RT — Audit Report / Information 2023

Dec 5, 2023

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2023 AND 2022 (Stock code: 2379)

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR23002885

To the Board of Directors and Shareholders of Realtek Semiconductor Corporation

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2023 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we

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do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2023 consolidated financial statements are stated as follows:

Evaluation of inventories

Description

Refer to Note 4(13) of the consolidated financial statements for inventory evaluation policies, Note 5(2) for uncertainty of accounting estimates and assumptions of inventory evaluation and Note 6(6) for the details of inventories.

The Group is primarily engaged in researching, developing, manufacturing, selling of various integrated circuits and related application software. Inventories are stated at the lower of cost and net realizable value. Due to the balances of inventories are significant to the financial statements and the rapid technological changes in the industry, there is a higher risk of decline in market value and obsolescence of inventories. Thus, we considered the evaluation of inventories as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Obtained an understanding of accounting policies on the provision of allowance for inventory valuation losses and assessed the reasonableness.

2. Validated the accuracy of inventory aging report, as well as sampled and confirmed the consistency of quantities and amounts with detailed inventory listing, verified dates of movements with supporting documents and ensured the proper categorization of inventory aging report.

3. Evaluated and confirmed the reasonableness of net realizable value for inventories through validating respective supporting documents.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion with other matter section on the parent company only financial statements of Realtek Semiconductor Corporation as at and for the years ended December 31, 2023 and 2022.

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Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

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

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

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

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as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

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

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

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

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

Li, Tien-Yi Cheng, Ya-Huei

For and on behalf PricewaterhouseCoopers, Taiwan February 27, 2024

------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) and 7 6(6) 6(2) 6(3) 6(4) and 8 6(7) 6(8) 6(9) 6(10) 6(11) 6(28) 9	December 31, 2023 AMOUNT % $ 10,268,291 11 948,832 1 32,373,191 34 10,663,065 11 2,093,922 2 616,624 1 11,756,934 13 566,761 1 69,287,620 74 53,000 - 3,126,098 3 5,509,030 6 131,794 - 8,754,486 9 1,767,795 2 33,878 - 2,624,598 3 337,312 1 2,189,659 2 24,527,650 26 $ 93,815,270 100	December 31, 2022	December 31, 2022
		AMOUNT $ 10,268,291 948,832 32,373,191 10,663,065 2,093,922 616,624 11,756,934 566,761 69,287,620 53,000 3,126,098 5,509,030 131,794 8,754,486 1,767,795 33,878 2,624,598 337,312 2,189,659 24,527,650 $ 93,815,270	AMOUNT $ 13,754,035 1,563,287 41,595,837 9,418,440 2,594,245 488,769 25,552,543 524,525 95,491,681 358,145 3,099,759 618,481 170,671 7,556,636 1,537,328 38,416 2,413,195 132,978 2,283,237 18,208,846 $ 113,700,527	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventories, net 1410 Prepayments 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Financial assets at amortised cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				12 1 37 8 2 - 23 1
				84
				- 3 1 - 7 1 - 2 - 2
				16
				100

(Continued)

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(12) 6(21) 7 6(13) 7 6(21) 6(14) 6(16) 6(28) 6(15) 6(17) 6(18) 6(19) 6(20) 9	December 31, 2023 AMOUNT % $ 4,250,000 5 336,648 - 6,904,009 7 369,104 - 24,513,037 26 60,293 - 1,764,021 2 139,213 - 7,909,427 9 46,245,752 49 2,227,346 2 1,392,138 2 203,766 - 1,408,856 2 99,250 - 5,331,356 6 51,577,108 55 5,128,636 5 542,048 1 8,882,764 9 - - 24,845,272 27 2,829,740 3 42,228,460 45 9,702 - 42,238,162 45 $ 93,815,270 100	December 31, 2022	December 31, 2022
		AMOUNT $ 4,250,000 336,648 6,904,009 369,104 24,513,037 60,293 1,764,021 139,213 7,909,427 46,245,752 2,227,346 1,392,138 203,766 1,408,856 99,250 5,331,356 51,577,108 5,128,636 542,048 8,882,764 - 24,845,272 2,829,740 42,228,460 9,702 42,238,162 $ 93,815,270	AMOUNT $ 13,737,994 117,752 10,340,079 156,296 27,684,495 90,401 1,379,985 78,446 8,959,279 62,544,727 1,713,316 1,287,710 62,725 1,223,185 105,914 4,392,850 66,937,577 5,128,636 1,045,147 7,262,359 1,776,089 28,854,826 2,686,175 46,753,232 9,718 46,762,950 $ 113,700,527	%
Current liabilities 2100 Short-term borrowings 2130 Contract liabilities - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2550 Provisions - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common shares Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Undistributed earnings Other equity 3400 Other equity interest 31XX Equity attributable to holders of the parent company 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments 3X2X Total liabilities and equity				12 - 9 - 25 - 1 - 8
				55
				2 1 - 1 -
				4
				59
				5 1 6 2 25 2
				41
				-
				41
				100

The accompanying notes are an integral part of these consolidated financial statements.

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(21) and 7 $ 95,179,276 100 $ 111,789,791 100 6(6) and 7 ( 54,431,219) ( 57) ( 57,154,955) ( 51) 40,748,057 43 54,634,836 49 6(26)(27) and 7 ( 3,864,715) ( 4) ( 4,724,569) ( 4) ( 3,768,586) ( 4) ( 4,138,151) ( 4) ( 26,434,295) ( 28) ( 30,081,533) ( 27) 12(2) ( 25,469) - 33,415 - ( 34,093,065) ( 36) ( 38,910,838) ( 35) 6,654,992 7 15,723,998 14 6(22) 2,581,961 3 950,676 1 6(23) 203,976 - 388,919 - 6(24) 398,354 - 96,732 - 6(25) ( 247,459) - ( 217,743) - 6(7) ( 47,189) - ( 20,723) - 2,889,643 3 1,197,861 1 9,544,635 10 16,921,859 15 6(28) ( 391,797) - ( 717,715) ( 1) $ 9,152,838 10 $ 16,204,144 14 6(20) 6(3) ($ 123,789) - ($ 988,964) ( 1) 283,799 - 5,451,229 5 $ 160,010 - $ 4,462,265 4 $ 9,312,848 10 $ 20,666,409 18 $ 9,152,772 10 $ 16,204,052 14 66 - 92 - $ 9,152,838 10 $ 16,204,144 14 $ 9,312,782 10 $ 20,666,317 18 66 - 92 - $ 9,312,848 10 $ 20,666,409 18 6(29) $ 17.85 $ 31.62 6(29) $ 17.59 $ 30.48

4000 Operating revenue 5000 Operating costs 5950 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit (losses) gains 6000 Total operating expenses 6900 Operating income Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of loss of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax, net 7950 Income tax expense 8200 Net income for the year Other comprehensive income (losses), net Components of other comprehensive income (losses) that will not be reclassified to profit or loss 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income Components of other comprehensive income (losses) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8300 Other comprehensive income, net 8500 Total comprehensive income for the year Net income attributable to: 8610 Equity holders of the parent company 8620 Non-controlling interest Net income for the year Comprehensive income attributable to: 8710 Equity holders of the parent company 8720 Non-controlling interest Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

2022 Balance at January 1, 2022 Net income for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Distribution of 2021 earnings Legal reserve Special reserve Cash dividends Employees’ compensation transferred to common shares Cash from capital surplus Cash dividends returned Changes in non-controlling interest Balance at December 31, 2022 2023 Balance at January 1, 2023 Net income for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Distribution of 2022 earnings Legal reserve Reversal of special reserve Cash dividends Cash from capital surplus Change in equity of associates accounted for under equity method Disposal of financial assets at fair value through other comprehensive income or losses Cash dividends returned Changes in non-controlling interest Balance at December 31, 2023	Notes						Equity attributable to o	Equity attributable to o	Equity attributable to o	wn	ers of parent comp	any	any	any				Non-controlling interest		Total equity
			Common shares		Capital surplus				Retained Earnings			Other equityinterest				Total
							Legal reserve		Special reserve		Undistributed earnings	Financial statements translation differences of foreign operations		Unrealised income (losses) from financial assets measured at fair value through other comprehensive income
	6(20) 6(19) 6(19) 6(19) 6(18)(19) 6(19) 6(18) 6(20) 6(19) 6(19) 6(19) 6(19) 6(18) 6(20) 6(18)		$ 5,106,849 - - - - - - 21,787 - - - $ 5,128,636 $ 5,128,636 - - - - - - - - - - - $ 5,128,636	$ 1,101,079 - - - - - - 969,551 ( 1,025,727 ) 244 - $ 1,045,147 $ 1,045,147 - - - - - - ( 512,864 ) 9,549 - 216 - $ 542,048			$ 5,577,083 - - - 1,685,276 - - - - - - $ 7,262,359 $ 7,262,359 - - - 1,620,405 - - - - - - - $ 8,882,764	$ 1,556,049 - - - - 220,040 - - - - - $ 1,776,089 $ 1,776,089 - - - - ( 1,776,089 ) - - - - - - $ -		$ 27,377,681 16,204,052 - 16,204,052 ( 1,685,276 ) ( 220,040 ) ( 12,821,591 ) - - - - $ 28,854,826 $ 28,854,826 9,152,772 - 9,152,772 ( 1,620,405 ) 1,776,089 ( 13,334,455 ) - - 16,445 - - $ 24,845,272		($ 4,156,871 ) - 5,451,229 5,451,229 - - - - - - - $ 1,294,358 $ 1,294,358 - 283,799 283,799 - - - - - - - - $ 1,578,157	$ 2,380,781 - ( 988,964 ) ( 988,964 ) - - - - - - - $ 1,391,817 $ 1,391,817 - ( 123,789 ) ( 123,789 ) - - - - - ( 16,445 ) - - $ 1,251,583		$ 38,942,651 16,204,052 4,462,265 20,666,317 - - ( 12,821,591 ) 991,338 ( 1,025,727 ) 244 - $ 46,753,232 $ 46,753,232 9,152,772 160,010 9,312,782 - - ( 13,334,455 ) ( 512,864 ) 9,549 - 216 - $ 42,228,460		$ 9,673 92 - 92 - - - - - - ( 47 ) $ 9,718 $ 9,718 66 - 66 - - - - - - - ( 82 ) $ 9,702		$ 38,952,324 16,204,144 4,462,265 20,666,409 - - ( 12,821,591 ) 991,338 ( 1,025,727 ) 244 ( 47 ) $ 46,762,950 $ 46,762,950 9,152,838 160,010 9,312,848 - - ( 13,334,455 ) ( 512,864 ) 9,549 - 216 ( 82 ) $ 42,238,162

The accompanying notes are an integral part of these consolidated financial statements.

