ASE Technology (ASX) 20-F for FY2019, filed Mar 31, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br><br>For the fiscal year ended December 31, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-16125

(Exact name of Registrant as specified in its charter)

ASE Technology Holding Co., Ltd.

(Translation of Registrant’s Name into English)

REPUBLICOF CHINA

(Jurisdiction of Incorporation or Organization)

26 ChinThird Road

NantzeExport Processing Zone

Nantze,Kaohsiung, Taiwan

Republicof China

(Address of Principal Executive Offices)

Joseph Tung

Room 1901, No. 333, Section 1 KeelungRd.

Taipei, Taiwan, 110

Republic of China

Tel: 886-2-6636-5678

Fax: 882-2-2757-6121

Email: ir@aseglobal.com

(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Shares, par value NT$10.00 each	ASX	The New York Stock Exchange*

* Traded in the form of American Depositary Receipts evidencing American Depositary Shares (the “ADSs”), each representing two common shares of ASE Technology Holding Co., Ltd.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

As of December 31, 2019, 4,329,883,632 Common Shares, par value NT$10 each were outstanding.**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Emerging growth company ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐	International Financial Reporting Standards as issued by the International Accounting Standards Board ☒	Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

** As a result of the exercise of employee stock options subsequent to December 31, 2019, as of January 31, 2020, we had 4,331,603,182 Common Shares outstanding.

tableof contents

Page

USE OF CERTAIN TERMS	1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	5
PART I	6
Item 1. Identity of Directors, Senior Management and Advisers	6
Item 2. Offer Statistics and Expected Timetable	6
Item 3. Key Information	6
SELECTED FINANCIAL DATA	6
CAPITALIZATION AND INDEBTEDNESS	8
REASON FOR THE OFFER AND USE OF PROCEEDS	8
RISK FACTORS	8
Item 4. Information on the Company	30
HISTORY AND DEVELOPMENT OF THE COMPANY	30
BUSINESS OVERVIEW	34
ORGANIZATIONAL STRUCTURE	59
PROPERTY, PLANTS AND EQUIPMENT	62
Item 4A. Unresolved Staff Comments	68
Item 5. Operating and Financial Review and Prospects	68
OPERATING RESULTS AND TREND INFORMATION	68
LIQUIDITY AND CAPITAL RESOURCES	81
RESEARCH AND DEVELOPMENT	85
TREND INFORMATION	86
OFF-BALANCE SHEET ARRANGEMENTS	86
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	87
SAFE HARBOR	87
Item 6. Directors, Senior Management and Employees	87
DIRECTORS AND SENIOR MANAGEMENT	87
COMPENSATION	94
BOARD PRACTICES	96
EMPLOYEES	96
SHARE OWNERSHIP	97
Item 7. Major Shareholders and Related Party Transactions	98
MAJOR SHAREHOLDERS	98
RELATED PARTY TRANSACTIONS	99
INTERESTS OF EXPERTS AND COUNSEL	100
Item 8. Financial Information	100
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	100
SIGNIFICANT CHANGES	102
Item 9. The Offer and Listing	103
OFFER AND LISTING DETAILS	103
PLAN OF DISTRIBUTION	103
MARKETS	103
SELLING SHAREHOLDERS	103
DILUTION	103
EXPENSES OF THE ISSUE	103
Item 10. Additional Information	103
SHARE CAPITAL	103
ARTICLES OF INCORPORATION	103
MATERIAL CONTRACT	109
FOREIGN INVESTMENT IN THE R.O.C.	111
EXCHANGE CONTROLS	113
TAXATION	113
DIVIDENDS AND PAYING AGENTS	117
STATEMENT BY EXPERTS	117
DOCUMENTS ON DISPLAY	118
SUBSIDIARY INFORMATION	118
Item 11. Quantitative and Qualitative Disclosures about Market Risk	118
Item 12. Description of Securities Other Than Equity Securities	121
DEBT SECURITIES	121
WARRANTS AND RIGHTS	121
OTHER SECURITIES	122
AMERICAN DEPOSITARY SHARES	122
PART II	124
Item 13. Defaults, Dividend Arrearages and Delinquencies	124
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	124
Item 15. Controls and Procedures	124
Item 16. [Reserved]	128
Item 16A. Audit Committee Financial Expert	128
Item 16B. Code of Ethics	128
Item 16C. Principal Accountant Fees and Services	128
Item 16D. Exemptions from the Listing Standards for Audit Committees	129
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	129
Item 16F. Change In Registrant’s Certifying Accountant	129
Item 16G. Corporate Governance	129
Item 16H. Mine Safety Disclosure	133
PART III	134
Item 17. Financial Statements	134
Item 18. Financial Statements	134
Item 19. Exhibits	134

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USEOF CERTAIN TERMS

Unless the context otherwise requires, references in this annual report to:

·	“2018 Convertible Bonds” are to US$400.0 million Zero Coupon Convertible Bonds due September 5, 2018, issued by the Company;
·	“2018 NTD-linked Convertible Bonds” are to US$200.0 million NTD-linked Zero Coupon Convertible Bonds due March 27, 2018, issued by the Company;
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·	“ASDI” are to ASDI Assistance Direction S.A.S., a simplified limited liability company (société par actions simplifiée) organized under the laws of France;
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·	“ASE,” “ASE Inc.” or “ASE Group” are to Advanced Semiconductor Engineering Inc. and, unless the context requires otherwise, its subsidiaries;
·	“ASE Chung Li” are to ASE (Chung Li) Inc., a company previously incorporated under the laws of the R.O.C. that merged into ASE Inc. on August 1, 2004;
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·	“ASE Electronics” are to ASE Electronics Inc., a company incorporated under the laws of the R.O.C.;
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·	“ASE Japan” are to ASE Japan Co. Ltd., a company incorporated under the laws of Japan;
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·	“ASE Korea” are to ASE (Korea) Inc., a company incorporated under the laws of the Republic of Korea;
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·	“ASE Material” are to ASE Material Inc., a company previously incorporated under the laws of the R.O.C. that merged into ASE Inc. on August 1, 2004;
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·	“ASE Shanghai” are to ASE (Shanghai) Inc., a company incorporated under the laws of the P.R.C.;
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·	“ASE Test” are to ASE Test Limited, a company incorporated under the laws of Singapore;
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·	“ASE Malaysia” are to ASE Electronics (M) Sdn. Bhd., a company incorporated under the laws of Malaysia;
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·	“ASE Test Taiwan” are to ASE Test, Inc., a company incorporated under the laws of the R.O.C.;
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·	“ASEEE” are to ASE Embedded Electronics Inc., a company incorporated under the laws of the R.O.C.;
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·	“ASEH,” the “Company,” “ASE Technology Holding,” “we,” “us” or “our” are to ASE Technology Holding Co., Ltd. and, unless the context requires otherwise, its subsidiaries;
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·	“ASEKS” are to ASE (KunShan) Inc., a company incorporated under the laws of the P.R.C.;
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·	“ASEN” are to Suzhou ASEN Semiconductors Co., Ltd., a company incorporated under the laws of the P.R.C.;
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·	“ASESH AT” are to ASE Assembly & Test (Shanghai) Limited, formerly known as Global Advanced Packaging Technology Limited, or GAPT, a company incorporated under the laws of the P.R.C.;
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·	“ASEWH” are to ASE (Weihai), Inc., a company incorporated under the laws of the P.R.C.;
·	“DECA” are to Deca Technologies Inc., a company incorporated in the Cayman Islands;
·	“Deposit Agreement” are to the deposit agreement, dated as of April 30, 2018, by and among ASE Technology Holding Co., Ltd., a company organized under the laws of the R.O.C. and previously known as “ASE Industrial Holding Co., Ltd.”, Citibank, N.A., as Depositary, and the Holders and Beneficial Owners of American Depositary Shares issued thereunder;
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·	“EEMS Test Singapore” are to EEMS Test Singapore Pte. Ltd., a company incorporated under the laws of Singapore, which changed its name to ASE Singapore II Pte. Ltd. and was subsequently merged into ASE Singapore Pte. Ltd. on January 1, 2011;
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·	“EMS” are to electronic manufacturing services;
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·	“EU” are to the European Union;
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·	“Exchange Act” are to the U.S. Securities Exchange Act of 1934, as amended;
·	“FAFG” are to Financiere AFG S.A.S., a simplified limited liability company (société par actions simplifiée) organized under the laws of France;
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·	“FSC” are to the Financial Supervisory Commission of the Republic of China;
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·	“Green Bonds” are to US$300.0 million 2.125% Guaranteed Bonds due July 24, 2017, offered by Anstock II Limited, our wholly owned subsidiary incorporated in the Cayman Islands with limited liability;
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·	“Hung Ching” are to Hung Ching Development & Construction Co. Ltd., a company incorporated under the laws of the R.O.C.;
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·	“IFRS” are to International Financial Reporting Standards, International Accounting Standards and Interpretations as issued by the International Accounting Standards Board;
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·	“ISE Shanghai” are to ISE Labs, China, Ltd., a company incorporated under the laws of the P.R.C.;
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·	“ISE Labs” are to ISE Labs, Inc., a corporation incorporated under the laws of the State of California;
·	“Initial SPIL Tender Offer” are to ASE’s offer to purchase 779,000,000 common shares (including common shares represented by outstanding American depositary shares) of SPIL through concurrent tender offers in the R.O.C. and the U.S., at a price of NT$45 per SPIL common share and NT$225 per SPIL American depositary share, commenced on August 24, 2015 and expired on September 22, 2015;
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·	“Joint Share Exchange Agreement” are to the joint share exchange agreement entered into between ASE and SPIL on June 30, 2016;
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·	“Korea” or “South Korea” are to the Republic of Korea;
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·	“Mainland Investors Regulations” are to the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors;
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·	“MOEAIC” are to Investment Commission, the R.O.C. Ministry of Economic Affairs;
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·	“NYSE” are to New York Stock Exchange;
·	“PowerASE” are to PowerASE Technology, Inc., a company incorporated under the laws of the R.O.C., which was merged into ASE Inc. in May 2012;
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·	“PPA Effects” are the earnings effects from purchase price allocation (“PPA”). PPA is the allocation of ASEH’s purchase price of SPIL into identifiable assets acquired and liabilities assumed from SPIL based on their fair values. The fair value write-up results in earnings effects over time which generates increases to ongoing depreciation and amortization in operating costs and amortization in operating expenses;
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·	“P.R.C.” are to the People’s Republic of China and excludes Taiwan, Macau and Hong Kong;
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·	“P.R.C. Regulations” are to the Regulations Governing Mainland China Investors’ Securities Investments and Futures Trading in Taiwan;
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·	“QDII” are to qualified domestic institutional investors;
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·	“Republic of China”, the “R.O.C.” and “Taiwan” are to the Republic of China, including Taiwan and certain other possessions;
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·	“R.O.C. Trading Day” are to a day when TWSE is open for business;
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·	“SEC” are to the Securities and Exchange Commission of the U.S.;
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·	“Second SPIL Tender Offer” are to ASE’s offer to purchase 770,000,000 common shares (including common shares represented by outstanding American depositary shares) of SPIL through concurrent tender offers in the R.O.C. and the U.S., at a price of NT$55 per SPIL common share and NT$275 per SPIL American depositary share, commenced on December 29, 2015 and expired on March 17, 2016 due to failure to obtain regulatory approval from the Taiwan Fair Trade Commission (“TFTC”) prior to the expiration of the Second SPIL Tender Offer;
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·	“Securities Act” are to the U.S. Securities Act of 1933, as amended;
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·	“SF” are to Siliconware Electronics (Fujian) Co., Limited, a company incorporated under the laws of the P.R.C.;
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·	“Share Exchange” is the statutory share exchange pursuant to the laws of the Republic of China, through which ASEH (i) acquired all issued shares of ASE in exchange for shares of ASEH using the share exchange ratio as described in “Item 10. Additional information—Material Contract” and (ii) acquired all issued shares of SPIL using the cash consideration as described in “Item 10. Additional information—Material Contract”;
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·	“SiP” are to system-in-package;
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·	“SPIL” or “SPIL Group” are to Siliconware Precision Industries Co., Ltd., and, unless the context requires otherwise, its subsidiaries;
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·	“SPIL Acquisition” are to ASEH’s effort to effect an acquisition of 100% of the common shares and American depositary shares of SPIL pursuant to the Joint Share Exchange Agreement;
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·	“SZ” are to Siliconware Technology (Suzhou) Limited, a company incorporated under the laws of the P.R.C.;
·	“Taiwan-IFRS” are to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the IFRS as well as related guidance translated by Accounting Research and Development Foundation and endorsed by the FSC;
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·	“Tessera” are to Tessera Technologies, Inc. and its subsidiaries;
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·	“TWSE” are to Taiwan Stock Exchange;
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·	“UGJQ” are to Universal Global Technology (Shanghai) Co., Ltd., a company incorporated under the laws of the P.R.C.;
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·	“UGKS” are to Universal Global Technology (Kunshan) Co. Ltd., a company incorporated under the laws of the P.R.C.;
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·	“UGPL” are to Chung Hong Electronics Poland Sp. z o.o., a company incorporated under the laws of Poland;
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·	“UGTW” are to Universal Global Scientific Industrial Co. Ltd., a company incorporated under the laws of the R.O.C.;
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·	“Universal Scientific Industrial” or “USI” are to Universal Scientific Industrial Co., Ltd., a company incorporated under the laws of the R.O.C.;
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·	“USIFR” are to Universal Scientific Industrial (France), a simplified limited liability company (société par actions simplifiée) organized under the laws of France;
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·	“USI Shanghai” are to Universal Scientific Industrial (Shanghai) Co., Ltd., a company incorporated under the laws of the P.R.C.;
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·	“U.S.” refers to the United States of America;
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·	“U.S. GAAP” are to accounting principles<br>generally accepted in the U.S.;
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·	“USI Group” are to USI Inc. and its subsidiaries. Prior to the 2016 USI Group Restructuring, USI Group are to USI Industrial and its subsidiaries;
·	“USI Inc.” are to USI Inc., a company incorporated under the laws of the R.O.C.;
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·	“USI Mexico” are to Universal Scientific Industrial de Mexico S.A. DE C.V., a company incorporated under the laws of Mexico;
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·	“USISZ” are to USI Electronics (Shenzhen) Co. Ltd., a company incorporated under the laws of the P.R.C.; and
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·	“Wuxi Tongzhi” are to Wuxi Tongzhi Microelectronics Co., Ltd., a company incorporated under the laws of the P.R.C.
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We publish our financial statements in New Taiwan dollars, the lawful currency of the R.O.C. In this annual report, references to “United States dollars,” “U.S. dollars” and “US$” are to the currency of the United States; references to “New Taiwan dollars,” “NT dollars” and “NT$” are to the currency of the R.O.C.; references to “RMB” are to the currency of the P.R.C.; references to “JP¥” are to the currency of Japan; references to “MYR” are to the currency of Malaysia; references to “SGD” are to the currency of the Republic of Singapore; references to “KRW” are to the currency of the Republic of Korea; references to “EUR” are to the currency of the EU; and references to “PLN” are to the currency of the Poland. Unless otherwise noted, all translations from NT dollars to U.S. dollars were made at the exchange rate as set forth in the H.10 weekly statistical release of the Federal Reserve System of the United States (the “Federal Reserve Board”) as of December 31, 2019, which was NT$29.91=US$1.00, and all translations from RMB to U.S. dollars were made at the exchange rate as set forth in the H.10 weekly statistical release of the Federal Reserve Board as of December 31, 2019, which was RMB6.9618=US$1.00. All amounts translated into U.S. dollars in this annual report are provided solely for your convenience and no representation is made that the NT dollar, RMB or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars or NT dollars/RMB, as the case may be, at any particular rate or at all. On March 13, 2020, the exchange rate between NT dollars and U.S. dollars as set forth in the H.10 weekly statistical release by the Federal Reserve Board was NT$30.13=US$1.00. On March 13, 2020, the exchange rate between RMB and U.S. dollars as set forth in the H.10 weekly statistical release by the Federal Reserve Board was RMB7.0079=US$1.00.

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SPECIALNOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this annual report. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronics industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and EMS we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the strained relationship between the R.O.C. and the P.R.C.; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, see “Item 3. Key Information—Risk Factors.”

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PARTI

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

SELECTED FINANCIAL DATA

The following tables present selected consolidated financial data for ASEH as of and for the years ended December 31, 2018 and 2019, and ASE as of and for the years ended December 31, 2015, 2016 and 2017.

The selected consolidated statements of comprehensive income data and cash flow data for the years ended December 31, 2017, 2018 and 2019, and the selected consolidated balance sheet data as of December 31, 2018 and 2019 set forth below are derived from our audited consolidated financial statements included in this annual report and should be read in conjunction with, and are qualified in their entirety by reference to, these consolidated financial statements, including the notes thereto. The selected consolidated statements of comprehensive income data and cash flow data for the years ended December 31, 2015 and 2016 and the selected consolidated balance sheet data as of December 31, 2015 and 2016 and 2017 set forth below are derived from our audited consolidated financial statements not included herein.

