NTC - Interim / Quarterly Report 2021

Stock Code:2408

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2021 and 2020

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

The independent auditors’ review 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’ review report and consolidated financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. 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	Page
	1 2 3 4 5 6 7 8 8 8～9 10～11 11 11～31 31～33 34 34～35 35 35 35 36～37 37 38 38 39

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. 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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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Review Report

To the Board of Directors of Nanya Technology Corporation：

Introduction

We have reviewed the accompanying consolidated balance sheets of Nanya Technology Corporation (the "Company") and its subsidiaries (together referred to as the "Group") as of March 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard ("IASs") 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph for the three months ended March 31, 2020, we conducted our reviews in accordance with Statement of Auditing Standards 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” . A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion of the consolidated financial report for the three months ended March 31, 2020

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $3,226,166 thousand, constituting 1.94% of the consolidated total assets; and the total liabilities amounting to $37,180 thousand, constituting 0.30% of the consolidated total liabilities as of March 31, 2020, as well as the total comprehensive income amounting to $22,751 thousand, constituting 1.20% of the consolidated total comprehensive income for the three months ended March 31, 2020.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

Unqualified Conclusion and Qualified Conclusion

Except for the adjustments for the three months ended March 31, 2020, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries described in the Basis for Qualified Conclusion paragraph for the three months ended March 31, 2020 above been reviewed by independent auditors, based on our reviews and the review report of another auditor (please refer to Other Matter paragraph), nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2021 and 2020, and of its consolidated financial performance and of its consolidated cash flows for the three months ended March 31, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We did not review 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 reviewed by another auditor, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for Formosa Advanced Technologies Co., Ltd., is based solely on the review report of another auditor. The aforementioned investment accounted for using the equity method amounted to $4,914,568 thousand , constituting 2.95% of the consolidated total assets as of March 31, 2020, and the share of profit of associates accounted for using the equity method amounted to $118,406 thousand constituting 5.10% of the consolidated total profit before tax for the three months ended March 31, 2020, respectively.

The engagement partners on the reviews resulting in this independent auditors’ review report are Hui-Chih Ko and Hsin-Yi Kuo.

KPMG

Taipei, Taiwan (Republic of China) May 5, 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

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.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2021 and 2020

Nanya Technology Corporation and Subsidiaries

Consolidated Balance Sheets

March 31, 2021, December 31 and March 31, 2020 (Expressed in Thousands of New Taiwan Dollars)

March 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 59,112,539 35 1150 Notes receivable, net (Notes 6(b)(n)) 6,027 - 1170 Accounts receivable, net (Note 6(b)(n)) 8,701,485 5 1180 Accounts receivable due from related parties, net (Notes 6(b)(n) and 7) - - 1200 Other receivables (Note 6(g)) 1,536,140 1 1310 Inventories (Note 6(c)) 12,332,671 7 1410 Prepayments 1,363,753 1 Total current assets 83,052,615 49 Non-current assets: 1550 Investments accounted for using equity method (Note 6(d)) 5,337,801 3 1600 Property, plant and equipment (Notes 6(e)(t) and 7) 77,574,824 46 1755 Right-of-use assets (Notes 6(f)) 1,760,202 1 1780 Intangible assets (Note 6(t)) 1,196,961 1 1840 Deferred tax assets 316,773 - 194D Long-term financial lease payments receivable (Note 6(g)) 428,373 - 1990 Other non-current assets (Note 8) 133,541 - Total non-current assets 86,748,475 51 Total assets $ 169,801,090 100	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	March 31, 2020 Amount % 47,532,381 28 - - 8,445,897 5 - - 1,892,197 1 17,818,520 11 1,470,341 1 77,159,336 46 4,914,568 3 82,877,974 50 49,611 - 277,154 - 496,607 - 640,273 1 50,847 - 89,307,034 54 166,466,370 100 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 2580 Non-current lease liabilities (Notes 6(h) and 7) 2640 Net defined benefit liability, non-current 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	March 31, 2021		December 31, 2020		March 31, 2020
			Amount %		Amount %		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		2,270,219 1 126,300 - 6,262,741 5 1,200,179 1 1,834,982 1 50,050 - 755 - 11,745,226 8 16,062 - - - 574,764 - 167,632 - 758,458 - 12,503,684 8 30,739,969 18 19,389 - 32,042,237 20 13,128,412 8 273,834 - 79,983,150 48 (1,077,373) (1) (1,146,932) (1) 153,962,686 92 166,466,370 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

