Macronix International Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2013 and 2012 and Independent Accountants’ Review Report

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

The Board of Directors and the Stockholders Macronix International Co., Ltd.

We have reviewed the accompanying consolidated balance sheets of Macronix International Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012 and the related consolidated statements of comprehensive income for the three months ended September 30, 2013 and 2012, nine months ended September 30, 2013 and 2012, and changes in equity and cash flows for the nine months ended September 30, 2013 and 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our reviews.

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

As disclosed in Note 4 to the financial statements, we did not review the financial statements as of September 30, 2013 and 2012 and for the nine months ended September 30, 2013 and 2012 of non-major subsidiaries. The carrying values of the assets of those non-major subsidiaries as of September 30, 2013 and 2012 amounted to NT$5,203,432 thousand and NT$4,802,988 thousand, representing 9.18% and 7.35% of the Group’s consolidated total assets as of September 30, 2013 and 2012, respectively. The carrying values of the liabilities of those non-major subsidiaries as of September 30, 2013 and 2012 amounted to NT$648,489 thousand and NT$751,886 thousand, representing 2.44% and 2.63% of the Group’s consolidated total liabilities as of September 30, 2013 and 2012, respectively. The total comprehensive loss of non-major subsidiaries for the nine months ended September 30, 2013 and 2012 amounted to NT$621,943 thousand and NT$582,133 thousand, representing 12.76% and 15.63%, respectively, of the Group’s total comprehensive loss for the nine months then ended. These amounts as well as the related financial information of the investees as disclosed in Note 35 to the financial statements were based on the subsidiaries’ unreviewed financial statements for the same periods.

Based on our reviews, except as discussed in the preceding paragraph that the carrying value of the subsidiaries as well as the related disclosures of the investment information were based on unreviewed financial statements of the subsidiaries, and except for the effects of such adjustment, if any, as might have been made had we applied review procedures on the consolidated financial statements of investees referred to in the preceding paragraph, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standard 1, “First-time Adoption of International Financial Reporting Standards,” and International Accounting Standard 34, “Interim Financial Reporting,” endorsed by the Financial Supervisory Commission of the Republic of China.

October 28, 2013

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 accountant’s 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 accountant’s review report and consolidated financial statements shall prevail.

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 30) Financial assets at fair value through profit or loss - current (Notes 7 and 30) Notes receivable and trade receivables, net (Notes 10 and 30) Receivables from related parties, net (Notes 10, 30 and 31) Other receivables (Notes 10 and 30) Inventories (Note 11) Other financial assets - current (Notes 15, 30 and 32) Other current assets (Notes 14 and 16) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 7 and 30) Available-for-sale financial assets - non-current (Notes 8 and 30) Financial assets measured at cost - non-current (Notes 9 and 30) Property, plant and equipment (Notes 12 and 32) Intangible assets (Note 13) Deferred tax assets (Note 25) Other financial assets - non-current (Notes 15, 30 and 32) Other non-current assets (Notes 14 and 16) Total non-current assets TOTAL		September 30, 2013		December 31, 2012		September 30, 2012		January 1, 2012 Amount % LIABILITIES AND EQUITY CURRENT LIABILITIES $ 19,727,097 29 Short-term borrowings (Notes 17 and 30) Notes payable and trade payables (Notes 18 and 30) - - Payables to related parties (Notes 30 and 31) 2,901,450 4 Other payables (Notes 19 and 30) Salary and bonus payable 918,063 1 Payable for purchase of equipment (Note 121,198 - 30) 6,468,003 10 Current tax liabilities (Note 25) Provisions - current (Note 20) - - Current portion of long-term borrowings 475,483 1 (Notes 17, 30 and 32) Other current liabilities 30,611,294 45 Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 17, 30 and 32) 39,357 - Accrued pension cost (Note 21) Others 879,392 1 Total non-current liabilities 154,491 - Total liabilities 35,496,832 52 148,475 - EQUITY ATTRIBUTABLE TO OWNERS OF THE 553,198 1 COMPANY (Note 22) Ordinary shares 201,741 1 Capital surplus 51,042 - Retained earnings Legal reserve 37,524,528 55 Unappropriated earnings (accumulated deficit) Other equity Treasury shares Equity attributable to owners of the Company NON-CONTROLLING INTERESTS (Note 22) Total equity $ 68,135,822 100 TOTAL		September 30, 2013		December 31, 2012		September 30, 2012		January 1, 2012
		Amount % $ 12,783,410 23 - - 3,268,772 6 1,184,844 2 206,600 - 8,709,553 15 - - 572,730 1 26,725,909 47 - - 826,280 1 82,698 - 27,533,689 49 340,261 1 913,944 2 189,219 - 90,741 - 29,976,832 53 $ 56,702,741 100		Amount % $ 19,096,662 30 6,199 - 2,911,980 5 427,453 1 106,203 - 6,859,892 11 41,106 - 479,392 1 29,928,887 48 - - 888,685 1 97,862 - 29,883,778 48 360,936 1 909,843 2 192,921 - 67,776 - 32,401,801 52 $ 62,330,688 100		Amount % $ 19,303,525 30 10,728 - 3,207,855 5 1,378,424 2 189,568 - 7,033,697 11 41,514 - 558,212 1 31,723,523 49 - - 932,684 1 104,501 - 31,489,045 48 345,541 1 505,744 1 190,915 - 91,435 - 33,659,865 51 $ 65,383,388 100				Amount % $ 1,263,883 2 2,183,667 4 182,326 - 1,937,401 4 - - 644,530 1 359,081 1 96,384 - 5,798,718 10 300,974 1 12,766,964 23 13,034,275 23 800,499 1 4,193 - 13,838,967 24 26,605,931 47 35,214,623 62 343,985 1 - - (5,678,042 ) (10 ) 317,335 - (159,061) - 30,038,840 53 57,970 - 30,096,810 53 $ 56,702,741 100		Amount % $ 88,406 - 1,834,141 3 136,005 - 2,619,846 4 - - 394,986 1 339,661 1 94,169 - 5,233,718 8 99,347 - 10,840,279 17 15,799,897 26 717,793 1 1,694 - 16,519,384 27 27,359,663 44 35,214,623 56 343,869 - 2,695,275 4 (3,528,992 ) (5 ) 346,196 1 (159,061) - 34,911,910 56 59,115 - 34,971,025 56 $ 62,330,688 100		Amount % $ 283,031 1 1,908,152 3 172,617 - 2,335,146 4 - - 444,192 1 60,181 - 97,074 - 5,940,718 9 188,575 - 11,429,686 18 16,440,993 25 688,257 1 1,847 - 17,131,097 26 28,560,783 44 35,213,693 54 343,868 - 2,695,275 4 (1,751,681 ) (3 ) 401,489 1 (159,061) - 36,743,583 56 79,022 - 36,822,605 56 $ 65,383,388 100		Amount % $ 1,800,488 3 2,154,754 3 82,244 - 2,176,649 3 530,775 1 875,833 1 348,966 1 88,488 - 1,527,718 2 85,504 - 9,671,419 14 16,078,614 24 622,566 1 3,766 - 16,704,946 25 26,376,365 39 33,847,486 50 346,489 - 2,407,003 3 4,776,572 7 402,047 1 (159,061) - 41,620,536 61 138,921 - 41,759,457 61 $ 68,135,822 100

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

(With Deloitte & Touche review report dated October 28, 2013)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

NET OPERATING REVENUE (Notes 23 and 31) OPERATING COSTS (Notes 11, 21, 24 and 31) GROSS PROFIT OPERATING EXPENSES (Notes 21, 24 and 31) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Notes 24 and 30) Other gains and losses (Note 24) Finance costs (Note 24) Total non-operating income and expenses LOSS BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET LOSS OTHER COMPREHENSIVE LOSS Exchange differences on translating foreign operations (Note 22) Unrealized gain (loss) on available-for-sale financial assets (Note 22) Other comprehensive loss for the period, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE PERIOD		For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30		For the Nine Months	EndedSeptember 30	EndedSeptember 30
		2013		2012		2013		2012
		Amount % $ 6,708,259 100 5,477,099 82 1,231,160 18 278,736 4 430,972 6 1,449,797 22 2,159,505 32 (928,345) (14) 77,190 1 28,090 - (83,424) (1) 21,856 - (906,489 ) (14 ) 797 - (907,286) (14) (19,101 ) - (12,240) - (31,341) - $ (938,627) (14)		Amount % $ 7,362,914 100 6,471,402 88 891,512 12 322,254 4 450,491 6 1,313,903 18 2,086,648 28 (1,195,136) (16) 102,100 1 5,350 - (81,866) (1) 25,584 - (1,169,552 ) (16 ) 32,609 - (1,202,161) (16) (31,860 ) (1 ) 3,972 - (27,888) (1) $ (1,230,049) (17)		Amount % $ 16,344,057 100 15,072,761 92 1,271,296 8 807,571 5 1,285,345 8 4,066,679 25 6,159,595 38 (4,888,299) (30) 177,641 1 123,695 1 (256,676) (2) 44,660 - (4,843,639 ) (30 ) 2,886 - (4,846,525) (30) 36,916 - (65,664) - (28,748) - $ (4,875,273) (30)		Amount % $ 18,389,298 100 16,162,234 88 2,227,064 12 892,081 5 1,268,701 7 3,707,783 20 5,868,565 32 (3,641,501) (20) 230,663 1 (49,438 ) - (214,062) (1) (32,837) - (3,674,338 ) (20 ) 48,642 - (3,722,980) (20) (59,993 ) - 59,316 - (677) - $ (3,723,657) (20) (Continued)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30	For the Nine Months	EndedSeptember 30
2013	2012	2013	2012
Amount % $ (896,588 ) (14 ) (10,698) - $ (907,286) (14) $ (927,896 ) (14 ) (10,731) - $ (938,627) (14) $ (0.26) $ (0.26)	Amount % $ (1,183,727 ) (16 ) (18,434) - $ (1,202,161) (16) $ (1,211,546 ) (17 ) (18,503) - $ (1,230,049) (17) $ (0.33) $ (0.33)	Amount % $ (4,804,846 ) (30 ) (41,679) - $ (4,846,525) (30) $ (4,833,707 ) (30 ) (41,566) - $ (4,875,273) (30) $ (1.37) $ (1.37)	Amount % $ (3,663,165 ) (20 ) (59,815) - $ (3,722,980) (20) $ (3,663,723 ) (20 ) (59,934) - $ (3,723,657) (20) $ (1.04) $ (1.04)
$
$
$

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

(With Deloitte & Touche review report dated October 28, 2013)

(Concluded)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

		Equity Attributable to	Equity Attributable to	ners of the Company
Share Capital $ 33,847,486 - - 1,288,408 - - - - 77,799 - - $ 35,213,693 $ 35,214,623 - - - - - - - $ 35,214,623	Capital Surplus $ 346,489 - - - - - - - (4,048 ) 1,427 - $ 343,868 $ 343,869 - 116 - - - - - $ 343,985	Retained Earnings		Other Equity Exchange Unrealized Differences on Gain (Loss) from Translating Available-for-sale Foreign Financial Operations Assets $ (30,048 ) $ 432,095 - - - - - - - - (59,874) 59,316 (59,874) 59,316 - - - - - - - - $ (89,922) $ 491,411 $ (102,785 ) $ 448,981 - - - - - - 36,803 (65,664) 36,803 (65,664) - - - - $ (65,982) $ 383,317	Treasury Shares $ (159,061 ) - - - - - - - - - - $ (159,061) $ (159,061 ) - - - - - - - $ (159,061)
				Exchange Differences on Translating Foreign Operations $ (30,048 ) - - - - (59,874) (59,874) - - - - $ (89,922) $ (102,785 ) - - - 36,803 36,803 - - $ (65,982)
		Legal Reserve $ 2,407,003 288,272 - - - - - - - - - $ 2,695,275 $ 2,695,275 (2,695,275 ) - - - - - - $ -	Unappropriated Earnings (Accumulated Deficit) $ 4,776,572 (288,272 ) (1,288,408 ) (1,288,408 ) (3,663,165 ) - (3,663,165) - - - - $ (1,751,681) $ (3,528,992 ) 2,695,275 (39,479 ) (4,804,846 ) - (4,804,846) - - $ (5,678,042)

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

(With Deloitte & Touche audit report dated October 28, 2013)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation expense Amortization expense Impairment loss recognized on trade receivables Finance costs Interest income Dividend income Compensation cost of employee share options Loss (gain) on disposal of property, plant and equipment Gain on disposal of investments Gain on foreign currency exchange Changes in operating assets and liabilities Decrease (increase) in financial assets held for trading Increase in notes receivable and trade receivables Increase in receivables from related parties Increase in other receivables Increase in inventories Increase in other current assets Increase (decrease) in notes payable and trade payables Increase in payables to related parties Increase (decrease) in other payables Increase in provisions Increase in other current liabilities Increase in accrued pension liabilities Decrease in other operating liabilities Cash generated from (used in) operations Interest received Dividend received Interest paid Income tax paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets designated as at fair value through profit or loss Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Proceeds from sale of financial assets measured at cost Proceeds from return of capital by financial assets measured at cost Increase in prepayment for investments	Nine Months Ended September 30	Nine Months Ended September 30	Nine Months Ended September 30
		2013 $ (4,843,639) 5,716,397 167,458 2,964 256,676 (98,804) (60,825) 371 (418) (2,957) (77,478) 6,199 (334,927) (749,885) (87,638) (1,849,661) (92,989) 359,406 53,902 (671,766) 2,215 201,587 82,706 - (2,021,106) 101,634 60,825 (256,690) (3,149) (2,118,486) - - - 9,462 8,775 (9,462)	2012 $ (3,674,338) 5,757,369 140,990 49,533 214,062 (123,358) (60,834) 636 85,206 (1,417) (1,227) (10,728) (389,136) (479,406) (58,232) (565,694) (83,120) (220,281) 94,006 158,661 21,120 103,260 65,691 (530,775) 491,988 113,220 60,834 (219,714) (289,973) 156,355 39,258 (150,000) 150,229 - 48,795 (29,295) (Continued)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Decrease (increase) in other financial assets Decrease (increase) in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits Increase (decrease) in other non-current liabilities Cash dividends Proceeds from exercise of employee stock options Increase (decrease) in non-controlling interests Net cash generated from (used in) financing activities EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	Nine Months Ended September 30	Nine Months Ended September 30	Nine Months Ended September 30
		2013 $ (3,106,728) 3,144 (245) 627 (146,600) 42,444 (10,311) (3,208,894) 1,571,765 (388,891) 1,200,000 (3,400,622) 220 - 2,279 - - 687 (1,014,562) 28,690 (6,313,252) 19,096,662 $ 12,783,410	2012 $ (2,304,520) 18,840 (101) 2,143 (352,035) (82,011) 2,287 (2,656,410) 531,715 (1,968,382) 4,960,000 (184,621) - (83) (357) (1,286,981) 73,751 (601) 2,124,441 (47,958) (423,572) 19,727,097 $ 19,303,525

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

(With Deloitte & Touche review report dated October 28, 2013)

(Concluded)

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Macronix International Co., Ltd. (the “Company”) was incorporated in the Republic of China (“ROC”) on December 9, 1989 and commenced business in December 1989. The Company operates principally as a designer, manufacturer and supplier of integrated circuits and memory chips. The Company also performs design, research and development, consultation and trade of relevant products.

The Company’s shares have been listed on the Taiwan Stock Exchange (TSE) since March 15, 1995. The Company listed a portion of its shares on the NASDAQ Stock Market in the form of American Depositary Shares (ADSs) in May 1996 but delisted on October 29, 2007.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were reported to the Board of Directors and issued on October 28, 2013.

APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND INTERPRETATIONS

a. New and revised Standards, Amendments and Interpretations in issue but not yet effective

The Company and its subsidiaries (the “Group”) have not applied the following International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) issued by the IASB.

