MTI - Annual Report 2021 | FinancialReports.eu

Stock Code 2314

Microelectronics Technology Inc. 2020 Annual Report (Translation)

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese version, the Chinese version shall prevail.

Publication Date ： May 24, 2021

Annual Reports are accessible from the following website `：`

http://mops.twse.com.tw/

I. Spokesperson and Acting Spokespersons of the Company Spokesperson: Hualin Chi Title: Chief Financial Officer

Acting Spokespersons: Sylvia Chen, Jamie Tai

Title: Financial Manager, Deputy Financial Manager Telephone: (03) 577-3335, extension number 6033, 2012 E-mail: [email protected]

II. Address and telephone of corporate headquarters and factory Address: No. 1, Innovation Road II, Hsinchu Science Park,

Hsinchu 300, Taiwan, R.O.C.

Telephone：(03) 577-3335~9

III. Share Transfer Agent (Share Transfer Agent of the Company)

Name: Stock Affairs Department, Taishin International Bank Address: B1, No. 96, Sec. 1, Jianguo North Rd., Taipei City Telephone: (02) 2504-8125

Website: www.taishinbank.com.tw

IV. Certified Public Accountants retained by the Company in the most recent year
Names of CPAs: Yu-Kuan Lin, Tian-Yi Lee

Name of CPA Office: PwC Taiwan

Address: 5F, No. 2, Gongye East 3rd Rd., Hsinchu Science Park, Hsinchu Tel: (03) 578-0205 Address: www.pwc.tw

V. Inquiry of overseas stock price

Not applicable

VI. Official website of the Company: www.mtigroup.com

Table of content

Page

I.	Letter to Shareholders .............................................................................................................. 6	Letter to Shareholders .............................................................................................................. 6
II.	Company Profile ....................................................................................................................... 9
	(I)	Date of establishment ...................................................................................................... 9
	(II)	Company history ............................................................................................................ 10
III.	Corporate Governance ............................................................................................................. 14
	(I)	Organization System ...................................................................................................... 14
	(II)	Profiles of the Directors, President, Vice Presidents, Assistant Vice Presidents,
		function heads and branch heads. .................................................................................. 16
	(III)	The pursuit of corporate governance ............................................................................. 32
	(IV)	Information on Payment for the CPAs ........................................................................... 82
	(V)	Information on replacement of CPAs. ........................................................................... 82
	(VI)	The Chairman, President and Managers in Charge of the Company’s
		Finance and Accounting Operations Did Not Hold Any Positions within the
		Company’s Independent Audit Firm or Its Affiliates in the Most Recent Year ............ 82
	(VII) The transfer of equity shares or change in the pledge of shares under lien by the
		Directors, Managers, and over 10% stake shareholders in the most recent year to the
		date this report was printed ........................................................................................... 82
	(VIII)Information on the top 10 shareholders by quantity of shareholding that are related
		parties, spouses, or kindred within the 2nd tier under the Civil Code to one another .. 85
	(IX)	The total quantity of shares of particular re-investment company held by the
		enterprises under the direct or indirect control of the Company, the directors and
		managers of the Company ............................................................................................. 86
IV.	State of offering ....................................................................................................................... 87
	(I)	Capital and shares .......................................................................................................... 87
	(II)	The offering of corporate bonds. ................................................................................... 91
	(III)	The offering of preferred shares. ...............................................錯誤!尚未定義書籤。
	(IV)	The issuance of overseas depository receipts ............................錯誤!尚未定義書籤。
	(V)	The issuance of ESO. .................................................................錯誤!尚未定義書籤。
	(VI)	The issuance of restricted stocks. ...............................................錯誤!尚未定義書籤。

(VII) Merger and acquisition, or acceptance of shares from assignment of other issuers.錯誤!	(VII) Merger and acquisition, or acceptance of shares from assignment of other issuers.錯誤!
(VIII)Fund utilization plan .................................................................錯誤!尚未定義書籤。
V. Business Overview .................................................................................................................. 92
(I)	Business Contents .......................................................................................................... 92
(II)	Market and sales overview ............................................................................................ 98
(III)	Number of employees over the last two years as of the published date, average
	seniority, average age and distribution of education level .......................................... 110
(IV)	Environmental expenditure information ...................................................................... 111
(V)	Labor relations ............................................................................................................. 112
(XI)	Important contracts ....................................................................................................... 115
VI. Financial Position .................................................................................................................. 117
(I)	Condensed Balance Sheets and Comprehensive Income Statements covering the
	period from 2015.01.01 to 2019.12.31 ........................................................................ 117
(II)	Financial Analysis in the period from 2015.01.01 to 2019.12.31................................ 122
(III)	The Review Report of the Audit Committee on the financial statements of the most
	recent year. .................................................................................................................. 126
(IV)	The audited Consolidated Financial Statements of the most recent year .................... 127
(V)	The audited Parent Company Only Financial Statements of the most recent year ..... 127
(VI)	If the Company and its subsidiaries encountered insolvency in the most recent year
	to the day this report was printed, specify the influence on the financial position of
	the Company ............................................................................................................... 127
VII. The review and analysis of financial position and performance, and assessment of related
risks ...................................................................................................................................... 128
(I)	Financial Position ........................................................................................................ 128
(II)	Financial performance ................................................................................................. 129
(III)	Cash flows ................................................................................................................... 129
(IV)	Major capital expenditure in the most recent year and the influence on the financial
	position and operation ................................................................................................. 130
(V)	The re-investment policy of the most recent year, the main reason for profit or loss,
	corrective action plan and the investment plan in the year ahead. .............................. 131
(VI)	Risks ............................................................................................................................ 131
(VII) Additional information. ............................................................................................... 134
VIII. Special Notes ........................................................................................................................ 135

(I) Subsidiaries .................................................................................................................. 135 (II) Offering of securities through private placement. ....................................................... 139 (III) The holding or disposal of Company shares by subsidiaries. ...................................... 139 (IV) Other additional information. ...................................................................................... 139

(V) Incidents that significantly affected the shareholders equity or stock price of the Company as prescribed in Subparagraph 2, Paragraph 2 in Article 36 of the Securities and Exchange Act in the most recent year to the day this report was printed .......................................................................................................................... 139

Appendix 1

Consolidated financial statements and report of independent accountants December 31, 2020 and 2019

Appendix 2

Parent company only financial statements and report of independent accountants December 31, 2020 and 2019

I. Letter to Shareholders

Dear Shareholders, Ladies and Gentlemen,

Year 2020 has been a historic year for the world. With unexpected outbreak of COVID-19 spreading all over the world, governments were forced to adopt large-scale country-wide and city-wide lockdowns. Global economic activities came to a virtual standstill. Government policies wavered between epidemic prevention versus economic development. Growth rate of major economies dipped into negatives. European and American unemployment rates worsened. Under these unfavorable factors, our company's 2020 consolidated revenue was NT$ 3.95 billion, down about 32% from that of last year. Based on persistent investment on R&D technology and development of new markets, gross profit margin increased from 3% to 19%. However due to lower economies of scale impact, the annual consolidated net loss after tax was NT$ 95 million, equivalent to a net loss of NT$0.42 per share.

Based on historical experience, destructive events often bring innovative business opportunities. Lockdowns stagnate economic activities and impact production and sales. However at the same time, there is evidence of growing demand for telecommunication such as work from home and distance learning types of applications. New working habits and lifestyles, along with the coming of the 5G generation, will bring positive growth momentum to the industry.

Grasping Trends

Looking back to 2020, the whole world was affected by the pandemic and implemented different levels of lock-down measures. Even though home TV viewership time increased significantly, the lockdowns and quarantine severely decreased new satellite TV installations. In addition, streaming services propelled changes in people’s viewing habits, further impacting our company’s satellite TV LNB’s sales growth. With these upcoming trend changes and in addition to the ongoing worldwide 5G service activations, O-RAN and LEO will be another fast growing new product markets.

5G coupled with satellite communication is regarded as the best solution for areas with insufficient mobile communications coverage. Moreover, Low-Earth-Orbit (LEO) Satellites’ competitive launch costs, lower transmission power consumption and low latency advantages are optimal solutions, thus market leaders actively invest in these fields. Our company has invested in the satellite field for a long time and in recent years pro-actively engaged in LEO user terminal technology and customer development. At the same time, we have partnered with market-leading

satellite operators that are actively deploying satellites into the space. We expect completion of large scale system verification (field tests) by end of the year, and will focus to ensure success of this important business opportunity.

Pursuing Growth

Our company offers professional design and contract manufacturing (ODM/OEM) experience in both Taiwan and China (Wuxi) with capability to assist various customers’ requirements for rapid transition to mass production. Our US and Denmark R&D teams have demonstrated great innovation through the completion of our new generation 4G LTE/5G NR wireless access network technology and also by utilizing our core RF technology to develop a 3GPP and O-RAN Alliance requirements-compliant low-cost and low-energy RU base station equipment (Radio Unit). Currently, we have successfully developed multiple sets of high-power base station equipment and completed interoperability tests with several worldwide renowned O-RAN software program operators. In addition, we are undergoing local field trials in India, Southeast Asia, Europe and the United States.

Our Company has been a member of the Open Wireless Access Network Alliance (Open RAN Alliance) since 2019 and participated in the Evenstar Program, part of the Telecom Infra Project (TIP) initiated by Facebook, obtaining End-to-End System verification approval. As a result, in 2020 we received purchase orders from a leading US telecommunications operator for delivery of 4G and 5G Open RAN network equipment in 2021 to support 5G networking across the United States.

Besides the above mentioned O-RAN product development positive results, low-earth-orbit satellite user terminal equipment product development is currently one of the company’s key areas of investment. For current low-earth-orbit satellites, ground user terminals need to align and synchronize with fast moving low-orbit satellites to avoid signal interruption. The challenge is to achieve the same performance while significantly decreasing costs. Based on our company's decades of technical experience in the satellite field and outstanding R&D team, we have secured strategic technical collaboration with main operators in Europe and the United States. At the present, we have completed LEO transceivers and antenna modules customer verification and have started production. Moreover, we have successfully crossed over to other related satellite user terminals fields for trial production. This will be another future growth driver for our company.

Building up Advantages

Continuous R&D investment has been the company's long-standing strategy and core strength. In 2020, we were awarded three US patents, including new technologies applicable on satellite communications and RF emitters type of products. In addition, we are actively investing in low-earth-orbit satellite communication user terminal equipment technology, which has been further propelled through last year’s special funding from Taiwan’s Ministry of Economic Affairs’ “Taiwan Industry Innovation Platform Program".

In response to the increased tariff costs resulted from the Sino-US Trade War, our company has strategically maintained manufacturing of high-level products in Taiwan to create skilled labor employment opportunities. At the same time we are continuing to invest in production automation and digital transformation to improve production efficiency, reduce production costs, and provide customers with better quality products.

Prospect

Looking forward to 2021, as the vaccines continue to roll out and the pandemic is gradually controlled, we expect economic activities to recover. We will not only leverage people’s lifestyle changes into higher dependency of telecommunications, but also closely monitor worldwide ever changing conditions that might adversely impact our business. Meanwhile, we will maintain an extremely cautious attitude to facing various challenges by focusing on core competency, continue R&D investment and increasing production efficiency to secure the promising upcoming O-RAN and LEO business opportunities. We look forward to bringing the shareholders even more value. Once again, we would like to express our sincere gratitude to all our shareholders’ continued support and encouragement amid this extremely challenging period. Thank you all!

Wishing you all health and prosperity!

Allen Yen, Chairman & CEO

Eugene Wu, General Manager

II. Company Profile

(I). Date of establishment

(i)Date of establishment: March 31, 1983

(ii) Scope of business

The Company is a professional manufacturer of microwave and satellite communication equipment. Headquartered at Hsinchu Science Park in Taiwan, the Company has production facilities in Hsinchu of Taiwan and Wuxi in Mainland China. The Company also has R&D centers in California of USA and Denmark, and service locations all over Europe and other places of the world. Ever since its establishment, the Company uses its core microwave technology to engage in joint ventures with major international communication firms in digital microwave, mobile communication stations module, broadband wireless transmission and satellite communication equipment, and is able to provide engineering pilot run samples in real-time that could quickly proceed to mass production. The Company could provide flexible and reliable product design, manufacturing and sale service to the diversity of needs of the customers.

Scope of business:

(1) The research, development, design, production, manufacturing and sale of the following products:
Personal communication equipment components, sub-systems and systems.
Electronic parts and components for wireless microwave communication system

and electronic system equipment.

(2) Production, domestic and export sale
Microwave and low-frequency IC and the substrate and capacitors used in IC.
High frequency microwave, mm wave, and optoelectronic communication electronic parts and components.
Microwave, mm wave and optoelectronic local system and system products.
Local systems made from outsourced and self-manufactured microwave and optoelectronic parts and components and related products.
(3) Production, domestic and export sale of satellite simulcast TV materials and systems.
(4) Design and customization of the aforementioned products to the order of the customers.
(5) Provide the aforementioned products and the inspection, maintenance, processing, installation and necessary assistance and services for related business.
(6) Export and import trade of related products

(II). Company History

time		Milestone
1983		Microelectronics Technology Inc. was officially established and
		located at Hsinchu Science Park. It is the first professional
		microwave and satellite communication company of Taiwan.
		Dr. Denny Ko was the Chairman and Mr. Patrick Wang was the first
		President of the Company.
1984		Allied with Stratex of the USA in joint venture for the development
		of point-to-point land surface microwave communication product
		series.
1985		Hewlett Packard of the USA invested in MTI and became the largest
		corporate shareholder.
1986		Mr. Patrick Wang was appointed the Chairman of MTI. Dr. Chi
		Hsieh was appointed the 2nd term of President of MTI.
1987		Successful development of satellite radio simulcast products to Ku
		frequency and entered the market of Europe.
		Participation in international telecommunication liberalization work
		and the successful launch of ground microwave communication
		products into the market of Europe.
1988		Completion of Phase I Plant. The Company relocated to this address
		since then.
1989		MTI established its technical support center in North America in
		response to the business growth in the region.
1990		Approved by the Securities and Futures Commission for listing
		Category I Stock for trading at TWSE (Stock Code 2314).
1991		MTI's Inmarsat gains world recognition during a Gulf War live
		satellite broadcast by CNN's Peter Arnett
		Joint venture with AT&T for the development of point-to-point
		microwave system and with HNS for the development of small
		satellite VSAT.
1992		The founding of Sasson International Holdings Inc. for speeding up
		the expansion of the MTI Group.
1993		Successful transfer of broadband microwave system product
		technology to build up system engineering capacity.
1994		Initial offering of GDR
		Accreditation with the ISO-9001 international quality system
1996		Successful entrance to the 2G mobile communication through the
		ODM/OEM mode of services and emerged as the major supplier of
		the major communication equipment firms in North America.
1997		MTI underwent strategic adjustment and organization reengineering
		in response to the rapid changes in market.
1998		Successful sale of 1 million sets of Satellite TV equipment.
1999		Accreditation with the ISO-14001 international environmental
		management system.
2000		Sale value surpassed US$100 million.

MTI established the “LEE & MTI Center” for advanced network research at National Chiao Tung University in Hsinchu, Taiwan.

time Milestone 2001  MTI established Jupiter Technology (Wuxi) Co., Ltd. in Wuxi, China, for the manufacturing of related products.
Accreditation with the TL-9000 communication electronics quality system standard.
Engagement in a joint venture with NEC of Japan in the development of low-noise signal amplifier for stepping into the 3G market.
2002  Entered into a strategic alliance agreement with Stratex that made MPI the sole contractor of its manufacturing business.
Founding of Jupiter Technology in Wuxi, China, for the manufacturing of communication related products.
2003  Formation of strategic alliance with UT Starcom for joint development of wireless broadband and 3G products.
Successful entrance to the simulcast satellite TV market of North America as a major supplier of provide low noise block 。
downconverter (LNB) to the satellite TV broadcasters.
2004  Entered into a strategic alliance agreement with UT Starcom thereby MPI was outsourced as the manufacturer of the frequency amplifiers noise reducer of the “PHS phone” stations and wireless LAN products.
2005  Mr. Allen Yen is appointed President and COO of MTI  Launched into mass production of the Ka-band Transceivers for VSAT ground satellite stations.
2006  Entered into a joint venture agreement with SR Telecom of USA on the development of Wimax broadband microwave products.
MTI achieves 100K Ka-band VSAT Transceiver ODU delivery milestone; accounts for over 95% of total market share for all Ka-band VSAT Transceivers
2007  Successful development of the new generation RFID reader with the application of Intel chip.
MTI RFID Reader won the 2007 Innovation Product Award of Hsinchu Science Park
MTI and Harris Stratex Networks entered into multi-year manufacture and supply agreement for TRuepoint RF Modules
2008  The RFID EPC Gen 2 Reader of MPI won the 2008 Taiwan Excellence Award. This is the first time that an Asian product won the Gen2 label of EPCglobal.
MTI receives the “16th Outstanding Enterprise Innovation Award” from Ministry of Economic Affairs due it its outstanding performance in corporate management and innovation in technology.
The DODECA LNBF of MTI won the 2008 Innovation Product Award. This is the only LNB of the world that could be shared by 12 users at the same time for the time being.
MTI received the 2008 Science Park Carbon Reduction Award from Hsinchu Science Park for its pursuit of energy saving and carbon reduction policy.

time Milestone 2009  The DODECA LNBF of MPI won the 2009 Taiwan Excellence Award.
ODIN's SMART Container Powered by MTI Technology won the prestigious "BEST IN SHOW" Award at RFID Journal Live! 2009
The WiMAX MIMO Remote Radio Head (RRH) of MTI won the 2009 Innovation Product Award
MTI acquired TeleASIC Communications Inc. at California, USA, to acquire the Remote Radio Head (RRH) product line with all tangible and intangible assets and the R&D team. This team is well seasoned in the R&D of wireless communication products and will be an input to the development of 3G/LTE products and international competitive power.
2010  MTI's 3G/LTE Remote Radio Head and WiMAX Outdoor CPE Won the 18th Taiwan Excellence Award in 2010.
The Point to Point Microwave IP Radio of MPI won the 2010 Innovation Product Award.
MPI won the “R&D Accomplishment Award” from Hsinchu Science Park for the first time for its achievement of the first Ka satellite radio, the leading microwave Transceiver/DOU of the world, the first UHF RFID Reader accredited with EPC Gen2 in Asia, and the world-class professional design/manufacturing of LNB and RFID.
MTI announced the entering into an agreement with RadioComp Aps of Denmark (hereinafter referred to as RadioComp) for the acquisition of its equity shares and intellectual property rights. MTI acquired the Danish company, RadioComp, through an overseas subsidiary as a wholly-owned subsidiary. RadioComp is a leader in the R&D of the software for wireless communication and could help to booster the capacity of MTI in software R&D. This core technology could be applied to the development of the 4G LTE technology for speeding up the development of current product line.
2011  MTI Ku-band VSAT Transceiver won the 2011 Innovation Product Award
MTI won the 1st "Taiwan Green Classic Award" of Ministry of Economic Affairs.
2012  MTI announced the signing of a NTD 1,800 million private placement investment agreement and strategic cooperation agreement with Hyield Venture Capital Co., Ltd. and CyberTAN Technology Inc.
2013  MTI UHF RFID MINI ME(TM) Reader won the Prestigious "2013 Taiwan Excellence Award" of the Bureau of International Trade, Ministry of Economic Affairs.
MTI All Outdoor IP Radio won the 2013 Innovation Product Award of Hsinchu Science Park
MTI announced decapitalization amounting to NT$1,439,077 thousand for offsetting carryforward loss.
Retirement of Chairman Patrick Wang. Dr. Chi Hsieh is appointed Chairman of MTI

time Milestone 2014  Construction of Jupiter Technology (Wuxi) Co., Ltd. was completed.  MTI Indoor Radio Head of LTE Base Station won the 2014 Innovation Product Award of Hsinchu Science Park
2015  MTI Satellite DTH Broadband Digital-SWM LNB won the 2015 Innovation Product Award
Disposal of the plant at Hsinchu to CyberTAN Technology Inc. for the efficient use of assets.
2016  MTI announced decapitalization amounting to NT$2,003,226 thousand for offsetting carryforward loss.
MTI raised additional capital by offering 13,000 thousand new shares and offered the 2nd issue of domestic secured convertible bonds of 4,000 lots for the retirement of short-term loans and fostering of financial structure. The amount of NT$674,200 thousand have been raised.
2017  MTI ranked among the top 6% 〜 20% in the “3[rd] Corporate Governance Evaluation” by Taiwan Stock Exchange Corporation for the first time.
The 6-42GHz Next Generation Ultra High Throughput Advanced Microwave Radio won the Innovative Product Award of Hsinchu Science Park.
2018  The satellite Broadband Outdoor Unit for VSAT of MTI won the Innovative Product Award.
2019  Mr. Allen Yen was appointed the Chairman and CEO of MTI. Mr. Eugene Wu was appointed President of MTI.
2020  MTI proceeded to the “LEO Satellite Communication End User RF Front-End Solution Development Project ” funded by the Ministry of Economic Affairs under the “ Taiwan Industry ”
Innovation Platform Program .
Accreditation with the AS9100 Aerospace Quality Standard management system.
MTI’s Open RAN radio units are deployed with DISH’s successful 5G validation.
MTI and Mavenir Launch First Evenstar Remote Radio Head to Accelerate OpenRAN Adoption.
NEC announced today its establishment of an Open RAN laboratory in India to accelerate commercial-ready 5G ecosystem by collaborating with partners Altiostar, GigaTera, MTI and others.
2021  Accreditation with the IATF 16949 Quality management system.
Successfully connected to MTI’s radio, JMA realizes viability of open networks in demonstrations at O-RAN plug fests in Europe and East Asia.
MTI ranked 6%~10% among all TSE&OTC listed companies with market cap between NT$5~10 bn in the “7[th] Corporate Governance Evaluation” by Taiwan Stock Exchange Corporation.
By combining JMA’s software baseband with MTI's radio units, TIM, among the first operators in Europe and the only one in Italy to launch Open RAN solutions on the mobile network.

III.Corporate Governance Report

(I). Organization System

(i) Organizational Chart

==> picture [473 x 375] intentionally omitted <==

----- Start of picture text -----

Shareholders’ Meeting
Audit Committee
The Board of Directors
Remuneration Committee
Internal Audit
Chairman
President
General
Department Administration Department and Health Department Information Technology Department Engineering Department Department Supply Chain Management Department Manufacturing Department
Finance and Stock Affairs Department Human Resources Environment, Safety Sales Department Quality Assurance
----- End of picture text -----

(ii) Job functions of the Departments

Department	Job function
Internal Audit	 Audit of the internal rules and regulations and internal control system of the Companywith recommendations for corrective action.
Manufacturing Department	 Coordinate with the R&D Engineering to administer R&D resources for the assurance of product development and launch for mass production as scheduled.  Adopt effective production process through the improvement and design of products for reducingcost and assurance ofproductquality.
Supply Chain Management Department	 Coordinate the transportation of materials and products, integrate the commonality of raw materials and control the sources of materials through properplanningfor achievingtheproduction capacityobjective.
Quality Assurance Department	 Establish the rules and regulations governing quality management operation of the Company and upgrade product quality of the Company, create a positive international quality image for the assurance of best quality for the customers.
Engineering Department	 Research and development new products, new production processes and new technologies in line with the product development strategy of the Company and the needs of the customers in market, develop new products in the best quality, best performance, and most efficient cost, pioneer the specifications in the industry through its leadership position in technology and easy for massproduction,sellingand for betterprofit.
Sales Department	 Design, development and market the products of the Company with increase of market share and upgrade brand image every year.
Information Technology Department	 Collection, arrangement, storage, and transmission of information with the use of information technology for generating reliable, effective, and integrated high-quality information for the users or for the management as reference or basis for business analysis and corporate management decision-making.
Environment, Safety and Health Department	 Establish and enforce management rules and regulations governing the environment, safety and health, fire safety and radioactive safety at workplace, implement the safety and health management system, environmentalprotection,andgreenprojects.
General Administration Department	 Perform administrative duties, plant power supply, air-conditioning, water supply, maintenance and service, facility planning and utilization management.
Human Resources Department	 Plan, establish and maintain human resources recruitment, training, remuneration and benefit systems.
Finance and Stock Affairs Department	 Plan, establish, and maintain financial and accounting and related duties.  Responsible for maintaining investor relation, administering corporate governance and related matters and share transfer and registration.

(II).Profiles of the Directors, President, Vice Presidents, Assistant Vice Presidents, function heads and branch heads.

