Raydium — Annual Report 2023

Nov 9, 2023

Stock Code:3592

Raydium Semiconductor Corporation and Subsidiaries

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: 2F, No. 23, Li-Hsin Rd., Hsinchu Science Park, Hsinchu City, Taiwan Telephone: (03)666-1818

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.

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Table of Contents

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Company History (2) Date and Procedures of Authorization of Financial Statements for Issue (3) Application of Newly Issued or Revised Standards and Interpretations (4) Summary of material accounting policies (5) Significant Accounting Judgments, and Major Sources of Estimation and Assumptions Uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant Contingencies and Unrecognized Commitments (10) Significant disaster losses (11) Subsequent events (12) Others (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Information of major shareholders (14) Segment information

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1 2 3 4 5 6 7 8 9 9 9～10 10～24 24～25 25～57 57～59 60 60 60 60 60 61～62 62 63 63 64

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Representation Letter

The entities that are required to be included in the combined financial statements of Raydium Semiconductor Corporation as of and for the year ended December 31, 2023 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements" endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Raydium Semiconductor Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Hereby declare

Company name: Raydium Semiconductor Corporation Chairman: Huang, Yu-Kuo Date: February 26, 2024.

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KPMG

新竹市科學園區 300091展業一路 11 號 電 話 Tel + 886 3 579 9955 No. 11, Prosperity Road I, Hsinchu Science Park, 傳 真 Fax + 886 3 563 2277 Hsinchu, 300091, Taiwan (R.O.C.) 網 址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Raydium Semiconductor Corporation:

Opinion

We have audited the consolidated financial statements of Raydium Semiconductor Corporation (“the Company”) and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for each of the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”), and the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statements Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Account of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

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

1. Valuation of inventories

Please refer to note 4(8) for the accounting policy of inventory valuation; note 5 for the estimation and assumption uncertainty of the valuation of inventory; and note 6(4) for information on estimation of the valuation of inventory to the consolidated financial statements.

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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.

Description of key audit matter:

The Group may write down the cost of inventories to net realizable value due to normal wear and tear, obsolescence or no market value. The inventory valuation may result in material changes because of decline in demand and prices. Due to the introduction of new products in the market, the original outdated products no longer meet the market demand, resulting in the cost of inventory to exceed its net realizable value. Therefore, the valuation of inventory is one of our key audit matters.

How the matter was addressed in our audit:

The principal procedures include testing the inventory aging reports and analyzing the aging of inventories for each period; inspecting the production and sales meetings to assess the destocking; assessing whether the valuation of inventories has been carried out in accordance with the established accounting policies; and performing retrospective testing on inventories to verify the appropriateness of the inventory provision.

1. Revenue recognition from contracts with customers

Please refer to note 4(14) “Revenue recognition” for the accounting policy on revenue recognition; and note 6(19) “Revenues from contracts with customers” for revenue recognition.

Description of key audit matter:

The Group mainly engages in the development, design and sale of display driver, touch control, and power management integrated circuit products. The recognition of operating revenue is determined according to the trade terms agreed with the customers. The Group recognizes revenue depending on the various sales terms in each individual contract with customers to ensure its performance obligation has been satisfied by transferring its control to its customer. It is necessary to determine the performance obligations and the time at which they are satisfied. Therefore, the appropriateness of timing of revenue recognition is one of our key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the Group's controls surrounding the revenue process and cash collection transaction process; analyzing the type of principal revenue and trading terms; selecting samples and inspecting contracts with customers or customers' orders to assess the adequacy of the timing of revenue recognition; and randomly selecting sales transactions incurred within a certain period before or after the balance sheet date by reviewing documents to ensure that revenue was recognized in the appropriate period.

Other Matter

The Company has prepared its parent-company-only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unqualified opinion.

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

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’ s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Chien-Hui Lu and An-Chih Cheng.

KPMG

Taipei, Taiwan (Republic of China) February 26, 2024.

Notes to Readers

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

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

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

Raydium Semiconductor Corporation and Subsidiaries

Consolidated Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(1)) 1110 Financial assets at fair value through profit or loss－current (note 6(2)) 1120 Financial assets at fair value through other comprehensive income－current (note 6(2)) 1170 Accounts receivable, net (note 6(3)) 1180 Accounts receivable－related parties, net (notes 6(3) and 7) 130X Inventories (note 6(4)) 1476 Other financial assets－current (notes 6(1), (3), (8), 8 and 9) 1479 Other current assets (note 6(9)) Non-current assets: 1517 Financial assets at fair value through other comprehensive income－non- current (note 6(2)) 1600 Property, plant and equipment (note 6(5)) 1755 Right-of-use assets (note 6(6)) 1780 Intangible assets (notes 6(7) and 7) 1840 Deferred tax assets (note 6(15)) 1980 Other financial assets－non-current (notes 6(8) and 9) 1990 Other non-current assets (note 6(9)) Total assets	December 31, 2023 Amount % $ 5,380,259 28 633,073 3 11,013 - 1,310,665 7 1,676,659 9 2,028,806 10 5,941,649 30 172,927 1 17,155,051 88 423,377 2 483,682 3 17,653 - 376,500 2 235,509 1 163,347 1 652,299 3 2,352,367 12 $ 19,507,418 100	December 31, 2022 Amount % 8,418,727 39 356,790 2 7,680 - 757,908 4 2,143,609 10 3,705,911 17 3,482,187 16 152,889 1 19,025,701 89 528,008 2 337,912 2 22,228 - 343,278 1 212,252 1 376,921 2 727,360 3 2,547,959 11 21,573,660 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(10)) 2130 Contract liabilities－current (note 6(19)) 2170 Accounts payable 2201 Salaries and bonuses payable 2220 Other payables－related parties (note 7) 2230 Current income tax liabilities 2250 Provision－current (note 6(12)) 2300 Other current liabilities (notes 6(11), (14), 7 and 9) Non-Current liabilities: 2527 Contract liabilities－non-current (note 6(19)) 2550 Provisions－non-current (note 6(12)) 2570 Deferred tax liabilities (note 6(15)) 2580 Lease liabilities－non-current (note 6(11)) 2640 Net defined benefit liability－non-current (note 6(13)) 2645 Guarantee deposits received (notes 6(14) and 9) Total liabilities Equity(notes 6(16) and (17)): 3110 Common stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31, 2023 Amount % $ 589,278 3 430,502 2 2,738,868 14 2,399,228 13 7,545 - 233,875 1 38,704 - 891,781 5 7,329,781 38 97,460 1 77,409 - 6,246 - 10,280 - 144 - 767,950 4 959,489 5 8,289,270 43 758,552 4 4,712,933 24 5,780,404 29 (33,741) - 11,218,148 57 $ 19,507,418 100	December 31, 2022
				Amount % 32,115 - 316,351 1 1,429,818 7 3,945,728 18 135 - 405,896 2 55,529 - 1,015,501 5 7,201,073 33 364,405 2 111,059 1 22,006 - 15,602 - 118 - 921,960 4 1,435,150 7 8,636,223 40 758,552 4 4,712,933 22 7,436,498 34 29,454 - 12,937,437 60 21,573,660 100

See accompanying notes to consolidated financial statements.

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

Raydium Semiconductor Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

4000 Operating revenue (notes 6(19), 7 and 14) 5000 Operating costs (notes 6(4), (7), (13), (21) and 12) Gross profit Operating expenses(notes 6(3), (7), (12), (13), (21), 7 and 12): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment losses Total operating expenses Operating income Non-operating income and expenses(notes 6(20) and 7): 7010 Other income 7020 Other gains and losses 7050 Finance costs 7100 Interest income Income before income tax 7950 Less: Income tax expenses (note 6(15)) Net income 8300 Other comprehensive income (loss): 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurements of defined benefit plans (note 6(13)) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (note 6(16)) 8349 Less: Income tax related to items that will not be reclassified to profit or loss (note 6(15)) Total item that will not be reclassified subsequently to profit or loss 8360 Items that may be reclassified subsequently to profit or loss (note 6(16)) 8361 Exchange differences on translation of foreign operations 8399 Less: Income tax related to items that may be reclassified to profit or loss (note 6(15)) Total items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income (loss), net of tax 8500 Total comprehensive income (loss) Earnings per share (New Taiwan Dollars)(note 6(18)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the years endedDecember 31,	For the years endedDecember 31,
	2023 Amount % $ 18,346,622 100 13,035,858 71 5,310,764 29 438,886 2 414,904 2 3,049,448 17 28,980 - 3,932,218 21 1,378,546 8 28,720 - 10,212 - (8,202) - 137,465 1 168,195 1 1,546,741 9 103,950 1 1,442,791 8 (26) - (70,094) - (19,086) - (51,034) - (1,227) - (245) - (982) - (52,016) - $ 1,390,775 8 $ 19.02 $ 18.78	2022
		Amount % 22,822,164 100 13,585,483 59 9,236,681 41 887,199 4 547,314 3 4,157,176 18 7,891 - 5,599,580 25 3,637,101 16 33,330 - 752,231 3 (792) - 83,178 1 867,947 4 4,505,048 20 642,712 3 3,862,336 17 384 - (78,418) - 17,024 - (95,058) - 1,636 - 327 - 1,309 - (93,749) - 3,768,587 17 51.23
		49.38

See accompanying notes to consolidated financial statements.

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

Raydium Semiconductor Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Balance as of January 1, 2022 Net income Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends Capital increase Share-based payments transaction Changes in other capital surplus Balance as of December 31, 2022 Net income Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of retained earnings: Legal reserve Cash dividends Disposal of investments in equity instruments measured at fair value through other comprehensive income **Balance as of December 31, 2023 **	Capital Common stock Capital collected in advance $ 669,368 410,564 - - - - - - - - - - - - 89,250 (410,564) (66) - - - 758,552 - - - - - - - - - - - - - $ 758,552 -	Capital surplus 853,315 - - - - - - 3,858,776 624 218 4,712,933 - - - - - - 4,712,933		Retained earnings	Subtotal 6,987,263 3,862,336 384 3,862,720 - - (3,413,485) - - - 7,436,498 1,442,791 (26) 1,442,765 - (3,110,064) 11,205 5,780,404		Other equity	Subtotal 112,872 - (94,133) (94,133) - - - - 10,715 - 29,454 - (51,990) (51,990) - - (11,205) (33,741)	Total equity 9,033,382 3,862,336 (93,749) 3,768,587 - - (3,413,485) 3,537,462 11,273 218 12,937,437 1,442,791 (52,016) 1,390,775 - (3,110,064) - 11,218,148
						Exchange differences on translation of foreign operations (801) - 1,309 1,309 - - - - - - 508 - (982) (982) - - - (474)	Unrealized gains (losses) on financial assets at fair value through other comprehensive income Unearned employee compensation 124,388 (10,715) - - (95,442) - (95,442) - - - - - - - - - - 10,715 - - 28,946 - - - (51,008) - (51,008) - - - - - (11,205) - (33,267) -
	Common stock $ 669,368 - - - - - - 89,250 (66) - 758,552 - - - - - - $ 758,552		Legal reserve 1,031,235 - - - 429,102 - - - - - 1,460,337 - - - 386,272 - - 1,846,609	Special reserve
				10,616
				- -
				-

See accompanying notes to consolidated financial statements.

