RT - Annual Report 2022 | FinancialReports.eu

TSE Code: 2379

REALTEK SEMICONDUCTOR CORP. 2021 Annual Report

The annual report is available at:

I. Taiwan Stock Exchange Market Observation Post System: https://mops.twse.com.tw II. Realtek website for annual report: https://www.realtek.com

Printed Date: April 28, 2022

Notice to Readers:

This annual report has been prepared originally in Chinese. The English version is a direct translation of the Chinese version .

I. Spokesperson: Name: Huang, Yee-Wei Title: Vice President Deputy Spokesperson: Name: Lin, Han-Chen Title: Special Assistant to President Tel: (03) 578-0211 Email: [email protected]

II. Headquarters Address: No. 2, Innovation Road II, Hsinchu Science Park, Hsinchu 300, Taiwan Tel: (03) 578-0211
III. Transfer Agent:

Company: CTBC BANK CO., LTD. Transfer Agency Department Address: 5F., No. 83, Sec. 1, Chongqing S. Rd., Taipei City 100, Taiwan. Website: www.ctbcbank.com Tel: (02) 6636-5566

IV. Auditor of the latest financial report: Auditors: Lin, Yu-Kuan & Tsang, Cheng, Ya-Huei Company: PricewaterhouseCoopers' Address: 5F., No. 2, Gongye E. 3rd Rd., Hsinchu Science Park, Hsinchu 300, Taiwan Website: www.pwc.com.tw

Tel: (03) 578-0205

V. GDR listed stock exchange and the way to search for information: Name: Luxembourg Stock Exchange
Please refer to the Luxembourg Stock Exchange official website for Realtek GDR Price. Website: www.bourse.lu
VI. Company website: www.realtek.com https://www.realtek.com

-ii-

Letter to Shareholders ..................................................................................................................................... 1
Company Introduction .................................................................................................................................... 4
Date of Establishment ...................................................................................................................................... 4
Company Milestones ....................................................................................................................................... 4
Corporate Governance Report ....................................................................................................................... 9
Organization .................................................................................................................................................... 9
Information of Directors and Officers ........................................................................................................... 11
Corporate Governance ................................................................................................................................... 22
Audit Fees ...................................................................................................................................................... 57
Share transfer or share pledge of Directors, Officers and major shareholders holding more than 10% shares
from last year to the date of the annual report printed. .................................................................................. 59
Capital Raising ............................................................................................................................................... 62
Source of Capital ........................................................................................................................................... 62
Structure of Shareholders .............................................................................................................................. 62
Distribution of Shareholding ......................................................................................................................... 63
List of Major Shareholders ............................................................................................................................ 63
Market price, net worth, earning, and dividends per common share and related information over the last
two years ....................................................................................................................................................... 64
Dividend Policy and Status of Execution ...................................................................................................... 65
Status of GDR ................................................................................................................................................ 68
Operations Overview ..................................................................................................................................... 69
Business Overview ........................................................................................................................................ 69
Marketplace and Production Overview ......................................................................................................... 88
Employees ..................................................................................................................................................... 96 95
Environmental Expenses ............................................................................................................................... 96 95
Labor Relations ............................................................................................................................................. 96 95
Cyber security management .......................................................................................................................... 99 98
Financial Status, Operating Results and Status of Risk Management ................................................... 103 102
Financial Status ........................................................................................................................................... 103 102
Operational Results ..................................................................................................................................... 104 103
Cash Flow .................................................................................................................................................... 105 104
Other important risks and measures ............................................................................................................ 107 106
Special Items ................................................................................................................................................. 108 107
Financial Information .................................................................................................................................. 119 118

Condensed balance sheet and Statement of Comprehensive Income, independent auditor’s name and audit

-iii-

iii

opinion in the recent five years .................................................................................................................... 119118 Financial Analysis in the Recent Five Years ............................................................................................... 123122 Audit Committee’s Review Report ............................................................................................................. 126125 Consolidated Financial Statements .............................................................................................................. 127126 Parent Company Only Financial Statements ............................................................................................... 128204

-iv-

Letter to Shareholders

1. 2021 Operating Results

During 2021, in addition to the continuing impact of COVID-19, the semiconductor industry experienced unprecedented supply shortages. These issues have put many markets and companies to the test. Alongside these black swan events, the world we live in is experiencing wave after wave of digital transformation. The demand for all types of connectivity products is rising rapidly, both for new products and because of the need to upgrade and improve existing products to meet the expectations and needs of customers.

The importance of semiconductor products to people's lives has become particularly obvious in the face of current supply shortages. In spite of the challenges created by the imbalance of supply and demand, Realtek achieved a new milestone in 2021, delivering another year of revenue growth and breaking the NT$100 billion mark. This has been attained through close collaboration with upstream suppliers and downstream customers, as well as the tremendous efforts provided by all Realtek employees.

Full-year 2021 consolidated revenue reached NT$105.5 billion, an increase of 35.7% from the previous year. Gross profit was NT$53.2 billion, an increase of 60.0% from the previous year; and net profit after tax was NT$16.8 billion, representing an increase of 91.7% compared to the previous year, with earnings per share of NT$33.00. According to IC Insights, worldwide semiconductor industry revenue in 2021 was US$613.9 billion, an increase of 25% compared to 2020, of which IC sales grew by 26%. Realtek once again marched forward at a speed outpacing the overall industry.

As well as economic performance, the industry continues to recognize Realtek's excellence in technological innovation and execution. According to the Taiwan Intellectual Property Office, Realtek submitted a new high of 442 patent applications in 2021, ranking fourth place among all domestic enterprises and the highest among all fabless IC design houses in Taiwan. At COMPUTEX 2021, Realtek received a Best Choice Golden Award for our Automotive Ethernet Switch (RTL9075AA/RTL9072AAD), and a Best Choice Category Award for our low-power AI IP camera SoC (RTS3916N). Additionally, the company's new generation gaming network total solution comprising 2.5GbE Gaming NIC (RTL8125BG) with its highly-praised ‘Dragon Feature’, Wi-Fi 6 (RTL8852AE), and 2.5G Intelligent Switch (RTL9313 + RTL8221B) was a 2021 COMPUTEX d&i awards winner.

Realtek puts corporate sustainability at its core, and is committed to meeting the expectations of various stakeholders. The company pays constant attention to corporate social responsibility-related initiatives, defines important indices, integrates internal resources, and formulates short, medium, and longterm goals. In 2021, material subjects included Corporate Governance and Law Compliance, Information Security, Economic Performance, Innovation and R&D, Talent Appointment and Development, Supplier Sustainability Management, and Climate Change Response. Responding to the continuing growth of the company and our responsibility to the environment, our two new offices (currently under construction) are being built with the goal of achieving the US Green Building Council's Leading Energy and Environmental Design (LEED) certification, providing employees with a high-efficiency, environmentally-friendly workplace. In order to increase our utilization of green energy, Realtek has also started to install solar panels on the roof of each building, and plans to purchase more renewable green energy over the years to come. In order to reduce the carbon footprint of our products, Realtek leverages its core technical capabilities to continuously launch products with higher performance and lower power consumption, while aiming at net zero carbon emissions as a long-term goal.

During the pandemic, Realtek comprehensively upgraded the company's IT infrastructure and information security to support the need for employees to work remotely in order to maintain the normal operation of the company, and to ensure the health and safety of employees. Leveraging our technical prowess and doing our share to fight against the pandemic, Realtek actively cooperated with the National

-1-

-1-

Taiwan University Hospital to provide intelligent medical aid equipment required for isolation wards. Additionally, the ‘Free Hepatitis and Liver Cancer Screening’ joint project sponsored by Realtek, Taipei Longshan Temple, the Liver Disease Prevention and Treatment Research Foundation, and Yuan High-Tech was recognized by Enterprise Asia with the ‘Asia Responsible Enterprise Award (AREA) for Health Promotion’ in 2021.

2. 2022 Business Plan

The impact of COVID-19, and the semiconductor industry’s supply and demand issues, continue to linger. In spite of this, Realtek continues to vigorously pursue its commitment to using innovation to provide more competitive products to the market, while in turn delivering a better overall user experience to its customers. In 2022, Realtek will launch a series of new products to strengthen its product portfolio in key markets in order to maintain growth momentum and leadership in technology.

In relation to wireless network communication, over the course of 2021, Wi-Fi 6 has gradually replaced Wi-Fi 5 in both PC and router markets, and is expected to become mainstream during 2022. After the successful production of the first-generation Wi-Fi 6 solutions for the mass market in 2021, Realtek's Wi-Fi 6E solution has been designed into several customers' products with the gradual opening of the 6 GHz unlicensed band around the world. In 2022, Realtek will focus on the optimization and promotion of Wi-Fi 6 and 6E, while simultaneously accelerating the development of our next generation Wi-Fi 7. Realtek continues to cooperate with IoT market standard leaders to provide a development platform for first-line customers so that they can launch new products when the official version of the standard is released in 2023. Realtek's multipronged strategy on Bluetooth (BT) has proven to be very successful. The new generation of BT SoC for TWS (True Wireless Stereo) with Active Noise Cancellation (ANC), and BT5.2 BLE Audio technology will further enable a wide range of BT audio applications. Realtek BT NIC and BLE SoCs are the prime choices for major global brands in the BT audio remote controller and wearable markets. Looking to the future, in addition to focusing our attention on personal entertainment and smart homes, we will also be targeting industrial, medical, and automotive markets to provide cross-domain and diverse applications.

Over the past two years, the specifications for Ethernet in both the PC and Network markets have gradually moved up from 1GbE to 2.5GbE. Realtek 2.5GbE Ethernet controller chips have been widely adopted in gaming motherboards, mid-to-high-end PCs, switches, and network expansion accessories. In 2022, we will launch third generation 2.5GbE products and higher-speed 5GbE Ethernet solutions to meet the needs of the highly digitalized post-pandemic market. The demand for network bandwidth has rapidly increased with the popularization of Wi-Fi 6, and the speed of older mainstream 1GbE switches is no longer sufficient. A boom in 2.5GbE switches can be expected, and in 2022, Realtek expects to launch an easy-tooperate 8-port 2.5GbE switch with low-power consumption.

With the trend towards enterprise networks driven by the infrastructure upgrade of telecom operators in various countries, Realtek will launch a high-end, multi-port, multi-GbE managed switch product to provide a complete and competitive solution to the market. In broadband networks, users' demand for bandwidth is increasing, and global operators are accelerating the deployment and upgrade of optical fiber networks. Realtek has a complete portfolio of PON products to meet various needs, and that can compete in telco tender projects in many countries. Realtek is a major supplier of automotive Ethernet, and Automotive Ethernet has become the backbone of in-vehicle networks. With ever more stringent requirements for speed, interfaces, safety, and security, Realtek will strive to meet these needs and continue to provide innovative high-quality products, thereby increasing both revenue, and market share.

For PC peripheral products, as the pandemic eased up in the second half of 2021 the commercial segment replaced the consumer segment and became the main driver for the PC market. In 2022, Realtek will build on existing voice recognition, voice wake-up, and noise reduction technologies, and add deep learning to create a superb user experience in voice applications, rendering Realtek the best voice and audio solution for new generation PC products. In image signal processing, this year Realtek will launch a new

-2-

-2-

generation of ISP solutions supporting 4K high picture quality with more user convenient features and superior clarity. For high-speed interface products, the Realtek Card Reader, Hub, USB Type-C, and highspeed Translators lead the industry in both portfolio breadth and compatibility, and are highly recognized and employed by customers.

With regard to multimedia products, the TV SoC supply cycle was disrupted due to both the epidemic and supply shortages, however, we will continue to do our best to meet our customer order demands. Realtek will also develop a new generation of TV SoC that supports 8K (7680x4320), and offers smart TV functions to provide users with the best experience in both audio and video. Responding to the trend towards higher resolution and multimedia network streaming, Realtek has developed a new generation of set-top-box products integrating HDR, 3D sound, and the latest encoding technologies. These software and hardware reference designs, complete with our in-house multimedia and network total solutions, help customers develop high-performance solutions that provide great value to the market. Regarding LCD monitors, Realtek continues to lead the industry in delivering various high-speed interface specifications, supporting the technologies that give rise to high resolution, high dynamic range, and high frame rate, providing customers with multiple product choices that more closely meet their requirements.

3. Strategy for Future Development and Impact by Competitive, Regulatory, and Macro Conditions

The world remains challenged by the semiconductor industry’s supply/demand imbalance and geopolitical conflicts. Nevertheless, there is still plenty of room for growth in the semiconductor market with the advancement and upgrade of 5G Communications, the Internet, and Artificial Intelligence. Realtek will continue to enhance its core competency in technology, make good use of diverse silicon IPs to create product differentiation, and establish mutual trust and lasting partnerships with customers. While creating greater economic performance, we are committed to strengthening corporate governance, corporate sustainability, and creating long-term increasing value for shareholders. Realtek wishes to thank all shareholders for your continued support!

Chairman Chiu, Sun-Chien President Yen, Kuang-Yu Controller Chang, Jr-Neng

-3-

-3-

Company Introduction

I. Date of Establishment

Realtek Semiconductor Corporation (‘the Company’) was incorporated on October 21, 1987, and debuted on the Taiwan Stock Exchange in October 1998. It is headquartered in Taiwan and it has sales or R&D teams in China, Singapore, the United States, Japan, and South Korea.

II. Company Milestones

1987/10 The Company is incorporated. 1988/04 The Company’s Taipei office is established. 1991/12 The Pocket Ethernet Controller receives an Innovative Technology Award from the Hsinchu Science Park Administration.
1993/12 The High-Performance Window Accelerator Chip receives an Innovative Product Award from the Hsinchu Science Park Administration.
1995/02 The Full Duplex Plug-and-Play Ethernet Controller receives a Product Innovation Award from EDN Asia.
1996/12 For its extensive R&D initiatives and achievements, the Company receives an R&D Participation Award from the Hsinchu Science Park Administration.
1997/06 The Single-Chip Fast Ethernet Controller receives a Best Component Award and a Best Product Award at Computex Taipei 1997.
1997/09 The Company is listed in Gre Tai Securities Market (Taipei Exchange). 1997/11 The Single-Chip Fast Ethernet Controller receives a New Product Development Award from the Industrial Development Bureau, Ministry of Economic Affairs.
1998/10 The Company debuts on the Taiwan Stock Exchange.
1998/12 For the fourth consecutive year, the Company receives an R&D Participation Award from the Hsinchu Science Park Administration.
1999/12 The 4-Port Fast Ethernet Transceiver receives an innovative technology R&D grant from the Hsinchu Science Park Administration.
2000/05 For the first time, the Company issues unsecured convertible bonds; the total value is NT$1.4 billion.
2000/08 For its outstanding R&D achievements, the Company receives a Most Outstanding Award at the Ministry of Economic Affairs’ 8[th] Industrial Technology Development Awards.
2001/12 The Multi-mode Single-Chip 10/100M Fast Ethernet Controller SoC receives a Component Design Award from EDA Asia Magazine .
2002/01 For the first time, the Company issues Overseas Depositary Receipts; the total value is US$240,180,375.
2002/06 The ALC650 6-Channel Audio Codec receives a Best Choice Award at Computex Taipei 2002.
2002/11 The Company ranks among the Global Top 10 Electronic Component Providers by Taiwan’s Micro-Electronics Magazine .
2003/10 For the second consecutive year, the Company ranks among the Forbes Global 200 Best Small Companies.

-4-

-4-

2003/10	The RTL8169S/RTL8110 Single-Chip Gigabit Ethernet Controller receives an
	Innovative Product award from the Hsinchu Science Park Administration.
2004/03	The PCI Express Single-Chip Gigabit Ethernet Controller receives an innovation
	R&D grant for NT$3 million from the Hsinchu Science Park Administration.
2004/06	The Dual-Band Triple-Mode WLAN Chipsets RTL8185L and RTL8255 receive a
	Best Choice Award at Computex Taipei 2004.
2004/09	The reference designs of the IEEE802.11a/b/g WLAN Chipsets RTL8185L and
	RTL8255 pass the Wi-Fi Alliance’s WPA2 (Wi-Fi Protected Access 2) testing and
	become the golden test bed.
2004/10	The Dual-Band Triple-Mode WLAN Chipset receives an Outstanding IT
	Application/Product Award from the committee for Taiwan Information
	Technology Month.
2004/12	The WLAN Chipsets RTL8187L and RTL8255 receive an Innovative Product
	Award from the Hsinchu Science Park Administration.
2004/12	The Company receives an R&D Accomplishment Award from the Hsinchu
	Science Park Administration.
2005/03	The Company unveils the ALC882 7.1+2 Channel High Definition Audio Codec.
2005/06	The Company celebrates the grand opening of its new building on Innovation Rd.
	II in Hsinchu Science Park.
2005/08	The Company releases the RTS5111, the world’s first USB 2.0 All-in-One Card
	Reader Controller with Integrated 5V/3.3V Regulator and Power MOSFET.
2005/11	For its substantive R&D achievements, the Company receives another R&D
	Accomplishment Award from the Hsinchu Science Park Administration.
2006/03	The Company releases a new generation of High Definition Audio codecs, the
	ALC885 and ALC888 Telecom.
2006/03	The ALC888 Telecom receives a Technology Innovation Accelerated Award for
	the ‘Digital Office’ platform at the 2006 Intel Developer Forum.
2006/08	The Company passes ISO 14001 Environmental Management Systems
	certification.
2006/10	The Company celebrates its 20thanniversary.
2006/12	The ALC888 Telecom receives an Innovative Product Award from the Hsinchu
	Science Park Administration.
2006/12	For the third consecutive year, the Company receives an R&D Accomplishment
	Award from the Hsinchu Science Park Administration.
2007/01	At an extraordinary shareholders’ meeting, shareholders approved a capital
	reduction of NT$4,180,701,000 (each share qualified for a rebate of approximately
	NT$5); the reduction ratio is 50%.
2007/06	The RTL8111C PCI Express Single-Chip Gigabit Ethernet Controller receives a
	Best Choice Award at Computex Taipei 2007.
2007/07	The Company releases the RTL8366S and RTL8366SR low power, highly
	integrated 6-Port Gigabit Ethernet Switch Controller Single-Chip solutions
	featuring patented Green Ethernet technology.
2007/10	The Company releases the RTS5161/68/69, the world’s first multi-function card
	reader controller to integrate a NAND flash card reader, a smart card reader, a
	fingerprint reader, and an IR receiver.

-5-

-5-

2007/10 The Company releases the ALC269, which is the first HD Audio Codec to integrate a 2W Class D Amplifier and the latest low power specifications. The device represents a breakthrough in reducing the power consumption of laptop computers.
2007/11 The Company releases the ALC889 HD Audio Codec, which features a Signal-toNoise Ratio (SNR) of 108dB and is the only HD Audio Codec to have full rate Blu-Ray DVD playback.
2007/12 The RTL8111C-GR PCI Express Gigabit Ethernet Controller receives an Innovative Product Award from the Hsinchu Science Park Administration.
2007/12 For the fourth consecutive year, the Company receives an R&D Accomplishment Award from the Hsinchu Science Park Administration.
2008/05 The Company demonstrates a series of Networked Multimedia SoC solutions at Computex Taipei 2008.
2008/06 The RTD2485D All-in-One LCD Monitor Controller receives a Best Choice Award at Computex Taipei 2008.
2008/09 The Company releases the RTL8191S and RTL8192S, the world’s smallest, most energy efficient 802.11n WLAN IC Single-Chip solutions. They are the first controllers to integrate MAC/BB/RF with an embedded power amplifier, EEPROM, and switching regulators.
2008/10 The RTL8366SR 5+1-Port Gigabit Ethernet Switch Controller Single-Chip receives a 2008 EDN China Innovation Award.
2008/12 The RTD2485D All-in-One LCD Monitor Controller receives an Innovative Product Award from the Hsinchu Science Park Administration.
2009/08 The Company receives a 2009 National Invention and Creation Award. 2009/10 The Company releases the RTL8111E, the first Gigabit Ethernet Controller SoC to use the IEEE 802.3az standard.
2009/10 The RTD1073 Full-HD Digital Media Processor receives a 2009 EDN China Innovation Award.
2009/11 The RTD1073/1283 Full-HD Digital Media Processor receives a 2009 Outstanding IT Application/Product Award.
2009/11 The RTL8111DP-GR PCI Express Gigabit Ethernet Management Controller receives a 2009 Innovative Product Award from the Hsinchu Science Park Administration.
2009/11 The Company receives the International Exchange and Cooperation Award from the Hsinchu Science Park Administration.
2009/11 The Company receives the 2009 R&D Accomplishment Award from the Hsinchu Science Park Administration.
2010/01 At the 2010 CES, the Company demonstrates industry-leading Green Ethernet power-savings technology, including the IEEE 802.3az Ethernet Single-Chip and Switch Controller, as well as the world’s most energy efficient power-over-USB 2x2 802.11n Wireless Router using the Company's Green WLAN technology.
2010/06 The ALC899-GR High Fidelity PC Audio Codec receives a Best Choice Award at Computex Taipei 2010.
2010/06 The RTL8111E Single-Chip Gigabit Ethernet Controller receives a Best Choice Award at Computex Taipei 2010.

-6-

-6-

2010/12	The RTL8111E Single-Chip Gigabit Ethernet Controller receives a 2010
	Outstanding IT Application and Products Award.
2010/12	The RTL8367M 7-Port Gigabit Ethernet Switch Controller receives a 2010
	Innovative Product Award from the Hsinchu Science Park Administration.
2010/12	The Company receives a 2010 Science Park R&D Accomplishment Award.
2011/10	The Company receives the 1stTaiwan Green Classics Award, hosted by the Bureau
	of Foreign Trade, Ministry of Economic Affairs.
2011/12	The Company receives an Industrial Sustainable Excellence Award from the
	Industrial Development Bureau, Ministry of Economic Affairs.
2011/12	The Company receives a National Industrial Innovation Award – Outstanding
	Enterprise Innovation Award from the Department of Industrial Technology,
	Ministry of Economic Affairs.
2011/12	The Company receives a 2011 Science Park R&D Accomplishment Award.
2012/12	The ALC5642 Hi-Fi Audio Integrated with Voice/Sound DSP and Codec Single-
	Chip receives a 2012 Innovative Product Award from the Hsinchu Science Park
	Administration.
2012/12	The Company receives a 2012 Science Park R&D Accomplishment Award.
2013/06	The RTD2995 4K2K UHD Smart TV SoC receives a Best Choice Golden Award
	at Computex Taipei 2013.
2013/11	The RTL8153 Low Power USB 3.0-to-Gigabit Ethernet Controller receives a
	2013 EDN China Innovation Award.
2013/12	The RTD2995 4K2K UHD Smart TV SoC receives a 2013 Innovative Product
	Award from the Hsinchu Science Park Administration.
2014/06	The RTL8118AS Ultra Low Power Gaming NIC receives a Best Choice Green
	ICT Award at Computex Taipei 2014.
2014/06	The RTL8881A AP/Router Network Processor SoC (with 11ac Wi-Fi) receives a
	Best Choice Award (in Communication) at Computex Taipei 2014.
2015/04	The Company’s subsidiary Realtek Singapore Pte Ltd. acquires 100% equity
	interest of Cortina Access, Inc. and its subsidiaries.
2015/06	The RTL8195AM Low Power Wi-Fi IoT SoC receives a Best Choice Golden
	Award at Computex Taipei 2015.
2015/12	The RTD2999 4K Ultra-High Picture Quality Smart TV SoC receives a 2015
	Innovative Product Award from the Hsinchu Science Park Administration.
2016/06	The RTL8762A Bluetooth Low Energy SoC receives a Best Choice Golden
	Award at Computex Taipei 2016.
2016/06	The RTS5421 USB 3.1 Type-C Hub receives a Best Choice Golden Award at
	Computex Taipei 2016.
2016/12	The Company receives a 2016 Science Park R&D Accomplishment Award.
2016/12	The RTL9020AA Automotive Camera SoC Integrated with Audio/Video
	Processor and Ethernet receives a 2016 Innovative Product Award from the
	Hsinchu Science Park Administration.
2017/06	The RTL9047A Automotive Ethernet Switch Controller receives a Best Choice
	Award in the Car Electronics category at Computex Taipei 2017.
2017/06	The RTL8771B Low Power Wearable GNSS Receiver receives a Best Choice
	Award in the Mobile & Wearables category at Computex Taipei 2017.

-7-

-7-

2017/06	The world’s most energy efficient Bluetooth 5 Dual Mode Audio SoC, the
	RTL8763B, receives a Best Choice Award in the IC & Components category at
	Computex Taipei 2017.
2017/06	The RTL8117 Personal Cloud IC Solution receives a Best Choice Award: the
	Jury’s Special at Computex Taipei 2017.
2017/11	The Communications Network Group’s CN3 Wi-Fi R&D team receives a 2017
	Outstanding Technology Management Award.
2018/05	The Company releases the world’s first 2.5G Ethernet Controller SoC for
	multiple applications, including gaming.
2018/06	The RTL8715A Highly Integrated, Ultra-Low-Power Wi-Fi IP Camera SoC
	receives a Best Choice Award in the IoT Applications category at Computex
	Taipei 2018.
2018/06	The RTL8762C Bluetooth 5 Low Energy SoC receives a Best Choice Award in
	the IC & Components category at Computex Taipei 2018.
2018/06	The ALC5520 Multi-Mic Far-Field Speech Recognition Enhanced SoC solution
	receives a Best Choice Golden Award at Computex Taipei 2018.
2018/06	The Company receives an Asia Responsible Entrepreneurship Award.
2018/12	The ALC5520 Multi-Mic Far-Field Speech Recognition Enhanced SoC solution
	receives a 2018 Innovative Product Award from the Hsinchu Science Park
	Administration.
2019/06	The RTD2893 8K Video Decoder and Processing IC receives the Best Choice of
	the Year/Golden Award at Computex Taipei 2019.
2019/06	The RTL8773B Bluetooth 5 ANC Smart Headset SoC receives a Best Choice
	Golden Award at Computex Taipei 2019.
2019/06	The RTL8722DM Ameba D: Ultra-Low-Power Versatile IoT Solution wins a
	Best Choice IoT Category Award at Computex Taipei 2019.
2019/12	The RTD2893 8K Video Decoder and Processing IC receives a 2019 Innovative
	Product Award from the Hsinchu Science Park Administration.
2019/12	The Company receives a 2019 Science Park R&D Accomplishment Award for
	overall R&D results.
2020/12	The RTL8156B 2.5G USB Ethernet controller with world’s smallest form factor
	& lowest power receives a 2020 Innovative Product Award from the Hsinchu
	Science Park Administration.
2020/12	The Company receives a 2020 Hsinchu Science Park R&D Accomplishment
	Award for overall R&D results.
2021/5	The New Generation Gaming Network Total Solution 2.5GbE Gaming NIC with
	‘Dragon Feature’ + Wi-Fi 6 & Intelligent Switch (RTL8125BG + RTL8852AE &
	RTL9313 + RTL8221B) wins a d&i award at Computex Taipei 2021.
2021/7	The Automotive Ethernet Switch IC (RTL9075AAD/RTL9072AAD) receives a
	Best Choice Golden Award at Computex Taipei 2021.
2021/7	The RTS3916N Low Power AI IP Camera SoC receives a Best Choice AI, Big
	Data & Cloud Computing Category Award at Computex Taipei 2021.
2021/9	The Company wins the 2021 Asia Responsible Enterprise Award.

-8- -8-

Corporate Governance Report

I. Organization

1. Organizational Structure

==> picture [509 x 307] intentionally omitted <==

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

Shareholders’
Meeting
Board of Directors Audit
Chairman Committee
Chairman's Compensation
Office Committee
Nominating
CEO / President Committee
Connected Media Network Business Communications Computer Peripheral Multimedia R&D Center Technology Corporate
Business Group Group Business Group Business Group Center
Intelligent Supply Quality Information Occupational
Finance Administration
Decision Management Management Technology Safety & Health
Division Department
Research Center Center Department Department Center
----- End of picture text -----

-9-

-9-

2. Responsibilities of Main Departments

Department	KeyResponsibilities
Chairman’s Office	Reviews the Company’s operations and implementation of resolutions made by shareholders’ meetings and the Board of Directors;Companyaudits.
President’s Office	Plans and executes the Company’s operational strategies and analysis; carries out Board of Directors’ resolutions, investment assessments, PR statements, legal and patent affairs, and international marketing.
Communications Network Business Group	Manages communications network product R&D, planning and marketing.
Computer Peripheral Business Group	Manages computer peripheral product R&D, planning and marketing.
Multimedia Business Group	Manages multimedia product R&D, planning and marketing.
Connected Media Business Group	Manages connected media product R&D, planning and marketing.
R&D Center	Plans new products, develops and designs relevant core technologies, and manages circuit layouts.
Corporate TechnologyCenter	Oversees the planning, research and service of all advanced technologies needed in the Company’sproduct development
Intelligent Decision Research Center	Oversees big data analytics.
Supply Management Center	Oversees raw materials, warehousing, materials control, procurement, IC manufacturing and testing,and testingequipment maintenance.
Quality Management Department	Oversees product quality control and reliability engineering.
Finance Division	Oversees finance,accounting,and stock affairs.
Information Technology Department	Oversees information management and computer systems integration and applications.
Administration Department	Oversees general affairs, factory administration, and human resources.
Occupational Safety & Health Center	Oversees occupational safety and health.

-10-

-10-

Managers or Directors who are spouse or within second-degree relatives to each other	Relation	-	-			Brother	-	Brother		-	-	-	-	-
	Name	-	-			Yeh, Po-Len	-	Yeh, Nan- Horng		-	-	-	-	-
	Title	-	-			Director	-	Chairman		-	-	-	-	-
Current Positions at the Company and other companies		NA	Chief Executive Officer of Realtek Semiconductor Corp. Chairman/Director of Realtek Semiconductor Corp. affiliates	Vice Chief Executive Officer & Chief Financial Officer of Realtek Semiconductor Corp. Director/Supervisor of Realtek Semiconductor Corp. affiliates	NA	Chairmanof Realtek Semiconductor Corp.affiliates Director of Yihong Investment Co., Ltd. Chairman of Zu Yuan Industries Co., Ltd. Director of Cotek Pharmaceutical Industry Co., Ltd. Director of Novasiot (Shanghai) Co., Ltd.	NA	Chairman/Director of Realtek Semiconductor Corp.affiliates	President of Realtek Semiconductor Corp. Director of Realtek Semiconductor Corp.affiliates	Chief Operating Officer of Realtek Semiconductor Corp. Chairman/Director of Realtek Semiconductor Corp.affiliates	None	CEO of Creative Education and Management Foundation Chairman of EZTravel Travel Service Co., Ltd. Chairman of You Hsin Creative Co., Ltd. Chairman of Eland Technologies Co., Ltd. Chairman of Eland Information Co., Ltd.	Director of Ming-Der Senior High School Chairman of Jhang Huei Co., Ltd Johnson Law office Lawyer	Investment Vice President of De Jie Investment Co., Ltd. Representative of juristic person director of Biofity Pharmaceuticals Inc.
Selected Education & Experience		NA	M.S. in Electrical Engineering, National Taiwan University	MBA(Master of Business Administration), The City University of New York, USA.	NA	MBA(Master of Business Administration) ,Washington University in St. Louis, USA.	NA	MSc. & Ph.D. in Material Engineering, Loughbourough University of Technology, United Kingdom	M.S. in Communications Engineering , National Chiao Tung University	M.S. in Electrical Engineering, State University of New York, USA	Open Junior College	M.A. in Journalism, National Chengchi University	Bachelor degree in College of Law, National Taiwan University	Master Degree in Business Administration, National Taiwan University
Shareholding by Nominee Arrangement	%	-	-	-	-	-	-	-	-	-	-	-	-	-
	Share	-	-		-	-	-	-	-	-	-	-	-	-
Spouse & Minor Shareholding	%	-	0.00%		-	-	-	0.04%	0.00%	0.02%	1.28%	-	-	-
	Share	-	1,384		-	-	-	208,398	4,000	79,625	6,569,949	-	-	-
Current Shareholding	%	0.64%	0.17%	0.01%	4.32%	-	0.01%	0.45%	0.00%	0.01%	1.23%	-	-	-
	Share	3,265,954	883,831	40,686	22,146,604	-	66,000	2,323,899	23,948	42,205	6,308,389	-	-	-
Shareholding When Elected	%	0.64%	0.17%	0.01%	4.34%	-	0.01%	0.46%	0.00%	0.01%	1.24%	-	-	�
	Share	3,265,954	892,831	40,686	22,146,604	-	66,000	2,323,899	23,948	42,205	6,308,389	-	-	�
Date First Elected		2021.08.09	2000.06.09	2006.06.12	2015.06.09	1994.04.02 (Note 1)	2015.06.09	1991.06.26	2021.08.09	2018.06.05	1991.06.26	2015.06.09	2006.06.12 (Note 2)	2021.08.09
Term of Office		3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years	3 years
Date Elected		2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09	2021.08.09
Gender Age		-	Male 51~60	Male 51~60	-	Male 61~70	-	Male 61~70	Male 41~50	Male 51~60	Female 61~70	Male 61~70	Male 81~90	Male 51~60
Name		United Glory Co., Ltd.	United Glory Co., Ltd. Representative: Chiu, Sun-Chien	United Glory Co., Ltd. Representative: Chern, Kuo-Jong	Cotek Pharmaceutical Industry Co., Ltd.	Cotek Pharmaceutical Industry Co., Ltd. Representative: Yeh, Nan-Horng	Sonnen Limited	Sonnen Limited Representative: Yeh, Po-Len	Yen, Kuang-Yu	Huang, Yung-Fang	Ni, Shu-Ching	Chen, Fu-Yen	Tsai, Tyau-Chang	Lo, Chun-Pa
Nationality / Country of Origin		Belize	ROC	ROC	ROC	ROC	BVI	ROC	ROC	ROC	ROC.	ROC	ROC	ROC
Title		Director	Chairman	Vice Chairman	Director	Director	Director	Director	Director	Director	Director	Independent Director	Independent Director	Independent Director

-11-

Table I: The major shareholders of institutional shareholders

April 10, 2022

	April 10, 2022
Institutional Shareholders	Major Shareholders of Institutional Shareholders
Cotek Pharmaceutical Industry Co., Ltd.	Leicester Worldwide Corporation (shareholding: 48.24%) De Tao Venture Capital Corp. (shareholding: 20%) Hi-Xuan Co., Ltd. (shareholding: 10.59%) YihongInvestment Co.,Ltd. (shareholding:10.59%)
Sonnen Limited	Yeh,Yen-Hsi(shareholding:100%)
United Glory Co.,Ltd.	Target Way Co.,Ltd. (shareholding:100%)

Table II: The major shareholders of the major shareholders of institutional shareholders in Table I

	April 10, 2022
Shareholder	Major Shareholders Holding
Leicester Worldwide Corporation	Top Best Development Limited (shareholding: 33%) Apex Fortune Global Limited (shareholding: 33%) Perfectech INT'L Ltd. (shareholding: 33%)
Target Way Co.,Ltd.	Chun MeiChen De Chang (shareholding:100%)

-12-

-12-

1.1 Disclosure of professional qualifications of directors and independent status of independent directors

Criteria Name	Professional qualifications and experience (Note1)	Independent Status (Note2)
United Glory Co., Ltd. Representative: Chiu, Sun-Chien	Business management, strategic planning, leadership and decision-making, international marketing, technologyresearchand development	-
United Glory Co., Ltd. Representative: Chern,Kuo-Jong	Business management, strategic planning, leadership and decision-making, accounting and financial analysis	-
Cotek Pharmaceutical Industry Co., Ltd Representative: Yeh, Nan-Horng	Business management, strategic planning, leadership and decision-making	-
Sonnen Limited Representative: Yeh,Po-Len	Business management, strategic planning, leadership and decision-making	-
Yen, Kuang-Yu	Business management, technology research and development, sales andmarketing	-
Huang, Yung-Fang	Business management, technology research and development, sales andmarketing	-
Ni, Shu-Ching	Business management, accounting and financial analysis	-
Chen, Fu-Yen	Business management, strategic planning	Please refer to statement of note 2.
Tsai, Tyau-Chang	Legal profession, crisis management
Lo, Chun-Pa	Business management, accounting and financial analysis(Note 3)

Note 1: Directors of the company are not of any conditions defined in Article 30 of the Company Act.
Note 2: (1) Whether the person, the person’s spouse, or relatives within the second degree serve as directors, supervisors, or employees of the company or its affiliated companies: none;
(2) The shareholding numbers and proportion by the person, the person’s spouse, or relatives within the second degree: 0;
(3) Whether the person serves as a director, a supervisor or an employee of a company with specific relationship to the company: none;
(4) The amount of remuneration received for providing business, legal, financial, accounting and other services to the company or its affiliates in recent two years: 0.
Note 3: Audit committee members with accounting or financial expertise shall state their accounting or financial background and work experience: Please refer to page 11, information of independent directors, for the selected education & experience, and current positions at the company and other companies.

1.2. Diversity and Independence of the Board

(1) Diversity of the board of directors: The diversity policy for the Company’s board members is as follows:
The structure of the Company's board of directors shall be determined by choosing an appropriate number of board members in consideration of business scale, the shareholdings of major shareholders, and practical operational needs. The composition of the board of directors shall be determined by taking diversity into consideration. An appropriate policy on diversity based on the company's business operations, operating dynamics, and long-term development needs shall be formulated and include, without being limited to, the following two general standards:
Basic requirements and values: gender, age, nationality, and culture.
Professional knowledge and skills: a professional background (e.g., law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience.
All members of the board shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities:
Ability to make operational judgments.
Ability to perform accounting and financial analysis.
Ability to conduct management administration.
Ability to conduct crisis management.
Knowledge of the industry.
International market perspective.
Ability to lead.
Ability to make policy decisions.

-13-

-13-

There are ten directors, three of them are independent directors, for the Company. Each director has his or her own professional background, including business management, leadership decision, industry knowledge, financial accounting, international marketing, etc.

The specific management objectives of the Company's board member diversity policy are that each of the eight abilities that the board of directors shall possess is at least possessed by five directors, and at least four of the eight abilities are possessed by individual board member. The management objective of diversity policy is reached by the Company's current board of directors and all individual board members.

Please refer to page 11 and page 35 note 1 for the information of individual board member and abilities possessed by individual board member of the Company.

(2) Independence of the board of directors: The Company has 3 independent directors, accounting for 3/10 of the board of directors.

