VIS 2005 Annual Report

Transcription

1 25 Annual Report

2 A BRIEF INTRODUCTION TO 1. Company Profile Vanguard International Semiconductor Corporation () is a leading specialty IC foundry service provider. Since its founding in December 1994 in Hsinchu Science Park, Taiwan, has been achieving continuous success in its technology development and production efficiency improvement. has also been consistently offering its customers costeffective solutions and high valueadded services. currently has one 8inch fab which has a monthly output of approximately 55, wafers. is a spinoff of the SubMicron Project, sponsored by the Industrial Technology Research Institute (ITRI). Original investors include Taiwan Semiconductor Manufacturing Corporation (TSMC) and 13 other institutional investors. was founded with the primary focuses on the production and development of DRAM and other memory IC. In March 1998, became a listed company on the Taiwan OverTheCounter Stock Exchange (OTC). In 1999, started to work as a subcontractor for TSMC for the manufacturing of logic and mixed signal products. In 2, officially announced its plan to transform from a DRAM manufacturer into a foundry service provider. In February 24, completely terminated its DRAM production and became a pureplay foundry company. Also, in order to improve our overall financial structure and to strengthen our operational capabilities, we completed our capital restructuring process by October 24 and decreased our paidin capital by 48% from NT$28.2 billion to NT$14.6 billion. Singapore Pte. Ltd. to provide dedicated specialty IC modeling and design services to its global foundry customers. has also partnered with IC design houses such as Cadence Methodology Service Company and Goyatek Technology Inc. Through these efforts, expects to offer its specialty IC foundry customers with the SystemonChip(SOC) total solutions. has about 194 employees. We are committed to adhering to our customeroriented business philosophy to provide our customers with continuously improved and enhanced specialty IC foundry services. has established sales offices in Taiwan and the United States to provide onsite technical and logistical support. To better serve its worldwide customers, also set up sales representatives in Israel, Germany, Korea, Hong Kong, Japan and China. Looking forward, is dedicated to becoming the world's leading customized specialty IC manufacturing services provider. is also committed to always providing its foundry customers costeffective and high valueadded solutions for their IC foundry manufacturing needs. has continued its investment in the product development and process technology for the market needs. offers a wide range of process technologies, including High Voltage,.18um Logic, MixedSignal, Analog, RF CMOS, Flash, Embedded Memory, and Bipolar CMOS DMOS (BCD) to further help increase its foundry customers global competitiveness. In order to enhance its IP service capability, has continued its IP development by strengthening strategic relationship with its IP provision partners. And the Company unveiled its whollyowned subsidiary, 25 Annual Report

3 2. Organization 2.1 Organization Chart Shareholders' Meeting Supervisors Board of s President Human Resources Finance Manufacturing & Technology Marketing & Sales Corporate Development Material Management Accounting Wafer Production Customer Engineering IP Management Legal Finance Technology Sales Design Service Public Relations Investor Relations Marketing IT & Ecommerce Quality Reliability Assurance Strategic Planning Operation Planning Risk & Environment Safety Management Internal Audit 25 Annual Report

4 2.2 Function Description President VP of Finance Sr. of Manufacture & Technology VP of Marketing and Sales VP of Corporate Development Human Resources Div. Material Management Div. Legal Dept. Public Relations Dept. Quality Reliability Assurance Div. Operation Planning Div. Risk & Env. Safety Management Dept. Internal Auditing Management and coordination of companywide operations; establishment of business goals; provide instructions and supervise execution. Corporate Accounting, Finance, and Investor Relations. Responsible for the company s finance and accounting operation, as well as BOD related business. Wafer Production, and Technology Division. Responsible for Improving operation efficiency, and ensuring timely delivery of high quality product to customers. Customer Engineering, Sales, and Marketing. Responsible for product service, market analysis and development, and establishing and execution of sales plan. IP Management, Information Technology & ecommerce, and Design Service. Responsible for providing support in IP resources, information system, MASK, CAD, and layout. Responsible for recruiting the most qualified and suitable talents, providing employee training & development programs to meet company's growth, and establishing an effective & innovative personnel management system and work environment in order to attract and retain talents. Responsible for maintaining the company's material management system, evaluation and selection of equipment & material vendors, as well as planning of bonded affairs. Responsible for execution and strategic planning of intellectual property & corporate legal affairs, including contract review and providing legal opinion for each department. Also setting up Board of s meetings and preparing meeting agenda. Responsible for establishing the company's external communication channel, and maintaining the company's corporate image, CI system, and media relations. Responsible for product check, quality control, reliability management and promoting quality policy in. Responsible for organizational efficiency improvement, production capacity management, investment analysis, and longterm investment planning. Responsible for conducting safety, health and environmental assessments to reduce and prevent occupational risks. Responsible for reviewing and evaluating company s operating process and effectiveness of internal control, and providing suggestions for improvement. 25 Annual Report