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

Raydium Semiconductor Corporation and Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments for: Depreciation Amortization Expected credit impairment losses Net gains on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Gains on disposal of property, plant and equipment Compensation costs of share-based payments Inventory valuation and obsolescence losses Other non-cash-related loss Income and expense adjustments Changes in operating assets and liabilities: Financial assets at fair value through profit or loss Accounts receivable and other receivables (including related parties) Inventories Other financial assets Other operation assets Contract liabilities Accounts payable and other payables (including related parties) Other operating liabilities Total changes in operating assets and liabilities Total adjustments Cash flow generated from operations Interests received Dividends received Interests paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in intangible assets (Increase) decrease in other non-current assets Increase in other financial assets Net cash used in investing activities Cash flows from financing activities: Increase in short term borrowings Decrease in guarantee deposits received Repayments of the principal portion of lease liabilities Cash dividends paid Proceeds from capital increase Others Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

For the years ended December 31, 2023 2022 $ 1,546,741 4,505,048 209,369 210,789 163,796 160,128 28,980 7,891 (833) (1,303) 8,202 792 (137,465) (83,178) (12,176) (17,900) (680) - - 11,273 50,869 442,850 129,915 189,468 439,977 920,810 (275,450) (26,714) (114,787) 3,326,022 1,626,236 (2,006,356) (992,031) (495,498) (20,038) 41,374 (152,794) 48,049 1,316,460 (2,112,463) (1,541,089) 682,760 (153,493) (542,826) 286,484 377,984 1,833,225 4,883,032 135,886 80,206 12,176 17,900 (7,677) (705) (295,657) (1,017,068) 1,677,953 3,963,365 - (239,123) 31,205 - - 35,978 (355,616) (81,234) 762 - (187,117) (165,033) 75,060 (128,883) (1,421,566) (1,889,023) (1,857,272) (2,467,318) 564,095 32,115 (304,872) (111,303) (7,388) (6,772) (3,110,064) (3,413,485) - 3,537,462 - 218 (2,858,229) 38,235 (920) 1,459 (3,038,468) 1,535,741 8,418,727 6,882,986 $ 5,380,259 8,418,727

2023 $ 1,546,741 209,369 163,796 28,980 (833) 8,202 (137,465) (12,176) (680) - 50,869 129,915 439,977 (275,450) (114,787) 1,626,236 (992,031) (20,038) (152,794) 1,316,460 (1,541,089) (153,493) 286,484 1,833,225 135,886 12,176 (7,677) (295,657) 1,677,953 - 31,205 - (355,616) 762 (187,117) 75,060 (1,421,566) (1,857,272) 564,095 (304,872) (7,388) (3,110,064) - - (2,858,229) (920) (3,038,468) 8,418,727 $ 5,380,259

See accompanying notes to consolidated financial statements.

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

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, unless otherwise indicated)

1. Company History:

Raydium Semiconductor Corporation (the “ Company” ) was organized and approved under the ROC Company Act on October 23, 2003. The Company was formally relocated to Hsinchu Science and Industry Park on January 29, 2007 after being approved by Hsinchu Science Park Bureau on December 12, 2006. Its current registered address is 2F, No.23, Li Hsin Rd., Hsinchu Science Park, Hsinchu City 300, Taiwan, R.O.C. The Company merged with Dazzo Technology Corporation (hereinafter referred to as Dazzo) on April 1, 2019 (the merger date). Thereafter, the Company became the sole surviving entity. The principal activities of the Company and its subsidiaries (hereinafter referred to as the Group) are the development, design and sale of display driver, sequential control and power management integrated circuit products.

The Company's shares were listed on Taiwan Stock Exchange on January 7, 2022.

2. Date and Procedures of Authorization of Financial Statements for Issue:

The consolidated financial statements were authorized for issue by the Board of Directors on February 26, 2024.

3. Application of Newly Issued or Revised Standards and Interpretations:

• (1) 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, 2023:

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

• ●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Group has initially adopted the new amendment, which do not have a significant impact on its consolidated financial statements, from May 23, 2023:

• ●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”

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Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (2) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its consolidated financial statements:

• ●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

• ●Amendments to IAS 1 “Non-current Liabilities with Covenants”

• ●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

• ●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

• (3) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Group does not expect the following 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 IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”

• ●Amendments to IAS 21 “Lack of Exchangeability”

4. Summary of material accounting policies:

• (1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations) and the IFRS endorsed by the FSC.

• (2) Basis of preparation

• A. Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the balance sheets:

• (a) Financial assets at fair value through profit or loss (FVTPL) are measured at fair value;

• (b) Financial assets at fair value through other comprehensive income (FVOCI) are measured at fair value; and,

• (c) The net defined benefit liabilities are measured as the fair value of the plan assets, less, the present value of the defined benefit obligation.

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Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• B. Functional and presentation currency

The functional currency of the Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollars (NTD), which is the Company’ s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(3) Basis of consolidation

• A. Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and the entities controlled by the Company (its subsidiaries).

The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Total comprehensive income (loss) of subsidiaries is attributed to the shareholders of the Company.

• B. List of subsidiaries in the consolidated financial statements

The list of subsidiaries is included in the consolidated financial statements :

Name of investor	Name of Subsidiary	Principal activity	Percentage of ownership
			December 31, 2023 December 31, 2022 % 100.00 % 100.00 % 100.00 % 100.00
the Company RSA	Raydium Semiconductor (SAMOA) Corp.(RSA) Raydium Semiconductor (Kunshan) Co., Ltd	Investment holding company Development, design and sale of the IC

C. List of subsidiaries which are not included in consolidated financial statements: None.

(4) Foreign currencies

• A. Foreign currency transactions

Transaction in foreign currency are translated into the functional currencies at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, (hereinafter referred to as the reporting date), monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date when fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

~11~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Exchange differences are generally recognized in profit or loss, except for the foreign currency items of financial instruments that applied the accounting policy of IFRS No. 9 “ Financial Instruments”.

When the profit or loss of non monetary item is recognized in other comprehensive income, then any change in the exchange foreign currency of the above items is recognized in other comprehensive income. When the profit or loss of non monetary item is recognized in profit or loss, then any change in the exchange foreign currency of the above items is recognized in profit or loss.

• B. Foreign operations

The assets and liabilities of foreign operations are translated to NTD using the exchange rates at the reporting date. The income and expenses are translated to NTD at the average rate for the period. Foreign currency differences are recognized in other comprehensive income.

• (5) Classification of current and non-current assets and liabilities

The Group classified an asset as current when any one of the following requirements is met. Assets that are not classified as current are non-current assets:

• A. It expects to realize the asset, or intends to sell or consume it, in its the normal operating cycle;

• B. It holds the asset primarily for the purpose of trading;

• C. It expects to realize the asset within twelve months after the reporting period; or

• D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Group classifies a liability as current when any one of the following requirements is met. Liabilities that are not classified as current are non-current liabilities:

• A. It expects to settle the liability in its normal operating cycle;

• B. It holds the liability primarily for the purpose of trading;

• C. The liability is due to be settled within twelve months after the reporting period; or

• D. It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of counterparty, result in its settlement by issuing equity instruments do not affect its classification.

• (6) Cash and cash equivalents

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

~12~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(7) Financial instruments

• A. Financial assets

The Group classifies financial assets into the following categories: amortized cost, FVOCI and FVTPL.

The Group shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

(a) Financial assets at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are initially recognized at fair value, plus any directly attributable transaction costs. Subsequently, these assets are measured at amortized cost using the effective interest method, less any impairment losses. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade date accounting.

(b) Financial assets at FVOCI

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Some accounts receivable are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group, therefore, those receivables are measured at FVOCI.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent fair value changes in the investments in other comprehensive income. This election is made on an instrument-by-instrument basis.

~13~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, impairment losses deriving from debt investments, and dividends income of equity investment (unless the dividend clearly represent a recovery part of the cost of investment) are recognized in profit or loss. Other net gains and losses of financial assets are recognized in other comprehensive income and accumulated in unrealized gains or losses of financial assets measured at FVOCI under equity. On derecognition, gains and losses accumulated in other comprehensive income of debt investments are reclassified to profit or loss. However, gains and losses accumulated in other comprehensive income of equity investments are reclassified to retain earnings instead of profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

(c) Financial assets at FVTPL

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL. On initial recognition, the Group may irrevocably designates a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Such financial assets are initially recognized at fair value, and attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized in profit or loss.

(d) Impairment of financial assets

The Group recognizes loss allowances for expected credit loss (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, accounts receivable, and other financial assets), and debt investments measured at FVOCI.

The Group measures the loss allowance at an amount equal to lifetime ECL, except for the financial instrument that is determined to have low credit risk (the risk of default in financial instrument duration) at the reporting date and the credit risk thereof has not increased significantly since initial recognition, which is measured at an amount equal to the 12-month expected credit losses. Loss allowance for accounts receivable are always measured at an amount equal to lifetime ECL.

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

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

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

~14~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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

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

In the circumstance that a financial asset is past due or the borrower is unlikely to pay its credit obligations to the Group in full, the Group considers the credit risk on that financial asset has significantly increased, or further, to be in default.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off either partially or in full to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

(e) Derecognition of financial assets

The Group derecognizes a financial assets when the contractual rights to the cash flows from the financial asset expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets to another entity.

B. Financial liabilities and equity instruments

(a) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual agreements and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences residual interest in the assets after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

~15~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(b) Financial liabilities

Financial liabilities that are not classified as held-for-trading or designated as at FVTPL, which comprise loans borrowings and accounts payable, are measured at fair value, plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method.

• (c) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

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

• (d) Offsetting of financial assets and liabilities

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

(8) Inventories

Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the weighted average method, and includes expenditures and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

• (9) Property, plant and equipment

• A. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

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

• B. Subsequent expenditure

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

~16~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• C. Depreciation

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

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

• (a) Research equipment: 2~4 years

• (b) Transportation equipment: 6 years

• (c) Office equipment: 3~5 years

• (d) Leasehold improvement: 2 years

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

• (10) Leases

• A. Identifying a lease

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

• (a) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• (b) the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• (c) the Group has the right to direct the use of an asset if either:

• The Group has the right to direct use of the identified asset when it has the decisionmaking rights that are most relevant to the changes on how and for what purpose the asset is used throughout the period.

• The relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the Group has the right to operate the asset without the supplier having the right to change those operating instructions; or

  • － the Group designs the asset in a way that predetermines how and for what purpose it will be used.

~17~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

• B. As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

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

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

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

• (a) fixed payments, including in-substance fixed payments;

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

• (c) amounts expected to be payable under a residual value guarantee; and

• (d) payments for purchase or termination options that are reasonably certain to be exercised.

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

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

• (b) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• (c) there is a change in the assessment regarding the purchase option; or

• (d) the estimate of whether to exercise the option to extend or terminate has changed, thereby changing the assessment of the lease period; or

• (e) there is modifications of the subject, scope, or other terms of the lease

~18~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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

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

The Group presents its right-of-use assets that do not meet the definition of investment properties and lease liabilities as a separate line item respectively in the balance sheets.

The Group has elected not to recognize the right-of-use assets and lease liabilities for its offices, employee dormitory, telecommunication equipment and parking lot, which qualify as short-term leases, as well as its other equipment, which qualify as short term leases and low-value assets leases. The relevant lease payments are recognized in expense on a straight line basis during the lease period.

