ 1,223,976	\$ 519	\$ 1,224,495
Accumulated amortization
Balance at January 1, 2021 Amortization Effect of exchange rate changes	\$ 615,510 225,179 (3)	\$ 480 22 -	\$ 615,990 225,201 (3)
Balance at September 30, 2021	\$ 840,686	\$ 502	\$ 841,188
Carrying amount at January 1, 2021 Carrying amount at September 30, 2021	\$ 443,846 \$ 383,290	\$ 39 \$ 17	\$ 443,885 \$ 383,307
Cost
Balance at January 1, 2020 Additions Effect of exchange rate changes	\$ 930,730 138,406 (1)	\$ 519 - -	\$ 931,249 138,406 (1)
Balance at September 30, 2020	\$ 1,069,135	\$ 519	\$ 1,069,654
Accumulated amortization
Balance at January 1, 2020 Amortization Effect of exchange rate changes	\$ 518,750 228,891 (1)	\$ 452 21 -	\$ 519,202 228,912 (1)
Balance at September 30, 2020	\$ 747,640	\$ 473	\$ 748,113
Carrying amount at January 1, 2020 Carrying amount at September 30, 2020	\$ 411,980 \$ 321,495	\$ 67 \$ 46	\$ 412,047 \$ 321,541

12. OTHER CURRENT ASSETS

	September 30, 2021	December 31, 2020	September 30, 2020
Prepayment for purchases	\$ 765,919	\$ 235,125	\$ 186,401
Prepaid license fees	315,941	359,389	191,300
VAT tax receivable	125,557	104,685	113,906
Prepaid expenses	28,829	30,736	38,730
Prepaid income tax	4,862	3,235	3,148
Temporary payments	558	8,898	8,772
	\$ 1,241,666	\$ 742,068	\$ 542,257

13. OTHER LIABILITIES

	September 30, 2021	December 31, 2020	September 30, 2020
Current
Payable for salaries and bonuses License fees payable Payable for royalties Refund liabilities Others	\$ 291,797 156,896 20,588 - 433,401 \$ 902,682	\$ 323,839 206,942 10,431 621 608,397 \$ 1,150,230	\$ 164,837 153,003 53,941 621 416,682 \$ 789,084
Non-current
License fees payable	\$ 113,476	\$ 74,921	\$ 52,973

The Company estimates and recognizes refund liabilities based on historical experience and the consideration of varying contractual terms.

The license fees payable are primarily attributable to several agreements that GUC entered into for certain technology license and software.

14. 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, GUC makes monthly contributions equal to 6% of each employee's monthly salary to employees' pension accounts. Furthermore, GUC-NA, GUC-Japan, GUC-Korea, GUC-Shanghai and GUC-Nanjing make monthly contributions at certain percentages of the salary of their employees. Accordingly, the Company recognized expenses of NT\$16,359 thousand and NT\$13,316 thousand in the consolidated statements of comprehensive income for the three months ended September 30, 2021 and 2020, respectively; and NT\$48,249 thousand and NT\$40,199 thousand in the consolidated statements of comprehensive income for the nine months ended September 30, 2021 and 2020, respectively.

b. Defined benefit plans

GUC 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. GUC 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, GUC 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, GUC 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"); GUC has no right to influence the investment policy and strategy.

GUC adopted projected unit credit method to measure the present value of the defined benefit obligation, current service costs and prior service costs.

GUC adopted the pension cost rate from the actuarial valuation as of December 31, 2020 and 2019 to determine and recognize pension expenses in general and administrative expenses of NT\$399 thousand and NT\$394 thousand in the consolidated statements of comprehensive income for the three months ended September 30, 2021 and 2020, respectively; and NT\$1,196 thousand and NT\$1,181 thousand in the consolidated statements of comprehensive income for the nine months ended September 30, 2021 and 2020, respectively.

15. EQUITY

a. Share capital

	September 30,	December 31,	September 30,
	2021	2020	2020
Authorized Issued	\$ 1,500,000 \$ 1,340,119	\$ 1,500,000 \$ 1,340,119	\$ 1,500,000 \$ 1,340,119

As of September 30, 2021, December 31, 2020 and September 30, 2020 GUC is authorized to issue 150,000 thousand shares, with par value of \$10; each share is entitled to the right to vote and to receive dividends; a total of 134,011 thousand shares have been paid and issued.

b. Capital surplus

	September 30,	December 31,	September 30,
	2021	2020	2020
From merger	\$	\$	\$
	16,621	16,621	16,621
Additional paid-in capital	13,232	13,232	13,232
Donations	2,660	2,660	2,660
Dividends from claims extinguished by prescription	128	105	105
	\$	\$	\$
	32,641	32,618	32,618

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 GUC's paid-in capital. The capital surplus from dividends from claims extinguished by prescription may be used to offset a deficit.

c. Retained earnings and dividend policy

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

1) Legal reserve at 10% of the remaining profit;
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 23.

In GUC'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.