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Expected credit losses (gains) Interest expense Interest income Dividend income (Gains) losses on financial assets at fair value through profit or loss Share of loss of associates and joint ventures accounted for under equity method Gains on disposal of property, plant and equipment Gains on disposal of investments Gains arising from lease modifications Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Accounts receivable, net Accounts receivable, net - related parties Other receivables Inventories Prepayments Changes in operating liabilities Contract liabilities - current Notes payable Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities Provisions - non-current Accrued pension obligations

YearendedDecember 31 Notes 2023 2022 $ 9,544,635 $ 16,921,859 6(26) 1,308,355 1,176,920 6(11)(26) 1,716,487 1,627,409 12(2) 25,469 ( 33,415 ) 6(25) 247,459 217,743 6(22) ( 2,581,961 ) ( 950,676 ) 6(23) ( 33,337 ) ( 60,741 ) 6(2)(24) ( 81,860 ) 180,983 6(7) 47,189 20,723 6(24) ( 5,275 ) ( 1,132 ) 6(24) ( 305,599 ) - 6(24) - ( 24 ) 692,017 220,475 ( 1,267,400 ) 3,404,506 497,629 605,229 15,161 ( 139,755 ) 13,795,609 ( 9,003,831 ) ( 42,236 ) 135,358 218,896 ( 93,348 ) - ( 3,276 ) ( 3,436,070 ) ( 765,489 ) 212,808 ( 178,117 ) ( 3,893,027 ) 4,350,517 ( 30,108 ) ( 10,851 ) ( 1,049,852 ) 1,419,864 124,713 185,080 ( 3,632 ) ( 4,277 )

(Continued)

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Cash inflow generated from operations Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of financial assets at fair value through profit or loss - non-current Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at amortised cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in refundable deposits Decrease (increase) in other non-current assets Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Increase in long-term borrowings Repayment of principal portion of lease liabilities Decrease in guarantee deposits Cash from capital surplus and cash dividends Cash dividends returned Net cash flows used in financing activities Effect of exchange rate Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2023 2022 $ 15,716,070 $ 19,221,734 2,438,945 758,590 33,337 60,741 ( 250,334 ) ( 214,712 ) ( 41,732 ) ( 768,184 ) 17,896,286 19,058,169 309,442 - - ( 370,244 ) ( 64,302 ) ( 228,910 ) 18,041 - ( 50,550,558 ) ( 92,296,234 ) 54,981,575 98,487,508 6(30) ( 2,166,602 ) ( 2,451,441 ) 15,428 1,353 6(30) ( 1,461,125 ) ( 1,959,501 ) 830 ( 1,457,055 ) 1,737 ( 91,531 ) 1,084,466 ( 366,055 ) 6(31) 134,242,945 167,983,101 6(31) ( 143,730,939 ) ( 167,587,207 ) 6(31) 511,090 711,110 6(31) ( 114,716 ) ( 97,150 ) 6(31) ( 92 ) ( 892 ) ( 13,847,319 ) ( 13,847,318 ) 216 244 ( 22,938,815 ) ( 12,838,112 ) 472,319 702,682 ( 3,485,744 ) 6,556,684 13,754,035 7,197,351 $ 10,268,291 $ 13,754,035

The accompanying notes are an integral part of these consolidated financial statements.

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Realtek Semiconductor Corporation (the “Company”) was incorporated as a company limited by shares on October 21, 1987 and commenced commercial operations in March 1988. The Company was based in Hsinchu Science Park since October 28, 1989. The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the research, development, design, testing, and sales of ICs and application software for these products.

1. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 27, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS ® ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC and became effective from 2023 are as follows:

are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
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’ Amendments to IAS 12, ‘International tax reform - pillar two model rules’	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. Amendments to IAS 12, ‘International tax reform - pillar two model rules’

The amendments give companies temporary relief from accounting for deferred income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD). An entity shall neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

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(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC

but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC and will become effective from 2024 are as follows:

from 2024 are as follows:
	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’’	January 1, 2024
The above standards, interpretations and amendments have no significant impact to the Group’s
financial condition and financial performance based on the Group’s	assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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IFRS Accounting Standards as endorsed by the FSC are as follows: New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information’
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025

The above standards, interpretations and amendments have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC ® Interpretations, and SIC ® Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

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• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	Ownership (%)	Ownership (%)	Description
			December 31,2023	December 31,2022
Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation Realtek Semiconductor Corporation	Amber Universal Inc. Realtek Singapore Private Limited Realtek Investment Singapore Private Limited Wise Elite Global Limited Realsun Investments 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%	Note 1 Note 2

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Ownership (%)
Name of Name of Main business December December
investor subsidiary activities 31, 2023 31, 2022 Description
----- End of picture text -----

Name of investor	Name of subsidiary	Main business activities	December 31, 2023 Owners	December 31, 2022 Description hip (%)
Realtek	Realsun	ICs	100%	100%
Semiconductor	Technology	manufacturing,
Corporation	Corporation	design, research,
		development,
		sales, and
		marketing
Realtek	Bobitag Inc.	Manufacture and	67%	67%
Semiconductor		installation of
Corporation		computer
		equipment and
		wholesale, retail
		and related
		service of
		electronic
		materials and
		information /
		software
Realtek	AICONNX	ICs	100%	100%
Semiconductor	Technology	manufacturing,
Corporation	Corporation	design, research,
		development,
		sales, and
		marketing
Leading	Realtek	Information	100%	100%
Enterprises	Semiconductor	collection and
Limited	(Japan) Corp.	technical support
Leading	Circon Universal	Investment	-	100%
Enterprises	Inc.	holdings
Limited
Amber Universal	Realtek	Information	100%	100%
Inc.	Semiconductor	services and
	(Hong Kong)	technical support
	Limited
Amber Universal	Realtek	R&D and	100%	100%
Inc.	Semiconductor	technical support
	(ShenZhen)
	Corp.

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Ownership (%)
Name of Name of Main business December December
investor subsidiary activities 31, 2023 31, 2022 Description
----- End of picture text -----

Name of investor	Name of subsidiary	Main business activities	Main business activities	December 31, 2023 Owners	December 31, 2022 Description hip (%)
Empsonic	Realsil	R&D and		100%	100%
Enterprises Inc.	Microelectronics	technical support
	(Suzhou)
	Co.,LTD
Talent Eagle	Ubilinx		〃	100%	100%
Enterprise Inc.	Technology Inc.
Realtek	Cortina Access		〃	100%	100%
Singapore	Inc.
Private Limited
Realtek	Cortina Systems		〃	100%	100%
Singapore	Taiwan Limited
Private Limited
Realtek	Cortina Network		〃	100%	100%
Singapore	Systems
Private Limited	Shanghai Co.,
	Ltd.
Realtek	Empsonic	Investment		100%	100%
Singapore	Enterprises Inc.	holdings
Private Limited
Realtek	Realtek	R&D and		100%	100%
Singapore	Viet Nam	technical support
Private Limited	Co., Ltd.
Realtek	RayMX	ICs		19%	19%
Singapore	Microelectronics	manufacturing,
Private Limited	Corp.	design, research,
		development,
		sales, and
		marketing
Realtek	Leading	Investment		100%	100%
Singapore	Enterprises	holdings
Private Limited	Limited
Realtek	Bluocean Inc.		〃	100%	100%
Singapore
Private Limited
Realtek	Talent Eagle		〃	100%	100%
Singapore	Enterprise Inc.
Private Limited

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Ownership (%)
Name of Name of Main business December December
investor subsidiary activities 31, 2023 31, 2022 Description
----- End of picture text -----

Name of investor	Name of subsidiary	Main business activities	December 31, 2023 Owners	December 31, 2022 hip (%)	Description
Realtek	Realtek Germany	R&D and	100%	-	Note 3
Singapore	GmbH	technical support
Private Limited
Realsil	RayMX	ICs	81%	81%
Microelectronics	Microelectronics	manufacturing,
(Suzhou)	Corp.	design, research,
Co.,LTD		development,
		sales, and
		marketing
Realsil	Suzhou PanKore	〃	80%	80%
Microelectronics	Integrated
(Suzhou)	Circuit
Co.,LTD	Technology Co.
	Ltd.
Realtek	Suzhou PanKore	〃	20%	20%
Semiconductor	Integrated
(ShenZhen)	Circuit
Corp.	Technology Co.
	Ltd.
Bluocean Inc.	Realtek	R&D and	100%	100%
	Semiconductor	technical support
	(Malaysia) Sdn.
	Bhd.
Bluocean Inc.	Realtek Korea	〃	100%	100%
	Inc.

Note 1: Realtek Investment Singapore Private Limited was dissolved on October 20, 2023 by resolution of the Board of Directors.

Note 2: Wise Elite Global Limited was established on February 17, 2023.

Note 3: Realtek Germany GmbH was established on August 18, 2023.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the

currency of the primary economic environment in which the entity operates (the “functional

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currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii. All resulting exchange differences are recognized in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at

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the balance sheet date.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

Otherwise, they are classified as non-current assets.

• B. Liabilities that meet one of the following criteria are classified as current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities held mainly for trading purposes;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Otherwise, they are classified as non-current liabilities.

(6) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (7) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income. Financial assets at amortized cost or fair value through other comprehensive income are designated as at fair value through profit or loss at initial recognition when they eliminate or significantly reduce a measurement or recognition inconsistency.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount

~21~

of the dividend can be measured reliably.

(8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs.

• The Group subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortized cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts receivable

• A. Accounts receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

• For financial assets at amortized cost, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses(ECLs) if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime ECLs if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts

~22~

receivable that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(13) Inventories

• Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

• (14) Investments accounted for under equity method / associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for under equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains or losses on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘ investments accounted for under equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s

~23~

ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.

• G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Other property, plant and equipment apply cost model and are depreciated using the straightline method to allocate their cost over their estimated useful lives. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

Buildings	10~55 years
Machinery	3~5 years
Test equipment	3~5 years
Office equipment	3~5 years
Others	3~5 years

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(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Fixed payments, less any lease incentives receivable.

  • The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability; and

  • (b) Any lease payments made at or before the commencement date.

  • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

• (17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 years.

• (18) Intangible assets

• A. Computer software

  • Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 1 to 5 years.

• B. Goodwill

  • Goodwill arises in a business combination accounted for by applying the acquisition method.

• C. Other intangible assets

  • Separately acquired intangible assets with a finite useful life are stated at cost. Intangible assets acquired in a business combination are recognized at fair value at acquisition date. The amortization amounts of separately and consolidated acquired intangible assets were amortized on a straight-line basis over their estimated useful lives of 2-5 years.

• (19) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances

~25~

or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

(20) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in loss over the period of the borrowings using the effective interest method.

• (21) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

• (23) Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date.

(24) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plan

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

~26~

(b) Defined benefit plan

     - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

     - ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the Board meeting resolution.

• (25) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business

~27~

combination that at the time of the transaction affects neither accounting nor taxable profit nor loss and does not give rise to equal taxable and dedutible temporary differences. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

• (26) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

• (27) Dividends

Cash dividends are recorded as liabilities in the Company’s financial statements in the period in which they are resolved by the Board of Directors. Stock dividends are recorded as stock dividends to be distributed in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders and are reclassified to ordinary shares on the effective date of new shares issuance.

• (28) Revenue recognition

• A. Sales of goods

  • (a) The Group manufactures and sells various integrated circuit related products. Sales are recognized when control of the products has transferred, being when the products are delivered to the customers, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Revenue from these sales is recognized based on the price specified in the contract. A refund liability is recognized for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time

~28~

value of money.

• (c) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Services revenue

Revenue from design, royalty and technical services is recognized after completing the services in which the services are rendered.

• (29) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate.

• (30) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

• None.

(2) Critical accounting estimates and assumptions

• Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As at December 31, 2023, the carrying amount of inventories was $11,756,934.

~29~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	December 31, 2023		December 31, 2022
Cash on hand and revolving funds	$	841	$	837
Checking accounts and demand
deposits		5,362,257		10,001,264
Time deposits		4,136,818		3,751,934
Cash equivalents - notes and bonds issued
under repurchase agreement		768,375		-
	$	10,268,291	$	13,754,035
The Group transacts with a variety of financial institutions all with high credit				quality to disper
credit risk, so it expects that the probability of counterparty default is remote.
Financial assets at fair value through profit or loss
	December31,2023		December 31, 2022
Current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Listed stocks	$	221,020	$	159,902
Beneficiary certificates		727,812		1,403,385
		948,832		1,563,287
Non-current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Beneficiary certificates	$	-	$	305,145
Hybrid instruments		53,000		53,000
		53,000		358,145
	$	1,001,832	$	1,921,432

The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

(2) Financial assets at fair value through profit or loss

• A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Equity instruments Beneficiary certificates	Year ended Year ended December31,2023 December31,2022 61,118 $ 198,989) ($ 20,742 18,006 81,860 $ 180,983) ($

• B. The Group has no financial assets at fair value through profit or loss pledged to others.

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(3) Financial assets at fair value through other comprehensive income

Items Non-current items: Equity instruments Listed stocks Emerging stocks Unlisted stocks	December31,2023 763,506 $ - 2,362,592 3,126,098 $	December31,2022 718,427 $ 28,771 2,352,561
		3,099,759 $

• A. The Group has elected to classify equity instruments investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $3,126,098 and $3,099,759 on December 31, 2023 and 2022, respectively.

• B. Amounts recognized in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Year ended	Year ended
	December31,2023		December31,2022
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in
other comprehensive loss	($	123,789)	988,964) ($
Cumulative gains reclassified
to retained earnings due to disposal	($	16,445)	- $

• C. The Group has no financial assets at fair value through other comprehensive income pledged to others.