The board of directors of the Company meets the following independence criteria:

Each director is not a family member of senior management who is employed by the Company or by a subsidiary of the Company
Each director is not (and is not affiliated with a Company that is) an adviser or consultant to the Company or a member of the Company's senior management.
Each director is not affiliated with a significant supplier of the Company.
Each director does not have any personal services contract with the Company or a member of the Company's senior management.
Each director is not affiliated with a not-for-profit entity that receives significant contributions from the Company.
Each director has not been a partner or employee of the Company's external auditor during the past three years.
Each director does not have any other conflict of interest that the board of directors determines to mean he or she cannot be considered independent.
The board of directors complies with the provisions of Article 26-3, Items 3 and 4 of the Securities and Exchange Act. Only director Ye, Po-Len and director Ye, Nan-Horng are relatives within the second degree.
Each independent director meets the provisions of Article 3, Item 1 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

-14-

-14-

April 10, 2022	Managers who are spouse or second-degree relative	Relation - - - - - - - - - -	-15-
		Name - - - - - - - - - -
		Title - - - - - - - - - -
	Current Positions at other companies	Chairman/Director of Realtek Semiconductor Corp.affiliates Director/Supervisor of Realtek Semiconductor Corp. affiliates Director of Realtek Semiconductor Corp.affiliates Chairman/Director of Realtek Semiconductor Corp.affiliates Chairman of Realtek Semiconductor Corp.affiliates Director of Realtek Semiconductor Corp.affiliates None Chairman of Realtek Semiconductor Corp.affiliates Director of Compal Broadband Networks Inc. Director of C-Media Electronics Inc. Director/Supervisor of Realtek Semiconductor Corp. affiliates Director of Greatek Electronics Inc. None
	Selected Education & Experience	M.S. in Electrical Engineering, National Taiwan University MBA(Master of Business Administration), The City University of New York, USA M.S. in Communications Engineering , National Chiao Tung University M.S. in Electrical Engineering, State University of New York, USA Ph.D. in Chemical Engineering, Kansas State University, USA M.S. in Electrical Engineering, National Taiwan University B.S in Electronics Engineering, National Chiao Tung University M.S. in Electrical Engineering, National Taiwan University MBA(Master of Business Administration), National Chengchi University M.A. in Accounting, National Taiwan University Ph.D. in Communications Engineering, National Chiao Tung University
	Shareholding by Nominee Arrangement	% - - - - - - - - - - -
		Total - - - - - - - - - - -
	Spouse & Minor Shareholding	% 0.00% 0.00% 0.00% 0.02% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
		Total 1,384 0 4,000 79,625 0 0 0 0 0 0 5,000
	Shareholding	% 0.17% 0.01% 0.00% 0.01% 0.04% 0.01% 0.02% 0.00% 0.00% 0.01% 0.00%
		Total 883,831 40,686 23,948 42,205 188,560 42,000 120,267 74 0 35,045 1,234
	Date Appointed (Note) 1999.07.01 2002.03.28 2017.10.30 2015.04.27 2014.03.24 2017.03.13 2017.03.13 2017.10.30 2020.07.31 2007.03.16 2021.07.23
	Gender Male Male Male Male Male Male Male Male Male Male Male
	Name Chiu, Sun- Chien Chern, Kuo- Jong Yen, Kuang- Yu Huang, Yung- Fang Huang, Yee- Wei Lin, Ying-Hsi Chang, King- Hsiung Tsai, Jon-Jinn Wang,Po-Chih Chang, Jr-Neng Shen, Jia-Ching
	Nationality ROC ROC ROC ROC ROC ROC ROC ROC ROC ROC ROC
	Title CEO Vice CEO & CFO President COO Vice President Vice President Vice President Vice President Vice President Vice President Vice President

-15-

Managers who are spouse or second-degree relative	Relation -
	Name -
	Title -
Current Positions at other companies	None
Selected Education & Experience	M.E.S. in Computer and Communication Engineering, Queensland University of Technology
Shareholding by Nominee Arrangement	% -
	Total -
Spouse & Minor Shareholding	% 0.00%
	Total 292
Shareholding	% 0.00%
	Total 0
Date Appointed (Note) 2021.07.23
Gender Male
Name Lee, Shang-Ta
Nationality ROC
Title Vice President

-16-

	Remuneration from investee business other than subsidiaries or from parent company	Remuneration from investee business other than subsidiaries or from parent company	Remuneration from investee business other than subsidiaries or from parent company	None	None	None	None	None	None	None	None	None	None
	Amount of Total Remuneration (A+B+C+D+E+F +G) and Proportion to Net Income (%)	Consolidated Entities		402,169 2.39%							1,920 0.01%
			REALTEK	402,169 2.39%							1,920 0.01%
Remuneration from concurrent position as employee	Profit distribution for employee compensation (G)	Consolidated Entities	Stock	0							0
			Cash	145,520							0
		REALTEK	Stock	0							0
			Cash	145,520							0
	Pension (F)	Consolidated Entities		1,432							0
		REALTEK		1,432							0
	Salaries, bonuses and special expenses (E) (Note 2)	Consolidated Entities		124,737							0
		REALTEK		124,737							0
Amount of	Total Remuneration (A+B+C+D) and Proportion to Net Income (%)	Consolidated Entities		130,480 0.77%							1,920 0.01%
		REALTEK		130,480 0.77%							1,920 0.01%
Director remuneration	Business expenses (D)	Consolidated Entities		1,680							7200
		REALTEK		1,680							720
	Director Remuneration (C	Consolidated Entities		128,800							1,200
		REALTEK		128,800							1,200
	Pension (B)	Consolidated Entities									-
		REALTEK									-
	Base Compensation (A)	Consolidated Entities									-
		REALTEK									-
	Name			United Glory Co., Ltd. Representative: Chiu, Sun-Chien	United Glory Co., Ltd. Representative: Chern, Kuo-Jong	Cotek Pharmaceutical Industry Co., Ltd Representative: Yeh, Nan-Horng	Sonnen Limited Representative: Yeh, Po-Len	Yen, Kuang-Yu	Huang, Yung-Fang	Ni, Shu-Ching	Chen, Fu-Yen	Tsai, Tyau-Chang	Lo, Chun-Pa
	Title			Chairman	Vice Chairman	Director	Director	Director	Director	Director	Independent Director	Independent Director	Independent Director

-17-

Remuneration Range

	Remuneration Range	Remuneration Range	Remuneration Range	Remuneration Range
Remuneration Range	Name of Directors
	Total remuneration (A+B+C+D)		Total remuneration (A+B+C+D+E+F+G)
	REALTEK	Consolidated Entities	REALTEK	Consolidated Entities
Less than $1,000,000	Chiu, Sun-Chien, Chern, Kuo-Jong, Yeh, Nan-Horng, Yeh, Po-Len, Chen, Fu-Yen, Tsai, Tyau-Chang, Lo,Chun-Pa	Chiu, Sun-Chien, Chern, Kuo-Jong, Yeh, Nan-Horng, Yeh, Po-Len, Chen, Fu-Yen, Tsai, Tyau-Chang, Lo,Chun-Pa	Chen, Fu-Yen, Tsai, Tyau-Chang, Lo, Chun-Pa	Chen, Fu-Yen, Tsai, Tyau-Chang, Lo, Chun-Pa
$1,000,000 (incl.) - $2,000,000 (excl.)	Yen, Kuang-Yu Huang, Yung-Fang, Ni,Shu-Ching	Yen, Kuang-Yu Huang, Yung-Fang, Ni,Shu-Ching	Ni, Shu-Ching	Ni, Shu-Ching
$2,000,000 (incl.) - $3,500,000 (excl.)	-	-	-	-
$3,500,000 (incl.) - $5,000,000 (excl.)	-	-	-	-
$5,000,000 (incl.) - $10,000,000 (excl.)	-	-	-	-
$10,000,000 (incl.) - $15,000,000 (excl.)	-	-	-	-
$15,000,000 (incl.) - $30,000,000 (excl.)	-	-	-	-
$30,000,000 (incl.) - $50,000,000 (excl.)	Cotek Pharmaceutical Industry Co., Ltd. Sonnen Limited,	Cotek Pharmaceutical Industry Co., Ltd. Sonnen Limited,	Chern, Kuo-Jong, Yeh, Nan-Horng, Yeh, Po-Len, Yen, Kuang-Yu, Huang, Yung-Fang, Cotek Pharmaceutical Industry Co., Ltd. Sonnen Limited,	Chern, Kuo-Jong, Yeh, Nan-Horng, Yeh, Po-Len, Yen, Kuang-Yu, Huang, Yung-Fang, Cotek Pharmaceutical Industry Co., Ltd. Sonnen Limited,
$50,000,000 (incl.) - $100,000,000 (excl.)	United Glory Co., Ltd.	United Glory Co., Ltd.	Chiu, Sun-Chien, United GloryCo.,Ltd.	Chiu, Sun-Chien, United GloryCo.,Ltd.
$100,000,000 and above	-	-	-	-
Total	13	13	13	13

-18-

-18-

Compensation from investee business other than subsidiaries or from parent company	Compensation from investee business other than subsidiaries or from parent company	Compensation from investee business other than subsidiaries or from parent company		None	None	None	None	None	None	None	None	None	None	None
Total Amount of A+B+C+D and Proportion to Net Income (%)		Consolidated Entities		403,728 2.40%
		REALTEK		403,728 2.40%
Employee compensation (D)	Consolidated Entities	Stock		0
		Cash		195,470
	REALTEK	Stock		0
		Cash		195,470
Bonuses and special expenses (C) (Note)	Consolidated Entities			156,128
	REALTEK			156,128
Pension (B)	Consolidated Entities			2,591
	REALTEK			2,591
Salary (A)	Consolidated Entities			49,539
	REALTEK			49,539
	Name		Chiu, Sun-Chien	Chern, Kuo-Jong	Yen, Kuang-Yu	Huang, Yung-Fang	Huang, Yee-Wei	Lin, Ying-Hsi	Chang, King-Hsiung	Tsai, Jon-Jinn	Wang, Po-Chih	Chang, Jr-Neng	Shen, Jia-Ching	Lee, Shang-Ta
	Title		CEO	Vice CEO & CFO	President	COO	Vice President	Vice President	Vice President	Vice President	Vice President	Vice President	Vice President	Vice President

-19-

Compensation Range

	Compensation Range	Compensation Range
Compensation Range	Name of Officers
	REALTEK	Consolidated Entities
Less than $1,000,000	-	-
$1,000,000(incl.)- $2,000,000(excl.)	-	-
$2,000,000(incl.)- $3,500,000(excl.)	-	-
$3,500,000(incl.)- $5,000,000(excl.)	-	-
$5,000,000 (incl.) - $10,000,000 (excl.)	-	-
$10,000,000(incl.)- $15,000,000(excl.)	Chang, King-Hsiung,	Chang, King-Hsiung,
$15,000,000 (incl.) - $30,000,000 (excl.)	Huang, Yee-Wei, Wang, Po-Chih, Chang, Jr-Neng, Shen, Jia-Ching, Lee,Shang-Ta	Huang, Yee-Wei, Wang, Po-Chih, Chang, Jr-Neng, Shen, Jia-Ching, Lee,Shang-Ta
$30,000,000 (incl.) - $50,000,000 (excl.)	Chern, Kuo-Jong, Yen, Kuang-Yu, Huang, Yung-Fang, Lin, Ying-His, Tsai,Jon-Jinn	Chern, Kuo-Jong, Yen, Kuang-Yu, Huang, Yung-Fang, Lin, Ying-His, Tsai,Jon-Jinn
$50,000,000(incl.)- $100,000,000(excl.)	Chiu, Sun-Chien	Chiu, Sun-Chien
$100,000,000 and above	-	-
Total	12	12

3.3 Employee’s Compensation for Officers

2021 / Unit: NT$K

mpoyees omp	nsaon or cers				2021 / Unit: NT$K
Title	Name	Stock	Cash	Total	Percentage of net income after taxes (% )
CEO	Chiu,Sun-Chien	0	195,470	195,470	1.16%
Vice CEO & CFO	Chern, Kuo-Jong
President	Yen,Kuang-Yu
COO	Huang,Yung-Fang
Vice President	Huang,Yee-Wei
Vice President	Lin,Ying-Hsi
Vice President	Chang,King-Hsiung
Vice President	Tsai,Jon-Jinn
Vice President	Wang,Po-Chih
Vice President	Chang,Jr-Neng
Vice President	Shen,Jia-Ching
Vice President	Lee,Shang-Ta

4. Percentage of remuneration and compensation paid to Directors and Officers by the Company and all companies of the consolidated statements accounts for net income after taxes for the recent two years.

Percentage of remuneration and compensation paid to Directors and Officers by the Company and all companies of the consolidated statements accounts for net income after taxes for 2020	Percentage of remuneration and compensation paid to Directors and Officers by the Company and all companies of the consolidated statements accounts for net income after taxes for 2021
3.47%	3.63%

The 2021 annual remuneration of directors and compensation of employees was decided in accordance with the Company's articles of incorporation. If gained profits within a fiscal year, the Company shall allocate at a maximum of 3% of the profits as directors’ remuneration, and allocate no less than 1% of the profits as employees’ compensation. The decision for directors' remuneration was based on the board performance evaluation results of such aspects as the participation in the operation, the quality of the board of directors’ decision-making, alignment of the goals and missions of the Company, awareness of the duties of a director, management of internal relationship and communication, the director’s professionalism and continuing education,

-20-

-20-

internal control, etc. The decision for officers’ compensation was based on the performance appraisal indicators such as the length of service and position, performance, contribution to the Company's operation, industry benchmark, the Company’s profitability, etc.

The directors’ remuneration and officers’ compensation were proposed to the board of directors after the resolution based on the performance evaluation results, the company’s operational performance, and future risk exposure approved by the remuneration committee, and processed after the approval of the board of directors. The directors’ remuneration and employees’ compensation will also be reported at the shareholders' meeting. The Company's remuneration committee and the board of directors will review the remuneration policies of directors and officers in a timely manner based on the actual operating conditions and relevant laws and regulations, in order to balance the company's sustainable operation and risk control.

The planning and operation of the succession of board members and senior management: 5.1 Succession planning for board members
- There are currently 10 directors (including 3 independent directors) for the Company. The nomination and selection of directors take into account the overall capacity and diversity of the board of directors, and adjust the composition of members according to the results of performance evaluation and the need for substantive operations. The succession planning of the board of directors includes the succession of the senior management of the group, and the recruitment of external professionals with background of business management, law, accounting, industry, technology, or marketing.
5.2 Succession planning for senior management
- The succession planning for senior management of the Company is mainly constructed as follows:
- (1) Based on the future development strategy, define the positions and talent needs of the company, and review the succession planning regularly in response to changes in operations and strategies.
- (2) Develop competent talents with potential and capacities to enter the succession planning talent pool, and establish a comprehensive training mechanism and talent development plan for the talent pool.
- (3) Timely promote the mid-level managers as deputies for the high-level managers, and understand the development of the middle-level management through performance appraisal and as a reference for succession planning.

-21-

-21-

III. Corporate Governance

1. Operation of Board of Directors

Operation of Board of Directors:

Previous member’s term of office: June 5, 2018 to June 4, 2021 Current member’s term of office: August 9, 2021 to August 8, 2024

The Board of Directors held meetings 7 times in 2021. Attendance status of Directors is as follows:

Title Chairman Vice Chairman Director Director Director Director Director Independent Director Independent Director Independent Director Independent Director Independent Director	Name United Glory Co., Ltd. Representative: Chiu, Sun-Chien United Glory Co., Ltd. Representative: Chern, Kuo-Jong Cotek Pharmaceutical Industry Co., Ltd. Representative: Yeh, Nan-Horng Sonnen Limited Representative: Yeh, Po-Len Yen, Kuang-Yu Huang, Yung-Fang Ni, Shu-Ching Chen, Fu-Yen Ou Yang, Wen-Han Wang, Chun-Hsiung Tsai, Tyau-Chang Lo, Chun-Pa	Attendance in Person 6 7 7 7 3 7 7 7 4 4 3 3	Attendance by Proxy 0 0 0 0 0 0 0 0 0 0 0 0	Attendance Rate (%) 86% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	Remarks - - - - Newly elected on 2021.08.09 - - - Resigned on 2021.08.09 Resigned on 2021.08.09 Newly elected on 2021.08.09 Newly elected on 2021.08.09

-22-

-22-

Other disclosures:

1.1

(1) Securities and Exchange Act §14-3 resolutions: Not applicable.
(2) Resolutions of the board of directors with objected or reserved opinions by independent directors and with records or written statements: Not applicable.
1.2 Execution of the directors' interests evasion: The directors have avoided the proposal with personal stake.
1.3 The goals for strengthening the powers of the board of directors and performance evaluation:
(1) Set up functions committees: For the purpose of developing supervisory functions and strengthening management mechanisms, the Company has set up audit committee, remuneration committee, and nominating committee.
(2) Enhance corporate governance: The Company has established corporate governance best practice principles, risk management policy, and regulations governing the board performance evaluation, and also discloses corporation governance information in accordance with the relevant laws.

-23- -23-

Board of Directors performance evaluation
2.1 Evaluation cycles: Conducting an internal board performance evaluation every year
2.2 Evaluation periods: From Jan. 1, 2021 to Dec. 31, 2021
2.3 Scope and method of evaluation: The performance evaluation of the board as a whole, individual board members and functional committees, including audit committee, remuneration committee, and nominating committee.
2.4 Method of evaluation: The internal evaluation of the board, self-evaluation by individual board members, and the internal evaluation of audit committee, remuneration committee, and nominating committee. The units conducting evaluations is nominating committee.
2.5 Criteria of evaluation:
- 2.5.1 The board of directors performance evaluation
  - (1) Participation in the operation of the company;
  - (2) Improvement of the quality of the board of directors' decision making;
  - (3) Composition and structure of the board of directors;
  - (4) Election and continuing education of the directors;
  - (5) Internal control.
- 2.5.2 The board members performance evaluation
  - (1) Alignment of the goals and missions of the company;
  - (2) Awareness of the duties of a director;
  - (3) Participation in the operation of the company;
  - (4) Management of internal relationship and communication;
  - (5) The director's professionalism and continuing education;
  - (6) Internal control.
- 2.5.3 Functional committee’s performance evaluation
  - (1) Participation in the operation of the company;
  - (2) Awareness of the duties of the functional committee;
  - (3) Improvement of quality of decisions made by the functional committee;
  - (4) Makeup of the functional committee and election of its members;
  - (5) Internal control.
2.6 Performance evaluation results: The 2021 performance evaluation results of the board, the board members, audit committee, remuneration committee, and nominating committee are all ‘outstanding’. The results of the performance evaluation will be used as a reference for the remuneration of individual directors or functional committee members and the nomination of continuation in office.

3. Operation of Audit Committee

The Audit Committee assists the Board of Directors in performing its supervision functions. It is also responsible for tasks defined by the Company Act, Securities and Exchange Act and other relevant regulations. The operation of Audit Committee is based on the Audit Committee Charter. The Audit Committee shall convene at least once quarterly; 6 meetings were held in 2021. It also maintains good communication channels with the Company’s internal audit manager and the CPA.

The major annual review matters of Audit Committee were as follows:

(1) Financial statements.
(2) Internal control system.
(3) Material transaction of asset acquisition, intercompany loans, and endorsement and guarantee.
(4) The audit plan and implementation of the internal audit unit.
(5) Appointment, remuneration and independence assessment of the CPA.
(6) Establishing or revising principles and regulations related to corporate governance and corporate social responsibility.

-24-

-24-

Operation of Audit Committee

Previous member’s term of office: June 5, 2018 to June 4, 2021 Current member’s term of office: August 9, 2021 to August 8, 2024

The Audit Committee held meetings 6 times in 2021. Attendance status of Independent Directors is as follows:

follows:
Title Independent Director Independent Director Independent Director Independent Director	Name Ou Yang, Wen-Han Chen, Fu-Yen Wang, Chun-Hsiung Tsai, Tyau-Chang	Attendance in Person 4 6 4 2	Attendance by Proxy 0 0 0 0	Attendance Rate (%) 100% 100% 100% 100%	Remarks Resigned on 2021.08.09 Resigned on 2021.08.09 Newly appointed on 2021.08.09 Newly appointed on 2021.08.09
Independent Director	Lo, Chun-Pa	2	0	100%

Other disclosures:

3.1 (1) Securities and Exchange Act §14-5 resolutions

Date	Resolutions	The Opinions of All Independent Directors and the Company’s Actions to theOpinions
Mar. 16, 2021	1. 2020 financial statements and consolidated financial statements. 2. The Company intends to endorse the guarantee for a Mainland China subsidiary. 3. The Company's investee company increases investment in a subsidiary. 4. The Company's Auditor of financial statements and Audit Fee for 2021. 5.2020 Statementof InternalControlSystem.	All independent directors approved
Apr. 20, 2021	1. Distribution of 2020 Retained Earnings. 2. 2020 cash dividends distribution from retained earnings. 3. Cash distribution from capital surplus. 4. 2020 business report and 2021 business plan. 5. Fund loans between subsidiaries of the Company. 6. The Companyintends to loan funds to subsidiaries.
May 31, 2021	1. The Company to sign a supply contract with a supplier. 2. Fund loans between subsidiaries of the Company. 3.The Companyintendstoloan a fundtoasubsidiary.
Jul. 23,2021	1. 2021Q2 consolidated financial statements.
Aug. 9, 2021	1. Election of the convener and chairman of the second term Audit Committee.
Oct.26, 2021	1. The Company intends to loan funds to subsidiaries. 2. The Company intends to loan a fund to a Mainland China subsidiary. 3. Fund loans between subsidiaries of the Company. 4. The Status that the Company regularly evaluates the independence of auditor. 5. 2022 annual auditplans.

(2) There was no resolution that was not approved by the Audit Committee but was approved by two thirds or more of all Directors.

-25-

-25-

3.2 Execution of the independent directors' interests evasion: None.
3.3 The communication between the independent directors and the internal audit manager and the CPA: The Company’s independent directors communicate with the CPA by the way of meetings, discussions, telephone calls or e-mails through the audit committee or separately to discuss the review results of the financial statements and related laws and regulations such as accounting, taxation, and securities management. If major issues occur, a meeting can be convened at any time.
The Company’s independent directors communicate with the internal audit manager by the way of meetings, discussions, telephone calls or e-mails through the audit committee or separately to discuss the company's audit-related works, audit reports, and the condition of discovering problems and tracking improvements. If major issues occur, a meeting can be convened at any time.

-26-

-26-

(1) The major items of communication between the independent directors and the CPA

Date	The Major Items of the Communication	The suggestions of independent directors and the Company’s action tothe suggestions
Mar. 16, 2021 (individual meeting)	The consolidated financial statement and independent auditor's report result for 2020 and Important audit events.	No suggestion from independent directors
Apr. 20, 2021 (individual meeting)	The consolidated financial statement and independent auditor's report result for the first quarter of 2021 and Important review events.	No suggestion from independent directors
Jul. 23, 2021 (individual meeting)	The consolidated financial statement and independent auditor's report result for the second quarter of 2021 and Important review events.	No suggestion from independent directors
Oct. 26, 2021 (individual meeting)	The consolidated financial statement and independent auditor's report result for the third quarter of 2021 and Important review events.	No suggestion from independent directors

(2) The major items of communication between the independent directors and the internal audit manager

Date	The Major Items of the Communication	The suggestions of independent directors and the Company’s action to the suggestions
Mar. 16, 2021 (individual meeting)	Implementation of the audit plan for the fourthquarterof 2020	No suggestion from independent directors
Apr. 20, 2021 (individual meeting)	Implementation of the audit plan for the firstquarterof 2021	No suggestion from independent directors
Jul. 23, 2021 (individual meeting)	Implementation of the audit plan for the second quarterof 2021	No suggestion from independent directors
Oct. 26, 2021 (individual meeting)	Implementation of the audit plan for the thirdquarter of 2021	No suggestion from independent directors

-27-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	-		-	-	-
Implementation Status	Summary Description	The Company established and disclosed the corporate governance best practice principles based on ‘Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies,’ with a dedicated ‘Corporate Governance’ section on the Company’s website for all investors to inquire the Company’s corporate governance regulations.		The Company has set up an investor relations team and appointed a professional stock transfer agency to handle matters such as shareholder suggestions or doubts.	The Company regularly collects the shareholdings of directors and officers.	The business transactions between the Company and affiliated companies are implemented and controlled in accordance with relevant internal control systems, and laws and regulations.
	No
	Yes	V		V	V	V
Evaluation Item		1. Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	2. Shareholding Structure and Shareholders’ Rights	(1) Does the Company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?	(2) Does the Company possess the list of its major shareholders as well as the ultimate owners of those shares?	(3) Does the Company establish and implement the risk management and firewall system between related companies?

-28-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	-		-
Implementation Status	Summary Description	The Company has established Regulation of Insider Trading, Educational activities with respect to Regulation of Insider Trading, and related laws and regulations shall be promoted at least once per year to current directors, officers and all employees. For new directors and officers, educational promotion shall be arranged within 3 months after taking office, and for new employees, educational promotion shall be arranged during educational training by personnel division. In 2021, the current directors, officers and all employees have been educated during the period of January 4 to December 30. In 2021, the Company provided 59.91 hours of training of insider trading prevention, with a total attendance of 719 persons. The content of the courses includes the confidentiality of material information, and that they may not take advantage of undisclosed information of which they have learned to engage in insider trading. They are also prohibited from divulging undisclosed information to any other party, in order to prevent other party from using such information to engage in insider trading. Course briefings and audio-visual files are placed in the Company’s internal system to provide relevant education and training for new employees.		The diversity policy for the Company’s board members is as follows: The structure of the Company's board of directors shall be determined by choosing an appropriate number of board members in consideration of business scale, the shareholdings of major shareholders, and practical operational needs. The composition of the board of directors shall be determined by taking diversity into consideration. An appropriate policy on diversity based on the company's business operations, operating dynamics, and long-term development needs shall be formulated and include, without being limited to, the following two general standards: 1. Basic requirements and values: gender, age, nationality,
	No
	Yes	V		V
Evaluation Item		(4) Does the Company establish internal rules against insiders trading with undisclosed information?	3. Composition and Responsibilities of the Board of Directors	(1) Does the Board formulate diversity policies, specific management objectives and implement it accordingly?

-29-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-	-
Implementation Status	Summary Description	and culture. 2. Professional knowledge and skills: a professional background (e.g., law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience. All members of the board shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities: 1. Ability to make operational judgments. 2. Ability to perform accounting and financial analysis. 3. Ability to conduct management administration. 4. Ability to conduct crisis management. 5. Knowledge of the industry. 6. International market perspective. 7. Ability to lead. 8. Ability to make policy decisions. There are ten directors, three of them are independent directors, for the Company. Each director has his or her own professional background, including business management, leadership decision, industry knowledge, financial accounting, international marketing, etc. The specific management objectives of the Company's board member diversity policy are that each of the eight abilities that the board of directors shall possess is at least possessed by five directors, and at least four of the eight abilities are possessed by individual board member. The management objective of diversity policy is reached by the Company's current board of directors and all individual board members. The abilities possessed by individual board members of the Company is as note1.	The Company has set up nominating committee. Please refer to the operation of nominating committee section disclosed in annual report or the Company's website.	The Company has established regulations governing the board performance evaluation and its evaluation method, regularly conducts performance evaluation every year, and submits the results of performance evaluation to the board
	No
	Yes		V	V
Evaluation Item			(2) Does the Company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?	(3) Does the Company establish regulations governing the board performance evaluation and its evaluation method, regularly conduct performance evaluation every year, submit the results of performance

-30-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-	-
Implementation Status	Summary Description	of directors. The 2021 performance evaluation results of the board, the board members, audit committee, remuneration committee and nominating committee are all “outstanding”. The results of the performance evaluation will be used as a reference for the remuneration of individual directors or functional committee members and the nomination of continuation in office. Please refer to Board of Directors performance evaluation section disclosed in annual report or the Company's website.	The Company regularly evaluates the performance and independence of the accountants every year and reports the results to the board of directors for approval. The Company's self-assessment of the independence of the accountants mainly includes: 1. The accountants have no significant financial interest in the company; 2. The accountants have no kinship relationship with the senior managers of the company; 3. The accountants shall not hold shares of the company; 4. The accountants shall not concurrently hold the position of the company; 5. The accountants provide independence statement The result of 2021 evaluation is that the independence of the accountants is in line with the Company's standards.	The Company, approved by the board of directors, has appointed a chief corporate governance officer to be in charge of corporate governance affairs. The main duties include handling of matters relating to board of directors meetings and shareholders meetings in compliance with law, preparation of minutes of the board of directors meetings and shareholders meetings, assistance in onboarding and continuing education of the directors, provision of information required for performance of duties by the directors, assistance in the directors' compliance of law. The performance of duties for 2021 was as following: 1. Assisted independent directors and directors in performing their duties, provided required information, and arranged directors' further education:
	No
	Yes		V	V
Evaluation Item		evaluation to the board of directors, and base the determination of remuneration, the election or nomination of an individual director on the evaluation results?	(4) Does the Company regularly evaluate the independence of accountants?	4. Does the Company have an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate governance officer to be in charge of corporate governance affairs. (including but not limited to providing data demanded by directors and supervisors, assisting directors and supervisors with legal compliance, handling matters relating to board meetings and shareholders meetings according to laws, and producing minutes of board meetings and shareholders meetings)?

-31-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.
Implementation Status	Summary Description	(1) Provided onboard directors revision and development of the latest laws and regulations regarding company management field and corporate governance, and updated them regularly. (2) Reviewed the confidential level of relevant information and provided the company information required by the directors, maintained smooth communication between the directors and officers. (3) Assisted in arranging relevant meetings when, in accordance with the corporate governance best-practice principles, independent directors needed to meet with the internal audit supervisor or accountants individually to understand the company's finance and business. (4) Assisted independent directors and directors to formulate annual training plans and arrange courses based on the company's industrial characteristics and directors' academic and professional experience background. 2. Assisted that the procedures and resolutions of board of directors meetings and shareholders meetings were in compliance with laws: (1) Confirmed whether the convening of the company's shareholders meetings and board of directors meetings were in compliance with relevant laws and corporate governance best-practice principles. (2) Assisted and reminded the directors of the laws and regulations to be followed when performing duties or making a formal resolution of the board of directors, and made suggestions when the board of directors will make a resolution in violation of the laws. (3) Checked the release of material information on important resolutions of the board of directors after the meetings, and ensured the legality and correctness of the content of the material information for the transaction information equality of investors. 3. Informed directors of the agenda for board of directors seven days before the meeting, convened a meeting and provided meeting materials, reminded directors to recuse if there is a conflict of interest in the agenda items in advance, and completed the minutes of the board of directors
	No
	Yes
Evaluation Item

-32-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-	-		-	-	The Company follows Securities and Exchange Act to publish and report its annual financial report and its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline.	-
Implementation Status	Summary Description	meetings within 20 days after the meetings. 4. Registered the date of the shareholders meeting in advance in accordance with the law, prepared meeting notices, handbook, meeting minutes within the statutory deadlines, and handled registration of change matters in the revised articles of incorporation or director election. Training situation: Professional training is arranged in accordance with the requirements of “Operation directions for compliance with the establishment of board of directors by TWSE listed companies and the board's exercise of powers”. Please refer to note 2.	The Company has set up a stakeholder section on our website with a dedicated email for stakeholder communication and contact. Any question, suggestion, or voice can be channeled through this mailbox for open and effective communication.	The Company appoints Chinatrust Commercial Bank Transfer Agency to deal with shareholder affairs.		The financial, business and corporate governance information has been disclosed on the company's website. Investors can also access the company's material information through the market observation post system.	The Company has set up an English website, and has a spokesman for external communication and designated personnel to disclose information about the company and the institutional investor conferences at market observation post system in accordance with the statutory requirements.	The Company follows Securities and Exchange Act to publish and report its annual financial report and its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline.	1. The Company provides information on relevant
	No							V
	Yes		V	V		V	V		V
Evaluation Item			5. Does the Company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employee and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?	6. Does the Company appoint a professional shareholder transfer agency to deal with shareholder affairs?	7. Information Disclosure	(1) Does the Company have a corporate website to disclose the financial, business, and corporate governance information?	(2) Does the Company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, implementing a spokesman system, webcasting investor conferences)?	(3) Does the Company publish and report its annual financial report within two months after the end of a fiscal year, and publish and report its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline?	8. Is there any other important information to facilitate a

-33-

Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.
Implementation Status	Summary Description	regulations that directors should pay attention to at any time. 2. The directors of the Company attended the board of directors in good condition and all met the requirements of the laws. 3. If the proposal has a stake in the directors, the director is required to evade. 4. The Company has purchased the liability insurance for directors which was approved by the board of directors. 5. The Company protects the legitimate rights and interests of employees in accordance with the provisions of Labor Standards Act, and establishes a good relationship of mutual trust with employees through the welfare system enhancing the stability of employees' lives, and completed educational trainings.
	No
	Yes
Evaluation Item		better understanding of the Company’s corporate governance practices (including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing liability insurance for directors and supervisors)?

-34-

Note1: The abilities possessed by individual board members of the Company	Ability to make policy decisions v v v v v v v v v v
	Ability to lead v v v v v v v v v
	International market perspective v v v v v v v v v v
	Knowledge of the industry v v v v v v v
	Ability to conduct crisis management v v v v v v v v v
	Ability to conduct management administration v v v v v v v v v
	Ability to perform accounting and financial analysis v v v v v v v
	Ability to make operational judgments v v v v v v v v v v
	Gender Male Male Male Male Male Male Female Male Male Male
	Directors Chiu, Sun-Chien Chern, Kuo-Jong Yeh, Nan-Horng Yeh, Po-Len Yen, Kuang-Yu Huang, Yung-Fang Ni, Shu-Ching Chen, Fu-Yen Tsai, Tyau-Chang Lo, Chun-Pa

-35-

			Independent Director (member) Lo, Chun-Pa Business management, accounting and financial analysis Working experience: 26 years 0 Note : (1) Whether the person, the person’s spouse, or relatives within the second degree serve as directors, supervisors, or employees of the company or its affiliated companies: none; (2) The shareholding numbers and proportion by the person, the person’s spouse, or relatives within the second degree: 0; (3) Whether the person serves as a director, a supervisor or an employee of a company with specific relationship to the company: none; (4) The amount of remuneration received for providing business, legal, financial, accounting and other services to the company or its affiliates in recent two years: 0.
Number of other public companies concurrently serving as an independent director	0	0	0
Independent Status		Please refer to statement of note
Professional qualifications and experience	Legal profession, crisis management Working experience: 43 years	Business management, strategic planning Working experience: 39 years	Business management, accounting and financial analysis Working experience: 26 years
Criteria Title / Name	Tsai, Tyau-Chang	Chen, Fu-Yen	Lo, Chun-Pa
	Independent Director (convener)	Independent Director (member)	Independent Director (member)

-36-


The Company’s action to the advices of the Remuneration Committee	Processed as the resolution results of the remuneration committee.	Processed as the resolution results of the remuneration committee.
Resolution results	Approved by all members of the committee.	Approved by all members of the committee.
Content of proposals	1. Approve the distribution of 2020 directors’ remuneration and officers’ compensation. 2. Approve 2021 officers’ salary adjustments.	1. Election of the convener and chairman of the 5th term Remuneration Committee.
Date	Mar. 16, 2021	Aug. 27, 2021

-37-

The Company’s action to the advices of the Remuneration Committee	Processed as the resolution results of the remuneration committee.
Resolution results	Approved by all members of the committee.
Content of proposals	1. Approve 2021 year-end bonus principle for officers.
Date	Oct. 26, 2021

-38-

6.Operation of Nominating Committee 1. The Company established a Nominating Committee in October 2019. The qualifications for the selection of the nomination committee member are possessing professional capabilities in business management, strategic planning, accounting and financial analysis as a whole, and are capable to contribute to the operation and decision-making of the committee. The committee is composed of three independent directors. The convener and chairman of the meeting, Chen, Fu-Yen, has the abilities of business management and strategic planning. The independent director, Tsai, Tyau-Chang, has the abilities of legal profession and crisis management. The independent director, Lo, Chun-Pa, has the abilities of business management and accounting and financial analysis. All of which meet the professional abilities required by the committee. The major duties of the nominating committee are as follows: (1) Laying down the standards of independence and a diversified background covering the expertise, skills, experience, gender, etc. of members of the board, and finding, reviewing, and nominating candidates for directors based on such standards. (2) Establishing and developing the organizational structure of the board and each committee, and evaluating the performance of the board, each director, and each committee. (3) Establishing and reviewing on a regular basis programs for the succession plans of directors and senior executives. 2. There are 3 members of the Nominating Committee. 3. Previous member’s term of office: October 31, 2018 to June 4, 2021 Current member’s term of office: August 9, 2021 to August 8, 2024 The Nominating Committee held meetings�times in 2021. Professional qualifications and experience, and attendance status of members are as follows:
	Remarks Resigned on 2021.08.09 Resigned on 2021.08.09 Newly appointed on 2021.08.09 Newly appointed on 2021.08.09
	Attendance Rate (%) 100% 100% 100% 100% 100%
	Attendance by Proxy 0 0 0 0 0
	Attendance in Person 2 2 5 3 3
	Professional qualifications and experience Business management, strategic planning, technology research and development Business management, accounting and financial analysis Business management, strategic planning Legal profession, crisis management Business management, accounting and financial analysis
	Name Ou Yang, Wen-Han Wang, Chun-Hsiung Chen, Fu-Yen Tsai, Tyau-Chang Lo, Chun-Pa
	Title Convener Member Convener Member Member

-39-

The Company’s action to the resolutions of the nominating committee	Processed as the resolution results of the nominating committee.	Processed as the resolution result of the nominating committee.	Processed as the resolution result of the nominating committee.	Processed as the resolution result of the nominating committee.	Processed as the resolution result of the nominating committee.
Resolution results	Approved by all members of the committee.	Approved by all members of the committee.	Approved by all members of the committee.	Approved by all members of the committee.	Approved by all members of the committee.
Content of proposals	1. 2020 Board and functional committees performance evaluation results. 2. The number of directors (including independent directors) re-elected at the 2021 annual shareholders meeting and the qualifications of the board members.	1. Propose a list of candidates for directors (including independent directors).	1. Election of the convener and chairman of the second term Nominating Committee.	1. Propose the recommendation of the 5th term Remuneration Committee members	1. Conduct 2021 performance evaluation of the board of directors and functional committees.
Date	Mar. 16, 2021	Apr. 20, 2021	Aug. 9, 2021	Aug.19, 2021	Oct. 26, 2021

-40-

Deviation from the ‘Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies’ and Reasons	Deviation from the ‘Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies’ and Reasons	-
Implementation Status	Summary	The company has the Board of Directors as the highest level of governance. The CSR Center is established under the President's Office with representatives from each department serving as the CSR committee members. Since 1997, it has been promoting various key topics of corporate social responsibility such as corporate governance, R&D innovation, environmental responsibility, human resources and social care, while reporting the progress to the board at least once a year. Three topics were reported to the board in October 2021, including (1) status of CSR promotion and stakeholder communication, (2) promotion and implementation of risk management, (3) promotion and implementation of integrity management. We will continue to work diligently towards accomplishing our six main goals and commitments, and refining the company's ESG comprehensive development strategy: (1) adhering to sustainable goals and the spirit of integrity, (2) implementing Green Energy Policy and Environmental Responsibility, (3) sustainable talent development and safe
	No
	Yes	�
	Assessment Item	1. Has the company established a governance structure to promote sustainable development and set up full- time (part-time) units to promote sustainable development, and has the board authorized senior management to execute under the board's supervision?

-41-

	-	-
workplace, (4) partnership, service and quality, (5) innovative R&D to yield a rich and convenient world, (6) warming the hearts of people	The company implements corporate governance obligations, maintains sustainable business goals, and controls the internal and external economic, social and environmental risks that the company's operations may face. Among the three risk areas, the environmental risk disclosure covers only Hsinchu operations, while the scope of economic and social risk disclosure also includes our offices in Dazhi, and Southern Taiwan Science Park . All departments should clearly identify the relevant risks that may affect the operation or sustainable development of the enterprise according to their authorities and responsibilities. Further, they are required to monitor potential risks and do preventive measures to strengthen risk management, improve systemic resilience, and achieve the goal of risk control, thereby safeguarding shareholders' rights and interests, enhancing competitiveness, and laying the foundation for the sustainable operation and development of the company.	In 2006, the company passed ISO14001 Environmental Management Systems verification, and in addition completed the ISO14001:2015 revision verification in October

	�	�
	2. Does the company conduct risk assessments on environmental, social, and corporate governance issues related to company operations in accordance with the principle of materiality, and formulate relevant risk management policies or strategies?	3. Environmental Issues (1) Does the Company establish proper environmental management systems based on the characteristics of its industries?

-42-

	-	-
2020. We continue to march towards accomplishing both the systemization of environmental management, and the realization of environmental sustainability.	The Company has environmental and energy policies, including compliance with environmental laws and regulations, active resource management to achieve effective utilization, strengthening pollution prevention, promotion of education and training, and continuous improvement plans. The Company also continuously invests in R&D to develop a variety of low-power products to reduce the impact on the environment.	The company refers to the four core elements of governance, strategy, risk management, as well as indicators and targets in the "Task Force on Climate-Related Financial Disclosures" (TCFD) framework to identify the potential risks and opportunities brought about by climate change, and comprehensively examine the possible impact of climate change on Realtek's business operations to formulate and implement countermeasures due to climate change, so that various impacts of climate change can be effectively monitored, controlled and quickly responded to. Relevant assessment results and countermeasures taken will be published in the current year’s ESG report.

	�	�
	(2) Does the Company endeavor to utilize all resources more efficiently and use renewable materials that have a low impact on the environment?	(3) Does the Company monitor the impact of climate change on present and future operations and evaluate related opportunities? Does it establish measures to respond to climate change related impacts?

-43-

-	-
The company attaches great importance to the sustainable development of the environment and ecology. Self-check and annual disclosure on greenhouse gas discharge have been done since 2019. In terms of management policies, Realtek actively checks the energy consumption data of the factory area, focusing on electricity, air conditioning, air compressors, and the IT room, in order to carry out an evaluation, and propose relevant optimization management plans. Various measures have been taken, such as replacing old electrical fixtures and fittings with new energy-saving models, the greater utilization of LED lighting, and recycling rainwater for reuse. In 2020 and 2021, 3.139 million kWh and 1.848 million kWh of electricity were saved respectively. 22,797.71 metric tons and 23,957.99 metric tons were generated in 2020 and 2021, respectively, per Greenhouse Gas internal check. Water usage was 34.98 and 50.64 liters, respectively, in 2020 and 2021. The total industrial waste produced was 26.57 and 27.3 metric tons in 2020 and 2021, respectively.	The Company abides by labor-related laws and regulations in each location, protects the legitimate rights and interests of employees, and follows the spirit and basic principles of

�	�
(4) Does the Company take inventories of greenhouse gas emissions, water use, and waste volume during the past two years? Does it adopt guidelines to conserve energy and reduce carbon and greenhouse gases emissions, water use, and waste generation?	4. Social Issues (1) Does the Company comply with relevant laws and regulations and the International Bill of Human Rights? Does it adopt relevant management policies

-44-

	-	-	-
human rights protection announced in the International Bill of Human Rights, the International Labor Organization - Declaration on Fundamental Principles and Rights at Work, the United Nations Global Compact and other international human rights conventions to formulate Realtek’s human rights policies and related practices so as to enhance human rights awareness and create an environment that respects human rights, while promoting it both in staff training courses, and executive staff seminars.	The Company establishes and implements appropriate employee welfare measures, including employee compensation, workplace diversity and equality, vacation system, various allowances, gifts and subsidies, as well as appropriate wage and remuneration, so that employees can share the Company’s operational achievements.	The Company provides employees with a safe and healthy working environment, inspects the working environment twice a year according to the law, conducts regular employee health inspections and emergency response fire drills every year, and obtained the ISO45001 Occupational Safety and Health System in 2020.	Through the ‘Realtek Enterprise University’, comprising five college courses (Newcomer Speed College, R&D Innovation College,

	�	�	�
and processes?	(2) Does the Company establish and implement appropriate remuneration mechanisms (including wages, vacation, and other benefits) and reflect the corporate business performance or achievements in the employee remuneration policy?	(3) Does the Company provide safe and healthful work environments for employees, and does it organize training on safety and health for employees on a regular basis?	(4) Does the Company establish effective training programs to foster employees’ career skills?

-45-

	-	-	-
Management Leadership College, Experiential Cognition College, Learning Organization College), the Company integrates organizational competitiveness and sustainable development goals, and effectively links the development of employees' functions, assisting all colleagues in professional learning that takes into account both breadth and depth according to career development. The relevant employee training plans and implementation are also disclosed in the current-year’s ESG report.	The Company follows the laws and regulations of the government and international guidelines in relation to customer health, safety, and privacy, as well as sales and labeling of its products and services, in order to protect the rights and interests of consumers.	The Company establishes policies that require suppliers to adhere to environmental, occupational health and safety, and labor rights laws and regulations.	Realtek publishes Sustainability /Corporate Social Responsibility reports in accordance with GRI standards to disclose business performance, corporate governance, stakeholder negotiation, social participation, environmental protection, friendly workplaces, and employee care. The 2021 Realtek

	�	�	�
	(5) Does the Company follow the laws and regulations of the government and international guidelines in relation to customer health, safety, and privacy, as well as sales and labeling of its products and services? Does the Company establish policies to protect consumer rights and interests and provide a clear and effective procedure for accepting consumer complaints?	(6) Does the Company establish policies to assess whether suppliers adhere to environmental, occupational health and safety, and labor rights laws and regulations, then follow up on implementation status?	5. Does the Company adopt internationally recognized standards or guidelines when producing corporate social responsibility reports and other related reports to disclose the status of implementing non-finance related policies? Does the Company obtain a third- party assurance or verification for the reports to enhance the reliability of the information in the

-46-

	6. If the company has established its corporate social responsibility code of practice according to ‘Corporate Social Responsibility Best Practice Principles for TWSE-GTSM-Listed Companies,’ please describe the operational status and differences: Realtek establishes its corporate social responsibility code of practice in accordance with the ‘Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies’. Its operations and corporate social responsibility spirit and principles adhere to this statute.	7. Other important information to facilitate better understanding of the company’s implementation of corporate social responsibility: The Company actively participates in social welfare activities and actions, through sponsorships, donations to educational funds and training, the hiring of people with disabilities, and other deeds.
Corporate Social Report has passed the external verification by SGS Taiwan Ltd., confirming that it complies with the core options of GRI Standards and AA1000 AS (2008) Moderate Assurance (Type I).


reports?

