RT — Audit Report / Information 2023

Dec 5, 2023

REALTEK SEMICONDUCTOR CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

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

---

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.

~1~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR23000224 To the Board of Directors and Shareholders of Realtek Semiconductor Corporation

Opinion

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

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and 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 Auditors’ responsibilities for the audit of the parent company only financial satatements section of our report. We are independent of the Company 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.

~2~

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Company’s 2023 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2023 parent company only financial statements are stated as follows:

Valuation of inventories

Description

Refer to Note 4(11) of the parent company only financial statements for inventory valuation policies, Note 5(2) for uncertainty of accounting estimates and assumptions of inventory valuation and Note 6(3) for the details of inventories.

The Company 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 valuation of inventories as one of the key audit matters.

~3~

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 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.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

~4~

Auditor’s responsibilities for the audit of the parent company only financial

statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 Standards of 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 parent company only financial statements.

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

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

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

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

~5~

1. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the parent company only 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 Company to cease to continue as a going concern.

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

3. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the 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.

~6~

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period 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 of PricewaterhouseCoopers, Taiwan February 27, 2024

------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only 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 parent company only 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.

~7~

REALTEK SEMICONDUCTOR CORPORATION PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(2) and 7 7 6(3) 8 6(4) 6(5) 6(6) 6(7) 6(23) 9	December 31, 2023 AMOUNT % $ 2,406,399 3 79,523 - 7,616,665 9 1,362,924 2 1,220 - 3,224,525 4 7,819,879 9 369,046 - 22,880,181 27 53,000 - 180,901 - 89,598 - 46,919,559 55 8,382,515 10 1,574,916 2 2,575,121 3 287,659 - 2,170,167 3 62,233,436 73 $ 85,113,617 100	December 31, 2022	December 31, 2022
		AMOUNT $ 2,406,399 79,523 7,616,665 1,362,924 1,220 3,224,525 7,819,879 369,046 22,880,181 53,000 180,901 89,598 46,919,559 8,382,515 1,574,916 2,575,121 287,659 2,170,167 62,233,436 $ 85,113,617	AMOUNT $ 2,538,812 57,533 5,364,402 1,096,212 2,861 6,910,735 12,024,974 366,842 28,362,371 53,000 61,455 81,197 59,161,713 7,133,169 1,331,689 2,353,616 132,969 2,262,850 72,571,658 $ 100,934,029	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 1210 Other receivables - related parties 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 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				3 - 5 1 - 7 12 -
				28
				- - - 59 7 1 3 - 2
				72
				100

(Continued)

~8~

REALTEK SEMICONDUCTOR CORPORATION PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(8) 6(16) 7 6(9) 7 6(16) 6(10) 6(23) 6(11) 6(12) 6(13) 6(14) 6(15) 9	December 31, 2023 AMOUNT % $ 4,250,000 5 131,853 - 4,958,007 6 311,850 - 21,694,542 26 279,265 - 1,748,109 2 29,191 - 5,630,149 7 39,032,966 46 2,227,346 3 203,766 - 1,322,500 1 98,579 - 3,852,191 4 42,885,157 50 5,128,636 6 542,048 1 8,882,764 10 - - 24,845,272 29 2,829,740 4 42,228,460 50 $ 85,113,617 100	December 31, 2022	December 31, 2022
		AMOUNT $ 4,250,000 131,853 4,958,007 311,850 21,694,542 279,265 1,748,109 29,191 5,630,149 39,032,966 2,227,346 203,766 1,322,500 98,579 3,852,191 42,885,157 5,128,636 542,048 8,882,764 - 24,845,272 2,829,740 42,228,460 $ 85,113,617	AMOUNT $ 13,737,994 52,282 4,411,608 90,102 25,604,066 232,531 1,374,807 27,166 5,701,663 51,232,219 1,713,316 62,725 1,067,060 105,477 2,948,578 54,180,797 5,128,636 1,045,147 7,262,359 1,776,089 28,854,826 2,686,175 46,753,232 $ 100,934,029	%
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 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 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments 3X2X Total liabilities and equity				14 - 5 - 25 - 1 - 6
				51
				2 - 1 -
				3
				54
				5 1 7 2 29 2
				46
				100

The accompanying notes are an integral part of these parent company only financial statements.

~9~

REALTEK SEMICONDUCTOR CORPORATION PARENT COMPANY ONLY 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(16) and 7 $ 61,378,334 100 $ 67,491,952 100 6(3) and 7 ( 34,470,870) ( 56) ( 35,701,718) ( 53) 26,907,464 44 31,790,234 47 ( 698) - ( 168) - 566 - 1,427 - 26,907,332 44 31,791,493 47 6(21)(22) and 7 ( 2,496,684) ( 4) ( 2,979,097) ( 4) ( 2,624,997) ( 4) ( 2,880,970) ( 4) ( 20,057,180) ( 33) ( 24,745,357) ( 37) 12(2) ( 25,469) - 33,415 - ( 25,204,330) ( 41) ( 30,572,009) ( 45) 1,703,002 3 1,219,484 2 6(17) and 7 307,216 - 227,202 - 6(18) and 7 118,103 - 227,189 - 6(19) 327,900 1 203,097 - 6(20) ( 235,939) - ( 201,454) - 6(4) 7,317,490 12 15,206,534 23 7,834,770 13 15,662,568 23 9,537,772 16 16,882,052 25 6(23) ( 385,000) ( 1) ( 678,000) ( 1) $ 9,152,772 15 $ 16,204,052 24 6(15) ($ 50,099) - $ 26,419 - ( 73,690) - ( 1,015,383) ( 1) ( 123,789) - ( 988,964) ( 1) 283,799 - 5,451,229 8 $ 160,010 - $ 4,462,265 7 $ 9,312,782 15 $ 20,666,317 31 6(24) $ 17.85 $ 31.62 6(24) $ 17.59 $ 30.48

4000 Operating revenue 5000 Operating costs 5900 Gross profit 5910 Unrealized profit from sales 5920 Realized profit from sales 5950 Net operating margin 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 7070 Share of profit 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 (income) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive losses of associates and joint ventures accounted for under equity method 8310 Total other comprehensive losses that will not be reclassified to profit or loss Components of other comprehensive income (losses) that will be reclassified to profit or loss 8380 Share of other comprehensive income of associates and joint ventures accounted for under equity method 8300 Other comprehensive income,net 8500 Total comprehensive income for the year Earnings Per Share (in dollars) 9750 Basic earnings per share Diluted earnings per share (in dollars) 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

~10~

REALTEK SEMICONDUCTOR CORPORATION

PARENT COMPANY ONLY 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 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 Changes 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 Balance at December 31, 2023	Notes		Common shares		Capital surplus				Retained Earnings				Other equityinterest	Other equityinterest	Other equityinterest		Total equity
							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(15) 6(14) 6(14) 6(14) 6(12)(13) 6(13) 6(13) 6(15) 6(14) 6(14) 6(14) 6(13) 6(13)		$ 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

The accompanying notes are an integral part of these parent company only financial statements.

