Macronix — Interim / Quarterly Report 2024

Oct 30, 2024

Macronix International Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2024 and 2023 and Independent Auditors' Review Report

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS	March 31, 2024 Amount	%	December 31, 2023 Amount	%	March 31, 2023 Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 6 and 32) Trades receivable, net (Notes 10 and 32)	\$ 10,719,460 3,010,473	14 4	\$ 11,905,912 2,561,602	16 3	\$ 14,998,781 3,036,472	18 4
Receivables from related parties, net (Notes 32 and 33)	433,891	1	489,154	1	1,240,414	2
Other receivables (Notes 10 and 32)	208,366	-	186,967	-	227,048	-
Inventories (Note 11)	13,157,731	17	13,368,867	17	14,959,193	18
Other current assets (Note 17)	909,667	1	179,867	-	543,294	1
Total current assets	28,439,588	37	28,692,369	37	35,005,202	43
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 7 and 32) Financial assets at fair value through other comprehensive income - non-current (Notes 8	272,957	-	261,911	-	171,612	-
and 32)	4,324,515	5	4,016,384	5	3,518,019	4
Financial assets at amortized cost - non-current (Notes 9 and 32)	44,080	-	43,270	-	-	-
Property, plant and equipment (Notes 13, 18, 30, 34 and 35) Right-of-use assets (Note 14)	41,802,367 696,920	54 1	41,498,097 693,553	53 1	39,914,496 771,430	49 1
Intangible assets (Note 15)	96,690	-	115,219	-	128,295	-
Deferred tax assets (Note 27)	1,307,034	2	1,155,327	2	1,010,046	1
Prepayments for equipment	129,682	-	235,195	-	131,588	-
Other financial assets - non-current (Notes 16, 32 and 34)	761,868	1	767,001	1	755,792	1
Other non-current assets (Note 17)	-	-	333,147	1	333,147	1
Total non-current assets	49,436,113	63	49,119,104	63	46,734,425	57
TOTAL	\$ 77,875,701	100	\$ 77,811,473	100	\$ 81,739,627	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 18 and 32)	\$ 300,000	-	\$ -	-	\$ -	-
Contract liabilities (Note 25) Trade payables (Notes 19 and 32)	82,570 2,034,397	- 3	41,027 2,039,130	- 3	57,071 2,182,184	- 3
Payables to related parties (Notes 32 and 33)	763,933	1	986,617	1	2,836,328	3
Accrued compensation of employees and remuneration of directors (Notes 26, 32 and 33)	638,405	1	965,965	1	2,696,903	3
Payables for purchase of equipment (Note 32)	841,005	1	1,147,179	2	1,361,907	2
Other payables (Notes 20 and 32)	1,486,113	2	1,499,934	2	1,272,461	2
Other payables to related parties (Notes 32 and 33)	5,051	-	10	-	6,048	-
Current tax liabilities (Notes 4 and 27) Provisions - current (Note 22)	2,860 29,036	- -	3,237 24,805	- -	1,481,037 27,906	2 -
Lease liabilities - current (Note 14)	99,400	-	83,522	-	101,180	-
Current portion of long-term borrowings (Notes 18, 30, 32 and 34)	2,963,142	4	2,117,062	3	5,324,938	7
Other current liabilities (Note 21)	327,278	-	345,636	-	337,209	-
Total current liabilities	9,573,190	12	9,254,124	12	17,685,172	22
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 18, 30, 32 and 34)	17,723,603	23	17,346,721	22	8,790,207	11
Deferred tax liabilities (Note 27)	870,437	1	840,797	1	781,009	1
Lease liabilities - non-current (Note 14)	611,039	1	622,770	1	682,612	1
Net defined benefit liabilities (Notes 4 and 23)	1,111,740	1	1,243,360	2	1,071,916	1
Other non-current liabilities (Notes 21 and 30)	181,303	-	177,746	-	121,200	-
Total non-current liabilities	20,498,122	26	20,231,394	26	11,446,944	14
Total liabilities	30,071,312	38	29,485,518	38	29,132,116	36
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 24 and 29) Share capital
Ordinary shares	18,558,264	24	18,558,264	24	18,558,279	23
Share capital to be cancelled	-	-	-	-	(15)	-
Total share capital	18,558,264	24	18,558,264	24	18,558,264	23
Capital surplus Retained earnings	406,198	1	406,198	1	402,676	-
Legal reserve	4,331,651	6	4,331,651	5	3,426,358	4
Special reserve	93,025	-	93,025	-	76,492	-
Unappropriated earnings	22,201,905	28	23,214,865	30	28,949,167	36
Total retained earnings	26,626,581	34	27,639,541	35	32,452,017	40
Other equity	2,370,754	3	1,879,879	2	1,353,049	1
Treasury shares	(159,061)	-	(159,061)	-	(159,061)	-

Total equity attributable to owners of the Company	47,802,736	62	48,324,821	62	52,606,945	64
NON-CONTROLLING INTERESTS (Note 24)	1,653	-	1,134	-	566	-
Total equity	47,804,389	62	48,325,955	62	52,607,511	64
TOTAL	\$ 77,875,701	100	\$ 77,811,473	100	\$ 81,739,627	100

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

(With Deloitte & Touche review report dated April 30, 2024)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share)

For the Three Months Ended March 31 2024 2023 Amount % Amount % NET OPERATING REVENUE (Notes 25 and 33) \$ 5,760,461 100 \$ 7,103,843 100 OPERATING COSTS (Notes 11, 23, 26 and 33) 4,618,023 80 5,317,968 75 GROSS PROFIT 1,142,438 20 1,785,875 25 OPERATING EXPENSES (Notes 23, 26 and 33) Selling and marketing expenses 416,647 7 416,635 6 General and administrative expenses 391,438 7 394,285 5 Research and development expenses 1,635,999 29 1,414,007 20 Total operating expenses 2,444,084 43 2,224,927 31 LOSS FROM OPERATIONS (1,301,646) (23) (439,052) (6) NON-OPERATING INCOME AND EXPENSES Interest income (Note 26) 50,904 1 75,217 1 Other income (Notes 14, 26 and 30) 60,474 1 13,790 - Other gains and losses (Note 26) 67,149 1 29,063 1 Finance costs (Notes 26 and 30) (73,308) (1) (67,075) (1) Total non-operating income and expenses 105,219 2 50,995 1 LOSS BEFORE INCOME TAX FROM CONTINUING OPERATIONS (1,196,427) (21) (388,057) (5) INCOME TAX BENEFIT (Notes 4 and 27) 117,664 2 32,682 - NET LOSS FOR THE PERIOD (1,078,763) (19) (355,375) (5) OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investments in equity instruments at fair value through other comprehensive income (Note 24) 392,155 7 380,600 5 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations (Note 24) 165,042 3 (28,024) - Other comprehensive income for the period, net of income tax 557,197 10 352,576 5 TOTAL COMPREHENSIVE LOSS FOR THE PERIOD \$ (521,566) (9) \$ (2,799) -

(Continued)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share)

	For the Three Months Ended March 31
	2024	2023
	Amount	%	Amount	%
NET (LOSS) INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests	\$ (1,079,282) 519	(19) -	\$ (355,282) (93)	(5) -
	\$ (1,078,763)	(19)	\$ (355,375)	(5)
TOTAL COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO:
Owners of the Company	\$ (522,085)	(9)	\$ (2,705)	-
Non-controlling interests	519	-	(94)	-
	\$ (521,566)	(9)	\$ (2,799)	-
LOSS PER SHARE (Note 28)
Basic	\$ (0.58)		\$ (0.19)
Diluted	\$ (0.58)		\$ (0.19)

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

(With Deloitte & Touche review report dated April 30, 2024) (Concluded)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

						Equity Attributable to Owners of the Company
		Share Capital				Retained Earnings		Exchange Differences on Translating of the Financial Statements of	Other Equity Unrealized Valuation Gain (Loss) on Financial
	Share (Thousands)	Ordinary Shares	Share Capital to be Cancelled	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Foreign Operations	Assets at FVTOCI	Treasury Shares	Total	Non-controlling Interests	Total Equity
BALANCE AT JANUARY 1, 2023	1,855,854	\$ 18,558,543	\$ (264)	\$ 402,710	\$ 3,426,358	\$ 76,492	\$ 29,304,449	\$ (142,966)	\$ 1,143,438	\$ (159,061)	\$ 52,609,699	\$ 660	\$ 52,610,359
Net loss for the three months ended March 31, 2023	-	-	-	-	-	-	(355,282)	-	-	-	(355,282)	(93)	(355,375)
Other comprehensive income (loss) for the three months ended March 31, 2023, net of income tax	-	-	-	-	-	-	-	(28,023)	380,600	-	352,577	(1)	352,576
Total comprehensive income (loss) for the three months ended March 31, 2023	-	-	-	-	-	-	(355,282)	(28,023)	380,600	-	(2,705)	(94)	(2,799)
Compensation cost of restricted shares for employees	-	-	-	(49)	-	-	-	-	-	-	(49)	-	(49)
Retirement of restricted shares for employees	(26)	(264)	249	15	-	-	-	-	-	-	-	-	-
BALANCE AT MARCH 31, 2023	1,855,828	\$ 18,558,279	\$ (15)	\$ 402,676	\$ 3,426,358	\$ 76,492	\$ 28,949,167	\$ (170,989)	\$ 1,524,038	\$ (159,061)	\$ 52,606,945	\$ 566	\$ 52,607,511
BALANCE AT JANUARY 1, 2024	1,855,826	\$ 18,558,264	\$ -	\$ 406,198	\$ 4,331,651	\$ 93,025	\$ 23,214,865	\$ (159,889)	\$ 2,039,768	\$ (159,061)	\$ 48,324,821	\$ 1,134	\$ 48,325,955
Net loss for the three months ended March 31, 2024	-	-	-	-	-	-	(1,079,282)	-	-	-	(1,079,282)	519	(1,078,763)
Other comprehensive income (loss) for the three months ended March 31, 2024, net of income tax	-	-	-	-	-	-	-	165,042	392,155	-	557,197	-	557,197
Total comprehensive income (loss) for the three months ended March 31, 2024	-	-	-	-	-	-	(1,079,282)	165,042	392,155	-	(522,085)	519	(521,566)
Disposal of investments in equity instruments designated as at fair value through other comprehensive income	-	-	-	-	-	-	66,322	-	(66,322)	-	-	-	-
BALANCE AT MARCH 31, 2024	1,855,826	\$ 18,558,264	\$ -	\$ 406,198	\$ 4,331,651	\$ 93,025	\$ 22,201,905	\$ 5,153	\$ 2,365,601	\$ (159,061)	\$ 47,802,736	\$ 1,653	\$ 47,804,389