• (11) Intangible assets

• A. Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete the development, and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including patents, that are acquired by the Group and have finite useful lives are measured at cost, less accumulated amortization and any accumulated impairment losses.

• B. Subsequent expenditure

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

~19~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• C. Amortization

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

The estimated useful lives for the current and comparative periods are as follows:

(a) Patents and technology: 2~5 years (b) Computer software, cost: 0.5~5 years

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

• (12) Impairment of non-financial assets

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

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or cash generating units (CGUs). Goodwill arising from a business combination is allocated to cashgenerating units (“CGUs”) or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash generating units (CGU) are the greater of its value in use and its fair value, less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset or CGU.

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

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

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

~20~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(13) Provisions

A provision is recognized when the Group has a present obligation arising from a past event, it is probable that the Group will be required to make an outflow of resources embodying economic benefits to settle the obligation, and the amount of the obligation can be estimated reliably. When the time value of currency is significant, the provision for liabilities is discounted at current pre-tax rates that adequately reflect the specific risks of the liabilities. The amount of the liabilities increased by time, is recognized as the borrowing cost when the liabilities are discounted.

A provision for warranties is measured with weighting factors based on historical experience of warranty claims rate and other possible outcomes against their associated probabilities.

• (14) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

A. Sale of goods

Revenue is recognized when the control over a product has been transferred to the customer. Being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer, as well as when the product has been accepted by the customer according to the terms of sales contract, or when the Group has objective evidence that all criteria for acceptance have been satisfied.

When the Group receives an advance payment from a customer, the advance amount of such future performance obligation shall be recognized as a contractual obligation, which shall be derecognized when the performance obligation is satisfied and then recognized as revenue.

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

Due to the application of IFRS 15, the sale return and allowance based on historical experience and other known causes were reclassified to provision of liabilities.

B. Financing components

The Group expects that the length of time when the Group transfers the goods or services to the customer and when the customer pays for those goods or services will be less than one year. Therefore, the amount of consideration is not adjusted for the time value of money.

~21~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(15) Employee benefits

• A. Defined contribution plans

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

B. Defined benefit plans

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

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

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

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

C. Short-term employee benefits

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

(16) Share-based payment transaction

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amounts recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized shall be based on the number of awards that meet the related services and non-market performance conditions at the vesting date.

~22~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

For share-based payment awards with non-vesting conditions, the grant-date fair value of the sharebased payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

Grant date of a share-based payment award is the date at which the Group and employees reach a consensus in the subscription price and number of shares.

• (17) Income taxes

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

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

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis at the reporting date.

Deferred taxes are not recognized for the following exceptions:

• A. temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• B. temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• C. taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflect the uncertainty related to income taxes, if any.

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

• A. the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• B. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• (a) the same taxable entity; or

~23~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (b) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

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

(18) Earnings per share

The Group discloses the Company’ s basic and diluted earnings per share attributable to ordinary shareholders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company, divided by the weighted-average number of current ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as employee compensation not yet approved by the Board of Directors and can be issued by stock and unvested restricted employee stock awards.

(19) Operating segments information

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

5. Significant Accounting Judgments, and Major Sources of Estimation and Assumptions Uncertainty:

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

The management continues to monitor the accounting estimations and assumptions. It recognizes any changes in the accounting estimations during the period in which the estimates are revised and in any future periods affected.

~24~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Information about critical judgements, estimates and assumptions made in applying accounting policies that have the significant effect on the amounts recognized in the consolidated financial statements is as follows:

Valuation of inventories

Inventories are stated at the lower of cost or net realizable value, the Group uses judgements and estimates the net realizable value of inventories for obsolescence and unmarketable items at the reporting period. It also writes down the cost of inventories to net realizable value. This inventory valuation may result in material changes in product demand due to the introduction of new products in the market, obsolescence or non-conformity of the original products, which may result in lower demand and prices, resulting in the risk that the cost of inventories may exceed its net realizable value. Please refer note 6(4) for valuation of Inventory.

The Group’s accounting policies and disclosures include the fair value measurement for financial and nonfinancial assets and liabilities. The financial management center of the Group is responsible for performing fair value verification and bringing the evaluation results comparable to market price based on independent, reliable, and representative executable price information. The Group also periodically assesses the evaluation model, performs retrospective tests, and updates inputs together with any other necessary fair value adjustment for the evaluation model in order to ensure the reasonableness of the results of the valuation.

The Group evaluates the assets and liabilities using the observable market inputs. The hierarchy of the fair value depends on the valuation techniques used and is categories as follows:

Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

For any transfer within the fair value hierarchy, the Group recognizes the transfer on the reporting date. For the assumption used in fair value measurement, please refer to note 6(22).

6. Explanation of significant accounts

• (1) Cash and cash equivalents

Demand deposits Time deposits	December 31, 2023 $ 1,386,209 3,994,050 $ 5,380,259	December 31, 2022
		1,224,677 7,194,050
		8,418,727

Please refer to note 6(22) for the credit risk, interest rate risk and sensitivity analysis of the financial assets of the Group.

~25~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

As of December 31, 2023 and 2022, the time deposits with original maturities of more than three months amounted to $3,500,000 thousand and $2,000,000 thousand, respectively, which were classified as other financial assets-current; please refer to note 6(8).

• (2) Financial assets at fair value

• －

• A. Financial assets at fair value through profit or loss current

Financial assets at fair value through profit or loss, mandatorily measured at fair value Beneficiary certificate	December 31, 2023 $ 633,073	December 31, 2022
		356,790

• －

• B. Financial assets at fair value through other comprehensive income current

Listed stocks	December 31, 2023 $ 11,013	December 31, 2022
		7,680

• －

• C. Financial assets at fair value through other comprehensive income non-current

Listed stocks Unlisted stocks	December 31, 2023 $ 308,860 114,517 $ 423,377	December 31, 2022
		263,692 264,316
		528,008

These investments in equity instruments are not held for trading, and therefore, are accounted for as FVOCI.

The Group sold part of its holdings measured at fair value through other comprehensive income in 2023, with the disposal price of $31,205 thousand, resulting in the realized gain of $11,205 thousand to be reclassified from other equity to retained earnings.

For the disclosure of market risk, please refer to note 6(22).

The financial assets mentioned above were not pledged as collateral.

• (3) Accounts receivable, net (including related parties)

Accounts receivable—measured at amortized cost Accounts receivable measured at fair value through other comprehensive income Less: loss allowance	December 31, 2023 $ 2,928,514 119,505 (60,695) $ 2,987,324	December 31, 2022 2,737,683 195,549 (31,715) 2,901,517

~26~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

The Group has assessed a portion of its trade receivables that was held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; therefore, such trade receivables were measured at fair value through other comprehensive income.

The Group uses a simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivable. To measure the expected credit losses, accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information.

The accounts receivable from related parties having significant impact over the Group and other individuals amounted to $1,676,659 thousand and $2,143,609 thousand as of December 31, 2023 and 2022, respectively. The days past due is less than 100 days, so there is no expected credit loss for the duration of the related party's accounts receivable.

The loss allowance provision of customers with relatively low credit risk was determined as follows:

Not past due Past due less than 30 days Past due 31~60 days Not past due Past due less than 30 days Past due 31~60 days	December 31, 2023	December 31, 2023
	Carrying amounts of accounts receivable Weighted- average loss rate $ 711,253 0% 1,629 0% 3,562 0% $ 716,444 December 31, 2022		Loss allowance for life time expected credit losses
			- - -
			-
		Weighted- average loss rate 0% 0% 0%	Loss allowance for life time expected credit losses
			- - -
			-

The loss allowance provision of customers with relatively high credit risk was determined as follows:

Not past due Past due less than 30 days	December 31, 2023	December 31, 2023
	Carrying amounts of accounts receivable $ 588,845 66,071 $ 654,916	Weighted- average loss rate 7.41% 25.80%	Loss allowance for life time expected credit losses
			43,649 17,046
			60,695

~27~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Not past due Past due less than 30 days Past due 31~60 days	December 31, 2022	December 31, 2022
	Carrying amounts of accounts receivable $ 435,207 3,085 80 $ 438,372	Weighted- average loss rate 7.07% 29.90% 56.20%	Loss allowance for life time expected credit losses
			30,748 922 45
			31,715

The movement in the allowance for accounts receivables was as follows:

Beginning balance Recognition of Impairment loss Ending balance	For the years ended December 31,	For the years ended December 31,
	2023 $ 31,715 28,980 $ 60,695	2022
		23,824 7,891
		31,715

The Group entered into an agreement with banks to factor certain of its accounts receivable. According to the agreement, within the factoring line, the Group does not have to ensure the ability of debtors to pay when transferring the rights and obligations. As of December 31, 2023 and 2022, the Group reclassified the trade receivables that met the derecognition terms to other receivables (recorded in other financial asset-current) as follows:

(In Thousands of New Taiwan Dollars)

	December 31, 2023	December 31, 2023
Buyer Factoring quota Taipei Fubon Bank **USD 145,000 **	Derecognition amount Advanced Amount USD 69,142 - December 31, 2022		Service fees 0.23%	Transfer terms Guaranteed promissory notes Notes 1 to 3 None
Buyer Factoring quota Taipei Fubon Bank **USD 139,000 **	Derecognition amount USD 36,830	Advanced Amount -	Service fees 0.23%	Transfer terms Guaranteed promissory notes Notes 1 to 3 None

Note 1: The above-mentioned amounts have been reclassified to other receivables. The terms of the transaction relating to factoring are based on the factoring consent for buyer. Such transaction should be factoring without recourse.

• Note 2: Within the factoring quota, if the original debtor is unable to pay or may be unable to pay due to financial difficulties, the risk of non-payment will be borne by the purchasing agency, not the Group. The original debtor's credit risk will be borne by the purchasing agency and the credit risk described above is the uncollectable debt risk due to default by the original debtor without reasonable cause.

~28~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Note 3: The Group informed the original debtor pursuant to account receivables to make payment directly to the Group's restricted account with the purchasing bank.

As of December 31, 2023 and 2022, total outstanding receivables after the above transactions, net of fees charged by purchasing bank, of $2,123,891 thousand and $1,131,859 thousand were recognized as other current financial assets; please refer to note 6(8).

As of December 31, 2023 and 2022, the Group's unused factoring quota amounted to $2,330,219 thousand and $3,139,889 thousand, respectively.

(4) Inventories

Work in progress Finished goods Cost of goods sold Inventory valuation and obsolescence losses	December 31, 2023 December 31, 2022 $ 1,603,029 3,331,377 425,777 374,534 $ 2,028,806 3,705,911 For the years ended December 31, 2023 2022 $ 12,984,989 13,142,633 50,869 442,850 $ 13,035,858 13,585,483	December 31, 2023 December 31, 2022 $ 1,603,029 3,331,377 425,777 374,534 $ 2,028,806 3,705,911 For the years ended December 31, 2023 2022 $ 12,984,989 13,142,633 50,869 442,850 $ 13,035,858 13,585,483
		2022 13,142,633 442,850 13,585,483

As of December 31, 2023 and 2022, the Group's inventories were not pledged as collateral.