~11~

REALTEK SEMICONDUCTOR CORPORATION

PARENT COMPANY ONLY 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 profit of associates and joint ventures accounted for under equity method Gain on disposal of property, plant and equipment Impairment loss Gains on disposal of investments Gains arising from lease modifications Changes in operating assets and liabilities Changes in operating assets Accounts receivable, net Accounts receivable, net - related parties Other receivables Other receivables, - related parties 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 Accrued pension obligations

YearendedDecember 31 Notes 2023 2022 $ 9,537,772 $ 16,882,052 6(21) 1,118,605 976,697 6(7)(21) 1,692,464 1,589,992 12(2) 25,469 ( 33,415 ) 6(20) 235,939 201,454 6(17) ( 307,216 ) ( 227,202 ) 6(18) ( 320 ) ( 1,278 ) 6(19) ( 21,990 ) 71,596 6(4) ( 7,317,490 ) ( 15,206,534 ) 6(19) ( 4,905 ) ( 1,002 ) - 3,031 6(19) ( 305,599 ) - 6(19) - ( 24 ) ( 2,275,038 ) 2,570,380 ( 269,406 ) 720,747 1,394 5,391 ( 39,731 ) ( 13,074 ) 4,205,095 ( 224,079 ) ( 2,204 ) 119,276 79,571 ( 31,977 ) - ( 3,276 ) 546,399 ( 2,937,835 ) 221,748 ( 146,871 ) ( 4,582,071 ) 4,010,659 46,734 168,577 ( 71,514 ) 657,199 ( 3,873 ) ( 4,484 )

(Continued)

~12~

REALTEK SEMICONDUCTOR CORPORATION

PARENT COMPANY ONLY 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 taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Acquisition 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 Increase in other receivables, - related parties Decrease in other receivables, - related parties Acquisition of investments accounted for under equity method Disposal of investments accounted for under equity method Proceeds from capital reduction of investee accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in refundable deposits 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 Net decrease 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 $ 2,509,833 $ 9,146,000 304,123 227,111 13,671,511 6,235,211 ( 238,814 ) ( 198,423 ) ( 25,412 ) ( 748,966 ) 16,221,241 14,660,933 - ( 53,000 ) ( 64,302 ) ( 35,037 ) ( 8,401 ) ( 10,125 ) - 4,786 ( 6,537,032 ) ( 11,788,573 ) 7,192,173 15,495,845 6(4) ( 30,215 ) - 6,436,133 - 3,067,700 - 6(25) ( 2,108,931 ) ( 2,349,017 ) 12,355 4,064 6(25) ( 1,455,145 ) ( 1,953,420 ) 1,672 ( 1,452,037 ) - ( 91,011 ) 6,506,007 ( 2,227,525 ) 6(26) 134,242,945 161,350,173 6(26) ( 143,730,939 ) ( 160,954,279 ) 6(26) 511,090 711,110 6(26) ( 35,569 ) ( 28,142 ) 6(26) ( 85 ) ( 719 ) ( 13,847,319 ) ( 13,847,318 ) 216 244 ( 22,859,661 ) ( 12,768,931 ) ( 132,413 ) ( 335,523 ) 2,538,812 2,874,335 $ 2,406,399 $ 2,538,812

The accompanying notes are an integral part of these parent company only financial statements.

~13~

REALTEK SEMICONDUCTOR CORPORATION NOTES TO THE PARENT COMPANY ONLY 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 is engaged in the research, development, design, testing, and sales of ICs and application softwares for these products.

1. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised 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:

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
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 Company’s financial condition and financial performance based on the Company’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.

~14~

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

but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC and will become effective 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 Company’s financial condition and financial performance based on the Company’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:

==> picture [493 x 48] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

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 Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

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

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

~15~

(2) Basis of preparation

• A. Except for the following items, the parent company only 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 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”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional 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’.

~16~

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the Company entities and associates 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 Company 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 the balance sheet date.

• (4) 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 realised, 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 realised 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.

~17~

(5) 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.

(6) 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 amortised cost or fair value through other comprehensive income. Financial assets at amortised 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 Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at amortised cost

The Company’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.

• (8) Accounts receivable

• A. Accounts receivable entitle the Company 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.

(9) Impairment of financial assets

• For financial assets at amortised cost, at each reporting date, the Company 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 receivable that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs.

(10) Derecognition of financial assets

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

~18~

(11) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, 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 realisable value. Net realisable 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.

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

• A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company 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.

• B. Unrealised profit (loss) occurred from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ 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 Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate to its ownership.

• D. Associates are all entities over which the Company 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.

• E. The Company’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 Company’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Company does not recognize further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.

• F. 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 Company’s ownership percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• G. Unrealised gains or losses on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised 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

~19~

adopted by the Company.

• H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’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 Company’s 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.

• I. Upon loss of significant influence over an associate, the Company 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.

• J. When the Company 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.

• K. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the parent company only financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the parent company only financial statements.

• (13) Property, plant and equipment

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

• 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 Company 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 straight-line 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.

~20~

• 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

• (14) 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 Company.

• 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 Company subsequently measures the lease liability at amortised 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 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.

• (15) Intangible assets

• A. Computer software

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

• B. Other intangible assets

• Separately acquired intangible assets with a finite useful life are stated at cost, net of accumulated amortisation and accumulated impairment. The amortisation amounts of separately and parent company only acquired intangible assets were amortised on a straight-line basis over their estimated useful lives of 2-5 years.

~21~

(16) Impairment of non-financial assets

• The Company 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 or reasons for recognising 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 amortised historical cost would have been if the impairment had not been recognized.

• (17) 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 recognized as interest expense in profit or loss over the period of the borrowings using the effective interest method.

• (18) 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.

(19) 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.

(20) 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. Pension

• (a) Defined contribution plan

For defined contribution plan, 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.

• (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

~22~

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 plan 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 Company calculates the number of shares based on the closing price at the previous day of the Board meeting resolution.