The appropriation for legal reserve shall be made until the reserve equals GUC'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 GUC 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 2020 and 2019 had been approved in the meetings of the shareholders of GUC held on May 20, 2021 and May 14, 2020, respectively. The appropriations and dividends per share were as follows:

		Appropriation of Earnings
		For the Year Ended December 31
	2020	2019
Legal reserve	\$ 84,544	\$ 62,920
Special reserve	\$ 1,408	\$ 12,109
Cash dividends	\$ 670,060	\$ 670,060
Cash dividends per share (NT\$)	\$ 5.00	\$ 5.00

d. Others

Changes in foreign currency translation reserve were as follows:

	Three Months Ended September 30		Nine Months Ended September 30
	2021	2020	2021	2020
Balance, beginning of period Exchange differences on translation of foreign	\$ (36,634)	\$ (29,167)	\$ (22,153)	\$ (20,745)
operations	(1,838)	2,564	(16,319)	(5,858)
Balance, end of period	\$ (38,472)	\$ (26,603)	\$ (38,472)	\$ (26,603)

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

16. NET REVENUE

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

		Three Months Ended September 30	Nine Months Ended September 30
	2021	2020	2021	2020
Revenue from customer contracts Net revenue from sale of goods Net revenue from NRE service	\$ 2,599,374 985,478	\$ 2,087,267 1,441,255	\$ 6,763,152 3,434,728	\$ 6,631,639 2,993,548
	\$ 3,584,852	\$ 3,528,522	\$10,197,880	\$ 9,625,187

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

	September 30,	December 31,	September 30,	January 1,
	2021	2020	2020	2020
Accounts receivable	\$	\$	\$	\$
	1,182,365	1,137,071	1,155,142	1,377,203
Contract assets - current	\$ -	\$ -	\$ 148,248	\$ 324,965
Contract liabilities - current	\$ 4,799,931	\$ 2,381,778	\$ 1,530,205	\$ 1,109,042

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

In the nine months ended September 30, 2021 and 2020, the Company recognized revenue of NT\$1,764,363 thousand and NT\$871,586 thousand, respectively from the beginning balance of contract liability.

b. Disaggregation of revenue from contracts with customers

		Three Months Ended September 30	Nine Months Ended September 30
Production	2021	2020	2021	2020
ASIC and wafer product	\$	\$	\$	\$
	2,599,374	2,087,267	6,763,152	6,631,639
NRE	869,669	1,374,755	3,240,378	2,667,973
Others	115,809	66,500	194,350	325,575
	\$	\$	\$	\$
	3,584,852	3,528,522	10,197,880	9,625,187

	Three Months Ended September 30		Nine Months Ended September 30
Region	2021	2020	2021	2020
China	\$ 1,405,591	\$ 768,713	\$ 3,261,609	\$ 2,031,747
United States	739,804	1,014,381	2,244,846	3,246,462
Taiwan	671,019	741,430	1,940,207	1,849,460
Japan	263,040	118,924	1,108,282	264,137
Korea	254,338	354,520	1,103,904	1,173,282
Europe	251,060	530,554	539,032	1,060,099
	\$ 3,584,852	\$ 3,528,522	\$ 10,197,880	\$ 9,625,187

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

		Three Months Ended September 30	Nine Months Ended September 30
Application Type	2021	2020	2021	2020
Digital Consumer	\$ 1,508,561	\$ 1,419,600	\$ 4,446,225	\$ 4,441,327
Networking	704,050	776,505	2,425,692	2,095,372
AI/ML	718,885	790,961	1,260,054	1,121,788
Industry	424,305	373,312	1,194,713	1,422,947
Others	229,051	168,144	871,196	543,753
	\$ 3,584,852	\$ 3,528,522	\$ 10,197,880	\$ 9,625,187
		Three Months Ended		Nine Months Ended
		September 30		September 30
Customer Type	2021	2020	2021	2020
System House	\$ 2,470,395	\$ 2,112,059	\$ 6,953,540	\$ 6,243,277
Fabless	1,114,457	1,416,463	3,244,340	3,381,910
	\$ 3,584,852	\$ 3,528,522	\$ 10,197,880	\$ 9,625,187
		Three Months Ended September 30, 2021	September 30, 2020	Three Months Ended
	Net Revenue	Net Revenue	Net Revenue	Net Revenue
	from NRE	from Sale of	from NRE	from Sale of
Resolution	Service	Goods	Service	Goods
7-nanometer	\$ 285,672	\$ 545,677	\$ 610,313	\$ -
16-nanometer	334,762	481,418	445,721	280,718
28-nanometer	129,323	419,371	207,508	473,935
40-nanometer and above	119,912	1,152,908	111,213	1,332,614
Others	115,809	-	66,500	-
	\$ 985,478	\$ 2,599,374	\$ 1,441,255	\$ 2,087,267

