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RT Interim / Quarterly Report 2022

Dec 9, 2022

52043_rns_2022-12-09_6e60d57a-d721-49c7-a7a1-74e0c92348e9.pdf

Interim / Quarterly Report

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REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT

JUNE 30, 2022 AND 2021 (Stock code: 2379)

~1~

INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

PWCR22000078

To the Board of Directors and Shareholders of Realtek Semiconductor Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of Realtek Semiconductor Corporation and subsidiaries as at June 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion

As explained in Notes 4(3) and 6(7), the consolidated financial statements of certain insignificant consolidated subsidiaries, investments accounted for under equity method and the information disclosed in Note 13 were based solely on the reports prepared by those subsidiaries and investee companies, which were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$6,729,145 thousand and NT$6,702,872 thousand, constituting 5.63% and 7.06% of the consolidated total assets as at June 30, 2022 and 2021, respectively, total liabilities amounted to NT$1,328,501

~2~

thousand and NT$1,099,676 thousand, constituting 1.64% and 1.68% of the consolidated total liabilities as at June 30, 2022 and 2021, respectively, and the total comprehensive (loss) income amounted to NT ($152,702) thousand, NT$110,767 thousand, NT($458,434) thousand and NT$378,937 thousand, constituting (2.55%), 3.22%, (3.66%) and 5.34% of the consolidated total comprehensive income for the three-month and six-month periods then ended, respectively. Furthermore, the investments accounted for under equity method as at June 30, 2022 and 2021 amounted to NT$180,113 thousand and NT$194,927 thousand, respectively, and the related investment loss were NT$5,577 thousand, NT$7,662 thousand, NT$11,281 thousand and NT$8,593 thousand for the three-month and six-month periods then ended, respectively.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under equity method been reviewed by independent auditors as described in the Basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Realtek Semiconductor Corporation and subsidiaries as at June 30, 2022 and 2021, and of its consolidated financial performance for the three-month and six-month periods then ended and its consolidated cash flows for the six-month periods then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Li, Tien-Yi Cheng, Ya-Huei For and on behalf PricewaterhouseCoopers, Taiwan July 28, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ review 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.

~3~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as at June 30, 2022 and 2021 are reviewed, not audited)

June 30, 2022 December 31, 2021 June 30, 2021
Assets Notes AMOUNT % AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 6,010,435 5 $ 7,197,351 7 $ 10,001,376 10
1110 Financial assets at fair value 6(2)
through profit or loss - current 1,570,655 1 1,952,647 2 770,077 1
1136 Financial assets at amortised 6(4)
cost - current 59,136,885 50 43,740,876 43 41,899,828 44
1170 Accounts receivable, net 6(5) 13,567,705 11 12,796,821 13 11,856,854 12
1180 Accounts receivable, net - 6(5) and 7
related parties 3,291,388 3 3,192,184 3 2,758,054 3
1200 Other receivables 292,744 - 156,928 - 96,192 -
130X Inventories, net 6(6) 19,773,668 17 16,548,712 16 13,073,429 14
1410 Prepayments 452,513 - 659,883 1 562,913 1
11XX Total current assets 104,095,993 87 86,245,402 85 81,018,723 85
Non-current assets
1517 Financial assets at fair value 6(3)
through other comprehensive
income - non-current 2,901,426 3 3,644,878 4 3,231,795 3
1535 Financial assets at amortised 6(4) and 8
cost - non-current 85,319 - 80,101 - 79,769 -
1550 Investments accounted for 6(7)
under equity method 180,113 - 191,377 - 194,927 -
1600 Property, plant and equipment 6(8) 6,863,949 6 6,302,938 6 5,415,641 6
1755 Right-of-use assets 6(9) 1,599,251 1 1,587,910 2 1,591,756 2
1760 Investment property 6(10) 40,628 - 41,641 - 43,296 -
1780 Intangible assets 6(11) 2,808,769 2 2,231,694 2 2,472,430 3
1840 Deferred income tax assets 157,610 - 171,321 - 175,674 -
1900 Other non-current assets 751,512 1 734,651 1 712,268 1
15XX Total non-current assets 15,388,577 13 14,986,511 15 13,917,556 15
1XXX Total assets $ 119,484,570 100 $ 101,231,913 100 $ 94,936,279 100
(Continued)

~4~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as at June 30, 2022 and 2021 are reviewed, not audited)

Liabilities and Equity Notes June 30, 2022 December 31, 2021
June 30, 2021
%
AMOUNT
%
AMOUNT
%
9
$
13,342,100 13
$
14,713,320
16
-
211,100
-
277,167
-
-
3,276
-
3,276
-
11
11,105,568 11
12,730,505
13
-
334,413
-
378,138
-
36
24,645,141 24
26,206,640
28
-
101,253
-
111,365
-
1
1,458,340
2
1,364,896
1
-
80,315
-
91,675
-
7
7,539,417
8
7,207,703
8
64
58,820,923 58
63,084,685
66
2
1,002,799
1
-
-
1
989,475
1
995,908
1
-
103,512
-
108,173
-
1
1,252,390
2
1,237,367
2
-
110,490
-
98,247
-
4
3,458,666
4
2,439,695
3
68
62,279,589 62
65,524,380
69
4
5,106,849
5
5,106,849
5
1
1,101,079
1
1,100,638
1
6
5,577,083
5
5,577,083
6
1
1,556,049
2
1,556,049
2
19
27,377,681 27
17,884,361
19
1 (
1,776,090 ) (
2) (
1,822,727) (
2)
32
38,942,651 38
29,402,253
31
-
9,673
-
9,646
-
32
38,952,324 38
29,411,899
31
100
$
101,231,913 100
$
94,936,279
100
AMOUNT
$
10,194,948
360,845
3,276
13,171,611
342,869
42,401,340
108,091
1,662,338
86,466
8,461,162
76,792,946
1,394,791
1,181,134
88,767
1,264,193
143,778
4,072,663
80,865,609
5,128,636
1,044,903
7,262,359
1,776,089
22,514,153
883,162
38,609,302
9,659
38,618,961
$
119,484,570
Current liabilities
2100
Short-term borrowings
2130
Contract liabilities - current
2150
Notes payable
2170
Accounts payable
2180
Accounts payable - related
parties
2200
Other payables
2220
Other payables - related parties
2230
Current income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2540
Long-term borrowings
2550
Provisions - non-current
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2600
Other non-current liabilities
25XX
Total non-current
liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Common shares
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Undistributed earnings
Other equity
3400
Other equity interest
31XX
Equity attributable to
holders of the parent
company
36XX
Non-controlling interest
3XXX
Total equity
Significant contingent liabilities
and unrecognized contract
commitments
3X2X
Total liabilities and equity		 6(12)
6(21)
7
6(13)
7
6(21)
6(14)
6(16)
6(17)
6(18)
6(19)
6(20)
9

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

~5~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021 (Expressed in thousands of New Taiwan dollars, except earnings per share amount) (Reviewed, not audited)

Three-month periods ended June 30 Three-month periods ended June 30 Three-month periods ended June 30 Six-month periods ended June 30 periods ended June 30
2022 2021 2022 2021
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
4000 Operating revenue 6(21) and 7 $ 30,499,344 100 $ 25,839,083 100 $ 60,255,655 100 $ 49,179,829 100
5000 Operating costs 6(6) and 7 ( 15,197,946)( 50)( 12,813,720)( 49)( 29,424,576)( 49)( 25,701,663)( 52)
5950 Gross profit 15,301,398 50 13,025,363 51 30,831,079 51 23,478,166 48
Operating expenses 6(26)(27) and 7
6100 Selling expenses ( 1,319,595 )( 4)( 1,100,697)( 4 )( 2,555,531)( 4)( 2,144,255 )( 4)
6200 General and administrative expenses ( 1,067,324 )( 4)(
813,138)(		 3 )( 2,100,873)( 4)( 1,475,861 )( 3)
6300 Research and development expenses ( 8,293,770 )( 27)( 6,811,517)( 27 )( 16,244,713)( 27)( 12,561,702 )( 26)
6450 Expected credit (losses) gains 12(2) ( 4,588) - 940 -( 12,186) - ( 2,610) -
6000 Total operating expenses ( 10,685,277)( 35)( 8,724,412)( 34)( 20,913,303)( 35)( 16,184,428)( 33)
6900 Operating income 4,616,121 15 4,300,951 17 9,917,776 16 7,293,738 15
Non-operating income and expenses
7100 Interest income 6(22) 253,725 1 76,224 -
328,068		 1 179,023 -
7010 Other income 6(23) 33,006 - 11,963 -
107,690		 - 69,235 -
7020 Other gains and losses 6(24) 7,846 - 128,748 1 (
11,981)		 - 185,255 1
7050 Finance costs 6(25) (
30,499 )		 - (
25,200)		 - (
52,966)		 - (
50,785 )		 -
7060 Share of loss of associates and joint ventures accounted 6(7)
for under equity method ( 5,577) - ( 7,662) -( 11,281) - ( 8,593) -
7000 Total non-operating income and expenses 258,501 1 184,073 1
359,530		 1 374,135 1
7900 Profit before income tax, net 4,874,622 16 4,485,024 18 10,277,306 17 7,667,873 16
7950 Income tax expense 6(28) ( 197,492) - ( 180,331)( 1)( 413,894)( 1)( 308,409)( 1)
8200 Net income for the period $ 4,677,130 16 $ 4,304,693 17$ 9,863,412 16 $ 7,359,464 15

(Continued)

~6~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except earnings per share amount) (Reviewed, not audited)

Three-month periods ended June 30 Three-month periods ended June 30 Three-month periods ended June 30 Three-month periods ended June 30 Six-month periodss7 Six-month periodss7 Six-month periodss7 ended June 30 ended June 30
2022 2021 2022 2021
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
Other comprehensive income(loss), net 6(20)
Components of other comprehensive income (loss) 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 ($
597,527 )(		 2) $
82,441		 - ($
939,965)(		 1) $
655,362		 1
Components of other comprehensive income (loss) that
will be reclassified to profit or loss
8361 Financial statements translation differences of foreign
operations 1,917,524 6 ( 951,229)( 4) 3,599,217 6 ( 922,040)( 2)
8300 Other comprehensive income(loss), net $ 1,319,997 4 ($ 868,788)( 4) $ 2,659,252 5 ($ 266,678)( 1)
8500 Total comprehensive income for the period $ 5,997,127 20 $ 3,435,905 13$ 12,522,664 21 $ 7,092,786 14
Net income attributable to:
8610 Equity holders of the parent company $ 4,677,111 16 $ 4,304,674 17 $ 9,863,379 16 $ 7,359,439 15
8620 Non-controlling interest 19 - 19 -
33		 - 25 -
Net income for the period $ 4,677,130 16 $ 4,304,693 17$ 9,863,412 16 $ 7,359,464 15
Comprehensive income attributable to:
8710 Equity holders of the parent company $ 5,997,108 20 $ 3,435,886 13 $ 12,522,631 21 $ 7,092,761 14
8720 Non-controlling interest 19 - 19 -
33		 - 25 -
Total comprehensive income for the period $ 5,997,127 20 $ 3,435,905 13$ 12,522,664 21 $ 7,092,786 14
Earnings per share (in dollars)
9750 Basic earnings per share 6(29) $ 9.12 $ 8.43$ 19.27 $ 14.41
9850 Diluted earnings per share 6(29) $ 9.05 $ 8.39$ 18.79 $ 14.22

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

~7~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021 (Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

Six-month period ended June 30, 2021
Balance at January 1, 2021
Net income for the period
Other comprehensive income (loss) for the period
Total comprehensive income (loss)
Distribution of 2020 earnings
Special reserve
Cash dividends
Cash from capital surplus
Changes in non-controlling interest
Balance at June 30, 2021
Six-month period ended June 30, 2022
Balance at January 1, 2022
Net income for the period
Other comprehensive income (loss) for the period
Total comprehensive income (loss)
Distribution of 2021 earnings
Legal reserve
Special reserve
Cash dividends
Employees’ compensation transferred to common shares
Cash from capital surplus
Changes in non-controlling interest
Balance at June 30, 2022		 Notes Equity Equity attributable to own er s of theparent com pany pany Non-controlling
interest		 Total equity
Common shares Capital surplus Retained Earnings Other equity interest Total
Legal reserve Special reserve Undistributed
earnings		 Financial
statements
translation
differences of
foreign operations		 Unrealised
gains(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
6(20)
6(19)
6(19)
6(19)
6(20)
6(19)
6(19)
6(19)
6(17)(18)
6(19)