As of the date that the consolidated financial statements were approved and authorized for issue, the Financial Supervisory Commission (“FSC”) has not announced the effective dates for the following new and revised Standards, Amendments and Interpretations:

New, Revised Standards, Amendments and Interpretations Endorsed by the FSC Amendments to IFRSs Improvements to IFRSs (2009) - amendment to IAS 39 IFRS 9 (2009) Financial Instruments Amendment to IAS 39 Embedded Derivatives	Effective Date Announced by IASB (Note)
	January 1, 2009 and January 1, 2010, as appropriate January 1, 2015 Effective for annual periods ending on or after June 30, 2009 (Continued)

New, Revised Standards, Amendments and Interpretations

Effective Date Announced by IASB (Note)

New, Revised Stand	ards, Amendments and Interpretations	(Note)
Not yet endorsed by the
FSC
Amendments to IFRSs	Improvements to IFRSs (2010) - amendment	July 1, 2010 and January
	to IAS 39	1, 2011, as appropriate
Amendments to IFRSs	Annual Improvements to IFRSs 2009-2011	January 1, 2013
	Cycle
Amendments to IFRS 1	Limited Exemption from Comparative IFRS 7	July 1, 2010
	Disclosures for First-Time Adopters
Amendments to IFRS 1	Severe Hyperinflation and Removal of Fixed	July 1, 2011
	Dates for First-Time Adopters
Amendments to IFRS 1	Government Loans	January 1, 2013
Amendment to IFRS 7	Disclosures - Offsetting Financial Assets and	January 1, 2013
	Financial Liabilities
Amendments to IFRS 9	Mandatory Effective Date and Transition	January 1, 2015
and IFRS 7	Disclosures
Amendment to IFRS 7	Disclosure - Transfer of Financial Assets	July 1, 2011
IFRS 9 (2010)	Financial Instruments	January 1, 2015
IFRS 10	Consolidated Financial Statements	January 1, 2013
IFRS 11	Joint Arrangements	January 1, 2013
IFRS 12	Disclosure of Interests in Other Entities	January 1, 2013
Amendments to IFRS 10,	Consolidated Financial Statements, Joint	January 1, 2013
IFRS 11 and IFRS 12	Arrangements and Disclosure of Interests in
	Other Entities: Transition Guidance
Amendments to IFRS 10	Investment Entities	January 1, 2014
and IFRS 12 and IAS 27
IFRS 13	Fair Value Measurement	January 1, 2013
Amendment to IAS 1	Presentation of Other Comprehensive Income	July 1, 2012
Amendment to IAS 12	Deferred Tax: Recovery of Underlying	January 1, 2012
	Assets
Amendment to IAS 19	Employee Benefits	January 1, 2013
Amendment to IAS 27	Separate Financial Statements	January 1, 2013
Amendment to IAS 28	Investments in Associates and Joint Ventures	January 1, 2013
Amendment to IAS 32	Offsetting of Financial Assets and Financial	January 1, 2014
	Liabilities
Amendment to IAS 36	Impairment of Assets: Recoverable Amount	January 1, 2014
	Disclosures for Non-Financial Assets
Amendment to IAS 39	Novation of Derivatives and Continuation of	January 1, 2014
	Hedge Accounting
IFRIC 20	Stripping Costs in the Production Phase of a	January 1, 2013
	Surface Mine
IFRIC 21	Levies	January 1, 2014
		(Concluded)

Note: Unless stated otherwise, the above new and revised Standards, Amendments and Interpretations are effective for annual periods beginning on or after the respective effective dates.

10 -
b. Significant changes in accounting policy resulted from new and revised Standards, Amendments and Interpretations in issue but not yet effective

Except for the following, the initial application of the above new and revised Standards, Amendments and Interpretations have not had any material impact on the Group’s accounting policies:

1) IFRS 9 “Financial Instruments”

With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” to be subsequently measured at amortized cost or fair value. Specifically, financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other financial assets are measured at their fair values at the balance sheet date. However, the Group may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss.

2) New and revised standards on consolidation, joint arrangement, and associates and disclosure
a) IFRS 10 “Consolidated Financial Statements”

IFRS 10 replaces IAS 27 “Consolidated and Separate Financial Statements” and SIC 12 “Consolidation - Special Purpose Entities”. The Group considers its ability of control over other entities for consolidation. The Group has control over an investee if and only if it has a) power over the investee; b) exposure, or rights, to variable returns from its involvement with the investee and c) the ability to use its power over the investee to affect the amount of its returns. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee.

b) IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the current standards.

3) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only will be extended by IFRS 13 to cover all assets and liabilities within its scope.

4) Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

The amendments to IAS 1 require items of other comprehensive income to be grouped into those that (1) will not be reclassified subsequently to profit or loss; and (2) will be reclassified subsequently to profit or loss when specific conditions are met. Income taxes on related items of other comprehensive income are grouped on the same basis. Previously, there were no such requirements.

11 -
5) Revision to IAS 19 “Employee Benefits”

The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the “corridor approach” permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The revision requires all actuarial gains and losses to be recognized immediately through other comprehensive income in order for the net pension asset or liability to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a “net interest” amount, which is calculated by applying the discount rate to the net defined benefit liability or asset.

6) Amendments to IAS 36 “Recoverable Amount Disclosures for Non-Financial Assets”

In issuing IFRS 13 “Fair Value Measurement”, the IASB made some consequential amendments to the disclosure requirements in IAS 36 “Impairment of Assets”, introducing a requirement to disclose in every reporting period the recoverable amount of an asset or each cash-generating unit. The amendment clarifies that the disclosure of such recoverable amount is required during the period when an impairment loss has been recognized or reversed. Furthermore, the Group is required to disclose the discount rate used in current and previous measurements of the recoverable amount based on fair value less costs of disposal measured using a present value technique.

7) New issued IFRIC 21 “Levies”

IFRIC 21 provides guidance on when to recognize a liability for a levy imposed by a government. It addresses the accounting for a liability whose timing and amount is certain and the accounting for a provision whose timing or amount is not certain. The Group accrues related liability when the transaction or activity that triggers the payment of the levy occurs. Therefore, if the obligating event occurs over a period of time (such as generation of revenue over a period of time), the liability is recognized progressively. If an obligation to pay a levy is triggered upon reaching a minimum threshold (such as a minimum amount of revenue or sales generated), the liability is recognized when that minimum threshold is reached.

c. Material impact on consolidated financial statements resulted from new and revised Standards, Amendments and Interpretations in issue but not yet effective

The Group is in the process of estimating the impact of the initial application of the Standards, Amendments and Interpretations on its financial position and results of operations. Disclosures will be provided until a detailed review of the impact has been completed and the consolidated financial statements have been approved and authorized for issuance.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY

On May 14, 2009, the FSC announced the “Framework for the Adoption of IFRSs by the Companies in the ROC.” In this framework, starting 2013, companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market should prepare their consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, and the Interpretations approved by the FSC. The date of transition to IFRSs was January 1, 2012. Refer to Note 37 for the impact of IFRS conversion on the consolidated financial statements.

12 -

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, IFRS 1 “First-time Adoption of International Financial Reporting Standards” and IAS 34 “Interim Financial Reporting” as endorsed by the FSC. Disclosure information included in interim financial reports is less than disclosures required in a full set of annual financial reports.

b. Basis of preparation

The consolidated financial statements have been prepared on the same basis as the consolidated financial statements as of March 31, 2013. Refer to the Note 4 to the consolidated financial statements as of March 31, 2013 for details.

1) Subsidiary included in consolidated financial statements

As of September 30, 2013, the Company has direct and indirect majority ownership in the following subsidiaries: Run Hong Investment, Ltd. (“Run Hong”), Hui Ying Investment, Ltd. (“Hui Ying”), Magic Pixel Inc. (“MPI”), Mxtran Inc. (“Mxtran”), Infomax Communication Co., Ltd. (“INFOMAX”), MoDioTek Co., Ltd. (“MoDioTek”), Macronix America Inc. (“MXA”), Macronix (BVI) Co., Ltd. (“MXBVI”), Magic Pixel Inc. (“MPI Samoa”), Magic Pixel Holding Company Limited (“MPI HK”), Magic Pixel (Shen Zhen) Co., Ltd. (“MPI SZ”), Mxtran Holding (Samoa) Co., Ltd. (“Mxtran Samoa”), Mxtran (H.K.) Holding Co., Limited (“Mxtran HK”), Maxtran Technology Co., Ltd. (“Maxtran Beijing”), Infomax Holding Co., Ltd. (“Infomax Samoa”), Infomax Holding Company Limited (“Infomax HK”), Infomax Communication (Suzhou) Co., Ltd. (“Infomax SU”), Mosatek Co., Ltd. (“Mosatek Samoa”), Mosatek (HK) Company Limited (“Mosatek HK”), Modiotek (Suzhou) Co., Ltd. (“Modiotek SU”), New Trend Technology Inc. (“NTTI”), Macronix (Asia) Limited (“MX Asia”), Macronix Pte. Ltd. (“MPL”), Macronix Europe NV. (“MXE”), Macronix (Hong Kong) Co., Ltd. (“MXHK”) and Macronix Microelectronics (Suzhou) Co., Ltd. (“MXm”).

Investor
Investee
Main Business
The Company
MXB Inc.
(“MXB”)
Sales and marketing
The Company
Run Hong
Investment company
The Company
Hui Ying
Investment company
The Company and Run
Hong
MPI
Fabless multimedia
system on chip
The Company and Run
Hong
Mxtran
Combi-SIM IC and the
related service
The Company and Run
Hong
INFOMAX
Baseband chip, analog
baseband chip, and
power management
chip
The Company, Run
Hong and Hui Ying
MoDioTek
Mobile audio platform
and smart remote
controller
The Company and Run
Hong
MaxRise Inc.
(“MaxRise”)
IC design, research,
development, design,
manufacturing and
sales of digital TV
receivable chips
The Company
MXA
Sales and marketing
The Company
MXBVI
Investment company
MPI
MPI Samoa
Investment company
MPI Samoa
MPI HK
Investment company
MPI HK
MPI SZ
Sales and technical
support of fabless
multimedia system
on chip
Mxtran
Mxtran Samoa
Investment company
Mxtran Samoa
Mxtran HK
Investment company
Mxtran HK
Maxtran Beijing
Technical support of
Combi-SIM IC

% of Ownership
September
30, 2013
December 31,
2012
September
30, 2012
January 1,
2012
Remark
-
-
50.00
50.00
Note 1
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
83.11
77.38
77.38
77.38
-
94.15
93.14
93.14
93.14
-
99.02
97.34
97.68
97.68
-
84.16
80.86
80.86
80.86
-
-
-
84.69
84.69
Note 2
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
(Continued)

13 -

Investor
Investee
Main Business
INFOMAX
Infomax Samoa
Investment company
Infomax Samoa
Infomax HK
Investment company
Infomax HK
Infomax SU
Software, rendering and
technical service
MoDioTek
Mosatek Samoa
Investment company
Mosatek Samoa
Mosatek HK
Investment company
Mosatek HK
Modiotek SU
Sales and technical
support of mobile
audio platform and
smart remote
controller
MXBVI
NTTI
IC design
MXBVI
MX Asia
Investment company
MXBVI
MPL
After-sales service
MXBVI
MXE
After-sales service
MXBVI
MXHK
Sales and marketing
MXHK
MXm
Development of
integrated circuit
system and software

% of Ownership
September
30, 2013
December 31,
2012
September
30, 2012
January 1,
2012
Remark
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
-

(Concluded)

Note 1: MXB was in the process of liquidation in 2011 and completed the liquidation in 2012.

Note 2: MaxRise merged with INFOMAX through share swap in December 2012, and INFOMAX continues to exist. MaxRise’s revenues and expenses before the merger were included in the consolidated financial statements of 2012.
c. Other significant accounting policies

The same accounting policies have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the three months ended March 31, 2013. Refer to Note 4 to the consolidated financial statements as of March 31, 2013 for the details of summary of significant accounting policy.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the three months ended March 31, 2013. Refer to the Note 5 to the consolidated financial statements as of March 31, 2013 for the details of critical accounting judgments and key sources of estimation uncertainty.

6. CASH AND CASH EQUIVALENTS

September 30, 2013 Cash on hand $ 836 Checking accounts and demand deposits 1,860,943 Cash equivalent Time deposits 10,921,631 Repurchase agreements collateralized by bonds - $ 12,783,410	December 31, 2012 September 30, 2012 $ 610 $ 605 1,292,609 1,432,352 17,803,443 17,820,540 - 50,028 $ 19,096,662 $ 19,303,525	January 1, 2012 $ 863 3,201,151 16,275,083 250,000
		$ 19,727,097

14 -

Cash equivalents include time deposits and repurchase agreements collateralized by bonds that are readily convertible to a known amount of cash, and are subject to an insignificant risk of change in value; these were held for the purpose of meeting short-term cash commitments.

Refer to Note 6 to the consolidated financial statements as of March 31, 2013 for other related information on cash and cash equivalents.

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	September	30,	December	December	31,	September	30,	January	January	1,
	2013			2012		2012			2012
Financial assets held for trading
Derivative financial assets (not
under hedge accounting)
Foreign exchange forward
contracts (a)	$	-	$	6,199		$ 10,728		$		-
Financial assets designated as at
FVTPL
Foreign publicly-traded convertible
bonds (b)		-			-		-		39,357
Financial assets at FVTPL	$	-	$	6,199		$ 10,728		$	39,357
Current	$	-	$	6,199		$ 10,728		$		-
Non-current		-			-		-		39,357
	$	-	$	6,199		$ 10,728		$	39,357

a. At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

				Contract Amount
	Contract	Currency	Maturity Date	(In Thousands)
December 31, 2012
Sell		JPY/NTD	2013.01	JPY400,000/NTD141,800
Sell		USD/NTD	2013.01	USD10,000/NTD290,456
September 30, 2012
Sell		JPY/NTD	2012.10	JPY2,000,000/NTD756,700
Sell		USD/NTD	2012.10	USD16,000/NTD479,724

The Group entered into foreign exchange forward contracts during the nine months ended September 30, 2013 and 2012 to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities. However, those contracts did not meet the criteria of hedge effectiveness and therefore were not accounted for by using hedge accounting.

b. The foreign publicly-traded convertible bonds with annual rate of 5% were matured and the amounts of principal and interest were received on January 12, 2012.
15 -

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

September 30,
2013
December 31,
2012
September 30,
2012
Domestic investments
Listed shares
$ 718,848
$ 725,526
$ 750,269

Foreign investments
Listed shares

107,432

163,159

182,415

Available-for-sale financial assets
$ 826,280
$ 888,685
$ 932,684

Non-current
$ 826,280
$ 888,685
$ 932,684

FINANCIAL ASSETS MEASURED AT COST
September 30,
2013
December 31,
2012
September 30,
2012
Domestic unlisted common shares
$ 82,698
$ 91,473
$ 98,056

Overseas unlisted common shares

-

6,389

6,445

$ 82,698
$ 97,862
$ 104,501

Non-current
$ 82,698
$ 97,862
$ 104,501

January 1,
2012
$ 678,663

200,729
$ 879,392
$ 879,392
January 1,
2012
$ 117,556

36,935
$ 154,491
$ 154,491

9. FINANCIAL ASSETS MEASURED AT COST

Management believed that the fair value of the above unlisted equity investments held by the Group cannot be reliably measured due to the significant range of reasonable fair value estimates, therefore, they were measured at cost less impairment at the end of the reporting period.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

September 30, 2013 December 31, 2012 September 30, 2012 Notes receivable Notes receivable - operating $ 400 $ 1,077 $ 417 Trade receivables Trade receivables 3,269,185 2,910,921 3,207,456 Less: Allowance for impairment loss 813 18 18 3,268,372 2,910,903 3,207,438 $ 3,268,772 $ 2,911,980 $ 3,207,855	January 1, 2012 $ 6,486 2,894,982 18 2,894,964 $ 2,901,450 (Continued)

16 -

September 30, 2013 December 31, 2012 September 30, 2012 Other receivables Tax receivable $ 187,494 $ 89,485 $ 163,908 Others 19,106 16,718 25,660 $ 206,600 $ 106,203 $ 189,568	January 1, 2012 $ 94,744 26,454 $ 121,198 (Concluded)

a. Trade Receivables

The average credit period for sales of goods was 60 days. In determining the recoverability of a trade receivable, the Group evaluates each customer’s credibility and financial position and considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period.

Before accepting any new customer, the Group uses an internal credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer.

Of the trade receivables balance (see aging analysis below) that are past due at the end of the reporting period, the Group had not recognized an allowance for impaired notes receivable and trade receivables for NT$209,529 thousand, NT$226,243 thousand, NT$168,290 thousand and NT$44,161 thousand as of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, respectively, because there had not been a significant change in credit quality and the amounts were still considered recoverable.

Age of receivables that were past due but not impaired was as follows:

Age of receivables that were past due but not impaired was as follows:
September 30, 2013 December 31, 2012 September 30, 2012 Neither past due nor impaired $ 3,058,843 $ 2,684,660 $ 3,039,148 Past due but not impaired Less than 60days 35,328 144,178 162,241 61-120 days 12,968 66,014 6,049 Over 121days 161,233 16,051 - $ 3,268,372 $ 2,910,903 $ 3,207,438	January 1, 2012 $ 2,850,803 44,161 - -
	$ 2,894,964

Above analysis was based on the past due date.

As of September 30, 2013, the Group did not hold collateral for most of the receivables.

17 -

Movements in the allowance for impairment loss recognized on trade receivables were as follows:

Balance at January 1 Add: Impairment losses recognized on receivables Less: Impairment losses reversed Balance at September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 18 813 (18) $ 813	2012 $ 18 - - $ 18

b. Notes Receivable

No allowance for impairment loss of notes receivable was recognized since the notes receivable of the Group were not past due and no uncertainty of recoverability was assessed.