		Nine Months Ended September 30, 2021	Nine Months Ended September 30, 2020
Resolution	Net Revenue from NRE Service	Net Revenue from Sale of Goods	Net Revenue from NRE Service	Net Revenue from Sale of Goods
7-nanometer	\$ 1,009,076	\$ 545,677	\$ 748,639	\$ -
16-nanometer	1,385,826	1,249,787	838,608	558,152
28-nanometer	500,727	1,284,724	655,361	2,300,487
40-nanometer and above	344,749	3,682,964	425,365	3,773,000
Others	194,350	-	325,575	-
	\$ 3,434,728	\$ 6,763,152	\$ 2,993,548	\$ 6,631,639

17. INTEREST INCOME

		Three Months Ended September 30	Nine Months Ended September 30
	2021	2020	2021 2020
Bank deposits	\$ 3,893	\$ 2,169	\$ 9,780	\$ 9,732

18. OTHER INCOME

	Three Months Ended September 30					Nine Months Ended September 30
		2021	2020		2021		2020
Government grants	\$	-	\$	709	\$	55,525	\$	56,038
Past due over 2 years' contract
liabilities transferred to income		4,333		-		17,709		3,528
Rental income		75		75		224		224
Other income		2,919		773		5,105		1,934
	\$	7,327	\$	1,557	\$	78,563	\$	61,724

19. OTHER GAINS AND LOSSES

	Three Months Ended September 30					Nine Months Ended September 30
	2021	2020		2021		2020
Gain on financial assets at fair value through profit or loss Gain on lease modification Foreign exchange loss, net	\$ 1,025 6 (5,753)	\$	871 - (6,486)	\$	2,754 462 (27,102)	\$	2,159 - (22,509)
	\$ (4,722)	\$	(5,615)	\$	(23,886)	\$	(20,350)

20. FINANCE COSTS

	Three Months Ended September 30		Nine Months Ended September 30
Interest on lease liabilities Interest on bank loans	2021	2020	2021	2020
	\$ 1,149 -	\$ 880 -	\$ 3,538 -	\$ 2,752 25
	\$ 1,149	\$ 880	\$ 3,538	\$ 2,777

21. INCOME TAX

a. Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

	Three Months Ended September 30				Nine Months Ended September 30
	2021	2020		2021		2020
Current income tax expense Current tax expense recognized in the current
period Adjustments to income tax of	\$ 73,196	\$	19,390	\$	157,352	\$	34,634
prior years	- 73,196		(334) 19,056		(209) 157,143		(781) 33,853
Deferred income tax expense Temporary differences	636		(2,096)		31,901		32,196
Effect of tax rate changes	- 636		- (2,096)		49 31,950		- 32,196
Income tax expense recognized in profit or loss	\$ 73,832	\$	16,960	\$	189,093	\$	66,049

b. Income tax examination

The tax authorities have examined the income tax returns of GUC through 2019.

22. EARNINGS PER SHARE

		Three Months Ended September 30		Nine Months Ended September 30
	2021	2020	2021	2020
Basic EPS Diluted EPS	\$ 3.11 \$ 3.10	\$ 0.80 \$ 0.79	\$ 7.05 \$ 7.03	\$ 1.81 \$ 1.80

EPS is computed as follows:

	Amounts (Numerator)	Number of Shares (Denominator) (In Thousands)	EPS (NT\$)
Three months ended September 30, 2021
Basic EPS Net income available to common shareholders Effect of dilutive potential common stock	\$ 417,584 -	134,011 356	\$3.11
Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock)	\$ 417,584	134,367	\$3.10
Three months ended September 30, 2020
Basic EPS Net income available to common shareholders Effect of dilutive potential common stock	\$ 106,453 -	134,011 124	\$0.80
Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock)	\$ 106,453	134,135	\$0.79
Nine months ended September 30, 2021
Basic EPS Net income available to common shareholders Effect of dilutive potential common stock	\$ 945,175 -	134,011 388	\$7.05
Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock)	\$ 945,175	134,399	\$7.03
Nine months ended September 30, 2020
Basic EPS Net income available to common shareholders Effect of dilutive potential common stock	\$ 241,956 -	134,011 166	\$1.81
Diluted EPS Net income available to common shareholders (including effect of dilutive potential common stock)	\$ 241,956	134,177	\$1.80

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.

23. ADDITIONAL INFORMATION OF EXPENSES BY NATURE

Net income included the following items:

			Three Months Ended September 30	Nine Months Ended September 30
		2021	2020	2021	2020
a.	Depreciation expense
	Depreciation of property, plant and equipment Recognized in cost of
	revenue Recognized in operating	\$ 3,156	\$ 2,425	\$ 8,035	\$ 5,415
	expenses	73,953 77,109	75,819 78,244	221,042 229,077	226,756 232,171
	Depreciation of right-of-use assets Recognized in cost of
	revenue	938	1,006	2,953	2,997
	Recognized in operating expenses	15,636 16,574	14,102 15,108	46,471 49,424	41,890 44,887
		\$ 93,683	\$ 93,352	\$ 278,501	\$ 277,058
b.	Amortization of intangible assets
	Recognized in cost of revenue	\$ 59	\$ -	\$ 158	\$ -
	Recognized in operating expenses	75,793	76,797	225,043	228,912
		\$ 75,852	\$ 76,797	\$ 225,201	\$ 228,912
c.	Research and development costs expensed as incurred	\$ 742,245	\$ 609,616	\$ 2,051,577	\$ 1,756,722
d.	Employee benefits expense
	Post-employment benefits (Note 14)
	Defined contribution plans Defined benefit plans	\$ 16,359 399	\$ 13,316 394	\$ 48,249 1,196	\$ 40,199 1,181
	Other employee benefits	16,758 678,098	13,710 485,712	49,445 1,793,482	41,380 1,401,074
		\$ 694,856	\$ 499,422	\$ 1,842,927	\$ 1,442,454 (Continued)