5 2.3 s and Supervisors Title Name Date Elected Tenure (Year) Date First Elected Shareholding when Elected Current Shareholding Spouse & Minor Shareholding % % % Chairman S.J. Paul Chien 23/6/5 3 23/6/5 3,131,229.11% 2,4,451.15% Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) Representative: 23/6/ /11/1 787,15, % 437,89, % C.V. Chen ChingI Eli Wang Supervisor JenChau Wendell Huang Development Fund, Executive Yuan Representative: 23/6/ /3/1 779,286, % 433,59, % MeiLing Chen (Note 2) LaiShou Su Supervisor Bill C. Huang (Note 3) USI Investment Co., Ltd. (USII) Representative: 23/6/5 3 23/6/5 2,425,.9% 1,349,255.8% Y.G. Quintin Wu LuPao Hsu 23/6/5 3 23/6/5 243,636.1% 135,557.1% Note 1: Mr. C.V. Chen replaced Ms. K.C. Chen as Representative for TSMC on Jan. 27, 26. Note 2: Mr. Bill C. Huang replaced Mr. Chintay Shih as Representative for Development Fund on May 1, 25, and Ms. MeiLing Chen replaced Mr. Bill C.Huang on Jan. 17, 26. Note 3: Mr. Bill C. Huang replaced Ms. Alice Chou as Representative for Development Fund on Jan. 17, Annual Report

6 As of April 1, 26 Shareholding by Nominee Arrangement Education &Selected Past Positions Selected Current Positions Managers Are Spouse or Within Seconddegree Relative of Consanguinity to Each Other % Title Name Relation M.S. Ch. E. & Chemical Engineering, Massachusetts Institute of Technology, U.S.A. Senior, TSMCU.S.A. President, Corporation, BOD of Associates Inc., BOD of Investment Holding, Inc., BOD of Micro Inc., BOD of Singapore Pte. Ltd. S.J.D., Harvard Law School, U.S.A. Managing Partner and CEO, Lee and Li AttorneysatLaw President, The Red Cross Society of R.O.C. Adjunct Professor of National Chengchi University and Soochow University Chairman, Taipei European School Foundation, Taiwan, Republic of China, Lee and Li Foundation President, The Chinese Society of International Law Board of, Yuan Ze University M.S.A., University of Illinois, U.S.A. Chairman & Managing Partner, T N Soong & Co., CPAs Managing Partner, Eli C. Wang & Co. CPAs, BOD of Accounting Research and Development Foundation of R.O.C. M.B.A., Cornell University, U.S.A. Deputy, Finance Division, TSMC, Finance Division, TSMC Ph.D. in Law, National Chengchi University, Ministry of Justice Chairman, Committee of Legal Affairs, Executive Yuan, Central Trust of China Chairman, Administrative Appeals Committee, Executive Yuan M.B.A., University of North Texas, U.S.A, Bank of Overseas Chinese Supervisor, Powerchip Semiconductor Corporation of Business Department, Development Fund, Executive Yuan, Sino Swearing Aircraft Corporation Councillor, Export Insurance Advisory Council, The ExportImport Bank of the Republic of China MBA, East Texas State University Specialist, National Treasury Agency, Ministry of Finance, BOD of Genovate Biotechnology Co., Ltd. Supervisor, BOD of Micropore, Inc Deputy Project Manager, Development Fund, Executive Yuan Supervisor, BOD of Promised Land Co. Ltd. BA Chairman, USI Corporation Chairman, USI Investment Co., Ltd Chairman, USI Corporation Chairman, Asia Polymer Corporation Chairman, China General Plastics Corporation Chairman, Taita Chemical Co., Ltd Chairman, Swanson Plastics Corporation Chairman, Chong Loong Trading Co., Ltd Chairman, Acme Electronics Corporation Chairman, Taiwan United Venture Capital Corporation Chairman, Taiwan United Venture Management Corporation Chairman, Emerald Investment Corporation Chairman, Taiwan Union International Investment Corporation Chairman, Union Polymer International Investment Corporation Chairman, National Datacomm Corporation Chairman, Fine Appliance Corporation, BOD of USI Venture Management Corporation, BOD of Taiwan VCM Corporation, BOD of Maw Chong Investment Corporation Ltd, BOD of China General Terminal & Distribution Corporation, BOD of Han Tech Venture Capital Corporation, BOD of Quanta Display Inc., BOD of Harbinger Venture Capital Corporation, BOD of GLink Technology Corporation, BOD of MiTAC Technology Corporation B.S., Physics Dept., National Cheng Kung University Executive Vice President, Philips Taiwan CEO,HannStar Display Corporation, BOD of TSMC Supervisor, BOD of Delta Electronics Inc. Chairmen, Philips Taiwan Quality Foundation, BOD of Winbond Electronics Corporation Independent, BOD of LiteOn Technology Corporation Supervisor, BOD of Corporate Synergy Development Center 25 Annual Report