Our consolidated financial statements have been prepared and presented in accordance with IFRS.

Following our adoption of IFRS for SEC filing purposes, pursuant to the rule amendments adopted by the SEC that became effective on March 4, 2008, we were no longer required to reconcile our consolidated financial statements with U.S. GAAP.

	As of and for the Year Ended December 31,
IFRS	2015<br><br> <br>(Retrospectively Adjusted)^(1)^	2016<br><br> <br>(Retrospectively Adjusted)^(1)^	2017<br><br> <br>(Retrospectively Adjusted)^(1)^	2018^(2)^	2019
	NT$	NT$	NT$	NT$	NT$	US$
	(in millions, except earnings per share and per ADS data)
Statement of Comprehensive Income Data:
Operating revenues	283,302.5	274,884.1	290,441.2	371,092.4	413,182.2	13,814.2
Operating costs	(233,167.3)	(221,696.9)	(237,708.9)	(309,929.4)	(348,871.4)	(11,664.0)
Gross profit	50,135.2	53,187.2	52,732.3	61,163.0	64,310.8	2,150.2
Operating expenses	(25,250.6)	(26,526.8)	(27,513.7)	(34,515.3)	(40,784.4)	(1,363.6)
Other operating income and expenses, net	(251.5)	(800.3)	108.6	371.6	(268.6)	(9.0)
Profit from operations	24,633.1	25,860.1	25,327.2	27,019.3	23,257.8	777.6
Non-operating income, net	378.7	2,108.6	5,693.5	4,918.4	22.0	0.7
Profit before income tax	25,011.8	27,968.7	31,020.7	31,937.7	23,279.8	778.3
Income tax expense	(4,311.1)	(5,390.8)	(6,523.6)	(4,513.4)	(5,011.2)	(167.5)
Profit for the year	20,700.7	22,577.9	24,497.1	27,424.3	18,268.6	610.8
Attributable to
Owners of the Company	19,732.1	21,324.4	22,819.1	26,220.7	17,060.6	570.4
Non-controlling interests	968.6	1,253.5	1,678.0	1,203.6	1,208.0	40.4
****	20,700.7	22,577.9	24,497.1	27,424.3	18,268.6	610.8
Other comprehensive loss, net of income tax	(147.5)	(7,959.3)	(4,637.9)	(852.6)	(4,370.6)	(146.1)
Total comprehensive income for the year	20,553.2	14,618.6	19,859.2	26,571.7	13,898.0	464.7
Attributable to
Owners of the Company	19,659.1	13,957.0	18,524.1	25,620.5	13,122.2	438.7
Non-controlling interests	894.1	661.6	1,335.1	951.2	775.8	26.0
	20,553.2	14,618.6	19,859.2	26,571.7	13,898.0	464.7
Earnings per common share^(3)^:
Basic	5.16	5.57	5.59	6.18	4.01	0.13
Diluted	4.95	4.66	5.19	6.07	3.91	0.13
Dividends per common share^(4)^	2.00	1.60	1.40	2.50	2.50	0.08
Earnings per equivalent ADS^(3)(4)^:
Basic	10.31	11.13	11.18	12.35	8.02	0.27
Diluted	9.90	9.31	10.38	12.14	7.82	0.26
Number of common shares^(3)(6)^:
Basic	3,826.4	3,831.4	4,080.4	4,245.2	4,252.0	4,252.0
Diluted	4,125.0	4,142.1	4,184.6	4,251.1	4,262.8	4,262.8
Number of equivalent ADSs^(3)^:
Basic	1,913.2	1,915.7	2,040.2	2,122.6	2,126.0	2,126.0
Diluted	2,062.5	2,071.0	2,092.3	2,125.6	2,131.4	2,131.4

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	As of and for the Year Ended December 31,
IFRS	2015<br><br> <br>(Retrospectively Adjusted)^(1)^	2016<br><br> <br>(Retrospectively Adjusted)^(1)^	2017<br><br> <br>(Retrospectively Adjusted)^(1)^	2018^(2)^	2019
	NT$	NT$	NT$	NT$	NT$	US$
	(in millions, except earnings per share and per ADS data)
Balance Sheet Data:
Current assets	156,732.8	142,789.7	144,938.3	201,558.9	202,001.1	6,753.6
Investments - non-current^(7)^	38,046.6	50,853.0	49,876.8	11,545.9	15,017.4	502.1
Property, plant and equipment	149,997.1	143,880.2	135,168.4	214,592.6	232,093.3	7,759.7
Right-of-use assets^(8)^	-	-	-	-	9,792.2	327.4
Intangible assets	11,888.6	12,107.6	11,341.4	80,872.1	79,222.8	2,648.7
Long-term prepayments for lease^(8)^	2,556.2	2,237.0	8,851.3	10,764.8	-	-
Others^(8)(9)^	5,765.6	6,063.1	13,746.1	14,727.6	19,096.9	638.5
Total assets	364,986.9	357,930.6	363,922.3	534,061.9	557,223.7	18,630.0
Short-term debts^(10)^	36,983.4	20,955.5	17,962.5	43,263.5	37,339.0	1,248.4
Current portion of long-term debts^(11)^	16,843.3	16,341.1	14,441.3	10,796.2	5,995.6	200.4
Long-term debts^(12)^	66,535.1	74,354.9	44,501.5	144,336.9	177,414.1	5,931.6
Other liabilities^(12)^	78,700.1	79,437.9	85,706.8	116,637.4	123,672.7	4,134.9
Total liabilities	199,061.9	191,089.4	162,612.1	315,034.0	344,421.4	11,515.3
Share capital	79,185.7	79,568.0	87,380.8	43,217.1	43,305.3	1,447.9
Non-controlling interests	11,492.5	12,000.6	13,190.1	17,639.5	13,374.9	447.2
Equity attributable to owners of the Company	154,432.4	154,840.6	188,120.1	201,388.4	199,427.4	6,667.5
Cash Flow Data:
Capital expenditures	(30,280.1)	(26,714.2)	(24,699.2)	(41,386.4)	(56,810.2)	(1,899.4)
Depreciation and amortization	29,518.7	29,470.4	29,205.2	42,688.9	50,466.8	1,687.3
Net cash inflow from operating activities	57,548.3	52,107.9	47,430.8	51,074.7	72,303.3	2,417.4
Net cash outflow from investing activities	(63,351.4)	(43,159.5)	(16,086.2)	(129,542.3)	(54,579.1)	(1,824.8)
Net cash inflow (outflow) from financing activities	8,636.3	(21,087.0)	(19,323.4)	83,111.4	(6,498.8)	(217.3)
Segment Data:
Operating revenues:
Packaging	116,607.3	125,282.8	126,225.1	178,308.2	198,916.8	6,650.5
Testing	25,191.9	27,031.8	26,157.3	35,903.2	42,658.7	1,426.2
EMS	138,242.1	115,395.1	133,948.0	151,890.4	165,789.5	5,543.0
Others	3,261.2	7,174.4	4,110.8	4,990.6	5,817.2	194.5
Gross profit:
Packaging	30,348.5	28,524.6	28,785.3	33,669.0	34,539.0	1,154.8
Testing	9,025.7	9,980.6	9,303.6	12,289.5	14,536.9	486.0
EMS	9,433.4	11,234.8	13,562.5	14,278.8	14,491.4	484.5
Others	1,327.6	3,447.3	1,080.9	925.7	743.5	24.9