• (5) Property, plant and equipment

The cost and accumulated depreciation of the property, plant and equipment for the years ended December 31, 2023 and 2022 were as follows:

							Equipment
		Research	Transportation	Office	Leasehold	Construction	under
		equipment	equipment	equipment	improvements	in progress	inspection	Total
Costs:
Balance as of January 1, 2023	$	938,271	11,410	129,010	35,645	-	9,100	1,123,436
Additions		29,608	-	14,038	7,666	228,429	68,625	348,366
Disposals		(1,850)	(1,472)	(210)	(209)	-	-	(3,741)
Reclassification		25,205	-	32,925	11,233	-	(69,363)	-
Effect of changes in exchange
rates		(249)	-	(32)	(133)	-	(5)	(419)
Balance as of December 31, 2023	$	990,985	9,938	175,731	54,202	228,429	8,357	1,467,642
Balance as of January 1, 2022	$	884,700	7,410	105,139	29,754	-	733	1,027,736
Additions		28,829	-	11,413	5,524	-	52,885	98,651
Disposals		(1,400)	-	(310)	-	-	-	(1,710)
Reclassification		26,092	4,000	12,747	281	-	(44,482)	(1,362)
Effect of changes in exchange
rates		50	-	21	86	-	(36)	121
Balance as of December 31, 2022	$	938,271	11,410	129,010	35,645	-	9,100	1,123,436

~29~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

							Equipment
		Research	Transportation	Office	Leasehold	Construction	under
		equipment	equipment	equipment	improvements	in progress	inspection	Total
Accumulated depreciation:
Balance as of January 1, 2023	$	659,710	5,209	91,279	29,326	-	-	785,524
Depreciation		165,927	1,779	25,201	9,400	-	-	202,307
Disposals		(1,850)	(1,390)	(210)	(209)	-	-	(3,659)
Effect of changes in exchange
rates		(57)	-	(30)	(125)	-	-	(212)
Balance as of December 31, 2023	$	823,730	5,598	116,240	38,392	-	-	983,960
Balance as of January 1, 2022	$	485,859	3,946	67,201	26,637	-	-	583,643
Depreciation		175,248	1,263	24,377	2,621	-	-	203,509
Disposals		(1,400)	-	(310)	-	-	-	(1,710)
Effect of changes in exchange
rates		3	-	11	68	-	-	82
Balance as of December 31, 2022	$	659,710	5,209	91,279	29,326	-	-	785,524
Carrying amounts:
Balance as of December 31, 2023	$	167,255	4,340	59,491	15,810	228,429	8,357	483,682
Balance as of December 31, 2022	$	278,561	6,201	37,731	6,319	-	9,100	337,912
Balance as of January 1, 2022	$	398,841	3,464	37,938	3,117	-	733	444,093

As of December 31, 2023 and 2022, none of the Group’ s property, plant and equipment were pledged as collateral.

(6) Right-of-use assets

The Group leases buildings. Information about leases for which the Group as a lessee were presented below:

Cost of right-of-use assets: Balance as of January 1, 2023 Additions Effect of changes in exchange rates Balance as of December 31, 2023 Balance as of January 1, 2022 Additions Decrease Effect of changes in exchange rates Balance as of December 31, 2022 Accumulated depreciation: Balance as of January 1, 2023 Depreciation Effect of changes in exchange rates Balance as of December 31, 2023	Buildings $ 28,168 2,586 (229) $ 30,525 $ 22,187 19,187 (13,367) 161 $ 28,168 $ 5,940 7,062 (130) $ 12,872

~30~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Balance as of January 1, 2022 Depreciation Decreases Effect of changes in exchange rates Balance as of December 31, 2022 Carrying amounts: Balance as of December 31, 2023 Balance as of December 31, 2022 Balance as of January 1, 2022	Buildings $ 12,005 7,280 (13,367) 22 $ 5,940 $ 17,653 $ 22,228 $ 10,182

(7) Intangible assets

The cost and amortization of the intangible assets of the Group for the years ended December 31, 2023 and 2022 were as follows:

Cost: Balance as of January 1, 2023 Additions Write-off Effect of changes in exchange rates Balance as of December 31, 2023 Balance as of January 1, 2022 Additions Write-off Effect of changes in exchange rates Balance as of December 31, 2022 Amortization: Balance as of January 1, 2023 Amortization Write-off Reclassification Balance as of December 31, 2023	Goodwill $ 237,800 - - - $ 237,800 $ 237,800 - - - $ 237,800 $ - - - - $ -	Patents and technology 106,973 - - - 106,973 106,973 - - - 106,973 102,352 4,621 - - 106,973	Software costs 310,017 197,019 (74,939) (2) 432,095 208,480 167,579 (66,041) (1) 310,017 209,160 159,175 (74,939) (1) 293,395	Total 654,790 197,019 (74,939) (2) 776,868 553,253 167,579 (66,041) (1) 654,790 311,512 163,796 (74,939) (1) 400,368

~31~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Goodwill Balance as of January 1, 2022 $ - Amortization - Write-off - Balance as of December 31, 2022 $ - Carrying amounts: Balance as of December 31, 2023 $ 237,800 Balance as of December 31, 2022 $ 237,800 Balance as of January 1, 2022 $ 237,800	Patents and technology 83,865 18,487 - 102,352 - 4,621 23,108	Software costs 133,560 141,641 (66,041) 209,160 138,700 100,857 74,920	Total
			217,425 160,128 (66,041) 311,512 376,500 343,278 335,828

• A. Amortization

The amortization of intangible assets for the years ended December 31, 2023 and 2022 were included in the statements of comprehensive income:

Operating costs Operating expenses	For the years ended December 31,	For the years ended December 31,
	2023 $ 265 163,531 $ 163,796	2022
		318 159,810
		160,128

As of December 31, 2023 and 2022, the Group’s intangible assets were not pledged as collateral.

• B. Impairment test on goodwill and other intangible assets (patents and technologies)

The Group conducts impairment tests on goodwill and intangible assets. As of December 31, 2023 and 2022, it was determined that the recoverable amount of the cash-generating unit to be greater than its carrying amount based on their value in use; hence, no impairment loss was recognized.

The key assumptions used in the estimation of value in use were as follows:

Discount Rate Revenue growth rate Sustainable growth rate	December 31, 2023 December 31, 2022 12% 15% 5%~14% -6%~5% 3% 2%

~32~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• －

• (8) Other financial assets current and non-current

Accounts receivable factoring Restricted time deposits Guaranty paid for product capacity and others The time deposits with original maturities of more than three months Others Other financial assets－current Other financial assets－non-current	December 31, 2023 $ 2,123,891 254,516 221,889 3,500,000 4,700 $ 6,104,996 $ 5,941,649 163,347 $ 6,104,996	December 31, 2022
		1,131,859 254,459 469,668 2,000,000 3,122
		3,859,108
		3,482,187 376,921
		3,859,108

The Group entered into capital guarantee contracts with several suppliers and paid deposits as agreed. Considering the future market demand and corresponding to production capacity adjustment, the Group recognized the losses recorded in operating costs.

• (9) Other current and non-current assets

Prepayments to suppliers Sales tax receivable and overpaid VAT Prepayments for mask and mold Others Other current assets Other non-current assets	December 31, 2023 $ 419,550 114,883 256,630 34,163 $ 825,226 $ 172,927 652,299 $ 825,226	December 31, 2022
		419,550 97,121 342,772 20,806
		880,249
		152,889 727,360
		880,249

• (10) Short-term borrowings

The short-term borrowings and unused credit lines were summarized as follows:

Unsecured bank loans Unused credit lines Range of interest rates	December 31, 2023 $ 589,278 $ 1,312,784 3.40%~6.45%	December 31, 2022
		32,115
		1,447,222
		3.70%~4.40%

As of December 31, 2023 and 2022, the Group's bank borrowings were not pledged as collateral.

~33~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(11) Lease liabilities

The carrying amounts of the Group's lease liabilities were as follows:

Current (recorded under other current liabilities) Non-current	December 31, 2023 $ 6,404 $ 10,280	December 31, 2022
		5,884
		15,602

For the maturity analysis, please refer to note 6(22) Financial Instruments.

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the years ended December 31,	For the years ended December 31,
	2023 $ 498 $ 35,577	2022
		552
		33,282

The amounts recognized in the statement of cash flows were as follows:

Total cash outflow for leases Buildings leases	For the years ended December 31,	For the years ended December 31,
	2023 $ 43,463	2022
		40,606

The Group leases buildings and improvements for its office, with lease terms that typically run for 2~5 years, and some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

The Group has elected not to recognize the right-of-use assets and lease liabilities for its offices, which qualify as short-term leases and low-value asset leases.

• (12) Provisions

Balance as of January 1, 2023 Provisions reversed during the year Balance as of December 31, 2023 Provisions – current Provisions – non-current	Warranties $ 166,588 (50,475) $ 116,113 $ 38,704 77,409 $ 116,113

~34~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Balance as of January 1, 2022 Provisions made during the year Balance as of December 31, 2022 Provisions – current Provisions – non-current	Warranties
	$ - 166,588
	$ 166,588
	$ 55,529 111,059
	$ 166,588

The provision for warranties is estimated based on historical warranty data associated with similar products and services. The Group expects to settle majority of its provision within three years from the date of the sale of the product.

• (13) Employee benefits

A. Defined benefit plans

The present value of the defined benefit obligation and the fair value adjustments of the plan assets for the Company were as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2023 $ 2,113 (1,969) $ 144	December 31, 2022 2,052 (1,934) 118

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pension for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

(a) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor (hereinafter referred to as the Bureau of Labor Funds). With regard to the utilization of the fund, minimum earnings shall be no less than the earnings attainable from two year time deposits, with interest rates offered by local banks.

The Group’s Bank of Taiwan labor pension reserve account balance amounted to $1,969 thousand as of December 31, 2023. For information on the utilization of the labor pension fund assets, including the asset allocation and yield rate of the fund, please refer to the website of the Bureau of Labor Funds.

~35~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(b) Movements in present value of defined benefit obligations

The movements in present value of the defined benefit obligations of the Group for the years ended December 31, 2023 and 2022 were as follows:

Defined benefit obligations as of January 1 Interest cost Remeasurement of the net defined benefit liabilities －Actuarial loss (gain) arising from changes in financial assumptions Defined benefit obligations as of December 31	For the years ended December 31, 2023 2022 $ 2,052 2,286 34 14 27 (248) $ 2,113 2,052
	2023 $ 2,052 34 27 $ 2,113

(c) Movements in fair value of the defined benefit plan assets

The movements in the fair value of the defined benefit plan assets of the Group for the years ended December 31, 2023 and 2022 were as follows:

Fair value of plan assets as of January 1 Interest income Contributions made Remeasurement on the net defined benefit liabilities Fair value of plan assets as of December 31	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,934 32 2 1 $ 1,969	2022
		1,784 11 3 136
		1,934

(d) Expenses recognized in profit or loss

The Group’s expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were as follows:

Operating expenses - Net interest on the net defined benefit	For the years ended December 31,	For the years ended December 31,
	2023 $ 2	2022
		3

~36~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (e) Remeasurement of the net defined benefit liabilities recognized in other comprehensive income

The Group’ s remeasurements of the net defined benefit liabilities recognized as accumulated in other comprehensive income for the years ended December 31, 2023 and 2022 were as follows:

Accumulated amount as of January 1 Recognized for the period Accumulated amount as of December 31	For the years ended December 31,	For the years ended December 31,
	2023 $ 939 (26) $ 913	2022
		555 384
		939

(f) Actuarial assumptions

The following are the Group’ s significant principal actuarial assumptions of the present value of the defined benefit obligation at the reporting date:

Discount rate Future salary increases rate	December 31, 2023 December 31, 2022 % 1.32 % 1.64 % 5.00 % 5.00

The Company expects to make a contribution of $2 thousand to its defined benefit plans in the following year, beginning December 31, 2023.