7 s/supervisors That are Representatives of Juridical Person Shareholders Development Fund, Executive Yuan Taiwan Semiconductor Manufacturing Company, Ltd. USIFE Investment Co., Ltd (USII) Juridical Person Shareholders Koninkijke Philips Electronics N.V. USI Far East Corporation Top Ten Shareholders of Juridical Person Shareholders, or Shareholders Owing More than 1% of Juridical Person Shareholders Not Available Shing Lee Enterprise, Ltd. As of April 1, 26 Independence Analysis of Board Members Under Taiwan SFB Criteria Taiwan SFB provides a set of criteria to determine the independence of Board Members. The specific criteria and applicability to Board Members are shown below in detail: Independence Criteria of s and Supervisors: Names Over 5 years of experience in business, finance, legal or areas required by the Company 1 Criteria Note (Note 2) S.J. Paul Chien C.V. Chen ChingI Eli Wang LaiShou Su Y.G. Quintin Wu LuPao Hsu 1 M.L. Chen JenChau Wendell Huang Bill C. Huang Note 1 : 1. Not an employee of the Company, nor a director, supervisor or employee of affiliated companies. 2. Not a natural person shareholder directly or indirectly owning more than 1% of the Company s outstanding shares, nor one of the Company s top 1 natural person shareholders. 3. Not a spouse nor firstorseconddegree relative to any person specified in Criteria 1 and Criteria Not a director, supervisor or employee of a shareholder of juridical person of the Company directly or indirectly owning more than 5% of the Company's outstanding shares, nor one of the Company's top five shareholders of juridical person 5. Not a director, supervisor, manager or shareholder holding more than 5%of the outstanding shares of certain companies or institutions that have financial or business relationship with the Company 6. Not an owner, partner, director, supervisor, manager of any sole proprietor, partnership, company or institution and his/her spouse, or the specialist and his/her spouse, that provides finance, commerce, legal consultation and services to the Company or affiliated companies within one year 7. Not a juridical person or its representative as defined in Article 27 of Company Law. Note 2 : Board independent directors or independent supervisors who serve concurrently other companies independent directors or independent supervisors Annual Report