		Three Months Ended September 30	Nine Months Ended September 30
	2021	2020	2021	2020
Employee benefits expense summarized by function Recognized in cost of revenue Recognized in operating expenses	\$ 65,033 629,823 \$ 694,856	\$ 42,765 456,657 \$ 499,422	\$ 174,148 1,668,779 \$ 1,842,927	\$ 123,226 1,319,228 \$ 1,442,454 (Concluded)

e. Employees' compensation and remuneration to directors

GUC 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 GUC are not entitled to receive the remuneration to directors. GUC shall first offset its losses in previous years before allocating for employees' compensation and remuneration to directors. GUC may issue stock or cash compensation to employees of an affiliated company upon meeting the conditions set by the Board of Directors.

For the three months ended September 30, and for the nine months ended September 30, 2021 and 2020, GUC accrued employees' compensation and remuneration to directors were made at the approved percentage of net income before tax and before deduction of the employees' compensation and remuneration to directors. The accrued amounts were as follows:

	Three Months Ended September 30			Nine Months Ended September 30
	2021		2020		2021		2020
Employees' compensation Remuneration to directors	\$ 92,766 9,809	\$	15,371 1,036	\$	177,955 17,867	\$	32,046 1,412

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

The employees' compensation and remuneration to directors of GUC in the amounts of NT\$133,640 thousand and NT\$11,994 thousand in cash for 2020, respectively, and in the amounts of NT\$75,228 thousand and NT\$5,463 thousand in cash for 2019, respectively, were approved by the Board of Directors in their meetings held on January 28, 2021 and February 6, 2020, respectively. The aforementioned approved amounts did not have any difference with the amounts recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019, respectively.

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

24. CASH FLOW INFORMATION

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

	Balance as of January 1, 2021	Cash Flows		Lease Additions		Non-cash Changes Lease Termination		Foreign Exchange Movement	Balance as of September 30, 2021
Guarantee deposits Lease liabilities	\$ 2,957 243,091	\$ 50 (42,823)	\$	- 87,818	\$	- (1,573)	\$	(65) (5,238)	\$ 2,942 281,275
						Non-cash Changes			Balance as of
	Balance as of January 1, 2020	Cash Flows		Lease Additions			Foreign Exchange Movement		September 30, 2020
Guarantee deposits Lease liabilities	\$ 3,075 250,577	\$	38 (42,308)	\$	- 37,277	\$		(88) 226	\$ 3,025 245,772

25. 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.

26. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

September 30, 2021	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL	\$	\$	\$	\$
Mutual funds	2,132,754	-	-	2,132,754
December 31, 2020	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL	\$	\$	\$	\$
Mutual funds	730,000	-	-	730,000
September 30, 2020	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL	\$	\$	\$	\$
Mutual funds	630,755	-	-	630,755

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

b. Categories of financial instruments

	September 30, 2021	December 31, 2020	September 30, 2020
Financial assets
FVTPL
Mandatorily classified as at FVTPL	\$ 2,132,754	\$ 730,000	\$ 630,755
Amortized cost
Cash and cash equivalents	4,375,186	3,896,753	2,336,258
Accounts receivable, net (including related
parties)	1,209,165	1,174,442	1,164,132
Other financial assets	654	383	408
Refundable deposits	2,515	1,328	2,360
Pledged time deposits	22,200	22,200	22,200
	\$ 7,742,474	\$ 5,825,106	\$ 4,156,113
Financial liabilities
Amortized cost
Accounts payable (including related
parties)	\$ 1,384,703	\$ 1,061,100	\$ 1,585,016
Payables on machinery and equipment	16,401	4,171	-
Accrued expenses and other current
liabilities	439,206	612,556	453,822
Other long-term payables	270,372	281,863	205,976
Guarantee deposits	2,785	2,848	2,910
	\$ 2,113,467	\$ 1,962,538	\$ 2,247,724

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 nine months ended September 30, 2021 and 2020 would have decreased by NT\$46,551 thousand and increased by NT\$3,743 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 trade receivables, 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 consolidated balance sheet.

Business related credit risk

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

As of September 30, 2021, December 31, 2020 and September 30, 2020, the Company's ten largest customers accounted for 57%, 31% and 52% 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.