The weighted-average duration of the defined benefits obligation is 13 years.

(g) Sensitivity analysis

If there is a change in the actuarial assumptions as of the December 31, 2023 and 2022, the impact on the defined benefit obligation would be as follows:

Actuarial assumptions December 31, 2023 Discount rate Future salary increase rate December 31, 2022 Discount rate Future salary increase rate	Impact on the defined benefit obligations Increased 0.5% Decreased 0.5% $ (128) 137 $ 131 (125) $ (132) (144) $ 138 (129)	Impact on the defined benefit obligations Increased 0.5% Decreased 0.5% $ (128) 137 $ 131 (125) $ (132) (144) $ 138 (129)
	Increased 0.5% $ (128) $ 131 $ (132) $ 138
		137 (125) (144) (129)

~37~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Reasonably possible changes to one of the relevant actuarial assumptions on the reporting date, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. In practice, the relevant actuarial assumptions are correlated to each other.

The approach used in recognizing the net defined liability in the balance sheets is the same as that used in developing the sensitivity analysis and the relevant actuarial assumptions in the current and previous years.

B. Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Company should contribute 6% of its employees’ monthly wages to their labor pension personal accounts with the Bureau of Labor Insurance, Ministry of Labor (hereinafter referred to as the Bureau of Labor Insurance). Under this defined contribution plan, the Group contributes a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation. The total pension costs of the Group’s overseas subsidiaries under their respective defined contribution plan are recognized in accordance with their local regulations.

The Group’ s pension costs under the defined contribution plan were $67,064 thousand and $60,299 thousand for the years ended December 31, 2023 and 2022, respectively.

(14) Guarantee deposits received

Capacity guaranty Current (recorded in other current liabilities) Non-current	December 31, 2023 $ 1,075,130 $ 307,180 767,950 $ 1,075,130	December 31, 2022
		1,412,443
		490,483 921,960
		1,412,443

The Group entered into production capacity guarantee agreement with its customers and reserved specific production capacity to such customers by collecting deposits, which would be refunded upon the fulfillment of the contract.

(15) Income tax

A. Income tax expenses

The amounts of income tax expense(benefit) were as follows:

Current income tax expense (benefit) Current period Adjustment for prior period	For the years ended December 31, 2023 2022 $ 239,559 831,483 (115,923) (74,945) 123,636 756,538
	2023 $ 239,559 (115,923) 123,636

~38~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Deferred income tax expense (benefit) Origination and reversal of temporary differences Income tax expense		For the years ended December 31,	For the years ended December 31,
			2022
			(113,826)
			642,712

B. The amounts of income tax expense (benefit) recognized in other comprehensive income were as follows:

Items that will not be reclassified subsequently to profit or loss: Unrealized gains or losses from investments in equity instruments measured at FVOCI Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations	For the years ended December 31,	For the years ended December 31,
	2023 $ (19,086) $ (245)	2022
		17,024
		327

C. The reconciliation of income tax expense and income before income tax were as follows:

Income before income tax Income tax at the Group’s domestic tax rate Effect of tax rates differences in foreign jurisdiction Adjustment for prior period and others Income tax effect of investment tax credit Additional surtax on undistributed retained earning Change in unrecognized temporary differences and others	For the years ended December 31, 2023 2022 $ 1,546,741 4,505,048 $ 309,348 901,010 (14,864) (4,809) (115,923) (74,945) (106,145) (200,655) 2,675 11,681 28,859 10,430 $ 103,950 642,712
	2023 $ 1,546,741 $ 309,348 (14,864) (115,923) (106,145) 2,675 28,859 $ 103,950

For investment credit applicable in accordance with the Statute for Industrial Innovation, a maximum of 15% of the expenses may be credited against the profit seeking enterprise income tax payable in the current year; and a maximum of 10% of the expenses may be credited against the profit seeking enterprise income tax payable in each of the three years following the current year; also, the creditable amount shall not exceed 30% of the profit seeking enterprise income tax payable in the current year. The Group’s investment credit for the year 2023 is in the process of application and the investment credit for the year 2022 is yet to be approved.

~39~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• D. Deferred income tax assets and liabilities

• (a) The amounts which the Company has not recognized deductible temporary differences in deferred tax assets were as follows:

Loss associated with investments in subsidiaries	December 31, 2023 $ 41,401	December 31, 2022
		34,793

• (b) Each entity in the Group is entitled to use tax losses to offset future taxable income in accordance with the respective local tax regulations of each jurisdiction. The deferred income tax assets were not recognized and the respective expiry years were as follows :

Unrecognized deferred income tax assets Year of expiry	December 31, 2023 $ 48,605 2024 to 2028	December 31, 2022
		40,239
		2023 to 2027

• (c) Changes in the amount of recognized deferred tax assets and liabilities were as follows:

January 1, 2023 Temporary differences: Unrealized Inventory valuation and obsolescence losses $ 150,758 Unrealized foreign exchange gain or loss 19,846 Unrealized loss 38,831 Sales transaction fiscal and tax differences 2,817 Exchange difference on translation of foreign operations (126) Goodwill and valuation of financial assets (4,856) Others (17,024) Deferred tax income (expense) Net deferred tax assets $ 190,246 Reflected in balance sheet as follows: Deferred tax assets $ 212,252 Deferred tax liabilities $ (22,006)	Recognized in profit or loss Recognized in other comprehensive income (4,437) - 15,123 - (3,355) - 7,280 - - 245 (1,390) - 6,465 19,086 $ 19,686 19,331	December 31, 2023 146,321 34,969 35,476 10,097 119 (6,246) 8,527 - 229,263 235,509 (6,246)

~40~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

January 1, 2022 Temporary differences: Unrealized Inventory valuation and obsolescence losses $ 89,148 Unrealized foreign exchange gain or loss 3,443 Unrealized loss - Sales transaction fiscal and tax differences 4,350 Exchange difference on translation of foreign operations 201 Goodwill and valuation of financial assets (3,371) Others - Deferred tax income (expense) Net deferred tax assets $ 93,771 Reflected in balance sheet as follows: Deferred tax assets $ 97,142 Deferred tax liabilities $ (3,371)	Recognized in profit or loss Recognized in other comprehensive income 61,610 - 16,403 - 38,831 - (1,533) - - (327) (1,485) - - (17,024) $ 113,826 (17,351)	December 31, 2022 150,758 19,846 38,831 2,817 (126) (4,856) (17,024) 190,246 212,252 (22,006)

E. The Company's tax returns have been examined and approved by the tax authorities through 2021.

(16) Equity

A. Common stock

As of December 31, 2023 and 2022, the authorized capital of the Company amounted to $1,000,000 thousand (including the amount of $50,000 thousand authorized for the issuance of the employee stock options), and the Company's issued capital amounted to $758,552 thousand, respectively, with a par value of $10 (dollars) per share.

Reconciliation of shares outstanding for 2023 and 2022 was as follows (in thousands of shares):

Balance as of January 1 Vested of restricted stock awards Cash capital increase Balance as of December 31	For the years ended December 31,	For the years ended December 31,
	2023 75,855 - - 75,855	2022
		66,300 630 8,925
		75,855

~41~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

For the year ended December 31, 2022, due to the resignation of its employees, the Company has withdrawn and canceled shares of restricted employee rights. The statutory registration procedures had been completed.

After the resolution of the Board of Director on October 26, 2021, the Company issued 8,925 thousand shares through cash capital increase for its initial public offering. The Company’ s shares have a par value of NT$10 per share, and are issued at the premium of NT$308 per share, besides the weighted average price of NT$505.55 per share for auction. As of December 31, 2021, the amount of $410,564 thousand was collected and recognized as capital collected in advance. The purpose of cash capital increase is mainly to increase the working capital, in which the rights and obligations of the ordinary shares are the same as those of the ordinary shares of the Company issued then.

The above cash capital increase was approved by the Taiwan Stock Exchange on November 8, 2021, with letter No. 1101805900. The Company received the full amount of $3,948,026 thousand on January 5, 2022 (the record date), and completed the change of registration on January 20, 2022.

B. Capital surplus

Capital surplus Employee remuneration paid in the form of stocks Others	December 31, 2023 $ 4,647,881 64,592 460 $ 4,712,933	December 31, 2022
		4,647,881 64,592 460
		4,712,933

In accordance with the R.O.C Company Act, the capital surplus generated from the premium of stock issuance and donation may only be used to offset accumulated deficits. In addition, when the Company incurred no deficit, such capital surplus may be distributed as cash or stock dividends. Pursuant to the R.O.C. Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total sum of the capital surplus capitalized per annum shall not exceed 10 percent of the paid-in capital.

C. Retained earnings

If the Company makes a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, and setting aside 10% of the remaining profit as legal reserve, unless the amount in the legal reserve is already equal to or greater than the total paid in capital. Thereafter, the amount shall be set aside or reversed as special reserve in accordance with related laws, regulations, or provisions of the competent authorities. Then, any remaining profit, together with any undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors. The distribution of dividends and bonuses, in whole or in part, by issuing new shares, shall be resolved during the shareholders' general meeting. As for the cash payment, it shall be approved by the Board of Directors and be reported in the shareholders' general meeting.

~42~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

The Company's dividend policy is to pay dividends from surplus considering factors such as the Company's current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, while taking into account shareholders' interest, maintenance of balanced dividend and the Company's long-term financial plan. An annual dividend of not less than 10 percent of the distributable surplus is provided for the shareholders, wherein the cash portion of the dividend, which may be in the form of cash and stock, shall not be less than 10% of the total dividend distributed during the year.

(a) Legal reserve

In accordance with the ROC Company Act, 10 percent of the net profit shall be allocated as legal reserve until the accumulated legal reserve equals the paid-in capital. If the Company incurs no loss, the reserve may be distributed as cash or stock dividends for the portion in excess of 25% of the paid-in capital.

(b) Special reserve

In accordance with Rule No. 1090150022 issued by the FSC on March 31, 2021, a portion of current earnings and previous unappropriated earnings shall be set aside as a special reserve during earnings distribution. The amount to be set aside should equal the total amount of contra accounts that are accounted for as deductions to other equity interests. A portion of the previous unappropriated earnings shall be set aside as a special reserve, which should not be distributed, to account for cumulative changes to other equity interests pertaining to prior periods. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

(c) Earnings distribution

The appropriations of earnings for 2022 and 2021 by way of cash dividends have been approved in the Board of Directors' meeting held on February 23, 2023 and February 24, 2022. In addition, the appropriations of earning for 2022 and 2021 by others ways have been approved in the annual shareholders' meeting held on May 29, 2023 and May 30, 2022, respectively. Details of distribution were as follows:

Legal reserve Special reserve Cash dividends	2022 2021 Amounts Dividends per share (NT$) Amounts Dividends per share (NT$) $ 386,272 $ 429,102 - (10,616) 3,110,064 41 3,413,485 45 $ 3,496,336 $ 3,831,971	2021
	Amounts $ 386,272 - 3,110,064 $ 3,496,336

The aforementioned appropriations of earnings were consistent with the resolutions of the Board of Directors' meeting.