-47-

Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-	-	-
Implementation Status	Summary Description		Per approval by the Board of Directors, the Company has established integrity management policies, integrity management codes, integrity management operating procedures and behavior guidelines and other integrity management related regulations, and announced them in the corporate governance section of the Company website for directors, managers and all employees to follow.	The Company’s integrity management rules, integrity management operating procedures and behavior guidelines, ethical codes of conduct, employee codes of conduct, regulations for reporting unlawful and unethical behaviors, and other integrity management related regulations, have covered a risk assessment mechanism, and preventive measures against dishonest behavior.	The Company clearly specifies operational procedures, guidelines, and a well-defined disciplinary and appeal system for handling violations in the prevention programs against dishonest behavior. The compliance situation is checked by the
	No
	Yes		�	�	�
Evaluation Item		1. Establishment of ethical corporate management policies and programs	(1) Does the company establish its ethical corporate management policies approved by the board of directors, and clearly specify in their rules and external documents the ethical corporate management policies and practices, and the commitment by the board of directors and senior management on rigorous and thorough implementation of such policies?	(2) Does the company establish a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within it’s business scope that are at a higher risk of being involved in unethical conduct, and establish prevention programs which at least include preventive measures against the conducts listed in article 7, paragraph 2 of Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?	(3) Does the company clearly specify operational procedures, guidelines, and well-defined disciplinary and appeal systems for handling violations in the prevention programs against unethical conducts, implement such programs rigorously, and regularly

-48-

Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.			-	-	-	-
Implementation Status	Summary Description	internal audit unit. The company also reviews the measures when necessary.		The Company regularly conducts quality and credit evaluations for suppliers and customers. For those who have not passed the rating, they will be removed from the cooperation list.	The Company's Administration Department is responsible for promoting the integrity of the business, the relevant units are responsible for the implementation, and the Internal Audit unit is independently responsible for auditing to ensure the implementation of the Company's integrity management philosophy, the results of which are reported to the Board of Directors at least once a year. (The execution results were reported to the Board of Directors on October 29, 2021)	The Company’s code of integrity management, operating procedures and behavior guidelines for integrity management, codes of ethical conduct, and codes of employee conduct have covered policies to prevent conflicts of interest and communication channels for directors, managers and all employees to follow.	The Company has established accounting systems, internal control systems, and internal auditing systems in accordance with various regulations. The auditors,
	No
	Yes			�	�	�	�
Evaluation Item		review and correct the programs?	2. Implement ethical corporate management	(1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts?	(2) Does the company establish an exclusively dedicated unit under the board of directors, which reports to the board of directors on a regular basis (at least once a year), on the establishment and supervision of the implementation of the ethical corporate management policies and prevention programs?	(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement the policies?	(4) Does the company establish effective systems for both accounting and internal control systems to facilitate ethical corporate management, and does the internal

-49-

Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-		-
Implementation Status	Summary Description	based on the result of assessment of the risk of involvement in unethical conduct, devise relevant audit plans to examine the compliance with the prevention programs against unethical conducts, and report to the board of directors on a regular basis.	The Company has established a code of integrity management, integrity management operating procedures and behavior guidelines, a code of ethics and conduct, a code of conduct for all employees, and internal (outside) personnel reporting unlawful and unethical behaviors and other relevant measures, which are published on the Realtek corporate website to provide information for directors, employees, and stakeholders. In addition, the Company continues to carry out relevant education and training on integrity management and ethical behavior for employees and supervisors. The contents include the Company’s integrity management policies, employee code of ethical conduct, and channels for reporting unethical behaviors, etc., so as to promote the integrity management philosophy and ensure it is implemented in daily work. In 2021, the total hours related to integrity management education were 25.5 hours, and a total of 959 people participated in the courses.		The Company has established measures to report
	No
	Yes		�		�
Evaluation Item		audit unit, based on the results of assessment of the risk of involvement in unethical conduct, devise relevant audit plans and examine accordingly the compliance with the prevention programs, or engage a certified public accountant to carry out the audit?	(5) Does the company regularly hold internal and external educational trainings of ethical corporate management?	3. Implementation status of the whistle-blowing system	(1) Does the company establish a concrete whistle-

-50-

Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.	Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		-	-	-
Implementation Status	Summary Description	illegal or unethical behavior, created a way for reporting, and appointed an appropriate designated unit for reported cases.	The Company’s code of integrity management, operating procedures and behavior guidelines for integrity management, and measures to report illegal or unethical behavior have covered standard operating procedures, follow-up measures to be taken after the investigation is completed, and related confidentiality measures for reported cases.	The Company will take the necessary protective measures for the whistle-blowers, and promises that the Company's employees will not be subject to inappropriate disciplinary actions due to their whistle- blowing.	The Company’s integrity management code, integrity management operating procedures and behavior guidelines, and other relevant regulations, as well as the implementation and operation of integrity management are disclosed on the Company’s website and MOPS, and are operated scrupulously.
	No
	Yes		�	�	�
Evaluation Item		blowing system and incentive measures, create a convenient way for reporting, and appoint appropriate designated personnel for reported cases?	(2) Does the company establish standard operating procedures, follow-up measures to be taken after the investigation is completed, and related confidentiality measures for reported cases?	(3) Does the company adopt measures for protecting whistle-blowers from inappropriate disciplinary actions due to their whistle-blowing?	4. Strengthening information disclosure Does the company disclose its ethical corporate management principles and the results of performance on the company’s website and MOPS?

-51-

Evaluation Item Implementation Status Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation. Yes No Summary Description 6. Other important information to facilitate a better understanding of the company’s ethical corporate management implementation: (e.g., review and amend the company’s principles) The Company complies with related laws and regulations including Company Act, Securities and Exchange Act, Business Entity Accounting Act, etc. to implement ethical corporate management 9. If the company has established corporate governance best-practice principles or related regulations, disclose the method of finding these: The Company’s Corporate Governance Best-Practice Principles and relevant regulations can be found on the corporate governance section of the Company’s website or Market Observations Post System. 10. Other important information to facilitate a better understanding of the state of the company's implementation of corporate governance may also be disclosed: The company in time discloses material information in accordance with regulations, and regularly holds institutional investor conference to present financial and business related information.	Evaluation Item Implementation Status Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation. Yes No Summary Description 6. Other important information to facilitate a better understanding of the company’s ethical corporate management implementation: (e.g., review and amend the company’s principles) The Company complies with related laws and regulations including Company Act, Securities and Exchange Act, Business Entity Accounting Act, etc. to implement ethical corporate management 9. If the company has established corporate governance best-practice principles or related regulations, disclose the method of finding these: The Company’s Corporate Governance Best-Practice Principles and relevant regulations can be found on the corporate governance section of the Company’s website or Market Observations Post System. 10. Other important information to facilitate a better understanding of the state of the company's implementation of corporate governance may also be disclosed: The company in time discloses material information in accordance with regulations, and regularly holds institutional investor conference to present financial and business related information.	Evaluation Item Implementation Status Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation. Yes No Summary Description 6. Other important information to facilitate a better understanding of the company’s ethical corporate management implementation: (e.g., review and amend the company’s principles) The Company complies with related laws and regulations including Company Act, Securities and Exchange Act, Business Entity Accounting Act, etc. to implement ethical corporate management 9. If the company has established corporate governance best-practice principles or related regulations, disclose the method of finding these: The Company’s Corporate Governance Best-Practice Principles and relevant regulations can be found on the corporate governance section of the Company’s website or Market Observations Post System. 10. Other important information to facilitate a better understanding of the state of the company's implementation of corporate governance may also be disclosed: The company in time discloses material information in accordance with regulations, and regularly holds institutional investor conference to present financial and business related information.
Deviation from the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies and the reason for deviation.		6. Other important information to facilitate a better understanding of the company’s ethical corporate management implementation: (e.g., review and amend the company’s principles) The Company complies with related laws and regulations including Company Act, Securities and Exchange Act, Business Entity Accounting Act, etc. to implement ethical corporate management
Implementation Status	Summary Description
	No
	Yes
Evaluation Item

-52-

11. Internal Control Status

11.1. Statement of internal control

Realtek Semiconductor Corporation Statement of Internal Control System

Date: March 18, 2022

Based on the findings of a self-assessment, Realtek Semiconductor Corporation (Realtek) states the following with regard to its internal control system during the year 2021:

Realtek’s board of directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. Our internal control is a process designed to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance, and safeguarding of assets), reliability, timeliness, transparency of our reporting, and compliance with applicable rulings, laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and Realtek takes immediate remedial actions in response to any identified deficiencies.
Realtek evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the ‘Regulations’). The Criteria adopted by the Regulations identify five key components of managerial internal control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities.
Realtek has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
Based on the findings of such evaluation, Realtek believes that, as of December 31, 2021, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations.
This Statement is an integral part of Realtek’s annual report for the year 2021 and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
This statement was passed by the board of directors in their meeting held on March 18, 2022, with none of the ten attending directors expressing dissenting opinions, and the remainder all affirming the content of this statement.

Realtek Semiconductor Corporation

Chairman: Chiu, Sun-Chien President: Yen, Kuang-Yu

11.2. The Company was not required to commission an independent auditor to audit its internal control system.
If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement.: None
Major resolutions of the shareholders’ meeting and the board meetings from last year to the

-53-

-53-

date of the annual report printed:

13.1. Major resolutions of 2021 shareholders’ meeting:

Date	Proposals	Resolution Results And Implementation
August 9, 2021	Ratification Items 1. 2020 business report and financial statements 2. Distribution of 2020 retained earnings Election of Directors (including Independent Directors)	Approved Approved Dividend record date: 2021/09/14 Payment date: 202110/07 Amount: NT$6,128,218,500 Election results are as follows: Directors: United Glory Co., Ltd. Representative: Chiu, Sun-Chien United Glory Co., Ltd. Representative: Chern, Kuo-Jong Cotek Pharmaceutical Industry Co., Ltd. Representative: Yeh, Nan-Horng Sonnen Limited Representative: Yeh, Po-Len Yen, Kuang-Yu Huang, Yung-Fang Ni, Shu-Ching Independent Directors: Chen, Fu-Yen Tsai, Tyau-Chang Lo, Chun-Pa

-54-

-54-

13.2. Major Resolutions of Board Meetings

Date	Summary of Major Resolutions	Resolution Results
Mar. 19, 2021	1. 2020 financial statements and consolidated financial statements. 2. Matters of convening 2021 shareholders’ meeting. 3. Election of Directors (including Independent Directors). 4. Adoption of the shareholders' proposals for 2021 shareholders’ meeting and adoption of the nomination of candidates for directors, including independent directors. 5. Employees’ compensation and Directors’ remuneration of 2020. 6. The Company intends to endorse the guarantee for a Mainland China subsidiary. 7. The Company's investee company increases investment in a subsidiary. 8. The Company's auditor of financial statements and audit Fee for 2021. 9.2020 Statementof InternalControlSystem.	Approved by all attending directors
Apr. 23, 2021	1. To amend matters of convening 2021 shareholders’ meeting. 2. To approve the list of nominated candidates for directors and independent directors. 3. Distribution of 2020 Retained Earnings. 4. 2020 cash dividends distribution from retained earnings. 5. Cash distribution from capital surplus. 6. To request the shareholders' meeting to release the Directors and their Representatives from non-competition restrictions. 7. 2020 business report and 2021 business plan. 8. Fund loans between subsidiaries of the Company. 9. The Companyintends to loan funds to subsidiaries.	Approved by all attending directors
May 31, 2021	1. The Company to sign a supply contract with a supplier. 2. Fund loans between subsidiaries of the Company. 3.The Companyintendstoloan fundsto subsidiaries.	Approved by all attending directors
Jul. 23, 2021	1. To change the date of 2021 Annual Shareholders' Meeting. 2. The matter of organizational adjustment. 3. The personnel related matter. 4. To establish a subsidiaryin Korea.	Approved by all attending directors
Aug. 9, 2021	1. Election of the Chairman of the 12th term board of directors. 2. Election of the Vice Chairman of the 12th term board of directors. 3.Elections of themembers of the2ndterm nominating committee.	Approved by all attending directors
Aug. 28, 2021	1. Appointment of 5th term Remuneration Committee members.	Approved by all attending directors
Oct. 29, 2021	1. The Company intends to loan funds to subsidiaries. 2. The Company intends to loan a fund to a Mainland China subsidiary. 3. Fund loans between subsidiaries of the Company. 4. The Status that the Company regularly evaluates the independence of auditor. 5. 2022 annual audit plans. 6.2021year-end bonus principleforofficers.	Approved by all attending directors
Mar. 18, 2022	1. 2021 financial statements and consolidated financial statements. 2. Matters of convening 2022 shareholders’ meeting. 3. Adoption of the shareholders' proposals for 2022 shareholders’ meeting. 5. Employees’ compensation and Directors’ remuneration of 2021. 6. The Company intends to endorse the guarantee for a subsidiary. 7. To revise the Articles of Incorporation 8. The Company's auditor of financial statements and audit Fee for 2022. 9. 2021 Statement of Internal Control System.	Approved by all attending directors
Apr. 22, 2022	1. Distribution of 2021Retained Earnings. 2. 2021 cash dividends distribution from retained earnings. 3. Cash distribution from capital surplus. 4. To revise the Articles of Incorporation 5. To revise the Procedures for Acquisition or Disposal of Assets	Approved by all attending directors

-55-

-55-

Date	Summary of Major Resolutions	Resolution Results
	6. 2021 business report and 2022 business plan. 7. The Company intends to loan funds to subsidiaries. 8. Fund loans between subsidiaries of the Company.

Directors’ objections against the important resolution of board meetings from last year to the date of the annual report printed: None
Information of resignation or dismissal of persons related to the financial reports (including chairman, president, accounting officers, finance officers, internal audit manager, corporate governance officer, and R&D officers) from last year to the date of the annual report printed: None

-56-

-56-

IV. Information Regarding Audit Fees

					Unit: NT$K	Unit: NT$K
Accounting Firm Pricewaterhouse Coopers Taiwan	Name of CPA Cheng,Ya-Huei	Period Covered by CPA’s Audit 2021/01/01~2021/12/31	Audit Fee 4,530	Non-audit Fee(Note) 950	Total 5,480	Remarks
	Lin,Yu-Kuan	2021/01/01~2021/12/31

Note � The fees were mainly related to the tax compliance service.

Replaced the audit firm and the audit fee paid to the new audit firm was less than the payment of previous year: Not applicable.
Audit fee reduced not less than 10% compared to previous year: Not applicable.

V. Replacement of Independent Auditors

Regarding the former CPA

Replacement Date	March 18, 2022	March 18, 2022	March 18, 2022	March 18, 2022	March 18, 2022
Replacement reasons and explanations	The internal regular rotation of PricewaterhouseCoopers Taiwan
Describe whether the Company terminated or the CPA rejected the appointment	Parties Status			CPA	The Company
	Appointment terminated automatically			Not applicable	Not applicable
	Appointment rejected (continued)			Not applicable	Not applicable
The Opinions other than Unmodified Opinion Issued in the Last Two Years and the Reasons for the Said Opinions(Note)		None
Is there any disagreement in opinion with the Company	YES		Accounting principles orpractices
			Disclosure of Financial Statements
			Audit scope or steps
			Others
	No	�
	Explanation
Supplementary Disclosure	None

-57-

-57-

2. Regarding the Successor CPA

rding the Successor CPA
Name of accounting firm	PricewaterhouseCoopers Taiwan
Name of CPA	Li, Tien-Yi ; Cheng, Ya-Huei
Date of appointment	March 18, 2022
Prior to the Formal Engagement, Any Inquiry or Consultation on the Accounting Treatment or Accounting Principles for Specific Transactions, and the Type of Audit Opinion that the CPA might issue on the Financial Report.	None
Written Opinions from the Successor CPA are different from the Former CPA’s opinions.	None

VI. If the Company’s Chairman, President, Managers in charge of finance or accounting operations held positions within the auditor’s firm or its affiliates during last year, the name, title, and period of holding positions should be disclosed: None

-58-

-58-

VII. Share transfer or share pledge of Directors, Officers and major shareholders holding more than 10% shares from last year to the date of the annual report printed. 1. Changes in shareholding of Directors, Officers and major shareholders

Title Chairman Vice Chairman Director Director Director Director Director Independent Director Independent Director Independent Director Independent Director Independent Director CEO Vice CEO & CFO President Chief Operating Officer Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President	Name United Glory Co., Ltd. Representative: Chiu, Sun-Chien United Glory Co., Ltd. Representative: Chern, Kuo-Jong Cotek Pharmaceutical Industry Co., Ltd.Representative: Yeh, Nan-Horng Sonnen Limited Representative: Yeh, Po-Len Yen, Kuang-Yu (Note1) Huang, Yung-Fang Ni, Shu-Ching Chen, Fu-Yen Wang, Chun-Hsiung (Note 2) Ou Yang, Wen-Han (Note 2) Tsai, Tyau-Chang (Note1) Lo, Chun-Pa (Note1) Chiu, Sun-Chien Chern, Kuo-Jong Yen, Kuang-Yu Huang, Yung-Fang Huang, Yee-Wei Lin, Ying-Hsi Chang, King-Hsiung Tsai, Jon-Jinn Wang, Po-Chih Chang, Jr-Neng Shen, Jia-Ching (Note1) Lee, Shang-Ta (Note1)	2021	2021	As of April 10,2022	As of April 10,2022
		Shares increased (decreased) - - - - - - - - - - - (100,000) - - - - (8,000) - - - - - -	Pledge shares increased (decreased) - - 5,010,000 - - - - - - - - - - - - - - - - - - - - -	Shares increased (decreased) - - - - - - - - - - - - - - - - - - - - - - -	Pledge shares increased (decreased) - - - - - - - - - - - - - - - - - - - - - - -

Note 1: Yen, Kuang-Yu, Tsai, Tyau-Chang and Lo, Chun-Pa were newly elected directors since 2021.8.9. Shen, Jia-Ching and Lee, Shang-Ta were newly appointed officers since 2021.7.23..

Note 2: Wang, Chun-Hsiung and Ou Yang, Wen-Han resigned on 2021.8.9

Information on stock transfer to related parties: None.
Information on pledge of shares to related parties: None.

-59-

-59-

VIII. The relationship between any of the Company’s top ten shareholders:

VIII. The relationship between	any of the Compan	any of the Compan	y’s top ten sh	y’s top ten sh	areholders:	areholders:
							April 10,2022
Name	Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Top Ten Shareholders who are Related Parties, Spouse, or Second-Degree Relatives
	Shares	%	Shares	%	Shares	%	Name	Relationship
Cotek Pharmaceutical Industry Co., Ltd. Representative: Yeh, Chia-Wen	22,146,604	4.32%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
Fubon Life Insurance Co., Ltd. Representative: Richard M. Tsai	17,661,000	3.44%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
New Labor Pension Fund	16,074,348	3.13%	-	-	-	-	-	-
Cathay Life Insurance Company, Ltd. Representative: Huang, Tiao-Kuei	13,940,000	2.72%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
Leicester Worldwide Corporation	9,498,184	1.85%	-	-	-	-	-	-
China Life Insurance Co., Ltd. Representative: Saloon Tham	8,445,000	1.65%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
Enable Educational Technology Co., Ltd. Representative: Yeh,Wei-Ting	8,181,000	1.60%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
Chunghwa Post Co., Ltd. Representative: Wu, Hong-Mo	8,021,856	1.56%	-	-	-	-	-	-
	-	-	-	-	-	-	-	-
Supervisory Committee of the Labor Retirement Fund-Labor Retirement Fund	7,226,000	1.41%	-	-	-	-	-	-
JPMorgan Chase Bank N.A. Taipei Branch in custodyfor JPMorgan Funds	6,900,000	1.35%	-	-	-	-	-	-

-60-

-60-

IX. The consolidated shareholdings and percentage of investments held by the Company, Directors, Officers, and the companies controlled directly or indirectly by the Company.

			December 31,2021 /Unit: shares:%	December 31,2021 /Unit: shares:%	December 31,2021 /Unit: shares:%	December 31,2021 /Unit: shares:%
Investments	Investments of the Company		Investments directly or indirectly held by Directors, Officers, and the companies controlled directly or indirectlybytheCompany		Consolidated	Investments
	Shares	%	Shares	%	Shares	%
Leading Enterprises Limited	34,630	100%	�	�	34,630	100%
Amber Universal Inc.	41,432	100%	�	�	41,432	100%
Realtek Singapore Private Limited	89,856,425	100%	�	�	89,856,425	100%
Realtek Investment Singapore Private Limited	200,000,000	100%	�	�	200,000,000	100%
Talent Eagle Enterprise Inc.	114,100,000	100%	�	�	114,100,000	100%
Bluocean Inc.	110,050,000	100%	�	�	110,050,000	100%
Realsun Investments Co., Ltd	28,000,000	100%	�	�	28,000,000	100%
Hung-wei Venture Capital Co., Ltd	25,000,000	100%	�	�	25,000,000	100%
Realking Investments Limited	29,392,985	100%	�	�	29,392,985	100%
Realsun Technology Corporation	500,000	100%	�	�	500,000	100%
AICONNX Technology Corporation	2,000,000	100%	�	�	2,000,000	100%
Bobitag Inc.	1,918,910	66.67%	�	�	1,918,910	66.67%
EstiNet Technologies Inc.	2,000,000	6.89%	�	�	2,000,000	6.89%

Note: The aforementioned are long-term investments under the equity method.

-61-

-61-

Capital Raising

I. Source of Capital

		Authorized	Authorized	Paid-in	Paid-in	Remarks Source of Equity Capital increase by assets other than cash Employees' compensation - Employees' compensation - Employees' compensation - Employees' compensation -	Other Note 1 Note 2 Note 3 Note 4
Year & Month 09/2017 04/2018 04/2020 04/2022	Issuing Price 10 10 10 10	Shares (K) 890,000 890,000 890,000 890,000	Amount ($K) 8,900,000 8,900,000 8,900,000 8,900,000	Shares (K) 506,506 508,095 510,685 512,864	Amount ($K) 5,065,062 5,080,955 5,106,849 5,128,636

Note 1: The capitalization was approved by the Hsinchu Science Park Administration on Sep. 25, 2017 with an approval letter of No. 1060026285.

Note 2: The capitalization was approved by the Hsinchu Science Park Administration on Apr 11, 2018 with an approval letter of No. 1070010727.
Note 3: The capitalization was approved by the Hsinchu Science Park Administration on Apr 20, 2020 with an approval letter of No. 1090010606.
Note 4: The capitalization was approved by the Hsinchu Science Park Administration on Apr 13, 2022 with an approval letter of No. 1110011158.

T f h	Authorized Capital	Authorized Capital	Authorized Capital	Remarks Note
ype o sare Common stock	Outstanding Shares 512,863,641	Un-issued Shares 377,136,359	Total 890,000,000

Note: The authorized capital retains 80,000,000 shares for the issue of employee warrant shares. Shelf Registration: Not Applicable.

II. Structure of Shareholders

April 10, 2022

Structure of Shareholders Number of Shareholders Shareholdings	Government Institutions 0 0	Financial Institutions 38 68,465,957	Other Institutional Investors 431 91,448,652	Foreign Institutional & Individual Investors 1,373 275,077,966	Individual Investors 53,707 77,871,066	Total 55,549 512,863,641 100.00%
Shareholding Percentage	0.00%	13.35%	17.83%	53.64%	15.18%

-62-

-62-

III. Distribution of Shareholding

I. Distribution of Shareholding	I. Distribution of Shareholding	I. Distribution of Shareholding	I. Distribution of Shareholding
April 10,2022
Category	Number of Shareholders	Shareholdings	Shareholding Percentage
1 to 999	39,656	3,380,369	0.66%
1,000 to 5,000	13,117	22,663,472	4.42%
5,001 to 10,000	1,039	7,548,408	1.47%
10,001 to 15,000	352	4,294,255	0.84%
15,001 to 20,000	167	2,985,795	0.58%
20,001 to 30,000	213	5,357,454	1.04%
30,001 to 40,000	130	4,552,241	0.89%
40,001 to 50,000	91	4,113,356	0.80%
50,001 to 100,000	257	18,204,364	3.55%
100,001 to 200,000	182	26,112,700	5.09%
200,001 to 400,000	144	39,426,648	7.69%
400,001 to 600,000	50	24,496,868	4.78%
600,001 to 800,000	38	26,500,714	5.17%
800,001 to 1,000,000	21	18,685,649	3.64%
1,000,001 and above	92	304,541,348	59.38%
Total	55,549	512,863,641	100.00%

IV. List of Major Shareholders

. List of Major Shareholders
	April 10, 2022
Shareholding Shareholder	Shareholdings	Percentage of Shareholding
Cotek Pharmaceutical Industry Co.,Ltd.	22,146,604	4.32%
Fubon LifeInsurance Co.,Ltd.	17,661,000	3.44%
NewLabor Pension Fund	16,074,348	3.13%
CathayLife Insurance Company,Ltd.	13,940,000	2.72%
LeicesterWorldwide Corporation	9,498,184	1.85%
China LifeInsurance Co.,Ltd.	8,445,000	1.65%
Enable Educational TechnologyCo.,Ltd.	8,181,000	1.60%
Chunghwa PostCo.,Ltd.	8,021,856	1.56%
Supervisory Committee of the Labor Retirement Fund-Labor Retirement Fund	7,226,000	1.41%
JPMorgan Chase Bank N.A. Taipei Branch in custody for JPMorgan Funds	6,900,000	1.35%

-63-

-63-

V. Market price, net worth, earning, and dividends per common share and related information over the last two years

Item	Year	Year	2020	2021	As of March 31, 2022
Market price per share	Highest		432	621	594
	Lowest		162	383	428
	Average		312.62	508.23	491.47
Net worth per share	Before distribution		57.69	76.26	-
	After distribution		43.69	-	-
Earnings per share	Weighted average shares		510,126 (thousand shares)	510,685 (thousand shares)	511,024 (thousand shares)
	Earnings per share		17.24	33.00	-
Dividends per share (Note4)	Cash dividends		12	25	-
	Stock dividends	Earning Distribution	-	-	-
		Capital Distribution	-	-	-
	Accumulated unappropriated dividends		-	-	-
Return on investment	Price/earnings ratio (Note1)		18.13	15.40	-
	Price/dividend ratio (Note2)		26.05	20.33	-
	Cash dividends yield (Note3)		3.84%	4.92%	-

Note 1: Price/Earnings Ratio = Average Market Price / Earnings Per Share

Note 2: Price/Dividend Ratio = Average Market Price / Cash Dividends Per Share

Note 3: Cash Dividend Yield = Cash Dividends / Average Market Price Per Share

Note 4: Cash dividends filled in 202� and 2020 represent the distribution of 2020 and 2019 retained earnings, respectively and exclude cash dividends from capital surplus.

-64-

-64-

VI. Dividend Policy and Status of Execution

Dividend Policy under the Articles of Incorporation
The Company belongs to the integrated circuit design industry and is in the growth phase of the enterprise life cycle. After considering the long-term business development of the Company, matching future investment fund requirements, and the long-term financial planning of the Company, if there are profits at the end of fiscal year, the Company shall first offset the accumulated losses with profits after tax, and then shall contribute 10% of profit as legal reserve, unless the accumulated legal reserve has reached the amount of the Company’s total capital, and contribute or reverse special reserve in accordance with relevant laws or regulation by the competent authority. If there are net profits remained, the remaining net profits and the retained earnings from previous years shall be distributed as shareholders’ dividend after the distribution proposal is prepared by the board of directors. In case the distribution is in the form of issuing new shares, the distribution proposal shall be approved at a shareholders meeting. In case the distribution is in the form of cash, the distribution proposal is authorized to be approved by the board of directors. After considering financial, business, and operational factors, the Company may distribute the whole of distributable earnings of the current year, and may also distribute whole or part of the reserves in accordance with the law or the regulation by the competent authority. The dividend distributed to shareholders shall not be less than 50% of the increased distributable retained earnings for the current year.
When distributing dividends, the main consideration is the Company's future expansion of operating scale and requirement of cash flow. The cash dividends shall not be less than 10% of the total dividends distributed to shareholders in the current year.
According to Article 240, Paragraph 5, and Article 241, Paragraph 2 of the Company Act, the Company authorizes the distributable dividends, legal reserve, and capital reserve in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors, and in addition thereto a report of such distribution shall be submitted to the shareholders meeting.
2022Annual Shareholders' Meeting report on the distribution of dividends for 2021: The Company’s dividend distribution from retained earnings for 2021, approved by the board of directors, was NTD 25 per share in cash.
VII. Impact to business performance and EPS resulting from stock dividend distribution: None.

VIII. Employees’ Compensation and Remuneration to Directors

1.Employees’ Compensation and Remuneration to Directors as Stated in the Articles of Incorporation:
If gained profits within a fiscal year, the Company shall allocate at a maximum of 3% of the profits as directors’ remuneration, and allocate no less than 1% of the profits as employees’ compensation. However, in case of the accumulated losses, certain profits shall first be reserved

-65-

-65-

to cover the accumulated losses, and then allocate employees’ compensation and directors’ remuneration according to the proportion in the preceding paragraph.

The distribution of employees' compensation in the preceding paragraph shall be in cash or in stock, and shall be resolved with a consent of a majority of the directors present at a meeting attended by over two-thirds of the total directors. The distribution of director's remuneration and employee’ compensation shall be reported to the shareholders meeting.

The employees entitled to receive employees’ compensation may include the employees of subsidiaries of the Company meeting certain specific requirements. The requirements are determined by the board of directors or its authorized person.

Accounting for Employee Compensation and Remuneration to Directors
The Company accrued employees’ compensation and remuneration to directors based on a percentage of profit as stated in the Articles of Incorporation Article. If the accrued amounts differ from the actual amounts approved by stockholders’ meeting, the Company will recognize the change as an adjustment to income of next year.
Employee compensation and Remuneration to Directors resolved by the Board of Directors
3.1. The Proposal of 2021 Employees’ Compensation and Remuneration to Directors resolved at the Board of Directors held on March 18, 2022:

Unit: New Taiwan Dollars; shares

Cash compensation 3,965,355,284	Employees’ Compensation Stock compensation Common Shares 991,338,530 2,178,766	Total 4,956,693,814	Remuneration to Directors Cash 130,000,000	Difference Difference Amount Treatment none Not applicable

Note: the 2021 Employees’ compensation and directors’ remuneration resolved at the Board of Directors are the same as the accrued amounts in 2021.

3.2. The ratio of employees’ stock compensation divided by the total of income after tax and employees’ compensation:

Item	Amount	The ratio of employees’ stock compensation divided by the total of income after tax	The ratio of employees’ stock compensation divided by the total of employees’ compensation
Employees’ stock compensation	991,338,530	5.88%	20.00%

The actual distribution of employees’ compensation and directors’ remuneration for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee’s compensation and directors’ remuneration, additionally the discrepancy, cause, and how it is treated.

-66-

-66-

			Unit: New Taiwan Dollars;shares Remuneration to Directors Difference Cash Difference Amount Treatment 90,000,000 none Not applicable	Unit: New Taiwan Dollars;shares Remuneration to Directors Difference Cash Difference Amount Treatment 90,000,000 none Not applicable
Cash compensation 2,586,316,785	Employees’ Compensation Stock compensation Common Shares 0 0	Total 2,586,316,785	Remuneration to Directors Cash 90,000,000	Difference Difference Amount Treatment none Not applicable

Note: The actual distribution of employees’ compensation and directors’ remuneration is the same as accrued amounts in 2020.

IX. Status of Treasury Stocks: None

X. Status of Corporate Bonds: None

XI. Status of Preferred Stocks: None

-67-

-67-

XII. Status of GDR

March 31, 2022

			March 31,2022
Issuing Date Item			Jan 24, 2002
IssuingDate			Jan 24,2002
Issuance &Listing			Luxembourg Stock Exchange.
Total Amount�US$�			240,180,375
OfferingPriceper Unit�US$�			17.25
Issued Units			13,923,500 units
Underlying Securities			New shares issued for capital increase of cash and issued common shares held by shareholders of the Company
Common Shares Represented			55,694,400 Common Shares
Rights and Obligations of GDR holders			According to the relevant instructions of thepublished manual
Trustee			N/A
DepositaryBank			Bankof NewYork Mellon
Custodian Bank			Mega International Commercial Bank
GDRs Outstanding			440,023 units
Apportionment of the expenses for the issuance and maintenance			In accordance with the contract of the underwriting syndicate and depositary bank
Terms and Conditions in the Deposit Agreement and Custody Agreement			The company will provide necessary public information in accordance with the contract for the depositary bank to notify the depositarycertificate holder
Closing price per GDRs �US$)	2021	Highest	88.67
		Lowest	54.69
		Average	72.57
	As of March 31 of 2022	Highest	84.78
		Lowest	61.08
		Average	70.14

XIII. Status of Employee Stock Warrants: None

XIV. Status of Employee Restricted Stocks: None

XV. Status of Mergers or Acquisitions, or as assignee of new shares issued by other companies: None

XVI. Status of Implementation of Fund Utilization Plan: Not Applicable

-68-

-68-

Operations Overview

I. Business Overview

1. Business Scope

(1) Realtek’s Main Business Areas
i. Research, development, production, manufacturing, and the sale of various types of integrated circuits
ii. Software and hardware application design, testing, repairs, and technical consultations for various types of integrated circuits
iii. Research, development, and the sale of various types of silicon intellectual property
iv. Adjunct trade and sales that relate to Realtek’s core businesses

(2) Percentage of Operating Revenue

		Unit: NT$thousands	Unit: NT$thousands
2021	IC Products	Other	Total
Net Operating Revenue	105,374,969	129,317	105,504,286
Percentage of OperatingRevenue	99.88%	0.12%	100%

(3) Current Products

Communications Network and Connected Media Products:

PCIe 10BASE-T/100BASE-TX Single-Chip Ethernet Controller
PCIe 1GBASE-T Single-Chip Ethernet Controller
PCIe 1GBASE-T Single-Chip Ethernet Controller for Gaming
PCIe 1GBASE-T Programmable Single-Chip Ethernet Controller
PCIe 2.5GBASE-T Single-Chip Ethernet Controller
PCIe 2.5GBASE-T Single-Chip Ethernet Controller for Gaming
PCIe 2.5GBASE-T Programmable Single-Chip Ethernet Controller
USB 2.0 10BASE-T/100BASE-TX Single-Chip Ethernet Controller
USB 3.2 Gen 1 1GBASE-T Single-Chip Ethernet Controller
USB 3.2 Gen 1 1GBASE-T Single-Chip Ethernet Controller for Gaming
USB 3.2 Gen 1 2.5GBASE-T Single-Chip Ethernet Controller
USB3.2 Gen 1 2.5GBASE-T Single-Chip Ethernet Controller for Gaming
USB 3.2 Gen 1 2.5GBASE-T Programmable Single-Chip Ethernet Controller
USB 3.2 Gen 2 to PCIe 3.0 x 2 Single-Chip Bridge Controller for PCIe NVMe/SATA AHCI Dual Protocol SSD
USB 3.2 Gen 2 to PCIe 3.0 x 2 Single-Chip Bridge Controller with PD3.0 for PCIe NVMe/SATA AHCI Dual Protocol SSD
USB 3.2 Gen 2 to PCIe 3.0 x 2 SD Express Card Single-Chip Bridge Controller

-69-

-69-

Long Distance 10/100 BASE-T/100BASE-T1 Ethernet PHY
PCIe 1GBASE-X Single-Chip Fiber Ethernet Controller
RGMII/SGMII/GMII 1GBASE-T Ethernet PHY
1GBASE-T Ethernet PHY for LED Transceiver
2.5GBASE-T Ethernet PHY
100BASE-T1 Automotive Ethernet PHY
100/1000BASE-T1 Automotive Dual Mode Ethernet PHY
100BASE-T1 Automotive Multiport Ethernet Switch Controller
100/1000BASE-T1 Automotive Multiport Ethernet Switch Controller
UHD HDR Streaming Multimedia SoC
Multi-CAS UHD Multimedia STB SoC
802.11b/g/n 1T1R WLAN Single-Chip Controller with PCIe/USB 2.0/SDIO 2.0 Interfaces
802.11b/g/n 2T2R WLAN Single-Chip Controller with PCIe/USB 2.0/SDIO 3.0 Interfaces
� 802.11b/g/n 1T1R WLAN and Bluetooth Smart Single-Chip Controller with PCIe/USB 2.0/SDIO 2.0 Interfaces
802.11a/b/g/n 1T1R WLAN and Bluetooth 5.2 Smart Single-Chip Controller with USB 2.0/ SDIO 2.0 Interfaces
802.11a/b/g/n/ac/ax 1T1R WLAN and Bluetooth 5.2 Smart Single-Chip Controller with PCIe/USB 2.0/SDIO 3.0 Interfaces
802.11a/b/g/n/ac/ax 2T2R WLAN and Bluetooth 5.2 Smart Single-Chip Controller with PCIe/USB 2.0/SDIO 3.0 and HS-UART Interfaces
802.11a/b/g/n/ac 2T2R WLAN Single-Chip Controller with USB 2.0 Interface
802.11a/b/g/n/ac 3T4R WLAN Single-Chip Controller with PCIe/USB 3.0 Interfaces
802.11a/b/g/n/ac 4T4R WLAN Single-Chip Controller with PCIe/USB 3.0 Interfaces
Integrated WLAN (Wi-Fi) and Microcontroller SoC
Integrated WLAN (Wi-Fi), Bluetooth and Microcontroller Multifunction SoC
Low-Power, Highly-Integrated Dual Band Wi-Fi Camera SoC
Integrated WLAN 802.11ac Dual Band Access Point/Router SoC
Bluetooth 5.2 LE Single Mode SoC and Bluetooth 5.2 Audio SoC
GNSS Satellite Positioning IC
8-Port 100BASE-T Ethernet PHY
5/8/16/24-Port 100BASE-T Ethernet Switch Controller
4/8-Port Gigabit Ethernet PHY
8-Port Gigabit Ethernet PHY
5/8-Port 1GBASE-T Ethernet Switch Controller
16/24-Port 1GBASE-T Ethernet Switch Controller
24-Port 1GBASE-T/2.5GBASE-T + 2-Port 10GBASE-T Managed Ethernet Switch Controller
48-Port 1GBASE-T + 4-Port 10GBASE-T Managed Ethernet Switch Controller
24-Port 1GBASE-T/2.5GBASE-T + 4-Port 10GBASE-T Managed Ethernet Switch Controller

-70-

-70-

48-Port 1GBASE-T + 6-Port 10GBASE-T Managed Ethernet Switch Controller
24-Port 2.5GBASE-T + 6-Port 10GBASE-T Managed Ethernet Switch Controller
1.25G/2.5G/10G Integrated PON Network Gateway Controller
Single-Port PON Network Bridge Controller
2-Port PON Network Gateway Controller
2.5G PON Laser Driver
Octal Port IEEE 802.3at PSE Controller
Quad Port IEEE 802.3bt PSE Controller
Long Distance 10/100BASE-T/100BASE-T1 Ethernet Switch Controller
VDSL 35B Network Router Controller

Computer Peripheral Products:

HD-A 4-Channel Audio Codec
HD-A 4-Channel Audio Codec with Embedded Class-D Amplifier and I2S In/Out
HD-A 4-Channel Audio Codec with High Wattage Class-D Amplifier Supporting Speaker Protection
HD-A Low Power Stereo Audio Codec
HD-A Multi-Channel Audio Codec (7.1 and 10 Channels)
I2S High Voltage Class-D Speaker Amplifier Supporting Speaker Protection
SoundWire 4-Channel Audio Codec with Embedded Class-D Amplifier and I2S In/Out
USB 2.0 Low Power Audio Codec with Equalizers
Hi-Fi Audio Codec Single Chip with Power Amplifier for Mobile Devices
USB 2.0 to I2S Bridge Controller
Hi-Fi Audio Codec Single Chip with Programmable Voice/Audio DSP for Mobile Devices
High Quality, High Performance Class D Amplifier with Embedded Adaptive Boost, Speaker Protection and Equalizer for Mobile Devices
Embedded USB 2.0 Image Signal Processor Chip Supporting Windows Hello Face Recognition
Low Power Fingerprint Hardware Encryption Bridge Chip with Embedded SPI to USB1.1/2.0 Interface for MoH (Match-on-Host) Architecture
Low Power Fingerprint Hardware Encryption and Matching Microcontroller Chip with Embedded SPI to USB2.0 Interface for MoC (Match-on-Chip) Architecture
Highly Integrated Surveillance Camera SoC
Highly Integrated, Low Power Neural Network Artificial Intelligence Surveillance Camera SoC
USB 3.0/USB 3.1 Gen 2 4-Port Hub Controller
Highly Integrated USB Type-C Controller
USB 10G Redriver IC

Multimedia Products :

Integrated LCD Controller with VGA Interface

-71-

-71-

Integrated LCD Controller with DVI Interface
Integrated LCD Controller with HDMI Interface
Integrated LCD Controller with DisplayPort Interface
DisplayPort to LVDS Translator
DisplayPort to VGA Translator
Low Power DisplayPort to HDMI 2.0 Translator
DisplayPort to HDMI 2.1 Translator
USB Type-C to VGA Translator
Low Power USB Type-C to HDMI 2.0 Translator
DisplayPort MST Hub Controller
Integrated High Resolution 5K3K/4K2K/QHD LCD Display Controller with HDR, DP 1.4, HDMI 2.0, and HDCP 2.2
Integrated High Resolution 4K2K144Hz Gaming LCD Display Controller with Realtek Owl Sight Technology, DSC, HDR, DP 1.4, HDMI 2.1, and HDCP 2.3
Integrated High Resolution 4K2K144Hz/QHD165Hz Gaming LCD Display Controller with Realtek Owl Sight Technology, DSC, HDR, DP 1.4, HDMI 2.0, and HDCP 2.3
Integrated High Resolution 4K2K/QHD LCD Controller with USB Type-C Interface
Integrated High Resolution QHD/FHD LCD Display Controller with USB Type-C Interface
High-End LCD TV SoC
High-End Multimedia Digital/Analog LCD TV SoC
High-End Connected Digital/Analog LCD TV SoC
High-End UHD Smart Connected Digital/Analog LCD TV SoC
High-End UHD HDR Smart Connected Digital/Analog LCD TV SoC
High-End UHD HDR 60Hz/120Hz FRC Full-Spec HDR Smart Connected LCD TV SoC
High-End UHD Full-Function HDR and 3D Surround Sound Multi-Core Smart Connected LCD TV SoC
High-End 8K LCD TV Video Decoder and Processing Chip
High-End Full Spec, Multi-Core UHD Connected LCD TV SoC with AI PQ and AQ Processing Features
High-End Full Function, Multi-Core 8K LCD TV SoC with AI PQ and AQ Processing Features
(4) Products Under Development

Communications Network and Connected Media Products:

New Generation PCIe 2.5GBASE-T Single-Chip Ethernet Controller
New Generation USB 3.2 Gen 1 1GBASE-T Single-Chip Ethernet Controller
USB3.2 Gen 2 5GBASE-T Single-Chip Ethernet Controller
PCIe 5GBASE-T Single-Chip Ethernet Controller
New Generation 1GBASE-T Ethernet PHY

-72-

-72-

5GBASE-T Ethernet PHY
10Gbps USB 3.2 Gen 2 to PCIe Gen 3.0 x 2 SATA Single-Chip Bridge Controller for SSD
20Gpbs USB3.2 Gen2 x2 to USB PCIe 3.0 x 4 Single-Chip Bridge Controller for SSD
100/1000BASE-T1 Automotive Dual Mode Ethernet PHY with MACsec
2.5GBASE-T1 Automotive Ethernet PHY with MACsec
Multi-Port 10BASE-T1S+100/1000BASE-T1 Automotive Ethernet Switch Controller with MACsec
Multi-Port 100/1000M/2.5GBASE-T Ethernet PHY
4-Port 2.5GBASE-T Ethernet PHY
8-Port 2.5GBASE-T Ethernet Switch Controller
24/48-Port 2.5G/5G/10G BASE-T Ethernet Switch Controller
New Generation Single-Port 2.5G/5G/10GBASE-T Ethernet PHY
New Generation 4-Port 2.5G/5G/10GBASE-T Ethernet PHY
New Generation Octal Port IEEE 802.3at PSE Controller
New Generation Quad Port IEEE 802.3bt PSE Controller
New Generation High-Port Density 1GBASE-T Managed Ethernet Switch Controller
New Generation 24-Port 10G + 4-Port 25G + 2-Port 100G Managed Ethernet Switch Controller
New Generation 10G xPON Home Gateway SoC
10G PON Laser Driver
802.11a/b/g/n/ac 2T2R WLAN and Bluetooth 5.2 Single-Chip Controller
802.11a/b/g/n/ac/ax 1T1R WLAN and Bluetooth 5.3 Single-Chip Controller
802.11a/b/g/n/ac/ax 4T4R WLAN Single-Chip Controller with PCIe/USB3.0 Interfaces
New Generation IoT SoC with WLAN (Wi-Fi), Bluetooth, and AI Audio
New Generation Low-Power, Highly-Integrated IoT SoC with Dual Band Wi-Fi Camera
Integrated Wi-Fi 802.11ax (Wi-Fi 6) Dual Band Access Point/Router SoC
Integrated WLAN 802.11be (Wi-Fi 7) Dual Band Access Point/Router SoC
Bluetooth 5.3 Dual Mode Active Noise Cancellation (ANC) Audio SoC
Bluetooth 5.3 LE IoT Multi-Standard SoC
Next Generation UHD HDR Streaming Multimedia SoC
Next Generation UHD HDR Set-Top Box SoC with Multi-CAS Support

Computer Peripheral Products:

SoundWire Audio Codec
USB2.0 Audio Codec with DSP
Audio DSP Supporting Neural Network Computing
I2S High Voltage Class-D Amplifier with Speaker Protection DSP
Hi-Fi Audio Codec with Power Amplifier for Mobile Devices
Customized Stereo Hi-Fi Audio Codec with Power Amplifier for Gaming Devices
High Performance Programmable Voice/Audio DSP for Mobile Devices
-73-

-73-

Hi-Fi Audio Codec with Class-D Amplifier and SoundWire Interface for Mobile Devices
Hi-Fi, High Efficiency Class-D Smart Amplifier with Built-In Boost for Mobile Devices
New Generation Embedded ISP Controller Featuring Video HDR with USB2.0 Interface
New Generation ISP Controller Featuring 4K2K Resolution, Video HDR, Quad-Cell Specification with USB3.0 Interface
New Generation Low Power Fingerprint Hardware Encryption and Matching Microcontroller Chip with Embedded SPI to USB2.0 Interface for MoC (Match-on-Chip) Architecture
Notebook PC Card Reader Controller with PCIe Gen I Interface, Supporting SD 7.0
Notebook PC Card Reader Controller with PCIe Gen II Interface, Supporting SD 8.0 Compatible UHS-II
USB 3.2 4-Port Hub Controller
Highly Integrated USB Type-C Controller
New Generation Surveillance Camera SoC Supporting 5MP Resolution and Video HDR
New Generation Surveillance Camera SoC Supporting 4K2K Resolution, Video HDR, and Neural Network Artificial Intelligence

Multimedia Products:

New Generation Integrated UHD/QHD LCD Display Controller with USB Type-C and HDMI 2.1 Interfaces
New Generation Low Power DisplayPort to HDMI2.1 Translator
New Generation DisplayPort MST HUB Controller with HDMI2.1 Output
New Generation High-End AI, UHD HDR 60Hz/120Hz LCD TV SoC with VVC (H.266) and AVS3 Video Decoders

2. Industry Overview

(1) Industry Status & Trends and Product Development & Competition During 2021, in addition to the continuing impact of COVID-19, the semiconductor industry experienced unprecedented supply shortages. These issues have put many markets and companies to the test. Alongside these black swan events, the world we live in is experiencing wave after wave of digital transformation. The demand for all types of connectivity products is rising rapidly, both for new products and because of the need to upgrade and improve existing products to meet the expectations and needs of customers. The importance of semiconductor products to people's lives has become particularly obvious in the face of current supply shortages. According to IC insights, worldwide semiconductor industry revenue in 2021 was US$613.9 billion, an increase of 25% compared to 2020, of which IC sales grew by 26%. Realtek once again marched forward at a speed outpacing the overall industry. According to TrendForce's research, Realtek's ranking among the top 10 IC design companies in the world has further advanced to eighth place.