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

		For the three	For the three	months	ended March	31,
			2021		2020
			Amount	%	Amount	%
4000	Operating revenue (Note 6(n))	$	17,730,613	100	14,418,870	100
5000	Operating costs (Notes 6(e)(f)(h)(i)(l)(o) and 7)		(12,568,601)	(71)	(10,982,671)	(76)
	Gross profit from operations		5,162,012	29	3,436,199	24
	Operating expenses (Notes 6(e)(f)(h)(i)(l)(o) and 7):
6100	Selling expenses		(178,304)	(1)	(178,990)	(1)
6200	Administrative expenses		(314,131)	(2)	(353,893)	(3)
6300	Research and development expenses		(1,642,593)	(9)	(1,071,119)	(7)
	Total operating expenses		(2,135,028)	(12)	(1,604,002)	(11)
	Net operating income		3,026,984	17	1,832,197	13
	Non-operating income and expenses (Notes 6(e)(g)(h)(p) and 7):
7100	Interest income		64,864	-	249,502	1
7020	Other gains and losses, net		113,242	1	124,018	1
7050	Finance costs		(6,049)	-	(372)	-
7060	Share of profit of associates accounted for using equity method, net		134,964	1	118,406	1
	Total non-operating income and expenses		307,021	2	491,554	3
7900	Profit from continuing operations before tax		3,334,005	19	2,323,751	16
7950	Income tax expenses (Note 6(j))		(629,672)	(4)	(395,477)	(3)
	Profit		2,704,333	15	1,928,274	13
8300	Other comprehensive income (loss) (Note 6(k)):
8310	Components of other comprehensive income (loss) income that will not be reclassified to
	profit or loss
8320	Share of other comprehensive income (loss) of associates accounted for using equity		42,332	-	(223,074)	(1)
	method, components of other comprehensive income (loss) that will not be reclassified
	to profit or loss
8349	Less: 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		42,332	-	(223,074)	(1)
	profit or loss
8360	Components of other comprehensive (loss) income that may be reclassified to profit or
	loss
8361	Exchange differences on translation of foreign financial statements		14,269	-	186,801	1
8399	Less:Income tax related to components of other comprehensive income (loss) that may be		-	-	-	-
	reclassified to profit or loss
	Components of other comprehensive (loss) income that may be reclassified to		14,269	-	186,801	1
	profit or loss
8300	Other comprehensive (loss) income, net		56,601	-	(36,273)	-
8500	Comprehensive income	$	2,760,934	15	1,892,001	13
	Earnings per share (Note 6(m))
9750	Basic earnings per share	$		0.88		0.63
9850	Diluted earnings per share	$		0.88		0.63

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Changes in Equity For the three months ended March 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

For the three months ended March 31, 2021 and 2020

Ordinary shares	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
$ 30,733,649 - - - - 6,320 $ 30,739,969 $ 30,935,939 - - - 28,410 - $ 30,964,349		273,834	78,054,876 1,928,274 - 1,928,274 - - 79,983,150 79,394,603 2,704,333 - 2,704,333 - - 82,098,936	(938,039) - 186,801 186,801 - - (751,238) (2,893,732) - 14,269 14,269 - - (2,879,463)	(103,061) - (223,074) (223,074) - - (326,135) (117,775) - 42,332 42,332 - - (75,443)	152,011,553
		- -				1,928,274 (36,273)
		-				1,892,001
		- -				24,764 34,368
		273,834				153,962,686
	$ 30,935,939	1,041,100				153,812,027
	- -	- -				2,704,333 56,601
	-	-				2,760,934
	28,410 -	- -				61,190 685,459
	$ 30,964,349	1,041,100				157,319,610

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense 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: Acquisition 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 Net cash flows used in investing activities Cash flows used in financing activities: Decrease in guarantee deposits received Decrease in other payables to related parties Payment of lease liabilities Exercise of employee share options Treasury shares transferred to employees Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		For the three m March	onths ended 31, 2020 2,323,751

			3,580,728 23,889 372 (249,502) 24,764 (118,406) - - (74,295) (16,380)
			3,171,170
			(1,038,237) (104,174) 303,976 166,788 (320,413) (395,464) (91,999) (1,132) 2,088
			(1,478,567)
			4,016,354 65,804 (48) (2,247)
			4,079,863
			(837,711) (1,885) (53,327) 66,083 (4,122)
			(830,962)
			(25,122) (32) (50,168) 34,368 -
			(40,954)
			175,455
			3,383,402 44,148,979
			47,532,381

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards Nanya Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

(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 May 5, 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, 2021:

●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”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) 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 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
(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Standards or
Interpretations
Amendments to IAS 1
“Disclosure of Accounting
Policies”
Amendments to IAS 8
“Definition of Accounting
Estimates”

Content of amendment
Effective date
IASB
The key amendments to IAS 1 include:
●requiring companies to disclose their
material accounting policies rather than
their significant accounting policies;
●clarifying
that
accounting
policies
related to immaterial transactions, other
events or conditions are themselves
immaterial and as such need not be
disclosed; and
●clarifying
that
not
all
accounting
policies
that
relate
to
material
transactions, other events or conditions
are themselves material to a company’s
financial statements.
January 1, 2023
The
amendments
introduce
a
new
definition
for
accounting
estimates:
clarifying that they are monetary amounts
in the financial statements that are subject
to measurement uncertainty.
The
amendments
also
clarify
the
relationship between accounting policies
and accounting estimates by specifying that
a company develops an accounting estimate
to achieve the objective set out by an
accounting policy.
January 1, 2023

Effective date per IASB 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 Equipment 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”

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for full annual consolidated financial statements.

The significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2020. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2020.

(b) Basis of consolidation
(i) List of subsidiaries included in the consolidated financial statements:

Investor	The name of subsidiaries	Business activity		Shareholding	March 31, 2020 Note % 100.00 Note % 100.00 Note % 100.00 Note % 100.00 Note % 100.00 % 100.00 Note % 100.00 Note
			March 31, 2021	December 31, 2020
The Company The Company The Company The Company The Company NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. H.K.	NANYA TECHNOLOGY CORP. U.S.A NANYA TECHNOLOGY CORP. Delaware NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. Japan NANYA TECHNOLOGY INTERNATIONAL LTD. NANYA TECHNOLOGY CORP., Europe GmbH NANYA TECHNOLOGY CORP. Shenzhen	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products General investment business Sales of semiconductor products Sales of semiconductor products	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

Note: The company is a non-significant subsidiary, its financial statements for the three months ended March 31, 2020 have not been reviewed by independent auditors.

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

(c) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, and was adjusted according to material volatility of the market, no material reimbursement and settlement or other material one time events since prior fiscal year.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period. (and allocated to current and deferred taxes based on its proportionate size.)

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and 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 preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2020.