__________________

(1)	The financial data for<br>the years ended December 31, 2015, 2016 and 2017 represents the financial condition, financial performance and cash flow of ASE,<br>except for earnings per common share, earnings per equivalent ADS, number of common shares and number<br>of equivalent ADSs which have been retrospectively adjusted to reflect share exchange ratio stated in the Joint Share Exchange<br>Agreement. For details about the Joint Share Exchange Agreement, see “Item 10. Additional information—Material Contract.”
(2)	Financial data for ASEH<br>are derived from the results of: (a) ASE Technology Holding Co., Ltd. and SPIL for the period from April 30, 2018 through<br>December 31, 2018; and (b) ASE, the predecessor entity of ASEH, for the twelve months ended December 31, 2018.
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(3)	We retrospectively adjusted<br>the earnings per common share, earnings per equivalent ADS, number of common shares and number of equivalent ADSs in accordance<br>with share exchange ratio stated in the Joint Share Exchange Agreement for the years ended December 31, 2015, 2016 and 2017, which<br>differ from the results included in our annual reports on Form 20-F for the years ended December 31, 2015, 2016 and 2017. For<br>details about the Joint Share Exchange Agreement, see “Item 10. Additional information—Material Contract.”
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(4)	The denominators for diluted<br>earnings per common share and diluted earnings per equivalent ADS are calculated to account for the potential diluted factors,<br>such as employees’ compensation, the exercise of options and conversion of our convertible bonds into our common shares.
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(5)	Dividends per common share<br>issued as a cash dividend and cash dividend distribution from capital surplus.
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(6)	Represents the weighted<br>average number of shares after retroactive adjustments to give effect to the Joint Share Exchange Agreement aforementioned. Common<br>shares held by consolidated subsidiaries are classified as “treasury stock,” and are deducted from the number of common<br>shares outstanding.
---	---
(7)	Data as of December 31,<br>2015, 2016 and 2017 included available-for-sale financial assets – non-current and investments accounted for using the equity<br>method. The category as of December 31, 2018 and 2019 included financial assets at fair value through profit or loss – non-current,<br>financial assets at fair value through other comprehensive income – non-current and investments accounted for using the<br>equity method.
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(8)	Starting from 2019, upon initial application of IFRS<br>16 “Leases,” long-term prepayments for lease were reclassified to related assets, such as right-of-use assets and<br>investment properties. See note 3 to our consolidated financial statements included herein for further information regarding the<br>initial application of IFRS 16.
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(9)	Including investment properties,<br>deferred tax assets, other financial assets – non-current and other non-current assets.
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(10)	Including short-term bank<br>loans and short-term bills payable.
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(11)	Data as of December 31,<br>2015, 2016, 2017 and 2018 included current portion of bonds payable, current portion of long-term borrowings and current portion<br>of capital lease obligations. Starting from 2019, upon initial application of IFRS 16 “Leases,” the category included<br>current portion of bonds payable, current portion of long-term borrowings and lease liabilities – current. See note 3 to<br>our consolidated financial statements included herein for further information regarding the initial application of IFRS 16.
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(12)	Data as of December 31,<br>2015, 2016, 2017 and 2018 included bonds payable, long-term borrowings (consisted of bank loans and bills payable) and capital<br>lease obligations. Starting from 2019, upon initial application of IFRS 16 “Leases,” the category included bonds payable,<br>long-term borrowings (consisted of bank loans and bills payable) and lease liabilities – non-current. See note 3 to our<br>consolidated financial statements included herein for further information regarding the initial application of IFRS 16.
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(13)	Including (x) current liabilities<br>other than short-term debts and current portion of long-term debts and (y) non-current liabilities other than long-term debts.
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Exchange Rates

Fluctuations in the exchange rate between NT dollars and U.S. dollars will affect the U.S. dollar equivalent of the NT dollar price of our common shares on the TWSE and, as a result, will likely affect the market price of the ADSs. Fluctuations will also affect the U.S. dollar conversion by the depositary under our ADS deposit agreement referred to below of cash dividends paid in NT dollars on, and the NT dollar proceeds received by the depositary from any sale of, common shares represented by ADSs, in each case, according to the terms of the deposit agreement dated September 29, 2000 and as amended and supplemented from time to time among us, Citibank N.A. as depositary, and the holders and beneficial owners from time to time of the ADSs, which we refer to as the deposit agreement.

CAPITALIZATION AND INDEBTEDNESS

Not applicable.

REASON FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

RISK FACTORS

Risks Relating to the SPIL Acquisition

Due to the SPIL Acquisition, our financialand operational results of annual and interim periods may not be comparable.

ASEH was formed pursuant to the consummation of the Share Exchange on April 30, 2018. ASE is ASEH’s predecessor entity; therefore, the financial and operational results of ASEH for periods before the Share Exchange were prepared under the assumption that ASEH owned 100% shareholdings of ASE. The financial and operational results before April 30, 2018 reflect the business operations of ASE. The financial and operational results for the second quarter of 2018 reflect the business operations of ASE starting from April 1, 2018 and the business operations of ASEH starting from April 30, 2018. The financial and operational results after April 30, 2018 reflect the combined operations after the SPIL Acquisition. Therefore, the financial and operational results of annual and interim periods may not be comparable.

There may be risks associated with our currentholding company structure.

We entered into the Joint Share Exchange Agreement with SPIL in June 2016, pursuant to which ASEH, a holding company in Taiwan, holds 100% of the equity interests in both ASE and SPIL such that ASE and SPIL became wholly owned subsidiaries of ASEH. The common shares of ASE and SPIL were delisted from the TWSE. The ADSs of ASE and SPIL were delisted from NYSE and NASDAQ, respectively, and became eligible for deregistration under the Exchange Act. Subsequently, the common shares of ASEH were listed on the TWSE, and the ADSs of ASEH were listed on the NYSE. The implementation of such corporate structure restructuring plan may result in contingent risks, including increase in tax liabilities or trading discounts relating to a holding company discount that may become apparent in the future. For details about the Joint Share Exchange Agreement, see “Item 10. Additional Information—Material Contract.”

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Risks Relating to Our Business

Since we are dependent on the highly cyclicalsemiconductor and electronics industries and conditions in the markets for the end-use applications of our products, our revenuesand net income may fluctuate significantly.

Our business is affected by market conditions in the highly cyclical semiconductor and electronics industries. Most of our customers operate in this industry, and variations in order levels from our customers and service fee rates may result in volatility in our revenues and net income. From time to time, the semiconductor and electronics industries have experienced significant, and sometimes prolonged, downturns. As our business is, and will continue to be, dependent on the requirements for independent packaging, testing and EMS, any future downturn in the industry would reduce demand for our services. If we cannot reduce our costs or adjust our product mix to sufficiently offset any decline in sales volumes, our profitability will suffer, and we may incur losses.

Market conditions in the semiconductor and electronics industries depend to a large degree on conditions in the markets for the end-use applications of various products, such as communications, computing and consumer electronics products. Any deterioration of conditions in the markets for the end-use applications would reduce demand for our services, and would likely have a material adverse effect on our financial condition and results of operations. In 2019, approximately 52.5%, 14.6% and 32.9% of our operating revenues from packaging and testing were attributed to the packaging and testing of semiconductors used in communications, computing and consumer electronics/industrial/automotive/other applications, respectively. In the same year, approximately 37.4%, 11.3%, 34.6%, 11.3% and 5.4% of our operating revenues from EMS were attributed to the communications, computers and storage, consumer electronics applications, industrial and automotive applications and other, respectively. Across end-use applications, our customers face intense competition and significant shifts in demand, which could put pricing pressure on our services and may adversely affect our revenues and net income.

A reversal or slowdown in the outsourcing trendfor semiconductor packaging and testing services and EMS could adversely affect our growth prospects and profitability.

Semiconductor manufacturers that have their own in-house packaging and testing capabilities, known as integrated device manufacturers and original equipment manufacturers, have increasingly outsourced stages of the production process, including packaging, testing, electronic manufacturing and assembly, to independent companies in order to reduce costs, eliminate product complexity and meet fast-to-market requirements. In addition, the availability of advanced independent semiconductor manufacturing services has also enabled the growth of so-called “fabless” semiconductor companies that focus exclusively on design and marketing and outsource their manufacturing, packaging and testing requirements to independent companies. We cannot assure you that these manufacturers and companies will continue to outsource their packaging, testing and manufacturing requirements to third parties like us. Furthermore, during an economic downturn, these integrated device manufacturers typically rely more on their own in-house packaging and testing capabilities, therefore decreasing their need to outsource. A reversal of, or a slowdown in, this outsourcing trend could result in reduced demand for our services and adversely affect our growth prospects and profitability.

Any global economic downturn could adverselyaffect the demand for our products and services, and a protracted global economic crisis would have a material adverse effect onus.

The global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and it is facing new challenges, including a European sovereign debt crisis that began in 2011, a referendum in the United Kingdom in June 2016, in which the majority of voters voted in favor of an exit from the European Union (“Brexit”), and continuing high unemployment rates in much of the world. It is unclear what the long-term impact of the European sovereign debt crisis will be and uncertainty remains over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities of some of the world’s leading economies. On January 31, 2020, the United Kingdom ceased to be a member state of the EU. As of the date of this filing until December 31, 2020, the EU and the United Kingdom will negotiate the terms of their future relationship. It remains unclear how the Brexit would affect the fiscal, monetary and regulatory landscape within the United Kingdom, the EU and globally. Any economic downturn or crisis may cause our customers to cancel or reduce planned expenditures for our products and services. Any uncertainty or significant volatility in global economic conditions may also make it difficult for our customers to accurately forecast and plan future business activities and may have a material adverse effect on us.

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If we are unable to compete favorably in thehighly competitive markets of semiconductor packaging and testing and EMS, our revenues and net income may decrease.