$ 5,106,849
-
-
-
-
-
-
-
$ 5,106,849
$ 5,106,849
-
-
-
-
-
-
21,787
-
-
$ 5,128,636		 $ 2,122,008
-
-
-
-
-
(
1,021,370 )
-
$ 1,100,638
$ 1,101,079
-
-
-
-
-
-
969,551
(
1,025,727 )
-
$ 1,044,903		 $ 5,577,083
-
-
-
-
-
-
-
$ 5,577,083
$ 5,577,083
-
-
-
1,685,276
-
-
-
-
-
$ 7,262,359


$
217,036
-
-
-
1,339,013
-
-
-
$ 1,556,049
$ 1,556,049
-
-
-
-
220,040
-
-
-
-
$ 1,776,089		 $ 17,992,154
7,359,439
-
7,359,439
(
1,339,013 )
(
6,128,219 )
-
-
$ 17,884,361
$ 27,377,681
9,863,379
-
9,863,379
(
1,685,276 )
(
220,040 )
(
12,821,591 )
-
-
-
$ 22,514,153		 ($ 2,940,958 )
-
(
922,040 )
(
922,040 )
-
-
-
-
($ 3,862,998 )
($ 4,156,871 )
-
3,599,217
3,599,217
-
-
-
-
-
-
($
557,654 )		 $ 1,384,909
-
655,362
655,362
-
-
-
-
$ 2,040,271
$ 2,380,781
-
(
939,965 )
(
939,965 )
-
-
-
-
-
-
$ 1,440,816		 $ 29,459,081
7,359,439
(
266,678 )
7,092,761
-
(
6,128,219 )
(
1,021,370 )
-
$ 29,402,253
$ 38,942,651
9,863,379

2,659,252

12,522,631
-
-
(
12,821,591 )
991,338
(
1,025,727 )
-
$ 38,609,302		 $
9,665
25
-
25
-
-
-
(
44 )
$
9,646
$
9,673
33
-
33
-
-
-
-
-
(
47 )
$
9,659		 $ 29,468,746
7,359,464
(
266,678 )
7,092,786
-
(
6,128,219 )
(
1,021,370 )
(
44 )
$ 29,411,899
$ 38,952,324
9,863,412
2,659,252
12,522,664
-
-
(
12,821,591 )
991,338
(
1,025,727 )
(
47 )
$ 38,618,961

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

~8~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortization

Expected credit losses

Interest expense

Interest income

Dividend income

Losses(gains) on financial assets at fair value
through profit or loss

Share of loss of associates and joint ventures
accounted for under equity method

Losses(gains) on disposal of property, plant and
equipment

Gains arising from lease modifications

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or
loss - current
Accounts receivable, net
Accounts receivable, net - related parties
Other receivables
Inventories
Prepayments
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Provisions - non-current
Accrued pension obligations		 Six-month periods ended June 30
Notes
2022
2021
$
10,277,306 $
7,667,873
6(26)
556,575
469,511
6(11)(26)
792,482
591,145
12(2)
12,186
2,611
6(25)
52,966
50,785
6(22)
(
328,068 ) (
179,023 )
6(23)
(
25,270 ) (
13,874 )
6(2)(24)
172,115 (
246,317 )
6(7)
11,281
8,593
6(24)
2,052 (
136 )
6(24)
(
24 )
-
209,877
556,897
(
781,279 ) (
1,020,448 )
(
100,995 )
55,997
(
2,755 ) (
2,532 )
(
3,224,956 ) (
4,450,452 )
207,370 (
35,839 )
149,745 (
59,087 )
- (
25,377 )
2,066,043
2,110,451
8,456
37,906
4,734,154
4,093,325
6,838
16,557
921,745 (
193,785 )
115,042
-
34,869 (
2,314 )

(Continued)

~9~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
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
Acquisition of investments 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 used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Decrease in short-term borrowings

Increase in long-term borrowing

Repayment of principal portion of lease liabilities

(Decrease)increase in guarantee deposits
Net cash flows (used in) from financing
activities
Effect of exchange rate
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period		 Six-month periods ended June 30
Notes
2022
2021
$
15,867,755 $
9,432,467
195,007
372,920
25,270
13,874
(
54,868 ) (
49,867 )
(
224,454 ) (
25,814 )
15,808,710
9,743,580
(
50,469 )
-
(
53,960,356 ) (
38,981,769 )
42,048,401
31,544,161
- (
45,000 )
6(30)
(
1,112,453 ) (
1,321,165 )
340
200
6(30)
(
1,021,506 ) (
762,944 )
22,221 (
661,813 )
(
39,082 ) (
1,136 )
(
14,112,904 ) (
10,229,466 )
6(31)
66,489,844
70,915,790
6(31)
(
69,636,996 ) (
67,659,160 )
6(31)
390,590
-
6(31)
(
41,931 ) (
46,234 )
(
179 )
219
(
2,798,672 )
3,210,615
(
84,050 ) (
19,713 )
(
1,186,916 )
2,705,016
7,197,351
7,296,360
$
6,010,435 $
10,001,376

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

~10~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (REVIEWED, NOT AUDITED)

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-Based Industrial Park since October 28, 1989. The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the research, development, design, testing, and sales of ICs and application software for these products.

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

  2. STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported to the Board of Directors on July 28, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

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

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

~11~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted

by the Group

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

Effective date by
International Accounting
New Standards,Interpretations andAmendments Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’ January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’ January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and January 1, 2023
liabilities arising from a single transaction’

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

(3) IFRSs issued by IASB but not yet endorsed by the FSC

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

IFRSs as endorsed by the FSC are as follows:
Effective date by
International Accounting
New Standards,Interpretations andAmendments 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 1, ‘Classification of liabilities as current January 1, 2023
or non-current’

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2021, except for the compliance statement, basis of preparation, basis of consolidation and interim financial statements applied as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

  • A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.

~12~

  • B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2021.

  • (2) Basis of preparation

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

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

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

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

  • B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations 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 Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

  • (3) Basis of consolidation

  • A. Basis for preparation of consolidated financial statements:

    • Basis for preparation of consolidated financial statements is consistent with the 2021 consolidated financial statements.

    • B. Subsidiaries included in the consolidated financial statements:

Name of investor Name of
subsidiary		 Main business
activities		 Ownership (%) Ownership (%) Ownership (%) Description
June 30,
2022		 December
31,2021		 June 30,
2021
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation		 Leading
Enterprises
Limited
Amber Universal
Inc.
Realtek
Singapore
Private Limited		 Investment
holdings
〃
ICs
manufacturing,
design, research,
development,
sales, and
marketing		 100%
100%
100%		 100%
100%
100%		 100%
100%
100%

~13~

Name of
investor		 Name of
subsidiary		 Main business
activities		 Ownership (%) Ownership (%) Ownership (%) Description
Note 3
Note 3
Note 3
Note 3
Note 3
Note 1
and 4
June 30,
2022		 December
31,2021		 June 30,
2021
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation
Realtek
Semiconductor
Corporation		 Bluocean Inc.
Talent Eagle
Enterprise Inc.
Realtek
Investment
Singapore
Private Limited
Realsun
Investments Co.,
Ltd.
Hung-wei
Venture Capital
Co., Ltd.
Realking
Investments
Co., Ltd.
Realsun
Technology
Corporation
Bobitag Inc.
AICONNX
Technology
Corporation		 Investment
holdings
〃
〃
〃
〃
〃
ICs
manufacturing,
design, research,
development,
sales, and
marketing
Manufacture and
installation of
computer
equipment and
wholesale, retail
and related
service of
electronic
materials and
information /
software
ICs
manufacturing,
design, research,
development,
sales, and
marketing		 100%
100%
100%
100%
100%
100%
100%
67%
100%		 100%
100%
100%
100%
100%
100%
100%
67%
100%		 100%
100%
100%
100%
100%
100%
100%
67%
-

~14~

Name of
investor		 Name of
subsidiary		 Main business
activities		 Ownership (%) Ownership (%) Ownership (%) Description
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
June 30,
2022		 December
31,2021		 June 30,
2021
Leading
Enterprises
Limited
Leading
Enterprises
Limited
Amber Universal
Inc.
Amber Universal
Inc.
Empsonic
Enterprises Inc.
Talent Eagle
Enterprise Inc.
Realtek
Singapore
Private Limited
Realtek
Singapore
Private Limited
Realtek
Singapore
Private Limited
Realtek
Singapore
Private Limited
Realtek
Singapore
Private Limited		 Realtek
Semiconductor
(Japan) Corp.
Circon Universal
Inc.
Realtek
Semiconductor
(Hong Kong)
Limited
Realtek
Semiconductor
(Shen Zhen)
Corp.
Realsil
Microelectronics
Corp.
Ubilinx
Technology Inc.
Cortina Access
Inc.
Cortina Systems
Taiwan Limited
Cortina Network
Systems
(Shanghai) Co.,
Ltd.
Empsonic
Enterprises Inc.
Realtek
Viet Nam
Co., Ltd.		 Information
collection and
technical support
Investment
holdings
Information
services and
technical support
R&D and
technical support
〃
〃
〃
〃
〃
Investment
holdings
R&D and
technical support		 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%		 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%		 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

~15~

Ownership (%) Ownership (%)
Name of Name of Main business June 30, December June 30,
investor subsidiary activities 2022 31,2021 2021 Description
Realtek RayMX ICs 19% 19% 19% Note 3
Singapore Microelectronics manufacturing,
Private Limited Corp. design, research,
development,
sales, and
marketing
Realsil RayMX 〃 81% 81% 81% Note 3
Microelectronics Microelectronics
Corp. Corp.
Realsil Suzhou PanKore 〃 80% 80% 80% Note 3
Microelectronics Integrated Circuit
Corp. Technology Co.
Ltd.
Realtek Suzhou PanKore 〃 20% 20% 20% Note 3
Semiconductor Integrated Circuit
(Shen Zhen) Technology Co.
Corp. Ltd.
Bluocean Inc. Realtek R&D and 100% 100% 100% Note 3
Semiconductor technical support
(Malaysia) Sdn.
Bhd.
Bluocean Inc. Realtek Korea 〃 100% - - Note 2
Inc. and 4
Note 1: AICONNX Technology Corporation was established on December 20, 2021.
Note 2: Realtek Korea Inc. was established on January 17, 2022.
Note 3: The financial statements of the entity as at and for the six-month periods ended June 30,
2022 and 2021 were not reviewed by the independent auditors as the entity did not meet
the definition of a significant subsidiary.

Note 4: The financial statements of the entity as at and for the six-month periods ended June 30, 2022 was not reviewed by the independent auditors as the entity did not meet the definition

~16~

of a significant subsidiary.

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

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

  • E. Significant restrictions: None.

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

(4) Employee benefits

Pensions - Defined benefit plan

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

(5) Income tax

  • A. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

  • B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

  • There have been no significant changes as at June 30, 2022. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2021.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds
Checking accounts and demand
deposits
Time deposits		 June30,2022
816
$ 5,861,917
147,702
6,010,435
$		 December31,2021
910
$ 7,113,048
83,393
7,197,351
$		 June30,2021
987
$ 9,897,230
103,159
10,001,376
$

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

~17~

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

==> picture [479 x 127] intentionally omitted <==

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

Items June 30, 2022 December 31, 2021 June 30, 2021
Current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Listed stocks $ 177,313 $ 358,892 $ 537,976
Beneficiary certificates 1,393,342 1,593,755 232,101
$ 1,570,655 $ 1,952,647 $ 770,077
----- End of picture text -----

1,570
$		 1,570
$		 ,655
1,952,647
$
770,077
$		 ,655
1,952,647
$
770,077
$
A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit o
loss are listed below:
For the three-month For the three-month
period ended period ended
June 30,2022 June 30,2021
Financial assets mandatorily measured at fair
value through profit or loss
Equity instruments 95,587)
($		 103,307
$
Beneficiary certificates 5,990 2,589
89,597)
($		 105,896
$
For the six-month For the six-month
period ended period ended
June 30,2022 June 30,2021
Financial assets mandatorily measured at fair
value through profit or loss
Equity instruments 181,578)
($		 239,361
$
Beneficiary certificates 9,463 6,956
172,115)
($		 246,317
$
  • A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

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

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

Items
Non-current items:
Equity instruments
Listed stocks
Emerging stocks
Unlisted stocks		 June 30,2022
599,028
$ 36,210
2,266,188
2,901,426
$		 December31,2021
788,460
$ 36,046
2,820,372
3,644,878
$		 June 30,2021
677,318
$ 22,372
2,532,105
3,231,795
$
  • A. The Group has elected to classify equity instruments investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $2,901,426, $3,644,878, and $3,231,795 on June 30, 2022,

~18~

December 31, 2021, and June 30, 2021, respectively.