• (21) 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 operates and generates 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 parent company only 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 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 deductible 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 Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax

~23~

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.

• (22) 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.

• (23) 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.

• (24) Revenue recognition

• A. Sales of goods

  • (a) The Company 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 Company 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 Company does not adjust the transaction price to reflect the time 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.

~24~

B. Services revenue

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

(25) Government grants

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

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’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 Company’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 Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company 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 $7,819,879.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Cash equivalents - notes and bonds issued under repurchase agreement	December31,2023 559 $ 1,637,465 768,375 2,406,399 $	December31,2022
		577 $ 2,538,235 -
		2,538,812 $

The Company transacts with a variety of financial institutions all with high credit quality to disperse

~25~

credit risk, so it expects that the probability of counterparty default is remote.

(2) Accounts receivable

Accounts receivable
		December	31, 2023		December 31, 2022
Accounts receivable		$	7,693,662		$	5,418,624
Accounts receivable – related parties			1,376,691			1,107,285
Less: Loss allowance	(		90,764)	(		65,295)
		$	8,979,589		$	6,460,614
A. The aging analysis of accounts receivable is	as follows:
		December	31,2023		December	31, 2022
Not past due	$		8,554,640	$		6,481,979
Up to 30 days			511,779			43,893
31 to 90 days			3,898			-
Over 90 days			36			37
	$		9,070,353	$		6,525,909

The above aging analysis is based on past due date.

• B. As at December 31, 2023 and 2022, accounts receivable arose from contracts with customers. As at January 1, 2022, the balance of receivables from contracts with customers amounted to $9,817,036.

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

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

(3) Inventories

Inventories
Raw materials Work in process Finished goods Total Raw materials Work in process Finished goods Total	Cost 1,939,008 $ 3,341,917 6,224,758 11,505,683 $	Allowance for obsolescence and market value decline 890,635) ($ 1,050,904) ( 1,744,265) ( 3,685,804) ($ December31,2023 December31,2022	Bookvalue
			1,048,373 $ 2,291,013 4,480,493
			7,819,879 $
	Cost 3,586,261 $ 4,477,022 6,181,572 14,244,855 $		Bookvalue
			2,855,419 $ 3,780,041 5,389,514
			12,024,974 $

~26~

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

Cost of inventories sold and others Loss on decline in market value, obsolete and slow-moving inventory Loss on scrap inventory	2023 2022 32,846,234 $ 34,051,261 $ 1,465,923 1,437,254 158,713 213,203 34,470,870 $ 35,701,718 $ Years endedDecember31,

(4) Investments accounted for under equity method

Subsidiaries: 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. Realsun Technology Corporatioin Bobitag Inc. AICONNX Technology Corporation Associates: Estinet Technologies Incorporation	December31,2023 December 31, 2022 674,265 $ 3,735,840 $ 44,568,730 47,105,531 - 6,925,958 31,808 - 779,553 691,262 588,997 422,217 242,417 259,432 4,983 5,030 19,403 19,436 9,403 5,269) ( - 2,276 46,919,559 $ 59,161,713 $

• A. Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s 2023 consolidated financial statements.

• B. The gain on investments accounted for under equity method amounted to $7,317,490 and $15,206,534 for the years ended December 31, 2023 and 2022, respectively.

• C. Wise Elite Global Limited was established on February 17, 2023. The Company’s investment in the investee amounted to $30,215.

• D. Realtek Investment Singapore Private Limited was dissolved on October 20, 2023 through a resolution of the Board of Directors.

~27~

(5) Property, plant and equipment

At January 1, 2023 Cost Accumulated depreciation and impairment 2023 At January 1 Additions Disposals Reclassifications Depreciation At December 31 At December 31, 2023 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment 489,370 $ 2,375,329 $ 1,268,586 $ 2,922,654 $ 381,989 $ - 772,754) ( 513,331) ( 1,568,905) ( 172,907) ( 489,370 $ 1,602,575 $ 755,255 $ 1,353,749 $ 209,082 $ 489,370 $ 1,602,575 $ 755,255 $ 1,353,749 $ 209,082 $ - 36,952 46,290 969,938 31,993 - - 7,450) ( - - - 1,518,099 11,399 77,517) ( 14,370 - 75,409) ( 189,173) ( 590,929) ( 56,820) ( 489,370 $ 3,082,217 $ 616,321 $ 1,655,241 $ 198,625 $ 489,370 $ 3,930,380 $ 1,305,370 $ 3,813,794 $ 428,352 $ - 848,163) ( 689,049) ( 2,158,553) ( 229,727) ( 489,370 $ 3,082,217 $ 616,321 $ 1,655,241 $ 198,625 $	Construction in progress and equipment to be inspected Others Total 2,340,749 $ 669,968 $ 10,448,645 $ - 287,579) ( 3,315,476) ( 2,340,749 $ 382,389 $ 7,133,169 $ 2,340,749 $ 382,389 $ 7,133,169 $ 869,169 371,353 2,325,695 - - 7,450) ( 1,528,237) ( 61,886 - - 156,568) ( 1,068,899) ( 1,681,681 $ 659,060 $ 8,382,515 $ 1,681,681 $ 1,104,487 $ 12,753,434 $ - 445,427) ( 4,370,919) ( 1,681,681 $ 659,060 $ 8,382,515 $

~28~

At January 1, 2022 Cost Accumulated depreciation and impairment 2022 At January 1 Additions Disposals Reclassifications Depreciation At December 31 At December 31, 2022 Cost Accumulated depreciation and impairment	Land Buildings Machinery Test equipment Office equipment 489,370 $ 2,815,676 $ 4,145,587 $ 3,476,211 $ 434,352 $ - 1,133,175) ( 3,516,970) ( 2,294,535) ( 210,265) ( 489,370 $ 1,682,501 $ 628,617 $ 1,181,676 $ 224,087 $ 489,370 $ 1,682,501 $ 628,617 $ 1,181,676 $ 224,087 $ - - 121,371 683,932 39,965 - - - 3,062) ( - - - 172,492 2,891 - - 79,926) ( 167,225) ( 511,688) ( 54,970) ( 489,370 $ 1,602,575 $ 755,255 $ 1,353,749 $ 209,082 $ 489,370 $ 2,375,329 $ 1,268,586 $ 2,922,654 $ 381,989 $ - 772,754) ( 513,331) ( 1,568,905) ( 172,907) ( 489,370 $ 1,602,575 $ 755,255 $ 1,353,749 $ 209,082 $	Construction in progress and equipment to be inspected Others Total 1,366,784 $ 1,036,586 $ 13,764,566 $ - 718,143) ( 7,873,088) ( 1,366,784 $ 318,443 $ 5,891,478 $ 1,366,784 $ 318,443 $ 5,891,478 $ 1,154,670 179,797 2,179,735 - - 3,062) ( 180,705) ( 5,128 194) ( - 120,979) ( 934,788) ( 2,340,749 $ 382,389 $ 7,133,169 $ 2,340,749 $ 669,968 $ 10,448,645 $ - 287,579) ( 3,315,476) ( 2,340,749 $ 382,389 $ 7,133,169 $