(4) Financial assets at amortized cost

others. Financial assets at amortized cost
Items Current items: Time deposits Non-current items: Corporate bonds Time deposits	December31,2023 32,373,191 $ 5,414,650 $ 94,380 5,509,030 $	December31,2022
		41,595,837 $
		532,574 $ 85,907
		618,481 $

• A. Details of the Group’s financial assets at amortized cost pledged to others as collateral are provided in Note 8.

• B. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in time deposits were financial institutions who have good credit quality, so it expects that the probability of counterparty default is remote.

~31~

(5) Accounts receivable

Accounts receivable
	December31,2023		December31,2022
Accounts receivable	$	10,740,062	$	9,472,662
Accounts receivable - related parties		2,107,689		2,605,318
Less: Loss allowance	(	90,764)	(	65,295)
	$	12,756,987	$	12,012,685
A. The aging analysis of accounts receivable is	as follows:
	December 31, 2023		December 31, 2022
Not past due	$	12,266,292	$	12,034,050
Up to 30 days		577,646		43,893
31 to 90 days		3,777		-
Over 90 days		36		37
	$	12,847,751	$	12,077,980

The above aging analysis is based on past due date.

• B. As at December 31, 2023 and 2022, accounts receivable were all from contracts with customers. And as at January 1, 2022, the balance of receivables from contracts with customers amounted to $16,087,715.

• C. The Group has no accounts receivable pledged to others.

• D. Information relating to credit risk of accounts receivable is provided in Note 12(2).

• (6) Inventories

Inventories
Raw materials Work in process Finished goods Raw materials Work in process Finished goods	December 31, 2023
	Allowance for obsolescence and Cost market value decline 2,647,401 $ 1,213,544) ($ 6,290,100 3,003,060) ( 9,829,180 2,793,143) ( 18,766,681 $ 7,009,747) ($ December 31, 2022	Bookvalue
		1,433,857 $ 3,287,040 7,036,037
		11,756,934 $
	Allowance for obsolescence and Cost market value decline 9,483,560 $ 1,024,725) ($ 8,905,516 948,334) ( 10,319,326 1,182,800) ( 28,708,402 $ 3,155,859) ($	Bookvalue
		8,458,835 $ 7,957,182 9,136,526
		25,552,543 $

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Operating costs incurred on inventories for the years ended December 31, 2023 and 2022 were as follows:

follows:
Investments accounted for under equity method Cost of inventories sold and others Inventory loss on decline in market value, obsolete and slow-moving inventories Loss on scrap inventory Estinet Technologies Incorporation Innorich Venture Capital Corp. Starmems Semiconductor Corp.	Year ended December 31, 2023 50,315,861 $ 3,904,005 211,353 54,431,219 $ December31,2023 - $ 112,797 18,997 131,794 $	Year ended December 31, 2022
		54,942,909 $ 1,986,470 225,576
		57,154,955 $ December31,2022
		2,276 $ 135,808 32,587 170,671 $

(7) Investments accounted for under equity method

The loss on investments accounted for under equity method amounted to $47,189 and $20,723 for the years ended December 31, 2023 and 2022, respectively.

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(8) Property, plant and equipment

At January 1, 2023 Cost Accumulated depreciation and impairment 2023 At January 1 Additions Disposals Reclassifications Depreciation Net exchange difference At December 31 At December 31, 2023 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment 489,370 $ 3,083,025 $ 1,292,529 $ 3,414,364 $ 434,731 $ - 1,187,897) ( 532,861) ( 1,960,834) ( 215,677) ( 489,370 $ 1,895,128 $ 759,668 $ 1,453,530 $ 219,054 $ 489,370 $ 1,895,128 $ 759,668 $ 1,453,530 $ 219,054 $ - 39,516 50,152 1,002,608 47,053 - - 7,451) ( 2,530) ( 172) ( - 1,518,099 11,399 77,518) ( 14,370 - 117,856) ( 191,845) ( 651,511) ( 67,103) ( - 7,276 2,768) ( 8,848 1,469 489,370 $ 3,342,163 $ 619,155 $ 1,733,427 $ 214,671 $ 489,370 $ 4,624,038 $ 1,329,794 $ 4,330,811 $ 494,375 $ - 1,281,875) ( 710,639) ( 2,597,384) ( 279,704) ( 489,370 $ 3,342,163 $ 619,155 $ 1,733,427 $ 214,671 $

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At January 1, 2022 Cost Accumulated depreciation and impairment 2022 At January 1 Additions Disposals Reclassifications Depreciation Net exchange difference At December 31 At December 31, 2022 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment 489,370 $ 3,466,696 $ 4,185,792 $ 3,926,851 $ 492,603 $ - 1,517,259) ( 3,546,371) ( 2,638,725) ( 255,610) ( 489,370 $ 1,949,437 $ 639,421 $ 1,288,126 $ 236,993 $ 489,370 $ 1,949,437 $ 639,421 $ 1,288,126 $ 236,993 $ - 47,562 125,763 729,752 45,270 - 57) ( - 41) ( 123) ( - - 172,492 2,891 - - 130,636) ( 169,607) ( 580,087) ( 63,891) ( - 28,822 8,401) ( 12,889 805 489,370 $ 1,895,128 $ 759,668 $ 1,453,530 $ 219,054 $ 489,370 $ 3,083,025 $ 1,292,529 $ 3,414,364 $ 434,731 $ - 1,187,897) ( 532,861) ( 1,960,834) ( 215,677) ( 489,370 $ 1,895,128 $ 759,668 $ 1,453,530 $ 219,054 $

A. There was no capitalization of borrowing costs attributable to the property, plant and equipment.

B. The Group has no property, plant and equipment pledged to others.

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－ (9) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings and other equipment. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation are as follows:

Land Buildings Other equipment Land Buildings Other equipment	December 31, 2023 December31,2022 1,558,868 $ 1,354,240 $ 185,723 182,939 23,204 149 1,767,795 $ 1,537,328 $ Carrying amount Depreciation	December31,2022 1,354,240 $ 182,939 149 amount
		1,537,328 $
	Year ended December31,2023 36,334 $ 72,865 6,877 116,076 $	Year ended December31,2022
		28,153 $ 76,443 1,794
		106,390 $

• C. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $341,081 and $69,238, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities	Year ended December31,2023 32,982 $	Year ended December31,2022
		27,680 $

• E. For the years ended December 31, 2023 and 2022, the Group’s total cash outflow for leases were $147,698 and $124,830, respectively.

~36~

(10) Investment property

Investment property
			Buildings
			2023			2022
At January 1
Cost		$	82,504		$	81,152
Accumulated depreciation and impairment	(		44,088)	(		39,511)
		$	38,416		$	41,641
At January 1		$	38,416		$	41,641
Depreciation	(		3,906)	(		3,924)
Net exchange difference	(		632)			699
At December 31		$	33,878		$	38,416
At December 31
Cost		$	81,024		$	82,504
Accumulated depreciation and impairment	(		47,146)	(		44,088)
		$	33,878		$	38,416

• A. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:

from the investment property are shown below:
Rental income from the lease of the investment property Operating expenses arising from the investment property that generated rental income during the year	Year ended December31,2023 2,259 $ 3,906 $	Year ended December31,2022
		2,274 $
		3,924 $

• B. The Group’s investment property is located in Mainland China. The fair value is based on valuation information from Information Centre of Real Estate in local governments in Mainland China and is adjusted and classified as level 3 accordingly. As at December 31, 2023 and 2022, the fair values were $112,686 and $133,060, respectively.

~37~

(11) Intangible assets

Intangible assets
			Computer			Intellectual
			software			property			Goodwill				Others			Total
At January 1, 2023
Cost		$	7,099,807		$	6,117,679		$	639,561			$	348,766		$	14,205,813
Accumulated amortisation
and impairment	(		5,700,830)	(		5,162,742)	(		639,561)		(		289,485)	(		11,792,618)
		$	1,398,977		$	954,937		$		-		$	59,281		$	2,413,195
2023
At January 1		$	1,398,977		$	954,937		$		-		$	59,281		$	2,413,195
Additions			1,551,278			319,286				-			49,609			1,920,173
Reclassifications			102,048			-				-	(		102,048)			-
Amortisation	(		1,141,458)	(		569,301)				-	(		5,728)	(		1,716,487)
Net exchange difference	(		324)			7,955				-			86			7,717
At December 31		$	1,910,521		$	712,877		$		-		$	1,200		$	2,624,598
At December 31, 2023
Cost		$	4,061,937		$	2,960,738		$	639,561			$	296,587		$	7,958,823
Accumulated amortisation
and impairment	(		2,151,416)	(		2,247,861)	(		639,561)		(		295,387)	(		5,334,225)
		$	1,910,521		$	712,877		$		-		$	1,200		$	2,624,598
			Computer			Intellectual
			software			property			Goodwill				Others			Total
At January 1, 2022
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
2022
At January 1		$	902,355		$	1,288,502		$		-		$	40,837		$	2,231,694
Additions			1,459,084			308,554				-			38,240			1,805,878
Amortisation	(		962,714)	(		642,764)				-	(		21,931)	(		1,627,409)
Net exchange difference			252			645				-			2,135			3,032
At December 31		$	1,398,977		$	954,937		$		-		$	59,281		$	2,413,195
At December 31, 2022
Cost		$	7,099,807		$	6,117,679		$	639,561			$	348,766		$	14,205,813
Accumulated amortisation
and impairment	(		5,700,830)	(		5,162,742)	(		639,561)		(		289,485)	(		11,792,618)
		$	1,398,977		$	954,937		$		-		$	59,281		$	2,413,195
Details of amortization on intangible assets						are as follows:
								Year ended					Year ended
						December31,				2023			December31,2022
Operating costs						$				4,668			$			2,615
Operating expenses									1,711,819							1,624,794
						$			1,716,487				$			1,627,409

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(12) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Unsecured borrowings Type ofborrowings Bank borrowings Unsecured borrowings	December31,2023 Interest rate range 4,250,000 $ 1.31%~1.35% December31,2022 Interestraterange 13,737,994 $ 1.18%~2.3%	Collateral None Collateral
		None

Interest expense of bank borrowings recognized in profit or loss amounted to $214,477 and $190,063 for the years ended December 31, 2023 and 2022, respectively.

(13) Other payables

Other payables
Accrued salaries and bonus Payable for employees’ compensation Other accrued expenses Payables on equipment Payables on software and intellectual property Others	December 31, 2023 9,186,342 $ 10,527,846 2,579,852 331,358 1,751,355 136,284 24,513,037 $	December31,2022
		11,366,632 $ 12,002,603 2,531,844 114,514 1,292,307 376,595
		27,684,495 $

- (14) Long term borrowings

Type of borrowings Loan for Accelerated Investment by Domestic Corporations (Note) Type of borrowings Loan for Accelerated Investment by Domestic Corporations (Note)	Borrowing Repayment period term 2021/11/8 ~2028/11/22 Repayable in instalment over the agreed period Borrowing Repayment period term 2021/11/8 ~2027/12/15 Repayable in instalment over the agreed period	Interest rate range 1.050%～ 1.250% Interest rate range 0.925%～ 1.125%	Collateral None Collateral None	December31,2023
				2,227,346 $
				December31,2022
				$1,713,316

Note: The Ministry of Economic Affairs implemented the “Action Plan for Accelerated Investment by Domestic Corporations” on July 1, 2019. An entity can apply for a subsidized loan for an eligible investment project from financial institutions at a preferential interest rate. The Group is qualified for the loan as approved by the Ministry of Economic Affairs and entered into a loan contract with a financial institution with a credit period of 5 years. The loan is used for construction of plant and related facilities.

