Stock Code: 2408 Annual Report Website: https: // www.nanya.com https: // mops.twse.com.tw

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Nanya Technology Corporation

2020 Annual Report

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistencies between the Chinese version and this translation, the Chinese version shall prevail.)

Published on April 23, 2021

I. Name, title, contact number, and e-mail of the Company's spokesperson and deputy spokesperson:

pokesperson:
Item	Spokesperson	Deputy Spokesperson
Name	Pei-Ing Lee	Joseph Wu
Title	President	VP
Tel	(02)2904-5858	(02)2904-5858
Email	[email protected]	[email protected]

II. Address and telephone number of head office and branches:

Company: No. 98, Nanlin Rd., Taishan Dist., New Taipei City 243, Taiwan(R.O.C.) Tel: (02)2904-5858

Factory: No. 98, Nanlin Rd., Taishan Dist., New Taipei City 243, Taiwan(R.O.C.) Tel: (02)2904-5858

III. Name, address, website, and telephone number of the Common Stock Transfer Agency:

Name: Nanya Technology Corp., Stock Affairs Department

Address: No.201, Dunhua N. Rd., Taipei City

Website: N/A

Tel: (02)2718-9898

IV. Name, address, website, and telephone number of auditors and the accounting firm that certified financial statements in the most recent year:

Name of auditors: Astor Kou and Hsin-Yi Kuo

Name of firm: KPMG Certified Public Accountants Firm

Address: 68F, No. 7, Sec. 5, Xinyi Rd., Taipei City

Website: http: //www.kpmg.com.tw

Tel: (02)8101-6666

V. Company website: https: //www.nanya.com

	Table of Contents
	Page No.
A.	Letter to Shareholders .......................................................................................... 1
B.	Company Profile ................................................................................................... 4
	I.Date of Incorporation ............................................................................................ 4
	II.Milestones ........................................................................................................... 4
C.	Corporate Governance ......................................................................................... 8
	I.Organization ......................................................................................................... 8
	II. Directors and Management Team ..................................................................... 11
	III.Remuneration of Directors, President, and Vice Presidents ............................ 20
	IV.Implementation of Corporate Governance ....................................................... 26
	V.Information Regarding NTC’s Audit Fees ........................................................ 97
	VI.Replacement of Independent Auditors ............................................................. 98
	VII.The Chairman, President and Financial or Accounting Managerial Officer of
	the Company who had worked for the Independent CPA or the affiliate in the
	past year ........................................................................................................ 99
	VIII.Share transfer by directors, supervisors, managerial officers and shareholders
	holding more than 10% equity and changes to share pledging by them in the
	past year and up to the date of report .......................................................... 100
	IX.Information on the relationship between any of the top ten shareholders
	(related party, spouse, or kinship within the second degree) ...................... 102
	X.The total number of shares and total equity stake held in any single enterprise
	by the Company, the Company’s directors, managers, and any companies
	controlled either directly or indirectly by the Company ............................. 104
D.	Capital and Shares ............................................................................................ 105
	I.Capitalization .................................................................................................... 105
	II.Composition of Shareholders .......................................................................... 106
	III.Distribution of Shareholding .......................................................................... 106
	IV.Major Shareholders ........................................................................................ 107
	V.Market Price, Net Worth, Earnings, and Dividends per Common Share ........ 107
	VI.Dividend Policy and Implementation Status ................................................. 108
	VII.The effects of the stock dividends proposed by the shareholders' meeting on

	the Company's business performances and earnings per share ................... 108
	VIII.Compensation of Employees, Directors ...................................................... 108
	IX.Repurchase of Common Stock ...................................................................... 110
	X.Status of Corporate Bonds .............................................................................. 111
	XI.Status of Preferred Stock ............................................................................... 111
	XII.Issuance of global depositary receipts (GDR) .............................................. 111
	XIII.Status of Employee Stock Options Plan ..................................................... 112
	XIV.Status of new shares issuance in connection with mergers and
	acquisitions ................................................................................................. 115
	XV.Implementation of capital use plan ............................................................... 115
E.	Operations overview ......................................................................................... 116
	I.Business content ............................................................................................... 116
	II.Market Status and the Overview of Sales and Production .............................. 123
	III.Information on employees in the most recent two years and up to the date of
	annual report publication ............................................................................ 128
	IV.Environmental Expenses Information ............................................................ 128
	V.Labor Relations................................................................................................ 129
	VI.Material Contracts ......................................................................................... 131
F.	Financial Status ................................................................................................. 132
	I.Five-Year Financial Summary .......................................................................... 132
	II.Most Recent Five-Year Financial Analysis ..................................................... 137
	III.Audit Committee’s Review Report for the Most Recent Year ....................... 140
	IV.Financial Statements for the Most Recent Year ............................................. 141
	V.Stand-alone Financial Statements for the Most Recent Year Reviewed and
	Certified by Independent Auditors .............................................................. 141
	VI.The Company should disclose the financial impact to the Company if the
	Company and its affiliated companies have incurred any financial or cash
	flow difficulties in the most recent year and as of the date of the publishing
	of this Annual Report .................................................................................. 141
G.	Financial Status, Operating Results and Risk Management ........................ 142
	I.Analysis of financial status ............................................................................... 142

II.Analysis of financial performance .................................................................. 143 III.Analysis of cash flow ..................................................................................... 144 IV.Impact of Major Capital Expenditures in Most Recent Year ......................... 145 V.Most Recent Year Reinvestment Policy, Cause of Gain or Loss, Corrective Action, and Future Investment Plan ........................................................... 145 VI.Risk Management .......................................................................................... 146 VII.Other Important Matters ............................................................................... 155 H. Other Special Notes ........................................................................................... 156 I.Profiles of affiliates and subsidiaries ................................................................ 156 II.Progress of private placement of securities during the latest year and up to the date of annual report publication ................................................................ 161 III.Holding or disposal of stocks of the Company by subsidiaries in the past year and up to the date of report ......................................................................... 161 IV.Other supplemental information ..................................................................... 161 V.Corporate events with material impact on shareholders' equity or stock prices set forth in Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act in the past year and up to the date of report......................... 161

Appendices

Appendix A: NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Consolidated Financial Statements With Independent Auditors' Report For the Years Ended December 31, 2021 and 2020 Appendix B: NANYA TECHNOLOGY CORPORATION Financial Statements With Independent Auditors' Report For the Years Ended December 31, 2021 and 2020

iii

A. Letter to Shareholders

I. Business Performance for 2020

Nanya Technology Corporation's (the Company) consolidated revenue was NT$61.01 billion, net income was NT$7.69 billion, and earnings per share was NT$2.51 in 2020. The overall DRAM market did not meet the Company’s expectations in 2020 due to the impact of COVID-19 on global economic development. Moreover, the US-China trade conflict affected deliveries to certain customers in China. A substantial appreciation of NTD also affected revenues and profits. The Company continued to operate normally and generate profits despite disadvantageous external factors. We optimized our product portfolio and invested even more resources to accelerate the development of 10nm class process technology to enhance our future competitiveness.

After the outbreak of COVID-19 in 2020, sales of smartphones, which account for the highest percentage of DRAM applications, declined, while cloud/data center/server markets fluctuated. However, demand from remote work and online teaching/shopping increased sales of laptops, tablet PCs, SSDs, and networking equipment and made up for the lower demand from smartphones. Demand for consumer applications, such as TV and automobiles, gradually began to grow in the fourth quarter. Despite making strategic adjustments to our product portfolio and lowering inventory levels, our revenue still grew by 17.9% and bit shipment grew over 30% compared with the previous year. However, a part of the growth was offset by the decrease in average selling price and the appreciation of NTD.

Our gross profit in 2020 was NT$15.69 billion and gross margin was 25.7%, down 6.2% compared with the gross margin of 31.9% in the previous year. This was mainly due to the decrease in average selling prices and appreciation of NTD. After deducting operating expenses, our operating income was NT$8.43 billion. Net cash inflows from operating activities reached NT$22.61 billion, mainly due to net income and depreciation. After deducting capital expenditures of NT$8.48 billion, free cash flow reached NT$14.13 billion.

We improved applications in server products to optimize our 20nm product portfolio, and successfully gained data center customers in the US, China, and Europe, with annual growth of bit shipment exceeding 150%, accounting for approximately 5% of our total shipments. We launched numerous lower power products, including LPDDR4/4X, and expanded their field of applications, such as smartphones, smart wearable devices, smart voice devices, low-power laptops, and high-performance SSD. We also raised the specifications of DDR4 products up to 3200 Mbps to meet customer requirements.

We are actively developing technologies and have completed the installation of a pilot production line for first-generation 10nm class process technology (1A), and

have begun pilot runs after completing the design of a 8Gb DDR4 chip. We completed trial manufacture of test chips using second-generation 10nm class process technology (1B) for function verification.

We take our corporate social responsibility very seriously and implement green technologies, value talent cultivation, and actively give back to society. We were twice selected as a constituent stock of the DJSI Emerging Markets Index. In 2020, we won the National Sustainable Development Award of the Executive Yuan, received the highest rating of "A" for climate change from the CDP, once again received the gold medal from the Talent Quality-management System (TTQS), was selected as a constituent stock of the FTSE4Good TIP Taiwan ESG Index, and raised to the top 5% in the 6th Corporate Governance Evaluation. The above awards are recognition of our efforts towards sustainable development.

II. Business Plan for 2021

We already completed a pilot production line for the 1A process, and will continue to dedicate our efforts to product trial runs and yield improvement this year. We expect to submit our lead product, a 8Gb DDR4, to customers for qualification and begin small-scale production in the second half of this year. We are currently designing and developing the second next generation DDR5 and expect to begin a pilot run in the second half of this year. The development of 1B process technology and products will be accelerated this year, and a trial run of the first products is expected for the third quarter of this year.

This year we will continue to optimize our 20nm product portfolio. Besides obtaining more qualifications from server and PC OEM customers with our 3200 Mbps DDR4 to increase sales volume, we will also accelerate the promotion of 20nm low-power products. Our highest specification product, LPDDR4X 4267 Mbps, is currently in the qualification process, and future target markets include portable products, automobiles, and industrial applications, effectively increasing product value and sales flexibility.

In order to satisfy market demands and long-term developments of the Company, a new plant has been planned to be constructed in the Nanlin Science Park to continue the introduction of advanced manufacturing processes and products and expand production capacity. Construction of the new plant is expected to begin at the end of the year and aims to be completed and operational before the end of 2023. The scale of the production capacity will be implemented in phases depending on market demands.

The upper limit on capital expenditures in response to the mass production of 1A process technology, new factory construction, and capital expenditures of general departments is expected to be NT$15.6 billion for the entire year.

III. Industry Outlook

Steady growth in DRAM demand: DRAM is a key component in all smart electronic products, and smartphones and servers/data centers are currently the main fields of application. The future development of 5G and AI, as well as smart consumer electronics products, will continue drive diverse applications of DRAM and also increase DRAM usage. The shipment of 5G phones will increase each year along with more DRAM content. Networking and edge computing required by 5G base stations around the world will also increase DRAM usage. Servers/data centers will have even greater demand for DRAM to meet the high-bandwidth, low-latency, and big-data requirements of 5G and AI. Demand from laptops, tablet PCs, TVs, and SSD will remain strong due to the development of work from home, distance learning, and smart homes. Furthermore, smart products such as self-driving cars, gaming consoles, smart cameras, smart wearable devices, and smart robots will continue to sustain demand.

Growth on the DRAM supply side will remain stable and maintain a balance between supply and demand: based on production capacity and capital expenditure plans announced by the three major DRAM suppliers, major companies have been conservative in increasing production capacity and capital expenditures over the past two years, so supply-side growth in 2021 will mainly rely on process transition, and bit supply growth is expected to be limited. Furthermore, according to analysis of research institutes, the scale of mass production by the Chinese DRAM maker will not affect the overall balance of supply and demand in the market.

Based on the above, bit supply growth by suppliers will be limited this year, while demand will see higher growth due to the development of 5G smartphones and data centers. Hence, the overall DRAM industry is expected to see healthy development.

IV. Conclusion

The COVID-19 pandemic was a challenge for the DRAM industry in 2020, but the Company continued to see revenue growth thanks to the collective efforts of all its employees, who rapidly responded to the pandemic. Looking towards 2021, we expect to see market prices rebound and the overall industry bottomed out and return to growth. We will invest in even more R&D resources this year to accelerate the development of 10nm process technologies and new generation DDR5 products to enhance our competitiveness. We also plan to expand our new factory and will gradually increase output to meet future market demand. The Company insists on the core value of technological innovation, which will continue to be the main driver of our growth. In the future, we will dedicate our efforts to creating greater value for all of our shareholders.

B. Company Profile

I. Date of Incorporation: Mar 4, 1995
II. Milestones
March 1995 Nanya Technology Corp. was established and incorporated.
Apr MOU signed by OKI, NTC and Nanya Plastics, in which NTC succeed all rights and obligations of 16Mb DRAM technology form Nanya Plastics Corp.
November 1996 Signed 0.36μm and 0.32μm 64Mb DRAM technology licensing agreement with OKI.
July 1997 Set up NTC-USA, the branch office in charge of sales and marketing activities in USA.
April 1998 Awarded ISO-9001 Certification by Lloyd's Register Quality Assurance (LRQA).
Nov Signed a technology transfer agreement for 0.2/0.175μm process technology with IBM.
Dec Awarded ISO-14001 Certification by Lloyd's Register Quality Assurance (LRQA).
Dec Set up a product design center in Houston, Texas. October 1999 0.20μm 64Mb SDRAM mass production started.
August 2000 NTC was listed on Taiwan Stock Exchange. Oct Signed a co-development agreement for 0.14/0.11μm process technology with IBM.
June 2001 Mass production of 0.175μm 128Mb/256Mb DRAM. Oct DDR Products leads the market in production. April 2002 Set up Nanya-HK Limited. Jun Signed a strategic alliance agreement with Dell as Dell’s main supplier of DRAM products.
Sep Set up a branch office in Tokyo, Japan. Nov Signed a Joint Development Program with Infineon Technologies AG to co-develop 0.07 and 0.09μm process technology.
Dec Awarded ISO-18001 Certification by Lloyd's Register Quality Assurance (LRQA).
- Awarded ISO-14001 Certification by Sweden Det Norske Veritas.

January 2003	Signed a Joint Development Program with Infineon Technologies AG to
	develop Inotera Memories Ltd.
Mar	According to Gartner iSuppli, our Company's market share rose to No.5
	in the world in 2002.
Jul	Offering of Global Depositary Shares (GDS) on Luxembourg Stock
	Exchange.
May 2004	DDR2 products obtained worldwide system makers' validation.
Dec	90nm pilot-run started.
April 2005	512Mb DDR2 SDRAM (667 MHz) validated by Intel.
Jun	Successful qualification of 90nm technology.
Sep	Signed 60nm technology co-development agreement with Infineon.
March 2006	Nanya Fab-3 (300mm) groundbreaking ceremony.
Oct	Set up Nanya Technology (Shanghai) Corp.
May 2007	FAB-3A equipment move-in.
Nov	Pilot run successful in FAB-3A; 70nm wafer starts in Q3.
April 2008	Signed JV agreement with Micron.
Nov	FAB-3A 1st phase full capacity with 70nm.
August 2009	68nm stack technology has been demonstrated successfully.
Sep	50nm stack technology has been demonstrated successfully.
January 2010	Invested in IC design company─PieceMakers Tech Inc.
Jul	42nm stack technology has been demonstrated successfully.
Oct	Started 42nm stack technology volume production.
July 2011	30nm stack technology has been demonstrated successfully.
March 2012	Set up Sumpro Electronics Corporation Limited.
January 2013	Amends Inotera Memories Joint Venture With Micron and Micron
	acquires rights to 100% of Inotera’s output.
Oct	Achieved certification ISO 10002– Complaints Management Systems.

July 2014	Disposal of Sumpro's 8-inch Fab and equipment.
Oct	Started 30nm process technology design shrink version volume
	production.
Oct	DDR4 products obtained worldwide system makers' validation.
July 2015	Fab 3A-N ground breaking.
Aug	30nm process technology design shrink version crossover.
Sep	NTC through the Electronic Industry Citizenship Alliance Validated Audit Process (EICC VAP).
Dec	LPDDR3 4Gb volume production.
June 2016	Social responsibility report of the Company is verified by the British
	Standards Association (BSI) according to the AA1000 Guarantee
	Standard.
Oct	20nm equipment move-in.
Dec	Completed Inotera share swap with Micron.
March 2017	20nm pilot run.
Apr	Nanya Technology was awarded "Qualified Supplier” from TCL Corporation.
Aug	New Headquarters Grand Opening.
Oct	Nanya Technology was awarded "The Excellent Supply Partner & Green
	Partner” from Huawei Technology.
	Nanya Technology Awarded 2017 New Taipei City Environmental
	Impact Assessment Excellent Development Selection – Gold Level.
Nov	New headquarters building achieved EEWH Assessment System Silver
	level.
	Nanya Technology won 2017 Taiwan Corporate Sustainability Award.
Dec	8Gb DDR4 mass production.
April 2018	Nanya Technology Awarded Thomson Reuters' Top 100 Global Technology Award.
May	Ranked in the top 5% of the 4th Corporate Governance Evaluation.
Jul	Acquired 19% shares of Formosa Advanced Technologies Co., Ltd.
Sep	Selected into the Dow Jones Sustainability Emerging Markets Index in 2018.
Oct	8Gb DDR4 server products were certified by server (data center) customers.
Nov	Achieved ISO 50001 certification.
Nov	Won numerous awards in the 2018 Taiwan Corporate Sustainability Awards.

April 2019	Won the 6th National Industrial Innovation Award of the Ministry of Economic Affairs, R.O.C.
Jun	Awarded the 8th New Taipei City Labour Safety and Health Award
Jun	8Gb LPDDR3 achieved customer qualification
Sep	Won the 2019 Common Wealth Magazine’s New Star Award in Corporate Social Responsibility Award
Sep	Named Dow Jones Sustainability Index on Emerging Markets Index for Second Straight Year
Oct	Received ISO 27001 Information Security Certification
Nov	Won numerous awards in the 2019 Taiwan Corporate Sustainability Awards
Dec	8Gb LPDDR4/4X achieved customer qualification
Dec	Won 2019 National Talent Development Award
Dec	Acquired 13% shares of Formosa Advanced Technologies Co., Ltd
January 2020	Developed core cell technology for the 10nm class DRAM process
Jan	Received RobecoSAM Sustainability Award - Silver Class 2020
Apr	Top 5% in 6th Corporate Governance Evaluation
Jul	Continuously obtained Golden Certificate of Talent Quality- management System (TTQS)
Aug	Rated "Prime" by ISS (Institutional Shareholder Services Inc.) ESG Corporate Rating
Sep	Awarded the Common Wealth Magazine’s Corporate Social Responsibility Award
Nov	Awarded 7 Awards in the 2020 Taiwan Corporate Sustainability Awards
Nov	Received 2020 National Sustainable Development Award
Dec	Selected in CDP Climate Change A List and evaluated Water Security as the Leadership Level
January 2021	Received the Green Factory Label certified by the Industrial Development Bureau, Ministry of Economic Affairs
Feb	Received S&P Global Sustainability Yearbook Award - Bronze Class 2021

C. Corporate Governance

I. Organization

(I) Organization Structure March 29, 2021

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Shareholders Meeting
Audit
Committee
Board of Directors
Compensation
Committee Chairman
Risk Management
Committee
General Manager Auditors
President Office
NTC-USA
NTC-Delaware
NTC-Europe
NTC-Japan
NTC-HK
NTC-Shenzhen
Nanya Technology International, Ltd.
Planning and Administration Management Legal& IP Safety & Hygiene QRA Product Development Design Verification Global Sales Marketing & Customization Operation Supporting Product Engineering Wafer Prodction
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March 29, 2021

(II) Major Corporate Functions

	March 29,2021
Department	Functions
Corp. Audit	Responsible for internal control system and evaluates the integrity and comprehensiveness of regulations; examines whether internal control is conducted effectively and continuously, measures the performance of each department and recommends corrective actions on a timely manner for an overall effective operation.
Planning and Administration Management	1. IR/PR: Responsible for maintaining the Companies' relationships with (institutional) investors and managing the release of public information to the mass media and the relationship with the general public. 2. Information Security: Responsible for the promotion and audit of the Company's safety and security affairs, strengthening the protection of technology and business secrets. 3. Human Resource: Establishing human resource policy and executing personnel systems, including personnel, salary and compensation, employee relationship, training and talent development effectively and efficiently to increase company’s human capital. 4. Responsible for financial policy management, capital movement, budget compilation, review and control, accounting process, and supervision of material assets, procurement and factory safety. 5. Responsible for market trends analysis, assessment of the investment plan, set product strategy and operational marketing plans, programs and promote the cross-functional projects, sales performance management, outsourcing policy management. 6. Responsible for the planning and promotion of corporate social responsibility and risk management. 7. Responsible for the planning and implementation of risk management.
Legal & IP	Responsible for company legal affairs and other intellectual property management.
Safety & Hygiene	Supervises and audits the working environment with professional knowledge and continuous improvement; planning and maintaining the safety and hygiene management system(ISO 14001,TOSHMS management system).
Quality & Reliability Assurance	1. Responsible for the planning and establishment of the Company's quality assurance system, and promote the quality of education and training, verification audit, quality control and quality improvement to meet quality theory of our business concept. 2. Responsible for establish FAB quality control system and incoming quality control, in-process quality control, failure analysis to ensure the stability of product quality and meet customer needs.

Department	Functions
Products Development	Responsible for design, develop and control new product.
Design Verification	Responsible for develop and design verification of mass production engineering technologyand set uptesting program.
Global Sales	Responsible for the promotion and development of global business, set business strategy, promotion of new products, elaboration and implementation of marketing plans andpublic relations matters.
Marketing and Customization	Responsible for product promotion and marketing program, planning marketing proposal, cost benefit analysis, managing the process of product development, sampling,customer verification,and massproduction.
Process Development	Responsible for process development, product shrink, and quality improvement for newproduct.
Operation Supporting	1. Responsible for the planning and management of production automation, maintenance and management of office automation, establishment and management of computer network automation, and maintenance and management of information security. 2. Plan for expansion program, promotion of new factory construction, factory duty engineering design, planning, and implementation, capacity planning and management,materials management,to helpimprove operational efficiency.
Product Engineering	Product Engineering and Testing: Responsible for validating new products, product engineering and testing technology development, abnormal product electrical/physical property analysis, development and management outsourcing of ICpackagingand testingtechnology.
Wafer Manufacturing	1. Manufacturing: Responsible for the planning and operation of the manufacturing, process, equipment, and facility, to meet our customer requirements in quality and delivery. 2. Public system: Institutionalization and systematic establishment of public equipment operation and maintenance, and strengthening operational efficiency.

II. Directors and Management Team

(I) Directors

March 29, 2021

Title	Nationality/Place of Incorporation	Name	Gender	Date Elected (In Office)	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Shares held by spouse and underage children	Shares held by spouse and underage children	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Director’s Current Position at NTC and Other Companies	Executives or Directors who are Spouses or within Two Degrees of Kinship	Executives or Directors who are Spouses or within Two Degrees of Kinship	Executives or Directors who are Spouses or within Two Degrees of Kinship	Remarks (Note 2)
							Shares	Percentage of shares(%)	Shares	Percentage of shares(%)	Shares	Percentage of shares(%)	Shares	Percentage of shares(%)			Title	Name	Relationship
Chairman	R.O.C	Nan Ya Plastics Corp. Representative: Chia Chau,Wu	Male	2019.05.30	Three years	1995.02.17 2004.05.12	907,303,775 -	29.71 -	907,303,775 957	29.30 0.00	0 0	0.00 0.00	0 0	0.00 0.00	Chairman, Nan Ya Plastics Corp. Department of Business Administration, National Chengchi University	Chairman, Nan Ya Plastics Corp. Chairman, Nan Ya PCB Corp.	N/A	N/A	N/A	N/A
Director	R.O.C	Wen Yuan, Wong	Male	2019.05.30	Three years	2007.05.25	4,000	0.00	4,000	0.00	127,648	0.00	0	0.00	Chairman, Formosa Chemicals & Fibre Corp. Master Degree in Industrial Engineering, University of Houston, USA	Chairman, Formosa Chemicals & Fibre Corp. Chairman, Formosa Taffeta Co., Ltd., Chairman, Formosa Advanced Technologies Co., Ltd. Chairman, Chinese National Federation of Industries	N/A	N/A	N/A	N/A
Director	R.O.C	Susan Wang	Female	2019.05.30	Three years	2010.06.24	0	0.00	0	0.00	0	0.00	0	0.00	Executive Director, Formosa Plastics Corp. Department of Economics, Barnard College,USA	Executive Director, Formosa Plastics Corp. Executive Director, Formosa Petrochemical Corp.	N/A	N/A	N/A	N/A
Director	R.O.C	Pei-Ing Lee	Male	2019.05.30	Three years	2004.05.12	683,098	0.02	884,098	0.03	571	0.00	0	0.00	President, Nanya Technology Corp. Ph.D. in Chemical Engineering, Syracuse University, USA	President, Nanya Technology Corp. Director, Formosa Advanced Technologies Co., Ltd. Independent Director, Powertech Technology Inc. (Note 1)	N/A	N/A	N/A	N/A
Director	R.O.C	Ming Jen, Tzou	Male	2019.05.30	Three years	2010.06.24	0	0.00	0	0.00	0 0	0.00 0.00	0 0	0.00 0.00	President, Nan Ya Plastics Corp. Department of Chemical Engineering, Former National Taipei Universityof Technology	Director and President, Nan Ya Plastics Corp. Director, Nan Ya PCB Corp.	N/A	N/A	N/A	N/A
Director	R.O.C	Lin-Chin Su	Male	2019.05.30	Three years	2016.06.22	269,601	0.01	145,601	0.00	0 0	0.00 0.00	0 0	0.00 0.00	Executive Vice President, Nanya Technology Corp. Ph.D. in Materials Science and Engineering, University of Utah, USA	Executive Vice President, Nanya Technology Corp. Director, Formosa Advanced Technologies Co., Ltd. (Note 1)	N/A	N/A	N/A	N/A

Director	R.O.C	Formosa Taffeta Co., Ltd. Representative: Shih-Ming Hsie	Male	2016.06.22	Three years	1995.02.17 2001.03.30	7,711,010 -	0.25 -	7,711,010 0	0.25 0.00	0 0	0.00 0.00	0 0	0.00 0.00	President, Formosa Advanced Technologies Co., Ltd. Graduated from National Taipei University of Technology	Vice Chairman and President, Formosa Advanced Technologies Co., Ltd. Vice Chairman, Formosa Taffeta Co.,Ltd.	N/A	N/A	N/A	N/A
Director	R.O.C	Nan Ya Plastics Corp. Representative: Joseph Wu	Male	2019.05.30	Three years	1995.02.17 2019.05.30	907,303,775 -	29.71 -	907,303,775 360,000	29.30 0.01	0 0	0.00 0.00	0 0	0.00 0.00	Vice President, Nanya Technology Corp. Master Degree in Material Engineering, National Taiwan University	Vice President, Nanya Technology Corp. (Note 1)	N/A	N/A	N/A	N/A
Director	R.O.C	Nan Ya Plastics Corp. Representative: Rex Chuang	Male	2019.05.30	Three years	1995.02.17 2019.05.30	907,303,775 -	29.71 -	907,303,775 2,000	29.30 0.00	0 0	0.00 0.00	0 0	0.00 0.00	Vice President, Nanya Technology Corp. Master Degree in Materials Engineering, San Jose State University,USA	Vice President, Nanya Technology Corp. (Note 1)	N/A	N/A	N/A	N/A
Independent Director	R.O.C	Ching-Chyi Lai	Male	2019.05.30	Three years	2016.06.22	0	0.00	0	0.00	0	0.00	0	0.00	Chairman, Chunghwa Post Co., Ltd. Chairman, Taiwan Insurance Institute Former Deputy Secretary General, Executive Yuan ROC, Former Chief Secretary, Council for Economic Planning and Development Master Degree in Public Finance, National Chengchi University	Director, Taipei Foundation of Finance Independent Director, Excellence Optoelectronic Inc. Chair Professor, Chung Hua University	N/A	N/A	N/A	N/A
Independent Director	R.O.C	Shu-Po Hsu	Male	2019.05.30	Three years	2013.06.21	0	0.00	0	0.00	0	0.00	0	0.00	Chairman, General Chamber of Commerce of the Republic of China Master Degree in Graduate Institute of Criminology, National Chung Cheng University	Vice Chairman, Taiwan Life Insurance Co., Ltd. Director, CTBC Insurance Co., Ltd. Chairman, General Chamber of Commerce of the Republic of China Chairman, Life Insurance Educational Foundation	N/A	N/A	N/A	N/A
Independent Director	R.O.C	Tsai-Feng Hou	Female	2019.05.30	Three years	2013.06.21	0	0.00	0	0.00	0	0.00	0	0.00	Former Legislator Former President, Former Ta Chong Securities Co., Ltd. Executive Master Degree in Public Policy Program, National Sun Yat-sen University	N/A	N/A	N/A	N/A	N/A

Note1: Please refer to VIII. Other Special Notes (Directors, Supervisors and Presidents of NTC’s Subsidiaries)

Note2: Where the Chairman of the Board of Directors and the general manager or person of an equivalent post (the highest level manager) of a Company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response.

Majorshareholders of theinstitutionalshareholders April 23,2021	Majorshareholders of theinstitutionalshareholders April 23,2021
Name of Institutional Shareholders	Major shareholders of the institutional shareholders
Nan Ya Plastics Corp.	Chang Gung Medical Foundation (11.05%), Formosa Plastics Corp. (9.88%), Formosa Chemicals & Fibre Corp. (5.21%), Chang Gung University (4%), Vanson International Investment Co., LTD. (2.39%), Formosa Petrochemical Corp. (2.26%), Chindwell International Investment Corp. (1.86%), LGT Bank (Singapore) Ltd. (1.56%), MACRO SYSTEMS CORP (1.38%), JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds (1.22%)
Formosa Taffeta Co., Ltd.	Formosa Chemicals & Fibre Corp. (37.40%), Chang Gung Medical Foundation (5.79%), Yuanta/P-shares Taiwan Dividend Plus ETF (3.46%), Yu Yuang Textile Co., Ltd. (2.55%), Min-Xiong Lai (2.43%), Chang Gung University (2.20%), Chang Gung University of Science and Technology (2.13%), Ming Chi University of Technology (1.87%), Taiwan Life Insurance Company Ltd. (1.59%), Asia Pacific Investment Co., Ltd. (1.43%)

Majorshareholders of the Company'smajor institutionalshareholders April 23,2021	Majorshareholders of the Company'smajor institutionalshareholders April 23,2021
Name of Institution	Major shareholders of institution
Formosa Plastics Corp.	Chang Gung Medical Foundation (9.44%), Formosa Chemicals & Fibre Corp.(7.65%), Credit Suisse AG -- CREDIT SUISSE SINGAPORE BRANCH (6.26%), Nan Ya Plastics Corp.(4.63%), Chindwell International Investment Corp.(4.16%), Vanson International Investment Co., Ltd. (3.05%), Formosa Petrochemical Corp. (2.07%), Investment Account of Singapore's Government Fund under the custody of Citibank Taiwan (1.34%), Ming Chi University of Technology (1.43%), Nan Shan Life InsuranceCo.,Ltd.(1.4%)
Formosa Chemicals & Fibre Corp.	Chang Gung Medical Foundation (18.58%), Chindwell International Investment Corp. (6.35%), Vanson International Investment Co., Ltd. (3.80%), Formosa Plastics Corp. (3.39%), Nan Ya Plastics Corp. (2.40%), Wen Yuan, Wong (2.20%), Fubon Life Insurance Corporation (2.06%), Consolidated Power Development Corp.(1.63%), Genesis Equity Group Inc. (1.50%), HSBC Bank (Taiwan) Limited In Custody for Consolidated Power DevelopmentCorp.(1.41%)
Formosa Petrochemical Corp.	Formosa Plastics Corp.(28.56%), Formosa Chemicals & Fibre Corp.(24.15%), Nan Ya Plastics Corp.(23.11%), Chang Gung Medical Foundation (5.79%), Formosa Taffeta Co., Ltd.(3.83%), Genesis Equity Group Inc. (0.60%), New Labor Pension Fund (0.59%), HSBC Bank (Taiwan) Limited In Custody for Power Unlimited Corporation (0.51%), Central Capital management Incorporated (0.49%), HSBC Bank (Taiwan) Limited InCustodyfor Pacific Light and PowerCorporation(0.48%)
Taiwan Life Insurance Co.,Ltd.	Chinatrust Financial Holding (100%)
LGT Bank(Singapore)Ltd.	Investment Account
MACRO SYSTEMS CORP	Investment Account
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund,a series ofVanguardStar Funds	Investment Account
Yuanta/P-shares Taiwan Dividend Plus ETF	Investment Account
Chindwell International Investment Corp.	Everred Coporate,Inc.(100%)
Vanson International InvestmentCo.,LTD.	LandmarkCapital Holdings Inc.(100%)
Yu Yuang Textile Co., Ltd.	Ming-Te Hsieh (16.75%), Meng-Hsun Hsieh (12.45%), DRAGON POWER TAFFETA CO., LTD. (10.66%), Chiu-Min Chung (7.16%), Yi- Chen Hsieh (6.78%) STABLE FULL INDUSTRIAL CO., LTD. (5.92%), Shih-Ming Hsie (2.68%), KEYFORD DEVELOPMENT CO., LTD. (2.05%)
Asia Pacific Investment Co., Ltd.	Formosa Plastics Corp. (16.17%), Nan Ya Plastics Corp. (14.99%), Formosa Chemicals & Fibre Corp. (14.97%), ENERGY ASSOCIATES LTD. (4.71%), POWER UNLIMITED CORP. (4.71%), Ssu-Han Wang (4.25%), Formosa Taffeta Co., Ltd. (2.35%), TAH HSIN INDUSTRIAL CORP. (2.35%), RIMWOOD INC. (2.35%), ACKERMAN BROTHERS INC.(2.35%)

Name of Institution	Major shareholders of institution
Chang Gung Medical Foundation	Nan Ya Plastics Corp. (19.51%), Formosa Chemicals & Fibre Corp. (15.02%), Formosa Plastics Corp. (14.41%), Wang Yung-Tsai (12.19%), WangYung-Ching (7.97%)
Chang Gung University	Chang Gung Medical Foundation (57.08%), Wang Yung-Ching (13.19%), Chindwell International Investment Corp. (3.90%), Nan Ya Plastics Corp. (2.57%),Formosa PlasticsCorp.(2.27%)
Ming Chi University of Technology	Wang Yung-Ching (43.23%), Wang Yung-Tsai (38.81%), Nan Ya Plastics Corp. (5.08%), Chindwell International Investment Corp. (3.74%), Formosa Chemicals & Fibre Corp.(1.66%)
Chang Gung University of Science and Technology	Wang Yung-Ching (31.99%), Chang Gung Medical Foundation (29.59%), Wang Yung-Tsai (21.65%), Wen Yuan, Wong (3.76%), Chindwell International Investment Corp.(1.99%),

Note: If the institutional shareholder is not a company, the names and shareholding ratio of shareholders to be disclosed are the names of people who contributed or donated the capital and the ratio of their contribution or donation.

Directors’ Professional Qualifications and Independent Analysis

March 29, 2021

				March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	March 29,	2021
Criteria Name	Has at least 5 years of work experience and meets one of the following professional qualifications			Independence (Note)												Number of other public companies in which the individual is concurrently serving as an Independent Director
	An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college, or university	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Has work experience in the areas of commerce, law, finance, or accounting, or areas otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
Nan Ya Plastics Corp. Representative: Chia Chau, Wu																N/A
Wen Yuan, Wong																N/A
Susan Wang																N/A
Pei-Ing Lee																`1`
Ming Jen, Tzou																N/A
Lin-Chin Su																N/A
Formosa Taffeta Co., Ltd. Representative: Shih-Ming Hsie																N/A
Nan Ya Plastics Corp. Representative: Joseph Wu																N/A
Nan Ya Plastics Corp. Representative: Rex Chuang																N/A
Ching-Chyi Lai																1
Shu-Po Hsu																N/A
Tsai-Feng Hou																N/A

Note: Directors, during the two years before being elected and during the term of office, meet any of the following situations, please tick the appropriate corresponding boxes.

(1) Not an employee of the Company or any of its affiliates.

(2) Not a director or supervisor of the Company or any of its affiliates (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).

(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of the manager described in (1) above, or of any of the persons described in (2) or (3) above.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the Company, or that ranks as one of its top five shareholders, or that designates its representative to serve as a director or supervisor of the Company based on Article 27, Paragraph 1 or 2 of the Company Law (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(6) Not a director, supervisor, or employee of another company controlled by the same person that holds a majority of board seats or voting shares of the Company (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(7) Not a director, supervisor, or employee of another company or institution of which the chairman or president (or equivalent) themselves or their spouse also serve as the Company’s chairman or president (or equivalent) (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(8) Not a director, supervisor, manager, 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 (except where the specified company or institution owns 20% or more but less than 50% of the total number of issued shares of the Company and the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(9) Not a professional individual who provides an audit service or receives no more than NT$500,000 in cumulative compensation in the last two years for commercial, legal, financial, or accounting services to the Company or its affiliates, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or institution that provides such services to the Company or its affiliates. However, the exception applies to members of a compensation committee, a public tender review committee, or a special committee for merger, consolidation and acquisition exercising their authority pursuant to the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(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.

Implementation of the Board Diversity Policy

The Board of Directors currently has 12 members, including 3 independent directors, 2 female directors, and 4 directors who are concurrently employees, accounting for 25%, 16.7%, and 33.3% of all directors, respectively.

											March 29, 2021	March 29, 2021	March 29, 2021
Item Title	Name	Gender	NTC’s Employee	Tenure of NTC’s Independent Director		Business Management	Leadership Decision	DRAM Industry	International Outlook	Financial / Accounting Analysis	GICS Level 1 (Note)
				3~5 Years	6~8 Years						Materials	Financials	Information Technology
Chairman	Chia Chau, Wu	Male									
Director	Wen Yuan, Wong	Male									
Director	Susan Wang	Female									
Director	Pei-Ing Lee	Male											
Director	Ming Jen, Tzou	Male									
Director	Lin-Chin Su	Male											
Director	Shih-Ming Hsie	Male											
Director	Joseph Wu	Male											
Director	Rex Chuang	Male											
Independent Director	Ching-Chyi Lai	Male								
Independent Director	Shu-Po Hsu	Male										
Independent Director	Tsai-Feng Hou	Female										

Note: Global Industry Classification Standard, GICS.

(II) Management Team	(II) Management Team	(II) Management Team	(II) Management Team										March 29,2021	March 29,2021	March 29,2021	March 29,2021
Title	Nationality	Name	Gender	Date Elected (In Office)	Shareholding		Spouse's/ minor's Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Current job position in other companies	Managerial officer who is a spouse or a relative within second degree			Remarks (Note 2)
					Shares (Share)	Percentage of shares(%)	Shares (Share)	Percentage of shares(%)	Shares (Share)	Percentage of shares(%)			Title	Name	Relationship
President	R.O.C	Pei-Ing Lee	Male	2015.10.06	884,098	0.03	571	0.00	0	0.00	President, Nanya Technology Corp. Ph.D. in Chemical Engineering, Syracuse University, USA	Director, Formosa Advanced Technologies Co., Ltd. Independent Director, Powertech Technology Inc. (Note 1)	N/A	N/A	N/A	N/A
Executive Vice President	R.O.C	Lin-Chin Su	Male	2019.03.08	145,601	0.00	0	0.00	0	0.00	Executive Vice President, Nanya Technology Corp. Ph.D. in Materials Science and Engineering, University of Utah, USA	Director, Formosa Advanced Technologies Co., Ltd. (Note 1)	N/A	N/A	N/A	N/A
Vice President	R.O.C	Joseph Wu	Male	2017.12.20	360,000	0.01	`0`	0.00	0	0.00	Vice President, Nanya Technology Corp. Master Degree in Material Engineering, National Taiwan University	(Note 1)	N/A	N/A	N/A	N/A
Vice President	R.O.C	Rex Chuang	Male	2017.12.20	2,000	0.00	`0`	0.00	0	0.00	Vice President, Nanya Technology Corp. Master Degree in Materials Engineering, San Jose State University, USA	(Note 1)	N/A	N/A	N/A	N/A
Vice President	R.O.C	Yau-Ming Chen	Male	2019.03.08	0	0.00	0	0.00	0	0.00	Vice President, Nanya Technology Corp. Department of Electrical Engineering, National Taiwan University	Director, Formosa Advanced Technologies Co., Ltd.	N/A	N/A	N/A	N/A
Assistant Vice President	R.O.C	Wesley Chang	Male	2013.04.01	42	0.00	0	0.00	0	0.00	Assistant Vice President, Nanya Technology Corp. Master Degree in Business Management, Chang Gung University	N/A	N/A	N/A	N/A	N/A
Assistant Vice President	R.O.C	Chi-Meng Su	Male	2013.02.20	0	0.00	0	0.00	0	0.00	Assistant Vice President, Nanya Technology Corp. Master Degree in Electronics Engineering, National Chiao Tung University	(Note 1)	N/A	N/A	N/A	N/A

Assistant Vice President	R.O.C	Mark Mao	Male	2017.12.20	0	Assistant Vice President, Nanya Technology Corp. Master Degree in Materials Science and Engineering, Columbia University, USA	N/A	N/A	N/A	N/A	N/A
Assistant Vice President	R.O.C	Jeff J.P. Lin	Male	2017.12.20	150,027	Assistant Vice President, Nanya Technology Corp. Ph.D. in Electrical Engineering, University of Texas at Austin, USA	N/A	N/A	N/A	N/A	N/A
Assistant Vice President	R.O.C	Rex Chen	Male	2017.12.20	57,000	Assistant Vice President, Nanya Technology Corp. Master Degree in International Business, Tamkang University	(Note 1)	N/A	N/A	N/A	N/A
Assistant Vice President	R.O.C	Chuan-Jen Chang	Male	2017.12.20	53,048	Assistant Vice President, Nanya Technology Corp. Master Degree in Electrical Engineering, State University of New York, USA	N/A	N/A	N/A	N/A	N/A
Finance Officer and Corporate Governance Supervisor	R.O.C	Philip Jao	Male	2017.03.09	0	Executive Administrator of Nanya Technology Corp. Master Degree in Business Administration, University of Florida, USA Executive Master in Business Administration, National Taiwan University	N/A	N/A	N/A	N/A	N/A
Accounting Supervisor	R.O.C	Hung-Chi Kuo	Male	2010.12.01	0	Director, Nanya Technology Corp. Department of Accounting, National Chung Hsing University	(Note 1)	N/A	N/A	N/A	N/A

Note 1: Please refer to VIII. Other Special Notes (Directors, Supervisors and Presidents of NTC’s Subsidiaries).

Note 2: Where the Chairman of the Board of Directors and the general manager or person of an equivalent post (the highest level manager) of a Company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response.

III. Remuneration of Directors, President, and Vice Presidents in the most recent year

(I) Remuneration of Directors and Independent Directors

Unit: NT$ thousands; December 31, 2020

Title	Name			Director's Remuneration	Director's Remuneration	Director's Remuneration	Director's Remuneration			Total Remuneration (A+B+C+D) as a % of Net Income (Note 2)	Total Remuneration (A+B+C+D) as a % of Net Income (Note 2)	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Compensation Received by a Director who is an employee of NTC or of NTC’s consolidated subsidiaries	Total Compensation (A+B+C+D+E +F+G) as a % of Net Income	Total Compensation (A+B+C+D+E +F+G) as a % of Net Income	Remuneration received from invested companies other than subsidiaries or the parent company
		(A)	Remuneration	Retirement pension (B)		(C) (Note 1)	Director's remuneration	business (D)	Fees for conducting			Salary, bonuses and allowances (E)		Retiremen t pension (F)		Remuneration for employees (Note 3) (G)
		The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company		financial statements	Companies in the consolidated	The Company	Companies in the consolidated financial statements
																Amount in cash	Amount in stock	Amount in cash	Amount in stock
Chairman	Nan Ya Plastics Corp. Representative: Chia Chau, Wu	0	0	0	0	0	0	500	500	0.0065	0.0065	24,893	24,893	216	216	16,100	0	16,100	0	0.5427	0.5427	2,545
Director	Wen Yuan, Wong
Director	Susan Wang
Director	Pei-Ing Lee
Director	Ming Jen, Tzou
Director	Lin-Chin Su
Director	Formosa Taffeta Co., Ltd. Representative: Shih-Ming Hsie
Director	Nan Ya Plastics Corp. Representative: Joseph Wu
Director	Nan Ya Plastics Corp. Representative: Rex Chuang
Independent Director	Ching-Chyi Lai	5,400	5,400	0	0	0	0	600	600	0.0781	0.0781	0	0	0	0	0	0	0	0	0.0781	0.0781	0
Independent Director	Shu-Po Hsu
Independent Director	Tsai-Feng Hou

Describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration: Refer to "Three. III. (III) 2." of the Corporate Governance Report for the policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with risks and business performance.
Other than as disclosed in the above table, the remuneration of directors providing services (e.g., providing consulting services as a non-employee) to the Company and all consolidated entities in the latest fiscal year: None.

Note 1: Remuneration was approved by the board of directors.

Note 2: Net profit after tax means the Company's net profit after tax in the most recent year. If the financial statements were prepared according to IFRSs, net profit after tax mens the Company's net profit after tax on the financial statements.

Note 3: The amount of employee compensation is estimated.

Range of Remuneration

	Range of Remuneration
22	Range of Remuneration Paid to Directors	Name of Directors
		Total amount for the 4 preceding remunerations (A+B+C+D)		Total amount for the 7 preceding remunerations (A+B+C+D+E+F+G)
		The Company	Companies in the consolidated financial statements	The Company	The Parent Company and Invested Companies
	Under NT$ 1,000,000	Wen Yuan, Wong, Susan Wang, Chia Chau, Wu, Pei-Ing Lee, Ming Jen, Tzou, Lin-Chin Su, Shih-Ming Hsie, Joseph Wu, Rex Chuang, Nan Ya Plastics Corp., Formosa Taffeta Co., Ltd.	Wen Yuan, Wong, Susan Wang, Chia Chau, Wu, Pei-Ing Lee, Ming Jen, Tzou, Lin-Chin Su, Shih-Ming Hsie, Joseph Wu, Rex Chuang, Nan Ya Plastics Corp., Formosa Taffeta Co., Ltd.	Wen Yuan, Wong, Susan Wang, Chia Chau, Wu, Ming Jen, Tzou, Shih-Ming Hsie, Nan Ya Plastics Corp., Formosa Taffeta Co., Ltd.	Wen Yuan, Wong, Susan Wang, Chia Chau, Wu, Ming Jen, Tzou, Shih-Ming Hsie, Nan Ya Plastics Corp.,
	NT$1,000,000 (inclusive) to NT$2,000,000 (exclusive)	N/A	N/A	N/A	N/A
	NT$2,000,000 (inclusive) to NT$3,500,000 (exclusive)	Ching-Chyi Lai, Shu-Po Hsu, Tsai-Feng Hou,	Ching-Chyi Lai, Shu-Po Hsu, Tsai-Feng Hou,	Ching-Chyi Lai, Shu-Po Hsu, Tsai-Feng Hou,	Ching-Chyi Lai, Shu-Po Hsu, Tsai-Feng Hou, Formosa Taffeta Co., Ltd.
	NT$3,500,000 (inclusive) to NT$5,000,000 (exclusive)	N/A	N/A	N/A	N/A
	NT$5,000,000 (inclusive) to NT$10,000,000 (exclusive)	N/A	N/A	Joseph Wu, Rex Chuang,	Joseph Wu, Rex Chuang,
	NT$10,000,000 (inclusive) to NT$15,000,000 (exclusive)	N/A	N/A	Lin-Chin Su	Lin-Chin Su
	NT$15,000,000 (inclusive) to NT$30,000,000 (exclusive)	N/A	N/A	Pei-Ing Lee	Pei-Ing Lee
	NT$30,000,000 (inclusive) to NT$50,000,000 (exclusive)	N/A	N/A	N/A	N/A
	NT$50,000,000 (inclusive) to NT$100,000,000 (exclusive)	N/A	N/A	N/A	N/A
	NT$100,000,000 or more	N/A	N/A	N/A	N/A
	Total	14	14	14	14

(II) Remuneration of President and Vice Presidents Unit: NT$ thousands; December 31, 2020

Name	Salary (A)	Salary (A)	Retirement pension (B)	Retirement pension (B)	Bonuses and allowances, etc. (C)	Bonuses and allowances, etc. (C)	Employee remuneration (D) (Note)	Employee remuneration (D) (Note)	Employee remuneration (D) (Note)	Employee remuneration (D) (Note)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)	Remuneration received from invested companies other than subsidiaries or the parent company
	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company		Companies in the consolidated financial statements		The Company	Companies in the consolidated financial statements
							Amount in cash	Amount in stock	Amount in cash	Amount in stock
Pei-Ing Lee	29,857	29,857	324	324	0	0	18,950	0	18,950	0	0.6392	0.6392	180
Lin-Chin Su
Joseph Wu
Rex Chuang
Yau-Ming Chen

Note: The amount of employee compensation is estimated.

Range of Remuneration

Range of Remuneration
Range of Remuneration of President and Vice Presidents	Name of President	and VicePresidents
	The Company	The Parent Company and Invested Companies
Under NT$ 1,000,000
NT$1,000,000(inclusive)to NT$2,000,000(exclusive)
NT$2,000,000(inclusive)to NT$3,500,000(exclusive)
NT$3,500,000(inclusive)to NT$5,000,000(exclusive)
NT$5,000,000(inclusive)to NT$10,000,000(exclusive)	Joseph Wu,Rex Chuang,Yau-MingChen	Joseph Wu,Rex Chuang,Yau-MingChen
NT$10,000,000(inclusive)to NT$15,000,000(exclusive)	Lin-Chin Su	Lin-Chin Su
NT$15,000,000(inclusive)to NT$30,000,000(exclusive)	Pei-IngLee	Pei-IngLee
NT$30,000,000(inclusive)to NT$50,000,000(exclusive)
NT$50,000,000 (inclusive) to NT$100,000,000 (exclusive)
NT$100,000,000 or more
Total	5	5

Employee Compensation of Executive Officers

Unit: NT$ thousands; December 31, 2020

Item	Title	Name	Amount in stock (Note 1)	Amount in cash (Note 1)	Total	Percentage of total bonuses to net profit after tax (％) (Note 2)
Managerial Officers	President	Pei-IngLee	0	36,000	36,000	0.4684
	Executive VicePresident	Lin-Chin Su
	Vice President	Joseph Wu
	Vice President	Rex Chuang
	Assistant Vice President	Yau-Ming Chen
	Assistant Vice President	Wesley Chang
	Assistant Vice President	Chi-Meng Su
	Assistant Vice President	Mark Mao
	Assistant Vice President	Jeff J.P. Lin
	Assistant Vice President	Rex Chen
	Assistant Vice President	Chuan-Jen Chang
	Finance Officer and Corporate Governance Supervisor	Philip Jao
	Accounting Supervisor	Hung-Chi Kuo

Note 1: The amount of employee compensation is estimated. Note 2: Net income is NTC’s net income after tax.

(III) Comparison and description of Remuneration for Directors, President and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, President and Vice Presidents. The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to Directors, President and Vice Presidents of the Company, to the net income.

1. Total remuneration as a percentage of net profit after tax

	ofit after tax
	Unit: %
2020	2019
0.6207	0.5135
0.6392	0.5325

Note: Remuneration for Directors includes compensation received by a Director who is an employee of NTC and Independent Directors.