11. INVENTORIES

September 30, 2013 Finished goods $ 1,098,833 Work in progress 7,182,161 Raw materials 428,559 $ 8,709,553	December 31, 2012 September 30, 2012 $ 1,004,290 $ 1,004,870 5,511,200 5,532,018 344,402 496,809 $ 6,859,892 $ 7,033,697	January 1, 2012 $ 1,045,265 5,002,956 419,782 $ 6,468,003

The cost of inventories recognized as cost of goods sold in the three months and the nine months ended September 30, 2013 included inventory write-downs of NT$222,150 thousand and NT$628,663 thousand, respectively. The cost of inventories recognized as cost of goods sold in the three months and nine months ended September 30, 2012 included inventory write-downs of NT$580,734 thousand and NT$1,088,493 thousand, respectively.

12. PROPERTY, PLANT AND EQUIPMENT

September 30, 2013 Carrying amount of each class Freehold land $ 881,445 Buildings 6,209,640 Machinery equipment 13,447,921 Research and development equipment 3,593,985 Transportation equipment 11,925 Leasehold improvements 20,118 Miscellaneous equipment 131,215 Advance payments and construction in progress 3,237,440 $ 27,533,689	December 31, 2012 September 30, 2012 $ 876,366 $ 878,808 6,701,794 6,930,260 16,592,121 17,769,973 4,041,246 4,222,781 15,557 15,652 23,236 3,278 158,981 160,844 1,474,477 1,507,449 $ 29,883,778 $ 31,489,045	January 1, 2012 $ 888,201 7,430,004 19,833,527 1,054,589 8,691 4,844 179,426 6,097,550
		$ 35,496,832

18 -

Cost Balance at January 1, 2012 Additions Disposals Effect of foreign currency exchange differences Reclassification Balance at September 30, 2012 Balance at January 1, 2013 Additions Disposals Effect of foreign currency exchange differences Reclassification Balance at September 30, 2013 Accumulated depreciation and impairment Balance at January 1, 2012 Disposals Depreciation expense Effect of foreign currency exchange differences Reclassification Balance at September 30, 2012 Balance at January 1, 2013 Disposals Depreciation expense Effect of foreign currency exchange differences Reclassification Balance at September 30, 2013	Freehold Land $ 1,264,367 - - (21,568 ) - $ 1,242,799 $ 1,237,187 - - 11,664 - $ 1,248,851 $ (376,166 ) - - 12,175 - $ (363,991) $ (360,821 ) - - (6,585 ) - $ (367,406)	Buildings $ 21,717,424 422,916 (4,431 ) (9,155 ) - $ 22,126,754 $ 22,209,968 419,824 (5,628 ) 9,380 (101) $ 22,633,443 $ (14,287,420 ) 4,431 (914,088 ) 583 - $ (15,196,494) $ (15,508,174 ) 5,629 (920,441 ) (820 ) 3 $ (16,423,803)	Machinery Equipment $ 75,224,281 2,334,626 (442,807 ) - (94,963) $ 77,021,137 $ 76,913,234 827,759 (119,493 ) - 94,346 $ 77,715,846 $ (55,390,754 ) 341,024 (4,198,011 ) - (3,423) $ (59,251,164) $ (60,321,113 ) 117,494 (4,034,443 ) - (29,863) $ (64,267,925)	Research and Development Equipment $ 2,381,513 3,638,801 (54,905 ) (783 ) 94,963 $ 6,059,589 $ 6,037,523 298,702 (65,030 ) 625 (94,245) $ 6,177,575 $ (1,326,924 ) 53,797 (567,490 ) 386 3,423 $ (1,836,808) $ (1,996,277 ) 65,010 (681,839 ) (344 ) 29,860 $ (2,583,590)	Transportation Equipment $ 28,192 10,070 (6,935 ) (72 ) - $ 31,255 $ 32,155 - (900 ) 62 - $ 31,317 $ (19,501 ) 6,443 (2,611 ) 66 - $ (15,603) $ (16,598 ) 210 (2,949 ) (55 ) - $ (19,392)	Leasehold Improvements $ 26,553 87 (1,538 ) (93 ) - $ 25,009 $ 44,894 253 - 282 - $ 45,429 $ (21,709 ) 1,538 (2,113 ) 553 - $ (21,731) $ (21,658 ) - (3,983 ) 330 - $ (25,311)	Miscellaneous Equipment $ 1,096,751 56,480 (22,366 ) (3,131 ) (27) $ 1,127,707 $ 1,142,967 44,264 (16,351 ) 1,926 - $ 1,172,806 $ (917,325 ) 21,703 (73,056 ) 1,813 2 $ (966,863) $ (983,986 ) 16,333 (72,742 ) (1,196 ) - $ (1,041,591)	Advance Payments and Construction in Progress $ 6,097,550 (4,590,101 ) - - - $ 1,507,449 $ 1,474,477 1,762,604 - 359 - $ 3,237,440 $ - - - - - $ - $ - - - - - $ -	Total $ 107,836,631 1,872,879 (532,982 ) (34,802 ) (27) $ 109,141,699 $ 109,092,405 3,353,406 (207,402 ) 24,298 - $ 112,262,707 $ (72,339,799 ) 428,936 (5,757,369 ) 15,576 2 $ (77,652,654) $ (79,208,627 ) 204,676 (5,716,397 ) (8,670 ) - $ (84,729,018)

Impairment assessment was performed in the nine months ended September 30, 2013 and 2012, but no impairment was recognized.

The carrying amount of the freehold land in the U.S.A. which is unutilized by the Group as of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012 was US$9,583 thousand.

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

following estimated useful life of the asset:
Buildings
Main buildings	20-40 years
Electronic equipment	11-20 years
Facility equipment	2-6 years
Landscape engineering	20 years
Machinery equipment	2-6 years
Research and development equipment	1-6 years
Transportation equipment	3-6 years
Leasehold improvements	3-16 years
Miscellaneous equipment	1-16 years

Refer to note 32 for the carrying amount of property, plant and equipment that had been pledged by the Group to secure long-term bank loans granted to the Group.

19 -

13. INTANGIBLE ASSETS

September 30, 2013 Carrying amount of each class Software $ 320,643 Licenses 13,891 Mask 800 Others 4,927 $ 340,261 Software Cost Balance at January 1, 2012 $ 163,866 Additions 311,397 Disposals (17,026) Reclassification 26 Effect of foreign currency exchange differences (485) Balance at September 30, 2012 $ 457,778 Balance at January 1, 2013 $ 480,358 Additions 139,156 Disposals (38,723) Effect of foreign currency exchange differences 480 Balance at September 30, 2013 $ 581,271 Accumulated amortization Balance at January 1, 2012 $ (87,174) Amortization expense (89,032) Disposals 17,030 Reclassification - Effect of foreign currency exchange differences 403 Balance at September 30, 2012 $ (158,773) Balance at January 1, 2013 $ (157,305) Amortization expense (141,749) Disposals 38,723 Effect of foreign currency exchange differences (297) Balance at September 30, 2013 $ (260,628)	December 31, 2012 September 30, 2012 $ 323,053 $ 299,005 26,288 28,383 9,643 16,799 1,952 1,354 $ 360,936 $ 345,541 Licenses Mask Others $ 220,451 $ 161,324 $ 23,166 16,774 22,151 1,713 (134,780) (134,460) (14,928) (13,406) - (514) - - (2) $ 89,039 $ 49,015 $ 9,435 $ 58,339 $ 22,633 $ 9,185 1,000 1,092 5,352 (33,444) (22,093) (7,953) - - - $ 25,895 $ 1,632 $ 6,584 $ (172,129) $ (139,569) $ (21,460) (23,302) (27,107) (1,549) 134,776 134,460 14,928 - - - (1) - - $ (60,656) $ (32,216) $ (8,081) $ (32,051) $ (12,990) $ (7,233) (13,397) (9,935) (2,377) 33,444 22,093 7,953 - - - $ (12,004) $ (832) $ (1,657)	January 1, 2012 $ 76,692 48,322 21,755 1,706 $ 148,475 Total $ 568,807 352,035 (301,194) (13,894) (487) $ 605,267 $ 570,515 146,600 (102,213) 480 $ 615,382 $ (420,332) (140,990) 301,194 - 402 $ (259,726) $ (209,579) (167,458) 102,213 (297) $ (275,121)
		$

The above items of other intangible assets were amortized on a straight-line basis over the following estimated useful life of the asset:

estimated useful life of the asset:
Software	1-6	years
Licenses	1-3	years
Mask	1-3	years
Others	1-3	years

20 -

14. PREPAYMENTS FOR LEASE

PREPAYMENTS FOR LEASE
	September 30,		December 31,		September 30,		January 1,
		2013		2012		2012		2012
Current asset (included in other
current assets)	$	544	$	523	$	523	$	543
Non-current asset (included in
other non-current assets)		22,991		22,477		22,607		23,920
	$	23,535	$	23,000	$	23,130	$	24,463

As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, prepaid lease payments include land use rights with carrying amounts of NT$23,535 thousand, NT$23,000 thousand, NT$23,130 thousand and NT$24,463 thousand, respectively, which are located in Mainland China. The Group has obtained the land use right certificates.

15. OTHER FINANCIAL ASSETS

September 30, 2013 December 31, 2012 September 30, 2012 Restricted time deposits $ 170,077 $ 211,282 $ 209,762 Refundable deposits 12,454 12,667 12,501 Long-term receivables 6,688 10,078 10,166 $ 189,219 $ 234,027 $ 232,429 Current $ - $ 41,106 $ 41,514 Non-current 189,219 192,921 190,915 $ 189,219 $ 234,027 $ 232,429	January 1, 2012 $ 187,182 14,559 - $ 201,741 $ - 201,741 $ 201,741

16. OTHER ASSETS

September 30,
2013
December 31,
2012
September 30,
2012
Supplies
$ 326,436
$ 308,755
$ 313,555

Prepayments
262,417
176,997
249,711
Prepayments for lease
23,535
23,000
23,130
Offset against business tax payable
22,353
20,085
18,602
Others

28,730

18,331

44,649

$ 663,471
$ 547,168
$ 649,647

Current
$ 572,730
$ 479,392
$ 558,212

Non-current

90,741

67,776

91,435

$ 663,471
$ 547,168
$ 649,647

January 1,
2012
$ 326,961
135,140
24,463
17,043

22,918
$ 526,525
$ 475,483

51,042
$ 526,525

Other assets-others are the commitment fee of the syndicated loans and the drawdown fee of long-term bank loans, which are amortized monthly over five and three years respectively.

21 -

17. BORROWINGS

a. Short-term borrowings

September 30, 2013 December 31, 2012 September 30, 2012 Unsecured borrowings Letter of credit loan $ 1,263,883 $ 88,406 $ 283,031	January 1, 2012 $ 1,800,488

The range of effective interest rate on the letter of credit loans was 0.76%-1.40%, 0.86%-1.06%, 0.82%-1.30%, and 0.84%-2.09% per annum as of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, respectively.

b. Long-term borrowings

September 30,
2013
Secured borrowings
Bank loans
$ 12,744,660

Unsecured borrowings
Bank loans

6,088,333

18,832,993
Less: Current portion

5,798,718

Long-term borrowings:
Non-current
$ 13,034,275

Maturity Date
I
Floating rate borrowings
Secured syndicated loan
denominated in NT$ 2015.12.16
Repayable NT$1,571,000 thousand
semi-annually from December
2012 to June 2015, and pay off
NT$6,284,000 thousand in
December 2015.
1
Un-secured syndicated loan
denominated in NT$ 2015.12.16
-
1
Un-secured bank borrowing
denominated in NT$ 2014.09.26
Repayable NT$200,000 thousand
semi-annually from March 2013
to March 2014, and pay off
NT$1,000,000 thousand in
September 2014.
1
Un-secured bank borrowing
denominated in NT$ 2014.10.16
-
Un-secured bank borrowing
denominated in NT$ 2014.11.14
Repayable NT$100,000 thousand
quarterly from February 2014 to
August 2014, and pay off
NT$700,000 thousand in
November 2014.
1
Un-secured bank borrowing
denominated in NT$ 2014.09.26
Repayable NT$120,000 thousand
quarterly from September 2013
to September 2014.
1
Un-secured bank borrowing
denominated in NT$ 2015.03.26
Repayable NT$50,000 thousand
quarterly from June 2013 to
March 2015.
Un-secured bank borrowing
denominated in NT$ 2014.09.16
Repayable NT$75,000 thousand
quarterly from March 2013 to
June 2014, and pay off
NT$50,000 thousand in
September 2014.

December 31,
2012
September 30,
2012
January 1,
2012
$ 14,366,948
$ 15,715,044
$ 13,556,332

6,666,667

6,666,667

4,050,000
21,033,615
22,381,711
17,606,332

5,233,718

5,940,718

1,527,718
$ 15,799,897
$ 16,440,993
$ 16,078,614
Effective
nterest Rate
September 30,
2013
December 31,
2012
September 30,
2012
January 1,
2012
.30%-1.58%
$ 12,568,000
$ 14,139,000
$ 15,470,000
$ 13,260,000
.35%-1.58%
1,500,000
1,500,000
1,500,000
1,500,000
.80%-1.85%
1,200,000
1,600,000
1,600,000
1,600,000
1.85%
1,200,000
-
-
-
.69%-1.70%
1,000,000
1,000,000
1,000,000
-
.88%-2.08%
480,000
600,000
600,000
50,000
1.62%
300,000
400,000
400,000
-
1.65%
275,000
500,000
500,000
500,000
(Continued)

22 -

Maturity Date
Effective
Interest Rate
September 30,
2013
Secured bank borrowing
denominated in NT$ 2016.04.16
Repayable NT$5,699 thousand
monthly from May 2003 to
April 2016.
1.84%-2.12%
$ 176,660

Un-secured bank borrowing
denominated in NT$ 2014.09.26
Repayable NT$66,667 thousand
semi-annually from March 2012
to September 2014.
1.80%-1.85%
133,333
Un-secured bank borrowing
denominated in NT$ 2013.09.26
-
1.83%-1.85%
-

$ 18,832,993

December 31,
2012
September 30,
2012
January 1,
2012
$ 227,948
$ 245,044
$ 296,332
266,667
266,667
400,000
800,000

800,000

-

$ 21,033,615
$ 22,381,711
$ 17,606,332
(Concluded)

The Group had provided notes used as refundable guarantees for borrowings that will be cancelled upon termination of the guarantee.

In addition, the Group’s interest bearing floating rate borrowing was reset every one to three months.

The loan agreement requires the maintenance of current ratio, debt ratio, and times interest earned ratio based on semi-annual and annual consolidated financial statements.

The details of assets pledged as collaterals for long-term loans are shown in Note 32.

18. NOTES PAYABLE AND TRADE PAYABLES

September 30, 2013 December 31, 2012 September 30, 2012 Notes payable Notes payable - operating $ 7 $ 105 $ 428 Trade payables Trade payables - operating 2,183,660 1,834,036 1,907,724 $ 2,183,667 $ 1,834,141 $ 1,908,152	January 1, 2012 $ 5,412 2,149,342
	$ 2,154,754

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

19. OTHER PAYABLES

OTHER PAYABLES
September 30, 2013 Other payables Payable for royalties $ 532,980 Payable for rework fees 504,709 Payable for maintenance and repair 212,627 Bonus 176,947 Payable for pension 59,106 Others 451,032 $ 1,937,401	December 31, 2012 September 30, 2012 $ 544,531 $ 561,079 851,804 698,887 354,863 377,313 270,794 179,074 56,709 57,295 541,145 461,498 $ 2,619,846 $ 2,335,146	January 1, 2012 $ 613,531 252,234 367,167 335,344 54,380 553,993
		$ 2,176,649

23 -

20. PROVISIONS

September 30,
2013
December 31,
2012
September 30,
2012

Employee benefits (a)
$ 70,993
$ 70,573
$ 70,746

Customer returns and rebates (b)

25,391

23,596

26,328

$ 96,384
$ 94,169
$ 97,074

Current
$ 96,384
$ 94,169
$ 97,074

Employee
Benefits
Customer
Returns and
Rebates
Balance at January 1, 2012
$ 63,967
$ 24,521

Additional provisions recognized
8,629
18,429
Reversing un-usage balances/usage
(1,725)
(16,573)

Effect of foreign currency exchange differences

(125)

(49)

Balance at September 30, 2012
$ 70,746
$ 26,328

Balance at January 1, 2013
$ 70,573
$ 23,596

Additional provisions recognized
61,612
22,565
Reversing un-usage balances/usage
(61,573)
(20,796)

Effect of foreign currency exchange differences

381

26

Balance at September 30, 2013
$ 70,993
$ 25,391

January 1,
2012
$ 63,967

24,521
$ 88,488
$ 88,488
Total
$ 88,488
27,058
(18,298)

(174)
$ 97,074
$ 94,169
84,177
(82,369)

407
$ 96,384

a. The provision for employee benefits represents vested long service leave entitlements accrued.
b. The provision of customer returns and rebates was based on historical experience, management's judgments and other known reasons estimated product returns and rebates may occur in the year. The provision was recognized as a reduction of operating income in the periods of the related goods sold.