The markets of semiconductor packaging and testing and EMS are very competitive. We face competition from a number of sources, including other independent semiconductor packaging and testing companies, integrated device manufacturers, and other EMS providers with large-scale manufacturing capabilities who can quickly react to market changes. We believe that the principal competitive factors in our industry are:

·	technological expertise;
·	the ability to provide total solutions to our customers, including integrated design, manufacturing, packaging and testing and EMS;
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·	ability to offer interconnect technologies at an optimal scale for our businesses;
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·	range of package types and testing platforms available;
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·	the ability to work closely with our customers at the product development stage;
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·	responsiveness and flexibility;
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·	fast-to-market product development;
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·	capacity;
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·	diversity in facility locations;
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·	production yield; and
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·	price.
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We face increasing competition, as most of our customers obtain services from more than one source. Rapid technological advances and aggressive pricing strategies by our competitors may continue to increase competition. Our ability to compete depends on factors both within and outside of our control and may be constrained by the distinct characteristics and production requirements of individual products. We cannot assure you that we will be able to continue to improve production efficiency and maintain reasonable profit for all of our products.

In addition, some of our competitors may have superior financial, marketing, manufacturing, research and development and technological resources than we do. For example, the central government of the P.R.C. as well as provincial and municipal governments have provided various incentives to domestic companies in the semiconductor industry, including major semiconductor testing and packaging providers, such as Jiangsu Changjiang Electronics Technology Co., Ltd. Similarly, our customers may face competition from their competitors in the P.R.C., and such competitors may also receive significant subsidies from the P.R.C. government. As we are downstream suppliers, the impact of such government policies on competition and price pressure of our customers may negatively impact our own business. Increasing competition may lead to declines in product prices and profitability and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

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Our profitability depends on our ability torespond to rapid technological changes in the semiconductor industry.

The semiconductor industry is characterized by rapid increases in the diversity and complexity of semiconductors. As a result, we expect that we will need to constantly offer more sophisticated packaging and testing technologies and processes in order to respond to competitive industry conditions and customer requirements. We have successfully combined our packaging, testing and materials technologies with the expertise of EMS at the systems level to develop our SiP business. We also entered into multiple technology license agreements with DECA to advance our fan-out technology. There is, however, no assurance that our development efforts for our SiP business or the use of licensed technology to further advance our fan-out technology will be successful.

We continue to develop new products in anticipation of future demand. However, there is no assurance that the launch of any new product will be successful or that whether we will be able to produce sufficient quantities of these products to meet market demand. If we fail to develop, or obtain access to, advances in packaging or testing technologies or processes, we may become less competitive and less profitable. In addition, advances in technology typically lead to declining average selling prices for semiconductors packaged or tested with older technologies or processes. As a result, if we cannot reduce the costs associated with our services, the profitability of a given service and our overall profitability may decrease over time.

Our operating results are subject to significantfluctuations, which could adversely affect the market value of your investment.

Our operating results have varied significantly from period to period and may continue to vary in the future. Downward fluctuations in our operating results may result in decreases in the market price of our common shares and the ADSs. Among the more important factors affecting our quarterly and annual operating results are the following:

·	changes in general economic and business conditions, particularly the cyclical nature of the semiconductor and electronics industries and the markets served by our customers;
·	our ability to quickly adjust to unanticipated declines or shortfalls in demand and market prices;
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·	changes in prices for our products or services;
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·	volume of orders relative to our packaging, testing and manufacturing capacity;
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·	changes in costs and availability of raw materials, equipment and labor;
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·	our ability to obtain or develop substitute raw materials with lower cost;
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·	our ability to successfully develop or market new products or services;
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·	our ability to successfully manage product mix in response to changes in market demand and differences in margin associated with different products;
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·	timing of capital expenditures in anticipation of future orders;
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·	our ability to acquire or design and produce cost-competitive interconnect materials, and provide integrated solutions for EMS;
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·	fluctuations in the exchange rate between the NT dollar or RMB and foreign currencies, especially the U.S. dollar; and
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·	typhoons, earthquakes, drought, epidemics, tsunami and other natural disasters, as well as industrial and other incidents such as fires and power outages.
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Due to the factors listed above, our future operating results or growth rates may be below the expectations of research analysts and investors. If so, the market price of our common shares and the ADSs, and thus the market value of your investment, may fall.

Due to our high percentage of fixed costs,we may be unable to maintain our gross margin at past levels if we are unable to achieve relatively high capacity utilization rates.

Our operations, in particular our testing operations, are characterized by relatively high fixed costs. We expect to continue to incur substantial depreciation and other expenses in connection with our acquisitions of equipment and facilities. Our profitability depends not only on the pricing levels for our services or products, but also on utilization rates for our machinery and equipment, commonly referred to as “capacity utilization rates.” In particular, increases or decreases in our capacity utilization rates can significantly affect gross margins since the unit cost generally decreases as fixed costs are allocated over a larger number of units. In periods of low demand, we experience relatively low capacity utilization rates in our operations, which leads to reduced margins. We cannot assure you that we will be able to maintain or surpass our past gross margin levels if we cannot consistently achieve or maintain relatively high capacity utilization rates.

If we are unable to manage our expansion orinvestments effectively, our growth prospects may be limited and our future profitability and core business operations may be adverselyaffected.

We have significantly expanded our operations through acquisitions and joint ventures in recent years. For our expansion or investments, see “Item 4. Information on the Company—Business Overview—Strategy—Strategically Expand and Streamline Production Capacity.”

While we expect that we will continue to expand our operations in the future to broaden our product offerings, rapid expansion may strain our managerial, technical, financial, operational and other resources. As a result of our expansion, we have implemented and will continue to implement additional operational and financial controls and hire and train additional personnel. Any failure to manage our growth effectively could lead to inefficiencies and redundancies and result in reduced growth prospects and profitability.

In addition, we have made several investments in the real estate development businesses in China. The P.R.C. property market is volatile and may experience undersupply or oversupply and property price fluctuations. The central and local governments frequently adjust monetary and other fiscal policies to prevent and curtail the overheating of the economy. Such policies may lead to changes in market conditions, including price instability and imbalance of supply and demand in respect of office, residential, retail, entertainment, cultural and intellectual properties. Our exposure to risks related to real estate development may also increase over time as a result of our expansion into such a business. We may continue to make investments in this area in the future and our diversification in this industry may put pressure on our managerial, financial, operational and other resources. There can be no assurance that our investments in such a business will yield the anticipated returns and that our expansion into such a business, including the resulting diversion of management’s attention, will not adversely affect our core business operations.

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The financial performance of our equity methodinvestments could adversely affect our results of operations.

As part of our business strategy, we have and may continue to pursue acquisitions of businesses and assets, strategic alliances and joint ventures. We currently have equity investments in certain entities and the accounting treatment applied for these investments varies depending on a number of factors, including, but not limited to, our percentage ownership,our percentage of membership of investee’s board and the level of influence we have over the relevant entity. Any losses experienced by these entities could adversely affect our results of operations and the value of our investment. In addition, if these entities were to fail and cease operations, we may lose the entire value of our investment and the stream of any shared profits.

There can be no assurance that we will be able to maintain or enhance the value or performance of our investee companies or that we will achieve the returns or benefits sought from such investments. If our interests differ from those of other investors in our investee companies, we may not be able to enjoy synergies with the investee and it may adversely affect our financial results or financial condition.

We recognized impairment charges of nil, NT$521.0 million and NT$400.2 million (US$13.4 million) in 2017, 2018 and 2019, respectively, in our investments under the equity method. See note 14 to our consolidated financial statements included in this annual report and see “Item 5. Operating and Financial Review and Prospects—Operating Results and Trend Information—Critical Accounting Policies and Estimates—Valuation of Investments.”

The packaging and testing businesses are capitalintensive. If we cannot obtain additional capital when we need it, our growth prospects and future profitability may be adverselyaffected.

The packaging and testing business is capital intensive. We will need capital to fund the expansion of our facilities as well as fund our research and development activities in order to remain competitive. We believe that our existing cash, marketable securities, expected cash flow from operations and existing credit lines under our loan facilities will be sufficient to meet our capital expenditures, working capital, cash obligations under our existing debt and lease arrangements, and other requirements for at least the next twelve months. However, future capacity expansions or market or other developments may cause us to require additional funds. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including:

·	our future financial condition, results of operations and cash flows;
·	general market conditions for financing activities by semiconductor or electronics companies; and
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·	economic, political and other conditions in Taiwan and elsewhere.
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If we are unable to obtain funding in a timely manner or on acceptable terms, our results of operations and financial conditions may be materially and adversely affected.