Description:

(1) Compared with 2019, Director's remuneration accounted for a higher percentage of net profit after tax in 2020 due to the decrease in net profit after tax.
(2) Compared with 2019, remuneration to the President and Vice Presidents accounted for a higher percentage of net profit after tax in 2020 due to the decrease in net profit after tax.
The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with risks and business performance.
(1) The remuneration of NTC’s Directors is determined in accordance with Article 16 of NTC’s Articles of Incorporation, which stipulates that: "The Board of Directors is authorized to determine the compensation for the Directors, according to their extent and value of the contribution provided for the Company and the common compensation standards of the same industry.", Furthermore, traffic fares are based on attendances of Board meetings.
(2) Independent directors receive a fixed amount of compensation each month, traffic fares based on attendance of Board meetings, and do not receive any variable remuneration. Other directors only receive traffic fares based on attendance of Board meetings and do not receive any variable remuneration. All directors do not receive director's remuneration.
(3) NTC’s Compensation Committee reviews remuneration policies, standards, structures, systems, and adjustments for Directors and executive officers, and reports to NTC’s Board for approval.
(4) The remuneration of managerial officers including the president and vice presidents is in accordance with the Articles of Incorporation and Article 29 of the Company Act. Furthermore, salary adjustments and other compensation are determined based on the attainment of business goals or financial indicators for functions they are responsible for, individual performance and contributions, as well as leadership, communication, and innovation performance. The Company also included their economic, environmental, and social contributions and other corporate governance indicators for sustainable development, and also references salary standards in the industry.

IV. Implementation of Corporate Governance

(I) Board of Directors’ Meeting Status

A total of 6 Board meetings were held in the most recent year up to December 31, 2020. Director attendance is shown as follows:

Title	Name	Attendance inperson	By Proxy	Attendance rate(%)
Chairman	Nan Ya Plastics Corp. Representative: Chia Chau, Wu	6	0	100
Director	Wen Yuan, Wong	6	0	100
Director	Susan Wang	2	4	33.3
Director	Pei-Ing Lee	6	0	100
Director	Ming Jen, Tzou	6	0	100
Director	Lin-Chin Su	6	0	100
Director	Formosa Taffeta Co., Ltd. Representative: Shih-Ming Hsie	6	0	100
Director	Nan Ya Plastics Corp. Representative: Joseph Wu	6	0	100
Director	Nan Ya Plastics Corp. Representative: Rex Chuang	6	0	100
Independent Director	Ching-Chyi Lai	6	0	100
Independent Director	Shu-Po Hsu	6	0	100
Independent Director	Tsai-Feng Hou	6	0	100
Other mentionable items: I. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all Independent Directors’ opinions and the Company’s response should be specified: (I) Items specified in Article 14-3 of the Securities and Exchange Act: N/A. (II) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the board of directors: None. II. Implementation of Directors Avoiding Conflict of Interests towards Resolution: (I) Name: Pei-Ing Lee Resolutions adopted: The 1st Board meeting in 2020 was convened on February 26, 2020 to seek approval from the Shareholders meeting to lift the non- compete clause for Director. Reasons for recusal due to a conflict of interest and participation in voting: The above Director was the captioned interested party, so he recused himself from discussion and vote.

	(II) Name: Pei-Ing Lee, Lin-Chin Su, Joseph Wu, and Rex Chuang
	Resolutions adopted: The 1st Board meeting in 2020 was convened on February 26, 2020,
	to determine the 2019 bonuses for managers.
	Reasons for recusal due to a conflict of interest and participation in voting:
	The above Directors were the captioned interested party, so they recused themselves from
	the discussion and vote.
	(III) Name: Chia-Chau Wu, Wen-Yuan Wang, Ming-Jen Tzou, Joseph Wu, and Rex Chuang
	Resolutions adopted: The 3rd Board meeting in 2020 was held on May 28, 2020 to sign 2
	"land lease contracts" with Nan Ya Plastics Corporation.
	Reasons for recusal due to a conflict of interest and participation in voting:
	The above Directors were the Chairman, Executive Director, Director, or representative of
	institutional Director of Nan Ya Plastics Corporation, and therefore recused themselves
	from discussion and did not participate in the vote.
	(IV) Name: Pei-Ing Lee, Lin-Chin Su, Joseph Wu, and Rex Chuang
	Resolutions adopted: The 4th Board meeting in 2020 was convened on August 6, 2020 to
	discuss the proposed salary raise for managers in 2020.
	Reasons for recusal due to a conflict of interest and participation in voting:
	The above Directors were the captioned interested party, so they recused themselves from
	the discussion and vote.
	(V) Name: Ching-Chyi Lai, Shu-Po Hsu, Tsai-Feng Hou, Lin-Chin Su, and Joseph Wu
	Resolutions adopted: The 5th Board meeting in 2020 was convened on November 4, 2020
	to appoint Independent Directors Mr. Ching-Chyi Lai, Mr. Shu-Po
	Hsu, and Ms. Tsai-Feng Hou, and Directors Mr. Lin-Chin Su and Mr.
	Joseph Wu as members of the Risk Management Committee.
	Reasons for recusal due to a conflict of interest and participation in voting:
	The above Directors were the captioned interested party, so they recused themselves from
	the discussion and vote.
III.	TWSE/TPEx-listed companies are required to disclose the evaluation cycle and period,
	scope of evaluation, evaluation method, and evaluation items of the self (or peer) evaluations
	conducted bythe Board of Directors:
	Evaluation cycle Evaluation period Scope of evaluation Evaluation method Evaluation items
	Includes "level of participation in
	Self- Company operations, improving the
	Board of evaluation by quality of Board decisions,Board
	Directors Board composition and structure, selection
	members and continuing education of directors,
	Once a year ~~O~~ctober 1, 201~~9~~ to September 30, 2020 and internal control system." Individual Directors Member Self- evaluation by Board members Includes grasp of company goals and missions, understanding of the director's responsibilities, level of participation in company operations, internal relationship management and communication, director's specialty
	and continuing education, and internal
	controls.

	Evaluation cycle Evaluation period Scope of evaluation Evaluation method Evaluation items	Evaluation cycle Evaluation period Scope of evaluation Evaluation method Evaluation items
		Includes participation in company
		operations, understanding of the Audit
		Self- Committee's responsibilities,
		Audit evaluation by improvement of the Audit
		Committee Committee Committee's decision-making quality,
		members composition of the Audit Committee
	Once a year October 1, 2019 to September 30, 2020 and member selection, and internal control. Includes participation in company
		operations, understanding of the
		Self- Remuneration Committee's
		Remuneration evaluation by responsibilities, improvement of the
		Committee Committee Remuneration Committee's decision-
		members making quality, and composition of
		the Remuneration Committee and
		member selection.
IV.	An evaluation of the goals set for strengthening the functions of the Board and implementation
	status during the current and immediately preceding fiscal years:
	(I)	All operations of the Board of Directors are in compliance with the law, the Company's
		Articles of Incorporation, and resolutions of shareholders' meetings. In addition to
		professional knowledge, skills, and literacy required by all directors to perform their duties,
		the Board of Directors maximizes benefits for all shareholders based on the principle of good
		faith and duty of care.
	(II)	We have appointed independent directors and established a good Board governance system,
		comprehensive supervision functions, and management mechanism. We established the
		Board of Directors Meetings Rules in accordance with regulations of the securities
		regulatory authority, including the contents of proceedings, operating procedures, matters to
		be specified in the meeting minutes, announcements, and other matters requiring
		compliance.
	(III) In accordance with regulations of the securities regulatory authority, the Board of Directors
		passed the resolution on September 28, 2011 to establish a remuneration committee, as well
		as the policy to review and submit remunerations of directors and managers to the Board of
		Directors for a resolution.
	(IV) In accordance with the provisions of the securities regulatory authority, the Company
		passed the resolution of the Board of Directors on June 22, 2016 and set up the Audit
		Committee to submit the resolutions of the Board of Directors to the implementation of
		corporate governance.
	(V) Besides annual self-evaluations of Board operations to strengthen Board functions, internal
		auditors prepare monthly audit reports on Board operations for review by independent
		directors before the end of the following month, in order to comply with regulations of the
		securities regulatory authority.

(VI) The Board of Directors adopted a resolution on November 4, 2020 to establish a Risk Management Committee, so as to strengthen Board functions and risk management mechanisms. The Committee will assist in the review of risk management policies and structure, risk appetite and tolerance, and supervise the implementation of the risk management system and the effective operation of related mechanisms, so as to achieve the Company's risk management goals.

(II) Audit Committee Meeting Status

The Audit Committee held a total of 6 meetings in the most recent year up to December 31, 2020. The attendance of independent directors was as follows:

Title	Name	Attendance in person	By Proxy	Attendance rate(%)
Convener	Ching-Chyi Lai	6	0	100
Committee member	Shu-Po Hsu	6	0	100
Committee member	Tsai-Feng Hou	6	0	100
Other mentionable items: I. The operation of the Audit Committee shall, if any of the following circumstances, specify the date of the Board, date, contents, results of the Audit Committee resolutions and the handling of the opinions of the Audit Committee as below: (I) The matters listed in Article 14-5 of the Securities Exchange Act. (II) Except previous matters, the other approved by the Audit Committee, and by more than two- thirds of all directors agreed to the matter. Board of Director Content Matters specified in Article 14-5 of Securities and Exchange Act The other approved by the Audit Committee, and by more than two-thirds of all directors agreed to the matter February 26, 2020 1st meeting in 2020 1. To approve the Company's 2019 financial statements. 2. To formulate the Company's "Internal Control System Statement". 3. To amend the Company's "Charter of the Audit Committee." 4. To amend the "Internal Control System" and "Internal Audit Implementation Rules" of the Company's financial statement preparation process.   `－`  `－` `－` `－` `－` Audit Committee Resolution on February 26, 2020: All attendants agreed to pass. The Company's handling of the opinions of the Audit Committee: Approved by all Directors in attendance. May 6, 2020 2nd meeting in 2020 1. To amend the Company's "Internal Control System" and "Internal Audit Implementation Rules."  `－` Audit Committee Resolution on May 6, 2020: All attendants agreed to pass. The Company's handling of the opinions of the Audit Committee: Approved by all Directors in attendance. May 28, 2020 3rd meeting in 2020 1. To sign 2 "land lease contracts" with Nan Ya Plastics Corporation.  `－` Audit Committee Resolution on May 28, 2020: All attendants agreed to pass. The Company's handling of the opinions of the Audit Committee: Some Directors recused themselves from the case (See 2. Implementation of Directors Avoiding Conflict of Interests towards Resolution); the remaining Directors approved the proposals.

		~~The other~~
		Board of Director Content Matters specified in Article 14-5 of Securities and approved by the Audit Committee, and by more than two-thirds
		Exchange Act of all directors agreed to the
		matter
		December 18, 2020 6th meeting in 2020 1. To approve the Company's internal audit plan in 2021. `－` `－` Audit Committee Resolution on December 18, 2020: All attendants agreed to pass. The Company's handling of the opinions of the Audit Committee: Approved by all Directors in attendance.
II.	The Independent Directors' avoidance of interest motion should indicate the names of the
	Independent Directors, content of the motion and reasons of avoidance of interest as well as the
	involvement in voting: None.
III.	The communication between the Independent Director, internal audit officer of the Company’s and
	CPA. (including major matters, methods and results of communication on the Company's financial
	and business conditions)
	(I)	The communication between the Independent Directors and the internal audit officer of the
		Company
		1. The amendment of the "Internal Control Systems" and "Internal Audit Implementation
		Rules" of the Company shall be subject to the approval of the Audit Committee and shall
		be submitted to the Board of Directors for a resolution.
		2. The Company's annual audit plan was approved by the Audit Committee and submitted to
		the Board of Directors for a resolution.
		3. The “Internal Control System Statement” of the Company shall be subject to the approval
		of the Audit Committee and shall be submitted to the Board of Directors for a resolution.
		4. The Audit Office regularly submits an internal audit report to independent directors for
		review each month.
		5. Independent directors and the chief internal auditor shall meet at least once a quarter to
		communicate the internal audit execution status and internal control operation status of the
		Company. Besides preparing an audit report on deficiencies and abnormalities in the
		internal control system, cases are tracked to ensure that relevant units take appropriate
		improvement measures.
		6. Independent directors may directly contact the internal audit supervisor when necessary.
		7. Summary of communication between independent directors and the chief internal auditor
		in 2020
		Date Meeting Content Result
		December 2019 Audit The Audit Office will
		Report schedule on-site audits of
		February 10, Telephone Recommendation from overseas subsidiaries once
		2020 conferences Independent Director: the COVID-19 pandemic
		Step up irregular audits of subsides.
		subsidiaries

Date	Meeting	Content	Result
February 14, 2020	Review meeting	1. To report on the implementation progress of the Company's internal audit plan in November through December 2019 Recommendation from Independent Director: Enhance audits of subsidiaries 2. Prepare an Internal Control System Statement	1. The Audit Office has handled matters as recommended by Independent Directors. 2. Good, no dissenting opinion.
February 26, 2020	Audit Committee	1. To report on the implementation progress of the Company's internal audit plan in November through December 2019 Recommendation from Independent Director: Method for preventing deficiencies found in audits from being repeated 2. Prepare an Internal Control System Statement	1. Noted and reported to the Board of Directors. The Audit Office and related departments have handled matters as recommended by independent directors. 2. Passed with the approval of all members in attendance and submitted to the Board of Directors for resolution.
April 23, 2020	Review meeting	1. To report on the implementation progress of the Company's internal audit plan in the first quarter of 2020 2. To amend the Company's "Internal Control Systems" and "Internal Audit Implementation Rules"	Good, no dissenting opinion.
May 6, 2020	Audit Committee	1. To report on the implementation progress of the Company's internal audit plan in the first quarter of 2020 2. To amend the Company's "Internal Control Systems" and "Internal Audit Implementation Rules"	1. Noted, no dissenting opinion, and reported to the Board of Directors. 2. Passed with the approval of all members in attendance and submitted to the Board of Directors for resolution.

Date	Meeting	Content	Result
May 6, 2020	Review meeting	To report the progress of correcting defects and irregularities in the internal control system in 2019.	Good, no dissenting opinion.
May 25, 2020	Audit Committee	To report the progress of correcting defects and irregularities in the internal control system in 2019.	Noted, no dissenting opinion, and reported to the Board of Directors.
July 24, 2020	Review meeting	To report on the implementation progress of the Company's internal audit plan in the second quarter of 2020 Recommendation from Independent Director: Revise related operating procedures and irregularly conduct on-site audits each year	Related departments have revised operating procedures as recommended by Independent Directors, and the Audit Office has arranged for Independent Directors to conduct an on- site audit on October 26.
August 6, 2020	Audit Committee	To report on the implementation progress of the Company's internal audit plan in the second quarter of 2020	Noted, no dissenting opinion, and reported to the Board of Directors.
October 26, 2020	Review meeting	To report on the implementation progress of the Company's internal audit plan in the third quarter of 2020	Good, no dissenting opinion.
October 26, 2020	Independent Directors conducted an on-site sampling inspection	On-site sampling inspection of the implementation of internal control procedures Recommendation from Independent Director: Improved and revised related operating procedures	Related departments have revised operating procedures as recommended by Independent Directors.
November 4, 2020	Audit Committee	To report on the implementation progress of the Company's internal audit plan in the third quarter of 2020	Noted, no dissenting opinion, and reported to the Board of Directors.
December 2, 2020	Review meeting	1. To report on the implementation progress of the Company's internal audit plan in October 2020 2. To approve the 2021 internal auditplan.	Good, no dissenting opinion.

		Date	Meeting	Content	Result
				1. To report on the	1. Noted, no dissenting
				implementation progress of	opinion, and reported to the
				the Company's internal audit	Board of Directors.
				plan in October 2020
				2. To approve the 2021	2. Passed with the
				internal audit plan.	approval of all members in
		December 18,	Audit		attendance and submitted to
		2020	Committee		the Board of Directors for
					resolution.
				Recommendation from	The Audit Office will
				Independent Director:	handle matters as
				Include departments with	recommended by
				relatively high risk in	Independent Directors.
				irregular audits
(II)	The communication between the Independent Directors and the CPA
	1. The Audit Committee of the Company is composed of all Independent Directors, the CPA
		has presented the findings or the comments for the financial reports and the impact of the
		amendment of the relevant laws and regulations.
	2. The Independent Directors could contact CPA directly by case.
	3. Summary of communication between independent directors and accountants in 2020
		Date	Meeting	Content	Result
				To explain audit opinions on	Passed with the approval of
		February 26,	Audit	the 2019 financial statements.	all members in attendance
		2020	Committee		and submitted to the Board of
					Directors for resolution.
		May 6, 2020	Audit Committee	To explain audit opinions on the financial statements for the firstquarter of 2020	Noted and reported to the Board of Directors.
				To explain audit opinions on	Noted and reported to the
		August 6, 2020	Audit Committee	the 2020 Q2 financial statements and the Company's evaluation of the	Board of Directors.
				COVID-19pandemic.
		November 4, 2020	Audit Committee	To explain audit opinions on the financial statements for the thirdquarter of 2020	Noted and reported to the Board of Directors.

IV. Key tasks of the Audit Committee this year:

The Audit Committee will continue supervise the Company in 2020 in accordance with the Audit Committee Charter and relevant laws and regulations, including: 1. Fair presentation of the financial reports

The hiring (or dismissal), independence, and performance of certificated public accountants.
The effective implementation of the internal control system
Compliance with relevant laws and regulations

(III)Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission

Assessment item			Implementationstatus (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies andreasons
	Yes	No	Explanation
I. Does Company follow “Taiwan Corporate Governance Implementation” to establish and disclose its corporate governance practices?			The Company's board of directors approved the establishment of the "Nanya Corporate Governance Principles" on November 10, 2014, and disclosed the principles on the website designated by the competent authority of securities and the Company website.	Complies with Article 1-2 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. The contents were slightly adjusted based on our practices, but still comply with the spirit of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.
II. The Company's shareholding structure and shareholders' rights and interests (I) Does the Company adopt internal procedures for appropriate handling shareholders' suggestions, doubts, disputes and litigation matters, and implementation in accordance with procedures? (II) Does the Company monitoringthe	 		The Company has designated a spokesman and deputy spokesman, and established the investor relationship department to handle shareholders’ suggestions and complaints. The Company monitors changes in shareholdings orpledged shares of Directors,	Complies with Article 13 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Article 19 of the

Assessment item			Implementationstatus (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies andreasons
	Yes	No	Explanation
status of major shareholders with control over the Company and their ultimate control persons? (III) Does the Company set up and execute the risk management and firewall between the Company and its affiliates? (IV) Does the Company establish internal rules prohibiting Company insiders from trading securities using information not disclosed to the market?	 		managers, and shareholders with more than 5% of total outstanding shares, and discloses information on shareholders with more than 5% of total outstanding shares in quarterly financial statements. Directors, managers, and shareholders with 10% or more shares complete reporting procedures on the website designated by the competent authority of securities each month. The personnel and property of the Company has been separated definitely from other affiliates without any abnormal transactions. All transactions with affiliated enterprises are conducted on a legitimate basis and at arm’s length. We have also set a limit on the scope and amount of endorsements and guarantees that can be provided to other companies. For banks, customers, and suppliers, we make a comprehensive risk arrangement through checking from computer and stop paying if any problems from same supplier. The Company has the internal prohibition with the Company's property, confidential information, or unable to obtain non-public information in the market to acquire its own illegitimate profits in the “Guidelines and Regulations Rule” of the Company. We established Personnel Management Rules and Guidelines for the Prevention of Insider Trading to prohibit insiders from illegally profiting from trades based on information not yet disclosed to the public, and we educate employees to comply with relevant regulations.	Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Articles 14 -17 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Paragraph 3, Article 10 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
III. Composition and duties of the Board of Directors (I) Does the Company set up the various policies for the composition of Board of Directors, and to implement the policies? (II) Does the Company	 		The Corporate Governance Principles of the Company stipulate that the diversity of Board members must be given due consideration, and Board members must have the necessary knowledge, skill, and experience to perform their duties, including but not limited to gender, race and nationality. In order to achieve the goals of corporate governance, the Board as a whole shall have the following abilities 1. Business judgment. 2. Ability to perform accounting and financial analysis. 3. Ability to manage a business. 4. Ability to handle crisis management. 5. Knowledge of the industry. 6. An international market perspective. 7. Leadership. 8. Decision-making ability. The Board of Directors currently has 12 members, including 3 Independent Directors, 2 female Directors, and 4 Directors who are concurrently employees (accounting for 25%, 16.7%, and 33.3% of all Directors, respectively). Our goal is for female Directors to account for 25% of all Directors. As of the end of 2020, 3 Directors were between the ages of 50 and 59, while the remaining Directors were all above the age of 60. Independent Directors are in compliance with the Code of Practice for Independent Directors of FSC. For information on the academic background, experience, gender, professional qualifications, and work experience of each director as well as Board diversity, please refer to "Three. Corporate Governance Report (I) Information on Directors. NTC has established Remuneration Committee that approved by the Board of Directors	Complies with Article 20 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Article 28 and 28-1

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
establish other functional committee voluntarily, besides the remuneration committee and audit committee? (III) Does the Company establish standards and method for evaluating Board performance, conduct annual performance evaluations, submit performance evaluation results to the Board, and use the results as a basis for determining the remuneration and nomination of individual directors? (IV) Does the Company evaluate the independence and suitability of the CPA regularly?	 		on August 26, 2011. In addition to establish the Audit Committee and approved by the Board of Directors on June 22, 2016. Besides the two committees above, the Board of Directors adopted the resolution to establish a Risk Management Committee on November 4, 2020 to strengthen Board functions and risk management mechanisms. The Board of Directors established the "Regulations Governing Board Performance Evaluations" on August 6, 2020 and has completed the 2020 performance evaluation. Evaluation results have been submitted to the Board of Directors on December 18 the same year, and will be used as a basis for determining the remuneration and nomination of individual directors. At least once a year, the Company evaluates the independence and qualifications of the external auditors, the scope and reputation of the auditing firm, provides the number of continuous years of auditing services, the nature and extent of services provided by non-auditors, the auditing fees, industry evaluation, whether there were any legal suits or disputes with competent authorities, investigated cases, the quality of auditing services, whether there is regular maintenance, and the level of interaction internallybetween the management	of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Article 37 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Article 29 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			and auditing management, and asks the auditing CPA to provide the related information based on the evaluated index. The evaluation results were reported to the Board on February 26, 2021.
IV. Does the public company have a suitable number of competent corporate governance personnel, and has it appointed a corporate governance supervisor responsible for corporate governance matters (including but not limited to providing information for directors to perform their duties, assisting directors with regulatory compliance, handling matters related to Board meetings and shareholders' meetings, and preparing proceedings for			1. The Board of Directors approved the appointment of a corporate governance supervisor on May 10, 2019. The corporate governance supervisor is the highest level manager of corporate governance affairs, and competent personnel are appointed to handle corporate governance affairs. The scope of authority, includes convening board meetings and shareholders' meetings in accordance with the law, preparing proceedings for board meetings and shareholders' meetings, assisting with the appointment and continuing education of directors, providing data required by directors to perform their duties, and assisting directors in compliance with the law. 2. Key points of operations in 2020: (1) Assist in the compliance of proceedings and resolutions of Board meetings and shareholders' meetings. (2) Notify directors of the agenda of Board meetings 7 days in advance, convene meetings, and provide meeting materials. Remind directors of agenda items with which they have a conflict of interest, and complete Board meeting minutes within 20 days after a meeting. (3) Provide assistance by arranging meetings if independent directors need to meet with the internal audit supervisor or CPA to understand the Company's business needs. (4)Assist inprovidingdirectors with the data they	Complies with Article 3-1 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
Board meetings and shareholders' meetings)?			need to perform their duties and arrange continuing education for directors. 3. Continuing education of the corporate governance supervisor:
			Course time	program	Organizer	hours
			August 27, 2019 ~ August 28, 2019	(Independent) Director, Supervisor, and Corporate Governance Supervisor Workshop– Taipei	Securities and Futures Institute	12
			March 5, 2020	Blockchain Principles and Applications		3
				Intellectual Property Rights – From the Perspective of Trade Secrets		3
V. Does the Company build channels of communication with its stakeholders and establish a designated section for stakeholders on the Company website to respond stakeholders’ CSR concerns?			1. Depending on the situation, the President's Office is responsible for communicating with stakeholders and the spokesperson or deputy spokesperson serve as external communication channels. 2. The Company will comply with relevant regulations to establish a designated section for stakeholders on the company website and a corporate social responsibility website to maintain good communication with our stakeholders. Stakeholders and investors can communicate with the company by telephone, letters, facsimile, and e-mails at any time if needed. 3. NTC responds to stakeholders’ concerns at the appropriate time through the following channels: (1) Shareholder: The general shareholders can learn about the Company's operations through the annual shareholders' meetings and annual reports. They can usually be queried by telephone or email. For corporate				Complies with Article 51 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			shareholders, there are quarterly legal briefings and global conference calls, participation in investment seminars at home and abroad, participation in brokers’ forums for unscheduled investors, telephone interviews, or visits. (2) Employee: Issues such as workplace safety, employee benefits, human rights protection, and employment relationships include corporate announcements, human resources service representatives, and regular meetings (such as staff meetings and online personnel meetings). A variety of education and training, irregular communication meetings, employee relations department channels of communication, suggestion boxes, company publications, electronic platforms, questionnaires (such as education and training satisfaction, catering satisfaction) and other channels to communicate with employees. (3) Client: Respond to customer-focused product quality, after-sales service and other issues by visiting customers, customer meetings, maintenance services, dealer meetings, regular technical support, customer education and training, and customer satisfaction surveys. In addition, the website lists the sales service line and e-mail address, and handles customer complaints through the "customer opinion response form" and "customer complaint processing form". (4) Supplier: The company upholds the spirit of sustainable development and adheres to the principle of fair trade. It strives to require the compliance of manufacturers with environmentalprotection,work safety,and

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			human rights standards. It conducts public tendering through the Formosa Plastics Network electronic trading platform procurement contracting system, and regularly organizes company briefing sessions to strengthen the two-way Communication and advocacy. In addition, it provides an instant supplier information platform, regular face-to- face review reports or meetings, supplier surveys, audits and guidance, and supplier delivery stability and quality assessment. Vendors can ask questions on the platform's "Vendor Feedback Section," and dedicated personnel will handle and respond to their questions to achieve the goal of information symmetry. (5) Government: Communication channels include correspondence, regulatory briefings, company financial reports, relevant information required by competent authorities and regulations, and communication with the competent authorities through computer associations, etc. (6) Community: The Company gathers together funds, supplies, and manpower inside and outside the Company through the 4U project (Focus On U, Light Up, Power Up, and Line Up) for community involvement. Information is announced on the company website inform communities, and we established a Charity Club to participate in volunteer activities and launch donation activities to provide support after a major natural disaster occurs in Taiwan. There is a feedback mailbox ([email protected]) to provide a communication channel for community

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			residents, and our factory has a management office to handle communication with communities. (7) Media: Communication methods include press releases, quarterly press conferences, the official company website, and interviews with the spokesperson.
VI. Does the Company appoint a professional stock agency to deal the shareholders affairs?			The Company’s shareholders’ meeting currently operates on its own. However, relevant processes are handled strictly according to regulations by the special stock affairs department, legal affairs department, president’s office; this allows the shareholders’ meeting to be convened effectively, safely, and according to the law and with proper protection to shareholders’ rights.	Does not comply with Paragraph 1, Article 7 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, but it does not affect the operations of the shareholders' meeting.
VII. Information disclosure (I) Does the Company establish a corporate website to disclose information regarding the Company's financials, operation and corporate governance (II) Does the Company adopt other disclosure methods (i.e., setting of English website, appointed personnel	 		The Company has disclosed information regarding the Company's financials, operation and corporate governance on its corporate website in Chinese and English. Company website: https: //www.nanya.com The Company has implemented a spokesperson and substitute spokesperson system as well as a designated personnel in the president’s office responsible for gathering and disclosing the Company’s information as well as providing the spokesperson and relevant departments with answers to inquiries by stakeholders and the	Complies with Article 57 and 59 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies. Complies with Article 55, Paragraph 3 and Article 56 and Article 58 of the Corporate Governance Best- Practice Principles

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
responsible for information gathering and disclosing, implement of spokesperson system, and uploading the materials of investor conferences on website)? (III) Does the Company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?			competent authorities. To strengthen corporate governance and help investors understand the Company's operations, the Company announces and reports monthly revenue on the 5th of each month, and announces and reports annual financial statements within two months after the end of each fiscal year. The Company has required the announcement and reporting of Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit starting in 2020.	for TWSE/TPEx Listed Companies. Complies with Article 55, Paragraph 2 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.
VIII. Does the Company have any other helpful information regarding corporate governance (i.e.,			(I) Employee rights and interests: The Company keeps good relationships with employees and pay attention for rights of expressing opinions and suggestions. We set boxes for employees to provide their opinions at the entry of working place and through computer system as well. All are replied by designated person and we	Complies with Article 52-54 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
the interest and care of employees, investor relations, relationship with vendors, stakeholders' rights, attendance of training courses by Directors and Supervisors, the implementation status for a risk management policy and risk measurement, the implementation status of protection for consumers or customers and liability insurance for Directors and Supervisors with respect to their liabilities resulting from exercising their duties)?			make policy of abnormal event arrangement to the protection. At the same time, department heads attend regular supervisory board meetings and labor-management meetings to fully communicate with employees. We first listen to the opinions of unions regarding major labor-management issues, and highest level supervisors negotiate with the unions to reach an agreement, ensuring harmonious labor relations and the Company's sustainable development. (II) Care for employees: With a view to taking care of employee physical and mental health, the Company has budgeted every year for Chang Gung Hospital to performs health checkups for employees; in addition to inspection items stipulated by law, it has added cancer screening for Alpha-Fetoprotein, AFP and carcinoembryonic antigen, CEA. This allows employees to understand and cherish their health. On the part of diet, we make health regulations to exam the source, people, storage, usage and clearance to protect employee’s health and safety. Also, we have dedicated counselors that periodically interview new employees to determine how well they are adapting to the Company, and also provide them with someone for advice and talking when they encounter difficulties at work and in life. Please refer to 5. Labor Relations in V. Business Overview for employee benefits. (III) Investor relations: The Company's President's Office and Stock Affairs Department severe as a communication channel between the Company and shareholders. With regard to information transparency, we provide investor information in an investor

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			relations section on our website. We take part in investment forum held by foreign broker and hold seminars with domestic and foreign periodically. (IV) Supplier relations: The spirit of purchasing activities of the company is creating a fair and competitive environment and seeking for qualified vendors to coordinate with each department by reasonable price, material, equipment and engineering. 1. Open and fair procurement mechanism: We organize "open bids" through the procurement system of Formosa Technology E-Market Place, and provide vendors with online inquiry, quotation, negotiation, purchase order, delivery, and payment progress inquiry functions. All information is encrypted via electronic certificates and protected by a firewall to ensure the safety of all data being transferred. Vendors can check requests for quotation online at any time and place, and provide quotations accordingly, significantly increasing operating efficiency while saving time and money. It also reduces operating cost and increases sales profits. After the computer opens all bids for a request for quotation, the vendor that bids the lowest price with a delivery time and quality that meet requirements will be given priority, this way both buyer and seller can achieve their goals in a harmonious atmosphere. 2. Complete supplier management: We implement comprehensive supplier management and assessment to achieve stable material quality and delivery, and also ensure the quality and progress of construction. All suppliers are assessed and graded when they register, and any late delivery

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			(construction), poor quality, or violation of labor safety by suppliers are automatically included in their assessment records. This eliminates bad suppliers and maintains long-term relationships with good suppliers. 3. Win-win through electronic transactions: We combined the ERP computer management system that we have perfected over the years with our quantified, open, and transparent online procurement mechanism to create a high quality, safe, convenient, and fast electronic trading environment. We have expanded to other vertical and horizontal industries to share the "Formosa Plastics Experience" with all enterprises in an electronic era. At present, our supply chain consists of over 10,000 suppliers and contractors who share the business opportunities and economic benefits of open transactions on this electronic transaction platform. 4. Sustainable supplier management: (1) We comply with the RBA® Code of Conduct in our pursuit of corporate sustainability, and have committed to ethical corporate management. Besides strengthening corporate governance and ensuring shareholder equity, we strive to create a working environment with harmony, health, and safety, and develop towards green technology and environmental sustainability. We invest in social welfare to meet the expectations of society and stakeholders, and also to fulfill our CSR. (2) Suppliers are important members for realizing the core values above. We prepared the Formosa Plastics Group Supplier/Contractor Corporate Social Responsibilities Letter of Undertaking,which contains the Code of

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			Conduct for Suppliers/Contractors, RBA Code of Conduct, and regulations and requirements related to conflict-free minerals established by Formosa Plastics Group. Suppliers are required to make a commitment to comply with CSR regulations before signing the contract, in order to ensure that the operations or activities of suppliers (including contractors) related to workers, health and safety, environmental protection, and business ethics comply with our Code of Conduct, thus contributing to the improvement of the overall business environment for the electronics industry. We communicate elements of human rights and ethical conduct with our suppliers, and ensure that their operations or activities comply with our requirements on employee and ethical conduct by requiring them to sign a letter of commitment, fill out self-assessment questionnaires, and conduct on-site audits. (3) To ensure the supply chain's implementation of sustainability, the Company distributes the Nanya Technology Corporation Supply Chain Code of Conduct Questionnaire to major suppliers each year. All major suppliers have to conduct a self-assessment, fill in the questionnaire, and hand it back. Suppliers are required to reply the implementation status of various sustainability issues on the questionnaire, and provide certification documents issued by related management systems. The results of the suppliers' self- assessment questionnaires shall be adopted as the basis of sustainability risk management and as reference for the Company's assistance to achieve supplychain sustainability. The

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			questionnaire assesses economic/social/environmental aspects. We analyzed the self-evaluation results of suppliers and screened the top 5% highest risk suppliers, conducting on-site audits and providing guidance for them to make improvements. Furthermore, we conduct document or on-site audits at least once every three years to improve the sustainable management of supply chain risks, and ensure that corporate sustainability measures are implemented in the supply chain. (V) Stakeholder interests: The company keeps going on own business and performance and achieve mission of caring employees, customer service, and reward shareholder. In addition to better performance in the industry, the company pursues good business performance and strives to achieve its mission to “care for its employees, serve its customers, and give back to shareholders.” To that end, it bears a responsibility to properly care for its shareholders, customers, suppliers, employees, and society. In addition to complying with laws and the norms of business ethics, the Company has maintained international standards to enhance competitiveness; created shareholders' rights; pay equal attention to economic, environmental and social aspects; promote green construction and procure green or energy-conserving materials and supplies; conserve energy and reduce carbon emissions; pay attention to social issues; invest in community or social welfare actions suitable for businesses, and thus extend care for society.

		Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
Yes	No	Explanation
		(VI) Advanced studies of directors and supervisors:						Complies with Article 40 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.
		`董事` `姓名`	`課程` `時間`	`參與` `課程`	`主辦` `單位`	`時數`
		Chia-Chau Wu	2020.11.27	Economic outlook and industry trends in 2021 Giving institutional investors a bigger role in corporate governance	Securities and Futures Institute Taiwan Corporate Governance Association	3 3	6
		Wen-Yuan Wang
		Ruei-Hua Wang
		Pei-IngLee
		Ming-Jen Tzou
		Lin-Chin Su
		Shih-Ming Hsie
		Joseph Wu	2020.01.16	Promotional event on the intellectual property management obligations of the Board of Directors of TWSE/TPEx- listed companies	Industrial Development Bureau, Ministry of Economic Affairs	2.5	13.5
			2020.02.05	The 19th CEO Lecture Hall and Lectures	Taiwan Institute for Sustainable Energy	2
			2020.05.13	The 20th CEO Lecture Hall and Lectures		2
			2020.07.30	The 21th CEO Lecture Hall and Lectures		2
			2020.10.29	The 22th CEO Lecture Hall and Lectures		2
			2020.11.27	Giving institutional investors a bigger role in corporate governance	Taiwan Corporate Governance Association	3
		Rex Chuang	2020.10.14	2020 Insider Trading Prevention Meeting and Insider Stock Transaction Explanation	Securities and Futures Institute	3	6
			2020.11.27	Economic outlook and industry trends in 2021		3


`董事` `姓名`	`課程` `時間`	`參與` `課程`	`主辦` `單位`	`時數`
Ching-Chyi Lai	2020.09.21	Corporate Governance 3.0 – Sustainable Development Blueprint Summit	Taiwan Stock Exchange	3	12
	2020.10.16	2020 Corporate Governance and Ethical Corporate Management Meeting for Directors and Supervisors		3
	2020.11.27	Economic outlook and industry trends in 2021	Securities and Futures Institute	3
	2020.11.27	Giving institutional investors a bigger role in corporate governance	Taiwan Corporate Governance Association	3
Shu-Po Hsu	2020.09.02	Retrospection and outlooks on AML risk management	Taiwan Academy of Banking and Finance	3	15
		Development of corporate governance practices, intellectual property management strategies		3
	2020.09.21	Corporate Governance 3.0 – Sustainable Development Blueprint Summit	Taiwan Stock Exchange	3
	2020.10.21	2020 Insider Trading Prevention Meeting and Insider Stock Transaction Explanation	Securities and Futures Institute	3
	2020.11.27	Economic outlook and industry trends in 2021		3
Tsai-Feng Hou	2020.09.03	2020 Insider Trading Prevention Meeting and Insider Stock Transaction Explanation	Securities and Futures Institute	3	6
	2020.11.13	2020 Corporate Governance and Ethical Corporate Management Meeting for Directors and Supervisors	Taiwan Stock Exchange	3
(VII) Implementation of risk management policies and risk assessment standards: 1. The Board of Directors approved the establishment of a Risk Management Committee

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			on November 4, 2020 to facilitate the Company's sound operation and sustainable development, establish a comprehensive risk management culture, and prepare for "Corporate Governance 3.0 – Sustainable Development Blueprint" announced by the FSC. The Board of Directors established the "Risk Management Committee Charter," and appointed 3 independent directors and 2 directors as committee members. The Board of Directors passed the "Risk Management Regulations" on December 18 the same year and reported the status of risk management in 2020. 2. The Company's Risk Management Regulations includes the risk management policy, and aims to effectively identify, analyze and assess, and continuously monitor risks, raising the risk awareness of all employees in hopes of controlling risks within a tolerable range. This ensures the completeness, effectiveness, and benefits of risk management. 3. The Board of Directors is the highest level decision-maker and supervision unit for risk management, and is responsible for establishing the Company's risk management policy and regulations. The Risk Management Committee is subordinate to the Board of Directors, and assists in the review of risk management policies and structure, risk appetite and tolerance, and supervises the implementation of the risk management system and the effective operation of related mechanisms, so as to achieve the Company's risk management goals. The Risk Management Committee convenes meetings at least once a year, and reports the status of risk management or material risks to the Board of	for TWSE/TPEx Listed Companies.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			Directors when appropriate. 4. We adjusted organizational operations in accordance with the Risk Management Regulations, and the Risk Management Steering Committee was renamed the Risk Management Center. The Center is headed by the president and members are departments heads, who form task forces and are responsible for implementing and supervising the work and overall risk management by the task forces. In coordination with the Company's business strategies, five risk management task forces were established, namely operations, information security, hazards, finance, and legal affairs. Each risk management task force collects information on risks in the internal and external environment. Besides monitoring risks in routine operations, the task forces are required to track and assess the risk level of risk factors, and take improvement measures accordingly. The task forces then report risk management results to the Center. 5. The Risk Management Center meets quarterly to review the performance of risk management organizations and business continuity plans, in order to ensure the suitability, relevance and effectiveness of its ongoing operations. 6. The continuous process of risk management is as follows: background data collection → risk analysis → operational impact analysis → confirmation of control mechanisms and setting of regulatory indicators → risk assessment → prevention and improvement measures → selection of recovery plan and strategy. 7. Emergency response mechanism and measures: The Companyhas a complete set of

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			operational norms and methods for handling emergency anomalies, covering manufacturing, supply chain and warehousing, information security, human resources and other aspects. Through the pre-sufficient plan, can immediately take response measures in the event of an emergency, mitigate the impact of the incident and quickly recover, ensure the normal operation to meet client needs. For example, raw material shortage, affecting 10% of output (such as earthquakes, typhoons, toxic gases, fire alarms, labor shortages, etc.), abnormal utilities systems, abnormal automation systems, abnormal outsourcing capacity, and large number of customer returns, all have specific treatment steps and improvement measures. In addition, the emergency response to personnel safety, such as fire alarm, gas leakage, leakage, odor, earthquake and radiation leakage, emergency response measures, notification procedures and command systems are all in accordance with EHS related regulations and drilled regularly. 8. Risk identification: NTC identifies risks based on the risk items proposed by the Risk Management Center each year. The operations, information security, hazards, finance, and legal affairs risk management task forces proposed 187 risk items in 2020. We raised the standards for risk identification and lowered our risk appetite/tolerance in December 2020, using a more rigorous attitude and approach to taking response measures based on the risk level of risk items. Distribution of identified risk items and quantities: There were no items that require immediate improvement, 14 items that require

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			improvement plans, 114 items that require indicators for monitoring, and 59 items that require further observation. Items that require improvement plans include 9 operations-related items (impact of COVID-19, water shortage, abnormal quality of contractors, abnormal power supply from Taiwan Power Company, clean room Internet switch malfunction, employee work overdue, personnel separation/poaching, earthquake, and fire accident), 3 information security-related items (ineffective terminal protection, OT equipment attacked or damaged, cyberattack or hacking), 1 hazard-related item (abnormal emission of process waste gas), and 1 exchange rate-related item. Risk management task forces have formulated and taken response measures for items that require improvement plans, and have established related handling mechanisms. 9. Stress test: The Company conducts sensitivity analysis and stress tests on major risks, including the industry environment, production and sales strategy, water resources, financial position, climate change, information security, and compliance, on an annual basis. We seek to learn about the impact of potential risk factors on the Company's finances, and provide senior executives with information for formulating response measures to mitigate risks and prevent impact brought to the Company by extreme events. 10. Emerging risks: We pay close attention to changes in the economic environment. We identify long-term risks and opportunities and adapt our business strategies to ensure sustainability and long-term operating

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			performance. We assess emerging risks for the next 3-5 years every year and the risk management task forces collect related domestic and international information to evaluate potential risks in the Company's long-term operations. The task forces used questionnaires or evaluations in meetings of senior executives to identify three issues with the highest level of potential impact in the future, and reviewed mitigation and response strategies. The issues and strategies are reported to the Risk Management Center for resolution and used as important references for formulating future business strategies. They are also disclosed in the Corporate Social Responsibility Report. Department heads collected and summarized 15 emerging risks in 2020, and discussed and established questionnaires measured on a five- point scale as an investigation tool for identifying material emerging risks to senior executives (assistant vice president and above including the president). Three material emerging risks have already been identified, and NTC has formulated response strategies and continues to implement improvements with the aim of mitigating related impacts. 11. Creating a risk culture: We established a Risk Management Committee under the Board of Directors to create a comprehensive risk management culture. The committee supervises the implementation of the risk management system and the effective operation of related mechanisms, so as to achieve the Company's risk management goals. The committee comprehensively implements risk management affairs accordingto the scope,organization,

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			duties, and risk management procedures set forth in the Risk Management Regulations. The Company's "Risk Management Center" has 3 directors who are concurrently managerial officers (president, executive vice president, and Vice President Wu) as its director and deputy directors. The Center internalizes risk awareness in the management hierarchy, enhances risk management, and reviews risk management performance and emerging risks on an annual basis. We also included risk management result in the annual performance evaluation of management (president and supervisors ranked assistant vice president and above), which was approved by the Board of Directors, using management by objective to implement risk management measures and comprehensively raise the Company's risk awareness. In addition, a variety of incentives are provided to encourage employee proposals and stimulate peers to think innovatively to explore potential risks. We set up a 24-hour reporting hotline, information security hotline, whistleblower hotline, and whistleblower mailbox for employees to report risks, and also deeply rooted the risk management culture among all employees through TV walls, posters, and desktop wallpapers. Our evaluation regulations have already included employees' understanding and implementation of risk management as an evaluation item in quarterly work evaluations and year-end evaluations, and serves as a basis for performance ratings, promotion, bonuses, and stock options, as well as the implementation of risk management measures. 12. Risk management education and training: The

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			Company's managerial officers and directors take corporate governance-related risk management courses offered by government agencies every year. In addition, business strategy-related risk management courses will be offered to members of the Risk Management Committee in 2021, in order to assist and guide the Company's risk management operations. Furthermore, the company internally compiles risk management materials, assigns employees to read the materials to raise their risk awareness, and encourages proposals to explore potential risks. The company also implements the spirit of risk management in daily management. For example, various standard operating practices and various types of management functions regularly perform self-inspection operations to identify potential risks as early as possible for prevention and improvement. (VIII) Implementation of Customer Policy: 1. Customer royalty will be helpful to expand the business scope and strengthen the good partnership with customers. Maintaining good customer relationships help build customer loyalty, and higher loyalty benefits business scope expansion and maintaining partnerships with customers. Creating quality service is one of the core values of the company. The company’s goal is to maintain its service in leading position among DRAM manufacturers, and believes that maintaining the aforementioned service objectives and attitudes will help to enhance the existing customer relationship and establish a reputation in the industry, which will be beneficial to attracting new customers.

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			2. Product design and test verification stage: In order to improve the efficiency and frequency of customer service and effectively build close relationships with customers, the Field Application Engineering Division provides technical support to customers in Taiwan, China, Southeast Asia, Europe, the United States, Japan and South Korea, organizing irregular technology exchange events to meet the technical needs of customers. In 2020, the Division held a total of 91 events, providing technical supports and assisting customers' engineering personnel to solve problems in design and testing. In addition, through the highly efficient, intensive, and high-quality customer platform parameter measurement service, of which 955 cases were completed in 2020, we assisted customers in understanding the characteristics of their product platforms so that the new product development progress and verification cycles of customers were significantly accelerated, reducing investment risks and helping final products to be launched in a timely manner in the demand market. We also provide "customer product joint validation" services, and help customers discover compatibility issues during early stages of product development and validation, so that they can make improvements before mass production. We completed a total of 27 joint validation services in 2020. 3. Production and sales stag: NTC has obtained the ISO 9001:2015 and IATF 16949:2016 quality system certifications. The Quality Assurance Division monitors and controls product quality as well as implements improvements in order to

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			make sure that all production processes are fully optimized. Moreover, the Division includes each stage of the production process into a well maintained and tightly controlled system, manufacturing the products that meet customers' requirements. The Company’s business staff continuously communicates with the customer through the weekly feedback of the customer’s future demand forecast. The company’s production and sales system converts into a production plan after the head office aggregates the needs of global business feedback. According to weekly feedback from business staff, it is continuously adjusted to facilitate production to meet customer needs. To ensure that product shipments can meet customer needs, the company cooperates with the world's top international express delivery companies to select the most appropriate delivery company based on customer area and delivery efficiency. 4. After-sales service stage: We are committed to improving product quality and rapidly responding to customers' quality issues to meet their expectations. In order to accelerate the efficiency of problem analysis, our service team will fully understand the problems reported by customers first, update analysis progress to customers based on analysis plans, and send customers corrective measures and handling methods once analysis is completed. Thanks to the cooperation between Field Application Engineering Division, Quality Assurance Division, Product Engineering Division, and Manufacturing Process Division, as well as process management carried out via the

Assessment item			Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			customer complaint handling system, 96% of customer complaint cases were resolved within target deadlines in 2020. We will continue to maintain frequent communication with customers and understand how customers use our products and failure conditions in the shortest time possible, in order to accelerate problem analysis and solve problems. 5. Customer privacy protection: The customer is an important partner of the company. Therefore, the customer's privacy and confidential information are classified as confidential information. In order to ensure the protection of confidential information, the company has established "company confidentiality management regulation" for employees to follow when dealing with customers’ information. The company will also regularly conduct advocacy and audits to enhance the awareness and ability of all employees in the process of classifying and handling confidential information. In addition, only authorized personnel have access to customers' information stored into the document control center. There were no customer privacy violations in 2020. If customers have any concerns or facts concerning leakage of information, they can also file a complaint through the company’s report box. Their email address is forcibly printed on each employee’s business card. The customer can be obtained from the company’s employee’s business card. 6. Customer Satisfaction: We employ an external third-party institution to for direct trade and to conduct end customer satisfaction surveys via the Internet or interviews,in hopes of

Assessment item	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
			understanding customers' needs from a fair and objective perspective. Content of the survey include product, delivery, quality, technical service, communication, business model, and comparison with competitors. With regard to items with low-satisfaction, relevant departments are responsible for the review and proposing corrective measures. In addition, the results of customer satisfaction surveys are reported during top management meeting. Then the sales staff will provide customers with improvement results or the direction of continuous improvements, as to continue enhancing customer satisfaction. In order to improve customer satisfaction, we specially established a review platform that gives priority to handling customers' needs and making improvements accordingly. Our average customer satisfaction score was 93.7 points in 2020, surpassing the goal of 90 points, and our customer satisfaction has gradually increased each year over the last three years. (IX) Case where the company purchased liability insurance for directors: We have insurance coverage for all directors, please refer to MOPS.	Complies with Article 39 of the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.
IX. Please indicate the improvement of the results of the corporate governance evaluation issued by the Company's Center for Corporate Governance in the last year of the Taiwan Stock Exchange Co., Ltd. and provide priority measures and measures for those who have not yet improved. The Taiwan Stock Exchange's Corporate Governance Center had not released the results of the 7th (2020) Corporate Governance Evaluation as of the date of report, improvement measures we plan to implement for items that we did not receive scores for in the 7th evaluation, and new indicators of enhanced measures in the 8th evaluation (2021) are as follows:

Assessment item	Implementation status (Note)	Implementation status (Note)	Implementation status (Note)	Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Explanation
(I) We will disclose the connection between performance evaluations and the remuneration of directors and managerial officers in the annual report. (II) We will disclose a clear dividend policy in the annual report. (III) We plan to upload the English version of the annual report 16 days prior to the annual general meeting. (IV) We plan to hold separate or joint meetings or forums for independent directors to communicate with the chief internal auditor and accountants.

Note: Summarize operations in the description field regardless of whether "Yes" or "No" was selected.

(IV)Composition, Responsibilities and Operations of the Company’s Remuneration Committee
Professional Qualifications and Independence Analysis of Remuneration Committee

		March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021	March 29,2021
Title	Criteria Name	Meet the following professional qualification requirements, together with at least five years work experience			Independence (Note)										Number of other public companies concurrently serving as a member of remuneration committee	Remarks
		An instructor or higher position in a department of commerce, law finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialists who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Have work experience in the area of commerce, law, finance, accounting, or otherwise necessary for the business needs of the Company	1	2	3	4	5	6	7	8	9	10
Independent Director	Ching-Chyi Lai														1
Independent Director	Shu-Po Hsu														N/A
Independent Director	Tsai-Feng Hou														N/A

Note: Committee member, during the two years before being elected and during the term of office, meet any of the following situations, please tick the appropriate corresponding boxes.

(1) Not an employee of the Company or any of its affiliates.

(2) Not a director or supervisor of the Company or any of its affiliates (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).

(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of the manager described in (1) above, or of any of the persons described in (2) or (3) above.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the Company, or that ranks as one of its top five shareholders, or that designates its representative to serve as a director or supervisor of the Company based on Article 27, Paragraph 1 or 2 of the Company Law (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).