As of September 30, 2021, December 31, 2020 and September 30, 2020, 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	Less Than 1 Year	2-3 Years	4+ Years	Total
September 30, 2021
Accounts payable (including related
parties)	\$ 1,384,703	\$ -	\$ -	\$ 1,384,703
Accrued expenses and other current
liabilities	439,206	-	-	439,206
Lease liabilities	65,226	126,554	115,958	307,738
Other long-term payables	156,896	113,476	-	270,372
Guarantee deposits	-	-	2,785	2,785
	\$ 2,046,031	\$ 240,030	\$ 118,743	\$ 2,404,804

Additional information about the maturity analysis of lease liabilities:

	Less than 4 Year	4-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$ 191,780	\$ 64,991	\$ 10,693	\$ 10,692	\$ 29,582
Non-derivative Financial Liabilities	Less Than 1 Year	2-3 Years		4+ Years	Total
December 31, 2020
Accounts payable (including related parties) Payables on machinery and	\$ 1,061,100	\$	- \$	-	\$ 1,061,100
equipment	4,171		-	-	4,171
Accrued expenses and other current liabilities	612,556		-	-	612,556
Lease liabilities	56,593	106,365		102,968	265,926
Other long-term payables	206,942	74,921		-	281,863
Guarantee deposits	-		-	2,848	2,848
	\$ 1,941,362	\$ 181,286	\$	105,816	\$ 2,228,464

Additional information about the maturity analysis of lease liabilities:

	Less than 4 Year	4-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$ 162,958	\$ 50,398	\$ 10,692	\$ 10,692	\$ 31,186
Non-derivative Financial Liabilities	Less Than 1 Year	2-3 Years		4+ Years	Total
September 30, 2020
Accounts payable (including related
parties)	\$ 1,585,016	\$	- \$	-	\$ 1,585,016
Accrued expenses and other current
liabilities	453,822		-	-	453,822
Lease liabilities	56,964	104,602		107,539	269,105
Other long-term payables	153,003	52,973		-	205,976
Guarantee deposits	-		-	2,910	2,910
	\$ 2,248,805	\$ 157,575	\$	110,449	\$ 2,516,829

Additional information about the maturity analysis of lease liabilities:

	Less than 4 Year	4-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$ 161,566	\$ 54,434	\$ 10,692	\$ 10,692	\$ 31,721

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 consolidated 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.

27. RELATED PARTY TRANSACTIONS

Intercompany balances and transactions between GUC and its subsidiaries have been eliminated upon consolidation; therefore, those items are not disclosed in this note. The following is a summary of transactions between the Company and other related parties:

a. Related party name and category

Related Party Name	Related Party Category
Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC)	An investor that accounts for its investment by using equity method
TSMC North America (TSMC-NA)	A subsidiary of TSMC
VisEra Technologies Co., Ltd. (VisEra)	A subsidiary of TSMC
Vanguard International Semiconductor	An associate of TSMC
Corporation (VIS)

b. Operating transactions

			Three Months Ended		Nine Months Ended
	Related Party Name and		September 30	September 30
Line Item	Category	2021	2020	2021	2020
Net revenue from sale	Investors with significant influence over the Company	\$ 100,396	\$ 56,122	\$ 177,388	\$ 134,702
Purchases	Investors with significant influence over the Company TSMC TSMC-NA	\$ 1,345,558 277,738	\$ 967,963 339,045	\$ 2,886,129 905,709	\$ 2,641,588 724,981
		1,623,296	1,307,008	3,791,838	3,366,569
	Other related parties	11,926	6,839	35,533	59,304
		\$ 1,635,222	\$ 1,313,847	\$ 3,827,371	\$ 3,425,873
Manufacturing overhead	Investors with significant influence over the Company
	TSMC	\$ 237,961	\$ 391,772	\$ 721,168	\$ 1,116,350
	TSMC-NA	138,328	201,458	369,228	383,565
	VisEra	-	395	1,203	933
		\$ 376,289	\$ 593,625	\$ 1,091,599	\$ 1,500,848
Operating expenses	Investors with significant influence over the Company	\$ 2,606	\$ 3,954	\$ 8,758	\$ 10,321

Line Item	Related Party Name and Category	September 30, 2021	December 31, 2020	September 30, 2020
Receivables from related parties	Investors with significant influence over the Company TSMC	\$ 26,800	\$ 37,371	\$ 8,990
Other current assets	Investors with significant influence over the Company TSMC	\$ 522,661	\$ -	\$ -
Refundable deposits	Investors with significant influence over the Company VisEra TSMC-NA	\$ 2,832 - \$ 2,832	\$ 2,832 419 \$ 3,251	\$ 2,832 428 \$ 3,260
Payables to related parties	Investors with significant influence over the Company TSMC TSMC-NA VisEra Other related parties	\$ 586,597 82,150 - 668,747 4,536 \$ 673,283	\$ 317,199 58,136 234 375,569 3,441 \$ 379,010	\$ 556,569 144,155 391 701,115 321 \$ 701,436
Accrued expenses and other current liabilities	Investors with significant influence over the Company	\$ -	\$ 1,057	\$ 156