  • B. Amounts recognized in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:
For the three-month For the three-month For the three-month For the three-month
period ended period ended
June 30,2022 June 30,2021
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income ($ 597,527)
 $ 82,441
For the six-month For the six-month
period ended period ended
June 30,2022 June 30,2021
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income ($ 939,965)
 $ 655,362
  • C. The Group has no financial assets at fair value through other comprehensive income pledged to others.

(4) Financial assets at amortized cost

Items
Current items:
Time deposits
Non-current items:
Time deposits		 June 30, 2022
59,136,885
$ 85,319
$		 December31,2021
June 30, 2021
43,740,876
$ 41,899,828
$ 80,101
$ 79,769
$

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

  • B. The counterparties that the Group’s investing in its time deposits were financial institution who have good credit quality, so it expects that the probability of counterparty default is remote.

(5) Accounts receivable

Accounts receivable
June30,2022 December31,2021 June30,2021
Accounts receivable $ 13,658,447
 $ 12,877,169
 $ 11,938,185
Accounts receivable
- related parties 3,311,542 3,210,546 2,774,693
Less: Allowance for bad debts ( 110,896)
 ( 98,710)
 ( 97,970)
$ 16,859,093 $ 15,989,005 $ 14,614,908

~19~

A. The aging analysis of accounts receivable is as follows:

June30,2022
Not past due
16,588,976
$ Up to 30 days
371,083
31 to 90 days
9,894

Over 90 days
36

16,969,989
$		 December31,2021
15,874,298
$ 210,889
2,067

461
16,087,715
$		 June30,2021
14,483,825
$ 228,592

-

461
14,712,878
$

The above aging analysis is based on past due date.

B. As at June 30, 2022, December 31, 2021 and June 30, 2021, accounts receivable were all from contracts with customers. And as at January 1, 2021, the balance of receivables from contracts with customers amounted to $13,748,428.

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

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

(6) Inventories

Inventories
Raw materials
Work in process
Finished goods
Raw materials
Work in process
Finished goods
Raw materials
Work in process
Finished goods		 June 30,2022
Allowance for
obsolescence and
Cost
marketvalue decline
2,251,004
$ 11,405)
($ 13,191,542
1,601,625)
(
6,798,273
854,121)
(
22,240,819
$ 2,467,151)
($ December31,2021		 Bookvalue
2,239,599
$ 11,589,917
5,944,152
19,773,668
$
Allowance for
obsolescence and
Cost
market value decline
1,181,719
$ 7,322)
($ 8,666,087
623,852)
(
7,815,457
483,377)
(
17,663,263
$ 1,114,551)
($ June 30,2021		 Bookvalue
1,174,397
$ 8,042,235
7,332,080
16,548,712
$
Allowance for
obsolescence and
Cost
market value decline
835,736
$ 15,840)
($ 9,549,258
541,018)
(
3,789,340
544,047)
(
14,174,334
$ 1,100,905)
($		 Bookvalue
819,896
$ 9,008,240
3,245,293
13,073,429
$

~20~

Operating costs incurred on inventories for the three-month and six-month periods ended June 30, 2022 and 2021 were as follows:

2022 and 2021 were as follows:
For the three-month For the three-month
period ended period ended
June 30,2022 June 30,2021
Cost of inventories sold and others $ 14,369,840
 $ 12,835,064
Inventory loss on (gain on reversal of) decline
in market value, obsolete and slow-moving
inventories 757,556 ( 145,769)
Loss on scrap inventory 70,550 124,425
$ 15,197,946 $ 12,813,720
For the six-month For the six-month
period ended period ended
June 30, 2022 June 30, 2021
Cost of inventories sold and others $ 28,014,064
 $ 25,602,318
Inventory loss on (gain on reversal of) decline
in market value, obsolete and slow-moving
inventories 1,318,912 ( 45,550)
Loss on scrap inventory 91,600 144,895
$ 29,424,576
 $ 25,701,663
Investments accounted for under equity method
June 30, 2022 December31,2021 June 30, 2021
Technology Partner V Venture
Capital Corporation $ -
 $ -
 $ 255
Estinet Technologies Incorporation 3,674 5,081
 6,810
Innorich Venture Capital Corp. 138,425 142,619 142,908
Starmems Semiconductor Corp. 38,014 43,677 44,954
$ 180,113 $ 191,377
 $ 194,927

(7) Investments accounted for under equity method

  • A. The loss on investments accounted for under equity method amounted to $5,577, $7,662, $11,281, and $8,593 for the three-month and six-month periods ended June 30, 2022 and 2021, respectively.

  • B. Technology Partner V Venture Capital Corporation was dissolved on September 21, 2020 and the process of liquidation was completed as at July 20, 2021.

  • C. Starmems Semiconductor Corp. was incorporated in April 2021. The Group’s investment in the investee amounted to $45,000.

~21~

(8) Property, plant and equipment

At January 1, 2022
Cost
Accumulated
depreciation and
impairment
2022
At January 1
Additions
Disposals
Reclassifications
Depreciation
Net exchange difference
At June 30
At June 30, 2022
Cost
Accumulated
depreciation and
impairment
At January 1, 2021
Cost
Accumulated
depreciation and
impairment
2021
At January 1
Additions
Disposals
Reclassifications
Depreciation
Net exchange difference
At June 30
At June 30, 2021
Cost
Accumulated
depreciation and
impairment		 Land
Buildings
Machinery
Test equipment
Office equipment
Others
Total
489,370
$ 3,466,696
$ 4,185,792
$ 3,926,851
$ 492,603
$ 2,477,232
$ 15,038,544
$ -
1,517,259)
(
3,546,371)
(
2,638,725)
(
255,610)
(
777,641)
(
8,735,606)
(
489,370
$ 1,949,437
$ 639,421
$ 1,288,126
$ 236,993
$
1,699,591
$ 6,302,938
$ 489,370
$ 1,949,437
$ 639,421
$ 1,288,126
$ 236,993
$ 1,699,591
$ 6,302,938
$ -
-
41,139

191,860
36,697

769,552
1,039,248
-
3)
(
-

2,366)
(
23)
(
-
2,392)
(
-
-

-

4,264
-
4,264)
(
-

-
72,009)
(
77,776)
(
264,881)
(
30,662)
(
56,348)
(
501,676)
(
-
23,159
1,134)
(
3,719
1,562
1,475)
(
25,831
489,370
$ 1,900,584
$ 601,650
$ 1,220,722
$ 244,567
$ 2,407,056
$ 6,863,949
$ 489,370
$ 3,481,104
$ 4,225,469
$ 4,110,978
$ 531,123
$ 3,245,896
$ 16,083,940
$ -
1,580,520)
(
3,623,819)
(
2,890,256)
(
286,556)
(
838,840)
(
9,219,991)
(
489,370
$ 1,900,584
$ 601,650
$ 1,220,722
$ 244,567
$ 2,407,056
$ 6,863,949
$ Land
Buildings
Machinery
Test equipment
Office equipment
Others
Total
387,280
$ 3,414,624
$ 3,838,068
$ 3,290,307
$ 333,113
$ 1,111,004
$ 12,374,396
$ -
1,413,842)
(
3,429,011)
(
2,195,086)
(
207,520)
(
680,405)
(
7,925,864)
(
387,280
$ 2,000,782
$ 409,057
$ 1,095,221
$ 125,593
$ 430,599
$ 4,448,532
$ 387,280
$ 2,000,782
$ 409,057
$ 1,095,221
$ 125,593
$ 430,599
$ 4,448,532
$ -
14,108
91,384
267,888

90,740
915,830
1,379,950
-
-
-
2)
(
62)
(
-
64)
(
102,090
42,767
-
-
-
144,857)
(
-
-
57,902)
(
53,574)
(
234,162)
(
21,298)
(
46,926)
(
413,862)
(
-
684
958)
(
1,394
11
46)
(
1,085
489,370
$ 2,000,439
$ 445,909
$ 1,130,339
$ 194,984
$ 1,154,600
$ 5,415,641
$ 489,370
$ 3,464,346
$ 3,927,693
$ 3,552,059
$ 422,654
$ 1,880,535
$ 13,736,657
$ -
1,463,907)
(
3,481,784)
(
2,421,720)
(
227,670)
(
725,935)
(
8,321,016)
(
489,370
$ 2,000,439
$ 445,909
$ 1,130,339
$ 194,984
$ 1,154,600
$ 5,415,641
$

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

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

~22~

－ (9) Leasing arrangements lessee

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

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

Land

Buildings
Transportation equipment

Land
Buildings
Transportation equipment
Land
Buildings
Transportation equipment		 June 30, 2022
1,368,174
$ 230,031
1,046
1,599,251
$		 December31,2021
1,370,790
$ 215,177
1,943
1,587,910
$ Carryingamount
Depreciation		 December31,2021
1,370,790
$ 215,177
1,943
1,587,910
$ Carryingamount
Depreciation		 June 30,2021
1,384,352
$ 204,564
2,840
1,591,756
$
For the three-month
period ended
For the three-month
period ended
June 30,2022
June 30,2021
7,497
$ 6,844
$ 19,339
18,427
449
448
27,285
$ 25,719
$
For the six-month
period ended
For the six-month
period ended
June 30,2022
June 30, 2021
14,343
$ 13,689
$ 37,698
39,278

897
747
52,938
$ 53,714
$ Depreciation		 For the three-month
period ended
June 30,2021
6,844
$ 18,427
448
25,719
$
13,689
$ 39,278

747
53,714
$

  • C. For the three-month and six-month periods ended June 30, 2022 and 2021, the additions to rightof-use assets were $40,575, $0, $66,554, and $3,588, 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		 For the three-month
period ended
June30,2022
7,540
$		 For the three-month
period ended
June30,2021
7,072
$

~23~

For the six-month For the six-month
period ended period ended
June 30,2022 June 30, 2021
Items affecting profit or loss
Interest expense on lease liabilities $ 14,567 $ 14,120

  • E. For the three-month and six-month periods ended June 30, 2022 and 2021, the Group’s total cash outflow for leases were $29,260, $27,100, $56,498 and $60,354, respectively.

  • (10) Investment property

==> picture [485 x 242] intentionally omitted <==

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

Buildings
2022 2021
At January 1
Cost $ 81,152 $ 81,499
Accumulated depreciation and impairment ( 39,511) ( 35,809)
$ 41,641 $ 45,690
At January 1 $ 41,641 $ 45,690
Depreciation ( 1,961) ( 1,935)
Net exchange difference 948 ( 459)
At June 30 $ 40,628 $ 43,296
At June 30
Cost $ 83,020 $ 80,644
Accumulated depreciation and impairment ( 42,392) ( 37,348)
$ 40,628 $ 43,296
----- End of picture text -----

  • A. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:
from the investment property are shown below:
Rental income from the lease of the investment
property
Operating expenses arising from the
investment property that generated rental
income during the period		 For the three-month
period ended
June30,2022
572
$ 982
$		 For the three-month
period ended
June30,2021
557
$
962
$

~24~

Rental income from the lease of the investment
property
Operating expenses arising from the
investment property that generated rental
income during the period		 For the six-month
period ended
For the six-month
period ended
June30,2022
June 30, 2021
1,139
$ 1,119
$
1,961
$ 1,935
$
  • B. The Group’s investment property is located in Mainland China. The fair value is based on valuation information from Information Centre of Real Estate in local governments in Mainland China and is adjusted and classified as level 3 accordingly. As at June 30, 2022, December 31, 2021 and June 30, 2021, the fair value was $133,444, $130,525, and $130,915, respectively.