(6) Not a director, supervisor, or employee of another company controlled by the same person that holds a majority of board seats or voting shares of the Company (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(7) Not a director, supervisor, or employee of another company or institution of which the chairman or president (or equivalent) themselves or their spouse also serve as the Company’s chairman or president (or equivalent) (except where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(8) Not a director, supervisor, manager, 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 (except where the specified company or institution owns 20% or more but less than 50% of the total number of issued shares of the Company and the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the Act or local regulations).
(9) Not a professional individual who provides an audit service or receives no more than NT$500,000 in cumulative compensation in the last two years for commercial, legal, financial, or accounting services to the Company or its affiliates, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or institution that provides such services to the Company or its affiliates. However, the exception applies to members of a compensation committee, a public tender review committee, or a special committee for merger, consolidation and acquisition exercising their authority pursuant to the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(10) Not been a person of any conditions defined in Article 30 of the Company Law.

Remuneration Committee Meeting Status
(1) There were 3 members of NTC’s Remuneration Committee.
(2) Current term for the members: May 30, 2019 ~ May 29, 2022. A total of 2 meetings of the Remuneration Committee were held as of December 31, 2020. The qualifications and attendance of committee members is shown below:

Title	Title	Name	Name	Attendance in person	By Proxy	Attendance rate (%)
Convener		Shu-Po Hsu		2	0	100
Committee member		Ching-Chyi Lai		2	0	100
Committee member		Tsai-Feng Hou		2	0	100
Other mentionable items: I. If the Board of Directors did not adopt or revise the recommendations of the Remuneration Committee, it should describe the date of the Board meeting, term of the Board, agenda item, resolutions adopted by the Board, and actions taken by the Company in response to the opinion of the Remuneration Committee (if the board of directors approved salaries higher than the recommendation of the Remuneration Committee, specify the discrepancy and reason): None. II. If a member opposes a resolution the Committee has adopted or has reservations with a written record or a statement, the date and session of the meeting, the resolution, opinions of all the members, and the handling of their opinions shall be indicated: None. III. Scope of authority of the Remuneration Committee: The Remuneration Committee performs the following duties in accordance with the Remuneration Committee Charter and relevant laws and regulations, and submit recommendations to the board of directors for discussion: 1. Periodically review the Company's Remuneration Committee Charter and submit revision recommendations. 2. Establish and periodically review director and manager performance evaluation and remuneration policies, systems, standards, and structures. 3. Periodically evaluate and set the remuneration to directors and managers. IV. Operations in the most recentyear: Board of Director Content February 26, 2020 1st meeting in 2020 1. Proposed employee bonuses for managers in 2019. RemunerationCommittee Resolution on February 26, 2020: All attendants agreed to pass. The Company's handling of theRemunerationCommittee's opinions: Except from some Directors that recused themselves (Please refer to 2. Implementation of Directors Avoiding Conflict of Interests towards Resolution), the remaining Directors approved the proposals. August 6, 2020 5th meeting in 2020 1. Proposed establishment of the Regulations Governing Board Performance Evaluations. 2. Proposed amendment to the Remuneration Committee Charter. 3. Proposed salaryraises for managers in 2020. RemunerationCommittee resolution on August 6, 2020: All attendants agreed to pass. The Company's handling of theRemunerationCommittee's opinions: Except from some Directors that recused themselves in the third cases (Please refer to 2. Implementation of Directors Avoiding Conflict of Interests towards Resolution), the remaining Directors approved the proposals.
	Board of Director		Content
	February 26, 2020 1st meeting in 2020		1. Proposed employee bonuses for managers in 2019.
			RemunerationCommittee Resolution on February 26, 2020: All attendants agreed to pass. The Company's handling of theRemunerationCommittee's opinions: Except from some Directors that recused themselves (Please refer to 2. Implementation of Directors Avoiding Conflict of Interests towards Resolution), the remaining Directors approved the proposals.
	August 6, 2020 5th meeting in 2020		1. Proposed establishment of the Regulations Governing Board Performance Evaluations. 2. Proposed amendment to the Remuneration Committee Charter. 3. Proposed salaryraises for managers in 2020.
			RemunerationCommittee resolution on August 6, 2020: All attendants agreed to pass. The Company's handling of theRemunerationCommittee's opinions: Except from some Directors that recused themselves in the third cases (Please refer to 2. Implementation of Directors Avoiding Conflict of Interests towards Resolution), the remaining Directors approved the proposals.

(V) Fulfillment of Social Responsibility and Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons

For details on implementation status, please refer to the Corporate Social Responsibility Report on our website. (https: //www.nanya.com/tw/CSR)

Assessment item			Implementationstatus	Deviations from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons
	Yes	No	Explanation
I. Does the Company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies?			We comply with the materiality analysis approach developed by the Global Reporting Initiative (GRI), and determine material sustainability issues through six procedures: (1) Determine which stakeholders to communicate with; (2) Collect sustainability issues; (3) Survey the level of concern; (4) Measure the effect on operations; (5) Verify material issues; (6) Decide material issues. We established policies to effectively identify, measure, evaluate, supervise, and manage risks based on the material issues that were identified, in hopes of reducing the impact of related risks. We also formulated long-term, mid-term, and short-term sustainability goals. Our risk management strategies for material issues in 2020: 1. Environmental issues: (1) Eco-friendly products: We use complete advanced processes to provide competitive advantages in optimized energy consumption, efficacy, and chip sizes. In addition, we manufacture more advanced, more energy-saving, more eco-friendly, and hazardous substance free products for our customers, while lowering the environmental impacts of the products. (2) Greenhouse Gas Management: We will include climate change risks into overall considerations of operations, and predict the probability of risk occurrence and levels of influence, formulating risk response plans and crisis handling mechanisms in order to issue warnings as early as possible to mitigate the impact of climate risks on our operations.	Complies with Article 3, Paragraph 2 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

			(3) Energy Management: We will improve the efficiency of energy use, promote energy saving measures, reduce greenhouse gas emissions, as well as lower environmental pollution to improve our image in society, and lower manufacturing cost while meeting the requirements of customers or government policies. (4) Water Management and Discharge: Through daily management, reductions and water recovery, we maximize the use of water resources and lower environmental pollution and production cost, while setting up response mechanisms for water shortage to mitigate the production impact risks resulting from water shortage. (5) Waste recycling and reuse: We will recycle waste to improve the effective use of resources and reduce other problems deriving from pollution. Moreover, we will provide waste to other industries for reuse, achieving the advantages of environmental impact reductions and circular economy development. 2. Social issues: (1) Talent Retention and Employee Care: We will build a diverse and inclusive company culture, so that our employees are able to contribute their thoughts, experiences, backgrounds, and individual characteristics to enliven team atmosphere, stimulate creative thinking, and enhance work performance. (2) Employee development: As a people-oriented company, we established an advantageous training development system, reinforcing our employees' core technological capabilities to achieve our annual strategic goals, create a harmonious workplace, and cultivate excellent high-tech semiconductor talent. (3) Occupational Health and Safety: Employees are our important assets. Through continuous improvements in providing employees with a safe and healthy working environment, we aim to enhance the awareness of safety culture, strengthen self- inspection, and reduce employee occupational accidents. (4) Social engagement: Based on our core competencies and values,we are buildinga sustainable enterprise

			and technological homeland through the reinforcement of industry-academia cooperation and exchange, humanistic care, environmental conservation, and community harmony. (5) Human rights: We value basic human rights, implement a human rights culture and training, establish principles of risk mitigation and compensation, and create a working environment that protects human rights. 3. Corporate governance issues: (1) Risk Management: We will establish and maintain effective risk management mechanisms and constantly improve them, lower operation cost to ensure corporate sustainable profits, and create a quality working environment to achieve the goals of corporate sustainable operation. (2) Ethical Corporate Management: We will build a sound corporate governance system and implement various business ethics policies and risk management mechanisms between suppliers, customers, and stakeholders to maintain the important cornerstone of corporate sustainable operation and value creation. (3) R&D and Innovation: In order to maintain competitive advantages, we will research and develop advanced process technologies as well as design new products of the next generation, make forward-looking market plans while providing customers high value-added solutions, and establish high intelligent product lines to enhance efficiency. (4) Customer Service: We will provide comprehensive customer services. Through regular communication and visits, we are able to understand customers' opinions about our products and services, which help us grasp customers' needs. Therefore, we will make further improvements to enhance customer satisfaction and market image. (5)Sustainable supplier management: We will promote sustainable performance of suppliers, improve resilience of supply chains, manage and control supply chain risks, and cooperate with suppliers to become the best partners in order to jointly move towards a sustainable future.


II. Does the Company establish an exclusively (or concurrently) dedicated unit to be in charge of CSR and appoint executive-level positions by the board of directors with responsibility for CSR issues, and to report the status of the handling to the board of directors?			1. We believe that "what is taken from society should be used in the interest of society," and fulfill our corporate social responsibility through "corporate governance," "environmental protection," and "social welfare." We established KPI for energy conservation, environmental protection, and assistance for the underprivileged. These KPI are constantly reviewed and improved based on the spirit to strive for absolute perfection, and are applied to CSR related work. 2. To raise employee awareness of human rights and work safety, we irregularly organize courses on labor safety and health, the Labor Standards Act, sexual harassment prevention, and gender equality at work, and also promote environmental protection policy and charity activities. 3. Establishment of a sustainable development organization (1) We formally established a Sustainable Development Committee in 2018 to implement our sustainable development strategy and management policies and goals for material issues each year. The company is the highest level execution unit. All departments participate in the committee, which is chaired by the president, and assistant vice president and above managers serve as committee members. The committee reports the Company's sustainable development strategies, vision, goals, implementation policies, and results (please refer to the CSR report) to the board of directors on an annual basis. (2) The Sustainable Development Committee plans execution of economic, social, and environmental aspects, in which the Finance Officer, Director of Human Resources, and Director of Safety and Health serve as the director-general for planning sustainable development affairs in each aspect, and report their implementation status and results to the Sustainable Development Committee each quarter. (3) The "Corporate Governance Working Group," "Environmental Sustainability Working Group," "Social Engagement WorkingGroup," "SupplyChain	Complies with Article 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

			Management Working Group," and "Customer Relations Working Group" were established in coordination with material issues in the three aspects of sustainable development, and continue to review key projects and establish KPI to achieve sustainable development goals. (4) A dedicated sustainable development organization was established under the President's Office to handle the following affairs: A. The Sustainable Development Committee meets on a quarterly basis to formulate the Company's sustainable development strategy, vision, goals, management policy, and related systems. B.Plan and execute the Company's sustainable development action plans, control progress, and conduct performance assessments. C.Assist working groups in planning sustainable development related approaches, follow up on the execution and performance assessment of material issues, and report execution results to the Sustainable Development Committee.
III. Environmental issues (I) Does the Company establish proper environment management systems based on the characteristics of their industries? (II) Does the Company endeavor to utilize all resources more	 		1. We established an EHS management policy, EHS Management Regulations, management information systems, and office automation systems, strengthening the EHS management in our factories through a comprehensive system. Furthermore, we implemented an environmental accounting system, monitor environmental expenditure information and benefits, and disclosure our environmental protection measures to stakeholders. 2. Our environmental management systems were certified by an independent third party according to the standards established by international organizations. Such as: ISO 14001, ISO 14064, and ISO 50001. 3. Compiled a GHG inventory by use of LCA that was certified by an independent third party. 4. Disclosed environment related data on the CSR Report and CDP website. We attach great importance to customers' health and safety in each stage from material procurement to product sales. We continue to improveproductionprocesses and are	Complies with Article 13 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Complies with Article 12 of the Corporate Social

	efficiently and use renewable materials which have a low impact on the environment?			developing non-toxic, eco-friendly, and green energy products in coordination with market trends and the needs of downstream customers. 1. Eco-friendly Products (1) We strive to develop advanced, highly efficient, and eco-friendly products to jointly protect the Earth. We not only assist customers in developing low-energy consumption products, but also exert our influence on the supply chain for hazardous product management and conflict minerals management. (2) We measured the electricity savings from the low power DRAM and 20nm consumer DRAM products sold in 2020 based on how electronic products containing the DRAM products are used, and determined that the products saved approximately 658,480,000 kWh, reducing CO2e by 335,164 tons, which is roughly 862 times the CO2absorption of Daan Forest Park for one year (389 tons of absorption). This contributes to our business expansion and maintaining a green planet. 2. Set and effectively monitor key indicators of material issues: Our GHG emissions are certified by an independent third party every year, and we set energy conservation and carbon reduction goals every year. 3. Certification by an independent third party and information disclosure on the website of international evaluation institutions: We successfully passed the external certification for ISO 14001 Environmental Management System, and implement environment improvement plans each year based on the spirit of making constant improvements, so as to minimize our environmental impact. Furthermore, we began using process gases with lower global warming potential and waste gas treatment equipment with high reduction rate in 2006 to reduce our GHG emission. We compile a GHG inventory according to ISO 14064 each year, and commission an independent third-party for verification. The information is disclosed on our CSR Report and the CDP website. 4. Establish a Green Product Committee for management and zero violation records:	Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

	(III) Does the Company evaluate potential risks and opportunities brought by climate change, and take response measures to climate- related issues?			We are committed to promoting environmental protection management, formulating EHS performance indicators, promoting various waste reduction and resource reuse, greenhouse gas reduction and other projects, and implementing green product management in coordination with the Green Product Promotion Committee, in order to comply with the global trend of environmental protection. Our environmental protection certificate management, testing contents, and reporting items were all handled according to law. There was no violation of environmental protection regulations in 2020. 5. Renewable energy: We purchased 362,000 kWh in T-RECs in 2020. Renewable energy accounts for 0.05% of company-wide electricity use. We set a goal for the use of renewable energy, and will achieve government requirements in advance in 2023 via the construction of a solar power plant in our factory area, purchase of T-RECs, and collaboration with external solar power plants. 1. Extreme climate change is gradually affecting the global ecosystem and humanity's survival, and has become an "Inconvenient Truth." In the light of this, we established a Climate Change Management Working Group overseen by the President's Office, and include climate change response as a topic of discussion during quarterly meetings of the Corporate Sustainability Committee, listing issues as requiring resolution or execution. We are actively implementing energy conservation and carbon reduction measures, and strive to mitigate climate change and improve the Company's adaptability. 2. Our Business Risk Management Working Group considers the potential impact of climate change to our overall operations each quarter, estimating the probability of risks and their impact. Main climate risks that we have identified include customer requirements on low carbon products, the implementation of total GHG emission control, higher unit price of electricity in 2025, and unstable power supply due to climate change. We have established risk response and mitigation plans, as well as crisis management mechanisms, which	Complies with Article 17, Paragraph 1 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

	(IV) Does the Company compile statistics of greenhouse gas emissions, water use, and total weight of waste in the past two years, and does it establish policies for energy conservation carbon reduction, greenhouse gas emission reduction, water use reduction, and other waste management?			enables the working group to give warnings in advance and mitigate the impact of risks on company operations. Furthermore, we have also identified the opportunities brought by climate change, including the implementation of ISO 50001 Energy Management, supplier engagement in energy conservation and carbon reduction, and development and expansion of low carbon products and services. We will be able to effectively reduce electricity consumption, increase the green value of products, enhance product competitiveness, and increase revenue by seizing these three opportunities. 1. We have established a CSR policy as well as an occupational health and safety and environmental management policy, and established regulations for energy conservation and carbon reduction, GHG reduction, water use reduction, and other waste management on this basis. 2. We began compiling a GHG inventory and report each year based on internal calculations starting in 2005, and we began commissioning a third party for ISO 14064-1 verification the same year to ensure the completeness and credibility of our GHG inventory. At present, greenhouse gases are divided into three scopes: Scope 1 (Direct GHG Emissions), Scope 2 (Electricity Indirect GHG Emissions), and Scope 3 (Other Indirect GHG Emissions). We used the operational control approach for GHG emission data, and the main source of GHG emissions is purchased electricity (accounts for about 81%) and perfluorocarbons (PFCs) used in processes (accounts for about 9%). 3. We have an open attitude towards carbon disclosures and began participating in ratings of the Carbon Disclosure Project (CDP) in 2009, disclosing GHG emissions each year. Information on GHG reduction. Information on GHG emissions include Scope 1: Direct GHG emissions from our factories and Scope 2: Indirect GHG emissions from purchased electricity and steam. Related information is directly disclosed on the CDP website. In addition to the information on our carbon emissions disclosed on the CDP website and our CSR report, we also disclose our GHG emission and reduction	Complies with Article 17, Paragraphs 2-3 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies

			information on the RBA (Responsible Business Alliance) GHG report system, or provide carbon emission data to help customers determine the carbon footprint of products. 4. Our EHS policy emphasizes waste reduction and resource recycling to comply with applicable laws and regulations, as well as our commitments to environmental protection. We hope to thereby improve our corporate image and ensure corporate sustainability. With regard to resource recycling and reuse, each year we assess the amount that can be reduced, and the types and amount of waste and wastewater that can be recycled and reused, and then set annual project goals. The projects are included in the annual budget and work plan, and then implemented after gaining approval from management. 5. Related measures include wastewater recycling, treatment, and reuse, copper sulfate waste liquid reuse, reduction of raw material use, recycled material use, packaging material reduction and recycling, air pollution prevention, water pollution prevention, waste management, resource recycling, water use reduction, recycling and reuse, water resource management, and energyconservation measures.
IV. Social issues (I) Does the Company comply with relevant laws and regulations, and the International Bill of Human Rights and adopt relevant management policies and procedure?			1. We comply with labor related laws and regulations, such as the Labor Standards Act, and also comply with the UN Universal Declaration of Human Rights, UN Guiding Principles on Business & Human Rights, and International Labor Office Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, in order to protect the fundamental human rights of employees and customers. We established regulations and systems for employee rights and interests, and provide stable and preferential salaries, complete education and training, a promotion and development system, and a safe and healthy work environment to enhance employees' professional competencies. The president of NTC has signed the human rights policy in August 2018. 2.We established the Employee Protection and Grievance Guidelines and Whistle-blower Policyso as to	Complies with Article 18 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

	(II) Does the Company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries?			understand employees' opinions and report issues in a timely manner, achieving positive communication between labor and management. When employees discover any conduct that affects their personal or the Company's rights and interests, improper management, illegal conduct, or attempts to use a position for unjust enrichment, employees can file a report through the employee protection and compliant mailbox and hotline, as well as the whistleblower mailbox and hotline. The Company will designate personnel to look into the reports and reply to employees, ensuring smooth communication channels for employees to express their opinions. 1. We have established clear rules for employee promotion, evaluation, training, reward, and punishment. The salary standard for new employees is based on the academic background and work experience of the required talent, as well as the spirit of "equal pay for equal work." The basic pay of male and female employees at the same job grade is 1:1. After employees are hired, they receive salary raises and promotions based on their work performance. 2. The Company's holidays include Saturday, Sunday, national holidays, and other holidays specified by the central competent authority. We also provide employees with special leave in accordance with the Labor Standards Act. Please refer to 5. Labor Relations in V. Business Overview for other employee benefits. 3. Our employee salaries include base pay, various allowances, and other compensation. Furthermore, we also offer variable compensations based on employees' individual performance and attainment of organizational goals (or profitability). In doing so, we reward employees for their excellent performance and share with them the profits we make as a group, regardless of their gender. Pursuant to the Articles of Incorporation, the Company shall allocate 1% to 12% of its pre-tax profits, if any, as employee bonuses. Please refer to 8. Employee Bonuses and Directors' Remuneration in IV. Capital Overview for the distribution of employee bonuses.	Complies with Article 21, Paragraph 2 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

	(III) Does the Company provide safe and healthful work environments for their employees and organize training on safety and health for their employees on a regular basis?			1. Operations of the Occupational Safety and Health Committee: Senior executives, department heads, and committee members (34% are labor representatives in accordance with the law) participate in committee operations. The committee reviews the attainment of EHS management goals, safety and health issues, hazards identification, and risk assessment and management goals on a monthly basis. The safety and health management plan, which involves all employees and contains the occupational safety and health policy, is formulated and implemented on the basis, and complies with regulatory and health promotion requirements. 2. Occupational accident prevention and management: Even through we have already achieved zero disabling injuries in our factories, we have not let our guard down when it comes to disaster prevention. We are constantly raising the safety awareness of new employees and contractors, and have implemented the following measures to prevent occupational accidents: Implement process safety management (PSM), HazOp analysis for potential equipment risks, job safety analysis for operating risks, safety and health education and training, and SWAT. 3. Occupational safety and health management system: We implemented and achieved the ISO 45001:2018 and TOSHMS Management Systems certifications and have set goals for hazards of high risk operations according to the PDCA management cycle to continue making improvements. 4. Safety and health education and training: We include courses for certifications required by the law, special hazardous operations, and emergency response to disasters into the annual training plan for new employees, senior employees, and supervisors. In addition to scheduled training courses, emergency response drills are arranged for high risk items to raise employees' safety awareness and achieve comprehensive prevention. 5. Employee healthcare: We are working with the medical team of Chang Gung Memorial Hospital to provide employees with annual health examinations, and follow-up and health management is carried out for	Complies with Article 20 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

(IV) Does the Company establish a platform to facilitate regular communication between the management and the employees and inform employees of operation changes that might have material impacts? (V) Does the Company comply with relevant regulations and international standards in customer health and safety, customer privacy, and marketing and labeling its goods and services, and has it established consumer	 		employees with abnormal results. All of our factories have a medical room with a physician stationed on site to provide employees with professional medical and consultation services. Seminars on spirituality and health and healthcare courses are arranged each quarter to meet employees’ need for knowledge on physical and mental health. 1. To provide a better and more effective talent cultivation system, we established a complete professional training system and implemented training development management. Training courses include new employee training, general training, position-specific training, manager training, internal lecturer training, direct personnel training. And personal development courses in physical classrooms and online courses. Furthermore, the establishment of a training development system and knowledge management system enriches our professional training system, and also links together internal knowledge and creativity. Employees can access, share, and create professional knowledge, courses, and articles on our internal website, which also provides a variety of learning resources and information to help units learn, including information on external training and lectures, specialized technology communities, and discussions. 2. We planned a variety of on-the-job training and learning channels to promote talent cultivation, lifelong learning, and assist employees with career development, so as to expand their scope of learning. Continuing education and learning channels include: Online learning multimedia center, language learning subsidies, on-the-job degree programs, and participation in external courses. 1. Customer relations management is an important part of corporate sustainability. In order to learn the precious opinions of our customers, we provide customer complaint channels and refund and compensation application procedures. Customers can express their opinions through the "Customer Feedback Form" and salespeople fill out a "Customer Complaint Handling Form" for refunds when there are customer complaints. The progress of each case is controlled by a computer system. Our website provides service hotlines and e- mails for variousproducts,so that customers can	Complies with Article 21, Paragraph 1 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Complies with Article 24 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

rights protection policies and complaint procedures? (VI) Does the Company have a supplier management policy, require suppliers to comply with regulations on environmental protection, occupational safety and health, and labor rights, and what is its implementation status?			directly provide feedback through different channels. Related departments periodically summarize issues of concern to customers, and set the priority for making improvements based on the importance and time constraints of the issues, ensuring that customers needs are met. 2. Most of our products are not directly sold to general consumers, so we have relatively few marketing activities such as commercials and flyers. If any promotional activities involve legal aspects, our units will consult the legal and intellectual property departments to avoid violating the law. Furthermore, we established Personal Information Management Procedures and strictly control the access and use of personal information to protect customer privacy. 3. Our customer service process comprises four aspects: (1) Product design: Strengthen technology exchanges with customers. (2) Testing and verification: Participate in customer platform parameter measurement services. (3) Manufacturing: Complete production, sales, and product tracking and identification system, as well as collaboration with global couriers. (4) Product launch: Trouble-shooting and system control progress. 1. We established a supplier management policy and a Supply Chain Management Committee to build the framework for sustainable supply chain management, which comprises sustainability regulations, active supplier risk assessment and investigation, sustainability risk assessment questionnaires, on-site audits and improvement measures of suppliers with high sustainability risk, and developing suppliers' sustainability abilities. We will promote sustainable performance of suppliers, improve resilience of supply chains, manage and control supply chain risks, and cooperate with suppliers to become the best partners in order to jointly move towards a sustainable future. 2. We require our upstream suppliers to be RoHS compliant, have labor safety qualifications required by the government, be ISO certified, and provide announcements and labels indicatinghazardous	Complies with Article 26 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

			substances during each procurement. Suppliers must properly recycle or reuse containers and loading devices, give priority to goods made by organizations for persons with disabilities, and attach proof that the goods do not have any radiation pollution. These requirements are specified in the "Request for Quotation" and "Purchase Notice", which also explain our policy for corporate sustainability, compliance with the principle of fair trade, and requirement that suppliers comply with environmental protection, labor safety, and human rights regulations. Shipments that fail to comply with these requirements will be rejected and will be taken into consideration during supplier assessments. When the materials, parts, or products procured contain metal, we require suppliers to thoroughly investigate whether if the are conflict minerals, ensuring that all raw materials we purchase are obtained through legal channels.
V. Does the Company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non- financial information of the Company, such as corporate social responsibility reports? Do the reports above obtain assurance from a third party verification unit?			The Company's Corporate Social Responsibility Report is compiled with reference to the spirit of the Global Reporting Initiative (GRI) 2018 Global Resiliency Reporting Standard (the core option of GRI Standards) and is planned by a third-party impartial unit. The Association (BSI) conducts a verification of the AA 1000 Type II, and the results of the verification have not been published as of the date of publication of the annual report.	Complies with Article 29 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

VI. If the Company has established its corporate social responsibility code of practice according to "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies", please describe the operational status and differences:

The Company has established its corporate social responsibility policies and code of practice which comply with “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies” on August 10, 2015. For the implementation status, please refer to NTC CSR Report and our corporate social responsibility related information on our website: http://www.nanya.com

VII. Other key information useful for explaining status of corporate social responsibility practices: (I) Participation in external associations:

We are dedicated to our core business and different aspects of sustainable development (environmental, social, and economic aspects), including industrial and economic development, technological innovation and development, climate change, employee rights and interests, human rights, and social engagement. We established the "Nanya Technology Corporation Guidelines for Participation in Public Affairs" as the basis for establishing all policies for participating in related industries or joining industry associations. This information is transparent and accessible by the public. We established a Public Affairs Participation Team under the Sustainable Development Committee. The team is responsible for making decisions regarding our participation in public affairs, and periodically assesses and reviews the commercial value of participating in public affairs, as well as whether the policy matches our business goals, corporate policy, and public policy, ensuring that it is in the interest of all stakeholders. Important associations that we are participating in are as follows:

Taiwan Semiconductor Industry Association (Director).
Taiwan IC Industry & Academia Research Alliance (Member).
Center for Corporate Sustainability (Director)
(II) Community engagement:

As a leading innovative company of global DRAM product, we believe that we should play a role as a participant who actively contributes to the society to help resolve environmental challenges and social issues, making efforts to create positive influence. The United Nations' Sustainable Development Goals (SDGs) have revealed the sustainable challenges that human beings are facing, and companies are expected to be the key roles in jointly resolving the problems. We have been thinking how to respond to the SDGs on the basis of our core professional innovative capabilities. We implemented the 4U Project in 2019 in coordination with the UN SDGs: Focus On U (talent cultivation), Light Up (environmental protection), Power Up (humanistic care, and Line Up (good neighbor) continue to invest human and material resources into talent cultivation, environmental protection, humanistic care, and good neighbor work. Relating to the strategic social welfare, SDG 8 (decent work and economic growth) drives us into talent cultivation and industry-academia cooperation. We have actively promoted technology upgrades and innovations for economic value enhancement in order to cultivate professional skills of youngsters and students, building the main theme of talent cultivation. SDG 13 (climate action) allows us to deeply experience the impact that extreme climate has on the community environment and the ecology. Therefore, NTC has set up a main theme of environmental conservation to safeguard environmental biodiversity and move toward a low carbon society. SDG 1 (no poverty) is the base for the NTC's public welfare implementation, so we have built two main themes of humanistic care and

community harmony so that we are able to make long-term contributions to the communities and neighborhoods where we have been operating.

4U Project:
Focus On U (talent cultivation):
(1) Stars of the Future: We provide various scholarships (including the Technology Talent Scholarship Program, Doctoral Student Sponsorship Program, and College/Master's Scholarship Program) to encourage students to focus on academic research, pursue excellence, and apply what they learn. We hope that students will continue to learn in a field that they are passionate about. We provided scholarships to a total of 5 students in 2020, and also organized Stars of the Future, which is an event for selecting students to receive a total of NT$637,000 in scholarships.
(2) Outstanding Project: We implemented industry-academia collaboration projects with four universities (National Taiwan University, National Tsing Hua University, National Chiao Tung University, Chang Gung University) in 2020, and invested a total of NT$5,950,000 in the projects. We also sponsored 5 campus events with a total amount of NT$1,370,462. These efforts aim to promote exchanges between industry and academia, fully utilize academic resources, improve the quality of education through teacher-student interactions, and enhance the competitiveness of domestic industries.
(3) Cultivating Students Project: We are actively involved in campuses and provide young students with an internship platform for two-way cultivation. We jointly offered internship programs with 12 schools in 2020, and provided internship opportunities to a total of 215 students, successfully retaining 8 interns to become formal employees in their original department, as well as 2 interns who were transferred to other suitable departments based on their expertise. The program allows
students to build on their internship experience and transition into employment opportunities.
(4) Understanding Project: We invite students to visit our company to help them better understand the industry's development. In 2020, we organized a total of 20 visits and arranged for employees who graduated from the same school to encourage the students by sharing their work experience, building cohesiveness and a sense of belonging.
(5) Speech Seminars: To help students strengthen the connection between what they learn at school with the realities of the workplace, our middle management and executives began interacting with students face-to-face on campus as industry experts in seminars or programs. We organized a total of 51 seminars with approximately 3,060 participants in 2020.
Light Up (environmental protection):
(1) Earth Hour: This global energy conservation event is held at 8:30-9:30 P.M. on the last Saturday of every March. We have participated in the event for three consecutive years. The event was moved online due to the pandemic in 2020. Besides collecting videos filmed by employees to support the event, we also invited business managers to participate with specially prepared Earth Hour masks.
(2) Beach cleanup event: NTC has collaborated with supplier Air Liquide Far Eastern in organizing a beach cleanup event for the second consecutive year to promote the concept of cherishing the ocean! We called on employees and family members of both companies to take action and jointly protect the ecosystem by picking up trash that does not belong on the beach. A total of 47 NTC employees and family members participated in the event that day and picked up 1,763 kg of trash.
(3) Earth Hour: This global energy conservation event is held at 8:30-9:30 P.M. on the last Saturday of every March. We have participated in the event for three consecutive years. The event was moved online due to the pandemic in 2020. Besides collecting videos filmed by employees to support the

event, we also invited business managers to participate with specially prepared Earth Hour masks.
1. Power Up (humanistic care):
(1) Lose weight for charity: The Company organized a three-month weight lost event, and donates NT$1,000 to food backs for every 1 kg of weight lost by employees. The limit on donations to a single bank is NT$100,000, and total donations to 5 institutions is limited to NT$500,000. A total of 419 employees participated in the event and lost a total of 834.7 kg. We split the donations between Little Happiness Link Social Welfare Foundation, Syin-Lu Social Welfare Foundation, and Eden Social Welfare Foundation.
(2) Dragon Boat Festival charity street: We invited four charities: Little Happiness Link Social Welfare Foundation, Syin-Lu Social Welfare Foundation, Eden Social Welfare Foundation, and Down Syndrome Foundation R.O.C., to organize a charity sale during Dragon Boat Festival. The charity sale was quite popular and achieved pretty good sales. In addition to the proceeds from the charity sale, we donated NT$50,000 to each of the four charities to support their normal operations.
(3) Fair trade pantry room: Starting in June 2018, our pantry rooms have been transformed into places where public welfare ideals are able to be implemented. We joined the project of fair trade pantry room promoted by Okogreen Co. Ltd., (the first Taiwanese trading company received the verification from the Fairtrade International (FLO)), installing fair trade coffee machines in the pantry rooms of the Company. Our employees can drink a cup of fair trade coffee for NT$10. The coffee machines were used a total of 49,326 times in 2020. NTC and its employees will continue to purchase fair trade coffee at a fair price for charity, and aid the development of communities in third-world countries to improve the lives of farmers.

4. Line Up (friendly neighbor):

NTC donated 5,100 dry-powder extinguishers to 17 villages in Taishan District, New Taipei City in 2017 to show goodwill and protect the safety of neighborhoods. The dry-powder extinguishers that were previously donated are about to expire, so we provided NT$892,500 to Taishan District Office to recharge the fire extinguishers in 2020.

(VI) Implementation of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
I. Establishment of ethical corporate management policy and approaches (I) Did the Company establish an ethical corporate management policy that was approved by the Board of Directors, and declare its ethical corporate management policy and methods in its regulations and external documents, as well as the commitment of its Board and senior management to implementing the management policies? (II) Does the Company establish mechanisms for assessing the risk of unethical conduct, periodically analyze and assess operating activities within the scope of business	 		1. We comply with laws and pursue our business objectives with integrity. Besides complying with the Company Act and Securities and Exchange Act, we uphold the corporate culture of "diligence" and the business philosophy of integrity, fairness, transparency, self-discipline, and responsibility. The Ethical Corporate Management Best Practice Principles established by the Board of Directors is implemented by the President's Office, which established various policies on ethics, and good corporate governance and risk management mechanisms to achieve sustainable development. The Board of Directors and senio executives active implement and supervise the ethical corporate management policy. 2.(1) NTC has established the Codes of Ethical Conduct and Employee Code of Conduct available on or internet for all employees understanding of the Company's resolve to implement ethical corporate management, the related policies, complaint channel, and the consequences of committing unethical conduct. In order to promote a culture of awareness, we require all employees to be trained periodicallyon our core values andpassed the	Complies with Article 4 and 5 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies. Even though we have not established Procedures for Ethical Management and Guidelines for Conduct, the contents are provided in different regulations and

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
with relatively high risk of unethical conduct, and formulate an unethical conduct prevention plan on this basis, which at least includes preventive measures for conduct specified in Article 7, Paragraph 2 of the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies? (III) Did the Company specify operating procedures, guidelines for conduct, punishments for violation, rules of appeal in the unethical conduct prevention plan, and does it implement and periodically review and revise the plan?			qualification. (2) We periodically analyze and review business activities with higher risk of unethical practices, and established the Business and Ethical Code of Conduct, Human Resources Management Regulations, and Work Rules for management of workers, stipulating that personnel holding positions involved in business, procurement, outsourcing, construction supervision, and budget and other interests of vendors may not accept the invitation of vendors to any form of entertainment, and may not accept money or other benefits from vendors. Violators will be terminated and their supervisors will also be punished. Employees periodically rotate through different positions to prevent corruption from occurring. 3. Our Business and Ethical Code of Conduct, Human Resources Management Regulations, Ethical Corporate Management Best Practice Principles, Guidelines for the Prevention of Insider Trading, Whistle-blower Policy, and Employee Protection and Grievance Guidelines clearly set forth our ethical corporate management policy, as well as related operating procedures, code of conduct, and rules for whistleblowing, penalties, and complaints. Furthermore, we established the Code of Conduct for Directors and Managerial Officers. The regulations and systems above are periodically reviewed to meet the needs in actual practice.	systems and implemented accordingly. Complies with Article 6, Paragraph 1 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
II. Full Implementation of Ethical Management Principles (I) Does the Company assess ethical records of business counterparties? Does the Company include business conduct and ethics related clauses in the business contracts? (II) Does the Company set up dedicated units under the board of directors in charge of promotion of the ethical corporate management and report execution to the board of directors periodically (at least once a year)?	 		All contracts signed due to our business activities contain clauses on ethical conduct. Furthermore, we investigate the integrity of stakeholders such as customers and suppliers to prevent unethical conduct from damaging our interests. The President's Office and Head Office are responsible for implementing ethical corporate management, and report evaluation results to the Board of Directors at least once a year. The most recent report was on December 18, 2020, and mainly evaluated the ethical corporate management policy and the commitment of the Board of Directors and management to implementing the ethical corporate management policy. Does the Company consider the legitimacy and integrity records of agents, suppliers, customers, or other business partners? Are personnel with access to the Company's trade secrets and sensitive data obligated to maintain confidentiality, and are preventive measures in place? Did the Company set up a whistleblower system and convenient whistleblower channels; Internal audit reports are submitted to independent directors for review each month and periodically reported to the Board of Directors.	Complies with Article 9 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies. Complies with Article 17 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies.

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
(III) Does the Company establish policies to prevent conflicts of interest, provides appropriate communication channels and implement the policies? (IV) Does the Company have effective accounting system and internal control systems set up to facilitate ethical corporate management, does the internal auditing unit formulate audit plans based on unethical	 		1. In the Board of Directors Meeting Rules, we require board members to explain the interest they or the entity they represent have in any important issues during the board meeting. If there is a potential conflict of interest, they may not participate in the discussion or voting, and should also recuse themselves. Nor may they vote on other directors' behalf. Furthermore, pursuant to the Procedure of Acquisition or Disposal of Assets, proposals to make transactions with stakeholders must be submitted to the Audit Committee for approval and passed by resolution of the Board of Directors. 2. In the Code of Business Conduct and Ethics and Personnel Management Rules, we require employees to strictly abide by the principle to avoid conflicts of interest and actively report any conflicts of interest. We also have non-compete clauses to prevent conflict of interest. 3. We established the Employee Protection and Grievance Guidelines and Whistle-blower Policy to provide channels for employees to report any illegal or unethical conduct. The Company sets up the effective accounting and internal control system. Connecting each operational function, including human resources, finance, operations, production, materials and resources, and engineering, via comprehensive computerization to implement cross audit and abnormal management. We established a professional and independent internal audit structure that comprises two aspects. The Auditing Office under the Board of Directors is responsible for the first aspect, and sets audit plans each year, which is the basis for verifying compliance with regulations and systems, and lowers the risk of unethical conduct. Furthermore, considering that internal audits are the duty of all employees, each department is required to perform regular (performed	Complies with Article 19 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies. Complies with Article 20 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies.

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
conduct risk assessment results, and does it audit compliance with the unethical conduct prevention plan or commission a CPA to perform the audit? (V) Does the Company periodically provide internal or external training courses of ethics corporate management?			monthly, quarterly, semi-annually, or annually, as established per item) self-inspections of business activities for the second aspect, applying the spirit of internal control to all aspects of the Company. We promote the corporate spirit of "Diligence & Frugality" through company periodicals and during various events, instilling employees with the concepts and attitude of integrity, fairness, transparency, self- discipline, and responsibility. Corporate culture courses are offered during new employee orientation. The Company provides new hire orientation and annual refreshed training to all employees for their understanding of the Company's resolve to implement ethical corporate management, the related policies, prevention program and the consequences of committing unethical conduct. We organized education and training sessions on laws and the Company's regulations and systems, internal controls and internal audits, and other issues related to ethical corporate management in 2020. A total of 42,387 people participated in the sessions and received a total of 22,997 hours of training.	Complies with Paragraph 2, Article 22 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies.
III. Implementation of the Company's Whistleblowing System (I) Does the Company set up specific reporting and reward system,			We established the Employee Protection and Grievance Guidelines and Whistle-blower Policy to provide a whistleblower system: 1. A variety of channels are available for filing reports,	Complies with Article 23 of the Ethical Corporate Management Best

Assessment item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Departure from "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies" and reasons
	Yes	No	Explanation
convenient reporting channel and assign appropriate and dedicated sponsor to handle the case? (II) Does the Company establish standard operating procedures for investigating reported cases, and does it take subsequent measures and implement a confidentiality mechanism after completing investigation? (III) Does the Company adopt protection measures of non- retaliation?	 		including a physical mailbox, e-mail, and whistleblower hotline. These channels are announced at an obvious place at main entrances and exits to notify potential whistleblowers. 2. After accepting a report, the President Office assigns designated person for review, opening a case, and subsequent investigation procedures. 3. Confidentiality: After the investigation period and investigation has been concluded, the case officer is strictly prohibited from disclosing information to unrelated persons. Supervisors at each level are also required to maintain confidentiality, and related data must be handled and stored as confidential documents, ensuring that whistleblowers will not be inappropriately treated. 4. Personnel who are verified to be in violation are punished in accordance with the Human Resources Management Regulations, and judicial agencies and prosecutors are notified when necessary. 5. We established the Whistle-blower Policy, our official website also set up a dedicated line and the mailbox, and have someone to deal with problems when employees, partners, or customer have rights damage appeals.	Practice Principles for TWSE/TPEx- Listed Companies.
IV. Enhancing information disclosure Does the Company disclose the content and the implement status of the Ethical Corporate Management Policies on the Company website and MOPS?			We disclose information on ethical corporate management in the "Investor Relations" section of our Chinese and English\ websites. Our Ethical Corporate Management Best Practice Principles can also be accessed on the Market Observation Post System.	Complies with Article 25 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx- Listed Companies.

Assessment item	Implementationstatus(Note1)	Implementationstatus(Note1)	Implementationstatus(Note1)
	Yes	No	Explanation
V. If the Company has established Ethical Corporate Management Best Practice Principles based on the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies," the Company shall elaborate on any departure from the principles: Our board of directors approved the Ethical Corporate Management Best Practice Principles" on November 10, 2014, which was amended by resolution of the board of directors on June 22, 2016 . Despite the amendment based on our practices, it still in line with the spirit of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies.
VI. Other helpful information regarding ethical corporate management: The Company arrange Directors and managers to take part in corporate governance course, and communicates the act of integrity, so as to enhance corporate governance efficiency and integrate integrity management.

V. If the Company has established Ethical Corporate Management Best Practice Principles based on the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies," the Company shall elaborate on any departure from the principles:

Our board of directors approved the Ethical Corporate Management Best Practice Principles" on November 10, 2014, which was amended by resolution of the board of directors on June 22, 2016 . Despite the amendment based on our practices, it still in line with the spirit of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies.

The Company arrange Directors and managers to take part in corporate governance course, and communicates the act of integrity, so as to enhance corporate governance efficiency and integrate integrity management.

Note 1: Summarize operations in the description field regardless of whether "Yes" or "No" was selected.

(VII) To access our Corporate Governance Best Practice Principles and related regulations

Please visit our website: (https: //www.nanya.com) and the Market Observation Post System: (https: //mops.twse.com.tw).

(VIII) Other Important Corporate Governance Information

NTC published the “Corporate Social Responsibility Report” to unroll its strategies and related activities in terms of economic, governance, environmental and social aspects. With that, the Company strengthens the communication with employees, shareholders and all stakeholders, as well as demonstrates its efforts in continuous improvement. And the Company has established "Code of Ethics of Directors and Managers " as the following:

The Codes of Ethics of Directors and Managers

Amended by the Board of Directors on June 22, 2016

CHAPTER Ⅰ GENERAL PRINCIPLES

Article 1

To establish the codes to avoid immoral behavior and activities resulting damages to the interests of company and shareholders in order to enable Directors and Managers

(including President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, Financial Officer, Accountant Officer and those who can manage affairs for and sign documents on behalf of the company) to conduct business activities on their duties and power for the company ethically.

CHAPTER Ⅱ CONTENTS OF THE CODES OF ETHICS

Article 2

Directors and Managers should manage affairs of the company honestly, faithfully, lawfully, fairly, justly and ethically.

Article 3

Directors and Managers should avoid to intervene conflicts with personal interests or interests of the company, including but not limited to unable managing affairs objectively and effectively, or letting themselves, spouse, parents, children or a blood relation within the second degree get improper interests for their position. To avoid conflicts, expansion monetary loans or guarantees and acquisition or disposition of major assets to the preceding persons or their affiliated enterprises shall be approved by the Board of Directors. Creating the greatest interests for the Company should be concerned while purchase or sale between these companies.

Article 4

When the company has a chance to gain profit, Directors and Managers should guard interests for Company legally. Directors and Mangers can’t gain personal profit by their duties or from using properties or information of the Company. Directors and Managers can’t do anything that is within the scope of the company’s business except for complying the regulations of Company Law or Articles of Incorporation.

Article 5

Directors and Managers should keep secret for any information of Company’s customers and suppliers unless they are authorized or permitted by law. Confidential information includes all undisclosed information that can be used by competitors or will be harmful to the company or customers after disclosure.

Article 6

Directors and Managers should treat customers, suppliers, competitors and employees fairly. They can’t gain improper interests by controlling, hiding, or abusing information given by their duties, describing major affairs unreally or transacting unfairly.

Article 7

Directors and Managers should protect and properly utilize properties of the Company, and they should avoid the properties of the company being stolen, neglected or wasted and then affecting profitability.

Article 8

Directors and Managers should follow laws and rules of the Company.

Article 9

When employees find that Directors and Managers violate laws, regulations or the codes, they should provide sufficient evidence to the Audit Committee, Direct Managers, personnel officers, internal control officers or other appropriate persons. Once the report is certified correct, the company should give a reward in accordance with the personal management regulation.

The Company should deal with the said report properly, confidentially and conscientiously, and the Company should protect the reporter’s safety from all kinds of retaliation.

Article 10

If Directors and Managers violate the codes, the Company should punish them in accordance with the personal management regulation and report to the Board of Directors after certification. The related violators should take civil and criminal responsibility and the Company should disclose dates of events, reasons of violation, items of violation and handling situation on the Market Observation Post System.

CHAPTER Ⅲ PROCEDURES OF APPLICATION OF EXEMPTION

Article 11

When the Company proposes to exempt Directors or Managers from complying the codes under special circumstances, the issue shall be determined by the Board of Directors by a resolution adopted by a majority vote at the Board Meeting by over two-thirds of the Directors attendance. The Company should immediately disclose dates of approval by the Board, any opposing or qualified opinion expressed by the independent directors, terms of exemption, reasons of exemption and items of exemption on the Market Observation Post System so as to be assessed the appropriateness by the shareholders and to protect the interests of the Company.

CHAPTER Ⅳ WAYS OF DISCLOSURE

Article 12

The codes should be disclosed on the Company’s website, annual report, prospectus and the Market Observation Post System. The same shall apply to any amendments to

the codes.

CHAPTER ANCILLARY RULES

Article 13

The codes shall take effect after approval by the Board of Directors and be reported to the Shareholders’ Meeting. The same shall apply to any amendments to the codes.

(IX) Implementation Status of the Internal Control System

1. Internal Control System Statement

Nanya Technology Corp. Internal Control System Statement

Date: February 26, 2021

The Company states the following with regard to its internal control system in 2020, based on the findings of a self-assessment:

I. The Company is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of its Board of Directors and management. The Company has established such a system aimed at providing reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguard of asset security), reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and bylaws.
II. There are inherent limitations to even the most well designed internal control system. As such, an effective internal control system can only reasonably ensure the achievement of the three aforementioned goals. Moreover, the operating environment and situation may change and impact the effectiveness of the internal control system. The internal control system of the Company contains self-monitoring mechanisms, however, and the Company takes corrective actions as soon as a deficiency is identified.
III. The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinafter the “Regulations”). The internal control system judgment criteria adopted by the Regulations divide internal control into five elements based on the process of management control: 1. Control environment, 2. Risk assessment, 3. Control operation, 4. Information and communication, and 5. Monitoring. Each element further contains several items. Please refer to the Regulations for details.
IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
V. Based on the findings of the assessment mentioned in the preceding paragraph, the Company believes that on December 31, 2020, its internal control system (including its supervision and management of subsidiaries), encompassing internal controls for understanding of the degree of achievement of operational effectiveness and efficiency objectives, reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance of reporting, and compliance with applicable laws, regulations, and bylaws, was effectively designed and operating, and reasonably assured the achievement of the above-stated objectives.
VI. This Statement will become a major part of the content of the Company's Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
VII. This statement has been passed by the Board of Directors Meeting of the Company held on February 26, 2021, where 0 of the 12 attending Directors expressed dissenting opinions, and the remainder all affirmed the content of this Statement.

Nanya Technology Corp.

Chairperson: Chia Chau, Wu

President: Pei-Ing Lee

Audit report of internal control system reviewed by independent auditors: None
(X) If any penalties are imposed on the Company and its personnel or punishments are imposed by the Company on personnel in violation of internal control system regulations in the past year and up to the date of report, and the results of the penalty may have a material effect on shareholders’ equity or stock price, specify the contents of the penalty, major deficiencies and improvement: None
(XI) Major Resolutions of Shareholders’ Meetings and Board Meetings:
Important resolutions of the Annual Shareholders' Meeting on May 28, 2020:
- (1) Ratified the Business Report and Financial Statements for 2019.
- (2) Ratified the Company's 2019 Proposal for Distribution of Profits.
- (3) Approved the Amendments to the “Convention Rules and Procedures for Shareholders’ Meeting” of the Company.
- (4) Approved Appropriateness of Releasing the Director of the Company from Non-Competition Restrictions.
Implementation Status:
- (1) The 2020 Annual General Meeting resolved to distribute cash dividends of NT$1.50622288 per share. The distribution ratio changed due to employees exercising their stock options, which increased the number of outstanding shares. The Board meeting on May 28, 2020 thus revised the cash dividend to NT$1.50589546 per share, and set the record date to July 8, 2020, and payment date to July 24. The number of outstanding shares was affected by employees once again exercising their employee stock options up to the suspension date specified in the Employee Stock Option Issuance Plan, and the Chairperson was authorized by the Board of Directors to adjust the cash dividend to NT$1.49728963 per share on June 11, 2020.
- (2) The resolutions in 2020 Annual General Meeting included amendments to the “Convention Rules and Procedures for Shareholders’ Meeting” of the Company and appropriateness of releasing the Director of the Company from non-competition restrictions, which have been implemented accordingly and were announced on the Company website.
Major Resolutions of Board Meetings in 2020:
- (1) February 26, 2020 The Board of Directors approved the proposal to convene the 2020 annual general meeting and approved the proposal for distribution of profits.
- (2) February 26, 2020 The Board of Directors approved a capital expenditure

budget of no more than NT$9.2 billion.

  - (3) May 6, 2020 The Board of Directors approved an additional capital expenditure budget of no more than NT$6.56 billion.

  - (4) November 14, 2020 The Board of Directors approved the proposal to establish Risk Management Committee.

Major Resolutions of Board Meetings in 2021:
- (1) February 26, 2021 The Board of Directors approved the proposal to convene the 2021 annual general meeting and approved the proposal for distribution of profits.
- (2) February 26, 2021 The Board of Directors approved a capital expenditure budget of no more than NT$15.6 billion.
(XII) Major issues of record or written statements made by any directors or supervisors which specified his/her dissent to important resolutions passed by the Board of Directors in the past year and up to the date of report: None
(XIII) Resignation or dismissal of personnel, including directors, general managers, accounting supervisors, financial officers, internal auditing supervisors, corporate governance supervisor and R&D supervisors, involved in the past year and up to the date of report: None

V. Information Regarding NTC's Audit Fees

(I) Information Regarding NTC's Audit Fees

Name of accounting firm	CPA name	CPA name	Audit period	Remarks
KPMG Certified Public Accountants Firm	Astor Kou, CPA	Hsin-Yi Kuo	January 1 2020 ~ December31,2020

Unit: NT$ thousands

Fees classification Range ofamount	Fees classification Range ofamount	Audit fee	Non-audit fee	Total shares
1	Less thanNT$2,000	-	683 (Note)	683
2	NT$2,000,000 (inclusive) to NT$4,000,000	3,998	-	3,998
3	NT$4,000,000 (inclusive) to NT$6,000,000	-	-	-
4	NT$6,000,000 (inclusive) to NT$8,000,000	-	-	-
5	NT$8,000,000 (inclusive) to NT$10,000,000	-	-	-
6	NT$10,000,000 (inclusive) orabove	-	-	-

Note: Non-audit fees include business registration NT$124,000 and other NT$599,000 (2020 master files and country reports amounted to NT$200,000, transfer pricing reports amounted to NT$175,000, and annual report and printing fees amounted to NT$184,000).