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company, Magic Pixel Inc., Mxtran Inc., Infomax Communication Co., Ltd., MoDioTek Co., Ltd. and MaxRise Inc. of the Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Based on the LPA, the Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group's subsidiary in China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

The total expense recognized in profit or loss for the three months ended September 30, 2013 and 2012 was NT$63,446 thousand and NT$59,703 thousand, respectively, and the total expense recognized in profit or loss for nine months ended September 30, 2013 and 2012 was NT$190,721 thousand and NT$177,915 thousand, which represents contributions payable to these plans by the Group at rates specified in the rules of the plans.

24 -

b. Defined benefit plans

The Company and Magic Pixel Inc. of the Group adopted the defined benefit plan provided in the Labor Standard Law (the “LSL”). Under the LSL, pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company and Magic Pixel Inc. contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name.

For defined benefit plans, employee benefit expenses were calculated using the actuarially determined pension cost discount rate as of December 31, 2012 and January 1, 2012, and recognized in their respective periods. Refer to Note 21 to the consolidated financial statements as of March 31, 2013 for information on the Group’s retirement benefit plans.

The net periodic pension costs of the Company’s separate executive pension plan were NT$29,466 thousand, NT$34,414 thousand, NT$89,980 thousand and NT$76,838 thousand for the three months ended September 30, 2013 and 2012, and the nine months ended September 30, 2013 and 2012, respectively.

Retirement related defined benefit plans were included in the following line items:

Operating cost Marketing expenses Administration expenses Research and development expenses		Three Months Ended September 30 2013 2012 $ 2,996 $ 1,978 $ 305 $ 174 $ 30,287 $ 35,047 $ 1,107 $ 889		Nine Months Ended September 30	Nine Months Ended September 30
		2013 $ 2,996 $ 305 $ 30,287 $ 1,107		2013 $ 8,983 $ 920 $ 92,498 $ 3,316	2012 $ 5,909 $ 528 $ 78,729 $ 2,675

22. EQUITY

a. Ordinary shares

Ordinary shares
September 30, 2013 Numbers of shares authorized $ 65,500,000 Shares issued $ 35,214,623	December 31, 2012 September 30, 2012 $ 65,500,000 $ 65,500,000 $ 35,214,623 $ 35,213,693	January 1, 2012 $ 65,500,000
		$ 33,847,486

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

A total of 864,704 thousand shares and 650,000 thousand shares of the Company’s authorized shares were reserved for the issuance of convertible bonds and employee share options.

25 -

b. Capital surplus

September 30, 2013 December 31, 2012 September 30, 2012 Arising from treasury share transactions $ 26,502 $ 26,502 $ 26,502 Arising from donations 37 37 37 Arising from share of changes in capital surplus of associates 229 113 - Arising from employee share options 317,217 317,217 317,329 $ 343,985 $ 343,869 $ 343,868	January 1, 2012 $ 25,075 37 - 321,377 $ 346,489

A reconciliation of the carrying amount at the beginning and at the end of the nine months ended September 30, 2013 and 2012, for each class of capital surplus was as follows:

Treasury Share Transactions Balance at January 1, 2012 $ 25,075 Company’s dividends received by its subsidiary 1,427 Issue of ordinary shares under employee share options - Balance at September 30, 2012 $ 26,502 Balance at January 1, 2013 $ 26,502 Share of changes in capital surplus of associates - Balance at September 30, 2013 $ 26,502	Donations Share of Changes in Capital Surplus of Associates Employee Share Options $ 37 $ - $ 321,377 - - - - - (4,048) $ 37 $ - $ 317,329 $ 37 $ 113 $ 317,217 - 116 - $ 37 $ 229 $ 317,217

The capital surplus arising from shares issued in excess of par (treasury share transactions and employee share options) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital (limited to a certain percentage of the Company’s capital surplus and once a year).

The capital surplus from long-term investments may not be used for any purpose.

c. Retained earnings and dividend policy

The Company’s Articles of Incorporation provide that any profit after annual closing should be used first to cover income tax and accumulated deficit. Then appropriate for legal reserve 10% of the remaining amount (until the amount of the legal reserve equals the amount of the Company’s capital stock) and appropriate for (or reverse) special reserve in accordance with law. Appropriation for remuneration to directors and supervisors should be made at 2% of the remaining amount. Any remaining amount will be added to the undistributed earnings from previous years and distributed in the following manner: (a) shareholders’ dividends - 85%; (b) employees’ bonus - 15%. Employees’

26 -

bonus will be distributed in the same form as the distribution of dividends to shareholders on a proportionate basis.

Distributions, except for the remuneration to directors and supervisors, may be made in the form of cash dividend or stock dividend, as determined by the shareholders at an Annual General Meeting. Both the shareholders’ bonus and employees’ bonus take the form of cash dividend as the first choice. Nevertheless, it still depends on the Company’s financial, sales or operating condition. The Company’s Articles of Incorporation provide that no more than 50% of the current year’s total amount of distributable earnings can be distributed in the form of stock dividend.

Due to the net loss for the nine months ended September 30, 2013 and 2012, there were no accrual for bonus to employees and remuneration to directors and supervisors.

Under Rule No. 100116 and Rule No. 0950000507 issued by the FSC, certain amounts shall be transferred from unappropriated earnings to a special reserve before any appropriation of earnings generated before January 1, 2012 shall be made. Any special reserve appropriated may be reversed to the extent of the decrease in the net debit balance.

Under Rule No. 1010012865 issued by the FSC on April 6, 2012 and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, on the first-time adoption of IFRSs, a company should appropriate to a special reserve.

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

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

The appropriations of earnings for 2011 had been approved in the shareholders’ meeting on June 6, 2012. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends Stock dividends	For the Year Ended 2011
	Appropriation of Earnings Dividends Per Share (NT$) $ 288,272 1,288,408 $ 0.38 1,288,408 0.38 $ 2,865,088

The above appropriation for stock dividends of NT$1,288,408 thousand from 2011 earnings will be adjusted when the outstanding shares at the ex-dividend date are increased due to exercise of stock options by the Company’s employees. The shareholders had authorized the chairman to adjust the cash and stock dividend per share when the outstanding shares at the ex-dividend date are increased. The above appropriation for stock dividends was approved by the Securities and the Futures Bureau of Financial Supervisory Commission, Executive Yuan on June 19, 2012 and had been officially registered with the Ministry of Economic Affairs, ROC.

27 -

The bonus to employees and remuneration to directors and supervisors for 2011 had been approved in the shareholders’ meeting on June 6, 2012. Details were stated as follows:

Amounts approved in shareholders’ meetings Amounts recognized in respective financial statements		For the Year Ended December 31, 2011
		Bonus to Employees Remuneration of Directors and Supervisors $ 454,732 $ 51,889 477,847 52,928 $ (23,115) $ (1,039)

The differences between the approved amounts of the bonus to employees and remuneration to directors and supervisors and the accrual amounts reflected in the financial statements for the years ended December 31, 2011 which were primarily due to changes in estimates (numbers of the outstanding shares and income tax expense) had been adjusted in profit and loss for the years ended December 31, 2012.

In their meeting on June 19, 2013, the Company’s shareholders resolved the proposal of the Board of Directors to use legal reserve to offset accumulated deficit in the amount of NT$2,695,275 thousand.

Information about the appropriations of earnings is available on the Market Observation Post System website of the Taiwan Stock Exchange.

d. Special reserves appropriated following first-time adoption of IFRSs

The Company had a decrease in retained earnings that resulted from all IFRSs adjustments; therefore, no special reserve was appropriated.

e. Others equity items

1) Foreign currency translation reserve

Exchange differences relating to the translation of the results and net assets of the Group's foreign operations from their functional currencies to the Group's presentation currency (i.e. New Taiwan dollars) were recognized directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve in respect of translating the net assets of foreign operations were reclassified to profit or loss on the disposal of the foreign operation.

2) Investments revaluation reserve

The investments revaluation reserve represents the cumulative gains and losses arising on the revaluation of available-for-sale financial assets that have been recognized in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

28 -

f. Non-controlling interests

g.	Nine Months Ended September 30 2013 2012 Balance at January 1 $ 59,115 $ 138,921 Attributable to non-controlling interests: Share of loss for the period (41,679) (59,815) Issue of employee share options by subsidiaries 371 636 Adjustment relating to changes in capital surplus of associates accounted for using equity method 39,363 - Exchange difference arising on translation of foreign entities 113 (119) Non-controlling interest relating to outstanding vested share options held by the employees of subsidiaries 687 (601) Balance at September 30 $ 57,970 $ 79,022 Treasury shares Purpose of Buy-back Number of Shares, Beginning of Period (In Thousands) Increase During The Period (In Thousands) Number of Shares, End of Period (In Thousands) Nine months ended September 30, 2013 The Company’s shares held by its subsidiaries 3,899 - 3,899 Nine months ended September 30, 2012 The Company’s shares held by its subsidiaries 3,757 142 3,899 The Company’s shares held by its subsidiaries at the end of the reporting periods were as follows: Name of Subsidiary Number of Shares Held (In Thousands) Carrying Amount Market Price September 30, 2013 Hui Ying Investment, Ltd. 3,899 $159,061 $ 28,076 December 31, 2012 Hui Ying Investment, Ltd. 3,899 159,061 33,808 September 30, 2012 Hui Ying Investment, Ltd. 3,899 159,061 38,175 January 1, 2012 Hui Ying Investment, Ltd. 3,757 159,061 45,456	Nine Months Ended September 30

29 -

The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

23. REVENUE

REVENUE
Revenue from the sale of goods Others		For the Three Months Ended September 30 2013 2012 $ 6,704,887 $ 7,349,203 3,372 13,711 $ 6,708,259 $ 7,362,914		For the Nine Months Ended September 30
		2013 $ 6,704,887 3,372 $ 6,708,259		2013 $ 16,334,245 9,812 $ 16,344,057	2012 $ 18,365,272 24,026 $ 18,389,298

The analysis of the Group's products and revenue is shown in Note 36.

24. NET LOSS

Net loss had been arrived at after crediting

a. Other income

Interest income Dividends Others Other gains and losses Net foreign exchange gains/(losses) Net gains arising on financial assets classified as held for trading Net gains on disposal of investments Other gains/(losses)	For the Three Months Ended September 30 2013 2012 $ 26,122 $ 40,449 41,416 45,011 9,652 16,640 $ 77,190 $ 102,100 For the Three Months Ended September 30 2013 2012 $ 19,285 $ (19,848) 9,576 22,343 2 3 (773) 2,852 $ 28,090 $ 5,350	For the Three Months Ended September 30 2013 2012 $ 26,122 $ 40,449 41,416 45,011 9,652 16,640 $ 77,190 $ 102,100 For the Three Months Ended September 30 2013 2012 $ 19,285 $ (19,848) 9,576 22,343 2 3 (773) 2,852 $ 28,090 $ 5,350		For the Nine Months Ended September 30	For the Nine Months Ended September 30
				2013 2012 $ 98,804 $ 123,358 60,825 60,834 18,012 46,471 $ 177,641 $ 230,663 For the Nine Months Ended September 30
		2013 $ 19,285 9,576 2 (773) $ 28,090		2013 $ 109,051 13,230 2,977 (1,563) $ 123,695	2012 $ (57,078) 12,118 1,417 (5,895) $ (49,438)

b. Other gains and losses

30 -

c. Finance costs

Interest on loans Others Less: Amounts included in the cost of qualifying assets	For the Three Months Ended September 30 2013 2012 $ 83,424 $ 86,771 - - - (4,905) $ 83,424 $ 81,866	For the Three Months Ended September 30 2013 2012 $ 83,424 $ 86,771 - - - (4,905) $ 83,424 $ 81,866		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 83,424 - - $ 83,424		2013 $ 256,676 - - $ 256,676	2012 $ 243,436 18 (29,392) $ 214,062

Information about capitalized interest was as follows:

Capitalized interest Capitalization rate	For the Three Months Ended September 30 2013 2012 $ - $ 4,905 - 1.52%	For the Nine Months Ended September 30
		2013 2012 $ - $ 29,392 - 1.52%

d. Impairment losses on financial assets

Trade receivables Other non-current financial assets	For the Three Months Ended September 30 2013 2012 $ 813 $ (20,021) - 49,533 $ 813 $ 29,512	For the Three Months Ended September 30 2013 2012 $ 813 $ (20,021) - 49,533 $ 813 $ 29,512	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 813 - $ 813		2013 $ 813 2,151 $ 2,964	2012 $ - 49,533 $ 49,533

The above impairment loss of financial assets was included in bad debt expense under operating expenses.

e. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses		For the Three Months Ended September 30 2013 2012 $ 1,576,132 $ 1,673,221 303,626 302,069 $ 1,879,758 $ 1,975,290		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 1,576,132 303,626 $ 1,879,758		2013 $ 4,798,319 918,078 $ 5,716,397	2012 $ 4,963,356 794,013 $ 5,757,369 (Continued)

31 -

For the Three Months Ended September 30 2013 2012 An analysis of amortization by function Operating costs $ 31,166 $ 18,910 Operating expenses 23,002 35,666 $ 54,168 $ 54,576 Employee benefits expense For the Three Months Ended September 30 2013 2012 Post-employment benefits Defined contribution plans $ 63,446 $ 59,703 Defined benefit plans 34,695 38,088 98,141 97,791 Share-based payments Equity-settled share-based payments 33 193 Other employee benefits 1,533,560 1,380,513 Total employee benefits expense $ 1,631,734 $ 1,478,497 An analysis of employee benefits expense by function Operating costs $ 749,232 $ 727,497 Operating expenses 882,502 751,000 $ 1,631,734 $ 1,478,497 Gain or loss on foreign currency exchange For the Three Months Ended September 30 2013 2012 Foreign exchange gains $ 215,785 $ 90,041 Foreign exchange losses (196,500) (109,889) $ 19,285 $ (19,848)		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 2012 $ 89,154 $ 41,893 78,304 99,097 $ 167,458 $ 140,990 (Concluded) For the Nine Months Ended September 30
		2013 2012 $ 190,721 $ 177,915 105,717 87,841 296,438 265,756 371 636 4,516,185 4,321,712 $ 4,812,994 $ 4,588,104 $ 2,233,256 $ 2,162,460 2,579,738 2,425,644 $ 4,812,994 $ 4,588,104 For the Nine Months Ended September 30
		2013 $ 1,114,774 (1,005,723) $ 109,051	2012 $ 409,158 (466,236) $ (57,078)

f. Employee benefits expense

g. Gain or loss on foreign currency exchange

32 -

25. INCOME TAX

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax In respect of the current period In respect of prior periods Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended September 30	For the Three Months Ended September 30	For the Three Months Ended September 30	For the Nine Months Ended September 30 2013 2012 $ 6,944 $ 10,312 42 (9,124) (4,100) 47,454 $ 2,886 $ 48,642	For the Nine Months Ended September 30 2013 2012 $ 6,944 $ 10,312 42 (9,124) (4,100) 47,454 $ 2,886 $ 48,642	For the Nine Months Ended September 30 2013 2012 $ 6,944 $ 10,312 42 (9,124) (4,100) 47,454 $ 2,886 $ 48,642
		2013 $ 3,107 13 (2,323) $ 797	2012 $ 7,467 - 25,142 $ 32,609		2013 $ 6,944 42 (4,100) $ 2,886	2012 $ 10,312 (9,124) 47,454 $ 48,642

A reconciliation of accounting loss and current income tax expenses is as follows:

Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Unrecognized temporary differences Unrecognized loss carryforward Unrecognized investment credits Additional income tax on unappropriated earnings Adjustments for prior years’ tax Income tax expense recognized in profit or loss Integrated income tax September 30, 2013 December 31, 2012 Unappropriated earnings (Accumulated deficit) Unappropriated earnings generated before January 1, 1998 $ - $ - Unappropriated earnings generated on and after January 1, 1998 (5,678,042) (3,528,992) $ (5,678,042) $ (3,528,992) Imputation credit accounts $ 220,638 $ 207,924		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ (895,101) 60,690 (163,411) 1,000,666 - - 42 $ 2,886 September 30, 2012 $ - (1,751,681) $ (1,751,681) $ 208,074	2012 $ (605,505) 72,348 109,856 - 475,876 5,191 (9,124) $ 48,642 January 1, 2012 $ - 4,776,572 $ 4,776,572 $ 184,671

b. Integrated income tax

33 -

No tax creditable ratio was calculated for accumulated deficit of 2012. The actual tax creditable ratio for distribution of earnings of 2011 was 9.15%.

c. Income tax assessments

The tax returns through 2009 have been assessed by the tax authorities. The Company disagreed with the tax authorities’ assessment of its 2009 and 2008 tax returns and had applied for re-examination. Nevertheless, the Company has provided for the income tax assessed by the tax authorities.