Restrictive covenants and broad default provisionsin our existing debt agreements may materially restrict our operations as well as adversely affect our liquidity, financial conditionand results of operations.

We are a party to numerous loans and other agreements relating to the incurrence of debt, which may include restrictive covenants and broad default provisions. In general, covenants in the agreements governing our existing debt, and debt we may incur in the future, may materially restrict our operations, including our ability to incur debt, pay dividends, make certain investments and payments, other than in connection with restructurings of consolidated entities, and encumber or dispose of assets. In addition, any global economic deterioration or ineffective expansion may cause us to incur significant net losses or force us to assume considerable liabilities. We cannot assure you that we will be able to remain in compliance with our financial covenants, which, as a result, may lead to a default. This may thereby restrict our ability to access unutilized credit facilities or the global capital markets to meet our liquidity needs. Furthermore, a default under any agreement by us or our subsidiaries may trigger cross-defaults under our other agreements. In the event of default, we may not be able to cure the default or obtain a waiver on a timely basis. An event of default under any agreement timely governing our existing or future debt, if not cured or waived, could have a material adverse effect on our liquidity, financial condition and results of operations.

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We have on occasion failed to comply with certain financial covenants in some of our loan agreements. Such non-compliance may also have, through broadly worded cross-default provisions, resulted in default under some of the agreements governing our other existing debt. For example, we failed to comply with certain financial covenants in some of our loan agreements as a result of our acquisition of the controlling interest of Universal Scientific Industrial in 2010, for which we have timely obtained waivers from our counterparties. With respect to our syndicated loan agreement for financing the SPIL Acquisition, the banks agreed to exempt debt/equity ratio from assessment before June 30, 2018. If we are unable to timely rectify any possible non-compliance under such loan agreements or obtain applicable waivers or amendments, we would breach our financial covenants and our financial condition would be adversely affected. As of December 31, 2019, we were not in breach of any of the financial covenants under our existing loan agreements, although we cannot provide any assurance that we will not breach any of such financial covenants in the future.

We depend on select personnel and could beaffected by the loss of their services.

We depend on the continued service of our executive officers and skilled technical personnel. Our business could suffer if we lose the services of any of these personnel and cannot adequately replace them. Although some of these management personnel have entered into employment agreements with us, they may nevertheless leave before the expiration of these agreements. We are not insured against the loss of the services of any of our personnel. In addition, these proceedings may divert these and other employees’ attention from our business operations.

In addition, we may be required to increase substantially the number of these employees in connection with our expansion plans, and there is intense competition for their services in this industry. We may not be able to either retain our present personnel or attract additional qualified personnel as and when needed. In addition, we may need to increase employee compensation levels in order to attract and retain our existing officers and employees and the additional personnel that we expect to require. Furthermore, a portion of the workforce at our facilities in Taiwan are foreign workers employed under work permits, which are subject to government regulations on renewal and other terms. Consequently, our business could also suffer if the Taiwan regulations relating to the employment of foreign workers were to become significantly more restrictive or if we are otherwise unable to attract or retain these workers at a reasonable cost.

The ongoing proceeding involving Dr. Tien Wumay have an adverse impact on our business and cause our common shares and ADS price to decline.

Dr. Tien Wu, ASEH’s director and chief operating officer, was involved in a criminal proceeding brought by the Taiwan Kaohsiung District Prosecutors Office. The indictment alleged that Dr. Tien Wu violated Article 157-1 of the R.O.C. Securities and Exchange Act for insider trading activities involving SPIL common shares conducted during the period when the Initial SPIL Tender Offers, the Second SPIL Tender Offers and negotiations of the memorandum of understanding in relation to SPIL Acquisition took place. Dr. Tien Wu was accused of tipping off a friend about the aforementioned tender offers and negotiation ahead of the public announcements. After an investigation that spanned over two years, the Taiwan Kaohsiung District Court pronounced its judgment on February 5, 2020 that Dr. Tien Wu is found to be NOT guilty. On March 20, 2020, the Taiwan Kaohsiung District Prosecutors Office filed an appeal against the February 5, 2020 judgement. This matter will continue to be litigated in the Taiwan High Court Kaohsiung Branch Court. ASEH has reinforced internal control measures after this incident and no ASEH directors are expected to become party to any current or future litigation related to Dr. Tien Wu.

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On October 26, 2018, the R.O.C. Securities and Futures Investors Protection Center filed a civil lawsuit against Dr. Tien Wu and ASEH, requesting the court to remove him from ASEH’s board based on Article 10-1 of the Securities Investor and Futures Trader Protection Act. No judicial conclusion has been reached yet for this proceeding. There is no assurance that this proceeding or the further scrutiny from regulators will not generate publicity or media attention. Any negative publicity in connection to this legal proceeding may adversely affect ASEH’s brand and reputation and result in a material adverse impact on their business operations and prospects. As ASEH depends on the continued service of its executive officers and is not insured against the loss of service of any of their personnel, ASEH’s business operations could suffer if it loses the service of any executive officers, including Dr. Tien Wu, and cannot adequately replace them.

If we are unable to obtain additional packagingand testing equipment or facilities in a timely manner and at a reasonable cost, our competitiveness and future profitability maybe adversely affected.

The semiconductor packaging and testing businesses are capital intensive and require significant investment in expensive equipment manufactured by a limited number of suppliers. The market for semiconductor packaging and testing equipment is characterized, from time to time, by intense demand, limited supply and long delivery cycles. Our operations and expansion plans depend on our ability to obtain a significant amount of such equipment from a limited number of suppliers. From time to time we have also leased certain equipment. We have no binding supply agreements with any of our suppliers and acquire our packaging and testing equipment on a purchase order basis, which exposes us to changing market conditions and other substantial risks. For example, shortages of capital equipment could result in an increase in the price of equipment and longer delivery times. Semiconductor packaging and testing also require us to operate sizeable facilities. If we are unable to obtain equipment or facilities in a timely manner, we may be unable to fulfill our customers’ orders, which could adversely affect our growth prospects as well as financial condition and results of operations. See “Item 4. Information on the Company—Business Overview—Equipment.”

Fluctuations in exchange rates could resultin foreign exchange losses.

Currently, the majority of our revenues are denominated in U.S. dollars, with a portion denominated in NT dollars and Japanese yen. Our operating costs and operating expenses, on the other hand, are incurred in several currencies, primarily NT dollars, U.S. dollars, RMB, Japanese yen, Korean won, as well as, to a lesser extent, Singapore dollars and Malaysian ringgit and Polish zloty. In addition, a substantial portion of our capital expenditures, primarily for the purchase of packaging and testing equipment, has been, and is expected to continue to be, denominated in U.S. dollars, with the remainder in Japanese yen. Fluctuations in exchange rates, primarily among the U.S. dollar and Japanese yen against the NT dollar and RMB, will affect our costs and operating margins. In addition, these fluctuations could result in exchange losses and increased costs in NT dollar and other local currency terms. Despite hedging and mitigating techniques implemented by us, fluctuations in exchange rates have affected, and may continue to affect, our financial condition and results of operations. We recognized net foreign exchange gains of NT$3,502.6 million in 2017, net foreign exchange losses of NT$1,015.6 million in 2018 and net foreign exchange gains of NT$1,125.7 million (US$37.6 million) in 2019. We cannot assure you that we will achieve foreign exchange gains in the future. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Market Risk—Foreign Currency Exchange Rate Risk.”

The loss of a large customer or disruptionof our strategic alliance or other commercial arrangements with semiconductor foundries and providers of other complementary semiconductormanufacturing services may result in a decline in our revenues and profitability.

Although we have a large customer base, we have derived and expect to continue to derive a large portion of our revenues from a small group of customers during any particular period due in part to the concentration of market share in the semiconductor and electronics industries. Our five largest customers together accounted for approximately 46.4%, 46.2% and 51.1% of our operating revenues in 2017, 2018 and 2019, respectively. One customer accounted for more than 10.0% of our operating revenues in 2017 and 2018. For our operating revenues in 2019, two of our customers individually accounted for more than 10.0% of our operating revenues. The demand for our services from a customer is directly dependent upon that customer’s level of business activity, which could vary significantly from year to year. Our key customers typically operate in the cyclical semiconductor and electronic business and, in the past, have varied, and may vary in the future, order levels significantly from period to period. Some of these companies are relatively small, have limited operating histories and financial resources, and are highly exposed to the cyclicality of the industry. We cannot assure you that these customers or any other customers will continue to place orders with us in the future at the same levels as in past periods. The loss of one or more of our significant customers, or reduced orders by any one of them, and our inability to replace these customers or make up for such orders, could adversely affect our revenues and profitability. In addition, we have in the past reduced, and may in the future be requested to reduce, our prices to limit the level of order cancellations. Any price reduction would likely reduce our margins and profitability.