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(15) Pension

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

• (b) The amounts recognized in the balance sheet are determined as follows:

	December	31,2023	December	31,2022
Present value of defined benefit obligations	($	630,660)	($	624,489)
Fair value of plan assets		544,541		533,997
Net defined benefit liability	($	86,119)	($	90,492)

• (c) Movement in net defined benefit liabilities are as follows:

2023

					2023
	Present value of
	defined benefit			Fair value of				Net defined
		obligations			plan assets		benefit liability
At January 1	($	624,489)		$	533,997	($		90,492)
Current service cost	(	1,106)			-	(		1,106)
Interest (expense) income	(	8,603)			7,582	(		1,021)
	(	634,198)			541,579	(		92,619)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)		-			28,522			28,522
Change in financial assumptions	(	5,706)			-	(		5,706)
Experience adjustments	(	22,316)			-	(		22,316)
	(	28,022)			28,522			500
Pension fund contribution		-			6,000			6,000
Paid pension		31,560	(		31,560)			-
At December 31	($	630,660)		$	544,541	($		86,119)

~40~

					2022
	Present value of
	defined benefit			Fair value of				Net defined
		obligations			plan assets		benefit liability
At January 1	($	628,846)		$	534,371	($		94,475)
Current service cost	(	1,136)			-	(		1,136)
Interest (expense) income	(	4,641)			3,760	(		881)
	(	634,623)			538,131	(		96,492)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)		-	(		1,418)	(		1,418)
Change in financial assumptions		38,312			-			38,312
Experience adjustments	(	36,894)			-	(		36,894)
		1,418	(		1,418)			-
Pension fund contribution		-			6,000			6,000
Paid pension		8,716	(		8,716)			-
At December 31	($	624,489)		$	533,997	($		90,492)

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “ Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, overthe-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks.

• (e) The principal actuarial assumptions used were as follows:

interest rates offered by local banks. The principal actuarial assumptions used were as	follows:
Discount rate Future salary increases	Year ended December31,2023 1.30% 4.75%	Year ended December31,2022
		1.40%
		4.75%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table for the years ended December 31, 2023 and 2022.

~41~

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

==> picture [441 x 133] intentionally omitted <==

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

Discount rate Future salary increases
Increase by Decrease by Increase by Decrease by
0.25% 0.25% 0.25% 0.25%
December 31, 2023
Effect on present value of
defined benefit obligation $ 14,524 ($ 15,015) ($ 14,185) $ 13,802
December 31, 2022
Effect on present value of
defined benefit obligation $ 14,986 ($ 15,511) ($ 14,672) $ 14,260
----- End of picture text -----

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2024 amount to $6,000.

• (g) As at December 31, 2023, the weighted average duration of the retirement plan is 11 years. The analysis of timing of the future pension payment was as follows:

Within 1 year	$	339,695
2-5 year(s)		146,891
5-10 years		162,637
	$	649,223

• B. (a) Effective July 1, 2005, the Company and domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. Employees may receive the payment of the pension every month or on a lump-sum basis depending on the accumulated earnings in the personal pension account.

• (b) The Company’s mainland China subsidiaries, Realsil Microelectronics (Suzhou) Co.,LTD, Realtek Semiconductor (ShenZhen) Corp., Cortina Network Systems (Shanghai) Co., Ltd., RayMX Microelectronics Corp. and Suzhou PanKore Integrated Circuit Technology Co. Ltd. have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Monthly contributions to an independent fund are administered by the government. Other than the monthly contributions, the Group has no further obligations.

~42~

• (c) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2023 and 2022 were $429,487 and $393,147, respectively.

(16) Provision

Provision
			2023		2022
At January 1		$	1,287,710	$	989,475
Increase in provision			124,713		185,080
Effect of exchange rate	(		20,285)		113,155
At December 31		$	1,392,138	$	1,287,710

As at December 31, 2023, provisions were estimated for potential infringement litigations, please refer to Note 9.

(17) Share capital

• A. As at December 31, 2023, the Company’s authority capital was $8,900,000, consisting of 890 million shares of common stock (including 80 million shares reserved for employee stock options), and the paid-in capital was $5,128,636 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number (thousands of shares) of the Company's common shares outstanding are as follows:

outstanding are as follows:
At January 1 Employees’ compensation transferred to common shares At December 31	2023 512,863 - 512,863	2022
		510,684 2,179
		512,863

• B. On March 18, 2022, the Company’s Board of Directors resolved to distribute employees’ compensation in the form of stocks amounting to $991,338. The Company issued 2,179 thousand shares based on the closing price of the Company’s share at the previous day of the Board meeting resolution at 455 NT dollar, which was approved by the competent authority, and the record date of issuance of new shares was March 30, 2022. The registration for the distribution of employees’ compensation was completed on April 13, 2022.

• C. On January 24, 2002, the Company increased its new common stock and sold its old common stock by issuing 13,924 thousand units of GDRs for cash. Each GDR unit represents 4 common stocks, so the total common stocks issued were 55,694 thousand shares. The Company’s GDRs are traded in the Luxembourg Stock Exchange. As at December 31, 2023, the outstanding GDRs were 428 thousand units, or 1,710 thousand shares of common stock, representing 0.33% of the Company’s total common stocks.

(18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that

~43~

the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

Change in equity of associates accounted for under Share premium equity method At January 1 982,830 $ 61,261 $ Changes in equity of associates accounted for under equity method - 9,549 Cash from capital surplus 512,864) ( - Cash dividends returned - - At December 31 469,966 $ 70,810 $ 2023 Change in equity of associates accounted for under Share premium equitymethod At January 1 1,039,006 $ 61,261 $ Employees’ compensation transferred to common shares 969,551 - Cash from capital surplus 1,025,727) ( - Cash dividends returned - - At December 31 982,830 $ 61,261 $ 2022

Others Total 1,056 $ 1,045,147 $ - 9,549 - 512,864) ( 216 216 1,272 $ 542,048 $ Others Total 812 $ 1,101,079 $ - 969,551 - 1,025,727) ( 244 244 1,056 $ 1,045,147 $

(19) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve, if legal reserve has accumulated to an amount equal to the paid-in capital, then legal reserve is not required to be set aside any more. After that, special reserve shall be set aside or reversed in accordance with the related laws or the regulations made by the Competent Authority. The remainder, if any, along with prior year’s accumulated undistributed earnings shall be proposed by the Board of Directors. However, the appropriation of earnings shall be resolved by the shareholders if earnings are distributed by issuing new shares, or the appropriation of earnings shall be resolved by the Board of Directors, if earnings are distributed in the form of cash. The Company should consider factors affecting finance, business and operations to appropriate distributable earnings for the period, and appropriate all or partial reserve in accordance with regulations of the Competent Authority. Dividends shall account for at least 50% of the distributable earnings added in the

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current year.

The Company’s dividend policy takes into consideration the Company’s future expansion plans and future cash flows. In accordance with the Company’s dividend policy, cash dividends shall account for at least 10% of the total dividends distributed.

In accordance with Company Act Article 240, Item 5 and Article 241, Item 2, the resolution, for all or partial of distributable dividends, legal reserve and capital surplus are distributed in the form of cash, will be adopted by a majority vote at a meeting of the Board of Directors attended by at least two-thirds of the total number of directors, and will be reported to the shareholders.

• B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• D. The appropriation of 2022 and 2021 earnings had been resolved at the shareholders’ meeting on June 6, 2023 and June 8, 2022, respectively. Details are summarized below:

Dividends per share Amount (indollars) Legal reserve 1,620,405 $ - $ Special reserve 1,776,089) ( - Cash dividends 13,334,455 26.00 Total 13,178,771 $ 26.00 $ 2022	2021	2021
	Amount 1,685,276 $ 220,040 12,821,591 14,726,907 $	Dividends per share (indollars)
		- $ - 25.00
		25.00 $

• E. On April 21, 2023, the Board of Directors of the Company proposed to distribute cash dividends from capital surplus to shareholders in the amount of $512,864 (NT$1 per share).

• F. On April 22, 2022, the Board of Directors of the Company proposed to distribute cash dividends from capital surplus to shareholders in the amount of $1,025,727 (NT$2 per share).

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(20) Other equity items

(21)

Operating revenue A. Disaggregation of revenue from contracts with customers The Group derives revenue from the transfer of goods and services at a point in time in the following major product lines: Unrealised gains Currency (losses) onvaluation translationdifference Total At January 1 1,391,817 $ 1,294,358 $ 2,686,175 $ Revaluation: –Group 123,789) ( - 123,789) ( Revaluation transferred to retained earnings: –Group 16,445) ( - 16,445) ( Currency translation differences: –Group - 283,799 283,799 At December 31 1,251,583 $ 1,578,157 $ 2,829,740 $ 2023 Unrealised gains Currency (losses) onvaluation translation difference Total At January 1 2,380,781 $ 4,156,871) ($ 1,776,090) ($ Revaluation: –Group 988,964) ( - 988,964) ( Currency translation differences: –Group - 5,451,229 5,451,229 At December 31 1,391,817 $ 1,294,358 $ 2,686,175 $ 2022 Year ended Year ended December 31, 2023 December31,2022 Revenue from contracts with customers 95,179,276 $ 111,789,791 $ Integrated Year ended December 31, 2023 circuit products Others Total Revenue from external customer contracts 94,998,343 $ 180,933 $ 95,179,276 $ Timing of revenue recognition At a point in time 94,998,343 $ 180,933 $ 95,179,276 $ Integrated Year ended December 31, 2022 circuit products Others Total Revenue from external customer contracts 111,560,194 $ 229,597 $ 111,789,791 $ Timing of revenue recognition At a point in time 111,560,194 $ 229,597 $ 111,789,791 $

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B. Contract liabilities

The Group has recognized the following revenue-related contract liabilities:

December 31, 2023 December 31, 2022 January 1,2022 Contract liabilities -advance sales receipts $ 336,648 $ 117,752 $ 211,100

Revenue recognized that was included in the contract liability balance at the beginning of the period:

Year ended Year ended December 31, 2023 December 31, 2022 Contract liabilities – advance sales receipts $ 109,890 $ 191,160

C. Refund liabilities (shown in other current liabilities)

The Group estimates the discounts based on accumulated experience. The estimation is subject to an assessment at each reporting date.

The following refund liabilities:

December 31, 2023 December 31, 2022 Refund liabilities – current $ 7,908,929 $ 8,932,366

(22) Interest income

Interest income
Other income Interest income from bank deposits and corporate bonds Dividend income Grant income Other income	Year ended December31,2023 2,581,961 $ Year ended December31,2023 33,337 $ 59 170,580 203,976 $	Year ended December31,2022
		950,676 $
		Year ended December 31, 2022
		60,741 $ 97,243 230,935
		388,919 $

(23) Other income

(24) Other gains and losses

Other gains and losses
			Year ended			Year ended
		December31,2023			December31,2022
Gains on disposal of property, plant and		$	5,275		$	1,132
equipment
Gains on disposal of investments			305,599			-
Gains arising from lease modifications			-			24
Net currency exchange gains			36,265			304,092
Gains (losses) on financial assets at fair value
through profit or loss			81,860	(		180,983)
Other losses	(		30,645)	(		27,533)
		$	398,354		$	96,732

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(25) Finance costs

Finance costs
		Year ended		Year ended
	December 31, 2023		December31,2022
Interest expense
Bank borrowings	$	214,477	$	190,063
Lease liabilities		32,982		27,680
	$	247,459	$	217,743

(26) Expenses by nature

Expenses by nature
Employee benefit expenses Employee benefit expenses Depreciation Amortisation Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Total	Year ended December31,2023 24,103,476 $ 1,308,355 1,716,487 Year ended December31,2023 22,354,529 $ 898,392 431,614 418,941 24,103,476 $	Year ended December 31, 2022
		29,155,537 $ 1,176,920 1,627,409 Year ended December 31, 2022
		27,606,128 $ 817,557 395,164 336,688
		29,155,537 $

(27) Employee benefit expenses

• A. In accordance with the Company’s Articles of Incorporation, the Company shall appropriate no higher than 3% for directors’ remuneration and no less than 1% for employees’ compensation, if the Company generates profit. If the Company has accumulated deficit, earnings should be reserved to cover losses before the appropriation of directors’ remuneration and employees’ compensation.

• Aforementioned employees’ compensation could be distributed by cash or stocks. Specifics of the compensation are to be determined by a majority vote at a meeting of the Board of Directors attended by at least two-thirds of the total number of directors. The resolution should be reported to the shareholders during the shareholders’ meeting.