(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 Notes and accounts receivable Notes receivable - from non-operating activities Accounts receivable (including related parties)-measured at amortized cost	March 31, 2021 $ 111 15,038,429 40,455,795 3,151,814 466,390 $ 59,112,539 March 31, 2021 $ 6,027 8,701,485 $ 8,707,512	December 31, 2020 108 14,820,415 34,398,887 2,014,416 492,080 51,725,906 December 31, 2020 - 7,876,165 7,876,165	March 31, 2020
			128 3,845,621 40,063,507 2,117,773 1,505,352
			47,532,381
			March 31, 2020 - 8,445,897
	$ $
			8,445,897

(b) Notes and accounts receivable

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

	March 31, 2021
Notes and accounts receivables (including related parties) Weighted average loss rate $ 8,644,332 - 63,180 - $ 8,707,512 December 31, 2020		Loss allowance provision
		- -
		-

	Weighted average loss rate - - March 31, 2020	Loss allowance provision
		- -
		-

	Weighted average loss rate - - -	Loss allowance provision
		- - -
		-

The Group did not recognize any allowance for impairment as there were no uncollected notes and accounts receivable (including related parties) that were past due as of March 31, 2021, December 31, and March 31, 2020.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Inventories

Raw materials Work in progress Finished goods	March 31, 2021 $ 347,369 6,868,794 5,116,508 $ 12,332,671	December 31, 2020 350,906 6,578,665 7,197,411 14,126,982	March 31, 2020
			421,206 6,874,246 10,523,068
			17,818,520

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 three months ended March 31, 2021 and 2020.

(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	March 31, 2021 $ 5,337,801	December 31, 2020 5,160,505	March 31, 2020
			4,914,568

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 March 31, 2021 December 31, 2020 March 31, 2020 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 % 32.00 The fair value of major associates listed on the Stock Exchange was as follows: March 31, 2021 December 31, 2020 March 31, 2020 Formosa Advanced Technologies Co., Ltd. $ 17,865,778 16,716,000 14,350,111	Nature of Relationship to the Group	Registration Country	Percentage of ownership
			March 31, 2021

The fair value of major associates listed on the Stock Exchange was as follows:

The aggregated financial information of the major associate was as follows:

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The financial information of FATC was as follows:

		March 31,		December 31,	March 31,
		2021		2020	2020
Current assets	$	8,649,949		7,816,528	6,755,020
Non-current assets		5,530,141		5,792,482	6,305,763
Current liabilities		(1,321,571)		(1,238,254)	(1,352,744)
Non-current liabilities		(549,828)		(555,589)	(587,415)
Net asset	$	12,308,691		11,815,167	11,120,624
Net asset contributed to FATC	$	12,308,691		11,815,167	11,120,624
				For the three months ended
				March 31,
				2021	2020
Operating revenue			$	2,534,354	2,574,022
Profit			$	361,236	387,656
Other comprehensive loss				132,288	(697,105)
Total comprehensive income			$	493,524	(309,449)
Total comprehensive income contributed to FATC			$	493,524	(309,449)
				For the three months ended
				March 31,
				2021	2020
Share of net assets of the major associate at January 1			$	3,780,854	3,657,624
Total comprehensive income contributed to the Group				157,927	(99,025)
Share of net assets of major associate at March 31				3,938,781	3,558,599
Add: good will				1,463,162	1,463,162
Less: unrealized profits on upstream sales net assets of the
associates				(64,142)	(107,193)
Total carrying amount of the major associate			$	5,337,801	4,914,568

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Property, plant and equipment

Land Building Cost: Balance as of January 1, 2021 $ 1,013,924 8,144,863 Additions - 8,420 Disposals - - Reclassification - 12,097 Effect of exchange rate change - (99) Balance as of March 31, 2021 $ 1,013,924 8,165,281 Balance as of January 1, 2020 $ 1,013,924 8,157,551 Additions - - Reclassification - - Effect of exchange rate change - 30 Balance as of March 31, 2020 $ 1,013,924 8,157,581 Accumulated depreciation / impairment: Balance as of January 1, 2021 $ - 2,609,251 Depreciation for the period - 80,058 Disposals - - Reclassification - - Gain from impairment loss - - Effect of exchange rate change - (85) Balance as of March 31, 2021 $ - 2,689,224 Balance as of January 1, 2020 $ - 2,295,380 Depreciation for the period - 80,005 Reclassification - - Effect of exchange rate change - 25 Balance as of March 31, 2020 $ - 2,375,410 Carrying amounts: Balance as of March 31, 2021 $ 1,013,924 5,476,057 Balance as of December 31, 2020 $ 1,013,924 5,535,612 Balance as of March 31, 2020 $ 1,013,924 5,782,171 (f) Right-of-use assets Cost： Balance at January 1, 2021 Additions Balance at March 31, 2021 The balance of January 1 and March 31, 2020	Machinery and equipment 199,055,350 136,865 (716) 4,210,820 (477) 203,401,842 195,903,720 296,617 399,562 1,515 196,601,414 132,426,497 3,535,520 (682) (11,951) (869) (481) 135,948,034 119,651,185 3,440,861 (62,101) 1,494 123,031,439 67,453,808 66,628,853 73,569,975	Other equipment 836,742 5,981 (1,458) 19,479 (268) 860,476 919,015 6,374 (3,685) (86) 921,618 658,368 13,852 (1,430) 11,951 - (228) 682,513 766,657 10,251 (6,103) (92) 770,713 177,963 178,374 150,905	co	Under nstruction Total 6,371,857 215,422,736 1,323,611 1,474,877 - (2,174) (4,242,396) - - (844) 3,453,072 216,894,595 2,249,124 208,243,334 691,141 994,132 (579,266) (183,389) - 1,459 2,360,999 209,055,536 - 135,694,116 - 3,629,430 - (2,112) - - - (869) - (794) - 139,319,771 - 122,713,222 - 3,531,117 - (68,204) - 1,427 - 126,177,562 3,453,072 77,574,824 6,371,857 79,728,620 2,360,999 82,877,974 Land $ 1,884,277 17,429 $ 1,901,706 $ 297,829	Total 215,422,736 1,474,877 (2,174) - (844)
					216,894,595
					208,243,334 994,132 (183,389) 1,459
					209,055,536
					135,694,116 3,629,430 (2,112) - (869) (794)
					139,319,771
					122,713,222 3,531,117 (68,204) 1,427
					126,177,562
					77,574,824
					79,728,620
					82,877,974