(II) If the non-audit fees paid to the CPA, the CPA's accounting firm, and its affiliated enterprises is more than one quarter of the audit fees, the amount of audit and non-audit fees and the content of non-audit services shall be disclosed: None.
(III) Replaced the audit firm and the audit fee paid to the new audit firm was less than the payment of previous year: None
(IV) Audit fee reduced more than 15% year over year: None
VI. Replacement of Independent Auditors
(I) About former accountant

Change date	January 22, 2019	January 22, 2019	January 22, 2019	January 22, 2019	January 22, 2019
Reason for replacement and description	internal job adjustment
Note that the appointment or accountant terminates or does not accept the appointment	Party situation			accountant	appointer
	Take the initiative to terminate the appointment			V
	No longer accept (continue) appointment
Comments and reasons for the issuance of unqualified opinions outside the latest two years	N/A
Opinions different from those of issuer	Yes		Accounting principles orpractices
			Disclosure of financial reports
			Check the scope or step
			Other

	N/A	V
	Description
OTHER DISCLOSURES (Disclosures required in Item 1-4 to 1-7, Subparagraph 6, Article 10 of these Regulations)	1. Notice from former accountants that the Company's internal control system is incomplete and financial reports are not credible: None 2. Notice from former accountants that the Company's statement cannot be trusted or is unwilling to be associated with the Company's financial reports: None 3. Notice from former accountants that the Company must expand the scope of audit, or data shows that expanding the scope of audits will damage the creditability of previously certified financial reports or financial reports that are about to be certified, but the scope of audit was not expanded due to replacement of accountant or other reasons: None 4. Notice from former accountants that the creditability of previously certified financial reports or financial reports that are about to be certified may be damaged by the data that was collected, but the former accountant did not handle the matter due to replacement or other reasons: None

(II) About the successor accountant

Office name	KPMG Certified Public Accountants Firm
CPA name	Astor Kou and Hsin-Yi Kuo
Date of appointment	January 22, 2019
Consultation given on accounting treatment or accounting principle adopted for any specific transactions and on possible opinion issued on financial report prior to appointment and results	N/A
Successor accountant's written opinion on the different opinions of the former accountant	N/A

VII.The Company’s Chairman, President, or Managers in charge of Finance or Accounting who have been employed in the Auditing Firm or its Affiliates in the past year shall disclose their name, title, and post during their period of employment at the Auditing Firm or its Affiliates. None

VIII. Share transfer by directors, managerial officers and shareholders holding more than 10% equity and changes to share pledging by them in the past year and up to the date of report

(I) Change in Shareholding of Directors, Managers and Major Shareholders

Unit: Shares

				Unit: Shares	Unit: Shares
Title	Name	2020		As of March 29 of the current year
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Corporate Director and Major shareholder	Nan Ya Plastics Corp.	0	0	0	0
Chairman	Nan Ya Plastics Corp. Representative: Chia Chau, Wu	0	0	0	0
Director	Wen Yuan, Wong	0	0	0	0
Director	Susan Wang	0	0	0	0
Director and President	Pei-Ing Lee	360,000	0	(159,000)	0
Director	Ming Jen, Tzou	0	0	0	0
Director and Executive Vice President	Lin-Chin Su	(5,000)	0	0	0
Corporate Director	Formosa Taffeta Co., Ltd.	0	0	0	0
Director	Formosa Taffeta Co., Ltd. Representative: Shih-Ming Hsie	0	0	0	0
Director	Nan Ya Plastics Corp. Representative: Joseph Wu	150,000	0	0	0
Director	Nan Ya Plastics Corp. Representative: Rex Chuang	(105,000)	0	(5,000)	0
Independent Director	Ching-Chyi Lai	0	0	0	0
Independent Director	Shu-Po Hsu	0	0	0	0
Independent Director	Tsai-Feng Hou	0	0	0	0

100

Title	Name	2020	2020	As of March 29 of the current year	As of March 29 of the current year
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Vice President	Yau-Ming Chen	0	0	0	0
Assistant Vice President	Wesley Chang	(21,000)	0	0	0
Assistant Vice President	Chi-Meng Su	0	0	0	0
Assistant Vice President	Mark Mao	0	0	0	0
Assistant Vice President	Jeff J.P. Lin	0	0	0	0
Assistant Vice President	Rex Chen	18,000	0	36,000	0
Assistant Vice President	Chuan-Jen Chang	0	0	0	0
Finance Officer and Corporate Governance Supervisor	Philip Jao	0	0	0	0
Accounting Officer	Hung-Chi Kuo	0	0	0	0
Major Shareholder	Formosa Plastics Corporation	0	0	0	0
Major Shareholder	Formosa Chemical & Fibre Corporation	0	0	0	0
Major Shareholder	Formosa Petrochemical Corporation	0	0	0	0

(II) Stock Trade/Pledge with Related Party by Directors, Managers and Major Shareholders with 10% Shareholding or More: None

101

IX. Relationship among the Top Ten Shareholders

							March 29,2021	March 29,2021	March 29,2021
NAME	Shareholding		Spouse’s/ minor’s Shareholding		Shareholding by Nominee Arrangement		Name and Relationship Between the Company’s Top Ten Shareholders		REMARKS
	Shares	Percentage of shares	Shares	Percentage of shares	Shares	Percentage of shares	Company Name (or name)	Relationship
Nan Ya Plastics Corp. (Hereinafter “NPC”) Legal Representative: Chia Chau, Wu	907,303,775	29.30%	-	-	-	-	FPC	Mutual Corporate Directors
							FCFC	The Chairman of FCFC is one of NPC’s Executive Directors. Mutual Corporate Directors
							FPCC	Mutual Corporate Directors NPC invests in FPCC under equitymethod.
							MLPC	The Chairman of NPC is one of MLPC’s Board Directors. NPC is one of MLPS’s Board Directors. NPC invests in MLPC under equitymethod
Formosa Chemicals & Fibre Corp. (Hereinafter “FCFC") Legal Representative: Wen Yuan, Wong	334,815,409	10.81%	-	-	-	-	FPC	The Chairman of FCFC is one of FPC’s Executive Directors. FCFC is one of FPC’s Board Directors.
							NPC	The Chairman of FCFC is one of NPC’s Executive Directors. Mutual Corporate Directors
							FPCC	The Chairman of FCFC is one of FPCC’s Executive Directors. Mutual Corporate Directors FCFC invests in FPCC under equitymethod.
							MLPC	The Chairman of FCFC is one of MLPC’s Board Directors. FCFC is one of MLPC’s Supervisors. FCFC invests in MLPC under equitymethod.
Formosa Plastics Corp. (Hereinafter “FPC”) Leal Reresentative:	334,815,409	10.81%	-	-	-	-	NPC	Mutual Corporate Directors
							FCFC	The Chairman of FCFC is one of FPC’s Executive Directors. FCFC is one of FPC’s Board Directors.
							FPCC	Mutual Corporate Directors FPC invests in FPCC under equitymethod.
g p Chien-Nan Lin							MLPC	The Chairman of FPC is one of MLPC’s Board Directors. FPC is one of MLPC’s Board Directors. FPC invests in MLPC under equitymethod.

102

Name	Shareholding	Shareholding	Spouse’s/ minor’s Shareholding	Spouse’s/ minor’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders or their spouses or relatives within the second degree of affinity.	Name and Relationship Between the Company’s Top Ten Shareholders or their spouses or relatives within the second degree of affinity.
	Shares	Percentage of shares	Shares	Percentage of shares	Shares	Percentage of shares	Company Name (or name)	Relationship
Formosa Petrochemical Corp. (Hereinafter “FPCC”) Legal Representative: Pao-Lang Chen	334,815,409	10.81%	-	-	-	-	FPC	Mutual Corporate Directors FPC invests in FPCC under equity method.
							NPC	Mutual Corporate Directors NPC invests in FPCC under equitymethod.
							FCFC	The Chairman of FCFC is one of FPCC’s Executive Directors. Mutual Corporate Directors FCFC invests in FPCC under equitymethod.
							MLPC	Chairperson is the same person. FPCC is one of MLPC’s Board Directors. FPCC invests in MLPC under equitymethod.
Labor Pension Fund (The New Fund)	66,029,278	2.13%	-	-	-	-	N/A	N/A
Cathy Life Insurance Co., Ltd. Legal Representative: Tiao-Kuei Huang	41,625,000	1.34%	-	-	-	-	N/A	N/A
Fubon Life Insurance Co., Ltd Legal Representative: Richard M. Tsai	32,059,000	1.04	-	-	-	-	N/A	N/A
Mai-Liao Power Corporation (hereinafter “MLPC”) Legal Representative: Pao-Lang Chen	26,261,393	0.85%	-	-	-	-	FPC	The Chairman of FPC is one of MLPC’s Board Directors. FPC is one of MLPC’s Board Directors. FPC invests in MLPC under equitymethod.
							NPC	The Chairman of NPC is one of MLPC’s Board Directors. NPC is one of MLPS’s Board Directors. NPC invests in MLPC under equitymethod
							FCFC	The Chairman of FCFC is one of MLPC’s Board Directors. FCFC is one of MLPC’s Supervisors. FCFC invests in MLPC under equitymethod.
							FPCC	Chairperson is the same person. FPCC is one of MLPC’s Board Directors. FPCC invests in MLPC under equitymethod.
Nan Shan Life Insurance Company, Ltd. Legal Representative: Tang Chen	17,176,000	0.55	-	-	-	-	N/A	N/A

103

Name	Shareholding	Shareholding	Spouse’s/ minor’s Shareholding	Spouse’s/ minor’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders or their spouses or relatives within the second degree of affinity.	Name and Relationship Between the Company’s Top Ten Shareholders or their spouses or relatives within the second degree of affinity.	Remarks
	Shares	Percentage of shares	Shares	Percentage of shares	Shares	Percentage of shares	Company Name (or name)	Relationship
Labor Retirement Fund(The Old Fund)	14,381,000	0.46%	-	-	-	-	N/A	N/A

X. The total number of shares and total equity stake held in any single enterprise by the Company, the Company’s directors, managers, and any companies controlled either directly or indirectly by the Company:

			Unit: Share; %;April 23,2021	Unit: Share; %;April 23,2021	Unit: Share; %;April 23,2021	Unit: Share; %;April 23,2021
Reinvestment Entities	Investment by the Company		Investments by Directors, Supervisors, managerial officers and directly or indirectly controlled enterprises		Comprehensive investment
	Shares	Shareholding percentage	Shares	Shareholding percentage	Shares	Shareholdin g percentage
Formosa Advanced Technologies Co., Ltd.	141,511,000	32%	139,699,759	31.59%	281,210,759	63.59%

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D. Capital and Shares

I. Capitalization

Unit: Share; NT$

Year / Month	Issue price (NT$ per share)	Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Remarks	Remarks
		Shares	Amount	Shares	Amount	Capitalization	Capital increased by assets other than cash	Other
201903	33.1	30,000,000,000	300,000,000,000	3,053,415,894	30,534,158,940	Exercised ESOP	N/A	Note 1
	-					Repurchased shares were canceled		Note 2
201905	33.1	30,000,000,000	300,000,000,000	3,053,504,894	30,535,048,940	Exercised ESOP	N/A	Note 1
201909	29.2~33.1	30,000,000,000	300,000,000,000	3,072,560,894	30,725,608,940	Exercised ESOP	N/A	Note 1
201912	29.2~30.3	30,000,000,000	300,000,000,000	3,073,364,894	30,733,648,940	Exercised ESOP	N/A	Note 1
202003	29.2	30,000,000,000	300,000,000,000	3,073,996,894	30,739,968,940	Exercised ESOP	N/A	Note 1
202006	29.2	30,000,000,000	300,000,000,000	3,074,660,894	30,746,608,940	Exercised ESOP	N/A	Note 1
10909	28.5~29.2	30,000,000,000	300,000,000,000	3,092,611,894	30,926,118,940	Exercised ESOP	N/A	Note 1
10911	28.5~29.6	30,000,000,000	300,000,000,000	3,093,593,894	30,935,938,940	Exercised ESOP	N/A	Note 1
11002	28.5~29.6	30,000,000,000	300,000,000,000	3,096,434,894	30,964,348,940	Exercised ESOP	N/A	Note 1
Note 3	28.5	30,000,000,000	300,000,000,000	3,097,011,894	30,970,118,940	Exercised ESOP	N/A	Note 1

Note 1: Approval document no. and approval date: Jin-Guan-Zheng-Fa-Zi No. 1040033035 dated August 24, 2015 from the FSC.

Note 2: Approval document no. for share buyback: Jin-Guan-Zheng-Jiao-Zi No. 1080301709 dated January 17, 2019 from the FSC.

Note 3: There have 577,000 shares have not been registered for change.

				Unit: Share;March 29,2021 Remarks Total shares 30,000,000,000	Unit: Share;March 29,2021 Remarks Total shares 30,000,000,000
Type of stock		Authorized capital			Remarks
	Outstanding shares (Note)	the Company's treasury stock	Outstanding Un-issued shares	Total shares
Common Stock	3,084,913,894	12,098,000	26,902,988,106	30,000,000,000

Note: There are listed Outstanding shares.

105

II. Composition of Shareholders

II. Composition of Shareholders	II. Composition of Shareholders	II. Composition of Shareholders	II. Composition of Shareholders	II. Composition of Shareholders	II. Composition of Shareholders	II. Composition of Shareholders
March 29,2021
Composition of Shareholders Quantity	Government agencies	Financial institutions	Other juridical person	Domestic natural person	Foreign institutions & natural person	Total shares
Number of shareholders	3	141	264	99,900	803	101,111
Shareholding (shares)	71,544,278	191,941,250	2,019,864,406	198,542,440	615,119,520	3,097,011,894
Holding (percentage)	2.31	6.20	65.22	6.41	19.86	100

III. Distribution of Shareholding

Par value: NT$10 per share March 29, 2021

Par value: NT$10 per share			March 29, 2021
Shareholding range	Number of shareholders	Ownership (shares)	Ownership (percentage)
1 - 999	62,218	8,145,178	0.26
1,000 - 5,000	32,460	60,139,966	1.94
5,001 - 10,000	3,136	24,807,714	0.80
10,001 - 15,000	871	11,012,432	0.36
15,001 - 20,000	562	10,450,302	0.34
20,001 - 30,000	482	12,267,470	0.40
30,001 - 40,000	213	7,606,843	0.25
40,001 - 50,000	161	7,529,388	0.24
50,001 - 100,000	314	22,859,200	0.74
100,001 - 200,000	202	29,461,205	0.95
200,001 - 400,000	151	43,296,690	1.40
400,001 - 600,000	58	29,142,526	0.94
600,001 - 800,000	42	29,209,595	0.94
800,001 - 1,000,000	38	34,134,718	1.10
Over 1,000,001	203	2,766,948,667	89.34
Total shares	101,111	3,097,011,894	100

106

IV. List of major shareholders

Names, shares and shareholding ratio of shareholders with 5% or more shares or top ten shareholders:

March 29, 2021	March 29, 2021	March 29, 2021
Shares Name of major shareholder	Shareholding (shares)	Holding (percentage)
Nan Ya Plastics Corp.	907,303,775	29.3
Formosa Chemicals & Fibre Corp.	334,815,409	10.81
Formosa Plastics Corp.	334,815,409	10.81
Formosa Petrochemical Corp.	334,815,409	10.81
Labor Pension Fund (The New Fund)	66,029,278	2.13
Cathy Life Insurance Co., Ltd.	41,625,000	1.34
Fubon Life Insurance Co., Ltd	32,059,000	1.04
Mai-Liao Power Corporation	26,261,393	0.85
Nan Shan Life Insurance Company, Ltd.	17,176,000	0.55
Labor Retirement Fund (The Old Fund)	14,381,000	0.46

V. Market Price, Net Worth, Earnings, and Dividends per Common Share

Item	Year	Year	2019	2020
Market price per share (Note 1)	Highest market price		86.70	92.00
	Lowest marketprice		49.50	44.00
	Average market price		67.55	65.59
Book value per share	Before distribution		49.78	50.02
	After distribution		48.28	Notyet distributed
Earnings per share (NT$)	Weighted average shares Weighted average shares (adjusted)		3,045,219 `－`	3,065,482 `－`
	Before adjustment		3.23	2.51
	After adjustment		`－`	`－`
Dividends per share	Cash dividends(Note 2)		1.49728963	1.29855082
	Stock dividend	Stock dividends from retained earnings	－	－
		Stock dividends from capital surplus	－	－
	Accumulated undistributed dividends		－	－
Return on Investment	Original PE ratio (Note 3)		20.91	26.13
	Adjusted PE ratio (Note 3)		`－`	`－`
	Price-dividend ratio(Note 4)		44.85	50.51
	Cash dividendyield(Note 5)		2.23	1.98

Note 1: Per share of market price is based on the information of Taiwan Stock Exchange Co., Ltd. Note 2: Dividends for the year are distributed in the following year. Distribution of 2020 earnings is an estimate and has not yet been approved by the Annual General Meeting.

Note 3: Price / earnings ratio = average market price / adjusted earnings per share Note 4: Price / dividend ratio = average market price / cash dividends per share Note 5: Cash dividend yield rate = cash dividends per share / average market price

107

VI. Dividend Policy and Implementation Status

(I) Dividend Policy

Whenever there are profits of the Company, it shall be used to pay all outstanding taxes, recover the Company’s accumulated losses, and set aside 10% thereof in a legal reserve. Thereafter, the remaining profit, if any, after set aside a special reserve or reserves for certain undistributed earnings for business purposes, shall collectively with any undistributed surplus earnings from previous fiscal years, be included in a surplus earning distribution plan submitted by the Board of Directors for approval at an Annual Shareholders’ Meeting.

The Company belongs to a high-technology and capital intensive industry and its operations are still experiencing significant growth. To accommodate the long-term financial projection of the Company, the Company adopts the policy that dividends shall be distributed appropriately in accordance with the Company's budget of capital expenditures. In principle, the stock dividends distributed by the Company shall not exceed 50% of the total distributable dividends of that year.

The Company will strive to maintain a stable dividend policy, and mainly dividends will be distributed by cash. The target of our dividend policy is around 45%~55% of the earnings of each fiscal year.

(II) Current Proposal to Distribute Profits

The Board meeting on February 26, 2021 proposed the distribution of NT$4.0 billion in cash dividends. The dividends distribution proposal will be resolved at Annual General Meeting on May 27, 2021, and will be handled according to related regulations. If the total number of outstanding shares increases as the transfer of treasury shares or exercise of the employee stock options. It is proposed that the Board of Directors be authorized to adjust the final cash dividend per share accordingly.

(III) Expect material change in dividend policy: N/A

VII. The effects of the stock dividends proposed by the shareholders' meeting on the Company's business performances and earnings per share: N/A.
(We did not release any financial forecasts).

VIII. Remuneration of employees and directors

(I) The percentages or ranges of employees, director’s compensation as stated in the Company's Articles of Incorporation:

The Company shall appropriate 1% to 12% for employees’ compensation from its profit, if any, before tax. However, the Company’s accumulated losses shall have been covered.

108

The Company may have the profit distributable as employees’ compensation distributed in the form of shares or in cash, and the qualification requirements of employees, including the employees of subsidiaries of the Company meeting certain specific requirements, entitled to receive compensation shall be determined by the Board of Directors.

Remuneration to employees are decided in accordance with Article 235 of the Company Act.

(II) The accounting treatment of the discrepancy between the actual distributed amount and the estimated figure for the current period:

The bases for estimating the amount of employee and director remuneration are based on relevant laws, the Company’s Article of Incorporation, and past experience. The difference, if any, between actual distribution and estimated amount will be included in the profit or loss in the following fiscal year based on relevant accounting principles.

(III) Distribution of Compensation Approved by the Board of Directors:

The Board Meeting on February 26, 2021 approved:

Employee remuneration in the amount of NT$600,000,000 will be distributed in cash and is consistent with the estimated amount.
Share amount of employees’ stock compensation is 0, percentage of the share amount to that of all stock dividends are 0%.
(IV) Distribution of Employee and Director compensation in the past year (including the number of shares, amount and stock price); the difference (when present) between the recognized compensation of employees and directors, the reasons, and the handling situation shall be stated

Amount approved in the Board meeting on February 26, 2020 and the amount distributed:

Employee remuneration in the amount of NT$800,000,000 was distributed in cash.
Actual share amount of employees’ stock compensation is 0, percentage of the share amount to that of all stock dividends are 0%.
The above-listed amount of employee remuneration was consistent with the estimated amount approved by the Board of Directors.

109

IX. Repurchase of Common Stock

(I) Exercised Items:

epurchase of Common Stock (I) Exercised Items:	epurchase of Common Stock (I) Exercised Items:	epurchase of Common Stock (I) Exercised Items:
March 29, 2021
Phase of repurchase	1st meeting in 2018	2nd meeting in 2018
Date of Board resolution	November 12, 2018
Purpose of repurchase	Transferred to employees	Safeguard the Company's credit and shareholders' rights and interests
Expected repurchase period	November 13-28, 2018	November 29, 2018 to January11,2019
Expected price interval of stock repurchase	NT$38-79
Expected type and quantity of repurchased shares	20,000,000 common shares	100,000,000 common shares
Type and quantity of actually repurchased shares	20,000,000 common shares	50,136,000 common shares
Average price of repurchased shares (including transaction fees)	NT$57.35	NT$53.17
Quantity of actually repurchased shares to expected(%)	100%	50.14%
Amount of repurchased shares (includingtransaction fees)	NT$1,146,932,497	NT$2,665,620,924
Number of shares canceled and transferred	Transferred 7,902,000 shares	50,136,000 shares
Accumulated quantity of NTC shares held	12,098,000 shares
Accumulated quantity of NTC shares held to total outstanding shares(%) (Note)	0.39%
Reason for incomplete share repurchase after the repurchase period expired	─	We did not complete the share repurchase to protect shareholders' interests and due to considerations for market mechanisms.

Note: Calculated using 3,097,011,894 outstanding shares (in which change of registration has not been completed for 577,000 shares in employee stock options).

(II) Exercising Items: None

110

X. Corporate bond issuance status: None

XI. Status of Preferred Stock: None

XII.Issuance of Global Depositary Receipts: None

111

XIII. Status of Employee Stock Options Plan

(I) Issuance of Employee Stock Options

March 29, 2021

		March 29, 2021
ESOP granted	2015-1	2015-2
Approval date by the securities &futures bureau	August 24, 2015	August 24, 2015
Issue (grant) date	May 10, 2016	August 11, 2016
Number of options granted	97,500 units	2,500 units
Percentage of shares exercisable to outstanding common shares (Note)	3.15%	0.08%
Option duration	8 years	8 years
Source of option shares	Issuing new common shares	Issuing new common shares
Vesting schedule (%)	Upon 2 years from the issue date, available subscription ratio for exercising: 50% (accumulated) Upon 3 years from the issue date, available subscription ratio for exercising: 75% (accumulated) Upon 4 years from the issue date, available subscription ratioforexercising:100% (accumulated)
Shares exercised	85,947,000 shares	1,583,000 shares
Value of shares exercised	NT$2,795,807,000	NT$50,894,100
Shares unexercised	11,553 Unit	917 Unit
Exercise price per share	NT$28.5	NT$29.6
Percentage of shares unexercised to outstanding common shares (%)(Note)	0.37%	0.03%
Impact to shareholders' equity	This will attract and retain technology and specialized talent required by the company, encourage employees and strengthen their sense of belonging, and maximize profits for shareholders. Dilution to shareholders' equity is 3.15%.	This will attract and retain technology and specialized talent required by the company, encourage employees and strengthen their sense of belonging, and maximize profits for shareholders. Dilution to shareholders' equity is 0.08%.

Note: Calculated using 3,097,011,894 outstanding shares (in which change of registration has not been completed for 577,000 shares in employee stock options).

112

March 29, 2021

(II) Employee stock options granted to management team and to top 10 employees:

113		Title	Name	Number of Options Granted % of shares	exercisable to outstanding common shares		Shares exercised	Shares exercised			Shares unexercised (Note)	Shares unexercised (Note)
						Shares Exercised	Exercise Price Per Share	Value of Shares Exercised	% of shares exercised to outstanding common shares	Shares Exercised	Exercise Price Per Share	Value of Shares Exercised	% of shares exercised to outstanding common shares
	Managerial Officers	President Executive Vice President Vice President Vice President Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Finance Officer and Corporate Governance Supervisor Accounting Officer	Pei-Ing Lee Lin-Chin Su Joseph Wu Rex Chuang Yau-Ming Chen Wesley Chang Chi-Meng Su Mark Mao Jeff J.P. Lin Rex Chen Chuan-Jen Chang Philip Jao Hung-Chi Kuo	5,490,000 shares	0.1773%	4,078,000 shares	NT$28.5	NT$128,655,800	0.1317%	1,412,000 shares	NT$28.5	NT$40,242,000	0.0456%

Note: Number of unexercised shares and amount as of March 29, 2021.

March 29, 2021

									March 29, 2021	March 29, 2021	March 29, 2021	March 29, 2021
	Title	Name	Number of Options Granted % of shares	exercisable to outstanding common shares		Shares exercised			Shares unexercised (Note 2)
					Shares Exercised	Exercise Price Per Share	Value of Shares Exercised	% of shares exercised to outstanding common shares	Shares Exercised	Exercise Price Per Share	Value of Shares Exercised	% of shares exercised to outstanding common shares
Employees	Executive Administrator Senior Director Senior Director Director Director Director Director Director Director Deputy Director Executive Engineer	Wooder Yang Yao-Hsiung Kung Hsu-Cheng Fan Dong-Liung Yang Wen-Hao Chang Peter Chen Eric Chuang Carver Liu Chiang-Lin Shih Benjamin Huang Yen-Nan Chang (Note 1)	1,950,000 shares	0.0630%	1,907,000 shares	NT$28.5	NT$61,930,000	0.0616%	43,000 shares	NT$28.5	NT$1,225,500	0.0014%

Note 1: Executive Engineer Yen-Nan Chang retired from February 18, 2021. Note 2: Number of unexercised shares and amount as of March 29, 2021

XIV. Status of new shares issuance in connection with mergers and acquisitions: None

XV.Financing plans and implementation-cash funding application: None

E. Operations overview

I. Business content

(I) Business scope

NTC is focused on becoming a key supplier in the global memory market with outstanding product research and development capabilities and competitive production cost advantage. We are committed to providing high quality and advanced memory products and services.

Our main product lineup:

DRAM chips
(1) DDR2 DRAM
- Capacity: 512 Mb、1Gb
- Speed: 800 Mb/s、1066 Mb/s
(2) DDR3 DRAM
- Capacity: 1Gb、2Gb、4Gb
- Speed: 1600 Mb/s、1866 Mb/s、2133 Mb/s
(3) DDR4 DRAM
- Capacity: 4Gb、8Gb
- Speed: 2667 Mb/s、2933Mb/s、3200 Mb/s
(4) LPDDR
- Capacity: 512Mb、1Gb
- Speed: 333 Mb/s、400 Mb/s
(5) LPDDR2
- Capacity: 1Gb、2Gb、4Gb
- Speed: 1066 Mb/s

(6) LPDDR3

Capacity: 4Gb 、 8Gb
Speed: 1866 Mb/s 、 2133 Mb/s
(7) LPDDR4/4X
Capacity: 2Gb、4Gb、8Gb
Speed: 3200 Mb/s、3733 Mb/s、4267 Mb/s
Wafer production services

In response to meeting market demand in the future, NTC continue to develop products toward higher speed and lower power consumption. Our business strategy focuses on the applications of consumer electronic, mobile devices and servers, and we offer a comprehensive product lineup for meeting market demand on low, medium and high capacity products. Our product portfolio includes 512Mb/1Gb DDR2, 1Gb/2Gb/4Gb DDR3, 4Gb/8Gb DDR4, 512Mb/1Gb LPDDR, 1Gb/2Gb/4Gb LPDDR2, 4Gb/8Gb LPDDR3, and 2Gb/4Gb/8Gb LPDDR4/4X.

116

Plans of developing new products and services

(II) Industry Overview

DRAM industry current status and development

The global DRAM market is an oligopoly dominated by major manufacturers, and rational investments that prioritize profitability are expected for industry supply. Capacity expansion is expected to be rational and disciplined. The conversion of advanced processes is much more difficult than before, and annual bit growth has slowed down. We will continue to focuses on consumer electronics and automobile markets in 2020, and will expand into server and lower power product markets.

End applications of DRAM have expanded from being concentrated in PC related applications to a wide range of applications, in which smartphones are the largest market segment and servers/data centers are the fastest growing market segment due to the rapid growth of cloud applications. Once commercial operations of 5G and artificial intelligence applications begin, self-driving cars, edge computing, and a variety of emerging applications are expected to inject new energy into the market.

Up-, mid-, and downstream DRAM industry supply chain

IC industry (including DRAM) is categorized as IC design, mask making/wafer material in upstream area, IC production in midstream area, IC packing and testing in downstream area. The whole industry system is illustrated as below table. Our operations involve upstream DRAM design and midstream DRAM manufacturing.

117

Upstream NTC IC design Mask Production Wafer Materials	Upstream NTC IC design Mask Production Wafer Materials	Midstream	Downstream	Downstream
NTC IC design		NTC		IC Testing
		IC Manufacturing	IC Packaging
	Wafer Materials

Product Development Trends
(1) The main application trends:
- A. Mobile Devices
  - (a) Global smartphone shipments in the year of 2020 declined drastically due to the COVID-19 pandemic. The demands are expected to resume growth in the year of 2021.
  - (b) The mainstream of DRAM content per mobile device on the market still remains 6-8GB. The content of iPhone also increases to 6GB.
- B. Servers
  - (a) Digital transformation stimulates the mid- to long-term demand growth of cloud computing. Expect the demands for server from Hyperscale data center continue to grow steadily in the year of 2021. In addition, the demand of edge computing emerges as the new driving force of sever market, and will evolve and develop with the deployment of 5G infrastructure.
  - (b) DRAM demands rise from inventory replenishment and release of new processors. DRAM content per server gradally increases with the time being.
- C. Personal Computers

Remote business drove sales boom in notebook in the year of 2020. Expect the notebook shipment will continue to hike in the year of 2021.

D. Consumer Electronics

Sales for consumer electronics such as new game console, TV, smart watch, networking, video and monitoring system, automotive and industrial devices are expected to have stable growth in the year of 2021.

118

(2) Performance requirements

A. High Density:

Following the arrival of the 10nm process era, 12Gb/6Gb will gradually become the mainstream product capacity, with applications in smartphones, servers, PCs. It is expected that the top three DRAM makers will continue to improve the yield and increase the ratio of 1Y/1Znm process, and increase the production.

B. High Speed:

DRAM specifications have increased in response to the increasing ratio of video/graphic content in data transmission. The highest speed DDR4 can currently reach is DDR4-3200 Mb/s; LPDDR4 and LPDDR5 can reach speeds of up to 4267Mb/s and 6400Mb/s, respectively.

C. Low Power Consumption:

As the threat of global warming is escalating, low voltage and low power features are key requirements for smart phones, servers, PCs, consumer electronics and automotive devices.

D. Function Requirements:

(a) High data transmission rate and broadband:

The high data transmission rate provided by DDR4 has made it the mainstream specification of servers and personal computers, while LPDDR4X and LPDDR5, which are characterized by high bandwidth and lower power, are widely adopted in smartphones.

(b) Diverse package specifications:

In response to diversity of application needs, DRAM package specifications spectrum expanded including module for PC/servers, PoP/eMCP for smart phones, SiP (System in Package) for digital TV, and MCP for Mobile WiFi.

4. Competition situation

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(III) Technology and R&D Status

1. Development Strategy

To meet the market trends, The Company has been focusing on specialty market development, which includes consumer, low power and server segments. We will provide high speed DDR4 and low power LPDDR4X products on the basis of our 20nm process technology. We will continue to develop DRAM products with advanced 10nm class process technologies to provide comprehensive product lineup for fulfilling the requirements by next-generation electronic devices.

Annual R&D Expenses over the past 5 years (Based on Consolidated Financial Statements Report)

				Unit: NT$thousands	Unit: NT$thousands
Year	2016	2017	2018	2019	2020
R&D Expenses	2,478,069	3,673,056	4,887,311	4,926,428	5,137,872

Successfully developed technologies and products

The Company has developed 16Mb, 64Mb, 128Mb, 256Mb, 512Mb, 1Gb, 2Gb and 4Gb DRAM products successfully. DDR4 8Gb DRAM has also been launched to the market. Below are the summaries:

(1) Successfully transfer 0.45μm, 0.36μm, and 0.32μm 16Mb DRAM design, manufacturing process, and element analysis from OKI within 2 years from setting up the 1st factory. Quickly achieve high yields in both wafer and finished goods, and immediately adopt computer automated production management.
(2) Successfully self-development 0.32μm 5V 16Mb EDO DRAM.
(3) Successfully finished design of 4 products, 0.32μm 16Mb SDRAM, 0.28μm 16Mb (2M×8), 0.28μm 64Mb SDRAM and 0.28μm 16Mb SDRAM (1Mb×16), within 2 years. 0.32μm SDRAM and 0.28μm 16Mb SDRAM (1Mb×16) was the main products at that time.
(4) Successfully transfer 0.2μm 64Mb and 0.175μm 256Mb DRAM from IBM. Self-develop 128Mb DRAM based on IBM technology platform, quickly introduce to production line and achieve the desired yield.
(5) Successfully convert FAB-1 from stack technology process to trench technology process. Successfully convert FAB-2 from 0.20μm technology to 0.175μm technology within 8 months from start-up and achieve the desired yield.
(6) Successfully shrink 64Mb and 128Mb DRAM to 0.175μm technology.

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As to the gross dies of 64Mb DRAM can exceed 1,100 ea per 8-inch wafer; it is very cost-competitive.

(7) Successfully create the combo design of 0.175μm 128Mb and 256Mb SDR/DDR.
(8) Successfully co-develop 0.14μm technology and products with IBM and quickly implement into production line.
(9) Successfully design 0.175μm PC333 DDR product. Successfully develop DDR400 with 0.14μm technology product to ensure the leading position in DDR products.
(10) Successfully design 0.14μm DDR1 128Mb specialty product and implement into mass production.
(11) Successfully design 0.11μm DDR1 256Mb and 512Mb products and implement into mass production.
(12) Successfully design 0.11μm DDR2 400, 533, 667 and 800 products and implement into mass production to ensure the leading position in DDR2 products.
(13) Successfully design 0.90μm DDR1 512Mb and DDR2 400, 533, 667 and 800 products and implement into mass production to ensure the leading position in DDR2 products.
(14) Successfully develop 0.70μm DDR2 512Mb, DDR2 1Gb and DDR3 1Gb products.
(15) Converted to 42nm technology in the fourth quarter of 2010. Successfully completed customer certification of 50nm DDR2 1Gb, 50nm DDR3 2Gb, and 42nm DDR3 2Gb and internal certification of 42nm DDR3 4Gb.
(16) Successfully began mass production of LPDDR memory products and developed 30nm process for DDR3 2Gb in the second half of 2011.
(17) Completed the internal certification of 30nm DDR4 4Gb in the first half of 2012, completed customer certification the same year, and also completed internal certification and customer certification of LPDDR2 512 Mb.
(18) In the first half of 2013, finish low power product, LPDDR2 4Gb internal and customer qualification and implement into mass production in Q2 of 2013.
(19) In the second half of 2013, completed the internal certification of 30nm DDR4 4Gb. Provided customers with early DDR4 products for

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certification, started developing LPDDR2 1Gb, and began internal certification of LPDDR3 4Gb in the same year.

(20) In the first half of 2014, finish the internal and customer qualification of LPDDR3 4Gb. In Q3 of 2014, start LPDDR3 4Gb mass production and trigger 30nm shrink products design to improve the product competitiveness.
(21) In second half of 2014, finish 30nm shrink product development and implement to mass production, including 4Gb DDR3 and 1Gb LPDDR2.
(22) In first half of 2015, finish 30nm shrink product development and implement to mass production, including 1/2/4Gb DDR3 consumer products. In the second half of 2015, finish 30nm 4Gb DDR4 product development and start to mass production. Finish internal qualification for 30nm shrink mobile products, including 2Gb LPDDR2 and 4Gb LPDDR3 in Q4 of 2015.
(23) In the second half of 2016, completed internal certification, customer certification, and mass production of 30nm 512Mb DDR2 consumer shrink products.
(24) In the first half of 2017, finish 20nm 4Gb DDR3 consumer product qualification and implement to mass production.
(25) In Q4 of 2017, finish 20nm 8Gb DDR4 product development, qualification and implement to mass production.
(26) In Q3 of 2018, completed internal certification, customer certification, and mass production of 20nm 4Gb DDR3 consumer products.
(27) Completed internal certification and mass production of 20nm 4Gb LPDDR4 in Q1 of 2019 and 8Gb LPDDR4 in Q2 of 2019.
(28) In Q3 of 2019, completed internal certification and mass production of 20nm 8Gb LPDDR4X.
(29) In Q1 of 2020, completed internal certification and mass production of 20nm 2Gb LPDDR4/X.
(IV) Long-Term and Short-Term Sales Development Plan
Short-Term Sales Development Plan
- (1) Optimize the 20nm product portfolio and expand the 8Gb DDR4 promotion.
- (2) Complete the validation at server manufacturers and first tier data center providers for bigger pie in server DRAM markets.
- (3) Enlarge customer base and shipment of 20nm-based products including 4Gb/ 8Gb LPDDR3, 2Gb/ 4Gb/ 8Gb LPDDR4/ 4X. Intensify focus on

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better penetration into sub-segments like smart phone, wearables, smart speakers, portable devices and enterprise SSD.

  2. Long-Term Sales Development Plan

     - (1) Continue the migration to advanced process nodes, and provide more product mix to meet customers’ demand for different density budget.

     - (2) Prioritize consumer, mobile and server markets as the major market domain.

     - (3) Extend services to versatile packages from DRAM discrete, KGD (known good die), and MCP (multi-chip packages). Additional, offer automotive/ industrial grade products and customization services to add NTC’s product values and to strengthen competitiveness to its peers.

II. Market Status and the Overview of Sales and Production
(I) Market Status
1. Sales Regions

The Company has a worldwide customer base. To provide the fast and real time service, we set up a global sales network which includes the U.S., Europe, Japan, China and Taiwan. We will continue expanding the customer groups in all sale regions, and the revenues from all regions will keep growing due to diversifying market applications and customization of products.

Market Share

The global market's main DRAM suppliers include Samsung, SK hynix, Micron, and Nanya Technology Corporation. In 2020, The Company was ranked number 4 with 3% market share.

==> picture [264 x 217] intentionally omitted <==

Source: DRAMeXchange, NTC

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3. DRAM Market Outlook

Steady growth in DRAM demand: DRAM is a key component in all smart electronic products, and smartphones and servers/data centers are currently the main fields of application. The future development of 5G and AI, as well as smart consumer electronics products, will continue drive diverse applications of DRAM and also increase DRAM usage. The shipment of 5G phones will increase each year along with more DRAM content. Networking and edge computing required by 5G base stations around the world will also increase DRAM usage. Servers/data centers will have even greater demand for DRAM to meet the high-bandwidth, lowlatency, and big-data requirements of 5G and AI. Demand from laptops, tablet PCs, TVs, and SSD will remain strong due to the development of work from home, distance learning, and smart homes. Furthermore, smart products such as self-driving cars, gaming consoles, smart cameras, smart wearable devices, and smart robots will continue to sustain demand.

4. Competitive Niche

There are diversified applications and many product specs in the DRAM market, and our company is identified as a key supplier in the global memory market.

Favorable and Unfavorable Factors Affecting Our Development
(1) Favorable Factors
- A. DRAM market structure already becames an oligopoly. The market is expected to remain steady and disciplined.
- B. Focus on consumer and low power niche markets, and continue to expand market shares in automotive, networking, customized

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segments which require long-term and stable supply.

     - C. Develop and offer customers our complete product lines with advanced 20nm and our proprietary 10nm class technology.

     - D. With the strong support from Formosa Group, and its strict production management system, strictly control quality, cost and delivery time.

  - (2)  Unfavorable Factors

     - A. The difficulties of develop DRAM advanced technology are high and the investment amount become huge.

     - B. The market applications are diversified and new applications are introduced at any time.

     - C. Threats from new comers, no impact in the near term, but need to monitor their development longer term.

  - (3)  Response Measures

     - A. Develop 10nm class technology to remain competitive.

     - B. Develop high density products and focus on the server market.

     - C. With a high-quality customer service, we have established a close strategic alliance with our chip vendors and customers to jointly develop new generations of consumer electronics products and to meet diverse needs.

     - D. To deeply root in consumer and low-power application markets, and develop automotive, networking, industrial niche market segments which require long-term and stable supply.

     - E. Collect market information, stay up-to-date on customer trends, and flexibly adjust product portfolio to maintain steady operations.

(II) Key Applications of Primary Products and the Production Process
Important Applications of Primary Products

NTC’s primary products are DRAM (Dynamic Random Access Memory) and other memory products. DRAM products are used to store the data while data processing and have a wide range of applications, such as mobile phones, servers, PC, consumer electronics and automotive applications.

Production Process

The production of integrated circuits can divide into three stages: making the silicon wafers, making the integrated circuits, and packing the

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integrated circuits. Nanya focuses making of integrated circuits. The process, which takes approximately one to two months from start to finish, is very complicated and basically comprised several hundreds of different steps. The circuits are printed on the wafer using layers of masks by repeating processes including lithography, etching, oxidation, ion implantation, and thin film several timers. Then, the wafers are sent to the testing area to verify the functions of each IC. Th wafer is then sent to the packaging house for packaging and testing.

(III) Supply of Raw Materials

Raw materials include silicon wafers and chemicals such as photoresist, special gases, and abrasives, and they are provided by the world’s leading semiconductor material suppliers from Japan, the U.S. and Taiwan who guarantee quality and stable supply. To diversify the risk of material supply, the Company has alternative solution to ensure the supply chain will not be interrupted by accidents.

We organize "open bids" through the procurement system of Formosa Technology E-Market Place, and provide vendors with online inquiry, quotation, negotiation, purchase order, delivery, and payment progress inquiry functions. All information is encrypted via electronic certificates and protected by a firewall to ensure the safety of all data being transferred. After the computer opens all bids for a request for quotation, the vendor that bids the lowest price with a delivery time and quality that meet requirements will be given priority.

We implement comprehensive supplier management and assessment to achieve stable material quality and delivery, and also ensure the quality and progress of construction. All suppliers are assessed and graded when they register, and any late delivery (construction), poor quality, or violation of labor safety by suppliers are automatically included in their assessment records. This eliminates lower grade suppliers and maintains long-term relationships with good suppliers.

We combine the ERP computer management system that we have perfected over the years with our quantified, open, and transparent online procurement mechanism to create a high quality, safe, convenient, and fast electronic trading environment. We have expanded to other vertical and horizontal industries to share the "Formosa Plastics Experience" with all enterprises in an electronic era. At present, our supply chain consists of over 10,000 suppliers and contractors who share the business opportunities and economic benefits of open transactions on this electronic transaction platform.

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(IV) Suppliers/Customers Accounted for at Least 10% of Annual Procurement/Sales

1. Major Customers for the Last Two Years

Unit: NT$ thousands; %

					Unit: NT$ thousands; %	Unit: NT$ thousands; %	Unit: NT$ thousands; %	Unit: NT$ thousands; %
Item	2019				2020
	Company Name	Amount	Proportion of total net sales value for the entire year (%)	Relations hip with issuer	Company Name	Amount	Proportion of total net sales value for the entire year (%)	Relations hip with issuer
1	KINGSTON	8,263,500	16.0	N/A	KINGSTON	7,339,958	12.0	N/A
2	─	─	─		Huawei	6,268,808	10.3	N/A
	Other	43,463,958	84.0		Other	47,396,748	77.7
	Net sales	51,727,458	100.0		Net sales	61,005,514	100.0
Analysis of Changes in the Most Recent Two Years: The Company continued to strengthen the sales of consumer, low power and datacenter applications,anditsannualgrowth rate ofsaleshadincreasedin 2020.

2. Major Suppliers for the Last Two Years

Unit: NT$ thousands; %

Unit: NT$ thousands; %					Unit: NT$ thousands; %	Unit: NT$ thousands; %	Unit: NT$ thousands; %	Unit: NT$ thousands; %
Item 2019 2020 Company Name Amount As a percentage of net purchase ratio (%) Relations hip with issuer Company Name Amount As a percentage of net purchase ratio (%) Relations hip with issuer 1 FORMOSA SUMCO Technology Corp. 1,199,180 9.8Interested party ─ ─ ─ Other 11,051,244 90.2 Other 11,979,906 100.0 Net purchase 12,250,424 100.00 Net purchase 11,979,906 100.0 Analysis of Changes in the Most Recent Two Years: The Company continued to adjust the ratio of supply to diversifythe risk ofpurchase in 2020.	2019				2020
	Company Name	Amount	As a percentage of net purchase ratio (%)	Relations hip with issuer	Company Name	Amount	As a percentage of net purchase ratio (%)	Relations hip with issuer
	FORMOSA SUMCO Technology Corp.	1,199,180	9.8	Interested party	─	─	─
	Other	11,051,244	90.2		Other	11,979,906	100.0
	Net purchase	12,250,424	100.00		Net purchase	11,979,906	100.0

(V) Production over the Last Two Years

Unit: NT$ thousands; Thousands pcs

				Unit: NT$ thousands; Thousands pcs	Unit: NT$ thousands; Thousands pcs	Unit: NT$ thousands; Thousands pcs
Year Output Products	2019			2020
	Production capacity (Note)	Output volume	Amount	Production capacity (Note)	Output volume	Amount
Memory	840,000 waferpcs/year	1,302,161	58,512,323	840,000 waferpcs/year	1,357,648	56,901,331
Total shares	─	─	58,512,323	─	─	56,901,331

Note: Production capacity refers to total output.

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(VI) Shipments over the Last Two Years

Unit: NT$ thousands; Thousands pcs

					Unit: NT$ thousands; Thousands pcs	Unit: NT$ thousands; Thousands pcs	Unit: NT$ thousands; Thousands pcs	Unit: NT$ thousands; Thousands pcs
Year Sales Main Products	2019				2020
	Domestic sales		Export		Domestic sales		Export
	Quantity	Amount	Quantity	Amount	Quantity	Amount	Quantity	Amount
Memory	347,273	13,805,032	794,392	37,712,082	397,501	14,077,071	1,048,926	46,789,249
Other	─	209,231	─	1,113	─	138,130	─	1,064
Total shares	─	14,014,263	─	37,713,195	─	14,215,201	─	46,790,313

III. Number of employees, average years of service, average age, and distribution of academic qualifications in the most recent two years up to the date of annual report publication

Unit: Persons

	report publication			Unit: Persons
	Year	2019	2020	As of March 31, 2021
Number of employees (Persons)	Indirect labor	2,070	2,006	2,011
	R&D staff	639	922	909
	Direct labor	598	614	599
	Total shares	3,307	3,542	3,519
average age		37.27	37.41	37.68
average seniority		9.96	10.09	10.32
Academic qualification(%)	Ph.D	0.91	1.02	1.05
	Master	35.35	37.61	37.62
	Bachelor	56.06	54.54	54.45
	higher School	7.65	6.80	6.85
	Under high school	0.03	0.03	0.03

IV. Environmental Expenses Information

We introduced the environmental accounting system in 2008 and the environmental benefits accounting system in 2009; the systems were formally implemented in 2010. The environmental accounting system allows us to monitor environmental expenditure information, evaluate the benefits from environmental expenditures, and concretely and correctly disclosure our environmental protection measures to stakeholders. Statistics are compiled for each category of environmental protection expenditures according to the rules established by the Environmental Protection Administration, and are used for internal management, so that the public will understand the environmental protection efforts of enterprises. Statistics show that environmental capital

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expenditures in 2020 totaled NT$154,289K, and environmental expenses was NT$667,850K, amounting to NT$822,139K. Environmental expenses accounted for 1.35% of our 2020 consolidated revenue of NT$61.0 billion.

NTC is committed to promoting environmental protection management, formulating environmental and safety performance indicators, promoting various waste reduction and resource reuse, greenhouse gas reduction and other projects, in order to comply with the trend of global environmental protection. NTC environmental protection certificate management, testing contents, and reporting items were all handled according to the laws. There was no violation of environmental protection regulations in 2020.

V. Labor Relations
(I) The Company's employee benefits, continuing education, training, retirement system, and actual state of implementation, as well as labor-management negotiations and measures for employee rights protection:
1. Employee Welfare Measures: We have convenience stores, coffee shops, health care center, gym, basketball and badminton court. In addition, we provide employee dormitory for single personnel; Shuttle bus services are available in several routes. The Employee Welfare Committee plans several activities and provides employees with a gift coupon on the Dragon Boat Festival, Moon Festival, and Birthday.
2. Training and Development: In order to maintain NTC’s development strategy and employee’s demand of self-development, we provide a series of complete training courses and advanced studies, including new employee training, helping them adapt to company’s environment and culture quickly. We systematically provide employees with courses that teach the professional knowledge, skills, and attitudes required for their duties. NTC also plans on-the-job training, professional training, leading and management training. Besides, we also cooperate with well-known universities to set up further study programs, satisfying employee’s self-development demand. We will keep going to offer multiple resources and enhance our demand of employee’s competitive in global.
3. Retirement Plan and Its Practices: To keep employee’s mind on his work and make his retirement life with good quality, NTC has established a Retirement Plan according to Regulations Governing the Retirement of the Factory Workers of Taiwan

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Province, Labor Standards Act, and Labor Retirement Pension. For those choosing the old pension fund system, the Company has deposit 2% monthly salary to a special retirement Account of Bank of Taiwan. It has been supervised by NTC Worker Retirement Fund Supervisory Committee. For the others choosing the new pension fund system, the Company contributes 6% monthly salary to employee’s individual retirement account in accordance with Monthly Contribution Wages Classification of Labor Pension. Employees are eligible to contribute more amounts voluntarily, and the amount will be deposit into his retirement account also. The execution of the Pension Plan is in good condition.

4.The Company has diverse, open and transparent communication channels in place to maintain harmonic employment relation, facilitate labor-management collaboration and improve workers' benefits. These communication channels not only enable employees to express opinions on various issues concerning health, safety, benefits and basic work conditions, but also allow the Company to take initiative in learning employees' thoughts and address problems in a timely manner. Employees can report any illegal conduct through the employee protection and complaint mailbox and hotline, and the whistleblower mailbox and hotline; employees can express their opinions on the Company's regulations and systems to the Human Resources Department. Employees are entitled to communicate openly and thoroughly with the management about work-related or personal affairs, terms of employment, salary, benefits and personal opinions.
5.NTC has good relationship between employee and management team so far.
(II) Case of Labor Management Conflict which results in any losses at the moment or in the future and disclosure of estimated amount and applicable solutions as of the most recent fiscal years, and during the current fiscal year up to the date of printing of the Annual Report:
NTC complies with local labor laws and protects employees' basic work
rights and employee benefits. Stay up-to-date on amendments to labor laws and regulations, review the appropriateness of the Company's internal management regulations, and revise relevant regulations to implement the compliance system. We have adopted self-inspection and risk prevention concepts to protect labor rights and improve the work environment, which lowers the probability of labor-management disputes. There were no administrative fines imposed by the competent authority of labor in 2020 as a result of our efforts.