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

(With Deloitte & Touche review report dated April 30, 2024)

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

	For the Three Months Ended March 31
	2024	2023
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax	\$ (1,196,427)	\$ (388,057)
Adjustments for:
Depreciation expense	1,179,420	1,055,902
Amortization expense	20,003	19,740
Finance costs	73,308	67,075
Interest income	(50,904)	(75,217)
Compensation cost of employee restricted shares	-	(49)
Gain on disposal of property, plant and equipment	-	(76)
Net (gain) loss on foreign currency exchange	(75,408)	5,623
Amortization of government grants deferred revenue	(3,040)	(1,749)
Changes in operating assets and liabilities
Trade receivables	(324,178)	1,018,195
Receivables from related parties	79,245	(480,209)
Other receivables	(1,341)	31,528
Inventories	211,136	(279,488)
Other current assets	(395,040)	(331,768)
Contract liabilities	41,543	26,185
Trade payables	(37,683)	(418,364)
Payables to related parties	(219,282)	107,302
Payables for compensation of employees and remuneration of
director	(327,560)	(425,045)
Other payables	23,910	(312,642)
Other payables to related parties	2,946	8,117
Provisions	4,231	1,623
Other current liabilities	(25,958)	(45,572)
Net defined benefit liabilities	(131,620)	(3,661)
Cash used in operations	(1,152,699)	(420,607)
Interest received	33,898	76,526
Interest paid	(127,884)	(77,308)
Income tax paid	(7,913)	(3,621)
Net cash used in operating activities	(1,254,598)	(425,010)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial assets at fair value through other
comprehensive income	150,328	-
Financial assets at amortized cost after maturity	-	44,450
Payments for property, plant and equipment	(1,665,617)	(2,726,248)
Proceeds from disposal of property, plant and equipment	84	81
		(Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

	For the Three Months Ended March 31
	2024	2023
Increase in refundable deposits	\$ -	\$ (3)
Payments for intangible assets	(1,446)	(21,817)
Decrease in other financial assets	5,201	14,050
Net cash used in investing activities	(1,511,450)	(2,689,487)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	300,000	-
Proceeds from long-term borrowings	1,580,000	-
Repayments of long-term borrowings	(351,267)	(1,538,711)
Proceeds from guarantee deposits received	10	-
Repayments of lease liabilities	(28,135)	(27,735)
Net cash generated from (used in) financing activities	1,500,608	(1,566,446)
EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH HELD IN FOREIGN CURRENCIES	78,988	(84,554)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,186,452)	(4,765,497)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
PERIOD	11,905,912	19,764,278
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	\$ 10,719,460	\$ 14,998,781

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

(With Deloitte & Touche review report dated April 30, 2024) (Concluded)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

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 (ICs) and memory chips. The Company also is engaged in the design, research and development, consultation and trade of relevant products.

The Company's shares have been listed on the Taiwan Stock Exchange (TWSE) since March 15, 1995.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved and authorized for issued by the Company's board of directors on April 30, 2024.

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

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

The initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the Group's accounting policies.

b. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB (Note 1)
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"	To be determined by IASB
IFRS 17 "Insurance Contracts"	January 1, 2023
Amendments to IFRS 17	January 1, 2023
Amendments to IFRS 17 "Initial Application of IFRS 9 and IFRS 17 - Comparative Information"	January 1, 2023
IFRS 18 "Presentation and Disclosures in Financial Statements" Amendments to IAS 21 "Lack of Exchangeability"	January 1, 2027 January 1, 2025 (Note 2)

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

Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments to IAS 21, the Group shall not restate the comparative information and shall recognize any effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or, if applicable, to the cumulative amount of translation differences in equity as well as affected assets or liabilities.

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

a. Statement of compliance

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

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and defined benefit liabilities.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
• 3) Level 3 inputs are unobservable inputs for an asset or liability.
• c. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

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

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Group directly disposed of the related assets or liabilities.

See Note 12, Tables 5 and 6 to the consolidated financial statements for detailed information on subsidiaries (including the percentages of ownership and main businesses).

d. Other material accounting policies

Except for the following, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2023. For the summary of other significant accounting policies, refer to the consolidated financial statements for the year ended December 31, 2023.

1) Retirement benefits

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

2) Income tax expense

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

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the year ended December 31, 2023.

6. CASH AND CASH EQUIVALENTS

	March 31, 2024	December 31, 2023	March 31, 2023
Cash on hand Checking accounts and demand deposits	\$ 12 4,200,058	\$ 12 5,219,685	\$ 11 5,558,845
Cash equivalents Time deposits	6,519,390	6,686,215	9,439,925
	\$ 10,719,460	\$ 11,905,912	\$ 14,998,781

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	March 31, 2024	December 31, 2023	March 31, 2023
Financial assets at FVTPL - non-current
Financial assets mandatorily classified as at FVTPL Hybrid financial assets
Foreign convertible preference shares	\$ 272,957	\$ 261,911	\$ 171,612

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

	March 31, 2024	December 31, 2023	March 31, 2023
Non-current
Investments in equity instruments
Domestic investments
Listed shares	\$ 3,091,554	\$ 2,739,124	\$ 2,142,654
Unlisted shares	736,295	842,438	719,231
	3,827,849	3,581,562	2,861,885
Foreign investments
Listed shares	496,666	434,822	656,134
	\$ 4,324,515	\$ 4,016,384	\$ 3,518,019

These investments in equity instruments are not held for trading. Instead, they are held for medium- to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments' fair value in profit or loss would not be consistent with the Group's strategy of holding these investments for long-term purposes.

The Group sold its ordinary shares in Genovior Biotech Corporation at a fair value of \$150,328 thousand on March, 2024. The related realized gain of financial assets at FVTOCI of \$66,322 thousand under other equity was transferred to retained earnings.

9. FINANCIAL ASSETS MEASURED AT AMORTIZED COST

	March 31, 2024	December 31, 2023	March 31, 2023
Non-Current
Time deposits with original maturities exceeding 1 year	\$ 44,080	\$ 43,270	\$ -

The interest rate for time deposits with original maturities exceeding 1 year was 2.40% per annum as of March 31, 2024 and December 31, 2023.

10. TRADE RECEIVABLES AND OTHER RECEIVABLES

	March 31, 2024	December 31, 2023	March 31, 2023
Trade receivables
Total amounts of trade receivables measured at amortized cost Less: Allowance for impairment loss	\$ 3,032,894 (22,421)	\$ 2,584,023 (22,421)	\$ 3,053,427 (16,955)
	\$ 3,010,473	\$ 2,561,602	\$ 3,036,472
Other receivables
Tax receivables Others	\$ 168,317 40,049	\$ 146,956 40,011	\$ 169,786 57,262
	\$ 208,366	\$ 186,967	\$ 227,048

a. Trade receivables

The average credit period for sales of goods is 60 days.

In determining the recoverability of a trade receivable, the Group evaluates each customer's credibility and financial position and considers any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience with the respective debtors and an analysis of the debtors' current financial positions, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of conditions at the reporting date. The Group estimates expected credit losses based on the number of days for which receivables are past due. As the Group's historical credit loss experience shows significantly different loss patterns for different customer segments, the provision for losses based on past due status of receivables is not further distinguished according to different segments of the Group's customer base.

The aging of trade receivables was as follows:

	March 31, 2024	December 31, 2023	March 31, 2023
Neither past due nor impaired	\$ 2,982,367	\$ 2,506,373	\$ 2,983,421
Past due but not impaired
Within 60 days	28,106	55,227	48,740
61-120 days	-	2	-
Over 120 days	-	-	4,311
	\$ 3,010,473	\$ 2,561,602	\$ 3,036,472

The above aging schedule was based on the past due days from the end of the credit term.

As of March 31, 2024 and 2023, the Group did not hold collateral for most of its receivables.

The movements of the allowance for doubtful trade receivables are as follows:

	For the Three Months Ended March	31
	2024	2023
Balance at January 1 and March 31	\$ 22,421	\$ 16,955

b. Other receivables

No allowance for impairment loss of other receivables was recognized since the other receivables of the Group were not past due and the Group assessed that there was no uncertainty of recoverability.