On February 26, 2024, the amount of cash dividends distributed to ordinary shareholders, at NT$15.2 per share, totaled $1,152,999 thousand; and the appropriation of the earnings for 2023 was approved by the Board of Meeting. The related information is available on the Market Observation Post System website.

~43~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

D. Other equity

Change in the amount of other equity were as follows:

Balance as of January 1, 2023 Differences on translation of foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Disposal of investments in equity instruments measured at fair value through other comprehensive income Income tax effect Balance as of December 31, 2023 Balance as of January 1, 2022 Differences on translation of foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Share-based payment Income tax effect Balance as of December 31, 2022	Exchange differences on translation of foreign operations $ 508 (1,227) - - 245 $ (474) $ (801) 1,636 - - (327) $ 508	Unrealized gain (losses) on financial assets at fair value through other comprehensive income 28,946 - (70,094) (11,205) 19,086 (33,267) 124,388 - (78,418) - (17,024) 28,946	Deferred compensation cost arising from issuance of restricted stock awards - - - - - - (10,715) - - 10,715 - -	Total 29,454 (1,227) (70,094) (11,205) 19,331 (33,741) 112,872 1,636 (78,418) 10,715 (17,351) 29,454

~44~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (17) Share-based payment

Information about the Company’s equity settled share-based payment transactions for the year ended December 31, 2022 was as follows:

Grant date Granted units (thousands of shares) Contractual life Recipients Vesting conditions	Restricted employee shares awards issued in 2019
	2019.7.26 2,000 1~3 years Employee Note

Note: Employees are entitled to receive restricted stock in the first, second and third year (from the grant date) of their service. The restricted stock awards will be granted only if the overall performance target and the personal performance target are reached.

The shareholders’ meeting resolved on June 12, 2019 to issue 2,000 thousand shares of restricted stock to full-time employees who conformed to certain requirements. The Company has filed an effective registration with the Securities and Futures Bureau of the FSC for the issuance. The closing price of 90.89 per share on the grant date was designated as the fair value.

For an employee who qualifies for the said restricted employee shares and who has remained in service at the Company for one, two and three years after the allotment period, without breaching any contractual agreement, and has achieved individual performance assessment targets set by the Company’s and overall performance of the Company, the maximum proportion of shares that may be awarded is 34% for the first year, 33% for the second year, and 33% for the third year, during the allotment period. No restricted employee shares shall be sold, pledged, transferred, designated, gifted or dispose in other ways, unless the vesting conditions have been met after the allotment of shares, except in the event of inheritance. The attendance, proposal, speaking, voting and election rights of a shareholders’ meeting shall be governed by the Custodial trust agreement.

The information of the Company’s restricted employee shares was as follows:

Unit: Thousand shares

Outstanding at January 1 Vested during the year Collection during the year Outstanding at December 31	For the years ended December 31, 2022 637 (630) (7) -

The expense recognized by the Group for share-based payments in 2022 was $11,273 thousand. As of December 31, 2022, the deferred compensation costs was $0 thousand.

~45~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(18) Earnings per share

Basic earnings per share: Net income attributable to ordinary shareholders of Company Weighted-average number of ordinary shares outstanding during the year (in thousands of shares) Basic earnings per share (NT dollars) Diluted earnings per share: Net income attributable to ordinary shareholders of Company Weighted-average number of ordinary shares outstanding during the year (in thousands of shares) Effect of employee stock remuneration Weighted average number of ordinary shares outstanding (in thousands of shares)(diluted) Diluted earnings per share (NT dollars)	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,442,791 75,855 $ 19.02 $ 1,442,791 75,855 971 76,826 $ 18.78	2022 3,862,336
		75,388
		51.23
		3,862,336
		75,388 2,821
		78,209
		49.38

(19) Revenue from contracts with customers

A. Detail of revenue

		For the years ended	December 31,
		2023	2022
Revenues from major regional markets:
China (including Hong Kong)	$	12,823,794	14,834,644
Taiwan		5,013,379	7,835,867
Others		509,449	151,653
	$	18,346,622	22,822,164
Revenue from major products:
Display Driver IC	$	17,698,235	22,081,123
Others		648,387	741,041
	$	18,346,622	22,822,164

~46~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

B. Contract balances

Contract liabilities	December 31, 2023 $ 527,962	December 31, 2022 680,756	January 1, 2022
			632,707

For details on notes and accounts receivable and loss allowance, please refer to note 6(3).

The amount of revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract liability balance at the beginning of the period were $292,589 thousand and $201,112 thousand, respectively.

The contract liabilities primarily relate to the advance consideration received from contracts with goods sold, for which revenue is recognized when products are delivered to customers.

• (20) Non-operating income and expenses

A. Other income

Dividend income Others	For the years ended December 31, 2023 2022 $ 12,176 17,900 16,544 15,430 $ 28,720 33,330	For the years ended December 31, 2023 2022 $ 12,176 17,900 16,544 15,430 $ 28,720 33,330
	2023 $ 12,176 16,544 $ 28,720
		33,330

• B. Other gains and losses

	For	the years ended	December 31,
		2023	2022
Foreign exchange gains, net	$	2,990	749,216
Gains on financial instruments measured at fair value
through profit or loss		6,542	3,017
Others		680	(2)
	$	10,212	752,231

C. Finance costs

Interest expense－bank borrowings Lease liabilities	For the years ended December 31, 2023 2022 $ (7,704) (240) (498) (552) $ (8,202) (792)	For the years ended December 31, 2023 2022 $ (7,704) (240) (498) (552) $ (8,202) (792)
	2023 $ (7,704) (498) $ (8,202)
		(792)

~47~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

D. Interest income

rest income
Interest income from bank deposits	For the years ended December 31,
	2023 $ 137,465	2022
		83,178

• (21) Remuneration to employees and directors

In accordance with the articles of incorporation, when the Company incurred profit for the year, the profit should first be used to offset against any deficit (including unappropriated retained earnings); then, no less than 1% of the profit (income before tax, excluding remuneration to employees and directors) shall be distributed as employee remuneration, and no more than 1% as directors' and supervisors' remuneration.

The aforementioned shall be resolved by the board of directors and reported to the shareholders' meeting:

Employees, including those belonging to affiliate companies that meet certain conditions, are entitled to the abovementioned remuneration, which to be distributed in stock or cash, employee stock option certificates, restricted employee shares, treasury stock purchased and transferred to employees, as well as employee stocks when issuing new shares. The said conditions and distribution method are decided by Board of Directors or the personnel authorized by Board of Directors.

For the years ended December 31, 2023 and 2022, the amounts of remuneration to employees were estimated at $270,959 thousand and $789,985 thousand, respectively; and those to the directors were estimated at $12,747 thousand and $42,702 thousand, respectively. The estimation basis shall be calculated as the amounts of net income before tax, excluding the remuneration to employees and directors, multiplied by the percentage remuneration to employees and directors, as specified in the Company's articles of incorporation. These remuneration were expensed under operating costs or expenses for the years ended December 31, 2023 and 2022. If there are changes in the proposed amounts after the annual consolidated financial statements have been authorized for issuance, the differences are accounted for as changes in accounting estimates and adjusted prospectively in profit or loss in the following year. However, if the Board of Directors resolved that the employee remuneration is to be paid in the form of stocks, the closing price of the ordinary share on the day before the Board of Directors' meeting will be used to calculate the number of stock shares.

There were no differences between the aforesaid amounts of employee and directors’ remuneration approved by the Board of Directors and the amounts in the 2022 consolidated financial statements. Related information is available on the Market Observation Post System website of the Taiwan Stock Exchange.

~48~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (22) Financial instruments

• A. Credit risk

  • (a) Credit risk exposure

The carrying amount of financial assets represent the maximum amounts exposed to credit risk.

(b) Credit risk concentration

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. As of the financial reporting date, the maximum credit risk exposure of the Group due to non-performance of the counterparty mainly derived from the carrying amount of the financial assets recognized in the balance sheet of the Group.

The Group's potential credit risk is derived primarily from cash in bank, cash equivalents and trade receivables. The cash is deposited in different financial institutions. The Group manages the credit risk exposure with each of these financial institutions and believes that cash and cash equivalents do not have a significant credit risk concentration.

In addition to granting credit facilities to customers in accordance with the credit procedures, the Group will require insurance for accounts receivable from certain customer groups in order to reducing the credit risk of accounts receivable, and use historical trading experience to continuously assess the financial condition, credit condition and current economic environment of the customers.

As of December 31, 2023 and 2022, the Group's five largest customers accounted for approximately 56% and 73% of the balance of accounts receivable (including related parties), respectively. After an assessment has been made on the lifetime expected credit losses of the accounts receivable, the management expects no significant losses in the future.

(c) Credit risk of receivables

For credit risk exposure on accounts receivable, please refer to note 6(3).

Other financial assets at amortized cost include other receivables, guarantee deposit and restricted bank deposits.

All of financial assets excluding the abovementioned accounts receivable are considered to be low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. (Please refer to note 4(7) of the financial statements for the year ended December 31, 2022 for further details of how the Group determines whether credit risk is to be low risk).

~49~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

B. Liquidity risk

The contractual maturities of financial liabilities were as follows:

December 31, 2023 Non-derivative financial liabilities Short-term borrowings Accounts payable Salaries and bonuses payable Other payables－related parties Lease liabilities (current and non-current) Guarantee deposits received (current and non-current) December 31, 2022 Non-derivative financial liabilities Short-term borrowings Accounts payable Salaries and bonuses payable Other payables－related parties Lease liabilities (current and non-current) Guarantee deposits received (current and non-current)	Carrying amounts $ 589,278 2,738,868 2,399,228 7,545 16,684 1,075,130 $ 6,826,733 $ 32,115 1,429,818 3,945,728 135 21,486 1,412,443 $ 6,841,725	Contractual cash flows (592,476) (2,738,868) (2,399,228) (7,545) (17,236) (1,075,130) (6,830,483) (32,912) (1,429,818) (3,945,728) (135) (22,452) (1,412,443) (6,843,488)	Within a year (592,476) (2,738,868) (2,399,228) (7,545) (6,719) (307,180) (6,052,016) (32,912) (1,429,818) (3,945,728) (135) (6,355) (490,483) (5,905,431)	Over 1 years - - - - (10,517) (767,950) (778,467) - - - - (16,097) (921,960) (938,057)

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

~50~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

C. Foreign currency risk

• (a) Exposure of foreign currency risk

The Group's financial assets and liabilities exposed to foreign currency risk were as follows:

follows:
Financial assets Monetary items USD JPY CNY Financial liabilities Monetary items USD CNY	December 31, 2023 Foreign currency Exchange rate TWD $ 181,959 30.718 5,589,417 24,856 0.2173 5,401 846 4.3152 3,651 $ 134,344 30.718 4,126,779 85 4.3152 367		December 31, 2022
	Foreign currency $ 181,959 24,856 846 $ 134,344 85	Exchange rate 30.718 0.2173 4.3152 30.718 4.3152	Foreign currency 165,062 25,256 1,629 96,687 84	Exchange rate TWD 30.732 5,072,685 0.2311 5,837 4.4076 7,180 30.732 2,971,385 4.4076 370

• (b) Sensitivity analysis

The Group's exposure to foreign currency risk arises mainly from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivable, other financial assets, short-term borrowings, accounts payable and deposits received, that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD, CNY, and JPY as of December 31, 2023 and 2022, assuming that all other variables remain constant, would have increased or decreased the profit after tax by $11,770 thousand and $16,908 thousand, respectively.