Communications Network and Connected Media Products:

-74-

-74-

In terms of Ethernet, due to the impact of the pandemic, many businesses were forced to dramatically reduce their overall working capacity, some cities put on complete lockdown, and periods of quarantine became the standard, resulting in a substantial delay for the delivery of semiconductor products. In addition, the demand for chips in various markets has greatly increased, resulting in supply chain capacity tightness, and the worst chip shortage faced by the industry in its history. Realtek has been proactively battling against this dilemma while also laying out plans for securing upstream capacity. In 2021, for products with severely limited production capacity, Realtek successively released chips from alternative foundries to reduce the chip shortage for its clients, benefiting end products such as notebook computers, motherboards, network storage devices (NAS), game consoles, docking stations, USB-toEthernet adapters, etc. The supply capacity has been increased to digest the continued strong demand for communications network chips in the future. In the past two years, the Ethernet specification in the computer and communications network market has been gradually upgraded from GbE to 2.5GbE. Realtek’s second-generation 2.5GbE chips have been popularized in gaming motherboards, mid-to-high-end computers, switches, and the network extension accessory market. In 2022, in response to the highly digitalized post-pandemic market demand, Realtek will launch its third-generation 2.5GbE products and higher-speed 5GbE Ethernet solutions.

Large amounts of data are rapidly accumulated in the hands of every end user, while the built-in capacity of computers and mobile phones has long been insufficient, and people turn to accessories for capacity expansion. Portable/external storage devices are more secure than cloud space and do not need to rely on a network. Traditional mechanical hard drives (HDDs) have been gradually replaced by solid-state drives (SSDs) that have faster transfer speeds and are both silent and shock-resistant. SSDs have many other advantages over HDDs due to their highspeed read and write, small size, light weight, and portability. Moreover, the fact that SSDs have become more competitively priced has further accelerated their overtaking of the hard drive market. The interface of an external SSD is divided into a traditional SATA and a new, higher-speed PCIe. While current SSD market suppliers could only provide a bridge chip with either a single USB-to-SATA or USB-to-PCIe interface, Realtek entered the high-end SSD storage market by launching the world's first solution to support both USB 3.2 Gen 2 conversion to PCIe/NVMe and SATA/AHCI dual protocols at the same time. In addition, the latest SD Express memory card SD 7.1/7.0 was launched at the end of 2021, which was 3 times more efficient than traditional UHS-II SD cards and drove the demand for card readers that support it. Realtek also launched the world's first USB 3.2 Gen 2 to SD Express bridge chip (currently in mass production), and the only solution in the industry that supports Active State Power Management (ASPM) protocol, thereby effectively decreasing the overheating problem caused by accessories during high-speed transmission, and providing a more stable and reliable storage environment for the system, to satisfy content creators and applications, such as highend audio and video systems, medical equipment, edge computing devices, and high-definition audio and video.

In the Ethernet Switch market, Realtek is the market share leader in embedded applications and

-75-

-75-

unmanaged switches. In recent years, its market share in Smart Switches has been steadily rising. In 2021, Realtek invested in the research and development of higher-level and higherspeed Multi-G Layer 3 managed switches, such as access managed switches and aggregation managed switches with a new generation of 10GbE PHY. These were created to provide a complete and competitive solution for the enterprise network and campus network market in response to Wi-Fi 6 and the post-pandemic development trend, driven by the new infrastructure upgrade to telecom access networks in various countries. After years of hard work, Realtek has successfully transformed embedded applications and managed switches into its main growth drivers. Furthermore, in the face of the popularity and fierce competition of 1GbE access ports for entry-level managed switches, Realtek will launch 24/48-port 1GbE managed switch products with higher cost performance, increased computing power, and reduced power consumption, in order to seize greater market share. At the same time, after the launch of the second-generation PSE (Power Sourcing Equipment) supporting IEEE802.3bt/at/af in response to market and customer feedback, the product has been gradually recognized by customers and designed in for mass production. It is expected that after the launch of a new generation of Ethernet Switch products, Realtek will continue to expand its market share in this sector.

As a result of Wi-Fi 6 applications gaining popularity, the demand for network bandwidth has increased greatly, and the speed of GbE switches can no longer meet the demand. Currently, all Multi-G switches on the market are 10GbE managed switches, usually with more than 10 ports. Not only are they very expensive, but also their operations are complicated and not user friendly. In response, in 2022, Realtek expects to launch a low power, easy to operate 8-port 2.5GbE switch, ideal for both gamers and non-gamers alike. It is expected to cause a surge in the sales of 2.5GbE switches.

In 2021, under the continuous strain of the pandemic, users' demand for bandwidth increased, and global operators accelerated the deployment and upgrade of optical fiber networks. Realtek has a comprehensive product portfolio for XGS-PON, XG-PON (10G-PON), 2.5G PON and 1G EPON, which can meet the needs of new global tender projects.

China is still the region with the largest demand for optical fiber in the world, and Realtek has achieved considerable market share in the Chinese market in recent years. Due to the pandemic, WFH and remote learning have become new social needs. The xPON's broadband access technology is right there to provide a stable, high-bandwidth, and affordable home Internet environment. As for the new market specifications, XG-PON products with larger bandwidth will become the mainstream for home broadband access equipment. The number of Chinese operators' tenders for XG-PON Home Gateway Unit (HGU) began to increase gradually in 2021. The shipment is expected to exceed that for 2.5G PON products in 2025. At the same time, Realtek continues to expand the overseas telecom market by leveraging the XG-PON products by Cortina Access, achieving good results in North America, Europe, Japan and South Korea.

Carmakers in Europe, the United States, China, Japan, South Korea, and other areas are turning

-76-

-76-

to Automotive Ethernet for in-vehicle networking. Many use Automotive Ethernet to connect in-vehicle safety sensors, 360-degree camera systems, infotainment head units, and instrument panels. Realtek’s Automotive Ethernet products were already named as a ‘Golden Sample’ by IOT Certification Laboratory for Interoperability Testing; they were the first in the world to pass the OPEN Alliance TC10 Deep Sleep & Wake Up protocol. With power consumption a mere 35μA, they support remote ECU TC10 wake-up, making them a necessary part of energyefficient automobiles. These Automotive Ethernet products have been certified by many carmakers, adopted by tier one suppliers, and are starting shipment. Realtek is using its superior technical advantages to pioneer second-generation Automotive Ethernet products, including a Dual Mode Multiport 100/1000BASE-T1 Switch and Dual Mode PHY that supports 100/1000BASE-T1. European and American automobile manufacturers and their tier one suppliers are gradually adopting this technology for their 2022/2023 automotive network backbone needs. In addition, Realtek is cooperating with automotive manufacturers in the OPEN Alliance to integrate 10BASE-T1 technology into the next generation of Multiport Switches. There have also been plans put in place to develop PHY controllers supporting the new 2.5GBASE-T1 standard, and for information security, MACsec will be introduced into the product road map to meet 2024/2025 market needs.

OTT services have experienced explosive growth in recent years. In addition to Netflix, YouTube, and Amazon, Disney+, Apple TV+, and HBO Max have subsequently put their hats in the ring. The demand for OTT set-top boxes continues to rise and the pay TV industry is pushing to become network IP-based. While continuing to deliver high-quality audio and video content through broadcast, IP, or hybrid network services, large telecom operators have also fully turned to the IP network ecosystem and started to launch their own OTT services or SetTop Boxes. For example, Comcast and Sky jointly launched the "global IP video platform" in 2011 to support their services in the United States, and in Europe with a single IP platform. In addition to the trend of turning to IP-based and OTT, open platforms rely on the support of app stores and a better integrated architecture for premium apps, in order to attract operators to abandon the old closed systems and embrace open platforms. Google launched Android TV and RDK Alliance launched the RDK-V platform, which has successfully attracted major operators. At the same time, Netflix also launched Netflix Scaling Program for the operator market, such as the Hailstorm based on Android TV, and RDK's DaVinci. The closed operator market has turned to open IP-based applications, driving operators to launch hybrid OTT and IPTV set-top boxes combined with network video. With consumers’ changing viewing habits and demanding higher quality content, the operators are facing greater challenges in system security. In this quickly maturing market, with products that offer more capabilities at lower prices, Realtek is responding with a new generation of UHD Multimedia Controllers that meet each operator’s Multi-CAS security requirements. Besides integrating a new generation of HDR and 3D audio technology, Realtek continues to develop a new generation of audio and video codec technology to cope with the increasing resolution. With a complete, cost competitive and lowpower hardware and software reference design, we assist customers to develop highperformance set-top box products to grasp business opportunities. Combined with their own complete solutions of multimedia and network, the customers can stay competitive in the

-77-

-77-

market, with the advantage that they cannot be easily copied by their competitors.

In the area of Wi-Fi controllers, the semiconductor supply was in shortage in 2021. The market was chasing delivery from upstream fabs to assembly and testing plants due to insufficient production capacity. Wafer foundries had several rounds of price increases, which were gradually reflected in the prices of end products. In the PC market, Wi-Fi 6 began to gradually replace the market share previously held by Wi Fi 5, and is expected to become the mainstream of the PC market in 2022. Realtek's first-generation Wi-Fi 6 products were officially in mass production and shipped in 2021, and were successfully introduced to PC customers for mass production. With the subsequent opening of the 6GHz frequency band, Realtek Wi Fi 6E was also officially launched in the second half of 2021, successfully securing several major customers.

Another important product in the IT market is printers, whose Wi-Fi specifications are still dominated by Wi-Fi 4. With the popularity of Wi-Fi 5 routers however, customers are accelerating towards the introduction of Wi-Fi 5 models. Also because the overall penetration of Wi-Fi 6 has gradually increased, printer customers have also begun to plan the Wi-Fi specifications for future products. In addition to upgrading to Wi-Fi 6 on the hardware side, they also require additional functions such as wireless roaming 802.11K/V/R, Neighborhood Aware Networking (NAN or Wi-Fi Aware), and Bluetooth printing, to give end customers greater convenience of use.

In the consumer market, the TV market generally moves with the epidemic and market fluctuations. High-end TVs maintain high-spec Wi-Fi, but require cost support. Customers with low-end specifications are faced with low gross profit that cannot cover the cost of sales, and are forced to adjust the specifications to Wi-Fi 4 1x1 single Wi-Fi. In order to simultaneously defend against market competition and enhance customers' hitherto low-end TV specifications, Realtek guides customers to move to a 1x1 combo or 2x2 with better cost-performance specifications, and upgrade W-Fi 4 1x1+BT from single-band to dual-band. In 2021, due to the limited supply of Wi-Fi 5 in the Chinese market, the set-top box was downgraded to models without Wi-Fi. However, the Chinese operator market is expected to start introducing Wi-Fi 6 models in the third quarter of 2022. Major telecom operators have added Wi-Fi 6 models to their set-top box tenders, and are expected to gradually upgrade the specifications of existing tenders.

Consumer wireless surveillance equipment (IP CAM) has shown a long-term steady growth trend by incorporating AI technology and IoT related applications. In 2021, due to the supply and demand imbalance, Wi-Fi 4 1x1 2.4GHz single-band received low-cost competition from Chinese manufacturers. In addition to defensive pricing, Realtek seeks to promote Wi-Fi 4 1x1 dual-band solutions, and mid-to-high-end products such as Wi-Fi 5, and Wi-Fi 6. Outside of China, Wi-Fi 5 2x2 was the mainstream specification internationally, and while the experienced wave of shortages also had a considerable impact, Realtek's Wi-Fi 6 solution was timely launched, the effect of which is expected to come to fruition in 2024.

-78-

-78-

In the speaker market, Realtek Wi-Fi has been a main supplier in the Chinese market. However, Chinese competitors are growing fast and eating away at the low-end speaker market. In response, Realtek launched a Wi-Fi 4 dual-band solution supporting BT 5.2 LE Audio which has since been successfully put into mass production. The solution is suitable for speaker designs with screens. While it has many applications, and a high adhesion rate, it nevertheless requires high transmission bandwidth, thereby giving rise to market, and specification segmentation with varying promotion focus. This Wi-Fi 4 dual-band solution will enter two markets simultaneously, the high-end speaker with screen market, and the European and American high-end speaker market.

For Wi-Fi access point/router integrated products, Realtek's Dual Band Mesh Router products have stimulated new market demands due to their excellent cost performance, and in turn created new growth momentum for the products. The trend of upgrading Wi-Fi 5 to Wi-Fi 6 is clear, especially under the influence of COVID-19 where most jobs have been converted to WFH. In order to improve work efficiency, consumers have higher requirements for routers used in their home office, which has driven the demand for Wi-Fi 6 routers with higher performance. To this end, a large number of AX1500/AX1800 replacements and upgrades began to appear in 2021, with even higher speed AX3000 emerging. Looking into 2022, in addition to continuing to promote the AX1500/AX1800 to more regions, we will also launch (in 2022/Q2) the AX3000 and AX5400 high-end solutions supporting 3-band, providing customers with more complete router product solutions.

The application of IoT in smart homes has become more and more extensive. More real-time voice control is desirable besides paring with smart speakers for control. Most current solutions utilize an external DSP for voice control of a single product. Due to the widespread deployment of IoT products, the interference of the 2.4GHz frequency band is increasing, so larger home appliances have begun to shift to a 5GHz frequency band. With the rise of applications such as AI and smart speakers, the portion of home appliances incorporating networking functions is increasing. Realtek has been working on the IoT product line for many years, with solutions including intelligent control, voice, and real-time video to provide customers with a variety of choices. In 2021, the number of IoT customers and shipments continued to grow rapidly, especially in the fields of voice and dual-band applications. According to the market report, the IoT market overall continues to maintain double-digit growth with the Wi-Fi based IoT devices currently dominated by smart home devices. The smart home is also the first IoT market for Realtek to enter. Realtek has a complete porfolio of IoT products, featuring high integration, ultra-low power, and high security. Every year, Realtek actively invests R&D resources to develop a new generation of Wi-Fi and Bluetooth technologies that support the latest IoT alliances standards to enable more AI applications. In addition to being a favorite for many top global brand customers in the smart home market, Realtek is also actively going after the IoT markets for commercial, industrial and medical usages, thereby introducing intelligence in various business and consumer applications, for better user experiences. Additionally, Realtek continues to cooperate with IoT-related organizations and leaders. Realtek is a main partner of

-79-

-79-

the latest IoT standard "Matter". As we speak, we are cooperating with leading companies and providing a development platform for first-line customers. It is expected that when the official version of the standard is released next year, customers will be able to release new products simultaneously.

Bluetooth has been widely adopted in mobile phones, TVs, set-top boxes, smart speakers, and other products, assisting individuals or home users to enjoy Bluetooth earphones, sports bracelets, Bluetooth voice-assisted remote controllers, and Bluetooth mesh peripherals, bringing easy entertainment enjoyment, user-friendly human-machine interfaces, as well as simple and fast operational feedback.

True Wireless Stereo (TWS) growth slowed down from 2020 to 2021 due to the impact of the pandemic. Nevertheless, Active Noise Cancelling (ANC) headphones can reduce external noise, and enable emerging applications such as Bluetooth wireless microphones, Bluetooth gaming headsets, and spatial audio headsets, thereby providing more choices for different user groups. Thus, the continuing expansion of the Bluetooth audio application market can be expected. Realtek has achieved a good reputation for its first-generation Bluetooth solutions. It also provides convenient ANC mass production tools in the second-generation ANC solution to help customers improve mass production efficiency, reduce costs, and ensure performance consistency. This second generation solution was well received by the market and has already become a favorite of many international brands. In 2021, Realtek’s latest generation of Bluetooth BT5.2 BLE Audio TWS solutions were released to meet the market’s expectations for the evolution of new Bluetooth headsets. This new range of devices is expected to enable Realtek to maintain its position as the leader in Bluetooth audio, and to expand its market influence and empower market growth by working closely with supply chain and brand partners.

Realtek’s BLE series of products are especially popular among major international brands for voice-assist remote controllers, assisting the transition of remote controllers from infrared to Bluetooth. They also enable large color display upgrades for wrist devices, thereby increasing the appeal and value of wearables. In addition, commercial applications of Bluetooth Mesh networks that support smart voice ecosystems are maturing, which is supporting growth of peripheral Bluetooth products. In the future, with the low power characteristics of Bluetooth and online cloud services taking shape, Realtek's Bluetooth will not only be used in personal entertainment and smart-homes, but will also enter industries such as smart factories, property management, B2B transportation management, medical, and automotive, providing multiple levels of cross-domain applications.

Computer Peripheral Products:

COVID-19 was still prevalent in 2021. Nonetheless, after the release of the vaccine, the world gradually returned to relative normality by the second half of the year, forming a new mixed model for work and study. This provided growth momentum for the PC market in the first and second half of the year separately - consumer and educational notebook computers led the

-80-

-80-

growth in the first half of the year, while business notebooks and desktop computers recovered in the second half and stimulated the continued growth of PCs. The strong demand for voice communication has also led to substantial growth in sales of VoIP conference speakerphone devices, USB headsets, USB microphone modules and noise reduction software. Realtek’s AI algorithm based on neural network computing can effectively eliminate uncontrollable sounds in the home environment, such as animal calls or alarm bells, thereby greatly improving the VoIP App user experience. In the future, we plan to annex the noise reduction software to more devices to create a complete ecological chain.

WFH and remote learning arising from COVID-19 induced the need for both high quality voice calls and also more convenient and clearer video. To this end, many 2021 flagship models of PC brands have upgraded the original HD resolution to FHD or 5MP resolution. In addition to the increased resolution of color video devices, the flagship models of many PC brands have upgraded from the Hybrid HD RGBIR single lens to a Dual Sensor dual lens to support Windows Hello Face Authentication technology. This enhances visible-light video to FHD resolution, and can support the 940nm band, which is less susceptible to interference by natural IR signals, thereby giving a better biometric user experience. As a market leader, Realtek launched a series of HD/FHD/5M in the first quarter of 2021 in response to customer needs. Each resolution has an ISP model that can support dual lenses and TNR (Temporal Noise Reduction). Customers' products went into mass production one by one in late 2021 and will continue in the first half of 2022 to establish the highest video quality standard in the PC industry and provide consumers with the best user experience.

In the field of IP Camera single chip solutions, Realtek's highly integrated surveillance camera SoC has an exceedingly flexible image processing engine (ISP) and can support the CMOS sensors of major manufacturers on the market, thus satisfying customers’ broad range of video preferences. Additionally, the integrated audio and network functions offer a network camera single-chip solution with high cost-effectiveness. Currently Realtek has successfully penetrated several renowned consumer smart-home surveillance IP camera brands as well as China

-81-

-81-

broadband operator tender projects. In the first quarter of 2011, Realtek launched a new generation of AI high-integration, low-power camera SoC supporting edge computing. They support up to 5 megapixel CMOS sensors, and also support the Video HDR wide dynamic long and short exposure specifications, thereby not only improving the single-chip product portfolio of Realtek surveillance cameras, but also continuing to provide customers with more competitive solutions. Further, Realtek camera solutions achieved mass production as TV Cams for internationally renowned TV brands in late 2021, developing differentiating applications for the surveillance camera product line.

Realtek released integrated card readers with PCI Express and USB 3.0 Interfaces to read both memory cards and smart cards for laptop and desktop computers. Realtek is a pioneer in releasing devices that support the latest SD7.0 memory cards and Intel’s newest energy-saving products. Besides maintaining the leadership position in market share, Realtek wants to continue to create new, and more innovative product applications, while providing even greater value for customers.

Products supporting USB 3.0 are gaining popularity, and the demand continues to grow. Realtek's 4-Port USB 3.0 hub products have been adopted by many system manufacturers, and the monthly shipment is increasing. Realtek is leading the industry in the release of USB 3.1 GEN 2 hubs, many of which are already being used by manufacturers on new platforms. Besides faster transmission and lower power consumption, they integrate USB Type-C functions to provide customers with the option of designing higher-spec, more refined products. In the past year, the popularity of USB hubs for computer peripheral products such as monitors and dongles has been increasing. This and the supply shortage at certain suppliers caused for USB hubs to become a focus of order fulfillment in the second half of 2021. Besides securing the original wafer capacity, Realtek has also made progress in developing new production capacity, and began to expand the supply of USB hubs at the beginning of 2022. In the future, Realtek will integrate existing technologies and products, launch newer multi-functional hub products to expand the market, and provide customers with more diverse products.

With the introduction of USB Type-C, Realtek simultaneously released the first highly integrated product that reduces overall design costs and refines product features. Manufacturers have already begun using them in a wide range of applications. Realtek will continue to develop products with improved specifications to provide customers with a wider range of product designs. USB Type-C was mostly dominated by US-based IDM manufacturers in the past. These manufacturers became the target of public criticism in the second half of 2011 due to capacity issues. Realtek's USB Type-C products were in the right place with the right specifications and performance. Coupled with a high degree of confidence in the upstream wafer production capacity through advanced planning, Realtek has become the first choice to replace the US-based suppliers. From the end of 2021 to the first half of 2022, Realtek USB Type-C has successively been designed into a number of PC brands and gone into mass production.

-82-

-82-

In the consumer electronics audio chip market, Realtek uses exclusive low power design technology and energy-saving hardware and software solutions to extend battery life. It developed an efficient Audio Codec with Class-D Amplifier, Built-in Adaptive Boost, Equalizer, and Speaker Protection. This highly integrated device helps customers reduce external components, thus reducing the motherboard area. In addition to the smartphone and game console sectors, Realtek’s Low Power Audio Codec, Smart Amplifier, and Programmable Audio DSP have not only been adopted by major brands, but also, through collaboration with strategic partners, made headway into VR and automotive voice markets and delivered results.

Multimedia Products:

New opportunities for LCD monitors are concentrated on devices offering high resolution, high refresh rates, superb video color, and the latest external display interfaces. Professional displays with ultra-high resolution and image quality, such as WFHD, QHD, WQHD, and UHD, highquality displays that support HDR or WCG, and specialized displays that use high refresh rates to improve the gaming experience are focal points of this competitive market. Since 2020, how we go about our daily lives has been altered by COVID-19. The necessity for WFH, remote learning, and home entertainment has dramatically increased in order to avoid crowd gathering and control the spread of the pandemic. This has significantly increased the demand for consumer models and gaming models. Realtek continues to offer related solutions, and the response from customers has been highly positive. For notebook and desktop applications, Realtek offers a DisplayPort to VGA Video Translator, and a DisplayPort to HDMI Video Translator. These have both been widely adopted by tier-one and tier-two brands. Many devices such as notebook computers, mobile phones, and the Apple iPad Pro now frequently use USB Type-C for transferring video, data, and power. This raises demand for Type-C peripheral products. The demand for laptops and PC peripheral accessories rose significantly in 2021 due to the need for work-from-home and remote learning. Realtek led the release of Integrated LCD Monitor Controllers with the USB Type-C Interface, and various video interface translators such as USB Type-C to VGA, and USB Type-C to HDMI, as well as highly integrated DisplayPort video hub ICs. Customers have responded positively.

Regarding LCD TVs, the supply cycle of chips has changed due to the impact of the epidemic. Aside from trying to meet the needs of customers for mass production, Realtek continues to develop 8K (7680 x 4320) Smart Internet-Enabled LCD TV SoCs, and TV SoCs supporting UHD 60Hz/120Hz Frame Frequency Conversion (FRC), as well as a new generation of Integrated 4K Smart LCD TV Controllers that support HDR. The economic threshold for 8K panels has dropped more than expected. Realtek's 8K TV decoder chip provides customers a path for seamless upgrades to 8K TVs, as well as a more competitive solution for LCD TV manufacturers.

(2) Industrial Upstream, Midstream and Downstream Relationships

The IC manufacturing industry can be divided into upstream IC design and design services companies, midstream IC chip manufacturers, and downstream IC packaging and testing

-83-

-83-

suppliers. IC design firms typically engage in design and sale of their own products or commissioned designs for other firms. Within the supply chain, they are knowledge intensive. Before the final product is completed, however, photo mask tooling, wafer fabrication, and product packaging and testing are needed. Generally, design firms contract external manufacturers to support these production and manufacturing processes.

3. R&D Development

(1) R&D Expenditure for the Past Two Years

		Unit: NT$thousands	Unit: NT$thousands
Year	Revenues	R&D Expenditure	s Ratio(%)
2020	77,759,470	19,054,888	24.50
2021	105,504,286	27,949,765	26.49

(2) Products Successfully Developed in the Past Year

Communications Network and Connected Media Products:

PCIe 2.5GBASE-T Single-Chip Programmable Ethernet Controller
USB3.2 Gen1 2.5GBASE-T Single-Chip Programmable Ethernet Controller
New Generation PCIe 1GBASE-T Single-Chip Ethernet Controller
New Generation of USB 3.2 Gen 1 1GBASE-T Single-Chip Ethernet Controller
USB 3.2 Gen 1 2.5GBASE-T Programmable Single-Chip Ethernet Controller
USB 3.2 Gen 2 to PCIe 3.0 x 2 SD Express Card Single-Chip Bridge Controller
100BASE-T1 Automotive Ethernet PHY
100/1000BASE-T1 Automotive Dual-Mode Ethernet PHY
100BASE-T1 Automotive Multiport Ethernet Switch Controller
100/1000BASE-T1 Automotive Multiport Ethernet Switch Controller
UHD STB SoC
802.11b/g/n 2T2R Ultra-Low-Power WLAN Single-Chip Controller with PCIe/USB 2.0/SDIO 3.0 Interfaces
802.11a/b/g/n/ac 2T2R WLAN and Bluetooth 5 Single-Chip Controller with PCIe/USB 2.0/SDIO 3.0 Interfaces
802.11a/b/g/n/ac/ax 2T2R WLAN and Bluetooth 5.2 Controller with PCIe 2.0/ USB 3.0/ SDIO Interfaces
802.11a/b/g/n/ac 2T2R WLAN Single-Chip Controller with USB 2.0 Interface
802.11a/b/g/n/ac 4T4R WLAN Single-Chip Controller with PCIe/ USB 3.0 Interfaces
Integrated WLAN 802.11ax (Wi-Fi 6) Dual Band Access Point/Router SoC
Integrated Multifunction Ultra-Low-Power IoT SoC with WLAN (Wi-Fi), Bluetooth, and Microcontroller
Low-Power, Highly-Integrated IoT SoC with Dualband Wi-Fi Camera
Bluetooth 5 Dual Mode Transceiver IC
Bluetooth 5 BLE SoC

-84-

-84-

Bluetooth 5 Audio SoC
GNSS Satellite Positioning IC
8-Port 1GBASE-T Ethernet PHY
24-Port 1G/2.5G BASE-T + 4-Port 10G Managed Ethernet Switch Controller
48-Port 1GBASE-T + 6-Port 10GBASE-T Managed Ethernet Switch Controller
1.25G/2.5G/10G Integrated PON Network Gateway Controller
Single-Port PON Network Bridge Controller
2-Port PON Network Gateway Controller
2.5G PON Laser Driver
Octal Port Integrated IEEE 802.3at PSE Controller
Quad Port Integrated IEEE 802.3bt PSE Controller
Long Distance 24-Port 100 BASE-T + 2-Port 1000BASE-T1 Ethernet Switch Controller
VDSL 35B Router Controller

Computer Peripheral Products:

HD-A 4-Channel Audio CodeC
HD-A 4-Channel Audio Codec with High Wattage Class-D Amplifier Supporting Speaker Protection
USB 2.0 Low Power Audio Codec with Equalizer
Mini DSP (Digital Signal Processor) for Voice Input Processing
SoundWire Audio Codec
Mobile Device Single-Chip Audio Codec with Power Amplifier
Hi-Fi Audio Codec with DSP for Mobile Devices
Low Power USB 2.0 Audio Codec
High Definition, High Efficiency Class-D Audio Amplifier with Equalizer and Speaker Protection for Handheld Mobile Devices
High Definition, High Efficiency Class-D Audio Amplifier with Multiband Equalizer and Dynamic Range Control for TV, Soundbar, and Sound System
SoundWire Interface High Definition Class-D Audio Amplifier with Built-in Audio Digital Signal Processing and Multi-Coil Speaker Driving Capability
Card Reader Controller with USB 2.0 Interface, Supporting SD 3.0 for Notebook PC
Card Reader Controller with USB 3.0 Interface, Supporting Intel NB Power Saving Specification
Card Reader with PCIe Interface, Supporting SD7.0
4-Port USB 3.0 Hub Controller
4-Port USB 3.1 Gen 2 Hub Controller
Type-C Controller
Embedded USB2.0/ USB3.0 High Definition Image Signal Processor Chip
Embedded USB2.0 and Windows Hello Face Authentication Enabling Image Signal Processor Chip
Low Power Embedded SPI to USB1.1/2.0 Interface Fingerprint Hardware Encryption
-85-

-85-

Bridge Chip for MoH, Match-on-Host, Architecture

Low Power Embedded SPI to USB2.0 Interface Fingerprint Hardware Encryption and Matching Microcontroller Chip for MoC (Match-on-Chip) Architecture
Highly Integrated, Low Power Neural Network Artificial Intelligence Surveillance Camera SoC

Multimedia Products:

High Resolution Integrated 5K3K/4K2K LCD Display Controller Supporting HDR, DP 1.4, HDMI 2.0, HDCP 2.2, and Display HDR
High Resolution Integrated 4K2K 144Hz Gaming LCD Display Controller Supporting Realtek Owl Sight Technology, DSC, HDR, DP 1.4, HDMI 2.1, and HDCP 2.3
Integrated High Resolution Integrated 4K2K 144Hz/QHD165Hz Gaming LCD Display Controller Supporting Realtek Owl Sight Technology, DSC, HDR, DP 1.4, HDMI 2.0, and HDCP 2.3
DisplayPort to HDMI 2.0 Translator
DisplayPort to HDMI 2.1 Translator
USB Type-C to HDMI 2.0/VGA Translator
DisplayPort MST Hub Controller
High-End LCD TV SoC
High-End Multimedia Digital/Analog LCD TV SoC
High-End Connected Digital/Analog LCD TV SoC
High-End UHD Smart Connected Digital/Analog LCD TV SoC
High-End UHD HDR Smart Connected Digital/Analog LCD TV SoC
High-End UHD HDR 60Hz/120Hz FRC Smart Connected Digital/Analog LCD TV SoC
High-End UHD HDR 60Hz/120Hz FRC and New Generation 3D Surround Sound Smart Connected LCD TV SoC
High-End 8K LCD TV Video Decoder and Processing Chip
New Generation High-End Full Function, Multi-Core UHD LCD TV SoC with AI PQ and AQ
High-End 8K LCD TV AI PQ Processing Chip
High-End Full Function AI 8K smart LCD TV SoC with High Performance Multi-Core Processors

4. Long-Term and Short-Term Business Development Plan

(1) Short-Term Business Development Plan

i. Continue to use the Company’s innovation framework to lower chip capital costs, in order to ensure competitive prices and raise profit margins.
ii. Maintain existing market share while expanding the overall market by releasing new products and offering diverse sales combinations and distribution strategies.
iii. Take the needs of key customers into account when assisting them in the integration of product logistical support systems. Provide the best sales and marketing services to win customers’ trust and meet customer’s needs.

-86-

-86-

iv. Participate in international product evaluation to raise the exposure of new products and demonstrate product quality.
(2) Long-Term Business Development Plan
i. Participate in formulating and promoting international standards to acquire related product and technical information in advance, thus accelerating Time-to-Market. Participating in the evaluation and selection of the test platforms for the standard organizations to make Realtek an industry benchmark in interoperability testing.
ii. For products with a high market share, stabilize the market share and quality of products while building a global service and technology network. For products with relatively low market share, actively develop new customers and expand new markets and sales channels to meet the goal of increasing overall market share.
iii. Regularly hold product release events and technical conferences in response to regional market needs. Directly speak with brand owners and discuss their future product needs, thus strengthening client relations.

-87-

-87-

II. Marketplace and Production Overview

1. Market Analysis

(1) Major Product Sales Regions

Unit: NT$ thousands

Sales Region	2020		2021
	Sales Amount	Percentage	Sales Amount	Percentage
Taiwan	34,965,916	44.97%	48,015,150	45.51%
Asia	42,521,571	54.68%	56,984,374	54.01%
Other	271,983	0.35%	504,762	0.48%
Total	77,759,470	100.00%	105,504,286	100.00%

(2) Market Share

Realtek is one of the world’s leading IC suppliers. It designs and develops wired and wireless communications networks as well as various computer peripheral IC products and multimedia applications. According to TrendForce, in 2021 Realtek ranked 8th worldwide in terms of revenue among IC design companies without fabrication plants.

(3) Future Market Supply and Demand and Growth Characteristics

The continuing impact of COVID-19, coupled with the supply-demand imbalance in the semiconductor industry, has resulted in supply shortages and protracted delivery in 2021. At the same time, due to changes in the way we live and work, people become more dependent on the IoTs and cloud services, thereby leading to strong demand for wired and wireless networking chips in many electronic products, home appliances and even cars. Examples include broadband devices like IP-STB, cable modems, and DSL, as well as consumer electronics products such as video game consoles, Blu-ray players, smart TVs, printers, refrigerators, air conditioners, voice-controlled smart speakers, cloud-based IP cameras, vacuum robots, drones, projectors, consumer and industrial robots, industrial controls, and automotive, each of which with more and more built-in Ethernet, Wi-Fi and Bluetooth. As more equipment is wirelessly connected, and as smart phones and cloud services become more widespread, the next wave of Wi-Fi and Bluetooth growth will come from hybrid applications involving IoT and AI. Meanwhile, the increase in wireless connection speed has also led to the upgrade of wired networks and broadband. The Multi-GbE network era arrived in 2021. In the Wi-Fi 6 wireless access point/router equipped with WAN and LAN ports, switch, PON optical network, TV cable modem network user, telephone DSL subscriber, 5G CPE, network storage device (NAS), gaming and commercial PCs as well as expansion cards and USB-to-Ethernet accessories have all been upgraded to 2.5Gbps or higher speed Ethernet. Another growth driver for the Ethernet market comes from the Internet of Vehicles. The trend of autonomous vehicles and electric cars has led to a substantial increase in the bandwidth of in-vehicle data streams, and the environmental awareness of weight reduction and energy saving has made Ethernet the

-88-

-88-

backbone network in the cars.

The OTT and network operator set-top box market will continue to grow. At the same time, the market for UHD televisions is rising and UHD HDR video content is becoming widespread. Demand for Wi-Fi 5 and Wi-Fi 6 is quickly increasing, and more people want integrated smarthome products with voice controls. These changes are boosting demand for fast wireless connections and smart edge computing. Moreover, the network operator market is shifting towards an open streaming media ecosystem that is boosting demand for IP OTT chips. Realtek is therefore developing highly integrated multimedia controllers with new features and a high cost-performance ratio. Used in conjunction with network communication chips, the controllers will offer a hardware-software total solution that helps customers take advantage of opportunities in this market.

The IP camera is an important IoT element that combines remote and mobile access with AI and AI edge computing tools like facial recognition, gesture recognition, and voice/speech recognition. Other diverse functions now available include a new generation of H.265 Codec, a 360-degree camera, and 3D video techniques. Besides traditional security surveillance, emerging applications with strong potential include AI optical recognition, unmanned stores, delivery and storage systems, and other essential industry 4.0 tools.

In the second half of 2021, with the gradual popularization of the Covid-19 vaccine, the epidemic slowed down, the market began to recover, people started to return to the office, and students returned to the classroom. This drove the need for an upgrade in both IT software, and hardware in the workplace and in schools, leading to an obvious supply shortage in 2021. This trend is expected to continue in the first half of 2022. At present, the upstream supply is still tight. We will continue to observe how sustainable market demand is, and also the potential impact to inventory caused by the protracted transportation delivery time.

In recent years, the requirements for voice, by PC products, broke away from the acoustic framework to use voice to realize many human-friendly applications. Besides continuing the development of existing voice recognition, voice wake-up and noise reduction technologies, Realtek has added deep learning technology to create a good user experience in voice applications, and to allow users to enjoy convenient voice control in both their work and daily life, thereby enabling Realtek to be the best voice and audio integrated solution provider for the next-generation of computer products. To this end, Realtek has developed a new generation of audio codec with high voltage (+9V) Class-D amplifiers and speaker protection. These integrate embedded adaptive boost circuits with low power designs to help customers reduce external components and cut the size of the motherboard via a reduced rBOM. To satisfy the high audio quality requirements of gaming PCs, e.g., to meet the Hi-Fi audio specs (32bits/384KHz sample rate), Realtek combines strengths in software and hardware integration to develop audio technology that provides the best balance between a slim PC and a Hi-Fi audio application.