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Accumulated depreciation: Balance at January 1, 2021 Depreciation for the period Balance at March 31, 2021 Balance at January 1, 2020 Depreciation for the period Balance at March 31, 2020 Carrying Amount: Balance at March 31, 2021 Balance at December 31, 2020 Balance at March 31, 2020	Land
	$ 94,085 47,419 $ 141,504 $ 198,607 49,611 $ 248,218 $ 1,760,202 $ 1,790,192 $ 49,611

(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 (including land, building and its facilities) 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 land was USD1,990 thousand and leased building (including facilities) was USD 13,010 thousand from January 1, 2010 to December 31, 2018; the first yearly renewal rentals for the leased land is USD1,990 thousand and building (including facilities) is USD8,010 thousand from January 1, 2019 to December 31, 2023; the subsequent yearly renewal rentals for the leased land will be USD1,990 thousand and building (including facilities) will be USD 10 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.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) The total lease receivable from the capital lease of the building (including facilities) was $5,185,620 thousand; 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 three months ended March 31, 2021 and 2020, the Group recognized the interest revenue of $16,470 and $21,381, 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	March 31, 2021 $ 264,330 264,330 198,247 - 726,907 (86,634) $ 640,273	December 31, 2020 264,330 264,330 264,330 - 792,990 (103,104) 689,886	March 31, 2020
			264,330 264,330 264,330 198,247
			991,237 (160,039
			831,198

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

(h) Lease liabilities

Lease liabilities
Current Non-current	March 31, 2021 $ 180,785 $ 1,588,055	December 31, 2020 178,432 1,617,652	March 31, 2020
			50,050
			-

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 three months ended March 31	For the three months ended March 31
	2021 $ 6,035 $ 23,955	2020
		294
		22,340

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Total cash outflow for leases	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 74,459	2020
		72,508

(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

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019 .

The expenses recognized in profit or loss for the Group were as follows:

Operating cost Operating expenses Total	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 1,389 972 $ 2,361	2020 1,585 908 2,493

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of local government were as follows:

Operating cost Operating expenses Total	For the three months ended March 31, 2021 2020 $ 23,199 23,110 24,176 20,336 $ 47,375 43,446 (Continued)
	2021 $ 23,199 24,176 $ 47,375

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 Deferred tax expense Tax expense	For the three months ended March 31, 2021 2020 $ 538,170 321,312 29,748 - 61,754 74,165 $ 629,672 395,477	For the three months ended March 31, 2021 2020 $ 538,170 321,312 29,748 - 61,754 74,165 $ 629,672 395,477
		2020
		321,312 - 74,165
		395,477

(ii) The Company's tax returns have been examined by the ROC tax authority through 2019.

(k) Capital and other equity

Except as described below, there was no material change in equity for the three months ended March 31, 2021 and 2020. Please refer to Note 6(k) of the consolidated financial statements as of and for the year ended December 31, 2020 for the related detail disclosures on equity.

(i) Ordinary Share

On February 26, 2021, 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 2,841 thousand ordinary shares at par value with an issuing prices of $28.5 to $29.6 per share, which totaled $28,410. All issued shares were paid up upon issuance and the related process for registration had been completed.

For the first quarter of 2021, the Company’s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 577 thousand ordinary shares, at issuing prices of $28.5 per share, which totaled $16,445, which was recognized as advance receipts for share capital as of March 31, 2021.

(ii) Capital surplus

Premium from the issuance of stock Treasury share transaction Employee stock option plans Expired employee stock option plans Past due unclaimed dividends Change in net equity of associates accounted for using equity method	March 31, 2021 $ 29,450,945 229,425 2,790,727 265,380 79 38 $ 32,736,594	December 31, 2020 29,398,346 - 2,790,727 262,499 79 38 32,451,689	March 31, 2020
			29,022,643 - 2,757,071 262,499 - 24
			32,042,237

(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 not exceed 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) Earnings distribution

Earnings distribution for 2020 and 2019 were approved by the general meetings of shareholders were held on February 26, 2021 and May 28, 2020, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2020	For the year ended December 31, 2020
	Dividends per share $ 1.30	Amount
		4,000,000

(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, 2019	For the year ended December 31, 2019
	Dividends per share $ 1.50	Amount 4,600,000

(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.

In accordance with the requirements of the Company Act of Taiwan, the Company does not hold any shareholders’ rights before transferring its treasury shares.

Balance as of January 1, 2021 Transfer for the period Balance as of March 31, 2021 Balance as of January 1, 2020 (Balance as of March 31,2020)	Transferring to employees thousand shares Amount 20,000 $ 1,146,932 (7,902) (453,153) 12,098 $ 693,779 20,000 $ 1,146,932

(v) Other equity (net of tax)

Balance as of January 1, 2021 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 March 31, 2021	Exchange differences on translation of foreign financial statements $ (2,893,732) 14,269 - $ (2,879,463)	Unrealized loss from financial assets measured at fair value through other comprehensive income (117,775) - 42,332 (75,443)	Total (3,011,507) 14,269 42,332 (2,954,906)

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance as of January 1, 2020 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 March 31, 2020	Exchange differences on translation of foreign financial statements $ (938,039) 186,801 - $ (751,238)	Unrealized losses from financial assets measured at fair value through other comprehensive income (103,061) - (223,074) (326,135)	Total (1,041,100) 186,801 (223,074) (1,077,373)

(l) Share-based payment

Except as described below, there was no material change on the share-based payment transactions for the three months ended March 31, 2021 and 2020. Please refer to Note 6(l) of consolidated financial statements as of and for the year ended December 31, 2020 for related disclosures on sharebased payment transactions.