• (c) Foreign exchange gains (losses) on monetary items

As the Group deals with diverse foreign currencies, gains and losses on foreign exchange were summarized as a single amount. The aggregate of realized and unrealized foreign exchange gains for the years ended December 31, 2023 and 2022 were $2,990 thousand and $749,216 thousand, respectively.

D. interest rate analysis

An increase or decrease of 0.25% in interest rates, mainly from cash and cash equivalents, restricted bank deposits and short term borrowings, with floating interest rates at the reporting date, assuming all other variables remain constant, would have increased or decreased net income by $3,070 thousand and $4,221 thousand for the years ended December 31, 2023 and 2022, respectively.

~51~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• E. Other market price risk

The impact of the changes in equity price on other comprehensive income was as follows, assuming the analysis use the same basis for both years, with other factors remaining constant:

Prices of securities at the reporting date Increasing 10% Decreasing 10%	For the years ended December 31, 2023 2022 Other comprehensive income before tax Other comprehensive income before tax $ 43,439 53,569 $ (43,439) (53,569)
	2023 Other comprehensive income before tax $ 43,439 $ (43,439)

• F. Fair value of financial instruments

• (a) Fair value and carrying amount

The fair value of financial assets and liabilities at fair value through profit or loss, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The Group's carrying amounts and the fair value of financial assets and liabilities (including the information for fair value hierarchy; but excluding financial instruments, whose fair values approximate the carrying amount, and lease liabilities, since the disclosure of fair value are not required) were as follows:

Financial assets at FVTPL－ current Financial assets at FVOCI Listed stocks Unlisted stocks Accounts receivable Financial assets measured at amortized cost Cash and cash equivalents Accounts receivable (including related parties) Other financial assets (current and non-current)	Carrying amounts $ 633,073 319,873 114,517 119,505 5,380,259 2,867,819 6,104,996 $ 15,540,042		December 31, 2023	December 31, 2023
			Fair value
		Level 1 633,073 319,873 - - - - - 952,946	Level 2 - - - 119,505 - - - 119,505	Level 3 - - 114,517 - - - - 114,517	Total
					633,073 319,873 114,517 119,505 - - -
					1,186,968

~52~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Financial liabilities measured at amortized cost Short-term borrowings Accounts payable Salaries and bonuses payable Other payables－related parties Lease liabilities (current and non-current) Guarantee deposits received (current and non-current) Financial assets at FVTPL－ current Financial assets at FVOCI Listed stocks Unlisted stocks Accounts receivable Financial assets measured at amortized cost Cash and cash equivalents Accounts receivable (including related parties) Other financial assets (current and non-current) Financial liabilities measured at amortized cost Short-term borrowings Accounts payable Salaries and bonuses payable Other payables－related parties Lease liabilities (current and non- current) Guarantee deposits received (current and non-current)	Carrying amounts $ 589,278 2,738,868 2,399,228 7,545 16,684 1,075,130 $ 6,826,733 Carrying amounts $ 356,790 271,372 264,316 195,549 8,418,727 2,705,968 3,859,108 $ 16,071,830 $ 32,115 1,429,818 3,945,728 135 21,486 1,412,443 $ 6,841,725		December 31, 2023	December 31, 2023
			Fair value
		Level 1 - - - - - - -	Level 2 - - - - - - - December	Level 3 - - - - - - - 31, 2022	Total
					- - - - - -
					-
			Fair value
		Level 1 356,790 271,372 - - - - - 628,162 - - - - - - -	Level 2 - - - 195,549 - - - 195,549 - - - - - - -	Level 3 - - 264,316 - - - - 264,316 - - - - - - -	Total
					356,790 271,372 264,316 195,549 - - -
					1,088,027
					- - - - - -
					-

~53~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (b) Fair value valuation technique of financial instruments measured at fair value

Non-derivative financial instruments

The listed shares and beneficiary certificates held by the Group are measured at fair value according to standard provision and conditions, and are traded in active markets, the fair value is measured using the quoted price in an active market. In addition to the above mentioned financial assets with active market transactions, the fair value of unlisted shares held by the Group is estimated using the market comparable company method, which is measured by price-book ratio of the peers.

• (c) There was no transfer between the different levels of fair value hierarchy for the years ended December 31, 2023 and 2022.

• (d) Quantified information for significant unobservable inputs used in fair value measurement(Level 3).

The Group's financial instruments measured at fair value which are categorized within Level 3 include financial assets at FVOCI – equity investments.

The Group classified the equity investments without an active market as recurring level 3 fair values in the fair value hierarchy due to the use of significant unobservable inputs. The significant unobservable inputs of equity investments without an active market are individually independent, and there is no correlation between them.

Quantified information regarding significant unobservable inputs were as follows:

Valuation technique

Item

Financial assets at Market approach FVOCI – equity (comparable with investments without price-book ratio of an active market the peers)

Inter-relationship between significant unobservable inputs and fair value measurement

• Significant unobservable and fair value inputs measurement

• ●P/B ratio multiplier ●The higher the P/B (2.63~3.94 and 2.73~4.61 ratio, the higher the fair as of December 31, 2023 value and 2022, respectively) ●The higher the market

• ●Discount for lack of market liquidity discount rate, the lower the fair value

• ●The higher the P/B ratio, the higher the fair value

• ●Discount for lack of market liquidity ( 30%~60% and 30% as of December 31, 2023 and 2022, respectively)

~54~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (e) Reconciliation for fair value measurements categorized within level 3:

Balance as of January 1 Addition in investments Disposal of investments Total gain/loss Recognized in other comprehensive income Balance as of December 31	Financial assets at FVOCI – equity investments without an active market
	For the years ended December 31, 2023 2022 $ 264,316 56,014 - 137,205 (31,205) - (118,594) 71,097 $ 114,517 264,316
	2023 $ 264,316 - (31,205) (118,594) $ 114,517

The total gains and losses above were recognized in“ unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income”.

• (23) Financial risk management

• A. Overview

The Group have exposure to the following risks from its financial instruments:

• (a) Credit risk

• (b) Liquidity risk

• (c) Market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

B. Structure of risk management

The significant financial activities of the Group have been reviewed by the Board of Directors and the Audit Committee in accordance with the relevant standards and internal control system. During the financial plan implementation, the Group must comply with the relevant financial operating procedures relating to the overall financial risk management and segregation of duties. The Group, through internal controls such as training, management standards, and operational procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

~55~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• C. Credit risk

The credit risk of the Group is mainly due to receivables and cash and cash equivalents arising from operating activities; please refer to note 6(22).

D. Liquidity risk

There is no liquidity risk of being unable to raise capital to settle contract obligations since the Group has sufficient capital and working capital to fulfill its contract obligations; please refer to note 6(22).

• E. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, that will affect the Group’s income or the value of its financial instruments; please refer to note 6(22). The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

• (a) Currency risk: The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primarily the NTD, USD, JPY and CNY.

• (b) Market price risk of interest rate change: All of the Group’ s assets and liabilities bear floating interest rates, and thus, cash flow is exposed to the risk of interest rate change.

• (24) Capital management

In consideration of the industry dynamics and future developments, as well as external environment factors, the Group maintains an optimal capital structure to enhance long-term shareholder value by managing its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, research and development activities, dividend payments, and other business requirements for continuing operations and to reward its shareholders and take into consideration the interests of other stakeholders.

The Group’s debt-to-equity ratio at the reporting date was as follows:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Debt-to-equity ratio	December 31, 2023 $ 8,289,270 (5,380,259) $ 2,909,011 $ 11,218,148 % 26	December 31, 2022 8,636,223 (8,418,727) 217,496 12,937,437 % 2

The increase in debt-to-equity ratio as of December 31, 2023 was mainly due to the decrease in cash flows incurred from operating activities in the current period, resulting in an increase in net debt.

~56~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(25) Financing activities of non-cash transactions

Reconciliation of liabilities arising from financing activities was as follows:

January 1, 2023 Short-term borrowings $ 32,115 Lease liabilities 21,486 Guarantee deposits received 1,412,443 Total liabilities from financing activities $ 1,466,044 January 1, 2022 Short-term borrowings $ - Lease liabilities 9,071 Guarantee deposits received 1,384,400 Total liabilities from financing activities $ 1,393,471	Cash flows 564,095 (7,388) (304,872) 251,835 Cash flows 32,115 (6,772) (111,303) (85,960)	Changes in foreign Exchange and other (6,932) 2,586 (32,441) (36,787) Changes in foreign Exchange and other - 19,187 139,346 158,533	December 31, 2023
			589,278 16,684 1,075,130
			1,681,092
			December 31, 2022
			32,115 21,486 1,412,443
			1,466,044

7. Related-party transactions

(1) Names and relationship with related parties

The followings is a summary of related parties that have had transactions with the Group during the periods presented in the consolidated financial statements.

Name of related parties Relationship with the Group AUO Corporation (AUO) AUO accounted for its investments in the Company using the equity method AUO (Suzhou) Co., Ltd. (AUOSZ) Subsidiary of AUO AUO (Xiamen) Co., Ltd. (AUOXM) Subsidiary of AUO AUO (Kunshan) Co., Ltd. (AUOKS) Subsidiary of AUO AUO Education Service Corp. (AUES) Subsidiary of AUO AUO Display Plus Corporation (ADP) Subsidiary of AUO AUO Envirotech Inc. Subsidiary of AUO Maxeda Technology Inc. (Maxeda) The Company represented as a director of Maxeda (Note)

Note: On October 13, 2023, the Company sold the entire equity of Maxeda Technology Inc., who became a non-related party thereafter.

~57~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(2) The Group's significant related party transactions and balances were as follows:

A. Sales

The amounts of significant sales transactions between the Group and related parties were as follows:

Relationship AUOSZ AUOXM AUO Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,964,882 1,815,706 937,560 180,609 $ 4,898,757	2022
		2,448,239 2,240,160 1,050,371 426,030
		6,164,800

For the years ended December 31, 2023 and 2022, the collection terms for sales to related parties were 60 to 120 days from the end of the month during which the invoice is issued. The collection terms for sales to non-related parties were 30 to 120 days from the end of the month during which the invoice is issued or the products have been delivered after the advance receipt. The pricing for sales to related parties were not materially different from those with third parties.