(I) Directors

1. Director Profiles

2021.04.18

Title	Natio nality or place of registr -ation	Name	Sex	Date of elected	Tenure	Date of initial term of office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at present	Quantity of shareholding at present	Shareholding by spouse and children who are minors	Shareholding by spouse and children who are minors	Shareholding in the name of a third party	Shareholding in the name of a third party	Major experience (education)	Also holding other positions in the Company or in other companies.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Rela -tion
Chairman	R.O.C	CyberTAN Technology Inc.		2019. 06.19	3 years	2013.06.14	60,924,995	26.72 %	60,689,995	26.62 %	0	0%	0	0%			－	－	－
	R.O.C	Representative : Allen Yen	Male	2019. 06.19	3 years	2007.06.11	476,746	0.21%	476,746	0.21%	4,626	0%	0	0%	‧EMBA, National Chiao Tung University ‧ Bachelor, Dept of Electrical Engineering, National Taiwan University ‧ President of MTI ‧ Product Engineer, RCA Taiwan Limited	Note 1	－	－	－
Director	R.O.C	CyberTAN Technology Inc.		2019. 06.19	3 years	2013.06.14	60,924,995	26.72 %	60,689,995	26.62 %	0	0%	0	0%			－	－	－
	R.O.C	Representative : Kuoliang Ho	Male	2019. 06.25	3 years	2019.06.25	0	0.00%	0	0.00%	0	0%	0	0%	‧Master Degree in Communication Engineering , National Chiao Tung University ‧Senior Director, Hon Hai Precision Industry Co., Ltd	Note 2	－	－	－

Title	Natio nality or place of registr -ation	Name	Sex	Date of elected	Tenure	Date of initial term of office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at present	Quantity of shareholding at present	Shareholding by spouse and children who are minors	Shareholding by spouse and children who are minors	Shareholding in the name of a third party	Shareholding in the name of a third party	Major experience (education)	Also holding other positions in the Company or in other companies.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Rela -tion
Director	R.O.C	CyberTAN Technology Inc.		2019. 06.19	3 years	2013.06.14	60,924,995	26.72 %	60,689,995	26.62 %	0	0%	0	0%			－	－	－
	R.O.C	Representative : Roger Wu	Male	2019. 06.19	3 years	2013.08.14	0	0.00%	0	0.00%	0	0%	0	0%	‧ Master Degree in Information Management, Lawrence University, USA ‧ Vice President, Communication and Network Solution Business Group, Hon Hai Precision Industry Co., Ltd. ‧ Vice President in R&D, Ambit Microsystems	Note 3	－	－	－
Director	R.O.C	Chi Hsieh	Male	2019. 06.19	3 years	1986.09.12	3,123,279	1.37%	3,123,279	1.37%	1,950	0%	0	0%	‧PhD, Electrical Engineering, University of Santa Clara, USA ‧Chairman of MTI ‧Director, Microwave Circuit Dept, Harris Farinon Corporation, USA	Note 4	－	－	－

Title	Natio nality or place of registr -ation	Name	Sex	Date of elected	Tenure	Date of initial term of office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at the time of elected to office	Quantity of shareholding at present	Quantity of shareholding at present	Shareholding by spouse and children who are minors	Shareholding by spouse and children who are minors	Shareholding in the name of a third party	Shareholding in the name of a third party	Major experience (education)	Also holding other positions in the Company or in other companies.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.	Spouse or kindred within the 2ndtier to other executives, directors or supervisors.
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Rela -tion
Indepen- dent Director	R.O.C	Yun Lin	Female	2019. 06.19	3 years	2016.06.14	0	0.00%	0	0.00%	0	0%	0	0%	‧ PhD. in Economics, University of Illinois at Urbana-Champaign ‧Director of Finance Department and Graduate School of Finance, National Taiwan University ‧ Director, Securities and Futures Investors Protection Center ‧IPO Committee member, Taipei Exchange	Note 5	－	－	－
Indepen- dent Director	U.S.A	Golub Drakulovic	Male	2020. 06.18	3 years	2020.06.18	0	0.00%	0	0.00%	0	0%	0	0%	‧M.B.A. - Fairleigh Dickenson University, Rutherford, NJ ‧M.S. in Mechanical Engineering - NJIT, Newark, NJ ‧VP China Wireless R&D - Lucent/Alcatel ‧Director - Lucent CDMA Deployment Wireless Networks(US)	Note 6	－	－	－

Note 1： Other positions in the Company and other companies held by Mr. Allen Yen: Chairman and CEO of MTI, Director of Jupiter Technology (Wuxi) Co., Ltd., Chairman of MTI Laboratory Inc., Chairman of RadioComp ApS, Director of Welltop Technology Co., Ltd., Director of MTI Network Inc., Director of Jupiter Network Inc.
Note 2： Other positions in the Company and other companies held by Mr. Kuoliang Ho: Senior Director of Hon Hai Precision Industry Co., Ltd., Director of CyberTAN Technology Inc., Director of Taiwan Intelligent Fiber Optic Network Co.,Ltd., Director of BoniO Inc., Director of Omniguider Inc., Director of Nuwa Robotics Corp., Director of FG Innovation Company Ltd., Director of PCCW International OTT (Cayman Islands) Holdings Ltd., Chairman of Fu Hua Ke Precision Industry (Shenzhen) Co., Ltd., Director of Vossic Technology Co., Ltd., Representative of Ambit Microsystems Inc.
Note 3: Other positions in the Company and other companies held by Mr. Roger Wu: Director and President of CyberTAN Technology Inc., Chairman of Hon Yao Fu Technology Company Limited, Chairman of Fu Hong Kang Technology (Shenzhen) Co., Ltd., Chairman of Chongqing Hongdaofu Technology Co.,Ltd., Director of Ta Tang Investment Co., Ltd., Chairman of CyberTAN (B.V.I.) Investment Corp., Chairman of CyberTAN Technology (Hong Kong) Limited, Director of Chun Yang Venture Capital Co., Ltd., Director of Chun Neng Management Consulting Co., Ltd.
Note 4： Other positions in the Company and other companies held by Dr. Chi Hsieh: Chief International Marketing Officer of MTI, Director of Sasson International Holdings Inc., Director of Jupiter Technology (Wuxi) Co., Ltd., Chairman of Jupiter Network Corp., Chairman of Welltop Technology Co., Ltd., Independent Director and Convener of Audit Committee and Remuneration Committee of Innolux Corporation, Director of Advanced Wireless Semiconductor Company, Chairman of Kopin Taiwan Corporation, Director of Kopin Corp., Director of Bright Led Electronics Corp., Director of Henan Bright Crystal Company Limited, Independent Director and Convener of Audit Committee and Remuneration Committee of AcBel Polytech Inc., Director of Taiwan Cement Corporation, Director of Bright Crystal Company Limited, Director of TCM limited, Director of Taicom Capital Limited, Director of KoBrite Corp.
Note 5： Other positions in the Company and other companies held by Dr. Yun Lin: Member of Remuneration Committee of MTI, Adjunct Professor of the Dept of Finance, National Taiwan University, Director of Hua Nan Bank, Director of Eslite Spectrum Corporation, Independent Director and member of the Remuneration Committee of Uni-President Group.
Note 6： Other positions in the Company and other companies held by Mr. Golub Drakulovic: Member of Remuneration Committee of MTI.

2. Dominant shareholders of the institutional shareholders

2021.04.27

		2021.04.27
Name of Institutional Director	Dominant shareholders of the Institutional Director	Proportion of shareholding
CyberTAN Technology Inc.	Hongyuan International Investment Co., Ltd.	3.05%
	Liyi International Investment Co., Ltd.	3.05%
	Foxconn Technology Co., Ltd.	3.05%
	Hyield Venture Capital Co., Ltd.	3.05%
	Standard Chartered in custody for Furstentum Liechtenstein bank	3.04%
	Shi Teng Investment Co., Ltd.	1.83%
	Hsiung Chih Investment Co., Ltd.	1.77%
	JPMorgan Chase bank Hosting Vanguard STAR developed Market Index Fund	1.40%
	JPMorgan Chase Hosting Vanguard Developed Market Index Fund	1.34%
	Hongqi International Investment Co., Ltd.	0.86%

3. Dominant shareholders of the above institutional shareholders

2021.04.27

		2021.04.27
Name of institutional shareholder	Dominant Shareholders of the Institutional Shareholders	Proportion of shareholding
Hongyuan International Investment Co., Ltd.	Hon Hai Precision Industry Co., Ltd.	100%
Liyi International Investment Co., Ltd.	Hon Hai Precision Industry Co., Ltd.	100%
Foxconn Technology Co., Ltd.	Hon Hai Precision Industry Co., Ltd.	9.88%
	Bao Shin International Investment Co.,Ltd.	8.92%
	Hyield Venture Capital Co., Ltd.	6.01%
	Shin Sheng Investment Co., Ltd.	4.80%
	Hongyuan International Investment Co.,Ltd.	2.41%
	Hongqi International Investment Co., Ltd.	2.25%
	Standard Chartered in custody for Furstentum Liechtensteinbank	1.17%
	JPMorgan Chase Hosting Vanguard DevelopedMarketIndex Fund	1.11%
	JPMorgan Chase bank Hosting Vanguard STAR developed Market Index Fund	0.98%
	Vanguard International Investment Co., Ltd.	0.72%
Hyield Venture Capital Co., Ltd.	Hon Hai Precision Industry Co., Ltd.	97.95%
	Bao Shin International Investment Co.,Ltd.	2.05%
Shi Teng Investment Co.,Ltd. (Note)	Samoa Goldway Industries Limited	100%
Hsiung Chih Investment Co., Ltd. (Note)	BVI Dennett Enterprises Limited	100%
Hongqi International Investment Co., Ltd. (Note)	Hon Hai Precision Industry Co., Ltd.	100%

Note: Information from MOEA

4. Professional qualification and status of independence of the Directors

Condition Name	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Conform to the status of independence (Note).	Number of public companies that the Director also holds the position as independent director
	In the capacity of a tutor or above in a public or private school of higher education in the disciplines of commerce, law, finance, accounting, or any other areas of specialization required for the business operation of the Company.	A professional or technician who has passed the national examination for professionals like court judge, prosecutor, lawyer, certified public accountant, or any other expertise required for the business operation of the Company with the issuance of a certificate of completion.	Work experience in commerce, law, finance, accounting, or a specialization required by the business operation of the Company.	1	2	3	4	5	6	7	8	9	10	11	12
CyberTAN Technology Inc. Representative: Allen Yen																None
CyberTAN Technology Inc. Representative： RogerWu																None
CyberTAN Technology Inc. Representative: KuoliangHo																None
Chi Hsieh																2 firms
Yun Lin																1 firm
Golub Drakulovic																None

Note: If the Directors and Supervisors met the following conditions in the period of 2 years prior to the assumption of office and within the term of office, put a “  ” in the appropriate box representing the specific condition.

（ 1 ） Not an employee of the Company or its affiliates.
（ 2 ） Not a Director or a Supervisor of an affiliate of the Company (except for an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).
（ 3 ） Not holding 1% or more of the outstanding shares issued by the Company by the person and its spouse, and children who are minors, or in the name of a third party, or, a shareholder among the top 10 shareholders and who is a natural person.
（ 4 ） Not a spouse, kindred within the 2[nd] tier under the Civil Code, or kindred by sanguinity within the 3[rd] tier under the Civil Code as mentioned in the preceding 3 paragraphs.
（5）Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds 5% or more of the total number of issued shares of the company, ranks as of its top five shareholders, or has representative director(s) serving on the company’s board based on Article 27 of the Company Law.
（ 6 ） Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (except for

an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).

（ 7 ） Not a director, supervisor, or employee of a company of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the company’s chairman or CEO (or equivalent) (except for an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).
（ 8 ） Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the company.
（ 9 ） Other than serving as a compensation committee member of the company, not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof, and the service provided is an “audit service” or a “non-audit service which total compensation within the recent two years exceeds NTD500,000”.
（10） Not having a marital relationship, or a relative within the second degree of kinship to any other director of the company.
（11）Not been a person of any conditions defined in Article 30 of the Company Law.
（12）Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

(II) Key Managers

1 Information on the President, Vice Presidents, Assistant Vice Presidents, and Function and Branch Heads:

2021.04.18

													2021.04.18	2021.04.18	2021.04.18
Title	Nation ality	Name	Sex	Date of Elected	Quantity of Shareholding		Shares Held by Spouse and/or Children who are Minors		Shareholding in the name of a third party		Major experience (education)	Positions in Other Companies at Present	Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman and CEO (Note)	R.O.C.	Allen Yen	Male	2019. 06.19	476,746	0.21%	4,626	0.00%	0	0.00%	‧EMBA, National Chiao Tung University ‧BS, Dept of Electrical Engineering, National Taiwan University ‧Prisident of MTI ‧Product Engineer, RCA Taiwan Limited	‧Director, Welltop Technology Co., Ltd ‧Chairman, MTI Laboratory Inc. ‧Chairman, RadioComp ApS. ‧Director, Jupiter Technology (Wuxi) Co., Ltd. ‧Director, Jupiter Network Corp.	－	－	－
President	R.O.C.	Eugene Wu	Male	2019. 07.03	108,563	0.05%	46,408	0.02%	0	0.00%	‧M.S. Electrical Engineering, University of Pittsburgh, USA ‧Vice President of Sales, MTI	None	－	－	－
Vice President and CFO	R.O.C.	Hualin Chi	Female	2010. 06.18	37,953	0.02%	0	0.00%	0	0.00%	‧MBA, University of Florida, USA ‧BS, Dept of Business Administration, National Cheng Chi University. ‧Asst VP of Finance, MTI.	‧Director, Welltop Technology Co., Ltd. ‧Director, Jupiter Network Corp. ‧ Supervisor, Jupiter Technology (Wuxi) Co., Ltd.	－	－	－
Vice President, Strategic Business Development	R.O.C.	Dunga Wu	Male	2019. 07.03	46,696	0.02%	0	0.00%	0	0.00%	‧M.S. Transportation Engineering and Management, National Chiao Tung University ‧VP, Manufacturing and SCM, MTI.	‧Director, Jupiter Technology (Wuxi) Co., Ltd.	－	－	－
Vice President of Engineering	R.O.C.	Hunter Huang	Male	2007. 06.11	59,276	0.03%	217	0.00%	0	0.00%	‧B.S. Electrical Engineering, Feng Chia University ‧Asst VP of Engineering, MTI.	‧Director, Jupiter Technology (Wuxi) Co., Ltd.	－	－	－
Asst VP of Engineering	R.O.C.	Chia-Yu Chou	Male	2003. 09.01	0	0.00%	0	0.00%	0	0.00%	‧B.S. Electrical Engineering, National Taiwan University ‧EngineeringManager of MTI	None	－	－	－
Asst VP of Engineering	R.O.C.	Jui-Yun Chen	Male	2007. 06.11	0	0.00%	0	0.00%	0	0.00%	‧M.S. in Electrical Engineering, University of South California, USA ‧ Engineering Manager of MTI	None	－	－	－
										24

Title	Nation ality	Name	Sex	Date of Elected	Quantity of Shareholding	Quantity of Shareholding	Shares Held by Spouse and/or Children who are Minors	Shares Held by Spouse and/or Children who are Minors	Shareholding in the name of a third party	Shareholding in the name of a third party	Major experience (education)	Positions in Other Companies at Present	Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Asst VP of Engineering	R.O.C.	Kuo-Tien Chang	Male	2010 06.18	0	0.00%	0	0.00%	0	0.00%	‧B.S., Electrical Engineering, National Central University ‧EngineeringManager of MTI	None	－	－	－
Asst VP of Manufacture	R.O.C	Yi-Shan Chang	Male	2007. 06.11	1,885	0.00%	0	0.00%	0	0.00%	‧M.S. in Electrical Engineering, National Sun Yat-Sen University ‧ Engineering Manager of MTI	‧General Manager, Jupiter Technology (Wuxi) Co., Ltd.	－	－	－
Asst VP of Sales	R.O.C	Wan- Ping Su	Female	2020. 03.17	589	0.00%	0	0.00%	0	0.00%	‧M.S. in Industrial Engineering, State University of New York at Buffalo, USA ‧ Sales Manager of MTI	None	－	－	－
Asst VP of SCM	R.O.C	Yu- Cheng Liu	Male	2020. 03.17	5,012	0.00%	5,000	0.00%	0	0.00%	‧PhD in Industrial Engineering and Mamagement, National Chiao Tung University ‧ SCM Manager of MTI	None	－	－	－
Asst VP of HR	R.O.C	Zih-Ying Chen	Female	2020. 03.17	0	0.00%	0	0.00%	0	0.00%	‧PhD in Finance, National Taiwan University of Science and Technology ‧Project Manager of MTI ‧Executive Assistant to the CFO of MTI	None	－	－	－
Asst VP of Manufacture	R.O.C	Zheng- Wei Chen	Male	2021. 03.17	0	0.00%	0	0.00%	0	0.00%	‧M.S. in Business Administration, National Taiwan University of Science and Technology ‧MFG Director of Aten International	None	－	－	－
Chief Accounting Officer	R.O.C	Sheng- Xiong Yu	Male	2020. 11.03	0	0.00%	0	0.00%	0	0.00%	‧B.S. in Finance, National Chengchi University ‧Account Manager of MacroWell Technology	None	－	－	－

Note: Mr. Allen Yen, Chairman & CEO of MTI, has been the Vice President and then President of the sale function of the Company, and is full-seasoned for the job. His capacity as the CEO of MTI will certainly be an input to business development of the Company. MTI has established the positions of Independent Directors and other functional committees as required by law. More than half of the members of the Board are not employees or managers of MTI for the reinforcement of the independence of the Board.

(III) Remuneration to the Directors, President and Vice Presidents

1. Remuneration to the Directors (including Independent Directors) 2020.12.31

Unit: NT$ Thousands

Title	Name	Director Fee	Director Fee	Director Fee	Director Fee	Director Fee	Director Fee	Director Fee	Director Fee	The sum of A + B + C + D in proportion to net income(%)	The sum of A + B + C + D in proportion to net income(%)	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	Remuneration in the capacity as employees	The sum of A + B + C + D + E + F + G in proportion to net income(%)	The sum of A + B + C + D + E + F + G in proportion to net income(%)	Remuneration from investee companies other than the subsidiaries
		Remuneration (A)		Pension and severance payment (B)		Director fee (C)		Professional subsidy (D)				Salaries, bonus, and special allowance(E)		Pension and severance payment (F) (Note 1)		Remuneration to employees (G)
		From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI		All companies included in the financial statements		From MTI	All companies included in the financial statements
																Cash	Stocks	Cash	Stocks
Chairman	Allen Yen (Note 2)
		0	0	0	0	0	0	0	0	0	0	5,077	5,077	0	0	0	0	0	0	(5.32)%	(5.32)%	None

Director	Chi Hsieh
		0	0	0	0	0	0	0	0	0	0	4,490	4,490	0	0	0	0	0	0	(4.71)%	(4.71)%	None

Director	Roger Wu (Note 2)
		0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	None

Director	Kuoliang Ho (Note 2)
		0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	None

Independent Director	Mary Shio Chan (Note 3)
		388	388	0	0	0	0	0	0	(0.41)%	(0.41)%	0	0	0	0	0	0	0	0	(0.41)%	(0.41)%	None

Independent Director	C. L. Liu (Note 4)
		450	450	0	0	0	0	0	0	(0.47)%	(0.47)%	0	0	0	0	0	0	0	0	(0.47)%	(0.47)%	None

Independent Director	Yun Lin
		450	450	0	0	0	0	0	0	(0.47)%	(0.47)%	0	0	0	0	0	0	0	0	(0.47)%	(0.47)%	None

Independent Director	Golub Drakulovic (Note 5)
		585	585	0	0	0	0	0	0	(0.61)%	(0.61)%	0	0	0	0	0	0	0	0	(0.61)%	(0.61)%	None

1) According to the Articles of Incorporation of the Company, the remuneration to the Independent Directors may be submitted to the board of directors, which is expressly authorized to resolve on that matter and shall take into account the general pay levels in the industry. In addition, the Company shall base its determination of an individual director's remuneration on the evaluation results of his or her performance. The Board shall determine the appropriation of no more than 1% of the earnings of the Company as remuneration to the Directors depending on the profit status of the year. 2) Otherthandisclosureinthe above table,Directorsremunerations earned by providing services (e.g. providing consulting services as anon-employee): None.
Note 1: The pension for retirement covers the old and new systems of retirement. Note 3: Mary Shio Chan resigned, effective June 17, 2020 Note 5: Golub Drakulovic took office, effective June 18, 2020 Note 2: Representative of CyberTAN Technology Inc. Note 4: C. L. Liu passed away on November 7, 2020

2020.12.31

Unit: NT$ Thousands

2. Remuneration to the President and the Vice Presidents.

Title	Name	Salary (A)	Salary (A)	Pension and severance payment (B) (Note1)	Pension and severance payment (B) (Note1)	Bonus and special allowance (C)(Note2)	Bonus and special allowance (C)(Note2)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	The sum of A+B+C+D in proportion to net income(%)	The sum of A+B+C+D in proportion to net income(%)	Remuneration from investee companies other than the subsidiaries
		From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI		All companies included in the financial statements		From MTI	All companies included in the financial statements
								Cash	Stocks	Cash	Stocks
CEO	Allen Yen	16,898	18,219	540	540	2,528	2,528	0	0	0	0	(20.93)%	(22.31)%	None
President	Eugene Wu
Vice President and CFO	Hualin Chi
Vice President, Strategic Business Development	Dunga Wu
Vice President of Engineering	Hunter Huang
Vice President of Manufacturing	Edward Chien (Note 3)

Note 1: The pension for retirement covers the old and new systems of retirement. Note 2: The Company did not issue any ESO and restricted stock in 2020. Note 3: Edward Chien resigned, effective November 30, 2020.

2020.12.31

Unit: NT$ Thousands

3. Remuneration to the top five management personnel.

Title	Name	Salary (A)	Salary (A)	Pension and severance payment (B) (Note1)	Pension and severance payment (B) (Note1)	Bonus and special allowance (C) (Note2)	Bonus and special allowance (C) (Note2)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	Amount of remuneration as an employee (D)	The sum of A+B+C+D in proportion to net income(%)	The sum of A+B+C+D in proportion to net income(%)	Remuneration from investee companies other than the subsidiaries
		From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI	All companies included in the financial statements	From MTI		All companies included in the financial statements		From MTI	All companies included in the financial statements
								Cash	Stocks	Cash	Stocks
CEO	Allen Yen	4,284	4,284	0	0	793	0	0	0	0	0	(5.32)%	(5.32)%	None
President	Eugene Wu	3,071	3,071	108	108	400	400	0	0	0	0	(3.75)%	(3.75)%
Chief International Marketing Officer	Chi Hsieh	2,833	2,833	0	0	1,657	1,657	0	0	0	0	(4.71)%	(4.71)%
Vice President of Engineering	Hunter Huang	2,625	2,625	108	108	473	473	0	0	0	0	(3.36)%	(3.36)%
Vice President of Manufacturing	Edward Chien (Note 3)	1,857	3,177	108	108	205	205	0	0	0	0	(2.27)%	(3.66)%

4. Bracket of remuneration along the payment scale to the President and Vice Presidents

2020.12.31

	2020.12.31	2020.12.31
Brackets of remuneration along the payment scale to the President and each Vice President	Names of the President and the Vice Presidents
	The Company	All companies included in the financialstatements
Less than NT$1,000,000	-	-
NT$1,000,000～NT$2,000,000	-	-
NT$2,000,000～NT$3,500,000	Dunga Wu, Hunter Huang, Hualin Chi, Edward Chien(Note1)	Dunga Wu, Hunter Huang, Hualin Chi, Edward Chien(Note1)
NT$3,500,000～NT$5,000,000	Eugene Wu	Eugene Wu
NT$5,000,000～NT$10,000,000	Allen Yen	Allen Yen
NT$10,000,000～NT$15,000,000	-	-
NT$15,000,000～NT$30,000,000	-	-
NT$30,000,000～NT$50,000,000	-	-
NT$50,000,000～NT$100,000,000	-	-
More than NT$100,000,000	-	-
Total	6 persons	6 persons

Note 1: Edward Chien resigned, effective November 30, 2020.

5. Names of managers with remuneration as employees and the payment

2020.12.31

Unit: NT$ Thousands

Title	Name	Amount of stock dividend	Amount of cash dividend	Total	Ratio to net income (%)
Chairman and CEO	Allen Yen	0	0	0	0%
President	Eugene Wu
Vice President	Hualin Chi
Vice President	Dunga Wu
Vice President	Hunter Huang
Vice President	Edward Chien (Note 1)
Asst Vice President	Chia-Yu Chou
Asst Vice President	Yi-Shan Chang
Asst Vice President	Jui-Yun Chen
Asst Vice President	Kuo-Tien Chang
Asst Vice President	Zih-Ying Chen
Asst Vice President	Wan-Ping Su
Asst Vice President	Yu-Cheng Liu

Title	Name	Amount of stock dividend	Amount of cash dividend	Total	Ratio to net income (%)
Chief Accounting Officer	Pi-Hua Chuang (Note 2)
Chief Accounting Officer	Sheng-Xiong Yu (Note 2)

Note 1: Edward Chien resigned, effective November 30, 2020. Note 2: Pi-Hua Chuang resigned, effective August 31, 2020.

Sheng-Xiong Yu took office, effective November 3, 2020

(IV) Compare the total amount of payment to the directors, president and vice presidents from the Company and all the companies included in the consolidated financial statements as remuneration in the last 2 years and the proportion to net income, and explain the policy of remuneration, standards and combination, procedure for determination of the remuneration, and association with operation performance and the risk in the future

1. Analysis of the total remuneration in proportion to net income

title	Total remuneration in proportion to net income in 2020 (%)	Total remuneration in proportion to net income in 2020 (%)	Total remuneration in proportion to net income in 2019 (%)	Total remuneration in proportion to net income in 2019 (%)
	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements
Director	(28)%	(29)%	1778%	1656%
President and Vice Presidents

In 2020 and 2019, the Company and all the companies included in the consolidated financial statements effected payment of NT$27,649 thousand and NT$29,942 thousand to the aforementioned directors, president and vice presidents as remuneration, respectively. The payment method was the same as was before.

2. Note to the policy of remuneration

The remuneration to the Directors
(1) The remuneration to the Directors is fixed. According to the Article 16 of Articles of Incorporation of the Company, the remuneration to the Directors may be submitted to the board of directors, which is expressly authorized to resolve on that matter and shall take into account the general pay levels in the industry.
(2) According to the Article 25 of Articles of Incorporation of the Company, the Board shall determine the appropriation of no more than 1% of the earnings of the Company as remuneration to the Directors depending on the profit status of the year.
(3) According to the Article 9 of“Procedures for Performance Evaluation of Board of Directors Meeting”, the Company shall base its election on the evaluation results of the performance of the board and shall base its determination of an individual director's remuneration on the evaluation results of his or her performance. Evaluation methods including: Participation in the operation of the company, Improvement of the quality of the board of directors' decision making, Election and continuing education of the directors etc.