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

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

~29~

－ (6) Leasing arrangements lessee

• A. The Company 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 charge are as follows:

Land Buildings Other equipment Land Buildings Other equipment	December31,2023 December31,2022 1,544,693 $ 1,328,950 $ 7,021 2,590 23,202 149 1,574,916 $ 1,331,689 $ Depreciation Carrying amount	December31,2022 1,328,950 $ 2,590 149 1,331,689 $ amount
	2023 2022 35,862 $ 33,148 $ 6,967 6,967 6,877 1,794 49,706 $ 41,909 $ Years endedDecember31,
		33,148 $ 6,967 1,794
		41,909 $

• C. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $292,933 and $15,882, 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	Years ended December 31,	Years ended December 31,
	2023 21,515 $	2022
		19,203 $

• E. For the years ended December 31, 2023 and 2022, the Company’s total cash outflow for leases were $57,084 and $47,345, respectively.

~30~

(7) Intangible assets

==> picture [487 x 453] intentionally omitted <==

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

Computer software Intellectual property Others Total
At January 1, 2023
Cost $ 7,064,616 $ 5,922,651 $ 53,639 $ 13,040,906
Accumulated amortisation
and impairment ( 5,679,003) ( 5,008,287) - ( 10,687,290)
$ 1,385,613 $ 914,364 $ 53,639 $ 2,353,616
2023
At January 1 $ 1,385,613 $ 914,364 $ 53,639 $ 2,353,616
Additions 1,534,323 330,037 49,609 1,913,969
Reclassifications 102,048 - ( 102,048) -
Amortisation ( 1,130,891) ( 561,573) - ( 1,692,464)
At December 31 $ 1,891,093 $ 682,828 $ 1,200 $ 2,575,121
At December 31, 2023
Cost $ 4,023,590 $ 2,764,499 $ 1,200 $ 6,789,289
Accumulated amortisation
and impairment ( 2,132,497) ( 2,081,671) - ( 4,214,168)
$ 1,891,093 $ 682,828 $ 1,200 $ 2,575,121
Computer software Intellectual property Others Total
At January 1, 2022
Cost $ 5,611,613 $ 5,614,097 $ 15,398 $ 11,241,108
Accumulated amortisation
and impairment ( 4,721,984) ( 4,375,313) - ( 9,097,297)
$ 889,629 $ 1,238,784 $ 15,398 $ 2,143,811
2022
At January 1 $ 889,629 $ 1,238,784 $ 15,398 $ 2,143,811
Additions 1,453,003 308,553 38,241 1,799,797
Amortisation ( 957,019) ( 632,973) - ( 1,589,992)
At December 31 $ 1,385,613 $ 914,364 $ 53,639 $ 2,353,616
At December 31, 2022
Cost $ 7,064,616 $ 5,922,651 $ 53,639 $ 13,040,906
Accumulated amortisation
and impairment ( 5,679,003) ( 5,008,287) - ( 10,687,290)
$ 1,385,613 $ 914,364 $ 53,639 $ 2,353,616
----- End of picture text -----

Details of amortisation on intangible assets are as follows:

Operating costs Operating expenses	Years ended December31,	Years ended December31,
	2023 4,668 $ 1,687,796 1,692,464 $	2022
		2,615 $ 1,587,377
		1,589,992 $

~31~

(8) Short-term borrowings

==> picture [474 x 101] intentionally omitted <==

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

Type of borrowings December 31, 2023 Interest rate range Collateral
Bank borrowings
Unsecured borrowings $ 4,250,000 1.31%~1.35% None
Type of borrowings December 31, 2022 Interest rate range Collateral
Bank borrowings
Unsecured borrowings $ 13,737,994 1.8%~2.3% None
----- End of picture text -----

The interest expense of long-term and short-term borrowing recognized in profit or loss amounted to $214,424 and $182,251 for the years ended December 31, 2023 and 2022, respectively.

(9) 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	December31,2023 7,292,219 $ 10,519,174 1,711,343 331,278 1,751,131 89,397 21,694,542 $	December31,2022 10,097,356 $ 12,001,135 1,977,312 114,514 1,292,307 121,442
		25,604,066 $

- (10) Long term borrowings

Type of borrowings Borrowing period Repayment term Interest rate range Collateral December 31, 2023

Loan for Accelerated 2021/11/8~ Repayable in instalment 1.050% ～ 1.250% None $ 2,227,346 Investment by Domestic Corporations (Note) 2028/11/22 over the agreed period

Type of borrowings Borrowing period Repayment term Interest rate range Collateral December 31, 2022

Loan for Accelerated 2021/11/8~ Repayable in instalment 0.925% ～1.125 % None $ 1,713,316 Investment by Domestic Corporations (Note) 2027/12/15 over the agreed period

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 subsidised loan for an eligible investment project from financial institutions at a preferential interest rate. The Company 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.

~32~

(11) 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 liability in the balance sheet	86,119) ($	($	90,492)

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

2023

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

~33~

2022

At January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability 628,846) ($ 534,371 $ 94,475) ($ 1,136) ( - 1,136) ( 4,641) ( 3,760 881) ( 634,623) ( 538,131 96,492) ( - 1,418) ( 1,418) ( 38,312 - 38,312 36,894) ( - 36,894) ( 1,418 1,418) ( - - 6,000 6,000 8,716 8,716) ( - 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 utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation 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:

Discount rate Future salary increases	Years ended December 31,
	2023 2022 1.30% 1.40% 4.75% 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.