• B. Receivables from related parties

The receivables from related parties were as follows:

Account Receivables from related parties Receivables from related parties Receivables from related parties Receivables from related parties	Relationship AUOSZ AUOXM AUO Other related parties	December 31, 2023 $ 712,608 584,172 301,599 78,280 $ 1,676,659	December 31, 2022
			848,279 855,837 300,611 138,882
			2,143,609

• C. Other payables to related parties

The payables to related parties were as follows:

Account Other accounts payable from related parties Other accounts payable from related parties Refund liability	Relationship AUO Other related parties Other related parties	December 31, 2023 $ 7,470 75 $ 7,545 2,025	December 31, 2022
			5 130
			135
			-

~58~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

D. Other

• (a) The other income of the Group from its related parties were as follows:

AUO	For the years ended December 31,	For the years ended December 31,
	2023 $ 11,567	2022
		17,290

• (b) The rental expenses and other expenses paid by the related parties under lessee contracts were as follows:

AUO Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 28,133 373 $ 28,506	2022
		27,054 216
		27,270

• (c) The costs of acquiring computer software from related parties were as follows:

Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 5,390	2022
		5,390

• (d) The costs of acquiring leasehold improvements from related parties were as follows:

Other related parties (e) Refund of capital reduction AUO	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,000 December 31, 2023 $ -		2022
			-
			December 31, 2022
			35,978

• (3) Key management personnel compensation

Key management personnel compensation were as follows:

Short-term employee benefits Post-employment benefits Share-based payments	For the years ended December 31,	For the years ended December 31,
	2023 $ 156,523 756 - $ 157,279	2022
		259,654 756 4,545
		264,955

~59~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

8. Pledged assets:

The carrying values of pledged assets were as follows:

Asset Name Restricted cash in bank (recognized in other financial assets－current) Restricted cash in bank (recognized in other financial assets－current)	Pledged to secure Import guarantee for customs Import Guarantee	December 31, 2023 $ 34,386 220,130 $ 254,516	December 31, 2022
			34,329 220,130
			254,459

9. Significant Contingencies and Unrecognized Commitments:

• (1) The Company signed a contract to purchase a real estate located in Tai Yuen Hi-Tech Industrial Park on November 2, 2023, with a total contract price of $1,845,000 thousand (tax included), of which, the amount of $239,850 thousand (tax included) had been paid as of December 31, 2023.

• (2) The Company has signed capacity guarantee contracts with several suppliers, paid the deposit and prepaid the goods in accordance with the agreement, and agreed on the relevant years and minimum quantity that the Company needs to purchase.

• (3) The Company has entered into capacity guarantee contracts with several customers, and collects deposits and advance receipts as agreed to reserve specific production capacity to such customers.

10. Significant disaster losses: None.

11. Subsequent events: None.

12. Others:

The following is the summary statement of the current period employee benefits, depreciation, and amortization expenses, by function:

By function By item	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,
	2023			2022
	Operating Costs	Operating Expenses	Total	Operating Costs	Operating Expenses	Total
Employee benefits Salary Labor and health insurance Pension Other employee benefits Depreciation Amortization	145,204 10,697 5,025 6,195 365 265	2,099,486 117,190 62,041 86,059 209,004 163,531	2,244,690 127,887 67,066 92,254 209,369 163,796	237,322 11,790 4,640 6,466 211 318	3,675,680 140,812 55,662 82,998 210,578 159,810	3,913,002 152,602 60,302 89,464 210,789 160,128

~60~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

13. Other disclosures:

• (1) Information on significant transactions:

The followings is a summary of the information on significant transactions required by the Regulations Governing the Preparation of Financial Reports by Securities Issuers for the Group:

• A. Loans to other parties: None.

• B. Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Endorsement / Guarantee Provider	Guarante	e Party	Limitation on Endorsement/ Guarantees Amount Provided to Each Guarantee Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantees to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship
0	The Company	Raydium Semiconductor (Kunshan) Co., Ltd.	Subsidiaries	2,243,630	614,360	614,360	375,640	-	% 5.48	5,609,074	Y	N	Y

• Note 1: The total amount of the Group's endorsement/guarantee for a single enterprise shall not exceed 20% of the net value of the latest financial statements audited or reviewed by accountants.

• Note 2: The total amount of the Group's endorsement/guarantee for others shall not exceed 50% of the net value of the latest financial statements audited or reviewed by accountants.

• C. Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of shares and Thousands of New Taiwan Dollars)

Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		Ending Balance	Ending Balance		Highest Holding during the year	Note
				Shares/Units	Carrying Value	Percentage of Ownership	Fair Value
The Company The Company The Company The Company The Company The Company The Company	Yuanta Wan Tai Money Market Fund Yuanta De Bao Money Market Fund Shares of Darfon Electronics Corp. Shares of AUO Corporation a i i t Shares of SiCEV Electronic Co., Ltd. r a S Shares of PlayNitride Inc. Shares of Neuchips Inc.	- - - AUO ccounted for ts investments n the Company using he equity method The Company epresented as director of iCEV - -	Financial assets at FVTPL －current " Financial assets at FVOCI －current Financial assets at FVOCI －non current " " "	13,164 34,691 203 14,459 8,943 470 2,000	204,740 428,333 11,013 262,424 50,223 46,436 64,294	- - % 0.07 % 0.19 % 18.73 % 0.44 % 2.18	204,740 428,333 11,013 262,424 50,223 46,436 64,294	- - % 0.07 % 0.19 % 18.73 % 0.44 % 2.18

• D. Individual securities acquired or disposed at costs or prices with accumulated amount exceeding the lower of NT$300 million or 20% of the stock capital:

(In Thousands of shares and Thousands of New Taiwan Dollars)

Securities Held by	Marketable Securities Type and Name	Financial Statement Account	Counter- Party	Relationship in the company	BeginningBalance	BeginningBalance	Ad	dition		Disposal	Disposal		EndingBalance	EndingBalance
					Shares	Amount	Shares	Amount	Shares	Price	Book Value	Gain (loss) on disposal	Shares	Amount
The Company The Company	Yuanta Wan Tai Money Market Fund Yuanta De Bao Money Market Fund	Financial assets at FVTPL－current "	- -	- -	13,144 12,664	201,156 154,050	47,844 77,372	740,000 950,000	47,824 55,345	740,000 680,000	736,918 677,381	3,082 2,619	13,164 34,691	204,238 (Note) 426,669 (Note)

• Note 1: The opening and closing balances are measured acquisition costs. For the carrying amount valuated against the market price, please refer to C item.

~61~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• E. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the stock capital:

(In Thousands of New Taiwan Dollars)

Name of company The company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Price Reference	Purpose and Usage of Acquisition	Other Commitments
							Owner	Relationship with the Issuer	Date of transfer	Amount
	Construction in progress	2023.11.2	1,845,000	239,850	Winsome Development Company Limited	NA	-	-	-	-	Real estate assessment report and approval from board of directors	office building for own-use	NA

• F. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the stock capital: None.

• G. Related-party transactions for purchases and sales with amount exceeding the lower of NT$100 million or 20% of the stock capital:

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship		Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)
			Purchase/ Sales	Amount	Percentage of Total Purchases/ Sales	Payment Terms	Unit Price	Payment Terms	Ending Balance	Percentage of Total Notes/ Accounts Receivable (Payable)
The Company The Company The Company The Company	AUOSZ AUOXM AUOKS AUO	Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO AUO accounted for its investment in the Company using the equity method	Sales Sales Sales Sales	1,909,645 1,754,596 179,262 937,560	% 10 % 10 % 1 % 5	EOM 120 days EOM 120 days EOM 120 days EOM 120 days	Please refer to note 7 Please refer to note 7 Please refer to note 7 Please refer to note 7	Please refer to note 7 Please refer to note 7 Please refer to note 7 Please refer to note 7	690,595 549,176 78,201 301,599	24% 19% 3% 11%

• H. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the stock capital:

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period (Note)	Allowance for Bad Debts
					Amount	Action Taken
The Company The Company The Company	AUOSZ AUOXM AUO	Subsidiary of AUO Subsidiary of AUO AUO accounted for its investment in the Company using the equity method	690,595 549,176 301,599	2.52 2.51 3.11	6,633 3 17	On the spot collection On the spot collection On the spot collection	166,372 138,638 81,332	- - -

Note: Amounts collected in subsequent period as of February 7, 2024.

• I. Trading the derivative instruments: None.

• J. The business relationship between the parent and the subsidiaries and significant transactions between them: None.

• (2) Information on investees (excluding information on investees in Mainland China):

				(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)	(In Thousands of shares and Thousands of New Taiwan Dollars)
Investor Company	Investee Company	Location	Main businesses and products	Original investment amount		Balance as	of December 31, 2023		Highest Shares of Ownership during the Year	Net income (losses) of investee	Share of Profits/ Losses of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying value
The Company	RSA	SAMOA	Investment Holding	248,280	157,080	8,100	% 100.00	40,683	% 100.00	(33,039	) (33,039	) Subsidiary of the Company

~62~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(3) Information on investment in Mainland China:

• A. The names of investees in Mainland China, the main businesses and products, and other information:

he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:	he names of investees in Mainland China, the main businesses and products, and other information:
(In Thousands of New Taiwan Dollars)
Investee Company	Main businesses and products	Total amount paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2023		Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2023	Net income (losses) of the investee (Note 3)	Percentage of ownership	Highest percentage of ownership during the year	Investment income (Note 3 and 5)	Carrying amounts (Note 2)	Accumulated remittance of earnings in current period
						Outflow	Inflow
Raydium Semiconductor (Kunshan) Co., Ltd.	Development, design and sale of the IC	245,200 (USD8,000 thousand)	(Note 1)	154,000		91,200	-	245,200	(33,032)	100.00%	100.00%	(33,032)	37,604	-
imitation on investment in Mainland China:
Accumulated Investment in Mainland China as of December 31, 2023					Investment Amounts Authorized by Investment Commission, MOEA					Upper Limit on Investment (Note 4)
245,200 (USD8,000 thousand)					245,200 (USD8,000 thousand)					6,730,889

• B. Limitation on investment in Mainland China:

Note 1: Investment in companies in Mainland China through the existing companies in SAMOA.

Note 2: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rate on the balance sheet date. Note 3: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rate.

Note 4: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, the Group's accumulated investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs (“MOEA”).

Note 5: The financial statements were audited by the parent's external accountants.

C. Significant transactions with the investees in Mainland China:

The significant inter-company transactions with the subsidiary in Mainland China for the year ended December 31, 2023, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

• (4) Major shareholders:

Major shareholders:
Shareholding Shareholder's Name	Shares	Percentage
Konly Venture Corp.	11,454,429	% 15.10
Capital Tip Customized Taiwan Select High Dividend ETF	6,920,000	% 9.12

Note: The information on major shareholders summarized the shareholders who held over 5% of the Company's ordinary shares.

~63~

Raydium Semiconductor Corporation and Subsidiaries Notes to the Consolidated Financial Statements

14. Segment information:

• (1) Industry financial information

The Group mainly engages in the development, design and sales of integrate circuits. It only has a single operating segment to be reported. The Group’s operating segment above is consistent with the related accounts shown in its consolidated balance sheets and consolidated statements of income. Please refer to the consolidated balance sheet and the consolidated income statement for details of departmental profit and loss, departmental information, and departmental liability information.

• (2) Overall company information

A. Product information

Please refer to note 6(19) for the Revenue information by product from external customers.

• B. Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

• (a) Please refer to note 6(19) for the Revenue information on the basis of geography.

• (b) Non-current assets:

(b) Non-current assets:
Geographical information(note) Taiwan Mainland China	December 31, 2023 $ 2,097,234 19,624 $ 2,116,858	December 31, 2022
		2,319,033 16,674
		2,335,707

Note: Non-current assets excluding deferred income tax assets.

• C. Major customer information

AUO Group Customer Z Customer Y	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
	2023 Amount % Accounted for net sales for the current period $ 4,898,757 27 3,666,734 20 2,213,075 12 $ 10,778,566 59	2022
	Amount $ 4,898,757 3,666,734 2,213,075 $ 10,778,566	Amount 6,164,800 5,627,004 2,704,635 14,496,439	% Accounted for net sales for the current period
			27 25 12
			64

~64~