26. LOSS PER SHARE

LOSS PER SHARE
Basic and diluted loss per share	For the Three Months Ended September 30 2013 2012 $ (0.26) $ (0.33)		Unit: NT$ Per Share For the Nine Months Ended September 30
		2013 $ (0.26)		2013 $ (1.37)	2012 $ (1.04)

The amount of loss and weighted average number of ordinary shares outstanding used in the computation of loss per share from continuing operations were as follows:

Net loss for the period

Net loss for the period
Loss for the period attributable to owners of the Company		For the Three Months Ended September 30 2013 2012 $ (896,588) $ (1,183,727)		For the Nine Months Ended September 30
		2013 $ (896,588)		2013 $ (4,804,846)	2012 $ (3,663,165)

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares in computation of basic and diluted loss per share		For the Three Months Ended September 30 2013 2012 $ 3,517,563 $ 3,516,121		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 3,517,563		2013 $ 3,517,563	2012 $ 3,516,121

As disclosed in Note 27 to the financial statements, the Company conforms according to IAS 33 “Earnings per Share”, in determining whether the share-based payments are potential ordinary stocks. The aforementioned stock options were not included in the calculation of diluted loss per share because they were antidilutive for the nine months ended September 30, 2013 and 2012.

34 -

27. SHARE-BASED PAYMENT ARRANGEMENTS

The Company

The Company has two employee stock option plans (“2005 Plan” and “2007 Plan”) approved by the ROC Securities and Futures Bureau (SFB) to grant options up to 200,000 thousand units and 120,000 thousand units, respectively. Each stock option may subscribe for one new share of common stock of the Company. The options are valid for six years subsequent to the grant dates and exercisable at certain percentages after the second anniversary from the grant date. The options were granted at the exercise price equal to the higher of closing price of the Company’s common shares listed on the TSE or the Company’s net asset value per common share on the grant date. For any subsequent changes in the Company’s capital surplus, the exercise price is adjusted accordingly.

Information on employee share options was as follows:

Unit: Option Numbers in Thousand and NT$ Per Share

2007 Plan Number of Options (In Thousands) Weighted- average Exercise Price (NT$) For the nine months ended September 30, 2013 Balance, beginning of period 42,078 $ 8.80 Options cancelled (643) - Balance, end of period 41,435 8.80 2007 Plan 2005 Plan Number of Options (In Thousands) Weighted-average Exercise Price (NT$) Number of Options (In Thousands) Weighted-average Exercise Price (NT$) For the nine months ended September 30, 2012 Balance, beginning of period 49,794 $ 9.50 37 $ 4.00 Options granted 1,556 8.80 - - Options exercised (7,780) 9.48 - - Options cancelled (1,281) - (37) - Balance, end of period 42,289 8.80 - -	2007 Plan	2007 Plan
Balance, beginning of period Options cancelled Balance, end of period For the nine months ended September 30, 2012 Balance, beginning of period Options granted Options exercised Options cancelled Balance, end of period
		Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 37 $ 4.00 - - - - (37) - - -

The number and exercise prices of outstanding options had been adjusted to reflect the stock dividends and the cancellation of common stock.

As of September 30, 2013, information about the Company’s outstanding and exercisable options was as follows:

Range of Exercise Price (NT$) $8.80	Options Issued on or After January 1, 2004 and Outstanding Number Outstanding (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 41,435 0.24 $8.80	Options Exercisable
		Number Exercisable (Thousand) Exercise Price (NT$/Per Share) 41,435 $8.80

35 -

MoDioTek

Approved by the Board of Directors of MoDioTek on April 2, 2007, December 3, 2007, August 18, 2008 and December 11, 2008, MoDioTek was authorized to issue employee stock options for 1,500 thousand units, 579 thousand units, 671 thousand units and 40 thousand units, respectively. Each stock option may subscribe for one new share of common stock of MoDioTek. The options are valid for six years and exercisable at certain percentages after the second anniversary from the grant date or the earlier of the first anniversary of the grant date or date of application for share listing on the TSE or GreTai Securities Market. For any subsequent changes in MoDioTek’s capital surplus, the exercise price is adjusted accordingly.

Information on employee share options was as follows:

Balance, beginning of period Options cancelled Balance, end of period	For the Nine Months	Ended September 30
	2013 Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 1,989 $ 10.35 (1,166) - 823 10.78	2012
		Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 2,040 $ 10.35 (51) - 1,989 10.35

As of September 30, 2013, information about MoDioTek’s outstanding and exercisable option was as follows:

Options Issued on or After January 1, 2004

	Options Issued on or After January 1, 2004
Range of Exercise Price (NT$) $10.00 11.40 11.40	and Outstanding Number Outstanding (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 364 0.17 $10.00 439 0.88 11.40 20 1.20 11.40 823	Options Exercisable
		Number Exercisable (Thousand) Exercise Price (NT$/Per Share) 364 10.00 439 11.40 20 11.40 823

Mxtran

Approved by the Board of Directors of Mxtran on April 2, 2007, May 4, 2007, November 16, 2007, December 21, 2007 and August 12, 2011, Mxtran was authorized to issue employee stock options for 1,409 thousand units, 74 thousand units, 17 thousand units, 1,564 thousand units and 2,344 thousand units, respectively. Each stock option may subscribe for one new share of common stock of Mxtran. The options are valid for six years and exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in Mxtran’s capital surplus, the exercise price is adjusted accordingly.

Mxtran cancelled and increased its share capital by 12,000 thousand shares and 20,000 thousand shares on March 5, 2009 and March 9, 2009, respectively. Each stock option has subscribed for 0.4 common stock share and the exercise price was subject to adjustments for any change of capital structure.

36 -

Information on employee share options was as follows:

Balance, beginning of period Options cancelled Balance, end of period	For the Nine Months	Ended September 30
	2013 Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 2,270 $ 10.30 (340) - 1,930 10.17	2012
		Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 2,664 $ 10.31 (336) - 2,328 10.31

As of September 30, 2013, information about Mxtran’s outstanding and exercisable option was as follows:

Options Issued on or After January 1, 2004

	Options Issued on or After January 1, 2004
Range of Exercise Price (NT$) $12.18 12.18 10.00	and Outstanding Number Outstanding (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 2 0.13 $12.18 153 0.23 12.18 1,775 3.86 10.00 1,930	Options Exercisable
		Number Exercisable (Thousand) Exercise Price (NT$/Per Share) 2 $12.18 153 12.18 888 10.00 1,043

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

follows:
Grant-date share price (NT$)	$	3.23
Exercise price (NT$)		10.00
Expected volatility		44.82%
Expected life (years)	4.25 years
Expected dividend yield		-
Risk-free interest rate		1.11%

For the three months ended September 30, 2013 and 2012, the compensation cost recognized was NT$33 thousand and NT$84 thousand, respectively. For the nine months ended September 30, 2013 and 2012, the compensation cost recognized was NT$183 thousand and NT$162 thousand, respectively. As of September 30, 2013 and 2012, the estimated percentages of forfeiture due to termination of employment over the remaining vesting period were both 6%.

INFOMAX

Approved by the Board of Directors of INFOMAX on April 2, 2007, November 16, 2007, December 21, 2007, April 2, 2010 and January 26, 2011, INFOMAX was authorized to issue employee stock options for 2,577 thousand units, 423 thousand units, 1,910 thousand units, 8,654 thousand units and 1,346 thousand units, respectively. Each stock option may subscribe for one new share of common stock of INFOMAX. The options authorized on April 2, 2007, November 16, 2007, December 21, 2007 and January 26, 2011 are valid for six years, eight years, eight years and six years, respectively. The options authorized on April 2, 2010 are valid for the earlier of six years to the grant dates or two months to the date of application for share listing on the TSE or GreTai Securities Market. The options granted are exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in INFOMAX’s capital surplus, the exercise price is adjusted accordingly.

37 -

INFOMAX cancelled and increased its share capital by 109,797 thousand shares and 100,000 thousand shares on December 1, 2012 and April 3, 2013, respectively. Each stock option has subscribed for 0.3 common stock share and the exercise price was subject to adjustments for any change of capital structure.

Information on employee share option was as follows:

Balance, beginning of period Options cancelled Balance, end of period	For the Nine Months	Ended September 30
	2013 Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 3,059 $ 31.87 (708) - 2,351 31.87	2012
		Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 10,943 $ 10.00 (1,039) - 9,904 10.00

As of September 30, 2013, information about INFOMAX’s outstanding and exercisable option was as follows:

Options Issued on or After January 1, 2004

	Options Issued on or After January 1, 2004
Range of Exercise Price (NT$) $31.87 31.87 31.87	and Outstanding Number Outstanding (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 46 0.10 $31.87 349 2.22 31.87 1,956 2.63 31.87 2,351	Options Exercisable
		Number Exercisable (Thousand) Exercise Price (NT$/Per Share) 46 $31.87 349 31.87 1,859 31.87 2,254

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

Grant-date share price (NT$)	$	5.17
Exercise price (NT$)		10.00
Expected volatility		37.82%
Expected life (years)	4.25 years
Expected dividend yield		-
Risk-free interest rate		0.91%

For the three months ended September 30, 2013 and 2012, the compensation cost recognized was NT$0 and NT$109 thousand, respectively. For the nine months ended September 30, 2013 and 2012, the compensation cost recognized was NT$188 thousand and NT$474 thousand, respectively. As of September 30, 2013 and 2012, the estimated percentages of forfeiture due to termination of employment over the remaining vesting period were both 3%.

MaxRise

Approved by the Board of Directors of MaxRise on January 12, 2007, April 18, 2007, November 16, 2007, December 21, 2007, August 14, 2008, April 15, 2009, May 5, 2010 and January 3, 2011, MaxRise was authorized to issue employee stock options for 1,160 thousand units, 230 thousand units, 110 thousand units, 1,350 thousand units, 780 thousand units, 225 thousand units, 863 thousand units and 2,007 thousand units, respectively. Each stock option may subscribe for one new share of common stock of MaxRise. The options are valid for six years and exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in MaxRise’s capital surplus, the exercise price is adjusted accordingly.

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Information on employee share options was as follows:

Balance, beginning of period Options cancelled Balance, end of period	For the Nine Months Ended September 30, 2012
	Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 3,034 $ 10.70 (3,034) - - -

The weighted-average exercise prices of outstanding options had been adjusted to reflect the capital reduction making up for losses.

As of December 31, 2012, there was no outstanding option of MaxRise due to the merger of MaxRise and INFOMAX.

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

follows:
Grant-date share price (NT$)	$1.55-$2.58
Exercise price (NT$)	10.00
Expected volatility	32.48%-34.84%
Expected life (years)	4.25 years
Expected dividend yield	-
Risk-free interest rate	0.84%-0.96%

The compensation cost for the nine months ended September 30, 2012 was minor; thus, it was not recognized.

MPI

Approved by the Board of Directors of MPI on June 20, 2007 and May 1, 2012, MPI was authorized to issue employee stock options for 2,400 thousand units and 841 thousand units, respectively. Each stock option may subscribe for one new share of common stock of MPI. The options are valid for six years and exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in MPI’s capital surplus, the exercise price is adjusted accordingly.

Information on employee share options was as follows:

Balance, beginning of period Options granted Options cancelled Balance, end of period	For the Nine Months	Ended September 30
	2013 Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 915 $ 19.07 - - (208) - 707 10.00	2012
		Number of Options (In Thousands) Weighted-average Exercise Price (NT$) 167 $ 67.30 841 10.00 (61) - 947 19.02

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As of September 30, 2013, information about MPI’s outstanding and exercisable options was as follows:

Options Issued on or After January 1, 2004

	Options Issued on or After January 1, 2004
Range of Exercise Price (NT$) $10.00	and Outstanding Number Outstanding (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 707 4.58 $10.00	Options Exercisable
		Number Exercisable (Thousand) Exercise Price (NT$/Per Share) 707 $10.00

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

follows:
Grant-date share price (NT$)	$	6.93
Exercise price (NT$)		10.00
Expected volatility		48.23%
Expected life (years)		4.25 years
Expected dividend yield		-
Risk-free interest rate		1%

The compensation costs for the nine months ended September 30, 2013 and 2012 were minor; thus, they were not recognized.

For the nine months ended September 30, 2013 and 2012, the compensation cost recognized based on intrinsic value method was zero. No share options were granted during the three months ended September 30, 2013 and 2012. Refer to Note 27 to the consolidated financial statements as of March 31, 2013 for the information on granted share options.

Information on employee share options was as follows:

Information on employee share options was as follows:
	September 30,	September 30,
	2013	2012
Consolidated net loss attributable to shareholders of the parent:
Net loss as reported	$ (4,804,846)	$ (3,663,165)
Pro forma net loss	$ (4,804,846)	$ (3,663,165)
Consolidated loss per share (LPS) - after income tax (NT$):
Basic and diluted LPS as reported	$(1.37)	$(1.04)
Pro forma basic and diluted LPS	$(1.37)	$(1.04)

28. OPERATING LEASE ARRANGEMENTS

a. The Group as lessee

Operating leases relate to leases of land, offices, employee dormitories and office equipment with lease terms between 1 and 50 years. The Group does not have a bargain purchase option to acquire the leased land, offices, employee dormitories and office equipment at the expiry of the lease periods.

As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, refundable deposits paid under operating leases amounted to NT$9,009 thousand, NT$8,523 thousand, NT$8,680 thousand and NT$8,781 thousand, respectively.

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The future minimum lease payments for non-cancellable operating lease commitments were as follows:

September 30, 2013 December 31, 2012 September 30, 2012 Not later than 1 year $ 92,051 $ 89,938 $ 80,803 Later than 1 year and not later than 5 years 157,750 159,256 172,186 Later than 5 years 187,974 189,339 193,694 $ 437,775 $ 438,533 $ 446,683	January 1, 2012 $ 86,259 218,819 204,156 $ 509,234

The lease payments recognized as expenses were as follows:

Minimum lease payment	For the Three Months Ended September 30 2013 2012 $ 25,644 $ 11,703	For the Three Months Ended September 30 2013 2012 $ 25,644 $ 11,703	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 25,644		2013 $ 81,609	2012 $ 60,057

b. The Group as lessor

Operating leases relate to the building owned by the Group with lease terms between 1 to 5 years. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have a bargain purchase option to acquire the property at the expiry of the lease period.

As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, deposits received under operating leases amounted to NT$339 thousand, NT$326 thousand, NT$139 thousand and NT$144 thousand, respectively.

The future minimum lease revenue from non-cancellable operating leases was as follows:

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,	January 1,	January 1,
		2013		2012		2012		2012
Not later than 1 year	$	4,046	$	3,728	$	3,921	$	2,881
Later than 1 year and not later
than 5 years		9,176		11,599		12,691		13,987
Later than 5 years		-		-		-		919
	$	13,222	$	15,327	$	16,612	$	17,787

29. CAPITAL MANAGEMENT

Management followed the same objectives, policies and process for managing capital, and capital structures of consolidated financial statements in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the three months ended March 31, 2013. Refer to Note 29 to the consolidated financial statements as of March 31, 2013 for details.

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30. FINANCIAL INSTRUMENTS

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

The management considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

2) Fair value measurements recognized in the consolidated balance sheets

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

a) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
b) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
c) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

September 30, 2013 Available-for-sale financial assets - non-current Securities listed in ROC Equity securities December 31, 2012 Financial assets at FVTPL - current Available-for-sale financial assets - non-current Securities listed in ROC Equity securities September 30, 2012 Financial assets at FVTPL - current Available-for-sale financial assets - non-current Securities listed in ROC Equity securities	Level 1 $ 826,280 Level 1 $ - $ 888,685 Level 1 $ - $ 932,684	Level 2 $ - Level 2 $ 6,199 $ - Level 2 $ 10,728 $ -	Level 3 $ - Level 3 $ - $ - Level 3 $ - $ -	Total $ 826,280 Total $ 6,199 $ 888,685 Total $ 10,728 $ 932,684

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January 1, 2012

Financial assets at FVTPL - non-current Available-for-sale financial assets - non-current Securities listed in ROC Equity securities	Level 1 $ 39,357 $ 879,392	Level 2 $ - $ -	Level 3 $ - $ -	Total $ 39,357 $ 879,392

There were no transfers between Level 1 and Level 2 in the current and prior periods.

3) Valuation techniques and assumptions applied for the purpose of measuring fair value

The fair values of financial assets and financial liabilities were determined as follows:

a) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;
b) The fair values of derivative instruments were calculated using quoted prices. Where such prices were not available, a discounted cash flow analysis was performed using the applicable yield curve for the duration of the instruments for non-optional derivatives. The estimates and assumptions used by the Group were consistent with those that market participants would use in setting a price for the financial instrument.
b. Categories of financial instruments

	September	30,	December	December	31,	September	September	30,		January 1,
	2013			2012			2012			2012
Financial assets
Fair value through profit or loss
(FVTPL)
Held for trading	$	-	$	6,199		$	10,728		$	-
Designated as at FVTPL		-			-			-		39,357
Loans and receivables (i)	17,632,845			22,776,325			24,311,801			23,869,549
Available-for-sale financial
assets (ii)	908,978			986,547			1,037,185			1,033,883
Financial liabilities
Amortized cost (iii)	25,044,800			26,106,999			27,524,849			24,696,300

i) The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, notes receivable and trade receivables (including receivables from related parties), other receivables, and other financial assets (including current and non-current assets).
ii) The balances included the carrying amount of available-for-sale financial assets measured at cost.
iii) The balances included financial liabilities measured at amortized cost, which comprise short-term loans, notes payable and trade payables (including payables to related parties), other payables, payable for purchase of equipment, and long-term loans (including current portion).
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c. Financial risk management objectives and policies

The Group manages its exposure to risks relating to the operations through market risk, credit risk, and liquidity risk 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 management in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Group must comply with certain treasury procedures that provide guiding principles for overall financial risk management.