~34~

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

December 31, 2023 Effect on present value of defined benefit obligation December 31, 2022 Effect on present value of defined benefit obligation	Increase by Decrease by Increase by Decrease by 0.25% 0.25% 0.25% 0.25% 14,524 $ 15,015) ($ 14,185) ($ 13,802 $ 14,986 $ 15,511) ($ 14,672) ($ 14,260 $ Discountrate Future salaryincreases	Increase by Decrease by Increase by Decrease by 0.25% 0.25% 0.25% 0.25% 14,524 $ 15,015) ($ 14,185) ($ 13,802 $ 14,986 $ 15,511) ($ 14,672) ($ 14,260 $ Discountrate Future salaryincreases
		14,260 $

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 2~5 years 5~10 years	339,695 $ 146,891 162,637
	649,223 $

• B. (a) Effective July 1, 2005, the Company has 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 contributes 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. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the defined contribution pension plans of the Company for the years ended December 31, 2023 and 2022 were $381,574 and $349,206, respectively.

• (12) Share capital

• A. As at December 31, 2023, the Company’s authorised capital was $8,900,000, consisting of 890 million shares of ordinary 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.

~35~

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

	2023	2022
At January 1	512,863	510,684
Employees' compensation transferred
to common stock	-	2,179
At December 31	512,863	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 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.

• (13) 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 the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised 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.

deficit unless the legal reserve is insufficient.	fficient.
Share premium At January 1 982,830 $ Changes in equity of associates accounted for under equity method - Cash from capital surplus 512,864) ( Cash dividends returned - At December 31 469,966 $		2023
		Change in equity of associates accounted for under equitymethod 61,261 $ 9,549 - - 70,810 $

~36~

2022

Share premium Change in equity of associates accounted for under equity method At January 1 1,039,006 $ 61,261 $ Employees’compensation transferred to common stock 969,551 - Cash from capital surplus 1,025,727) ( - Cash dividends returned - - At December 31 982,830 $ 61,261 $	Others Total 812 $ 1,101,079 $ - 969,551 - 1,025,727) ( 244 244 1,056 $ 1,045,147 $

(14) 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 current year.

~37~

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 appropriations of 2022 and 2021 earnings had been resolved at the shareholders ’ meeting on June 6, 2023 and June 8, 2022, respectively. Details are summarised below:

Dividends per Amount share (indollars) Legal reserve 1,620,405 $ - $ Special reserve 1,776,089) ( - Cash dividends 13,334,455 26.00 13,178,771 $ 26.00 $ 2022	2021	2021
	Amount 1,685,276 $ 220,040 12,821,591 14,726,907 $	Dividends per share (in dollars)
		- $ - 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 (1 NT dollar 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 (2 NT dollars per share).

~38~

(15) Other equity items

(15)	Other equity items
					2023
			Unrealised
			gains(losses) on		Currency
			valuation	translation difference				Total
	At January 1	$	1,391,817	$	1,294,358		$	2,686,175
	Revaluation:
	–the Company	(	50,099)		-	(		50,099)
	–Subsidiary and
	associates	(	73,690)		-	(		73,690)
	Revaluation transferred to
	retained earnings:
	–the Company	(	16,445)		-	(		16,445)
	Currency translation
	differences:
	–Subsidiary and
	associates		-		283,799			283,799
	At December 31	$	1,251,583	$	1,578,157		$	2,829,740
					2022
			Unrealised
			gains(losses) on		Currency
			valuation	translationdifference				Total
	At January 1	$	2,380,781	($	4,156,871)	($		1,776,090)
	Revaluation:
	–the Company		26,419		-			26,419
	–Subsidiary and
	associates	(	1,015,383)		-	(		1,015,383)
	Currency translation
	differences:
	–Subsidiary and
	associates		-		5,451,229			5,451,229
	At December 31	$	1,391,817	$	1,294,358		$	2,686,175
(16)	Operating revenue
					Years ended	December31,
					2023			2022
	Revenue from contracts with		customers	$	61,378,334		$	67,491,952

~39~

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services at a point in time in the following major product lines:

following major product lines:
YearendedDecember31,2023 Revenue from external customer contracts Timing of revenue recognition At a point in time YearendedDecember31,2022 Revenue from external customer contracts Timing of revenue recognition At a point in time		Integrated circuit products 61,197,580 $ 61,197,580 $ Integrated circuit products 67,267,956 $ 67,267,956 $	Others 180,754 $ 180,754 $ Others 223,996 $ 223,996 $	Total 61,378,334 $
				61,378,334 $ Total
				67,491,952 $
				67,491,952 $

B. Contract liabilities

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

Contract liabilities – advance sales receipts	December31,2023 131,853 $	December 31, 2022 52,282 $	January1,2022
			84,259 $

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

period:
Contract liabilities – advance sales receipts	Years ended December31,
	2023 2022 41,317 $ 67,789 $

C. Refund liabilities (shown in other current liabilities)

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

Refund liabilities – current	December31,2023 December 31, 2022 5,624,804 $ 5,701,692 $

(17) Interest income

Interest income Refund liabilities – current	5,624,804 $ 5,701,692 $	5,624,804 $ 5,701,692 $
Interest income from bank deposits Other interest income	Years ended December31,
	2023 178,110 $ 129,106 307,216 $	2022
		64,434 $ 162,768
		227,202 $

~40~

(18) Other income

Other income
		Years ended	December31,
		2023		2022
Dividend income	$	320	$	1,278
Grant income		59		97,243
Other income		117,724		128,668
	$	118,103	$	227,189

(19) Other gains and losses

			Years ended	December31,	December31,	December31,
			2023			2022
Gains on disposal of property, plant and equipment		$	4,905		$	1,002
Gains on disposal of investments			305,599			-
Net currency exchange gains			791			281,355
Gains (losses) on financial assets
at fair value through profit or loss			21,990	(		71,596)
Other losses	(		5,385)	(		7,688)
Gains arising from lease modifications			-			24
		$	327,900		$	203,097
Finance costs
			Years ended December31,
			2023			2022
Interest expense
Bank borrowings	$		214,424	$		182,251
Lease liabilities			21,515			19,203
	$		235,939	$		201,454
Expenses by nature
			Years ended December31,
			2023			2022
Employee benefit expenses	$		17,750,356	$		23,814,213
Depreciation			1,118,605			976,697
Amortisation			1,692,464			1,589,992

(20) Finance costs

(21) Expenses by nature

~41~

(22) Employee benefit expenses

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	2023 2022 16,161,647 $ 22,400,629 $ 845,848 774,930 383,701 351,223 359,160 287,431 17,750,356 $ 23,814,213 $ Years endedDecember31,

• 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 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 were accrued at $2,696,047 and $4,765,898, respectively; directors’ remuneration were 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 Incorparation.

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

• 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 the website of the Taiwan Stock Exchange.