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VI. Material Contracts

Agreements	Party	Term	Summary	Restriction Clause
Service Agreement	Inotera Memory Inc. (Renamed Micron Memory Taiwan, MMT)	From July 15, 2003, until certain termination terms	Service provision	N/A
Amended and Restated Technology Transfer and License Agreement	Micron Technology Inc.	From November 26, 2008, until certain termination terms or mutual termination	Technology transfer and license	N/A
Technology Transfer and License Option Agreement for 20nm Process Node	Micron Technology Inc.	From January 1, 2013, until certain termination terms or mutual termination	Technology transfer and license	N/A

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F. Financial Overview

I. Five-Year Financial Summary

(I) Condensed Statements of Financial Position and Comprehensive Income by – by IFRSs

1. Condensed balance sheet

Unit: NT$ thousands

		Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item		Five-Year Financial Summary (Note1)
		2020	2019	2018	2017	2016
Current assets		76,744,601	72,862,627	82,386,911	62,406,327	25,211,686
Property, plant and equipment		79,728,620	85,530,112	95,358,992	86,241,880	67,917,337
intangible assets		1,258,380	296,710	45,881	136,550	272,185
Other assets		7,900,379	6,411,203	4,794,029	1,994,545	43,575,934
Total assets		165,631,980	165,100,652	182,585,813	150,779,302	136,977,142
Current liabilities	Before Dist.	8,778,672	12,271,542	16,763,342	14,703,104	33,709,907
	After Dist.	Note 2	16,871,542	38,463,342	25,582,392	37,831,724
Non-current liabilities		3,041,281	817,557	915,173	3,961,010	17,622,088
Total Liabilities	Before Dist.	11,819,953	13,089,099	17,678,515	18,664,114	51,331,995
	After Dist.	Note 2	17,689,099	39,378,515	29,543,402	55,453,812
Equity attributable to owners of the parent		153,812,027	152,011,553	164,907,298	131,999,865	85,542,818
Common stock		30,935,939	30,733,649	31,032,389	29,863,340	27,485,658
Advance receipts for share capital		36,264	3,475	6,488	-	-
Capital surplus		32,451,689	32,005,339	33,557,005	27,277,191	11,523,007
Retained earnings	Before Dist.	94,546,574	91,457,122	103,367,925	74,898,497	39,092,585
	After Dist.	Note 2	86,857,122	81,667,925	64,019,209	34,970,768
Other equity		(3,011,507)	(1,041,100)	(273,834)	(39,163)	7,789,101
Treasury stock		(1,146,932)	(1,146,932)	(2,782,675)	-	(347,533)
Non-controlling interest		-	-	-	115,323	102,329
Total equity	Before Dist.	153,812,027	152,011,553	164,907,298	132,115,188	85,645,147
	After Dist.	Note 2	147,411,553	143,207,298	121,235,900	81,523,330

Note 1: The Financial Statements from the past five years have been audited by KPMG.

Note 2: The proposed distribution of 2020 earnings has yet not been approved by the Annual General Meeting.

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2. Condensed statement of comprehensive income

		Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item		Five-Year Financial Summary (Note)
		2020	2019	2018	2017	2016
Operating revenues		61,005,514	51,727,458	84,721,804	54,918,224	41,632,505
Gross profit		15,691,578	16,494,087	46,616,003	24,644,147	12,851,093
Operating income		8,434,474	9,516,820	39,355,470	18,791,300	8,552,235
Non-operating income and expenses		556,743	1,708,462	2,228,867	23,039,231	17,173,495
Income before income tax		8,991,217	11,225,282	41,584,337	41,830,531	25,725,730
Profit from Continuing Operation		7,686,041	9,824,599	39,360,850	40,294,624	23,728,585
Income (Loss) from Discontinued Operation		`－`	`－`	`－`	`－`	`－`
Net income (Loss)		7,686,041	9,824,599	39,360,850	40,294,624	23,728,585
Other comprehensive income of the term (Net income after tax)		(1,966,996)	(802,668)	(247,580)	(7,897,606)	7,871,871
Total comprehensive income		5,719,045	9,021,931	39,113,270	32,397,018	31,600,456
Net Income attributable to owners of theparent		7,686,041	9,824,599	39,361,625	40,281,927	23,721,277
Net income attributable to non-controllinginterests		`－`	`－`	(775)	12,697	7,308
Total comprehensive income attributable to owners of theparent		5,719,045	9,021,931	39,114,045	32,384,321	31,593,148
Total comprehensive income attributable to Non-controllinginterest		`－`	`－`	(775)	12,697	7,308
Earnings	Before adjustment	2.51	3.23	12.8	14.36	8.67
per share	After adjustment	`－`	`－`	`－`	`－`	`－`

Note: The Financial Statements from the past five years have been audited by KPMG.

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3. Condensed Statements of Financial Position – Stand-alone by IFRSs

Unit: NT$ thousands

Year Item	Year Item	Five-Year Financial Summary (Note1)	Five-Year Financial Summary (Note1)	Five-Year Financial Summary (Note1)	Five-Year Financial Summary (Note1)	Five-Year Financial Summary (Note1)
		2020	2019	2018	2017	2016
Current assets		41,860,123	35,276,840	71,765,971	61,632,067	24,563,252
Property, plant and equipment		79,696,505	85,513,880	95,339,823	86,218,545	67,886,857
intangible assets		1,258,380	296,710	45,881	136,442	272,185
Other assets		42,809,464	44,006,010	36,014,363	2,529,325	43,987,041
Total assets		165,624,472	165,093,440	203,166,038	150,516,379	136,709,335
Current liabilities	Before Dist.	8,776,884	12,267,524	37,346,075	14,580,862	33,378,569
	After Dist.	Note 2	16,867,524	59,046,075	25,460,150	37,501,417
Non-current liabilities		3,035,561	814,363	912,665	3,935,652	17,787,948
Total Liabilities	Before Dist.	11,812,445	13,081,887	38,258,740	18,516,514	51,166,517
	After Dist.	Note 2	17,681,887	59,958,740	29,395,802	55,289,365
Equity attributable to owners of the parent		－	－	－	－	－
Common stock		30,935,939	30,733,649	31,032,389	29,863,340	27,485,658
Advance receipts for share capital		36,264	3,475	6,488	-	-
Capital surplus		32,451,689	32,005,339	33,557,005	27,277,191	11,523,007
Retained earnings	Before Dist.	94,546,574	91,457,122	103,367,925	74,898,497	39,092,585
	After Dist.	Note 2	86,857,122	81,667,925	64,019,209	34,969,737
Other equity		(3,011,507)	(1,041,100)	(273,834)	(39,163)	7,789,101
Treasury stock		(1,146,932)	(1,146,932)	(2,782,675)	－	(347,533)
Non-controlling interest		`－`	－	－	－	－
Total equity	Before Dist.	153,812,027	152,011,553	164,907,298	131,999,865	85,542,818
	After Dist.	Note 2	147,411,553	143,207,298	121,120,577	81,419,970

Note 1: The Financial Statements from the past five years have been audited by KPMG.

Note 2: The proposed distribution of 2020 earnings has yet not been approved by the Annual General Meeting.

134

4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－	4. Condensed Balance Sheets and Statements of Operations– Stand-alone by IFRSs Unit: NT$thousands Year Item Five-Year Financial Summary (Note) 2020 2019 2018 2017 2016 Operating revenues 60,700,390 51,475,494 84,269,952 54,086,251 41,023,122 Gross profit 15,416,122 16,233,371 46,292,143 24,257,260 12,503,534 Operating income 8,343,289 9,449,910 39,248,107 18,706,036 8,520,796 Non-operating income and expenses 630,729 1,758,464 2,318,431 23,087,047 17,174,078 Income before income tax 8,974,018 11,208,374 41,566,538 41,793,083 25,694,874 Profit from Continuing Operation 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Income (Loss) from Discontinued Operation `－` `－` －－－ Net income (Loss) 7,686,041 9,824,599 39,361,625 40,281,927 23,721,277 Other comprehensive income of the term (Net income after tax) (1,966,996) (802,668) (247,580) (7,897,606) 7,871,871 Total comprehensive income 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Net Income attributable to owners of theparent `－` －－－－ Net income attributable to non- controllinginterests `－` －－－－ Total comprehensive income attributable to owners of the parent 5,719,045 9,021,931 39,114,045 32,384,321 31,593,148 Total comprehensive income attributable to non-controllinginterests `－` －－－－ Earnings per share (NT$) Before adjustment 2.51 3.23 12.8 14.36 8.67 After adjustment `－` －－－－
Year Item		Five-Year Financial Summary (Note)
		2020	2019	2018	2017	2016
Operating revenues		60,700,390	51,475,494	84,269,952	54,086,251	41,023,122
Gross profit		15,416,122	16,233,371	46,292,143	24,257,260	12,503,534
Operating income		8,343,289	9,449,910	39,248,107	18,706,036	8,520,796
Non-operating income and expenses		630,729	1,758,464	2,318,431	23,087,047	17,174,078
Income before income tax		8,974,018	11,208,374	41,566,538	41,793,083	25,694,874
Profit from Continuing Operation		7,686,041	9,824,599	39,361,625	40,281,927	23,721,277
Income (Loss) from Discontinued Operation		`－`	`－`	－	－	－
Net income (Loss)		7,686,041	9,824,599	39,361,625	40,281,927	23,721,277
Other comprehensive income of the term (Net income after tax)		(1,966,996)	(802,668)	(247,580)	(7,897,606)	7,871,871
Total comprehensive income		5,719,045	9,021,931	39,114,045	32,384,321	31,593,148
Net Income attributable to owners of theparent		`－`	－	－	－	－
Net income attributable to non- controllinginterests		`－`	－	－	－	－
Total comprehensive income attributable to owners of the parent		5,719,045	9,021,931	39,114,045	32,384,321	31,593,148
Total comprehensive income attributable to non-controllinginterests		`－`	－	－	－	－
Earnings	Before adjustment	2.51	3.23	12.8	14.36	8.67
per share (NT$)	After adjustment	`－`	－	－	－	－

Note: The Financial Statements from the past five years have been audited by KPMG.

135

(II) Condensed Statements of Comprehensive Income– by ROC GAAP

NTC has used the International Financial Reporting Standard(s) since 2013. Please refer to the information in the above table for 2016-2020 financial data.

(III) Auditors’ Opinions from the past five years

Year	Accounting firm	CPA's Name	Auditing Opinion
2016	KPMG Certified Public AccountantsFirm	Delphi Chen and Isabel Lee	An Unqualified Opinion Subsequent to Revision
2017	KPMG Certified Public AccountantsFirm	Delphi Chen and Astor Kou	An Unqualified Opinion Subsequent to Revision
2018	KPMG Certified Public AccountantsFirm	Astor Kou and DelphiChen	An Unqualified Opinion Subsequent to Revision
2019	KPMG Certified Public AccountantsFirm	Astor Kou and Hsin- Yi Kuo	An Unqualified Opinion Subsequent to Revision
2020	KPMG Certified Public AccountantsFirm	Astor Kou and Hsin- Yi Kuo	Unmodified Opinion

136

II. Five-Year Financial Analysis

(I) Financial Analysis – Consolidated by IFRSs

Item	Year	Year	Five-Year Financial Analysis	Five-Year Financial Analysis	Five-Year Financial Analysis	Five-Year Financial Analysis	Five-Year Financial Analysis
			2020	2019	2018	2017	2016
Capital structure	Debt ratio (%)		7.13	7.92	9.68	12.37	37.47
	Long-term Fund to Property, Plant and Equipment Ratio (%)		196.73	178.68	173.89	157.78	152.04
Liquidity	Current ratio (%)		874.21	593.75	491.47	424.44	74.79
	Quick ratio (%)		695.98	432.73	408.39	366.56	55.90
	Times interest earned (times)		686.46	3440.11	7240.61	92.00	37.47
Operating performance	Accounts receivable turnover (times)		8.04	6.06	9.26	7.68	7.42
	Days sales outstanding		45.39	60.23	39.41	47.52	49.19
	Inventory turnover (times)		2.81	2.32	3.99	5.15	5.33
	Accounts payable turnover (times)		18.80	9.67	9.58	6.74	8.02
	Inventory turnover days		129.89	157.32	91.47	70.87	68.48
	Property, plant and equipment turnover(times)		0.73	0.57	0.93	0.71	0.70
	Total assets turnover (times)		0.36	0.29	0.50	0.38	0.34
Profitability	Return on total assets (%)		4.65	5.65	23.61	28.27	20.17
	Return on total equity (%)		5.02	6.20	26.50	37.00	33.77
	Pre-tax income to paid-in capital ratio (%)		29.05	36.52	133.97	140.07	93.59
	Net margin (%)		12.59	18.99	46.45	73.37	56.99
	Earnings per share (NT$)	Before adjustment	2.51	3.23	12.8	14.36	8.67
		After adjustment	`－`	`－`	－	－	－
Cash flow	Current Ratio (%)		257.57	141.84	287.79	154.33	47.30
	Quick Ratio (%)		85.43	84.72	112.59	112.39	106.63
	Times Interest Earned (Times)		6.23	-1.56	13.67	8.00	4.33
Leverage	Operating leverage		2.71	2.51	1.30	1.45	1.70
	Financial leverage		1.00	1.00	1.00	1.02	1.08
Reasons for changes in financial ratios in recent two years. (Analysis not necessary if the change does not reach 20%) 1. Current and quick ratio increased in 2020 due to the decrease in current liabilities. Times interest earned decreased in 2020 due to the decrease in pre-tax profit. 2. Accounts receivable turnover, property, plant and equipment turnover, and total assets turnover increased in 2020 due to the increase in sales volume and revenue; average inventory turnover days decreased due to the increase in operating costs in 2020, which resulted in higher inventory turnover. 3. Overall profitability decreased in 2020 due to the decrease in net profit and pre-tax profit. 4. Current ratio and case reinvestment ratio both increased in 2020 due to the increase in net cash inflow from operating activities and decrease in cash dividends.

Note: The Financial Statements from the past five years have been audited by KPMG.

137

(II) IFRS – Standalone

Item	Year	Year	Financial analysis for the most recent five	Financial analysis for the most recent five	Financial analysis for the most recent five	Financial analysis for the most recent five	years
			2020	2019	2018	2017	2016
Capital structure	Debt ratio (%)		7.13	7.92	18.83	12.30	37.42
	Long-term Fund to Property, Plant and Equipment Ratio(%)		196.80	178.71	173.92	157.66	152.21
Liquidity	Current ratio (%)		476.93	287.56	192.16	422.69	73.58
	Quick ratio (%)		299.24	126.92	154.92	365.31	55.11
	Times interest earned (times)		690.08	3588.82	7806.92	92.47	37.83
Operating performance	Accounts receivable turnover (times)		7.71	5.80	8.74	7.18	6.98
	Days sales outstanding		47.34	62.93	41.76	50.83	52.29
	Inventory turnover (times)		2.81	2.33	4.02	5.22	5.44
	Accounts payable turnover (times)		18.79	9.67	9.62	6.69	8.02
	Inventory turnover days		129.89	156.65	90.79	69.92	67.09
	Property, plant and equipment turnover(times)		0.73	0.56	0.92	0.70	0.69
	Total assets turnover (times)		0.36	0.27	0.47	0.37	0.34
Profitability	Return on total assets (%)		4.65	5.33	22.26	28.31	20.23
	Return on total equity (%)		5.02	6.20	26.51	37.03	33.81
	Pre-tax income to paid-in capital ratio(%)		28.99	36.46	133.91	139.94	93.48
	Net margin (%)		12.66	19.08	46.70	74.47	57.82
	Earnings per share(NT$)	Before adjustment	2.51	3.23	12.8	14.36	8.67
		After adjustment	`－`	`－`	－	－	－
Cash flow	Current Ratio (%)		248.57	136.72	128.77	152.27	48.17
	Quick Ratio (%)		84.15	83.75	111.84	112.25	109.19
	Times Interest Earned (Times)		5.96	-1.79	13.62	7.80	4.40
Leverage	Operating leverage		2.73	2.52	1.30	1.45	1.70
	Financial leverage		1.00	1.00	1.00	1.02	1.08
Reasons for changes in financial ratios in recent two years. (Analysis not necessary if the change does not reach 20%) 1. Current and quick ratio increased in 2020 due to the decrease in current liabilities. Times interest earned decreased in 2020 due to the decrease in pre-tax profit. 2. Accounts receivable turnover, property, plant and equipment turnover, and total assets turnover increased in 2020 due to the increase in sales volume and revenue; average inventory turnover days decreased due to the increase in operating costs in 2020, which resulted in higher inventory turnover. 3. Overall profitability decreased in 2020 due to the decrease in net profit and pre-tax profit. 4. Current ratio and case reinvestment ratio both increased in 2020 due to the increase in net cash inflow from operating activities and decrease in cash dividends.

Note: The Financial Statements from the past five years have been audited by KPMG.

138

Formulas for financial analysis are as follows:

Capital structure
(1) Debt ratio ＝ Total liabilities / Total assets
(2) Long-term fund to property, plant and equipment ratio ＝(Total equity + non-current liabilities) / Net property, plant and equipment
Liquidity
(1) Current ratio ＝Current assets / Current liabilities
(2) Quick ratio ＝ (Current assets – inventory – prepaid expenses) / Current liabilities
(3) Times interest earned ＝ Net Income before tax and interest expenses / Interest expenses
Operating performance
(1) Account receivable turnover (including accounts receivable and notes receivable) ＝ Net sales / Average account receivable (including account receivable and notes receivable) balance
(2) Days sales outstanding ＝ 365 / Receivable turnover
(3) Inventory turnover ＝ Cost of goods sold / Average inventory
(4) payable turnover (including accounts payable and notes payable) ＝ Cost of goods sold /Average account payable (including account payable and notes payable) balance
＝
(5) Inventory turnover days 365 / Inventory turnover
＝
(6) Property, plant and equipment turnover Net sales / Average net property, plant and equipment
(7) Total assets turnover ＝Net sales / Average total assets
Profitability
(1) Return on total assets ＝ [Net income after tax + interest expense x (1-interest rate)] / Average total assets
(2) Return on total equity ＝ Net income after tax / Average shareholders’ equity
(3) Net margin = Net income / Net sales
(4) Earnings per share = (Net income - preferred stock dividend) / Weighted average number of shares outstanding
Cash flow
(1) Cash flow ratio ＝ Net cash flow provided by operating activities / Current liabilities
(2) Cash flow adequacy ratio ＝ Five-year sum of cash from operations / Five-year sum of capital expenditures, inventory additions, and cash dividend
(3) Cash flow reinvestment ratio = (Cash provided by operating activities - cash dividends) / (Gross property, plant and equipment + long-term investments + other noncurrent assets + working capital)
Leverage
(1) Operating leverage ＝ (Operating revenues – variable cost and expense) / Operating Income
(2) Financial leverage ＝ Operating income / (Operating income – interest expenses)
(III) Financial Analysis – by ROC GAAP

NTC has used the International Financial Reporting Standard(s) since 2013. Please refer to the information in the above table for 2016-2020 financial analysis data.

139

III. Audit Committee’s Review Report for the Most Recent Year:

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements (including consolidated and Stand-alone statements), and Proposal for Profits Distribution. The CPA firm of KPMG has audited the Financial Statements and issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Nanya Technology Corporation. According to the Article of the Securities and Exchange Act and Article of the Company Law, we hereby submit this report.

Nanya Technology Corporation

Chairman of the Audit Committee: Ching-Chyi Lai

February 26, 2021

140

IV. Consolidated Financial Statements for the Past Year Please refer to Appendix A of the Annual Report.
V. Stand-alone Financial Statements for the Most Recent Year Reviewed and Certified by Independent Auditors

Please refer to Appendix B of the Annual Report.

VI. The Company should disclose the financial impact to the Company if the Company and its affiliated companies have incurred any financial or cash flow difficulties in the most recent year and as of the date of this Annual Report: None

141

G. Financial Status, Operating Results and Risk Management

I. Financial Status

Unit: NT$ thousands

			Unit: NT$ thousands	Unit: NT$ thousands
Year			Difference
	2020	2019
Item			Amount	%

Current assets	76,744,601	72,862,627	3,881,974	5.3
Non-current assets	88,887,379	92,238,025	(3,350,646)	(3.6)
Total Assets	165,631,980	165,100,652	531,328	0.3
Current liabilities	8,778,672	12,271,542	(3,492,870)	(28.5)
Non-current liabilities	3,041,281	817,557	2,223,724	272.0
Total Liabilities	11,819,953	13,089,099	(1,269,146)	(9.7)
Common stock	30,935,939	30,733,649	202,290	0.7
Advance receipts for share capital	36,264	3,475	32,789	943.6
Capital surplus	32,451,689	32,005,339	446,350	1.4
Retained earnings	94,546,574	91,457,122	3,089,452	3.4
Other equity interest	(3,011,507)	(1,041,100)	(1,970,407)	189.3
Treasury shares	(1,146,932)	(1,146,932)	0	-
Total equity	153,812,027	152,011,553	1,800,474	1.2

Explanation for Significant Changes:

Current liabilities: Mainly due to the decrease in accounts/other payables and current tax liabilities.
Non-current liabilities: Mainly due to the increase in non-current lease liabilities.
Advance receipts for share capital: Mainly due to the increase in employee stock options which change of registration has not been completed.
Other equity interest: Mainly due to the increase in exchange differences on translation of foreign financial statements.

142

II. Financial performance

(I) Consolidated Report – IFRSs

Unit: NT$ thousands

Year Item	2020	2020	2019	2019	Change (amount)	%
Operating revenues Cost of goods sold Gross profit Operating expenses Operating income Non-operating income and expenses Income before income tax Minus: Income tax expense Net income	61,005,514 45,313,936		51,727,458 35,233,371		9,278,056 10,080,565 (802,509) 279,837 (1,082,346) (1,151,719) (2,234,065) (95,507) (2,138,558)	17.9 28.6 (4.9) 4.0 (11.4) (67.4) (19.9) (6.8) (21.8)
	15,691,578 7,257,104 8,434,474 556,743 8,991,217 1,305,176 7,686,041		16,494,087 6,977,267 9,516,820 1,708,462 11,225,282 1,400,683 9,824,599
		8,434,474 556,743 8,991,217 1,305,176
		7,686,041		9,824,599

Analysis for Significant Changes:

Cost of goods sold: Mainly due to the increase in bit shipment.
Non-operating income and expenses: Mainly due to the loss in the exchange differences on translation.
Net income: Mainly due to the decrease in operating income and non-operating income.

(II) Gross Profit Variance Analysis – Consolidated Report by IFRSs:

Unit: NT$ thousands

	Variances
Item	between 2020		Effect of	variances
	and 2019
		Average selling			Bit shipment
			Cost variances	Product mix
Gross profit	(802,509)	price variances			variances

		(7,656,942)	2,394,533	35,035	4,424,865

Average selling price variances: The decrease of average selling price had negative impact on the variances.
Cost variances: The higher ratio of 20nm products in the current period had a positive effect on unit cost.

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Product mix: The higher ratio of higher margin products had positive effect on product portfolio.
Bit shipment variances: The increase of bit shipment had positive effect on the variances.

III. Cash Flow

(I) Cash Flow Analysis for 2020

				Unit: NT$ thousands	Unit: NT$ thousands
		Net cash used		Remedy for insufficient
Cash	Annual net cash
		in investing	Cash surplus	cash
balance,	flow from operating
		and financing	(deficit)
beginning	activities			Investment	Financing
		activities	(1)+(2)-(3)
(1)	(2)			plan	plan
		(3)

44,148,979	22,612,037	(15,035,110)	51,725,906	−	−

Operating activities: Net cash inflows from operations this year was NT$22.6 billion, and was mainly due to net income of NT$7.7 billion and depreciation of NT$14.2 billion.
Cash outflow from investing activities: Cash outflow from investing activities this year was approximately NT$8.8 billion, was mainly due to an increase of NT$8.5 billion in property, plant and equipment.
Cash outflow from financing activities: Cash outflow from financing activities this year was approximately NT$4.1 billion, and was mainly due to cash dividends of NT$4.6 billion.
Remedies for insufficient cash: None

Liquidity:

Liquidity:
Year
	December 31, 2020	December 31, 2019	Change (%)
Item

Current Ratio (%)	257.57	141.84	81.59
Quick Ratio (%)	85.43	84.72	0.84
Times Interest Earned
	6.23	(1.56)	(499.36)
(Times)

Explanation for significant changes:

(1) Current Ratio: Mainly due to the increase in cash inflow from operations and decrease in Current liabilities.
(2) Time’s interest earned: Mainly due to the increase in cash inflow from operations and decrease in cash dividends.

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(II) Cash flow projection for next year:

I) Cash flow projection for next year:	I) Cash flow projection for next year:	I) Cash flow projection for next year:	I) Cash flow projection for next year:
				Unit: NT$ thousands
	Annual net cash			Remedy for insufficient
Cash balance,
	flow from	Annual	Cash surplus	cash
beginning
	operating	cash outflow	(deficit)	Investment	Financing
Balance
	activities			plan	plan


51,725,906	31,290,808	(19,600,000)	63,416,714	─	─

Cash inflow from operating activities in the coming year is expected to be approximately NT$31.3 billion. Cash outflow is expected to be NT$19.6 billion, and will mainly be for the capital expenditures and cash dividends; our cash balance will be approximately NT$63.4 billion.

IV. Major Capital Expenditures

			Unit: NT$ thousands	Unit: NT$ thousands
Project	Sources of Funding	Total Funds Required (2020 and 2019)	Actual Capex AMT
			2020	2019
Production and factory equipment and other capital expenditures.	Working capital	13,972,695	8,476,438	5,496,257

The abovementioned capital expenditures will increase our output to 70,000 WSPM.

V. Reinvestment Policy, Cause of Gain or Loss, Corrective Action, and Investment Plan for the Coming Year Plan

Plan for the Coming Year Plan	Plan for the Coming Year Plan	Plan for the Coming Year Plan
			Unit: NT$ thousands; December 31, 2020
Description Item	Investment	Policy	Cause of Gain or Loss	Improvement plan	Other investment plan
NTC-USA	20,392	Selling of semiconductor products	Gained NT$18,263 from investment	－	－
Nanya-Delaware	36,005	Designing of semiconductor products	Gained NT$17,632 from investment	－	－
Nanya-HK	66,271	Selling of semiconductor products	Gained NT$9,535 from investment	－	－
Nanya-Japan	20,161	Selling of semiconductor products	Lost NT$15,847 from investment	Strengthen business development and costdown	－
Nanya-Europe	30,056	Selling of semiconductor products	Gained NT$4,242 from investment	－	－
NTC-Shenzhen	28,080	Selling of semiconductor products	Gained NT$3,681 from investment	－	－
Nanya Technology International, Ltd.	37,004,400	Investment business	Gained NT$547,446 from investment	－	－

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VI. Risk Management

(I) Risk Associated with Interest Rates, Foreign Exchange and Inflation:
1.Interest rate: We do not have any interest bearing debt and our current assets exceed current liabilities. Our cash is mainly invested in shortterm investments, future interest rate fluctuations should have no material impact on our profits & losses.
2.Foreign exchange: The functional currency of the Company is NTD. However, since DRAM products are mainly transacted in US dollars, over 90% of the company's revenues are in US dollars. Since over 50% of our capital expenditures each year is paid in USD or other foreign currencies, so we need to maintain an appropriate USD cash position. However, we also need to exchange USD to maintain daily operations and pay cash dividends and employee bonuses. At present, we dynamically adjust our USD cash position each month based on our future USD-denominated asset and debt position, so as to lower the effect of exchange rate fluctuations. In order to minimize the impact to the Company’s profits and losses from exchange rate fluctuation, the Company can also buy/sell Foreign Exchange Forward for hedging purposes, if needed.
3.Inflation: According to the announcement by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, the annual growth rate of Consumer Price and Core Consumer Price in 2020 is -0.23% and 0.35%, respectively, the impact on our profitability was insignificant.
(II) Risks Associated with High-risk/high-leveraged Investment; Lending, Endorsements, and Guarantees for Other Parties; and Financial Derivative Transactions:
High-risk or high-leveraged investments: The Company did not engage in any high-risk or high-leveraged investments in 2020.
Lending to others: We did not lend funds to others in 2020. All lending operations are carried out in accordance with the Company’s “The Procedure of Loans of Funds to Others”.
Endorsements and guarantees: We did not provide any endorsements and guarantees in 2020. The transactions and procedures related to lending and endorsement are based on the Company’s “The

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Procedure of Making Endorsements or Guarantees”.

Financial derivative transactions: We engaged in financial derivative transactions to avoid market risks caused by exchange rate and interest rate fluctuations, and not for arbitrage or speculation. Transactions are executed in accordance with laws and regulations promulgated by the competent authority, IFRSs, “Handling Procedures to Engage in the Derivative Transaction of Products”, and “Foreign Currency Transactions and Risk Management Regulations”.
(III) Future Research & Development Plans and Expected R&D Spending:

We will continue to develop 10nm advanced process technology and products. We estimate R&D expenses at approximately NT$6.3 billion in 2021, an increase of 23% compared to 2020.

(IV) Risks Associated with Changes in the Government Policies and Regulatory Environment:

NTC pays close attention to changes in domestic and international politics and economic situations, major policy formation, and regulation amendments. Professional training is provided to NTC employees as needed. The following summarizes major regulatory changes related to our finances and operations from 2020 to February 28, 2021: Pursuant to the "Regulations Governing the Chartered Capacity on Electricity Consumption Agreements Which the Users Shall Install Renewable Energy Facilities for Exceeding a Certain Capacity" in Announcement Ling-Jing-Neng-Zi No. 10904606910 of the Ministry of Economic Affairs dated December 31, 2020, starting on January 1, 2021, where the chartered capacity on an electricity consumption agreement reaches 5,000 kWh and above, the user shall install or provide a location for the installation of renewable energy generation equipment, energy storage equipment, or purchase renewable energy or certificates exceeding a certain capacity. The capacity of renewable energy equipment that the user is obligated to install is calculated at 10% the average chartered capacity in the previous year, and the obligation must be met within 5 years (2025). The Regulations also specify deductibles for existing renewable energy equipment and early completion.

(V) Impact of recent technological and market changes on the Company's finance and business, and response measures:

Market supply and demand has a significant effect on prices in the DRAM

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industry. New manufacturers will damage the balance between supply and demand and cause prices to drop. China's DRAM manufacturers are the most likely to join the market in the future. It is our understanding that Chinese manufacturers currently are not engaging in any technical collaborations with major manufacturers, and it will not be easy for Chinese manufacturers to develop their own technology in the short-term as they continue to face intellectual property right lawsuits and pressure from the US-China trade conflict. However, we still need to pay attention to their development and adopt countermeasures to reduce operational risks.

We will continue to research and develop new technologies and products, actively expand the market with higher added value, and increase the proportion of revenue from markets, such as automotive, industrial, Netcom, etc., to reduce operational risks and reduce the impact of DRAM made in China.

(VI) Impact of corporate image change on risk management and response measures:

NTC “keep inquiring to the very root” and “rest only when perfection is achieved” and insist on such determination to face problems openly and solve problems with practical methods. Also, we constantly keep the idea of “work hard, rest only when perfection is achieved, devote ourselves to society, and sustainable management.”

(VII)Risks Associated with Mergers and Acquisitions: None
(VIII)Risks Associated with Capacity Expansion:

Please see VII. “Financial Status, Operating Results and Risk Management”: 4. Major Capital Expenditures. NTC will take the best operational strategy for capacity expansion plans or production adjustments depending on customer needs, market supply and demand and funding sources.

(IX) Risks Associated with Sales Concentration and Purchase Concentration:
Concentration of sales

Please refer to V. Operations overview (IV) Suppliers/Customers that Accounted for at Least 10% of Annual Procurement/Sales in the most recent two years. Kingston and Huawei accounted for more than 10% of sales in 2020, and all other customers accounted for less than 10%. Hence, the risk of sales concentration is acceptable.

2. Concentration of purchase

Please refer to V. Operations overview (IV) Suppliers/Customers that Accounted for at Least 10% of Annual Procurement/Sales in the most recent

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two years. The Company continued to adjust the ratio of supply to diversify the risk of purchase, and there is no supplier accounted for more than 10% of purchase in 2020. We still have multiple sources and qualified suppliers to ensure the stability and quality of manufacturing materials. Therefore, the risk of purchase concentration risk is minimal.

(X) Potential Impact and Risks Associated with Sales of Significant Numbers of Shares by Nanya’s Directors, Supervisors, and/or Major Shareholders Who Own 10% or More of Nanya’s Total Outstanding Shares: None
(XI) Risks Associated with Change in Management: None
(XII)Risks Associated with Litigation:
In mid of 2010, Nanya Technology Corporation (“Nanya”), other manufacturers and individuals were alleged to international cartel in the industry for DRAM, which may have effected the Brazilian market. This case is currently being reviewed by the courts in the Federative Republic of Brazil. We have engaged counsels to deal with the case to protect our interests.
In October, 2016, Lone Star Silicon Innovations accused Nanya Technology Corporation and its subsidiaries (collectively "Nanya") in U.S District Court of East Texas for patent infringement. The Plaintiff has revoked the case in April, 2021, and then the case is closed.
The U.S.-based Monterey Research LLC. accused Nanya Technology Corporation and subsidiaries Nanya Technology USA and Nanya Technology Delaware in the U.S. District Court for the District of Delaware for patent infringement in November 2019. We have engaged counsels to properly handle the case to protect our rights and interests.
(XIII)Other Material Risks:
Guidelines of internal material information
- (1) We uphold the principles of "diligence, perseverance, frugality and trustworthiness" and have established a strict code of conduct. We hope that employees will take responsibility for their actions at work and in life and comply with the code of conduct and code of ethics. Employees are strictly prohibited from leaking trade secrets, giving false information, obtaining fraudulent personal gains, or spreading rumors.
- (2) The Company has a "Personnel Management Rules" and informs the Employee that, without written permission, it shall not disclose any

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internal information to the public, nor shall it be used for personal or other business purposes.

(3) We also established Spokesperson Guidelines to provide a complete set of principles for handling information transparency and material abnormalities in our factories. Except from the spokesperson, all employees are prohibited from disclosing information and data on company policy, business, or financial position to the public to prevent violating the law and insider trading.
Information Security Risks:
(1) We have an Information Security Section responsible for planning, implementation, auditing, and improvement of information security management, and we established related management regulations and handling guidelines. All of our applications, operating system, and network systems have layers of control and protection mechanisms to prevent disasters, data corruption, and theft of trade secrets. These effectively control our corporate information system risks and maintain business continuity. To ensure our information security and establish a trustworthy environment for information access, our information security principles are as follows:
- A. Comply with regulatory requirements and raise information security awareness.
- B. Value risk management and protect data safety.
- C. Engage all employees in the pursuit of continuous improvement.
(2) Information Security Policy of the Company:

We insist to strengthen our information confidentiality, integrity and availability, to protect the rights and interests of our customers, stockholders, employees and suppliers, and to take corporate social responsibility.

(3) We have planned and implemented robust information security measures as described below:
A. We adopted the defense-in-depth architecture with sensitive data encryption, endpoint protection, and network gateway protection, which are supported by network access control, document output management, and e-mail protection mechanisms. We also installed metal detectors for controlled information security products, so as

150

to prevent external cyberattacks and internal leaks.

  - B.  Door access control for sensitive areas, system user identity authentication, password control, access right control, periodic vulnerability scanning, and website penetration testing. We also installed anti-virus software, updated security patches, controlled USB access, and established a backup mechanism to strengthen endpoint protection.

  - C.  We installed an information security system to prevent hackers and computer viruses or malware from affecting information system services or accessing confidential data, and also prevent the theft of confidential data or extortion through social engineering.

  - D.  We provide employees with annual information security education, training, testing, and e-mail social engineering drills to raise their awareness of information security risks.

  - E.  Each year we examine our information security measures and regulations, follow information security issues, and formulate response plans to ensure their appropriateness and effectiveness.

  - F.  In addition to the Company itself, we have expanded our information security to the entire supply chain. Equipments must pass a security inspection when entering our factories before they may be used. We also signed an information security clause with vendors and their employees to prevent attacks through our supply chain.

(4) Obtain the international certification ISO/IEC 27001:2013 Information Security Management System (ISMS):
- A. The scope includes providing DRAM technology transfer documents and information on process technologies we independently developed, as well as their ISMS, including maintenance of related facilities, network services, and the development, operation, and maintenance of information systems.
- B. Nanya Technology Corporation has achieved confidentiality, integrity, and availability through information security management, protecting the rights and interests of customers, partners, shareholders, employees, and suppliers, while fulfilling our CSR.
Response measures for the COVID-19 pandemic:

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(1) Establish an Pandemic Response Task Force:

We establish an Pandemic Response Task Force on January 30, 2020 in response to the COVID-19 pandemic. The special assistant of the President's Office serves as the commander and directly reports to the President. The task force is responsible for establishing, implementing, and providing guidance for pandemic prevention measures and tasks in response to developments in the pandemic and government regulations each day.

(2) Pandemic prevention measures:

We strictly enforce pandemic prevention measures with high standards in coordination with government regulations, in order to protect the health of our employees, suppliers, and visitors. There have been no abnormalities so far.

A. Internal pandemic prevention measures include a work model that divides employees into different groups, areas, and work hours, employees of overseas subsidiaries work at home, and all factory personnel have their temperatures taken, wear masks, and maintain healthy diets.
B. External pandemic prevention measures include visitor control and replacing business trips with video/telephone conferences.
(3) Supply Chain Management:
A. Manufacturing and outsourced packaging and testing are all carried out in Taiwan and not impacted by the pandemic.
B. Our suppliers of raw materials and parts and components currently have not been affected.
- (a) Shipments and transportation in the supply chain are currently normal.
- (b) Increase stocking in factories and at suppliers.
- (c) Increase the sources of suppliers to disperse risk.
(4) Customer support:

Exert every effort to assist customers in maintaining stable production lines, ensure the flexibility of their supply chain, and give priority to satisfying customers' needs.

(5) Subsequent actions:

Continue to closely monitor developments in the pandemic, and take necessary measures to ensure that overall operations and

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shipments remain normal.

4. Emerging risks:

(1) Growingly strict environmental protection laws have increased the uncertainty of obtaining building permits for factories, and has affected the schedule for factory construction:

With consideration to resource integration, cluster effect, and production efficiency, our land for expansion of current and future factories is located in industrial parks in New Taipei City. Unlike other semiconductor companies that give priority to industrial parks that have completed the environmental impact assessment, our factory expansions still need to complete environmental impact assessments required by environmental protection laws. Due to the growingly strict laws and additional expenses that may be needed for environmental protection facilities, as well as the growingly complex administrative procedures, being unable to fully grasp the application process may drag out administrative procedures and affect the operations of current factories or planning of future expansions. To lower this risk, we will periodically review the contents of environmental impact assessment laws to stay up-to-date on regulatory requirements and future trends, and will carefully select an experienced consulting company that has a good relationship with the competent authority to assist in our application. Before submitting an application for an environmental impact assessment, the consulting company will first provide an explanation to the Environmental Protection Administration (EPA), so that fewer reviews will be needed. We will maintain close contact with the EPA after submitting our application, and request guidance from the EPA. If necessary, we will convene meetings for preliminary reviews and reviews to shorten our response time. We will reserve space when planning and designing new factories in the future, so that we will be able to respond to future regulatory changes.

(2) The cost of purchasing renewable energy may gradually increase:

Some of our customers have become corporate members of the international initiative RE100, and they have made a written request that products sold to them must be green products. Hence, we will need to use renewable energy for production and manufacturing, and expect even more customers to make this request in the future. The Executive

153

Yuan announced that the "Regulations Governing the Chartered Capacity on Electricity Consumption Agreements Which the Users Shall Install Renewable Energy Facilities for Exceeding a Certain Capacity" will come into effect on January 1, 2021. Hence, we must complete renewable energy generation devices or purchase renewable energy equal to 10% of the chartered capacity on our electricity consumption agreements in 2025, in order to fulfill this obligation, which will increase our operating costs. If the installation of renewable energy generation equipment in Taiwan does not meet expectations in the next 5 years, there will be insufficient supply in the market, and the cost of purchasing electricity may increase in the future, or we might need to invest in renewable energy generation equipment, which will increase our operating costs. To lower this risk, we will purchase renewable energy from renewable energy companies or evaluate the feasibility of investing in solar power equipment ahead of schedule, and plan to install renewable energy equipment or purchase renewable energy and certificates reaching 8% of the chartered capacity on our electricity consumption agreements in 2023 (the law provides an early bird program).

(3) Risk of insufficient talent retention and recruitment:

Taiwanese business began returning to Taiwan in 2020 due to COVID-19 and US-China trade tensions. This increased investments in Taiwan and the demand on human resources. The booming semiconductor and electronics industries in Taiwan led to even more investments and a rapid increase in demand on talent in Taiwan. TSMC raised its base pay at the end of 2020, and other companies in the same industry and other industries have followed, creating even more severe competition for talent. Due to the growingly severe low birth rates and insufficient qualified labor in Taiwan (population projections of the National Development Council show growingly severe low birth rates and aging population; the working age population between the ages of 15 and 64 peaked in 2015, and the declined every year after), as well as the significant increase in demand on labor after our new factory is completed, we will face the risk of difficult talent recruitment and retention. In response to the factors described above, we will adjust our salary structure to offer more competitive salaries; strengthen retention measures, including talent development, employee benefits, and

154

incentives; begin talent recruitment on campus, especially in universities in northern Taiwan (geographic considerations); begin talent recruitment and training in advance to strengthen talent recruitment and retention according to the progress of factory expansion.

VII. Other Important Matters: None

155

H. Other Special Notes

I. Profiles of affiliates and subsidiaries

(I) Consolidated Operation Report of Affiliates

1. Summary of NTC’s Subsidiaries

(1) Subsidiary Chart:

==> picture [433 x 244] intentionally omitted <==

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

December 31, 2020
Nanya-USA
100 %
Nanya-Delaware
100 %
Nanya-Europe
100 %
Nanya-HK
Nanya Technology Corp.
100 %
NTC-Shenzhen
Nanya-Japan 100 %
100 %
Nanya Technology
International, Ltd.
100 %
----- End of picture text -----

==> picture [6 x 15] intentionally omitted <==

156

(2) Subsidiary Information:

Unit: Thousands; December 31, 2020

Name of Subsidiary	Date of Incorporation	Address	Capital Stock	Business Activities
Nanya-USA	1997.04	1735 Technology Drive, Suite 400, San Jose, CA 95110	US$ 720	Selling of semiconductor products.
Nanya-Delaware	2008.10	245 Commerce Green Blvd. #210, Sugar Land, TX 77478	US$ 1,100	Designing of semiconductor products.
Nanya-HK	2002.04	7thFloor, Citicorp Centre, 18 Whitfield Road, Causeway Bay, HongKong	HKD 15,366	Selling of semiconductor products.
Nanya-Japan	2002.09	8F Moriden Building, 3-9-9 Mita, Minato-ku,Tokyo, 108-0073, Japan	JPY 70,000	Selling of semiconductor products.
Nanya-Europe	2002.09	Pempelforter Strasse 50, 40211 Duesseldorf, Germany	EUR 800	Selling of semiconductor products.
NTC-Shenzhen	2006.08	201-209, 2nd Floor, Building 2, Nanyou 4th Industrial Zone, No.1124, Nanshan Avenue, Nanguang Community, Nanshan Subdistrict, Nanshan District, Shenzhen City	US$ 985	Selling of semiconductor products.
Nanya Technology International, Ltd. (Note 1)	2018.11	Vistra Corporate Services Centre, Wickhams Cay II,Road Town, Tortola,VG1110,British Virgin Islands	US$ 1,200,000	General investments

(3) Shareholders in Common of NTC and Its Subsidiary with Deemed Control and Subordination: None

(4) Businesses covered by the affiliated enterprises' overall operations

The subsidiary overall is engaged in research, development, design, manufacturing and sale of semiconductor products. NTC-USA, NTC-Japan, NTC-HK, NTC-Europe and NTC-Shenzhen those are selling semiconductor products on behalf of NTC. Nanya Technology International, Ltd. is engaged in general investments.

157

(5) Directors, Supervisors and Presidents of NTC’s Subsidiaries

December 31, 2020

Name of Subsidiary	Title	Name or Representative	Shareholding
			Shares (Amount of contribution)	Shareholding percentage
Nanya-USA	Chairman Director Director Director President	Pei-Ing Lee Rex Chuang Rex Chen Brian Donahue Brian Donahue	－－－－－ Nanya Technology Corporation holds 2,400 shares	－－－－－ 100%
Nanya-Delaware	Chairman Director Director Director President	Pei-Ing Lee Chi-Meng Su Joseph Wu Douglas Lewellen Douglas Lewellen	－－－－－ Nanya Technology Corporation holds 1 shares	－－－－－ 100%
Nanya-HK	Director Director Director President	Pei-Ing Lee Lin-Chin Su Rex Chen Pei-Ing Lee	－－－－ Nanya Technology Corporation holds 19,700 shares	－－－－ 100%
Nanya-Japan	Representativ e Director Representativ e Director Director Director Director Supervisor President	Pei-Ing Lee Chin-Lu Pan Lin-Chin Su Joseph Wu Rex Chen Hung-Chi Kuo Chin-Lu Pan	－－－－－－－ Nanya Technology Corporation holds 1,000 shares	－－－－－－－ 100%

158

Name of Subsidiary	Title	Name or Representative	Shareholding	Shareholding
			Shares (Amount of contribution)	Shareholding percentage
Nanya-Europe	Managing Director	Jean-Louis Freart	- (Invested EUR800,000 through Nanya-HK)	- 100%
NTC-Shenzhen	Chairman Director Director Supervisor President	Pei-Ing Lee Lin-Chin Su Rex Chen Hung-Chi Kuo Johnny Wang	－－－－－ (Invested US$985,000 through Nanya-HK)	－－－－－ 100%
Nanya Technology International, Ltd.	Director Director	Chia Chau, Wu Pei-Ing Lee	－－ Nanya Technology Corporation holds 1,200 shares	－－ 100%

159

(6) Operational Highlights of NTC's Subsidiaries:

Unit: NT$ thousands; December 31, 2020

Name of Subsidiary	Capital	Total assets	Total liabilities	Net worth	Operating revenues	Operating income	Profit or loss for the current period (After-tax)	Earnings per share (NT$) (NT$; After-tax)
Nanya-USA	20,392	1,611,569	1,442,229	169,340	9,326,370	24,021	18,263	7,609
Nanya-Delaware	36,005	195,825	23,832	171,993	454,105	21,624	17,632	17,632,128
Nanya-HK	66,271	593,976	523,361	70,614	2,957,465	14,990	9,535	484
Nanya-Japan	20,161	914,367	747,594	166,772	3,899,518	30,018	(15,847)	(15,847)
Nanya-Europe	30,056	553,411	482,230	71,181	2,730,971	8,960	4,242	-
NTC-Shenzhen	28,080	23,330	4,362	18,968	50,943	4,407	3,681	-
Nanya Technology International, Ltd.	37,004,400	34,357,531	38	34,357,492	-	(92)	547,446	-

Note: Daily exchange rate used in the report:

(1)Total assets, Total liabilities 1USD = NT$28.508 ； Operating revenue, Operating income, Net income 1USD

= NT$29.5675 。

(2)Total assets, Total liabilities 1JPY = NT$0.2724 ； Operating revenue, Operating income, Net income 1JPY (3)Total assets, Total liabilities 1EUR = NT$34.56 ； Operating revenue, Operating income, Net income 1EUR

(2)Total assets, Total liabilities 1JPY = NT$0.2724 ； Operating revenue, Operating income, Net income 1JPY = NT$0.2757 。 (3)Total assets, Total liabilities 1EUR = NT$34.56 ； Operating revenue, Operating income, Net income 1EUR = NT$33.5964 。 (4)Total assets, Total liabilities 1HKD = NT$3.6257 ； Operating revenue, Operating income, Net income 1HKD = NT$3.7946 。 (5)Total assets, Total liabilities 1CNY = NT$4.3058 ； Operating revenue, Operating income, Net income 1CNY = NT$4.2683 。

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(II) Consolidated Financial Statements of Affiliated Enterprises

1. Representation Letter

Representation Letter

The entities that are required to be included in the combined financial statements of Nanya Technology Corporation as of and for the year ended 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 Accounting Standards No.10 by the Financial Supervisory Commission, “Consolidated and Separate Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Nanya Technology Corporation and Subsidiaries do not prepare a separate set of combined financial statements. It is hereby declared

Company name: Nanya Technology Corportion

Chairman: Chia Chau, Wu

Date: February 26, 2021

  2. Consolidated Financial Statements of Affiliated Enterprises: same as NTC’s Financial Statements.

(III) Consolidated Business Reports of Affiliated Enterprises: None
II. Private Placement Securities in the past year and up to the date of report: None
III. Holding or disposal of stocks of the Company by subsidiaries in the past year and up to the date of report: None
IV. Other supplemental information: None
V. Any Events in the past year and up to the date of report that Had Significant Impacts on Shareholders’ Right or Share Prices as Stated in Item 3 Paragraph 2 of Article36 of Securities and Exchange Law of Taiwan: None

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Appendix A

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Report For the Years Ended December 31, 2020 and 2019

Stock Code:2408

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors� Report For the Years Ended December 31, 2020 and 2019

Address: No.98, Nanlin Rd., Dake Vil., Taishan Dist., New Taipei City, Taiwan (R.O.C.) Telephone:(02)2904-5858

The independent auditors� report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors� report and consolidated financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Representation Letter
4. Independent Auditors� Report
5. Consolidated Balance Sheets
6. Consolidated Statements of Comprehensive Income
7. Consolidated Statements of Changes in Equity
8. Consolidated Statements of Cash Flows
9. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Information on major shareholders
(14) Segment information

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Representation Letter

The entities that are required to be included in the combined financial statements of Nanya Technology Corporation as of and for the year ended 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 International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Nanya Technology Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Nanya Technology Corporation Chairman: JIA-ZHAO, WU Date: February 26, 2021

) Telephone + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet home.kpmg/tw

Independent Auditors� Report

To the Board of Directors of Nanya Technology Corporation:

Opinion

We have audited the consolidated financial statements of Nanya Technology Corporation (�the Company�) and its subsidiaries (�the Group�), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of another auditor (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (�IFRSs�), International Accounting Standards (�IASs�), Interpretations developed by the International Financial Reporting Interpretations Committee (�IFRIC�) or the former Standing Interpretations Committee (�SIC�) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors� Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (�the Code�), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the report of another auditor, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of Formosa Advanced Technologies Co., Ltd., an investment in other accounted for using the equity method of the Group. The financial statements were audited by another auditor, whose audit report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Formosa Advanced Technologies Co., Ltd., is based solely on the audit report of another auditor. The aforementioned investment accounted for using the equity method constituted 3.04% of the consolidated total assets as of December 31, 2019 and the share of profit of associates accounted for using the equity method constituted 1.64% of the consolidated total profit before tax for the period from January 1 to December 31, 2019.

The company has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion and an unmodified opinion with another matter paragraph, respectively..

4-1

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of inventories

Please refer to Notes 4(h), 5, as well as 6(c) for details on accounting policy, judgments and major sources of estimation uncertainty, as well as disclosure on information about inventory valuation, respectively.

The Group recognizes a loss from the devaluation of inventories on a quarterly basis based on the lower of cost or net realizable value method. The international market price of DRAM has significantly affected the net realizable value of inventories. Therefore, the evaluation of inventory has been identified as a key audit matter in the consolidated financial statements.

The principal audit procedures performed to address the aforementioned key audit matter included understanding the basis adopted by the management in the estimate of net realizable value, and sampling to test the reasonableness of the net realizable value.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the audit committee) are responsible for overseeing the Group's financial reporting process.

Auditors� Responsibilities for the Audit of the Consolidated Financial Statements

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

4-2

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group�s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management�s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group�s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors� report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors� report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. Furthermore, we remain solely responsible for our audit opinion.

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

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

4-3

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

The engagement partners on the audit resulting in this independent auditors� report are Hui-Chih Ko and HsinYi Kuo.