1) Market risk

The Group's activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below), interest rates (see (b) below), and other price risk (see (c) below).

a) Foreign currency risk

Several subsidiaries of the Company had foreign currency sales and purchases, which exposed the Group to foreign currency risk. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts.

Sensitivity analysis

The Group was mainly exposed to the USD and JPY.

Sensitivity analysis of rate is for the transactions in currencies other than the entity’s functional currency (foreign currencies) which are recognized at the rates of exchange prevailing at the dates of the transactions.

The following table details the Group’s sensitivity to a 3% and 10% increase in New Taiwan dollars (the functional currency) against the relevant foreign currencies, respectively. The sensitivity rates used are 3% and 10% when reporting foreign currency risk internally to key management personnel.

management personnel.
Pre-tax loss	Currency USD Impact For the Nine Months Ended September 30 2013 2012 $ 38,768 $ 38,536	Currency JPY Impact
		For the Nine Months Ended September 30
		2013 2012 $ 22,274 $ 139,320

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

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

	September 30,	December 31,	September 30,	January 1,
	2013	2012	2012	2012
Fair value interest rate risk
Financial assets	$ 11,060,500	$ 17,835,488	$ 17,784,388	$ 16,001,937
Financial liabilities	1,263,883	88,406	280,031	-
Cash flow interest rate risk
Financial assets	1,892,151	1,471,846	1,728,294	3,911,479
Financial liabilities	18,832,993	21,033,615	22,381,711	19,406,820
Sensitive analysis

Sensitivity analysis of interest is calculated based on the financial liabilities exposed to cash flow interest rate risk at the end of each reporting period.

If interest rates had been 50 basis points higher/lower, the Group’s pre-tax loss for the nine months ended September 30, 2013 and 2012 would increase/decrease by NT$74,750 thousand and NT$78,353 thousand, respectively.

c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

Sensitive analysis

Sensitivity analysis of equity price is calculated based on the fair values of available-for-sale investments at the end of each reporting period.

If equity prices had been 10% higher/lower, equity for the nine months ended September 30, 2013 and 2012 would have increased/decreased by NT$82,628 thousand and NT$93,268 thousand, respectively, as a result of the changes in fair value of available-for-sale investments.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s exposure to credit risk mainly arises from trade receivables - operating, bank deposits, and other financial instruments. Credit risk is managed separately for business related and financial related exposures.

Business related credit risk

In order to maintain the credit quality of trade receivables, the Group has established procedures to monitor and limit exposure to credit risk on trade receivables.

Credit evaluation is performed in the consideration of the relevant factors which may affects the customer’s paying ability such as financial condition, external and internal credit scoring, historical experience, and economic conditions. The Group holds some of the credit enhancements such as prepayments and collateral to mitigate its credit risks.

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Trade receivables consisted of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables and, where appropriate, credit guarantee insurance cover is purchased.

As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, the Group’s ten largest customers accounted for 57%, 47%, 56% and 50% of total trade receivables (including receivables from related parties), respectively. The Group believed the concentration of credit risk was relatively insignificant for the remaining trade receivables.

Financial credit risk

The Group’s exposure to financial credit risk which pertained to bank deposits and other financial instruments were evaluated and monitored by Corporate Treasury function. The Group only deals with creditworthy counterparties and banks so that no significant credit risk was identified.

3) Liquidity risk

The objective of liquidity risk management is to ensure the Group has sufficient liquidity to fund its business requirements of cash and cash equivalents and the unused of financing facilities associated with existing operations.

The Group relies on bank borrowings as a significant source of liquidity. As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, the Group had available unutilized overdraft and short-term bank loan facilities of approximately NT$5,487,381 thousand, NT$6,856,768 thousand, NT$7,424,934 thousand and NT$10,099,344 thousand, respectively.

Liquidity and interest rate risk tables

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows.

Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

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

September 30, 2013

September 30, 2013
On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 4,947,924 Variable interest rate liabilities 6,311,712 Fixed interest rate liabilities 1,037,444 $ 12,297,080	1-3 Years $ - 13,231,117 - $ 13,231,117	3-5 Years $ - - - $ -	5+ Years $ - - - $ -	Total $ 4,947,924 19,542,829 1,037,444
				$ 25,528,197

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December 31, 2012

On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 4,984,978 Variable interest rate liabilities 5,559,431 Fixed interest rate liabilities 88,767 $ 10,633,176 September 30, 2012 On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 4,860,107 Variable interest rate liabilities 6,280,024 Fixed interest rate liabilities 283,303 $ 11,423,434 January 1, 2012 On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 5,289,480 Variable interest rate liabilities 1,815,677 Fixed interest rate liabilities 1,804,025 $ 8,909,182	1-3 Years $ - 16,174,602 - $ 16,174,602 1-3 Years $ - 9,131,261 - $ 9,131,261 1-3 Years $ - 8,308,774 - $ 8,308,774	3-5 Years $ - 22,886 - $ 22,886 3-5 Years $ - 7,758,567 - $ 7,758,567 3-5 Years $ - 8,358,820 - $ 8,358,820	5+ Years $ - - - $ - 5+ Years $ - - - $ - 5+ Years $ - - - $ -	Total $ 4,984,978 21,756,919 88,767
				$ 26,830,664
				Total $ 4,860,107 23,169,852 283,303
				$ 28,313,262
				Total $ 5,289,480 18,483,271 1,804,025
				$ 25,576,776

31. TRANSACTIONS WITH RELATED PARTIES

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

a. Trading transactions

Sales of Goods Key management personnel Others Purchases of Goods Key management personnel		For the Three Months Ended September 30 2013 2012 $ 2,296,760 $ 2,725,056 239 356 $ 2,296,999 $ 2,725,412 $ 451,027 $ 115,684		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 2,296,760 239 $ 2,296,999 $ 451,027		2013 $ 4,239,534 1,531 $ 4,241,065 $ 1,020,621	2012 $ 5,554,643 1,334 $ 5,555,977 $ 137,778

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Sales prices to related parties were not comparable to those with external customers as the Company was the sole provider for them. The sales terms to the related parties were between 30 to 60 days after monthly closing, similar to those with external customers.

Materials purchased from related parties were for manufacturing process. The payment term was 30 days after monthly closing, similar to those with external vendors.

Manufacturing Expense The Group is its major management authority Operating Expense The Group is its major management authority Key management personnel Others Joint Development Revenue The Group is its major management authority	For the Three Months Ended September 30 2013 2012 $ 122,603 $ 110,525 $ 228 $ 255 - - 6,250 6,292 $ 6,478 $ 6,547 $ - $ -	For the Three Months Ended September 30 2013 2012 $ 122,603 $ 110,525 $ 228 $ 255 - - 6,250 6,292 $ 6,478 $ 6,547 $ - $ -	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 122,603 $ 228 - 6,250 $ 6,478 $ -		2013 $ 342,093 $ 1,038 2,581 18,750 $ 22,369 $ -	2012 $ 296,638 $ 640 - 18,792 $ 19,432 $ 5,769

The subcontract processing charges of related parties were comparable to those with other vendors. The payment term was 75 days after monthly closing.

The following balances of trade receivables from related parties were outstanding at the end of the reporting period:

The following balances of trade receivables from related parties were outstanding at reporting period:	the end of th
September 30, 2013 December 31, 2012 September 30, 2012 Key management personnel $ 1,184,674 $ 427,401 $ 1,378,385 Others 170 52 39 $ 1,184,844 $ 427,453 $ 1,378,424	January 1, 2012 $ 918,063 -
	$ 918,063

The following balances of trade payables to related parties were outstanding at the end of the reporting period:

September 30, 2013 December 31, 2012 September 30, 2012 Key management personnel $ 54,259 $ - $ 66,259 The Group is its major management authority 112,532 118,455 106,358 Others 15,535 17,550 - $ 182,326 $ 136,005 $ 172,617	January 1, 2012 $ - 82,244 - $ 82,244

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The outstanding of trade payables from related parties are unsecured and will be settled in cash. No guarantees had been given or received for trade receivables to related parties. No expense had been recognized for the nine months ended September 30, 2013 and 2012 for allowance for impairment of trade receivables in respect of the amounts owed by related parties.

b. Compensation of key management personnel

The remuneration of directors and other members of key management personnel for the nine months ended September 30, 2013 and 2012 was as follows:

Short-term benefits Post-employment benefits	For the Three Months Ended September 30 2013 2012 $ 28,624 $ 28,223 29,599 27,797 $ 58,223 $ 56,020	For the Three Months Ended September 30 2013 2012 $ 28,624 $ 28,223 29,599 27,797 $ 58,223 $ 56,020	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2013 $ 28,624 29,599 $ 58,223		2013 $ 106,809 90,402 $ 197,211	2012 $ 108,786 83,443 $ 192,229

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

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, the tariff of imported raw materials guarantees or the deposit for hiring foreign workers:

September 30, 2013 Pledge deposits (classified as other financial assets - current) $ - Property, plant and equipment, net 15,947,220 Pledge deposits (classified as other financial assets - non-current) 170,077 $ 16,117,297	December 31, 2012 September 30, 2012 $ 41,106 $ 41,514 18,773,742 18,662,169 170,176 168,248 $ 18,985,024 $ 18,871,931	January 1, 2012 $ - 13,119,861 187,182
		$ 13,307,043

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of September 30, 2013 were as follows:

a. As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, unused letters of credit amounted to approximately NT$2,166 thousand, NT$15,930 thousand, NT$20,808 thousand and NT$50,489 thousand, respectively.
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b. Unrecognized commitments are as follows:

September 30, 2013 December 31, 2012 September 30, 2012 Acquisition of property, plant and equipment $ 2,007,953 $ 812,424 $ 979,098	January 1, 2012 $ 716,395

c. The Company entered into the Phase-change memory technology agreement with IBM Company in January 2010, and the term of the agreement is from January 2010 to January 2013. Under the agreement, both parties have to share in the related expenditures of the technology development, and the Group has completed the payment in January, 2013. The Company entered into another Phase-change memory technology agreement with IBM Company in January 2013. The term of the agreement is from January 2013 to January 2016. As of September 30, 2013, the Group has paid US$2,100 thousand.
d. The Company entered into the Patents Cross-License Agreement with J Company in December 2009, and the term of the agreement is from December 2009 to December 2015. Under the agreement, the Company has completed the payment.
e. In August 2013, Spansion Inc. (“Spansion”) filed a lawsuit against the Company with both the U.S. International Trade Commission (“ITC”) and the U.S. District Court in California concurrently, alleging that the Company infringed its patents. To protect the Company’s interests, the Company not only hired a U.S. attorney to respond to the charges but also filed a lawsuit against Spansion for the infringement of the Company’s seven patents. The Company evaluated that Spansion’s lawsuit would have limited impact on the Company’s financial statements since there were various points of argument that could be taken into account.

34. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities denominated in foreign currencies were as follows:

September 30, 2013
	Exchange		Financial		Financial
	Rate		Assets		Liabilities
Monetary items
JPY	0.30	$	4,937,437	$	4,194,977
USD	29.57		115,531		71,829
December 31, 2012
	Exchange		Financial		Financial
	Rate		Assets		Liabilities
Monetary items
JPY	0.34	$	2,452,014	$	861,058
USD	29.04		89,627		50,585

50 -

September 30, 2012

September 30, 2012
	Exchange		Financial		Financial
	Rate		Assets		Liabilities
Monetary items
JPY	0.38	$	4,879,259	$	1,212,946
USD	29.30		94,137		50,296
January 1, 2012
	Exchange		Financial		Financial
	Rate		Assets		Liabilities
Monetary items
JPY	0.39	$	6,450,652	$	3,733,623
USD	30.28		94,522		58,094

35. SEPARATELY DISCLOSED ITEMS

Information on significant transactions and information on investees:

a. Lending funds to others: None
b. Providing endorsements or guarantees for others: None
c. Holding of securities at the end of the period: Table 1 (attached)
d. Aggregate purchases or sales of the same securities reaching NT$100 million or 20 percent of paid-in capital or more: Table 2 (attached)
e. Acquisition of real estate reaching NT$100 million or 20 percent of paid-in capital or more: None
f. Disposal of real estate reaching NT$100 million or 20 percent of paid-in capital or more: None
g. Purchases or sales of goods from or to related parties reaching NT$100 million or 20 percent of paid-in capital or more: Table 3 (attached)
h. Trade receivables from related parties reaching NT$100 million or 20 percent of paid-in capital or more: Table 4 (attached)
i. Information on investees: Table 5 (attached)
j. Trading in derivative instruments: None
k. The business relationship between the parent and the subsidiaries and between each subsidiary, and the circumstances and amounts of any significant transactions between them: Table 6 (attached)
l. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, investment gain or loss, carrying amount of the investment at the end of the period, repatriated investment gains, and limit on the amount of investment in the mainland China area: Table 7 (attached)
51 -
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses: None
3) Endorsements, guarantees or collateral directly or indirectly provided to the investees: None
4) Financing directly or indirectly provided to the investees: None
5) Other transactions that significantly impacted current period’s profit or loss or financial position: None

36. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group's reportable segments were as follows:

Memory products and wafer fabrication

IC design

The reported segments above were separated by the nature of the operation. The accounting policies adopted by the segments have no significant differences from summary of significant accounting policies stated in Note 4.

a. Segment revenues and results

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

Memory products and wafer fabrication IC design Revenues from continuing operations Other income Other gains and losses Finance costs Loss before tax (continuing operations)		Segment	Re	venue For the Nine Months Ended September 30 ~~2013~~ ~~2012~~ $ 16,287,448 $ 18,327,092 56,609 62,206 $ 16,344,057 $ 18,389,298		Segment	Segment	Loss	Loss
		For the Three Months Ended September 30 ~~2013~~ ~~2012~~ $ 6,681,306 $ 7,343,808 26,953 19,106 $ 6,708,259 $ 7,362,914				For the Three Months Ended September 30 ~~2013~~ ~~2012~~ $ (781,666 ) $ (1,015,139 ) (146,679) (179,997) (928,345 ) (1,195,136 ) 77,190 102,100 28,090 5,350 (83,424) (81,866) $ (906,489) $ (1,169,552)		For the Nine Months Ended September 30
		~~2013~~ $ 6,681,306 26,953 $ 6,708,259		~~2013~~ $ 16,287,448 56,609 $ 16,344,057		~~2013~~ $ (781,666 ) (146,679) (928,345 ) 77,190 28,090 (83,424) $ (906,489)		~~2013~~ $ (4,394,102 ) (494,197) (4,888,299 ) 177,641 123,695 (256,676) $ (4,843,639)	~~2012~~ $ (3,100,213 ) (541,288) (3,641,501 ) 230,663 (49,438 ) (214,062) $ (3,674,338)

b. Segment total assets

Segment total assets
September 30, 2013 Memory products and wafer fabrication $ 55,209,827 IC design 1,492,914 Consolidated total assets $ 56,702,741	December 31, 2012 September 30, 2012 $ 61,639,280 $ 64,515,790 691,408 867,598 $ 62,330,688 $ 65,383,388	January 1, 2012 $ 66,726,569 1,409,253
		$ 68,135,822

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37. FIRST-TIME ADOPTION OF IFRSs

a. Basis of the preparation for financial information under IFRSs

The Group’s condensed consolidated financial statements for the nine months ended September 30, 2013 not only follows the significant accounting policies stated in Note 4 but also applies the requirements under IFRS 1 “First-time Adoption of IFRS” as the basis for the preparation.

Except for the following additional information on the impact on the transition to IFRSs, refer to Note 37 to the consolidated financial statements as of March 31, 2013 for the impact on the Group’s consolidated balance sheets and consolidated statements of comprehensive income after transition to IFRSs.