~42~

(23) Income tax

A. Income tax expense

ome tax Income tax expense
			Years ended	December31,
			2023			2022
Current income tax:
Current income tax on profits for the year		$	443,063		$	929,588
Tax on undistributed earnings			151,264			106,293
Prior year income tax overestimation	(		195,678)	(		355,446)
Total current income tax			398,649			680,435
Deferred income tax:
Origination and reversal of temporary
differences	(		13,649)	(		2,435)
Income tax expense		$	385,000		$	678,000

B. Reconciliation between income tax expense and accounting profit

			Years ended	December31,	December31,	December31,
			2023			2022
Income tax calculated based on income before
tax		$	1,907,554		$	3,376,410
Expenses disallowed by tax regulation and
effects from tax-exempt income	(		1,478,140)	(		2,449,257)
Prior year income tax overestimation	(		195,678)	(		355,446)
Tax on undistributed earnings			151,264			106,293
Income tax expense		$	385,000		$	678,000

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

follows:
			Yearended		December31,2023
				Recognised in
			January1	profit or loss		December31
Deferred income tax assets:
-Temporary differences:
Unrealised loss on market price decline
and obsolete and slow-moving
inventories and others		$	132,969	$	154,690	$	287,659
Deferred income tax liabilities:
-Temporary differences:
Unrealised exchange gain	(		62,725)	(	141,041)	(	203,766)
		$	70,244	$	13,649	$	83,893

~43~

			YearendedDecember31,2022	YearendedDecember31,2022	YearendedDecember31,2022	YearendedDecember31,2022	YearendedDecember31,2022
				Recognised in
			January1	profit or loss			December31
Deferred income tax assets:
-Temporary differences:
Unrealised loss on market price decline
and obsolete and slow-moving
inventories and others		$	171,321	($	38,352)		$	132,969
Deferred income tax liabilities:
-Temporary differences:
Unrealised exchange gain	(		103,512)		40,787	(		62,725)
		$	67,809	$	2,435		$	70,244

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

Deductible temporary differences	December 31, 2023 December 31, 2022 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.

(24) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to common shareholders Diluted earnings per share Profit attributable to common shareholders Assumed conversion of all dilutive potential common shares Employees’ compensation Profit attributable to common shareholders plus assumed conversion of all dilutive potential common shares		Year ended December31,2023			Earnings per share (in dollars)
		Amount after tax		Weighted average number of common shares outstanding (shares in thousands)
		9,152,772 $ 9,152,772 $ - 9,152,772 $		512,863 512,863 7,561 520,424	17.85 $ 17.59 $

~44~

==> picture [468 x 252] intentionally omitted <==

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

Year ended December 31, 2022
Weighted average number of Earnings per
Amount after common shares outstanding share
tax (shares in thousands) (in dollars)
Basic earnings per share
Profit attributable to common
shareholders $ 16,204,052 512,410 $ 31.62
Diluted earnings per share
Profit attributable to common
shareholders $ 16,204,052 512,410
Assumed conversion of all dilutive
potential common shares
Employees’ compensation - 19,175
Profit attributable to common
shareholders plus assumed
conversion of all dilutive
potential common shares $ 16,204,052 531,585 $ 30.48
----- End of picture text -----

(25) Supplemental cash flow information

Investing activities with partial cash payments

Supplemental cash flow information Investing activities with partial cash payments
			Years ended	December31,
			2023		2022
Purchase of property, plant and equipment		$	2,325,695	$	2,179,735
Add: Opening balance of payable on equipment			114,514		283,796
Less: Ending balance of payable on equipment	(		331,278)	(	114,514)
Cash paid during the year		$	2,108,931	$	2,349,017
			Years ended	December31,
			2023		2022
Purchase of intangible assets		$	1,913,969	$	1,799,797
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	(		1,751,131)	(	1,292,307)
Cash paid during the year		$	1,455,145	$	1,953,420

~45~

(26) Changes in liabilities from financing activities

At January 1, 2023 Changes in cash flow from financing activities Interest paid Interest on lease liabilities Changes in other non-cash items At December 31, 2023 At January 1, 2022 Changes in cash flow from financing activities Interest paid Interest on lease liabilities Changes in other non-cash items At December 31, 2022	Short-term borrowings	Short-term borrowings	Guarantee deposits 331 $ 85) ( - - - 246 $ Guarantee deposits	Lease liabilities		Long-term borrowings	Liabilities from financing activities-total
	13,737,994 $ 9,487,994) ( - - - 4,250,000 $ Short-term borrowings			1,094,226 $ 35,569) ( 21,515) ( 21,515 293,034 1,351,691 $ Lease liabilities		1,713,316 $ 511,090 - - 2,940 2,227,346 $ Long-term borrowings	16,545,867 $ 9,012,558) ( 21,515) ( 21,515 295,974 7,829,283 $ Liabilities from financing activities-total
		13,342,100 $ 395,894 - - - 13,737,994 $	1,050 $ 719) ( - - - 331 $	1,105,395 $ 26,897) ( 19,203) ( 19,203 15,728 1,094,226 $	1,002,799 $ 711,110 - - 593) ( 1,713,316 $		15,451,344 $ 1,079,388 19,203) ( 19,203 15,135 16,545,867 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Realtek Singapore Private Limited Subsidiary Amber Universal Inc. Subsidiary Hung-wei Venture Capital Co., Ltd. Subsidiary AICONNX Technology Corporation Subsidiary Bobitag Inc. Subsidiary Realsun Investments Co., Ltd. Subsidiary Leading Enterprises Limited Sub-subsidiary Bluocean Inc. Sub-subsidiary Realtek Korea Inc. Sub-subsidiary Ubilinx Technology Inc. Sub-subsidiary Cortina Systems Taiwan Limited Sub-subsidiary RayMX Microelectronics Corp. Sub-subsidiary 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

~46~

(2) Significant related party transactions and balances

• A. Operating revenue

Operating revenue
		Years ended	December31,
		2023		2022
Sales of goods﹕
G.M.I Technology Inc.	$	6,576,979	$	9,142,682
Others		57,261		390,473
	$	6,634,240	$	9,533,155

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
	Years ended	December31,
	2023		2022
Greatek Electronics Inc.	886,974 $	$	694,922

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

general payment term was 69 days after monthly Receivables from related parties	billings.
Accounts receivable﹕ G.M.I Technology Inc. Others	December31,2023 1,350,251 $ 12,673 1,362,924 $	December31,2022
		$ 1,048,725 47,487
		1,096,212 $

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:
Accounts payable﹕ Greatek Electronics Inc. Others	December31,2023 304,820 $ 7,030 311,850 $	December31,2022
		90,031 $ 71
		$ 90,102

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.