KPMG

Taipei, Taiwan (Republic of China) February 26, 2021

Notes to Readers

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Nanya Technology Corporation and Subsidiaries

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(a)) 1160 Notes receivable due from related parties, net (Notes 6(b)(n) and 7) 1170 Accounts receivable, net (Note 6(b)(n)) 1180 Accounts receivable due from related parties, net (Note 6(b)(n) and 7) 1200 Other receivables (Note 6(g)) 1310 Inventories (Note 6(c)) 1410 Prepayments Total current assets Non-current assets: 1550 Investments accounted for using equity method (Note 6(d)) 1600 Property, plant and equipment (Note 6(e)(t) and 7) 1755 Right-of-use assets (Note 6(f) and 7) 1780 Intangible assets (Notes 6(t)) 1840 Deferred tax assets (Notes 6(j)) 194D Long-term financial lease payments receivable (Note 6(g)) 1990 Other non-current assets (Note 8) Total non-current assets Total assets	December 31, 2020 Amount % $ 51,725,906 31 - - 7,867,928 4 8,237 - 1,496,119 1 14,126,982 9 1,519,429 1 76,744,601 46 5,160,505 3 79,728,620 49 1,790,192 1 1,258,380 1 353,567 - 483,436 - 112,679 - 88,887,379 54 $ 165,631,980 100	December 31, 2019 Amount % 44,148,979 27 41,545 - 7,291,735 4 - - 1,620,743 1 18,122,496 11 1,637,129 1 72,862,627 44 5,019,236 3 85,530,112 52 99,222 - 296,710 - 555,885 - 689,886 1 46,974 - 92,238,025 56 165,100,652 100 Liabilities and Equity Current liabilities: 2170 Accounts payable 2180 Accounts payable to related parties (Note (7)) 2200 Other payables (Note 6(t)) 2220 Other payables to related parties (Note 7) 2230 Current tax liabilities 2280 Current lease liabilities (Notes 6(h) and 7) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2570 Deferred tax liabilities (Note 6(j)) 2580 Non-current lease liabilities (Notes 6(h) and 7) 2640 Net defined benefit liability, non-current (Note 6(i)) 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity (Note 6(k)): 3110 Ordinary shares 3140 Advance receipts for share capital 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity	December 31, 2020		December 31, 2019 Amount % 2,573,759 2 133,199 - 6,650,153 4 1,205,857 1 1,515,896 1 99,924 - 92,754 - 12,271,542 8 1,197 - - - 575,896 - 240,464 - 817,557 - 13,089,099 8 30,733,649 19 3,475 - 32,005,339 20 13,128,412 8 273,834 - 78,054,876 47 (1,041,100) (1) (1,146,932) (1) 152,011,553 92 165,100,652 100
			Amount %
			$ 2,027,096 1 84,678 - 4,211,470 2 1,069,910 1 1,131,327 1 178,432 - 75,759 - 8,778,672 5 4,042 - 1,617,652 1 566,283 - 853,304 1 3,041,281 2 11,819,953 7 30,935,939 19 36,264 - 32,451,689 20 14,110,871 8 1,041,100 1 79,394,603 48 (3,011,507) (2) (1,146,932) (1) 153,812,027 93 $ 165,631,980 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except Earnings Per Share)

2020
Amount
%
4000
Operating revenue (Note 6(n) and 7)
$ 61,005,514
100
5000
Operating costs (Notes 6(c)(e)(f)(i)(l)(o) and 7)
(45,313,936)
(74)
Gross profit from operations
15,691,578
26
Operating expenses (Notes 6(e)(f)(i)(l)(o) and 7):
6100
Selling expenses
(791,263)
(2)
6200
Administrative expenses
(1,327,969)
(2)
6300
Research and development expenses
(5,137,872)
(8)
Total operating expenses
(7,257,104)
(12)
Net operating income
8,434,474
14
Non-operating income and expenses (Notes 6(d)(e)(g)(h)(p) and 7):
7100
Interest income
681,235
1
7020
Other gains and losses, net
(578,270)
(1)
7050
Finance costs
(13,117)
-
7055
Expected credit impairment gain
-
-
7060
Share of profit of associates accounted for using equity method, net
466,895
1
Total non-operating income and expenses
556,743
1
7900
Profit from continuing operations before tax
8,991,217
15
7950
Income tax expenses (Note 6(j))
(1,305,176)
(2)
Profit
7,686,041
13
8300
Other comprehensive income (loss) (Note 6(i)(j)(k)):
8310
Components of other comprehensive income (loss) income that will not be reclassified to
profit or loss
8311
Remeasurements of the net defined benefit
3,767
-
8320
Share of other comprehensive income (loss) of associates accounted for using equity
method, components of other comprehensive income (loss) that will not be reclassified
to profit or loss
(14,316)
-
8349
Income tax related to components of other comprehensive income (loss) that will not be
reclassified to profit or loss
754
-
Components of other comprehensive income (loss) that will not be reclassified to
profit or loss
(11,303)
-
8360
Components of other comprehensive (loss) income that will be reclassified to profit or
loss
8361
Exchange differences on translation of foreign financial statements
(1,955,693)
(4)
8399
Income tax related to components of other comprehensive income (loss) that will be
reclassified to profit or loss
-
-
Components of other comprehensive (loss) income that will be reclassified to
profit or loss
(1,955,693)
(4)
8300
Other comprehensive (loss) income, net
(1,966,996)
(4)
8500
Comprehensive income
$
5,719,045
9
Earnings per share (Note 6(m))
9750
Basic earnings per share
$
2.51
9850
Diluted earnings per share
$
2.49

2019
Amount
%
51,727,458
100
(35,233,371)
(68)
16,494,087
32
(737,082)
(1)
(1,313,757)
(3)
(4,926,428)
(10)
(6,977,267)
(14)
9,516,820
18
1,303,594
3
214,749
1
(3,264)
-
9,508
-
183,875
-
1,708,462
4
11,225,282
22
(1,400,683)
(3)
9,824,599
19
(42,096)
-
(10,688)
-
(8,419)
-
(44,365)
-
(758,303)
(2)
-
-
(758,303)
(2)
(802,668)
(2)
9,021,931
17
3.23
3.19

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Ordinary shares	Special reserve	Unappropriated retained earnings	O	her equity interes	Total equity
			Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
$ 31,032,389 - - - - - - - - - (501,360) 202,620 30,733,649 - - - - - - - - - 202,290 $ 30,935,939	39,163 - - - - 234,671 - - - - - - 273,834 - - - - 767,266 - - - - - 1,041,100	94,136,513 9,824,599 (35,402) 9,789,197 (3,936,163) (234,671) (21,700,000) - - - - - 78,054,876 7,686,041 3,411 7,689,452 (982,459) (767,266) (4,600,000) - - - - 79,394,603	(179,736) - (758,303) (758,303) - - - - - - - - (938,039) - (1,955,693) (1,955,693) - - - - - - - (2,893,732)	(94,098) - (8,963) (8,963) - - - - - - - - (103,061) - (14,714) (14,714) - - - - - - - (117,775)	164,907,298
					9,824,599 (802,668)
					9,021,931
					- - (21,700,000) 19 150,116 (1,029,878) - 662,067
					152,011,553
					7,686,041 (1,966,996)
					5,719,045
					- - (4,600,000) 14 58,420 79 622,916
					153,812,027

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Expected credit impairment gain Interest expense Interest income Share-based payments Share of profit of associates accounted for using equity method Gain or loss on disposal of property, plant and equipment Reversal of impairment loss on non-financial assets Unrealized foreign exchange loss Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Notes and accounts receivable (including related parties) Other receivables Inventories prepayments Accounts payable (including related parties) Other payables (including related parties) Other current liabilities Net defined benefit liability Other non-current liabilities Total net changes in operating assets and liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Decrease in lease and installment receivables Increase in other non-current assets Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Increase (decrease) in guarantee deposits received Decrease in other payables to related parties Payment of lease liabilities Cash dividends paid Exercise of employee share options Payments to acquire treasury shares Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		2020 $ 8,991,217 14,214,238 236,477 - 13,117 (681,235) 58,420 (466,895) 6,642 - 70,894 (30,748) 13,420,910 (579,243) 121,995 3,995,514 117,700 (291,755) (2,262,463) (16,995) (5,846) (6,429) 1,072,478 23,484,605 623,784 (12,770) (1,483,582) 22,612,037 - (8,476,438) 71 (72,994) (878,657) 264,330 (759) 311,324 (8,853,123) 63,246 (3,450) (188,459) (4,600,000) 622,916 - (4,105,747) (2,076,240) 7,576,927 44,148,979 $ 51,725,906	2019 11,225,282

			14,326,287 91,126 (9,508) 3,264 (1,303,594) 150,116 (183,875) (4,424) (213,282) 94,027 -
			12,950,137
			2,372,242 (397,933) (5,954,759) 121,244 (429,964) (1,870,902) 91,186 (3,503) 9,720
			(6,062,669)
			18,112,750 1,313,286 (422) (2,018,607)
			17,407,007
			(2,049,483) (5,496,257) 4,729 (1,773) (164,666) 264,331 (9,319) 210,056
			(7,242,382)
			(297,469) (4,175) (184,115) (21,700,000) 662,067 (1,029,878)
			(22,553,570)
			(846,082)
			(13,235,027) 57,384,006
			44,148,979

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Nanya Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

Nanya Technology Corporation (the �Company�) was legally established with the approval of the Ministry of Economic Affairs on March 4, 1995, with registered address at No.98 Nanlin Road Dake Vil., Taishan District, New Taipei City, Taiwan. The main operating activities of the Company and its subsidiary (the �Group�) are researching, developing, manufacturing and selling semiconductor products, and the import and export of its machinery, equipment and raw materials.

(2) Approval date and procedures of the consolidated financial statements:

The consolidated financial statements were authorized for issuance by the Board of Directors on February 26, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (�IFRSs�) endorsed by the Financial Supervisory Commission, R.O.C. (�FSC�) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

Amendments to IFRS 3 �Definition of a Business�

Amendments to IFRS 9, IAS39 and IFRS7 �Interest Rate Benchmark Reform�
Amendments to IAS 1 and IAS 8 �Definition of Material�
Amendments to IFRS 16 �COVID-19-Related Rent Concessions�
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

Amendments to IFRS 4 �Extension of the Temporary Exemption from Applying IFRS 9�

Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 �Interest Rate Benchmark Reform Phase 2�

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
�Classification of Liabilities as
Current or Non-current�

Content of amendment
Effective date per
IASB
The amendments aim to promote consistency
in applying the requirements by helping
companies
determine
whether,
in
the
statement of balance sheet, debt and other
liabilities with an uncertain settlement date
should be classified as current (due or
potentially due to be settled within one year)
or non-current.
The amendments include clarifying the
classification
requirements
for
debt
a
company might settle by converting it into
equity.
January 1, 2023

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 �Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture�
IFRS 17 � Insurance Contracts� and amendments to IFRS 17 � Insurance Contracts�
Amendments to IAS 16 �Property, Plant and Equipmentt Proceeds before Intended Use� Amendments to IAS 37 �Onerous Contracts Cost of Fulfilling a Contract�
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 �Reference to the Conceptual Framework�

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as �the Regulations�) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, ROC. (hereinafter referred to IFRS as endorsed by the FSC).

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Basis of preparation
(i) Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis except the defined benefit liabilities are measured at fair value of the plan assets less the present value of the defined benefit obligation.

(ii) Functional and presentation currency

The functional currency of the Group is determined based on the primary economic environment in which the entities operate. The consolidated financial statements are presented in New Taiwan Dollar, which is the Group's functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group �controls� an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

Changes in the Group�s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly disposed of the related assets or liabilities.

(ii) List of subsidiaries included in the consolidated financial statements:

Investor	The name of subsidiaries	Business activity	Shareholding
			December 31, 2020 December 31, 2019 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
The Company The Company The Company The Company	NANYA TECHNOLOGY CORP. U.S.A NANYA TECHNOLOGY CORP. Delaware NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. Japan	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	The name of subsidiaries	Business activity	Shareholding
			December 31, 2020 December 31, 2019 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
The Company NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. H.K.	NANYA TECHNOLOGY INTERNATIONAL LTD. NANYA TECHNOLOGY CORP., Europe GmbH NANYA TECHNOLOGY CORP. Shenzhen	General investment business Sales of semiconductor products Sales of semiconductor products

(iii) Subsidiaries not included in the consolidated financial statements: None.

(d) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into thefunctional currency at the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss.

(ii) Foreign operations

The assets and liabilities of foreign operations are translated to the Group's functional currency at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to the Group's functional currency at average rate. Foreign currency differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planed nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under any one of the following conditions. All other assets are classified as non-current.

(i) The asset is expected to be realized, or intended to be sold or consumed, in the Group's normal operating cycle;
(ii) The asset is held primarily for the purpose of trading;
(iii) The asset is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under any one of the following conditions. All other liabilities are classified as non-current.

(i) The liability is expected to be settled in the normal operating cycle;
(ii) The liability is held primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The liability does not have any unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(f) Cash and cash equivalents

Cash comprises cash on hand, checks and cash in bank. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes are classified under cash equivalents.

(g) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Financial assets

1) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables (including related parties), other receivable, leases receivable and guarantee deposit paid).

The Group measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for note and trade receivables due from related parties are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group�s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 60 days past due.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is �creditimpaired� when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

a breach of contract such as a default or being more than 60 days past due;

the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group�s procedures for recovery of amounts due.

2) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

(ii) Financial liabilities and equity instruments

1) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

2) Financial liabilities

Financial liabilities are classified as FVTPL. Foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged cancelled or expired. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid is recognized in profit or loss.

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in acquiring the inventories, production costs and other costs incurred in bringing them to their existing location and condition. The cost of inventories is calculated using the weighted-average method. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group� s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate�s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group�s interests in the associate.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the Company�s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Group�s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under capital surplus. If the capital surplus resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Group�s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(j) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and any accumulated impairment losses.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives.

Land is not depreciated.

The estimated useful lives of significant items of property, plant and equipment has an unlimited useful life and therefore are as follows:

1)	buildings	25 years
2)	Machinery and equipment	5~16 years
3)	Other equipment	3~15 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Leases

(i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

1) the contract involves the use of an identified asset � this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the customer has the right to direct the use of the asset throughout the period of use only if either:
- the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
- the relevant decisions about how and for what purpose the asset is used are predetermined and:
  - the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
  - the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.
(ii) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group�s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;

variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or

there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of dormitory, plants, parking lots and offices that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Group recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor�s net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of �other income�.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Intangible assets
(i) Recognition and measurement

Intangible assets, patents that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use.

The estimated useful lives of patent for current and comparative periods are both 5~10 years.

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-derivative financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets to determine whether there is any indication of impairment. If any such indication exists, then the asset�s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from an acquisition about an investment accounted for using the equity method is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU value in use fair value less costs to sell.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset�s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Revenue recognition

Revenue form contracts with customers is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer.

The Group manufactures and sells semiconductor products on the market. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer�s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

(o) Employee benefits

(i) Defined contribution plan

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plan

The Group�s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income , and accumulated in retained earnings. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(p) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The grant date of a share-based payment is the date which the board of directors authorized the price and number of a share-based payments.

(q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future;and,

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) The same taxable entity; or
2) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improve.

(r)

Earnings per share

The Group discloses the Company�s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee stock options and employee compensation.

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group�s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the Regulations and the IFRSs endorsed by the FSC, requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor its accounting estimates and assumptions. It recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements are as follows:

Judgment of whether the Group has substantive control over its investees

The Group holds 32% of the voting shares of Formosa Advanced Technologies Co., Ltd (FATC), whose shareholders hold 68% of its remaining shares, where 31% of the voting rights are concentrated in a specific shareholder, Formosa Taffeta Co. Ltd., resulting in the Group for failing to obtain more than half of the total number of FATC�s directors and voting rights at a shareholders� meeting. Therefore, it is determined that the Group has only significant influence over FATC.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to Note 6(c) for details of the valuation of inventories.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Petty cash Checking accounts and demand deposit Cash equivalents: Time deposits Commercial paper Repurchase agreements collateralized by corporate bonds	December 31, 2020 $ 108 14,820,415 34,398,887 2,014,416 492,080 $ 51,725,906	December 31, 2019
		147 4,119,539 39,215,453 454,300 359,540
		44,148,979

Refer to Note 6(q) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

(b) Notes and accounts receivable

Notes receivable-related parties from non-operating activities Accounts receivable (including related parties)-measured at amortized cost	December 31, 2020 $ - 7,876,165 $ 7,876,165	December 31, 2019
		41,545 7,291,735
		7,333,280

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for notes and accounts receivables (including related parties). To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information.

The loss allowance provision for notes and account receivable (including related parties) was determined as follows:

December 31, 2020	December 31, 2020
Notes and accounts receivables (including related parties) $ 7,825,234 50,931 $ 7,876,165	Weighted average loss rate - -	Loss allowance provision
		- -
		-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2019	December 31, 2019
Notes and accounts receivables (including related parties) $ 7,283,834 49,446 $ 7,333,280	Weighted average loss rate - -	Loss allowance provision
		- -
		-

The movement in the allowance for notes and accounts receivable was as follows:

Balance on January 1, Reversal of impairment losses Foreign exchange gains Balance on December 31,	For the year ended December 31, 2020 2019 $ - 9,298 - (9,508) - 210 $ - -	For the year ended December 31, 2020 2019 $ - 9,298 - (9,508) - 210 $ - -
	2020 $ - - - $ -
		-

Please refer to Note 6(q) for other information of credit risk.

Raw materials Work in progress Finished goods	December 31, 2020 $ 350,906 6,578,665 7,197,411 $ 14,126,982	December 31, 2019 381,848 7,329,074 10,411,574
		18,122,496

The Group recognized cost of goods sold amounting to $44,906,712 and $34,716,236 for the years ended December 31, 2020 and 2019, respectively.

The Group did not recognize any loss or gain from devaluation of inventories as there was no indication of impairment or net realizable value of inventories has increased because the circumstance that caused the inventory devaluation in prior period has improved on inventories for the years ended December 31, 2020 and 2019.

(d) Investments accounted for using equity method

A summary of the Group�s financial information for investments accounted for using the equity method at the reporting date is as follows:

Associates	December 31, 2020 $ 5,160,505	December 31, 2019 5,019,236 (Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The related information of the major associate to the Group was as follows:

Percentage of ownership Name of Associates Nature of Relationship to the Group Registration Country December 31, 2020 December 31, 2019 Formosa Advanced Technologies Co., Ltd. (FATC) It mainly engages in assembling and testing of module products, as well as in the research and development of integrated circuits. Taiwan % 32.00 % 32.00 The fair value of major associates listed on the Stock Exchange was as follows: December 31, 2020 December 31, 2019 Formosa Advanced Technologies Co., Ltd. $ 16,716,000 16,494,889 The aggregated financial information of the major associate was as follows:	Nature of Relationship to the Group	Registration Country	Percentage of ownership	Percentage of ownership
				16,494,889

The financial information of FATC was as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net asset Net asset contributed to FATC Operating revenue Profit Other comprehensive loss Total comprehensive income Total comprehensive income contributed to FATC	December 31, 2020 December 31, 2019 $ 7,816,528 6,631,748 5,792,482 6,643,175 (1,238,254) (1,250,356) (555,589) (594,494) $ 11,815,167 11,430,073 $ 11,815,167 11,430,073 For the year ended December 31, 2020 2019 $ 9,706,776 9,457,849 $ 1,402,677 1,262,496 (44,738) (83,445) $ 1,357,939 1,179,051 $ 1,357,939 1,179,051

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Share of net assets of the major associate at January 1
Acquisition of share of net assets of the major associate
allocated to the Group
Total comprehensive income contributed to the Group
Uncollected dividends beyond the collection period which are
reclassified to capital surplus
Cash dividends contributed to the Group
Share of net assets of major associate at December 31
Add: good will
Less: unrealized profits on upstream sales net assets of the
associates
Total carrying amount of the major associate

For the year ended
December 31,
2020
2019
$ 3,657,624
2,157,732
-
1,474,005
434,540
235,924
14
19
(311,324)
(210,056)
3,780,854
3,657,624
1,463,162
1,463,162
(83,511)
(101,550)
$
5,160,505
5,019,236

2020
$ 3,657,624
-
434,540
14
(311,324)
3,780,854
1,463,162
(83,511)
$
5,160,505

(e) Property, plant and equipment

Cost: Balance as of January 1, 2020 Additions Disposals Reclassification Effect of exchange rate change Balance as of December 31, 2020 Balance as of January 1, 2019 Additions Disposals Reclassification Effect of exchange rate change Balance as of December 31, 2019 Accumulated depreciation / impairment: Balance as of January 1, 2020 Depreciation for the period Disposals Reclassification Effect of exchange rate change Balance as of December 31, 2020 Balance as of January 1, 2019 Depreciation for the period Reversal of impairment loss Disposals Reclassification Effect of exchange rate change Balance as of December 31, 2019	Land $ 1,013,924 - - - - $ 1,013,924 $ 1,013,924 - - - - $ 1,013,924 $ - - - - - $ - $ - - - - - - $ -	Building 8,157,551 - (12,660) - (28) 8,144,863 7,740,635 - - 416,922 (6) 8,157,551 2,295,380 319,859 (5,965) - (23) 2,609,251 1,978,349 317,039 - - - (8) 2,295,380	Machinery and equipment 195,903,720 872,893 (846,932) 3,127,446 (1,777) 199,055,350 180,746,435 2,052,813 (102,453) 13,209,013 (2,088) 195,903,720 119,651,185 13,653,945 (846,914) (30,696) (1,023) 132,426,497 106,196,034 13,772,529 (213,282) (102,148) (180) (1,768) 119,651,185	Other equipment 919,015 62,119 (154,494) 10,808 (706) 836,742 1,132,778 44,373 (258,379) 365 (122) 919,015 766,657 47,127 (154,494) (802) (120) 658,368 986,840 38,112 - (258,379) 180 (96) 766,657	Under construction 2,249,124 7,429,580 - (3,306,847) - 6,371,857 13,886,443 1,988,981 - (13,626,300) - 2,249,124 - - - - - - - - - - - - -	Total 208,243,334 8,364,592 (1,014,086) (168,593) (2,511)
						215,422,736 204,520,215 4,086,167 (360,832) - (2,216)
						208,243,334 122,713,222 14,020,931 (1,007,373) (31,498) (1,166)
						135,694,116 109,161,223 14,127,680 (213,282) (360,527) - (1,872)
						122,713,222

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying amounts: Balance as of December 31, 2020 Balance as of December 31, 2019	Land $ 1,013,924 $ 1,013,924	Building 5,535,612 5,862,171	Machinery and equipment 66,628,853 76,252,535	Other equipment 178,374 152,358	Under construction 6,371,857 2,249,124	Total 79,728,620 85,530,112

(i) Reversal of impairment loss

The estimated future recoverable amount of equipment, which had been identified to be no longer useful for its operation, is higher than the book value. In 2019, the Group reassessed its estimates, wherein the amount of $213,282 of the initially recognized impairment has been reversed.

(f) Right-of-use assets

==> picture [446 x 328] intentionally omitted <==

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

Land
Cost
Balance at January 1, 2020 $ 297,829
Additions 1,884,277
Decrease (297,829)
Balance at December 31, 2020 $ 1,884,277
Balance at January 1, 2019 $ 300,605
Decrease (2,776)
Balance at December 31, 2019 $ 297,829
Accumulated depreciation:
Balance at January 1, 2020 $ 198,607
Depreciation for the period 193,307
Decrease (297,829)
Balance at December 31, 2020 $ 94,085
Balance at January 1, 2019 $ -
Depreciation for the period 198,607
Balance at December 31, 2019 $ 198,607
Carrying Amount:
Balance at December 31, 2020 $ 1,790,192
Balance at December 31, 2019 $ 99,222
----- End of picture text -----

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Lease receivables

(i) On June 18, 2009, the Group signed an amended long-term lease agreement with Inotera Memories, Inc. (its name was changed to Micron Technology Taiwan in March, 2017, referred to as "MTTW") on the lease of building, facilities and land located on 348, 348-1 and 348-3, Hwa Ya Section, Kueishan District, Taoyuan City. This amended lease agreement, which took effect retroactively from January 1, 2009, includes the renewal term. Initial lease term is from January 1, 2009 to December 31, 2018. However, MTTW is entitled to renew this amended lease agreement for an unlimited number of consecutive additional terms of five years each, by providing a written notice with the intention to renew the lease term commencing from January 1, 2019. MTTW has completed the renewal of its lease agreement, with a written notice on December 13, 2018. In addition, MTTW has an exclusive option to purchase the leased assets for a total purchase price of USD50,000 thousand on and after January 1, 2024. Also, the rental receivable for the entire year of 2009 has been waived. Initial yearly rentals for the leased building (including facilities and land) were USD13,010 thousand and USD1,990 thousand, respectively from January 1, 2010 to December 31, 2018; the first yearly renewal rentals for the leased building (including facilities and land) will be USD8,010 thousand and USD1,990 thousand, respectively, from January 1, 2019 to December 31, 2023; the subsequent yearly renewal rentals for the leased building (including facilities and land) will be USD10 thousand and USD1,990 thousand commencing from January 1, 2024. The amended lease agreement for the building (including facilities) is treated as a capital lease because (a) the present value of the periodic rental payments made since the inception date is at least 90% of the market value of the leased assets and (b) the lease term is equal to 75% or more of the total estimated economic life of the leased assets. The land is treated as an operating lease.
(ii) The total lease receivable from the capital lease of the building (including facilities) was $5,185,620; the implicit interest rate was 10.56%. The cost of the leased assets at the beginning of the lease period was $2,656,223. The difference was recognized as unrealized interest revenue of $2,529,397. For the years ended December 31, 2020 and 2019, the Group recognized the interest revenue of $78,316 and $96,730, respectively, from the amortization of unrealized interest revenue.

A maturity analysis of lease receivables, showing the undiscounted lease receivables to be received after the reporting date is as follows:

Less than one year One to two years Two to three years Three to four years Total lease payments receivable Unearned finance income Present value of lease payments receivable	December 31, 2020 $ 264,330 264,330 264,330 - 792,990 (103,104) $ 689,886	December 31, 2019 264,330 264,330 264,330 264,330 1,057,320 (181,420) 875,900

For credit risk information, please refers to Note 6(q).

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Lease liabilities

Current Non-current	December 31, 2020 $ 178,432 $ 1,617,652	December 31, 2019
		99,924 -

For the maturity analysis, please refer to Note 6(q).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases and low-value lease assets	For the years ended December 31	For the years ended December 31
	2020 $ 12,833 $ 91,718	2019
		2,933 81,096

The amount recognized in the statement of cash flows of the Group was as follows:

Total cash outflow for leases	For the years ended December 31,	For the years ended December 31,
	2020 $ 292,122	2019
		255,304

(i) Land lease

The Group leases its land with a period of 3 to 10 years. The lease included an option to terminate the contract, which is exercisable only by the Group and not by the lessors. The lease payment changes annually based on a local price index.

(ii) Other leases

The Group leases staff dorm, factory, parking lots and office spaces with contract terms ranging from one to five years. These leases are short-term or with low-value items. The Group applied the recognition exemptions and elected not to recognize its right-of-use assets and lease liabilities for these leases.

(i) Employee benefits

(i) Defined benefit plan

The movements in the present value of the defined benefit obligations and fair value of plan assets were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 1,108,808 (542,525) $ 566,283	December 31, 2019 1,098,174 (522,278) 575,896

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group has established an employee defined benefit retirement plan covering full-time employees. Under this plan, contributions are made to an independent fund that is deposited with Bank of Taiwan. Employees are eligible for retirement and payments of retirement benefits are based on years of service and the average salary for the last six months before the employee�s retirement according to the R.O.C. Labor Standards Law.

1) Composition of plan assets

The Labor Pension Fund Supervisory Committee manages the Group's pension fund which is being funded according to the Labor Standards Law. Under the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, this fund is required to distribute minimum income, but such minimum income shall not be less than the interest income derived from two-year time deposit with the local banks.

As of December 31, 2020, the Group's pension fund with Bank of Taiwan amounted to $542,525. Please refer to the related information published on the website of the Labor Pension Supervisory Committee concerning the utilization of the labor pension fund, related yield rate and its allocation.

2) Movements in present value of the defined benefit obligations

Defined benefit obligation as of January 1, Current service and interest costs Remeasurement of net defined benefit liabilities actuarial losses arising from change in financial assumptions Reclassification of liabilities from transfer of employees Benefits paid Defined benefit obligation as of December 31,	For the years ended December 31, 2020 2019 $ 1,098,174 1,025,794 15,266 18,052 14,987 64,451 (869) - (18,750) (10,123) $ 1,108,808 1,098,174

3) Movements in fair value of defined benefit plan assets

Fair value of plan assets as of January 1, Interest income Remeasurement of net defined liabilities return on plan assets (excluding interest income) Contributions from employer Benefits already paid by the plan Fair value of plan assets as of December 31,	For the years ended December 31, 2020 2019 $ 522,278 488,491 5,298 6,192 18,754 22,355 14,711 14,357 (18,516) (9,117) $ 542,525 522,278

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Expenses recognized in profit or loss

Current service costs Net interest income of net defined benefit liabilities Expected rate of return for the plan asset Operating costs Operating expenses	For the years ended December 31, 2020 2019 $ 4,284 5,230 10,982 12,822 (5,298) (6,192) $ 9,968 11,860 $ 6,145 7,662 3,823 4,198 $ 9,968 11,860

5) Remeasurement of net defined benefit liabilities recognized in other comprehensive income

Balance of January 1, Recognized during the period Balance of December 31, 6) Actuarial assumptions Discount rate Future salary increases	For the years ended December 31, 2020 2019 $ 57,312 23,635 (3,013) 33,677 $ 54,299 57,312 December 31, 2020 December 31, 2019 % 1.00 % 1.00 % 2.85 % 2.85

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date for 2020 is $14,216.

The weighted average duration of the defined benefit plan is 16.2 years.

7) Sensitivity analysis

		Effect of	defined
		benefit obligations
		Increase	Decrease
		Amount	Amount
December 31, 2020
Discount rate (change 0.25%)	$	37,838	(36,211)
Future salaries (change1%)		159,749	(136,769)
December 31, 2019
Discount rate (change 0.25%)		41,656	(39,743)
Future salaries (change1%)		176,405	(149,197)
			(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

The same methods and assumptions are adopted in the preparation of sensitivity analysis as in previous year.

(ii) Defined contribution plan

The Taiwanese companies of the Group contributes an amount equal to 6% of the employee�s monthly wages to the Labor Pension personal account of the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act, under which, the Group is not required to bear the regulated or putative obligation subsequent to the payment of fixed rate contribution.

The overseas companies of the Group contribute an appropriate pension amount to the designated account of the local government in accordance with the statutory laws, under which, the Group is not required to bear the regulated or putative obligation subsequent to the payment of fixed rate contribution.

The Group's pension costs under the contribution pension plan amounted to $174,957 and $158,696 for the years ended 2020 and 2019, respectively.

(j) Income tax

(i) The Group�s income tax expenses in the years 2020 and 2019 were as follows:

Current tax expense Current period Adjustment for prior periods Surtax on undistributed earnings Taxes on remitted earnings from subsidiary Deferred tax expense Tax expense	For the year ended December 31,	For the year ended December 31,
	2020 $ 1,413,672 (588,184) 171,974 103,526 204,188 $ 1,305,176	2019
		892,390 (485,929) 673,894 - 320,328 1,400,683

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amount of income tax recognized in other comprehensive income for 2020 and 2019 was as follows:

Items that could not be reclassified subsequently to profit or loss: Remeasurement of net defined benefit plan	For the year ended December 31,	For the year ended December 31,
	2020 $ (754)	2019
		8,419

Reconciliation of income tax and profit before tax for 2020 and 2019 is as follows:

Income tax calculated based on local tax rate Effect of foreign tax rate change Tax effect of permanent differences Change in unrecognized temporary difference Tax effect of unrecognized current year loss carryforward Adjustment for prior periods Surtax on undistributed earnings Taxes on remitted earnings from subsidiary Other Total	For the years ended December 31, 2020 2019 $ 1,913,649 2,445,925 (103,779) (183,605) (192,462) (168,234) (1,609) (50,986) 3,159 (829,740) (588,184) (486,048) 171,974 673,894 103,526 - (1,098) (523) $ 1,305,176 1,400,683
	2020 $ 1,913,649 (103,779) (192,462) (1,609) 3,159 (588,184) 171,974 103,526 (1,098) $ 1,305,176

(ii) Deferred tax assets and liabilities

Deferred tax assets

Impairment loss of assets Balance as of January 1, 2020 $ 155,102 Recognized in profit or loss (30,878) Recognized in other comprehensive loss - Exchange differences on translation of foreign financial statements - Balance as of December 31, 2020 $ 124,224	Improvements cost of environmental safety and factory facilities 165,032 (30,785) - - 134,247	Others 235,751 (139,507) (754) (394) 95,096	Total
			555,885 (201,170) (754) (394)
			353,567

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Impairment loss of assets Balance as of January 1, 2019 $ 234,579 Recognized in loss (79,477) Recognized in other comprehensive income - Exchange differences on translation of foreign financial statements - Balance as of December 31, 2019 $ 155,102 Deferred tax liabilities Balance as of January 1, 2020 Recognized in profit or loss Exchange differences on translation of foreign financial Balance as of December 31, 2020 Balance as of January 1, 2019 Recognized in profit or loss Exchange differences on translation of foreign financial Balance as of December 31, 2019	Improvements cost of environmental safety and factory facilities 168,625 (3,593) - - 165,032 statements statements	Others 464,107 (236,657) 8,419 (118) 235,751	Total 867,311 (319,727) 8,419 (118) 555,885 Others
			$ 1,197 3,018 (173)
			$ 4,042 $ 625 601 (29)
			$ 1,197

(iii) The Company's tax returns have been examined by the ROC tax authority through 2017.

(k) Capital and other equity

As of December 31, 2020 and 2019, the Company's total authorized capital both amounted to $300,000,000 with $10 dollars par value per share, the number of ordinary shares both were 30,000,000 thousand shares and total paid-up ordinary share amounted to $30,935,939 and $30,733,649, respectively. All issued shares were paid up upon issuance.

The movements of shares outstanding for the years ended December 31, 2020 and 2019 were as follows:

(in thousand shares)

Balance as of January 1, Exercise of employees share options Retirement of treasury shares Balance as of December 31,	Ordinary Shares 2020 2019 3,073,365 3,103,239 20,229 20,262 - (50,136) 3,093,594 3,073,365
	2020 3,073,365 20,229 - 3,093,594

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Ordinary Share

On February 26, May 6, August 6 and November 4, 2020, the Group� s Board of Directors approved to issue the Group's ordinary shares deriving from the exercise of employee share options. The Group had issued 632 thousand, 664 thousand, 17,951 thousand and 982 thousand ordinary shares at par value, with the issuing prices of $29.2, $29.2, $28.5 to $29.2 and $28.5 to $29.6 dollars per share, which totaled $202,290. All issued shares were paid up upon issuance and the related process for registration had been completed.

For the fourth quarter of 2020, the Group�s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 1,271 thousand ordinary shares, at issuing prices of $28.5 to $29.6 dollars per share, which totaled $36,264, which was recognized as advance receipts for share capital as of December 31, 2020.

On February 27, May 10, August 12 and November 8, 2019, the Group� s Board of Directors approved to issue the Group's ordinary shares deriving from the exercise of employee share options. The Group had issued 313 thousand, 89 thousand, 19,056 thousand and 804 thousand ordinary shares at par value, with the issuing prices of $33.1, $33.1, $29.2 to $33.1 and $29.2 to $30.3 dollars per share, which totaled $202,620. All issued shares were paid up upon issuance and the related process for registration had been completed.

For the fourth quarter of 2019, the Group�s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 119 thousand ordinary shares,at issuing prices of $29.2 dollars per share, which totaled $3,475, which was recognized as advance receipts for share capital as of December 31, 2019.

(ii) Capital surplus

Capital surplus
Premium from the issuance of stock Employee stock option plans Expired employee stock option plans Past due unclaimed dividends Change in equity of associates accounted for using equity method	December 31, 2020 $ 29,398,346 2,790,727 262,499 79 38 $ 32,451,689	December 31, 2019
		29,010,509 2,732,307 262,499 - 24
		32,005,339

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retain earning

According to the Company's Articles of Incorporation, the Company's annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof until the accumulated balance of legal reserve equals the total issued capital and any special reserves pursuant to relevant laws and regulations. The remainder, plus the undistributed earnings of the previous years, are distributed or left undistributed for business purposes according to the resolution of the stockholders�dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in the annual stockholders� meeting.

As it belongs to a highly capital-intensive industry with strong growth potential, the Company adopts a dividend distribution policy which is in line with its plans for product line expansion and the demand of fund. This policy requires that the distribution of cash dividends shall be equal to at least 50% of the Company's total dividend distribution every year.

1) Legal reserve

When the Group incurs no loss, it may, in pursuant to a resolution to be adopted by a shareholders� meeting, distribute its legal reserve by issuing new shares or by cash. Only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.

2) Special Reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders� equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders� equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

3) Earrings distribution

Earnings distribution for 2019 and 2018 were approved by the general meetings of shareholders were held on May 28, 2020 and May 30, 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2019	For the year ended December 31, 2019
	Dividends per share $ 1.50	Amount
		4,600,000

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2018	For the year ended December 31, 2018
	Dividends per share $ 7.11	Amount
		21,700,000

(iv) Treasury shares

The Company repurchased shares from the securities exchange market based on section 28(2) of the Securities and Exchange Act and the movement in treasury shares were as follows:

Reasons for repurchase of shares Transferring to employees Protecting th integrity and sha thousand shares Amount thousand shares 20,000 $ 1,146,932 - Reasons for repurchase of shares	Reasons for repurchase of shares Transferring to employees Protecting th integrity and sha thousand shares Amount thousand shares 20,000 $ 1,146,932 - Reasons for repurchase of shares	Reasons for repurchase of shares Transferring to employees Protecting th integrity and sha thousand shares Amount thousand shares 20,000 $ 1,146,932 - Reasons for repurchase of shares		T thousand shares 20,000 To	otal
		Protecting th integrity and sha	e Company's reholders' equity
			Amount - e Company's reholders' equity Amount 1,635,743 1,029,878 (2,665,621) -		Amount 1,146,932 tal Amount 2,782,675 1,029,878 (2,665,621) 1,146,932
Transferring	to employees Amount $ 1,146,932 - - $ 1,146,932	Protecting th integrity and sha
thousand shares 20,000 - - 20,000		thousand shares 30,445 19,691 (50,136) -		thousand shares 50,445 19,691 (50,136) 20,000

On February 27, 2019, the Company�s Board of Directors approved to retire 50,136 thousand treasury shares, resulting in a decrease in ordinary shares amounting to $501,360. The Company recognized the decrease in capital surplus of $2,164,261, with the same record date as the capital reduction, due to the book value being higher than the par value of the treasury shares. The related process for registration had been completed.

In accordance with Securities and Exchange Act requirements, the number of shares repurchased should not exceed 10 percent of all shares outstanding. Also, the value of the repurchased shares should not exceed the sum of the Company�s retained earnings, share premium, and realized capital reserves. As of September 30, 2018, the Company could repurchase no more than 310,142 thousand shares, with a total value of no more than $127,955,392. As of the same date, the Company had not yet repurchased any shares.

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Other equity (net of tax)

Balance as of January 1, 2020 Exchange differences on translation of foreign financial statements Unrealized loss from financial of assets measured at fair value through other comprehensive loss, associates accounted for using equity method Balance as of December 31, 2020 Balance as of January 1, 2019 Exchange differences on translation of foreign financial statements Unrealized gain from financial of assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance as of December 31, 2019	Exchange differences on translation of foreign financial statements $ (938,039) (1,955,693) - $ (2,893,732) $ (179,736) (758,303) - $ (938,039)	Unrealized loss from financial assets measured at fair value through other comprehensive income (103,061) - (14,714) (117,775) (94,098) - (8,963) (103,061)	Total (1,041,100) (1,955,693) (14,714) (3,011,507) (273,834) (758,303) (8,963) (1,041,100)

(l) Share-based payment

As of December 31, 2020, the Group had 3 share-based payment arrangements as follows:

Grant date Grant unit Exercise price (Notes 1-5) Deal period Vested Conditions	The 8th batch of Employee Stock Option Plan The 9th batch of Employee Stock Option Plan 2016.5.10 2016.8.11 97,500 2,500 38.0 36.6 8years 8years Duration of two years duration and at certain proportion Duration of two years duration and at certain proportion

Note 1: The Company approved to distribute its cash dividends in 2016. As a result, the exercise price of the 8th batch of the employee stock option plan was adjusted to $35.3 dollars in accordance with the offering and exercising terms and conditions of ESOP.

Note 2: The Company approved to distribute its cash dividends in 2017. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $ 34.3 dollars and $ 35.5 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 3: The Company approved to distribute its cash dividends in 2018. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $33.1 dollars and $34.3 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.
Note 4: The Company approved to distribute its cash dividends in 2019. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $29.2 dollars and $30.3 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.
Note 5: The Company approved to distribute its cash dividends in 2020. As a result, the exercise price of the 8th and 9 the batch of the employee stock option plan were adjusted to $28.5 dollars and $29.6 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.

(i) Determining the fair value of equity instruments granted

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

were as follows:
		The 8th batch	The 9th batch
		of Employee	of Employee
		Stock Option	Stock Option
		Plan	Plan
Dividend yield		% -	% -
Expected volatility		% 55.47	% 45.80
Risk-free rate		% 0.5728	% 0.529
Fair value of unit stock option (dollar)	$	18.77	15.30

Expected volatility is based on weighted average of historical volatility, and it is adjusted accordingly when there is additional market information about the volatility. The expected term of stock option is based on each of the Group's issued stock option plans. Expected dividend and risk-free rate is determined based on government bonds.

(ii) Relevant information of employee stock option plans

The Company:

The Company:
Outstanding at January 1, Options granted Options expired Options forfeited Outstanding at December 31, Options exercisable at December 31,	For the years ended December 31,
	2020 Weighted- average exercise (price TWD) Number of options (Thousand Units) $ 29.22 28,202 28.52 (21,381) - - 28.55 (2,359) 28.51 4,462 28.51 4,462	2019 Weighted- average exercise (price TWD) Number of options (Thousand Units) 34.49 109,382 29.22 (20,185) 35.60 (60,367) 29.25 (628) 29.22 28,202 29.23 5,617
	Weighted- average exercise (price TWD) $ 29.22 28.52 - 28.55 28.51 28.51	Weighted- average exercise (price TWD) 34.49 29.22 35.60 29.25 29.22 29.23
			28,202 5,617

Further details of the stock options of the Group were as follows:

Range of exercise price (dollar) Weighted average of remaining option plan period (year)	December 31, 2020 December 31, 2019 28.5~29.6 29.2~33.1 3.35~3.61 4.36~4.61

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Compensation cost

Compensation cost arising from share options granted to employees (m) Earnings per share Basic earnings per share: Net profit attributable to the Company Weighted-average number of ordinary shares outstanding Basic earnings per share (dollar) Diluted earnings per share: Net profit attributable to the Company (basic and diluted) Effect of dilutive potential ordinary shares Weighted-average number of ordinary shares (basic) Effect of employee share option Effect of employee remuneration Weighted-average number of ordinary shares (diluted) Diluted earnings per share (dollar)	For the years ended December 31,	For the years ended December 31,
	2020 2019 $ 58,420 150,116 For the years ended December 31,	2019
	2020 $ 7,686,041 3,065,482 $ 2.51 $ 7,686,041 3,065,482 8,474 8,408 3,082,364 $ 2.49	2019
		9,824,599 3,045,219
		3.23 9,824,599 3,045,219 22,392 14,052
		3,081,663
		3.19

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020
Manufacturing department $ 18,120,076 - 322,911 78,949 25,283,420 51,618 486,818 - 61,422 243,569 227,270 $ 44,876,053	Overseas sales department 1,746,814 1,512,613 1,190,737 410,401 6,919,169 496,534 1,155,251 552,366 528,538 283,916 1,333,122 16,129,461	Total
		19,866,890 1,512,613 1,513,648 489,350 32,202,589 548,152 1,642,069 552,366 589,960 527,485 1,560,392
		61,005,514

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Major products line:
Dynamic Random Access Memory
(DRAM)
Others
Primary geographic markets:
Taiwan
Japan
Malaysia
Korea
China
USA
Thailand
Germany
Vietnam
Singapore
Other countries
Major products line:
Dynamic Random Access Memory
(DRAM)
Others
(ii)
Contract balances
Notes receivable-related parties from
nonoperating activities
Notes receivable(including related
parties)
Less: allowance for impairment
Total

For the years ended December 31, 2020
Manufacturing
department
Overseas sales
department
Total
$ 44,737,923
16,128,397
60,866,320
138,130
1,064
139,194
$
44,876,053
16,129,461
61,005,514
For the years ended December 31, 2019
Manufacturing
department
Overseas sales
department
Total
$ 19,426,583
588,110
20,014,693
-
1,762,307
1,762,307
106,853
827,297
934,150
165,693
552,319
718,012
18,376,066
6,151,341
24,527,407
254,778
164,345
419,123
419,045
658,794
1,077,839
-
378,191
378,191
23,150
13,682
36,832
159,393
159,751
319,144
258,745
1,281,015
1,539,760
$
39,190,306
12,537,152
51,727,458
$ 38,981,075
12,536,039
51,517,114
209,231
1,113
210,344
$
39,190,306
12,537,152
51,727,458
December 31,
2020
December 31,
2019
January 1,
2019
$ -
41,545
481
7,876,165
7,291,735
9,772,558
-
-
(9,298)
$
7,876,165
7,333,280
9,763,741

For details on notes and accounts receivable (including related parties), and loss allowance for impairment, please refer to note 6(b).

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Remuneration to employees

According to the Group's articles of incorporation, if the Group makes a profit, it should appropriate for employee compensation which is calculated based on 1% to 12% of the Group's net income before tax before deduction of employee compensation, and after offsetting accumulated deficits, if any, should be distributed as employee compensations. Employees who are entitled to receive the above-mentioned employee compensation, in shares or cash, include the employees of the subsidiaries of the Group who meet certain specific requirements.

The estimated employee remuneration which was charged to profit or loss under operating costs or expense amounted to $600,000 and $800,000 for the years ended December 31, 2020 and 2019, respectively. This employee remuneration was estimated based on the Company's net income before tax before deducting any employee compensation, according to the earnings allocation method as stated under the Company's articles of association. If there is any difference between the actual amounts and the estimated amounts of employee remuneration to employees after the financial reports are issued, the management of the Company is expecting that the differences will be treated as a change in accounting estimates and recognized through profit or loss in the following year.

There is no difference between the estimated amounts of employee remuneration for the years ended December 31, 2020 and 2019, and he financial statements for the years ended December 31, 2020 and 2019, which were approved by the Company's Board of Directors.

(p) Non-operating income and expenses
(i) Interest income

Interest income
Interest income from bank deposits and short-term notes Interest income from financial lease receivables	For the years ended December 31, 2020 2019 $ 602,919 1,206,864 78,316 96,730 $ 681,235 1,303,594
	2020 $ 602,919 78,316 $ 681,235

(i) Other gains and losses

Gain or loss on disposal of property, plant and equipment Foreign exchange gains (losses) Reversal of impairment loss (impairment loss) on non- financial assets Others	For the years ended December 31, 2020 2019 $ (6,642) 4,424 (754,936) (186,184) - 213,282 183,308 183,227 $ (578,270) 214,749
	2020 $ (6,642) (754,936) - 183,308 $ (578,270)

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Finance costs

Financing from other related parties Amortization interest of lease liabilities Others	For the years ended December 31, 2020 2019 $ 94 140 12,833 2,933 190 191 $ 13,117 3,264	For the years ended December 31, 2020 2019 $ 94 140 12,833 2,933 190 191 $ 13,117 3,264
		2019
		140 2,933 191
		3,264

(q) Financial instruments

(i) Credit risk
1) Exposure to credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk.

2) Concentration of credit risk

The majority of the Group's customers are mostly those in the high-tech industry. In order to reduce accounts receivable credit risk, the Group continuously assesses the financial condition of its customers. If it is necessary, the Group will ask for guarantees or warranties. The Group still regularly assesses the likelihood of collectability of accounts receivable and sets aside allowance for bad debts, based on the result of management�s evaluation of the overall amounts of bad debts.

As of December 31, 2020 and 2019, the Group's major customers consisted of five customers which accounted for 45.83% and 42.66%, respectively, of accounts receivable so that management believes the concentration of credit risk.

3) Credit risk of receivables

For credit risk exposure of notes and accounts receivables, please refer to note 6(b).

Other financial assets at amortized cost includes other receivables, time deposits and refundable deposits.

Considering that the Group deals only with other external parties with good credit standing and with the above investment grade financial institutions, all of the above financial assets are considered to have low credit risk.

As of December 31, 2020 and 2019, no allowance for impairment was provided because there was no indication of credit-impaired for the 12-month ECL or lifetime ECL allowance for other financial assets measured at amortized cost.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments but excluding the impact of netting agreements:

Carrying amount $ 2,111,774 5,281,380 1,796,084	Within 6 months 2,111,774 5,281,380 100,758	6-12months - - 100,758	2-5years - - 604,549	Over 5 years
				- - 906,824
$ 9,189,238 $ 3,450 2,705,781 7,852,560 99,924	7,493,912 3,635 2,705,781 7,852,560 100,336	100,758 - - - -	604,549 - - - -	906,824 - - - -
$ 10,661,715	10,662,312	-	-	-

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

(iii) Currency risk

1) Exposure to currency risk

The Group's significant exposure to foreign currency risk was as follows:

Financial assets: Monetary items USD JPY EUR HKD Financial liabilities: Monetary items USD JPY EUR	December 31, 2020 Foreign currency (in thousands) Exchange rate (dollars) New Taiwan Dollars $ 299,515 28.508 8,538,574 770,896 0.2724 209,992 42 34.5600 1,452 1,379 3.6257 5,000 $ 115,140 28.508 3,282,411 1,272,668 0.2724 346,675 150 34.5600 5,184	December 31, 2020 Foreign currency (in thousands) Exchange rate (dollars) New Taiwan Dollars $ 299,515 28.508 8,538,574 770,896 0.2724 209,992 42 34.5600 1,452 1,379 3.6257 5,000 $ 115,140 28.508 3,282,411 1,272,668 0.2724 346,675 150 34.5600 5,184	December 31, 2019	December 31, 2019
	Foreign currency (in thousands) $ 299,515 770,896 42 1,379 $ 115,140 1,272,668 150	Exchange rate (dollars) 28.508 0.2724 34.5600 3.6257 28.508 0.2724 34.5600	Foreign currency (in thousands) 242,435 888,926 144 227,936 112,965 2,014,894 4,616	Exchange rate (dollars) New Taiwan Dollars 30.106 7,298,748 0.2763 245,610 33.6895 4,851 3.8634 880,608 30.106 3,400,924 0.2763 556,715 33.6895 155,511

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Sensitivity analysis

The Group's exposure to foreign currency risk arises from the translation of the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, accounts payable (including related parties) and other payable (including related parties) which are denominated in different foreign currencies. A 1% depreciation of the TWD against the USD, JPY, EUR and HKD as of December 31, 2020 and 2019 would have increased the net income before tax by $51,207 and $43,167 for the years ended December 31, 2020 and 2019, respectively. This analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis as prior year.

Since the Group has many kinds of functional currency, the information on foreign exchange loss on monetary items is disclosed by total amount. For the years ended December 31, 2020 and 2019, foreign exchange gain (including realized and unrealized portions) amounted to $754,936 and $186,184, respectively.

(iv) interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases by 1% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased by 1 basis points, the Group�s net income would have increased or decreased by $35 for the year ended December 31, 2019 with all other variable factors remaining constant. This is mainly due to the Group�s borrowing at variable rates and investment in variable-rate bills.

(v) Fair value of financial instruments

1) Types and fair value of financial instruments

The carrying amount and fair value of the Group's financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described on the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities disclosure of fair value information is not required:

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Book Value $ 51,725,906 7,876,165 1,289,669 689,886 $ 61,581,626 $ 2,111,774 5,281,380 1,796,084 $ 9,189,238	Fair Value Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - December 31, 2019	Fair Value
			Level 3 - - - - - - - - - 9	Total - - - - - - - - - Total - - - -
Book Value $ 44,148,979 7,333,280 1,434,729 875,900 $ 53,792,888 $ 2,706,958 7,856,010 99,924 $ 10,662,892		Fair Value
	Level 1 - - - - - - - - -	Level 2 - - - - - - - - -	Level 3 - - - - - - - - -
				- - - -
				-

  - 2) There were no transfers from financial assets at fair value for the years ended December 31, 2020 and 2019.