The following balances were outstanding at the end of the reporting period:

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

Line Item	Related Party Name and Category		September 30, 2021		December 31, 2020			September 30, 2020
Lease liabilities - current	Investors with significant influence over the Company
	VisEra	\$	16,358		\$ 16,236		\$	16,195
	TSMC-NA		-		1,671			3,680
		\$	16,358		\$ 17,907		\$	19,875
Lease liabilities - non-current	Investors with significant influence over the Company
	VisEra	\$	54,311		\$ 66,595		\$	70,670
	Related Party Name and	Three Months Ended	September 30				Nine Months Ended September 30
Line Item	Category	2021		2020		2021		2020
Finance costs	Investors with significant influence over the Company
	VisEra	\$ 184	\$	225	\$	582	\$	704
	TSMC-NA	-		36		4		149
		\$ 184	\$	261	\$	586	\$	853

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

d. Compensation of key management personnel:

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

	Three Months Ended September 30 2021 2020			Nine Months Ended September 30
			2021	2020
Short-term employee benefits Post-employment benefits	\$ 43,856 189	\$ 18,480 216	\$ 86,820 540	\$ 54,422 486
	\$ 44,045	\$ 18,696	\$ 87,360	\$ 54,908

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

28. PLEDGED OR MORTGAGED ASSETS

As of September 30, 2021, December 31, 2020 and September 30, 2020 GUC 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).

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

GUC has entered into license agreements with several companies that own intellectual property rights. According to the agreements, GUC 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, GUC shall pay at least US\$4,200 thousand, US\$4,200 thousand and US\$8,200 thousand to the counterparty in the period from April 2020 to April 2023, from October 2020 to October 2023 and from March 2021 to March 2024, respectively.

Under the agreement, GUC shall pay at least US\$1,500 thousand to the counterparty in the period from July 2021 to June 2023.

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

The following information was aggregated by the foreign currencies other than functional currencies of the consolidated entities. The significant foreign-currency financial assets and liabilities were as follows:

(Unit: Foreign Currency in Thousands)

	Foreign Currency	Exchange Rate (Note)	Carrying Amount
September 30, 2021
Monetary item - financial assets
USD	\$ 55,961	27.85	\$ 1,558,503
Monetary item - financial liabilities
USD	71,409	27.85	1,988,748
JPY	71,551	0.249	17,816
RMB	3,391	4.305	14,600
December 31, 2020
Monetary item - financial assets
USD	82,639	28.48	2,353,564
Monetary item - financial liabilities
USD	58,306	28.48	1,660,554
JPY	66,988	0.2763	18,509
RMB	3,077	4.377	13,468
			(Continued)

	Foreign Currency	Exchange Rate (Note)	Carrying Amount
September 30, 2020
Monetary item - financial assets
USD	\$ 60,180	29.10	\$ 1,751,235
Monetary item - financial liabilities
USD	60,389	29.10	1,757,319
JPY	63,593	0.2756	17,526
RMB	2,638	4.2690	11,261
			(Concluded)

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

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

		Three Months Ended September 30
	2021		2020
		Net Foreign		Net Foreign
		Exchange Gain		Exchange Gain
Foreign Currency	Exchange Rate	(Loss)	Exchange Rate	(Loss)
JPY	0.2531 (JPY:NTD)	\$ 64	0.2776 (JPY:NTD)	\$ 229
EUR	32.8530 (EUR:NTD)	35	34.4352 (EUR:NTD)	(118)
KRW	0.02425 (KRW:NTD)	3	0.02501 (KRW:NTD)	1
RMB	4.3055 (RMB:NTD)	(24)	4.2570 (RMB:NTD)	(700)
USD	27.8582 (USD:NTD)	(6,091)	29.4499 (USD:NTD)	(1,353)
USD	1,146.1198 (USD:KRW)	20	1,173.0279 (USD:KRW)	(46)
USD	6.4683 (USD:RMB)	240	6.9729 (USD:RMB)	(4,499)
		\$ 5,753		\$ (6,486)
		Nine Months Ended September 30
	2021		2020
		Net Foreign		Net Foreign
		Exchange Gain		Exchange Gain
Foreign Currency	Exchange Rate	(Loss)	Exchange Rate	(Loss)
JPY	0.2589 (JPY:NTD)	\$ 1,992	0.2774 (JPY:NTD)	\$ (610)
EUR	33.5933 (EUR:NTD)	119	33.5188 (EUR:NTD)	(237)
KRW	0.02503 (KRW:NTD)	16	0.02507 (KRW:NTD)	(3)
RMB	4.3375 (RMB:NTD)	(43)	4.2595 (RMB:NTD)	499
USD	28.0671 (USD:NTD)	(28,026)	29.8170 (USD:NTD)	(20,478)
USD	1,117.9844 (USD:KRW)	9	1,186.3121 (USD:KRW)	(6)
USD	6.4765 (USD:RMB)	(1,169)	7.0071 (USD:RMB)	(1,674)

31. 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 related operating segment information and Note 16 for information about disaggregation of revenue.