The remuneration to the Managerial officers
(1) The Salary to Managerial officers is fixed.
(2) According to the Article 25 of Articles of Incorporation of the Company, the Board shall determine the appropriation of no more than 7% of the earnings as remuneration to the employees depending on the profit status of the year.
(3) The standard of the remuneration to the Managerial officers in accordance with participation in the operation of the company and personal performance assessment. In addition, according to the Article 4 and 7 of Remuneration Committee Chart, the Committee with its professionally and objectively status take into account the result of various performance evaluation, then submit recommendations to the board of directors for its reference in decision-making. Evaluation methods including: Practical theory of business, corporate culture, and considering the goal achievement rate, profitability, operating efficiency, contribution, internal management, and other special contributions of Managerial officers to calculate the reasonable remuneration. Routine review of the status of operation and applicable laws for determining the remuneration to the Directors and the Managerial officers. Even if the company has not achieved the goal of operating performance, the individual with special performance can also get corresponding remuneration.

(III).The pursuit of corporate governance

(I) The function of the Board

1. The convention of the Board

The Board convened for 6 times in 2020 (A) and the attendance of the Directors is shown below:

title	Name	Actual attendances (B)	Attended by proxy	Actual attendance rate (%) (B/A)	Remark
Chairman	CyberTAN Technology Inc. Representative: Allen Yen	6	0	100	Got re-elected on June 19, 2019
Director	CyberTAN Technology Inc. Representative: Roger Wu	5	1	83	Got re-elected on June 19,2019
Director	CyberTAN Technology Inc. Representative: KuoliangHo	6	0	100	Took office on June 25,2019
Director	Chi Hsieh	6	0	100	Got re-elected on June 19,2019
Independent Director	Mary Shio Chan	2	0	100	Resigned, effective June 17,2020
Independent Director	C. L. Liu	3	2	60	Passed away on November 7,2020
Independent Director	Yun Lin	6	0	100	Got re-elected on June 19,2019
Independent Director	Golub Drakulovic	4	0	100	Took office on June 18,2020

The attendance of the Independent Directors in the sessions of the Board in 2020 is shown below:

Name	1st	2nd	3rd	4th	5th	6th
MaryShio Chan	○	○	-	-	-	-
C. L. Liu	○	○	☆	○	☆	-
Yun Lin	○	○	○	○	○	○
Golub Drakulovic	-	-	○	○	○	○

○:Attend in person; ☆ :Attend by proxy; ＊:Absence; -: Not applicable

2. The conduct of evaluation of the Board

Frequency of Evaluation	Evaluation Period	Scope of evaluation	Method of evaluation	Content of evaluation
Self-Evaluation conducted once annually	2020/01/01 to 2020/12/31	Evaluation of the performance of the Board, members of the Board, and members of the	Self-Evaluation of the Board, Self-Evaluation of the Directors, Self-Evaluation of the members	The summary of the content of different aspects of evaluation is shown below: 1 Evaluation of Board performance: Level of participation in the operation of the Company, qualify of decision-making by the Board, the organization and structure of the Board,the election and

		functional committees.	of functional committees.	continuing education of the Directors, and internal control. 2 Evaluation of Director performance: The grip of company objective and mission, realization of the responsibilities of Directors, level of participation in the operation of the Company, cultivation of internal relations and communications, professional standing and continuing education of the Directors, and internal control. 3 Evaluation of functional committee members performance: The level of participation in the operation of the Company, realization of the responsibilities of the functional committee, quality of decision-making of the functional committee, the organization and appointment of the members, and internal control.

Additional information on the sessions of the Board
(1) If any of the following occurs to the operations of the Board, specify the date, the session, the content of the motion, the opinions of the Independent Directors, and the response of the Company to the opinions of the Independent Directors:
- A. The particulars exhibited in Article 14-3 of the Securities and Exchange Act: Not applicable, MTI has established the Audit Committee.
- B. Further to the aforementioned matters, any adverse opinion or qualified opinion of the independent directors against the resolutions of the Board: None.
(2) Recusal of the directors from motions involved their private interest:
- Pursuant to Paragraph 2 in Article 206 of the Company Act, Directors recused from the discussion and voting of motion related to their remuneration. The other Directors in session passed the motion with common consent. The Board convened for 6 times in 2020, among the Board meeting:
- A. Independent Director Golub Drakulovic recused from the discussion and voting of motion related to his remuneration.
- B. Independent Director Golub Drakulovic recused from the discussion and voting of motion related to his appointment as the Remuneration Committee member.
(3) The objective of the Board in fortifying its function in the recent and present year (such as the establishment of the Auditing Committee, and enhancement of transparency) and assessment of the attainment:
- A. In 2019, the Board approved the “Procedures for Performance Evaluation of Board of Directors Meeting”. Conduct evaluation of the Board, and report the result to the Board. In addition, Remuneration Committee would propose directors’ remuneration by referring to the results of evaluation of the Board.

B. In 2019, the Board appoint Ms. Hualin Chi, current chief finance officer, as a chief corporate governance officer as the most senior officer to be in charge of corporate governance affairs.
C. In accordance with SEC regulations in its letter #1090002299 dated February 13, 2020, the 2020 Board approved the amendments of the “Corporate Governance Best Practice Principles”. Enhance the functions of the Board of corporate governance, including the management of intellectual property rights, the regulation of the symmetry of information disclosure, etc.

(II) The function of the Audit Committee:

The convention of the Audit Committee

The Audit Committee has convened for 4 times in 2020 (A). Main issues for review in the meetings specified as follows:

(1) Amendments of the “Audit Committee Charter”
(2) Eavualution of the the internal control system for assurance of effectiveness
(3) The status of derivative transactions
(4) Evaluation of the status of independence of the CPAs and remuneration
(5) The appointment of the Chief Accounting Officer
(6) Review of the financial statements and accounting policy
(7) Law and compliance

The Committee members’s attendance status in 2020 is shown in the following table.

title	Name	Actual attendance (B)	Attended by proxy	Actual attendance rate (%) (B/A)	Remark
Independent Director	Yun Lin	4	0	100	None
Independent Director	Mary Shio Chan	2	0	100	Resigned, effective June 17, 2020
Independent Director	C. L. Liu	3	1	75	Passed away on November 7,2020
Independent Director	Golub Drakulovic	2	0	100	Took office on June 18, 2020

Additional information on the Audit Committee
(1) If any of the following applies to the operation of the Auditing Committee, specify the date of the meeting and the session of the Board, the content of the motion, the resolutions of the Auditing Committee, and the response of the Company to the opinions of the Auditing Committee.
- A. The particulars exhibited in Article 14-5 of the Securities and Exchange Act: resolutions made by all Independent directors with common consent.

Date Session	Major resolutions
2020.03.17 The 3rdsession of the 2ndAudit Committee	1. 2019 Business Report and Financial Reports of the Company 2. Proposal for the distribution of 2019 earnings 3. Assessment of the effectiveness of the internal control system and the statement of 2019 internal control 4. Independence evaluation and 2020 remuneration of the CPAs 5. Amendment of the “Procedures for Handling Acquisition and Disposal of Assets”
2020.05.06 The 4thsession of the 2ndAudit Committee	1. 2020 Q1 MTI financial reports 2. Amendment of the “Audit Committee Charter”
2020.08.06 The 5thsession of the 2ndAudit Committee	1. 2020 Q2 MTI financial reports
2020.11.03 The 6thsession of the 2ndAudit Committee	1. 2020 Q3 MTI financial reports 2. 2021 annual internal audit plan 3. Appointment of the Chief Accounting Officer

B. Further to the aforementioned matters, motions rejected by the Auditing Committee but passed by the Board with the consent of more than 2/3 of the directors: Not applicable.
(2) The recusal of the Independent Directors from motions involving the interest of the Independent Directors: Not applicable.
(3) The communication between the Independent Directors and the Chief Internal Auditor and the CPAs:
The Independent directors met with the Chief Internal Auditor and the CPAs in the sessions of the Audit Committee quarterly.
A. The Chief Internal Auditor compiles the audit reports monthly for the review of each independent director, and attend the quarterly session of the Audit Committee as an observer to communicate with issues pertinent to the audit plan and status of corrective action, and exchanges views on the result of the internal audits. Communication between the Chief Internal Auditor and the Independent Directors is positive.
B. The CPAs attend the session of the Audit Committee in the review of the quarterly financial statements, and explain the process of financial auditing, the scope of audit and legal update, and engaged in thorough discussion with the Independent Directors. Communication between the CPAs and the Independent Directors is positive.
Issues for communication between the Independent Directors and the Chief Internal Auditors and the CPAs:
A. The communication between the Independent Directors and the Chief Internal Auditors and the CPAs, and the summary of the result: the independent directors have no objections against the following issues and passed the motions after review or approval with report to the Board.

Date Session	Communication focus
2020.03.17 The 3rdsession of the 2ndAudit Committee	1. The pursuit of the audit plan from November 2019 to March 2020, and the corrective action taken in response to the audit findings 2. Declaration of Internal Control System in 2019
2020.05.06 The 4thsession of the 2ndAudit Committee	1. The pursuit of the audit plan from March to April, 2020, and the corrective action taken in response to the audit findings
2020.08.06 The 5thsession of the 2ndAudit Committee	1. The pursuit of the audit plan from May to July, 2020, and the corrective action taken in response to the audit findings
2020.11.03 The 6thsession of the 2ndAudit Committee	1. The pursuit of the Audit Plan from August to November, 2020, and the corrective action taken in response to the audit findings 2. 2021 Annual Audit Plan.

B. The communication between the Independent Directors and the CPAs and the summary of the result: the independent directors have no objections against the following issues and passed the motions after review or approval with report to the Board.

following issues Board.	and passed the motions after review or approval with report to the
Date Session	Communication focus
2020.03.17 The 3rdsession of the 2nd Audit Committee	1. Audit report on 2019 MTI financial reports 2. Communication of key audit matters 3. Other materialityinaccounting and audit
2020.05.06 The 4thsession of the 2nd Audit Committee	1. Audit report on 2020 Q1 MTI financial reports 2. Communication of key audit matters
2020.08.06 The 5thsession of the 2nd Audit Committee	1. Audit report on 2020 Q2 MTI financial reports 2. Communication of key audit matters
2020.11.03 The 6thsession of the 2nd Audit Committee	1. Audit report on 2020 Q3 MTI financial reports 2. Communication of key audit matters

(III) The pursuit of corporate governance and the variations with the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies, and the reason:

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
I. Has the Company instituted its own corporate governance best practice principles in accordance with the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and made disclosure?	V		The Corporate Governance Best Practice Principles approved by the Board of the Company and effective from December 22, 2014. Until now, it had been amended for three times. The latest edition has disclosed the detail at the official website of the Companyand MOPS.	Nil
II. The Equity Structure and Shareholders Equity of the Company (I) Has the Company established its internal operation procedure for responding to the suggestions, queries, disputes, and legal actions of the shareholders in accordance with the procedure?	V		Proceed in accordance with the “Procedure for the Processing of Inside Information in Material Aspects” and the “Corporate Governance Best Practice Principles.” The Company has a viable system of spokesperson and window for investor relation available for solving related problems. In the event of a dispute, the Company has designated legal affairs personnel to respond to the suggestions or disputes of the shareholders.	Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
(II) Has the Company kept the list of the dominant shareholders that exercise de facto control of the Company and the parties that exercise ultimate control of these dominant shareholders under control?	V		The Company keeps abreast of the latest state of affairs of the Directors, Managers, and shareholders who holds more than 5% shares with routine disclosure under law.	Nil
(III) Has the Company established and exercised risk control and firewall mechanisms with its affiliates?	V		The management of the financial and business relation between the Company and its affiliates was performed in accordance with the rules and regulations of the Company and of the subsidiaries. Respective subsidiaries have conducted internal audits in accordance with relevant internal control operation.	Nil
(IV) Has the Company instituted internal rules and regulations prohibiting insiders from using undisclosed information in the market for the trading of securities?	V		For the establishment of the management system for the prevention of insider trade, the Company has passed the amendment to the “Procedure for the Processing of Inside Information in Material Aspects) in the 19th session of the 14th Board on 2016.03.18.	Nil
III. The Organization and Function of the Board (I) Has the Board developed its policies in diversity relevant to the composition of the members and has it properly pursued these policies?	V		The 7 Directors of the Board of the Company were selected through a cautious procedure. The diversities of their background (including industry background,finance & accounting,marketingor	Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			technology), professional competence and experience were taken into consideration carefully. According to Article #20 of MTI’s Corporate Governance Best Practice Principles, all members of the board shall have knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the directors shall possess the following abilities: 1. Ability to make operational judgments 2. Ability to perform accounting and financial analysis 3. Ability to conduct management administration (including subsidiary management) 4. Ability to conduct crisis management 5. Knowledge of the industry 6. An international market perspective 7. Ability to lead 8. Ability to make policy decisions The company focuses on professional knowledge, skills and gender equality in the composition of the Board of Directors. All the 7 members of the Board are good at corporate management and operation, with international market view and capacityin

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			leadership and decision-making. The Company had achieved the first target of having more than half of directors experienced in relevant industries, including Dr. Chi Hsieh, Mr. Roger Wu, Mr. Allen Yen, Mr. Kuoliang Ho, and Mr. Golub Drakulovic. The second target is to have more than two-sevenths female directors in the Board. Now Dr. Yun Lin who is good at accounting and financial analysis are the only female director in the Board. This this will be one of the main considerations when selecting directors in the future. In addition, there are 3 Independent Directors in the Board (43% of the total) according to the Article of Incorporation. Two of them have 1~5 years of service seniority. One more independent director will be elected in 2021 annual shareholders meeting for filling up the vacancy. The Company plans to have at least 4 seats of Independent Directors in the Board and at least 2 of them will have tenure of less than 9 years. This goal is scheduled to be reached in the 17thand 18th term of the Board.

			The Pursuit	The Pursuit	The Pursuit	The Pursuit	The Pursuit
Yes	No		Summary Description
									Years of independent director 3~6years Within 3 years
		Diversific -ation Name	Nationality		Gender		Concurrent Employee		Years of independent director
		Allen Yen	R.O.C			M	V
		Kuoliang Ho	R.O.C			M
		RogerWu	R.O.C			M
		Chi Hsieh	R.O.C			M
		Yun Lin	R.O.C			F			3~6years
		Golub Drakulovic	U.S.A			M			Within 3 years
		(Vacancy)

		Diversific -ation Name	Operation Management	Leadership & Decision-making		Finance & Accounting	International Market perspective	Risk Planning		Trend analysis of the industry
		Allen Yen	V	V			V	V		V
		KuoliangHo	V	V			V	V		V
		RogerWu	V	V			V	V		V
		Chi Hsieh	V	V			V	V		V
		Yun Lin	V	V		V	V	V		V

Items for Evaluation				The Pursuit	The Pursuit	The Pursuit			Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No		Summary Description
			Golub Drakulovic	V	V	V	V	V
			`（`Vacancy`）`

(II) Has the Company voluntarily established other functional committees further to the establishment of a remuneration committee and auditingcommittee?		V	The Company has established the Remuneration Committee and the Audit Committee. The Company will establish different functional committees as required for the operation in the future.						Nil
(III) Has the Company established the rules and regulations and the methods for the evaluation of Board performance, and has it conducted performance evaluations at regular intervals each year?	V		The Board of the Company resolved to establish the “Regulations Governing the Evaluation of Board Performance” on 2019.03.19 thereby the performance of the Board will be subject to evaluation once annually. An external evaluation will also be conducted by an external professional and independent institutions or a team of scholars and experts once every 3 years. The company will conduct an external evaluation before the end of 2021. The evaluation result will be presented to the Remuneration Committee and the Board for reporting by the end of the 1stquarter of the next year. The Company has reported on the evaluation result of Board Performance in 2020 in the session of the						Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			Board held on 2021/3/17. The remuneration committee and the Board would base its nomination and determination of an individual director's remuneration on the evaluation results of performance of the board. According to the statistics compiled from the questionnaires responded by the Board, Directors, and members of the functional committees, the scoring falls within the range of 4.76~4.98 (5 for strongly agree, 4 for agree). The performance evaluation result indicated Outstanding.
(IV) Has the Company assessed the independence status of the CPAs at regular intervals?	V		The Audit Committee and the Board conduct a review of the CPAs once annually as required for assurance of their independence and suitability. Evaluation standards: There is no other financial interest and business relation between the CPAs and the Company except the service charge from financial and tax auditing and certification. The families of the CPAs shall also duly observe the requirement of independence. No penalty or demerit point has been given by the Financial Supervisory Commission. The rotation of the CPAs has also been made in conformity to related requirements. The evaluation result was presented to the Audit Committee and the Board on 2021.03.17. As	Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			evaluated, Mr. Yu-Kuan Lin and Tian-Yi Lee, CPAs of PwC Taiwan, meet the standards of independence and suitability of the Company and eligible of acting as the external auditors for the Company.
IV. Does the Company appoint competent and appropriate corporate governance personnel and corporate governance officer to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors, assisting directors’ compliance of law, handling matters related to board meetings and shareholders’ meetings according to law, and recording minutes of board meetings and shareholders’ meetings)?	V		The Finance and Stock Affairs Department is in charge of corporate governance related business under the supervision of the Corporate Governance Office of the Company. The primary functions are as follows: 1. Assist Independent Director and General Directors in performing their duties, providing required information and continuing education. (1) Provide board members the revision of the latest laws and regulations related to corporate governance once on board and updated regularly. (2) Provide companyinformation required by	Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			directors, and maintain smooth communication channel between directors and managers. (3) In accordance with the Corporate Governance Best Practice Principles, the Independent directors meet with the Chief Internal Auditor and the CPAs individually, to understand the development of the company’s financial business in the sessions of the Audit Committee quarterly. (4) Assist Independent Directors and General Directors in planning annual training schedule and arranging courses based on the company's industry characteristics and directors' background. 2. Assist the Board of Directors and Shareholders Meeting procedures and resolutions for legal compliance matters: (1) Report the corporate governance implementation status to the Board of Directors, Independent Directors, and Audit Committee. Confirm whether the company's shareholders meetingand the board of

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			directors meet the relevant laws and Corporate Governance Best Practice Principles. (2) Assist and remind directors to comply with the laws and regulations when conducting business or making formal board resolutions. (3) Review the release of material information of important resolutions of the Board with legality and correctness to guarantee the information symmetry of all investor. (4) Handle the performance evaluation of the board of directors and various functional committees, and report the results to the Board of Directors. 3. Draft the agenda of the Board of Directors and notify the directors 7 days in advance, convene the meeting and provide meeting materials. Remind the Directors if there are conflicts of interest issues of the resolutions. The minutes of the board of directors should be delievered within 20 days after the meeting. 4. Handle the registration of shareholders meetings’ date, prepare meetingnotices,meeting

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			handbooks, and meeting minutes. Handle the company certificate registration when there are amendments of the articles of association or the re-election of directors and so on…. 5. Take care of company information disclosure and public relations maintenance. Communicate with investors through institution investor conference and annual shareholders’ meetings. Update the company website irregularly. Investors can know the company's financial, business, corporate governance and other related information in time in order to protect their rights and interests. 6. Assist in the implementation and promotion of all corporate governance related work in the company. The Board assigned MTI’s CFO, Ms. Hualin Chi to be the Corporate Governance Officer on March 19, 2019. She also acts as the secretary of the Board who is in charge with the duties of supervising the pursuit of corporate governance. Ms. Chi has been in a managerial position for more than three years in public company to handle financial affairs. The Corporate Governance Officer has completed 18 hours courses within her firstyear. Since2021,there

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			will 12 hours of continuing education courses per year for her. 2020 education courses:2020/1/7 Accounting Researchand Development Foundation The impact and response of the newly publicized "Labor Incident Act" on enterprises
V. Has the Company established channels for the communications with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), and the section for the shareholders on the official website of the Company to respond to all concerns of the stakeholders on corporate social responsibility?	V		The Company has set up a section for the stakeholders at its official website at to provide related information and methods of contact for relevant departments so that the stakeholders can make inquiry and express their opinions. This helps the Company to understand the needs of the stakeholders and could respond to their needs and handle the concerned issues of stakeholdersproperly.	Nil
VI. Has the Company appointed a professional share registration and investors service agent for handling matters pertaining to the Shareholders’ Meeting?	V		The Company has appointed a professional stock affairs agent, the “Stock Affairs Department of Taishin International Bank” for handling share transfer the investor services.	Nil
VII. Disclosure of Information (I) Has the Company installed a website for the disclosure of information on financial position and operation, as well as corporate governance?	V		The Company has installed its official website in Chinese and English at for the disclosure of the financial and business information, and the pursuit of corporate governance of the Company from time to time.	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
(II) Has the Company adopted other means for disclosure (such as the installation of a website in the English language, appointment of designated persons for the collection and disclosure of information on the Company, the implementation of ae spokesman system, and videotaping institutional investor conferences)? (III) Does the Company announce and report the annual financial statements within two months after the end of the fiscal year, and announce and report the first, second, and third quarter financial statements as well as the operating status of each month before the prescribed deadline?	V	V	As always, the Company spares no effort in the timely disclosure and transparency of information. Related measures are: installation of an official website in Chinese and English with routine updates, designated personnel have been appointed to collect and disclose related information on the Company, a perfect system of spokespersons and a window for handling investor relations, holding institutional investors conference and colloquium from time to time for the better protection of the right of the investors. The Company has announced and declared its annual report within 3 months after the end of the fiscal year, and has announced and declared the quarterly reports in Q1, Q2, and Q3 within 45 days after the end of each quarter in the fiscal year, and the monthly business report by the 10th day of the next month	Nil The Company has announced and declared financial reporting and business report in accordance with Article 36 of the Securities and Exchange Act.
VIII. Is there any other essential information that would help us to understand the pursuit of corporategovernance(includingbut not	V		 Employee rights and employee concerns: 1. No discrimination against race, social class, nationality,religion, physical impairment,	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights, the continuing education of the directors and supervisors, the pursuit of a risk management policy and standard of risk assessment, the pursuit of a customer policy, and professional liability insurance coverage for the directors and supervisors)?			gender, sexual preference, union members, political affiliation or age in the selection and employment of personnel. 2. Prohibition of employing forced labor and minors. 3. Establishment of an overall remuneration policy and framework under applicable laws governing labor force to attract, motivate, reward and keep good people. 4. Through channels for communication were provided for the employees in expression of constructive opinions and protection of their employment right, and provide them a work environment free of sexual harassment with proper preventive measures, corrective action, and punishment for the offenders.  Investor relation: The Company values investor relations and has established a viable spokesperson system and window for handling investor relation. In addition, the Company also holds institutional investors conference and colloquium from time to time for the timely disclosure and transparencyof information for the

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			protection of the right of the investors.  Supplier relation: The Company has a strict system for the evaluation of suppliers. Once a suppler relation is established, the Company seeks to maintain such relation in the long run in a stable development for the assurance of smooth production and sale.  Maintaining stakeholder rights: The Company seeks to maintain positive cooperative relation with the stakeholders for the protection of the rights through reliable and effective communications.  Continuing education of the Directors of the Company: for further information, visit MOPS.  Risk management policy and the pursuit of the standard for risk measurement: The Company takes preventive measures to manage risk. In addition to a viable internal control system, the Company examines the effectiveness of the system through internal control reguarly. The Company has taken related insurances like property insurance, product transportation and liabilityinsurance,account receivable insurance,

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			and employee loyalty insurance to avoid risks.  The pursuit of customer policy: Under the policy of customer first, the Company provides customization, design and development, and mass production services for the customers. The Company has been accredited with the ISO9001/TL9000, ANSI/ESD S20.20, ISO/IEC 17025, ISO14001, ISO45001, CNS45001, AS9100, IATF 16949 and management systems for assurance of the highest standard in product design, manufacturing, and production process to the full satisfaction of the customers.  The professional liability insurance for the Directors of the Company: The Company has taken professional liability insurance for the protection of the directors. For further information, visit the MOPS.  The Company established “Procedure for the Processing of Inside Information in Material Aspects” to prevent inappropriate information leakage and ensure the consistency and accuracy published information. This procedure can be find at the Company’s website.

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
IX. Corrective action taken in response to the result of the Corporate Governance Evaluation conducted by the Corporate Governance Center of Taiwan Stock Exchange Corporation, and the priority of action on issues pending for corrective action: In the 7th Corporate Governance Evaluation, MTI ranked in top 6%~20% among all TSE listed companies, and in top 6%~10% among all TSE &OTC listed companies with market cap between NT$5~10 billion. In 2020, MTI conducted various internal education and training to enhance the concept of corporate governance. Furthermore, we tried hard to integrate the implementation of the company's intellectual property management and report it to the board of directors. The priority in 2021 will be to arrange regular schedule for Institutional Investor Conference and Seminar. In addition, the company will arrange online training programs to foreign directors under the impact of Covid-19 epidemic.

IX. Corrective action taken in response to the result of the Corporate Governance Evaluation conducted by the Corporate Governance Center of Taiwan Stock Exchange Corporation, and the priority of action on issues pending for corrective action: In the 7th Corporate Governance Evaluation, MTI ranked in top 6%~20% among all TSE listed companies, and in top 6%~10% among all TSE &OTC listed companies with market cap between NT$5~10 billion. In 2020, MTI conducted various internal education and training to enhance the concept of corporate governance. Furthermore, we tried hard to integrate the implementation of the company's intellectual property management and report it to the board of directors. The priority in 2021 will be to arrange regular schedule for Institutional Investor Conference and Seminar. In addition, the company will arrange online training programs to foreign directors under the impact of Covid-19 epidemic.

(IV) The function of the Remuneration Committee:

1. Profiles of the members of the Remuneration Committee

Identity	Condition Name	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Conform to the status of independence (Note)	Number of public companies that the Independent Director also holds the position as independent director in.	Remark
		In the capacity of a tutor or above in a public or private school of higher education in the disciplines of commerce, law, finance, accounting, or any other areas of specialization required for the business operation of theCompany.	A professional or technician who has passed the national examination for professionals like court judge, prosecutor, lawyer, certified public accountant, or any other expertise required for the business operation of the Company with the issuance of a certificate of completion.	Work experience in commerce, law, finance, accounting, or a specializatio n required by the business operation of the Company.	1	2	3	4	5	6	7	8	9	10
Independent Director	C. L. Liu		-												1	Passed away on Nov 7, 2020
Independent Director	Golub Drakulovic	-	-												0	Took office on Dec 17,2020
Independent Director	Yun Lin		-												1	-
Others	Chi-Yuan Chang	-	-												0	-

Note: If the members met the following conditions in the period of 2 years prior to the assumption of office and within the term of office, put a “  ” in the appropriate box representing the specific condition.