8 2.4 Executive Officer As of April 1, 26 Title Name Date Effective Shareholding Shareholding by Spouse & Minor Shareholding by Nominee Arrangement Education & Selected Past Positions Selected Current Positions Managers are Spouse of Within Seconddegree Relative of Consanguinity to Each Other % % % Title Name Relation Vice President Corporate Development George Liu 11/1/23 75,.5% MS, Electrical Engineering, Arizona State University Vice President, Primarion Inc., BOD of Singapore Pte. Ltd., BOD of Specialty TechFarm, Inc., BOD of CMSC. Inc., BOD of INNOTECH Co., Ltd. Vice President Finance Robert Hsieh 2/1/ ,9.2% MBA, National Taiwan University Vice President, Country Banking Head, Bank of America, NTSA, BOD of Associates Inc., BOD of Investment Holding, Inc., BOD of Micro, Inc., BOD of Walton Advanced Engineering Inc., BOD of Anpec Electronics Corp. Supervisor, BOD of CMSC Inc. Supervisor, BOD of Goyatek Technology Inc. Supervisor, BOD of INNOTECH Co., Ltd. Vice President Marketing & Sales Thomas Chang 9/1/23 384,888.2% MS, Electrical Engineering, University of Cincinnati Vice President, Mosel Vitalic Inc., BOD of Specialty TechFarm, Inc., BOD of Megic Corp., BOD of Goyatek Technology Inc., BOD of Mosel Vitalic Inc. Note 1: George Liu, Vice President was appointed as Acting President on Dec. 2, Annual Report 11

9 2.5 Remuneration to s, Supervisors & Managers Remuneration Paid to s in 25 Unit : NT$ thousand Transportation Fee Remuneration Remuneration to s from Allocated Earnings Employee Profit Sharing Total Remuneration Total Remuneration as % 25 of Net Income ESOP shares granted in 25 Title Name & & & Cash Stock Market Price Per Share Market Value Cash & Stock Market Price Per Share Market Value & & & Other Remuneration Chair man S.J. Paul Chien Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) Representative: C.V. Chen (Note1) TSMC Representative: ChingI Eli Wang Development Fund, Executive Yuan Representative: M.L. Chen (Note2) ,167 19,167 2,847 2, USI Investment Co., Ltd. (USII) Representative Y.G. Quintin Wu LuPao Hsu Note 1: Mr. C.V. Chen replaced Ms. K.C. Chen as Representative for TSMC on Jan. 27, 26. Note 2: Mr. Bill C. Huang replaced Mr. Chintay Shih as Representative for Development Fund on May 1, 25, and Ms. MeiLing Chen replaced Mr. Bill C.Huang on Jan. 17, 26. Number of Range of Remuneration to s (NT$) 25 & Under 2,, 2,,(Included) ~5,, 5,,(Included) ~1,, 7 7 1,,(Included) ~5,, Over 5,, Total Annual Report

10 Remuneration Paid to Supervisors in 25 Title Name Transportation Fee (NT$ thousands) Remuneration (NT$ thousands) Remuneration to Supervisors from Allocated Earnings (NT$ thousands) Total Remuneration (NT$ thousands) Total Remuneration as % 25 of Net Income Other Remuneration (NT$ thousands) & & & & & Supervisor Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) Representative: JenChau Wendell Huang ,476 5,476 5,716 5, Supervisor Development Fund, Executive Yuan Representative: Bill C. Huang (Note.1) Note1: Mr. Bill C. Huang replaced Ms. Alice Chou as Representative for Development Fund on Jan. 17, 26. Number of Supervisor Range of Remuneration to Supervisors (NT$) 25 & Under 2,, 2,,(Included) ~5,, 2 2 5,,(Included) ~1,, 1,,(Included) ~5,, Over 5,, Total Annual Report 13

11 Compensation Paid to President and Vice Presidents in 25 In NT$ thousands Title Name Salary Bonus (NT$ thousands) (NT$ thousands) & & Cash Employee Profit Sharing Stock Market Price Per Share Market Value Cash & Stock Market Price Per Share Market Value Total Compensation & Total Compensation to President and VPs as % 25 of Net Income ESOP shares granted in 25 & & Other Compensation Chairman and President (Note 3) S.J. Paul Chien 22,972 25,72 2,652 2,652 (Note 2) (Note 2) (Note 2) (Note 2) 25,624 27, Vice President Corporate Development (Note 4) George Liu Vice President Finance Robert Hsieh Vice President Marketing & Sales Thomas Chang Vice President Legal & Adm (Note5) Daniel S. Chen Note1: Amount of 25 profit sharing to be approved by the BOD meeting in 26. Note2: Not available at the time of printing. Please visit website for an update after the BOD meeting. Note3: S.J. Paul Chien resigned from the position of President on December 2, 25. Note4: George Liu was appointed as Acting President on December 2, 25. Note5: Daniel S. Chen was released from the position of Vice President of Legal & Adm on December 2, 25 Number of President and Vice Presidents Range of compensation paid to President and VPs (NT$) 25 & Under 2,, 2,,(Included) ~5,, 5,,(Included) ~1,, ,,(Included) ~5,, Over 5,, Total Annual Report