(11) Intangible assets

respectively.
Intangible assets
Computer Intellectual
software property Goodwill Others Total
At January 1, 2022
Cost $ 5,639,381
 $ 5,805,930
 $ 639,561
 $ 281,520
 $ 12,366,392
Accumulated amortisation
and impairment ( 4,737,026)
 ( 4,517,428)
 ( 639,561)
 ( 240,683)
 ( 10,134,698)
$ 902,355 $ 1,288,502 $ - $ 40,837
 $ 2,231,694
2022
At January 1 $ 902,355
 $ 1,288,502
 $ -
 $ 40,837
 $ 2,231,694
Additions 1,315,263 28,356 - 25,893 1,369,512
Amortisation ( 469,114)
 ( 312,799)
 - ( 10,569)
 ( 792,482)
Net exchange difference 311 ( 1,782)
 - 1,516 45
At June 30 $ 1,748,815 $ 1,002,277 $ - $ 57,677 $ 2,808,769
At June 30, 2022
Cost $ 6,955,731
 $ 5,838,701
 $ 639,561
 $ 326,981
 $ 13,760,974
Accumulated amortisation
and impairment ( 5,206,916)
 ( 4,836,424)
 ( 639,561)
 ( 269,304)
 ( 10,952,205)
$ 1,748,815 $ 1,002,277 $ -
 $ 57,677 $ 2,808,769

~25~

==> picture [491 x 244] intentionally omitted <==

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

Computer Intellectual
software property Goodwill Others Total
At January 1, 2021
Cost $ 5,088,065 $ 4,900,421 $ 639,561 $ 275,206 $ 10,903,253
Accumulated amortisation
and impairment ( 3,987,796) ( 3,981,733) ( 639,561) ( 226,839) ( 8,835,929)
$ 1,100,269 $ 918,688 $ - $ 48,367 $ 2,067,324
2021
At January 1 $ 1,100,269 $ 918,688 $ - $ 48,367 $ 2,067,324
Additions 248,888 752,056 - 525 1,001,469
Amortisation ( 359,033) ( 221,755) - ( 10,357) ( 591,145)
Net exchange difference ( 73) ( 4,204) - ( 941) ( 5,218)
At June 30 $ 990,051 $ 1,444,785 $ - $ 37,594 $ 2,472,430
At June 30, 2021
Cost $ 5,336,658 $ 5,650,456 $ 639,561 $ 269,599 $ 11,896,274
Accumulated amortisation
and impairment ( 4,346,607) ( 4,205,671) ( 639,561) ( 232,005) ( 9,423,844)
$ 990,051 $ 1,444,785 $ - $ 37,594 $ 2,472,430
----- End of picture text -----

Details of amortization on intangible assets are as follows:

Short-term borrowings
Operating costs
Operating expenses
Operating costs
Operating expenses
Type ofborrowings
Bank borrowings
Unsecured borrowings
Type ofborrowings
Bank borrowings
Unsecured borrowings
Type ofborrowings
Bank borrowings
Unsecured borrowings		 June 30,2022
10,194,948
$ December31,2021
13,342,100
$ June 30,2021
14,713,320
$		 For the three-month
period ended
June 30,2022
360
$ 406,011
406,371
$ For the six-month
period ended
June 30,2022
720
$ 791,762
792,482
$ Interestraterange
0.12%~1.99%
Interestraterange
0.42%~0.57%
Interestraterange
0.425%~0.55%		 For the three-month
period ended
June 30,2021
272
$ 306,052
306,324
$
For the six-month
period ended
June 30,2021
757
$ 590,388
591,145
$
Collateral
None
Collateral
None
Collateral
None

(12) Short-term borrowings

~26~

Interest expense of bank borrowings recognized in profit or loss amounted to $22,959, $18,128, $38,399 and $36,665 for the three-month and six-month periods ended June 30, 2022 and 2021, respectively.

(13) Other payables

Accrued salaries and bonus
Payable for dividends and
cash from capital surplus
Payable for employees'
compensation
Other accrued expenses
Payables on equipment
Payables on software and
intellectual property
Others		 June 30,2022
10,972,746
$ 13,847,318
13,008,288
2,195,277
210,591
1,793,936
373,184
42,401,340
$		 December31,2021
June 30,2021
9,641,868
$ 6,900,133
$ -

7,149,589
11,117,412

8,302,196
1,927,958
2,054,432
283,796
117,744
1,445,930
1,391,116
228,177
291,430
24,645,141
$ 26,206,640
$

- (14) Long term borrowings

Long-term borrowings
Type of borrowings
Borrowing period
Loan for Accelerated
Investment by Domestic
Corporations (Note)
2021/11/8
~2027/2/15
Type of borrowings
Borrowing period
Loan for Accelerated
Investment by Domestic
Corporations (Note)
2021/11/8
~2026/12/15		 Repayment term
Repayable in
instalment over
the agreed period
Repayment term
Repayable in
instalment over
the agreed period		 Interest rate range
Collateral
0.675%～0.875%
None
Interest rate range
Collateral
0.30%
None		 June 30, 2022
1,394,791
$
December 31, 2021
1,002,799
$

There were no such transactions as at June 30, 2021.

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

(15) Pension

  • A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on

~27~

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 pension costs under the defined benefit pension plans of the Company for the threemonth and six-month periods ended June 30, 2022 and 2021 were $505, $343, $1,009 and $686, respectively.

  • (c) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2022 amount to $6,000.

  • B. (a) Effective July 1, 2005, the Company and domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

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

  • (c) The pension costs under the defined contribution pension plans of the Group for the threemonth and six-month periods ended June 30, 2022 and 2021 were $99,629, $79,716, $194,125 and $160,508, respectively.

~28~

(16) Provision

At January 1
Increase in provision
Effect of exchange rate
At June 30		 2022
2021
989,475
$ 1,018,706
$ 115,042
-
76,617
22,798)
(
1,181,134
$ 995,908
$

As at June 30, 2022, provisions were estimated for potential infringement litigations.

(17) Share capital

  • A. As at June 30, 2022, the Company’s authority capital was $8,900,000, consisting of 890 million shares of common stock (including 80 million shares reserved for employee stock options), and the paid-in capital was $5,128,636 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

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

outstanding are as follows:
At January 1
Employees’ compensation transferred to
common shares
At June 30		 2022
510,684
2,179

512,863		 2021
510,684
-
510,684

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

  • C. On January 24, 2002, the Company increased its new common stock and sold its old common stock by issuing 13,924 thousand units of GDRs for cash. Each GDR unit represents 4 common stocks, so the total common stocks issued were 55,694 thousand shares. The Company’s GDRs are traded in the Luxembourg Stock Exchange. As at June 30, 2022, the outstanding GDRs were 420 thousand units, or 1,682 thousand shares of common stock, representing 0.33% of the Company’s total common stocks.

(18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated

~29~

deficit unless the legal reserve is insufficient.

2022
Change in
associates
accounted for
under
Sharepremium equitymethod Others Total
At January 1 $ 1,039,006
 $ 61,261
 $ 812
 $ 1,101,079
Employees’ compensation
transferred to common shares 969,551
 - -
 969,551
Cash from capital surplus ( 1,025,727)
 - - ( 1,025,727)
At June 30 $ 982,830 $ 61,261 $ 812 $ 1,044,903
2021
Change in associates
accounted for under
Sharepremium equitymethod Others Total
At January 1 $ 2,060,376
 $ 61,035
 $ 597
 2,122,008
$
Cash from capital surplus ( 1,021,370) - - 1,021,370)
(
At June 30 $ 1,039,006 $ 61,035 $ 597 1,100,638
$

(19) Retained earnings

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

~30~

attended by at least two-thirds of the total number of directors, and will be reported to the shareholders.

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

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

  • D. The appropriation of 2021 and 2020 earnings had been resolved at the shareholders’ meeting on June 8, 2022 and August 9, 2021. Details are summarized below:

Dividends
per share
Amount
(in dollars)
Legal reserve
1,685,276
$ -
$ Special reserve
220,040
-

Cash dividends
12,821,591
25.00
Total
14,726,907
$ 25.00
$ 2021		 2020
Dividends
per share
Amount
(in dollars)
-
$ -
$ 1,339,013
-
6,128,219
12.00
7,467,232
$ 12.00
$

  • E. 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 dollar per share).

  • F. On April 23, 2021, the Board of Directors of the Company proposed to distribute cash dividends from capital surplus to shareholders in the amount of $1,021,370 (2 NT dollar per share).

(20) Other equity items

share).
Other equity items
At January 1
Revaluation:
–Group
Currency translation
differences:
–Group
At June 30		 2022
Unrealised
gains(losses)on valuation
2,380,781
$ 939,965)
(
-
1,440,816
$

~31~

(21) Operating revenue
A. Disaggregation of revenue from contracts with customers
Unrealised
Currency
gains on valuation
translationdifference
Total
At January 1
1,384,909
$ 2,940,958)
($ 1,556,049)
($ Revaluation:
–Group
655,362

-
655,362
Currency translation
differences:
–Group
-

922,040)
(
922,040)
(
At June 30
2,040,271
$ 3,862,998)
($ 1,822,727)
($
2021
For the three-month
period ended
For the three-month
period ended
June 30, 2022
June 30,2021
Revenue from contracts with customers
30,499,344
$ 25,839,083
$ For the six-month
period ended
For the six-month
period ended
June 30, 2022
June 30,2021
Revenue from contracts with customers
60,255,655
$ 49,179,829
$

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

For the three-month period ended June 30, 2022
Revenue from external customer contracts
Timing of revenue recognition
At a point in time
For the six-month period ended June 30, 2022
Revenue from external customer contracts
Timing of revenue recognition
At a point in time
For the three-month period ended June 30, 2021
Revenue from external customer contracts
Timing of revenue recognition
At a point in time		 Integrated
circuit products
30,448,229
$ 30,448,229
$ Integrated
circuit products
60,161,967
$ 60,161,967
$ circuit products
25,808,168
$ 25,808,168
$		 Others
51,115
$ 51,115
$ Others
93,688
$ 93,688
$ Others
30,915
$ 30,915
$		 Total
30,499,344
$
30,499,344
$
Total
60,255,655
$
60,255,655
$
Total
25,839,083
$
25,839,083
$

~32~

For the six-month period ended June 30, 2021
Revenue from external customer contracts
Timing of revenue recognition
At a point in time		 Integrated
circuitproducts
49,115,862
$ 49,115,862
$		 Others
63,967
$ 63,967
$		 Total
49,179,829
$
49,179,829
$

B. Contract liabilities

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

June 30, 2022 December 31, 2021 June 30, 2021 January 1,2021 Contract liabilities - advance sales receipts $ 360,845 $ 211,100 $ 277,167 $ 336,254

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

period:
Contract liabilities – advance sales receipts
Contract liabilities – advance sales receipts		 For the three-month
period ended
June 30, 2022
20,493
$ For the six-month
period ended
June 30, 2022
133,896
$		 For the three-month
period ended
June 30,2021
-
$
For the six-month
period ended
June 30,2021
264,547
$

C. Refund liabilities (shown in other current liabilities)

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

The following refund liabilities:

June 30, 2022 December 31, 2021 June 30, 2021 Refund liabilities – current $ 8,428,637 $ 7,521,493 $ 7,189,815

(22) Interest income

Interest income
Interest income from bank deposits
Interest income from bank deposits		 For the three-month
period ended
June30,2022
253,725
$ For the six-month
period ended
June30,2022
328,068
$		 For the three-month
period ended
June30,2021
76,224
$
For the six-month
period ended
June30,2021
179,023
$

~33~

(23) Other income

Other gains and losses
Dividend income
Other income
Dividend income
Other income
Gains (losses) on disposal of property, plant and
equipment
Net currency exchange gains
(Losses) gains on financial assets at fair value
through profit or loss
Other losses
(Losses) gains on disposal of property, plant and
equipment
Gains arising from lease modifications
Net currency exchange gains (losses)
(Losses) gains on financial assets at fair value
through profit or loss
Other losses		 For the three-month
period ended
For the three-month
period ended
June 30,2022
June 30,2021
7,150
$ -
$ 25,856
11,963
33,006
$ 11,963
$ For the six-month
period ended
For the six-month
period ended
June30,2022
June30,2021
25,270
$ 13,874
$ 82,420

55,361
107,690
$ 69,235
$ For the three-month
period ended
For the three-month
period ended
June 30,2022
June 30,2021
302
$ 28)
($ 111,853
27,331
89,597)
(
105,896
14,712)
(
4,451)
(
7,846
$ 128,748
$ For the six-month
period ended
For the six-month
period ended
June 30,2022
June 30,2021
2,052)
($ 136
$ 24
-
181,757
56,601)
(
172,115)
(
246,317
19,595)
(
4,597)
(
11,981)
($ 185,255
$

(24) Other gains and losses

~34~

(25) Finance costs

Finance costs
Expenses by nature
Employee benefit expenses
Interest expense
Bank borrowings
Lease liabilities
Interest expense
Bank borrowings
Lease liabilities
Employee benefit expenses
Depreciation
Amortisation
Employee benefit expenses
Depreciation
Amortisation
Wages and salaries
Labor and health insurance fees
Pension costs
Other personnel expenses
Total		 For the three-month
period ended
June 30,2022
22,959
$ 7,540
30,499
$ For the six-month
period ended
June 30,2022
38,399
$ 14,567
52,966
$ For the three-month
period ended
June 30,2022
8,182,572
$ 281,647
406,371
For the six-month
period ended
June 30,2022
16,820,206
$ 556,575
792,482
For the three-month
period ended
June 30,2022
7,830,104
$ 200,326
100,134
52,008
8,182,572
$		 For the three-month
period ended
June 30,2021
18,128
$ 7,072
25,200
$
For the six-month
period ended
June 30, 2021
36,665
$ 14,120
50,785
$
For the three-month
period ended
June 30, 2021
6,765,447
$ 239,941
306,324
For the six-month
period ended
June 30,2021
12,417,321
$ 469,511
591,145
For the three-month
period ended
June 30,2021
6,514,704
$ 125,923
80,059
44,761
6,765,447
$

(26) Expenses by nature

(27) Employee benefit expenses

~35~

Wages and salaries
Labor and health insurance fees
Pension costs
Other personnel expenses
Total		 For the six-month
period ended
For the six-month
period ended
June30,2022
June30,2021
15,575,558
$ 11,832,767
$ 391,547

311,318

195,134

161,194
117,967
112,042

16,280,206
$ 12,417,321
$

  • A. In accordance with the Company’s Articles of Incorporation, the Company shall appropriate no higher than 3% for directors’ remuneration and no less than 1% for employees’ compensation, if the Company generates profit. If the Company has accumulated deficit, earnings should be reserved to cover losses before the appropriation of directors’ remuneration and employees’ compensation. Aforementioned employees’ compensation could be distributed by cash or stocks. Specifics of the compensation are to be determined by a majority vote at a meeting of the Board of Directors attended by at least two-thirds of the total number of directors. The resolution should be reported to the shareholders during the shareholders’ meeting.