(1) Not an employee of the Company or its affiliates.
(2) Not a Director or a Supervisor of an affiliate of the Company (except for an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).
(3) Not holding 1% or more of the outstanding shares issued by the Company by the person and its spouse, and children who are minors, or in the name of a third party, or, a shareholder among the top 10 shareholders and who is a natural person.
(4) Not a spouse, kindred within the 2[nd] tier under the Civil Code, or kindred by sanguinity within the 3rd tier under the Civil Code as mentioned in the preceding 3 paragraphs.
(5) Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds 5% or more of the total number of issued shares of the company, ranks as of its top five shareholders, or has representative director(s) serving on the company’s board based on Article 27 of the Company Law.
(6) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (except for an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).
(7) Not a director, supervisor, or employee of a company of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the company’s chairman or CEO (or equivalent) (except for an Independent Director of the Company or the parent company, subsidiaries which seat was established in accordance of this law or applicable laws of relevant host countries).
(8) Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the company.
(9) Other than serving as a compensation committee member of the company, not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof, and the service provided is an “audit service” or a “non-audit service which total compensation within the recent two years exceeds NTD500,000”.
(10) Not been a person of any conditions defined in Article 30 of the Company Law.

Information on the function of the Remuneration Committee

The Remuneration Committee of the Company is consisted of 3 members. Tenure of the members for the 4[th] Remuneration Committee: 2019.07.03 to 2022.06.18. The Remuneration Committee has convened three times (A) in 2020 with the attendance of the members specified below:

Title	Name	Actual attendances (B)	Attended by proxy	Actual attendance rate (%) (B/A)	Remark
Convener	C. L. Liu	3	0	100	-
Member	Yun Lin	3	0	100	-
Member	Chi-Yuan Chang	3	0	100	-
Additional information: I. If the Board declines to accept or revise the recommendations of the Remuneration Committee, specify the meeting date, the session, the content of the motion, the resolutions of the Board, and the response of the Company to the opinions of the Remuneration Committee: Not applicable. II. If a specific member of the Remuneration Committee has adverse or qualified opinions on the resolutions of the Remuneration Committee on record or in written declaration, specify the meeting date, the session, the content of the motion, the opinions of all members, and the response to the opinions of the members: Not applicable.

Motions for discussion by the Remuneration Committee and resolutions: The following has been reviewed or approved by the members with no objection, and reported to the Board for final approval.

final approval.
Date Session 2020.03.17 The 3thSession of the 4thRemuneration Committee 2020.05.06 The 4thSession of the 4thRemuneration Committee 2020.08.06 The 5thSession of the 4thRemuneration Committee	Major resolutions
	1. Recommendation for the remunerations to employees and Directors in 2019.
	1. Recommendation for the remuneration and salaries to the new managers in 2020.
	1. Recommendation for the remuneration to the by-elected director in 2020.

(V) The performance of corporate social responsibility:

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
I. Does the Company follow materiality principle to conduct risk assessment for environmental, social and corporate governance topics related to company operation, and establish risk management related policy or strategy?	V		The Company has conducted risk assessment on environmental, social, and corporate governance issues pertinent to the operation of the Company, followed materiality principle to conduct risk assessment, and established risk management related policy or strategy. Please refer to page 63 to 65 note1. The company has published the Corporate Social ResponsibilityReport.	Nil
II. Has the Company established a designated full-time (or part-time) body or position for the advocacy of corporate social responsibility administered by the senior management at the empowerment of the Board and reporting to the Board regularly?	V		For vitalizing the management of corporate social responsibility, the ESH Department of the Company is the designated (part-time) body for the advocacy of corporate social responsibility, and is responsible for the proposal of the corporate social responsibility policy, system, or action plans, and reports to the Board the performance once annually. (Reported on March 17,2020) The Company compiles the Corporate Social Responsibility Report annually for reporting to the stakeholders (including the customers, employees, suppliers, participation in social charity and environmental protection) on the operations, environmental protection, corporate social responsibility and other non-financial strategy and events. The content was posted at the official website of the Company and MOPS.	Nil
III. Environmental Topic (I) Has the Company established an appropriate environmental management system relevant with the specific nature of its industry?	V		The Company was accredited with the ISO 14001 standard by a third-party accreditor in 1999 and has conducted internal and external audits annually.	Nil

Items for Evaluation			The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
(II) Has the Company made efforts in the efficient use of all resources, and used renewable materials to mitigate the impact on the environment? (III) Does the Company evaluate current and future climate change potential risks and opportunities and take measures related to climate related topics? (IV) Does the Company collect data for greenhouse gas emissions, water usage and waste quantity in the past two years, and set energy conservation, greenhouse gas emissions reduction, water usage reduction and other waste management policies?	V V V		The Company demands the R&D personnel to start the evaluation from the engineering design stage for assurance of friendly to the environment, including the carbon footprint, recycling rate, the use of hazardous substances in sequential analysis. In dealing with the potential risk and opportunities deriving from climate change on the enterprise at present and in the future, MTI has conducted evaluation on measures for energy (water) saving, and compiled statistics on the volume of greenhouse gas emission. Please refer to page 66 note2. The data for greenhouse gas emissions, water usage and waste quantity in the past two years: Unit:tonne			Nil Nil Nil
			Year Item	2019	2020
			greenhouse gas emissions	5,683	5,240
			waterusage	46,300	45,085
			waste quantity	22.3	20.2
			Energy savings and carbon reduction strategy: 1. Assurance of power shut off at idle zones to reduce waste of electrical energy. 2. Flexible adjustment of the air-conditioning and the number of ice machine for functioning and loading in line with seasonal changes and the environmental conditions.

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			Water saving strategy: 1. Collection of rainwater for irrigation. 2. Efficient use of water (including household use and industrial use) 3. Fitting of water saving devices to the taps. Water consumption objective: the average monthly total consumption of water was 3,757 units, which is lower than the target level of 3,858 units. The energy saving strategy is shown below: Waste reduction strategy: 1. The lighting of the underground parking lot is controlled by sensor switch. 2. The lighting of the new production line was changed from T8 fluorescent tubes to LED tubes. Energy saving record: the average monthly power consumption was 588,167Kwh, which is lower than the target level by 609,570 Kwh.
IV. Social Topic (I) Does the Company set policies and procedures in compliance with regulations and internationally recognized human rights principles?	V		MTI duly observes the principles of several international conventions of human rights such as the “Universal Declaration of Human Rights”, “The United Nations Global Compact”, “The OECD Declaration and Decisions on International Investment and Multinational Enterprises”, and the “UN Guiding Principles on Business and Human Rights” to institute the policy for the protection of human rights such as freedom of association, collective bargaining right, concern for the	Nil

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			social vulnerable groups, prohibition of child labor, elimination of forced labor of any form, and elimination of discrimination against employment so that there is no discrimination against gender, race, social class, age, marital status and family condition in the human resources policy. Related declarations and action plans are inscribed in the Corporate Social Responsibility Report. In addition, MTI also receive the training provided by the Ministry of Labor on the SDGs of the United Nations, and spares no effort to cultivate amicable labor-management relation and a proper balance between work and family. The substantive measures taken include: `•`Arrangement of safe and healthy work environment `•`Elimination of unlawful discrimination and assurance of equal opportunity of employment `•`Prohibition of child labor `•`Prohibition of forced labor `•`Development of a favorable environment for communication and liberal mode of management. `•`Assistance to employees in keeping physical and mental health and maintaining balance between work and living. `•`Review and evaluation of related systems and actions at regular intervals. `•`Arrangement of education and training pertinent to respect of human rights and occupationalsafety.

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			In addition, MTI is committed to provide a friendly workplace environment and create positive labor - management relations. In this respect, MTI regularly conducts multifaceted education trainings(including education training and employee activities related to human rights) to ensure the physical and mental health of employees with work-life balance: (1)New employee training: MTI always conducts training for new employees, not only to familiarize new employees with the company business but also to promote the protection of employees’ rights and human rights, including the procedure of employee complaint channels, sexual harassment, and workplace bullying complaint. Hope to protect the rights and interests of employees the best. In 2020, more than 60 indirect personnel and more than 360 direct employees of the production line had completed the training. (2) Supervisor communication and care skills training: In order to help employees to interact well with supervisors and communicate smoothly, MTI regularly arranges supervisor function training to improve supervisors' skills in caring for subordinates, empathy, work guidance, and work problem handling to create a friendly team and workplace culture. There were five events in 2020, with nearly 200 participating supervisors and senior employees. (3)Health promotion activities: In order to help the good health of employees, MTI conducted 10 health promotionactivitiesin 2020,including ultrasound

Items for Evaluation			The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			examinations, bone density examinations, intraocular pressure tests and influenza vaccine administration activities. The total cumulative number of participants is close to 500 employees. (4)Stress relief activities: In order to help employees to remove the pressure from work and life, MTI held 5 stress relief and parent-child activities in 2020, including hand-made antibacterial hand sanitizer, hand-made essential oil roll-on bottles, and hand-made paper Clay, etc., with a total cumulative participation of more than 300 employees. (5) In-plant safety and health training: In order to equip employees with hazards and safety-related knowledge and response capabilities, MTI conducted 42 training courses in 2020, including general safety and health, general hazard knowledge training, fire safety training, waste classification and management training. There were nearly 1,000 employees participate.
(II) Has the Company established appropriately managed employee welfare measures (include salary and compensation, leave and others), and link operational performance or achievements with employee salary and compensation?	V		MTI provides a wide array of benefits for the employees, including the subsidy of tourist travelling every year, subsidy in matrimonial, bereavement and maternity occasions, payment for hospitalization due to injury or illness, a variety of social activities, gifts for the Mid-Autumn Festival and Dragon Boat Festival, Labor Day celebration and citation of outstanding employees, and employee canteen. There is also an emergency aid program and subsidyin severe disasters.	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
(III) Has the Company provided a safe and healthy work environment for the employees, and related education on occupational safety and health for the employees at regular intervals?	V		The Company was accredited with the ISO 14001, ISO45001 and CNS45001 environmental safety and health management system, and has provided health examination and organized seminars on occupational safety and health for the employees annually.	Nil
(IV) Has the company provided effective training in career planning for the employees?	V		According to the rules and regulations of the Company governing education and training, all employees have mapped out their training blueprint by nature of their assigned duties, including orientation, professional qualification training, management and general training, qualityand environmental safetytraining.	Nil
(V) Does the Company’s product and service comply with related regulations and international rules for customers’ health and safety, privacy, sales, labelling and set policies to protect consumers’ rights and consumer appeal procedures?	V		This item of evaluation is not applicable, as MTI is not a manufacturer of end products.	Nil
(VI) Does the Company set supplier management policy and request suppliers to comply with related standards on the topics of environmental, occupational safety and health or labor right, and their implementation status?	V		In the procurement procedure, MTI demands all suppliers to duly observe related rules and regulations governing environmental protection and occupational safety and health of the Company, and conduct audits on environmental protection and occupational safety and health at regular intervals of the year for assurance of compliance with the rules and regulationsgoverning	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variations from the Corporate Governance Best Practice Principles for TWSE Listed and TPEx Listed Companies and the reasons.
	Yes	No	Summary Description
			environmental protection and occupational safety and health of the Company. There is no defects found in the audits of environmental protection and occupational safety and health of the Company which may violate applicable laws.
V. Does the Company refer to international reporting rules or guidelines to publish CSR Report to disclose non-financial information of the Company? Has the said Report acquire 3rd certification party verification or statement of assurance?		V	MTI follows the instructions of GRI in compiling its Corproate Social Responsibility Report for disclosure of non-financial information. This report is posted at the official website of the Company and also the MOPS website for the viewing of the public. The CSR Report has not be accredited by a third party for validation or guarantee.	MTI has not been accredited by a third party for validation or guarantee of its CSR Report.
VI. Whether the Company has instituted the corporate social responsibility best practice principles in accordance with the “Corporate Social Responsibility Best Practice Principles for the TWSE Listed and TPEx Listed Companies,” specify the implementation of these principles and the variation with the Corporate Social Responsibility Best Practice Principles for the TWSE/TPEx-listed Companies: The Company has established the Corporate Social Responsibility Best Practice Principles. There is no significant difference between the Corporate Social Responsibility Best Practice Principles of the Company and the practice of corporate social responsibility.
VII. Is there any other essential information that helps to understand the performance of corporate social responsibility: Further information is accessible from the official website of the Company

VI. Whether the Company has instituted the corporate social responsibility best practice principles in accordance with the “Corporate Social Responsibility Best Practice Principles for the TWSE Listed and TPEx Listed Companies,” specify the implementation of these principles and the variation with the Corporate Social Responsibility Best Practice Principles for the TWSE/TPEx-listed Companies: The Company has established the Corporate Social Responsibility Best Practice Principles. There is no significant difference between the Corporate Social Responsibility Best Practice Principles of the Company and the practice of corporate social responsibility.

Note1:

Note1:
Major issues	Risk assessment items	Risk management policies or strategies	Related company internal regulations
Environment	Environmental protection and ecological conservation	1. The company bases on the environmental and occupational health and safety policies of “Compliance with law and regulations, emphasis on communication, education and training, continuous improvement, prevention, and sustainable development” to forcefully promote RoHS and WEEE related work in the factory and to guide the suppliers to implement it synchronously. 2. In addition, for the management of conflict minerals, the company does not directly purchase metal materials and does not use cassiterite (Sn), wolfram (W), tantalum (Ta), gold (Au), and other metals from the Democratic Republic of Congo and surrounding countries and regions. Also, the company values the impact of environmental pollution on the overall living environment; therefore, audits the suppliers regularly and demands the identified nonconformities to be corrected accordingly. 3. The company strives to protect the environment and respond to green and clean production. In addition to passing and obtaining ISO 14001 environmental management system verification and certificates, the company also adopts measures, such as, process management and formulating environmental management plans, to reduce pollution emissions and environmental impacts.	1. The CEO has the environmental and occupational health and safety policies signed, announced, and implemented. 2. The company has formulated MTI-M0028 procurement management operating procedures, which have been implemented accordingly. 3. The company has formulated the MTI-M0087 Environmental and Occupational Health and Safety Management Manual, which has been implementedaccordingly.
Society	Occupational safety	The company obtained the ISO 45001 and CNS 45001 occupational safety and health management system verification and certificates. Beside comply with local occupational safety and health-related law and regulations, the company promises to lower the risk of manufacturing processes, facilities, and activities on the occupational health and safety risks of employees, suppliers, contractors, by-standers, and related groups. At the same time, formulates corresponding occupational safety and health management documents and plans for implementing related work in the factory for securing a safe operating environment in thefactory.	The company has formulated the MTI-M0087 “Environmental and Occupational Health and Safety Management Manual,” which has been implemented accordingly.
	Product Safety	1. The company actively promotes green products and green production in response to international trendsand customer needs.The companyhasalsoimplementedthe	Formulate MTI-M0141 green productverificationoperating

Major issues	Risk assessment items	Risk management policies or strategies	Related company internal regulations
		concept and action of green procurement into the supply chain in order to prohibit the use of toxic and hazardous substances; also, regularly reviews the performance of suppliers. 2. The company has established a “Green Product (GP) management system” and has incorporated it into the existing management system. The company has the contact window of each department integrated to formulate product specifications and related operating procedures; it also assists suppliers in establishing their green supply chain system to complete the introduction of the lead-free manufacturing processes. 3. The company, through product life cycle management, introduction of green innovative design, product environment-friendly design, enhancement of the green supply chain system, and regular customer satisfaction surveys, has conducted a customer questionnaire survey with a focus on the product design expertise, quality stability, urgent order support, customer complaint handling, prompt information feedback, and communication. Analyze the problems and needs responded by customers with the corresponding improvement measures implemented, continuously improve the company’s product quality, after-sales service, and customersatisfaction;also,furtherenhancethe goodrelationship betweenparties.	procedures, MTI-M0141-01 Green Product RoHS Inspection Operation Specification, and MTI-M0145 Green Product Operation Manual, which have been implemented accordingly.
Corporate Governance	Society economy, and legal compliance	Ensured all personnel and operations of the company actually comply with relevant law and regulations by establishing an internal corporate governance mechanism and implementing internal control.	Operational risk management standards for companies, boards of directors, etc.: (1) Articles of Incorporation (2) Board Meeting Procedure and Rules (3) Measures of the Election of directors and supervisors (4) Procedures for Performance Evaluation of Board of Directors Meeting

Major issues	Risk assessment items	Risk management policies or strategies	Related company internal regulations
			(5) Shareholders Meetings Rules of Procedure (6) Audit Committee Charter (7) Remuneration Committee Charter Rules Governing Financial Risks: (1) Procedures for Handling Acquisition and Disposal of Assets (2) Procedures for Loaning of Funds (3) Regulations Governing Making of Endorsements / Guarantees (4) Corporate Governance Best Practice Principles (5) Guidelines for the Adoption of Codes of Ethical Conduct (6) Ethical Corporate Management Best Practice Principles (7) Corporate Social Responsibility Best Practice Principles (8) Procedures for Handling Material Inside Information Rules Governing Information Security Risk: (1) Trade SecretsRegulations

Major issues	Risk assessment items	Risk management policies or strategies	Related company internal regulations
			(2) Intellectual Property Rights Regulations

Note2:

item	Climate Risk	Potential Financial Impact	Climate Opportunity	Potential Financial Impact	Potential Financial Impact
1	Natural Disaster (drought)	The water lowering of the reservoir result in production affect and the risk of financial losses	Strengthen resilience to natural disasters	Reduce the probability of operation interruption and the risk of losses	Implement water-saving control measures for toilets/pantry rooms, and set water-saving goals
2	The goal and commitment of CO2 Reduction	Increase the cost of carbon-reduction equipment installation and operation	Energy-Saving equipment purchase and subsidies	Reduce the cost of equipment purchase and operation	Purchase energy-saving lamps and flexibly adjust the number and load of air-conditioning equipment based on environmentalconditions
3	Temperature rise	Energy consumption and carbon emission increased	Promote Energy-Saving and green manufacturing activities	Save energy costs	To reduce the indoor temperature and to save electricity and load for air-conditioning equipment, the windows of the production lineare covered withcurtains
4	Cost of developing low-carbon energy saving products	Increase the cost of developing low-carbon energy-saving products	Develop or increase Energy-Saving productsand services	Develop or increase Energy-Saving products and services	Invested in the development of Energy-Saving products

(VI) The Practice of Ethical Corporate Management:

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
I. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures (I) Does the Company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team?	V		Integrity” has always been a vital part of the corporate culture of MTI, which is also a critical part of its core value. As always, MTI lives up with high moral standard and requests all employees to follow the policy of integrity in all activities. MTI has instituted the “Corporate Governance Best Practice Principles”, “Ethical Corporate Management Best Practice Principles”, “Ethic Code of Conduct”, and the “Ethical Corporate Management Procedure and Code of Conduct” for demonstrating its intent of assuming corporate social responsibility and the code of corporate ethics, and resolved by the Board. MTI demands all employees, including the members of subsidiaries to observe and preserve high moral standard, reputation of the Company and abide applicable legal rules as essential responsibilities.	Nil
(II) Whether the Company has established an assessment mechanism for the risk of unethical conduct; regularly analyzes and evaluates within a business context, the business activities with a higher risk of unethical conduct; has formulated aprogram toprevent unethical	V		For a better understanding of ethical practices among the employees from time to time, MTI has instituted separate rules and regulations governing anti-corruption, anti-harassment/discrimination, environmental protection, compilation of financial statements/internal control, insider trade, protection of intellectualpropertyrights, protection of	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
conduct with a scope no less than the activities prescribed in paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?			confidential information, protection of personal information, and keeping and destruction of documents. Further to posting related internal rules and regulations at the intranet of the Company for the viewing of the employees at any time, MTI also promote the persistence of the Company of such core value through training, poster, and a wide array of channels. MTI elaborates its ethical corporate management policy and the commitment of the realization of its corporate policy by the Board and the management through annual report, corporate website, and the CSR Report.
(III) Whether the Company has established relevant policies that are duly enforced to prevent unethical conduct, provided implementation procedures, guidelines, consequences of violation and complaints procedures, and periodically reviews and revises such policies?	V		For assurance of strong demand for compliance with applicable laws in the conduct, the procedure for reporting illegal acts and response procedure are explicitly stated in related rules and regulations. MTI also provides the system for complaint of any unethical practices to impose strict punishment and take legal action timely against any unethical practices in operation. In addition, MTI demands all employees to read related laws and internal code thoroughly and make the right business and moral judgment. This demand extends to the subsidiaries of MTI that the same standard is applied in compliance and legal matters. The internal audit function of MTI plays a critical role in matters pertaining to compliance with applicable laws and the ethic code of conduct. This functional unit conducts audits in	Nil

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
			accordance with the annual audit plans approved by the Board, and report to the Board and the management the audit findings and subsequent corrective action plans for the best result of audits.
II. Implementation of Ethical Corporate Management (I) Has the Company assessed the record of the counterparties in business integrity, and has it specified the clause of ethical practices in business transactions in the contracts binding the Company and the counterparties?	V		The clause of business ethics has been inscribed in all contracts binding the Company and the suppliers. It is explicitly stated that suppliers should engage in business activities fairly, with transparency, integrity and lawfully. There shall be no bribery or offering of commission for private interest, and no damage to the interest or image of the Company. An undertaking of integrity and confidentiality has been signed for declaration annually. The internal auditors will examine on a selective basis for assurance of no bribery. The Company expects and takes action for assist customers, suppliers, and other business partners to understand and recognize the moral standard and culture of MTI in business.	Nil

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
(II) Whether the Company has set up a unit which is dedicated to promoting the Company’s ethical standards and regularly (at least once a year) reports directly to the Board of Directors on its ethical corporate management policy and relevant matters, and program to prevent unethical conduct and monitor its implementation?	V		For the proper pursuit of ethical corporate governance, the HR Department of the Company is responsible for the amendment, interpretation, inquiry service and notification of the content of related operation procedures and code of conduct, and will conduct inspection and follow up with the development in accordance with the “Ethical Corporate Management Procedure and Code of Conduct.” A status report on the operation of the year will be presented to the Board in March of the next year. (Reported on March 17,2021) In addition, the Auditing Committee of MTI has instituted the procedures for the supervision of accounting, internal audits, and financial reporting for assurance of viable internal control procedure and reliability	Nil
(III) Has the Company made policies for the prevention of the conflict of interest, and provided the channels for expressions, and has it properly implemented this system?	V		The Company posted the “Corporate Governance Best Practice Principles,” “Ethical Corporate Management Best Practice Principles” and the “Ethical Code of Conduct” at its official website, and educated the employees of ethical corporate management procedure and code of conduct at regular intervals. Proceed in conformity to the requirements of the “Ethic Code of Conduct” and “Ethical Corporate Management Best Practice Principles.” In case of the conflict of interest in the course of business conduct,employees should report to the	Nil

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
			supervisor or recuse from the transaction to avoid the conflict of interest. The principle of recusal is in effect at the Board on motions entailing a conflict of interest. Accordingly, the Directors concerned will recuse from the discussion and voting of the motion.
(IV) To implement relevant policies on ethical conducts, has the Company established effective accounting and internal control systems, audit plans based on the assessment of unethical conduct, and have its ethical conduct program audited by internal auditors or CPA periodically?	V		The Company established its accounting system in accordance with the Securities and Exchange Act, Company Act, Business Entities Accounting Act, Criteria for the Compilation of Financial Statements by Public Companies, and the IFRS, IAS, IFRIC and SIC recognized by Financial Supervisory Commission with reference to the reality of business operation of the Company. The Company also retains CPAs to audit the financial statements. The Company established its internal control system in accordance with applicable legal rules including the “Regulations Governing the Establishment of Internal Systems by Public Companies” and acts accordingly. The audit function of the Board also examines the accounting system and the internal control system for assurance of compliance, and report to the Board of the findings.	Nil

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
(V) Has the Company provided internal and external trainings on topics of ethical corporate management at regular intervals?	V		Law and compliance education constituted a vital part of the training of the Company. Through the routine education and training on legal topics, the employees could understand the latest regulatory environment and applicable laws and be more determined of their promise to ethical corporate management. As for the suppliers or contractors, the Company will invite them to take part in the education of the ethic code of conduct of the Company for assurance of their compliance. The Company held internal and external training (including the compliance with applicable laws governing ethical corporate management, the management of occupational safety environment, accounting system, internal control and the risk of information security). Due to the impact of COVID-19, the number of classes was less than that of last year, and most of them were in the form of group discussions. 1. Integrity training for new employees: To let employees be aware of integrity management regulations and policies, the Company regularly held relevant trainings for new employees and reminded employees to abide strictly. In 2020, more than 60 indirect personnel and more than 360 direct employees of the production line have completed the training.	Nil.