~47~

E. Other transactions and other payables (receivables):

			Years ended	Years ended	December31,	December31,
		2023				2022
				Ending				Ending
		Amount		balance		Amount		balance
Other related parties-
Sales commissions	$	285,657	$	37,110	$	412,307	$	36,122
Technical royalty revenue	($	1,134)	$	-	($	911)	$	-
Cash dividend income	($	320)	$	-	($	1,278)	$	-
Others	$	3,926	$	67	$	-	$	7,701
Subsidiaries and sub-subsidiaries-
Interest income	($	176,144)	($	44,551)	($	162,768)	($	34,772)
Other income	$	-	($	50,003)	$	-	($	49,959)
Cash dividend income	($	10,600,391)	$	-	($	9,304,732)	($	3,070,800)
Rent income	($	3,740)	($	2,077)	($	2,030)	($	243)
Technical service fees	$	885,026	$	242,088	$	756,426	$	188,642
Others	$	4,969	($	5,218)	$	-	$	66

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

• F. Acquisition of financial assets:

Loans to related parties : a) Outstanding balance: Year ended December31,2023 Accounts No. of shares Objects Consideration Wise Elite Global Limited Investments accounted for under equity method 1,000 Wise Elite Global Limited (Investment Establishment) 30,215 $ December31,2023 December31,2022 Subsidiaries Leading Enterprises Limited - $ 1,197,612 $ Bluocean Inc. 2,919,825 - Amber Universal Inc. 202,851 2,487,348 Hung-wei Venture Capital Co., Ltd. - 70,000 3,122,676 $ 3,754,960 $	Year ended December31,2023 Consideration	Year ended December31,2023 Consideration
	$	30,215
		December31,2022
		1,197,612 $ - 2,487,348 70,000
		3,754,960 $

• G. Loans to related parties :

• (a) Outstanding balance:

~48~

(b) Interest income

Subsidiaries

	Years ended	December31,	December31,
	2023		2022
$	129,106	$	162,768

The loans to subsidiaries are repayable monthly within one year, and carry interest at 5.83% and 2% for the years ended December 31, 2023 and 2022, respectively.

H. Endorsements and guarantees provided to related parties:

	December	31, 2023	December 31, 2022
Subsidiaries	$	2,336,009	17,766,228 $

(3) Key management compensation

Key management compensation Subsidiaries	December 31, 2023 December 31, 2022 2,336,009 $ 17,766,228 $	December 31, 2023 December 31, 2022 2,336,009 $ 17,766,228 $
Salaries and other short-term employee benefits Post-employment benefits Total	Years ended December 31,
	2023 555,673 $ 4,188 559,861 $	2022
		564,883 $ 3,875
		568,758 $

8. PLEDGED ASSETS

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

PLEDGED ASSETS The Company’s assets pledged as collateral are as follows: Total 559 $	,861 568,758 $
Pledged asset December 31, 2023 December31,2022 Time deposits (shown in financial assets at amortised cost - non-current) 31,779 $ 31,348 $ " 57,819 49,849 89,598 $ 81,197 $ Book value	Purposes
	Guarantee for the importation customs duties of materials Guarantee for leasing land in Science Park

1. 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.

~49~

• 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.

• 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 Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an

~50~

optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

• A. 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 (including related parties) 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 liability Lease liability	December31,2023 132,523 $ 180,901 $ 2,406,399 $ 89,598 8,979,589 3,225,745 2,170,167 16,871,498 $ 4,250,000 $ 5,269,857 21,973,807 2,227,346 246 5,624,804 39,346,060 $ 1,351,691 $	December31,2022
		110,533 $
		61,455 $
		2,538,812 $ 81,197 6,460,614 6,913,596 2,171,839 18,166,058 $
		13,737,994 $ 4,501,710 25,836,597 1,713,316 331 5,701,692
		51,491,640 $
		1,094,226 $

• B. Financial risk management policies

• (a) The Company’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 Company finance under policies approved by the Board of Directors. Company finance identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising

~51~

from various currency exposures, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities.

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

• iii. The Company’s businesses involve some functional currency operations (the Company’s functional currency: NTD). 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 (Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	December 31, 2023	December 31, 2023	December 31, 2023
	Foreign currency amount Book value (Inthousands) Exchangerate (NTD) 415,696 $ 30.735 12,776,417 $ 1,473,227 30.735 45,279,632 340,558 30.735 10,467,050 December31,2022
	Foreign currency amount (Inthousands) 432,408 $ 1,881,393 354,424	Exchangerate 30.708 30.708 30.708	Book value (NTD)
			13,278,385 $ 57,773,816 10,883,652

~52~

The total exchange gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2023 and 2022, amounted to $791 and $281,355, respectively. Analysis of foreign currency market risk arising from significant foreign exchange variation:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	Effect on Degree ofvariation profit or loss 5% 638,821 $ 5% - 5% 523,353) ( Year ended December31, Sensitivityanalysis YearendedDecember31,	Effect on other comprehensive income - $ 2,263,982 - 2023 2022
	Sensitivity analysis
	Effect on Degree ofvariation profit or loss 5% 663,919 $ 5% - 5% 544,183) (	Effect on other comprehensive income
		- $ 2,888,691 -

~53~

Price risk

• i. The Company’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 Company’s investments in equity securities comprise shares issued by the domestic 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 decreased/increased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have decreased/increased by $13,252 and $11,053, 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 $18,090 and $6,146, 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

• A. The Company’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 Company 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 Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.

• B. 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 increased/decreased by $213 and $196, 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 Company 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 amortised cost, at fair value through profit or loss and at fair value through other comprehensive income.

• ii. The Company manages their credit risk taking into consideration the entire Company’s concern. According to the Company’s credit policy, the Company is responsible for managing and analysing 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

~54~

and other factors.

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

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

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

• viii. The Company used the forecast ability of semiconductor industry research report to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2023 and 2022, the provision matrix is 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	Not past due 0-1% 8,554,640 $ 84,914 $ Not past due 0-1% 6,481,979 $ 64,819 $	1~90 days past due 0-1% 515,677 $ 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
				9,070,353 $
				90,764 $
				Total
				6,525,909 $
				65,295 $

~55~

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

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

• x. For financial assets at amortised cost, the credit rating levels are presented below:

Financial assets at amortised cost Financial assets at amortised cost	12 months 89,598 $ 12 months 81,197 $	Significant increase in Impairment creditrisk of credit - $ - $ December31,2023 Lifetime Significant increase in Impairment creditrisk ofcredit - $ - $ December31,2022 Lifetime	Total
			89,598 $
			Total
		Significant increase in creditrisk - $
			81,197 $

The financial assets at amortized cost are bank time deposits with original maturity more than three months.