32. 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;
10) Others: Intercompany relationships and significant intercompany transactions: See Table 4 attached;
11) Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in Mainland China): See Table 5 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 6 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 4 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.

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 30, 2021

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

				September 30, 2021
Holding Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	Shares/Units	Carrying Amount	Percentage of Ownership (%)	Fair Value	Note
GUC	Mutual funds
	Jih Sun Money Market Fund	-	Financial assets at fair value through profit or loss - current	48,801,508	\$ 731,017	-	\$ 731,017
	Taishin 1699 Money Market Fund	-	Financial assets at fair value through profit or loss - current	27,846,440	380,686	-	380,686
	Fuh Haw Money Market Fund	-	Financial assets at fair value through profit or loss - current	24,064,102	350,364	-	350,364
	UPAMC James Bond Money Market Fund	-	Financial assets at fair value through profit or loss - current	13,054,458	220,156	-	220,156
	Yuanta Wan Tai Money Market Fund	-	Financial assets at fair value through profit or loss - current	13,109,940	200,215	-	200,215
	Taishin Ta-Chong Money Market Fund	-	Financial assets at fair value through profit or loss - current	10,473,032	150,217	-	150,217
	Prudential Financial Money Market Fund	-	Financial assets at fair value through profit or loss - current	6,262,643	100,099	-	100,099
	Preferred stock
	eTopus Technology Inc.	-	Financial assets at fair value through profit or loss - non-current	1,515,151	-	3.0	-

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT\$300 MILLION OR 20% OF THE PAID-IN CAPITAL NINE MONTHS ENDED SEPTEMBER 30, 2021 (Amounts in Thousands of New Taiwan Dollars)

						Beginning Balance		Acquisition			Disposal		Ending Balance
Company Name	Type and Name of Marketable Securities	Financial Statement Account Counterparty Relationship			Units	Amount	Units	Amount	Units	Amount	Carrying Amount	Gains on Disposal	Units	Amount
GUC	Jih Sun Money Market Fund Fuh Haw Money Market Fund Financial assets at fair value	Financial assets at fair value through profit or loss through profit or loss	- -	- -	26,755,853 3,437,844	\$ 400,000 50,000	22,045,655 48,113,841	\$ 330,000 700,000	- 27,487,583	\$ - 400,000	\$ - 399,897	\$ - 103	48,801,508 24,064,102	\$ 731,017 350,364

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL NINE MONTHS ENDED SEPTEMBER 30, 2021 (Amounts in Thousands of New Taiwan Dollars)

			Transaction Details					Abnormal Transaction	Notes/Accounts Receivable (Payable)
Company Name	Related Party	Nature of Relationship	Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total	Note
GUC	TSMC	TSMC is an investor that accounts for its investment by using equity method	Sales	\$ 177,388	2	30 days after monthly closing	Note 27	Note 27	\$ 26,800	2
	TSMC-NA	TSMC-NA is a subsidiary of TSMC	Purchases Purchases	2,886,778 905,709	75 24	30 days after monthly closing 30 days after invoice date and 30 days after monthly closing	Note 27 Note 27	Note 27 Note 27	(521,504) (82,150)	(38) (6)

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS NINE MONTHS ENDED SEPTEMBER 30, 2021 (Amounts in Thousands of New Taiwan Dollars)

					Intercompany Transactions
No.	Company Name	Counterparty	Nature of Relationship (Note 1)	Financial Statement Account	Amount	Terms (Note 2)	Percentage to Consolidated Net Revenue or Total Assets
0 GUC		GUC-NA	1	Operating expenses	\$ 182,098	-	2%
				Accrued expenses and other current liabilities	14,885	-	-
		GUC-Japan	1	Operating expenses	175,940	-	2%
				Accrued expenses and other current liabilities	17,816	-	-
		GUC-Europe	1	Operating expenses	25,318	-	-
				Accrued expenses and other current liabilities	2,715	-	-
		GUC-Korea	1	Operating expenses	5,552	-	-
				Accrued expenses and other current liabilities	485	-	-
		GUC-Shanghai	1	Operating expenses	69,378	-	1%
				Accrued expenses and other current liabilities	6,039	-	-
		GUC-Nanjing	1	Operating expenses	76,474	-	1%
				Accounts payable	57,531	-	-
				Accrued expenses and other current liabilities	8,561	-	-

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.