-89-

-89-

New specs and interface technologies, such as 4K2K, USB Type-C, HDMI 2.1, DP 1.4, HDR, WCG, and high-frame-rate gaming, are ushering in growth for the LCD monitor market. Lower overall costs are another key trend. For the NB/DT market, more video interface connectors are using digital interfaces in 2022. For example, there is increased demand for the DisplayPort to HDMI 2.0 interface controller and the high-end DisplayPort to HDMI 2.1 interface controller. As more notebooks and mobile phones adopt USB Type-C, Thunderbolt 4, and USB 4 interfaces, demand for Realtek’s external USB Type-C image translators is expected to increase dramatically. Demand for laptops and peripheral accessories products in 2022 will continue the trend. The strong demand is also expected to benefit Realtek’s Single-Chip USB Type-C video translator.

The LCD TV market experienced several challenges over the course of 2021. In the first half of the year, there was a shortage of wafers, substrates, DRAM and packaging capacity, while in the second half of the year, high panel prices and the other complex market conditions led to lower than expected results. In 2022, the total shipment of LCD TVs is expected to be tepid due to the shortage of wafers and the overall weak consumer market. 2022 will be flattish for TV compared to 2021. UHD/HDR smart TVs have become mainstream in the market. The demand for 8K TVs with new specifications is expected to grow gradually as the cost of panels decreases. With Google leading end-point devices using Android TV OS, it is becoming more aggressive in launching devices using a new Google TV OS to attract more OEMs to join. Over the long-term, growth in the global LCD television market will continue. Realtek will promote its products in key markets while providing customers with comprehensive solutions.

(4) Competitive Strengths

i. Advanced Core Technologies: Realtek has excellent complementary Radio Frequency (RF), analog and mixed signal circuit design capacity, IC manufacturing knowledge, systems technology, and intellectual property. These factors contribute to higher product effectiveness and production yield, thus lowering costs.
ii. Strong Customer Base: Realtek’s customer base includes leading manufacturers of PCs, motherboards, network hardware, consumer electronics, and multimedia products. By offering high-value, high-capacity products with excellent economic benefits, Realtek endeavors to build long-term partnerships with customers.
iii. Excellent Cost-Benefit Returns and Customer-Oriented Products: Realtek is adept at developing products with high cost-benefit returns. By combining chip and system design, it provides customers with high-value system integration and helps them quickly release new products.
iv. Experienced R&D and Management Teams: Realtek’s R&D and management teams have extensive experience in the semiconductor industry. An excellent workplace environment and strong corporate culture attract talented technical and management staff.
(5) Future Advantageous and Disadvantageous Factors
i. Advantageous Factors:

-90-

-90-

(a) Ahead of domestic peers in the release of many communications network, computer peripheral, and multimedia IC products. Competitive prices. Realtek will continue to develop advanced core technologies to help increase product yield and decrease production costs.
(b) Realtek maintains good relations with wafer foundries, which promotes a stable supply of raw materials and steady raw material costs.
(c) Active client support, including the best sales and marketing services. These factors support a strong customer base.
(d) Experienced R&D and management teams with decision-making authority combined with a corporate culture of mutual support attract talented technical staff.
ii. Disadvantageous Factors
Fierce competition in a short product life-cycle market. Failure to quickly release new products would lead to a loss of market share, thereby impacting profits.
iii. Countermeasures:
(a) Proactively invest in new product development to timely release new products and gain market share.
(b) Proactively improve existing products. Reduce costs or increase product added value by yield improvement and performance enhancement.
(c) Offer comprehensive product services or jointly develop new products with customers to foster win-win situations.

2. Main Applications for Major Products and Production Process

(1) Main Applications
i. Communications Network Products: routers, switches, home gateways, OTT boxes, Wi-Fi applications, smart-home appliances, game consoles, security cameras, etc.
ii. Computer Peripheral Products: Desktop computers, notebook computers, card readers, etc. iii. Consumer Electronics Products: GPS, mobile electronic devices, mobile phones, tablet computers, etc.
iv. Multimedia Products: LCD monitors, multimedia video translators, smart HD TVs, etc.
(2) Production Process

Realtek primarily engages in product design; it commissions wafer foundries to do wafer manufacturing. Finished wafers are tested then sent to an assembly house for packaging. Packaged products then go through final testing.

3. Supply Status of Key Raw Materials

Wafers are Realtek’s primary raw materials. Main suppliers include TSMC, UMC, and other professional wafer foundries, which have a considerable level of quality and process capability. However, in 2021, due to the impact of factors such as COVID-19 and the trade relationship between the United States and China, the semiconductor supply chain remains in a supply-demand imbalance with supply lagging demand. To strive for production capacity, the company actively deepened collaboration with foundries, and has made mid- and long-term plans to secure stable supplies.

-91-

-91-

Major suppliers in the last two years Unit: NT$ thousands	2022 first Quarter	Relation to the Company
		% of Total Purchase 30 20 16 34 100
		Amount 4,292,378 2,766,673 2,250,684 4,784,968 14,094,703
		Name A C B Other Total
	2021	Relation to the Company
		% of Total Purchase 27 21 12 40 100
		Amount 15,541,105 11,887,976 7,091,591 23,061,955 57,582,627
		Name A C B Other Total
	2020	Relation to the Company
		% of Total Purchase 29 20 15 36 100
		Amount 12,551,958 8,504,500 6,583,180 15,870,529 43,510,167
		Name A C B Other Total
		Item 1 2 3

-92-

2022 first Quarter	Relation to the Company (note)		-94- There have been few changes in the Company's major customers in the last two years. Note: The chairmen of A and Realtek are second-degree relatives.
	% of Total Operating revenue 23 23 15 39 100
	Amount 6,852,151 6,778,121 4,437,927 11,688,112 29,756,311
	Name B D A Other Total Operating revenue
2021	Relation to the Company (note)
	% of Total Operating revenue 23 22 15 40 100
	Amount 24,336,918 22,895,750 16,083,737 42,157,881 105,504,286
	Name B D A Other Total Operating revenue
2020	Relation to the Company (note)
	% of Total Operating revenue 21 18 16 45 100
	Amount 16,074,247 14,175,131 12,212,600 35,297,492 77,759,470
	Name B D A Other Total Operating revenue
	Item 1 2 3

-93-

5. Production Volume and Value in the Past Two Years

Unit: NT$ thousands

oduction Volume and Value	in the Past Two Years	in the Past Two Years	in the Past Two Years	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Quantity & Value Major Product	2020			2021
	Capacity	Output	Value	Capacity	Output	Value
IC (thousandpieces)	�	2,674,003	43,263,645	�	3,288,848	56,806,629
Total	�	2,674,003	43,263,645	�	3,288,848	56,806,629

6. Sales Volume and Value in the Past Two Years

Unit: NT$ thousands

					Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Quantity & Value Major Product	2020				2021
	Domestic		Export		Domestic		Export
	Quantity	Sales	Quantity	Sales	Quantity	Sales	Quantity	Sales
IC (thousand pieces)	1,273,989	36,857,996	1,453,849	49,046,890	1,529,042	49,438,669	1,699,054	60,983,436
Others	�	142,521	�	272,151	�	161,309	�	180,181
Total	1,273,989	37,000,517	1,453,849	49,319,041	1,529,042	49,599,978	1,699,054	61,163,617

Note: Sales volume and value as shown above has not deducted sales returns and allowances.

-95-

-94-

III. Employees

Employee breakdown over the past two calendar years and up until the date of the Report’s publication

rt’spublication	rt’spublication
Year Num ber Research and Development Administration and Sales Production and Testing Total		2020 5,253	2021 5,655	As of March 31, 2022 5,560
	Administration and Sales	530	575	566
	Production and Testing	190	212	211
	Total	5,973	6,442	6,337
Average Age		34.90	35.49	35.59
Average Years of Service		6.40	6.42	6.64
Educ ation	Ph.D./Master’s	70.95%	71.02%	72.05%
	University/College Degree	26.70%	26.73%	25.97%
	High School/Vocational High School Degree	2.35%	2.25%	1.97%

Note: Data are based on the Company’s consolidated statements, including employees of the Company and its subsidiaries.

IV. Environmental Expenses

The Company did not incur any losses, penalties or liabilities due to environmental pollution during the previous calendar year or up until the date of the Report’s publication.
The Company passed ISO 14001 Environmental Management Systems certification on September 22, 2006. It was recertified on August 18, 2021.
The Company passed OHSAS18001 Occupational Health and Safety Management Systems certification on June 29, 2017. It was revised to ISO45001 certification on August 3, 2020. ISO 14001 was recertified on December 15, 2021.

V. Labor Relations

Summary of the Company’s employee benefits, continuing education, training, pension plan and
implementation results, as well as labor agreements and measures to uphold employee rights.
- (1) Wages and Benefits
  - i. Performance appraisal twice a year for promotion/salary adjustment/bonus.
  - ii. R&D and patent application training and patent bonuses.
  - iii. Library of renowned domestic and foreign journals, papers and books, and guidance and

-96-

-95-

incentive bonus system for publication.

iv. R&D project participation based on professional suitability and personal choices.
v. Incentive system for the ‘Stimulus for Employee Brain Power Sharing Program’.
vi. Dual track career development to decide on going for R&D management based on ability and interest.
vii. Bonus and dividend system based on performance appraisal and comprehensive evaluation of R&D investment.
viii. Highly competitive salary and fringe benefit system.
ix. Profit sharing with the Company through salary adjustment, year-end bonus, and employee dividends based on personal performance.
x. New Year's Day and birthday gift vouchers, as well as a cafeteria benefit plan by the Welfare Committee.
xi. Paid annual health check-up to assist employees in implementing self-health care management.
xii. Major holiday bonuses, as well as wedding and funeral subsidies.
xiii. Professional and diverse intellectual lectures, club activities, ball games, and competition interactions held by the Employee Welfare Committee.
xiv. Employee Assistance Program providing psychological counseling, legal counseling, and stress relief massage services.
xv. Employee restaurants, cafes, and convenience stores for diversified dining services at a discount.
xvi. Employee group insurance to strengthen the work and life protection in addition to labor insurance and national health insurance.
xvii. Realtek gymnasium for exercise, reading, games, and health management.
(2) Realtek Educational Training, and Development
Talent is a key requirement for building intellectual power, blazing competitive new trails, and fostering sustainable operations. The Company’s greatest assets in these pursuits are the professionals of various fields who compose its workforce. In order to sustain competitiveness and develop new talent, the Company founded the Realtek Corporate University, which offers classes covering topics such as professional R&D, leadership development, organizational operations, and spontaneous learning. This initiative is part of the comprehensive education and training plans the Company offers to help all employees raise their capabilities to new heights.
i. New Employee Training Camps
- Orientation for new employees focuses on teamwork, innovation and vitality to help new team members quickly adapt to the Company’s corporate lifestyle and culture.
ii. Professional R&D Training
- Each year the Company holds more than 260 education and training courses for new R&D staff to quickly raise their professional capabilities. It invites R&D experts from Taiwan and overseas to share their knowledge and techniques. Employees can also join fully subsidized external training courses.
iii. Management and Leadership Training

-97-

-96-

Besides providing management training to employees based on their rank and role, the Company fully subsidizes training classes for employees at external institutions.

iv. Self-Study and Development
The Company offers open, diverse study environments and contents. It maintains awareness of employees’ learning and development while taking into account their professional needs and lifestyle aspirations. Diversity, timeliness, and convenience are distinguishing features of our planning.
v. Tailored Professional Development Plans
A combination of traditional and on-line classes offers flexible professional development plans tailored to the specific needs of every employee. Raising the R&D capabilities of each individual and team gives the Company a workforce with diverse professional knowledge.

(3) Pension System

The Company established pension plans and created a Supervisory Committee of Labor Retirement Reserve to manage pension payments for regular employees in accordance with the ‘Labor Standards Act’. From 1995, it appropriated labor pension reserve funds each month based on pension actuarial evaluations. From July 1, 2005, it utilized a defined contribution system for employees who are ROC nationals in accordance with the ‘Labor Pension Act’. At least 6% of the worker’s monthly wages are paid into his or her Individual Account of Labor Pension at the Bureau of Labor Insurance. Employees receive monthly retirement payments calculated based upon their individual account balance and other factors, or claim their pension in a lump-sum payment.

(4) Labor Agreements and Upholding Worker Rights

i. The Company’s intranet offers a forum that gives employees immediate access to management.
ii. The Company holds worker-employer meetings as a positive mechanism for communication.
iii. The Company set up two-way communication channel (CEO mailbox) for employees to offer their opinions to management.
iv. At regular departmental/unit meetings, employees can voice their opinions on problems. v. The Company has a sexual harassment prevention hotline and a prevention plan against unlawful violation to provide a safe work environment that puts employees’ minds at ease.
vi. The Company has an Employee Care and Consultation Center to provide individual or team consultation services.
vii. The Occupational Safety and Health Center is responsible for matters related to safe workplaces and health promotion.
The Company did not incur any losses due to labor disputes during the past calendar year and up until the date of publication of this Report.

-98-

-97-

VI. Cyber security management

(I) Cyber security risk management framework, cyber security policies, concrete management programs, and investments in resources for cyber security management.

‘Information security is everyone's responsibility’. In order to protect the security of information assets, including personnel, equipment, systems, information, raw data, and networks, etc., from disclosure, destruction, or loss by external threats or internal personnel abnormal operations, we ensure continuous improvement of risk management, continuous strengthening of governance strategies, personnel training, assessment and review, and information security. Our vision is to create a solid, secure, and reliable enterprise digital environment, and provide a solid foundation for the sustainable operation of said enterprise. The following describes the specific requirements:

Governance Strategy

In order to implement and improve information security, the company formed an Information Security Steering Committee (hereafter referred to as the ISSC). The chairman of the ISSC is the Chief Information Security Officer (CISO) of company. The first-level supervisors of each unit are ex-officio members. A regular ISSC meeting is held every year, and intermediate meetings are held on a case-by-case basis as events occur. The mission of the ISSC is to formulate security policies, comprehensively review and supervise the execution of security policies, continuously improve the capabilities of information security protection, and reduce information security risks. The meeting minutes are required to be submitted to the board of directors, and the main items are listed in the company's annual report.

Information Security Organization

The Company has created a Chief Information Security Officer (CISO) position. There are 5 teams under the CISO’s jurisdiction: product development and security platform team, industrial network security team, IT security technology team, information security audit team, information security education and training team, to implement security policy and employee education and training, and to strengthen the security management of various information assets to ensure its confidentiality, integrity, and availability.

The ISSC refers to the product development security and network security committee, industrial network data security review committee, IT security resources and technology committee, audits committee, and the defect review and improvement committee. It provides cross-function information security notices, is responsible for security policy review, and promotes information security management.

Employee Training

The information security awareness of enterprise members is the cornerstone of company information security. Over the years, through internal training, members of all functions have become familiar with security related courses. In order to improve the information security DNA, Realtek encourages employees to take the necessary security certification exams, and gives priority to recruiting new personnel who pass the certification exams. An online education system has also been introduced to enable corporate members to more efficiently learn the required security courses. The system also provides unit testing to aid learning. The visibility of high-level managers to the training results is greatly improved by quantifying the learning results, and integrated reports are automatically generated by the system. This enables easy integration of the learning achievements into the KPI assessment standards.

Assessment & Review

-99-

-98-

The core of information security management is risk management. In order to construct an intelligent, realtime information security management system, Realtek collects and examines network data flow for anomaly detection and pattern analysis, software updates, and other information gathered by the hardware and software systems of network equipment. Through automation, visualization, and quantifiable control systems, it lays a solid foundation for standard operating procedures for early warning, continuous monitoring, notification of contingency, and assistance with improvement. This system can fully provide required information for event analysis before, during, and after the event.

For accurate quantification, all incidents are marked with severity levels and corresponding scores, and event points will trigger the intelligent system to take action. Relevant personnel are notified in real time and automatically log in to the incident management system. The managers can handle the system from multiple angles through the security management system, which can be used as the basis for future evaluation and assessment of security risks.

Information Security Policy

Security threats are ubiquitous, with countless Internet viruses, Trojan horses, spyware, ransomware, blocking attacks, social engineering, and more. In recent years, due to the rapid development of network connections and bandwidth, coupled with the explosive amount of encrypted data transmission, the huge information flow has prompted the information security system to combine the security framework and corresponding measures to be more effective in providing complete and comprehensive security protection.

a. Front-end users: Front-end users must comply with the security policy, operating system regulations, and domain policy defined by company. Front-end users also need to execute computer system updates to effectively block computer viruses, Trojan horses, and malicious programs, providing the first line of Security protection.
b. Enterprise data center: Enterprise data centers must adopt new generation firewalls to filter encrypted data effectively and instantly, and manage traffic by application type. The firewalls also have to provide the necessary information for the security management system to facilitate automated analysis.
c. Centralization of confidential information: Important confidential information of the company should be stored centralized in specific areas. The latest information security technology should be integrated to manage and monitor access to confidential information. In cases where the confidential information has to be stored out of the specific area, attention should be paid to the protection and management of the access and delivery of the data.
d. Data backup management: Adopt advanced backup system to carry out full backup, incremental backup, off-site, and offline backup for important data according to various timing and management plans. All off-line and off-site backups should be encrypted, and regularly restored to ensure their recoverability.
e. Information Security Management System: Information Security Management System (ISMS) integrates the massive network traffic information of the enterprise, various antivirus systems, antihacking systems, and other system logs. The system logs of irregular health check scanning and penetration testing are processed by big data analysis system. The results are classified and presented to different management members according to different aspects to achieve the goals of information classification, risk classification, and management stratification. Therefore, Realtek can reduce the impact of security threats on corporate operations.

Information Security Risks & Countermeasures

-100-

-99-

In order to improve the protection capability of information security, Realtek identified information security risks, individually proposed countermeasures, and regularly reviewed their effectiveness.

Identified Information Security Risks	Explanation of Impact Assessment	Response Measure	Performance Management
Personal computer account and password security	Prevent the deliberate theft of trade secrets	Changing the personal computer boot (and e- mail) password regularly.	Regular changing of the password and requiring password of a certain strength.
Information security	Requests to access information systems must go through a formal application process and are logged.	An authorization application access was established for work- related information.	Electronic application for permission by the applicant’s supervisor and the competent unit.
Computer virus protection	Computer viruses are constantly evolving and ransom-ware is difficult to guard against.	The Virus definition files are regularly updated and pushed out to personal computers by the system automatically.	Improve the security of information on personal computers.
Network administration safety	Maintain the firewall to protect against malicious attacks.	Update firmware and backup configuration regularly.	Improve the quality of data transmission through the network.
Safety of external network access	Prevent and redirect access to malicious domains and IP addresses, restrict improper data transfers by malware, network phishing, and Command & Control (C&C) of zombie networks.	Adopt Enterprise Threat Protector (ETP) mechanism.	Strengthen access security for external networks.

(II) Losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to

significant cyber security incidents, the possible impacts therefrom, and measures being or to be taken: None

VII. Significant Agreements

-101-

-100-

Agreement Type Rental Agreements 4 Items	Signatory Hsinchu Science Park Bureau	Contract Validity Sep, 2003~Dec, 2022 Mar, 2014~Dec, 2027 Sep, 2019~Dec, 2038 Feb, 2020~Dec, 2039	Summary The lessee shall build a factory, warehouse, or laboratory or use the site for storage and delivery, loading and unloading, packaging, or repairs and maintenance.	Limitations The site must be used to build a factory, warehouse, or laboratory, or to conduct business- related tasks such as storage and delivery, loading and unloading, packaging, or repairs and maintenance.

-102-

-101-

Financial Status, Operating Results and Status of Risk Management

I. Financial Status

Financial Status, Operating Results and Status of Risk Management I. Financial Status	Financial Status, Operating Results and Status of Risk Management I. Financial Status	Financial Status, Operating Results and Status of Risk Management I. Financial Status	Financial Status, Operating Results and Status of Risk Management I. Financial Status	Financial Status, Operating Results and Status of Risk Management I. Financial Status
Unit: NT$ thousands 2021 2020 Changes % of Changes Current Assets 86,245,402 66,811,913 19,433,489 29.09% Non-current assets 14,986,511 11,284,004 3,702,507 32.81% Total assets 101,231,913 78,095,917 23,135,996 29.63% Current liabilities 58,820,923 46,128,894 12,692,029 27.51% Non-current liabilities 3,458,666 2,498,277 960,389 38.44% Total Liabilities 62,279,589 48,627,171 13,652,418 28.08% Share capital 5,106,849 5,106,849 0 0.00% Capital surplus 1,101,079 2,122,008 (1,020,929) -48.11% Retained earnings 34,510,813 23,786,273 10,724,540 45.09% Other equity (1,776,090) (1,556,049) (220,041) 14.14% Non-controlling interest 9,673 9,665 8 0.08% Total Equity 38,952,324 29,468,746 9,483,578 32.18% Year Item
Year Item	2021	2020	Changes	% of Changes
Current Assets	86,245,402	66,811,913	19,433,489	29.09%
Non-current assets	14,986,511	11,284,004	3,702,507	32.81%
Total assets	101,231,913	78,095,917	23,135,996	29.63%
Current liabilities	58,820,923	46,128,894	12,692,029	27.51%
Non-current liabilities	3,458,666	2,498,277	960,389	38.44%
Total Liabilities	62,279,589	48,627,171	13,652,418	28.08%
Share capital	5,106,849	5,106,849	0	0.00%
Capital surplus	1,101,079	2,122,008	(1,020,929)	-48.11%
Retained earnings	34,510,813	23,786,273	10,724,540	45.09%
Other equity	(1,776,090)	(1,556,049)	(220,041)	14.14%
Non-controlling interest	9,673	9,665	8	0.08%
Total Equity	38,952,324	29,468,746	9,483,578	32.18%

Analysis of Changes equal to or over 20%

1.Increase in Current assets: Mainly due to increase in financial assets at amortised cost and inventories.

2.Increase in Non-current assets: Mainly due to increase in property, plant, and equipment.

Increase in Current liabilities: Mainly due to increase in other payables
Increase in Non-current liabilities: Mainly due to increase in long-term loans
5.Decrease in Capital surplus: Mainly due to distribution by cash.
6.Increased in Retained earnings: Mainly due to increase in net income.

-103-

-102-

II. Operational Results

Unit: NT$ thousands

Year Item	2021	2020	Changes	% of Changes
Operating revenue	105,504,286	77,759,470	27,744,816	35.68%
Operating costs	( 52,315,883)	(44,510,731)	(7,805,152)	17.54%
Gross profit	53,188,403	33,248,739	19,939,664	59.97%
Operating expenses	( 35,863,507)	(24,609,176)	(11,254,331)	45.73%
Operating income	17,324,896	8,639,563	8,685,333	100.53%
Non-operating income and expenses	249,826	716,582	(466,756)	-65.14%
Profit before income tax, net	17,574,722	9,356,145	8,218,577	87.84%
Income tax expense	( 721,911)	(562,619)	(159,292)	28.31%
Net income for the year	16,852,811	8,793,526	8,059,285	91.65%

Analysis of Changes equal to or over 20%

Increase in Operating revenue and Operating costs: Mainly due to increase in sales.
Increase in Operating expenses: Mainly due to increase in research and development expenses.
Decrease in Non-operating income and expenses �� Mainly due to the decrease in interest income.
Increase in Profit before income tax, net: Mainly due to increase in operating income.

-104-

-103-

III. Cash Flow

1. Analysis of the Change in Cash Flow in 2020

Unit: NT$ thousands

				Unit: NT$ thousands	Unit: NT$ thousands
The beginning of Cash Balance (1) 7,296,360	Net Cash Provided by Operating Activities (2) 18,351,929	Net Cash Used in Investing and Financing Activities (3) 18,450,938	The end of Cash Balance (1)+(2)-(3) 7,197,351	Remedyfor Cash Shortage
				Investment plan �	Financial leverage plan �

Analysis of the Change in Cash Flow:

(1) Operating activities: Net cash inflow is mainly due to increase in operating income.

(2) Investing activities: Net cash outflow is mainly due to acquisition of financial assets at amortised

cost.

Financing activities: Net cash outflow is mainly due to distribution of cash dividends.

Cash Flow Projection for Next Year: Not applicable.
IV. Impact on Financial and Business associated with Major Capital Expenditures in recent years: None.

V. Investment Policies in recent years, the reasons for losses and plans to improve for next year:

Our investment policies are based on strategic investments. The investment losses accounted for under the equity method in 2021 was approximately NT$12,113 thousand. We will continuously focus on strategic investment and prudently evaluate investment plans in the future.

VI. Risk Items

The effect upon the profits (or losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future.
Our exposure to interest rate risks arises from time deposits, short-term loans and long-term loans with floating rates, which are not significant and are normally incurred to support our operating activities. The Realtek Group is a multinational group in the Electronics industry. Currently, the majority of our revenues are denominated in USD. Our operating expenses are incurred in several currencies, primarily in USD, NTD, and RMB. After offsetting assets and liabilities between the currencies, the natural hedge is used to reduce the foreign exchange risk. Inflation risk does not have a significant impact on the results of our operating activities.
The policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements and guarantees, and derivatives transactions, the main reasons for the profits/losses generated thereby, and response measures to be taken in the future:

The Realtek Group adopts a conservative investment policy and does not engage in high-risk investments

-105-

-104-

or highly leveraged investments.

The Realtek Group has formulated its procedures for Loaning Funds to Others, Procedures for Endorsements and Guarantees, and Procedures for Financial Derivatives Transactions in compliance with these Regulations. These procedures are aimed at improving operational performance and reducing financial risk.

Future R&D plans and expected R&D spending: We will continuously research in chips regarding the area of communication networks, computer peripherals, multimedia and connected media. In addition, we will actively recruit outstanding R&D talents and invest in the best R&D resources and develop key technologies or obtain necessary licensed technology. The expected R&D spending for next year will be approximately NT$33.4 billion.
Impact on finance and business associated with changes in domestic and foreign regulations and laws, and corresponding reactions: None.
Impact on finance and business associated with new technology and industry changes, and corresponding reactions:
We pay attention to the trend of future technology at all times. We not only focus on the timely launch new products, but also continuously enhance product functions and technical specifications in line with market trends and customer needs in order to strength our competitiveness and increase our market share.
Impact on Company’s crisis management associated with changes in corporate image, and corresponding reactions:
Our corporate culture is ‘self-confidence and trust in people’. Integrity is the central core of our corporate culture. We will maintain our good standing according to our corporate culture.
Risks and expected benefits associated with mergers and acquisitions, and corresponding reactions: None.
Risks and expected benefits associated with facility expansion, and corresponding reactions: In order to meet the needs of future growth and operating development, the 2020 board of directors has resolved to build factory & office buildings and a parking garage. Currently, there are no known risks associated with this plan.
Risks associated with Purchase and sales Concentration and corresponding reactions: The Company’s raw material is wafer. We have maintained a good cooperative relationship with foundries. For wafer purchases, we have not concentrated on a single foundry. Moreover, we also have not concentrated on a single customer and the collection period is implemented in accordance with company policies and there is no abnormal situation.
Impact and risks to the Company associated with significant transfer of shares by the Company’s Directors and major Shareholders who own 10% or more of the Company’s outstanding shares, and
- -106-

-105-

corresponding reactions: None.

Impact to the Company associated with change in management, and corresponding reactions: None.
Litigious and non-litigious matters:

The company is currently in major litigation, non-litigation, or administrative disputes �

(1) In 2020, Divx, LLC brought actions for patent infringement in United States International Trade Commission (“ITC”) and United States District Court of Delaware against the Company’s IC products. On July 4, 2021, DivX terminated the investigation against the Company in ITC.

(2) In 2020, KONINKLIJKE PHILIPS N.V. and PHILIPS NORTH AMERICA LLC brought actions for patent infringement in United States International Trade Commission (“ITC”) and United States District Court of Delaware against the Company’s IC products. On October 21, 2021, the Administrative Law Judge of ITC issued his initial determination finding non-infringement for the accused Company’s IC products and non-existence of the required domestic industry.

(3) Future Link Systems, LLC brought actions for patent infringement in United States International Trade Commission (“ITC”) and United States District Court for the Western District of Texas against the Company’s IC products. The cases are still pending, and the Company is unable to reliably determine the outcome of the cases.

(4) BANDSPEED, LLC brought an action for patent infringement in United States District Court for the Western District of Texas against the Company’s IC products. The case is still pending, and the Company is unable to reliably determine the outcome of the case.

13. Other important risks and measures: None

VII. Other Material Events: None.

-107-

-106-

==> picture [256 x 718] intentionally omitted <==

-107-

Main Business Activities	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Manufacture and installation of computer equipment and wholesale, retail and related service of electronic materials and information/software	R&D and technical support	ICs manufacturing, design, research, development, sales, and marketing	ICs design, sales and consultancy	Information services and technical support	R&D and technical support	R&D and technical support	R&D and technical support	ICs manufacturing, design, research, development, sales, and marketing	ICs manufacturing, design, research, development, sales, and marketing	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	R&D and information services	R&D and information services	R&D and technical support	R&D and technical support
Paid-in Capital	US$34,630,000	US$41,432,000	US$300,000	US$28,250,000	US$110,050,000	US$114,100,000	NT$280,000,000	NT$250,000,000	NT$293,929,850	NT$5,000,000	NT$28,783,650	NT$211,300,000	NT$20,000,000	JY¥20,000,000	HK$1,500,000	US$5,000,000	US$1,650,000	US$28,000,000	CNY 26,250,000	CNY10,000,000	US$200,000,000	US$89,856,425	US$16,892	US$60,000,000	US$4,000,000	US$2,500,000
Place of Registration	British Virgin Islands	British Virgin Islands	Mauritius	Mauritius	Cayman Islands	Cayman Islands	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Japan	Hong Kong	China	China	China	China	China	Singapore	Singapore	United States	United States	Vietnam	Malaysia
Date of Incorporation	1998.04	1998.10	2002.01	2002.06	2016.02	2016.02	1998.06	1999.12	2000.04	2004.12	2012.12	2015.04	2021.12	2001.12	1999.09	2004.07	2015.04	2001.12	2018.12	2020.07	2016.08	2013.10	2015.04	2016.08	2018.09	2020.06
Company Name	Leading Enterprises Limited	Amber Universal Inc.	Circon Universal Inc.	Empsonic Enterprises Inc.	Bluocean Inc.	Talent Eagle Enterprise Inc.	Realsun Investments Co., Ltd	Hung-wei Venture Capital Co., Ltd	Realking Investments Limited	Realsun Technology Corporation	Bobitag Inc.	Cortina Systems Taiwan Limited.	AICONNX Technology Corporation	Realtek Semiconductor (Japan) Corp.	Realtek Semiconductor (HK) Limited	Realtek Semiconductor (ShenZhen) Corp.	Cortina Network Systems (Shanghai) Co., Ltd.	Reasil Microelectronics Corporation	RayMX Microelectronics Corporation	Suzhou PanKore Integrated Circuit Technology Co., Ltd.	Realtek Investment Singapore Private Limited	Realtek Singapore Private Limited	Cortina Access, Inc.	Ubilinx Technology Inc.	Realtek Viet Nam Co., Ltd	Realtek Semiconductor (Malaysia) SDN. BHD.

-108-

Division of Work Among the Affiliates	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable	Provide research and development and technical services	Not applicable	Provide sales and technical services	Not applicable	Provide research and development and technical services	Provide research and development and technical services	Provide research and development and technical services	Not applicable	Not applicable	Not applicable	Not applicable	Provide consultancy and services	Provide consultancy and services	Provide research and development and technical services	Provide research and development and technical services	Provide research and development and technical services
Main Business Activities	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Manufacture and installation of computer equipment and wholesale, retail and related service of electronic materials and information/software	R&D and technical support	ICs manufacturing, design, research, development, sales, and marketing	ICs design, sales and consultancy	Information services and technical support	R&D and technical support	R&D and technical support	R&D and technical support	ICs manufacturing, design, research, development, sales, and marketing	ICs manufacturing, design, research, development, sales, and marketing	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	R&D and information services	R&D and information services	R&D and technical support	R&D and technical support	R&D and technical support
Company Name	Leading Enterprises Limited	Amber Universal Inc.	Circon Universal Inc.	Empsonic Enterprises Inc.	Bluocean Inc.	Talent Eagle Enterprise Inc.	Realsun Investments Co., Ltd	Hung-wei Venture Capital Co., Ltd	Realking Investments Limited	Realsun Technology Corporation	Bobitag Inc.	Cortina Systems Taiwan Limited.	AICONNX Technology Corporation	Realtek Semiconductor (Japan) Corp.	Realtek Semiconductor (HK) Limited	Realtek Semiconductor (ShenZhen) Corp.	Cortina Network Systems (Shanghai) Co., Ltd.	Reasil Microelectronics Corporation	RayMX Microelectronics Corporation	Suzhou Pankore Integrated Circuit Technology Co. Ltd.	Realtek Investment Singapore Private Limited	Realtek Singapore Private Limited	Cortina Access, Inc.	Ubilinx Technology Inc.	Realtek Viet Nam Co., Ltd.	Realtek Semiconductor (Malaysia) SDN. BHD.	Realtek Korea Inc.

-109-

% of Investment Holding	100%	100%	-	-	-	-	-	-	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%
Shares/ Investment Amount	34,630	41,432	-	-	-	-	-	-	110,050,000	114,100,000	28,000,000	28,000,000	28,000,000	28,000,000	25,000,000	25,000,000	25,000,000	25,000,000
Name	Realtek Semiconductor Corp. (Representative: Yeh, Po-Len)	Realtek Semiconductor Corp. (Representative: Yeh, Po-Len)	Huang, Yung-Fang	Yen, Kuang-Yu	Lin, Tsung-Ming	Huang, Yung-Fang	Yen, Kuang-Yu	Chang, Jr-Neng	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Huang, Yee-Wei)	Realtek Semiconductor Corp. (Representative: Huang, Yung-Fang)	Realtek Semiconductor Corp. (Representative: Chern, Kuo-Jong)	Realtek Semiconductor Corp. (Representative: Chiang, Ting-Chi)	Realtek Semiconductor Corp. (Representative: Yeh, Po-Len)	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Huang, Yung-Fang)	Realtek Semiconductor Corp. (Representative: Chiang, Ting-Chi )
Title (note 1)	Director	Director	Chairman	Director and President	Director	Chairman	Director and President	Director	Director	Director	Chairman and President	Director	Director	Supervisor	Chairman	Director and President	Director	Supervisor
Company Name	Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited			Realtek Investment Singapore Private Limited			Bluocean Inc.	Talent Eagle Enterprise Inc.	Realsun Investments Co., Ltd				Hung-wei Venture Capital Co., Ltd

-110-

% of Investment Holding	100%	100%	100%	100%	100%	100%	100%	100%	66.67%	66.67%	66.67%	-	100%	100%	100%	100%	-	-	-
Shares/ Investment Amount	29,392,985	29,392,985	29,392,985	29,392,985	500,000	500,000	500,000	500,000	1,918,910	1,918,910	1,918,910	-	2,000,000	2,000,000	2,000,000	2,000,000	-	-	-
Name	Realtek Semiconductor Corp. (Representative: Yeh, Po-Len)	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Huang, Yung-Fang)	Realtek Semiconductor Corp. (Representative: Chiang, Ting-Chi�	Realtek Semiconductor Corp. (Representative: Yeh, Po-Len)	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Huang, Yung-Fang�	Realtek Semiconductor Corp. (Representative: Chern, Kuo-Jong�	Realtek Semiconductor Corp. (Representative: Chiang, Ting-Chi)	Realtek Semiconductor Corp. (Representative: Lu, Shiu-Hung)	Realtek Semiconductor Corp. (Representative: Chan, Te-Chuan)	Guo, Yu-zhi	Realtek Semiconductor Corp. (Representative: Chiu, Sun-Chien)	Realtek Semiconductor Corp. (Representative: Chern, Kuo-Jong)	Realtek Semiconductor Corp. (Representative: Chang Yi-Shu�	Realtek Semiconductor Corp. (Representative: Chang, Jr-Neng�	Cheng, Shu-Chien	Chiu, Sun-Chien	Huang, Yung-Fang
Title (note 1)	Chairman	Director and President	Director	Supervisor	Chairman	Director	Director	Supervisor	Chairman	Director	Director	Supervisor	Chairman	Director	Director	Supervisor	Director and President	Director	Director
Company Name	Realking Investments Limited				Realsun Technology Corporation				Bobitag Inc.				AICONNX Technology Corporation				Realtek Semiconductor (Japan) Corp.

-111-

% of Investment Holding	-	100%	100%	-	-	100%	100%	100%	-	-	-	100%	100%	100%	100%	-	-
Shares/ Investment Amount	-	300,000	HK$1,500,000	-	-	2,825,000	2,825,000	2,825,000	-	-	-	21,130,000	21,130,000	21,130,000	21,130,000	-	-
Name	Chiang, Ting-Chi	Leading Enterprises Limited (Representative: Yeh, Po- Len)	Amber Universal Inc. (Representative: Yeh, Po-Len)	Lin, Ying-Hsi	Chern, Kuo-Jong	Realtek Singapore Private Limited (Representative: Huang, Yung-Fang)	Realtek Singapore Private Limited (Representative: Yen, Kuang-Yu)	Realtek Singapore Private Limited (Representative: Lin, Tsung-Ming)	Huang, Yung-Fang	Yen, Kuang-Yu	Zeineddine Chair	Realtek Singapore Private Limited (Representative: Huang, Yung-Fang)	Realtek Singapore Private Limited (Representative: Yen, Kuang-Yu)	Realtek Singapore Private Limited (Representative: Hsiao, Wang-Mien )	Realtek Singapore Private Limited (Representative: Fu, Ying-Chi )	Zeineddine Chair	Ke, Chieh-Yuan
Title (note 1)	Supervisor	Director	Director	Director	Director and President	Chairman	Director	Director	Director	Director	Director	Chairman	Director	Director	Supervisor	Director	Supervisor
Company Name		Circon Universal Inc.	Realtek Semiconductor (Hong Kong) Limited		Realtek Semiconductor (ShenZhen) Corp.	Empsonic Enterprises Inc.			Cortina Access, Inc.			Cortina Systems Taiwan Limited.				Cortina Network Systems (Shanghai) Co., Ltd.

-112-

% of Investment Holding	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Shares/ Investment Amount	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Name	Soh Wei Kwek	Kao Shu-yi	Nguyen Phuoc Vinh Thang	Chiang, Ting-Chi	Fu, Ying-Chi	Lin, Chia-Liang	Chang Yi-Shu	Fu, Ying-Chi	Lau Lai Li	Chang Yi-Shu	Chiang, Ting-Chi	Byung-gi Park	Fu, Ying-Chi	Yeh, Nan-Horng	Yeh, Ta-Hsun	Chiou, Mhu-Hsiu	Chern, Kuo-Jong	Tsai, Jon-Jinn	Zhu, Ying-hui	Su, Chu-Ting
Title (note 1)	Director	Director	Director	Director	Director	Director	Director	Director	Director	Director and President	Director	Director	Supervisor	Chairman	Director and President	Director	Supervisor	Chairman	Director and President	Director
Company Name	Realtek Viet Nam Co., Ltd.			Ubilinx Technology Inc.			Realtek Semiconductor (Malaysia) SDN. BHD.			Realtek Korea Inc.				Reasil Microelectronics Corporation				RayMX Microelectronics Corporation

-113-

														Supervisor Lu, Shiu-Hung - - Note 1: If the affiliates are foreign companies, list the same positions as domestic. Note 2: The shares are the total of shareholdings directly or indirectly held; if the affiliates do not issue shares, the shareholdings are presented by the investment amount. Note 3: The above information up to March 31, 2022
Shareholding (note 2)	% of Investment Holding	-	-	-	-	-	-	-	-	-	-	-	-	-
	Shares/ Investment Amount	-	-	-	-	-	-	-	-	-	-	-	-	-
	Name	Chen, Chih-tung	Chien, Chih-Ching	Wu, Wen-Bin	Chang, Jr-Neng	Liu, Shuan-Ta	Huang, Yung-Fang	Peng, Zuo-Hui	Yen, Kuang-Yu	Shen, Jia-Qing	Liu Yong	Lin, Hou-Wei	Li, Chao-Ming	Lu, Shiu-Hung
	Title (note 1)	Director	Director	Supervisor	Supervisor	Supervisor	Chairman	Director and President	Director	Director	Director	Supervisor	Supervisor	Supervisor
	Company Name						Suzhou PanKore Integrated Circuit Technology Co., Ltd.

-114-

EPS (After Taxes)	-	-	-	-	-	-	0.61	3.23	(0.05)	0.01	0.05	(0.01)	-	-	-	-	-	-	0.25	-	-	-	-	-	-
Net Income for the year (After Taxes)	36,386	20,550	13,267,476	43,812	10,825	85,684	17,017	80,784	(1,484)	7	157	(20)	4,621	(320)	(12)	15,258	395,720	26,504	5,326	6,952	(9,916)	54,656	1,452	396,350	311,601
Operation Income	(38,816)	(10,513)	12,720,330	(196)	(26,531)	(5,335)	(101)	(2,876)	(41)	(39)	(70)	(20)	3,503	(329)	(12)	28,070	(238)	14,208	8,601	7,390	(10,218)	33,665	1,150	181,820	291,028
Operating revenue	0	0	35,793,253	0	0	0	0	0	0	0	0	0	68,159	0	0	564,876	0	217,183	151,956	138,314	10,370	514,591	17,575	2,492,779	1,219,539
Equity	13,271,127	3,495,793	18,484,215	6,138,099	3,281,951	2,190,704	880,497	758,769	285,893	5,074	29,020	19,980	6,345	7,126	1,034	285,009	1,959,833	724,213	82,636	168,411	76,353	254,166	62,076	1,955,656	397,149
Liabilities	6,189,262	1,634,520	7,978,903	668,786	2,473,278	4,525,883	113	90,254	121	0	104	20	726	0	0	159,147	0	60,440	30,321	51,255	8,400	118,790	847	623,925	287,626
Assets	19,460,389	5,130,313	26,463,118	6,806,885	5,755,229	6,716,587	880,610	849,023	286,014	5,074	29,124	20,000	7,071	7,126	1,034	444,156	1,959,833	784,653	112,957	219,666	84,753	372,956	62,923	2,579,581	684,775
Paid in Capital	13,676,922	4,358,823	3,334,651	5,538,000	3,047,285	3,159,429	280,000	250,000	293,930	5,000	28,784	20,000	4,812	8,307	5,326	138,450	782,243	364,073	211,300	99,684	110,760	1,661,400	69,275	775,320	113,941
Company	Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited	Realtek Investment Singapore Private Limited	Bluocean Inc.	Talent Eagle Enterprise Inc.	Realsun Investments Co., Ltd	Hung-wei Venture Capital Co., Ltd	Realking Investments Limited	Realsun Technology Corporation	Bobitag Inc.	AICONNX Technology Corporation	Realtek Semiconductor (Japan) Corp.	Circon Universial Inc.	Realtek Semiconductor (Hong Kong) Limited	Realtek Semiconductor (ShenZhen) Corp.	Empsonic Enterprises Inc.	Cortina Access, Inc.	Cortina Systems Taiwan Limited.	Cortina Network Systems (Shanghai) Co., Ltd.	Realtek Viet Nam Co., Ltd	Ubilinx Technology, Inc	Realtek Semiconductor (Malaysia) SDN. BHD.	Reasil Microelectronics Corporation	RayMX Microelectronics Corporation

-115-

EPS (After Taxes)	-
Net Income for the year (After Taxes)	(82,838)
Operation Income	(82,840)
Operating revenue	0
Equity	(57,525)
Liabilities	104,441
Assets	46,916
Paid in Capital	43,406
Company	Suzhou PanKore Integrated Circuit Technology Co., Ltd.