(c) Liquidity risk

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

~56~

• ii. Company 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 head-room as determined by the above-mentioned forecasts.

• iii. The table below analyses the Company’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 liability 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 liability Long-term borrowings Guarantee deposits Other financial liabilities	Less than 1 year	Between 1 and 5 years	Over5 years
	4,250,000 $ 5,269,857 21,973,807 61,399 - - 5,624,804 Less than 1 year	- $ - - 198,071 2,227,346 - - Between 1 and 5 years	- $ - - 1,627,457 - 246 - Over 5 years
	13,737,994 $ 4,501,710 25,836,597 43,884 - - 5,701,692	- $ - - 158,424 1,728,470 - -	- $ - - 1,305,338 - 331 -

• iv. The Company 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

~57~

value of the Company’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.

• Level 3: Unobservable inputs for the asset or liability.

• B. 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 instruments 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 instruments Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 79,523 $ - 109,638 189,161 $ Level 1 57,533 $ - 61,455 118,988 $	Level 2 - $ - - - $ Level 2 - $ - - - $	Level3 - $ 53,000 71,263 124,263 $ Level3 - $ 53,000 - 53,000 $	Total 79,523 $ 53,000 180,901 313,424 $ Total 57,533 $ 53,000 61,455 171,988 $	Total 79,523 $ 53,000 180,901 313,424 $ Total 57,533 $ 53,000 61,455 171,988 $
					57,533 $ 53,000 61,455
					171,988 $

~58~

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

• i. The instruments the Company 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 Closing price Closing price	Open-end fund Government bond Net asset value Transaction price	Corporate bond Convertible (exchangeable) bond 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 cash flow method or other valuation methods, including calculated by applying model using market information available at the 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 Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional input.

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

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

2022:
At January 1 Gains recognized in other comprehensive income Acquisition in the period At December 31	2023 Non-derivative equity 53,000 $ 567 70,696 124,263 $	2022 Non-derivative equity
		- $ - 53,000 53,000 $

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

• F. The finance division is in charge of valuation procedures for fair value measurements being categorised 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.

~59~

• G. 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 Hybrid instruments: Convertible notes Hybrid instruments: Convertible note	Fair value at December 31, 2023 Valuation technique 71,263 $ Net asset value 53,000 $ Binomial Model Fair value at December 31, 2022 Valuation technique 53,000 $ Binomial Model	Significant unobservable input Not applicable Not applicable Significant unobservable input	Range (weighted average) Relationship of inputs to fair value - Not applicable - Not applicable Range (weighted average) Relationship of inputs to fair value - Not applicable
		Not applicable

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.

~60~

(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 table 1, table 2 and table 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

Not applicable.

~61~

REALTEK SEMICONDUCTOR CORPORATION Loans to others

For the year ended December 31, 2023

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

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.	Bluocean 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
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

Table 1 Page 1

REALTEK SEMICONDUCTOR CORPORATION

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	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	Y	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	Y	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	Y	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

Provision of endorsements and guarantees to others For the year ended December 31, 2023

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 of December 31, 2023 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2023 (Note 5)	Actual amont drawn down (Note 6)	Amount of endorsements/ gurantees 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	Provision of endorsements/ guarantees to the party in Mainland China (Note 7) Footnote
		Companyname Relationship with the endorser/ guarantor (Note 2)
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 six 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 of 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

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION

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

Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account		As of December31,2023	As of December31,2023	As of December31,2023	Footnote (Note 4)
				Number of shares	Book value (Note3)	Ownership (%) Fairvalue
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 amortised cost	-	2,519,824	-	2,519,824
Leading Enterprises Limited	Qualcomm Inc. - Corporate bond	None	Financial assets at amortised cost	-	506,967	-	506,967
Leading Enterprises Limited	Microsoft Corp. - Corporate bond	None	Financial assets at amortised 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

Table 3

REALTEK SEMICONDUCTOR CORPORATION

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

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account	Securities held by Marketable securities （Note 1） Relationship with the securities issuer(Note 2) General ledger account		As of December31,2023	As of December31,2023	As of December31,2023	Footnote (Note 4)
				Number of shares	Book value (Note3)	Ownership (%) Fairvalue
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 amortised 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 Cash 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 instrument'. 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

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

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)

Transaction

REALTEK SEMICONDUCTOR CORPORATION

Significant inter-company transactions during the reporting period For the year ended December 31, 2023

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 Page 1

REALTEK SEMICONDUCTOR CORPORATION

Information on investees

For the year ended December 31, 2023

				For the year ended December 31, 2023	For the year ended December 31, 2023
Investor Table 7	Investee	Location	Main business activities	Initial investment amount		Sharesheld as atDecember31,2023			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 Expressed in thousands of NTD (Except as otherwise indicated)
				Balance as at December31,2023	Balance as at December 31, 2022	Numberofshares	Ownership (%)	Bookvalue
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 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

Information on investees

For the year ended December 31, 2023

				For the year ended December 31, 2023	For the year ended December 31, 2023
Investor Table 7	Investee	Location	Main business activities	Initial investment amount		Sharesheld as atDecember31,2023			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 Expressed in thousands of NTD (Except as otherwise indicated)
				Balance as at December31,2023	Balance as at December 31, 2022	Numberofshares	Ownership (%)	Bookvalue
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

REALTEK SEMICONDUCTOR CORPORATION

Information on investees

For the year ended December 31, 2023

Table 7										Expressed in thousands of NTD	Expressed in thousands of NTD
Investor	Investee	Location	Main business activities	Initial investment amount		Sharesheld as atDecember31,2023			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 (Except as otherwise indicated)
				Balance as at December31,2023	Balance as at December 31, 2022	Numberofshares	Ownership (%)	Bookvalue
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 information services	17,006	-	500,000	100%	17,398	389	389	Sub-Subsidiary
Talent Eagle Enterprise Inc.	Ubilinx Technology Inc.	U.S.A	R&D and information services	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 information services	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 information services	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 related to income and expenses 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

Expressed in thousands of NTD

REALTEK SEMICONDUCTOR CORPORATION

Information on investments in Mainland China

For the year ended December 31, 2023

(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 of 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 of 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 the year ended December 31, 2023 (Note2(2))	Book value of investment in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of 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 of 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.

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 related to income and expenses 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