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
			2. In-plant safety and health training: In order to equip employees with hazard and safety-related knowledge and response capabilities, MTI held 42 trainings in 2020, including general safety and health, hazard general knowledge training, fire safety training, waste classification and management training, etc. There were total nearly 1,000 employees attened. 3. Accounting system and internal control: The company's accounting and auditors regularly participate in relevant education trainings. In 2020, 4 employees participated in a total of 58 hours. 4. Information security risk: The company's information personnel regularly participate in system security, network security and information security maintenance and other related trainings. In 2020, 5 employees participated in a total of 48 hours.
III. The Function of the Reporting System of the Company (I) Has the Company established substantive systems for reporting and rewards for facilitating the reporting of unethical practices, and appointed designated persons for dealing with thepersons beingreported?	V		The Company has established an independent mail box and hotline for reporting of unethical practices. MTI encourages whistle blowing on unethical practices or illicit behaviors by insiders and outsiders. If the employees realize suspected unethicalpractices,report to the supervisors,head of human	Nil

Items for Evaluation			The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
			resource or report through the established channels of filing complaints.
(II) Has the Company established standard operation procedures for investigation of reports on unethical practices and related mechanisms for confidentiality of the procedures?	V		The Company has established independent mail box and hotline for reporting of unethical practices and misconduct at the official website and intranet of the Company for both the insiders and the outsiders. The Company takes caution in protecting the identity of the whistle blower, the content of complaint and subsequent investigation in strict confidence, and has explicitly stated in relevant rules and regulations. There was no formal complaints on violation of ethical corporate management ever filed through the mechanisms that led to investigation, action, and settlement in 2020.	Nil
(III) Has the Company established related measures for the protection of the informants from undue treatment?	V		The personnel responsible for handling reports on unethical practices and misconduct shall declare in writing of keeping the identity of the informants and the content of the complaints in confidence. Any kind of reprisal is strictly prohibited. The Company will do the best to to protect the whistle blower, and this has been stated explicitly in the internal regulations.	Nil

Items for Evaluation	The Pursuit	The Pursuit	The Pursuit	Variation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies
	Yes	No	Summary Description
IV. Intensification of Disclosure Has the Company disclosed the content of its ethical corporate management best practice principles on its official website and MOPS, and the results of implementation?	V		The Company has established an official website in Chinese and English for the disclosure of overview, basic data, financial and business information, including the content of ethical corporate management best practice principles and the results of implementation of the Company in real-time and in transparency. Disclosure will also be made at MOPS and company’s official website at regular intervals.	Nil
V. If the Company has established the ethical corporate management best practice principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE Listed and TPEx Listed Companies,” specify the state of implementation and the variation with the “Ethical Corporate Management Best Practice Principles for TWSE Listed and TPEx Listed Companies:” The Company has established the “Ethical Corporate Management Best Practice Principles” and the “Ethic Code of Conduct” and the practice of which is no different from the “Ethical Corporate Management Best Practice Principles for TWSE Listed and TPEx Listed Companies.”
VI. Any other essential information that helps to understand the implementation of ethical corporate management of the Company: The Company discloses information on MOPS and company’s official website in materiality in real-time to the public and holds institutional investors conference and seminar from time to time. This is the manifestation of the sense of responsibility of the Company to the investors and the shareholders.

(VII) The method of inquiry of the ethical corporate governance best practice principles and related rules and regulations instituted by the Company: The ethical corporate governance best practice principles and related rules and regulations instituted by the Company were disclosed at the official website of the Company as well as MOPS.

(VIII) The Implementation of the Internal Control System:

1. Declaration of Internal Control

==> picture [437 x 612] intentionally omitted <==

----- Start of picture text -----

Microelectronics Technology Inc.
Declaration of Internal Control System
Date: 2021.03.17
MTI has conducted internal audit in accordance with its Internal Control System covering
the period from January 1 to December 31, 2020, and hereby declares as follows:
I. The company acknowledges and understands that, the establishment, enforcement
and preservation of internal control system is the responsibility of the Board and
the managers and that the company has already established such system. The
purpose it to reasonably ensure the effect and efficiency of operation (including
profitability, performance and security of assets), the reliability of financial
reporting and the compliance with relevant legal rules.
II. There is limitation inherent to the internal control system, no matter how perfect the
design. As such, effective internal control system may only reasonably ensure the
achievement of the aforementioned goals. Further, the operation environment and
situation may vary, and hence the effectiveness of the internal controls system.
The internal control system of the company features the self-monitoring
mechanism. Once identified, any shortcoming will be corrected immediately.
III. The company judges the effectiveness of the internal control system in design and
enforcement in accordance with the “Criteria for the Establishment of Internal
Control System of Public Offering Companies” (hereinafter referred to as “the
Criteria”). The Criteria is instituted for judging the effectiveness of the design and
enforcement of internal control system. There are five components of effective
internal control as specified in the Criteria with which the procedure for effective
internal control are composed by five elements, namely, 1. Control environment,
2. Risk Evaluation, 3. Control Operation, 4. Information and Communication, and
5. Monitoring. Each of the elements in turn contains certain audit items, and shall
be referred to the “Criteria” for detail.
IV. The company has adopted the aforementioned internal control system for internal
audit on the effectiveness of the design and enforcement of the internal control
system.
V. Based on the aforementioned audit findings, the company holds that it has
reasonably preserved the achievement of the aforementioned goals of internal
control (including the monitoring over the subsidiaries), including the
effectiveness and efficiency in operation, reliability in financial reporting and
compliance with relevant legal rules, and that the design and enforcement of
internal control are effective, as of December 31 2020.
VI. This statement of declaration shall form an integral part of the annual report and
prospectus on the company and will be announced. If there is any fraud,
concealment and unlawful practice discovered in the content of the
aforementioned information, the company shall be liable to legal consequences
under Article 20, Article 32, Article 171 and Article 174 of the Securities and
Exchanges Act.
VII. This statement of declaration has been approved by the Board on March 17 2021,
with none of the six attending directors expressing dissenting opinions, and the
remainder all affirming the concent of this Statement.
Microelectronics Technology Inc.
Chairman: Allen Yen
President: Eugene Wu
----- End of picture text -----

Remark: The format prescribed in Article 24 of the “Criteria for the Establishment of Internal Control System of Public Offering Companies” is applicable to the declaration of the effectiveness of the design and implementation of the internal control system – declaration of compliance with applicable laws after the annual self-assessment of the internal control system conducted by the Company.

The Company did not retain CPAs to review the internal control system that no Review Report of the CPAs is available.
(IX) The penalty to the Company and its insiders under law, the punishment of the insiders in violation of the internal control system by the Company in the most recent year to the date this report was printed, the major shortcomings and state of corrective action: Not applicable.
(X) Major resolutions of the Board and the Shareholders Meeting in the most recent year to the day this report was printed:

1.Resolutions of the Board:

Date Session	Major resolutions
2020.03.17 The 6thsession of the 16thBoard	1. the date and the subjects to be reported on in the 2020 Annual Shareholders’ Meeting 2.the proposed resolutions to be voted on in the 2020 Annual Shareholders’ Meeting 3.Proposal of the 2019 remuneration to employees and the Directors 4.2019 business report and financial reports 5.Proposal for the distribution of 2019 earnings 6.Suspension of non-competition restrictions on the Direcros and their representatives 7.Amendment of the Procedures for Handling Acquisition and Disposal of Assets 8.Amendment of the Board Meeting Procedure and Rules 9.Assessment of the effectiveness of the internal control system and the statement of 2019 internal control 10.Independence evaluation and 2020 remuneration of the certified public accountant 11.Renewal of bank facilities 12.The change of Sr. Managers 13.Approve an independent director by-election 14.Approve revised the proposed resolutions to be voted on in the 2020 Annual Shareholders’ Meeting
2020.05.06 The 7thsession of the 16thBoard	1.2019 Q1 financial reports 2.The nomination of an Independent Director 3.Renewal of bank facilities 4.Approve the 2020 remuneration proposal for Sr. Managers 5.Amendment of the Audit Committee Charter 6.Amendments of the Corporate Social Responsibility Best Practice Principles 7.Amendments of the Ethical Corporate Management Best Practice Principles 8.The amendments of the Procedures for Ethical Management and Guidelines for Conduct
2020.06.18 The 8thsession of the 16thBoard	None

Date Session	Major resolutions
2020.08.06 The 9thsession of the 16thBoard	1. 2020 Q2 financial reports 2. Approve the 2020 remuneration for the new Independent Director 3. Renewal of bank credit facilities
2020.11.03 The 10thsession of the 16thBoard	1. Approve the change of Accounting Officer 2. 2020 Q3 financial reports 3. 2021 annual internal audit plan 4. Approve the change of Senior Managers 5. Increase of bank credit facilities
2020.12.17 The 11thsession of the 16thBoard	1. 2021 business plan and budget 2. 2021 capital expenditure budget 3. Approve the appointment of the Remuneration Committee member 4. Amendments of the Corporate Governance Best Practice Principles 5. Renewal of bank credit ficilities
2021.03.17 The 12thsession of the 16thBoard	1. The date and subjects to be reported on in the 2021 Annual Shareholders’ Meeting 2. The proposed resolutions to be voted on in the 2021 Annual Shareholders’ Meeting 3. 2020 business report and financial statements 4. 2020 losses covering 5. Amendments of the Measures of the Election of Directors 6. The nomination of an Independent Director 7. Assessment of the effectiveness of the internal control system and the statement of 2020 internal control 8. Amendment of the Internal Control System 9. The independence and suitability evaluation and 2021 remuneration of the certified public accountant 10. The change of Sr. Managers 11. The 2021 remuneration for the Board Directors and Sr. Managers

2.Resolutions of the 2020 Shareholders Meeting and follow-up with the resolutions:

Time: 2020.06.18

Major resolutions:

Motion (I): 2019 Business Report and Financial Statements for acknowledgement. (Proposed by the Board of Directors)

Action status: the motion was approved by the participating shareholders.

Motion (II): 2019 disposition of net earnings for acknowledgement. (Proposed by the Board of Directors)

Action status: MTI’s retained earnings available for distribution as of December 31, 2019 is NT$2,413,197. According to Article #25-1 of the company’s “Articles of Incorporation”, the Company may pay dividend or not, provided the accumulated disposable earning is less than 5% of outstanding share capital. So there will be no dividend distribution this year.
Motion (III)：The amendment of the Procedures for Handling Acquisition and Disposal of Assets for resolution. (Proposed by the Board of Directors)
Action status: the motion was approved by the participating shareholders. Revised Procedures for Handling Acquisition and Disposal of Assets was posted at the official website of the Company and MOPS.
Motion (IV): By-elect a new independent director of the Company. (Proposed by the Board of Directors)
Action status: List of Independent Directors Elected: Golub Drakulovic
- This change has been approved by and registered at the Hsinchu Science Park Bureau, Ministry of Science and Technology on 2020/07/10 and posted at the official website of the Company.
Motion (V): Suspension of the non-competition restriction on the director and their representatives. (Proposed by the Board of Directors)
Action status: the motion was approved by the participating shareholders. It has been conducted and posted at MOPS.
(XI) Adverse opinions of the Directors or Supervisors on major resolutions of the Board on record or in written declaration in the most recent year to the day this report was printed: Not applicable.
(XII) Resignation/dismissal of the Chairman, President, Chief Accounting Officer, Chief Financial Officer, Chief Internal Auditor, Corporate Governance Officer or R&D Manager of the Company in the most recent year to the day this report was printed:

to the daythis report wasprinted	to the daythis report wasprinted	to the daythis report wasprinted	to the daythis report wasprinted	to the daythis report wasprinted
Title	Name	On-board date	Resignation date	Reason
Chief Accounting Officer	Pi-Hua Chuang	2018.11.12	2020.08.31	Career planning

(IV).Information on Payment for the CPAs:

Name of CPA office	Name of CPA	Examination Period	Remark
PwC Taiwan	Yu-Kuan Lin	2020.01.01~2020.12.31	-
	Tian-Yi Lee	2020.01.01~2020.12.31

Unit ： NT$ Thounsands

billing items Amount difference	billing items Amount difference	Audit fee	Non-audit fee	Total
1	Less than NT$2,000 thousand		V(Note)	V
2	NT$2,000 thousand～NT$4,000 thousand
3	NT$4,000 thousand～NT$6,000 thousand	V		V
4	NT$6,000 thousand～NT$8,000 thousand
5	NT$8,000 thousand～NT$10,000 thousand
6	More than NT$10,000 thousand

Note: Non-audit fee of NT$100 thousand was the fee for key-in, copy, binding, and postage, etc.

(I) The payment of the non-audit fee to the CPAs retained for certification, the CPA firm, and its subsidiaries exceeds 1/4 of the auditing fee: Not applicable
(II) Replacement of CPA Office and the service charge was less than the previous year: Not applicable.
(III) The audit fee decreased by more than 10% from the previous year: Not applicable.
(V).Information on replacement of CPAs : Not applicable.

(VI).The Chairman, President, and managers charged with accounting or financial functions of the Company have been working with the service CPA firm or its affiliates in the recent year : Not applicable

(VII).The transfer of equity shares or change in the pledge of shares under lien by the Directors, Managers, and shareholders holding more than 10% of the shares issued by the Company in the most recent year to the date this report was printed: Not applicable

(I) Changes in shareholding of the Directors, Managers, and the dominant shareholders:

Title	Name	2020	2020	2021.04.18	2021.04.18
		Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity	Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity
Director and major shareholder	CyberTAN Technology Inc.	0	0	(235,000)	0
Representative of Institutional Director Chairman and CEO	Allen Yen	0	0	0	0
Representative of Institutional Director	Roger Wu	0	0	0	0
Representative of Institutional Director	Kuoliang Ho	0	0	0	0
Director	Chi Hsieh	0	0	0	0
Independent Director	Mary Shio Chan (Date of relief from office: 2020/06/17)	0	0	Not Applicable	Not Applicable
Independent Director	C. L. Liu (Date of relief from office: 2020/11/07)	0	0	Not Applicable	Not Applicable
Independent Director	Yun Lin	0	0	0	0
Independent Director	Golub Drakulovic (Date of relief from office: 2020/06/18)	0	0	0	0
President	Eugene Wu	0	0	0	0
Vice President and CFO	Hualin Chi	0	0	0	0
Vice President	Hunter Huang	(2,000)	0	(1,000)	0
Vice President	Dunga Wu	0	0	0	0
Vice President	Edward Chien (Date of relief from office: 2020/11/30)	0	0	Not Applicable	Not Applicable
Asst Vice President	Chia-Yu Chou	0	0	0	0
Asst Vice President	Yi-Shan Chang	0	0	0	0
Asst Vice President	Jui-Yun Chen	(4,555)	0	(1)	0
Asst Vice President	Kuo-Tien Chang	0	0	0	0
Asst Vice President	Wan-PingSu	0	0	0	0
Asst Vice President	Yu-ChengLiu	0	0	0	0
Asst Vice President	Zih-YingChen	0	0	0	0
Asst Vice President	Zheng-Wei Chen (Date of appointment: 2021/03/17)	Not Applicable	Not Applicable	0	0

Title	Name	2020	2020	2021.04.18	2021.04.18
		Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity	Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity
Chief Accounting Officer	Pi-Hua Chuang (Date of relief from office: 2020/11/30)	0	0	Not Applicable	Not Applicable
Chief Accounting Officer	Sheng-Xiong Yu (Date of appoinment: 2021/03/17)	0	0	0	0

(II) The transferee of share transfer is a related party: Note applicable.

(III)The counterparty of lien is a related party: Not applicable.

(VIII). Information on the top 10 shareholders by quantity of shareholding that are related parties, spouses, or kindred within the 2nd tier under the Civil Code to one another:

NAME	SHAREHOLDING BY THE PERSON	SHAREHOLDING BY THE PERSON	SHARES HELD BY SPOUSE AND/OR CHILDREN WHO ARE MINORS	SHARES HELD BY SPOUSE AND/OR CHILDREN WHO ARE MINORS	TOTAL SHAREHOLDING IN THE NAME OF A THIRD PARTY	TOTAL SHAREHOLDING IN THE NAME OF A THIRD PARTY	THE TITLES OR NAMES AND RELATIONS OF THE TOP 10 SHAREHOLDERS WHO ARE RELATED PARTIES OR SPOUSES, OR KINDRED WITHIN THE 2ND TIER UNDER THE CIVIL CODE TO ONE ANOTHER.	THE TITLES OR NAMES AND RELATIONS OF THE TOP 10 SHAREHOLDERS WHO ARE RELATED PARTIES OR SPOUSES, OR KINDRED WITHIN THE 2ND TIER UNDER THE CIVIL CODE TO ONE ANOTHER.	R E M A R K
	Shares	%	Shares	%	Shares	%	Title (or name)	Relation
CyberTAN Technology Inc.	60,689,995	26.62%	0	0.00%	0	0.00%	Hyield Venture Capital Co., Ltd.	The Chairman of CyberTAN Technology is the legal representative of Hyield Venture Capital	-
Hyield Venture Capital Co., Ltd.	7,615,528	3.34%	0	0.00%	0	0.00%	CyberTAN Technology Inc.	The Chairman of CyberTAN Technology is the legal representative of Hyield Venture Capital	-
Nomura International plc	5,329,000	2.34%	0	0.00%	0	0.00%	None	-	-
Chi Hsieh	3,123,279	1.37%	1,950	0.00%	0	0.00%	None	-	-
UBS Europe SE	2,395,000	1.05%	0	0.00%	0	0.00%	None	-	-
TransGlobe Life Insurance Inc.	1,800,000	0.79%	0	0.00%	0	0.00%	None	-	-
Chun Tsun Cheng	1,750,000	0.77%	0	0.00%	0	0.00%	None	-	-
Jen-Chieh Luo	1,108,510	0.49%	0	0.00%	0	0.00%	None	-	-
Cheng-Feng Chen	1,004,654	0.44%	0	0.00%	0	0.00%	None	-	-
Morgan Stanley & Co. International Plc	840,246	0.37%	0	0.00%	0	0.00%	None	-	-

(IX).The total quantity of shares of particular re-investment company held by the enterprises under the direct or indirect control of the Company, the directors and managers of the Company

2021.04.18 Unit: Share/%

					2021.04.18 Unit: Share/%	2021.04.18 Unit: Share/%
Re- investment Company (Note)	Investment of the Company		Investment of the business under the direct or indirect control of the Directors and Managers		Overall investment
	Quantity of shares	%	Quantity of shares	%	Quantity of shares	%
Sasson International Holdings Inc.	3,920	100.00%	0	0.00%	3,920	100.00%

Note: Re-investment of the Company accounted for under the equity method

IV. State of offering

(I). Capital and shares

(i) Sources of capital stock

2021.04.18

Unit: NT$ Thousands/1,000 shares

						2021.04.18 Unit: NT$Thousands/1,000 shares	2021.04.18 Unit: NT$Thousands/1,000 shares	2021.04.18 Unit: NT$Thousands/1,000 shares
YY MM	Offering price (Face value)	Authorized capital		Paid-in capital		Remark
		Quantity of shares	Amount	Quantity of shares	Amount	Source of equity capital (NT$1,000)	Investment by assets other than cash	Others
2018.1	10	700,000	7,000,000	228,028	2,280,283	Convertible bonds 33,161	None	Hsinchu Science Park Administration 2018.1.3 Shang-Zi No. 1061002905

(ii) Types of shares issued

2021.04.18 Unit: share

				2021.04.18 Unit: share
Type of shares	Authorized capital			Remark
	Outstanding shares	Unissued shares	Total
Common shares	228,028,320	471,971,680	700,000,000	-

(iii) Information on inclusive declaration system: Not applicable.

(iv) Shareholder Structure:

2021.04.18

						2021.04.1
Shareholder Structure: Quantity	Government Agencies	Financial Institutions	Other Institutional Shareholders	Individuals	Foreign Institutional Shareholders and Individuals	Total
Number of Persons	1	11	145	45,826	68	46,051
Quantity of shares held	3	2,968,937	69,453,902	142,721,126	12,884,352	228,028,320
Proportion of shareholding	0.00%	1.30%	30.46%	62.59%	5.65%	100.00%

(v) Dispersion of Shareholdings:

2021.04.18

NT$10/share in face value

Shareholdings Along the Scale of ShareQuantity	Number of Shareholders	Quantity of shares held	Proportion of shareholding
1 to 999	26,188	4,995,703	2.19%
1,000 to 5,000	15,858	32,601,497	14.30%
5,001 to 10,000	2,080	16,848,892	7.39%
10,001 to 15,000	551	7,138,051	3.13%
15,001 to 20,000	418	7,900,817	3.46%
20,001 to 30,000	339	8,885,879	3.90%
30,001 to 40,000	145	5,197,297	2.28%
40,001 to 50,000	108	5,160,041	2.26%
50,001 to 100,000	204	14,947,001	6.55%
100,001 to 200,000	77	10,547,085	4.63%
200,001 to 400,000	48	13,663,596	5.99%
400,001 to 600,000	15	7,331,816	3.22%
600,001 to 800,000	9	6,331,433	2.78%
800,001 to 1,000,000	2	1,663,246	0.73%
More than 1,000,001	9	84,815,966	37.20%
Total	46,051	228,028,320	100.00%

(vi) List of Dominant Shareholders:

2021.04.18

Shares Names of Dominant Shareholders	Quantity of shares held	Proportion of shareholding
CyberTAN Technology Inc.	60,689,995	26.62%
Hyield Venture Capital Co., Ltd.	7,615,528	3.34%
Nomura International plc	5,329,000	2.34%
Chi Hsieh	3,123,279	1.37%
UBS Europe SE	2,395,000	1.05%
TransGlobe Life Insurance Inc.	1,800,000	0.79%
Chun Tsun Cheng	1,750,000	0.77%
Jen-Chieh Luo	1,108,510	0.49%
Cheng-Feng Chen	1,004,654	0.44%
Morgan Stanley & Co. International Plc	840,246	0.37%

(vii) Market value, net value, earnings and dividends per share in the last 2 years and related information.

	Year	Year			2021.04.30
			2019	2020
Item					(Note 9)

Market	Highest		31.05	35.50	49.35
price per	Lowest		19.35	11.95	30.35
share
	Average		23.77	22.77	35.65
(Note 1)
Net value	Cum-dividend		11.65	10.61	10.10
per share
	Ex-dividend		11.65	-(Note8)	-
(Note 2)

	Weighted average quantity
			228,028	228,028	228,028
	of shares

Earnings
	Cum-dividends earnins
per share	g		0.01	(0.42)(Note 8)	(0.49)
	h
(Note 3)	per sare
	Ex-dividends earnings per

			-	-	-
	share

	Cash dividend		0	0 (Note 8)	-
		Capitalization
		of retained
		earnings into	-	-	-
		new shares for
	Stock
		distribution
Dividends
	dividends	Capitalization
per share
		of additional
		paid-in capital	-	-	-
		into new shares
		for distribution
	Accumulated undistributed
			-	-	-
	dividends(Note 4)

	Price/Earnings ratio(Note 5)		2,377	(54.21) (Note 8)	-
Analysis	Price/Profit ratio(Note 6)		0	N/A	-
of ROI	Cash dividends yield rate
			0	N/A	-

	(Note 7)

Note 1: Specify the highest and lowest market price of each common share in relevant years, and calculate the average market price of the relevant year with reference to the trading value and volume.

Note 2: Fill in the information on the basis of the quantity of outstanding shares on the last day of the year, and the resolution of the Shareholders Meeting for distribution of the year.

Note 3: If stock dividends were paid with a retroactive adjustment, state the earnings per share before and after adjustment.

Note 4: If the issuance of equity securities allowed for the accumulation of undistributed dividends of the year to the year with earnings as a condition for offering, disclose the undistributed dividends accumulated to current period.

Note 5: P/E Ratio = The average closing price per share of the year/earnings per share.

Note 6: P/P Ratio = The average closing price per share of the year/cash dividends per share.

Note 7: Cash Dividends Yield = Cash dividend per share/the average closing price per share of the year Note 8: Pending on the decision of the Shareholders’ Meeting.

Note 9: The net value and earnings per share is the based on the information presented in the audited consolidated financial statements of 2021 Q1.

(VIII) Dividends Policy and the Implementation of the Policy:

Dividend Policy as Stated in the Articles of Incorporation: The Company is now at the stage of stable growth in operation. In consideration of the macroeconomic environment and the specific nature of the industry, the capital needs and long-term financial planning of the Company for sustainable development and stable development, and the assessment of the capital expenditure and requirement of the future, the Company could appropriate at least 30% of its earnings as dividend for the shareholders. If the accumulated earnings available for distribution are less than 5% of the paid-in capital, no dividend will be paid. Cash dividends are preferred among other forms of shareholders’ dividends. The percentage of cash dividends will range from 30-100% of the total dividends of the year for payment. The remainder could be paid by stock dividends. The Board shall propose the plan for the distribution of earnings and present to the Shareholders’ Meeting for final approval.
The payment of dividend proposed to current session of the Shareholders’ Meeting: The Board dated on 2021/3/17 had approved no dividend distribution this yeas because the accumulated earnings available for distribution now were less than 5% of the paid-in capital.
(IX) The influence of issuance of bonus shares discussed in current session of the Shareholders’ Meeting on the operation performance and earnings per share of the Company: Not applicable. No issuance of bonus shares this year.
(X) Remuneration to the Employees and Directors:
Information on the remuneration to the employees and directors as Stated in the Articles of Incorporation
- If the Company made a profit in the year, appropriate at least 7% as remuneration to the employees, which will be paid in cash or by stock as determined by the Board. The targets of payment include employees of subsidiaries meeting the designated conditions. The Company will, depending on the profit of the year, determine to appropriate no more than 1% of the earnings as remuneration to the directors in the care of the Board.

The proposal for the remuneration to the employees and the directors shall be reported to the Shareholders Meeting. The Company shall appropriate for covering carryforward loss, if applicable, and appropriate for the remuneration to the employees and Directors in the aforementioned percentages.

Information on the proposal of the Board on remuneration to the employees and the Directors. (1) There was no remuneration to the employees and the Directors this year.
- (2) The amount of remuneration to the employees by stock in proportion to the net income presented in the separate financial statements in current period and to the total remuneration to the employees: Not applicable.
The actual amount of remuneration to the employees and the Directors and the difference from the stated amount of remuneration to the employees and the directors in the previous year, the reason for the difference and response: The Board resolved to remunerate employees in cash in the session dated 2020.03.17 amounting to NT$128,158 and no remuneration for directors. Difference from the amount stated in book in 2020: No difference from the remuneration to the employees in cash. The remuneration to the Directors was NT$18,308 less than the amount stated in book due to difference in accounting estimation, and has been recognized as income/loss in 2020.
(XI) The repurchase of shares by the Company: Nil.