11. INVENTORIES

	March 31,	December 31,	March 31,
	2024	2023	2023
Finished goods and merchandise Work in progress Raw materials	\$ 931,012 11,171,689 1,055,030	\$ 902,661 11,260,794 1,205,412	\$ 1,402,358 12,184,100 1,372,735
	\$	\$	\$
	13,157,731	13,368,867	14,959,193

For the three months ended March 31, 2024 and 2023, the costs of inventories recognized as cost of goods sold included inventory loss that resulted from the write-downs of inventory to net realizable value. The amounts were as follows:

	For the Three Months Ended March	31
	2024	2023
Loss on inventory write-downs	\$ 503,607	\$ 922,461

12. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements

As of March 31, 2024, December 31, 2023 and March 31, 2023, the Company has direct and indirect majority ownership in the following subsidiaries: Run Hong Investment Ltd. (Run Hong), Hui Ying Investment Ltd. (Hui Ying), Mxtran Inc. (Mxtran), Macronix America, Inc. (MXA), Macronix (BVI) Co., Ltd. (MXBVI), Mxtran Holding (Samoa) Co., Ltd. (Mxtran Samoa), Mxtran (H.K.) Holding Co., Limited (MxtranHK), New Trend Technology Inc. (NTTI), Macronix (Asia) Limited (MX Asia), Macronix Pte Ltd (MPL), Macronix Europe N.V. (MXE), Macronix (Hong Kong) Co., Limited (MXHK) and Macronix Microelectronics (Suzhou) Co., Ltd. (MXm).

				% of Ownership
Investor	Investee	Nature of Activities	March 31, 2024	December 31, 2023	March 31 2023
The Company	Run Hong	Investment company	100.00	100.00	100.00
The Company	Hui Ying	Investment company	100.00	100.00	100.00
The Company and Run Hong	Mxtran	IC design	94.84	94.84	94.84
The Company	MXA	Sales and marketing	100.00	100.00	100.00
The Company	MXHK	Sales and marketing	100.00	100.00	100.00
The Company	MPL	After-sales services	100.00	100.00	100.00
The Company	MXBVI	Investment holding company	100.00	100.00	100.00
Mxtran	Mxtran Samoa	Investment holding company	Note 1	Note 1	100.00
Mxtran Samoa	Mxtran HK	Investment holding company	Note 2	Note 2	Note 2
MXBVI	NTTI	IC design	100.00	100.00	100.00
MXBVI	MX Asia	After-sales services	100.00	100.00	100.00
MXBVI	MXE	After-sales services	100.00	100.00	100.00
MXHK	MXm	Development of integrated circuit system and software	100.00	100.00	100.00

Note 1: Mxtran Samoa has been dissolved in May 2023.

Note 2: Mxtran HK has been dissolved in March 2023.

In order to restructure the investment structure of the subsidiaries, the Company's board of directors approved on February 14, 2023 to acquire the outstanding shares of MXHK and MPL, which were held by MXBVI at carrying amount of US\$19,756,278 as of December 31, 2022, and MXBVI bought back 19,756,278 shares at US\$1 per share and canceled them on March 1, 2023.

On March 3, 2023 and May 12, 2023, the Group was dissolved into Mxtran (H.K.) Holding Co., Limited and Mxtran Holding (Samoa) Co., Ltd., respectively.

The subsidiaries included in the consolidated financial statements except for MXHK in 2023 are immaterial, and their financial statements have not been reviewed.

13. PROPERTY, PLANT AND EQUIPMENT

	March 31, 2024	December 31, 2023	March 31, 2023
Assets used by the	\$	\$	\$
Group	41,802,367	41,498,097	39,914,496

			For the Three Months Ended March 31, 2024
	Balance at Beginning of Period	Additions	Disposals	Effects of Foreign Currency Exchange Differences	Reclassification	Balance at End of Period
Cost
Freehold land	\$ 1,273,704	\$ -	\$ -	\$ 28,495	\$ -	\$ 1,302,199
Buildings	23,525,604	-	-	4,010	105,126	23,634,740
Machinery equipment	95,821,160	-	258	-	7,017,938	102,838,840
Research and development
equipment	7,536,336	-	-	807	129,974	7,667,117
Transportation equipment	27,916	-	-	35	4,789	32,740
Leasehold improvements	14,625	-	-	214	-	14,839
Miscellaneous equipment	1,345,563	384	2,181	2,386	12,053	1,358,205
Advance payments and construction
in progress	15,527,033	1,441,247	-	-	(7,271,414)	9,696,866
	145,071,941	\$ 1,441,631	\$ 2,439	\$ \$ 35,947	\$ (1,534)	146,545,546
Accumulated depreciation and impairment
Freehold land	381,509	\$ -	\$ -	\$ 16,090	\$ -	397,599
Buildings	18,041,155	143,143	-	1,693	-	18,185,991
Machinery equipment	81,099,924	831,995	258	-	(28)	81,931,633
Research and development
equipment	2,867,383	148,762	-	679	-	3,016,824
Transportation equipment	20,548	939	-	35	-	21,522
Leasehold improvements	14,401	35	-	209	-	14,645
Miscellaneous equipment	1,148,924	25,956	2,097	2,154	28	1,174,965
	103,573,844	\$ 1,150,830	\$ 2,355	\$ 20,860	\$ -	104,743,179
Carrying amount at March 31, 2024	\$ 41,498,097					\$ 41,802,367

				For the Three Months Ended March 31, 2023
	Balance at Beginning of Period	Additions	Disposals	Effects of Foreign Currency Exchange Differences	Reclassification	Balance at End of Period
Cost
Freehold land	\$ 1,273,814	\$ -	\$ -	\$ (5,721)	\$ -	\$ 1,268,093
Buildings	22,392,682	-	143	1,139	54,820	22,448,498
Machinery equipment	93,948,076	-	7,904	-	859,544	94,799,716
Research and development
equipment	8,053,449	-	1,002	232	(701,285)	7,351,394
Transportation equipment	26,894	-	-	11	-	26,905
Leasehold improvements	14,828	-	-	(151)	-	14,677
Miscellaneous equipment	1,227,653	321	1,115	13	35,691	1,262,563
Advance payments and construction
in progress	10,724,565	2,961,481	-	-	(249,412)	13,436,634
	137,661,961	\$ 2,961,802	\$ 10,164	\$ (4,477)	\$ (642)	140,608,480
Accumulated depreciation and impairment
Freehold land	381,571	\$ -	\$ -	\$ (3,231)	\$ -	378,340
Buildings	17,521,831	127,976	138	440	-	17,650,109
Machinery equipment	77,989,290	728,145	7,904	-	243,598	78,953,129
Research and development
equipment	2,690,825	145,560	1,002	178	(243,598)	2,591,963
Transportation equipment	18,943	1,076	-	10	-	20,029
Leasehold improvements	14,398	57	-	(147)	-	14,308
Miscellaneous equipment	1,063,056	24,157	1,115	8	-	1,086,106
	99,679,914	\$ 1,026,971	\$ 10,159	\$ (2,742)	\$ -	100,693,984
Carrying amount at March 31, 2023	\$ 37,982,047					\$ 39,914,496

For the three months ended March 31, 2024 and 2023, the Group assessed that no indication of an impairment loss was present; therefore, no impairment assessment was performed.

The carrying amount of the freehold land in the U.S.A. which was unutilized by the Group as of March 31, 2024, December 31, 2023 and March 31, 2023 was US\$9,579 thousand, respectively.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings	31-40 years
Electronic equipment	11-20 years
Facility equipment	15 years
Landscape engineering	20 years
Machinery equipment	11 years
Research and development equipment	5-11 years
Transportation equipment	5 years
Leasehold improvements	6-16 years
Miscellaneous equipment	2-16 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 34 to the consolidated financial statements.

14. LEASE ARRANGEMENTS

a. Right-of-use assets

	March 31,	December 31,	March 31,
	2024	2023	2023
Carrying amount
Freehold land Buildings Machinery equipment Transportation equipment Miscellaneous equipment	\$ 639,127 43,854 9,875 4,064 -	\$ 653,069 35,308 - 4,678 498	\$ 696,194 61,957 7,348 5,931 -
	\$	\$	\$
	696,920	693,553	771,430

For the Three Months Ended March 31

	2024	2023
Additions to right-of-use assets	\$ 30,699	\$ 13,557
Depreciation charge for right-of-use assets
Freehold land	\$ 14,243	\$ 14,245
Buildings	9,941	10,003
Machinery equipment	3,292	3,475
Transportation equipment	617	708
Miscellaneous equipment	497	500
	\$ 28,590	\$ 28,931
Income from the subleasing of right-of-use assets (included in
other income)	\$ (980)	\$ (935)

Except for the recognized depreciation, the Group did not have impairment of right-of-use assets for the three months ended March 31, 2024 and 2023.

b. Lease liabilities

	March 31, 2024	December 31, 2023	March 31, 2023
Carrying amount
Current Non-current	\$ 99,400 \$ 611,039	\$ 83,522 \$ 622,770	\$ 101,180 \$ 682,612

Range of discount rates for lease liabilities was as follows:

	March 31, 2024	December 31, 2023	March 31, 2023
Freehold land	1.22%-1.73%	1.22%-1.73%	1.22%-1.73%
Buildings	1.03%-6.00%	1.03%-6.00%	1.19%-6.00%
Machinery equipment	2.14%	1.56%-1.96%	1.56%-1.96%
Transportation equipment	1.18%-2.15%	1.18%-2.15%	1.03%-1.56%
Miscellaneous equipment	2.08%	2.08%	1.22%

c. Material lease-in activities and terms

The Group also leased certain land and buildings for the use as plant and office in a period of one to twenty years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor's consent.