(i) As of March 31, 2021, the Group has two share-based payment transactions as follows:

Grant date Grant unit Exercise price (dollar) Vesting conditions	The 1th batch of treasury shares transferred to employees The 2th batch of treasury shares transferred to employees 2021.1.15 2021.2.2 3,936 4,064 $57.4 $57.4 Immediately vested Immediately vested

The Group used Black-Scholes option pricing method in measuring the fair value of the sharebased payment at the grant date.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Relevant information of employee stock option plans and the transfer of treasury shares

Outstanding at January 1, Options granted Options exercised Options expired Options forfeited Outstanding at March 31, Options exercisable at March 31,	For the three months ended March 31, 2021 2020 Weighted- average exercise (price TWD) Number of options (Thousand Units) Weighted- average exercise (price TWD) Number of options (Thousand Units) $ 28.51 4,462 29.25 28,202 57.40 8,000 - - 51.23 (10,049) 29.20 (1,177) 57.40 (98) - - - - 29.38 (60) 28.52 2,315 29.22 26,965 28.52 2,315 29.24 4,440	For the three months ended March 31, 2021 2020 Weighted- average exercise (price TWD) Number of options (Thousand Units) Weighted- average exercise (price TWD) Number of options (Thousand Units) $ 28.51 4,462 29.25 28,202 57.40 8,000 - - 51.23 (10,049) 29.20 (1,177) 57.40 (98) - - - - 29.38 (60) 28.52 2,315 29.22 26,965 28.52 2,315 29.24 4,440
	2021 Weighted- average exercise (price TWD) Number of options (Thousand Units) $ 28.51 4,462 57.40 8,000 51.23 (10,049) 57.40 (98) - - 28.52 2,315 28.52 2,315
	Weighted- average exercise (price TWD) $ 28.51 57.40 51.23 57.40 - 28.52 28.52	Weighted- average exercise (price TWD) 29.25 - 29.20 - 29.38 29.22 29.24

(iii) Compensation cost

Compensation cost arising from share options granted to employees Compensation cost arising from treasury shares transferred to employees Total Earnings per share Basic earnings per share: Net profit attributable to the Company’s ordinary shareholders Weighted-average number of ordinary shares outstanding Basic earnings per share (dollar) Diluted earnings per share: Net profit attributable to the Company’s ordinary shareholders (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 three months ended March 31,	For the three months ended March 31,
	2021 2020 $ - 24,764 233,245 - $ 233,245 24,764 For the three months ended March 31, 2021 2020 $ 2,704,333 1,928,274 3,081,387 3,054,149 $ 0.88 0.63 $ 2,704,333 1,928,274 3,081,387 3,054,149 1,957 16,810 4,971 9,055 3,088,315 3,080,014 $ 0.88 0.63	2020
		3,054,149
		0.63
		1,928,274
		3,054,149 16,810 9,055
		3,080,014
		0.63

(m) Earnings per share

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021
Manufacturing department Overseas sales department Total $ 6,209,338 366,173 6,575,511 - 549,722 549,722 50,541 293,260 343,801 18,874 55,682 74,556 6,991,686 1,566,352 8,558,038 9,199 107,154 116,353 172,946 323,858 496,804 - 230,304 230,304 6,201 172,760 178,961 31,558 50,495 82,053 65,729 458,781 524,510 $ 13,556,072 4,174,541 17,730,613 $ 13,518,589 4,174,286 17,692,875 37,483 255 37,738 $ 13,556,072 4,174,541 17,730,613 For the three months ended March 31, 2020		Total
		6,575,511 549,722 343,801 74,556 8,558,038 116,353 496,804 230,304 178,961 82,053 524,510
		17,730,613
		17,692,875 37,738
		17,730,613
	Overseas sales department 409,628 77,910 386,807 283,450 88,299 1,523,609 52,875 215,153 141,642 75,581 85,976 227,361 3,568,291	Total
		4,727,609 77,910 386,807 337,244 114,533 7,633,840 64,663 310,451 141,642 125,186 168,541 330,444
		14,418,870

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020
Manufacturing department $ 10,819,871 30,708 $ 10,850,579 March 31, 2021 $ 6,027 8,701,485 $ 8,707,512	Overseas sales department 3,568,020 271 3,568,291 December 31, 2020 - 7,876,165 7,876,165	Total
		14,387,891 30,979
		14,418,870
		March 31, 2020
		- 8,445,897
		8,445,897

(ii) Contract balances

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 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 $102,329 and $163,221 for the three months ended March 31, 2021 and 2020, 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. 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.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 three months ended March 31,	For the three months ended March 31,
	2021 $ 48,394 16,470 $ 64,864	2020 228,121 21,381 249,502

(i) Other gains and losses

Withholding tax refund Foreign exchange gains Reversal of impairment loss (impairment loss) on non- financial assets Loss on disposal of property, plant and equipment Others Finance costs Interest amortization of lease liability Financing from other related parties Others	For the three months ended March 31,	For the three months ended March 31,
	For the three months ended March 31,
	2021 2020 $ 42,693 - 37,757 78,039 869 - (62) - 31,985 45,979 $ 113,242 124,018 For the three months ended March 31,	2020
		- 78,039 - - 45,979
		124,018
	For the three months ended March 31,
	2021 $ 6,035 - 14 $ 6,049	2020
		294 30 48
		372

(ii) Finance costs

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group's financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note6(q) of the consolidated financial statements for the year ended December 31, 2020.