(II) The offering of corporate bonds: Nil

(III) The offering of preferred shares: Nil
(IV) The issuance of overseas depository receipts: Nil
(V) The issuance of ESO: Nil
(VI) The issuance of restricted stocks: Nil
(VII) Merger and acquisition, or acceptance of shares from assignment of other issuers: Nil

(VIII)Fund utilization plan: Nil

V. Business Overview

(I). Business Contents

(i) Main business Contents and their business distribution

(The financial figures herein are excerpted from the Company’s financial statements which are audited and certified by the accountants)

Our main business contents in 2020 included two categories: Satellite Communication Products and Telecommunication Products. The Satellite Communication Products consist of the satellite TV receiving equipment and commercial private satellite communication system; while the Telecommunication Products consist of the cell site equipment and digital microwave communication products. In 2020, the satellite communication system and its devices approximately account for 63.8% of the combined sales amounts, while telecommunication system and its devices approximately account for 36.2%

(ii) Industry overview and its future development as well as trends

The industry overview and its future development as well as trends are reviewed for the satellite communication system as well as its devices, and the telecommunication system as well as its devices:

Satellite communication system and its devices

The global satellite TV markets mainly consist of America, Europe, Asia Pacific, Middle East, and Africa. Among them, America is the most mature market with the highest HD rate. Nearly 60 ％ of global HDTV channels serves America; Europe is a traditional market with a HD rate lower than America’s and its broadband satellite market is still growing and getting mature; Asia Pacific is a thriving and emerging market. In recent years, it has gradually become the largest market in the world. Additionally, Latin America has likewise been gradually growing.

As the global demands for high-definition televisions (HDTV) and HD shows are on the rise, and the regional and multilingual channels are rapidly increasing the Direct Broadcasting Satellite (DBS) operators are providing thousands of TV channels and abundant broadcasting channels. This, undoubtedly, will boost the demand for satellite transponders and satellite TV receivers. The satellite bandwidth will be sufficiently used for wider coverage and lower external interference. Afterwards, the traditional cable TV, IPTV and satellite TV will dominate the market, respectively.

==> picture [400 x 196] intentionally omitted <==

Source: Grand View Research, 2019

The Very Small Aperture Terminal (VSAT) is mainly used to provide the broadband satellite services, such as the high-speed two-way voice, digital communications, and Internet, to the subscribers in the remote areas for which cable modems and DSL are unavailable. In response to the unprecedented demands for high data rate transmission business and broad-band multimedia applications, the HTS (High Throughput Satellite) system has been invented. For the satellite communication system, the C/Ku bands (each with 500 MHz bandwidth was commonly utilized at the early stage. Nowadays, the high-frequency Ka band (2.5 GHz bandwidth) or even Q/V bands (each with 10 GHz bandwidth) are used, which drives the rapid development of the broadband satellite communications. As the broadband communication satellite system and space network technologies develope, the satellite communications have gradually entered the era of the Internet, with the advent of satellite Internet access. Currently, several airlines have provided the "in-flight Internet access” service. In the 5G era, LEO satellite communication will complement with the 5G base stations, which covers high mountain, desert, ocean and other areas that could not be penetrated by 5G base stations into the scope of communication. For this reason, the newly emerged satellite service providers, such as Space X, and Telesat, have started to launch satellite to provide worldwide satellite communication service aiming at the realization of worldwide Internet. MTI is actively engaged in joint ventures with LEO satellite service providers recently to develop communication equipments for small size ground satellite stations.

==> picture [451 x 157] intentionally omitted <==

==> picture [484 x 147] intentionally omitted <==

Source: NSR, 2019

Telecommunication Products

Along with the gradual launch of 5G worldwide, in addition to accelerating the pace of 5G deployment, the increase in 5G deployment has prompted global telecom operators to seek the possible solution of reducing deployment costs. Since 5G stations accounted for as high as 40% of the overall Capex and the 5G deployment cost is at least about 1.5 times higher than that of 4G, cost-saving is likely the biggest incentive to drive telecom operators to introduce an Open RAN (O-RAN). For example, Vodafone has announced to introduce an O-RAN structure to the 100,000 stations in Europe. In addition to focusing on cost saving, it is also beneficial for future network flexible management and function updates, especially, the station software and hardware structure are the core value of O-RAN structure. Before Vodafone announced the massive introduction of O-RAN, Rakuten in Japan had adopted the software/hardware structure to deploy the 4G network in 2019 and become an important example for reference in constructing open 5G RAN worldwide.

The advantages of this open mobile network structure include fast network function upgrades, reduced hardware costs, and quick response to needs. In terms of the network upgrade, since all

software is in the form of virtualization, and individual network software functions may be provided by different vendors and exist in a modular form, it can be quickly upgraded by targeting on individual function without the need of turning off the device for upgrading. In addition, since individual network management software can be purchased separately, telecom operators can select the ideal products in a more open supplier ecosystem. Software suppliers will be able to invent products faster since they can focus on specific functions for development. According to a research report issued by ABI Research, the market share of O-RAN starting from the development in 2021 will be equivalent to the traditional RAN in 2028 as shown in the figure below:

==> picture [385 x 196] intentionally omitted <==

Source: ABI Research Global

Since the evolution of telecommunications networks has existed for multiple generations, there are many communication standards and equipment is not easy to obsolete. As a result, the open networking industry chain is still concentrated on the RAN, including CU/DU, Fronthaul network, RU and other parts. Facing the vast 5G telecommunications equipment market, to meet the requirement of Macrocell in the 4G/5G telecommunication market, the company has begun to analyze the market, accumulate R&D technology, cultivate strategic partners, and actively develop 4G/5G eCPRI O-RAN Split Option. 7.2x Multi-Band Radio Unit, RU that comply with the O-RAN standard.

(iii) Linkage of industry upstream, midstream, and downstream

Upstream	Midstream (where the companyis located)	Downstream
Suppliers of parts and components	Manufacturers of equipment	System integrators Telecoms or satellite service providers
Semiconductors, transistors, resistors, capacitors, printed circuit boards, transformers, filters, mechanical components,antennas	Companies specializing in R&D, manufacturing, assembly, etc.	System integrators Mobile communication/telecoms service providers Satellite TV service providers

(iv) Technological research and development

Based on the core RF technology, the Company continues to develop the most niche products in the wireless communication market.
In recent years, Microelectronics Technology has been investing in researching, developing and manufacturing of the low-earth-orbit satellite communication system to enter the next-generation 5G communication field for the future high-speed wireless transmission and communication market. The Company's technological R&D and investment focus on the core technologies such as the RF (radio frequency) and DSP (digital signal processing). To meet the growth of our businesses, the Company develops the following three product lines:
End user equipment of LEO
- To finish LEO transceiver/antenna module and establish key tech
- The mass production transceiver and trial production of phased array antenna and monopole antenna
Virtualization of wireless protocol
- Calibrate with rising vRAN/ORAN solution provider to support the infrastructure construction of 4G/5G RRH/RRU operators.
Key R&D plans in 2020:
Developed LTE Open RAN RRH
Established the system test capability of frequency Band I&V
Established Base Band O-RAN Processing development capability
Completed IOT interoperability test verification with several DU manufacturers
GEO related projects
- ODU of Ka-band satellite user terminal and implemented mass production
- ODU of Ka-band satellite air bourn user terminal and implemented mass production
LEO related projects
- Small batch production of 3W Ku-bank Transceiver
- Started Beamforming array antenna small batch production

Patents related to newly developed technologies in 2020:

		Applied			Approval
Item	Name of Application Case		Type	Certificate No.
		Country			Date

1.	Antenna apparatus and circuit	USA	Invention	US 10770780	2020/09/15
	board thereof
2.	Resampling apparatus and	USA	Invention	US 10778193	2020/09/15
	method thereof
3.	Electronic tag and electronic	USA	Invention	US 10810480	2020/10/20
	system usingthe same

The R&D plan of main products in 2021 are described below:
(1) Focus on 5G NR RU new tech R&D and RU product mix, including
- O-RAN eCPRI protocol
- Synchronization by IEEE & SyncE
- DSP Back End and Front End IP
- Multi-band of RU new product mix
(2) GEO related projects
- Gateway ODU of new generation Ka-band consumer satellite system
- UT ODU of new generation Ka-band consumer satellite system
(3) LEO related projects
- Research on Ku-band transceiver and system test of LEO UT
- Develop Phased Array Antenna Fast Measurement Technique
- Started LED UT JDM projects and LEO UT project to start trail production
Development of Ku Band Beam Forming AESA (Active Electronically Scanned Array) Antenna for LEO (Low Earth Orbit ) Satellite
(4) Estimated 2021 R&D expenditure: It is estimated that the R&D expenditure invested in 2021 approximately accounts for 8%-9% of the revenue
The R&D expenditure
```
 - (1) Stand-alone information
```

Unit: NT$ Thousands

			Unit: NT$ Thousand
Year	2019	2020	2021 Q1
R&D expenditure	480,676	495,085	127,405
% of revenue	10%	16%	14%

(2) Consolidated information

Unit: NT$ Thousands

Year	2019	2020	2021 Q1
R&D expenditure	507,214	604,499	164,122
% of revenue	9%	15%	16%

(v) Long and short-term business plans

1. Short-term business plan

Strengthen current customers’ relationships. By closely cooperating with our customers, the Company provides customized products and services with higher value. With the win-win relationship, it provides more cost-effective products to improve customer's competitiveness and increase its market share.
Work with large system operators in each region of distribution to enhance the network of channels to provide timely services for customers and grasp business opportunities.
Increase the contribution of the high value-added products to the total turnover, and take advantage of the Company’s leading product development and technology capabilities to establish a marketing network to support key customers, improve the management of the supply chain, and shorten the delivery period.
Continue to cultivate outstanding R&D talents, stay technological competitiveness, and rapidly launch new competitive products.
Gather more information about the upstream and downstream of the industry to quickly respond to market demands and create niche products.

2. Long-term business plan:

To achieve the goal of becoming the world-class supplier of professional RF communication equipment, continue to expand our customer base, and explore the market.
To establish a long-term partnership with the suppliers of key components and good subcontractors to create a win-win strategy
To forge alliances with the vendors of key technologies in the industry for technical cooperation, improvement of R&D strength, and building of a market-oriented and responsive R&D team.

(II). Market and sales overview

(1) Market analysis

1. Services and sales of main products

The Company has rich experience in professional ODM/OEM experience while our sales model is mainly ODM/OEM. For many years, we have been committed to forging alliances with global renowned communications companies and leading system vendors to provide rapid and flexible design and manufacturing services, and sell our products to every corner of the world through the global sale channel of system vendors.

2. Market supply and demand for products in 2020

Unit: NT$ Thousands

Region of distribution	MTI Alone sales	Proportion	Consolidated sales	Proportion
America	1,681,328	53%	1,821,920	46%
Europe	275,812	9%	275,812	7%
Asia and others	1,208,191	38%	1,852,265	47%
Total	3,165,331	100%	3,949,997	100%

Satellite communication system and its devices

As the demand for Video on Demand (VOD), Personal Video Recorder (PVR), and interactive TV, the high-end Multi-output LNB has become the mainstream in the market when combined with the high-end set-top box (STB). Over recent years, in addition to the investment in high end Multi-Output and Multi-Satellite products for the LNB lineup, we have designed more digital products to replace their analog counterparts to become of the main suppliers of LTB for the global top satellite Pay-TV operators. For the product lineup, our high-end products are mainly sold to the US market while mid-end and low-end products are mainly sold to the European and Latin American markets. The low-end LNB are mainly available in Asia, especially in India.

For Broadband Satellite products, the core product is Ka-band broadband VSAT Transceiver. Currently, Microelectronics Technology is the first professional manufacturer of the Ka-band VAST transceivers, and continues to invest in R&D of new products. In addition to the high-speed satellite Internet access, the applications include the in-flight broadband access during high-speed moving, which are offered to the main operators in North American broadband satellite market.

Ground station communication equipments

Microelectronics Technology Inc. (MTI) became a member of the Open RAN Alliance in 2019, hoping to directly provide telecom operators wit 4G and 5G network RU equipment in the O-RAN ecosystem. Microelectronics Technology Inc. has strategically cooperated with the top SDN/NFV software companies in the United States to carry out various interoperability tests, receive product trial orders, and enter the O-RAN market in Europe, Southeast Asia, and India for on-site validations. In addition, benefiting from the company’s long-term and stable relationship with Dish Network in the satellite business, a Multi-Band Radio Unit (RU) product research and development and product procurement contract was signed with Dish Wireless in September 2020 to provide radio frequency units equipment. The dish had also announced in early December 2020 that its 5G O-RAN structure would be built with the RU products of Microelectronics Technology Inc. The construction goal is to

meet the needs of 20% of the U.S. population in the first half of 2022 and to meet the needs of 70% of the U.S. population in the first half of 2023.Many models are gradually entering the stage of the “System Acceptance Test” (SAT) in the first half of this year. It is estimated that the shipments will be made starting from the second half of this year to meet the needs of customers. Such progress will help the company to be on the new equipment vendor list of the telecommunication operators in Europe and America. The company will also continue to initiate various market plans to understand local needs worldwide, the network coverage of telecom companies, operating costs, terminal equipment performance, etc. in order to win procurement contracts from local telecom companies with multiple tests performed.

Microelectronics Technology Inc. has professional design and manufacturing (ODM/OEM) experience in Taiwan and Wuxi. The company can provide engineering trial samples in real-time according to the needs of each customer; also, can help customers quickly start mass production. The company has two important R&D teams in the United States and Denmark; it also owns the new generation 4G LTE/5G NR radio access network (RAN) technology. The company aims to directly provide telecom operators with 4G and 5G network station radio unit (RU) equipment in the O-RAN ecosystem.

The new generation RU supports the Split 7.2x of the O-RAN Alliance, which complies with the 3GPP standards and the interface specifications of the O-RAN Alliance. It includes power amplifier modules, duplexers, RF linearization modules, power supplies modules, the circuit signal bridge module, and the RoE interface of the customer baseband unit (DU) with the eCPRI communication protocol adopted. The core of the software, firmware, and hardware used by RU are all independently developed by the company’s R&D teams in America and Denmark with the autonomy of technology fully grasped.

3. Competitive niche

With its solid and outstanding RF design capability, the Company continue to focus on the product development of satellite communication system, cell sites, and microwave transmission equipment. By working with international companies, we develop the most niche products in the wireless communication market, help customers optimize their products, and enhance our market leadership.
We have more-than-thirty-year experience in professional ODM/OEM/JDM. We are capable of providing engineering samples in real time and perform mass production. We can also provide flexible and trustworthy production services based on customer needs, which are well recognized by international companies.
Through manufacturing consolidation and cost control, we can maintain competitive production costs, improve the operation performance, and profitability.
The Company has been granted several management system certificates, such as

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ISO9001/TL9000, ANSI/ESD S20.20, ISO/IEC 17025, ISO14001, ISO45001, CNS4001, AS9100, and IATF 16949 to ensure the design and manufacture processes meet the highest standards, include the comprehensive design, optimized manufacturing processes, complete quality feedback and control system. We are committed to providing the product and services with the highest quality.

Positive and negative factors for future development
Positive factors
Wireless communication trend
- The output value of the global wireless communications is increasingly growing with the growth of the global mobile phones and Internet which drive the demands for wireless transmission.
- The global 5G RRU/RRH wireless communication market is expanding actively.
- The Virtual Radio Access Network (vRAN) and hybrid network allow operators to reduce the network deploument costs and improve flexibility.
- The digital satellite TV and broadband satellite market needs to be tapped.
- The trend of Low Earth Orbit (LEO) satellite communications is clearly developing.
- The broadband technology becomes the mainstream. For the wireless broadband technology, the Company has started development of future-proof broadband technology in addition to its immense strength in satellite broadband technology over years.
Large European and US companies seek outsourcing
- Considering the production cost and professional division of labor of, large European and US companies have gradually outsourced their products which will create huge potential opportunities for Microelectronics Technology’s ODM/OEM products.
- The Company’s 35-year ODM/OEM capability of RF products are well-received by many large international companies in the industry.
- The outsourcing trend created by large communication companies will continue and require OEM to provide more extensive services from design, assembly to warranty. This trend enables Microelectronics Technology to take advantage of its outstanding engineering and logistics management.
Invested by CyberTAN and Foxconn Technology Group
- Since September 2012, CyberTAN and Foxconn Technology Group have jointly invested in the Company, and become the largest shareholders. It is expected that with the technical expertise and advantages of three companies, in terms of technological R&D, production manufacturing, and customer marketing, the Company can grasp enormous business opportunities which will be created by the new generation 4G/LTE communication technology and satellite communication demand.

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Negative factors
Affected by COVID-19 broke out at the beginning of 2020, the global economic situation has become highly uncertain.
the US-China trade war triggered since 2018 and is still heating up.
Satellite TV market is shrinking with the surge in the popularity of OTT streaming media services.
In the global market, as the international telecom companies have performed the integration of the technology, services and products, it is more difficult to establish a relationship with the marketing channel which may affect the benefits of new products.

When facing the development opportunities of the industry in the future, with our strength, in addition to actively control cost, explore the market, and enhance R&D, all of our staff will “perform continuous improvement and pursue the highest quality” to seize business opportunities in the market. It is believed that collective efforts can overcome various difficulties and create a better tomorrow.

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(2) Main product applications and production processes:

1. Main applications of our two key products:

Product items	Product items	Main applications
Satellite communication system and its devices	Low-Noise Block Downconverter (LNB)	- Direct Broadcasting Satellite (DBS). DBS broadcasts TV shows directly with high-power Ku-band satellites. Users can receive satellite TV programs with a small antenna of approximately45 cm width.
	Very Small Aperture Terminal (VSAT)	 The traditional commercial small satellite communication system uses satellite networks to provide immediate transmission of sound, data and images. The main applications include: - Private networks, such as bank account inquiries and transaction records, factory inventory management, and hotel reservations, etc. - Telephones in rural areas, such as developing countries with large geographical areas, scattered populations in rural areas, or countries dotted with islands such as Indonesia and the Philippines. - Distance education and telemedicine. - Video conferencing. - Disaster recovery.  In recent years, broadband satellites have been used to provide services such as multimedia and high-speed Internet. Applications include: - SME (Small and Medium Enterprises) and household Internet access. - High-speed broadband Internet access for large enterprises orpublic hotspots.
Telecommunica -tion system and its devices	Digital Microwave Radio	- Cellular Network Back-haul. - Alternatives to “Last Mile Access.” - Private Networks. - Telephony in Developing Countries. - Disaster Recovery.
	Radio Frequency Identification (RFID)	 The Company's RFID products are mainly UHF (850MHz-930 MHz), which can provide a longer reading range and higher reading speed.  RFID has a wide variety of applications including: - Identification and tracking of valuables. - Transportation and supply chain tracking. - Animal identification and tracking. - Object management for industries such as healthcare.

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Product items	Product items	Main applications
	4G/LTE Remote Radio Head)	- For the “Remote Radio Head” (RRH), the radio unit (power amplifier and filter) is independent from the traditional cell site and can be placed anywhere to form a main cell site and network with several radio units (RRH). It can be used in areas with high traffic intensity, such as shopping centers, airports, as well as subway stations and to improve areas where underground parking lots, tunnels that signals are difficult to reach. This can improve the quality of indoor broadband transmission.

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2. The production process of the Company's products is as follows:

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----- Start of picture text -----

Supplier’s delivery of
materials
Reject Receive materials
Incoming inspection
Stocking
Picking (issuing) Outsourcing and processing
SMT
Finished product assembly
Testing and adjustment
Reject
Process quality inspection
Reject
Packaging
Final quality inspection
Stocking
Shipping
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(3) Supply of key materials

The Company's materials are high-frequency thin film Microwave Integrated Circuit (MIC), transistor, Monolithic Microwave Integrated Circuit (MMIC), Application Specific Integrated Circuit (ASIC), Radio Frequency Integrated Circuit (RFIC), diode and casing. The Company designs and manufactures the thin film Microwave Integrated Circuit (MIC) through special manufacturing processes. We also have the ability to design and develop the MMIC, RFIC and ASIC. Since the Company has maintained good cooperative relations with the aforementioned suppliers for many years, it can control the supply status; the casing is manufactured by domestic manufacturers in accordance with the specifications; for GaAs field effect transistors (GaAs FET) and diodes, it chooses domestic and foreign manufacturers with stable supply and good quality. The Company has always maintained good cooperative relations with domestic and foreign suppliers, and adopted strategic procurement methods for important components to achieve the stability and autonomy of the supply; for the quality management of the incoming materials, the quality inspection is performed in accordance with the TL-9000 policy to meet international standards.

Based on supplier's technology, quality, service, delivery period and cost, the Company makes an overall assessment to select good suppliers for long-term cooperation. The Company develop the supplier management guidelines based on the above principles:

The Company regularly visits the factory by senior personnel at least every six months, share the market and price information with suppliers, and cooperates with manufacturers to make the company and customers more competitive in the market.
In the initial stage of product design, the Company asks suppliers to participate in development of parts, so that they can meet the cost target of parts and their manufacturability will meet its needs.
The Company provides a score and improvement report on the overall performance for major suppliers monthly so that they have a better understanding of their performance.
Every year the suppliers with good performance are publicly recognized in to encourage manufacturers to coexist.
For the EU RoHS (Restriction of Hazardous Substances Directive) in 2006, the Company has launched a green environmental protection plan, and each supplier has performed an improvement plan, and cooperate with Microelectronics Technology to introduce it.

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(4) The suppliers and customers whose total purchases and total sales are more than 10% in one year of the last two years, and their purchase and sales amount as well as ratio

 Supplier data


 Supplier data Amount Unit: NT$ Thousands
2019				2020				Q1 2021
Name	Amount	Ratio of annual net purchase	Relationship with the issuer	Name	Amount	Ratio of annual net purchase	Relationship with the issuer	Name	Amount	Ratio of annual net purchase as of the previous quarter of the year	Relationship with the issuer
Vendor A	278,809	7%	None	Vendor G	217,236	8%	None	Vendor I	82,643	9%	None
Vendor S	237,414	6%	None	Vendor I	158,827	6%	None	Vendor G	82,174	9%	None
Others	3,292,546	87%	-	Others	2,452,967	86%	-	Others	726,281	82%	-
Net purchase	3,809,769	100%	-	Net purchase	2,829,030	100%	-	Net purchase	891,098	100%	-

Difference between two years (1) In 2020, the increase in purchases of Vendor G and Vendor A’s materials is due to the increase of new product’s shipment. (2) In 2020, the decrease in purchases from Vendor A and Vendor S is due to the decrease in sales of products which use their materials.

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 Customer data

Amount Unit: NT$ Thousands

2019	2019	2019	2019	2020	2020	2020	2020	Q1 2021	Q1 2021	Q1 2021	Q1 2021
Name	Amount	Ratio of annual net sales	Relationship with the issuer	Name	Amount	Ratio of annual net sales	Relationship with the issuer	Name	Amount	Ratio of annual net sales as of the previous quarter of the year	Relationship with the issuer
Customer G	1,115,949	19%	None	Customer A	897,004	23%	None	Customer G	217,491	22%	None
Customer A	1,087,284	19%	None	Customer G	675.301	17%	None	Customer A	149,589	15%	None
Customer P	764,006	13%	None	-	-	-	-	Customer Q	140,876	14%	None
Customer I	756,906	13%	None	-	-	-	-	Customer R	112,942	11%	None
Others	2,074,735	36%	-	Others	2,377,692	60%	-	Others	380,318	38%	-
Net sales	5,798,880	100%	-	Net sales	3,949,997	100%	-	Net sales	1,001,216	100%	-

Comparisons between two years: The decrease in sales to Customer I in 2020 when compared to those in 2019 is due to less demand from this customer.

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(5) Production over the Last Two Years

Unit: Piece (set) Value: NT$ Thousands

Year Production value Product type		2019			2020
	Production capacity	Yield	Output value	Production capacity	Yield	Output value
Satellite communication and Telecommunication system and devices	17,940,179	11,713,895	4,340,859	15,065,438	10,037,457	3,054,533
Total	17,940,179	11,713,895	4,340,859	15,065,438	10,037,457	3,054,533

(6) Sales over Last Two Years

Unit: Piece (set) Value: NT$ Thousands

					Unit: Piece (set) Value: NT$Thousands	Unit: Piece (set) Value: NT$Thousands	Unit: Piece (set) Value: NT$Thousands	Unit: Piece (set) Value: NT$Thousands
Year Quantity & Value Product type	2019				2020
	Domestic Sales		Export		Domestic Sales		Export
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Satellite communication/ Telecommunication system and its devices	3,541	41,401	14,278,533	5,757,479	117,245	285,004	11,697,033	3,664,993
Total	Quantity: 14,282,074 Value: 5,798,880				Quantity: 11,814,278 Value: 3,949,997

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(III). Number of employees over the last two years as of the published date, average seniority, average age and distribution of education level

Year	Year	2019	2020	Apr 30 2021
Number of employees	Production	609	695	657
	Engineering	268	265	263
	Sales	35	36	37
	Administration	81	85	82
	Total	993	1081	1039
Average age		35.02	36.25	37.9
Average	seniority	8.15	7.99	7.6
Distribution of education level	Doctorate degree	1.21%	1.20%	1.15%
	Master’s degree	14.40%	14.80%	15.27%
	Bachelor’s degree	40.28%	36.08%	36.67%
	High school graduate	44.11%	47.92%	46.87%

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(IV). Environmental expenditure information

The annual expenses related to work safety in 2020 are based on the requirements of environmental and occupational health and safety policies. The Company continues to promote environmental protection and occupational safety and health. The main completed tasks are as follows

Continuous waste sorting and clean-up management: Strict control of the general and hazardous waste storage, and clean-up process. Select good waste clean-up companies, verify the legal clean-up channel, and do recycling properly. The waste clean-up proposal and on-line application should be submitted for the storage, clean-up and output of wastes in accordance with the laws and regulations.
Regular inspection of the air pollution, waste (sewage) water, waste and working environment: Commission qualified inspection agencies every year to perform inspection to ensure that the pollutant discharge, waste disposal and working environment of the Company can meet the regulatory requirements.
Promotion of the ISO-14001, ISO-45001 and CNS45001 management systems, implementation of the autonomous management system, and maintenance of employees’ safety and health: On January 3, 2020, the Company passed the annual certification by the Certification Body (BSI) to ensure that the management system functions properly and the certificate effectiveness is maintained.
Enhanced promotion of the safety and health concepts: In addition to the newly-recruited/on-job EHS training based on the annual education and training program, the new GHS system is promoted among employees and the emergency response team performs the evacuation drills.
In 2020, MTI has accomplished the revision of the Occupational safety and health management entities and personnel report, COVID-19 prevention management plan, COVID-19 confirmed cases notification and emergency response drill management plan, SMT reflow fernance & hole fishing machine project improvement management plan, Health Improvement Advocacy Plan, Protection of Radiation from Ionizing Radiative Equipement Plan, Waterproof Work at the boundary of Phase I/III on Top Floor Project, Energy Efficiency in Lighting Program – replacement of LED fixtures, in order to realize clean production through improvement of production process and operation environment and continued upgrading of safety and health performance in the environment.
Continuous implementation of zero-disaster working hour activities: Continue to promote safety and health activities, and the concept of hazard prevention. As of December 2020, the Company’s accumulated zero-disaster working hours reach 9,251,119.
Promotion of green product solutions: In addition to the establishment of the ISO14001 environmental management system, Microelectronics Technology has established a “Green Product (GP) Management System” in response to RoHS requirements to meet customer and international environmental law and regulations, and requires suppliers to announce the compliance with REACH and conduct inventory.
Each environmental and energy saving indicator in 2020:


2020	Average water usage per month	Average electricity usage per month	Waste recovery rate
Performance	3,757 kWh/month	588,167 kWh/month	55%
Goal	3,858 kWh/month	609,570 kWh/month	50%

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Status Achieved Achieved Achieved

CO2 emissions over last year and performance of emission reduction


Year	CO2 emissions	CO2 emission reduction
2020	5,240 Eq (tons)/year	443 Eq (tons)/year
2019	5,683 Eq (tons)/year	1,340 Eq (tons)/year

Compliance with laws and regulations: The Company complies with the requirements of the safety and health / fire / radiation control law and regulations, without any violations, or is never fined by related authorities.