  • B. For the three-month and six-month periods ended June 30, 2022 and 2021, employees’ compensation was accrued at $1,374,696, $1,263,709, $2,892,868 and $2,156,712, respectively; directors’ remuneration was accrued at $62,728, $30,466, $163,939 and $90,000, respectively. The amounts were estimated as operating cost or operating expense in accordance with the Company’s Articles of Incorporation.

  • On March 18, 2022, the employees’ compensation of $4,956,694 and directors’ remuneration of $130,000 for 2021 resolved at the meeting of the Board of Directors agreed with those amounts recognized in the 2021 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.

~36~

(28) Income tax

A. Income tax expense

ome tax
Income tax expense
For the three-month For the three-month
period ended period ended
June 30,2022 June 30,2021
Current income tax:
Current income tax on profit for the period $ 447,364
 $ 391,778
Tax on undistributed earnings 106,293 64,850
Prior year income tax overestimation ( 355,446) ( 276,529)
Total current income tax 198,211 180,099
Deferred income tax:
Origination and reversal of temporary
differences ( 719) 232
Income tax expense $ 197,492 $ 180,331
For the six-month For the six-month
period ended period ended
June 30,2022 June 30,2021
Current income tax:
Current income tax on profit for the period $ 664,081
 $ 520,585
Tax on undistributed earnings 106,293 64,850
Prior year income tax overestimation ( 355,446) ( 276,529)
Total current income tax 414,928 308,906
Deferred income tax:
Origination and reversal of temporary
differences ( 1,034) ( 497)
Income tax expense $ 413,894 $ 308,409

B. As at June 30, 2022, the Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

~37~

(29) Earnings per share

Earnings per share

Basic earnings per share
Profit attributable to common
shareholders of the parent company
Diluted earnings per share
Profit attributable to common
shareholders of the parent company
Assumed conversion of all dilutive
potential common shares
Employees’ compensation
Profit attributable to common shareholders
of the parent company plus assumed
conversion of all dilutive potential
common shares

Basic earnings per share
Profit attributable to common
shareholders of the parent company
Diluted earnings per share
Profit attributable to common
shareholders of the parent company
Assumed conversion of all dilutive
potential common shares
Employees’ compensation
Profit attributable to common shareholders
of the parent company plus assumed
conversion of all dilutive potential
common shares		 For the three-monthperiod ended June 30,2022
Amount after
Weighted average number
of common shares
outstanding (shares
Earnings
per share
tax
in thousands)
(in dollars)
4,677,111
$ 512,863
9.12
$ 4,677,111
$ 512,863
-
4,067
4,677,111
$ 516,930
9.05
$ For the three-monthperiod ended June 30,2021		 Earnings
per share
(in dollars)
9.12
$
9.05
$
Amount after

tax
4,304,674
$ 4,304,674
$ -
4,304,674
$		 Weighted average number
of common shares
outstanding (shares
in thousands)
510,685
510,685
2,593
513,278		 Earnings
per share
(in dollars)
8.43
$
8.39
$

~38~


Basic earnings per share
Profit attributable to common
shareholders of the parent company
Diluted earnings per share
Profit attributable to common
shareholders of the parent company
Assumed conversion of all dilutive
potential common shares
Employees’ compensation
Profit attributable to common shareholders
of the parent company plus assumed
conversion of all dilutive potential
common shares

Basic earnings per share
Profit attributable to common
shareholders of the parent company
Diluted earnings per share
Profit attributable to common
shareholders of the parent company
Assumed conversion of all dilutive
potential common shares
Employees’ compensation
Profit attributable to common shareholders
of the parent company plus assumed
conversion of all dilutive potential
common shares		 Amount after
Weighted average number
of common shares
outstanding (shares
Earnings
per share
tax
in thousands)
(in dollars)
9,863,379
$ 511,949

19.27
$ 9,863,379
$ 511,949

-
13,101
9,863,379
$ 525,050
18.79
$ For the six-monthperiod ended June 30,2022
For the six-monthperiod ended June 30,2021		 Amount after
Weighted average number
of common shares
outstanding (shares
Earnings
per share
tax
in thousands)
(in dollars)
9,863,379
$ 511,949

19.27
$ 9,863,379
$ 511,949

-
13,101
9,863,379
$ 525,050
18.79
$ For the six-monthperiod ended June 30,2022
For the six-monthperiod ended June 30,2021		 Amount after
Weighted average number
of common shares
outstanding (shares
Earnings
per share
tax
in thousands)
(in dollars)
9,863,379
$ 511,949

19.27
$ 9,863,379
$ 511,949

-
13,101
9,863,379
$ 525,050
18.79
$ For the six-monthperiod ended June 30,2022
For the six-monthperiod ended June 30,2021
Amount after

tax
7,359,439
$ 7,359,439
$ -
7,359,439
$		 Weighted average number
of common shares
outstanding (shares
in thousands)
510,685
510,685
6,754
517,439		 Earnings
per share
(in dollars)
14.41
$
14.22
$

~39~

(30) Supplemental cash flow information

Investing activities with partial cash payments

Supplementalcashflow information
Investing activities with partial cash payments
For the six-month For the six-month
period ended period ended
June 30,2022 June 30,2021
Purchase of property, plant and equipment $ 1,039,248
 $ 1,379,950
Add: Opening balance of payable on equipment 283,796 58,959
Less: Ending balance of payable on equipment ( 210,591)
 ( 117,744)
Cash paid during the period $ 1,112,453 $ 1,321,165
For the six-month For the six-month
period ended period ended
June 30,2022 June 30,2021
Purchase of intangible assets $ 1,369,512
 $ 1,001,469
Add: Opening balance of payable on
software and intellectual property 1,445,930 1,152,591
Less: Ending balance of payable on
software and intellectual property ( 1,793,936)
 ( 1,391,116)
Cash paid during the period $ 1,021,506 $ 762,944
For the six-month For the six-month
period ended period ended
June30,2022 June30,2021
Cash dividends declared $ 12,821,591
 $ 6,128,219
Cash from capital surplus 1,025,727 1,021,370
Ending balance of other payables
(shown in other payables) ( 13,847,318)
 ( 7,149,589)
Cash paid during the period $ - $ -

(31) Changes in liabilities from financing activities

Short-term
Guarantee
deposits
Lease
borrowings
received
liabilities
At January 1, 2022
13,342,100
$ 1,448
$ 1,332,705
$ Changes in cash flow from
financing activities
3,147,152)
(
179)
(
41,931)
(
Interest paid
-
-
14,567)
(
Interest of lease liabilities
-
-
14,567
Impact of changes in
foreign exchange
-
-
4,663)
(
Changes in other non-cash
items
-
-
64,548
At June 30, 2022
10,194,948
$ 1,269
$ 1,350,659
$		 Long-term
borrowings
1,002,799
$ 390,590
-
-
-
1,402
1,394,791
$		 Payable for
Liabilities from
financing
dividends
activities-total
-
$ 15,679,052
$ -
2,798,672)
(
-
14,567)
(
-
14,567
-
4,663)
(
13,847,318
13,913,268
13,847,318
$ 26,788,985
$

~40~

At January 1, 2021
Changes in cash flow from
financing activities
Interest paid
Interest of lease liabilities
Impact of changes in
foreign exchange
Changes in other non-cash
items
At June 30, 2021		 Short-term

borrowings
11,456,690
$ 3,256,630
-

-
-
-
14,713,320
$		 Guarantee
deposits
Lease
Payable for
Liabilities from
financing
received
liabilities
dividends
activities-total
1,251
$ 1,377,257
$ -
$ 12,835,198
$ 219
46,234)
(
-

3,210,615
-

14,120)
(
-
14,120)
(
-
14,120
-

14,120
-
5,569)
(
-

5,569)
(
-
3,588
7,149,589
7,153,177
1,470
$ 1,329,042
$ 7,149,589
$ 23,193,421
$

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The ultimate controlling party of the Group is the Company.

(2) Names of related parties and relationship

LATED PARTY TRANSACTIONS
Parent and ultimate controlling party
The ultimate controlling party of the Group is the
Names of related parties and relationship		 Company.
Names of relatedparties
G.M.I Technology Inc.
Actions Semiconductor Co., Ltd.
C-Media Electronics Inc.
Greatek Electronics Inc.
EmBestor Technology Inc.		 Relationship with theCompany
Other related party
Other related party
Other related party
Other related party
Other related party

(3) Significant related party transactions and balances

A. Operating revenue

gnificant related party transactions and balances
Operating revenue
Sales of goods﹕
G.M.I Technology Inc.
Others		 For the three-month
period ended
June 30,2022
4,145,180
$ 121,228
4,266,408
$		 For the three-month
period ended
June 30,2021
3,975,087
$ 159,638
4,134,725
$

~41~

For the six-month For the six-month
period ended period ended
June 30, 2022 June 30, 2021
Sales of goods﹕
G.M.I Technology Inc. $ 8,583,107
 $ 7,613,621
Others 248,984 308,971
$ 8,832,091 $ 7,922,592

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

B. Processing cost

Processing cost
Greatek Electronics Inc.
Others
Greatek Electronics Inc.
Others		 For the three-month
period ended
June 30,2022
305,966
$ 3,667
309,633
$ For the six-month
period ended
June 30,2022
650,658
$ 10,528
661,186
$		 For the three-month
period ended
June 30,2021
362,276
$ 4,734
367,010
$
For the six-month
period ended
June 30, 2021
723,986
$ 6,065
730,051
$

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

C. Receivables from related parties

Receivables from related parties
Accounts receivable﹕
G.M.I Technology Inc.
Other		 June30,2022
3,259,667
$ 31,721
3,291,388
$		 December31,2021
3,146,078
$ 46,106
3,192,184
$		 June30,2021
2,698,174
$ 59,880
2,758,054
$

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.

~42~

D. Payables to related parties

Accounts payable﹕
Greatek Electronics Inc.
Others		 June 30,2022
338,951
$ 3,918
342,869
$		 December 31,2021
333,380
$ 1,033
334,413
$		 June 30,2021
371,770
$ 6,368

378,138
$

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

E. Other transactions and other (receivables) payables:

For the six-month period For the six-month period For the six-month period For the six-month period For the six-month period For the six-month period
ended June 30, 2022 endedJune 30,2021
Ending Ending
Amount balance Amount balance
Other related parties-
Sales commissions $ 356,389 $ 108,091 $ 296,660 $ 111,365
Technical royalty revenue ($ 723)
 $ - ($ 6,341) $ -
Other $ - $ - $ 327 $ -

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

(4) Key management compensation

days after monthly billings.
Key management compensation
Salaries and other short-term employee benefits
Post-employment benefits
Total
Salaries and other short-term employee benefits
Post-employment benefits
Total		 For the three-month
period ended
June 30, 2022
101,505
$ 933
102,438
$ For the six-month
period ended
June 30,2022
206,645
$ 1,865
208,510
$		 For the three-month
period ended
June 30,2021
14,554
$ 729
15,283
$
For the six-month
period ended
June 30,2021
91,881
$ 1,458
93,339
$

~43~

8. PLEDGED ASSETS

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

==> picture [507 x 126] intentionally omitted <==

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

Book value
Pledged asset June 30, 2022 December 31, 2021 June 30, 2021 Purposes
Time deposits (shown in Guarantee for
financial assets at amortised the importation customs
cost non-current) $ 31,048 $ 31,048 $ 30,821 duties of materials
Guarantee for leasing
" land and office in
54,271 49,053 48,948 science park
$ 85,319 $ 80,101 $ 79,769
----- End of picture text -----

  1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

  2. (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.

    • 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.

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

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

    • E. Advanced Micro Devices, Inc./ ATI Technologies ULC brought an action for patent infringement in United States International Trade Commission (“ITC”) 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

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

~44~

12. OTHERS

(1) Capital management

There have been no significant changes as at June 30, 2022. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2021.