12 Employee Profit Sharing Granted to Management Team in 25 Title Name Profit Sharing Stock (Note.1) Market Price Per Share (NT$) (Note.2) Market Value (NT$ thousands) Profit Sharing Cash (NT$ thousands) (Note.1) Total Profit Sharing Value (NT$ thousands) Total Profit Sharing Value to Management Team as % of 24 Net Income Management Team Chairman and President (Note 2) S.J. Paul Chien 975, ,222 6,2 26, Vice President Corporate Development (Note 3) George Liu Vice President Finance Vice President Marketing & Sales Vice President Legal & Adm (Note 4) Robert Hsieh Thomas Chang Daniel S. Chen Note.1: Employee Profit sharing of 24 Note.2: Average closing price per common share in December 24. Note.3: S.J. Paul Chien resigned from the position of President on December 2, 25. Note.4: George Liu was appointed as Acting President on December 2, 25. Note.5: Daniel S. Chen was released from the position of Vice President of Legal & Adm on December 2, Information on Net Change in Shareholding and Net Change in Pledged by s, Supervisors, Management and Shareholders of 1% Shareholdings or More Title Chairman Name S. J. Paul Chien Net Change in Shareholding 25 1/1/26 ~ 4/1/26 Net Change in Pledged Net Change in Shareholding Net Change in Pledged 32,759 Supervisor Development Fund, Executive Yuan Representatives: M.L. Chen Lai Shou Su Bill C. Huang 28,8,562 Supervisor Taiwan Semiconductor Manufacturing Co., Ltd.(TSMC) Representative: ChingI Eli Wang C.V. Chen JenChau Wendell Huang 28,359,74 USI Investment Co., Ltd. (USII) Representative: Y.G. Quintin Wu 87,381 LuPao Hsu 8,779 Vice President George Liu 75, Vice President Robert Hsieh (559,6) Vice President Thomas Chang 19,97 Stock Trade with Related Party: None Stock Pledge with Related Party: None 25 Annual Report 15

13 2.7 LongTerm Investment Ownership As of December 31, 25 LongTerm Investment Ownership by Direct/Indirect Ownership by s, Supervisors, and Management Total Ownership % % % Associates Inc. 21,7, 1% 21,7, 1% Walton Advanced Engineering Inc. 34,551, 8% 5,.1% 34,61, 8% Megic Corporation 11,45, 8% 11,45, 8% United Industrial Gases Co., Ltd. 3,356,585 2% 16,782, % 2,139, % Cadence Methodology Service Company (CMSC) 7,768,64 34% 7,768,64 34% 3. Capital and 3.1 History of Capitalization As of April 1, 26 Month/Year Price Authorized Capita Paidin Capital Remark Amount Amount Sources of Capital Capital Increase by Assets other than Cash Date of Approval & Approval Document No. 12/1994 NT$1 1,8,, 18,,, 1,4,2,75 14,2,7,5 Original * Investment 11/1995 NT$1 1,8,, 18,,, 1,8,, 18,,, Cash offering 12/1996 NT$1 2,2,, 22,,, 1,92,65,914 19,26,59,14 Capitalization of Profit 8/26/1996 (85) TaiTsaiZheng (I) No /1998 NT$25 2,7,, 27,,, 2,2,65,914 Cash offering 2,26,59,14 4/22/1997 (87) TaiTsaiZheng (I) No.368 1/1999 NT$2 2,7,, 27,,, 2,2,, 22,,, Cash offering 7/22/1999 (88) TaiTsaiZheng (I) No /21 3,,, 3,,, 2,2,, 22,,, 3,, are reserved shares for Employee Stock Option Program 2/23 NT$7 3,3,, 33,,, 2,8,, 28,,, Cash offering 11/4/22 (91) TaiTsaiZheng (I) No /23 NT$1 3,3,, 33,,, 2,8,782, 28,7,82, Exercise of employees stock options 2/2/21 (9) TaiTsaiZheng (I) No /24 NT$1 NT$13.4 3,3,, 33,,, 2,83,844, 28,38,44, Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24 NT$1 NT$12.9 NT$13.4 3,3,, 33,,, 2,821,263, 28,212,63, Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No (Continued) Annual Report