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) NINE MONTHS ENDED SEPTEMBER 30, 2021

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

						Original Investment Amount			Balance as of September 30, 2021
					September 30,		December 31, 2021 2020					Net Income	Investment
Investor Company Investee Company		Location	Main Businesses and Products	(Foreign			(Foreign	Shares	Percentage of Ownership (%)	Carrying Amount	(Losses) of the Investee	Income (Losses)	Note
				Currencies in Thousands)			Currencies in Thousands)
GUC	GUC-NA	U.S.A.	Products consulting, design and technical support service \$		40,268	\$	40,268	800,000	100	\$ 134,795	\$ 6,534	\$ 6,534
	GUC-Japan	Japan	Products consulting, design and technical support service	( US\$ ( YEN 55,000)	1,264) 15,393	( US\$ ( YEN 55,000)	1,264) 15,393	1,100	100	62,501	7,972	7,972
	GUC-Europe	Netherlands	Products consulting, design and technical support service	( EUR	8,109 200)	( EUR	8,109 200)	-	100	12,365	1,254	1,254
	GUC-Korea	Korea	Products consulting, design and technical support service	( KRW222,545)	5,974	( KRW222,545)	5,974	44,000	100	6,689	317	317

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA NINE MONTHS ENDED SEPTEMBER 30, 2021 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investee Company	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, 2021 (US\$ in Thousands)	Outflow	Investment Flows Inflow	Accumulated Outflow of Investment from Taiwan as of September 30, 2021 (US\$ in Thousands)	Net Income (Losses) of the Investee	Percentage of Ownership	Investment Income (Losses)	Carrying Amount as of September 30, 2021	Accumulated Inward Remittance of Earnings as of September 30, 2021
GUC-Nanjing GUC-Shanghai	Products consulting, design and technical support service Products consulting, design and technical support service	\$ 118,133 (US\$ 4,000) 31,165 (US\$ 1,000)	(Note 1) (Note 1)	\$ 90,138 (US\$ 3,000) 31,165 (US\$ 1,000)	\$ 27,995 (US\$ 1,000) -	\$ - -	\$ 118,133 (US\$ 4,000) 31,165 (US\$ 1,000)	\$ 87,280 3,745	100% 100%	\$ 87,280 (Note 2) 3,745 (Note 3)	\$ 346,224 44,392	\$ - -

Accumulated Investment in Mainland China as of September 30, 2021 (US\$ in Thousands)	Investment Amounts Authorized by Investment Commission, MOEA (US\$ in Thousands)	Upper Limit on Investment (US\$ in Thousands)
\$	\$	\$
149,298	207,998	2,847,482
(US\$	(US\$	(Note
5,000)	7,000)	4)

Note 1: The Company invested the investee directly.

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

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

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

GLOBAL UNICHIP CORP. AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS SEPTEMBER 30, 2021

	Shares
Name of Major Shareholder	Number of Shares	Percentage of Ownership (%)
Taiwan Semiconductor Manufacturing Co., Ltd. SmallCap World Fund Inc.	46,687,859 6,965,000	34.83 5.19

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 truster who opened the trust account. 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.

AI assistant

GUC — Interim / Quarterly Report 2021

52327_rns_2021-10-28_ff1b1fff-e6e8-46aa-afaa-7286389870ef.pdf

Global Unichip Corp. and Subsidiaries

Notice to Readers

CONSOLIDATED BALANCE SHEETS

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) (Reviewed, Not Audited)

1. GENERAL

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

Basis of Preparation

Basis of Consolidation

Principles for preparing consolidated financial statements

The subsidiaries in the consolidated financial statements and relevant information

Foreign Currencies

Classification of Current and Non-current Assets and Liabilities

Cash Equivalents

Financial Instruments

Financial Assets

b. Impairment of financial assets and contract assets

Financial Liabilities and Equity Instruments

Inventories

Property, Plant and Equipment

Leases

b. The Company as lessee

Intangible Assets

Impairment of Tangible and Intangible Assets

Revenue Recognition

Revenue from sale of goods

Rendering of Non-Recurring Engineering (NRE) services

Retirement Benefits

Taxation

Current tax

Deferred tax

Current tax and deferred tax for the period

Government Grants

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

CRITICAL ACCOUNTING JUDGMENTS

Revenue Recognition

KEY SOURCES OF ESTIMATION AND UNCERTAINTY

Impairment of Financial Assets

Realization of Deferred Income Tax Assets

Valuation of Inventory

Lessees' Incremental Borrowing Rates

6. ACCOUNTS RECEIVABLE, NET

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. INVENTORIES

9. PROPERTY, PLANT AND EQUIPMENT

10. LEASE ARRANGEMENTS

a. Right-of-use assets

Sublease of right-of-use assets

e. Other lease information

11. INTANGIBLE ASSETS

12. OTHER CURRENT ASSETS

13. OTHER LIABILITIES

14. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

15. EQUITY

d. Others

16. NET REVENUE

17. INTEREST INCOME

18. OTHER INCOME

19. OTHER GAINS AND LOSSES

20. FINANCE COSTS

21. INCOME TAX

b. Income tax examination

22. EARNINGS PER SHARE

23. ADDITIONAL INFORMATION OF EXPENSES BY NATURE

e. Employees' compensation and remuneration to directors

24. CASH FLOW INFORMATION

25. CAPITAL MANAGEMENT

26. FINANCIAL INSTRUMENTS

b. Categories of financial instruments

c. Financial risk management objectives and policies

Foreign currency risk

GUC Interim / Quarterly Report 2021