(2) Financial instruments

A. Financial instruments by category

nancial instruments
Financial instruments by category
Financial assets
Financial assets at fair value through
profit or loss
Financial assets mandatorily
measured at fair value through
profit or loss
Financial assets at fair value through
other comprehensive income
Designation of equity instrument
Financial assets at amortised cost/
Receivables
Cash and cash equivalents
Financial assets at amortised cost
Accounts receivable (including
related parties)
Other receivables
Refundable deposits
Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings
Notes payable
Accounts payable (including related
parties)
Other payables (including related
parties)
Long-term borrowings
Guarantee deposits
Other financial liabilities
Lease liabilities		 June 30,2022
December 31,2021
1,570,655
$ 1,952,647
$ 2,901,426
$ 3,644,878
$ 6,010,435
$ 7,197,351
$ 59,222,204
43,820,977
16,859,093
15,989,005
292,744
156,928
712,634
734,855
83,097,110
$ 67,899,116
$ 10,194,948
$ 13,342,100
$ 3,276
3,276
13,514,480
11,439,981
42,509,431
24,746,394
1,394,791
1,002,799
1,269
1,448
8,428,637
7,521,493
76,046,832
$ 58,057,491
$ 1,350,659
$ 1,333,705
$		 June 30,2021
770,077
$
3,231,795
$
10,001,376
$ 41,979,597
14,614,908
96,192
711,940
67,404,013
$
14,713,320
$ 3,276
13,108,643
26,318,005
-
1,470
7,189,815
61,334,529
$
1,329,042
$

~45~

  • B. Financial risk management policies

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

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

  • C. Significant financial risks and degrees of financial risks

  • (a) Market risk

Foreign exchange risk

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

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

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

(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD
Non-monetary items
USD:NTD
Financial liabilities
Monetary items
USD:NTD		 June 30,2022 June 30,2022 Book value
(NTD)
Foreign currency
amount
(Inthousands)
369,769
$ 1,973,423
447,695		 Exchangerate
29.730
29.730
29.730
10,993,232
$ 58,669,866
13,309,972

~46~

==> picture [429 x 469] intentionally omitted <==

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

December 31, 2021
Foreign currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD $ 371,907 27.690 $ 10,298,105
Non-monetary items
USD:NTD 1,692,376 27.690 46,861,891
Financial liabilities
Monetary items
USD:NTD 458,477 27.690 12,695,228
June 30, 2021
Foreign
currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD $ 390,779 27.87 $ 10,891,011
Non-monetary items
USD:NTD 1,596,574 27.87 44,496,517
Financial liabilities
Monetary items
USD:NTD 513,135 27.87 14,301,072
----- End of picture text -----

The exchange gains (losses), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and six-month periods ended June 30, 2022 and 2021, amounted to $111,853, $27,331, $181,757 and ($56,601), respectively.

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

~47~

For the six-month period ended June 30, 2022

Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
109,932
$ -
$ Non-monetary items
USD:NTD
1%
-

586,699
Financial liabilities
Monetary items
USD:NTD
1%
133,100)
(
-
Sensitivity analysis
Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
108,910
$ -
$ Non-monetary items
USD:NTD
1%
-
444,965
Financial liabilities
Monetary items
USD:NTD
1%
143,011)
(
-
Forthe six-monthperiod ended June 30,2021
Sensitivity analysis		 Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
109,932
$ -
$ Non-monetary items
USD:NTD
1%
-

586,699
Financial liabilities
Monetary items
USD:NTD
1%
133,100)
(
-
Sensitivity analysis
Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
108,910
$ -
$ Non-monetary items
USD:NTD
1%
-
444,965
Financial liabilities
Monetary items
USD:NTD
1%
143,011)
(
-
Forthe six-monthperiod ended June 30,2021
Sensitivity analysis		 Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
109,932
$ -
$ Non-monetary items
USD:NTD
1%
-

586,699
Financial liabilities
Monetary items
USD:NTD
1%
133,100)
(
-
Sensitivity analysis
Effect on
Effect on other
comprehensive
Degree ofvariation
profit or loss
income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
1%
108,910
$ -
$ Non-monetary items
USD:NTD
1%
-
444,965
Financial liabilities
Monetary items
USD:NTD
1%
143,011)
(
-
Forthe six-monthperiod ended June 30,2021
Sensitivity analysis
Sensitivity analysis
Effect on
Degree ofvariation
profit or loss
1%
108,910
$ 1%
-
1%
143,011)
(		 Effect on other
comprehensive
income
-
$ 444,965
-

Price risk

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

  • ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the six-month periods ended June 30, 2022 and 2021 would have increased/decreased by $157,066 and $77,008, respectively, as a result of gains/losses on

~48~

equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $290,143 and $323,180, 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

The Group has no material interest rate risk.

  • (b) Credit risk

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

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

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

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

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

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

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

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

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

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

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

~49~

viii. The Group used the forecast ability of semiconductor industry research report to adjust historical and timely information to assess the default possibility of accounts receivable. As at June 30, 2022, December 31, 2021 and June 30, 2021, the provision matrix are as follows:

==> picture [430 x 294] intentionally omitted <==

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

1~90 days Over 90 days
Not past due past due past due Total
At June 30, 2022
Expected loss rate 0%~1% 0%~1% 100%
Total book value $ 16,588,976 $ 380,977 $ 36 $ 16,969,989
Loss allowance $ 107,050 $ 3,810 $ 36 $ 110,896
1~90 days Over 90 days
Not past due past due past due Total
At December 31, 2021
Expected loss rate 0%~1% 0%~1% 100%
Total book value $ 15,874,298 $ 212,956 $ 461 $ 16,087,715
Loss allowance $ 96,119 $ 2,130 $ 461 $ 98,710
1~90 days Over 90 days
Not past due past due past due Total
At June 30, 2021
Expected loss rate 0%~1% 0%~1% 100%
Total book value $ 14,483,825 $ 228,592 $ 461 $ 14,712,878
Loss allowance $ 95,223 $ 2,286 $ 461 $ 97,970
----- End of picture text -----

  • ix. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:
allowance for accounts receivable are as follows:
At January 1
Provision for impairment loss
At June 30
At January 1
Provision for impairment loss
At June 30		 2022
Loss allowance for
accounts receivable
98,710
$ 12,186
110,896
$
2021
Loss allowance for
accountsreceivable
95,360
$ 2,610
97,970
$

~50~

(c) Liquidity risk

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

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

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

Non-derivative financial liabilities:

in the table are the contractual undiscounted
Non-derivative financial liabilities:		 cash flows.
Short-term borrowings
Notes payable
Accounts payable (including related
parties)
Other payables (including related parties)
Lease liabilities
Long-term borrowings
Guarantee deposits received
Other financial liabilities
Non-derivative financial liabilities:
Short-term borrowings
Notes payable
Accounts payable (including related
parties)
Other payables (including related parties)
Lease liabilities
Long-term borrowings
Guarantee deposits received
Other financial liabilities
June 30, 2022
December 31, 2021		 Less than 1
year
10,194,948
$ 3,276
13,514,480
42,509,431
129,834
-
-
8,428,637
Less than 1
year
13,342,100
$ 3,276
11,439,981
24,746,394
115,821
-
-
7,521,493		 Between 1
and 5years
-
$ -
-
-
345,366
1,397,390
-
-
Between 1
and 5years
-
$ -
-
-
334,479
1,017,360
-
-		 Over 5years
-
$ -
-
-
1,328,708
-
1,269
-
Over 5years
-
$ -
-
-
1,340,088
-
1,448
-

~51~

Non-derivative financial liabilities:

Non-derivative financial liabilities:
June 30, 2021 Less than 1
year		 Between 1
and 5years		 Over 5 years
Short-term borrowings $ 14,713,320
 $ -
 $ -
Notes payable 3,276 -
 -
Accounts payable (including related
parties) 13,108,643 - -
Other payables (including related parties) 26,318,005 - -
Lease liabilities 116,471 308,680 1,366,855
Guarantee deposits received -
 - 1,470
Other financial liabilities 7,189,815 - -
  • iv. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

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

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

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

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

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

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

~52~

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

June 30, 2022
Assets
Recurring fair value measurement
Financial assets at fair value
through profit or loss
Equity securities
Financial assets at fair value
through other comprehensive
income
Equity securities
Total
December 31, 2021
Assets
Recurring fair value measurement
Financial assets at fair value
through profit or loss
Equity securities
Financial assets at fair value
through other comprehensive
income
Equity securities
Total
June 30, 2021
Assets
Recurring fair value measurement
Financial assets at fair value
through profit or loss
Equity securities
Financial assets at fair value
through other comprehensive
income
Equity securities
Total		 Level 1
1,570,655
$ 635,238
2,205,893
$ Level 1
1,952,647
$ 824,506
2,777,153
$ Level 1
770,077
$ 699,690
1,469,767
$		 Level 2
-
$ -
-
$ Level 2
-
$ -
-
$ Level 2
-
$ -
-
$		 Level3
-
$ 2,266,188
2,266,188
$ Level3
-
$ 2,820,372
2,820,372
$ Level3
-
$ 2,532,105
2,532,105
$		 Total
1,570,655
$ 2,901,426
4,472,081
$
Total
1,952,647
$ 3,644,878
5,597,525
$
Total
770,077
$ 3,231,795
4,001,872
$

~53~

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

  • i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

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

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

  • D. For the six-month periods ended June 30, 2022 and 2021, there was no transfer between Level 1 and Level 2.

  • E. The following chart is the movement of Level 3 for the six-month periods ended June 30, 2022 and 2021:

2022 and 2021:
2022
Non-derivative equityinstrument
At January 1
2,820,372
$ (Losses) gains recognized
in other comprehensive
income
554,184)
(
At June 30
2,266,188
$		 2021
Non-derivative equityinstrument
2,031,480
$ 500,625
2,532,105
$

  • F. For the six-month periods ended June 30, 2022 and 2021, there was no transfer into or out from Level 3.

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

~54~

exercisable price, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

  • H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:
Non-
derivative
equity
instrument:
Unlisted
shares
〃
Private equity
fund
investment
Non-
derivative
equity
instrument:
Unlisted
shares
〃
Private equity
fund
investment		 Fair value at
June 30,2022		 Valuation
technique		 Significant
unobservable
input		 Range
(weighted
average)		 Relationship of
inputs to fair value
115,013
$ 35,437
2,115,738
Fair value at
December 31,
2021		 Market
comparable
companies
Net asset
value
Net asset
value
Valuation
technique		 Price to book
ratio multiple
Not applicable
Not applicable
Significant
unobservable
input		 14.24
-
-
Range
(weighted
average)		 The higher the
multiple, the higher
the fair value
Not applicable
Not applicable
Relationship of
inputs to fair value
106,304
$ 30,270
2,683,798		 Market
comparable
companies
Net asset
value
Net asset
value		 Price to book
ratio multiple
Not applicable
Not applicable		 15.33
-
-		 The higher the
multiple, the higher
the fair value
Not applicable
Not applicable

~55~

Non-
derivative
equity
instrument:
Unlisted
shares
〃
Private equity
fund
investment		 Fair value at
June 30,2021
Valuation
technique
106,995
$ Market
comparable
companies
23,624

Net asset
value
2,401,486
Net asset
value		 Significant
unobservable
input
Range
(weighted
average)
Relationship of
inputs to fair value
Price to book
ratio multiple
4.39 The higher the
multiple, the higher
the fair value
Not applicable - Not applicable
Not applicable - Not applicable
  • I. The Group has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

June 30, 2022

June30,2022
Financial assets
Equity instrument
Financial assets
Equity instrument		 Input Change
± 1%
Change
± 1%

 Favourable Unfavourable Favourable Unfavourable
Change
change
Change
change
-
$ -
$ 7,262
$ 7,262)
($ Favourable Unfavourable Favourable Unfavourable
Change
change
Change
change
-
$ -
$ 7,283
$ 7,283)
($ Recognizedinprofit or loss
comprehensiveincome
Recognized in other
December31,2021
Recognized in other
Recognizedinprofit or loss
comprehensiveincome
Price to
book ratio
multiple
Input
Favourable Unfavourable
Change
change
-
$ -
$ Recognizedinprofit or loss
Price to
book ratio
multiple

~56~

June 30, 2021

Recognized in other Recognized in profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change Change change Change change Financial assets Price to Equity instrument book ratio ± 1% $ - $ - $ 1,758 ($ 1,758) multiple

’ - (4) Effects on the Group s operation arising from the COVID 19 pandemic

  • In response to the COVID-19 pandemic, the Company adjusted the working pattern of its employees, enhanced cleaning and disinfection and other measures to comply with the government regulations. As at June 30, 2022, the Group assessed that the epidemic had no significant impact on the overall operating activities and financial statements.