(r) Financial risk management
(i) Nature and extent

The Group has the following exposure risks for holding certain financial instruments:

1) Credit risk
2) Liquidity risk

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Market risk

The following further discloses detailed information about exposure risk arising from the aforementioned risks and the Group's objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these exposure risks, please refer to the respective notes in the accompanying consolidated financial statements.

(ii) Framework of risk management

The Group's board of directors has overall responsibility for the establishment and oversight of the risk management framework.

The Group's risk management policies are established to identify and analyze the risks being faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through their training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group's board of directors oversees how management monitors compliance with the risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group's board of directors is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the board of directors.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers, bank deposits and investments.

1) Accounts receivable

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk.

The Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered. The Group's review includes external ratings, when available, and in some cases, bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the Group; these limits are reviewed quarterly. Customers that fail to meet the Group's benchmark creditworthiness may transact with the Group only on a prepayment basis.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group established an impairment allowance that represents its estimate of incurred losses in respect of accounts receivable and other investments. Major components of this impairment allowance are specific loss component that is related to individually significant exposure and collective loss component where the loss is incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

2) Investment

The credit risk exposure in the bank deposits and other financial instruments are measured and monitored by the Group's finance department. Considering that the Company deals only with banks and other external parties with good credit standing and with above investment grade financial institutions, corporate organization and government agencies, management is not expecting non-compliance issues and significant credit risk.

3) Guarantees

The Group�s policy is to provide financial guarantees only to wholly owned subsidiaries. At December 31, 2020 and 2019, no other guarantees were outstanding.

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Also, the Group's approach to managing liquidity is to ensure, as much as possible, that it will always have sufficient current funds, such as cash and cash equivalents, securities with high liquidity and sufficient credit line from banks, to meet its liabilities when due, without incurring unacceptable losses or risking damage to the consolidated Group's reputation.

The Group has unused bank facilities for $20,072,000 and $17,479,000 as of December 31, 2020 and 2019.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Group buys and sells derivatives in order to reduce market risks. All these transactions are made in accordance with the risk management policy.

1) Currency risk

The Group's exposure to currency risk is on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Group, primarily the New Taiwan Dollars (NTD). The currencies used in these transactions are denominated in NTD, USD, JPY, EUR and HKD.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Interest rate risk

The Group adopts a policy of entering into financial instrument transaction that fixes interest rate, such as interest rate swaps, by predicting the trend of future interest rate. All of the Group's long-term loans bear floating interest rates. However, as the range of fluctuation of the interest rates during the term of agreements is acceptable, the Group believes that their interest rate risk need not be hedged.

(s) Capital management

The Group's policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of the Group's equity.

The Group may adjust the payment of dividend to shareholders, return cash to shareholders through capital reduction, issue new shares or sell held for sale assets in order to pay off its liabilities. Likewise, the Group monitors its debt-to-capital ratio which serves as the basis to control capital, the same practice as the other companies in the industry. The Group's debt-to-capital ratio on reporting date was as follows:

Total Liabilities Deduct: cash and cash equivalents Net liabilities Total equity Debt-to-capital ratio	December 31, 2020 $ 11,819,953 (51,725,906) $ (39,905,953) $ 153,812,027 % (25.94)	December 31, 2019 13,089,099 (44,148,979) (31,059,880) 152,011,553 % (20.43)

The Group has not changed its capital management strategy as of December 31, 2020.

(t) The investing and financing activities on non-cash transactions

The Group's investing and financing activities on non-cash transactions for the years ended December 31, 2020 and 2019 were as follows:

(i) Acquisition of right-of-use assets by lease, please refer to Note6(f).

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii)

Acquisition of property, plant and equipment Add: Payables on equipment at beginning of period others Less: Payables on equipment at end of period Others Cash Paid Acquisition of intangible assets Add: Payables on patent authorization at beginning of period Less: Payables on patent authorization at end of period Others Cash paid Retirement of treasury shares	For the years ended December 31, For the years ended December 31, 2020 2019 $ 8,364,592 4,086,167 973,002 2,383,093 (693,313) (973,002) (167,843) (1) $ 8,476,438 5,496,257 For the years ended December 31, 2020 2019 $ 1,650,880 377,975 204,017 - (917,376) (204,017) (58,864) (9,292) $ 878,657 164,666 For the years ended December 31, 2019 2,665,621	For the years ended December 31, For the years ended December 31, 2020 2019 $ 8,364,592 4,086,167 973,002 2,383,093 (693,313) (973,002) (167,843) (1) $ 8,476,438 5,496,257 For the years ended December 31, 2020 2019 $ 1,650,880 377,975 204,017 - (917,376) (204,017) (58,864) (9,292) $ 878,657 164,666 For the years ended December 31, 2019 2,665,621	For the years ended December 31, For the years ended December 31, 2020 2019 $ 8,364,592 4,086,167 973,002 2,383,093 (693,313) (973,002) (167,843) (1) $ 8,476,438 5,496,257 For the years ended December 31, 2020 2019 $ 1,650,880 377,975 204,017 - (917,376) (204,017) (58,864) (9,292) $ 878,657 164,666 For the years ended December 31, 2019 2,665,621
		2020
	$ 1,650,880 204,017 (917,376) (58,864) $ 878,657

(iii) Retirement of treasury shares

(iv) Reconciliation of liabilities arising from financing activities was as follow:

Non-Cash changes	Non-Cash changes	Non-Cash changes	December 31, 2020
Additions Increased by other payables Interest expense 1,884,277 (70) 412 Non-Cash changes
			1,796,084 December 31, 2019
Change in an index of lease payment (2,776)	Increased by other payables (16,723)	Interest expense 2,933
			99,924

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions:

(a) Names and relationship with related parties

The following are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of related party Relationship with the Group Formosa Petrochemical Corporation The Group's other related parties Fromosa Carpet Co.,Ltd The Group's other related parties Nan Ya Photonics Incorporation The Group's other related parties Formosa Technologies (Nanjing) Corporation The Group's other related parties Formosa Sumco Technology Corporation The Group's other related parties Formosa Advanced Technologies Co., Ltd. The Group's associates (referred to as "FATC") Formosa Technologies Corporation The Group's other related parties Formosa Biomedical Technology Corp. The Group's other related parties Formosa Plastics Corporation The Group's other related parties Formosa Waters Technology Co., Ltd. The Group's other related parties Nan Ya Plastics Corporation Formosa Taffeta Co., Ltd. The Group's other related parties

The Group's other related parties The Group's other related parties The Group's other related parties The Group's other related parties The entity with significant influence over the Group The Group's other related parties

(b) Significant transactions with related parties
(i) Sales to related parties

Sales

	Sales
Relationship	For the year ended December 31, 2020 2019 $ 9,271 -	Accounts receivable to related parties
	2020 $ 9,271	December 31, 2020 8,237	December 31, 2019
Associates			-

The terms and pricing of sales with associates were not significantly different from normal selling price, which is collected every15th of the following month. Amounts receivable from related parties were uncollateralized, and no expected credit loss were required after the assessment by the management.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Purchase from related parties

Relationship	Purchases For the year ended December 31, 2020 2019 $ 89,770 98,740 801 1,157 573,342 1,199,180 233,946 305,673 $ 897,859 1,604,750	Accounts payable to related parties December 31, 2020 December 31, 2019 9,686 6,183 - - 71,257 119,204 3,735 7,812 84,678 133,199
	2020 $ 89,770 801 573,342 233,946 $ 897,859	December 31, 2019
Entities with significant influence over the Group Associates Other related parties: Formosa Sumco Technology Corporation Other related parties		6,183 - 119,204 7,812
		133,199

The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors. The payment terms ranged from one to two months, which were no different from the payment terms given by other vendors.

(iii) Consigned out for processing

Relationship	Amount For the year ended December 31, 2020 2019 $ 7,136,528 7,088,474	Other payables to related parties December 31, 2020 December 31, 2019 1,049,080 1,202,342	Other payables to related parties December 31, 2020 December 31, 2019 1,049,080 1,202,342
	2020		December 31, 2019
Associates	$ 7,136,528		1,202,342

The term of transactions with the related parties above is 60 days after the end of each month when processed consigned goods are received.

(iv) Financing from related parties

Relationship	Financial costs For the year ended December 31 2020 2019 $ 94 140 Other payables to related parties	Financial costs	Financial costs	Financial costs	Financial costs
		For the year ended December 31
				2019
Other related parties: Formosa Technologies (Nanjing) Corporation Relationship Other related parties: Formosa Technologies (Nanjing) Corporation$
	Balance of borrowings December 31, 2020 December 31, 2019 - 3,450		Interest payable
	December 31, 2020 -		December 31, 2020		December 31, 2019
			-		65

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Property transactions

1) Acquisition of equipment

1) Acquisition of equipment
Acquisition price For the years ended December 31, Relationship 2020 2019 Entities with significant influence over the Group$ 40,550 - Other related parties - 340 $ 40,550 340	Other payables to related parties
	December 31, 2020 20,830 - 20,830	December 31, 2019
		- -
		-

2) Acquisition of Financial Assets

Relationship Other related parties- Formosa Taffeta Co., Ltd.	Financial Statement Account	For the	year ended December 31, 2019 Item of transaction Acquisition price Shares of stock of Formosa Advanced Technologies Co., Ltd. $ 2,049,483
		Number of Shares (in thousands)
	Investments accounted for using equity method	57,489

(vi) Leases

Relationship Entities with significant influence over the Group	Acquisition price	Acquisition price
	For the years ended December 31,
	2020 $ 62,391	2019
		49,426

The rentals charged to the entities with significant influence over the Company are determined based on the local market prices, and rents are paid monthly.

The Group entered into 9 to 10 years lease agreements between July and August 2020, as well as a 3-year lease agreement in July 2017, with Nan Ya Plastics Corporation, at the total values of $2,015,018 and $617,862, respectively. Also, for the years ended December 31, 2020 and 2019, the Group recognized the amount of $12,833 and $2,933, as interest expense, respectively. Furthermore, as of December 31, 2020 and 2019, the balance of lease liabilities amounted to $1,796,084 and $99,924, respectively. In additions, for the year ended December 31, 2020, the Group recognized the additional amount of $1,884,277 of right-of-use assets. Please refer to Note 6(f) for the details on right-of-use assets.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) Others

Relationship Associates	Other income For the years ended December 31 2020 2019 $ 3,635 41,545	Notes receivable from related parties	Notes receivable from related parties
	2020 $ 3,635	December 31, 2020 -	December 31, 2019
			41,545

Key management personnel compensation comprised:

Short-term employee benefits Share-based payment	For the years ended December 31, 2020 2019 $ 77,621 103,456 702 3,942 $ 78,323 107,398	For the years ended December 31, 2020 2019 $ 77,621 103,456 702 3,942 $ 78,323 107,398
		2019 103,456 3,942
		107,398

Please refer to Note 6(l) for the details of share-based payment.

(8) Pledged assets:

The Group�s assets pledged to secure loans are as follows:

Pledged assets Other non-current assets	Object	December 31, 2020 $ 5,573	December 31, 2019
	Office leasing		5,122

(9) Commitments and contingencies:

(a) Significant commitments

Guarantees for importation goods provided by bank Unused letters of credit Total	December 31, 2020 $ 935,000 660,779 $ 1,595,779	December 31, 2019
		1,045,000 39,023
		1,084,023

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Contingent liabilities
(i) In 2000, the Company was charged by Brazil's Ministry of Justice as being involved in the International Monopolies, which influences Brazil's DRAM market. Consequently, the Company, other large international companies and individuals are investigated at the same time. The lawsuit was in a court hearing. The Company has engaged counsels to properly handle it to ensure the Company's rights.
(ii) In October 2016, Lone Star Silicon Innovations LLC (Lone Star) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of East Texas for patent infringement. The lawsuit was handed over to the US District Court of Northern California in July 2017, wherein it was denied in January 2018. Therefore, Lone Star appealed to the US Court of Appeals for the Federal Circuit on the said matter. The case is still in progress. The Group has engaged lawyers to handle the case to ensure its rights.
(iii) In November 2019, Monterey Research LLC (Monterey) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of Delaware for patent infringement. The Company has engaged counsels to properly handle it to ensure the Company's rights.
(iv) The original Joint Venture agreement signed by the Company, Micron Technology, Inc. and its related parties was terminated after Micron Semiconductor Co. completed its share-swap with Micron Technology Taiwan. Both parties had mutually agreed to sign a cooperation agreement, the details of the agreement were as follows:
- 1) The estimated cost for improving specific environmental safety and factory facilities in mutually operating period of joint venture agreement amounted to US$54,030 thousand; the Company agreed to share the 50% portion of the total costs and accrued it as expense of $850,000 (USD27,015 thousand) to other payable. The Company will share the cost based on the actual amounts at the appointed time. As of December 31, 2020 and 2019, the payment amounting to $200,950 and $47,200 had been recognized by the Company, respectively.
- 2) The Company agreed to share the 50% portion of the total losses for penalty, improving costs and suspending operation before the date of share-swap in the following two to five years due to an existing event of environmental safety and factory facilities which violated the laws.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

On January 15 and February 2, 2021, the Company approved to transfer 3,936 thousand and 4,064 thousand treasury shares, respectively, to its employees; of which, only 3,922 thousand and 3,980 thousand treasury shares, respectively, were transferred, at the average repurchase price of $57.4 dollars, with the subscription record dates respectively set on the same dates as above.

(12) Other:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
	For the year ended December 31, 2020			For the year ended December 31, 2019
	Cost of goods sold	Operating expenses	Total	Cost of goods sold	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension expenses Remuneration for directors Other personnel expenses Depreciation expenses Amortization expenses	2,955,084 194,298 99,661 - 73,204 13,773,731 236,477	2,253,131 166,321 85,264 6,500 30,092 440,507 -	5,208,215 360,619 184,925 6,500 103,296 14,214,238 236,477	3,041,992 192,226 99,008 - 71,809 14,045,030 91,126	2,108,949 142,896 71,548 6,660 23,934 281,257 -	5,150,941 335,122 170,556 6,660 95,743 14,326,287 91,126

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the �Regulations Governing the Preparation of Financial Reports by Securities Issuers� for the Group for the year ended December 31, 2020:

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties: None
(iii) Securities held at the reporting date (excluding investment in subsidiaries, associates and joint ventures):None
(iv) Information regarding purchase or sale of securities for the period exceeding $300 million or 20% of the capital stock: None
(v) Acquisition of individual real estate with amount exceeding $300 million or 20% of the Company's paid-in capital: None
(vi) Disposal of individual real estate with amount exceeding $300 million or 20% of the Company's paid-in capital: None
(vii) Related-party transaction for purchases and sales for which amounts exceeding $100 million or 20% of the Company's paidin capital:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions different fr	with terms om others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase /Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company Nanya Technology Corp., Delaware Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Formosa Sumco Technology Corporation Formosa Biomedical Technology Corporation	Subsidiary Subsidiary Subsidiary subsidiary The parent company The parent company The parent company The parent company The parent company Other related parties Other related parties	(Sale) (Sale) (Sale) (Sale) (Sale) Purchase Purchase Purchase Purchase Purchase Purchase	(9,211,321) (3,777,092) (2,662,397) (173,527) (454,105) 9,211,321 3,777,092 2,662,397 173,527 573,342 156,534	(15.18)% (6.22)% (4.39)% (0.29)% 100.00% 100.00% 100.00% 100.00% 100.00% 4.79% 1.31%	O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90 Days O/A 60~90 Days O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90Days O/A 60Days Payment after arrival and inspection of good	- - - - - - - - - - -		1,436,308 740,886 465,705 36,866 46,251 (1,436,308) (740,886) (465,705) (36,866) (71,257) (3,602)	17.44% 9.00% 5.65% 0.45% 100.00% (100.00)% (100.00)% (100.00)% (100.00)% (3.37)% (0.17)%	(Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note) - -

Note: The transactions were written off in the consolidated financial statements.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding $100 million or 20% of the Company's paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance of accounts receivable from related parties	Turnover rate	Over	due	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Europe GmbH	Subsidiary Subsidiary Subsidiary	1,436,308 740,886 465,705	6.26 6.30 6.26	- - -	- - -	644,093 419,180 282,397	- - -

Note: the transactions were written off in the consolidated financial statements.

(ix) Trading in derivative instruments: None
(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

					(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship		Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 0 0 0 1 0 0 0 0 1	Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp Nanya Technology Corp.Delaware Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp.Delaware	Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH Nanya Technology Corp. HK Nanya Technology Corp. Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH Nanya Technology Corp. HK Nanya Technology Corp.	1 1 1 1 2 1 1 1 1 2	Sales Sales Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable	9,211,321 3,777,092 2,662,397 173,527 454,105 1,436,308 740,886 465,705 36,866 46,251	On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions	15.10% 6.19% 4.36% 0.28% 0.74% 0.87% 0.45% 0.28% 0.02% 0.03%

Note 1: Assigned numbers represent the following:

0 represents the parent company.
The subsidiaries are represented numerically starting from 1.

Note 2: The terms of transactions are defined as follows:

  1. Parent company to subsidiary.

  2. Subsidiary to parent company.

  3. Subsidiary to Subsidiary.

Note 3: The business relationship and significant transactions between the parent company and the subsidiary only disclose the importations of sales and account receivable, did not repeat about the purchase and account payable.
(b) Information on investees (excluding information on investees in Mainland China):

The following is the information on investees for the year ended December 31, 2020:

(In Thousands of New Taiwan Dollars / Shares)

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance	as of December	31, 2020	Highest Percentage of ownership	Net income of investee	Share of profits of investee	Note
				December 31, 2020	December 31, 2019	Shares	Percentage of ownership	Carrying value
The Company The Company The Company The Company The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Delaware Nanya Technology Corp., HK Nanya Technology Corp., Japan Nanya Technology International, Ltd. Formosa Advanced Technologies Co., Ltd.	U.S.A U.S.A Hong Kong Japan British Virgin Island Yunlin	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products General investment business Assembling, testing and producing modules for IC	20,392 36,005 66,271 20,161 37,004,400 5,099,482	20,392 36,005 66,271 20,161 37,004,400 5,099,482	2 - 20 1 1 141,511	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 32.00	158,076 171,992 70,615 166,621 34,357,493 5,160,505	100.00 100.00 100.00 100.00 100.00 32.00	18,263 17,632 9,535 (15,847) 547,446 1,402,677	18,263 17,632 9,535 (15,847) 547,446 466,895	(Note1) (Note1) (Note1) (Note1) (Note 1) (Note 2)

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance a	s of December	31, 2020	Highest Percentage of ownership	Net income of investee	Share of profits of investee	Note
				December 31, 2020	December 31, 2019	Shares	Percentage of ownership	Carrying value
Nanya Technology Corp., HK	Nanya Technology Europe GmbH	Germany	Sales of semiconductor products	30,056	30,056	-	% 100.00	71,181	100.00	4,242	4,242	(Note1)

Note: (1) The transactions were written off in the consolidated financial statements.

(2) Investment accounted for using equity method.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Highest Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Nanya Technology Corp., Shenzhen	Sales of semiconductor products	28,080 (USD985 thousand)	(2)	28,080 (USD985 thousand	) -	-	28,080 (USD985 thousand	) 3,681	100.00%	100.00	3,681 (Note 2	) 18,977	-

Note 1 Three types of investments were as follows:

(1) Investing directly in Mainland China
(2) Investing the companies in Mainland China through third parties.
(3) Others

Note 2 The financial statements were reviewed by a certified public accountant of the Taiwanese parent company.

Note3 The transactions were written off in thee consolidated financial statements.

(ii) Limitation on investment in Mainland China:

(In Thousands of New Taiwan Dollars)

Accumulated Investment in Mainland China as of December 31, 2020 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1	) Upper Limit on Investment (Note 2)
28,080 (USD985 thousand)	28,080 (USD985 thousand)	92,287,216

Note 1 The exchange rate of New Taiwan dollars to US dollars on December 31, 2020 was USD1 TWD 28.508

Note 2 60% of net equity.

(iii) Significant transactions: None

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Information on major shareholders:

Information on major shareholders:
Shareholding Shareholder�s Name	Shares	Percentage
Nan Ya Plastics Corporation	907,303,775	% 29.31
Formosa Chemicals & Fibre Corporation	334,815,409	% 10.81
Formosa Plastics Corporation	334,815,409	% 10.81
Formosa Petrochemical Corp	334,815,409	% 10.81

Note 1: The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical ordinary shares and preference shares (including treasury shares) on the last business date of each quarter. The actual registered non-physical shares may be different from the capital shares disclosed in the financial statement due to different calculation basis.
Note 2: If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust ac count. The shareholders holding more than 10% of the total shares of the company should declare insider�s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider�s equity announcement please refer to the TWSE website.

(14) Segment information:

(a) General information:

The Group has 4 reporting segments: segment of manufacturing, segment of oversea sales , segment of oversea overseas R&D, and segment of investment. The segment of manufacturing is responsible for the manufacture and sales of semiconductor products; the segment of oversea sales is responsible for the sales of semiconductor products; the segment of overseas R&D is responsible for research and development of semiconductor products; and the segment of investment is responsible for investment securities.

The operating decision maker, on the other hand, uses the geographic area information as its management framework in managing the segments mentioned above.

(b) The income of the reporting segment, segment assets, segment liabilities and the information of the measure basis and reconciliation.

The accounting policies of each segment was similar to those described in note 4 �significant accounting policies�. The performance evaluation of each department is based on the gain or loss of the Group�s operating department, which is measured using the profit before tax. The Group treated intersegment sales and transfers as third-party transactions. They are measured at market price.

No tax expenses(income) were allocated to the reporting segment and the reportable amounts were same as to the report used by the chief operating decision maker.

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

The Group�s operating segment information and reconciliation are as follows:

	For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020
Overseas sales division $ 16,129,461 53,891 $ 16,183,352 $ 94 6,192 7,923 $ 23,811 14,968 $ 3,119,912 $ 2,713,185	Overseas R&D division Manufacturing divisions Investment divisions Adjustments and eliminated - 44,876,053 - - 454,105 15,824,337 - (16,332,333) 454,105 60,700,390 - (16,332,333) - 13,023 - - 3,519 14,441,004 - - - 1,043,924 - (584,952) 22,971 8,974,018 547,446 (577,029) 17,147 82,745,077 - - 195,825 165,624,472 34,357,531 (37,665,760) 23,832 11,812,445 38 (2,729,547) For the year ended December 31, 2019				Total
					61,005,514 -
					61,005,514
					13,117 14,450,715 466,895 8,991,217
					82,777,192 165,631,980
					11,819,953

	Overseas R&D division - 462,733 462,733 - 2,112 - - - 23,698 5,063 178,026 14,345	Manufacturing divisions 39,190,306 12,285,189 51,475,495 3,124 14,409,157 1,188,213 - 213,282 11,208,374 85,909,812 165,093,440 13,081,887	Investment divisions - - - - - - - - 950,976 - 37,056,800 18	Adjustments and eliminated - (12,802,105) (12,802,105) - - (1,011,183) - - (1,004,339) - (40,069,983) (2,446,260)	Total
					51,727,458 -
					51,727,458
					3,264 14,417,413 183,875 9,508 213,282 11,225,282
					85,926,044 165,100,652
					13,089,099

The Group's revenue from external customer were as follows:

Products and service DRAM Others Total	For the year ended ,	For the year ended ,
	December 31, 2020 $ 60,866,320 139,194 $ 61,005,514	December 31, 2019
		51,517,114 210,344
		51,727,458

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Geographic area information

The Group's revenue from operations from external customers by location of operations and information concerning the location of its non-current assets were as follows:

District From external clients: Taiwan USA Japan Mainland China Other countries Total District Non-current assets: Taiwan Other countries Total	For the year ended ,	For the year ended ,
	December 31, 2020 $ 19,866,890 548,152 1,512,613 32,202,589 6,875,270 $ 61,005,514 December 31, 2020 $ 82,745,077 32,115 $ 82,777,192	December 31, 2019
		20,014,693 419,123 1,762,307 24,527,407 5,003,928
		51,727,458
		December 31, 2019
		85,909,812 16,232
		85,926,044

Non-current assets included property, plant and equipment, right-of-use assets and intangible asset, excluding financial instruments and deferred tax assets.

(e) Major clients

KINGSTONE TECHNOLOGY CO, LTD Huawei Tech.Investment Co.,Limited WPI Total	December 31, 2020 $ 7,339,958 6,268,808 5,470,587 $ 19,079,353	December 31, 2019
		8,263,500 2,007,256 4,559,531
		14,830,287

Appendix B

NANYA TECHNOLOGY CORPORATION

Financial Statements

With Independent Auditors' Report For the Years Ended December 31, 2020 and 2019

Stock Code:2408

(English Translation of Financial Statements and Report Originally Issued in Chinese) NANYA TECHNOLOGY CORPORATION

Financial Statements

With Independent Auditors� Report For the Years Ended December 31, 2020 and 2019

Address: No.98, Nanlin Rd., Dake Vil., Taishan Dist., New Taipei City, Taiwan (R.O.C.) Telephone:(02)2904-5858

The independent auditors� report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors� report and financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors� Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Information on major shareholders
(14) Segment information
9. List of major account titles

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) Telephone + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet home.kpmg/tw

Independent Auditors� Report

To the Board of Directors of Nanya Technology Corporation:

Opinion

We have audited the financial statements of Nanya Technology Corporation (�the Company�), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2020 and 2019, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of another auditor (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years ended December 31, 2020 and 2019, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors� Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (�the Code�), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the report of another auditor, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of Formosa Advanced Technologies Co., Ltd., an investment in other accounted for using the equity method of the Company. The financial statements were audited by another auditor, whose audit report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Formosa Advanced Technologies Co., Ltd., are based solely on the audit report of another auditor. The aformentioned investment accounted for using the equity method constituted 3.04% of the total assets as of December 31, 2019, and the share of profit of associates accounted for using the equity method constituted 1.64% of the total profit before tax for the period from January 1 to December 31, 2019.

3-1

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of inventories

Please refer to Notes 4(g), 5(a), as well as 6(c) for details on accounting policy, judgments, and major sources of estimation uncertainty , as well as disclosure on information about inventory valuation, respectively.

The Company recognizes a loss from the devaluation of inventories on a quarterly basis based on the lower of cost or net realizable value method. The international market price of DRAM has significantly affected the net realizable value of inventories. Therefore, the evaluation of inventory has been identified as a key audit matter in the financial statements.

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

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

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

Those charged with governance (including the audit committee) are responsible for overseeing the Company's financial reporting process.

Auditors� Responsibilities for the Audit of the Financial Statements

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

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

3-2

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company�s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management�s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company�s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors� report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor�s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities of the investments in other entities accounted for using the equity method. We are responsible for the direction, supervision and performance of our audit. Furthermore, we remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor�s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors� report are Hui-Chih Ko and Hsin-Yi Kuo.

KPMG

Taipei, Taiwan (Republic of China) February 26, 2021

Notes to Readers

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

(English Translation of Financial Statements and Report Originally Issued in Chinese)

Nanya Technology Corporation

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(a)) 1160 Notes receivable due from related parties, net (Notes 6(b)(n) and 7) 1170 Notes and accounts receivable, net (Notes 6(b)(n)) 1180 Accounts receivable due from related parties, net (Notes 6(b)(n) and 7) 1200 Other receivables (Notes 6(g)) 1310 Inventories (Note 6(c)) 1410 Prepayments Total current assets Non-current assets: 1550 Investments accounted for using equity method (Note 6(d)) 1600 Property, plant and equipment (Notes 6(e)(t)) 1755 Right-of-use assets (Notes 6(f) and 7) 1780 Intangible assets (Note 6(t)) 1840 Deferred tax assets (Notes 6(j)) 194D Long-term financial lease payments receivable (Note 6(g)) 1990 Other non-current assets Total non-current assets Total assets	December 31, 2020 Amount % $ 16,573,114 10 - - 5,547,350 3 2,688,002 2 1,456,089 1 14,084,255 8 1,511,313 1 41,860,123 25 40,084,942 25 79,696,505 48 1,790,192 1 1,258,380 1 345,830 - 483,436 - 105,064 - 123,764,349 75 $ 165,624,472 100	December 31, 2019 Amount % 6,497,820 4 41,545 - 5,074,912 3 2,391,150 1 1,565,121 1 18,072,308 11 1,633,984 1 35,276,840 21 42,627,209 26 85,513,880 52 99,222 - 296,710 - 550,033 - 689,886 1 39,660 - 129,816,600 79 165,093,440 100 Liabilities and Equity Current liabilities: 2170 Accounts payable 2180 Accounts payable to related parties (Note 7) 2200 Other payables(Note 6(t)) 2220 Other payables to related parties (Note 7) 2230 Current tax liabilities 2280 Current lease liabilities (Notes 6(h) and 7) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2580 Non-current lease liabilities (Note 6(h) and 7) 2640 Net defined benefit liability, non-current (Note 6(i)) 2670 Other non-current liabilities(Note 6(t)) Total non-current liabilities Total liabilities Equity (Note 6(k)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity		December 31, 2020		December 31, 2019 Amount % 2,573,759 2 133,199 - 6,605,917 4 1,258,964 1 1,514,804 1 99,924 - 80,957 - 12,267,524 8 - - 575,896 - 238,467 - 814,363 - 13,081,887 8 30,733,649 19 3,475 - 32,005,339 19 13,128,412 8 273,834 - 78,054,876 48 (1,041,100) (1) (1,146,932) (1) 152,011,553 92 165,093,440 100
				Amount %
				2,027,096 1 84,678 - 4,161,575 2 1,119,693 1 1,129,651 1 178,432 - 75,759 - 8,776,884 5 1,617,652 1 566,283 - 851,626 1 3,035,561 2 11,812,445 7 30,935,939 19 36,264 - 32,451,689 19 14,110,871 9 1,041,100 1 79,394,603 48 (3,011,507) (2) (1,146,932) (1) 153,812,027 93 $ 165,624,472 100

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) NANYA TECHNOLOGY CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except Earnings Per Share)

4000 Operating revenue (Notes 6(n) and 7) 5000 Operating costs (Notes 6(c)(e)(f)(i)(l)(o) and 7) Gross profit from operations 5910 Add: Unrealized profit (loss) from sales 5920 Realized profit (loss) on from sales Gross profit from operations Operating expenses (Notes 6(e)(f)(i)(l)(o) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Total operating expenses Net operating income Non-operating income and expenses (Notes 6(d)(e)(g)(h)(p) and 7): 7100 Total interest income 7020 Other gains and losses, net 7050 Finance costs 7060 Share of profit of associates accounted for using equity method Total non-operating income and expenses 7900 Profit before tax 7950 Less: Tax expenses (Notes 6(j)) Profit 8300 Other comprehensive income (loss) (Notes 6(i)(j)(k)): 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of the net defined benefit 8330 Share of other comprehensive income (loss) of subsidiaries, and associates for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income (loss) that will be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive (loss) income, net 8500 Comprehensive income Earnings per share (dollar) (Note 6(m)) 9750 Basic earnings per share 9850 Diluted earnings per share	2020 Amount % $ 60,700,390 100 (45,288,242) (75) 15,412,148 25 (11,775) - 15,749 - 15,416,122 25 (600,862) (1) (1,312,475) (2) (5,159,496) (8) (7,072,833) (11) 8,343,289 14 127,709 - (527,881) (1) (13,023) - 1,043,924 2 630,729 1 8,974,018 15 (1,287,977) (2) 7,686,041 13 3,767 - (14,316) - 754 - (11,303) - (1,955,693) (3) - - (1,955,693) (3) (1,966,996) (3) $ 5,719,045 10 $ 2.51 $ 2.49	2019
		Amount % 51,475,494 100 (35,251,755) (68) 16,223,739 32 (15,749) - 25,381 - 16,233,371 32 (536,767) (1) (1,320,266) (3) (4,926,428) (9) (6,783,461) (13) 9,449,910 19 343,548 1 229,827 - (3,124) - 1,188,213 2 1,758,464 3 11,208,374 22 (1,383,775) (3) 9,824,599 19 (42,096) - (10,688) - (8,419) - (44,365) - (758,303) (1) - - (758,303) (1) (802,668) (1) 9,021,931 18 3.23
		3.19

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) Nanya Technology Corporation

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Ordinary shares	Advance receipts for share capital	Capital surplus 33,557,005	Legal reserve 9,192,249	Special reserve 39,163	Unappropriated retained earnings		ther equity interes	t	Treasury shares (2,782,675)	Total equity 164,907,298
						Exchange differences on translation of foreign financial statements (179,736)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Total other equity interest
$ 31,032,389	6,488				94,136,513		(94,098)	(273,834)
- -	- -	- -	- -	- -	9,824,599 (35,402)	- (758,303)	- (8,963)	- (767,266)	- -	9,824,599 (802,668)
-	-	-	-	-	9,789,197	(758,303)	(8,963)	(767,266)	-	9,021,931
- - - - - - (501,360) 202,620	- - - - - - - (3,013)	- - - 19 150,116 - (2,164,261) 462,460	3,936,163 - - - - - - -	- 234,671 - - - - - -	(3,936,163) (234,671) (21,700,000) - - - - -	- - - - - - - -	- - - - - - - -	- - - - - - - -	- - - - - (1,029,878) 2,665,621 -	- - (21,700,000) 19 150,116 (1,029,878) - 662,067
30,733,649	3,475	32,005,339	13,128,412	273,834	78,054,876	(938,039)	(103,061)	(1,041,100)	(1,146,932)	152,011,553
- -	- -	- -	- -	- -	7,686,041 3,411	- (1,955,693)	- (14,714)	- (1,970,407)	- -	7,686,041 (1,966,996)
-	-	-	-	-	7,689,452	(1,955,693)	(14,714)	(1,970,407)	-	5,719,045
- - - - - - 202,290	- - - - - - 32,789	- - - 14 58,420 79 387,837	982,459 - - - - - -	- 767,266 - - - - -	(982,459) (767,266) (4,600,000) - - - -	- - - - - - -	- - - - - - -	- - - - - - -	- - - - - - -	- - (4,600,000) 14 58,420 79 622,916
$ 30,935,939	36,264	32,451,689	14,110,871	1,041,100	79,394,603	(2,893,732)	(117,775)	(3,011,507)	(1,146,932)	153,812,027

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

Nanya Technology Corporation

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Interest expense Interest income Share-based payments Share of profit of subsidiaries and associates accounted for using equity method Gain on disposal of property, plant and equipment Reversal of impairment loss on non-financial assets Unrealized gains on sales Realized profit from sales Foreign exchange gain or loss Others Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Notes and accounts receivable (including related parties) Other receivables Inventories Prepayments Accounts payable (including related parties) Other payable (including related parties) Other current liabilities Net defined benefit liability Other non-current liabilities Total changes in operating assets and liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Proceds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Decrease in lease and installment receivables Increase in other non-current assets Dividends received Net cash flows (used in) from investing activities Cash flows used in financing activities: Increase (decrease) in guarantee deposits received Payment of lease liabilities Cash dividends paid Exercise of employee share options Payments to acquire treasury shares Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		2020 $ 8,974,018 14,204,527 236,477 13,023 (127,709) 58,420 (1,043,924) 6,633 - 11,775 (15,749) 70,894 (30,748) 13,383,619 (764,103) 125,831 3,988,053 122,671 (291,754) (2,274,962) (5,198) (5,846) (6,109) 888,583 23,246,220 53,030 (12,611) (1,469,681) 21,816,958 - (8,449,490) 71 (73,144) (878,657) 264,330 (308) 1,620,170 (7,517,028) 63,246 (188,459) (4,600,000) 622,916 - (4,102,297) (122,339) 10,075,294 6,497,820 $ 16,573,114	2019 11,208,374

			14,318,031 91,126 3,124 (343,548) 150,116 (1,188,213) (4,723) (213,282) 15,749 (25,381) 124,536 -
			12,927,535
			2,642,414 (391,993) (5,923,956) 123,620 (429,964) (1,859,005) 79,389 (3,503) 9,606
			(5,753,392)
			18,382,517 396,063 (191) (2,005,134)
			16,773,255
			(28,787,503) (5,490,289) 4,723 (3,504) (164,666) 264,331 (9,295) 210,056
			(33,976,147)
			(297,469) (184,115) (21,700,000) 662,067 (1,029,878)
			(22,549,395)
			(88,467) (39,840,754) 46,338,574
			6,497,820

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) NANYA TECHNOLOGY CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

Nanya Technology Corporation (the �Company�) was legally established with the approval of the Ministry of Economic Affairs on March 4, 1995, with registered address at No.98, Nanlin Road, Dake Vil., Taishan District, New Taipei City, Taiwan. The main operating activities of the Company are researching, developing, manufacturing and selling semiconductor products, and the import and export of its machinery, equipment and raw materials.

(2) Approval date and procedures of the financial statements:

The financial statements were authorized for issuance by the Board of Directors on February 26, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (�IFRSs�) endorsed by the Financial Supervisory Commission, R.O.C. (�FSC�) which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2020:

Amendments to IFRS 3 �Definition of a Business�

Amendments to IFRS 9, IAS39 and IFRS7 �Interest Rate Benchmark Reform�
Amendments to IAS 1 and IAS 8 �Definition of Material�
Amendments to IFRS 16 �COVID-19-Related Rent Concessions�
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

Amendments to IFRS 4 �Extension of the Temporary Exemption from Applying IFRS 9�

Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 �Interest Rate Benchmark Reform Phase 2�

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
�Classification of Liabilities as
Current or Non-current�

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 �Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture�
IFRS 17 � Insurance Contracts� and amendments to IFRS 17 � Insurance Contracts�
Amendments to IAS 16 �Property, Plant and Equipmentt Proceeds before Intended Use� Amendments to IAS 37 �Onerous Contracts Cost of Fulfilling a Contract�
Annual Improvements to IFRS Standards 2018-2020

Amendments to IFRS 3 �Reference to the Conceptual Framework�

(4) Summary of significant accounting policies:

The significant accounting policies presented in the financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

The accompanying financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as the �Regulations�).

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(b) Basis of preparation

(i) Basis of measurement

The financial statements have been prepared on a historical cost basis except the net defined benefit liabilities are measured at fair value of the plan assets less the present value of the defined benefit obligation.

(ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entities operate. The financial statements are presented in New Taiwan Dollar, which is the Company�s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(c) Foreign currency

(i) Foreign currency transactions

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss.

(ii) Foreign operations

The assets and liabilities of foreign operations are translated to the Company�s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to the Company�s functional currency at average rate. Foreign currency differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interest. When the Company disposes of only part of investment in an associate or joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under any one of the following conditions. All other assets are classified as non-current.

(i) The asset is expected to be realized, or intended to be sold or consumed, in the Company�s normal operating cycle;
(ii) The asset is held primarily for the purpose of trading;
(iii) The asset is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under any one of the following conditions. All other liabilities are classified as non-current.

(i) The liability is expected to be settled in the normal operating cycle;
(ii) The liability is held primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The liability does not have any unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

(f) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(i) Financial assets

1) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and trade receivables (including related parties), other receivable, leases receivable, and guarantee deposit paid).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for note and trade receivables due from related parties are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company�s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 60 days past due.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is �credit-impaired� when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

a breach of contract such as a default or being more than 60 days past due;

the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company�s procedures for recovery of amounts due.

2) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

(ii) Financial liabilities and equity instruments

1) Treasury shares

2) Financial liabilities

Financial liabilities are classified as FVTPL. Foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

3) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid is recognized in profit or loss.

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in acquiring the inventories, production costs and other costs incurred in bringing them to their present location and condition. The cost of inventories is calculated using the weighted-average method. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies.

The financial statements include the Company�s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate�s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company�s interests in the associate.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

When the Company�s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Company�s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under capital surplus. If the capital surplus resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Company�s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(i) Subsidiaries

The Company accounts for investee companies in which it has a controlling interest using the equity method. The net income, other comprehensive income, and shareholders�equity in the financial reports of the Company and the net income, other comprehensive income, and shareholder�s equity that belongs to the Company in the consolidated financial reports should be the same.

The Company accounts for changes in owners� equity of subsidiaries as equity transactions between the two parties of the transaction, provided that control is still exists.

(j) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and any accumulated impairment losses.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives.

Land is not depreciated.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The estimated useful lives of significant items of property, plant and equipment has an unlimited useful life and therefore are as follows:

1) Buildings: 25 years.
2) Machinery and equipment: 5 to 16 years.
3) Other equipment: 3 to 15years.

Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate, the change is accounted for as a change in accounting estimate.

(k) Leases

(i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1) the contract involves the use of an identified asset � this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the customer has the right to direct the use of the asset throughout the period of use only if either:
- the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
- the relevant decisions about how and for what purpose the asset is used are predetermined and:
  - the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
  - the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.
(ii) As a lessor

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company�s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;

variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or

there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

there is any lease modifications

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of dormitory, parking lots and offices that have a lease term of 12 months or less and lease of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(iii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor�s net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of �other income�.

(l) Intangible assets

(i) Recognition and measurement

Intangible assets, patents that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

(iii) Amortization

The estimated useful lives of patent for current and comparative periods are both 5~10 years.

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-derivative financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset�s recoverable amount is estimated. Goodwill is tested annually for impairment.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The recoverable amount of an asset or CGU is value in use fair value less costs to sell.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

(n) Revenue recognition

The Company manufactures and sells semi-conductor products on the market. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer�s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(o) Employee benefits

(i) Defined contribution plan

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(ii) Defined benefit plan

The Company�s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(p) Share-based payment

The grant date of a share-based payment is the date which the Board of Directors authorized the price and number of a share-based payment.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(q) Income taxes

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction.
(ii) Temporary differences related to investments in subsidiaries that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) The same taxable entity; or
2) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(r) Earnings per share

The Company discloses the Company�s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee stock options and employee compensation.

(s) Operating segments

The Company discloses its information on operating segments in its consolidated financial statements, so it need not disclose such information in its financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the financial statements, in conformity with the Regulation Governing the Preparation of Financial Reports by Securities Issuers, requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

For information about judgments made in applying the accounting policies that have the most significant effects on the recognized amounts in the financial statements, whether the Company has substantive control over its investees, please refer to the notes in consolidated financial statements for the year ended 2020.

(a) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to Note 6(c) for details of the valuation of inventories.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand pretty cash Demand deposit and checking accounts Cash equivalents: Time deposits Commercial paper Repurchase agreements collateralized by corporate bonds	December 31, 2020 $ - 14,066,618 - 2,014,416 492,080 $ 16,573,114	December 31, 2019 1 3,553,628 2,130,351 454,300 359,540 6,497,820

Refer to Note 6(q) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

(b) Notes and accounts receivable

Notes receivable-related parties from non-operating activities Accounts receivable (including related parties)-measured at amortized cost	December 31, 2020 $ - 8,235,352 $ 8,235,352	December 31, 2019
		41,545 7,466,062
		7,507,607

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for notes and accounts receivables (including related parties) as of December 31, 2020 and 2019. To measure the expected credit losses, notes and accounts receivables (including related parties) have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information.

The expected credit losses for notes and accounts receivables (including related parties) as of December 31, 2020 and 2019 was determined as follows:

Due days Current	December 31, 2020	December 31, 2020
	Notes and accounts receivables gross carrying amount $ 8,235,352	Weighted average loss rate -	Loss allowance provision
			-

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

Due days Current	December 31, 2019	December 31, 2019
	Notes and accounts receivables (including related parties) gross carrying amount $ 7,507,607	Weighted average loss rate -	Loss allowance provision
			-

As of December 31, 2020 and 2019, no allowance for impairment was provided because all of the accounts comprising notes and accounts receivable (including related parties) were still within the normal credits terms and were evaluated to be collectable.

Please refer to Note 6(q) for other information of credit risk.

Raw materials Work in progress Finished goods Total	December 31, 2020 $ 350,906 6,578,665 7,154,684 $ 14,084,255	December 31, 2019
		381,848 7,329,074 10,361,386
		18,072,308

The Company recognized cost of goods sold amounting to $44,881,018 and $34,734,620 for the years ended 2020 and 2019, respectively.

The Company did not recognize any loss or gain from devaluation of inventories as there was no indication of impairment or net realizable value of inventories has increased because the circumstance that caused the inventory devaluation in prior period has improved on inventories for the years ended 2020 and 2019.

(d) Investments accounted for using equity method

The components of the investments accounted for using equity method at the reporting date were as follows:

Subsidiaries Associates	December 31, 2020 $ 34,924,437 5,160,505 $ 40,084,942	December 31, 2019
		37,607,973 5,019,236
		42,627,209

(i) Subsidiaries

Please refer to the consolidated financial statements as of and for the year ended December 31, 2020 for further information.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(ii) Associates

The related information of the major associate to the Company was as follows:

Name of Associates Formosa Advanced Technologies Co., Ltd.(FATC)	Nature of Relationship to the Group	Registration Country	Percentage of ownership
			December 31, 2020 December 31, 2019 % 32.00 % 32.00
	It mainly engages in assembling and testing of module products, as well as in the research and development of integrated circuits.	Taiwan

The fair value of major associates listed on the Stock Exchange was as follows:

Formosa Advanced Technologies Co., Ltd.	December 31, 2020 $ 16,716,000	December 31, 2019
		16,494,889

The aggregated financial information of the major associate was as follows:

The financial information of FATC was as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net asset Net asset contributed to FATC Operating revenue Profit Other comprehensive loss Total comprehensive income Comprehensive income contributed to FATC	December 31, 2020 December 31, 2019 $ 7,816,528 6,631,748 5,792,482 6,643,175 (1,238,254) (1,250,356) (555,589) (594,494) $ 11,815,167 11,430,073 $ 11,815,167 11,430,073 For the year ended December 31,	December 31, 2019
		6,631,748 6,643,175 (1,250,356) (594,494)
		2019
		9,457,849 1,262,496 (83,445)
		1,179,051 1,179,051

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

Share of net assets of the major associate at January 1 Acquisition of share of net assets of the major associate allocated to the Company Total comprehensive income contributed to the Company Uncollected dividends beyond the collection period which are reclassified to capital surplus Cash dividends contributed to the Company Share of net assets of major associate at December 31 Add: Goodwill Less: Unrealized profits on upstream sales net assets of the associates Total carrying amount of the major associate	December 31, 2020 $ 3,657,624 - 434,540 14 (311,324) 3,780,854 1,463,162 (83,511) $ 5,160,505	December 31, 2019 2,157,732 1,474,005 235,924 19 (210,056) 3,657,624 1,463,162 (101,550) 5,019,236

(e) Property, plant and equipment

Cost: Balance as of January 1, 2020 Additions Disposals Reclassification Balance as of December 31, 2020 Balance as of January 1, 2019 Additions Disposals Reclassification Balance as of December 31, 2019 Accumulated depreciation / impairment: Balance as of January 1, 2020 Depreciation for the period Disposals Reclassification Balance as of December 31, 2020 Balance as of January 1, 2019 Depreciation for the period Impairment loss Disposals Reclassification Balance as of December 31, 2019 Carrying amounts: Balance as of December 31, 2020 Balance as of December 31, 2019	Land $ 1,013,924 - - - $ 1,013,924 $ 1,013,924 - - - $ 1,013,924 $ - - - - $ - $ - - - - - $ - $ 1,013,924 $ 1,013,924	Building 8,155,623 - (12,661) - 8,142,962 7,738,701 - - 416,922 8,155,623 2,293,861 319,741 (5,965) - 2,607,637 1,976,959 316,902 - - - 2,293,861 5,535,325 5,861,762	Machinery and equipment 195,834,150 858,712 (846,845) 3,127,446 198,973,463 180,675,614 2,048,367 (98,844) 13,209,013 195,834,150 119,593,407 13,647,817 (846,837) (30,696) 132,363,691 106,139,332 13,765,707 (213,282) (98,844) (180) 119,592,733 66,609,772 76,241,417	Other equipment 911,349 49,353 (154,494) 10,808 817,016 1,126,512 42,851 (258,379) 365 911,349 763,023 43,662 (154,494) (802) 651,389 985,081 36,815 - (258,379) 180 763,697 165,627 147,652	Under construction 2,249,125 7,429,579 - (3,306,847) 6,371,857 13,886,444 1,988,981 - (13,626,300) 2,249,125 - - - - - - - - - - - 6,371,857 2,249,125	Total 208,164,171 8,337,644 (1,014,000) (168,593)
						215,319,222 204,441,195 4,080,199 (357,223) -
						208,164,171 122,650,291 14,011,220 (1,007,296) (31,498)
						135,622,717 109,101,372 14,119,424 (213,282) (357,223) -
						122,650,291 79,696,505 85,513,880

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(i) Reversal of impairment loss and impairment loss

The estimated future recoverable amount of equipment, which had been identified to be no longer useful for its operation, is higher than the book value. In 2019 , the Company reassessed its estimates, wherein the amount of $213,282 of the initially recognized impairment has been reversed.

(f) Right-of-use assets

==> picture [446 x 354] intentionally omitted <==

(g) Lease receivables

(i) On June 18, 2009, the Company signed an amended long-term lease agreement with Inotera Memories, Inc. (its name was changed to Micron Technology Taiwan in March, 2017, referred to as "MTTW") on the lease of building, facilities and land located on 348, 348-1 and 348-3, Hwa Ya Section, Kueishan District, Taoyuan City. This amended lease agreement, which took effect retroactively from January 1, 2009, includes the renewal term. Initial lease term is from January 1, 2009 to December 31, 2018. However,MTTW is entitled to renew this amended lease agreement for an unlimited number of consecutive additional terms of five years each, by providing a written notice with the intention to renew the lease term commencing from January 1, 2019. MTTW has completed the renewal of its lease agreement, with a written notice on December 13, 2018. In addition, MTTW has an exclusive option to purchase the leased assets

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

for a total purchase price of USD50,000 thousand on and after January 1, 2024. Also, the rental receivable for the entire year of 2009 has been waived. Initial yearly rentals for the leased building (including facilities and land) were USD13,010 thousand and USD1,990 thousand, respectively from January 1, 2010 to December 31, 2018; the first yearly renewal rentals for the leased building (including facilities and land) will be USD8,010 thousand and USD1,990 thousand, respectively, from January 1, 2019 to December 31, 2023; the subsequent yearly renewal rentals for the leased building (including facilities and land) will be USD10 thousand and USD1,990 thousand commencing from January 1, 2024. The amended lease agreement for the building (including facilities) is treated as a capital lease because (a) the present value of the periodic rental payments made since the inception date is at least 90% of the market value of the leased assets and (b) the lease term is equal to 75% or more of the total estimated economic life of the leased assets. The land is treated as an operating lease.

(ii) The total lease receivable from the capital lease of the building (including facilities) was $5,185,620; the implicit interest rate was 10.56%. The cost of the leased assets at the beginning of the lease period was $2,656,223. The difference was recognized as unrealized interest revenue of $2,529,397. For the years ended 2020, the Company recognized the interest revenue of $78,316 and $96,730, respectively, from the amortization of unrealized interest revenue.

The details of lease receivables were as follows:

Less than one year One to two years Two to three years Three to four years Total lease payments receivable Unearned finance income Present value of lease payments receivable

Please refer to Note 6(q) for information of credit risk.

(h) Lease liabilities

Lease liabilities
Current Non-current	December 31, 2020 $ 178,432 $ 1,617,652	December 31, 2019
		99,924 -

For the maturity analysis, please refer to Note 6(q).

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The amount recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases and low-value lease assets	For the years ended December 31	For the years ended December 31
	2020 $ 12,833 $ 65,879	2019
		2,933 49,426

The amount recognized in the statement of cash flows of the Group was as follows:

Total cash outflow for leases	For the years ended December 31,	For the years ended December 31,
	2020 $ 266,283	2019
		231,901

(i) Land lease

The Company leases its land with a period of 3 to 10 years. The lease included an option to terminate the contract, which is exercisable only by the Company and not by the lessors. The lease payment changes annually based on a local price index.