(i) For credit risk exposure of notes and accounts receivables (including related parties), 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 March 31, 2021, December 31 and March 31, 2020, 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.

(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:

March 31, 2021 Non-derivative financial liabilities Accounts payable (including related parties) Other payables (including related parties) Lease liabilities (including current portion) December 31, 2020 Non-derivative financial liabilities Accounts Payable (including related parties) Other payable (including related parties) Lease liabilities (including current portion) March 31, 2020 Non-derivative financial liabilities Financing from other related parties Accounts payable (including related parties) Other payables (including related parties) Lease liabilities-(current)		Carrying amount $ 2,291,941 5,358,307 1,768,840 $ 9,419,088 $ 2,111,774 5,281,380 1,796,084 $ 9,189,238 $ 3,418 2,396,519 7,459,502 50,050 $ 9,909,489	Contractual cash flow 2,291,941 5,358,307 1,882,264 9,532,512 2,111,774 5,281,380 1,914,405 9,307,559 3,537 2,396,519 7,459,502 50,168 9,909,726	Within 6 months 2,291,941 5,358,307 101,744 7,751,992 2,111,774 5,281,380 100,758 7,493,912 3,537 2,396,519 7,459,502 50,168 9,909,726	6-12months - - 101,744 101,744 - 100,758 100,758 - - - - -	1-2years - - 203,488 203,488 - 201,516 201,516 - - - - -	2-5years - - 610,464 610,464 - 604,549 604,549 - - - - -	Over 5 years
								- - 864,824
								864,824
								- 906,824
								906,824
								- - - -
								-

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

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Market 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	M	arch 31, 2021	New Taiwan Dollars 13,928,463 46,775 1,235 106 3,367,343 213,855 7,512	De	cember 31, 2020	New Taiwan Dollars 8,538,574 209,992 1,452 5,000 3,282,411 346,675 5,184		March 31, 2020
	Foreign currency (in thousands) $ 488,187 181,158 37 29 $ 118,024 828,252 225	Exchange rate (dollars) 28.531 0.2582 33.3849 3.6656 28.531 0.2582 33.3849		Foreign currency (in thousands) 299,515 770,896 42 1,379 115,140 1,272,668 150	Exchange rate (dollars) 28.508 0.2724 34.560 3.626 28.508 0.2724 34.5600		Foreign currency (in thousands) 304,188 510,285 47 291,986 112,279 1,156,178 442	Exchange rate (dollars) New Taiwan Dollars 30.254 9,202,904 0.2807 143,237 33.4489 1,572 3.9039 1,139,884 30.254 3,396,889 0.2807 324,539 33.4489 14,784

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% appreciation and depreciation of the TWD against the USD, JPY, EUR and HKD as of March 31, 2021 and 2020 would have decreased and increased the net income before tax by $103,879 and $67,514 for the three months ended March 31, 2021 and 2020, 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 three months ended March 31, 2021 and 2020, foreign exchange gain (including realized and unrealized portions) amounted to $37,757 and $78,039, 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.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

If the interest rate had increased and decreased by 1 basis points, the Group’ s net income would have increased or decreased by $0 and $34 for the three months ended March 31, 2021 and 2020 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 information

Types and fair value of financial instruments

The carrying amount of the Group's financial assets and liabilities are reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	March 31, 2021	March 31, 2021	March 31, 2021
Book Value $ 59,112,539 8,707,512 1,324,240 640,273 $ 69,784,564 $ 2,291,941 5,358,307 1,768,840 $ 9,419,088		Fair Value
	Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - December 31, 2020			Total - - - -
				-
				- - -
				-

		Fair Value
	Level 1 - - - - - - - - -	Level 2 - - - - - - - - -	Level 3 - - - - - - - - -	Total - - - -
				-
				- - -
				-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2020	March 31, 2020	March 31, 2020
Book Value $ 47,532,381 8,445,897 1,701,272 831,198 $ 58,510,748 $ 2,396,519 7,462,920 50,050 $ 9,909,489	Level 1 - - - - - - - - -	Fair Value
		Level 2 - - - - - - - - -	Level 3 - - - - - - - - -	Total - - - -
				-
				- - -
				-

(r) Financial risk management

There were no significant changes in the Group's financial risk management and policies as disclosed in Note 6(r) of the consolidated financial statements for the year ended December 31, 2020.

(s) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2020. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2020. Please refer to Note 6(s) of the consolidated financial statements for the year ended December 31, 2020 for further details.

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

The Group's investing and financing activities on non-cash transactions for the three months ended March 31, 2021 and 2020 were as follows:

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

(ii)

Acquisition of property, plant and equipment Add: Payables on equipment at beginning of period Less: Payables on equipment at end of period Others Cash Paid	For the three months ended March 31, 2021 2020 $ 1,474,877 994,132 693,313 973,002 (683,559) (997,858) - (131,565) $ 1,484,631 837,711
	2021
	$ 1,474,877 693,313 (683,559) - $ 1,484,631

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

January 1, 2020	January 1, 2020	Non-Cash changes	Non-Cash changes	Non-Cash changes	March 31, 2021
		Additions Increased by other payables Interest expense 17,429 (195) - Non-Cash changes
$ 1,796,084 January 1, 2019					1,768,840
	January 1, 2019				March 31, 2020
		Change in an index of lease payment -	Increased by other payables -	Interest expense 294
$ 99,924					50,050

(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 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 The entity with significant influence over the Group

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

Relationship Associates	Sales For the three months ended March 31, 2021 2020 $ - -	Accounts receivable to related parties March 31, 2021 December 31, 2020 March 31, 2020 - 8,237 -	Accounts receivable to related parties March 31, 2021 December 31, 2020 March 31, 2020 - 8,237 -	Accounts receivable to related parties March 31, 2021 December 31, 2020 March 31, 2020 - 8,237 -
	2021 $ -		December 31, 2020 8,237	March 31, 2020
				-