13. SUPPLEMENTARY DISCLOSURES

  • (1) Significant transactions information

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

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

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

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

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

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

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

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

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

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

  • (2) Information on investees

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

(3) Information on investments in Mainland China

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

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

~57~

(4) Major shareholders information

As at June 30, 2022, the Company had no shareholders who hold over 5% (including 5%) of the Company’s shares.

14. SEGMENT INFORMATION

(1) General information

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

(2) Measurement of segment information

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

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

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

(4) Reconciliation for segment profit (loss)

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

~58~

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Loans to others

For the six-month period ended June 30, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
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		 Hung-wei Venture Capital
Co., Ltd.		 Other receivables-related
parties		 Y 300,000
$		 300,000
$		 81,500
$		 0.95 Short-term
financing		 -
$		 Operations -
$		 None -
$		 3,860,930
$		 15,443,721
$		 None
0 Realtek
Semiconductor
Corporation		 RayMX Microelectronics
Corp.		 Other receivables-related
parties		 Y 59,452 59,452 - - Short-term
financing		 - Operations - None - 3,860,930 15,443,721 None
0 Realtek
Semiconductor
Corporation		 Bluocean Inc. Other receivables-related
parties		 Y 2,080,820 2,080,820 2,080,820 2.05 Short-term
financing		 - Operations - None - 3,860,930 15,443,721 None
0 Realtek
Semiconductor
Corporation		 Talent Eagle Enterprise Inc. Other receivables-related
parties		 Y 2,378,080 2,378,080 2,378,080 2.05 Short-term
financing		 - Operations - None - 3,860,930 15,443,721 None
0 Realtek
Semiconductor
Corporation		 Leading Enterprises Limited Other receivables-related
parties		 Y 2,675,340 2,675,340 2,601,025 2.05 Short-term
financing		 - Operations - None - 3,860,930 15,443,721 None
1 Leading Enterprises Limited Bluocean Inc. Other receivables-related
parties		 Y 1,783,560 1,783,560 3,121 2.05 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
1 Leading Enterprises Limited Talent Eagle Enterprise Inc. Other receivables-related
parties		 Y 1,783,560 1,783,560 264,561 2.05 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
2 Amber Universal Inc. Blueocean Inc. Other receivables-related
parties		 Y 1,486,300 1,486,300 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
2 Amber Universal Inc. Talent Eagle Enterprise Inc. Other receivables-related
parties		 Y 2,972,600 2,972,600 1,203,903 2.05 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
3 Cortina Access, Inc. Leading Enterprises Limited Other receivables-related
parties		 Y 891,780 891,780 765,445 0.44 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
4 Realtek Investment Singapore
Private Limited		 Realtek Singapore Private
Limited		 Other receivables-related
parties		 Y 2,972,600 2,972,600 2,595,080 2.05 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None 
Table 1 Page 1

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Loans to others

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

For the six-month period ended June 30, 2022

Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
Interest rate(%)
Nature of
loan
Amount of
transactions with the
borrower
Reason for short-
term
financing
Allowance for doubtful
accounts		 Maximum outstanding
balance during the six-
month period ended
June 30,2022
(Note 3)
Balance at
June
30,2022
Actual amount
drawn down
(Note 4)
No
(Note 1)
Creditor
Borrower
General ledger account
Is a related
party
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
5 Realtek Singapore Private
Limited		 Leading Enterprises Limited Other receivables-related
parties		 Y 2,972,600
$		 2,972,600
$		 2,972,600
$		 2.05 Short-term
financing		 -
$		 Operations -
$		 None -
$		 15,443,721
$		 15,443,721
$		 None
5 Realtek Singapore Private
Limited		 RayMX Microelectronics
Corp.		 Other receivables-related
parties		 Y 59,452 59,452 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
5 Realtek Singapore Private
Limited		 Realsil Microelectronics
Corp.		 Other receivables-related
parties		 Y 891,780 891,780 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
5 Realtek Singapore Private
Limited		 Realtek Investment Singapore
Private Limited		 Other receivables-related
parties		 Y 2,972,600 2,972,600 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
5 Realtek Singapore Private
Limited		 Bluocean Inc. Other receivables-related
parties		 Y 2,972,600 2,972,600 2,526,710 2.05 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
6 Realsil Microelectronics Corp. Suzhou Pankore Integrated
Circuit Technology Co. Ltd		 Other receivables-related
parties		 Y 355,240 355,240 102,132 4.35 Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
6 Realsil Microelectronics Corp. RayMX Microelectronics
Corp.		 Other receivables-related
parties		 Y 355,240 355,240 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 None
7 Cortina Network Systems
(Shanghai) Co., Ltd.		 Suzhou Pankore Integrated
Circuit Technology Co. Ltd		 Other receivables-related
parties		 Y 133,215 133,215 - - Short-term
financing		 - Operations - None - 15,443,721 15,443,721 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

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Provision of endorsements and guarantees to others

For the six-month period ended June 30, 2022

Expressed in thousands of NTD

(Except as otherwise indicated)

Party being

endorsed/guaranteed

Party being
endorsed/guaranteed		 Party being
endorsed/guaranteed
Number
(Note 1)
Endorser/
guarantor		 Companyname
Relationship
with the
endorser/
guarantor
(Note 2)		 Limited on
endorsements/
guarantees
provided for a
single party
(Note 3)		 Maximum
outstanding
endorsement/
amount as at
June 30, 2022
(Note 4)		 Outstanding
endorsement/
guarantee
amount at
June 30,
2022
(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
0 Realtek
Semiconductor
Corporation		 Realtek Singapore
Private Limited		 2 19,304,651
$		 3,860,930
$		 3,860,930
$		 -
$		 -
$		 10% 19,304,651
$		 Y N N
0 Realtek
Semiconductor
Corporation		 Leading Enterprises
Limited		 2 19,304,651 7,721,861 7,721,861 - - 20% 19,304,651 Y N N
0 Realtek
Semiconductor
Corporation		 Suzhou PanKore
Integrated Circuit
Technology Co., Ltd.		 2 19,304,651 386,093 386,093 - - 1% 19,304,651 Y N Y
0 Realtek
Semiconductor
Corporation		 Realsil
Microelectronics
Corp.		 2 19,304,651 1,158,279 1,158,279 - - 3% 19,304,651 Y N Y
0 Realtek
Semiconductor
Corporation		 RayMX
Microelectronics
Corp.		 2 19,304,651 1,158,279 1,158,279 30,318 - 3% 19,304,651 Y N Y
0 Realtek
Semiconductor
Corporation		 AICONNX
Technology
Corp.		 2 19,304,651 772,186 772,186 - - 2% 19,304,651 Y N N
1 Leading Enterprises
Limited		 Realsil
Microelectronics
Corp.		 2 19,304,651 594,520 594,520 - - 1% 19,304,651 N N Y
2 Realsil Microelectronics
Corp.		 RayMX
Microelectronics
Corp.		 2 19,304,651 594,520 594,520 - - 1% 19,304,651 N N Y

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 AND SUBSIDIARIES

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

June 30, 2022

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 at June 30,2022 As at June 30,2022 As at June 30,2022 Footnote
(Note 4)
Number of shares Book value
(Note 3)		 Ownership (%)
Fair value
Realtek Semiconductor Corporation C-media Electronics Inc. - Common stock Other related parties Financial assets at fair value through profit
or loss		 1,278,501 $ 63,797 1.63% $ 63,797
Realking Investment Co., Ltd. Compal broadband networks Inc. - Common
stock		 Other related parties Financial assets at fair value through other
comprehensive income		 3,575,000 100,100 5.23% 100,100
Realsun Investment Co., Ltd. Shieh-Yong Investment Co., Ltd. -
Common stock		 None Financial assets at fair value through other
comprehensive income		 48,736,172 428,499 2.21% 428,499
Realsun Investment Co., Ltd. Compal broadband networks Inc. - Common
stock		 Other related parties Financial assets at fair value through other
comprehensive income		 3,575,000 100,100 5.23% 100,100
Leading Enterprises Limited Fortemedia Inc. - Common stock None Financial assets at fair value through other
comprehensive income		 8,837,301 97,177 6.89% 97,177
Leading Enterprises Limited Starix Technology, Inc.-Preferred stock None Financial assets at fair value through other
comprehensive income		 5,000,000 17,836 - 17,836
Leading Enterprises Limited Octtasia Investment Holding Inc. - Common
stock		 None Financial assets at fair value through other
comprehensive income		 9,000,000 1,106,238 12.49% 1,106,238
Amber Universal Inc. Octtasia Investment Holding Inc. - Common
stock		 None Financial assets at fair value through other
comprehensive income		 4,726,836 581,001 6.56% 581,001
Hung-wei Venture Capital Co., Ltd. United Microelectronics Corporation -
Common stock		 None Financial assets at fair value through other
comprehensive income		 336,346 13,168 - 13,168
Hung-wei Venture Capital Co., Ltd. C-media Electronics Inc.- Common stock Other related parties Financial assets at fair value through profit
or loss		 2,274,875 113,516 2.89% 113,516
Hung-wei Venture Capital Co., Ltd. Greatek Electroninc Inc. - Common stock Other related parties Financial assets at fair value through other
comprehensive income		 5,823,602 363,393 1.02% 363,393
Hung-wei Venture Capital Co., Ltd. Subtron technology Co., Ltd - Common
stock		 None Financial assets at fair value through other
comprehensive income		 1,093,968 36,210 0.37% 36,210
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 35,437 10.77% 35,437 
Table 3 Page 1

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

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

June 30, 2022

Table 3

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 at June 30,2022 As at June 30,2022 As at June 30,2022 Footnote
(Note 4)
Number of shares Book value
(Note 3)		 Ownership (%)
Fair value
Blueocean Inc. EARGO, Inc. None Financial assets at fair value through other
comprehensive income		 797,261 $ 17,820 2.03% $ 17,820
Talent Eagle Enterprise Inc. EARGO, Inc. None Financial assets at fair value through other
comprehensive income		 199,000 4,447 0.51% 4,447
Realsil Microelectronics Corp. Cuam Money Fund None Financial assets at fair value through profit
or loss		 55,255,818 245,363 - 245,363
Realsil Microelectronics Corp. Guang-Fa Demand Policy Loan Fund None Financial assets at fair value through profit
or loss		 15,023,194 66,710 - 66,710
Realsil Microelectronics Corp. Jian-Xin Monetary Fund None Financial assets at fair value through profit
or loss		 13,021,692 57,824 - 57,824
Realsil Microelectronics Corp. ICBC Cash Fund None Financial assets at fair value through profit
or loss		 4,327 19 - 19
Realsil Microelectronics Corp. JIA SHI Monetary Fund None Financial assets at fair value through profit
or loss		 10,048,800 44,622 - 44,622
Realsil Microelectronics Corp. BOC Cash Fund None Financial assets at fair value through profit
or loss		 20,097,728 89,244 - 89,244
Realsil Microelectronics Corp. Guang-Fa Currency Fund None Financial assets at fair value through profit
or loss		 89,620,060 397,957 - 397,957
Realsil Microelectronics Corp. WAN JIA Monetary Fund None Financial assets at fair value through profit
or loss		 10,052,017 44,636 - 44,636
Realtek Semiconductor (Shen Zhen) Corp. Pu-Yin Monetary Fund None Financial assets at fair value through profit
or loss		 20,567,584 91,330 - 91,330
Realtek Semiconductor (Shen Zhen) Corp. Capital Increase Monetary Fund A None Financial assets at fair value through profit
or loss		 10,034,075 44,556 - 44,556
Realtek Semiconductor (Shen Zhen) Corp. Capital Increase Monetary Fund B None Financial assets at fair value through profit
or loss		 10,039,625 44,581 - 44,581
Realtek Semiconductor (Shen Zhen) Corp. Ri-Ri-Xin Fund None Financial assets at fair value through profit
or loss		 32,500,000 144,573 - 144,573
Cortina Network Systems (Shanghai) Co. Ltd. Zhou Zhou Fa Fund None Financial assets at fair value through profit
or loss		 7,588,335 45,995 - 45,995
Cortina Network Systems (Shanghai) Co. Ltd. Step by step Gold Fund None Financial assets at fair value through profit
or loss		 17,100,000 75,932 - 75,932
Bluocean Inc. CyWeeMotion Group Limited None Financial assets at fair value through other
comprehensive income		 8,422,256 - 7.01% -

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

Note 2: Leave the column blank if the issuer of marketable securities is non-related party. Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost for the marketable securities not measured at fair value.