d. Other lease information

	For the Three Months Ended March	31
	2024	2023
Expenses relating to short-term leases	\$ 201	\$ 750
Expenses relating to low-value asset leases	\$ 40	\$ 101
Expenses relating to variable lease payments not included in the
measurement of lease liabilities	\$ 2,063	\$ 3,807
Total cash outflow for leases	\$ (33,778)	\$ (36,101)

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

15. INTANGIBLE ASSETS

	For the Three Months Ended March 31, 2024
Cost	Balance at Beginning of Period	Additions	Disposals	Net Exchange Differences	Balance at End of Period
Software	\$ 265,677	\$ 1,446	\$ (15,554)	\$ 397	\$ 251,966
Accumulated amortization Software	150,458	\$ 20,003	\$ (15,554)	\$ 369	155,276
Carrying amount at March 31, 2024	\$ 115,219				\$ 96,690

	For the Three Months Ended March 31, 2023
	Balance at Beginning of Period	Additions	Disposals	Net Exchange Differences	Balance at End of Period
Cost
Software	\$ 242,202	\$ 22,100	\$ (8,475)	\$ 105	\$ 255,932
Accumulated amortization
Software	116,273	\$ 19,740	\$ (8,475)	\$ 99	127,637
Carrying amount at March 31, 2023	\$ 125,929				\$ 128,295

Intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Software 3 years

16. OTHER FINANCIAL ASSETS

		March 31, 2024	December 31, 2023	March 31, 2023
	Non-current
	Refundable deposits Restricted time deposits (Note 34)	\$ 573,896 187,972	\$ 573,828 193,173	\$ 562,619 193,173
		\$ 761,868	\$ 767,001	\$ 755,792
17.	OTHER ASSETS
		March 31, 2024	December 31, 2023	March 31, 2023
	Current
	Prepayments Others	\$ 909,630 37	\$ 179,853 14	\$ 543,294 -
		\$ 909,667	\$ 179,867	\$ 543,294
	Non-current
	Prepayments	\$ -	\$ 333,147	\$ 333,147

The non-current prepayments were made according to the production capacity cooperation agreement signed between the Company and its suppliers; the prepayments were paid in accordance with the contract.

18. BORROWINGS

a. Short-term borrowings

			March 31, 2024	December 31, 2023	March 31, 2023
	Unsecured borrowings
	Line of credit borrowings		\$ 300,000	\$ -	\$ -
	Interest rate		1.78%-1.88%	-	-
b.	Long-term borrowings
			March 31, 2024	December 31, 2023	March 31, 2023
	Secured borrowings from financial institutions Unsecured borrowings from financial		\$ -	\$ -	\$ 3,850,000
	institutions Less: Current portion		20,804,500 20,804,500 2,963,142	19,587,000 19,587,000 2,117,062	10,355,750 14,205,750 5,324,938
	Less: Arrangement fee Less: Government loan	discount	- 117,755	- 123,217	4,000 86,605
	Long-term borrowings		\$ 17,723,603	\$ 17,346,721	\$ 8,790,207
	Interest rate		1.38%-2.39%	1.25%-2.26%	1.25%-2.33%
		Repayment Term	March 31, 2023	December 31, 2022	March 31, 2022
	Unsecured bank borrowings denominated in NT\$	From April 2021 to April 2028	\$ 1,000,000	\$ 1,000,000	\$ 1,000,000
	Unsecured bank borrowings denominated in NT\$	From April 2021 to April 2028	2,300,000	2,300,000	2,300,000
	Unsecured bank borrowings denominated in NT\$	From April 2021 to April 2028	600,000	600,000	600,000
	Unsecured bank borrowings denominated in NT\$	From April 2021 to April 2028	1,100,000	1,100,000	1,100,000
	Unsecured bank borrowings denominated in NT\$	From April 2021 to April 2031	1,167,000	787,000	787,000
	Unsecured bank borrowings denominated in NT\$	From December 2021 to December 2024	187,500	250,000	437,500

(Continued)

	Repayment Term	March 31, 2023	December 31, 2022	March 31, 2022
Unsecured bank borrowings denominated in NT\$	From March 2022 to September 2024	\$ 300,000	\$ 450,000	\$ 600,000
Unsecured bank borrowings denominated in NT\$	From March 2022 to March 2025	350,000	400,000	450,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2029	1,000,000	1,000,000	263,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2029	2,000,000	2,000,000	116,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2029	109,000	109,000	109,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2029	400,000	400,000	100,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2029	400,000	400,000	54,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2032	1,228,000	1,228,000	557,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2032	1,005,000	1,005,000	243,000
Unsecured bank borrowings denominated in NT\$	From July 2022 to July 2032	58,000	58,000	58,000
Unsecured bank borrowings denominated in NT\$	From August 2022 to August 2025	225,000	262,500	300,000
Unsecured bank borrowings denominated in NT\$	From August 2022 to August 2029	500,000	500,000	500,000
Unsecured bank borrowings denominated in NT\$	From June 2023 to June 2030	800,000	800,000	-
Unsecured bank borrowings denominated in NT\$ Unsecured bank	From August 2023 to August 2030 From September 2023	2,000,000 375,000	2,000,000 437,500	- -
borrowings denominated in NT\$ Unsecured bank	to September 2025 From September 2023	1,000,000	1,000,000	-
borrowings denominated in NT\$	to September 2026
Unsecured bank borrowings denominated in NT\$	From September 2023 to September 2026	1,500,000	900,000	-

(Continued)

	Repayment Term	March 31, 2023	December 31, 2022	March 31, 2022
Unsecured bank borrowings denominated in NT\$	From September 2023 to September 2026	\$ 600,000	\$ 600,000	\$ -
Unsecured bank borrowings denominated in NT\$	From March 2024 to March 2027	600,000	-	-
Unsecured bank borrowings denominated in NT\$	Pay off in December 2023	-	-	500,000
Secured syndicated loan denominated in NT\$	Pay off in August 2023	-	-	3,850,000
Unsecured bank borrowings denominated in NT\$	Pay off in August 2023	-	-	125,000
Unsecured bank borrowings denominated in NT\$	Pay off in August 2023	-	-	93,750
Unsecured bank borrowings denominated in NT\$	Pay off in June 2023	-	-	62,500
Less: Current portion		2,963,142	2,117,062	5,324,938
Less: Arrangement fee		-	-	4,000
Less: Government loan	discount	117,755	123,217	86,605
Total long-term borrowings		\$ 17,723,603	\$ 17,346,721	\$ 8,790,207 (Concluded)

To purchase equipment or machinery, the Group has entered into a 5-year syndicated loan agreement with 9 financial institutions including the Taiwan Cooperative Bank in January 2019 with a total amount of NT\$8 billion, which was repaid in advance in August 2023. The Group provided notes used as refundable guarantees for syndicated loan mentioned above that will be cancelled upon termination of the guarantee.

The Ministry of Economic Affairs implemented the "Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan" on January 1, 2019, which provided enterprises to make compliant investments with financial institutions at preferential interest rates. The Group has obtained the approval of the Ministry of Economic Affairs to qualify for the project loan and signed a loan contract with a financial institution to obtain a financing line of NT\$21 billion, with a credit period of 7 to 10 years. The funds obtained are used for factory expansion, purchased machinery and equipment, buildings and operating turnover, etc. The details of government grants are set out in Note 30 to the consolidated financial statements.

In addition, the Group's floating borrowing rate on the above borrowing is reset every one to three months.

The loan agreement requires the maintenance of a current ratio, debt ratio, and interest coverage ratio based on the Group's semi-annual and annual consolidated financial statements. For the year ended December 31, 2023, the Group met the financial ratio covenants.

The details of assets pledged as collateral for long-term loans are set in Note 34 to the consolidated financial statements.

19. TRADE PAYABLES

	March 31, 2024	December 31, 2023	March 31, 2023
Trade payables	\$	\$	\$
	2,034,397	2,039,130	2,182,184

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

20. OTHER PAYABLES

	March 31, 2024	December 31, 2023	March 31, 2023
Payables for maintenance and repairs	\$ 272,919	\$ 253,903	\$ 212,205
Payables for bonuses	171,583	362,498	172,878
Payable for spare parts	124,162	119,330	65,495
Payables for insurance	112,831	81,746	99,225
Payables for patents	93,748	75,634	98,518
Payable for pension	75,815	76,294	75,419
Others	635,055	530,529	548,721
	\$ 1,486,113	\$ 1,499,934	\$ 1,272,461

21. OTHER LIABILITIES

	March 31, 2024	December 31, 2023	March 31, 2023
Current
Refund liabilities Government grants deferred revenue Receipts under custody Temporary credits	\$ 209,983 50,000 58,202 9,093 \$ 327,778	\$ 201,030 100,000 37,131 7,475 \$ 345,636	\$ 292,386 - 37,706 7,117 \$ 337,209
Non-current
Government grants deferred revenue (Note 30) Guarantee deposits	\$ 159,538 21,765	\$ 156,807 20,939	\$ 100,372 20,828
	\$ 181,303	\$ 177,746	\$ 121,200

22. PROVISIONS

	March 31, 2024	December 31, 2023	March 31, 2023
Current
Employee benefits (a)	\$ 29,036	\$ 24,805	\$ 27,906

a. The provision for employee benefits represents vested long service leave entitlements accrued.

23. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and Mxtran of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under on the LPA, the Group makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

The Group's subsidiaries in Hong Kong, the USA, Europe, Japan, Korea, Singapore and China are 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.

b. Defined benefit plans

Employee benefit expenses in respect of the Group's defined benefit retirement plans were NT\$2,376 thousand and NT\$2,024 thousand for the three months ended March 31, 2024 and 2023, respectively, and were calculated using the actuarially determined pension cost discount rate as of December 31, 2023 and 2022.

The Group maintains a separate executive pension plan, and the net periodic pension costs were NT\$1,803 thousand and NT\$2,648 thousand for the three months ended March 31, 2024 and 2023, respectively.

24. EQUITY

a. Share capital

Ordinary shares

	March 31, 2024	December 31, 2023	March 31, 2023
Numbers of shares authorized (in thousands) Share authorized Numbers of shares issued and fully paid (in	6,550,000 \$ 65,500,000	6,550,000 \$ 65,500,000	6,550,000 \$ 65,500,000
thousands) Shares issued	1,855,826 \$ 18,558,264	1,855,826 \$ 18,558,264	1,855,828 \$ 18,558,279

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.

The change in the Company's share capital is due to the withdrawal and cancellation of new shares that limit the rights of employees which do not meet the vested conditions.

b. Capital surplus

	March 31, 2024	December 31, 2023	March 31, 2023
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1)
Issuance of ordinary shares Donations Treasury share transactions	\$ 359,064 37 42,488	\$ 359,064 37 42,488	\$ 359,064 37 38,966
	\$ 401,589	\$ 401,589	\$ 398,067
May be used to offset a deficit only
Changes in percentage of ownership interests in subsidiaries (2)	\$ 4,609	\$ 4,609	\$ 4,609
May not be used for any purpose
Employee restricted shares	\$ -	\$ -	\$ -

• 1) Such capital surplus 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 share capital (limited to a certain percentage of the Company's paid-in capital and once a year).
• 2) Such capital surplus arises from changes in capital surplus of subsidiaries accounted for by using the equity method.
• c. Retained earnings and dividends policy

The Company's Articles of Incorporation state that where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside a legal reserve 10% of the remaining profit (until the amount of the legal reserve equals the amount of the Company's paid-in capital), setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved by the shareholders in their meeting for the distribution of dividends and bonuses to shareholders. Regarding the policies on the distribution of employees' compensation and remuneration of directors stated in the Company's Articles of Incorporation, refer to "Employees' compensation and remuneration of directors" in Note 26 (g) to the consolidated financial statements.

The Company is classified under the capital-intensive industry. In accordance with the long-term financial program of the Company, the above shareholders' dividends can be retained as undistributed earnings, and then be distributed in future, as determined by the shareholders at the Annual General Meeting.

Distributions shall be prioritized to take the form of cash dividends. Nevertheless, it still depends on the Company's financial, sales or operating conditions. 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 share dividends.

The appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company's paid-in capital. The legal reserve may be used to offset any 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.

The appropriations of earnings for 2023 and 2022, which were proposed by the Company's board of directors on February 27, 2024 and resolved by the shareholders in the Company's general meeting of shareholders on May 24, 2023, respectively, were as follows:

	Appropriation of Earnings
	For the Year	Ended December 31
	2023	2022
Legal reserve	\$ -	\$ 905,293
Special reserve	\$ (4,696)	\$ 16,533
Cash dividends	\$ 927,913	\$ 3,340,488
Cash dividends per share (NT\$)	\$ 0.5	\$ 1.8

The appropriation of earnings for 2023 is subject to the resolution of the shareholders in the shareholders' meeting to be held on May 30, 2024.

d. Special reserve

	For the Three Months March 31	Ended
	2024	2023
Balance at January 1 and March 31	\$ 93,025	\$ 76,492

The Company appropriated earnings to a special reserve for the difference between the market price and carrying amount of the Company's shares held by subsidiaries proportional to its holding of those subsidiaries. The special reserve appropriated may be reversed to the extent that the market price reverses.

• e. Others equity items
• 1) Exchange differences on the translation of the financial statements of foreign operations

	For the March 31	Three Months Ended
	2024	2023
Balance at January 1 Exchange differences on the translation of the financial	\$ (159,889)	\$ (142,966)
statements of foreign operations	165,042	(28,023)
Balance at March 31	\$ 5,153	\$ (170,989)

2) Unrealized valuation gain on financial assets at FVTOCI

	March 31, 2024	March 31, 2023
Balance at January 1	\$ 2,039,768	\$ 1,143,438
Recognized for the year
Unrealized gain equity instrument	392,155	380,600
Other comprehensive income recognized for the year	2,431,923	1,524,038
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal	(66,322)	-
Balance at March 31	\$ 2,365,601	\$ 1,524,038

f. Non-controlling interests

	For the Three	Months March 31	Ended
	2024		2023
Balance at January 1 Share of profit (loss) for the period Other comprehensive income (loss) for the period Exchange difference on translation of the financial statements	\$ 1,134 519	\$	660 (93)
of foreign operations	-		(1)
Balance at March 31	\$ 1,653	\$	566

g. Treasury shares

The Company's shares held by its subsidiaries on March 31, 2024, December 31, 2023 and March 31, 2023 were as follows:

Name of Subsidiary	Number of Shares Held (In Thousands)	Carrying Amount	Market Price
March 31, 2024
Hui Ying	1,957	\$ 159,061	\$ 52,242
December 31, 2023
Hui Ying	1,957	\$ 159,061	\$ 61,340
March 31, 2023
Hui Ying	1,957	\$ 159,061	\$ 68,579

The Company's shares held by subsidiaries are regarded as treasury shares; shareholder's rights are retained, except the rights to participate in any share issuance for cash and to vote.

25. REVENUE

a. Disaggregation of revenue from contracts with customers

			For the Three Months Ended March 31
			2024	2023
	Product type
	Flash ROM		\$ 4,251,188 1,024,410	\$ 4,565,246 2,101,381
	Foundry		480,018	437,189
	Other		4,845	27
			\$ 5,760,461	\$ 7,103,843
b.	Contract balances
		March 31, 2024	December 31, 2023	March 31, 2023
	Contract liabilities (classified as current
	liabilities)	\$ 82,570	\$ 41,027	\$ 57,071

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

The Company recognized revenue from the beginning balance of contract liabilities as follow:

	For the Three March	Months Ended 31
	2024	2023
From the beginning balance of contract liabilities
Sale of goods	\$ 37,695	\$ 30,511

26. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

a. Interest income

		For the Three Months Ended March 31
		2024	2023
	Bank deposits	\$ 50,904	\$ 75,217
b.	Other income
		For the Three Months Ended

March 31 2024 2023 Others \$ 60,474 \$ 13,790 c. Other gains and losses

	For March	the Three Months Ended 31
	2024	2023
Net foreign exchange gains Other losses	\$ 70,090 (2,941)	\$ 31,018 (1,955)
	\$ 67,149	\$ 29,063

d. Finance costs

	For the Three Months Ended March 31
	2024	2023
Interest on loans	\$ 96,394	\$ 73,822
Interest on lease liabilities Less: Amounts included in the cost of qualifying assets	3,339 (26,425)	3,708 (10,455)
	\$ 73,308	\$ 67,075

Information about capitalized interest was as follows:

	For the March 31	Three Months Ended
	2024	2023
Capitalized interest amount Capitalization rate	\$ 26,425 1.54%	\$ 10,455 1.35%

e. Depreciation and amortization

	For the Three Months Ended March 31
	2024	2023
An analysis of depreciation by function
Operating costs	\$ 967,893	\$ 854,424
Operating expenses	211,527	201,478
	\$ 1,179,420	\$ 1,055,902
An analysis of amortization by function
Operating costs	\$ 11,447	\$ 10,402
Operating expenses	8,556	9,338
	\$ 20,003	\$ 19,740

f. Employee benefits expense

	For the Three Months Ended March 31
	2024	2023
Post-employment benefits (Note 23)
Defined contribution plans	\$ 66,137	\$ 65,581
Defined benefit plans	4,179	4,672
	70,316	70,253
Share-based payments
Equity-settled	-	(49)
Other employee benefits	1,695,946	1,727,841
Total employee benefits expense	\$ 1,766,262	\$ 1,798,045
An analysis of employee benefits expense by function
Operating costs	\$ 698,555	\$ 728,512
Operating expenses	1,067,707	1,069,533
	\$ 1,766,262	\$ 1,798,045

g. Employees' compensation and remuneration of directors

In compliance with the Articles of Incorporation, the Company accrued employees' compensation and remuneration of directors at the rates of 15% and no higher than 2%, respectively, of net profit before income tax, employees' compensation, and remuneration of directors. The Company does not intend to contribute employees' compensation and remuneration of directors for the three months ended March 31, 2024 and 2023 due to the Company's net loss before tax.

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

The appropriations of compensation of employees and remuneration of directors for 2022 that was resolved by the board of directors on February 14, 2023, is as shown below:

Amount

	For the Year Ended December 31, 2022
	Cash
Employees' compensation Remuneration of directors	\$ 1,854,831 \$ 247,311

There is no difference between the actual amounts of the compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2022.

In compliance with the Articles of Incorporation, the Company does not intend to contribute employees' compensation and remuneration of directors for the year 2023 due to the Company's net loss before tax.

Information on the employees' compensation and remuneration of directors resolved by the Company's board of directors is available at the Market Observation Post System website of the TWSE.

27. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Income tax recognized in profit or loss

Major components of income tax benefit are as follows:

	For the Three Months Ended March 31
	2024	2023
Current tax In respect of the current period Overseas income tax Adjustment for prior year	\$ 3,997 701 (294)	\$ 94,796 628 -
Deferred tax In respect of the current period	(122,068)	(128,106)
Income tax benefit recognized in profit or loss	\$ (117,664)	\$ (32,682)

b. Income tax assessments

The Company's, Mxtran's, Hui Ying's and Run Hong's tax returns through 2022 have been assessed by the tax authorities.

28. LOSS PER SHARE

Unit: NT\$ Per Share

	For the Three March 31	Months Ended
	2024	2023
Basic loss per share Diluted loss per share	\$ (0.58) \$ (0.58)	\$ (0.19) \$ (0.19)

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

Net loss for the period

	For the Three March 31	Months Ended
	2024	2023
Loss for the period attributable to owners of the Company	\$ (1,079,282)	\$ (355,282)

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

	For the Three March 31	Months Ended
	2024	2023
Weighted average number of ordinary shares in computation of basic
loss per share	1,853,870	1,853,864
Effects of potentially dilutive ordinary shares:
Restricted shares to employees	Note	Note
Compensation of employees or bonus issue to employees	Note	Note
Weighted average number of ordinary shares in computation of
diluted earnings per share	1,853,870	1,853,864

Note: The potential shares have an anti-dilution effect for the net loss for the three months ended March 31, 2024 and 2023. Such shares are not included in the calculation of loss per share.

29. SHARE-BASED PAYMENT ARRANGEMENTS

Restricted share plan for employees

Information on share plan for employees was as below:

		Shares Granted by
Approved Date	Grant Shares (Thousand)	the Board of Directors (Thousand)	Grant Date	Issued Date	Issued Shares (Thousand)	Fair Value
2019/06/18	35,294	16,815	2019/10/21	2020/06/16	16,400	\$ 32.55

To meet the vesting conditions, an employee has to meet performance and other conditions over the vesting period listed as follows:

• a. If an employee remains employed by the Company for one year after the grant date; and has a current year's performance rating of A0 or A1, 40% of the restricted shares will be vested;
• b. If an employee remains employed by the Company for two years after the grant date; and has a current year's performance rating of A0 or A1, 30% of the restricted shares will be vested;
• c. If an employee remains employed by the Company for three years after grant date; and has a current year's performance rating of A0 or A1, 30% of the restricted shares will be vested.

In addition to the vesting conditions, the limitations are as follows:

• a. Employees, except for inheritance, should not sell, transfer, pledge, donate or in any other way dispose of the shares.
• b. The shares should be held in shares trust.

• c. Except for the above two paragraphs, the other rights of the restricted share plan for employees, which include, but are not limited to, dividends, bonuses, the distribution rights of the legal reserve and capital surplus, share options of cash capital voting rights of shareholders, etc., are the same as the Group's issued ordinary shares.

• d. The dividends of restricted share plan for employees are not restricted by existing conditions.

• e. When a new share is returned in cash due to the Company's capital reduction, the refund of the vested capital loss shall be under custodian trust. In accordance with the issuance method, such capital and shares shall be granted if the vesting conditions for new restricted employee shares are met. The vested shares are granted to employees without interests; if the vested conditions are not met, such cash will be recovered by the Company.

When employees do not reach the vesting conditions of restricted share plan for employees during the year, the Company will recover and cancel the shares.

Information on restricted share plan for employees was as follows:

	Number of Shares For the Three Months March 31	(In Thousands) Ended
	2024	2023
Balance at January 1	-	15
Vested	-	(13)
Forfeited (Note)	-	(2)
Balance at March 31	-	-

Note: The forfeited shares for the three months ended March 31, 2023 were 2 thousand shares which will be cancelled.

For the three months ended March 31 2023, the compensation cost recognized was \$(49) thousand.

30. GOVERNMENT GRANTS

As of March 31, 2023, the Company obtained a government preferential interest rate loan of \$15,667,000 thousand from the "Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan". The loan will be repaid on an average monthly basis after the date of expiry. At the time of the borrowing, the fair value of the borrowing was estimated based on the market interest rate. The difference between the amount obtained and the fair value of the loan is \$186,002 thousand, which is regarded as a government low interest loan and recognized as deferred income. For the three months ended March 31, 2024 and 2023, the Company recognized other income of \$3,040 thousand and \$1,749 thousand, respectively. For the year ended March 31, 2024 and 2023, the interest expense of the loan of \$11,235 thousand and \$6,964 thousand, respectively.

31. CAPITAL MANAGEMENT

The Group manages its capital to ensure that the Group will be able to operate under the premises of going concerns and growth while maximizing the return to shareholders through the optimization of the debt and equity balance.

The Group's strategy for managing the capital structure is to lay out the plan of product development and expand the market share considering the growth and the magnitude of industry and further developing an integral plan founded on the required capacity, capital outlay, and magnitude of assets in long-term development. Ultimately, considering the risk factors such as the fluctuation of the industry cycle and the life cycle of products, the Group determines the optimal capital structure by estimating the profitability of products, operating profit ratio, and cash flow based on the competitiveness of products.

The management of the Group periodically examines the capital structure and contemplates on the potential costs and risks involved while exerting different financial tools. In general, the Group implements prudent strategy of risk management.

32. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured 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.

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

March 31, 2024

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL Foreign convertible preference shares	\$ -	\$ -	\$ 272,957	\$ 272,957
Financial assets at FVTOCI Investments in equity instruments
Securities listed in ROC	\$ 3,091,554	\$ -	\$ -	\$ 3,091,554
Securities listed in other countries Securities unlisted	496,666 -	- -	- 736,295	496,666 736,295
	\$ 3,588,220	\$ -	\$ 736,295	\$ 4,324,515
December 31, 2023
	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL Foreign convertible preference
shares	\$ -	\$ -	\$ 261,911	\$ 261,911
Financial assets at FVTOCI Investments in equity instruments
Securities listed in ROC	\$ 2,739,124	\$ -	\$ -	\$ 2,739,124
Securities listed in other countries	434,822	-	-	434,822
Severities unlisted	-	-	842,438	842,438
	\$ 3,173,946	\$ -	\$ 842,438	\$ 4,016,384

March 31, 2023

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL Foreign convertible preference shares	\$ -	\$ -	\$ 171,612	\$ 171,612
Financial assets at FVTOCI Investments in equity instruments
Securities listed in ROC Securities listed in other	\$ 2,142,654	\$ -	\$ -	\$ 2,142,654
countries	656,134	-	-	656,134
Securities unlisted	-	-	719,231	719,231
	\$ 2,798,788	\$ -	\$ 719,231	\$ 3,518,019

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

2) Reconciliation of Level 3 fair value measurements of financial assets

For the Three Months Ended March 31, 2024

Financial Assets	Financial Assets at FVTPL	Financial Assets at FVTOCI	Total
Balance at January 1	\$ 261,911	\$ 842,438	\$ 1,104,349
Sales Recognized in other comprehensive income (unrealized gain (loss) on	-	(150,780)	(150,780)
financial assets at FVTOCI) Effects of foreign currency exchange	-	44,637	44,637
differences	11,046	-	11,046
Balance at March 31	\$ 272,957	\$ 736,295	\$ 1,009,252

For the Three Months Ended March 31, 2023

Financial Assets	Financial Assets at FVTPL	Financial Assets at FVTOCI	Total
Balance at January 1 Recognized in other comprehensive income (unrealized gain (loss) on	\$ 173,076	\$ 647,468	\$ 820,544
financial assets at FVTOCI)	-	71,763	71,763
Effects of foreign currency exchange differences	(1,464)	-	(1,464)
Balance at March 31	\$ 171,612	\$ 719,231	\$ 890,843

3) Valuation used in Level 3 fair value measurement

The fair values of equity securities listed in the ROC and other countries and foreign convertible preference shares was arrived at using either the asset-based approach or based on the multiplier evaluated in the active market by the market approach and adjustments of liquidity.

c. Categories of financial instruments

	March 31, 2024	December 31, 2023	March 31, 2023
Financial assets
Measured at amortized costs (1)	\$ 15,009,821	\$ 15,806,950	\$ 20,088,721
Measured at FVTPL	272,957	261,911	171,612
Measured at FVTOCI	4,324,515	4,016,384	3,518,019
Financial liabilities
Measured at amortized cost (2)	25,914,794	24,757,177	21,575,024

• 1) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, trade receivables (including receivables from related parties), other receivables and other financial assets.
• 2) The balances included financial liabilities measured at amortized cost, which comprise, short-term borrowings, trade payables (including payables to related parties), other payables (including other payables to related parties), payables for purchases of equipment, guarantee deposits received and long-term loans (including current portion).
• d. 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

The Group 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.

The sensitivity analysis of foreign currency risk focuses mainly on exchange rates for transactions in currencies other than the entity's functional currency (i.e., foreign currencies) which are recognized at the rates of exchange prevailing at the end of each reporting period.

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

		USD Impact	JPY Impact
	For the Three Months Ended March 31		For the Three Months Ended March 31
	2024	2023	2024	2023
Pre-tax profit decrease	\$ 44,170	\$ 92,718	\$ 116,288	\$ 18,165

b) Interest rate risk

The Group is exposed to interest rate risk from outstanding bank loans. Interest rates of the Group's long-term bank loans are floating, and changes in interest rates would affect the future cash flows but not the fair value.