14 As of April 1, 26 Month/Year Price Authorized Capita Paidin Capital Remark Amount Amount Sources of Capital Capital Increase by Assets other than Cash Date of Approval & Approval Document No. 8/24 NT$1 3,3,, 33,,, 1,467,843,663 14,678,436,63 Capital Reduction 8/9/24 KingKuangZheng (I) No /24 NT$1 3,3,, 33,,, 1,468,189,663 14,681,896,63 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24 NT$9.7 NT$1 3,3,, 33,,, 1,468,323,663 14,683,236,63 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24/22 (91)TaiTsaiZheng (I) No /25 NT$18.6 NT$19.2 3,3,, 33,,, 1,469,382,85 14,693,82,85 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24/22 (91)TaiTsaiZheng (I) No /25 NT$18.6 NT$19.2 3,3,, 33,,, 1,476,288,986 14,762,889,86 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24/22 (91)TaiTsaiZheng (I) No /25 NT$1 3,3,, 33,,, 1,592,649,9 15,926,49,9 Capitalization of Profit 6/3/25 FSC (I) No /25 NT$16.4 ~ NT$25.8 3,3,, 33,,, 1,66,182,115 16,61,821,15 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24/22 (91)TaiTsaiZheng (I) No /26 NT$16.4 ~ NT$22.8 3,3,, 33,,, 1,69,871,613 16,98,716,13 Exercise of employees stock options 2/2/21 (9)TaiTsaiZheng (I) No /24/22 (91)TaiTsaiZheng (I) No * Capital increase includes property capitalized as equity investment NT$3,93,491, and technical knowhow capitalized as equity investment NT$1,824,59,. As of April 1, 26 Type of Stock Authorized Capital Listed Nonlisted Total Note Common Stock 1,613,698,552 1,686,31,448 3,3,, Issued are listed on OTC, not register for 3,826,939 shares from exercise of employee stock options yet. 25 Annual Report 17

15 3.2 Status of Shareholders As of December 31, 25 Government Agencies Financial Institutions Other Juridical Person Domestic Natural Persons Foreign Institutions & Natural Persons Total Number of Shareholders , ,332 Shareholding 434,493,49 46,744,21 53,742, ,772,677 36,897,97 1,611,651,13 Holding Percentage (%) 26.96% 2.9% 31.26% 16.49% 22.39% 1.% 3.3 Distribution Profile of Shareholder Ownership As of December 31, 25 Shareholder Ownership (Share) Number of Shareholders Ownership (Share) Ownership (%) 1~999 27,375 9,891,218.61% 1,~5, 24,184 46,297, % 5,1~1, 5,114 31,613, % 1,1~15, 1,475 17,2, % 15,1~2, 622 1,631,391.66% 2,1~3, 63 14,965,587.93% 3,1~5, ,23,871.81% 5,1~1, ,36, % 1,1~2, ,597, % 2,1~4, 78 22,571,92 1.4% 4,1~6, 41 2,986, % 6,1~8, 19 13,387,423.83% 8,1~1,, 1 9,34,.58% Over 1,,1 99 1,367,18, % Total 6,332 1,611,651,13 1.% 3.4 Major Shareholders As of December 31, 25 Major Shareholders Total Owned Ownership (%) Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) Development Fund, Executive Yuan 437,89, ,59, % 26.9% Annual Report