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Since 1997, we have maintained a strategic alliance with Taiwan Semiconductor Manufacturing Company Limited, or TSMC, one of the world’s largest dedicated semiconductor foundries. TSMC designates us as their nonexclusive preferred provider of packaging and testing services for semiconductors manufactured by TSMC. In May 2015, we entered into a joint venture agreement with TDK Corporation to invest in ASEEE and in April 2019 we obtained control over ASEEE to further expand our business in embedded substrates. In February 2018, to expand our SiP business, we entered into a joint venture agreement with Qualcomm Incorporated to form Semicondutores Avancados do Brasil S.A. Such strategic alliances, as well as our other commercial arrangements with providers of other complementary semiconductor manufacturing services, enable us to offer total semiconductor manufacturing solutions to our customers. These strategic alliances and other commercial arrangements may not achieve their anticipated commercial benefits and may be terminated at any time. Any failure in successfully maintaining such alliances, any termination of such alliances or our failure to enter into substantially similar strategic alliances or commercial arrangements may adversely affect our competitiveness and our revenues and profitability.

We rely on a limited number of key customersin certain products for our revenues, and our results of operations may be adversely affected by a reduction of business from ourkey customers.

Our results of operations also depend on the performance and business of our key customers. Accordingly, risks that could seriously harm our key customers could harm us as well, including:

·	loss of market share for our key customers’ products;
·	recession in our key customers’ markets;
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·	failure of their products to gain wide-spread commercial acceptance; and
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·	our key customers’ inability to manage their operations efficiently and effectively.
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The launch and market acceptance of our individual key customers’ products could significantly impact our product and customer mix, resulting in significant volatility in the demand for the solutions we offer and our results of operations. It is also possible that a key customer’s market share with respect to its product may decline as its competitors introduce new products, which could adversely affect our results of operations, particularly if we are unable to sell our solutions to such competitors. Furthermore, sales of our key customers’ products are subject to seasonal fluctuation.

Our revenues and profitability may declineif we are unable to obtain adequate supplies of raw materials in a timely manner and at a reasonable price.

Our operations, such as packaging operations, substrate operations and EMS, require that we obtain adequate supplies of raw materials on a timely basis. Shortages in the supply of raw materials have in the past resulted in occasional price increases and delivery delays. In addition, the operations of some of our suppliers are vulnerable to natural disasters, such as earthquakes and typhoons, the occurrences of which may deteriorate and prolong the shortage or increase the uncertainty of the supply of raw materials. We experienced a disruption to the supply of raw materials from Japan for about three to four weeks due to the fear of radiation contamination and the reduction or postponement in production by some of our Japanese suppliers. Although the purchase of supplies from Japan has been restored to the previous level, we cannot assure you that we will not suffer in the long term from the impact of the earthquake and the tsunami. In addition, further earthquakes, aftershocks thereof or other disasters in Japan or other regions in which we operate may cause a decline in our sales. Any of the above events or developments may have a material adverse effect on our business, results of operations and financial condition.

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Raw materials such as IC substrates are prone to supply shortages since such materials are produced by a limited number of suppliers, such as Kinsus Interconnect Technology Corporation, Nan Ya Printed Circuit Board Corporation, SIMMTECH Co. Ltd., and Unimicron Technology Corporation. Our operations conducted through our wholly owned subsidiaries ASE Electronics and ASE Shanghai have improved our ability to obtain IC substrates on a timely basis and at a reasonable cost. In 2019, our interconnect materials operations supplied approximately 10.0% of our consolidated substrate requirements by value. We do not expect that our internal interconnect materials operations will be able to meet all of our interconnect materials requirements. Consequently, we will remain dependent on market supply and demand for our raw materials. In addition, recent fluctuations in prices of precious metals, such as gold, have also affected the price at which we have been able to purchase the principal raw materials we use in our packaging processes. We cannot guarantee that we will not experience shortages in the near future or that we will be able to obtain adequate supplies of raw materials in a timely manner or at a reasonable price. Our revenues and net income could decline if we are unable to obtain adequate supplies of high quality raw materials in a timely manner or if there are significant increases in the costs of raw materials that we cannot pass on to our customers.

Regulations related to conflict minerals couldadversely affect our business, financial condition and results of operations.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as conflict minerals, which are defined as cassiterite, columbite-tantalite, gold, wolframite or their derivatives and other minerals determined by the U.S. government to be financing conflict in the Democratic Republic of Congo and adjoining countries. As a result, in August 2012 the SEC adopted annual disclosure and reporting requirements for those companies who use conflict minerals in their products. These rules require companies that manufacture or contract to manufacture products for which conflict minerals are necessary to the functionality or production to begin scrutinizing the origin of conflict minerals in their products starting from January 1, 2013, and file a new form, Form SD, containing the conflict minerals disclosure by May 31 for the prior calendar year, beginning May 31, 2014. We filed a specialized disclosure report on Form SD for the years ended December 31, 2013, 2014, 2015, 2016, 2017 and 2018, on May 30, 2014, June 1, 2015, May 31, 2016, May 31, 2017, April 27, 2018 and May 31, 2019 respectively. Pursuant to the SEC rules governing conflict minerals disclosures, we have engaged an independent auditing firm to conduct audits on our due diligence framework to provide a private sector report for our specialized disclosure report on Form SD for the years ended December 31, 2014, 2015, 2016, 2017, 2018 and 2019. As a result, there will be costs associated with complying with these disclosure requirements, including costs for diligence to determine the sources of conflict minerals used in our products and other potential changes to products, processes or sources of supply as a consequence of such verification activities. The implementation of these rules could adversely affect the sourcing, supply and pricing of materials used in our products.

As there may be only a limited number of suppliers offering “conflict free” minerals, we cannot be sure that we will be able to obtain necessary “conflict free” minerals from such suppliers in sufficient quantities or at competitive prices. Also, we may face adverse effects to our reputation if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals used in our products through the procedures we may implement.

System security risks, data protection breachesor unexpected system outage or failures could harm our business, financial condition and results of operations.

We rely on the efficient and uninterrupted operation of complex information technology applications, systems and networks to operate our business. Our systems are vulnerable to damage or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, cyber-attacks, computer viruses, computer denial of service attacks or other attempts to harm our system, and similar events. In recent years, the risks that we face from cyber attacks have increased significantly. Some of these attacks may originate from well-organized, highly skilled organizations. Although there have not been reported major cyber attacks against our systems in recent years, any such attack or system or network disruption could result in a loss of our intellectual property, the release of commercially sensitive information, customer or employee personal data. Failures to protect the privacy of customer and employee confidential data against breaches of network security could result in damage to our reputation.

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Furthermore, some of our data centers are located in areas with a high risk of major earthquakes. Our data centers are also subject to break-ins, sabotage and intentional acts of vandalism, and to potential disruptions if the operators of these facilities have financial difficulties. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, a decision to close a facility we are using without adequate notice for financial reasons or other unanticipated problems at our data centers could result in loss of production capabilities and lengthy interruptions in our service. Any damage to or failure of our systems could result in interruptions in our service. Interruptions in our service could materially and adversely affect our business, financial condition and results of operations.

A cybersecurity breach could interfere withour business operations, compromise confidential information, adversely impact our reputation and operating results and potentiallylead to litigation and other liabilities.

Cybersecurity threats continue to expand and evolve globally. Our cybersecurity response system includes a risk notification and assessment scheme that categorizes and implements different responses to address different levels of cybersecurity risk. In addition, we have implemented risk management programs at our major manufacturing sites and have included cybersecurity threats as an integral subject in these programs. While we actively take measures to manage information technology security risks, there can be no assurance that these measures will be sufficient to mitigate all potential risks to our system, networks and data.

Although our on-site safety teams conduct periodic meetings to update our cybersecurity protocols and cybersecurity is a key part of our risk management program that our management regularly reviews, a failure or breach in security could expose us and our customers, dealers and suppliers to risks of unauthorized access to information technology systems, misuse and compromise of confidential information, manipulation and destruction of data, which could potentially result in disruption of our business operations and adversely affect our reputation, competitive position, financial condition and results of operations. Security breaches could also result in litigation with third parties, regulatory actions and higher costs of implementing additional data protection measures.

Negative publicity may adversely affect ourbrand and reputation, which may result in a material adverse impact on our business, results of operations and business prospectsand cause fluctuations in the price of our common shares and ADSs.