(ii) Other leases

The Company leases staff dorm, factory, parking lots and office spaces with contract terms ranging from one to five years. These leases are short-term or with low-value items. The Company applied the recognition exemptions and elected not to recognize its right-of-use assets and lease liabilities for these leases.

(i) Employee benefits

(i) Defined benefit plan

The movements in the present value of the defined benefit obligations and fair value of plan assets were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 1,108,808 (542,525) $ 566,283	December 31, 2019 1,098,174 (522,278) 575,896

The Company has established an employee defined benefit retirement plan covering full-time employees. Under this plan, contributions are made to an independent fund that is deposited with Bank of Taiwan. Employees are eligible for retirement and payments of retirement benefits are based on years of service and the average salary for the last six months before the employee�s retirement according to the R.O.C. Labor Standards Law.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

1) Composition of plan assets

The Labor Pension Fund Supervisory Committee manages the Company�s pension fund which is being funded according to the Labor Standards Law. Under the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, this fund is required to distribute minimum income, but such minimum income shall not be less than the interest income derived from two-year time deposit with the local banks.

As of December 31, 2020, the Company�s pension fund with Bank of Taiwan amounted to $542,525. Please refer to the related information published on the website of the Labor Pension Supervisory Committee concerning the utilization of the labor pension fund, related yield rate and its allocation.

2) Movements in present value of the defined benefit obligations

Defined benefit obligation as of January 1, Current service and interest costs Remeasurement of net defined benefit liabilities actuarial losses arising from change in financial assumptions Reclassification of liabilities from transfer of employees Benefits paid Defined benefit obligation as of December 31,	For the years ended December 31, 2020 2019 $ 1,098,174 1,025,794 15,266 18,052 14,987 64,451 (869) - (18,750) (10,123) $ 1,108,808 1,098,174

3) Movements in fair value of defined benefit plan assets

Fair value of plan assets as of January 1,
Interest income
Remeasurement of net defined liabilities
return on plan assets (excluding interest income)
Contributions from employer
Benefits already paid by the plan
Fair value of plan assets as of December 31,
Expenses recognized in profit or loss
Current service costs
Net interest income of net defined benefit liabilities
Operating expected rate of return for the plan asset

For the years ended December 31,
2020
2019
$ 522,278
488,491
5,298
6,192
18,754
22,355
14,711
14,357
(18,516)
(9,117)
$
542,525
488,491
For the years ended December 31,
2020
2019
$ 4,284
5,230
10,982
12,822
(5,298)
(6,192)
$
9,968
11,860

4) Expenses recognized in profit or loss

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

Operating costs Operating expenses	2020 $ 6,145 3,823 $ 9,968	2019
		7,662 4,198
		11,860

5) Remeasurement of net defined benefit liabilities recognized in other comprehensive income

Balance as of January 1, Recognized during the period Balance as of December 31,	For the years ended December 31, 2020 2019 $ 57,312 23,635 (3,013) 33,677 $ 54,299 57,312	For the years ended December 31, 2020 2019 $ 57,312 23,635 (3,013) 33,677 $ 54,299 57,312
		2019
		23,635 33,677
		57,312

6) Actuarial assumptions

Discount rate Future salary increases	December 31, 2020 December 31, 2019 % 1.00 % 1.00 % 2.85 % 2.85

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date for 2020 is $14,216.

The weighted average duration of the defined benefit plan is 16.2 years.

7) Sensitivity analysis

Sensitivity analysis
		Effect of	defined
		benefit obligations
		Increase	Decrease
		amount	amount
December 31, 2020
Discount rate (change 0.25%)	$	37,838	(36,211)
Future salaries (change1%)		159,749	(136,769)
December 31, 2019
Discount rate (change 0.25%)		41,656	(39,743)
Future salaries (change1%)		176,405	(149,197)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. The sensitivity analysis adopts the same methods for determining the defined benefit assets at balance sheet date.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The same methods and assumptions are adopted in the preparation of sensitivity analysis as in previous year.

(ii) Defined contribution plan

The Company contributes an amount equal to 6% of the employee�s monthly wages to the Labor Pension personal account of the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act, under which, the Company is not required to bear the regulated or putative obligation subsequent to the payment of fixed-rate contribution.

The Company�s pension costs under the contribution pension plan amounted to $151,699 and $141,403 for the years ended 2020 and 2019, respectively.

(j) Income tax

(i) The Company�s income tax expense recognized for the years ended 2020 were as follows:

Current tax expense Current period Surtax on undistributed earnings Adjustment for prior periods Taxes on remitted earnings from subsidiary Deferred tax expense Tax expense	For the years ended December 31, 2020 2019 $ 1,397,212 876,663 171,974 673,894 (588,184) (485,929) 103,526 - 203,449 319,147 $ 1,287,977 1,383,775	For the years ended December 31, 2020 2019 $ 1,397,212 876,663 171,974 673,894 (588,184) (485,929) 103,526 - 203,449 319,147 $ 1,287,977 1,383,775
	2020 $ 1,397,212 171,974 (588,184) 103,526 203,449 $ 1,287,977
		876,663 673,894 (485,929) - 319,147 1,383,775

The Company�s tax income recognized in other comprehensive income for the years ended 2020 and 2019 were as follows:

Items that could not be reclassified subsequently to profit or loss:
Remeasurement of net defined benefit plan
Reconciliation of income tax expense and profit before tax
Income tax calculated based on local tax rate
Tax effect of permanent differences
Change in unrecognized temporary differences
Tax effect of unrecognized current-year loss carryforward
Adjustment for prior periods
Taxes on remitted earnings from subsidiary
Surtax on undistributed earnings
Total

For the years ended December 31,
2020
2019
$
(754)
8,419
for 2020 and 2019 is as follows:
For the years ended December 31,
2020
2019
$ 1,794,804
2,241,675
(192,534)
(168,317)
(1,609)
(48,133)
-
(829,415)
(588,184)
(485,929)
103,526
-
171,974
673,894
$
1,287,977
1,383,775

2020
$ 1,794,804
(192,534)
(1,609)
-
(588,184)
103,526
171,974
$
1,287,977

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(ii) Deferred tax assets

1) Recognized deferred tax assets

Deferred tax assets

Deferred tax assets
Balance as of January 1, 2020 Recognized in loss Recognized in other comprehensive loss Balance as of December 31, 2020 Balance as of January 1, 2019 Recognized in loss Recognized in other comprehensive income Balance as of December 31, 2019	Impairment loss of assets 155,102 (30,878) - 124,224 234,579 (79,477) - 155,102	Improvements costs of environmental safety and factory facilities 165,032 (30,785) - 134,247 168,625 (3,593) - 165,032	Others 229,899 (141,786) (754) 87,359 457,557 (236,077) 8,419 229,899	Total 550,033 (203,449) (754)
				345,830 860,761 (319,147) 8,419
				550,033

Deferred tax liabilities

2) The Company's income tax returns have been examined by the ROC tax authority through 2017.

(k) Capital and other equity

As of December 31, 2020 and 2019, the Company�s government registered total authorized capital both amounted to $300,000,000 with $10 dollars par value per share, the number of ordinary shares both were 30,000,000 thousand shares and total paid-up ordinary share amounted to $30,935,939, and $30,733,649 respectively. All issued shares were paid up upon issuance.

The movements of shares outstanding for the years ended 2020 and 2019 were as follows:

(in thousand shares)

Balance as of January 1, Exercise of employees share options Retirement of treasury shares Balance as of December 31,	Ordinary Shares 2020 2019 3,073,365 3,103,239 20,229 20,262 - (50,136) 3,093,594 3,073,365
	2020 3,073,365 20,229 - 3,093,594

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(i) Ordinary share

On February 26, May 6, August 6 and November 4, 2020, the Company�s Board of Directors approved to issue the Company's ordinary shares deriving from the exercise of employee share options. The Company had issued 632 thousand, 664 thousand, 17,951 thousand and 982 thousand ordinary shares at par value, respectively, with the issuing prices of $29.2, $29.2, $28.5 to $29.2 and $28.5 to $29.6 dollars per share, which totaled $202,290. All issued shares were paid up upon issuance and the related process for registration had been completed.

For the fourth quarter of 2020, the Company�s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 1,271 thousand ordinary shares, at issuing prices of $28.5 to $29.6 dollars per share, which totaled $36,264, which was recognized as advance receipts for share capital as of December 31, 2020 and 2019.

On February 27, May 10, August 12 and November 8, 2019, the Company�s Board of Directors approved to issue the Company's ordinary shares deriving from the exercise of employee share options. The Company had issued 313 thousand, 89 thousand, 19,056 thousand and 804 thousand ordinary shares at par value, with the issuing prices of $33.1, $33.1, $29.2 to $33.1, $29.2, $30.3 dollars per share, which totaled $202,620. All issued shares were paid up upon issuance and the related process for registration had been completed.

For the fourth quarter of 2019, the Company�s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 119 thousand ordinary shares, at issuing prices of $29.2 dollars per share, which totaled $3,475, which was recognized as advance receipts for share capital as of December 31, 2019.

(ii) Capital surplus

Premium from the issuance of stock Employee stock option plans Expired employee share option plans Psat due unclaimed dividends Change in equity of associates accounted for using equity method	December 31, 2020 $ 29,398,346 2,790,727 262,499 79 38 $ 32,451,689	December 31, 2019
		29,010,509 2,732,307 262,499 - 24
		32,005,339

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(iii) Retain earning

According to the Company�s Articles of Incorporation, the Company�s annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof until the accumulated balance of legal reserve equals the total issued capital and any special reserves pursuant to relevant laws and regulations. The remainder, plus the undistributed earnings of the previous years, are distributed or left undistributed for business purposes according to the resolution of the stockholders� dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in the annual stockholders� meeting.

As it belongs to a highly capital-intensive industry with strong growth potential, the Company adopts a dividend distribution policy which is in line with its plans for product line expansion and the demand of fund. This policy requires that the distribution of cash dividends shall be equal to at least fifty percent (50%) of the Company�s total dividend distribution every year.

1) Legal reserve

When the Company incurs no loss, it may, in pursuant to a resolution to be adopted by a shareholders� meeting, distribute its legal reserve by issuing new shares or by cash. Only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.

2) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders� equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders� equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders� equity shall qualify for additional distributions.

3) Earnings distribution

Earnings distribution for 2019 and 2018 was approved in the general meeting of shareholders held on May 28, 2020 and May 30, 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2019	For the year ended December 31, 2019
	Dividends per share $ 1.50	Amount
		4,600,000

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2018	For the year ended December 31, 2018
	Dividends per share $ 7.11	Amount
		21,700,000

(iv) Treasury shares

The Company repurchased shares from the securities exchange market based on section 28(2) of the Securities and Exchange Act and the movement in treasury shares were as follows:

		Reasons for repurchase of shares	Reasons for repurchase of shares	Reasons for repurchase of shares
				Protecting the Company's
				integrity and	shareholders�
	Transferring	to	employees	equity				Total
	Thousand			Thousand			Thousand
	shares		Amount	shares		Amount	shares		Amount
Balance as of January 1, 2020 (Balance as of December 31, 2020)	20,000	$	1,146,932	-	$	-	20,000		1,146,932
		Reasons for repurchase of shares
				Protecting the Company's
				integrity and	shareholders�
	Transferring	to	employees	equity				Total
	Thousand			Thousand			Thousand
	shares		Amount	shares		Amount	shares		Amount
Balance as of January 1, 2019	20,000	$	1,146,932	30,445	$	1,635,743	50,445		2,782,675
Repurchase for the period	-		-	19,691		1,029,878	19,691		1,029,878
Retirement for the period	-		-	(50,136)		(2,665,621)	(50,136)		(2,665,621)
Balance as of December 31, 2019	20,000	$	1,146,932	-	$	-	20,000		1,146,932

On February 27, 2019, the Company�s Board of Directors approved to retire 501,360 thousand treasury shares, resulting in a decrease in ordinary shares amounting to $501,360. The Company recognized the decrease in capital surplus of $2,164,261, with the same record date as the capital reduction, due to the book value being higher than the par value of the treasury shares. The related process for registration had been completed.

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(v) Other equity (net of tax)

Other equity (net of tax)
Balance as of January 1, 2020 Exchange differences on translation of foreign financial statements Unrealized losses from financial of assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance as of December 31, 2020 Balance as of January 1, 2019 Exchange differences on translation of foreign financial statements Unrealized losses from financial of assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance as of December 31, 2019	Exchange differences on translation of foreign financial statements	Unrealized losses from financial assets measured at fair value through other comprehensive income	Total
	$ (938,039) (1,955,693) - $ (2,893,732) $ (179,736) (758,303) - $ (938,039)	(103,061) - (14,714) (117,775) (94,098) - (8,963) (103,061)	(1,041,100) (1,955,693) (14,714) (3,011,507) (273,834) (758,303) (8,963) (1,041,100)

(l) Share-based payment transactions

As of December 31, 2020, the Company had 3 share-based payment arrangements as follows:

Grant date Grant unit Exercise price (dollar) (Notes1~5) Deal period Vested Conditions	The 8th batch of Employee Stock Option Plan The 9th batch of Employee Stock Option Plan 2016.5.10 2016.8.11 97,500 2,500 38.0 36.6 8 years 8 years Duration of two years duration and at certain proportion Duration of two years duration and at certain proportion

Note 1: The Company approved to distribute its cash dividends in 2016. As a result, the exercise price of the 8th batch of the employee stock option plan were adjusted to $35.3 dollars, in accordance with the offering and exercising terms and conditions of ESOP.
Note 2: The Company approved to distribute its cash dividends in 2017. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $34.3 dollars and $35.5 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.
Note 3: The Company approved to distribute its cash dividends in 2018. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $33.1 dollars and $34.3 dollars, respectively, in accordance with the offering and exercising terms and conditions of ESOP.
Note 4: The Company approved to distribute its cash dividends in 2019. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $29.2 dollars and $30.3 dollars, respectively in accordance with the offering and exercising terms and conditions of ESOP.
Note 5: The Company approved to distribute its cash dividends in 2020. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $28.5 dollars and $29.6 dollars, respectively in accordance with the offering and exercising terms and conditions of ESOP.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

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

were as follows:
		The 8th batch of		The 9th batch of
		Employee Stock		Employee Stock
		Option Plan		Option Plan
Dividend rate		-	%	-	%
Expected volatility		55.47	%	45.80	%
Risk-free rate		0.5728	%	0.529	%
Fair value of unit stock option (dollar)	$	18.77		15.30

Expected volatility is based on weighted average of historical volatility, and it is adjusted accordingly when there is additional market information about the volatility. The expected term of stock option is based on each of the Company�s issued stock option plans. Expected dividend and risk-free rate is determined based on government bonds.

(ii) Relevant information of employee stock option plans

For the years ended December 31, 2020 2019 Weighted- average exercise (price TWD) Number of options (Units) Weighted- average exercise (price TWD) Number of options (Units) $ 29.22 28,202 34.49 109,382 28.52 (21,381) 29.22 (20,185) 28.55 (2,359) 29.25 (628) - - 35.60 (60,367) 28.51 4,462 29.22 28,202 28.51 4,462 29.23 5,617	For the years ended December 31, 2020 2019 Weighted- average exercise (price TWD) Number of options (Units) Weighted- average exercise (price TWD) Number of options (Units) $ 29.22 28,202 34.49 109,382 28.52 (21,381) 29.22 (20,185) 28.55 (2,359) 29.25 (628) - - 35.60 (60,367) 28.51 4,462 29.22 28,202 28.51 4,462 29.23 5,617	For the years ended December 31, 2020 2019 Weighted- average exercise (price TWD) Number of options (Units) Weighted- average exercise (price TWD) Number of options (Units) $ 29.22 28,202 34.49 109,382 28.52 (21,381) 29.22 (20,185) 28.55 (2,359) 29.25 (628) - - 35.60 (60,367) 28.51 4,462 29.22 28,202 28.51 4,462 29.23 5,617
2020 Weighted- average exercise (price TWD) Number of options (Units) $ 29.22 28,202 28.52 (21,381) 28.55 (2,359) - - 28.51 4,462 28.51 4,462
Weighted- average exercise (price TWD) $ 29.22 28.52 28.55 - 28.51 28.51	Weighted- average exercise (price TWD) 34.49 29.22 29.25 35.60 29.22 29.23
		28,202 5,617

Further details of the outstanding stock options of the Company as of December 31, 2020 and 2019 were as follows:

Range of exercise price (dollar) Weighted average of remaining option plan period (year) (iii) Compensation cost Compensation cost arising from share options granted to employees	December 31, 2020 December 31, 2019 28.5~29.6 29.2~33.1 3.35~3.61 4.36~4.61 For the years ended December 31,	December 31, 2020 December 31, 2019 28.5~29.6 29.2~33.1 3.35~3.61 4.36~4.61 For the years ended December 31,
	2020 $ 58,420	2019
		150,116

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(m) Earnings per share

Basic earnings per share Net income attributable to the Company Weighted-average number of ordinary shares outstanding (basic) Basic earnings per share (dollar) Diluted earnings per share: Net income attributable to the Company (basic and diluted) Effect of potentially dilutive ordinary shares Weighted-average number of ordinary shares (basic) Effect of employee stock option Effect of employee remuneration Weighted-average number of ordinary shares (diluted) Diluted earnings per share (dollar)	For the years ended December 31,	For the years ended December 31,
	2020 $ 7,686,041 3,065,482 $ 2.51 $ 7,686,041 3,065,482 8,474 8,408 3,082,364 $ 2.49	2019
		9,824,599 3,045,219
		3.23 9,824,599 3,045,219 22,392 14,052
		3,081,663
		3.19

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

Primary geographic markets: Taiwan Japan China USA Other countries Major products line: Dynamic Random Access Memory (DRAM) Others	For the year ended December 31, 2020 Manufacturing department $ 18,120,076 3,777,093 25,456,947 9,262,938 4,083,336 $ 60,700,390 $ 60,562,260 138,130 $ 60,700,390	For the year ended December 31, 2019
		Manufacturing department
		19,426,583 3,849,678 18,562,317 5,917,946 3,718,970
		51,475,494 51,266,263 209,231
		51,475,494

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(i) Contract balances

Notes receivable from operating activities Notes receivable-related parties from non-operating activities Accounts receivable (including related parties) Total	December 31, 2020 $ - - 8,235,352 $ 8,235,352	December 31, 2019 - 41,545 7,466,062 7,507,607	January 1, 2019
			481 - 10,217,057
			10,217,538

For details on notes and accounts receivable (including related parties), and loss allowance for impairment, please refer to note 6(b).

(o) Remuneration to employees

According to the Company's articles of incorporation, if the Company makes a profit, it should appropriate for employee compensation which is calculated based on 1% to 12% of the Company's net income before tax before deduction of employee compensation, and after offsetting accumulated deficits, if any, should be distributed as employee compensations. Employees who are entitled to receive the above-mentioned employee compensation, in shares or cash, include the employees of the subsidiaries of the Company who meet certain specific requirements.

The estimated employee remuneration which was charged to profit or loss under operating costs or expense amounted to $600,000 and $800,000 for the years ended 2020 and 2019, respectively. This employee remuneration was estimated based on the Company's net income before tax before deducting any employee compensation, according to the earnings allocation method as stated under the Company's articles of association, the related information would be available at the Market Observation Post System website.

There is no difference between the estimated amounts of employee remuneration for the year ended December 31, 2020 and 2019 and the financial statements for the year ended December 31, 2020 and 2019, which were approved by the Company's Board of Directors.

(p) Non-operating income and expenses

(i) Interest income

Interest income from bank deposits and short-term notes Interest income from financial lease receivables	For the years ended December 31,	For the years ended December 31,
	2020 $ 49,393 78,316 $ 127,709	2019
		246,818 96,730
		343,548

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(ii) Other gains and losses

Gain or loss on disposal of property, plant and equipment Foreign exchange gains (losses) Reversal of impairment loss (impairment loss) on non- financial assets Others Finance costs Amortization interest of lease liabilities Others	For the years ended December 31, 2020 2019 $ (6,633) 4,723 (699,836) (168,956) - 213,282 178,588 180,778 $ (527,881) 229,827 For the years ended December 31, 2020 2019 12,833 2,933 190 191 $ 13,023 3,124

(iii) Finance costs

(q) Financial instruments

(i) Credit risk

1) Exposure to credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk.

2) Concentration of credit risk

The majority of Company's customers are mostly those in the high-tech industry. In order to reduce accounts receivable credit risk, the Company continuously assesses the financial condition of its customers. If it is necessary, the Company will ask for guarantees or warranties. The Company still regularly assesses the likelihood of collectability of accounts receivable and sets aside allowance for bad debts, based on the result of management�s evaluation of the overall amounts of bad debts.

As of December 31, 2020 and 2019, the Company�s major customers consisted of five and eight customers which accounted for 75.46% and 69.57%, respectively, of accounts receivable so that management believes the concentration of credit risk.

3) Credit risk of receivables

For credit risk exposure of notes and accounts receivables (including related parties), please refer to note 6(b).

Other financial assets measured at amortized cost includes other receivables, time deposits and refundable deposits.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

Considering that the Company deals only with other external parties with good credit standing and with the above investment grade financial institutions, all of the above financial assets are considered to have low credit risk.

(ii) Liquidity risk

Contractual cash flow 2,111,774 5,281,268 1,914,405	Within 6 months 2,111,774 5,281,268 100,758	1-2years - - 201,516	2-5years - - 604,549	Over 5 years
				- - 906,824
9,307,447 2,706,958 7,864,881 100,336	7,493,800 2,706,958 7,864,881 100,336	201,516 - - -	604,549 - - -	906,824 - - -
10,672,175	10,672,175	-	-	-

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

(iii) Currency risk
1) Exposure to currency risk

The Company�s significant exposure to foreign currency risk was as follows:

Financial assets: Monetary items USD JPY EUR HKD Financial liabilities: Monetary items USD JPY EUR	December 31, 2020 Foreign currency (in thousands) Foreign rate (dollars) New Taiwan Dollars $ 367,526 28.508 10,477,431 3,490,741 0.2724 950,878 42 34.5600 1,452 1,379 3.6257 5,000 $ 115,140 28.508 3,282,411 1,272,668 0.2724 346,675 150 34.5600 5,184	December 31, 2020 Foreign currency (in thousands) Foreign rate (dollars) New Taiwan Dollars $ 367,526 28.508 10,477,431 3,490,741 0.2724 950,878 42 34.5600 1,452 1,379 3.6257 5,000 $ 115,140 28.508 3,282,411 1,272,668 0.2724 346,675 150 34.5600 5,184	December 31, 2019	December 31, 2019
	Foreign currency (in thousands) $ 367,526 3,490,741 42 1,379 $ 115,140 1,272,668 150	Foreign rate (dollars) 28.508 0.2724 34.5600 3.6257 28.508 0.2724 34.5600	Foreign currency (in thousands) 306,649 2,546,135 144 227,936 112,965 2,014,894 4,616	Foreign rate (dollars) New Taiwan Dollars 30.106 9,231,975 0.2763 703,497 33.690 4,851 3.863 880,608 30.106 3,400,924 0.2763 556,715 33.690 155,511

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

2) Sensitivity analysis

The Company�s exposure to foreign currency risk arises from the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable (including related parties), accounts payable, and other payables (including related parties) which are denominated in different foreign currencies. A 1% depreciation of the TWD against the USD, EUR, and JPY as of December 31, 2020 and 2019 would have increased the net income before tax by $78,005 and $67,077 for the years ended 2020 and 2019, respectively. This analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis.

Since the Company has many kinds of functional currency, the information on foreign exchange loss on monetary items is disclosed by total amount. For the years ended December 31, 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $699,836 and $168,956, respectively.

(iv) Fair value of financial instruments
1) Types and fair value of financial instruments

The fair value of financial liabilities at fair value though profit or loss was measured at recurring fair value. The carrying amount and fair value of the Company's financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, disclosure of fair value information is not required:

	December 31, 2020	December 31, 2020	December 31, 2020
Book Value $ 16,573,114 8,235,352 1,249,639 689,886 $ 26,747,991 $ 2,111,774 5,281,268 1,796,084 $ 9,189,126	Level 1 - - - - - - - - -	Fair Value
		Level 2 - - - - - - - - -	Level 3 - - - - - - - - -	Total - - - -
				- - - -
				-

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

==> picture [397 x 216] intentionally omitted <==

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

December 31, 2019
Fair Value
Book Value Level 1 Level 2 Level 3 Total
Financial assets measured at amortized
cost
Cash and cash equivalents $ 6,497,820 - - - -
Notes and accounts receivable
(including related parties) 7,507,607 - - - -
Other receivables 1,379,107 - - - -
Lease payments receivable (including
current portion) 875,900 - - - -
Total $ 16,260,434 - - - -
Financial liabilities measured at
amortized cost
Notes and accounts payable
(including related parties) 2,706,958 - - - -
Other payables (including related
parties) 7,864,881 - - - -
Lease liabilities-current 99,924 - - - -
Total $ 10,671,763 - - - -
----- End of picture text -----

  - 2) There were no transfers from financial assets at fair value for the years ended 2020 and 2019.

(r) Financial risk management
(i) Nature and extent

The Company has the following exposure risks for holding certain financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following further discloses detailed information about exposure risk arising from the aforementioned risks and the Company�s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these exposure risks, please refer to the respective notes in the financial statements.

(ii) Framework of risk management

The Company's Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The Company's risk management policies are established to identify and analyze the risks being faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company�s activities. The Company, through their training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The Company's Board of Directors oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company�s Board of Directors is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board of Directors.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers, bank deposits and investments.

1) Accounts receivable

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk.

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, when available, and in some cases, bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the Company; these limits are reviewed quarterly. Customers that fail to meet the Company's benchmark creditworthiness may transact with the Company only on a prepayment basis.

The Company established an impairment allowance that represents its estimate of incurred losses in respect of accounts receivable and investments. Major components of this impairment allowance are specific loss component that is related to individually significant exposure and collective loss component where is the loss is incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

2) Investment

The credit risk exposure in the bank deposits and other financial instruments are measured and monitored by the Company's finance department. Considering that the Company deals only with banks and other external parties with good credit standing and with above investment grade financial institutions, corporate organization and government agencies, management is not expecting non-compliance issues and significant credit risk.

3) Guarantees

The Company�s policy is to provide financial guarantees only to wholly owned subsidiaries. At December 31, 2020 and 2019, no other guarantees were outstanding.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Also, the Company's approach to managing liquidity is to ensure, as much as possible, that it will always have sufficient current funds, such as cash and cash equivalents, securities with high liquidity and sufficient credit line from banks, to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Consolidated Company's reputation.

The Company has unused bank facilities for $20,072,000 and $17,479,000 as of December 31, 2020 and 2019.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company buys and sells derivatives in order to reduce market risks. All these transactions are made in accordance with the risk management policy.

1) Currency risk

The Company's exposure to currency risk is on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company, primarily the New Taiwan Dollars (NTD). The currencies used in these transactions are denominated in NTD, USD, JPY, EUR and HKD.

(s) Capital management

The Company's policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of the Company's equity.

The Company may adjust the payment of dividend to shareholders, return cash to shareholders through capital reduction, issue new shares or sell held for sale assets in order to pay off its liabilities. Likewise, the Company monitors its debt-to-capital ratio which serves as the basis to control capital, the same practice as the other companies in the industry. The Company's debt-tocapital ratio on reporting date was as follows:

Total Liabilities Deduct: cash and cash equivalents Net liabilities Total equity Debt-to-capital ratio	December 31, 2020 $ 11,812,445 (16,573,114) $ (4,760,669) $ 153,812,027 % (3.10)	December 31, 2019 13,081,887 (6,497,820) 6,584,067 152,011,553 % 4.33

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The Company has not changed its capital management strategy as of December 31, 2020.

(t) The investing and financing activities on non-cash transactions

The Company's investing and financing activities on non-cash transactions for the years ended 2020 and 2019 were as follows:

(i) Acquisition of right-of-use asses by lease, please refer to Note6(f)

(ii)

For the years ended December 31,	For the years ended December 31,	For the years ended December 31,
2020		2019
$ 8,337,644 4,080,199 973,002 2,383,092 (693,313) (973,002) (167,843) - $ 8,449,490 5,490,289 For the years ended December 31,		4,080,199 2,383,092 (973,002) -
	2020	2019
$ 1,650,880 377,975 204,017 - (917,376) (204,017) (58,864) (9,292) $ 878,657 164,666 For the years ended December 31,		377,975 - (204,017) (9,292)
		2019
		2,665,621

(iv) Reconciliation of liabilities arising from financing activities were as follows:

	Non-Cash changes		December 31, 2020
Increase 1,884,277	Increased by other payables (70) Non-Cash changes	Interest expense 412
			1,796,084 December 31, 2020
Change in an index of lease payment (2,776)	Increased by other payables (16,723)	Interest expense 2,933
			99,924

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(7) Related-party transactions:

(a) Names and relationship with related parties

The following are entities that have had transactions with related party during the periods covered in the financial statements.

Name of related party Relationship with the Company Nanya Technology Corp. U.S.A. The Company�s subsidiary Nanya Technology Corp. Delaware The Company�s subsidiary Nanya Technology Corp. H.K. The Company�s subsidiary Nanya Technology Corp. Japan The Company�s subsidiary Nanya Technology International, Ltd. The Company�s subsidiary Nanya Technology Corp. Europe GmbH The Company�s subsidiary Nanya Technology Corp. Shenzhen The Company�s subsidiary Nan Ya Photonics Incorporation The Company�s other related parties Formosa Sumco Technology Corporation The Company�s other related parties Formosa Advanced Technologies Co., Ltd. The Company�s associates Formosa Technologies Corporation The Company�s other related parties Formosa Biomedical Technology Corp. The Company�s other related parties Formosa Petrochemical Corporation The Company�s other related parties Formosa Plastics Corporation The Company�s other related parties Formosa FCFC Carpet Corporation The Company�s other related parties Formosa Waters Technology Co., Ltd. The Company�s other related parties Nan Ya Plastics Corporation The entity with significant influence over the Company Formosa Taffeta Co., Ltd. The Company�s other related parties

(b) Significant related-party transactions
(i) Sales to related parties

Subsidiaries Nanya Technology Corp. USA Other Subsidiaries Associates Total	Sales For the years ended December 31, 2020 2019 $ 9,211,321 5,663,168 6,613,016 6,622,021 9,271 - $ 15,833,608 12,285,189	Accounts receivable to related parties	Accounts receivable to related parties
	2020 $ 9,211,321 6,613,016 9,271 $ 15,833,608	December 31, 2020 1,436,308 1,243,457 8,237 2,688,002	December 31, 2019 1,506,295 884,855 -
			2,391,150

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The selling prices and collection terms for the sales to subsidiaries, related parties and associates above are not significantly different from those third-party customers, and the normal credit term with the related parties above is O/A 60 to 180 days and due for collection on the 15th day of the month following the month of delivery of goods sold. There is no collateral received among related parties accounts receivable. However, not expected credit loss is necessary based on the result of management�s evaluation.

(ii) Purchase from related parties

Entities with significant influence over the Company Associates Other related parties: Formosa Sumco Technology Corporation Other related parties Total	Purchases For the years ended December 31, 2020 2019 $ 89,770 98,740 801 1,157 573,342 1,199,180 233,946 305,673 $ 897,859 1,604,750	Accounts payable to related parties	Accounts payable to related parties
	2020 $ 89,770 801 573,342 233,946 $ 897,859	December 31, 2020 9,686 - 71,257 3,735 84,678	December 31, 2019 6,183 - 119,204 7,812
			133,199

The purchase price and payment terms for the purchase from related parties above are not significantly different from those with third party vendors, and the average payment period for notes and accounts payable pertaining to such purchase transactions ranged from one to two months, which was similar to that of other normal vendors.

(iii) Consigned out for processing

Associates	Amount For the years ended December 31, 2020 2019 $ 7,136,528 7,088,474	Other payables to related parties	Other payables to related parties
	2020 $ 7,136,528	December 31, 2020 1,049,080	December 31, 2019
			1,202,342

The term of transactions with the related parties above is 60 days after the end of each month when processed consigned goods are received.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(iv) Service received

Other gains	Other gains	Other payables to related parties December 31, 2020 December 31, 2019 - - - - 3,532 6,241 46,251 50,381 - - 49,783 56,622
For the yea Decemb	rs ended er 31,
2020 $ 288 171 - 144 - $ 603	2019 305 181 - 153 -	December 31, 2019 - - 6,241 50,381 -
	639	56,622

(v) Property transactions

1) Acquisition of equipment:

Acquisition price For the years ended December 31, 2020 2019 $ 40,550 - - 340 $ 40,550 340	Other payables to related parties	Other payables to related parties
2020 $ 40,550 - $ 40,550	December 31, 2020 20,830 - 20,830	December 31, 2019
		- -
		-

2) Acquisition of Financial Assets

Relationship Other related parties - Formosa Taffeta Co., Ltd. Subsidiary - Nanya Technology International, Ltd	Account Investments accounted for using equity method Investments accounted for using equity method		For the year ended December 31, 2019 Item of transaction Acquisition price Shares of Formosa Advanced Technologies Co., Ltd. $ 2,049,483 Shares of Nanya Technology International, Ltd. 6,116,400 $ 8,165,883
		Number of shares of transaction (in thousands) 57,489 0.2

(vi) Lease contracts

Relationship Entities with significant influence over the Company	Acquisition price	Acquisition price
	For the years ended December 31,
	2020 $ 62,391	2019
		49,426

The rentals charged to the entities with significant influence over the Company are determined based on the local market prices, and rents are paid monthly.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

The Company entered into 9 to 10 years lease agreements between July and August 2020, as well as a 3 year lease agreement in July 2017, with Nan Ya Plastics Corporation, at the total values of $2,015,018 and $617,862, respectively. Also, for the years ended December 31, 2020 and 2019, the Group recognized the amount of $12,833 and $2,933, as interest expense, respectively. Furthermore, as of December 31, 2020 and 2019, the balance of lease liabilities amounted to $1,796,084 and $99,924, respectively. In additions, for the year ended December 31, 2020, the Group recognized the additional amount of $1,884,277 of right of use assets. Please refer to Note 6(f) for the details on right of use assets.

(vii) Others

Associates	Other income December 31, 2020 2019 $ 3,635 41,545	Other payables to related parties	Other payables to related parties
	December 31, 2020 $ 3,635	December 31, 2020 -	December 31, 2019
			41,545

Key management personnel compensation comprised:

Short-term employee benefits Share-based payment	For the years ended December 31,	For the years ended December 31,
	2020 $ 55,141 702 $ 55,843	2019
		79,107 3,942
		83,049

Please refer to Note 6(l) for the details of share-based payment.

(8) Pledged assets: None

(9) Commitments and contingencies:

(a) Significant commitments

Guarantees for importation goods provided by bank Unused letters of credit Total	December 31, 2020 $ 935,000 660,779 $ 1,595,779	December 31, 2019 1,045,000 39,023
		1,084,023

(b) Contingent liabilities
(i) In 2000, the Company was charged by Brazil's Ministry of Justice as being involved in the International Monopolies, which influences Brazil's DRAM market. Consequently, the Company, other large international companies and individuals are investigated at the same time. The lawsuit was in a court hearing. The Company has engaged counsels to properly handle it to ensure the Company's rights.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(ii) In October 2016, Lone Star Silicon Innovations LLC (Lone Star) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of East Texas for patent infringement. The lawsuit was handed over to the US District Court of Northern California in July 2017, wherein it was denied in January 2018. Therefore, Lone Star appealed to the US Court of Appeals for the Federal Circuit on the said matter. The case is still in progress. The Company has engaged lawyers to handle the case to ensure its rights.
(iii) In November 2019, Monterey Research LLC (Monterey) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of Delaware for patent infringement. The Company has engaged counsels to properly handle it to ensure the Company's rights.
(iv) The original Joint Venture agreement signed by the Company, Micron Technology, Inc. and its related parties was terminated after Micron Semiconductor Co. completed its share-swap with Micron Technology Taiwan. Both parties had mutually agreed to sign a cooperation agreement, the details of the agreement were as follows:
1) The estimated cost for improving specific environmental safety and factory facilities in mutually operating period of joint venture agreement amounted to US$54,030 thousand; the Company agreed to share the 50% portion of the total costs and accrued it as expense of $850,000 (USD27,015 thousand) to other payable. The Company will share the cost based on the actual amounts at the appointed time. As of December 31, 2020 and 2019, the payment amounting to $200,950 and $47,200 had been recognized by the Company, respectively.
2) The Company agreed to share the 50% portion of the total losses for penalty, improving costs and suspending operation before the date of share-swap in the following two to five years due to an existing event of environmental safety and factory facilities which violated the laws.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to the Financial Statements

(12) Other:

A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
	For theyear ended December 31, 2020			For theyear ended December 31, 2019
	Cost of goods sold	Operating expenses	Total	Cost of goods sold	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension expenses Remuneration of directors Other personnel expenses Depreciation expenses Amortization expenses	2,955,084 194,298 99,661 - 73,204 13,773,731 236,477	1,823,776 90,411 62,006 6,500 30,092 430,796 -	4,778,860 284,709 161,667 6,500 103,296 14,204,527 236,477	3,041,992 192,226 99,008 - 71,809 14,045,030 91,126	1,643,263 73,687 54,255 6,660 23,935 273,001 -	4,685,255 265,913 153,263 6,660 95,744 14,318,031 91,126

The Company's number of employees and additional information on employee benefits for the years ended December 31, 2020 and 2019 are as follows

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Changes of the average salaries and wages Remuneration to supervisor

The Company�s salary and remuneration policies (including directors, managers, and employees) are as follows:

The Company established a remuneration committee to monitor its directors and executives, and to protect the rights of its shareholders and employees. Also, the Company formulates the policies, standards and structures of remuneration, to regularly examine the performance of directors and executives. Furthermore, the Company aims to attract and hold talented employees though providing competitive salaries.

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the �Regulations Governing the Preparation of Financial Reports by Securities Issuers� for the Company for the year ended December 31, 2020:

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties: None
(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):None
(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the Company's paid-in capital:None
(v) Acquisition of individual real estate with amount exceeding the lower of $300 million or 20% of the Company's paid-in capital: None
(vi) Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the Company's paid-in capital: None
(vii) Related-party transaction for purchases and sales for which amounts exceeding the lower of $100 million or 20% of the Company's paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions different fr	with terms om others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase /Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The company Nanya Technology Corp. Delaware Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK Nanya Technology Corp. Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Formosa Sumco Technology Corporation Formosa Biomedical Technology Corp.	Subsidiary Subsidiary Subsidiary Subsidiary The parent company The parent company The parent company The parent company Other related company Other related company Other related company	(Sale) (Sale) (Sale) (Sale) (Sale) Purchase Purchase Purchase Purchase Purchase Purchase	(9,211,321) (3,777,092) (2,662,397) (173,527) (454,105) 9,211,321 3,777,092 2,662,397 173,527 573,342 156,534	(15.18)% (6.22)% (4.39)% (0.29)% 100.00% 100.00% 100.00% 100.00% 100.00% 4.79% 1.31%	O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90 Days O/A 60~90 Days O/A 180Days O/A 60~90Days O/A 60~90Days O/A 60Days O/A 60Days Payment after arrival and inspection of goods	- - - - - - - - - - -		1,436,308 740,886 465,705 36,866 46,251 (1,436,308) (740,886) (465,705) (36,866) (71,257) (3,602)	17.44% 9.00% 5.65% 0.45% 100.00% (100.00)% (100.00)% (100.00)% (100.00)% (3.37)% (0.17)%	- - -

(Continued)

NANYA TECHNOLOGY CORPORATION Notes to Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the Company's paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Account receivable from related parties	Turnover rate	O	verdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Europe GmbH	Subsidiary Subsidiary Subsidiary	1,436,308 740,886 465,705	6.26 6.30 6.26	- - -	-	644,093 419,180 282,397	- - -

(ix) Trading in derivative instruments: None

(b) Information on investees:

The following is the information on investees for the year ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars / shares)

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance	as of December 3	1, 2020	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares (thousand)	Percentage of ownership	Carrying value
The Company The Company The Company The Company The Company The Company Nanya Technology Corp., HK	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Delaware Nanya Technology Corp., HK Nanya Technology Corp., Japan Formosa Advanced Technologies Co., Ltd. Nanya Technology International, Ltd. Nanya Technology Europe GmbH	U.S.A U.S.A Hong Kong Japan Yunlin County, Taiwan British Virgin Island Germany	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products Assembling, testing and producing modules for IC General investment business Sales of semiconductor products	20,392 36,005 66,271 20,161 5,099,482 37,004,400 30,056	20,392 36,005 66,271 20,161 5,099,482 37,004,400 30,056	2 - 20 1 141,511 1.0 -	% 100.00 % 100.00 % 100.00 % 100.00 % 32.00 % 100.00 % 100.00	158,076 171,992 70,615 166,261 5,160,505 34,357,493 71,181	18,263 17,632 9,535 (15,847) 1,402,677 547,446 4,242	18,263 17,632 9,535 (15,847) 466,895 547,446 4,242	Note 1 Note 1 Note 1 Note 1 Note 3 Note 1 Note 2

Note 1: As subsidiary

Note 2: As sub-subsidiary

Note 3: As investee company accounted for using equity method

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investment flows Outflow Inflow	Investment flows Outflow Inflow	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in currentperiod -
						Inflow
Nanya Technology Corp., Shenzhen	Sales of semiconductor products	28,080 (USD985 thousand	) (2)	28,080 (USD985 thousan	d) -	-	28,080 (USD985 thousand)	3,681	100.00%	3,681 (Note 2)	18,977

Note 1 Three types of investments were as follows:

(1) Investing directly in Mainland China
(2) Investing the companies in Mainland China through third parties.
(3) Others

Note 2: The financial statements were reviewed by a certified public accountant of the Taiwanese parent company.

NANYA TECHNOLOGY CORPORATION Notes to Financial Statements

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated Investment in Mainland China as of December 31, 2020 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 2)
28,080 (USD985 thousand)	28,080 (USD985 thousand)	92,287,216

Note 1 The exchange rate of New Taiwan dollars to US dollars on December 31, 2020 was USD1 TWD 28.508.

Note 2 60% of net equity.

(iii) Significant transactions: None
(a) Information on major shareholders:

Shareholding Shareholder�s Name	Shares	Percentage
Nan Ya Plastics Corporation	907,303,775	% 29.31
Formosa Chemicals & Fibre Corporation	334,815,409	% 10.81
Formosa Plastics Corporation	334,815,409	% 10.81
Formosa Petrochemical Corp	334,815,409	% 10.81

Note 1: The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical ordinary shares and preference shares (including treasury shares) on the last business date of each quarter. The actual registered non-physical shares may be different from the capital shares disclosed in the financial statement due to different calculation basis.
Note 2: If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust ac count. The shareholders holding more than 10% of the total shares of the company should declare insider�s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider�s equity announcement please refer to the TWSE website.

(14) Segment information:

Please refer to the consolidated financial statements as of and for the year ended December 31, 2020.

Nanya Technology Corporation

STATEMENT OF CASH AND CASH EQUIVALENTS

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items Cash in bank Repurchase bonds Commercial paper Total	Description Checking Account Demand deposits Foreign currency deposits	Amount Note $ 12,731 10,734,497 3,319,390 (Note) 492,080 2,014,416 $ 16,573,114

Note	Original currency (in thousand ) Currency rate USD 109,017 28.508 JPY 770,896 0.2724 EUR 42 34.56 HKD 29 3.6257

Nanya Technology Corporation

Statement of trade receivables

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

	Clients		Amount
Non-related parties:
MediaTek Inc.		$	1,004,312
KINGSTON			950,315
WPI			608,667
Realtek Semiconductor Corp.			582,311
Kingston (Taiwan)			425,947
Techmosa International Inc			381,753
WT Microelectronics Co., Ltd.			380,658
Other (Less than 5%	of the ending balance)		1,213,387
Total		$	5,547,350

Nanya Technology Corporation

STATEMENT OF INVENTORIES

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items Raw materials Work in process Finished goods Total	Amount	Amount
	Cost $ 350,906 6,578,665 7,154,684 $ 14,084,255	Net Realizable value
		350,906 6,578,665 7,154,684
		14,084,255

Nanya Technology Corporation

STATEMENT OF PREPAYMENTS

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items Prepaid expense Prepaid material expense Others Total	Description Amount Project maintenance $ 676,200 Computer usage fee 199,570 Software 193,397 R&D expense 100,687 Material 283,748 Less than 5% of the ending balance 57,711 $ 1,511,313

Nanya Technology Corporation

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Investee Company Nanya Technology Corp, USA Nanya Technology Corp, Delaware Nanya Technology Corp, HK Nanya Technology Corp, Japan Formosa Advanceed Technologies Co., Ltd. Nanya Technology International, Ltd Subtoatl Add: Exchange differences on translation of foreign financial statements Nanya Technology Corp, USA Nanya Technology Corp, Delaware Nanya Technology Corp, HK Nanya Technology Corp, Japan Nanya Technology International, Ltd Subtoatl	Beginning Balance Number of Shares Amount 2,400 $ 147,580 1 165,736 19,699 68,560 1,000 204,937 141,511,000 5,019,236 1,200 37,959,199 43,565,248 (1,318) (2,056) (10,578) (21,670) (902,417) (938,039) $ 42,627,209	Addit	ions Amount (Note1) - - - - - - - - - - - - - -	Disposals Number of Shares Amount (Note 1) - - - - - - - - - 311,324 - 1,308,846 1,620,170 - - - - - - 1,620,170	Disposals Number of Shares Amount (Note 1) - - - - - - - - - 311,324 - 1,308,846 1,620,170 - - - - - - 1,620,170	Others (Note2) 2,711 - - 1,263 (14,302) - (10,328) (9,160) (9,320) 3,098 (2,422) (1,937,889) (1,955,693) (1,966,021)	Income from investments 18,263 17,632 9,535 (15,847) 466,895 547,446 1,043,924 - - - - - - 1,043,924	Ending Balance	Ending Balance	Amount Guarantee or pledge 168,554 Nil 183,368 Nil 78,095 Nil 190,353 Nil 5,160,505 Nil 37,197,799 Nil 42,978,674 (10,478) (11,376) (7,480) (24,092) (2,840,306) (2,893,732) 40,084,942
	Number of Shares	Number of Shares - - - - - -		Number of Shares - - - - - -				Number of Shares 2,400 1 19,699 1,000 141,511,000 1,200	Percentage of ownership % 100.00 % 100.00 % 100.00 % 100.00 % 32.00 % 100.00
	2,400 1 19,699 1,000 141,511,000 1,200

Note1 : The amounts consisted of cash dividend.

Note2 : The amounts consisted of realized net profit or loss from sales amounting to $3,974, share of other comprehensive income of associates accounted for using equity method amounting to $(14,316),and changes in Capital surplus amounting to $14.

Nanya Technology Corporation

STATEMENT OF TRADE PAYABLES

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Accounts O/A payable	$	478,979
Accounts raw material and supplies payable		1,514,079
Others (Less than 5% of the ending balance)		34,038
Total	$	2,027,096

STATEMENT OF OTHER PAYABLES

	Items		Amount
Salaries payable		$	1,200,994
Royalty Payable			1,119,465
Consigned out for processing			521,634
Others (Less than	5% of the ending		1,319,482
balance)
		$	4,161,575

Nanya Technology Corporation

STATEMENT OF OPERATING COSTS

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Beginning balance of year for raw materials	$	381,848
Add: raw materials purchased		11,979,905
Ending balance of year for raw materials		(350,906)
Add: Others		207,639
Less: Reclassified to manufacturing and operating expenses		(4,541,151)
Usage material		7,677,335
Direct labor		547,361
Manufacturing expenses		34,164,940
Manufacturing Costs		42,389,636
Beginning balance of year for work in progress		7,329,074
Add: Transferred from finished goods		12,061,787
Less: Reclassified to operating expenses		(1,405,353)
Ending balance of year for work in progress		(6,578,665)
Cost of finished goods		53,796,479
Beginning balance of year for finished goods		10,361,386
Less: Reclassified to work in progress		(12,061,787)
Reclassified to operating expenses		(60,376)
Ending balance of year for finished goods		(7,154,684)
Add: Other costs		144,745
Loss on work stoppage		262,479
Operating costs	$	45,288,242

Nanya Technology Corporation

STATEMENT OF SELLING EXPENSES

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Salaries	$	232,123
Air Freights on export sales		100,962
Commissions on export sales		55,412
Compensation costs		35,180
Welfare costs		30,431
Others (Less than 5% of the ending		146,754
balance)
Total	$	600,862

Nanya Technology Corporation

STATEMENT OF ADMINISTRATIVE EXPENSES

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Salaries	$	484,028
Amortization expenses		162,652
Miscellaneous expenses		153,892
Professional service fee		147,958
Utilities		97,382
Rent expenses		67,599
Others (Less than 5% of the ending		198,964
balance)
	$	1,312,475

Nanya Technology Corporation

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSE

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Testing material expenses	$	2,360,149
Salaries		1,294,526
Depreciation expenses		412,687
Computer usage expenses		339,061
Others (Less than 5% of the ending		753,073
balance)
	$	5,159,496

AI assistant

NTC — Annual Report 2021

52061_rns_2021-09-28_227ecd4a-69fc-4edd-9c16-414038e848e0.pdf

Nanya Technology Corporation

2020 Annual Report

Table of Contents

Appendices

A. Letter to Shareholders

I. Business Performance for 2020

II. Business Plan for 2021

III. Industry Outlook

IV. Conclusion

B. Company Profile

C. Corporate Governance

I. Organization

(II) Major Corporate Functions

II. Directors and Management Team

(I) Directors

Implementation of the Board Diversity Policy

III. Remuneration of Directors, President, and Vice Presidents in the most recent year

(I) Remuneration of Directors and Independent Directors

Note 1: Remuneration was approved by the board of directors.

Range of Remuneration

Range of Remuneration

Employee Compensation of Executive Officers

1. Total remuneration as a percentage of net profit after tax

IV. Implementation of Corporate Governance

(I) Board of Directors’ Meeting Status

(II) Audit Committee Meeting Status

(III)Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission

4. Line Up (friendly neighbor):

(VI) Implementation of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons

(VIII) Other Important Corporate Governance Information

The Codes of Ethics of Directors and Managers

CHAPTER Ⅰ GENERAL PRINCIPLES

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Directors and Managers should follow laws and rules of the Company.

Article 9

Article 10

CHAPTER Ⅲ PROCEDURES OF APPLICATION OF EXEMPTION

Article 11

CHAPTER Ⅳ WAYS OF DISCLOSURE

Article 12

CHAPTER ANCILLARY RULES

Article 13

1. Internal Control System Statement

Nanya Technology Corp. Internal Control System Statement

V. Information Regarding NTC's Audit Fees

(II) About the successor accountant

IX. Relationship among the Top Ten Shareholders

D. Capital and Shares

I. Capitalization

II. Composition of Shareholders

III. Distribution of Shareholding

IV. List of major shareholders

V. Market Price, Net Worth, Earnings, and Dividends per Common Share

VI. Dividend Policy and Implementation Status

(I) Dividend Policy

(II) Current Proposal to Distribute Profits

(III) Expect material change in dividend policy: N/A

VIII. Remuneration of employees and directors

IX. Repurchase of Common Stock

(I) Exercised Items:

(II) Exercising Items: None

X. Corporate bond issuance status: None

XIII. Status of Employee Stock Options Plan

(I) Issuance of Employee Stock Options

(II) Employee stock options granted to management team and to top 10 employees:

E. Operations overview

I. Business content

(6) LPDDR3

(II) Industry Overview

D. Consumer Electronics

NTC Annual Report 2021