16 3.5 Other Share Information Item /1/26 4/1/26 Market Price Per Share Highest Market Price Lowest Market Price Average Market Price Net Worth Per Share Before Distribution (Note 2) After Distribution Earnings Per Share Weighted Average 1,476,849,127 1,61,118,99 1,613,114,96 Earnings Per Share Before Adjustment After Adjustment (Note 3) (Note 2) 2.99 Dividends Per Share Cash Dividends Stock Dividends Dividends from Retained Earnings Dividends from Capital Surplus.69.1 Accumulated Undistributed Dividend Return on Investment Price / Earning Ratio (Note 4) (Note 2) Price / Dividend Ratio (Note 5) 9.9 Cash Dividend Yield Rate (Note 6).11 Note 1:Pending shareholder s meeting resolution. Note 2:Financials of period not yet finalized. Note 3:Retroactive adjustment for stock dividends and bonus to employees. Note 4:Price / Earning Ratio = Average Market Price / Earnings Per Share Note 5:Price / Dividend Ratio = Average Market Price / Cash Dividends Per Share Note 6:Cash Dividend Yield Rate = Cash Dividends Per Share / Average Market Price 3.6 Dividend Policy According to the Company's Articles of Incorporations, shall not pay dividends when there is no profit for a particular fiscal year. When allocating net profits for each fiscal year, the Company, after setting aside regulatoryrequired legal reserves, shall set aside 1% of the balance as bonus to directors and supervisors, and not less than 1% as bonus to employees of the Company. The distribution of profits may be in the form of cash dividend, stock dividend or a combination of cash and stock. In the past, profit distribution had been made accorded priority to distribution of stock dividend, that is, cash dividend should not exceed 5% of the total dividend. However, the first special shareholders' meeting in 24 adopted a resolution to amend the former dividend policy whereunder the distribution of cash dividend should not be lower than 1% of the total dividend. The Company's board of directors have proposed to distribute 25 profit in the forms of both cash dividend and stock dividend and this proposal will be brought into a vote at the Company's 26 Regular Shareholders' Meeting. 3.7 Distribution of Profit The Board of s formulated the 25 surplus earnings distribution proposal on February 1, 26 as stated below: The Board of s will determine the exdividend date after the proposal is ratified by the regular shareholders' meeting on May 11, 26 and approved by the relevant authority. 25 Annual Report 19

17 Proposal to Distribute 25 Profits Bonus to s & Supervisors Cash dividend to Common Shareholders (NT$1.4 per share)* Stock dividend to Common Shareholders (NT$.1 per share at par value) Employees profit sharing (Distribution in cash) Employees profit sharing (Distributed in stock at par value) Unit: NT$ 24,643,363 2,256,311, ,165,11 78,75, ,113,95 *Equivalent to number of shares: 1,611,651,13 According to the Company's Articles of Incorporations, when allocating net profits for each fiscal year, the Company, after setting aside regulatoryrequired legal reserves, shall set aside 1% of the balance as bonus to directors and supervisors, and not less than 1% as bonus to employees of the Company. 24 profit distribution for s & Supervisors Compensation, and Employee Profit Sharing: Board Resolution (2/25/25) Actual Result Amount (NT$) Amount (NT$) Underlying Number of Dilution(%) Bonus to s & Supervisors 42,197,993 42,197,993 Employees profit sharing in cash 22,55, ,959,83 Employees profit sharing in stock at par value 135,33,58 135,33,58 13,53,358.84% Total 379,781, ,191,43 The EPS of 24 and 25 might have varied if s & Supervisors Compensation and Employee Profit Sharing had been subject to different accounting treatments: Accounting Treatments 24 EPS 25 EPS Treatment as Profit Distribution Treatment as Expenses (Employee Profit Sharing in stock expensed at par value) NT$ 3.1 NT$ 2.77 NT$ 1.69 NT$ Impact to 26 Business Performance, EPS and ROE Resulting from Stock Dividend Distribution Not Applicable. 3.9 Share buyback during the period January 1, 25 to April 1, 26 Nil 2 25 Annual Report