-116-

Affiliated Entities Consolidated Financial Statements:
The entities included in the consolidated financial statements are the same as the entities pursuant to the financial accounting standards to be included in the consolidated financial statements of the Parent Company. Therefore, please refer to consolidated financial reports for consolidated financial statement of affiliated entities.
II. Significant events with impact on shareholders’ rights or stock price regulated in Article 36-3-2 of the Securities and Exchange Act happened during last year to the date of the annual report printed: None
III. Acquisition or disposal of Realtek shares by subsidiaries during last year to the date of the annual report printed: None
IV. Issuance of private placement securities: None

V. Other Necessary Supplements: None

-118-

-117-

Financial Information

I. Condensed balance sheet and Statement of Comprehensive Income, independent auditor’s name and audit opinion in the recent five years
Condensed Balance Sheet

1.1. Condensed Consolidated Balance Sheet (Note1)

I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)	I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)	I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)	I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)	I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)	I. Condensed balance sheet and Statement of Comprehensive Income, independent audit name and audit opinion in the recent five years 1. Condensed Balance Sheet 1.1. Condensed Consolidated Balance Sheet (Note1)
Unit: NT$thousands
Item Year	2017	2018	2019	2020	2021
Current assets Property, plant and equipment Right-of-use assets Intangible assets Other non-current assets Total assets Current liabilities Before distribution After distribution Non-current liabilities Total liabilities Before distribution After distribution Equity attributable to owners of the parent company Share capital Capital surplus Retained earnings Before distribution After distribution Other equity interest Treasury shares Non-controlling interest Before distribution	45,092,540 3,162,949 - 2,078,355 41,021 52,310,913 29,520,661 32,135,601 931,140 30,451,801 33,066,741 21,849,518 5,065,062 3,558,856 13,826,043 11,539,613 (600,443) � 9,594 21,859,112	51,153,278 3,316,578 - 1,686,249 50,169 58,252,314 32,502,254 36,058,922 1,103,161 33,605,415 37,162,083 24,637,292 5,080,955 3,236,659 15,917,714 12,869,141 401,964 � 9,607 24,646,899	64,289,591 3,446,162 1,403,245 1,952,960 61,646 73,431,830 43,970,187 49,168,236 2,232,959 46,203,146 51,401,195 27,218,985 5,080,955 2,736,854 19,618,212 15,022,048 (217,036) � 9,699 27,228,684	66,811,913 4,448,532 1,647,421 2,067,324 49,319 78,095,917 46,128,894 53,278,483 2,498,277 48,627,171 55,776,760 29,459,081 5,106,849 2,122,008 23,786,273 17,658,054 (1,556,049) � 9,665 29,468,746 22,319,157	86,245,402 6,302,938 1,587,910 2,231,694 734,651 101,231,913 58,820,923 (Note) 3,458,666 62,279,589 (Note) 38,942,651 5,106,849 1,101,079 34,510,813 (Note) ( 1,776,090) � 9,673 38,952,324 (Note)
Total Equity After distribution	19,244,373	21,090,457	22,030,635

Note: Pending on approval of shareholders at Annual General Shareholders’ Meeting.

-119-

-118-

1.2. Condensed Balance Sheet – Parent Company

Unit: NT$ thousands

Item Year	2017	2018	2019	2020	2021
Current assets Property, plant and equipment Right-of-use assets Intangible assets Other non-current assets Total assets Current abilities Before distribution After distribution Non-current liabilities Total liabilities Before distribution After distribution Share capital Capital surplus Retained earnings Before distribution After distribution Other equity interest Treasury shares Total Equity Before distribution	12,587,447 2,679,455 - 1,495,547 6,456 50,512,739 28,199,217 30,814,157 464,004 28,663,221 31,278,161 5,065,062 3,558,856 13,826,043 11,539,613 (600,443) � 21,849,518	13,962,708 2,863,756 - 1,160,549 14,444 53,992,856 28,733,410 32,290,078 622,154 29,355,564 32,912,232 5,080,955 3,236,659 15,917,714 12,869,141 401,964 � 24,637,292	22,953,769 3,019,258 1,091,607 1,652,722 46,151 67,445,996 39,316,733 44,514,782 910,278 40,227,011 45,425,060 5,080,955 2,736,854 19,618,212 15,022,048 (217,036) � 27,218,985	21,247,908 4,027,004 1,390,104 1,955,629 34,805 70,040,894 39,289,791 46 439,380 1,292,022 40,581,813 47,731,402 5,106,849 2,122,008 23,786,273 17,658,054 (1,556,049) � 29,459,081 22,309,492	32,551,097 5,891,478 1,357,716 2,143,811 719,802 91,738,180 50,500,155 (Note) 2,295,374 52,795,529 (Note) 5,106,849 1,101,079 34,510,813 (Note) ( 1,776,090) � 38,942,651 (Note)
After distribution	19,234,779	21,080,850	22,020,936

Note: Pending on approval of shareholders at Annual General Shareholders’ Meeting.

-120-

-119-

2. Condensed Statement of Comprehensive Income

2.1. Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Comprehensive Income	Condensed Consolidated Statement of Comprehensive Income	Condensed Consolidated Statement of Comprehensive Income	Condensed Consolidated Statement of Comprehensive Income	Condensed Consolidated Statement of Comprehensive Income	Condensed Consolidated Statement of Comprehensive Income
Unit: NT$ thousands
Year Item Operating revenue Gross Profit Operating income Non-operating income(expenses) Net income before income tax, net Income From Operations of Continued Segments Income (Loss) From Operations of Discontinued Segments Net income for the year Total Comprehensive income for the year Net Profit Attributable to: Owner of the Company Net Profit(loss) Attributable to: Non- controlling interests Total Comprehensive Income Attributable to: Owner of the Company Total Comprehensive Income (Loss) Attributable to: Non-controlling interests	2017 41,688,021 17,903,422 3,204,237 422,116 3,626,353 3,392,160 � 3,392,160 1,390,168 3,392,153 7 1,390,161 7	2018 45,805,746 20,460,870 3,764,460 892,741 4,657,201 4,350,781 � 4,350,781 5,054,264 4,350,768 13 5,054,251 13	2019 60,744,006 26,583,316 6,330,865 905,007 7,235,872 6,790,375 � 6,790,375 6,130,163 6,790,283 92 6,130,071 92	2020 77,759,470 33,248,739 8,639,563 716,582 9,356,145 8,793,526 � 8,793,526 7,425,261 8,793,477 49 7,425,212 49 17.24	2021 105,504,286 53,188,403 17,324,896 249,826 17,574,722 16,852,811 � 16,852,811 16,632,770 16,852,759 52 16,632,718 52 33.00
Earningsper share	6.71	8.57	13.36

-121-

-120-

2.2. Condensed Statement of Comprehensive Income – Parent Company

2.2. Condensed Statement of Comprehensive Income – Parent Company	2.2. Condensed Statement of Comprehensive Income – Parent Company	2.2. Condensed Statement of Comprehensive Income – Parent Company	2.2. Condensed Statement of Comprehensive Income – Parent Company	2.2. Condensed Statement of Comprehensive Income – Parent Company	2.2. Condensed Statement of Comprehensive Income – Parent Company
Unit: NT$thousands
Year Item	2017	2018	2019	2020	2021
Operating revenue Gross Profit Operating income Non-operating income Net income before income tax, net Income From Operations of Continued Segments Net Income for the year Other comprehensive income (Loss), net Total Comprehensive income for the year	30,043,540 12,168,244 898,802 2,703,351 3,602,153 3,392,153 3,392,153 (2,001,992) 1,390,161	32,194,291 13,288,095 699,986 3,938,782 4,638,768 4,350,768 4,350,768 703,483 5,054,251	40,845,708 16,202,655 1,316,005 5,912,278 7,228,283 6,790,283 6,790,283 (660,212) 6,130,071	56,426,751 22,535,979 3,282,942 6,070,535 9,353,477 8,793,477 8,793,477 (1,368,265) 7,425,212 17.24	68,352,652 32,982,757 4,199,739 13,358,020 17,557,759 16,852,759 16,852,759 (220,041) 16,632,718 33.00
Earningsper share	6.71	8.57	13.36

3. Name of Auditors and Issued Opinions in the recent five years

Year	Name of Auditors(CPA)	Auditor Opinion
2017	Hsueh,Seou-Hung,Li,Tien-Yi	Unqualified Opinions
2018	Hsueh,Seou-Hung,Li,Tien-Yi	Unqualified Opinions
2019	Lin,Yu-Kuan,Tsang,Kwok-Wah	Unqualified Opinions
2020	Lin,Yu-Kuan,Cheng,Ya-Huei	Unqualified Opinions
2021	Cheng,Ya-Huei,Lin,Yu-Kuan	Unqualified Opinions

-122-

-121-

II. Financial Analysis in the Recent Five Years

1. Consolidated Financial Analysis

1. Consolidated Financial Analysis	1. Consolidated Financial Analysis
Year Item		2017 2018 2019 2020 2021
Capital Structure	Debt ratio (%) Long-term fund to Property, plant and equipment (%)	58.21 57.68 62.91 62.26 61.52 720.53 776.40 854.91 718.59 672.87
Liquidity	Current ratio (%) Quick ratio (%) Times interest earned(times)	152.74 157.38 146.21 144.83 146.62 132.98 138.43 128.67 125 117.36 24.77 34.63 45.46 59.47 171.22
Operating Performance	Average collection turnover (times) Average collection days Inventory turnover (times) Payment turnover (times) Average inventory turnover days Fixed assets turnover (times) Property, plant and equipment turnover(times)	6.35 6.32 6.74 6.4 7.07 57 58 54 57 52 4.29 3.98 4.57 4.88 3.78 4.83 4.64 4.95 4.69 4.63 85 92 80 75 97 13.11 14.13 17.96 19.69 19.62 0.77 0.82 0.92 1.02 1.17
Profitability	Return on total assets (%) Return on stockholders’ equity (%) Profit before tax to paid-in capital (%) Profit after tax to net sales (%) Earnings per share (NT$)	6.56 8.1 10.54 11.79 18.90 15.18 18.71 26.17 31.01 49.26 71.59 91.65 142.41 183.2 344.14 8.13 9.49 11.17 11.30 15.97 6.71 8.57 13.36 17.24 33.00
Cash Flow	Cash flow ratio (%) Cash flow adequacy ratio (%) Cash flow reinvestment ratio(%)	12.73 25.20 27.86 33.47 31.19 100 109.92 124.89 143.56 128.26 4.58 17.53 26.05 27.31 23.78
Leverage	Operating leverage Financial leverage	5.51 5.31 4.11 3.79 3.02 1.05 1.03 1.02 1.01 1.00
Analysis of Changes equal to or over 20% in the recent two years: Increase in Times interest earned: Mainly due to increase in net income. Decrease inInventory turnover (times) and increase in Average inventory turnover days: Mainly due to increase in inventories. Increase inprofitability: Mainlydue to increase in net income.

-123-

-122-

2. Financial Analysis-Parent Company

2. Financial Analysis-Parent Company	2. Financial Analysis-Parent Company
Year Item		2017 2018 2019 2020 2021
Capital Structure	Debt ratio (%) Long-term fund to Property, plant and equipment(%)	56.74 54.36 59.64 57.94 57.55 832.76 882.03 931.66 763.62 699.96
Liquidity	Current ratio (%) Quick ratio (%) Times interest earned(Times)	44.63 48.59 58.38 54.07 64.45 28.10 33.81 43.05 37.77 40.12 25.72 34.55 50.31 66.31 192.93
Operating Performance	Average collection turnover (Times) Average collection days Inventory turnover (times) Payment turnover (times) Average inventory turnover days Fixed assets turnover (times) Property, plant and equipment turnover(times)	6.00 5.66 6.14 6.49 7.07 60 64 59 56 52 4.22 3.92 4.34 4.91 3.58 4.67 4.60 4.87 4.82 4.56 86 93 84 74 102 11.16 11.61 13.88 16.01 13.78 0.61 0.61 0.67 0.82 0.84
Profitability	Return on total assets (%) Return on stockholders’ equity (%) Profit before tax to paid-in capital (%) Profit after tax to net sales (%) Earningsper share(NT$)	7.18 8.57 11.40 12.97 20.94 15.18 18.71 26.18 31.02 49.27 71.11 91.29 142.26 183.15 343.8 11.29 13.51 16.62 15.58 24.65 6.71 8.57 13.36 17.24 33.00
Cash Flow	Cash flow ratio (%) Cash flow adequacy ratio (%) Cash flow reinvestment ratio (%)	6.99 16.13 10.06 38.88 27.02 71.41 74.81 59.46 102.41 95.03 -2.09 6.10 1.26 28.10 14.30
Leverage	Operating leverage Financial leverage	13.72 19.19 12.50 6.97 7.88 1.19 1.25 1.12 1.04 1.02
Analysis of Changes equal to or over 20% in the recent two years: Increase in Times interest earned: Mainly due to increase in net income. Decrease inInventory turnover (times) and increase in Average inventory turnover days: Mainly due to increase in inventories. crease in profitability: Mainly due to increase in net income. Decrease in Cash flow ratio and Cash flow reinvestment ratio: Mainlydue to increase in investment and dividends.

-124-

-123-

Glossary:

Capital Structure Analysis:
(1). Debt ratio = Total liabilities / Total assets
(2). Long-term fund to property, plant and equipment ratio = (Shareholders’ equity + non-current liabilities) / Net property, plant and equipment
Liquidity Analysis:
(1). Current ratio = Current assets / Current liabilities
(2). Quick ratio = (Current assets – inventories – prepaid expenses) / Current liabilities
(3). Times interest earned = Earnings before interest and taxes / Interest expenses
Operating Performance Analysis:
(1). Average collection turnover = Net sales / Average trade receivables

(2). Days sales outstanding = 365 / Average collection turnover

(3). Average inventory turnover = Operating costs / Average inventory

(4). Average payment turnover = operating costs / Average trade payables

(5). Average inventory turnover days = 365 / Average inventory turnover

(6). Property, plant and equipment turnover = Net sales / Average property, plant and equipment

(7). Total assets turnover = Net sales / total assets

Profitability Analysis:

(1). Return on total assets = [Net income + Interest expenses x (1 – tax rate)] / Average total assets

(2). Return on equity attributable to shareholders of the parent = Net income attributable to shareholders of the parent / Average equity attributable to shareholders of the parent

(3). Net margin = Net income / Net sales

(4). Earnings per share = (Net income attributable to shareholders of the parent – preferred stock dividend) / Weighted average number of shares outstanding

Cash Flow:
(1). Cash flow ratio = Net cash provided by operating activities / Current Liabilities
(2). Cash flow adequacy ratio = Five-year sum of cash from operations / Five-year sum of capital expenditures, inventory additions, and cash dividend
(3). Cash flow reinvestment ratio = (Cash provided by operating activities – cash dividends) / (Gross property, plant and equipment + long-term investments + other noncurrent assets + working capital)
Leverage:

(1). Operating leverage = (Net sales – variable cost) / Operating income

(2). Financial leverage = Operating income / (Operating income – interest expenses)

III. Has the company or its affiliates experienced financial difficulties in the most recent years up to the date of publication of the 2021 annual report: None.

-125-

-124-

IV. Audit Committee’s Review Report

Audit Committee’s Review Report

The Company's 2021 business report, financial statements and distribution of retained earnings have been prepared by the Board of Directors. The financial statements also have been audited by Pricewaterhouse Coopers' with the opinion that they present fairly the Company’s financial position, operating performance, and cash flows. The Audit Committee has reviewed the business report, financial statements, and distribution of retained earnings, and found no irregularities. We hereby according to Securities and Exchange Act and Company Act submit this report.

To 2022 Annual Shareholders’ Meeting.

Realtek Semiconductor Corp.

Chairman of the Audit Committee: Chen, Fu-Yen

March 18, 2022

-126-

-125-

V. Consolidated Financial Statements

��

�� �� ��

��

-126-

��

��
��
��

��

-127-

��

-128-

��

��
��
��
��
��
��

��

-129-

��

��

��

-130-

��

�� �� �� �� �� � �� � �� �� �� �� � �� �� �� � �� �� �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � �� � �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� �� �� �� � �� � �� �� �� �� �� � �� � �� �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� � �� � �� �� �� �� �� �� �� �� � �� ��	��	��
		�
�� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� ��
		��

��

-131-

��

��
��
��
��
�
��
�
��
�
��
��
�
��
��
��
��
�
��
�
��
�
��
�
��
��
��
��
�
��
�
��
�
��
��
��
��
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
��
�
��
��
��
��
��
��
��
��
�
�
�
��
��
�
��
�
��
��
�
��
�
��
�
��
�
��
��
�
��
�
��
�
��
�
��
��
��
��
��
��
�
��
�
��
��
�
��
�
��
��
�
��
�
��
�
��
�
��
��
��
��
��
�
��
��
��
�
��
��
��
��
��
�
��
�
��
��
��
��
�
�
��
�
��
��

��
��
��

��
��

��
��
��
��
��
��

��
��

��
��

��
��
��
��
��
��

��
��
��
��
��

��
��

��
��

��
��
��
��

��
��
��
��
��
��

��
��
��

��
��
��

��
��
��
��
��
��
��

��
��
��
��
��
��
��
��
��
��
��

��
��

��

-132-

��

				��	��	��	��
				��			��
	��	��		��	�		��	�
��	��	��		�� �� �			�� ��
��	��	��	�	��		�� ��			��
��	��		�� �� �� ��
	��	��
��	��		�	��		�� ��			�
��	��
	��		�	��		�� ��			�
��	��
	��		�	��		�� ��			��
��	��	��	�	��		�� ��			�
��	��		�	��		�� ��			��
��	��		�� �� �� ��
	��
	��
��	��	��	�� � �� �
��	��	��	�� � �� �
��	��	��	�	��		�� ��			�
��	��	��	�	��		�� ��			�
��	��	��
	��
	��		�	��		�� ��			�
��	��
	��		�� � �� �
��	��		�� �� �� ��
��	��	��	�	��		�� ��			�
��	��			�� �� �			�� ��

��

-133-

��

						��	��	��	��
					��				��
	��		��		��		�		��	�
	�� �� ��
	��
	��
��	�� ��
	��					� ��			��	�
��	��
	��
	��
	��
	��			�� � ��						�
��	��
	��
	��
	��
	��
	��
	��			� � ��						�
��	��
	��
	��
	��			�� � ��						�
	��
	��
	��
��	�� ��
	��			�	��			��	��	�
��	��
	��
	��			�	��			��	��	�
��	��			�	��			��	��	�
��	��
	��				�� ��				��	��
��	�� ��
	��				�� ��				��	��
��	��			�� � ��						�
	��				�� ��				��	��
	��
��	�� ��
	��				�� ��				��	��
��	��			�� � ��						�
	��
	��				�� ��				��	��
��	�� �� �� ��									��
��	��	��					��			��

��

-134-

												��		��	��	� ��	��		�	�	� ��	��	� ��	� ��		��	��	��		��	��	� ��	��		�	� ��	� ��	� ��		��	��	��
											��	��		� ��	��	�	��		�	�	�	�	�	� ��		�	�	� ��		� ��	��	�	��		�	�	�	� ��		�	�	� ��
��	��	��	��	��	�� ��	��	��	�� ��	�� ��	�� ��	�� �� ��	�� �� �� �� �� �� ��		�� �� � �� � � �� ��	� � � �� � � ��	� � � � �� �� �� ��	� � � �� � �� �� ��		� �� � � �� � � �	� � �� �� � � �	� � � � �� � � � ��	�� � � � � � ��	� �� � � � � � � ��	� � � � � � �		�� � � � � � ��	�� � � � � � ��	�� �� �� � ��		�� �� �� � ��	� � � �� � � ��	� � � � � �� �� ��	� � � �� � �� ��		� � �� �� � � �	� � � � �� � � � ��	� �� � � � � � � ��	� � � � � � �		�� � � � � � ��	�� � � � � � ��	�� �� � ��
												��		��	�	�	�		�	�	�	��	�	�		�	�	��		��	�	�	�		�	�	�	�		�	�	��
												��				��			��	��	��	��	��		��		��					��			��	��	��		��		��
													��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��

-135-

��

��
��
��
��
��

��

��

��

��

��

��
��

��
��

��
��

��

��

��

��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��

��

-136-��

��

��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��

��

��
��
��

��
��
��
��
��

��

��

��

��
��
��
��
��
��
��
��

��

-137-��

��

1. ��

��

2. ��

��
��
(1) ��

��

��
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4,�Extension of the temporary exemption from applying IFRS 9� Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,�Interest Rate Benchmark Reform�Phase 2� Amendment to IFRS 16,�Covid-19-related rent concessions beyond 30 June 2021�	January 1, 2021 January 1, 2021 April 1, 2021(Note)

Note�Earlier application from January 1, 2021 is allowed by FSC.

��

��

(2) ��

��

-138-

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3,�Reference to the conceptual framework� Amendments to IAS 16,�Property, plant and equipment: proceeds before intended use� Amendments to IAS 37,�Onerous contracts�cost of fulfilling a contract� Annual improvements to IFRS Standards 2018�2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

��

(3) ��

��

New Standards,Interpretations and Amendments

Effective date by
International Accounting
Standards Board

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�
Amendments to IFRS 17, 'Insurance contracts'
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9�
comparative information'
Amendments to IAS 1,�Classification of liabilities as current
or non-current�
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�

To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

��

4. ��

��

(1) ��

��

-139-

(2) ��

��
��
��
��

(3) ��

��
��
��
��
��
��

��

-140-

��

Name of investor	Name of subsidiary	Main business activities	Ownership (%)	Ownership (%)	Description
			December 31, 2021	December 31, 2020
Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation	Leading Enterprises Limited Amber Universal Inc. Realtek Singapore Private Limited Bluocean Inc. Talent Eagle Enterprise Inc. Realtek Investment Singapore Private Limited Realsun Investment Co., Ltd. Hung-wei Venture Capital Co., Ltd. Realking Investments Co., Ltd.	Investment holdings � ICs manufacturing, design, research, development, sales, and marketing Investment holdings � � � � �	100% 100% 100% 100% 100% 100% 100% 100% 100%	100% 100% 100% 100% 100% 100% 100% 100% 100%

��

-141-

Name of investor	Name of subsidiary	Main business activities	Ownership (%)	Ownership (%)	Description Note
			December 31, 2021	December 31, 2020
Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Leading Enterprises Limited Leading Enterprises Limited Amber Universal Inc. Amber Universal Inc. Empsonic Enterprises Inc.	Realsun Technology Corporation Bobitag Inc. AICONNX Technology Corporation Realtek Semiconductor (Japan) Corp. Circon Universal Inc. Realtek Semiconductor (Hong Kong) Limited Realtek Semiconductor (Shen Zhen) Corp. Realsil Microelectronics Corp.	ICs manufacturing, design, research, development, sales, and marketing Manufacture and installation of computer equipment and wholesale, retail and related service of electronic materials and information / software ICs manufacturing, design, research, development, sales, and marketing ICs design,sales and consultancy Investment holdings Information services and technical support R&D and technical support �	100% 67% 100% 100% 100% 100% 100% 100%	100% 67% - 100% 100% 100% 100% 100%

��

-142-

Name of investor	Name of subsidiary	Main business activities	Ownership (%)	Ownership (%)	Description
			December 31, 2021	December 31, 2020
Talent Eagle Enterprise Inc. Realtek Singapore Private Limited Realtek Singapore Private Limited Realtek Singapore Private Limited Realtek Singapore Private Limited Realtek Singapore Private Limited Realtek Singapore Private Limited Realsil Microelectronics Corp. Realsil Microelectronics Corp. Realtek Semiconductor (Shen Zhen) Corp. Bluocean Inc.	Ubilinx Technology Inc. Cortina Access Inc. Cortina Systems Taiwan Limited Cortina Network Systems Shanghai Co., Ltd. Empsonic Enterprises Inc. Realtek Viet Nam Co., Ltd. RayMX Microelectronics Corp. RayMX Microelectronics Corp. Suzhou PanKore Integrated Circuit Technology Co. Ltd. Suzhou PanKore Integrated Circuit Technology Co. Ltd. Realtek Semiconductor (Malaysia) Sdn. Bhd.	R&D and information services � R&D and technical support � Investment holdings R&D and technical support ICs manufacturing, design, research, development, sales, and marketing � � � R&D and technical support	100% 100% 100% 100% 100% 100% 19% 81% 80% 20% 100%	100% 100% 100% 100% 100% 100% 19% 81% 80% 20% 100%

��

-143-

  - ���������������������������������������������������������������������������

  - ����������������������������������������������������������������������������

  - �������������������������������������������������������������������������

  - ����������������������������������

  - �����������������������������������������������������������������������������������������

(4) ��
��
��
- ��
- ��
- ��
- ��
��
- ��
- ��
- ��
- ��

��

-144-

  - �������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������� �������������������������

  - ��������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������ �����������������������

(5) ��
- ��
- ��
- ��
- ��
- ��
- ��
��
��
��
��
��

��

(6) ��
��

(7) ��

��

��

-145-

��
��
��
��
(8) ��
��
��
��
(9) ��
��
(10) ��
��
��
(11) ��
��

��

-146-

(12) ��

��

(13) ��

��

(14) ��

��
��
��
��
��
��

��

-147-

��

��
��
(15) ��
��
��
��
��
(16) ��
��
��
- ��

��

-148-

  - ���������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������� �����������������������

��
- ��
- ��
(17) ��

��

(18) ��
��
- ��
��
- ��
��
- ��
(19) ��
��
��

��

-149-

��

(20) ��

��

(21) ��

��
��

(22) ��

��
(23) ��
��

(24) ��

��
��
��
��
- ��
��
- ��

��

-150-

��

     - ������������������������������������������������������������������������������������������ �������������������������������������������������������������������������������

��
- ��
(25) ��
��
��
��

��

-151-

��
��
(26) ��
��
(27) ��
��
(28) ��
��
- ��
- ��
- ��
��
- ��

��

-152-

(29) ��

��

(30) ��

��

5. ��

��

(1) ��

��

(1) ��

��
��
��

6. ��

(1) ��

�� ��
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December 31,2021 910 $ 7,113,048 83,393 7,197,351 $	December 31,2020
		1,011 $ 7,210,606 84,743
		7,296,360 $

��

-153-

��

(2) ��

��
Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Beneficiary certificates	December 31,2021 358,892 $ 1,593,755 1,952,647 $	December 31,2020
		298,615 $ 782,042
		1,080,657 $

��

��
Financial assets mandatorily measured at fair value through profit or loss Equity instruments Beneficiary certificates	Year ended December 31,2021 102,751 $ 11,613 114,364 $	Year ended December 31,2020
		229,614 $ 1,856
		231,470 $

��

(3) ��

Items		December 31,2021		December 31,2020
Non-current items: Equity instruments Listed stocks Emerging stocks Unlisted stocks		788,460 $ 36,046 2,820,372 3,644,878 $		571,496 $ 16,355 2,031,480
				2,619,331 $

�� on December 31, 2021 and 2020, respectively.

��

-154-

��

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income	Year ended December 31,2021 995,872 $	Year ended December 31,2020
		829,923 $

��he Group has no financial assets��

(4) ��

��he Group has no financial assets�� �� ��	�	��	�	��
Items		December 31,2021		December 31,2020
Current items: Time deposits Non-current items: Time deposits		43,740,876 $ 80,101 $		35,330,346 $ 79,657 $

��
��

(5) ��

��
	December 31,2021		December 31,2020
Accounts receivable	$	12,877,169	$	10,917,737
Accounts receivable - related parties		3,210,546		2,830,691
Less: Allowance for bad debts	(	98,710)	(	95,360)
	$	15,989,005	$	13,653,068

��

Not past due Up to 30 days 31 to 90 days Over 90 days	December 31,2021 15,874,298 $ 210,889 2,067 461 16,087,715 $	December 31,2020
		13,471,549 $ 269,996 6,449 434
		13,748,428 $

��

��December 31, 2021 and 2020,��
��
��he Group has no��
��

��

-155-

(6) ��

��
Raw materials Work in process Finished goods Raw materials Work in process Finished goods		December 31,2021
	Allowance for obsolescence and Cost market value decline 1,181,719 $ 7,322) ($ 8,666,087 623,852) ( 7,815,457 483,377) ( 17,663,263 $ 1,114,551) ($ December 31,2020		Book value
			1,174,397 $ 8,042,235 7,332,080
			16,548,712 $

	Allowance for obsolescence and Cost market value decline 1,308,241 $ 20,696) ($ 6,342,702 645,173) ( 2,121,699 483,796) ( 9,772,642 $ 1,149,665) ($		Book value
			1,287,545 $ 5,697,529 1,637,903
			8,622,977 $

�� ended December 31, 2021 and 2020��

	��
(7)	�� Year ended December 31,2021 Cost of inventories sold and others 51,952,047 $ (Gain on reversal of) loss on decline in market value, obsolete and slow-moving Inventory 30,051) ( Loss on scrap inventory 393,887 52,315,883 $ December 31,2021 Technology Partner V Venture Capital Corporation - $ Estinet Technologies Incorporation 5,081 Innorich Venture Capital Corp. 142,619 Starmems Semiconductor Corp. 43,677 191,377 $	Year ended December 31,2020
		43,984,825 $ 318,025 207,881
		44,510,731 $
		December 31,2020 255 $ 9,158 147,441 - 156,854 $

��$12,113 and $30,980 for the years ended December 31, 2021 and 2020, respectively.
��
��

��

-156-

��

(8) ��

��	��	��
At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Disposals Reclassifications Depreciation Net exchange difference At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Disposals Reclassifications Depreciation Net exchange difference At December 31 At December 31, 2020 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment Others Total 387,280 $ 3,414,624 $ 3,838,068 $ 3,290,307 $ 333,113 $ 1,111,004 $ 12,374,396 $ - 1,413,842) ( 3,429,011) ( 2,195,086) ( 207,520) ( 680,405) ( 7,925,864) ( 387,280 $ 2,000,782 $ 409,057 $ 1,095,221 $ 125,593 $ 430,599 $ 4,448,532 $ 387,280 $ 2,000,782 $ 409,057 $ 1,095,221 $ 125,593 $ 430,599 $ 4,448,532 $ - 16,140 356,412 686,676 161,590 1,514,187 2,735,005 - 146) ( - 10) ( 167) ( 73) ( 396) ( 102,090 42,767 - - - 144,857) ( - - 114,392) ( 126,350) ( 493,922) ( 50,054) ( 99,321) ( 884,039) ( - 4,286 302 161 31 944) ( 3,836 489,370 $ 1,949,437 $ 639,421 $ 1,288,126 $ 236,993 $ 1,699,591 $ 6,302,938 $ 489,370 $ 3,466,696 $ 4,185,792 $ 3,926,851 $ 492,603 $ 2,477,232 $ 15,038,544 $ - 1,517,259) ( 3,546,371) ( 2,638,725) ( 255,610) ( 777,641) ( 8,735,606) ( 489,370 $ 1,949,437 $ 639,421 $ 1,288,126 $ 236,993 $ 1,699,591 $ 6,302,938 $ Land Buildings Machinery Test equipment Office equipment Others Total - $ 3,222,502 $ 3,899,552 $ 2,623,658 $ 280,814 $ 850,212 $ 10,876,738 $ - 1,305,695) ( 3,529,856) ( 1,809,993) ( 176,813) ( 608,219) ( 7,430,576) ( - $ 1,916,807 $ 369,696 $ 813,665 $ 104,001 $ 241,993 $ 3,446,162 $ - $ 1,916,807 $ 369,696 $ 813,665 $ 104,001 $ 241,993 $ 3,446,162 $ 387,280 160,674 132,151 696,848 53,893 297,232 1,728,078 - 7) ( - 23) ( 162) ( 7) ( 199) ( - 26,110 5) ( 1,696 - 27,801) ( - - 108,601) ( 94,750) ( 416,378) ( 32,250) ( 79,708) ( 731,687) ( - 5,799 1,965 587) ( 111 1,110) ( 6,178 387,280 $ 2,000,782 $ 409,057 $ 1,095,221 $ 125,593 $ 430,599 $ 4,448,532 $ 387,280 $ 3,414,624 $ 3,838,068 $ 3,290,307 $ 333,113 $ 1,111,004 $ 12,374,396 $ - 1,413,842) ( 3,429,011) ( 2,195,086) ( 207,520) ( 680,405) ( 7,925,864) ( 387,280 $ 2,000,782 $ 409,057 $ 1,095,221 $ 125,593 $ 430,599 $ 4,448,532 $
		4,448,532 $

��

-157-

� (9) ��

��
��

Land Buildings Transportation equipment Land Buildings Transportation equipment	Carrying	amount
	December 31,2021 December 31,2020 1,370,790 $ 1,398,253 $ 215,177 249,168 1,943 - 1,587,910 $ 1,647,421 $ Depreciation	December 31,2020
		1,398,253 $ 249,168 -
		1,647,421 $
	Year ended December 31,2021 27,376 $ 81,295 1,644 110,315 $	Year ended December 31,2020
		26,828 $ 79,389 -
		106,217 $

��
��

		Year ended		Year ended
	December 31,2021		December 31,2020
Items affecting profit or loss
Interest expense on lease liabilities	$	28,590	$	28,913
��
��

��

-158-

(10) ��

��
			Buildings
		2021			2020
At January 1
Cost	$		81,499	$	80,799
Accumulated depreciation and impairment	(		35,809)	(	31,663)
	$		45,690	$	49,136
At January 1	$		45,690	$	49,136
Depreciation	(		3,858)	(	3,807)
Net exchange difference	(		191)		361
At December 31	$		41,641	$	45,690
At December 31
Cost	$		81,152	$	81,499
Accumulated depreciation and impairment	(		39,511)	(	35,809)
	$		41,641	$	45,690

��

��
Rental income from the lease of the investment property Operating expenses arising from the investment property that generated rental income during the period	Year ended December31,2021 2,231 $ 3,858 $	Year ended December 31,2020
		1,127 $
		3,807 $

��

��

-159-

(11) ��

��
		Computer		Intellectual
		software		property		Goodwill		Others		Total
At January 1, 2021
Cost	$	5,088,065	$	4,900,421	$	639,561	$	275,206	$	10,903,253
Accumulated amortisation
and impairment	(	3,987,796)	(	3,981,733)	(	639,561)	(	226,839)	(	8,835,929)
	$	1,100,269	$	918,688	$	-	$	48,367	$	2,067,324
2021
At January 1	$	1,100,269	$	918,688	$	-	$	48,367	$	2,067,324
Additions		551,638		906,330		-		14,176		1,472,144
Amortisation	(	749,514)	(	532,557)		-	(	20,588)	(	1,302,659)
Net exchange difference	(	38)	(	3,959)		-	(	1,118)	(	5,115)
At December 31	$	902,355	$	1,288,502	$	-	$	40,837	$	2,231,694
At December 31, 2021
Cost	$	5,639,381	$	5,805,930	$	639,561	$	281,520	$	12,366,392
Accumulated amortisation
and impairment	(	4,737,026)	(	4,517,428)	(	639,561)	(	240,683)	(	10,134,698)
	$	902,355	$	1,288,502	$	-	$	40,837	$	2,231,694
		Computer		Intellectual
		software		property		Goodwill		Others		Total
At January 1, 2020
Cost	$	4,083,596	$	4,500,995	$	645,724	$	291,141	$	9,521,456
Accumulated amortisation
and impairment	(	3,307,376)	(	3,550,602)	(	498,707)	(	211,811)	(	7,568,496)
	$	776,220	$	950,393	$	147,017	$	79,330	$	1,952,960
2020
At January 1	$	776,220	$	950,393	$	147,017	$	79,330	$	1,952,960
Additions		1,006,607		397,771		-		-		1,404,378
Reclassifications		540		-		-	(	572)	(	32)
Amortisation	(	683,120)	(	431,854)		-	(	27,248)	(	1,142,222)
Impairment		-		-	(	140,854)		-	(	140,854)
Net exchange difference		22		2,378	(	6,163)	(	3,143)	(	6,906)
At December 31	$	1,100,269	$	918,688	$	-	$	48,367	$	2,067,324
At December 31, 2020
Cost	$	5,088,065	$	4,900,421	$	639,561	$	275,206	$	10,903,253
Accumulated amortisation
and impairment	(	3,987,796)	(	3,981,733)	(	639,561)	(	226,839)	(	8,835,929)
	$	1,100,269	$	918,688	$	-	$	48,367	$	2,067,324

��

Operating costs Operating expenses	Year ended December 31,2021 1,374 $ 1,301,285 1,302,659 $	Year ended December 31,2020
		6,080 $ 1,136,142
		1,142,222 $

��

-160-

(12) ��

��

Impairment loss�Goodwill	Year ended December 31,2020	Year ended December 31,2020
	Recognised in profit or loss	Recognised in other comprehensive income
	140,854 $	- $

��
��
��

��

(13) ��

��
Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December 31,2021 13,342,100 $ December 31,2020 11,456,690 $	Interest rate range 0.42%~0.57% Interest rate range 0.57%~0.60%	Collateral
			None Collateral
			None

��

-161-

(14) ��

��
Accrued salaries and bonus Payable for employees' compensation Other accrued expenses Payables on equipment Payables on software and intellectual property Others	December 31,2021 9,641,868 $ 11,117,412 1,927,958 283,796 1,445,930 228,177 24,645,141 $	December 31,2020
		5,286,534 $ 6,145,470 1,850,766 58,959 1,152,591 171,133
		14,665,453 $

� (15) ��

Type of borrowings Borrowing period repayment term Interest rate range Collateral December 31, 2021 Loan for Accelerated Repayable in 2021/11/8 Investment by Domestic instalment over 0.3%�0.8% None ~2026/12/15 Corporations (Note) the agreed period $ 1,002,799

��

��

(16) ��

��

��

-162-

��

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	December 31,2021	December 31,2020
	628,846) ($ 534,371 94,475) ($	600,923) ($ 501,842 99,081) ($

��

At January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31			2021
	Present value of defined benefit obligations		Fair value of plan assets	Net defined benefit liability
	600,923) ( 1,079) ( 2,056) ( 604,058) ( - 34,449) ( 29,040 30,534) ( 35,943) ( - 11,155 628,846) ($	501,842 - 1,741 503,583 35,943 - - - 35,943 6,000 11,155) ( 534,371 $		99,081) ( 1,079) ( 315) ( 100,475) ( 35,943 34,449) ( 29,040 30,534) ( - 6,000 - 94,475) ($

��

-163-

At January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31			2020
	Present value of defined benefit obligations		Fair value of plan assets	Net defined benefit liability
	595,932) ($ 1,580) ( 4,727) ( 602,239) ( - 3,573) ( 17,863) ( 13,726) ( 35,162) ( - 36,478 600,923) ($	522,312 $ - 4,098 526,410 5,910 - - - 5,910 6,000 36,478) ( 501,842 $		73,620) ($ 1,580) ( 629) ( 75,829) ( 5,910 3,573) ( 17,863) ( 13,726) ( 29,252) ( 6,000 - 99,081) ($

��

��

Discount rate Future salary increases	Year ended December 31,2021	Year ended December 31,2020
	0.75%	0.3%
	4.75%	4.75%

��

-164-

December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation		Discount rate	Discount rate	Future salaryincreases	Future salaryincreases	Future salaryincreases
		Increase by 0.25%	Decrease by 0.25%	Increase by 0.25%		Decrease by 0.25%
		16,290 $ 16,617 $	16,894) ($ 17,201) ($	15,888) ($ 16,104) ($		15,415 $ 15,599 $

��
��

�� �� �� �� ��	�� �� �� �� ��	�� �� �� �� ��
��
��
Within 1 year	$	297,815
2-5 year(s)		119,175
5-10 years		209,134
	$	626,124

��
��
�� 290,735,��

��

-165-

(17) ��

��
		2021		2020
At January 1	$	1,018,706	$	1,075,809
Effect of exchange rate	(	29,231)	(	57,103)
At December 31	$	989,475	$	1,018,706

��31��

(18) ��

�� 31��

��

��
At January 1 Employees�compensation transferred to common shares At December 31	2021 510,684 - 510,684	2020
		508,095 2,589
		510,684

��
��

(19) ��

��

-166-

��

��	��
Sharepremium At January 1 2,060,376 $ Cash from capital surplus 1,021,370) ( Change in associates accounted for under equity method - Cash dividends returned - At December 31 1,039,006 $ Sharepremium At January 1 2,688,155 $ Employees�compensation transferred to common stock 393,591 Cash from capital surplus 1,021,370) ( Change in associates accounted for under equity method - Cash dividends returned - At December 31 2,060,376 $		2021
		Change in associates accounted for under equitymethod 61,035 $ - 226 - 61,261 $ 2020
		Change in associates accounted for under equitymethod 48,272 $ - - 12,763 - 61,035 $

(20) ��

A. ��

��

-167-

��

��
��
�� The appropriation of 2020 and 2019 �� on August 9, 2021 and June 10, 2020, respectively. Details are summarized below:

Dividends per share Amount (in dollars) - $ - $ 1,339,013 - 6,128,219 12.00 7,467,232 $ 12.00 $ 2020	2019	2019
Amount - $ 1,339,013 6,128,219 7,467,232 $	Amount 674,907 $ 217,036 4,596,164 5,488,107 $	Dividends per share (in dollars)
		- $ - 9.00
		9.00 $