• B. For the years ended December 31, 2023 and 2022, employees’ compensation was accrued at $2,696,047 and $ 4,765,898, respectively; directors’ remuneration was accrued at $90,000 and $ 120,000, respectively. The amounts were estimated as operating cost or operating expense in accordance with the Company’s Articles of Incorporation.

• On April 21, 2023, employees’ compensation was $4,765,898, and directors’ remuneration was $120,000 for 2022 resolved at the meeting of the Board of Directors agreed with those amounts recognized in the 2022 financial statements. Both could be distributed in the form of cash.

• Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at

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the website of the Taiwan Stock Exchange.

(28) Income tax

A. Income tax expense

the website of the Taiwan Stock Exchange. ome tax Income tax expense
			Year ended			Year ended
		December 31, 2023			December 31, 2022
Current income tax:
Current income tax on profit for the year		$	499,504		$	969,312
Tax on undistributed earnings			151,264			106,293
Prior year income tax overestimation	(		195,678)	(		355,446)
Total current income tax			455,090			720,159
Deferred income tax:
Origination and reversal of temporary differences	(		63,293)	(		2,444)
Income tax expense		$	391,797		$	717,715

• B. Reconciliation between income tax expense and accounting profit

			Year ended			Year ended
		December 31, 2023			December 31, 2022
Income tax calculated based on income		$	1,926,504		$	3,413,672
before tax
Expenses disallowed by tax regulation and
effects from tax-exempt income	(		1,490,293)	(		2,446,804)
Prior year income tax overestimation	(		195,678)	(		355,446)
Tax on undistributed earnings			151,264			106,293
Income tax expense		$	391,797		$	717,715

• C. Amounts of deferred income tax assets or liabilities as a result of temporary differences are as follows:

follows:
						2023
						Recognised in
			January1			profit or loss			December31
Deferred income tax assets:
－Temporary differences:
Unrealised loss on market price		$	132,978		$	204,334		$	337,312
decline and obsolete and
slow-moving inventories and
others
Deferred income tax liabilities:
－Temporary differences:
Unrealised exchange gain	(		62,725)	(		141,041)	(		203,766)
Total		$	70,253		$	63,293		$	133,546

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					2022
					Recognised in
			January1		profit or loss		December31
Deferred income tax assets:
－Temporary differences:
Unrealised loss on market price		$	171,321	($	38,343)	$	132,978
decline and obsolete and
slow-moving inventories and
others
Deferred income tax liabilities:
－Temporary differences:
Unrealised exchange gain	(		103,512)		40,787	(	62,725)
Total		$	67,809	$	2,444	$	70,253

• D. The amounts of deductible temporary differences that were not recognized as deferred income tax assets are as follows:

tax assets are as follows:
	December 31, 2023	December 31, 2022
Deductible temporary differences	1,769,259 $	2,179,722 $
E. As at December 31, 2023, the Company’s income tax returns through 2021 have been assessed
and approved by the Tax Authority.

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(29) Earnings per share

Earnings per share
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 common shares 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 common shares	YearendedDecember31,2023
	Weighted average number of common shares Amount after outstanding (shares tax inthousands) 9,152,772 $ 512,863 9,152,772 $ 512,863 - 7,561 9,152,772 $ 520,424 YearendedDecember31,2022		Earnings per share (indollars)
			17.85 $
			17.59 $
	Amount after tax 16,204,052 $ 16,204,052 $ - 16,204,052 $	Weighted average number of common shares outstanding (shares inthousands) 512,410 512,410 19,175 531,585	Earnings per share (indollars)
			31.62 $
			30.48 $

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(30) Supplemental cash flow information

Investing activities with partial cash payments

Supplemental cash flow information Investing activities with partial cash payments
				Year ended				Year ended
			December 31, 2023				December 31, 2022
Purchase of property, plant and equipment		$		2,383,446		$		2,282,159
Add: Opening balance of payable on equipment				114,514				283,796
Less: Ending balance of payable on equipment	(			331,358)	(			114,514)
Cash paid during the year		$		2,166,602		$		2,451,441
				Year ended				Year ended
			December31,2023				December 31, 2022
Purchase of intangible assets			$	1,920,173			$	1,805,878
Add: Opening balance of payable on
software and intellectual property				1,292,307				1,445,930
Less: Ending balance of payable on
software and intellectual property	(			1,751,355)	(			1,292,307)
Cash paid during the year			$	1,461,125			$	1,959,501

(31) Changes in liabilities from financing activities

												Liabilities from
		Short-term		Guarantee			Lease		Long-term			financing
		borrowings			deposits		liabilities		borrowings			activities-total
At January 1, 2023	$	13,737,994	$		556	$	1,301,631	$		1,713,316	$	16,753,497
Changes in cash flow from
financing activities	(	9,487,994)	(		92)	(	114,716)			511,090	(	9,091,712)
Interest paid		-			-	(	32,982)			-	(	32,982)
Interest of lease liabilities		-			-		32,982			-		32,982
Impact of changes in
foreign exchange		-			-		20,073			-		20,073
Changes in other non-cash
items		-			-		341,081			2,940		344,021
At December 31, 2023	$	4,250,000	$		464	$	1,548,069	$		2,227,346	$	8,025,879
												Liabilities from
		Short-term		Guarantee			Lease		Long-term			financing
		borrowings			deposits		liabilities		borrowings			activities-total
At January 1, 2022	$	13,342,100	$		1,448	$	1,332,705	$		1,002,799	$	15,679,052
Changes in cash flow from
financing activities		395,894	(		892)	(	97,150)			711,110		1,008,962
Interest paid		-			-	(	27,680)			-	(	27,680)
Interest of lease liabilities		-			-		27,680			-		27,680
Impact of changes in
foreign exchange		-			-	(	1,156)			-	(	1,156)
Changes in other non-cash
items		-			-		67,232	(		593)		66,639
At December 31, 2022	$	13,737,994	$		556	$	1,301,631	$		1,713,316	$	16,753,497

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7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The ultimate controlling party of the Group is the Company.

(2) Names of related parties and relationship

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Names of related parties Relationship with the Company
----- End of picture text -----

Names of related parties and relationship Names of related parties	Relationship withthe Company
G.M.I Technology Inc.	Other related party
Actions Technology (HK) Company Limited	Other related party
C-Media Electronics Inc.	Other related party
Greatek Electronics Inc.	Other related party
EmBestor Technology Inc.	Other related party
Compal broadband networks Inc.	Other related party

(3) Significant related party transactions and balances

• A. Operating revenue

gnificant related party transactions and balances Operating revenue
Sales of goods﹕ G.M.I Technology Inc. Others	Year ended December 31, 2023 11,680,734 $ 57,889 11,738,623 $	Year ended December31,2022
		16,520,851 $ 395,667
		16,916,518 $

Goods are sold based on the price lists in force and terms that would be available to third parties, and the general collection term was 30 ~ 60 days after monthly billings.

• B. Processing cost

Processing cost
Greatek Electronics Inc. Others	Year ended December31,2023 1,233,087 $ 39,318 1,272,405 $	Year ended December31,2022
		1,057,117 $ 10,598
		1,067,715 $

Processing cost is paid to related parties on normal commercial terms and conditions, and the general payment term was 69 days after monthly billings.

• C. Receivables from related parties

Receivables from related parties
Accounts receivable﹕ G.M.I Technology Inc. Others	December31,2023 2,083,442 $ 10,480 2,093,922 $	December31,2022
		2,548,128 $ 46,117
		2,594,245 $

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Aforementioned receivables were 30 ~ 60 days after monthly billings. The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest.

• D. Payables to related parties

bear no interest. Payables to related parties
	December	31,2023	December	31,2022
Accounts payable﹕
Greatek Electronics Inc.	$	362,074	$	156,225
Others		7,030		71
	$	369,104	$	156,296

The payment term above was 69 days after monthly billings. The payables to related parties arise mainly from processing cost. The payables bear no interest.

• E. Other transactions and other payables (receivables):

		Year ended	Year ended	Year ended			Year ended	Year ended	Year ended
		December31,		2023			December31,		2022
				Ending					Ending
		Amount		balance			Amount		balance
Other related parties-
Sales commissions	$	491,228	$	60,226		$	722,091	$	90,401
Cash dividends revenue	($	30,211)	$		-	($	30,114)	$	-
Technical royalty revenue	($	1,134)	$		-	($	14,291)	$	-
Others	$	3,926	$		67	$	-	$	-

The payment term above was 49 days after monthly billings; the collection term was 30 ~ 60 days after monthly billings.

(4) Key management compensation

days after monthly billings. Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Total	Year ended December31,2023 555,673 $ 4,188 559,861 $	Year ended December 31, 2022
		564,883 $ 3,875
		568,758 $

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8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

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

Book value
Pledged asset December 31, 2023 December 31, 2022 Purposes
Time deposits (shown in $ 31,779 $ 31,348 Guarantee for the
financial assets at amortised importation customs
cost non-current) duties of materials
Guarantee for leasing
land in science park
" 62,601 54,559 and office.
$ 94,380 $ 85,907
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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

• A. 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. The case in the United States District Court of Delaware is still pending, and the Company is unable to reliably determine the outcome of the case.

• B. 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 March 23, 2022, ITC issued the final determination finding non-infringement for the accused Company’s IC products and non-existence of the required domestic industry. The case in the United States District Court of Delaware is still pending, and the Company is unable to reliably determine the outcome of the case.

• C. 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 terminated due to dismissal with prejudice of the case by both parties.

• D. In 2022, Advanced Micro Devices, Inc./ ATI Technologies ULC brought an action for patent infringement in United States International Trade Commission (“ITC”) and United States District Court for the Eastern District of Texas against the Company’s IC products. The Company are seeking all remedies available regarding the final determination issued by ITC on January 25, 2024 including but not limited to appeal and other available procedures. Additionally, the Company already made the design around available. The related procedures are under process pursuant to the procedural schedule, and the Company is unable to reliably determine the outcome of such procedures.

• E. In 2022, ParkerVision, Inc. 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.

~55~

• F. In 2023, Monterey Research, LLC brought an action for patent infringement in the Tokyo District Court against the Company and its subsidiary, Realtek Semiconductor (Japan) Corp. The case is still pending, and the Company is unable to reliably determine the outcome of the case.

• G. In 2023, the Company filed a complaint in the Northern District of California against MediaTek Inc., Future Link Systems LLC, and IPValue Management (Future Link’s parent company) for violation of, including but not limited to, US anti-trust and unfair competition laws. The case is still pending, and the Company is unable to reliably determine the outcome of the case.

• H. In 2023, ParkerVision, Inc. brought another 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.

(2) Commitments

The Company entered into a contract with the supplier. According to the contract, the supplier provided agreed production capacity to the Company after the Company paid the guarantee deposits. The abovementioned payment was shown in other non-current assets.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

• None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

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(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
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 Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings Guarantee deposits Other financial liabilities Lease liabilities	December31,2023 1,001,832 $ 3,126,098 $ 10,268,291 $ 37,882,221 12,756,987 616,624 2,191,080 63,715,203 $ 4,250,000 $ 7,273,113 24,573,330 2,227,346 464 7,908,929 46,233,182 $ 1,548,069 $	December31,2022
		1,921,432 $
		3,099,759 $
		13,754,035 $ 42,214,318 12,012,685 488,769 2,191,910
		70,661,717 $
		13,737,994 $ 10,496,375 27,774,896 1,713,316 556 8,932,366
		62,655,503 $
		1,301,631 $

B. Financial risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

(b) Risk management is carried out by a Group finance under policies approved by the Board of Directors. Group finance identifies, evaluates, and hedges financial risks in close cooperation with the Group’s operating units.

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• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to USD and CNY. Foreign exchange risk arises from future commercial transactions, recognized assets, and liabilities.

• ii. Management has set up a policy to require the Group to manage its foreign exchange risk against its functional currency. The Group is required to hedge its entire foreign exchange risk exposure with the Group finance.