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 three months ended March 31, 2021 2020 $ 28,815 20,862 731 710 166,981 172,181 65,704 51,876 $ 262,231 245,629	Accounts payable to related parties	Accounts payable to related parties	Accounts payable to related parties
	2021 $ 28,815 731 166,981 65,704 $ 262,231	March 31, 2021	December 31, 2020 9,686 - 71,257 3,735 84,678	March 31, 2020
Entities with significant influence over the Group Associates Other related parties: Formosa Sumco Technology Corporation Other related parties		10,476 - 112,087 9,544		7,128 - 114,007 5,165
		132,107		126,300

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 Associates	Amount For the three months ended March 31, 2021 2020 $ 1,922,073 1,958,034	Other payables to related parties	Other payables to related parties	Other payables to related parties
	2021 $ 1,922,073	March 31, 2021 1,239,200	December 31, 2020 1,049,080	March 31, 2020
				1,196,666

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 Other related parties: Formosa Technologies (Nanjing) Corporation $ Other payables to Balance of borrowings Relationship March 31, 2021 December 31, 2020 March 31, 2020 Other related parties: Formosa Technologies (Nanjing) Corporation $ - - 3,418	Relationship Other related parties: Formosa Technologies (Nanjing) Corporation $ Other payables to Balance of borrowings Relationship March 31, 2021 December 31, 2020 March 31, 2020 Other related parties: Formosa Technologies (Nanjing) Corporation $ - - 3,418	Relationship Other related parties: Formosa Technologies (Nanjing) Corporation $ Other payables to Balance of borrowings Relationship March 31, 2021 December 31, 2020 March 31, 2020 Other related parties: Formosa Technologies (Nanjing) Corporation $ - - 3,418	Financial costs For the three months ended March 31 2021 2020 - 30 related parties	Financial costs For the three months ended March 31 2021 2020 - 30 related parties	Financial costs For the three months ended March 31 2021 2020 - 30 related parties	Financial costs For the three months ended March 31 2021 2020 - 30 related parties

			2021
			-			30
			related parties
	Bala	nce of borrowings December 31, 2020 March 31, 2020 - 3,418	I March 31, 2021 -	ntere	st payable
	March 31, 2021 $ -	December 31, 2020 -		December 31, 2020 30		March 31, 2020
Other related parties: Formosa Technologies (Nanjing) Corporation						65

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Property transactions

1) Acquisition of equipment

(vi)	Other payables to related parties Relationship March 31, 2021 December 31, 2020 March 31, 2020 Entities with significant influence over the Group $ 1,590 20,830 - Leases Acquisition price For the years ended March 31, Relationship 2021 2020 Entities with significant influence over the Group $ 16,484 15,027	Other payables to related	Other payables to related	parties
			December 31, 2020 March 31, 2020 20,830 - Acquisition price	March 31, 2020
				-
			For the years ended March 31,
			2021 $ 16,484	2020
				15,027

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 three months ended March 31, 2021 and 2020, the Group recognized the amount of $6,035 and $294, as interest expense, respectively. Furthermore, as of March 31, 2021, December 31 and March 31, 2020, the balance of lease liabilities amounted to $1,768,840, $1,796,084 and $50,050, respectively.

(vii) Others

(c) Key	Relationship Associates management personnel compensation	Other income	Other income
		For the years ended March 31
		2021 $ 301	2020
			-

Key management personnel compensation comprised:

Short-term employee benefits Share-based payment	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 12,534 - $ 12,534	2020 13,433 393 13,826

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

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(8) Pledged assets:

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

Pledged assets Other non-current assets	Object	March 31, 2021 $ 5,559	December 31, 2020 5,573	March 31, 2020
	Office leasing			5,158

(9) Commitments and contingencies:

(a) Significant commitments

Significant commitments
Guarantees for importation goods provided by bank Unused letters of credit Total	March 31, 2021 $ 935,000 29,396 $ 964,396	December 31, 2020 935,000 660,779 1,595,779	March 31, 2020
			1,045,000 131,045
			1,176,045

(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 dismissed in April 2021, therefore it was closed.
(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.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 March 31, 2021 and 2020, the payment amounting to $200,950 and $198,080 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:

On April 20, 2021, the Company had announced a material information concerning its plan to build a 12inch advanced semiconductor fabrication plant to produce independent developed 10 nm DRAM chips, with the estimated total investment amounting to NTD 300 billion.

(12) Other:

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

follows:
	For the three months ended March 31, 2021			For the three months ended March 31, 2020
	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	777,235 51,903 24,588 - 17,722 3,557,315 64,934	647,179 47,423 25,148 1,560 8,156 119,534 -	1,424,414 99,326 49,736 1,560 25,878 3,676,849 64,934	779,150 49,267 24,695 - 18,509 3,475,321 23,889	537,974 38,441 21,244 1,560 6,390 105,407 -	1,317,124 87,708 45,939 1,560 24,899 3,580,728 23,889

(b) Seasonal operation:

The Group's operation is not affected by seasonal or cyclical factor.