��
(21) ��

��
At January 1 Revaluation: �Group Currency translation differences: �Group At December 31		2021
	Unrealised Currency gains on valuation translation difference Total 1,384,909 $ 2,940,958) ($ 1,556,049) ($ 995,872 - 995,872 - 1,215,913) ( 1,215,913) ( 2,380,781 $ 4,156,871) ($ 1,776,090) ($		Total

��

-168-

At January 1 Revaluation: �Group �Associates Currency translation differences: �Group At December 31		2020

(22) ��

��
�� Year ended December 31,2021 Revenue from contracts with customers 105,504,286 $	Year ended December 31,2020
	77,759,470 $

��

��
�� Year ended December 31, 2021 Revenue from external customer contracts Timing of revenue recognition At a point in time Year ended December 31, 2020 Revenue from external customer contracts Timing of revenue recognition At a point in time	Integrated circuitproducts 105,374,969 $ 105,374,969 $ Integrated circuitproducts 77,588,285 $ 77,588,285 $	Others 129,317 $ 129,317 $ Others 171,185 $ 171,185 $	Total
			105,504,286 $
			105,504,286 $
			Total
			77,759,470 $
			77,759,470 $

�� At a point in time 77,588,285 $ 171 $	�� At a point in time 77,588,285 $ 171 $	�� At a point in time 77,588,285 $ 171 $	�� At a point in time 77,588,285 $ 171 $	�� At a point in time 77,588,285 $ 171 $	�� At a point in time 77,588,285 $ 171 $	,1	85 77,759,47 $
��
	December 31,2021		December 31,2020				January1,2020
Contract liabilities�
advance sales receipts	211,100 $	$		336,254	$		104,947
��	��
��
				Year ended			Year ended
			December 31,2021			December 31,2020
Contract liabilities�advance sales receipts		$		269,069	$		98,318

��	��

��

-169-

��

�� ��
�� Refund liabilities�current Interest income from bank deposits	December31,2021 7,521,493 $ Year ended December 31,2021 326,399 $	December31,2020
		7,386,910 $
		Year ended December 31,2020 833,821 $

(23) ��

(24) ��

Dividend income Grant income Other income	Year ended December 31,2021 43,713 $ 53,621 116,093 213,427 $	Year ended December 31,2020 24,877 $ 60,635 91,453 176,965 $

(25) ��

�� Gains (losses) on disposal of property, plant and equipment Gains (losses) on disposal of investments Net currency exchange losses Gains on financial assets at fair value through profit or loss Impairment losses of intangible assets Other (losses) income Gains arising from lease modifications Interest expense Bank borrowings Lease liabilities	Year ended December 31,2021 196) ($ 145) ( 109,466) ( 114,364 - 176,040) ( 236 171,247) ($ Year ended December 31,2021 78,050 $ 28,590 106,640 $	Year ended December 31,2020 1,501 $ 466 206,408) ( 231,470 140,854) ( 4,497 - 109,328) ($ Year ended December 31,2020 124,983 $ 28,913 153,896 $	Year ended December 31,2020

(26) ��

��

-170-

(27) ��

��
Employee benefit expenses Depreciation Amortisation	Year ended December 31,2021 27,400,484 $ 998,212 $ 1,302,659 $	Year ended December 31,2020
		17,418,281 $
		841,711 $
		1,142,222 $

(28) ��

�� Employee benefit expenses Depreciation Amortisation	27,400,484 $ 998,212 $ 1,302,659 $	17,418,281 $ 841,711 $ 1,142,222 $
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Total	Year ended December 31,2021 26,163,019 $ 662,438 331,831 243,196 27,400,484 $	Year ended December 31,2020
		16,381,081 $ 505,515 292,944 238,741
		17,418,281 $

��
��
��
��agreed��
��

��

-171-

(29) ��

��

�� ��
					Year ended			Year ended
				December 31,2021			December 31,2020
Current income tax:
Current income tax on profit for		the period		$		934,395	$	625,190
Tax on undistributed earnings						64,850		63,048
Prior year income tax overestimation			(			276,529)	(	121,055)
Total current income tax						722,716		567,183
Deferred income tax:
Origination and reversal of temporary
differences			(			805)	(	4,564)
Income tax expense				$		721,911	$	562,619
��				��
				Year	ended December		Year ended December
					31,2021			31,2020
Income tax calculated based on income before tax			$		3,528,450		$	1,873,197
Expenses disallowed by tax regulation and
effects from tax-exempt income			(		2,594,860)		(	1,252,571)
Prior year income tax overestimation			(			276,529)	(	121,055)
Tax on undistributed earnings						64,850		63,048
Income tax expense			$			721,911	$	562,619
��
��
					2021
		January1			loss			December 31
Deferred income tax assets:
�Temporary differences:
Unrealised loss on
market price decline
and obsolete and
slow-moving
inventories and
others	$	169,876		$		1,445	$	171,321
Deferred income tax liabilities:
�Temporary differences:
Unrealised exchange gain	(	106,872)	(			640)	(	103,512)
Total	$	63,004		$		805	$	67,809

��

-172-

2020

Deferred income tax assets: �Temporary differences: Unrealised loss on market price decline and obsolete and slow-moving inventories and others Deferred income tax liabilities: �Temporary differences: Unrealised exchange gain	January1 Recognised inprofit or loss December 31 114,163 $ 55,713 $ 169,876 $ 51,723) ( 51,149) ( 102,872) ( 62,440 $ 4,564 $ 67,004 $	January1 Recognised inprofit or loss December 31 114,163 $ 55,713 $ 169,876 $ 51,723) ( 51,149) ( 102,872) ( 62,440 $ 4,564 $ 67,004 $
		169,876 $ 102,872) ( 67,004 $

��

�� �� December31,2021 December31,2020 Deductible temporary differences 1,414,597 $ 1,256,642 $		December31,2021		December31,2020

(30) ��

�� ��
Basic earnings per share Profit attributable to common shareholders of the parent company Diluted earnings per share Profit attributable to common shareholders of the parent company Assumed conversion of all dilutive potential common shares Employees�compensation Profit attributable to common shareholders of the parent company plus assumed conversion of all dilutive potential	Year ended December 31,2021
	Amount after tax 16,852,759 $ 16,852,759 $ - 16,852,759 $	Weighted average number of common shares outstanding (shares in thousands) 510,684 510,684 9,726 520,410	Earnings per share (in dollars)
			33.00 $
			32.38 $

��

-173-

(31)

��cash��
��
Amount after
Weighted average number
of common shares
outstanding (shares
Earnings
per share
tax
in thousands)
(in dollars)
Basic earnings per share
Profit attributable to common
shareholders of the parent company
8,793,477
$ 510,126
17.24
$ Diluted earnings per share
Profit attributable to common
shareholders of the parent company
8,793,477
$ 510,126
Assumed conversion of all dilutive
potential common shares
Employees�compensation
-
9,418
Profit attributable to common
shareholders
of the parent company plus assumed
conversion of all dilutive potential
8,793,477
$ 519,544
16.93
$ Year ended December 31,2020
Year ended
Year ended
December 31,2021
December 31,2020
Purchase of property, plant and equipment
2,735,005
$ 1,728,078
$ Add: Opening balance of payable on equipment
58,959
113,350
Less: Ending balance of payable on equipment
283,796)
(
58,959)
(
Cash paid during the period
2,510,168
$ 1,782,469
$ Year ended
Year ended
December 31,2021
December 31,2020
Purchase of intangible assets
1,472,144
$ 1,404,378
$ Add: Opening balance of payable on
software and intellectual property
1,152,591
725,345
Less: Ending balance of payable on
software and intellectual property
1,445,930)
(
1,152,591)
(
Cash paid during the period
1,178,805
$ 977,132
$

��

-174-

(32) ��

			Guarantee	Guarantee	Guarantee							Liabilities from	Liabilities from
		Short-term	deposits				Lease			Long-term			financing
	borrowings		received				liabilities			borrowings		activities-total
At January 1, 2021	$	11,456,690	$		1,251	$	1,377,257		$	-		$	12,835,198
Changes in cash flow from
financing activities		1,885,410			197	(	90,779)			1,017,360			2,812,188
Interest paid		-			-	(	28,590)			-	(		28,590)
Interest of lease liabilities		-			-		28,590			-			28,590
Impact of changes in
foreign exchange		-			-	(	3,056)			-	(		3,056)
Changes in other non-cash
items		-			-		49,283		(	14,561)			34,722
At December 31, 2021	$	13,342,100	$		1,448	$	1,332,705		$	1,002,799		$	15,679,052
					Guarantee						Liabilities from
		Short-term			deposits					Lease			financing
		borrowings			received				liabilities		activities-total
At January 1, 2020	$	18,966,042		$			3,450	$		1,112,675	$		20,082,167
Changes in cash flow from
financing
activities	(	7,490,176)		(			2,199)	(		88,691)	(		7,581,066)
Interest paid			-				-	(		28,913)	(		28,913)
Interest of lease liabilities			-				-			28,913			28,913
Impact of changes in foreign (		19,176)					-			3,340	(		15,836)
Changes in other non-cash
items			-				-			349,933			349,933
At December 31, 2020	$	11,456,690		$			1,251	$		1,377,257	$		12,835,198

��

-175-

7. ��

(1) ��

��

(2) ��

��
Names of relatedparties	Relationshipwith the Company
G.M.I Technology Inc. Actions Semiconductor Co., Ltd. C-Media Electronics Inc. Greatek Electronics Inc. EmBestor Technology Inc.	Other related party Other related party Other related party Other related party Other related party

(3) ��

��

�� ��
Sales of goods� G.M.I Technology Inc. Others	Year ended December 31,2021 16,083,737 $ 623,758 16,707,495 $	Year ended December 31,2020
		12,212,600 $ 377,047
		12,589,647 $

��

��

��
Greatek Electronics Inc. Others	Year ended December 31,2021 1,339,141 $ 8,413 1,347,554 $	Year ended December 31,2020
		1,253,860 $ 45
		1,253,905 $

��

��
Accounts receivable� G.M.I Technology Inc. Other	December 31,2021 3,146,078 $ 46,106 3,192,184 $	December 31,2020
		2,753,359 $ 59,040
		2,812,399 $

��

-176-

��

��
Accounts payable� Greatek Electronics Inc. Others	December31,2021 333,380 $ 1,033 334,413 $	December31,2020
		340,187 $ 45
		340,232 $

��

		Year ended	Year ended	Year ended		Year ended	Year ended	Year ended
		December 31,		2021		December 31,		2020
				Ending				Ending
		Amount		balance		Amount		balance
Other related parties-
Sales commissions	$	633,550	$	101,253	$	471,394	$	94,808
Cash dividends revenue	($	21,761)	$	-	($	14,381)	$	-
Technical royalty revenue	($	31,451)	$	-	($	8,406)	$	-
Other	$	327	$	-	$	-	$	-

��

(4) ��

�� ��
Salaries and other short-term employee benefits Post-employment benefits Total	Year ended December 31,2021 248,487 $ 3,103 251,590 $	Year ended December 31,2020
		137,298 $ 2,721
		140,019 $

8. ��

��

�� ��	��
Pledged asset Time deposits (shown in financial assets at amortised cost non-current) "	December 31,2021 December 31,2020 31,048 $ 30,821 $ 49,053 48,836 80,101 $ 79,657 $ Book value	Purposes
	December 31,2021 31,048 $ 49,053 80,101 $
		Guarantee for the importation customs duties of materials Guarantee for leasing land and office in science park

��

-177-

��
(1) ��
- A. ��
- B. ��
- C. ��
- D. ��
(2) ��
- ��

10. ��

��

11. ��

��.

12. ��

(1) ��

��

��

-178-

(2) ��

��

�� ��
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost/ Receivables Cash and cash equivalents Financial assets at amortised cost Accounts receivable (including related parties) Other receivables Refundable deposits Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings Guarantee deposits received Other financial liabilities Lease liabilities	December 31,2021 1,952,647 $ 3,644,878 $ 7,197,351 $ 43,820,977 15,989,005 156,928 734,855 67,899,116 $ 13,342,100 $ 3,276 11,439,981 24,746,394 1,002,799 1,448 7,521,493 58,057,491 $ 1,333,705 $	December 31,2020
		1,080,657 $
		2,619,331 $
		7,296,360 $ 35,410,003 13,653,068 301,431 50,127
		56,710,989 $
		11,456,690 $ 28,653 10,960,286 14,760,261 - 1,251 7,386,910
		44,594,051 $
		1,377,257 $

��

��

��

��

-179-

  - ����������������������������������������������������������������������

��
��

��

��
��
��

Foreign currency amount (In thousands) Exchange rate Book value (NTD) 371,907 $ 27.690 10,298,105 $ 1,692,376 27.690 46,861,891 $ 458,477 27.690 12,695,228 $ December 31,2021	Foreign currency amount (In thousands) Exchange rate Book value (NTD) 371,907 $ 27.690 10,298,105 $ 1,692,376 27.690 46,861,891 $ 458,477 27.690 12,695,228 $ December 31,2021	Foreign currency amount (In thousands) Exchange rate Book value (NTD) 371,907 $ 27.690 10,298,105 $ 1,692,376 27.690 46,861,891 $ 458,477 27.690 12,695,228 $ December 31,2021
Foreign currency amount (In thousands) 371,907 $ 1,692,376 458,477	Exchange rate 27.690 27.690 27.690
		10,298,105 $ 46,861,891 $ 12,695,228 $

��

-180-

			December 31,2020	December 31,2020
		Foreign
		currency
		amount			Book value
	(In thousands)		Exchange rate		(NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	425,703	28.508	$	12,135,941
Non-monetary items
USD:NTD		1,387,989	28.508		39,568,790
Financial liabilities
Monetary items
USD:NTD		543,630	28.508		15,497,804
��	��
��
��	��		��
��			��	��
��

��
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	Year ended December 31,	2021
	Sensitivityanalysis
	Effect on Degree of variation profit or loss 1% 102,981 $ 1% - 1% 126,952) (	Effect on other comprehensive income
		- $ 468,619 -

��

-181-

Year ended December 31, 2020 Sensitivity analysis

Effect on other Effect on comprehensive Degree of variation profit or loss income

(Foreign currency: functional currency)

Financial assets Monetary items USD:NTD 1% $ 121,359 $ - Non-monetary items USD:NTD 1% - 395,688 Financial liabilities Monetary items USD:NTD 1% ( 154,978) -

��

��
�� $108,066�� $261,933��
��

��

��
��
��

��

-182-

��
��
��
��
��
��
��
��
��
��
��
��

At December 31, 2021 Expected loss rate Total book value Loss allowance At December 31, 2020 Expected loss rate Total book value Loss allowance	Notpast due 0%~1% 15,874,298 $ 96,119 $ Notpast due 0%~1% 13,471,549 $ 92,162 $	1~90 days past due 0%~1% 212,956 $ 2,130 $ 1~90 days past due 0%~1% 276,445 $ 2,764 $	Over 90 days past due 100% 461 $ 461 $ Over 90 days past due 100% 434 $ 434 $	Total
				16,087,715 $
				98,710 $
				Total
				13,748,428 $
				95,360 $

��

-183-

��

�� ��	��
At January 1 Provision for impairment loss At December 31 At January 1 Provision for impairment loss At December 31	2021
	Loss allowance for accounts receivable
	95,360 $ 3,350
	98,710 $
	2020
	Loss allowance for accounts receivable
	79,607 $ 15,753
	95,360 $

��

December 31, 2021

		December 31,2021
Financial assets at amortised cost Financial assets at amortised cost	12 months 43,820,977 $	Significant increase in Impairment of credit risk credit - $ - $ Lifetime December 31,2020	Total
		Significant increase in credit risk - $ December
			43,820,977 $

	12 months 35,410,003 $	Significant increase in Impairment of credit risk credit - $ - $ Lifetime	Total
		Significant increase in credit risk - $
			35,410,003 $

��

-184-

��

��
��
��

Non-derivative financial liabilities:

Non-derivative financial liabilities:
Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liabilities Long-term borrowings Guarantee deposits received Other financial liabilities Non-derivative financial liabilities: Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liabilities Guarantee deposits received Other financial liabilities December 31, 2021 December 31, 2020	Less than 1 year 13,342,100 $ 3,276 11,439,981 24,746,394 115,821 - - 7,521,493 Less than 1 year 11,465,691 $ 28,653 10,960,286 14,760,261 123,951 - 7,386,910	Between 1 and 5years - $ - - - 334,479 1,017,360 - - Between 1 and 5years - $ - - - 338,279 - -	Over 5years
			- $ - - - 1,340,088 - 1,448 - Over 5years
			- $ - - - 1,393,936 1,251 -

��

��

-185-

(3) ��

��
��
��
��
��
��

December 31, 2021 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities Total December 31, 2020 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 1,952,647 $ 824,506 2,777,153 $ Level 1 1,080,657 $ 587,851 1,668,508 $	Level 2 - $ - - $ Level 2 - $ - - $	Level 3 - $ 2,820,372 2,820,372 $ Level 3 - $ 2,031,480 2,031,480 $	Total
				1,952,647 $ 3,644,878
				5,597,525 $
				Total
				1,080,657 $ 2,619,331
				3,699,988 $

��

-186-

��

ClosedOpenConvertible Listed end end Government Corporate (exchangeable) shares fund fund bond bond bond Market quoted Closing Closing Net asset Translation Weighted Closing price price price price value price average quoted price

  - �������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������� ������������������������������������������������������������������������������������ �������������������

  - ����������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������� �����������������������������������

��
��
��

At January 1 Gains recognized in other comprehensive income At December 31	2021 Non-derivative equityinstrument 2,031,480 $ 788,892 2,820,372 $	2020
		Non-derivative equityinstrument
		1,353,863 $ 677,617
		2,031,480 $

��
��

��

-187-

��

��

Non- derivative equity Unlisted shares � Private equity fund investment Non- derivative equity Unlisted shares � Private equity fund investment	Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	106,304 $ 30,270 2,683,798 Fair value at December 31, 2020	Market comparable companies Net asset value Net asset value Valuation technique	Price to book ratio multiple Not applicable Not applicable Significant unobservable input	15.33 - - Range (weighted average)	The higher the multiple, the higher the fair value Not applicable Not applicable Relationship of inputs to fair value
	109,445 $ 22,737 1,899,298	Market comparable companies Net asset value Net asset value	Price to book ratio multiple Not applicable Not applicable	4.04 - -	The higher the multiple, the higher the fair value Not applicable Not applicable

��

-188-

December 31, 2021

Financial assets Equity instrument Financial assets Equity instrument	Input	Change ± 1% Change ± 1%	Favourable Unfavourable Change change - $ - $ Recognized inprofit or loss December	Favourable Unfavourable Change change 7,283 $ 7,283) ($ Favourable Unfavourable Change change 1,760 $ 1,760) ($ comprehensive income Recognized in other 31,2020 Recognized in other comprehensive income
	Price to book ratio multiple Input
			Favourable Unfavourable Change change - $ - $ Recognized inprofit or loss
	Price to book ratio multiple

� � (4) ��

��

13. ��

(1) ��
��
��
��
��
��
��
��
��

��

-189-

��
(2) ��
��
(3) ��
��
��
(4) ��
��
��

14. ��

(1) ��

��

(2) ��

��

(3) ��

��

(4) ��

��

(5) ��

��

Revenue from ICs Others Total		Year ended December 31,2021		Year ended December 31,2020
		105,374,969 $ 129,317 105,504,286 $		77,588,285 $ 171,185 77,759,470 $

��

-190-

(6) ��

��

Taiwan Asia Others Total	Revenue Non-current assets 48,015,150 $ 9,397,141 $ 56,984,374 670,167 504,762 96,671 105,504,286 $ 10,163,979 $ Year ended December 31,2021	Revenue Non-current assets 48,015,150 $ 9,397,141 $ 56,984,374 670,167 504,762 96,671 105,504,286 $ 10,163,979 $ Year ended December 31,2021	Revenue Non-current assets 34,965,916 $ 7,231,964 $ 42,521,571 847,660 271,983 128,535 77,759,470 $ 8,208,159 $ Year ended December 31, 2020	Revenue Non-current assets 34,965,916 $ 7,231,964 $ 42,521,571 847,660 271,983 128,535 77,759,470 $ 8,208,159 $ Year ended December 31, 2020	Revenue Non-current assets 34,965,916 $ 7,231,964 $ 42,521,571 847,660 271,983 128,535 77,759,470 $ 8,208,159 $ Year ended December 31, 2020
	Revenue 48,015,150 $ 56,984,374 504,762 105,504,286 $		Revenue 34,965,916 $ 42,521,571 271,983 77,759,470 $
					7,231,964 $ 847,660 128,535 8,208,159 $

��

(7) ��

��

��
Customer B Customer D Customer A	Revenue Segment 24,336,918 $ The whole group 22,895,750 " 16,083,737 " Year ended December 31,2021	Year ended December 31,2020
	Revenue 24,336,918 $ 22,895,750 16,083,737	Revenue 16,074,247 $ 14,175,131 12,212,600	Segment
			The whole group " "

��

-191-

None	None	None	None	None	None	None	None	None	None	None	None	None
�� �	��	��	��	��	��	��	��	��	��	��	��	��
�� �	��	��	��	��	��	��	��	��	��	��	��	��
- $	-	-	-	-	-	-	-	-	-	-	-	-
None	None	None	None	None	None	None	None	None	None	None	None	None
- $	-	-	-	-	-	-	-	-	-	-	-	-
Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations
� �	�	�	�	�	�	�	�	�	�	�	�	�
�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��
��	�	�	��	��	��	��	��	��	��	��	�	�
�� �	�	�	��	��	��	��	��	��	��	��	�	�
�� �	��	��	��	��	��	��	��	��	��	��	��	��
�� �	��	��	��	��	��	��	��	��	��	��	��	��
Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y
Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties
Hung-wei Venture Capital Co., Ltd.	RayMX Microelectronics Corp.	Realtek Singapore Private Limited	Amber Universal Inc.	Bluocean Inc.	Talent Eagle Enterprise Inc.	Leading Enterprises Limited	Bluocean Inc.	Talent Eagle Enterprise Inc.	Blueocean Inc.	Talent Eagle Enterprise Inc.	Leading Enterprises Limited	Realtek Singapore Private Limited
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Amber Universal Inc.	Cortina Access, Inc.	Realtek Investment Singapore Private Limited
�	�	�	�	�	�	�	�	�	�	�	�	�

-192-

None	None	None	None	None	None	None
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
� �	-	-	-	-	-	-
None	None	None	None	None	None	None
� �	-	-	-	-	-	-
Operations	Operations	Operations	Operations	Operations	Operations	Operations
� �	�	�	�	�	�	�
�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��
��	�	�	��	��	�	�
�� �	�	�	��	��	�	�
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
Y	Y	Y	Y	Y	Y	Y
Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties
Leading Enterprises Limited	RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Investment Singapore Private Limited	Suzhou Pankore Integrated Circuit Technology Co. Ltd	RayMX Microelectronics Corp.	Suzhou Pankore Integrated Circuit Technology Co. Ltd
Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Cortina Network Systems Shanghai Co., Ltd.
�	�	�	�	�	�	�

-193-


�	�	�	�	�	�	�
�	�	�	�	�	�	�
�	�	�	�	�	�	�
�� �	��	��	��	��	��	��
��	��	��	��	��	��	��
� �	�	�	�	�	�	�
� �	�	�	�	��	�	�
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
�	�	�	�	�	�	�
Realtek Singapore Private Limited	Leading Enterprises Limited	Suzhn PanKore Integrated Grcuit Technology Co., Ltd.	Realsil Microelectronics Corp.	RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	RayMX Microelectronics Corp.
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Leading Enterprises Limited	Realsil Microelectronics Corp.
�	�	�	�	�	�	�

-194-


��	��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	�	��	��	�	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��	��
Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income
Other related parties	None	None	Other related parties	None	None	None	None	None	Other related parties	Other related parties	None	Other related parties
C-media Electronics Inc. - Common stock	Compal broadband networks Inc. - Common stock	Shieh-Yong Investment Co., Ltd. - Common stock	Compal broadband networks Inc. - Common stock	Fortemedia Inc. - Common stock	Starix Technology, Inc.-Preferred stock	Octtasia Investment Holding Inc. - Common stock	Octtasia Investment Holding Inc. - Common stock	United Microelectronics Corporation - Common stock	C-media Electronics Inc.- Common stock	Greatek Electroninc Inc. - Common stock	Subtron technology Co., Ltd - Common stock	Embestor Technology Inc. - Common stock
Realtek Semiconductor Corporation	Realking Investment Co., Ltd.	Realsun Investment Co., Ltd.	Realsun Investment Co., Ltd.	Leading Enterprises Limited	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.

-195-


��	��	��	��	��	��	��	��	��	��	��	��	��	��	�
��	��	�	�	�	�	�	�	�	�	�	�	�	�	��
��	��	��	��	��	��	��	��	��	��	��	��	��	��	�
��	��	��	��	��	��	��	��	��	��	��	��	��	��	��
Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income
None	None	None	None	None	None	None	None	None	None	None	None	None	None	None
EARGO, Inc.	EARGO, Inc.	Cuam Money Fund	Ri-Ri-Xin Fund	Guang-Fa Demand Policy Loan Fund	Guang-Fa Currency Class B Fund	Jian-Xin Monetary Fund	Rui-Xin Monetary Fund	Pu-Yin Monetary Fund	Ri-Ri-Xin Fund	Tian-Tian-Zeng-Li Monetary Fund	Cash Appreciation Currency Fund	Zhou Zhou Fa Fund	Step by step Gold Find	CyWeeMotion Group Limited
Blueocean Inc.	Talent Eagle Enterprise Inc.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Network Systems Shanghai Co. Ltd.	Bluocean Inc.

-196-


11%	0%	0%	8%	0%	0%	0%
1,763,556 $	17,189	28,999	1,339,319	43,203	235,939) (	97,441) (
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
(9%)	0%	0%	(6%)	0%	2%	1%
9,690,767) ($	184,238) (	420,529) (	5,864,928) (	487,094) (	1,009,689	289,394
(Sales)	(Sales)	(Sales)	(Sales)	(Sales)	Purchase	Purchase
Other related parties	Other related parties	Other related parties	Other related parties	Other related parties	Other related parties	Other related parties
G.M.I Technology Inc.	Actions Semiconductor Co., Ltd.	C-Media Electronics Inc.	G.M.I Technology Inc.	G.M.I Technology Inc.	Greatek Electronics Inc.	Greatek Electronics Inc.
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Singapore Private Limited	RayMX Microelectronics Corp.	Realtek Semiconductor Corporation	Realtek Singapore Private Limited

-197-

Table 5 Amount Action taken Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Creditor Counterparty Relationship with the counterparty Balance as at December 31, 2021 Turnover rate Overdue receivables REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more December 31, 2021 Expressed in thousands of NTD (Except as otherwise indicated)	17,814) ($	-
	833,031 $	454,424
	-	-
	$ -	-
	5.51	5.26
	1,763,556 $	1,339,319
	Other related parties	Other related parties
	G.M.I Technology Inc.	G.M.I Technology Inc.
	Realtek Semiconductor Corporation	Realtek Singapore Private Limited

-198-

0.04%	2.26%	0.32%	0.54%	0.10%	0.21%	0.01%	0.13%	0.04%	0.14%	0.01%	0.07%	0.49%	0.26%	0.01%	0.02%	0.04%
No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.
$ 45,049	2,386,682	326,742	566,137	105,776	217,181	11,200	138,457	39,249	152,176	13,453	69,211	514,586	259,448	10,604	17,565	45,049
Other receivables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Technical service fees	Other payables	Technical service fees	Technical service fees	Other receivables
�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�
RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Cortina Access, Inc.	Cortina Access, Inc.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Systems Taiwan Limited	Cortina Systems Taiwan Limited	Realtek Semiconductor (Japan) Corp.	Ubilinx Technology Inc.	Ubilinx Technology Inc.	Realtek Viet Nam Co., Ltd.	Realtek Semiconductor (Malaysia) SDN. BHD	RayMX Microelectronics Corp.
Realtek Semiconductor Corporation	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited
�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�

-199-

Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary
36,386 $	20,550	13,268,254	10,825	85,684	43,812	17,017	80,784	1,484) (	7	105	20) (
36,386 $	20,550	13,267,476	10,825	85,684	43,812	17,017	80,784	1,484) (	7	157	20) (
$ 13,271,128	3,495,793	18,474,782	3,281,950	2,190,704	6,138,099	880,497	758,769	285,893	5,074	19,347	19,980
100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	66.67%	100%
34,630	41,432	89,856,425	110,050,000	114,100,000	200,000,000	28,000,000	25,000,000	29,392,985	500,000	1,918,910	2,000,000
$ 14,080,956	4,487,621	4,076,101	3,137,305	3,252,763	5,701,600	280,000	250,000	293,930	5,000	19,189	-
$ 13,676,922	4,358,823	3,928,798	3,047,285	3,159,429	5,538,000	280,000	250,000	293,930	5,000	19,189	20,000
Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Manufacturing and installation of computer equipment and wholesasle, retail and related services of electronic materials and information/software	ICs manufacturing, design, research, development, sales, and marketing
British Virgin Islands	British Virgin Islands	Singapore	Cayman Islands	Cayman Islands	Singapore	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan
Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited	Bluocean Inc.	Talent Eagle Enterprise Inc.	Realtek Investment Singapore Private Limited	Realsun Investments Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Realking Investments Co., Ltd.	Realsun Technology Corporatioin	Bobitag Inc.	AICONNX Technology Corporation
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation

-200-

Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary
(5,968) $	(4,882)	294) (	676) (	353) (	4,621	320) (	12) (	395,720	26,504
(64,411) $	(17,446)	2,940) (	2,940) (	2,940) (	4,621	320) (	12) (	395,720	26,504
$ 5,081	142,619	9,706	22,324	11,647	6,344	7,126	1,034	1,959,141	839,870
6.89%	37.38%	10%	23%	12%	100%	100%	100%	100%	100%
2,000,000	20,000,000	1,000,000	2,300,000	1,200,000	400	300,000	-	2,825,000	16,892
$ 110,000	200,000	-	-	-	5,530	1,847,318	5,516	805,351	1,164,438
$ 110,000	200,000	10,000	23,000	12,000	4,812	8,307	5,326	782,243	1,131,026
Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Venture capital activities	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	ICs deign,sales, and consultancy	Investment holdings	Information services and technical support	Investment holdings	R&D and information services
Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Japan	Mauritius	Hong Kong	Mauritius	U.S.A
Estinet Technologies Incorporation	Innorich Venture Capital Corp.	Starmems Semiconductor Corporation	Starmems Semiconductor Corporation	Starmems Semiconductor Corporation	Realtek Semiconductor (Japan) Corp.	Circon Universal Inc.	Realtek Semiconductor (Hong Kong) Limited	Empsonic Enterprises Inc.	Cortina Access Inc.
Realtek Semiconductor Corporation	Realking Investments Co., Ltd.	Realking Investments Co., Ltd.	Realsun Investments Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited	Realtek Singapore Private Limited

-201-

Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary
5,326 $	9,916) (	54,656	1,452
5,326 $	9,916) (	54,656	1,452
$ 54,730	76,353	254,166	62,077
100%	100%	100%	100%
21,130,000	4,000,000	60,000,000	10,450,000
$ 57,016	114,032	1,482,416	74,144
$ 55,380	110,760	1,661,400	69,275
R&D and technical support	R&D and technical support	R&D and information services	R&D and information services
Taiwan	Vietnam	U.S.A	Malaysia
Cortina Systems Taiwan Limited	Realtek Viet Nam Co., Ltd.	Ubilinx Technology Inc.	Realtek Semiconductor (Malaysia) Limited
Realtek Singapore Private Limited	Realtek Singapore Private Limited	Talent Eagle Enterprise Inc.	Bluocean Inc.

-202-

Remitted to
Mainland
China
Remitted
back to
Taiwan
Footnote
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31, 2021
Net income of
investee for the
year ended
December 31,
2021
Investee in Mainland
China
Main business activities
Paid-in Capital
Investment
method
(Note1)
Accumulated amount of
remittance from Taiwan to
Mainland China as of
January 1, 2021
Ownership held
by the Company
(direct or
indirect)
Investment income (loss)
recognised by the
Company for the year
ended December 31,
2021
(Note2(2))
Book value of
investment in
Mainland China
as of December
31, 2021
Accumulated
amount of investment
income remitted back to
Taiwan as of December 31,
2021
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2021

Cortina Network
Systems Shanghai Co.,
Ltd.
R&D and technical support
99,684
$ (2)
99,684
$ $ -
$ -
99,684
$ 6,952
$ 100%
6,952
$ 106,099
$ $ -
Realsil Microelectronics
Corp.
R&D and technical support
775,320
(2)
775,320
-
-
775,320
396,350
100%
396,350
1,955,657
-
Realtek Semiconductor
(Shen Zhen) Corp.
R&D and technical support
138,450
(2)
138,450
-
-
138,450
15,258
100%
15,258
285,009
-
RayMX Microelectronics
Corp.
ICs manufacturing, design,
research, development,
sales, and marketing
113,941
(2)
113,941
-
-
113,941
311,601
100%
311,601
397,149
-
Suzhou Pankore
Integrated Circuit
Technology Co. Ltd.
ICs manufacturing, design,
research, development,
sales, and marketing
43,406
(2)
43,406
-
-
43,406
82,838)
(
100%
82,838)
(
57,525)
(
-
Company name
Accumulated amount
of remittance from Taiwan
to Mainland
China as of
December 31, 2021
Investment amount
approved by the
Investment
Commission of the
Ministry of
Economic Affairs
(MOEA)
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
Cortina Network
Systems Shanghai Co.,
Ltd.
99,684
$ 99,684
$ $ 23,365,591
Realsil Microlectronics
Corp.
775,320
775,320
Realtek Semiconductor
(Shan Zhen) Corp.
138,450
138,450
RayMX Microelectronics
Corp.
113,941
113,941
Suzhou Pankore
Integrated Circuit
Technology Co. Ltd.
43,406
43,406
Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.
(3) Others.

-203-

VI. Parent Company Only Financial Statements

��

��Realtek Semiconductor Corporation

��

�� �� ��

��

-204-

��

�� .
��
��

��

-205-

��

-206-

��

��
��
��
��
��
��

��

-207-

��

��

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period �� 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�

Cheng, Ya-Huei

[Lin, Yu-Kuan ]

��

-208-

��

�� �� �� �� �� � �� � �� �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� �� �� �� �� �� �� � �� � �� �� �� � �� � �� �� � �� � �� � �� �� �� �� �� �� � �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� � �� � �� � �� �� �� �� �� �� �� �� �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� �� � �� � �� �� �� � �� � �� �� �� �� �� �� �� �� �� ��	��	��
		�
�� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� ��
		��

��

-209-

��

��
��
��
��
�
��
�
��
�
��
��
��
��
��
��
�
��
�
��
�
��
�
��
�
��
��
�
��
�
��
�
��
��
��
��
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
��
�
��
�
��
��
��
��
��
��
�
�
�
��
��
�
��
�
��
�
��
�
��
��
�
��
�
��
�
��
�
��
��
��
��
��
��
�
��
�
��
��
�
��
�
��
��
�
��
�
��
�
��
�
��
��
��
��
��
�
��
��
��
�
��
��
��
��
�
�
��
��

��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��

��

-210-

��

				��	��	��	��
				��			��
	��	��		��	�		��	�
��	��	��	�	�� ��			��	��
��	��	��	�	��		�� ��		��
��	��		�� �� ��					��
��	��		� �� ��					�
��	��		�� �� ��					��
��	�� �� �� � �� �� �� �
��	��		�	��		�� ��		�
��	��		�	��		�� ��		��
��	��	��	�	�� �� ��				�
��	��		�	��		�� ��		��
��	��		�� � ��					�
��	�� �� �� �� � �� �
��	��	��	�� � ��					�
��	��	��	�	��		�� ��		�
��	��	��	�	�� �� ��				�
��	��	��
	��
	��		�� �� ��					��
��	��
	��		�� �� ��					��
��	��		�� �� ��					��
��	��	��	�	��		�� ��		�
��	��		�	�� ��			��	��
	�� ��
	��
��	�� ��
	��		�	� ��			��	�
��	��	��
	��
	��
	��		�� � ��					�
��	��
	��
	��		�� � ��					�
	��
	��
��	�� �� ��
	��
	��		�	��		�� ��		�
��	��		��	�� ��			��	�
��	��
	��		�	�� ��			��	��
��	�� �� �� � ��							��
��	�� �� � ��							��

��

-211-

										��		��	��	��	��		�	�	��		��	��		��	��	��		��	��	��	��		�	��	��		��	��	��
				��	��	��	�� ��	�� ��	�� ��	�� ��		�� �� �� �	� �	� �� ��	� �� ��		� �	� �	� � �		� �	� � �		� �	� �	�� �� �� �		�� �� �� �	� �	� �� ��	� �� ��		� �	� � �	� � �		� �	� �	�� �� �� �
��	��	��	��	��					��	�� �� �� �� ��		� �� � �� � �� � � � ��	� � � � ��	� � � � � ��	� � � � ��		� � �� � � ��	� � � �� ��	� � � � � ��		�� �� � � �	� � �� � � �		� �� � � �	� �� � � �	� �� � �� � �� � �� ��		� �� � �� � �� � �� ��	� � � � ��	� � � � �	� � � � ��		� � � �� ��	� � � � � ��	� � �� � � �		� �� � � �	� �� � � �	� �� � �� � �� � �� ��	��	��
										��				��			��	��	��	��		��	��		��					��			��	��	��	��		��
											��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��	��

-212-

��

��
��
��
��
��

��

��

��

��

��

��
��

��
��

��
��

��

��
��

��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��

��

-213-

��

��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��

��
��
��

��
��
��

��
��
��
��
��

��

��

��

��
��
��
��
��
��
��

��

-214-��

��

1. ��

��
��

��

�� (1) ��

��

��
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4,�Extension of the temporary exemption from applying IFRS 9� Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,�Interest Rate Benchmark Reform�Phase 2� Amendment to IFRS 16,�Covid-19-related rent concessions beyond 30 June 2021�	January 1, 2021 January 1, 2021 April 1, 2021(Note)

Note�Earlier application from January 1, 2021 is allowed by FSC. ��

��

-215-

(2) ��

��

��
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3,�Reference to the conceptual framework� Amendments to IAS 16,�Property, plant and equipment:proceeds before intended use� Amendments to IAS 37,�Onerous contracts�cost of fulfilling a contract� Annual improvements to IFRS Standards 2018�2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

��

(3) ��

��

New Standards,Interpretations and Amendments

Effective date by
International Accounting
Standards Board

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�
Amendments to IFRS 17, 'Insurance contracts'
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9�
comparative information'
Amendments to IAS 1,�Classification of liabilities as current or non-
current�
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�

To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

��

4. ��

��

-216-

(1) ��

��
(2) ��
��
- ��
- ��
- ��
��
(3) ��
��
��
- ��
- ��
- ��

��

-217-

  - ���������������������������������������������������������������������������������������������� �����������������������������������������������������������������������������������

��
- ��
  - ��
  - ��
  - ��
- ��
- ��
(4) ��
��
- ��
- ��
- ��
- ��
- ��
��
- ��
- ��
- ��
- ��

��

-218-

(5) ��
��

(6) ��

��
��
��
��
(7) ��
��
(8) ��
��
��
(9) ��
��
(10) ��
��

��

-219-

(11) ��
��

(12) ��

��
��
��
��
��
��
��

��

-220-

  - �����������������������

��
��
��
��
(13) ��
��
��
��
��

��

-221-

��

(14) ��

��
��
��
��
��

(15) ��

��
��
��
��

(16) ��

��

��

-222-

��

(17) ��

��

(18) ��

��
��

(19) ��

��

(20) ��

��

��

��
��

��

��
��

��

-223-

        - ������������������������������������������������������������������������������������������ �����������������������������������������������������������������������

     - ����������������������������������������������������������������������������������������� �������������������������������������������������������������������������������

��
- ��
(21) ��
��
��
��
��
��

��

-224-

��

(22) ��

��

(23) ��

��

��

(24) ��

��
��
��
��
��

��

(25) ��

��

-225-

5. ��

��

��

(1) ��

��

(2) ��

��
��
��
��

6. ��

(1) ��

�� ��
Cash on hand and revolving funds Checking accounts and demand deposits	December 31,2021 706 $ 2,873,629 2,874,335 $	December 31,2020
		806 $ 4,629,642
		4,630,448 $

��

(2) ��

��
	December	31,2021	December	31,2020
Accounts receivable	$	7,989,004	$	7,664,148
Accounts receivable�related parties		1,828,032		1,829,192
Less: Allowance for bad debts	(	98,710)	(	95,360)
	$	9,718,326	$	9,397,980

��

-226-

Not past due Up to 30 days 31 to 90 days Over 90 days	9,733,237 $ 81,271 2,067 461 9,817,036 $ December31,2021	December 31,2020
		9,274,060 $ 212,397 6,449 434
		9,493,340 $

��

��As of December 31, 2021 and 2020, accounts receivable arose from��As of January 1, 2020, the balance of receivables from contracts with customers amounted to $7,815,480.