• iii. The Group’s businesses involve some functional currency operations (the Company’s and other certain subsidiaries’ functional currency: NTD ； other certain subsidiaries’ functional currency: USD and CNY). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	December31,2023	December31,2023
	Foreign currency amount (Inthousands) 319,882 $ 1,473,227 340,095	Book value Exchangerate (NTD) 30.735 9,831,573 $ 30.735 45,279,632 30.735 10,452,820

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

December 31, 2022
Foreign currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ 246,929 30.708 $ 7,582,696
Non-monetary items
USD:NTD 1,881,393 30.708 57,773,816
Financial liabilities
Monetary items
USD:NTD 354,424 30.708 10,883,652
----- End of picture text -----

The exchange gains, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2023 and 2022, amounted to $36,265 and $304,092, respectively.

Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	YearendedDecember31,	2023
	Sensitivity analysis
	Effect on Degree ofvariation profit or loss 5% 491,579 $ 5% - 5% 522,641) (	Effect on other comprehensive income
		- $ 2,263,982 -

~59~

	Yearended	Yearended	Yearended	December31,	2022	2022
	Sensitivity analysis
					Effect on other
				Effect on	comprehensive
	Degree ofvariation		profit or loss			income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	5%		$	379,135	$	-
Non-monetary items
USD:NTD	5%			-		2,888,691
Financial liabilities
Monetary items
USD:NTD	5%	(		544,183)		-

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.

• ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $100,183 and $192,143, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $312,610 and $309,976, respectively, as a result of gains/losses on equity securities classified as at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s interest rate risk arises from bank time deposits, time deposits with maturity over three months and long-term and short-term borrowings with variable rates. Borrowings with variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. For the years ended December 31, 2023 and 2022, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.

• ii. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit before tax for the years ended December 31, 2023 and 2022 would have decreased/increased by $27,411 and $37,245, respectively. If the time deposits interest rate had increased/decreased by 0.25% with all other variables held constant, profit before tax for the years ended December 31, 2023 and 2022 would have

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increased/decreased by $102,548 and $111,673, respectively. The main factor is that increase or decrease in interest expense and interest income result in floating-rate.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of financial assets at amortized cost.

• ii. The Group manages their credit risk taking into consideration the entire Group’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors.

• iii. The Group adopts the assumption under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

• iv. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii) Default or delinquency in interest or principal repayments;

  • (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• vi. The Group classifies customers’ accounts receivable in accordance with customer types. The Group applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

• vii. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

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viii. The Group used the forecast ability of semiconductor industry research report to adjust historical and timely information to assess the default possibility of accounts receivable. As at December 31, 2023 and 2022, the provision matrix are as follows:

At December 31, 2023 Expected loss rate Total book value Loss allowance At December 31, 2022 Expected loss rate Total book value Loss allowance	Notpast due 0%~1% 12,266,292 $ 84,914 $ Not past due 0%~1% 12,034,050 $ 64,819 $	1~90 days past due 0%~1% 581,423 $ 5,814 $ 1~90 days past due 0%~1% 43,893 $ 439 $	Over 90 days past due 100% 36 $ 36 $ Over 90 days past due 100% 37 $ 37 $	Total 12,847,751 $
				90,764 $
				Total
				12,077,980 $
				65,295 $

• ix. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

			2023
			Loss allowance for
			accounts receivable
At January 1		$	65,295
Provision for impairment loss			25,469
At December 31		$	90,764
			2022
			Loss allowance for
			accounts receivable
At January 1		$	98,710
Reversal for impairment loss	(		33,415)
At December 31		$	65,295

• x. For investments in debt instruments at amortised cost, the credit rating levels are presented below:

below:
Financial assets at amortised cost Group 1 Group 2				December31,2023				Total
		12 months		Lifetime
				Significant increase in credit risk	Impairment of credit
		32,467,571 $ 5,414,650 37,882,221 $		- $ - - $		- $ - - $		32,467,571 $ 5,414,650 37,882,221 $

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December 31, 2022

Financial assets at amortised cost Group 1 41,681,744 $ Group 2 532,574 42,214,318 $ 12 months	Significant increase in credit risk Impairment of credit Total - $ - $ 41,681,744 $ - - 532,574 - $ - $ 42,214,318 $ Lifetime

• Group 1: Time deposits with original maturity over three months deposited in financial institutions having good credit quality.

Group 2: Standard Poor’s, Fitch’s, or Moody’s rating of A-level.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group finance. Group finance monitors forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities.

• ii. Group finance invests surplus cash in interest bearing demand deposits, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts.

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• iii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2023 Short-term borrowings Accounts payable (including related parties) Other payables (including related parties) Lease liabilities Long-term borrowings Guarantee deposits Other financial liabilities Non-derivative financial liabilities: December 31, 2022 Short-term borrowings Accounts payable (including related parties) Other payables (including related parties) Lease liabilities Long-term borrowings Guarantee deposits Other financial liabilities	Less than 1 year 4,250,000 $ 7,273,113 24,573,330 137,620 - - 7,908,929 Less than 1 year 13,737,994 $ 10,496,375 27,774,896 120,508 - - 8,932,366	Between 1 and5 years - $ - - 305,571 2,227,346 - - Between 1 and5 years - $ - - 307,758 1,728,470 - -	Over5 years
			- $ - - 1,627,457 - 464 - Over5 years - $ - - 1,305,338 - 556 -

• iv. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(10).

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets is as follows:

• (a) The related information of nature of the assets is as follows:

December 31, 2023 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Hybrid instrument Financial assets at fair value through other comprehensive income Equity securities Total December 31, 2022 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Hybrid instrument Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 948,832 $ - 763,506 1,712,338 $ Level 1 1,868,432 $ - 747,198 2,615,630 $	Level 2 - $ - - - $ Level 2 - $ - - - $	Level3 - $ 53,000 2,362,592 2,415,592 $ Level3 - $ 53,000 2,352,561 2,405,561 $	Total
				948,832 $ 53,000 3,126,098
				4,127,930 $
				Total
				1,868,432 $ 53,000 3,099,759
				5,021,191 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level

  • 1) are listed below by characteristics:

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

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted

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cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs.

• D. For the years ended December 31, 2023 and 2022, there was no transfer between Level 1 and Level 2.

• E. The following chart is the movement of Level 3 for the years ended December 31, 2023 and 2022:

2022:
			2023			2022
			Non-derivative			Non-derivative
			equity instrument			equity instrument
At January 1		$	2,405,561		$	2,820,372
Losses recognized in other
comprehensive loss	(		60,665)	(		467,811)
Acquisition during the period			70,696			53,000
At December 31		$	2,415,592		$	2,405,561

• F. For the years ended December 31, 2023 and 2022, there was no transfer into or out from Level 3.

• G. The finance division is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

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• H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Unlisted shares 〃 Private equity fund investment Hybrid instrument: Convertible notes Non-derivative equity instrument: Unlisted shares 〃 Private equity fund investment Hybrid instrument: Convertible notes	Fair value at December 31, 2023	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	118,916 $ 113,921 2,129,755 53,000 Fair value at December 31, 2022	Market comparable companies Net asset value Net asset value Binomial model Valuation technique	Price to book ratio multiple Not applicable Not applicable Not applicable Significant unobservable input	3.40 - - - Range (weighted average)	The higher the multiple, the higher the fair value Not applicable Not applicable Not applicable Relationship of inputs to fair value
	118,812 $ 40,408 2,193,341 53,000	Market comparable companies Net asset value Net asset value Binomial model	Price to book ratio multiple Not applicable Not applicable Not applicable	3.18 - - -	The higher the multiple, the higher the fair value Not applicable Not applicable Not applicable

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13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paidin capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more:

• Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations, and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to tables 1, 2 and 6.

(4) Major shareholders information

As at December 31, 2023, the Company had no shareholders who hold over 5% (including 5%) of the Company’s shares.

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry. The Chief Operating Decision-Maker, who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Measurement of segment information

The Chief Operating Decision-Maker assesses the performance of the operating segments based on the consolidated financial statements. The accounting policy of operating segments is the same as that described in Note 4.

(3) Information on segment profit (loss), assets and liabilities

The revenue from external customers and segment financial information reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the consolidated

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statement of comprehensive income.

(4) Reconciliation for segment profit (loss)

The segment assets, liabilities and profit before income tax reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the consolidated balance sheet and consolidated statement of comprehensive income. As a result, no reconciliation was reported.

(5) Information on products and services

Revenue from external customers is derived from the sale of integrated circuits. Other income is derived from design, royalty and technical services.

Breakdown of the revenue from all sources are as follows:

Revenue from ICs Others Total	Year ended Year ended December31,2023 December31,2022 94,998,343 $ 111,560,194 $ 180,933 229,597 95,179,276 $ 111,789,791 $

(6) Geographical information

Geographical information for the years ended December 31, 2023 and 2022 is as follows:

Geographical information Geographical information for the years ended December 31,	2023 and 2022 is as follows:	2023 and 2022 is as follows:
Revenue Non-current assets Taiwan 38,940,171 $ 11,850,678 $ Asia 55,394,154 1,251,586 Others 844,951 77,072 Total 95,179,276 $ 13,179,336 $ Year ended December 31, 2023	Year ended December 31, 2022
	Revenue 48,934,459 $ 61,794,824 1,060,508 111,789,791 $	Non-current assets
		10,914,084 $ 643,800 79,018
		11,636,902 $

Note: Non-current assets exclude financial instruments and deferred income tax assets.

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2023 and 2022 is as follows:

follows:
Customer D Customer B Customer A	Revenue Segment 19,723,991 $ All group 17,261,675 " 11,680,734 " Year ended December31,2023	Year ended December31,2022
	Revenue 19,723,991 $ 17,261,675 11,680,734	Revenue 25,425,420 $ 23,180,512 16,520,851	Segment
			All group " "

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Loans to others

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

For the year ended December 31, 2023

No (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2023 (Note 3)	Balance at December 31,2023	Actual amount drawn down (Note 4)	Interest rate(%)	Nature of loan	Amount of transactions with the borrower	Reason for short- term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loans granted (Note 2)	Footnote
													Item	Value
0	Realtek Semiconductor Corporation	RayMX Microelectronics Corp.	Other receivables-related parties	Y	61,470 $	61,470 $	- $	-	Short-term financing	- $	Operations	- $	None	- $	4,222,846 $	16,891,384 $	None
0	Realtek Semiconductor Corporation	Bluocean Inc.	Other receivables-related parties	Y	3,073,500	3,073,500	2,919,825	5.83	Short-term financing	-	Operations	-	None	-	4,222,846	16,891,384	None
0	Realtek Semiconductor Corporation	Amber Universal Inc.	Other receivables-related parties	Y	922,050	922,050	202,851	5.83	Short-term financing	-	Operations	-	None	-	4,222,846	16,891,384	None
1	Leading Enterprises Limited	Talent Eagle Enterprise Inc.	Other receivables-related parties	Y	1,844,100	1,844,100	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
2	Amber Universal Inc.	Blueocean Inc.	Other receivables-related parties	Y	1,536,750	1,536,750	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
2	Amber Universal Inc.	Talent Eagle Enterprise Inc.	Other receivables-related parties	Y	3,073,500	3,073,500	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
3	Cortina Access, Inc.	Leading Enterprises Limited	Other receivables-related parties	Y	922,050	922,050	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
4	Realtek Singapore Private Limited	Leading Enterprises Limited	Other receivables-related parties	Y	3,073,500	3,073,500	3,058,133	5.83	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
4	Realtek Singapore Private Limited	RayMX Microelectronics Corp.	Other receivables-related parties	Y	61,470	61,470	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None

Table 1 Page 1

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Loans to others

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

For the year ended December 31, 2023

No (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2023 (Note 3)	Balance at December 31,2023	Actual amount drawn down (Note 4)	Interest rate(%)	Nature of loan	Amount of transactions with the borrower	Reason for short- term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loans granted (Note 2)	Footnote
													Item	Value
4	Realtek Singapore Private Limited	Bluocean Inc.	Other receivables-related parties	Y	3,073,500 $	3,073,500 $	2,262,096 $	5.83	Short-term financing	- $	Operations	- $	None	- $	16,891,384 $	16,891,384 $	None
4	Realtek Singapore Private Limited	Talent Eagle Enterprise Inc.	Other receivables-related parties	Y	3,073,500	3,073,500	2,458,800	5.83	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
5	Realsil Microelectronics (Suzhou) Co.,LTD	Suzhou Pankore Integrated Circuit Technology Co. Ltd	Other receivables-related parties	Y	346,701	346,701	145,831	4.35	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
5	Realsil Microelectronics (Suzhou) Co.,LTD	RayMX Microelectronics Corp.	Other receivables-related parties	Y	346,701	346,701	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
6	Cortina Network Systems (Shanghai) Co., Ltd.	Suzhou Pankore Integrated Circuit Technology Co. Ltd	Other receivables-related parties	Y	130,013	130,013	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
7	Realtek Investment Singapore Private Limited	Leading Enterprises Limited	Other receivables-related parties	N	3,073,500	3,073,500	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
7	Realtek Investment Singapore Private Limited	Realtek Singapore Private Limited	Other receivables-related parties	N	3,073,500	3,073,500	-	-	Short-term financing	-	Operations	-	None	-	16,891,384	16,891,384	None
8	Realsun Investments Co., Ltd.	Hung-wei Venture Capital Co., Ltd.	Other receivables-related parties	N	25,000	25,000	16,500	1.80	Short-term financing	-	Operations	-	None	-	4,222,846	16,891,384	None

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: The Company’s “Procedures for Provision of Loans” are as follows:

(1) Ceiling on total loans granted by the Company to all parties is 40% of the Company’s net assets value as per its most recent financial statements.