(V). Labor relations

1. Harmonious labor relations - shared concern and mutual growth

The communication industry involves a wide range of technologies and rapid technological development. It requires a long-term cultivation of talents. The Company has been committed to industrial upgrading and accelerated integration over the years. In the field of microwave and satellite communications, it has cultivated many professionals to lay a foundation for domestic related fields. As a result of cultivation over many years, we have created a dynamic and innovative working environment and excellent team:

With excellent staff quality, the employees actively pursue excellence and challenge themselves; As the distribution of education level shows, the employees of the Manufacturing Department at least have a high school diploma or above. To know the education level of our talents is also helpful for correct operation of the manufacturing processes. The marketing, research and sales personnel mostly have a bachelor degree or above. This will greatly benefit the company's consistent technology leadership and R&D innovation.
In the organization of training, an open learning space is available with flexible functions of the target team, flexible use of human resources and organizational management, the use of advanced equipment and equipment, in continuous pursuit of excellence and teamwork. We continuously invest in research and development. In the vertical integration process, through systematic planning of education and training required for various duties, on-the-job training, and caring and respecting employees, while emphasizing professionalism and teamwork, we have cultivated a considerable number of outstanding talents to meet the rapidly changing technical challenges and fierce competitiveness in the future. Those have laid a solid foundation.
In the pursuit of quality, through the certification and education training of ISO9001/TL9000, ANSI/ESD S20.20, ISO/IEC 17025, ISO-14001, ISO45001, CNS45001, AS9100, and IATF 16949, each employee has been asked to respect the quality and system specifications. In terms of cost, technology, engineering services and sales, they are committed to "continuous improvement, in the pursuit of the highest quality" to achieve and exceed the international

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standards.

In terms of technical strength, the Company's R&D personnel account for about 30% of all employees so that the Company is a task-oriented project organization, improving technical standards and satisfying employees' sense of accomplishment, and cultivating professionals with different fields through vertical integration experience over many years. It has enhanced the strength of domestic microwave and satellite communications, and has also created a number of system integration technologies, which have considerable potential for meeting the rapid development of future business.

2. Employee Behavior and Ethics

By caring for and respecting the employees, the internal documents prepared by Microelectronics Technology serve as the basis of the behavior and ethics to convey that the employee should have a cautious and loyal working attitude, and maintain Microelectronics Technology’s assets, interests, and image. Their contents are:

Non-compete clause: The employee may not engage in, be employed by or participate in any business that directly or indirectly competes with Microelectronics Technology Inc. or its affiliates without permission.
Prevention of conflict of interest: The employee may deal with official duties with an objective attitude and should avoid situations in which individuals have potential conflicts of interest with the Company.
Avoid opportunities for self-dealing: employees must not handle private business on behalf of Microelectronics Technology, or use authority to take advantage of personal interests.
Responsibility for protecting the Company's business secrets: Except for the information authorized or required by laws and regulations for disclosure, the information of Microelectronics Technology or the customer should be kept confidential.
Respect the intellectual property rights of the Company and others: Comply with the with the provisions of the Copyright Act and related regulations of intellectual property rights
Fair Trade: Microelectronics Technology’s customers, suppliers, competitors and employees should be treated in a fair and objective manner.
Protect and properly use company assets: The employees are responsible for protecting the assets of Microelectronics Technology and ensuring that it can be used effectively and legally in business matters.

3. Education and training and development

Microelectronics Technology’s education and training system is based on organizational strategy, departmental goals, personal performance development and personal functions. It plans the implementation direction of the education and training, and provides a learning blueprint for a working environment for continuous learning and development.

Its development system for education and training includes the following five items:

Training about product applications: Expertise or skills training related to product and

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product applications.

Training of professional functions: In addition to products and product applications, training about other technical or business-related professional knowledge and skills includes various working procedures, processes, instrument and facilities management and environmental management.
Quality management training: Improve quality related knowledge and skills training
Management training: To improve management-related knowledge and skills,
General education and training: Related to the Company's values, various rules and regulations, or necessary training used to enhance the common knowledge, ability, labor safety and environmental management, and environmental management.

In addition to providing employees with a sound education and training program and environment, Microelectronics Technology also emphasizes the development of employees' career. The diverse resources are provided for on-the-job training, work authorization, task assignment, project participation, mentor system, job rotation and external training opportunities, and talent training management, combined with performance management system to stimulate employees' potential and achieve organizational performance improvement for the personal growth.

4. Existing important labor agreements and their implementation

Employee benefits: The Company's Employee Welfare Committee was established on December 11, 1984 and approved by the Hsinchu Science Park Bureau on December 23, 1984. Since its establishment, each business unit has performed according to the regulations and has good performance.
Retirement system:
(1) The Company's Supervisory Committee of Business Entities’ Labor Retirement Reserve was established on December 11, 1985 and was approved by Hsinchu Science Park Bureau on December 23, 1985. Since the establishment of the committee, the monthly appropriated labor pension reserve funds based on the total salary ratio, and the standard and method of application for pension payment are handled in accordance with Labor Standards Act. Since July 1, 2005, the company was based on the “Labor Pension Act”. The Ordinance has a retirement scheme that is determined to be applicable to employees of this nationality. The Company selects the part of the labor pension system stipulated in the "Labor Pension Act" for employees. It pays 6% of the salary to the individual accounts of the employees of the Bureau of Labor Insurance every month. The payment of the employee's pension is based on the individual pension of the employee. The amount of the special account and the accumulated income will be collected by monthly pension or one pension.
(2) Our subsidiary, Jupiter Technology (Wuxi) Co., Ltd., in Mainland China has appropriated pension fund every month in conformity to the law of the People’s Republic of China governing the retirement and pension system. Due to the impact of Covid-19, pension fund was exempted in 2021. In 2022, 16% of the total salaries will be appropriated as pension fund as usual. The retirement of local employees will be managed and coordinated by the government.
(3) Our subsidiary, MTI Laboratory Inc., does not need to pay pension fees in accordance with local laws and regulations; RadioComp ApS provides a salary fee of 5% of the total salary as pension in accordance with local laws and regulations.
Other important agreements: None
Losses due to the labor dispute over last three years: None

114

(XI). Important contracts

The date of the annual report, the date of publication, the date of publication and the most recent annual supply and sales contract, technical cooperation contract, engineering contract, long-term loan contract and other important contracts that affect shareholders' equity, the main content, the restrictions and the date of commencement of the contract:

Contract property	Interested parties	Contract date	Main content	Restrictions
Factory rental	CyberTAN Technology, Inc.	2020.07.01 ~ 2023.06.30	The Company rents an area of 13,745.454 square meters as factories.	None
Land access	Wuxi Land and Resources	2008.09.29 ~ 2058.09.28	Jupiter Technology has acquired the land access for Research and Development Park of Taihu International Technology Park, Wuxi, with an area of 15,249.6 square meters.	None
Long-term debt payable	Mega International Commercial Bank	2019.12.23~ 2025.12.15	"Loans for Returning Overseas Taiwanese Business" 6-year Loan for Machine & Equipment Purchare NT$340 million.	"Loans for Returning Overseas Taiwanese Business" Only for the purchase of machinery & equipment, not for revolving
Long-term debt payable	Mega International Commercial Bank	2020.09.30~ 2026.09.15	"Loans for Returning Overseas Taiwanese Business" 6-year Loan for Working Capital Need NT$200 million.	Provide the working capital need "Loans for Returning Overseas Taiwanese Business" cannot be revolved.
Long-term debt payable	Land Bank of Taiwan	2021.02.05~ 2026.03.15	"Loans for Returning Overseas Taiwanese Business" 5-year Loan for Working Capital Need NT$250 million	Provide the working capital need "Loans for Returning Overseas Taiwanese Business" cannot be revolved.
Long-term debt payable	The Shanghai Commercial	2020.03.31~ 2025.03.15	"Loans for Returning Overseas Taiwanese Business"	Provide the working capital need "Loans for Returning

115

Contract property	Interested parties	Contract date	Main content	Restrictions
	& Savings Bank		5-year Loan for Working Capital Need NT$300 million	Overseas Taiwanese Business" cannot be revolved

116

VI. Financial Position

(I). Condensed Balance Sheets and Comprehensive Income Statements covering the period from 2016.01.01 to 2020.12.31

1. Condensed Consolidated Balance Sheet - IFRS

Unit: NT$ Thousands

Year Item	Year Item	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)	Financial information of current period to 2021.03.31 (Note 2)
		2016	2017	2018	2019	2020
Current assets		3,804,010	4,282,998	4,383,047	3,245,272	3,451,306	3,478,532
Property, plant and equipment(Note 3)		570,611	547,887	540,951	495,226	522,570	530,093
Intangible assets		307,186	303,073	301,060	302,120	304,576	302,399
Other assets		638,309	616,264	693,130	981,606	1,121,331	1,113,628
Total assets		5,320,116	5,750,222	5,918,188	5,024,224	5,399,783	5,424,652
Current liabilities	Cum-divi dend	2,318,506	2,673,156	2,833,598	1,778,982	1,888,517	1,958,919
	Ex-divide nd	2,318,506	2,673,156	2,833,598	1,778,982	(Note 4)	(Note 4)
Non-current liabilities		674,286	306,920	325,033	589,787	1,091,736	1,162,423
Total liabilities	Cum-divi dend	2,992,792	2,980,076	3,158,631	2,368,769	2,980,253	3,121,342
	Ex-divide nd	2,992,792	2,980,076	3,158,631	2,368,769	(Note 4)	(Note 4)
Shareholders equity attributable to the parent company		2,327,267	2,770,090	2,759,557	2,655,455	2,419,530	2,303,310
Capital stock		2,133,226	2,280,283	2,280,283	2,280,283	2,280,283	2,280,283
Additional capital	paid-in	161,372	402,937	402,937	402,937	402,937	402,937
Retained earnings	Cum-divi dend	53,721	170,316	269,763	220,811	101,062	(10,632)
	Ex-divide nd	53,721	170,316	269,763	220,811	(Note 4)	(Note 4)
Other equity		(21,052)	(83,446)	(193,426)	(248,576)	(364,752)	(369,278)
Treasuryshares		-	-	-	-	-	-
Uncontrolled equity		57	56	-	-	-	-
Total equity	Cum-divi dend	2,327,324	2,770,146	2,759,557	2,655,455	2,419,530	2,303,310
	Ex-divide nd	2,327,324	2,770,146	2,759,557	2,655,455	(Note 4)	(Note 4)

Note 1: The Financial information in the period of 2016.01.01 to 2020.12.31 was based on the audited financial statements of the Company.

Note 2: The financial information covering 2021 Q1 was based on the audit financial statements of the Company.

Note 3: No asset re-evaluation has been conducted in the aforementioned periods.

Note 4: The proposal for the 2020 covering of losses is pending the final approval of the Shareholders’ Meeting and is not presented here.

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2. Condensed Consolidated Comprehensive Income Statement- IFRS

2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS	2. Condensed Consolidated Comprehensive Income Statement- IFRS
Unit: NT$Thousands
Year Item	Financial information of the period from 2016.01.01 to 2020.12.31(Note 1)					Financial information of current period to 2021.03.31 (Note 2)
	2016	2017	2018	2019	2020
Revenue	7,597,056	7,550,804	7,969,155	5,798,880	3,949,997	1,001,216
Grossprofit	1,265,495	1,157,736	1,066,361	952,277	739,872	107,827
Operatingincome	212,655	187,846	55,192	12,781	(137,009)	(118,486)
Non-operating income and expense	11,981	11,894	26,478	(2,256)	56,464	3,605
Earnings before taxation	224,636	199,740	81,670	10,525	(80,545)	(114,881)
Net income of continuing operations in currentperiod	164,228	160,595	52,109	1,684	(95,415)	(111,694)
Loss from discontinued operations	-	-	-	-	-	-
Net income (loss) in current period	164,228	160,595	52,109	1,684	(95,415)	(111,694)
Other comprehensive incomes in current period (Net income)	(138,564)	(80,796)	(17,092)	(60,180)	(140,510)	(4,526)
Total comprehensive income in currentperiod	25,664	79,799	35,017	(58,496)	(235,925)	(116,220)
Net income attributable to the shareholders ofparent company	164,269	160,595	52,109	1,684	(95,415)	(111,694)
Net income attributable to uncontrolled equity	(41)	-	-	-	-	-
Total comprehensive income attributable to the shareholders ofparent company	25,712	79,800	35,073	(58,496)	(235,925)	(116,220)
Total comprehensive income attributable to uncontrolled equity	(48)	(1)	(56)	-	-	-
Earningsper share	0.81	0.73	0.23	0.01	(0.42)	(0.49)

Note 1: The Financial information in the period of 2016.01.01 to 2020.12.31 was based on the audited financial statements of the Company.

Note 2: The financial information covering 2021 Q1 was based on the audit financial statements of the Company.

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3. Condensed Stand-alone Balance Sheet - IFRS

Unit: NT$ Thousands

		Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands
Year Item		Financial information of the period from 2016.01.01 to 2020.12.31
		2016	2017	2018	2019	2020
Current assets		2,713,685	2,709,570	2,850,464	2,200,703	2,507,893
Property, plant and equipment(Note 2)		49,721	46,630	80,754	93,334	119,451
Intangible assets		160,591	164,753	157,552	163,085	166,109
Other assets		2,000,205	1,975,431	2,039,497	2,219,892	2,401,619
Total assets		4,924,202	4,896,384	5,128,267	4,677,014	5,195,072
Current liabilities	Cum-divi dend	1,926,015	1,830,090	2,047,787	1,513,458	1,753,740
	Ex-divide nd	1,926,015	1,830,090	2,047,787	1,513,458	Note 3
Non-current liabilities		670,920	296,204	320,923	508,101	1,021,802
Total liabilities	Cum-divi dend	2,596,935	2,126,294	2,368,710	2,021,559	2,775,542
	Ex-divide nd	2,596,935	2,126,294	2,368,710	2,021,559	Note 3
Shareholders equity attributable to the parent company		2,327,267	2,770,090	2,759,557	2,655,455	2,419,530
Capital stock		2,133,226	2,280,283	2,280,283	2,280,283	2,280,283
Additional capital	paid-in	161,372	402,937	402,937	402,937	402,937
Retained earnings	Cum-divi dend	53,721	170,316	269,763	220,811	101,062
	Ex-divide nd	53,721	170,316	269,763	220,811	Note 3
Other equity		(21,052)	(83,446)	(193,426)	(248,576)	(364,752)
Treasuryshares		-	-	-	-	-
Uncontrolled equity		-	-	-	-	-
Total equity	Cum-divi dend	2,327,267	2,770,090	2,759,557	2,655,455	2,419,530
	Ex-divide nd	2,327,267	2,770,090	2,759,557	2,655,455	Note 3

Note 1: The Financial information in the period of 2016.01.01 to 2020.12.31 was based on the audited financial

statements of the Company.

Note 2: No asset reevaluation has been conducted in the aforementioned periods.

Note 3: The proposal for the 2020 covering of losses is pending on the final approval of the Shareholders’ Meeting and

is not presented here.

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4. Condensed Separate Comprehensive Income Statement - IFRS

Unit: NT$ Thousands

Year Item	Financial information of the period from 2016.01.01 to 2020.12.31	Financial information of the period from 2016.01.01 to 2020.12.31	Financial information of the period from 2016.01.01 to 2020.12.31	Financial information of the period from 2016.01.01 to 2020.12.31	Financial information of the period from 2016.01.01 to 2020.12.31
	2016	2017	2018	2019	2020
Revenue	6,737,797	6,560,807	7,124,093	4,922,305	3,165,331
Grossprofit	953,902	997,775	878,625	777,893	498,049
Operatingincome	34,194	127,625	(46,907)	(48,095)	(183,873)
Non-operating income and expense	133,285	41,719	107,616	49,779	88,458
Earnings before taxation	167,479	169,344	60,709	1,684	(95,415)
Net income of continuing operations in currentperiod	164,269	160,595	52,109	1,684	(95,415)
Loss from discontinued operations	-	-	-	-	-
Net income (loss) in currentperiod	164,269	160,595	52,109	1,684	(95,415)
Other comprehensive incomes in current period (Net income)	(138,556)	(80,795)	(17,036)	(60,180)	(140,510)
Total comprehensive income in currentperiod	25,713	79,800	35,073	(58,496)	(235,925)
Net income attributable to the shareholders of parent company	164,269	160,595	52,109	1,684	(95,415)
Net income attributable to uncontrolled equity	-	-	-	-	-
Total comprehensive income attributable to the shareholders of parent company	25,713	79,800	35,073	(58,496)	(235,925)
Total comprehensive income attributable to uncontrolled equity	-	-	-	-	-
Earningsper share	0.81	0.73	0.23	0.01	(0.42)

Note: The Financial information in the period of 2016.01.01 to 2020.12.31 was based on the audited financial

statements of the Company.

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Names of the external auditors in the period of 2016.01.01 to 2020.12.31 and audit opinion

Audit year	Name of CPA office	Name of CPA	Audit Opinion
2016	PwC Taiwan	Fang-Yu Wen, Yu-Kuan Lin	Unqualified opinion
2017	PwC Taiwan	Yu-Kuan Lin, Tien-Yi Lee	Unqualified opinion
2018	PwC Taiwan	Yu-Kuan Lin, Tien-Yi Lee	Unqualified opinion
2019	PwC Taiwan	Yu-Kuan Lin, Tien-Yi Lee	Unqualified opinion
2020	PwC Taiwan	Yu-Kuan Lin, Tien-Yi Lee	Unqualified opinion

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(II).Financial Analysis in the period from 2016.01.01 to 2020.12.31 1. Consolidated financial analysis - IFRS

1. Consolidated financial analysis	1. Consolidated financial analysis	- IFRS	- IFRS	- IFRS	- IFRS	- IFRS
Year Items of analysis		Financial Analysis in the period from 2016.01.01 to 2020.12.31(Note 1)					Financial information of current period to 2021.03.31 (Note 2)
		2016	2017	2018	2019	2020
Financ ial Struct ure (%)	Liabilities to assets ratio	56.25	51.83	53.37	47.15	55.19	57.54
	Long-term capital to property, plant and equipment ratio	526.03	561.62	570.22	655.31	671.92	653.8
Ability to re-pay debts %	Current ratio	164.07	160.22	154.68	182.42	182.75	177.57
	Quick ratio	115.21	107.79	105.28	131.53	125.41	116.51
	Debt service coverage ratio	10.57	23.59	5.59	1.92	(4.06)	(26.39)
Operat ing ability	Receivables turnover(time)	5.47	5.04	4.82	4.08	3.76	3.94
	Average days of collection	67	72	76	89	97	92
	Inventoryturnover(time)	4.84	5.00	4.71	3.88	2.98	3.07
	Payables turnover(time)	3.68	4.38	4.02	3.20	3.72	4.01
	Average days of sale	76	73	77	94	122	118
	Property, plant and equipment turnover(time)	12.37	13.5	14.64	11.19	7.76	7.61
	Total assets turnover(time)	1.36	1.36	1.37	1.06	0.76	0.74
Profita bility	Return on assets(%)	3.24	3.08	1.09	0.10	(1.53)	(7.97)
	Return on equity (%)	7.57	6.3	1.88	0.06	(3.76)	(18.92)
	EBT to paid-in capital ratio (%)	10.53	8.76	3.58	0.46	(3.53)	(20.15)
	Net income ratio(%)	2.16	2.13	0.65	0.03	(2.42)	(11.16)
	Earningsper share(NTD)	0.81	0.73	0.23	0.01	(0.42)	(0.49)
Cash flows	Cash flow ratio(%)	11.54	(Note 4)	9.04	12.32	2.53	(Note 4)
	Cash flow adequacy ratio (%)	75.04	48.09	56.83	87.73	77.21	48.31
	Cash re-investment ratio(%)	6.59	(3.33)	6.15	5.86	1.54	(Note 4)
Levera ge:	Operating leverage	4.55	4.92	14.7	48.79	(Note 3)	(Note 3)
	Financial leverage	1.12	1.07	1.48	(1.28)	0.9	0.97
Explain the changes in the financial ratios in the last 2 years and the reasons for the changes: 1. The ability to re-pay debts: The debt service coverage ratio turned negative in 2020 due to the deficit of EBT. 2. Operating ability: Ratios were worse due to sales decline in 2020. 3. Profitability: The profitability was negative due to net loss in 2020. 4. Cash flows: 2020 net operating cash inflow was less than that of 2019 result because of business slowdown. 5. Leverage: The leverage was affected by 2020 negative operating income.

Note 1: The financial information in the period from 2016.01.01 to 2020.12.31 was audited. Note 2: The financial information covering 2021 Q1 was audited. Note 3: No calculation as operating income minus interest expense was negative.

Note 4: Not applicable when oprating cash outflow was reported.

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The equations for calculation are shown below:

Financial Structure
(1) Liabilities to assets ratio = Total liabilities/total assets
(2) Long-term capital to property, plant and equipment ratio – (total equity + non-current liabilities)/net

property, plant and equipment

Ability to repay debts
(1) Current ratio = current assets/current liabilities
(2) Quick ratio = (current assets – inventory – prepayment)/ current liabilities
(3) Debt service coverage ratio = EBIT/interest expense in current period
Utility

(1) Receivables (including account receivables and note receivables from business operation) turnover = net sale/balance of average receivables in each period (including account receivables and note receivables from business operation).

(2) Average days of collection = 365/ account receivable turnover
(3) Inventory turnover = cost of sale/ average inventory
(4) Payables (including account payables and note payables from business operation) turnover = net

sale/balance of average payables in each period (including

account payables and note payables from business operation)

(5) Average days of sale = 365/inventory turnover
(6) Property, plant, and equipment turnover = net sale / average net property, plant, and equipment
(7) Total asset turnover = net sale/ average total assets
Profitability
(1) Return on assets = [net income + interest expense x (1-tax rate)] / average total assets
(2) Return on equity = net income / average total equity
(3) Net income ratio = net income/net sale

(4) Earnings per share = (income attributable to parent company – preferred share dividend) / weighted average outstanding shares

Cash flows
(1) Cash flow ratio = cash flow from operation /current liabilities
(2) Net cash flow adequacy ratio = net cash flows from operation in the last 5 years / (capital expenditures + inventory increment + cash dividends) of the last 5 years
(3) Cash re-investment ratio = (net cash flows from operation – cash dividend) / (gross property, plant, and equipment + other non-current assets + working capital)
Leverage:
(1) Operating leverage = (net sales – variable operating costs and expense) operating income
(2) Financial leverage = operating income / (operating income – interest expense)

123

2. Stand-Alone Financial Analysis - IFRS

Year Items of analysis	Year Items of analysis	Financial Analysis in the period from 2016.01.01 to 2020.12.31 (Note 1)	Financial Analysis in the period from 2016.01.01 to 2020.12.31 (Note 1)	Financial Analysis in the period from 2016.01.01 to 2020.12.31 (Note 1)	Financial Analysis in the period from 2016.01.01 to 2020.12.31 (Note 1)	Financial Analysis in the period from 2016.01.01 to 2020.12.31 (Note 1)
		2016	2017	2018	2019	2020
Financial Structure (%)	Liabilities to assets ratio	52.74	43.43	46.19	43.22	53.43
	Long-term capital to property, plant and equipment ratio	6,030.02	6,575.8	3,814.65	3,389.5	2,880.96
Ability to re-pay debts%	Current ratio	140.9	148.06	139.2	145.41	143
	Quick ratio	108.2	120.91	102.15	105.42	93.87
	Debt service coverage ratio	10.25	38.57	4.82	1.56	(6.02)
Operatin g ability	Receivables turnover(time)	5.34	4.89	5.04	4.27	3.56
	Average days of collection	69	74	72	86	102
	Inventoryturnover(time)	7.12	9.26	8.85	5.59	3.58
	Payables turnover(time)	4.19	5.00	6.83	4.39	3.64
	Average days of sale	52	39	41	65	102
	Property, plant and equipment turnover(time)	120.91	136.19	111.85	56.55	29.75
	Total assets turnover(time)	1.33	1.34	1.42	1.00	0.64
Profitabil ity	Return on assets(%)	3.57	3.42	1.32	0.39	(1.67)
	Return on equity (%)	7.57	6.30	1.88	0.06	(3.76)
	EBT to paid-in capital ratio (%)	7.85	7.43	2.66	0.07	(4.18)
	Net income ratio(%)	2.44	2.45	0.73	0.03	(3.01)
	Earningsper share(NTD)	0.81	0.73	0.23	0.01	(0.42)
Cash flows	Cash flow ratio(%)	30.24	(Note 3)	6.98	15.23	(Note 3)
	Cash flow adequacyratio(%)	578.9	464.18	168.36	189.34	123.17
	Cash re-investment ratio(%)	17.28	(12.95)	2.94	6.00	(Note 3)
Leverage	Operating leverage (Note 4)	144.45	36.09	(Note 4)	(Note 4)	(Note 4)
	Financial leverage	2.05	1.06	0.74	0.74	0.93
Explain the changes in the financial ratios in the last 2 years and the reasons for the changes: 1. The ability to re-pay debts: The debt service coverage ratio was negative in 2020 due to the deficit of EBT. 2. Operating ability: Ratios were worse due to sales decline in 2020. 3. Profitability: The profitability was negative due to net loss in 2020. 4. Cash flows: 2020 net operating cash inflow was less than that of 2019 result because of business slowdown

Note 1: The financial information in the period from 2016.01.01 to 2020.12.31 was audited.