After transition to IFRSs, the effect on the Group’s consolidated balance sheets and consolidated statements of comprehensive income is stated as follows:

1) Reconciliation of consolidated balance sheet as of September 30, 2012

ROC GAAP	Amount $ 19,303,525 10,728 3,194,061 1,378,424 189,568 7,033,697 371,674 41,514 557,689 32,080,880 932,684 104,501 1,037,185 31,208,311 354,782 280,734 134,070 168,248 105,384 688,436 $ 65,369,594 $ 283,031 1,908,152 172,617 60,181 2,335,146 444,192		Effect of Transit	ion to IFRSs Presentation Difference $ - - 13,794 - - - (371,674 ) - 523 (357,357) - - - 280,734 (9,241) (280,734 ) 371,674 - 8,718 99,658 $ 13,794 $ - - - - - -		IFRSs Amount Item Note Current assets $ 19,303,525 Cash and cash equivalents 10,728 Financial assets at fair value through profit or loss - current 3,207,855 Notes receivable and trade receivables, net a) 1,378,424 Receivables from related parties, net 189,568 Other receivables 7,033,697 Inventories - - b) 41,514 Other financial assets - current 558,212 Other current assets c) 31,723,523 Total current assets Long-term investments 932,684 Available-for-sale financial assets - non-current 104,501 Financial assets carried at cost - non-current 1,037,185 Total non-current assets 31,489,045 Property, plant and equipment d) 345,541 Intangible assets c), e) Other assets - - d) 505,744 Deferred income tax assets b) 168,248 Other financial assets - non-current 114,102 Other non-current assets c), e) 788,094 $ 65,383,388 Total Current liabilities $ 283,031 Short-term borrowings 1,908,152 Notes payable and trade payables 172,617 Payables to related parties 60,181 Current tax liabilities 2,335,146 Other payables 444,192 Payable for purchase of equipment (Continued)
			Recognition and Measurement Difference $ - - - - - - - - - - - - - - - - - - - - $ - $ - - - - - -
Item Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Notes and accounts receivable, net Receivables from related parties, net Other receivables, net Inventories Deferred income tax assets - current Restricted assets - current Other current assets Total current assets Long-term investments Available-for-sale financial assets - non-current Financial assets carried at cost - non-current Total long-term investments Net property, plant and equipment Net intangible assets Other assets Idle assets, net Deferred income tax assets - non-current Restricted assets - non-current Other assets Total other assets Total Current liabilities Short-term bank loans Notes and accounts payable Payables to related parties Income tax payable Accrued expenses Payables for equipment

53 -

ROC GAAP	Amount $ 5,940,718 201,109 11,345,146 16,440,993 431,559 1,847 433,406 28,219,545 35,213,693 347,918 2,695,275 (1,441,298 ) 491,411 (89,905 ) (142,365) 37,074,729 75,320 37,150,049 $ 65,369,594		Effect of Transit	ion to IFRSs Presentation Difference $ - 13,794 13,794 - - - - 13,794 - - - - - - - - - - $ 13,794		IFRSs Amount Item Note $ 5,940,718 Current portion of long-term borrowings 285,649 Other current liabilities a), g) 11,429,686 Total current liabilities 16,440,993 Total long-term liabilities Other liabilities 688,257 Accrued pension cost h) 1,847 Others 690,104 Total other liabilities 28,560,783 Total liabilities 35,213,693 Ordinary shares 343,868 Capital surplus f) 2,695,275 Legal reserve (1,751,681 ) Accumulated deficit g), h), i) 491,411 Unrealized gain from available-for-sale financial assets (89,922 ) Cumulative translation adjustments g) (159,061) Treasury stock i) 36,743,583 Equity attributable to owners of the company 79,022 Non-controlling interests f), g), h) 36,822,605 Total equity $ 65,383,388 Total
			Recognition and Measurement Difference $ - 70,746 70,746 - 256,698 - 256,698 327,444 - (4,050 ) - (310,383 ) - (17 ) (16,696) (331,146 ) 3,702 (327,444) $ -
Item Current portion of long-term bank loans Other current liabilities Total current liabilities Total long-term liabilities Other liabilities Accrued pension cost Others Total other liabilities Total liabilities Shareholders' equity Capital stock Capital surplus Legal capital reserve Accumulated deficit Unrealized gains on financial instruments Cumulative translation adjustments Treasury stock Total equity attributable to shareholders of the parent Minority interests Total shareholders' equity Total

(Concluded)

2) Reconciliation of consolidated statement of comprehensive income for the nine months ended September 30, 2012

September 30, 2012
		Effect of Transition to IFRSs
		Recognition
		and
ROC GAAP		Measurement			Presentation			IFRSs
Item	Amount	Difference			Difference		Amount	Item		Note
Net sales	$ 18,389,298	$	-		$	-	$ 18,389,298	Net operating revenue
Cost of sales	16,077,128	(1,071)			86,177		16,162,234	Operating costs	g),	h), j)
Gross profit	2,312,170	1,071			(86,177)		2,227,064	Gross profit
Operating expenses								Operating expenses
Sales and marketing	893,390	(1,286 )			(23 )		892,081	Sales and marketing	g),	h), j)
								expenses
General and	1,266,105	2,061			535		1,268,701	General and	g),	h), j)
administrative								administrative expenses
Research and	3,707,673	1,593			(1,483)		3,707,783	Research and	g),	h), j)
development								development expenses
Total operating expenses	5,867,168	2,368			(971)		5,868,565	Total operating expenses
Loss from operations	(3,554,998)	(1,297)			(85,206)		(3,641,501)	Loss from operations
Non-operating income and								Non-operating income and
gains								gains
Interest income	123,358		-			-	123,358	Interest income
Valuation gain on	10,728		-			-	10,728	Valuation gain arising	on
financial assets								financial assets
								classified as held for
								trading
Others	110,112		-			-	110,112	Others
Total non-operating	244,198		-			-	244,198	Total non-operating
income and gains								income and gains
Non-operating expenses and								Non-operating expenses and
losses								losses
Interest expense	214,062		-			-	214,062	Interest expense
Loss on disposal of assets	85,206		-	(	85,206 )		-	-	j)
Foreign exchange losses,	57,078		-			-	57,078	Foreign exchange losses,
net								net
Others	5,895		-			-	5,895	Others
Total non-operating	362,241		-		(85,206)		277,035	Total non-operating
expenses and losses								expenses and losses
									(Continued)

54 -

ROC GAAP	Amount $ (3,673,041 ) 48,642 $ (3,721,683)		Effect of Transiti	on to IFRSs Presentation Difference $ - - $ -		IFRSs Amount Item Note $ (3,674,338 ) Loss before income tax 48,642 Income tax expense (3,722,980) Consolidated net loss (59,993 ) Exchange differences on translating foreign operations 59,316 Unrealized gain on available-for-sale financial assets (677) Other comprehensive income for the period, net of income tax $ (3,723,657) Total comprehensive loss for the period (Concluded)
			Recognition and Measurement Difference $ - - $ (1,297)
Item Loss before income tax Income tax expense Consolidated net loss

3) Reconciliation of consolidated statement of comprehensive income for the three months ended September 30, 2012

ROC GAAP	Amount $ 7,362,914 6,471,621 891,293 322,607 448,880 1,313,337 2,084,824 (1,193,531) 40,449 392 6,747 80,102 127,690 81,866 19,848 101,714 (1,167,555 ) 32,609 $ (1,200,164)		Effect of Transiti	on to IFRSs Presentation Difference $ - (486) 486 (39 ) 136 (3) 94 392 - (392 ) - - (392) - - - - - $ -		IFRSs Amount Item Note $ 7,362,914 Net operating revenue 6,471,402 Operating costs g), h), j) 891,512 Gross profit Operating expenses 322,254 Sales and marketing expenses g), h), j) 450,491 General and administrative expenses g), h), j) 1,313,903 Research and development expenses g), h), j) 2,086,648 Total operating expenses (1,195,136) Loss from operations Non-operating income and gains 40,449 Interest income - - j) 6,747 Valuation gain arising on financial assets 80,102 Others 127,298 Total non-operating income and gains Non-operating expenses and losses 81,866 Interest expense 19,848 Foreign exchange losses, net 101,714 Total non-operating expenses and losses (1,169,552 ) Loss before income tax 32,609 Income tax expense (1,202,161) Consolidated net loss (31,860 ) Exchange differences on translating foreign operations 3,972 Unrealized gain on available-for-sale financial assets (27,888) Other comprehensive income for the period, net of tax $ (1,230,049) Total comprehensive loss for the period
			Recognition and Measurement Difference $ - 267 (267) (314 ) 1,475 569 1,730 (1,997) - - - - - - - - - - $ (1,997)
Item Net sales Cost of sales Gross profit Operating expenses Sales and marketing General and administrative Research and development Total operating expenses Loss from operations Non-operating income and gains Interest income Gain on disposal of assets Valuation gain on financial assets Others Total non-operating income and gains Non-operating expenses and losses Interest expense Foreign exchange losses, net Total non-operating expenses and losses Loss before income tax Income tax expense Consolidated net loss

55 -
4) Exemptions from IFRS 1

The exemptions adopted by the Group on January 1, 2012 were the same as those indicated in the consolidated financial statements as of March 31, 2013. Refer to the Note 37 to the consolidated financial statements as of March 31, 2013 for detail information.

5) Explanations of significant reconciling items in the transition to IFRSs

Material differences between the accounting policies under ROC GAAP and the accounting policies adopted under IFRSs were as follows:

a) Allowance for sales returns and others

Under ROC GAAP, provisions for estimated sales returns and others are recognized as a reduction in revenue in the period the related revenue is recognized based on historical experience. Allowance for sales returns and others is recorded as a deduction in accounts receivable. Under IFRSs, the allowance for sales returns and others is a present obligation with uncertain timing and an amount that arises from past events; it is therefore reclassified as provisions (classified under current liabilities) accordingly.

As of September 30, 2012, the amounts reclassified from allowance for sales returns and others to provisions was NT$13,794 thousand.

b) Classifications of deferred income tax asset/liability and valuation allowance

Under ROC GAAP, valuation allowance is provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. Under IFRSs, deferred tax assets are only recognized to the extent that it is probable that there will be sufficient taxable profits and the valuation allowance account is no longer used.

In addition, under ROC GAAP, a deferred tax asset or liability is classified as current or non-current in accordance with the classification of its related asset or liability. However, if a deferred income tax asset or liability does not relate to an asset or liability in the financial statements, it is classified as either current or non-current based on the expected length of time before it is realized or settled. Under IFRSs, a deferred tax asset or liability is classified as non-current asset or liability.

As of September 30, 2012, the amount reclassified from deferred income tax assets - current to deferred income tax assets - non-current was NT$371,674 thousand.

c) Reclassification of burgage

Under ROC GAAP, held burgage is classified under intangible assets. Under IFRSs, burgage is reclassified as lease prepayments in accordance with IAS No 17, “Leases”.

As of September 30, 2012, the amounts reclassified to lease prepayments - current and lease prepayments - non-current were NT$523 thousand and NT$22,607 thousand, respectively.

d) Reclassification of idle assets

Under ROC GAAP, idle assets are classified under other assets. After the adoption of IFRSs, idle assets are reclassified under property, plant and equipment in accordance with IAS No 16, “Property, Plant and Equipment”.

As of September 30, 2012, the amount reclassified from idle assets to property, plant and equipment was NT$280,734 thousand.

56 -
e) Reclassification of deferred assets

Under ROC GAAP, deferred assets are classified under other assets. Under IFRSs, deferred assets are reclassified under intangible assets.

As of September 30, 2012, the amount reclassified from deferred assets to intangible assets was NT$13,889 thousand.

f) Capital surplus of subsidiaries - employee stock options

Under ROC GAAP, employee stock options granted by a subsidiary are recognized by the parent company according to its ownership percentage as capital surplus - employee stock options under the equity attributable to shareholders of the parent in the consolidated financial statements. Under IFRSs, the equity not attributable, directly or indirectly, to a parent is non-controlling interest.

As of September 30, and January 1, 2012, the amounts reclassified to non-controlling interest were NT$4,050 thousand.

g) Employee benefits - short-term accumulating compensated absences

Short-term accumulating compensated absences are not specifically addressed under ROC GAAP and usually recognized as salary expense while distributed. Under IFRSs, accumulating compensated absences are recognized as salary expense when the employees render services that increase their entitlement to future compensated absences.

At the transition to IFRSs, the Company elected to recognize all the resulting accounting difference of compensated absences in retained earnings. As of September 30, 2012, other current liabilities increased by NT$70,746 thousand, non-controlling interests decreased by NT$579 thousand; cumulative translation adjustments decreased by NT$17 thousand. For the three months ended September 30, 2012, the cost of sales and operating expenses increased by NT$1,299 thousand and NT$2,575 thousand, respectively. For the nine months ended September 30, 2012, cost of sales and operating expenses increase by NT$2,027 thousand and NT$4,903 thousand, respectively.

h) Employee benefits - corridor approach

Under ROC GAAP, unrecognized net transition obligation from first-adoption of SFAS No. 18, “Accounting for Pensions”, should be amortized over the expected average remaining service lives of the employees who are still in service and expected to receive pension benefits using the straight-line method and recorded in net pension cost. Transition to IFRSs, the Company is not subject to the transition requirements of IAS 19 “Employee Benefits.” Thus, unrecognized net transition obligation should be recognized immediately to unappropriated earnings.

Under ROC GAAP, actuarial gains and losses are accounted for under the corridor approach which resulted in the deferral of gains and losses. When using the corridor approach, actuarial gains and losses should be amortized over the expected average remaining working lives of the participating employees and be recognized directly to retained earnings. At the transition to IFRSs, the Company decided to adopt the corridor approach continuously in accordance with IAS No. 19, “Employee Benefits,” and as its accounting policy.

At the transition date, the Company performed actuarial valuation under IAS No. 19, “Employee Benefits,” and recognized the valuation difference directly to retained earnings under the requirement of IFRS 1, “First-time Adoption of International Financial Reporting Standards.” As of September 30, 2012, accrued pension cost was adjusted for an increase of

57 -

NT$256,698 thousand and non-controlling interest adjusted for an increase of NT$231 thousand. Pension cost for the three months ended September 30, 2012 was adjusted for a decrease in cost of sales of NT$1,032 thousand and a decrease in operating expenses of NT$845 thousand. Pension cost for the nine months ended September 30, 2012 was also adjusted for a decrease in cost of sales of NT$3,098 thousand and a decrease in operating expenses of NT$2,535 thousand.

i) Treasury stock transactions

Under ROC GAAP, the Company’s stocks held by subsidiaries were accounted for as treasury stock. For its first-time adoption of SFAS No. 30, ”Accounting for Treasury Stocks,” the recorded cost of the stock is based on its carrying amount as of January 1, 2002, which may not equal to its acquisition cost.

At the transition to IFRSs, treasury stock is stated at cost and shown as a deduction in shareholders’ equity. The Company is not subject to the transition requirement; thus, the amounts of the related accounts in the statements of changes in shareholders’ equity should be adjusted retrospectively.

As of September 30, 2012, the book value of treasury stock increased by NT$16,696 thousand.

j) The reclassification of line items in the consolidated statement of comprehensive loss

Under IFRSs, based on the nature of operating transactions, the Group reclassified net gain on disposal of property, plant and equipment of NT$392 thousand for the three months ended September 30, 2012 as a decrease in cost of sales of NT$486 thousand and an increase in operating expenses of NT$94 thousand. For the nine months ended September 30, 2012, the Group also reclassified net loss on disposal of property, plant and equipment of NT$85,206 thousand as an increase in cost of sales of NT$86,177 thousand and a decrease in operating expenses of NT$971 thousand.