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

Table 3 Page 2

Table 4

Expressed in thousands of NTD

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the six-month period ended June 30, 2022

(Except as otherwise indicated)

Purchase/seller 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		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Footnote
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) 5,344,183)
($		 (9%) Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 1,963,134
$		 13%
Realtek Semiconductor Corporation Actions Semiconductor Co., Ltd. Other related parties (Sales) 37,137)
(		 0% Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 - 0%
Realtek Semiconductor Corporation C-Media Electronics Inc. Other related parties (Sales) 206,655)
(		 0% Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 31,724 0%
Realtek Singapore Private Limited G.M.I Technology Inc. Other related parties (Sales) 3,190,242)
(		 (5%) Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 1,284,796 7%
RayMX Microelectronics Corp. G.M.I Technology Inc. Other related parties (Sales) 48,683)
(		 0% Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 11,737 0%
Realtek Semiconductor Corporation Greatek Electronics Inc. Other related parties Purchase 464,611 0% Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 244,290)
(		 3%
Realtek Singapore Private Limited Greatek Electronics Inc. Other related parties Purchase 178,336 0% Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 Approximately
the same with
third party
transactions		 94,266)
(		 1% 
Table 4

Expressed in thousands of NTD

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

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

June 30, 2022

Table 5

(Except as otherwise indicated)

Creditor Counterparty Relationship with
the counterparty		 Balance as at
June 30,2022		 Turnover rate Overdue receivables Overdue receivables Amount collected
subsequent to the
balance sheet date		 Allowance for
doubtful accounts
Amount Action taken
Realtek Semiconductor Corporation G.M.I Technology Inc. Other related
parties		 1,963,134
$		 5.74 $ - - 910,598
$		 19,830)
($
Realtek Singapore Private Limited G.M.I Technology Inc. Other related
parties		 1,284,796 5.10 - - 547,545 -
$		 
Table 5

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Significant inter-company transactions during the reporting period For the six-month period ended June 30, 2022

Transaction

Number
(Note 1)		 Companyname Counterparty Relationship
(Note 2)		 General ledgeraccount Amount Transactionterms Percentage of
consolidated total
operating revenues or
totalassets (Note 3)
0 Realtek Semiconductor Corporation RayMX Microelectronics Corp. 1 Other receivables $ 48,362 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.04%
0 Realtek Semiconductor Corporation Realtek Korea 1 Technical service fees 55,664 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.09%
0 Realtek Semiconductor Corporation Realtek Korea 1 Other receivables 55,664 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.05%
0 Realtek Semiconductor Corporation Ubilinx Technology Inc. 1 Technical service fees 283,035 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.47%
0 Realtek Semiconductor Corporation Ubilinx Technology Inc. 1 Other receivables 283,035 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.24%
1 Realtek Singapore Private Limited Realsil Microelectronics Corp. 3 Technical service fees 1,320,109 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 2.19%
1 Realtek Singapore Private Limited Realsil Microelectronics Corp. 3 Prepaid account 695,588 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.58%
1 Realtek Singapore Private Limited Realtek Semiconductor(Shen Zhen) Corp. 3 Technical service fees 263,159 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.44%
1 Realtek Singapore Private Limited Cortina Access, Inc. 3 Technical service fees 102,194 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 Access, Inc. 3 Other payables 17,270 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.01%
1 Realtek Singapore Private Limited Cortina Network Systems (Shanghai) Co. Ltd. 3 Technical service fees 70,633 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.12%
1 Realtek Singapore Private Limited Cortina Network Systems (Shanghai) Co. Ltd. 3 Other payables 37,169 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 Systems Taiwan Limited 3 Technical service fees 96,146 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.16%
1 Realtek Singapore Private Limited Cortina Systems Taiwan Limited 3 Other payables 13,477 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.01%
1 Realtek Singapore Private Limited Realtek Semiconductor (Japan) Corp. 3 Technical service fees 30,954 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.05%
1 Realtek Singapore Private Limited Realtek Viet Nam Co. Ltd. 3 Technical service fees 16,201 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 RayMX Microelectronics Corp. 3 Other receivables 48,362 No similar transaction can be compared with. Transaction prices and terms are
determined in accordance with mutual agreement.		 0.04%

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 AND SUBSIDIARIES

Information on investees

For the six-month period ended June 30, 2022

Table 7
Investor		 Investee Location Main business
activities		 Initial investment amount Initial investment amount Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Net profit (loss)
of the investee for the
six-month period ended
June 30,2022		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote
Balance as at
June 30,2022		 Balance as at
December 31,
2021		 Numberofshares Ownership (%) Bookvalue
Realtek Semiconductor
Corporation		 Leading Enterprises Limited British Virgin
Islands		 Investment holdings $ 14,682,563 $ 13,676,922 34,630 100% $ 13,913,763 55,700)
($		 55,700)
($		 Subsidiary
Realtek Semiconductor
Corporation		 Amber Universal Inc. British Virgin
Islands		 Investment holdings 4,679,286 4,358,823 41,432 100% 3,575,230 20,737)
(		 20,737)
(		 Subsidiary
Realtek Semiconductor
Corporation		 Realtek Singapore Private
Limited		 Singapore ICs manufacturing, design, research,
development, sales, and marketing		 4,217,676 3,928,798 89,856,425 100% 28,754,722 8,723,395 8,724,225 Subsidiary
Realtek Semiconductor
Corporation		 Bluocean Inc. Cayman
Islands		 Investment holdings 3,271,346 3,047,285 110,050,000 100% 3,435,363 17,882 17,882 Subsidiary
Realtek Semiconductor
Corporation		 Talent Eagle Enterprise Inc. Cayman
Islands		 Investment holdings 3,391,737 3,159,429 114,100,000 100% 2,350,751 29,367 29,367 Subsidiary
Realtek Semiconductor
Corporation		 Realtek Investment Singapore
Private Limited		 Singapore Investment holdings 5,945,200 5,538,000 200,000,000 100% 6,623,545 33,467 33,467 Subsidiary
Realtek Semiconductor
Corporation		 Realsun Investments Co., Ltd. Taiwan Investment holdings 280,000 280,000 28,000,000 100% 577,418 18,824 18,824 Subsidiary
Realtek Semiconductor
Corporation		 Hung-wei Venture Capital Co.,
Ltd.		 Taiwan Investment holdings 250,000 250,000 25,000,000 100% 473,977 117,282)
(		 117,282)
(		 Subsidiary
Realtek Semiconductor
Corporation		 Realking Investments Co., Ltd. Taiwan Investment holdings 293,930 293,930 29,392,985 100% 272,299 1,797)
(		 1,797)
(		 Subsidiary
Realtek Semiconductor
Corporation		 Realsun Technology
Corporatioin		 Taiwan ICs manufacturing, design, research,
development, sales, and marketing		 5,000 5,000 500,000 100% 5,028 39)
(		 39)
(		 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% 19,318 99 66 Subsidiary
Realtek Semiconductor
Corporation		 AICONNX Technology
Corporation		 Taiwan ICs manufacturing, design, research,
development, sales, and marketing		 20,000 20,000 2,000,000 100% 26,619 6,639 6,639 Subsidiary 
Table 7 Page 1

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investees

For the six-month period ended June 30, 2022

Table 7
Investor		 Investee Location Main business
activities		 Initial investment amount Initial investment amount Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Net profit (loss)
of the investee for the
six-month period ended
June 30,2022		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote
Balance as at
June 30,2022		 Balance as at
December 31,
2021		 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 $ 110,000 2,000,000 6.89% $ 3,674 27,427)
($		 1,424)
($		 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% 138,425 6,673)
(		 4,194)
(		 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% 8,448 12,584)
(		 1,258)
(		 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% 19,430 12,584)
(		 2,894)
(		 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% 10,136 12,584)
(		 1,511)
(		 Investments
accounted for
under equity
method
Leading Enterprises Limited Realtek Semiconductor (Japan)
Corp.		 Japan Information collection and technical
support		 4,364 4,812 400 100% 7,244 5,581 5,581 Sub-Subsidiary
Leading Enterprises Limited Circon Universal Inc. Mauritius Investment holdings 8,918 8,307 300,000 100% 7,571 77)
(		 77)
(		 Sub-Subsidiary
Amber Universal Inc. Realtek Semiconductor (Hong
Kong)Limited		 Hong Kong Information services and technical
support		 5,683 5,326 - 100% 1,081 22)
(		 22)
(		 Sub-Subsidiary
Realtek Singapore Private Limited Empsonic Enterprises Inc. Mauritius Investment holdings 839,760 782,243 2,825,000 100% 2,031,239 26,956 26,956 Sub-Subsidiary
Realtek Singapore Private Limited Cortina Access Inc. U.S.A R&D and information services 1,214,188 1,131,026 16,892 100% 897,787 6,857 6,857 Sub-Subsidiary 
Table 7 Page 2

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investees

For the six-month period ended June 30, 2022

Table 7
Investor		 Investee Location Main business
activities		 Initial investment amount Initial investment amount Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Sharesheld as at June 30,2022 Net profit (loss)
of the investee for the
six-month period ended
June 30,2022		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote		 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment income
(loss)
recognised by the
Company for the six-
month period ended
June 30,2022
Footnote
Balance as at
June 30,2022		 Balance as at
December 31,
2021		 Numberofshares Ownership (%) Bookvalue
Realtek Singapore Private Limited Cortina Systems Taiwan Limited Taiwan R&D and technical support $ 59,452 $ 55,380 21,130,000 100% $ 65,204 13,051
$		 13,051
$		 Sub-Subsidiary
Realtek Singapore Private Limited Realtek Viet Nam Co., Ltd. Vietnam R&D and technical support 118,904 110,760 4,000,000 100% 82,491 1,026 1,026 Sub-Subsidiary
Talent Eagle Enterprise Inc. Ubilinx Technology Inc. U.S.A R&D and technical support 1,783,560 1,661,400 60,000,000 100% 290,114 16,699 16,699 Sub-Subsidiary
Bluocean Inc. Realtek Semiconductor
(Malaysia)Limited		 Malaysia R&D and technical support 70,495 69,275 10,450,000 100% 65,066 1,890 1,890 Sub-Subsidiary
Bluocean Inc. Realtek Korea Inc. Korea R&D and technical support 45,789 - 200,000 100% 49,299 3,572 3,572 Sub-Subsidiary

Note ： The amount of foreign currencies denominated in New Taiwan dollars in this table, which relates to income and expenses which were re-translated at the average exchange rate from January 1, 2022 to June 30, 2022, 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 (Except as otherwise indicated)

REALTEK SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

Information on investments in Mainland China

For the six-month period ended June 30, 2022

Investee in Mainland
China		 Main business activities Paid-in Capital Investment
method
(Note1)		 Accumulated amount of
remittance from Taiwan to
Mainland China as of
January1,2022		 Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the six-
month period ended June
30,2022		 Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the six-
month period ended June
30,2022		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of June 30,
2022		 Net income of
investee for the
six-month
period ended
June 30,2022		 Ownership held
by the Company
(direct or
indirect)		 Investment income (loss)
recognised by the
Company for the six-
month period ended June
30, 2022
(Note2(2)C)		 Book value of
investment in
Mainland China
as of June 30,
2022		 Accumulated
amount of investment
income remitted back to
Taiwan as of June 30,2022		 Footnote
Remitted to
Mainland
China		 Remitted
back to
Taiwan
Cortina Network
Systems (Shanghai) Co.,
Ltd.
Realsil Microelectronics
Corp.
Realtek Semiconductor
(Shen Zhen) 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
June 30,2022		 107,014
$ 832,328
148,630
116,563
44,405
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		 107,014
$ 832,328
148,630
116,563
44,405		 $ -
-
-
-
-		 $ -
-
-
-
-		 107,014
$ 832,328
148,630
116,563
44,405		 3,458
$ 28,433
29,041)
(
3,160)
(
46,322)
(		 100%
100%
100%
100%
100%		 3,458
$ 28,433
29,041)
(
3,160)
(
47,817)
(		 109,037
$ 2,029,129
262,494
403,125
105,224)
(		 $ -
-
-
-
-
Cortina Network
Systems (Shanghai) Co.,
Ltd.
Realsil Microlectronics
Corp.
Realtek Semiconductor
(Shan Zhen) Corp.
RayMX Microelectronics
Corp.
Suzhou Pankore
Integrated Circuit
Technology Co. Ltd.		 107,014
$ 832,328
148,630
116,563
44,405		 107,014
$ 832,328
148,630
116,563
44,405		 $ 23,165,582

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

(3) Others.

Note 2: In the Investment income (loss) recognised by the Company for the six-month period ended June 30, 2022 column was recorded based on the financial statements prepared by the company. were audited by the independent auditors of parent company in Taiwan.

Note 3: The amount of foreign currencies denominated in New Taiwan dollars in this table, which relates to income and expenses which were re-translated at the average exchange rate from January 1, 2022 to June 30, 2022, others were re-translated at the exchange rate prevailing at the end of the financial reporting period. 

Table 8

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