(2) Limit on loans to a single party with business transactions is the business transactions occurred between the creditor and borrower in the current year. The business transaction amount is the higher of purchasing and selling during current year on the year of financing.

(3) For companies needing for short-term financing, the cumulative lending amount may not exceed 40% of the borrowing company’s net assets based on its latest financial statements audited or reviewed by independent auditors.

The amount the Company or its subsidiaries lend to an individual entity may not exceed 10% of the Company’s or subsidiary’s net assets based on its latest financial statements audited or reviewed by independent auditors.

For the foreign companies which the Company holds 100% of the voting rights directly or indirectly, limit on loans is not restricted as stipulated in the above item (3). However, the ceiling on total loans and limit on loans to a single party may not exceed 40% of the Company’s net assets based on its latest financial statements audited or reviewed by independent auditors.

Note 3: Acccumulated maximum outstandings balance of loans to others as at the reporting month of the current period.

Note 4: Fill in the actual amount of loans to others used by the borrowing company.

Table 1 Page 2

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Provision of endorsements and guarantees to others

For the year ended December 31, 2023

Number (Note 1) Endorser/ guarantor	Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limited on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ amount as at December 31, 2023 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2023 (Note 5)	Actual amont drawn down (Note 6)	Amount of endorsements/gurant ees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
		Companyname Relationship with the endorser/ guarantor (Note2)
0	Realtek Semiconductor Corporation	Realsil Microelectronics (Suzhou) Co., LTD	2	21,114,230 $	798,918 $	798,918 $	- $	- $	1.89%	21,114,230 $	Y	N	Y
0	Realtek Semiconductor Corporation	RayMX Microelectronics Corp.	2	21,114,230	758,238	758,238	52,039	-	1.80%	21,114,230	Y	N	Y
0	Realtek Semiconductor Corporation	AICONNX Technology Corp.	2	21,114,230	778,853	778,853	-	-	1.84%	21,114,230	Y	N	N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories:

(1) Having business relationship.

(2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3) The endorser/guarantor company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

(4) The endorser/guarantor parent company owns directly or indirectly owns more than 50% voting shares of the endorsed/guaranteed subsidiary.

(5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

(7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: Ceiling on total endorsements/guarantees granted by the Company and subsidiaries is 50% of the Company’s net asset based on the latest financial statements audited or reviewed by independent auditors, and limit on endorsements/guarantees to a single party is 50% of the Company's net asset based on the latest financial statements audited or reviewed by independent auditors.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as at the reporting period.

Note 5: Fill in the amount approved by the Board of Directors or the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Gorverning Loaning of Funds and Making of Endorsements/Guarantees by Public Companies. Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2023

Table 3

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer(Note 2)	General ledger account	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023
Realtek Semiconductor Corporation	C-media Electronics Inc. - Common stock	Other related parties	Financial assets at fair value through profit or loss	1,278,501	$ 79,523	1.63%	$ 79,523
Realtek Semiconductor Corporation	Nuheara Ltd - Convertible notes	Other related parties	Financial assets at fair value through profit or loss	-	53,000	-	53,000
Realtek Semiconductor Corporation	Nuheara Ltd - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	45,396,172	109,638	19.25%	109,638
Realtek Semiconductor Corporation	GT Booster Corp.-Preferred stock	Other related parties	Financial assets at fair value through other comprehensive income	63,158	61,470	8.00%	61,470
Realtek Semiconductor Corporation	Golden Smart Home Technology Corp.- Common stock	None	Financial assets at fair value through other comprehensive income	1,700,000	9,793	2.75%	9,793
Realking Investments Co., Ltd.	Compal broadband networks Inc. - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	3,575,000	97,955	5.29%	97,955
Realsun Investments Co., Ltd.	Shieh-Yong Investment Co., Ltd. - Common stock	None	Financial assets at fair value through other comprehensive income	65,013,874	636,817	3.03%	636,817
Realsun Investments Co., Ltd.	Compal broadband networks Inc. - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	3,575,000	97,955	5.29%	97,955
Leading Enterprises Limited	Fortemedia Inc. - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	8,873,301	100,475	6.61%	100,475
Leading Enterprises Limited	Starix Technology, Inc.-Preferred stock	None	Financial assets at fair value through other comprehensive income	5,000,000	18,441	-	18,441
Leading Enterprises Limited	Octtasia Investment Holding Inc. - Common stock	None	Financial assets at fair value through other comprehensive income	9,000,000	978,845	12.49%	978,845
Leading Enterprises Limited	Apple Inc. - Corporate bond	None	Financial assets at amortized cost	-	2,519,824	-	2,519,824
Leading Enterprises Limited	Qualcomm Inc. - Corporate bond	None	Financial assets at amortized cost	-	506,967	-	506,967
Leading Enterprises Limited	Microsoft Corp. - Corporate bond	None	Financial assets at amortized cost	-	261,753	-	261,753
Amber Universal Inc.	Octtasia Investment Holding Inc. - Common stock	None	Financial assets at fair value through other comprehensive income	4,726,836	514,093	6.56%	514,093
Hung-wei Venture Capital Co., Ltd.	United Microelectronics Corporation - Common stock	None	Financial assets at fair value through other comprehensive income	336,346	17,692	-	17,692
Hung-wei Venture Capital Co., Ltd.	C-media Electronics Inc.- Common stock	Other related parties	Financial assets at fair value through profit or loss	2,274,875	141,497	2.89%	141,497
Hung-wei Venture Capital Co., Ltd.	Greatek Electroninc Inc. - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	5,823,602	356,404	1.02%	356,404
Hung-wei Venture Capital Co., Ltd.	Unimicron Technology Corp. - Common stock	None	Financial assets at fair value through other comprehensive income	239,578	42,166	0.02%	42,166
Hung-wei Venture Capital Co., Ltd.	Embestor Technology Inc. - Common stock	Other related parties	Financial assets at fair value through other comprehensive income	2,800,000	42,658	10.77%	42,658
Blueocean Inc.	CyWeeMotion Group Limited	None	Financial assets at fair value through other comprehensive income	8,422,256	-	7.01%	-

Table 3 Page 1

Expressed in thousands of NTD

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2023

Table 3

(Except as otherwise indicated)

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer(Note 2)	General ledger account	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023	Number of shares Book value (Note 3) Ownership (%) Fair value Footnote (Note 4) As at December 31,2023
Blueocean Inc.	Eargo, Inc. - Common stock	None	Financial assets at fair value through other comprehensive income	419,163	$ 33,367	2.02%	$ 33,367
Blueocean Inc.	Apple Inc. - Corporate bond	None	Financial assets at amortized cost	-	2,126,106	-	2,126,106
Talent Eagle Enterprise Inc.	Eargo, Inc. - Common stock	None	Financial assets at fair value through other comprehensive income	104,625	8,329	0.50%	8,329
Realsil Microelectronics (Suzhou) Co.,LTD	Cuam Money Fund	None	Financial assets at fair value through profit or loss	19,380,792	83,992	-	83,992
Realsil Microelectronics (Suzhou) Co.,LTD	Guang-Fa Demand Policy Loan Fund	None	Financial assets at fair value through profit or loss	10,184,154	44,136	-	44,136
Realsil Microelectronics (Suzhou) Co.,LTD	Jian-Xin Monetary Fund	None	Financial assets at fair value through profit or loss	221,903	962	-	962
Realsil Microelectronics (Suzhou) Co.,LTD	JIA SHI Monetary Fund	None	Financial assets at fair value through profit or loss	35,657	155	-	155
Realsil Microelectronics (Suzhou) Co.,LTD	BOC Monetary Fund	None	Financial assets at fair value through profit or loss	94,868	411	-	411
Realsil Microelectronics (Suzhou) Co.,LTD	Guang-Fa Currency Fund	None	Financial assets at fair value through profit or loss	39,599,803	171,616	-	171,616
Realsil Microelectronics (Suzhou) Co.,LTD	WAN JIA Monetary Fund	None	Financial assets at fair value through profit or loss	10,033,730	43,484	-	43,484
Realsil Microelectronics (Suzhou) Co.,LTD	Pu-Yin Monetary Fund	None	Financial assets at fair value through profit or loss	753	3	-	3
Realtek Semiconductor (ShenZhen) Corp.	Ri-Ri-Xin Fund	None	Financial assets at fair value through profit or loss	42,076,862	182,351	-	182,351
Realtek Semiconductor (ShenZhen) Corp.	Jhao-Jhao-Jin Fund	None	Financial assets at fair value through profit or loss	35,060,147	151,942	-	151,942
Cortina Network Systems (Shanghai) Co. Ltd.	Cuam Money Fund	None	Financial assets at fair value through profit or loss	6,157,304	26,684	-	26,684
Cortina Network Systems (Shanghai) Co. Ltd.	JIA SHI Monetary Fund	None	Financial assets at fair value through profit or loss	5,094,243	22,076	-	22,076

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments'.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 3 Page 2

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more For the year ended December 31, 2023

Purchase/seller Table 4	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Balance Percentage of total notes/accounts receivable(payable) Footnote Notes/accounts receivable(payable) (Except as otherwise indicated) Expressed in thousands of NTD	Balance Percentage of total notes/accounts receivable(payable) Footnote Notes/accounts receivable(payable) (Except as otherwise indicated) Expressed in thousands of NTD	Balance Percentage of total notes/accounts receivable(payable) Footnote Notes/accounts receivable(payable) (Except as otherwise indicated) Expressed in thousands of NTD
			Purchase (sales)	Amount	Percentage of total purchase (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Realtek Semiconductor Corporation	G.M.I Technology Inc.	Other related parties	(Sales)	6,576,979) ($	(7%)	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	1,350,251 $	11%
RayMX Microelectronics Corp.	G.M.I Technology Inc.	Other related parties	(Sales)	258,052) (	0%	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	40,317	0%
Realtek Singapore Private Limited	G.M.I Technology Inc.	Other related parties	(Sales)	4,845,703) (	(5%)	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	692,874	5%
Realtek Semiconductor Corporation	Greatek Electronics Inc.	Other related parties	Purchase	886,974	3%	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	304,820) (	6%
Realtek Singapore Private Limited	Greatek Electronics Inc.	Other related parties	Purchase	344,234	1%	Approximately the same with third party transactions	Approximately the same with third party transactions	Approximately the same with third party transactions	55,794) (	1%

Table 4

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2023

Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31,2023	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Realtek Semiconductor Corporation	G.M.I Technology Inc.	Other related parties	1,350,251 $	5.48	$ -	-	525,931 $	13,639 $
Realtek Singapore Private Limited	G.M.I Technology Inc.	Other related parties	692,874	4.46	-	-	227,080	-

Table 5

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES Significant inter-company transactions during the reporting period For the year ended December 31, 2023