The sensitivity analysis of interest is performed 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 three months ended March 31, 2024 and 2023 would have increased/decreased by \$26,233 thousand and \$17,644 thousand, respectively.

c) Other price risk

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

Sensitive analysis

A sensitivity analysis of equity price is performed based on the fair values of equity investments at the end of each reporting period.

If equity prices had been 10% higher/lower, equity for the three months ended March 31, 2024 and 2023 would have increased/decreased by \$432,452 thousand and \$351,802 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, such as financial condition, external and internal credit scoring, historical experience, and economic conditions, which may affect the customer's paying ability. The Group holds some of the credit enhancements such as prepayments and collateral to mitigate its credit risks.

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 March 31, 2024, December 31, 2023 and March 31, 2023, the Group's ten largest customers accounted for 37%, 40% and 51% of its total trade receivables (including receivables from related parties), respectively. The Group believed that the concentration of credit risk is 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 table below summarizes the maturity profile of the Group's financial liabilities based on contractual, undiscounted payments, including principal and estimated interest of interest bearing.

March 31, 2024

	On Demand or Less than 1 Year	1-3 Years	3-5 Years	5+ Years	Total
Non-derivative financial liabilities
Noninterest bearing Lease liabilities Interest bearing	\$ 5,768,903 111,246 3,695,507	\$ - 144,783 9,708,843	\$ - 128,699 6,063,764	\$ - 388,976 2,810,198	\$ 5,768,903 773,704 22,278,312
	\$ 9,575,656	\$ 9,853,626	\$ 6,192,463	\$ 3,199,174	\$ 28,820,919

Additional information about the maturity analysis for lease liabilities:

	Less than 1 Year	1-5 Years	5-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$ 111,246	\$ 273,482	\$ 307,290	\$ 70,216	\$ 11,470	\$ -
December 31, 2023		On Demand or Less than 1 Year	1-3 Years	3-5 Years	5+ Years	Total
Non-derivative financial liabilities
Non-interest bearing Lease liabilities Interest bearing	\$ \$	6,638,835 96,271 2,510,071 9,245,177	\$ - 142,660 8,659,114 \$ 8,801,774	\$ - 128,699 6,274,427 \$ 6,403,126	\$ - 405,063 3,254,838 \$ 3,659,901	\$ 6,638,835 772,693 20,698,450 \$ 28,109,978

Additional information about the maturity analysis for lease liabilities:

	Less than 1 Year	1-5 Years	5-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$	\$	\$	\$	\$	\$
	96,271	271,359	308,164	83,984	12,915	-

March 31, 2023

	On Demand or Less than 1 Year	1-3 Years	3-5 Years	5+ Years	Total
Non-derivative financial liabilities
Noninterest bearing	\$ 10,355,830	\$ -	\$ -	\$ -	\$ 10,355,830
Lease liabilities	115,409	162,311	128,940	453,325	859,985
Interest bearing	5,606,599	4,211,889	3,626,932	1,395,602	14,841,022
	\$ 16,077,838	\$ 4,374,200	\$ 3,755,872	\$ 1,848,927	\$ 26,056,837

Additional information about the maturity analysis for lease liabilities:

	Less than 1 Year	1-5 Years	5-10 Years	10-15 Years	15-20 Years	20+ Years
Lease liabilities	\$	\$	\$	\$	\$	\$
	115,409	291,251	310,785	125,288	17,252	-

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

33. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

a. Related parties and their relationships associated with the Company:

Related Parties	Relationship with the Company
MegaChips Corporation (MegaChips)	Key management personnel
Ardentec Corporation (Ardentec)	The Group is its major management authority
Macronix Education Foundation (MXIC Foundation)	Others

b. Operating revenue

			For March 31	the Three Months Ended
	Line Item	Related Party Category/Names	2024	2023
Sales		Key management personnel MegaChips	\$ 1,031,939	\$ 2,130,688

Sales prices for the related parties were not comparable to those for external customers as the Group was the sole provider of these customers. The sales terms for the related parties was 30 days after the monthly closing.

c. Purchases

	For the Three Months Ended March 31
Related Party Category /Name	2024	2023
Key management personnel MegaChips	\$ 8,007	\$ 1,012,739

Materials purchased from related parties were for manufacturing process. The payment term was 30 days after monthly closing and after acceptance of material.

d. Receivables from related parties

Item	Related Party Category/ Names	March 31, 2024	December 31, 2023	March 31, 2023
Receivables from related parties, net	Key management personnel MegaChips	\$ 433,891	\$ 489,154	\$ 1,240,414
Other Receivables	Key management personnel MegaChips	\$ -	\$ 4	\$ -

The outstanding trade receivables from related parties are unsecured. For the three months ended March 31, 2024 and 2023, no impairment loss was recognized for trade receivables from related parties.

e. Payables to related parties

Item	Related Party Category/ Names	March 31, 2024	December 31, 2023	March 31, 2023
Payables to related parties	Key management personnel MegaChips The Group is its major management authority	\$ 663,395 100,538	\$ 899,359 87,258	\$ 2,736,517 99,811
		\$ 763,933	\$ 986,617	\$ 2,836,328
Other payables to related parties	Others MXIC Education Other	\$ 5,031 20	\$ - 10	\$ 6,038 10
		\$ 5,051	\$ 10	\$ 6,048

The outstanding trade payables from related parties are unsecured and will be settled in cash.

f. Other transactions with related parties

		For the Three Months Ended March 31
Line Item	Related Party Category /Name	2024	2023
Manufacturing expenses	The Group is its major management authority Ardentec	\$ 81,643	\$ 98,522
Operating expenses	Others MXIC Education	\$ 5,031	\$ 6,038

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

g. Remuneration of key management personnel

		For the Three Months Ended March 31
	2024	2023
Short-term benefits	\$ 44,299	\$ 45,054
Post-employment benefits	1,803	2,648
Share-based payments	-	-
Other long-term employee benefits	17	(3)
	\$ 46,119	\$ 47,699

The remuneration of key executives was determined by the remuneration committee based on the performance of individuals and market trends.

34. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, the tariff of imported raw materials guarantees, natural gas agreement, land and dormitory lease agreement:

	March 31, 2024	December	31, 2023	March 31, 2023
Property, plant and equipment, net Pledge deposits (classified as other financial	\$ -	\$	-	\$ 7,940,334
assets - non-current)	187,972		193,173	193,173
	\$ 187,972	\$	193,173	\$ 8,133,507

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of March 31, 2023 were as follows:

• a. As of March 31, 2024, December 31, 2023 and March 31, 2023, unused letters of credit amounted to approximately \$0 thousand, \$138,173 and \$73,161 thousand, respectively.
• b. Unrecognized commitments are as follows:

	March 31, 2024	December 31, 2023	March 31, 2023
Acquisition of property plant and equipment	\$ 3,951,765	\$ 4,509,478	\$ 7,087,048

c. As a contribution to society, the Company's board of directors passed a resolution to donate to National Cheng Kung University to establish the "School of Computing" in order to cultivate cross domain innovative talents with dual expertise "specific discipline" and "computing", and to fulfill the Company's social responsibilities with a donation amount of \$100,000 thousand per year for the next ten years on June 2, 2020. As of March 31, 2024, the Company has made a donation of \$400,000 thousand to National Cheng Kung University.

• d. On October 26, 2021, the board of directors of the Company approved the continued participation in the joint development plan of IBM "Phase Change Memory" and obtain the authorization of specific analog artificial intelligence technology. The period is from January 2022 to January 2025. The two parties jointly bear the related technology development fees. As of December 31, 2023, the unrecognized contract amount is US\$3,500 thousand.
• e. On December 26, 2023, the board of directors of the Company approved the joint development project with IBM regarding "Enterprise-class SSD Storage" from December 2023 to December 2026, the unrecognized contract amount is US\$15,000 thousand.
• f. The Company signed a long-term purchase contract with supplier A and supplier B. According to the contract, the Company shall prepay a certain amount of money as a guarantee, and these suppliers shall supply the Company according to the quantity and price agreed in the contract. As of March 31, 2024, the Company's prepayments and deposits for supplier A and supplier B were US\$11,994 thousand and \$549,580 thousand, respectively, and the unpaid contract amounts were US\$10,470 thousand and US\$68,805 thousand, respectively.

36. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

An earthquake occurred in Taiwan on April 3, 2024. The Company's insurance coverage covers earthquake accidents, and the insurance company has been notified to start the claim settlement process. The Company has resumed work and is operating normally.

37. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group's significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the entities in the Group and the related exchange rates between the foreign currencies and the respective functional currencies were as follows:

March 31, 2024

	Foreign Currency (In thousands)	Exchange Rate	Carrying Amount
Financial assets
Monetary items JPY USD	\$ 9,812,134 89,722	0.2115 32.00	\$ 2,075,266 2,871,118 \$ 4,946,384
Financial liabilities
Monetary items JPY USD	4,313,865 43,712	0.2115 32.00	\$ 912,382 1,398,776 \$ 2,311,158

December 31, 2023

	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount
Financial assets
Monetary items JPY USD	\$ 10,429,679 106,975	0.2172 30.705	\$ 2,265,326 3,284,653 \$ 5,549,979
Financial liabilities
Monetary items JPY USD	5,387,842 53,605	0.2172 30.705	\$ 1,170,239 1,645,948 \$ 2,816,187
March 31, 2023
	Foreign Currency (In thousands)	Exchange Rate	Carrying Amount
Financial assets
Monetary items JPY USD	\$ 14,034,140 147,658	0.2288 30.45	\$ 3,211,011 4,496,190 \$ 7,707,201
Financial liabilities
Monetary items JPY USD	13,240,198 46,160	0.2288 30.45	\$ 3,029,357 1,405,562 \$ 4,434,919

Realized and unrealized net foreign exchange gains were \$70,090 thousand and \$31,018 thousand for the three months ended March 31, 2024 and 2023, respectively. It is impractical to disclose net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the entities in the Group.

38. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:
• 1) Financing provided to others: None

• 2) Endorsements/guarantees provided: None

• 3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Table 1 (attached)

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT\$300 million or 20% of the paid-in capital: None
• 5) Acquisition of individual real estate at costs of at least NT \$300 million or 20% of the paid-in capital: None
• 6) Disposal of individual real estate at prices of at least NT\$300 million or 20% of the paid-in capital: None
• 7) Total purchases from or sales to related parties amounting to at least NT\$100 million or 20% of the paid-in capital: Table 2 (attached)
• 8) Receivables from related parties amounting to at least NT\$100 million or 20% of the paid-in capital: Table 3 (attached)
• 9) Trading in derivative instruments: None
• 10) Intercompany relationships and significant intercompany transactions: Table 4 (attached)
• b. Information on investees: Table 5 (attached)
• c. 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 gains or losses, carrying amount of the investment at the end of the period, repatriation of investment gains or losses, and limit on the amount of investment in the mainland China area: Table 6 (attached)
• 2) Any of the 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: Table 4 (attached)
• d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: None

39. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and the assessment of segment performance emphasizes the types of goods or services delivered or provided. Considering the nature of the product and the process of manufacture, the management integrated those divisions of similar operation functions into one operation segment. The resource allocation and performance of the Group's overall business focus on the memory products and wafer fabrication segment, so the Group only takes the memory products and wafer fabrication segment as the reportable segment.

There was no material difference between the accounting policies of the Group reportable segment and those described in Note 4. For the revenue and operating results of the segment, refer to the consolidated financial statements.

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

MARCH 31, 2024

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

						March 31, 2024
Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	Shares/Unit	Carrying Amount	Percentage of Ownership (%)	Fair Value	Shares as Collateral
The Company	Shares
	Ardentec Corporation	The Company serves as member of its board of directors	Financial assets at FVTOCI - non-current	35,951,871	\$ 3,005,577	7.33	\$ 3,005,577	None
	United Industrial Gases Co., Ltd.	None	"	6,671,877	703,816	3.06	703,816	None
	Zowie Technology Co., Ltd.	None	"	20,426	-	0.07	-	None
MXBVI	Shares
	Chipbond Technology Corporation	None	Financial assets at FVTOCI - non-current	1,088,319	85,977	0.15	85,977	None
	Tower Semiconductor Ltd.	None	"	464,000	496,666	0.42	496,666	None
	Foreign Convertible Preference Shares
	Kneron Holding Corporation	None	Financial assets at FVTPL - non-current	566,711	103,636	0.83	103,636	None
	Wolley Inc.	Associate (Note)	"	2,400,000	169,321	18.13	169,321	None
Hui Ying	Shares
	Macronix International Co., Ltd.	The Company	Financial assets at FVTOCI - non-current	1,956,619	52,242	0.11	52,242	None
	Raio Technology Co., Ltd.	None	"	1,247,288	32,479	10.03	32,479	None

Note: The Company has the ability to participate in the decision-making of the company's financial and operating policies and has significant influence on the company.

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2024

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

							Transaction Details	Abnormal	Transaction		Notes/Accounts Receivable (Payable)
Buyer	Related Party	Relationship	Purchase/ Sale		Amount	% to Total	Payment Term	Unit Price	Payment Term		Ending Balance	% to Total	Note
The Company	MegaChips	Its subsidiary, Shun Ying Investment, is represented in MXIC's board of directors	Sales	\$	1,031,939	18	30 days after monthly closing	Note 33	Note 33	\$	433,891	13	-
	MXHK	Subsidiary	Sales		648,734	12	45 days after monthly closing	Note 33	Note 33		355,519	10	-
	MXA	Subsidiary	Sales		452,917	8	Net 60 days	Note 33	Note 33		225,648	7	-
	Mxtran	Subsidiary	Sales		139,624	2	30 days after monthly closing	Note 33	Note 33		75,630	2	-
	MegaChips	Its subsidiary, Shun Ying Investment, is represented in MXIC's board of directors	Purchase		8,007	1	30 days after monthly closing and after acceptance of materials	Note 33	Note 33		663,395	24	-
MXHK	The Company	Subsidiary	Purchase	US\$	20,712	100	45 days after monthly closing	No material difference	No material difference	US\$	11,110	100	-
MXA	The Company	Subsidiary	Purchase	US\$	14,460	100	Net 60 days	No material difference	No material difference	US\$	7,051	100	-

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL MARCH 31, 2024

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

						Overdue	Amounts Received in	Allowance for
Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Amount	Action Taken	Subsequent Period	Impairment Loss
The Company	MegaChips	Its subsidiary, Shun Ying Investment, is represented in MXIC's board of directors	\$ 433,891	8.94 times	\$ -	-	\$ 354,444 thousand	\$ -
	MXHK	Subsidiary	355,519	7.68 times	-	-	206,807 thousand	-
	MXA	Subsidiary	225,648	7.63 times	-	-	152,080 thousand	-
	Mxtran	Subsidiary	75,630	11.06 times	-	-	55,776 thousand	-

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

					Transaction Details
Investee Company	Counterparty	Relationship (Note 1)	Financial Statement Accounts	Amount	Payment Term	% to Total Revenue or Assets
The Company	MXHK	1	Sales	\$ 648,734	Note 2	11
			Net receivable from related parties	355,519	-	-
	MXE	1	Operating expenses	45,224	-	1
			Other payables to related parties	58,568	-	-
	MXA	1	Sales	452,917	Note 2	8
			Operating expenses	47,266	-	1
			Net receivable from related parties	225,648	-	-
			Other payables to related parties	62,309	-	-
	Mxtran	1	Sales	139,624	Note 2	2
			Net receivable from related parties	75,630	-	-
			Rental revenue	109	Note 3	-
	MX Asia	1	Operating expenses	40,537	-	1
			Other payables to related parties	39,215	-	-
MXHK	MXm	3	Operating expenses	99,354	-	2

Note 1: The transactions from the parent company to the subsidiary are denoted as 1.

The transactions from the subsidiary to the parent company are denoted as 2.

The transactions between two subsidiaries are denoted as 3.

• 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.

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

					Original Investment Amount		Balance as of March 31, 2024		Net Income
Investor Company	Investee Company	Location	Main Businesses and Products	March 31,	December 31,	Shares	%	Carrying	(Loss) of the	Share of Profit (Loss)	Note
				2024	2023			Amount	Investee
The Company	MXA	San Jose, California, U.S.A.	Sales and marketing	\$ 2,640	\$ 2,640	100,000	100.00	\$ 393,211	\$ (2,699) \$		(2,699) Subsidiary
	MXBVI	Tortola, British Virgin Islands	Investment holding company	6,744,008	6,744,008	182,589,357	100.00	2,526,176	16,943		16,943 Subsidiary
	MXHK	Hong Kong	Sales and marketing	598,700	598,700	89,700,000	100.00	520,484	(57,158)		(57,158) Subsidiary
	MPL	Singapore	After-sales services	5,348	5,348	174,000	100.00	7,173	325		325 Subsidiary
	Hui Ying	Taipei, Taiwan	Investment	500,000	500,000	-	100.00	168,236	134		134 Subsidiary
	Run Hong	Taipei, Taiwan	Investment	1,014,432	1,014,432	-	100.00	72,207	431		431 Subsidiary
	Mxtran	Hsinchu, Taiwan	IC design	755,287	755,287	69,627,323	90.43	31,654	10,067		9,103 Subsidiary
MXBVI	NTTI	San Jose, California, U.S.A.	IC design	936,053	936,053	28,650,000	100.00	314,270	(3,035)		Note Subsidiary
	MXE	Belgium	After-sales services	2,106	2,106	1,000	100.00	161,736	2,350		Note Subsidiary
	MX Asia	Cayman Island	After-sales services	19,744	19,744	600,000	100.00	75,987	2,115		Note Subsidiary
Run Hong	Mxtran	Hsinchu, Taiwan	IC design	40,318	40,318	3,393,200	4.41	1,413	10,067		Note Subsidiary

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

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

				Accumulated	Remittance of Funds		Accumulated					Accumulated
Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Outward Remittance for Investment from Taiwan as of January 1, 2024	Outward	Inward	Outward Remittance for Investment from Taiwan as of March 31, 2024	Net Income (Loss) of the Investee	% Ownership for Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of March 31, 2024	Repatriation of Investment Income as of March 31, 2024
MXm	Development of integrated circuit system and software	\$ 296,160	MXHK (Note 2)	\$ 296,160	\$ -	\$ -	\$ 296,160	\$ 5,080	100	\$ 5,080	\$ 473,757	\$ -

Accumulated Outward Remittance for Investment in Mainland China as of March 31, 2024	Investment Amount Authorized by the Investment Commission, MOEA	Upper Limit on the Amounts of Investment Stipulated by Investment Commission, MOEA
\$	\$	\$
296,160	296,160	28,681,642

Note 1: The amount was recognized based on the unreviewed financial statements of the investee company.

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