��he Company has no��

��

(3) ��

��
Raw materials Work in process Finished goods Total Raw materials Work in process Finished goods Total		December 31,2021
	Cost 689,396 $ 6,256,802 5,637,324 12,583,522 $	Allowance for obsolescence and market value decline 5,657) ($ 436,512) ( 340,458) ( 782,627) ($ December 31,2020	Book value
			683,739 $ 5,820,290 5,296,866
			11,800,895 $

	Cost 843,416 $ 4,542,905 1,659,044 7,045,365 $	Allowance for obsolescence and market value decline 20,128) ($ 598,262) ( 397,418) ( 1,015,808) ($	Book value
			823,288 $ 3,944,643 1,261,626
			6,029,557 $

��

Years ended December 31,

2021 Cost of inventories sold and others 35,229,040 $ (Gain on reversal of) loss on decline in market value, obsolete and slow-moving Inventory 233,181) ( Loss on scrap inventory 374,036 35,369,895 $	2020
	33,389,503 $ 292,451 207,547
	33,889,501 $

��

-227-

(4) ��

��
Subsidiaries: Leading Enterprises Limited Amber Universal Inc. Realtek Singapore Private Limited Realtek Investment Singapore Private Limited Talent Eagle Enterprise Inc. Bluocean Inc. Realsun Investments Co., Ltd. Hung-wei Venture Capital Co., Ltd. Realking Investments Co., Ltd. Realsun Technology Corporatioin Bobitag Inc. AICONNX Technology Corporation Associates: Technology Partner V Venture Capital Corporation Estinet Technologies Incorporation	December 31,2021 13,271,128 $ 3,495,793 18,474,782 6,138,099 2,190,704 3,281,950 880,497 758,769 285,893 5,074 19,347 19,980 - 5,081 48,827,097 $	December 31,2020
		13,239,425 $ 3,367,376 11,149,584 6,275,015 2,162,386 3,369,936 619,510 632,946 290,236 5,118 19,330 - 255 9,158
		41,140,275 $

��
��
�� The �� received the proceeds of $20,684 from the capital reduction carried out by Technology Partner V Venture Capital Corporation in July 2020. The investee was dissolved on September 21, 2020 and the process of liquidation was completed as at July 20, 2021.
��

��

-228-

(5) ��

��	��
At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Reclassifications Depreciation At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Reclassifications Depreciation At December 31 At December 31, 2020 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment Others Total 387,280 $ 2,758,801 $ 3,800,466 $ 2,904,416 $ 278,569 $ 1,034,223 $ 11,163,755 $ - 1,050,324) ( 3,401,211) ( 1,889,965) ( 167,599) ( 627,652) ( 7,136,751) ( 387,280 $ 1,708,477 $ 399,255 $ 1,014,451 $ 110,970 $ 406,571 $ 4,027,004 $ 387,280 $ 1,708,477 $ 399,255 $ 1,014,451 $ 110,970 $ 406,571 $ 4,027,004 $ - 14,108 353,207 612,924 155,783 1,514,004 2,650,026 102,090 42,767 - - - 144,857) ( - - 82,851) ( 123,845) ( 445,699) ( 42,666) ( 90,491) ( 785,552) ( 489,370 $ 1,682,501 $ 628,617 $ 1,181,676 $ 224,087 $ 1,685,227 $ 5,891,478 $ 489,370 $ 2,815,676 $ 4,145,587 $ 3,476,211 $ 434,352 $ 2,403,370 $ 13,764,566 $ - 1,133,175) ( 3,516,970) ( 2,294,535) ( 210,265) ( 718,143) ( 7,873,088) ( 489,370 $ 1,682,501 $ 628,617 $ 1,181,676 $ 224,087 $ 1,685,227 $ 5,891,478 $ Land Buildings Machinery Test equipment Office equipment Others Total - $ 2,574,744 $ 3,863,302 $ 2,281,360 $ 233,933 $ 772,540 $ 9,725,879 $ - 971,140) ( 3,505,163) ( 1,527,274) ( 140,063) ( 562,981) ( 6,706,621) ( - $ 1,603,604 $ 358,139 $ 754,086 $ 93,870 $ 209,559 $ 3,019,258 $ - $ 1,603,604 $ 358,139 $ 754,086 $ 93,870 $ 209,559 $ 3,019,258 $ 387,280 160,674 131,306 637,467 44,636 291,664 1,653,027 - 23,383 5) ( - - 23,378) ( - - 79,184) ( 90,185) ( 377,102) ( 27,536) ( 71,274) ( 645,281) ( 387,280 $ 1,708,477 $ 399,255 $ 1,014,451 $ 110,970 $ 406,571 $ 4,027,004 $ 387,280 $ 2,758,801 $ 3,800,466 $ 2,904,416 $ 278,569 $ 1,034,223 $ 11,163,755 $ - 1,050,324) ( 3,401,211) ( 1,889,965) ( 167,599) ( 627,652) ( 7,136,751) ( 387,280 $ 1,708,477 $ 399,255 $ 1,014,451 $ 110,970 $ 406,571 $ 4,027,004 $	Total
		4,027,004 $

��

-229-

� (6) ��

��
��

Land Buildings Transportation equipment Land Buildings Transportation equipment	Carrying	amount
	December 31,2021 December 31,2020 1,350,829 $ 1,377,739 $ 4,944 12,365 1,943 - 1,357,716 $ 1,390,104 $ Depreciation	December 31,2020
		1,377,739 $ 12,365 -
		1,390,104 $
	Years ended December 31,
	2021 26,910 $ 19,572 1,644 48,126 $	2020
		26,367 $ 23,276 -
		49,643 $

��
��

Items affecting profit or loss Interest expense on lease liabilities	Years ended December 31,	Years ended December 31,
	2021 18,924 $	2020
		18,916 $

��

��

-230-

(7) ��

Computer software Intellectualproperty At January 1, 2021 Cost 5,071,405 $ 4,707,768 $ Accumulated amortisation and impairment 3,975,903) ( 3,848,863) ( 1,095,502 $ 858,905 $ 2021 At January 1 1,095,502 $ 858,905 $ Additions 540,208 906,329 Amortisation 746,081) ( 526,450) ( At December 31 889,629 $ 1,238,784 $ At December 31, 2021 Cost 5,611,613 $ 5,614,097 $ Accumulated amortisation and impairment 4,721,984) ( 4,375,313) ( 889,629 $ 1,238,784 $ Computer software Intellectualproperty At January 1, 2020 Cost 4,067,350 $ 4,309,997 $ Accumulated amortisation and impairment 3,293,971) ( 3,431,876) ( 773,379 $ 878,121 $ 2020 At January 1 773,379 $ 878,121 $ Additions 1,004,055 397,771 Amortisation 681,932) ( 416,987) ( At December 31 1,095,502 $ 858,905 $ At December 31, 2020 Cost 5,071,405 $ 4,707,768 $ Accumulated amortisation and impairment 3,975,903) ( 3,848,863) ( 1,095,502 $ 858,905 $	Others Total 1,222 $ 9,780,395 $ - 7,824,766) ( 1,222 $ 1,955,629 $ 1,222 $ 1,955,629 $ 14,176 1,460,713 - 1,272,531) ( 15,398 $ 2,143,811 $ 15,398 $ 11,241,108 $ - 9,097,297) ( 15,398 $ 2,143,811 $ Others Total 1,222 $ 8,378,569 $ - 6,725,847) ( 1,222 $ 1,652,722 $ 1,222 $ 1,652,722 $ - 1,401,826 - 1,098,919) ( 1,222 $ 1,955,629 $ 1,222 $ 9,780,395 $ - 7,824,766) ( 1,222 $ 1,955,629 $	Total

��

Operating costs Operating expenses	Years ended December31,	Years ended December31,
	2021 1,374 $ 1,271,157 1,272,531 $	2020
		3,968 $ 1,094,951
		1,098,919 $

��

-231-

(8) ��

��
Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December 31,2021 13,342,100 $ December 31,2020 11,456,690 $	Interest rate range 0.42%~0.57% Interest rate range 0.57%~0.60%	Collateral
			None Collateral
			None

��

(9) ��

Accrued salaries and bonus Payable for employees�compensation Other accrued expenses Payables on equipment Payables on software and intellectual property Others	December 31,2021 8,499,995 $ 11,117,373 1,373,848 283,796 1,445,930 184,695 22,905,637 $	December 31,2020 4,675,282 $ 6,145,446 1,236,747 58,959 1,152,591 134,645 13,403,670 $

� (10) ��

Type of borrowings Borrowing period Repayment term Interest rate range Collateral December 31, 2021 Loan for Accelerated 2021/11/8~ Repayable in instalment 0.3%��% None $ 1,002,799 Investment by Domestic Corporations (Note) 2026/12/15 over the agreed period

��

��

(11) ��

��

��

-232-

��

		December31,2021	December31,2021	December31,2021		December31,2020	December31,2020	December31,2020
Present value of defined benefit obligations		($		628,846)		($		600,923)
Fair value of plan assets				534,371				501,842
Net liability in the balance sheet		($		94,475)		($		99,081)

��
	Present value of			Fair value of
		defined	benefit	plan				Net defined
		obligations		assets			benefit liability
Year ended December 31, 2021
At January 1	($		600,923)	$	501,842		($	99,081)
Current service cost	(		1,079)			-	(	1,079)
Interest (expense) income	(		2,056)			1,741	(	315)
	(		604,058)		503,583		(	100,475)
Remeasurements:
Return on plan assets (excluding amounts			-			35,943		35,943
included in interest income or expense)
Change in demographic assumptions	(		34,449)			-	(	34,449)
Change in financial assumptions			29,040			-		29,040
Experience adjustments	(		30,534)			-	(	30,534)
	(		35,943)			35,943		-
Pension fund contribution			-			6,000		6,000
Paid pension			11,155	(		11,155)		-
At December 31	($		628,846)	$	534,371		($	94,475)

��

-233-

	Present value of	Present value of		Fair value of
		defined benefit		plan		Net defined
		obligations		assets	benefit liability
Year ended December 31, 2020
At January 1	($	595,932)	$	522,312	($	73,620)
Current service cost	(	1,580)		-	(	1,580)
Interest (expense) income	(	4,727)		4,098	(	629)
	(	602,239)		526,410	(	75,829)
Remeasurements:
Return on plan assets (excluding amounts		-		5,910		5,910
included in interest income or expense)
Change in demographic assumptions	(	3,573)		-	(	3,573)
Change in financial assumptions	(	17,863)		-	(	17,863)
Experience adjustments	(	13,726)		-	(	13,726)
	(	35,162)		5,910	(	29,252)
Pension fund contribution		-		6,000		6,000
Paid pension		36,478	(	36,478)		-
At December 31	($	600,923)	$	501,842	($	99,081)

��

Discount rate Future salary increases	Years ended December 31,	Years ended December 31,
	2021 0.75% 4.75%	2020
		0.3%
		4.75%

��

-234-

December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation	Increase by Decrease by Increase by Decrease by 0.25% 0.25% 0.25% 0.25% 16,290 $ 16,894) ($ 15,888) ($ 15,415 $ 16,617 $ 17,201) ($ 16,104) ($ 15,599 $ Discount rate Future salaryincreases	Future salaryincreases	Future salaryincreases
			Decrease by 0.25%
			15,415 $
			15,599 $

��

�� Within 1 year $ 297,815 2~5 years 119,175 5~10 years 209,134 $ 626,124 ��

��

(12) ��

��

-235-

Unit : Thousands of shares

2021 2020
At January 1 510,684 508,095
Employees' compensation transferred
to common stock - 2,589
At December 31 510,684 510,684
��On March 20, 2020, the Board of Directors of the Company during their meeting resolved for the
��
The Company calculates the number of shares based on the closing price at the previous day of
the board meeting resolution. The closing price was $162 (in dollars) per share, and the Company
issued 2,589 thousand new shares, which was approved by the Competent Authority. The
effective date for the issuance was April 8, 2020, and the related registration for the issuance was
completed on April 20, 2020.

��

(13) ��

��

��	��
Sharepremium At January 1 2,060,376 $ Change in associates accounted for under equity method - Cash from capital surplus 1,021,370) ( Cash dividends returned - At December 31 1,039,006 $			2021
			Change in associates accounted for under equitymethod 61,035 $ 226 - - 61,261 $

��

-236-

Sharepremium At January 1 2,688,155 $ Employees' compensation transferred to common stock 393,591 Change in associates accounted for under equity method - Cash from capital surplus 1,021,370) ( Cash dividends returned - At December 31 2,060,376 $		2020
		Change in associates accounted for under equitymethod 48,272 $ - 12,763 - - 61,035 $

(14) ��

��

-237-

��

��
��

Dividends per Amount share(in dollars) - $ - $ 1,339,013 - 6,128,219 12.00 7,467,232 $ 12.00 $ 2020	2019	2019
Amount - $ 1,339,013 6,128,219 7,467,232 $	Amount 674,907 $ 217,036 4,596,164 5,488,107 $	Dividends per share(in dollars)
		- $ - 9.00
		9.00 $

��
(15) ��

��
At January 1 Revaluation �Group Currency translation differences: �Group At December 31 At January 1 Revaluation �Group �Associates Currency translation differences: �Group At December 31		2021
	Unrealised gains on valuation
	1,384,909 $ 995,872 - 2,380,781 $
	Unrealised gains on valuation
	545,107 $ 829,923 9,879 - 1,384,909 $

��

-238-

(16) ��

��
Revenue from contracts with customers	Years ended December 31,
	2021 68,352,652 $	2020
		56,426,751 $

��

��
Year ended December 31,2021	Integrated circuitproducts 68,225,415 $ 68,225,415 $ Integrated circuitproducts 56,311,636 $ 56,311,636 $	Others 127,237 $ 127,237 $ Others 115,115 $ 115,115 $	Total
Revenue from external customer contracts Timing of revenue recognition At a point in time Year ended December 31,2020			68,352,652 $
			68,352,652 $
			Total
Revenue from external customer contracts Timing of revenue recognition At a point in time			56,426,751 $
			56,426,751 $

��

Contract liabilities �advance sales receipts	December 31,2021 84,259 $	December 31,2020 163,080 $	January1,2020
			67,853 $

��

��
Contract liabilities�advance sales receipts	Years ended December 31,
	2021 130,391 $	2020
		49,080 $

��

��
Refund liabilities�current	December31,2021 5,044,386 $	December31,2020
		5,240,048 $

��

-239-

(17) ��

Interest income from bank deposits

Other interest income

Years ended December31,	Years ended December31,
2021 4,621 $ 23,182 27,803 $	2020
	23,356 $ 28,747
	52,103 $

(18) ��

Rent income Dividend income Grant income Other income

Years ended December 31,	Years ended December 31,
2021 4,226 $ 1,434 53,621 7,262 66,543 $	2020
	4,571 $ 411 60,635 1,905
	67,522 $

(19) ��

Gains on disposal of property, plant and equipment (Losses)gains on disposal of investment Net currency exchanges losses Gains on financial assets at fair value through profit or loss Other losses Gains arising from lease modifications

	Years ended	December 31,
	2021	2020
$	200	$	1,700
(	145)		466
(	76,404)	(	105,455)
	47,244		95,624
(	176,833)	(	5,132)
	236		-
($	205,702)	($	12,797)

(20) ��

Interest expense Bank borrowings Lease liabilities

Years ended December 31,	Years ended December 31,
2021 75,951 $ 18,924 94,875 $	2020
	118,211 $ 18,916
	137,127 $

(21) ��

Employee benefit expenses Depreciation Amortisation

Years ended December31,	Years ended December31,
2021 23,378,582 $ 833,678 $ 1,272,531 $	2020
	14,433,363 $
	694,924 $
	1,098,919 $

��

-240-

(22) ��

��
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Years ended December 31,
	2021 22,176,909 $ 627,431 309,162 265,080 23,378,582 $	2020
		13,445,450 $ 474,118 275,054 238,741
		14,433,363 $

��
��
��
��

��

-241-

(23) ��

��

�� ��
		Years ended	December 31,
		2021	2020
Current income tax:
Current income tax on profits for the year	$	917,484	$	622,571
Tax on undistributed earnings		64,850		63,048
Prior year income tax overestimation	(	276,529)	(	121,055)
Total current income tax		705,805		564,564
Deferred income tax:
Origination and reversal of temporary
differences	(	805)	(	4,564)
Income tax expense	$	705,000	$	560,000

��

		Years ended December 31,	Years ended December 31,	Years ended December 31,
		2021		2020
Income tax calculated based on income before
tax	$	3,511,552	$	1,870,696
Expenses disallowed by tax regulation and
effects from tax-exempt income	(	2,594,873)	(	1,252,689)
Prior year income tax overestimation	(	276,529)	(	121,055)
Tax on undistributed earnings		64,850		63,048
Income tax expense	$	705,000	$	560,000

��

��
		Year ended December 31,				2021
			Recognised in
		January1	profit or loss			December 31
Deferred income tax assets:
-Temporary differences:
Unrealised loss on market price decline
and obsolete and slow-moving
inventories and others	$	169,876	$	1,445	$		171,321
Deferred income tax liabilities:
-Temporary differences:
Unrealised exchange gain	(	102,872)	(	640)	(		103,512)
	$	67,004	$	805	$		67,809

��

-242-

(24)

��
��
��
assessed and approved by the Tax Authority.
��
January1
Recognised in
profit or loss
December 31
Deferred income tax assets:
-Temporary differences:
Unrealised loss on market price decline
and obsolete and slow-moving
inventories and others
114,163
$ 55,713
$ 169,876
$ Deferred income tax liabilities:
-Temporary differences:
Unrealised exchange gain
51,723)
(
51,149)
(
102,872)
(
62,440
$ 4,564
$ 67,004
$ Year ended December 31,2020
December31,2021
December31,2020
Deductible temporary differences
1,414,597
$ 1,256,642
$

��
Basic earnings per share Profit attributable to common shareholders Diluted earnings per share Profit attributable to common shareholders Assumed conversion of all dilutive potential ordinary shares �� Profit attributable to common shareholders plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2021		Earnings per share (in dollars)
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)
	16,852,759 $ 16,852,759 $ - 16,852,759 $	510,684 510,684 9,726 520,410	33.00 $ 32.38 $

��

-243-

Basic earnings per share Profit attributable to common shareholders Diluted earnings per share Profit attributable to common shareholders Assumed conversion of all dilutive potential ordinary shares Employees�compensation Profit attributable to common shareholders plus assumed conversion of all dilutive potential ordinary shares		Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020		Earnings per share (in dollars)
		Amount after tax		Weighted average number of ordinary shares outstanding (shares in thousands)
		8,793,477 $ 8,793,477 $ - 8,793,477 $		510,126 510,126 9,418 519,544		17.24 $ 16.93 $

(25) ��

��

�� ��
		Years ended	December 31,
		2021		2020
Purchase of property, plant and equipment	$	2,650,026	$	1,653,027
Add: Opening balance of payable on equipment		58,959		113,350
Less: Ending balance of payable on equipment	(	283,796)	(	58,959)
Cash paid during the year	$	2,425,189	$	1,707,418
		Years ended	December 31,
		2021		2020
Purchase of intangible assets	$	1,460,713	$	1,401,826
Add: Opening balance of payable on
software and intellectual property		1,152,591		725,345
Less: Ending balance of payable on
software and intellectual property	(	1,445,930)	(	1,152,591)
Cash paid during the year	$	1,167,374	$	974,580

��

-244-

(26) ��

At January 1, 2021 Changes in cash flow from financing activities Interest paid Interest on lease liabilities Changes in other non-cash items At December 31, 2021		Short-term borrowings		Guarantee deposits received	Lease liabilities	Long-term borrowings	Liabilities from financing activities-total
		11,456,690 $ 1,885,410 - - - 13,342,100 $		1,038 $ 12 - - - 1,050 $	1,124,974 $ 35,293) ( 18,924) ( 18,924 15,714 1,105,395 $	- $ 1,017,360 - - 14,561) ( 1,002,799 $	12,582,702 $ 2,867,489 18,924) ( 18,924 1,153 15,451,344 $

At January 1, 2020 Changes in cash flow from financing activities Interest paid Interest on lease liabilities Changes in other non-cash items At December 31, 2020	Short-term borrowings	Guarantee deposits received	Lease liabilities 812,095 $ 35,261) ( 18,916) ( 18,916 348,140 1,124,974 $	Liabilities from financing activities-total
	18,604,770 $ 7,148,080) ( - - - 11,456,690 $	3,258 $ 2,220) ( - - - 1,038 $		19,420,123 $ 7,185,561) ( 18,916) ( 18,916 348,140 12,582,702 $

7. ��

(1) ��

Names of related parties

Leading Enterprises Limited Realtek Singapore Private Limited Bluocean Inc. Talent Eagle Enterprise Inc. Amber Universal Inc. AICONNX Technology Corporation Equity Cortina Systems Taiwan Limited RayMX Microelectronics Corp. G.M.I Technology Inc. Actions Semiconductor Co., Ltd. C-Media Electronics Inc. Greatek Electronics Inc. EmBestor Technology Inc.

Relationship with the Company

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Sub-subsidiary Sub-subsidiary Other related party Other related party Other related party Other related party Other related party

��

-245-

��

�� ��
Sales of goods� G.M.I Technology Inc. Others	Years ended December 31,
	2021 9,690,767 $ 604,767 10,295,534 $	2020
		7,375,829 $ 365,249
		7,741,078 $

��

��
Greatek Electronics Inc.	Years ended December 31,
	2021 1,009,689 $	2020
		1,033,517 $

��

��
Accounts receivable� G.M.I Technology Inc. Others	December 31,2021 1,763,556 $ 46,113 1,809,669 $	December 31,2020
		$ 1,751,860 59,040
		1,810,900 $

��

��
Accounts payable� Greatek Electronics Inc. Other	December 31,2021 235,939 $ 1,034 236,973 $	December 31,2020
		253,691 $ -
		$253,691

��

-246-

��

			Years ended	Years ended	December 31,	December 31,
		2021				2020
				Ending				Ending
		Amount		balance		Amount		balance
Other related parties-
Sales commissions	$	396,355	$	63,954	$	286,704	$	60,784
Technical royalty revenue	($	31,451)	$	-	($	8,406)	$	-
Cash dividend income	($	1,434)	$	-	($	411)	$	-
Subsidiaries and sub-subsidiaries-
Interest income	($	23,182)	($	18,285)	($	28,747)	($	20)
Other income	$	-	($	53,368)	$	-	($	46,380)
Cash dividend income	($	5,669,060)	$	-	($	5,631,482)	$	-
Rent income	($	1,922)	($	248)	($	1,922)	($	245)

��

AICONNX Technology Corporation Leading Enterprises Limited Leading Enterprises Limited	Accounts No. of shares Investments accounted for under equity method 2,000,000 Accounts No. of shares Investments accounted for under equity method 9,856,425 Investments accounted for under equity method 60,000	Objects AICONNX Technology Corporation equity (Investment Establishment) Objects Realtek Singapore Private Limited equity Leading Enterprises Limited equity (increased common stock)	Year ended December 31,2021
			Consideration
			20,000 $
			Year ended December 31,2020
			Consideration
			1,780,187 $ 1,735,500
			3,515,687 $

��

-247-

��

�� ��
Subsidiaries Leading Enterprises Limited Talent Eagle Enterprise Inc. Bluocean Inc. Amber Universal Inc. Realtek Singapoe Private Limited Hung-wei Venture Capital Co., Ltd.	December 31,2021 2,422,875 $ 1,661,400 1,661,400 1,629,557 - 87,000 7,462,232 $	December 31,2020
		- $ 57,016 - 11,403 570,160 -
		638,579 $

��

Subsidiaries

Years ended December 31,	Years ended December 31,
2021 23,182 $	2020
	28,747 $

��

Subsidiaries

��
December31,2021 14,339,165 $	December31,2020
	10,605,268 $

(2) ��

��
Salaries and other short-term employee benefits Post-employment benefits Total	Years ended December31,
	2021 248,487 $ 3,103 251,590 $	2020
		137,298 $ 2,721
		140,019 $

8. ��

��

Pledged asset Time deposits (shown in financial assets at amortised cost - non-current) "	December 31,2021 December 31,2020 31,048 $ 30,821 $ 44,810 44,472 75,858 $ 75,293 $ Bookvalue	Purposes
	December 31,2021 31,048 $ 44,810 75,858 $
		Guarantee for the importation customs duties of materials Guarantee for leasing land and office in Science Park

��

-248-

��
(1) ��
- ��
- ��
- ��
- ��

(2) ��

��

10. ��

��

11. ��

��

12. ��

(1) ��

��

-249-

(2) ��

��

�� ��
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at amortised cost/Receivables Cash and cash equivalents Financial assets at amortised cost Accounts receivable (including related parties) Other receivables (including related parties) Refundable deposits Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable (including related parties) Other payable (including related parties) Long-term borrowings Guarantee deposits received Other financial liability Lease liability	December 31,2021 129,129 $ 2,874,335 $ 75,858 9,718,326 7,542,294 719,802 20,930,615 $ 13,342,100 $ 3,276 7,586,416 22,969,591 1,002,799 1,050 5,044,386 49,949,618 $ 1,105,395 $	December 31,2020
		124,360 $
		4,630,448 $ 75,293 9,397,980 689,052 34,805
		14,827,578 $
		11,456,690 $ 3,276 7,862,783 13,464,454 - 1,038 5,240,048
		38,028,289 $
		1,124,974 $

��
��
��
��
��

��

��
��

��

-250-

��
��

December 31,2021	December 31,2021	December 31,2021
Foreign currency amount Book value (In thousands) Exchange rate (NTD) 721,980 $ 27.690 19,991,626 $ 1,692,376 27.690 46,861,891 458,477 27.690 12,695,228 December 31,2020		Book value (NTD)
Foreign currency amount (In thousands) 445,489 $ 1,387,989 468,326	Exchange rate 28.508 28.508 28.508	Book value (NTD)
		12,700,000 $ 39,568,790 13,351,038

��

-251-

��

Year ended December 31,	Year ended December 31,	2021
Sensitivityanalysis
Effect on Degree of variation profit or loss 1% 199,916 $ 1% - 1% 126,952) ( December 31,2020		Effect on other comprehensive income
		- $ 468,619 -
Sensitivityanalysis
Degree of variation 1% 1% 1%	Effect on profit or loss 127,000 $ - 133,510) (	Effect on other comprehensive income
		- $ 395,688 -

��

-252-

��
��
��

��

��
��
��
��
��
��
��
��
��
��
��

��

-253-

��

��
��

At December 31, 2021 Expected loss rate Total book value Loss allowance At December 31, 2020 Expected loss rate Total book value Loss allowance	Notpast due 0-1% 9,733,237 $ 96,119 $ Notpast due 0-1% 9,274,060 $ 92,162 $	1~90 dayspast due 0-1% 83,338 $ 2,130 $ 1~90 dayspast due 0-1% 218,846 $ 2,764 $	Over 90 days past due 100% 461 $ 461 $ Over 90 days past due 100% 434 $ 434 $	Total
				9,817,036 $
				98,710 $
				Total
				9,493,340 $
				95,360 $

��

��
At January 1 Provision for impairment At December 31 At January 1 Provision for impairment At December 31	2021
	Loss allowance for accounts receivable
	95,360 $ 3,350
	98,710 $
	2020
	Loss allowance for accounts receivable
	79,607 $ 15,753
	95,360 $

��

-254-

��

	December 31,2021
12 months 75,858 $	Significant increase in Impairment credit risk of credit - $ - $ Lifetime December 31,2020	Total
	Significant increase in credit risk - $ December
		75,858 $

12 months 75,293 $	Significant increase in Impairment credit risk of credit - $ - $ Lifetime	Total
	Significant increase in credit risk - $
		75,293 $

��

��
��
��

��

-255-

��

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2021 Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liability Long-term borrowings Guarantee deposits received Other financial liabilities Non-derivative financial liabilities: December 31, 2020 Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liability Guarantee deposits received Other financial liabilities	Less than 1 year	Between 1 and 5years	Over 5years
	13,342,100 $ 3,276 7,586,416 22,969,591 45,175 - - 5,044,386 Less than 1 year	- $ - - - 162,621 1,017,360 - - Between 1 and 5years	- $ - - - 1,328,389 - 1,050 - Over 5years
	11,465,691 $ 3,276 7,862,783 13,464,454 54,804 - 5,240,048	- $ - - - 153,111 - -	- $ - - - 1,366,224 1,038 -

��

(3) ��

��
��

��

-256-

��
��
- ��
��

December 31, 2021 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities $ 129,129 $ - $ - $ 129,129 December 31, 2020 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurement Financial assets at fair value through profit or loss $ 124,360 $ - $ - $ 124,360 Equity securities ��

��
��

13. ��

(1) ��

��
��
��
��
��
��

��

-257-

��
��
��
(2) ��
��
(3) ��
��
��
(4) ��
��

14. ��

��

��

-258-

None	None	None	None	None	None	None	None	None	None	None	None	None
�� �	��	��	��	��	��	��	��	��	��	��	��	��
�� �	��	��	��	��	��	��	��	��	��	��	��	��
- $	-	-	-	-	-	-	-	-	-	-	-	-
None	None	None	None	None	None	None	None	None	None	None	None	None
- $	-	-	-	-	-	-	-	-	-	-	-	-
Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations	Operations
� �	�	�	�	�	�	�	�	�	�	�	�	�
�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��
��	�	�	��	��	��	��	��	��	��	��	�	�
�� �	�	�	��	��	��	��	��	��	��	��	�	�
�� �	��	��	��	��	��	��	��	��	��	��	��	��
�� �	��	��	��	��	��	��	��	��	��	��	��	��
Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y
Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties
Hung-wei Venture Capital Co., Ltd.	RayMX Microelectronics Corp.	Realtek Singapore Private Limited	Amber Universal Inc.	Bluocean Inc.	Talent Eagle Enterprise Inc.	Leading Enterprises Limited	Bluocean Inc.	Talent Eagle Enterprise Inc.	Blueocean Inc.	Talent Eagle Enterprise Inc.	Leading Enterprises Limited	Realtek Singapore Private Limited
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Amber Universal Inc.	Cortina Access, Inc.	Realtek Investment Singapore Private Limited
�	�	�	�	�	�	�	�	�	�	�	�	�

-259-

None	None	None	None	None	None	None
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
� �	-	-	-	-	-	-
None	None	None	None	None	None	None
� �	-	-	-	-	-	-
Operations	Operations	Operations	Operations	Operations	Operations	Operations
� �	�	�	�	�	�	�
�� ��	�� ��	�� ��	�� ��	�� ��	�� ��	�� ��
��	�	�	��	��	�	�
�� �	�	�	��	��	�	�
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
Y	Y	Y	Y	Y	Y	Y
Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties	Other receivables-related parties
Leading Enterprises Limited	RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Investment Singapore Private Limited	Suzhou Pankore Integrated Circuit Technology Co. Ltd	RayMX Microelectronics Corp.	Suzhou Pankore Integrated Circuit Technology Co. Ltd
Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Cortina Network Systems Shanghai Co., Ltd.
�	�	�	�	�	�	�

-260-


�	�	�	�	�	�	�
�	�	�	�	�	�	�
�	�	�	�	�	�	�
�� �	��	��	��	��	��	��
��	��	��	��	��	��	��
� �	�	�	�	�	�	�
� �	�	�	�	��	�	�
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
�� �	��	��	��	��	��	��
�	�	�	�	�	�	�
Realtek Singapore Private Limited	Leading Enterprises Limited	Suzhn PanKore Integrated Grcuit Technology Co., Ltd.	Realsil Microelectronics Corp.	RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	RayMX Microelectronics Corp.
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Leading Enterprises Limited	Realsil Microelectronics Corp.
�	�	�	�	�	�	�

-261-


��	��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	�	��	��	�	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��	��
Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income
Other related parties	None	None	None	None	None	None	None	None	Other related parties	Other related parties	None	Other related parties
C-media Electronics Inc. - Common stock	Compal broadband networks Inc. - Common stock	Shieh-Yong Investment Co., Ltd. - Common stock	Compal broadband networks Inc. - Common stock	Fortemedia Inc. - Common stock	Starix Technology, Inc.-Preferred stock	Octtasia Investment Holding Inc. - Common stock	Octtasia Investment Holding Inc. - Common stock	United Microelectronics Corporation - Common stock	C-media Electronics Inc.- Common stock	Greatek Electroninc Inc. - Common stock	Subtron technology Co., Ltd - Common stock	Embestor Technology Inc. - Common stock
Realtek Semiconductor Corporation	Realking Investment Co., Ltd.	Realsun Investment Co., Ltd.	Realsun Investment Co., Ltd.	Leading Enterprises Limited	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Hung-wei Venture Capital Co., Ltd.

-262-


��	��	��	��	��	��	��	��	��	��	��	��	��	��	�
��	��	�	�	�	�	�	�	�	�	�	�	�	�	��
��	��	��	��	��	��	��	��	��	��	��	��	��	��	�
��	��	��	��	��	��	��	��	��	��	��	��	��	��	��
Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through profit or loss	Financial assets at fair value through other comprehensive income
None	None	None	None	None	None	None	None	None	None	None	None	None	None	None
EARGO, Inc.	EARGO, Inc.	Cuam Money Fund	Ri-Ri-Xin Fund	Guang-Fa Demand Policy Loan Fund	Guang-Fa Currency Class B Fund	Jian-Xin Monetary Fund	Rui-Xin Monetary Fund	Pu-Yin Monetary Fund	Ri-Ri-Xin Fund	Tian-Tian-Zeng-Li Monetary Fund	Cash Appreciation Currency Fund	Zhou Zhou Fa Fund	Step by step Gold Find	CyWeeMotion Group Limited
Blueocean Inc.	Talent Eagle Enterprise Inc.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Network Systems Shanghai Co. Ltd.	Bluocean Inc.

-263-


11%	0%	0%	8%	0%	0%	0%
1,763,556 $	17,189	28,999	1,339,319	43,203	235,939) (	97,441) (
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions
(9%)	0%	0%	(6%)	0%	2%	1%
9,690,767) ($	184,238) (	420,529) (	5,864,928) (	487,094) (	1,009,689	289,394
(Sales)	(Sales)	(Sales)	(Sales)	(Sales)	Purchase	Purchase
Other related parties	Other related parties	Other related parties	Other related parties	Other related parties	Other related parties	Other related parties
G.M.I Technology Inc.	Actions Semiconductor Co., Ltd.	C-Media Electronics Inc.	G.M.I Technology Inc.	G.M.I Technology Inc.	Greatek Electronics Inc.	Greatek Electronics Inc.
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Singapore Private Limited	RayMX Microelectronics Corp.	Realtek Semiconductor Corporation	Realtek Singapore Private Limited

-264-

Table 5 Amount Action taken Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Creditor Counterparty Relationship with the counterparty Balance as at December 31, 2021 Turnover rate Overdue receivables Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more December 31, 2021 Expressed in thousands of NTD (Except as otherwise indicated)	17,814) ($	-
	833,031 $	454,424
	-	-
	$ -	-
	5.51	5.26
	1,763,556 $	1,339,319
	Other related parties	Other related parties
	G.M.I Technology Inc.	G.M.I Technology Inc.
	Realtek Semiconductor Corporation	Realtek Singapore Private Limited

-265-

0.04%	2.26%	0.32%	0.54%	0.10%	0.21%	0.01%	0.13%	0.04%	0.14%	0.01%	0.07%	0.49%	0.26%	0.01%	0.02%	0.04%
No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.
$ 45,049	2,386,682	326,742	566,137	105,776	217,181	11,200	138,457	39,249	152,176	13,453	69,211	514,586	259,448	10,604	17,565	45,049
Other receivables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Other payables	Technical service fees	Technical service fees	Other payables	Technical service fees	Technical service fees	Other receivables
�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�
RayMX Microelectronics Corp.	Realsil Microelectronics Corp.	Realsil Microelectronics Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Realtek Semiconductor (Shen Zhen) Corp.	Cortina Access, Inc.	Cortina Access, Inc.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Network Systems Shanghai Co. Ltd.	Cortina Systems Taiwan Limited	Cortina Systems Taiwan Limited	Realtek Semiconductor (Japan) Corp.	Ubilinx Technology Inc.	Ubilinx Technology Inc.	Realtek Viet Nam Co., Ltd.	Realtek Semiconductor (Malaysia) SDN. BHD	RayMX Microelectronics Corp.
Realtek Semiconductor Corporation	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited	Realtek Singapore Private Limited
�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�	�

-266-

Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary
36,386 $	20,550	13,268,254	10,825	85,684	43,812	17,017	80,784	1,484) (	7	105	20) (
36,386 $	20,550	13,267,476	10,825	85,684	43,812	17,017	80,784	1,484) (	7	157	20) (
$ 13,271,128	3,495,793	18,474,782	3,281,950	2,190,704	6,138,099	880,497	758,769	285,893	5,074	19,347	19,980
100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	66.67%	100%
34,630	41,432	89,856,425	110,050,000	114,100,000	200,000,000	28,000,000	25,000,000	29,392,985	500,000	1,918,910	2,000,000
$ 14,080,956	4,487,621	4,076,101	3,137,305	3,252,763	5,701,600	280,000	250,000	293,930	5,000	19,189	-
$ 13,676,922	4,358,823	3,928,798	3,047,285	3,159,429	5,538,000	280,000	250,000	293,930	5,000	19,189	20,000
Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	Investment holdings	ICs manufacturing, design, research, development, sales, and marketing	Manufacturing and installation of computer equipment and wholesasle, retail and related services of electronic materials and information/software	ICs manufacturing, design, research, development, sales, and marketing
British Virgin Islands	British Virgin Islands	Singapore	Cayman Islands	Cayman Islands	Singapore	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan
Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited	Bluocean Inc.	Talent Eagle Enterprise Inc.	Realtek Investment Singapore Private Limited	Realsun Investments Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Realking Investments Co., Ltd.	Realsun Technology Corporatioin	Bobitag Inc.	AICONNX Technology Corporation
Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation	Realtek Semiconductor Corporation

-267-

Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Investments accounted for under equity method	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary
(5,968) $	(4,882)	294) (	676) (	353) (	4,621	320) (	12) (	395,720	26,504
(64,411) $	(17,446)	2,940) (	2,940) (	2,940) (	4,621	320) (	12) (	395,720	26,504
$ 5,081	142,619	9,706	22,324	11,647	6,344	7,126	1,034	1,959,141	839,870
6.89%	37.38%	10%	23%	12%	100%	100%	100%	100%	100%
2,000,000	20,000,000	1,000,000	2,300,000	1,200,000	400	300,000	-	2,825,000	16,892
$ 110,000	200,000	-	-	-	5,530	1,847,318	5,516	805,351	1,164,438
$ 110,000	200,000	10,000	23,000	12,000	4,812	8,307	5,326	782,243	1,131,026
Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Venture capital activities	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	ICs deign,sales, and consultancy	Investment holdings	Information services and technical support	Investment holdings	R&D and information services
Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Japan	Mauritius	Hong Kong	Mauritius	U.S.A
Estinet Technologies Incorporation	Innorich Venture Capital Corp.	Starmems Semiconductor Corporation	Starmems Semiconductor Corporation	Starmems Semiconductor Corporation	Realtek Semiconductor (Japan) Corp.	Circon Universal Inc.	Realtek Semiconductor (Hong Kong) Limited	Empsonic Enterprises Inc.	Cortina Access Inc.
Realtek Semiconductor Corporation	Realking Investments Co., Ltd.	Realking Investments Co., Ltd.	Realsun Investments Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Leading Enterprises Limited	Leading Enterprises Limited	Amber Universal Inc.	Realtek Singapore Private Limited	Realtek Singapore Private Limited

-268-

Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary	Sub-Subsidiary
5,326 $	9,916) (	54,656	1,452
5,326 $	9,916) (	54,656	1,452
$ 54,730	76,353	254,166	62,077
100%	100%	100%	100%
21,130,000	4,000,000	60,000,000	10,450,000
$ 57,016	114,032	1,482,416	74,144
$ 55,380	110,760	1,661,400	69,275
R&D and technical support	R&D and technical support	R&D and information services	R&D and information services
Taiwan	Vietnam	U.S.A	Malaysia
Cortina Systems Taiwan Limited	Realtek Viet Nam Co., Ltd.	Ubilinx Technology Inc.	Realtek Semiconductor (Malaysia) Limited
Realtek Singapore Private Limited	Realtek Singapore Private Limited	Talent Eagle Enterprise Inc.	Bluocean Inc.

-269-

==> picture [456 x 688] intentionally omitted <==

-270-

AI assistant

RT — Annual Report 2022

52043_rns_2022-06-21_a8e773ad-3b93-43e7-9892-0f207248d909.pdf

REALTEK SEMICONDUCTOR CORP. 2021 Annual Report

Notice to Readers:

Table of Contents

Letter to Shareholders

1. 2021 Operating Results

2. 2022 Business Plan

3. Strategy for Future Development and Impact by Competitive, Regulatory, and Macro Conditions

Company Introduction

I. Date of Establishment

II. Company Milestones

Corporate Governance Report

I. Organization

1. Organizational Structure

2. Responsibilities of Main Departments

Table II: The major shareholders of the major shareholders of institutional shareholders in Table I

1.1 Disclosure of professional qualifications of directors and independent status of independent directors

1.2. Diversity and Independence of the Board

Remuneration Range

3.3 Employee’s Compensation for Officers

2021 / Unit: NT$K

4. Percentage of remuneration and compensation paid to Directors and Officers by the Company and all companies of the consolidated statements accounts for net income after taxes for the recent two years.

III. Corporate Governance

1. Operation of Board of Directors

Operation of Board of Directors:

Previous member’s term of office: June 5, 2018 to June 4, 2021 Current member’s term of office: August 9, 2021 to August 8, 2024

3. Operation of Audit Committee

Operation of Audit Committee

3.1 (1) Securities and Exchange Act §14-5 resolutions

11. Internal Control Status

11.1. Statement of internal control

Realtek Semiconductor Corporation Statement of Internal Control System

date of the annual report printed:

13.1. Major resolutions of 2021 shareholders’ meeting:

13.2. Major Resolutions of Board Meetings

IV. Information Regarding Audit Fees

V. Replacement of Independent Auditors

2. Regarding the Successor CPA

VII. Share transfer or share pledge of Directors, Officers and major shareholders holding more than 10% shares from last year to the date of the annual report printed. 1. Changes in shareholding of Directors, Officers and major shareholders

VIII. The relationship between any of the Company’s top ten shareholders:

IX. The consolidated shareholdings and percentage of investments held by the Company, Directors, Officers, and the companies controlled directly or indirectly by the Company.

Capital Raising

I. Source of Capital

II. Structure of Shareholders

III. Distribution of Shareholding

IV. List of Major Shareholders

V. Market price, net worth, earning, and dividends per common share and related information over the last two years

VI. Dividend Policy and Status of Execution

VIII. Employees’ Compensation and Remuneration to Directors

IX. Status of Treasury Stocks: None

X. Status of Corporate Bonds: None

XI. Status of Preferred Stocks: None

XII. Status of GDR

XIII. Status of Employee Stock Warrants: None

Operations Overview

I. Business Overview

1. Business Scope

(2) Percentage of Operating Revenue

(3) Current Products

Communications Network and Connected Media Products:

Computer Peripheral Products:

Multimedia Products :

Communications Network and Connected Media Products:

Computer Peripheral Products:

Multimedia Products:

2. Industry Overview

Communications Network and Connected Media Products:

Computer Peripheral Products:

Multimedia Products:

(2) Industrial Upstream, Midstream and Downstream Relationships

3. R&D Development

Communications Network and Connected Media Products:

Computer Peripheral Products:

Multimedia Products:

4. Long-Term and Short-Term Business Development Plan

(1) Short-Term Business Development Plan

II. Marketplace and Production Overview

1. Market Analysis

RT Annual Report 2022

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

1. ��