18 4. Issuance of Corporate Bond 4.1 Corporate bond Bond Domestic Second Secured Bond Issuing Date November 15, 21 Denomination Offering Price Total Amount Coupon Rate Tenure Guarantors Trustee Underwriter Legal Counsel Auditor Method of Payment Outstanding Redemption or Early Repayment Clause Credit Rating, Date of Rating, Results of Rating Subordinate Conversion Rights Dilution of Current Shareholders Equity due to New Issue, Conversion, Swap or Share Subscription Regulation, Issuance Requirement Custodian NT$1,, Par NT$1. 1 Billion with the total of four Tranches Tranche A &B & C: NT$3 Million Tranche D: NT$2 Million Tranche A: 3.6% p.a. Tranche B: 3.54% p.a. Tranche C & D: 3.5% p.a. Five years Issuing Date: November 15, 21 Maturity: November15, 26 Tranche A: China Trust Commercial Bank Tranche B: Bank SinoPac Hsinchu Branch Tranche C: ChiaoTung Bank Hsinchu Sciencebased Industrial Park Branch Tranche D: Taipei Fubon Bank Trustee Dept. of The International Commercial Bank of China Nil FuShan Shiew S.C. Huang Half of the principle in two installments on 4th anniversary and 5th anniversary of issuing date NT$ 55 Million Nil Nil Nil N/A N/A 4.2 Convertible Bond: None 4.3 Exchangeable Bond: None 4.4 Bond with Warrants: None 5. Issuance of Preferred : None 6. Issuance of Depositary : None 25 Annual Report 21

19 7. Status of Employee Stock Option Plan (ESOP) 7.1 Employee Stock Option Plan As of April 1, 26 ESOP granted 1st ESOP 2nd ESOP 3rd ESOP 4th ESOP 5th ESOP 6th ESOP 7th ESOP Approval date 2/2/21 2/2/21 2/2/21 6/21/22 9/18/23 9/18/23 9/18/23 Issue (Grant) date 5/25/21 8/24/21 2/6/22 9/24/22 11/28/23 6/16/24 9/16/24 Number of Options Granted () 7,79, 82,95, 6,35, 62,239, 24,85, 42,29, 2,86, Number of Options Granted After Capital Reduction and Exright (shares) 39,43,434 45,279,82 3,55,69 34,335,647 13,948,86 23,716,896 1,63,76 Percentage of Exercisable to Outstanding Common shares (%) 2.44% 2.81%.22% 2.13%.86% 1.47%.1% Option Duration 1 years 1 years 1 years 1 years 1 years 1 years 1 years Source of Option Issue new stock Issue new stock Issue new stock Issue new stock Issue new stock Issue new stock Issue new stock Vesting Schedule 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% 2nd year up to 5% 3rd year up to 75% 4th year up to1% No. of Exercised () 7,236,655 2,785,284 72,755 11,569,9 2, Value of Exercised NT$ 174,297,963 NT$ 389,352,156 NT$ 16,942,588 NT$ 28,387,119 NT$ 474, Unexercised () 21,94,145 12,1,8 1,871,698 14,451,344 11,54,294 21,759, ,182 Original Grant Price Per Share NT$ 22.8 NT$ 17. NT$ 21.9 NT$ 16.4 NT$ 23.7 NT$ 22. NT$ 17.8 Percentage of Unexercised to Outstanding Common shares (%) 1.31%.75%.12%.9%.69% 1.35%.5% Impact to Shareholders Equity Dilution to Shareholders Equity is limited Annual Report

20 7.2 ESOP Granted to Management Team and to Top 1 Employees with an Individual Grant Value over NT$3,, As of April 1, 26 Exercised Unexercised Title Name Number of Options Granted () Number of Exercisable to Outstanding Common Exercised Exercised Price Per Share Value of Exercised (NT$) % of Exercised to Outstanding Common Unexercised Original Grant Price Per Share* (Note 2) Value of Unexercised (NT $) % of Unexercised to Outstanding Common Vice President Corporate Development (Note 3) George Liu 1,459,9 1,459, ,8,395.9% Vice President Finance Robert Hsieh 1,234,839 1,234, ,888,91.8% Vice President Marketing & Sales Thomas Chang 1,571,254 1,571, ,476,3.1% Note 1: Number of Options Granted includes the additional shares due to stock dividend distributed in 25. Note 2: Original granted price per share is weightedaverage calculated according to the different ESOP granted. Note 3: George Liu, Vice President was appointed as Acting President on Dec. 2, 25. ESOP granted to Top 1 Employees with an Individual Granted Value over NT$3,,: None 8. Status of shares from Mergers and Acquisitions: Nil 25 Annual Report 23