(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 three months ended March 31, 2021:

(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	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 Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Formosa Sumco Technology Corporation	Subsidiary Subsidiary Subsidiary The parent company The parent company The parent company Other related parties	(Sale) (Sale) (Sale) Purchase Purchase Purchase Purchase	(1,899,682) (1,150,223) (991,092) 1,899,682 1,150,223 991,092 166,981	(10.77)% (6.52)% (5.62)% 100.00% 100.00% 100.00% 5.70%	O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60Days	- - - - - - -		1,455,737 768,307 602,107 (1,455,737) (768,307) (602,107) (112,087)	16.30% 8.60% 6.74% (100.00)% (100.00)% (100.00)% (4.89)%	(Note) (Note) (Note) (Note) (Note) (Note) -

Note: The transactions were written off in the 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	Overdue	Overdue	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	1,455,737 768,307 602,107	5.25 6.10 7.43	- - -	- - -	459,309 304,719 362,996	- - -

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

(ix) Trading in derivative instruments: None

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(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)	(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 0 0	Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp.	Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH	1 1 1 1 1 1	Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable	1,899,682 1,150,223 991,092 1,455,737 768,307 602,107	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	10.71% 6.49% 5.59% 0.86% 0.45% 0.35%

Note 1: Assigned numbers represent the following:

==> picture [97 x 7] intentionally omitted <==

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

1. 0 represents the parent company.
----- End of picture text -----

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 three months ended March 31, 2021:

(In Thousands of New Taiwan Dollars / Shares)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net income of investee	Share of profits of investee	Note
				March 31, 2021	December 31, 2020	Shares	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 Nanya Technology International, Ltd. Formosa Advanced Technologies Co., Ltd. Nanya Technology Europe GmbH	U.S.A U.S.A Hong Kong Japan British Virgin Island Yunlin Germany	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 Sales of semiconductor products	20,392 36,005 66,271 20,161 37,004,400 5,099,482 30,056	20,392 36,005 66,271 20,161 37,004,400 5,099,482 30,056	2 - 20 1 1 141,511 -	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 32.00 % 100.00	170,870 176,947 85,835 256,401 34,427,903 5,337,801 83,294	4,788 4,792 17,891 105,342 42,482 361,237 14,723	4,788 4,792 17,891 105,342 42,482 134,964 14,723	(Note1) (Note1) (Note1) (Note1) (Note 1) (Note 2) (Note1)

Note: (1) The transactions were written off in the consolidated financial statements.

(2) Investment accounted for using equity method.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(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, 2021	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of March 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in currentperiod
					Outflow	Inflow
Nanya Technology Corp., Shenzhen	Sales of semiconductor products	28,103 (USD985 thousand)	(2)	28,103 (USD985 thousand)	-	-	28,103 (USD985 thousand)	2,776	100.00%	2,776 (Note 2)	21,887	-

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:

itation on investment in Mainland China:	itation on investment in Mainland China:	itation on investment in Mainland China:
(In Thousands of New Taiwan Dollars)
Accumulated Investment in Mainland China as of March 31, 2021 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 2)
28,103 (USD985 thousand)	28,103 (USD985 thousand)	94,391,766

Note 1：The exchange rate of New Taiwan dollars to US dollars on March 31, 2021 was USD1：TWD 28.531

Note 2：60% of net equity.

(iii) Significant transactions: None
(d) Information on major shareholders:

Information on major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Nan Ya Plastics Corporation	907,303,775	% 29.29
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.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(14) Segment information:

Segment information:
Revenue: From external customers From sales among intersegments Total revenue Reportable segment profit or loss Revenue: From external customers From sales among intersegments Total revenue Reportable segment profit or loss Reportable segment assets Balance at March 31, 2021 Balance at December 31, 2020 Balance at March 31, 2020 Reportable segment liabilities Balance at March 31, 2021 Balance at December 31, 2020 Balance at March 31, 2020		For the three months ended March 31, 2021
	Overseas sales division $ 4,174,541 13,666 $ 4,188,207 $ 128,270	Overseas R&D division Manufacturing divisions Investment divisions Adjustments and eliminated - 13,556,072 - - 96,510 4,083,039 - (4,193,215) 96,510 17,639,111 - (4,193,215) 4,792 3,333,757 42,482 (175,296) For the three months ended March 31, 2020				Total
						17,730,613 -
						17,730,613
						3,334,005

		Overseas R&D division - 95,919 95,919 5,009 Overseas R&D division 180,892 195,825 170,609 Overseas R&D division 3,945 23,832 1,098	Manufacturing divisions 10,850,579 3,479,897 14,330,476 2,323,425 Manufacturing divisions 169,775,015 165,624,472 166,461,373 Manufacturing divisions 12,455,405 11,812,445 12,498,687	Investment divisions - - - 215,746 Investment divisions 34,427,903 34,357,531 37,455,411 Others divisions - 38 -	Adjustments and eliminated - (3,586,143) (3,586,143) (238,497) Adjustments and eliminated (38,020,828) (37,665,760) (40,725,809) Adjustments and eliminated (2,895,051) (2,729,547) (2,676,788)	Total
						14,418,870 -
						14,418,870
						2,323,751
						Total
						169,801,090
						165,631,980
						166,466,370
						Total
						12,481,480
						11,819,953
						12,503,684

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NTC — Interim / Quarterly Report 2021

52061_rns_2021-12-16_0984ea7e-614f-4378-aa45-db7376ca8511.pdf

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion of the consolidated financial report for the three months ended March 31, 2020

Unqualified Conclusion and Qualified Conclusion

Other Matter

KPMG

Notes to Readers

Nanya Technology Corporation and Subsidiaries

Consolidated Balance Sheets

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the three months ended March 31, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards Nanya Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

(c) Employee benefits

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Income taxes

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

(6) Explanation of significant accounts:

(b) Notes and accounts receivable

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Inventories

(d) Investments accounted for using equity method

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Property, plant and equipment

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Lease receivables

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Lease liabilities

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(i) Employee benefits

(i) Defined benefit plan

(ii) Defined contribution plans

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Income tax

(k) Capital and other equity

(i) Ordinary Share

(ii) Capital surplus

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retain earning

1) Legal reserve

2) Special Reserve

3) Earnings distribution

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Treasury shares

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Share-based payment

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Remuneration to employees

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Non-operating income and expenses

NTC Interim / Quarterly Report 2021