Note 2: No calculation as operating cash outflow was reported.

Note 3: Not applicable when there was operating cash outflow.

Note 4: Not applicable when operating loss was reported.

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The equations for calculation are shown below:

Financial Structure
(1) Liabilities to assets ratio = Total liabilities/total assets
(2) Long-term capital to property, plant and equipment ratio – (total equity + non-current liabilities)/net

property, plant and equipment

Ability to repay debts
(1) Current ratio = current assets/current liabilities
(2) Quick ratio = (current assets – inventory – pre-payment)/ current liabilities
(3) Debt service coverage ratio = EBIT/interest expense in current period
Utility
(1) Receivables turnover = net sale/balance of average receivables in each period.
(2) Average days of collection = 365/ account receivable turnover
(3) Inventory turnover = cost of sale/ average inventory
(4) Payables turnover = net sale/balance of average payables in each period.
(5) Average days of sale = 365/inventory turnover
(6) Fixed assets turnover = net sale /net fixed assets
(7) Total asset turnover = net sale/ average total assets
Profitability
(1) Return on assets = [net income + interest expense x (1-tax rate)] / average total assets
(2) Return on equity = net income / average total equity
(3) Net income ratio = net income/net sale
(4) Earnings per share = (Net income – preferred share dividend) / weighted average outstanding shares
Cash flows
(1) Cash flow ratio = cash flow from operation /current liabilities
(2) Net cash flow adequacy ratio = net cash flows from operation in the last 5 years / (capital expenditures + inventory increment + cash dividend) of the last 5 years
(3) Cash reinvestment ratio = (net cash flows from operation – cash dividend) / (gross fixed assets + other non-current assets + working capital)
Leverage:
(1) Operating leverage = (net sales – variable operating cost and expense) operating income (Note 6)
(2) Financial leverage = operating income / (operating income – interest expense)

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(III).The Review Report of the Audit Committee on the financial statements of the most recent year.

The Board of Directors compiled the 2020 Business Report, Financial Statements, and Proposal for the losses covering. The aforementioned financial statements were audited by Yu-Kuan Lin and Tien-Yi Lee, CPAs from PwC Taiwan with the issuance of an Auditors’ Report. We have reviewed the aforementioned Business Report, Financial Statements and the Proposal for the losses covering, which were prepared in conformity to applicable rules and regulations. We hereby present this report to the Shareholders’ Meeting of Microelectronics Technology Inc. for your reference pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

2020 Annual Shareholders’ Meeting

Microelectronics Technology Inc.

Convener of Audit Committee: Yun Lin

March 17 2021

126

(IV).The audited Consolidated Financial Statements of the most recent year Please refer to Appendix 1.
(V).The audited Parent Company Only Financial Statements of the most recent year

Please refer to Appendix 2.

(VI).If the Company and its subsidiaries encountered insolvency in the most recent year to the day this report was printed, specify the influence on the financial position of the Company : Not applicable.

127

VII. The review and analysis of financial position and performance, and assessment of related risks

(I). Financial Position


Year Item	2019	2020	Difference
			Change in amount	Change in ratio %
Current assets	3,245,272	3,451,306	206,034	6.35%
Property, plant and equipment	495,226	522,570	27,344	5.52%
Intangible assets	302,120	304,576	2,456	0.81%
Other assets	981,606	1,121,331	139,725	14.23%
Total assets	5,024,224	5,399,783	375,559	7.47%
Current liabilities	1,778,982	1,888,517	109,535	6.16%
Non-current liabilities	589,787	1,091,736	501,949	85.11%
Total liabilities	2,368,769	2,980,253	611,484	25.81%
Shareholders equity attributable to the parent company	2,655,455	2,419,530	(235,925)	(8.88)%
Capital stock	2,280,283	2,280,283	-	-
Additional paid-in capital	402,937	402,937	-	-
Retained earnings	220,811	101,062	(119,749)	(54.23)%
Other equity	(248,576)	(364,752)	(116,176)	46.74%
Treasuryshares	-	-	-	-
Uncontrolled equity	-	-	-	-
Total shareholders’ equity	2,655,455	2,419,530	(235,925)	(8.88)%
Note to the difference: 1. Increase in current assets: Due to increases of long-term loan and lease liability-non current. 2. Decrease in other assets: this was a result of evaluation loss of financial assets. Note: the above financial information was audited by CPAs under IFRS.

128

(II).Financial performance

Unit: NT$ Thousands

Year Item	2019	2020	Change in amount	Change in ratio %
Revenue Cost ofgoods sold	5,798,880 4,846,603	3,949,997 3,210,125	(1,848,883) (1,636,478)	(31.88)% (33.77)%
Gross profit Operatingexpense	952,277 939,496	739,872 876,881	(212,405) (62,615)	(22.3)% (6.66)%
Operating income (loss) Non-operating income and (expense)	12,781 (2,256)	(137,009) 56,464	(149,790) 58,720	(1,171.97)% 2,602.84%
Earnings (loss) before tax Income tax expense(benefit)	10,525 8,841	(80,545) 14,870	(91,070) 6,029	(865.27)% 68.19%
Net income(loss)	1,684	(95,415)	(97,099)	(5,765.97)%
Note to the changes in the ratios: 1. Decrease in revenue, cost of goods sold, and operating income: mainly because of lower demand from customers. 2. Increase in non-operating income: mainly because of government grants. 3. Increase of income tax expense: because the profits of subsidiary. Note: the above financial information was audited by CPAs under IFRS.

(III).Cash flows

Liquidity analysis of the last 2 years

Unit：%

			Unit：%
Year Item	2019.12.31	2020.12.31	Change in ratio %
Cash flow ratio (%)	12.32	2.53	(79.46)%
Cash flow adequacy ratio (%)	87.73	77.21	(11.99)%
Cash re-investment ratio (%)	5.86	1.54	(73.72)%
Note to analysis of the change in the ratios: Cash flow analysis: 2020 operating cash inflow was less than it of 2019 result in Ratios decreased. Note: the above financial information was audited byCPAs under IFRS.

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Unit: NT$ Thousands

2. Analysis of cash flow in the year ahead

				Unit: NT$ Thousands	Unit: NT$ Thousands
Cash balance at	Projected cash flow from	Projected cash flow from investing and	Projected cash	Remedy actions to projected cash short
beginning of period (1)	operating activies in the whole period (2)	financing activities in the whole period (3)	balance (short) (1) + (2) + (3)
				Investment plan	Financial management plan
1,324,793	-213,719	195,380	1,306,454	No cash short

Note to the analysis of cash flow of MTI in the year ahead:

(1) Operating activities: With projected revenue growth and improvement on operatiing performance, operating cash outflow is expected.
(2) Investing and financing activities: Capital expenditures and the offsetting by increase of long-term Loans for Returning Overseas Taiwanese Businesses, which caused the outflow of cash from investing and financing activities.

(IV).Major capital expenditure in the most recent year and the influence on the financial position and operation

1. Major capital expenditure and the sources of capital for MTI Group

Unit: NT$ Thousands

Planned programs Additional purchase of equipment and software	Actual or expected sources of capital	Actual or expected date of completion	Total amount of capital requirement (2019 and 2020)	Actualexpenditure ofcapital	Actualexpenditure ofcapital
				2019	2020
	Equity capital and part of long-term Loans for Returning Overseas Taiwanese Businesses	Purchase in respective years	205,376	76,186	129,190

2. Expected results

The capital spending on the procurement of additional plant, automation equipment, R&D and testing software and equipment could upgrade the innovation of products perpetually and upgrade product quality and quantity, to the extent that cost could be cut down, quality and performance could be improved. These will be essential for the high-tech industry in maintaining competitive advantage.

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(V).The re-investment policy of the most recent year, the main reason for profit or loss, corrective action plan and the investment plan in the year ahead.

Re-investment policy:
The main direct investment of the Company is Sasson International Holdings Inc., which is a holding company responsible for the planning and execution of domestic and foreign investment management. Through international strategic alliance or merger and acquisition, the Company could develop more channels for international marketing and upgrade technology. In general, the strategy will focus on long-term holding and not for profit through short swing trade.
Main reason for profit or loss:

In 2020, the Company mainly recognized the losses from the satellite communication systems and equipment manufactured by subsidiary Jupiter Technology (Wuxi) Co., Ltd. amounting to NT$ 18,128 thousand as return on investment.

(VI).Risks

The influence of changes in interest rate and exchange rate, and inflation, and information security risk on the income position of the Company and the remedy in the future:
(1) Interest rate: the interest rate risk of the Company is derived from financing and financial investment. The fluctuation of interest rate in Taiwan and the U.S.A. will affect the expenses incurred from interest payable, and the interest income generated from cash and cash equivalents. The treasury policy of the Company focused on the security and liquidity of cash flow and keep the receipt and payment of cash under control with close attention to the changes in interest rate in market and the proper use of different financing instruments for keeping the cost of financing at reasonable levels.
(2) Exchange rate: The Company has appointed designated personnel to observe the changes in the foreign exchange market daily, and adopted the quotation for sale and purchase in the same currency for natural hedge of most of the exchange risk. The position of foreign currency that cannot be offset by natural hedge will be remedied by forwards and FX swap through cautious risk assessment before engagement for mitigating the influence from exchange rate fluctuation.
(3) Inflation: Inflation did not significantly affect the cost of purchase for the Company. Ongoing observation of the trend is still necessary.
(4) Information security risk: MTI has built up a set of information environment protection mechanisms for responding to any kind of possible threats in responding the the everchanging network and virus attacks form outside so as to reduce the risks of external attacks on the information environment of the Company. Although the protection mechanisms are established, the avoidance of possible network and computer virus attack can not be fully guaranteed. Successful network attack may cause network interruption, congestion or instability. Computer virus infection may paralyze personal computer, system server, or production apparatus and equipment. The attack from hackers from outside may cause data leak or encryption of data of the Company that can not be used. The above situations may deprive the Company from normal operation and production. Further to the loss caused by termporary suspension of production, the discontinuation of the production line may also affect the promise to customers on delivery. Data leak may cause the drain out of vital technical documents of the Company that affects the competitive power of the Company in the long-run. The divulgence of information provided by customers/suppliers may result in liability of damages to the customers/suppliers. The divulgence of information on the employees

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may trigger legal proceedings pertinent to the protection of personal information under applicable laws. Further to the protective mechanisms, MTI has also established the mechanism for recovery after disaster through routine backup of vital information at alternate locations. Exercise drill will be conducted regularly for assurance of system recovery in the shortest possible time after natural disaster or sabotages. From 2020 to the day this report was printed, MTI did not discover any incident on information security that may significantly affect the business and operation of the Company. MTI has also established a cross-function “Business Secret Management Committee” in 2017 for fostering the protection of business secrets and enhancement of the information security protective mechanisms. This committee is responsible for setting up and carrying out the mechanisms for the protection of business secrets and essential information security policies. In addition, MTI has also established the “Regulations Governing Business Secrets of MTI” as the guidelines for the pursuit of the tasks for protection. The committee convenes at least once quarterly for assessing the pursuit of the information security policies by respective functional departments and making related adjustment. The information function of the staff units are responsible for the advocacy of information security protection. This functional unit is responsible for the introduction of the mechanisms for information security and assessment of the information security technology and risk from time to time. The findings of assessment on information security mechanisms will be reported to the committee meeting for discussion. The legal affairs function of the Company will assist to affirm the compliance of the information security policies and review the changes in applicable laws at regular intervals for giving recommendation for the timely adjustment of related policies. The internal audit function will conduct audit on each department from time to time for assurance of the proper pursuit of information security policies. All departments in the committee will implement security protection relevant work in accordance with the resolutions of the meeting.

Information security insurance is emerging insurance that was still under careful evaluation; therefore, it had not yet applied in 2020. However, in order to reduce information security risks, the specific practices adopted currently are as follows:

Check the information environment occasionally: Observe whether there is a new information security attack externally and new protection technology, and check whether the existing information system structure is with potential risks, whether information security regulations are appropriate, and whether the related software and hardware equipment are updated completely. Base on the review results to formulate relevant improvement measures and have them implemented on schedule.
Regular account and authorization review: Regularly review the account authorization of each system to ensure that the relevant account authorization is programmed appropriately.
Regular backup and disaster recovery drills: Formulate and implement a backup plan. Arrange disaster recovery drills for the key systems every year to ensure that the system can be restored as soon as necessary.
4.Occasional phishing drills: Arrange phishing drills occasionally every year to improve personnel’s ability to respond to information security attacks.
The policies for the engagement in high risk and high leverage investment, loaning of funds to a third party, endorsement/guarantee, and derivative trade, the main reason for profit or loss and the remedies in the future:

Under the Regulations Governing the Use of Funds of the Company, MTI is not allowed to use its funds for speculation and assets not for production like speculative investment in stocks or property not for official use for the proper management of financial risk. Relevant effective

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internal management regulations and procedures were in place for governing all other investment: including the “Procedure for the Acquisition or Disposition of Assets (including derivatives),” “Procedure for the Loaning of Funds” and “Regulations Governing Endorsement/Guarantees.”

The main targets for endorsement/guarantee are the subsidiaries and usually up to the amount of net shareholders equity. As of the day this report was printed, the Company did not undertake any endorsement/guarantee. The “Procedure for Loaning of Funds” specified that the Company shall not offer loan to a third party.

3. The R&D plan in the future and projected expenditure:

The Company has attracted good people in research and development and invested in the best resources for research and development for the control of the core RF technology and integration with DSP and Software technology. These resources allowed for the differentiation of new products and providing the customers with high benefit products and the best solutions to the extent that both sides are the winners. For information on R&D plan in the future, refer to V. Business Review (I) Business Overview (iv) Technological research and development of the annual report.

The influence of the changes in major policies of the home countries and overseas and the changes in the regulatory environment on the financial position and operation of the Company and the response:

The Company complies with the policies and laws of the home country. The treasury and legal affairs functions of the Company can keep track with related policies and applicable laws for timely adjustment of related internal systems of the Company and respond appropriately to the changes for assurance of smooth business operation. The change in the regulatory environment in 2020 did not significantly affect the operation of the Company.

The influence of the changes in technology and industry on the financial position and operation of the Company and the response:

The Company highly treasures R&D and training of personnel and has appropriate a portion of its revenue for investment in R&D and training of personnel for assurance of an edge in innovation of technology and production process. In responding to the acute competition in market, the Company continues to fortify the function of its products, reduce the cost of production and launch the products to the needs of the customers, keep abreast of any trend in the market and align with any technological and industrial change.

The influence of the change in corporate image on corporate crisis management and response:

The Company highly treasures corporate governance and corporate social responsibility, and spares no effort in keeping high moral standard in business and ethical corporate management. The Company holds conference related to its operation and improve the transparency of financial information. The Company also participates in social charity voluntarily for the assurance of performing its social responsibility.

The expected results and possible risks of mergers and acquisitions, and the

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response: The Company has no plans for mergers and acquisitions to the day this report was printed.

The expected results and possible risks of capacity expansion, and the response: The Company will take precautions in capacity expansion and upgrade in response to the changes in market and customer needs, and procures automated production equipment.
The risks deriving from concentration of purchase or sales and remedies:
Purchase: The Company keeps at least 2 suppliers for the same item for the diversification of the sources of supply and has maintained positive relationships with its suppliers for assurance of the uninterrupted sources and good quality of materials supply.

Sale: The Company insists on the capacity in R&D and manufacturing. Further to keeping prolonged cooperative relationships with existing customers, the Company also seeks to cultivate new customers and broaden the sources of business. The risk of concentration in sale is not a concern.
The influence of voluminous transfer of share or swap of shares by the directors, supervisors, or major shareholders holding more than 10% of the shares on the Company and the risks thereof, and the response: Not applicable to the Company to the day this report was printed.
The influence of the ownership on the Company, the risk thereof and the response: Not applicable to the Company to the day this report was printed.
Law suits or non-contentious matters: Not applicable to the Company to the day this report was printed.

(VII).Additional information: Nil.

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VIII.Special Notes

(I). Subsidiaries

Organizational chart

2020.12.31

==> picture [525 x 332] intentionally omitted <==

----- Start of picture text -----

Microelectronics Technology Inc.
Sasson International
Holdings Inc.
100%
Welltop Technology Co.,Ltd. Jupiter Network Corp.
100% 100%
RadioComp MTI Laboratory
Jupiter Technology
ApS Inc.
(Wuxi) Co., Ltd.
100% 100%
100%
----- End of picture text -----

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2. Basic information on the affiliates

2020.12.31

Unit: NTD/USD/DKK Thousands

Enterprise name	Date of establishment	Address	Paid-in capital	Principal business or products
Sasson International Holdings Inc.	February 1992	Avias Fabrega & Febrega Trust Co. BVI Ltd. Level 1, Palm Grove House, Wickham’s Cay 1, Road Town, Tortola, BVI	US$39,202	Investment management
Welltop Technology Co., Ltd.	October 2000	Tropic Isle Building, P.O. Box 438, Road Twon, Tortola, BVI	US$7,834	Investment management
Jupiter Network Corp.	January 2001	Tropic Isle Building, P.O. Box 438, Road Twon, Tortola, BVI	US$31,072	Investment management
Jupiter Technology (Wuxi) Co., Ltd.	March 2001	No. 180-2, Linghu Blvd, Independent Research and Development Park, Taihu International TechnologyPark,Wuxi.	US$31,000	Communication industry
MTI Laboratory Inc.	July 2006	201 Continental Boulevard #300, El Segundo, CA 90245	US$1,500	Communication industry
RadioComp ApS	October 2010	Krakasvej 17, DK-3400 Hillerød, Denmark	DKK$1,751	Communication industry

Same shareholders of enterprises presumed under control and in subordination to the Company: Nil.
The industries covered by the enterprises of the whole group:
(1) The business engaged by the affiliates of the Company are: investment management and communication.
(2) The affiliates in association with one another, their transactions, and division of labor: The Company has purchases and sales with Jupiter Technology (Wuxi) Co., Ltd., subsidiary of the Company. RadioComp and MTI Laboratory Inc. have signed the service contracts with the Company.

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Profiles of the directors, supervisors and president of the affiliates

2020.12.31

Unit: share; %

			2020.12.31 Unit: share;%	2020.12.31 Unit: share;%
Enterprise name	Title	Name or Representative	Quantity of Shareholding
			Quantity of share	Proportion of shareholding
Sasson International Holdings Inc.	Director President	Patrick Wang Chi Hsieh Amy Ting Chris Wei	3,920	100.00%
Welltop Technology Co., Ltd.	Director	Sasson International Holdings Inc. -Representative: Chi Hsieh -Representative：Allen Yen -Representative: Hualin Chi	7,834,000	100.00%
Jupiter Network Corp.	Director	Sasson International Holdings Inc. -Representative: Chi Hsieh -Representative：Allen Yen -Representative: Hualin Chi	31,071,800	100.00%
Jupiter Technology (Wuxi) Co., Ltd.	Director Supervisor President	Jupiter Network Corp. -Representative: Chi Hsieh -Representative：Allen Yen - Representative: Dunga Wu -Representative: Hunter Huang Hualin Chi Yi-Shan Chang	N / A	100.00%
MTI Laboratory Inc.	Director President	Welltop Technology Co., Ltd	1,500,000	100.00%
		-Representative: Allen Yen -Representative: George Ling -Representative: Chris Wei Davis Kent
RadioComp ApS	Director President	Welltop Technology Co., Ltd -Representative: Allen Yen -Representative: George Ling -Representative: Chris Wei Henrik Repsdorph	1,527,944	100.00%

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5. Business Highlights of the Affiliates

2020.12.31

Unit: NT$ Thousands

Enterprise name	Paid-in capital	Total assets	Total liabilities	Net worth	Revenue	Operating income	Net income (After tax)
Sasson International Holdings Inc.	US$39,202,000	1,552,353	0	1,552,353	0	(71)	40,199
Welltop Technology Co., Ltd	US$7,834,000	326,006	0	326,006	0	0	20,562
Jupiter Network Corp.	US$31,071,800	1,012,409	0	1,012,409	0	0	18,128
Jupiter Technology (Wuxi)Co.,Ltd.	US$31,000,000	1,651,505	639,140	1,012,365	2,130,036	19,817	18,128
MTI Laboratory Inc.	US$1,500,000	217,432	101,346	116,086	234,317	10,487	16,469
RadioComp ApS	DKK`＄`1,750,912	80,228	29,687	50,542	111,717	5,829	4,013

Consolidated financial statements of the affiliates: refer to VI. Financial Position(IV) the Audited Consolidatd Financial Statements of the most recent year.

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Representation Letter:

Microelectronics Technology Inc. Representation Letter

The entities that are required to be included in the combined financial statements of the Company for year 2020 (from Janauary 1, 2020 to December 31, 2020), under the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, the Company does not prepare a separate set of combined financial statements. Microelectronics Technology Inc. Representative: Allen Yen March 17 2021

(II). Offering of securities through private placement: Nil.
(III). The holding or disposal of Company shares by subsidiaries: Nil. (IV). Other additional information: Nil.
(V). Incidents that significantly affected the shareholders equity or stock price of the Company as prescribed in Subparagraph 2, Paragraph 2 in Article 36 of the Securities and Exchange Act in the most recent year to the day this report was printed: Nil.

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AI assistant

MTI — Annual Report 2021

52003_rns_2021-09-01_de0e3f31-0a37-40ce-ad96-6540d25435b1.pdf

Stock Code 2314

Microelectronics Technology Inc. 2020 Annual Report (Translation)

Notice to readers

Annual Reports are accessible from the following website ：

http://mops.twse.com.tw/

V. Inquiry of overseas stock price

Table of content

Page

I. Letter to Shareholders

Dear Shareholders, Ladies and Gentlemen,

Grasping Trends

Pursuing Growth

Building up Advantages

Prospect

II. Company Profile

(I). Date of establishment

(ii) Scope of business

(II). Company History

III.Corporate Governance Report

(I). Organization System

(i) Organizational Chart

(ii) Job functions of the Departments

(II).Profiles of the Directors, President, Vice Presidents, Assistant Vice Presidents, function heads and branch heads.

(I) Directors

1. Director Profiles

2. Dominant shareholders of the institutional shareholders

3. Dominant shareholders of the above institutional shareholders

4. Professional qualification and status of independence of the Directors

(II) Key Managers

1 Information on the President, Vice Presidents, Assistant Vice Presidents, and Function and Branch Heads:

(III) Remuneration to the Directors, President and Vice Presidents

1. Remuneration to the Directors (including Independent Directors) 2020.12.31

2. Remuneration to the President and the Vice Presidents.

3. Remuneration to the top five management personnel.

4. Bracket of remuneration along the payment scale to the President and Vice Presidents

5. Names of managers with remuneration as employees and the payment

1. Analysis of the total remuneration in proportion to net income

2. Note to the policy of remuneration

(III).The pursuit of corporate governance

(I) The function of the Board

1. The convention of the Board

2. The conduct of evaluation of the Board

(II) The function of the Audit Committee:

(IV) The function of the Remuneration Committee:

1. Profiles of the members of the Remuneration Committee

(V) The performance of corporate social responsibility:

Note1:

(VI) The Practice of Ethical Corporate Management:

(VIII) The Implementation of the Internal Control System:

1. Declaration of Internal Control

1.Resolutions of the Board:

(IV).Information on Payment for the CPAs:

(VIII). Information on the top 10 shareholders by quantity of shareholding that are related parties, spouses, or kindred within the 2nd tier under the Civil Code to one another:

IV. State of offering

(I). Capital and shares

(i) Sources of capital stock

(ii) Types of shares issued

(iii) Information on inclusive declaration system: Not applicable.

(iv) Shareholder Structure:

(v) Dispersion of Shareholdings:

(vi) List of Dominant Shareholders:

(II) The offering of corporate bonds: Nil

(VIII)Fund utilization plan: Nil

V. Business Overview

(I). Business Contents

(i) Main business Contents and their business distribution

(ii) Industry overview and its future development as well as trends

Satellite communication system and its devices

Telecommunication Products

(iv) Technological research and development

(2) Consolidated information

(v) Long and short-term business plans

1. Short-term business plan

2. Long-term business plan:

(II). Market and sales overview

(1) Market analysis

1. Services and sales of main products

MTI Annual Report 2021

Annual Reports are accessible from the following website `：`