58 -

TABLE 1

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

MARKETABLE SECURITIES HELD SEPTEMBER 30, 2013

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

Holding Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		September 30, 2013	September 30, 2013		Note
				Shares/Units (In Thousands)	Carrying Value (Note 5)	Percentage of Ownership	Market Value or Net Asset Value (Note 5)
The Company Macronix (BVI) Co., Ltd.	Stock Macronix America Inc. Macronix (BVI) Co., Ltd. Hui Ying Investment, Ltd. Run Hong Investment, Ltd. Infomax Communication Co., Ltd. MoDioTek Co., Ltd. Magic Pixel Inc. Mxtran Inc. Ardentec Corporation United Industrial Gases Co., Ltd. Zowie Technology Co., Ltd. Aetas Technology Inc. Honbond Venture Capital Co., Ltd. Stock New Trend Technology Inc. Macronix Europe NV. Macronix Pte Ltd. Macronix (Hong Kong) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary The Company serves as member of its board of directors None None None The Company serves as member of its board of directors Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equitymethod	100,000 223,300,000 - - 150,271,240 43,023,160 30,651,523 60,627,800 34,896,736 6,671,877 105,981 145,850 4,972,500 25,850,000 999 174,000 89,700,000	$ 251,599 1,445,354 26,386 48,080 994,857 81,211 72,857 156,099 652,569 58,500 - - 24,198 297,132 89,609 15,419 586,617	100.00 100.00 100.00 100.00 97.25 74.18 78.27 89.16 7.48 3.06 0.32 0.29 15.00 100.00 100.00 100.00 100.00	$ 251,563 1,445,354 54,462 48,080 998,911 81,211 72,857 156,518 652,569 126,428 187 (173) 22,278 664,538 89,609 15,419 586,617	Note 1 Note 1 Notes 1 and 3 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 4 Note 4 Note 4 Note 4 Note 1 Note 1 Note 1 Note 1

(Continued)

59 -

Holding Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		September 30, 2013	September 30, 2013		Note
				Shares/Units (In Thousands)	Carrying Value (Note 5)	Percentage of Ownership	Market Value or Net Asset Value (Note 5)
Macronix (BVI) Co., Ltd. Macronix (Hong Kong) Co., Ltd. Hui Ying Investment, Ltd. Run Hong Investment, Ltd. Infomax Communication Co., Ltd. Infomax Holding Co., Ltd. Infomax Holding Company Limited MoDioTek Co., Ltd.	Macronix (Asia) Limited Chipbond Technology Corporation Key ASIC Bhd Tower Semiconductor Ltd. Global Strategic Investment Fund Stock Macronix Microelectronics (Suzhou) Co., Ltd. Stock MoDioTek Co., Ltd. Macronix International Co., Ltd. Raio Technology Co., Ltd. Stock Infomax Communication Co., Ltd. MoDioTek Co., Ltd. Magic Pixel Inc. Mxtran Inc. Stock Infomax Holding Co., Ltd. Stock Infomax Holding Company Limited Stock Infomax Communication (Suzhou) Co., Ltd. Stock Mosatek Co., Ltd.	Indirect subsidiary None None None None Indirect subsidiary Subsidiary The Company None Subsidiary Subsidiary Subsidiary Subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary	Investments accounted for using equity method Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Investments accounted for using equity method Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equitymethod	800,000 1,088,319 26,924,500 584,893 680,000 - 2,894,200 3,899,382 797,244 2,742,506 2,894,200 1,895,440 3,393,200 7,220,000 22,962,500 - 3,390,000	$ 49,166 66,279 23,204 84,228 - 312,272 5,463 28,076 - 18,107 5,463 4,505 8,736 7,124 6,559 5,588 4,401	100.00 0.18 3.34 1.22 2.52 100.00 4.99 0.11 10.73 1.77 4.99 4.84 4.99 100.00 100.00 100.00 100.00	$ 49,166 66,279 23,204 84,228 13,631 312,272 5,463 28,076 18,073 18,181 5,463 4,505 8,760 7,124 6,559 5,588 4,401	Note 1 Note 2 Note 2 Note 2 Note 4 Note 1 Note 1 Note 2 Note 4 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

(Continued)

60 -

Holding Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		September 30, 2013	September 30, 2013		Note
				Shares/Units (In Thousands)	Carrying Value (Note 5)	Percentage of Ownership	Market Value or Net Asset Value (Note 5)
Mosatek Co., Ltd. Mosatek (H.K) Company Limited Magic Pixel Inc. Magic Pixel Inc. Magic Pixel Holding Company Limited Mxtran Inc. Mxtran Holding (Samoa) Co., Ltd. Mxtran (H.K.) Holding Co., Limited	Stock Mosatek (H.K) Company Limited Stock Modiotek (Suzhou) Co., Ltd. Stock Magic Pixel Inc. Stock Magic Pixel Holding Company Limited Stock Magic Pixel (Shen Zhen) Co., Ltd. Stock Mxtran Holding (Samoa) Co., Ltd. Stock Mxtran (H.K.) Holding Co., Limited Maxtran Technology Co., Ltd.	Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equitymethod	12,905,100 - 2,450,000 14,820,000 - 920,000 6,152,000 -	$ 4,006 3,790 7,609 6,869 6,610 9,473 9,179 8,748	100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	$ 4,006 3,790 7,609 6,869 6,610 9,473 9,179 8,748	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

Note 1: Recognized based on the unreviewed financial statements for the same period as the Company.

Note 2: The market value was based on the closing price as of September 30, 2013.

Note 3: The book value excluded $28,076 thousand, held by a subsidiary.

Note 4: The calculation is based upon the most recent financial statements available to the Company.

Note 5: The foreign currency amount is converted into New Taiwan dollars based on the exchange rate at September 30, 2013.

(Concluded)

61 -

TABLE 2

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

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

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counter-party	Nature of Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending Balance	Ending Balance
					Shares/Units (In Thousands)	Amount	Shares/Units (In Thousands)	Amount	Shares/Units (In Thousands)	Amount	Carrying Value	Gain/Loss on Disposal	Shares/Units (In Thousands)	Amount (Note)
The Company	Stock Infomax Communication Co., Ltd.	Investments accounted for using equity method	Infomax Communication Co.,Ltd.	Subsidiary	50,322,240	$ 221,645	99,949,000	$ 999,490	-	$ -	$ -	$ -	150,271,240	$ 994,857

Note: The ending balance of securities.

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TABLE 3

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

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

Company Name	Related Party	Nature of Relationship	Transaction	Transaction	Transaction	Details	Non-arm’s Length Transaction	Non-arm’s Length Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Term	Ending Balance	% to Total
The Company Macronix (Hong Kong) Co., Ltd. Macronix America Inc.	MegaChips Corporation Macronix (Hong Kong) Co., Ltd. Macronix America Inc. MegaChips Corporation The Company The Company	Its subsidiary, Shun Ying Investment, is represented in MXIC’s board of directors Indirect subsidiary Subsidiary Its subsidiary, Shun Ying Investment, is represented in MXIC’s board of directors Indirect subsidiary Subsidiary	Sales Sales Sales Purchase Purchase Purchase	$ 4,239,534 2,030,078 410,368 1,020,621 US$ 68,427,587 US$ 13,813,856	26% 12% 3% 20% 100% 100%	30 days after monthly closing 45 days after monthly closing Net 60 days 30 days after monthly closing 45 days after monthly closing Net 60 days	Note 31 Note 35 Note 35 Note 31 No material difference No material difference	Note 31 Note 35 Note 35 Note 31 No material difference No material difference	$ 1,184,674 409,656 71,900 54,259 US$ 13,851,900 US$ 2,428,441	27% 9% 2% 2% 100% 100%	- - - - - -

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TABLE 4

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2013

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

Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Doubtful Accounts
					Amounts	Action Taken
The Company	MegaChips Corporation Macronix(HongKong)Co.,Ltd.	Its subsidiary, Shun Ying Investment, is represented in MXIC’s board of directors Indirect subsidiary	$ 1,184,674 409,656	7.01 times 7.14 times	$ - -	- -	JPY 3,006,805 thousand US$ 8,114 thousand	$ - -

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TABLE 5

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original Inves	tment Amount	Balance a	s of September 30, 2013	s of September 30, 2013	Net Income (Loss) of the Investee (Note 3)	Investment Income (Loss) Recognized	Note
				September 30, 2013 (Note 1)	December 31, 2012 (Note 1)	Shares	Percentage of Ownership	Carrying Amount (Note 2)
The Company Macronix (BVI) Co., Ltd. Macronix (Hong Kong) Co., Ltd. Hui Ying Investment, Ltd. Run Hong Investment, Ltd. Infomax Communication Co., Ltd. Infomax Holding Co., Ltd. Infomax Holding Company Limited MoDioTek Co., Ltd. Mosatek Co., Ltd. Mosatek (H.K.) Company Limited Magic Pixel Inc. Magic Pixel Inc. Magic Pixel Holding Company Limited Mxtran Inc. Mxtran Holding (Samoa) Co., Ltd. Mxtran(H.K.)HoldingCo.,Limited	Macronix America Inc. Macronix (BVI) Co., Ltd. Hui Ying Investment, Ltd. Run Hong Investment, Ltd. Infomax Communication Co., Ltd. MoDioTek Co., Ltd. Magic Pixel Inc. Mxtran Inc. New Trend Technology Inc. Macronix Europe NV. Macronix Pte Ltd. Macronix (Hong Kong) Co., Ltd. Macronix (Asia) Limited Macronix Microelectronics (Suzhou) Co., Ltd. MoDioTek Co., Ltd. Infomax Communication Co., Ltd. MoDioTek Co., Ltd. Magic Pixel Inc. Mxtran Inc. Infomax Holding Co., Ltd. Infomax Holding Company Limited Infomax Communication (Suzhou) Co., Ltd. Mosatek Co., Ltd. Mosatek (H.K) Company Limited Modiotek (Suzhou) Co., Ltd. Magic Pixel Inc. Magic Pixel Holding Company Limited Magic Pixel (Shen Zhen) Co., Ltd. Mxtran Holding (Samoa) Co., Ltd. Mxtran (H.K.) Holding Co., Limited. Maxtran TechnologyCo.,Ltd.	San Jose, California, U.S.A. Tortola, British Virgin Islands Taipei, Taiwan Taipei, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan San Jose, California, U.S.A. Belgium Singapore Hong Kong Cayman Island China Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Samoa Hong Kong China Samoa Hong Kong China Samoa Hong Kong China Samoa Hong Kong China	Marketing Investment holding company Investment Investment Baseband chip, analog baseband chip, and power management chip Mobile audio platform and smart remote controller Fabless multimedia system on chip Combi-SIM IC and the related service IC design After-sale service After-sale service Marketing Investment holding company Development of integrated circuit system and software Mobile audio platform and smart remote controller Baseband chip, analog baseband chip, and power management chip Mobile audio platform and smart remote controller Fabless multimedia system on chip Combi-SIM IC and the related service Investment holding company Investment holding company Software, rendering and technical service Investment holding company Investment holding company Sales and technical support of mobile audio platform and smart remote controller Investment holding company Investment holding company Sales and technical support of fabless multimedia system on chip Investment holding company Investment holding company Technical support of Combi-SIM IC	$ 2,640 7,348,057 500,000 984,432 1,502,711 430,232 312,803 607,379 850,637 2,106 3,291 378,427 26,325 296,160 30,442 27,423 30,442 22,131 34,271 223,673 96,022 82,415 105,070 53,398 53,231 76,913 59,668 34,282 27,809 23,880 23,435	$ 2,640 7,348,057 500,000 984,432 520,117 340,212 217,825 512,371 850,637 2,106 3,291 378,427 26,325 296,160 25,452 28,879 25,452 17,286 29,279 195,457 94,516 82,415 91,644 53,398 53,231 65,050 50,771 25,385 27,809 23,880 23,435	100,000 223,300,000 - - 150,271,240 43,023,160 30,651,523 60,627,800 25,850,000 999 174,000 89,700,000 800,000 - 2,894,200 2,742,506 2,894,200 1,895,440 3,393,200 7,220,000 22,962,500 - 3,390,000 12,905,100 - 2,450,000 14,820,000 - 920,000 6,152,000 -	100.00 100.00 100.00 100.00 97.25 74.18 78.27 89.16 100.00 100.00 100.00 100.00 100.00 100.00 4.99 1.77 4.99 4.84 4.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	$ 251,999 1,445,354 26,386 48,080 994,857 81,211 72,857 156,099 297,132 89,609 15,419 586,617 49,166 312,272 5,463 18,107 5,463 4,505 8,736 7,124 6,559 5,588 4,401 4,006 3,790 7,609 6,869 6,610 9,473 9,179 8,748	$ (3,747 ) (28,544 ) (3,800 ) (18,998 ) (217,570 ) (90,768 ) (88,831 ) (81,288 ) (2,628 ) 5,330 690 (41,357 ) 3,356 (6,573 ) (90,768 ) (217,570 ) (90,768 ) (88,831 ) (81,288 ) (865,509 ) (416 ) 45 (14,971 ) (1,569 ) (1,569 ) (6,670 ) (4,438 ) (4,439 ) 4,718 1,145 1,145	$ (3,710 ) (28,544 ) (3,800 ) (18,998 ) (208,129 ) (65,641 ) (67,631 ) (71,830 ) Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4

Note 1: The foreign currency amount was converted into New Taiwan dollars at the historical exchange rate.

Note 2: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the exchange rate on September 30, 2013.

Note 3: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the average exchange rate for the nine months ended September 30, 2013.

Note 4: Under relevant regulations, no disclosure of investment gain (loss) is needed.

65 -

TABLE 6

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

TRANSACTIONS AMONG CONSOLIDATED ENTITIES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Transaction Subject	Transaction Object	Relation (Note 1)			Transaction Summary
			Account	Amount	Term of Transaction	% to Total Assets or Total Revenue
MXIC	MXHK	2	Sales	$2,030,078	Note 2	12%
			Notes receivable and trade receivables	409,656		1%
	MXE	2	Operatingexpenses	67,167		-
			Tradepayables	18,112		-
	MXA	1	Sales	410,368	Note 2	3%
			Operatingexpenses	120,884		1%
			Notes receivable and trade receivables	71,900		-
			Tradepayables	46,852		-
	Mxtran	1	Rental revenue	4,209	Note 3	-
	MoDioTek	1	Rental revenue	4,194	Note 3	-
	MX Asia	2	Operatingexpenses	87,143		1%
			Tradepayables	13,838		-
	INFOMAX	1	Rental revenue	5,642	Note 3	-
	MPI	1	Rental revenue	3,275	Note 3	-

Note 1: 1. Transaction was between the parent company and subsidiaries.

Transaction was between the parent company and indirect subsidiaries.

Note 2: The sale price referred to the product price to end customer.

Note 3: The Company leased office to related parties and collected rental revenue according to the floor space per month.

Note 4: The transaction terms with related parties were 30 to 60 days after monthly closing and were similar to those with third parties.

66 -

TABLE 7

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (Note 1 and 4)	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2013 (Note 4)	Investme	nt Flows	Accumulated Outflow of Investment from Taiwan as of September 30, 2013 (Note 4)	Percentage of Ownership (Note 5)	Investment Income (Loss) (Note 6)	Carrying Amount as of September 30, 2013 (Note 7)	Accumulated Inward Remittance of Earnings as of September 30, 2013
						Outflow (Note 4)	Inflow
Macronix Microelectronics (Suzhou) Co., Ltd. Infomax Communication (Suzhou) Co., Ltd. Modiotek (Suzhou) Co., Ltd. Magic Pixel (Shen Zhen) Co., Ltd. Maxtran Technology Co., Ltd.	Development of integrated circuit system and software Software, rendering and technical service Sales and technical support of mobile audio platform and smart remote controller Sales and technical support of fabless multimedia system on chip Technical support of Combi-SIM IC		$ 296,160 82,415 53,231 34,282 23,435	(Note 2) (Note 3) (Note 3) (Note 3) (Note 3)	$ 296,160 82,415 53,231 25,385 23,435	$ - - - 8,897 -	$ - - - - -	$ 296,160 82,415 53,231 34,282 23,435	100.00% 99.02% 84.16% 83.11% 94.15%	$ (6,573 ) 275 (1,321 ) (3,689 ) 1,078	$ 312,272 5,533 3,190 5,493 8,236	$ - - - - -

Accumulated Investment in Mainland September 30, 2013	China as of	Investment Amount Authoriz Commission,	ed by the Investment MOEA	Upper Limit on Investment
$ 515,186 (Note 4)		$ 549 (No	,261 te 4)	$ 18,023,304

Note 1: The amount of paid in capital included prepaid investments.

Note 2: The Company invested in a company located in Mainland China indirectly through the existing company in the third country.

Note 3: The Company invested in a company located in Mainland China indirectly through the investing company in the third country.

Note 4: The foreign currency amount was converted into New Taiwan dollars at the historical exchange rate.

Note 5: The percentage of ownership is based on the total holding percentage owned by the Company and its subsidiaries.

Note 6: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the average exchange rate for the nine months ended September 30, 2013.

Note 7: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the exchange rate on September 30, 2013.

67 -

AI assistant

Macronix — Interim / Quarterly Report 2013

52013_rns_2013-11-13_d559dfcd-c495-41e4-9171-6344ee89b440.pdf

Macronix International Co., Ltd. and Subsidiaries

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

October 28, 2013

Notice to Readers

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND INTERPRETATIONS

New, Revised Standards, Amendments and Interpretations

Effective Date Announced by IASB (Note)

1) IFRS 9 “Financial Instruments”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY

a. Statement of compliance

b. Basis of preparation

1) Subsidiary included in consolidated financial statements

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

9. FINANCIAL ASSETS MEASURED AT COST

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

b. Notes Receivable

11. INVENTORIES

12. PROPERTY, PLANT AND EQUIPMENT

13. INTANGIBLE ASSETS

14. PREPAYMENTS FOR LEASE

15. OTHER FINANCIAL ASSETS

16. OTHER ASSETS

17. BORROWINGS

a. Short-term borrowings

b. Long-term borrowings

18. NOTES PAYABLE AND TRADE PAYABLES

19. OTHER PAYABLES

20. PROVISIONS

21. RETIREMENT BENEFIT PLANS

b. Defined benefit plans

22. EQUITY

a. Ordinary shares

b. Capital surplus

d. Special reserves appropriated following first-time adoption of IFRSs

e. Others equity items

1) Foreign currency translation reserve

f. Non-controlling interests

23. REVENUE

24. NET LOSS

c. Finance costs

25. INCOME TAX

c. Income tax assessments

26. LOSS PER SHARE

Net loss for the period

27. SHARE-BASED PAYMENT ARRANGEMENTS

The Company

Unit: Option Numbers in Thousand and NT$ Per Share

MoDioTek

Options Issued on or After January 1, 2004

Mxtran

Options Issued on or After January 1, 2004

INFOMAX

Options Issued on or After January 1, 2004

MaxRise

MPI

Options Issued on or After January 1, 2004

28. OPERATING LEASE ARRANGEMENTS

a. The Group as lessee

29. CAPITAL MANAGEMENT

30. FINANCIAL INSTRUMENTS

January 1, 2012

1) Market risk

Macronix Interim / Quarterly Report 2013