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	Realtek Semiconductor Corporation	RayMX Microelectronics Corp.	1	Other receivables	$ 50,003	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.05%
0	Realtek Semiconductor Corporation	Realtek Korea Inc.	1	Technical service fees	179,904	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.19%
0	Realtek Semiconductor Corporation	Realtek Korea Inc.	1	Other payables	30,748	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.03%
0	Realtek Semiconductor Corporation	Ubilinx Technology Inc.	1	Technical service fees	705,122	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.74%
0	Realtek Semiconductor Corporation	Ubilinx Technology Inc.	1	Other payables	211,340	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.23%
1	Realtek Singapore Private Limited	Realsil Microelectronics (Suzhou) Co., LTD	3	Technical service fees	3,077,288	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	3.23%
1	Realtek Singapore Private Limited	Realsil Microelectronics (Suzhou) Co., LTD	3	Prepaid account	691,538	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.74%
1	Realtek Singapore Private Limited	Realtek Semiconductor(ShenZhen) Corp.	3	Technical service fees	623,564	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.66%
1	Realtek Singapore Private Limited	Realtek Semiconductor(ShenZhen) Corp.	3	Other payables	15,368	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.02%
1	Realtek Singapore Private Limited	Cortina Access, Inc.	3	Technical service fees	286,926	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.30%
1	Realtek Singapore Private Limited	Cortina Access, Inc.	3	Other payables	28,701	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.03%
1	Realtek Singapore Private Limited	Cortina Network Systems (Shanghai) Co. Ltd.	3	Technical service fees	162,411	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.17%
1	Realtek Singapore Private Limited	Cortina Network Systems (Shanghai) Co. Ltd.	3	Other payables	39,944	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.04%
1	Realtek Singapore Private Limited	Cortina Systems Taiwan Limited	3	Technical service fees	172,472	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.18%
1	Realtek Singapore Private Limited	Cortina Systems Taiwan Limited	3	Other payables	17,257	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.02%
1	Realtek Singapore Private Limited	Realtek Semiconductor (Japan) Corp.	3	Technical service fees	73,049	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.08%
1	Realtek Singapore Private Limited	Realtek Viet Nam Co., Ltd.	3	Technical service fees	37,631	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.04%
1	Realtek Singapore Private Limited	Realtek Semiconductor (Malaysia) Sdn. Bhd.	3	Technical service fees	19,168	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.02%
1	Realtek Singapore Private Limited	RayMX Microelectronics Corp.	3	Other receivables	50,003	No similar transaction can be compared with. Transaction prices and terms are determined in accordance with mutual agreement.	0.05%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the

subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.): (1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: Only transactions above NT$10 million are disclosed. Transactions of related parties are not further disclosed here.

Table 6

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investees

For the year ended December 31, 2023

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2023	Shares held as at December 31,2023	Shares held as at December 31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote
				Balance as at December 31,2023 Balance as at December 31, 2022		Number of shares Ownership (%) Book value
Realtek Semiconductor Corporation	Amber Universal Inc.	British Virgin Islands	Investment holdings	$ 1,764,641	$ 4,833,896	41,432	100%	$ 674,265	65,070 $	65,070 $	Subsidiary
Realtek Semiconductor Corporation	Realtek Singapore Private Limited	Singapore	ICs manufacturing, design, research, development, sales, and marketing	4,360,838	4,357,007	116,059,638	100%	44,568,730	6,947,246	6,948,906	Subsidiary
Realtek Semiconductor Corporation	Realtek Investment Singapore Private Limited	Singapore	Investment holdings	-	6,141,600	-	-	-	251,996	251,996	Subsidiary
Realtek Semiconductor Corporation	Realsun Investments Co., Ltd.	Taiwan	Investment holdings	280,000	280,000	28,000,000	100%	779,553	4,882) (	4,882) (	Subsidiary
Realtek Semiconductor Corporation	Hung-wei Venture Capital Co., Ltd.	Taiwan	Investment holdings	250,000	250,000	25,000,000	100%	588,997	72,122	72,122	Subsidiary
Realtek Semiconductor Corporation	Realking Investments Co., Ltd.	Taiwan	Investment holdings	293,930	293,930	29,392,985	100%	242,417	23,987) (	23,987) (	Subsidiary
Realtek Semiconductor Corporation	Realsun Technology Corporatioin	Taiwan	ICs manufacturing, design, research, development, sales, and marketing	5,000	5,000	500,000	100%	4,983	47) (	47) (	Subsidiary
Realtek Semiconductor Corporation	Bobitag Inc.	Taiwan	Manufacturing and installation of computer equipment and wholesasle, retail and related services of electronic materials and information/software	19,189	19,189	1,918,910	66.67%	19,403	198	132	Subsidiary
Realtek Semiconductor Corporation	AICONNX Technology Corporation	Taiwan	ICs manufacturing, design, research, development, sales, and marketing	20,000	20,000	2,000,000	100%	9,403	16,253	17,683	Subsidiary
Realtek Semiconductor Corporation	Wise Elite Global Limited	British Virgin Islands	Investment holdings	30,735	-	1,000	100%	31,808	1,085	1,085	Subsidiary

Table 7 Page 1

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investees

For the year ended December 31, 2023

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2023	Shares held as at December 31,2023	Shares held as at December 31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote
				Balance as at December 31,2023 Balance as at December 31, 2022		Number of shares Ownership (%) Book value
Realtek Semiconductor Corporation	Estinet Technologies Incorporation	Taiwan	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	$ -	$ 110,000	-	-	$ -	158,506) ($	10,588) ($	Investments accounted for under equity method
Realking Investments Co., Ltd.	Innorich Venture Capital Corp.	Taiwan	Venture capital activities	200,000	200,000	20,000,000	37.38%	112,797	61,553) (	23,011) (	Investments accounted for under equity method
Realking Investments Co., Ltd.	Starmems Semiconductor Corporation	Taiwan	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	10,000	10,000	1,000,000	10%	4,222	30,200) (	3,020) (	Investments accounted for under equity method
Realsun Investments Co., Ltd.	Starmems Semiconductor Corporation	Taiwan	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	23,000	23,000	2,300,000	23%	9,709	30,200) (	6,946) (	Investments accounted for under equity method
Hung-wei Venture Capital Co., Ltd.	Starmems Semiconductor Corporation	Taiwan	Research and development, design, manufacturing, sales and other services of electronic components, information/Software and integrated circuits.	12,000	12,000	1,200,000	12%	5,066	30,200) (	3,624) (	Investments accounted for under equity method
Leading Enterprises Limited	Realtek Semiconductor (Japan) Corp.	Japan	Information collection and technical support	4,347	4,627	400	100%	3,913	2,105	2,105	Sub-Subsidiary
Amber Universal Inc.	Realtek Semiconductor (Hong Kong)Limited	Hong Kong	Information services and technical support	5,901	5,901	-	100%	1,120	1) (	1) (	Sub-Subsidiary
Realtek Singapore Private Limited	Empsonic Enterprises Inc.	Mauritius	Investment holdings	868,264	867,501	2,825,000	100%	2,277,575	169,450	169,450	Sub-Subsidiary
Realtek Singapore Private Limited	Cortina Access Inc.	U.S.A	R&D and technical support	1,255,402	1,254,299	16,892	100%	970,747	50,619	50,619	Sub-Subsidiary

Table 7 Page 2

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investees

For the year ended December 31, 2023

Initial investment amount Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023 Balance as at December 31, 2022 Number of shares Ownership (%) Book value	Balance as at December 31,2023 Balance as at December 31, 2022 Number of shares Ownership (%) Book value	Balance as at December 31,2023 Balance as at December 31, 2022 Number of shares Ownership (%) Book value	Balance as at December 31,2023 Balance as at December 31, 2022 Number of shares Ownership (%) Book value	Balance as at December 31,2023 Balance as at December 31, 2022 Number of shares Ownership (%) Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote	Investment income (loss) recognised by the Company for the year ended December 31, 2023 Footnote
Realtek Singapore Private Limited	Cortina Systems Taiwan Limited	Taiwan	R&D and technical support	$ 61,470	$ 61,416	21,130,000	100%	$ 86,110	12,491 $	12,491 $	Sub-Subsidiary
Realtek Singapore Private Limited	Realtek Viet Nam Co., Ltd.	Vietnam	R&D and technical support	122,940	122,832	4,000,000	100%	86,466	3,342	3,342	Sub-Subsidiary
Realtek Singapore Private Limited	Leading Enterprises Limited	British Virgin Islands	Investment holdings	15,180,939	15,167,602	34,630	100%	14,836,806	643,414	643,414	Sub-Subsidiary
Realtek Singapore Private Limited	Bluocean Inc.	Cayman Islands	Investment holdings	3,382,387	3,379,415	110,050,000	100%	3,551,355	157,649	157,649	Sub-Subsidiary
Realtek Singapore Private Limited	Talent Eagle Enterprise Inc.	Cayman Islands	Investment holdings	3,506,864	3,503,783	114,100,000	100%	2,515,371	166,277	166,277	Sub-Subsidiary
Realtek Singapore Private Limited	Realtek Germany GmbH.	Germany	R&D and technical support	17,006	-	500,000	100%	17,398	389	389	Sub-Subsidiary
Talent Eagle Enterprise Inc.	Ubilinx Technology Inc.	U.S.A	R&D and technical support	1,844,100	1,842,480	60,000,000	100%	357,112	45,790	45,790	Sub-Subsidiary
Bluocean Inc.	Realtek Semiconductor (Malaysia)Sdn.Bhd.	Malaysia	R&D and technical support	69,989	72,519	10,450,000	100%	68,163	3,207	3,207	Sub-Subsidiary
Bluocean Inc.	Realtek Korea Inc.	South Korea	R&D and technical support	47,420	48,177	200,000	100%	63,867	11,953	11,953	Sub-Subsidiary

Note ： The amount of foreign currencies denominated in New Taiwan dollars in this table, which relates to income and expenses which were re-translated at the average exchange rate from January 1, 2023 to December 31, 2023, others were re-translated at the exchange rate prevailing at the end of the financial reporting period.

Table 7 Page 3

Table 8

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investments in Mainland China

For the year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in Capital	Investment method (Note1)	Accumulated amount of remittance from Taiwan to Mainland China as at January1,2023	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2023	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2023	Accumulated amount of remittance from Taiwan to Mainland China as at December 31,2023	Net income of investee for the year ended December 31, 2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for year ended December 31, 2023 (Note2)	Book value of investment in Mainland China as at December 31,2023	Accumulated amount of investment income remitted back to Taiwan as at December 31, 2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Cortina Network Systems (Shanghai) Co., Ltd. Realsil Microelectronics (Suzhou) Co.,LTD Realtek Semiconductor (ShenZhen) Corp. RayMX Microelectronics Corp. Suzhou Pankore Integrated Circuit Technology Co. Ltd. Companyname	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 Accumulated amount of remittance from Taiwan to Mainland China as at December31,2023	110,646 $ 860,580 153,675 113,761 43,338 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	2 2 2 2 2 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	110,646 $ 860,580 153,675 113,761 43,338	$ - - - - -	$ - - - - -	110,646 $ 860,580 153,675 113,761 43,338	14,746 $ 180,167 39,426 113,958) ( 10,257) (	100% 100% 100% 100% 100%	14,746 $ 180,167 39,426 113,958) ( 10,257) (	124,164 $ 2,273,080 344,737 263,569 149,422) (	$ - - - - -
Cortina Network Systems (Shanghai) Co., Ltd. Realsil Microelectronics (Suzhou) Co.,LTD Realtek Semiconductor (ShenZhen) Corp. RayMX Microelectronics Corp. Suzhou Pankore Integrated Circuit Technology Co. Ltd.	110,646 $ 860,580 153,675 113,761 43,338	110,646 $ 860,580 153,675 113,761 43,338	$ 25,337,076

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.

Note 2: In the Investment income (loss) recognised by the Company for the year ended December 31, 2023 column were based on the financial andited by independent anditors of the parent company.

Note 3: The amount of foreign currencies denominated in New Taiwan dollars in this table, which relates to income and expenses which were re-translated at the average exchange rate from January 1, 2023 to December 31, 2023, others were re-translated at the exchange rate prevailing at the end of the financial reporting period.

Table 8