Any negative publicity may damage our brand and reputation, harm our ability to attract and retain customers and have a material adverse impact on our results of operations as well as cause fluctuations in the trading price of our common shares and ADSs. In addition, any change in policy or the direction in which we carry out our corporate social responsibility or corporate sustainability activities may also have an adverse effect on our business reputation. In recent years, we have experienced and may continue to experience negative publicity in connection with administrative penalties and criminal charges related to alleged violations of environmental regulations and laws. For further details, see “Item 4. Information on the Company—Business Overview—Environmental Matters,” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.”

Any environmental claims or failure to complywith any present or future environmental regulations, as well as any fire or other industrial accident, may require us to spendadditional funds and may materially and adversely affect our financial condition and results of operations.

We are subject to various laws and regulations relating to the use, storage, discharge and disposal of chemical by-products of, and water used in, our packaging and interconnect materials production processes, and the emission of volatile organic compounds and the discharge and disposal of solid industrial wastes from EMS operations. In recent years, we have been subject to environmental administrative actions and judicial proceedings related to certain wastewater discharge incidents that occurred at our facilities. As a result of these proceedings, we have been subject to monetary fines as well as sanctions, including orders to suspend or limit our operations and criminal charges against us. For further details, see “Item 4. Information on the Company—Business Overview—Environmental Matters,” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.”

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Climate change, water shortage and other environmentalconcerns could negatively affect our business and financial planning.

There is concern that without substantial remediation, increasing man-made climate change could adversely affect the global economy irreversibly. A modest change in average global temperatures would result in increased coastal flooding, altered precipitation patterns and increased risk of extinction for the world’s species. Extreme weather conditions, such as droughts and floods, that occur due to climate change can also impact our business operations and financial performance. For example, since our business operations depend on adequate supplies of water, an extended drought may affect our ability to obtain sufficient amounts of water and threaten our production capability.

We believe that we should play our part in the mitigation of man-made climate change. For instance, we have incorporated green design standards and building concepts into the construction of our facilities. Since 2014, we have been committed to constructing all of our new Taiwan manufacturing facilities and office buildings while following the most up-to-date green building standards, such as the US Leadership in Energy and Environmental Design and the Taiwan Ecology, Energy Saving, Waste Reduction and Health standards. In addition, when developing our business strategies, we strive to reflect industry leading awareness of environmental protection and low-carbon transition planning. In 2017, we implemented a top-down enterprise risk-management (ERM) system and created a Task Force to provide a Climate-related Financial Disclosures framework. These actions help to provide our management team with the tools necessary to identify, assess and prevent environment-related corporate risks.

Public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation and raw material costs. Scientific examination of, political attention to and rules and regulations on issues surrounding the existence and extent of man-made climate change may result in an increase in the cost of production due to increase in the prices of energy and introduction of energy or carbon tax. Various regulatory developments have been introduced that focus on restricting or managing emissions of carbon dioxide, methane and other greenhouse gases. Enterprises may need to purchase at higher costs emission credits, new equipment or raw materials with lower carbon footprints. These developments and further legislation that is likely to be enacted could negatively affect our operations and financial performance. Also, changes in environmental regulations, such as those that concern the use of perfluorinated compounds (known commonly as PFC’s), could increase our production costs, which may adversely affect our results of operation and financial results.

As freshwater supply is key to our business operations, we have established a sustainable water recycling system and implemented water management strategies to identify and prevent water-shortage related risks. Our water management program is based on the core ideas of reduce, reuse and recycle. We reference the Aqueduct Water Risk data from the World Resources Institute to calculate the level of water risk at each site based on the product of various risk factors. We continuously seek opportunities to improve our operational resilience through effective water use management.

We may be subject to intellectual propertyrights disputes, which could materially adversely affect our business.

Our ability to compete successfully and achieve future growth depends, in part, on our ability to develop and protect our proprietary technologies and to secure on commercially acceptable terms certain technologies that we do not own. We cannot assure you that we will be able to independently develop, obtain patents for, protect or secure from any third party, the technologies required. Our failure to successfully obtain such technology may seriously harm our competitive position.

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Our ability to compete successfully also depends, in part, on our ability to operate without infringing the proprietary rights of others. We have no means of knowing what patent applications have been filed in the United States or elsewhere until they are granted or published. In particular, the semiconductor and electronics industries are characterized by frequent litigation regarding patent and other intellectual property rights. It is common for patent owners to assert their patents against semiconductor manufacturers. We have received from time to time communication from third parties asserting patents that cover certain of our technologies and alleging infringement of intellectual property rights of others, and we may continue receiving such communication in the future. In the event that any third party makes a valid claim against us or against our customers, we could be required to:

·	seek to acquire licenses to the infringed technology which may not be available on commercially reasonable terms, if at all;
·	discontinue using certain process technologies, which could cause us to stop manufacturing certain semiconductors;
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·	pay substantial monetary damages; and/or
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·	seek to develop non-infringing technologies, which may not be feasible.
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Any one of these developments could place substantial financial and administrative burden on us and hinder our business. In February 2006, Tessera filed a suit against ASE Inc., ASE (U.S.) Inc. and others alleging patent infringement. In February 2014, ASE Inc. and ASE (U.S.) Inc. reached a term sheet agreement with Tessera to fully resolve the remaining legal proceedings between each other, under which ASE Inc. and ASE (U.S.) Inc. would pay a total of US$30.0 million to Tessera and both Tessera and ASE Inc. and ASE (U.S.) Inc. would dismiss all pending claims against each other. The final settlement agreement was entered into among the parties in October 2014 and the final settlement amount was reduced to US$27.0 million. In October 2014, the United States District Court for the Northern District of California dismissed all claims between Tessera and ASE Inc. and ASE (U.S.) Inc.. ASE Inc. and ASE (U.S.) Inc. have fully paid the settlement amount in January 2015. In connection to the 2016 patent dispute between Broadcom and Tessera, SPIL and Broadcom settled the dispute for a total of US$5.0 million in February 2020. This settlement amount was recognized in our consolidated financial statements for the year end December 31, 2019. See “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings” for more information about the Broadcom Patent Dispute.

Any litigation, whether as plaintiff or defendant and regardless of the outcome, is costly and diverts company resources. Any of the foregoing could harm our competitive position and render us unable to provide some of our services operations.

Our major shareholders may take actions thatare not in, or may conflict with, our public shareholders’ best interest.

Members of the Chang family own, directly or indirectly, a significant interest in our outstanding common shares. See “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders.” Accordingly, these shareholders will continue to have the ability to exercise a significant influence over our business, including matters relating to:

·	our management and policies;
·	the timing and distribution of dividends; and
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·	the election of our directors.
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Members of the Chang family may take actions that you may not agree with or that are not in our or our public shareholders’ best interests.

We are an R.O.C. company and, because the rightsof shareholders under R.O.C. law differ from those under U.S. law and the laws of certain other countries, you may have difficultyprotecting your shareholder rights.

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Our corporate affairs are governed by our Articles of Incorporation and by the laws governing corporations incorporated in the R.O.C. The rights of shareholders and the responsibilities of management and the members of the board of directors under R.O.C. law are different from those applicable to a corporation incorporated in the United States and certain other countries. As a result, public shareholders of R.O.C. companies may have more difficulty in protecting their interests in connection with actions taken by management or members of the board of directors than they would as public shareholders of a corporation in the United States or certain other countries.

We have made investments in, and are exploringthe possibility of expanding our businesses and operations to, or making additional investments in, the P.R.C., which may exposeus to additional political, regulatory, economic and foreign investment risks.

We currently maintain packaging and testing facilities and EMS sites in the P.R.C. We also made substantial investments in P.R.C. real estate development through our subsidiaries in the P.R.C. Under P.R.C. laws and regulations, foreign investment projects, such as our subsidiaries, must obtain certain approvals from the relevant governmental authorities in the provinces or special economic zones in which they are located and, in some circumstances, from the relevant authorities in the P.R.C. central government. Foreign investment projects must also comply with certain regulatory requirements. However, P.R.C. laws and regulations are often subject to varying interpretations and means of enforcement, and additional approvals from the relevant governmental authorities may be required for the operations of our P.R.C. subsidiaries. If required, we cannot assure you that we will be able to obtain these approvals in a timely manner, if at all. Because the P.R.C. government holds significant discretion in determining matters relating to foreign investment, we cannot assure you that the relevant governmental authorities will not take action that is materially adverse to our P.R.C. operations.

In addition, the P.R.C. stock market is subject to extreme price and volume fluctuations. We are the controlling shareholder of USI Shanghai, which is an entity currently listed on the Shanghai Stock Exchange. The P.R.C. securities markets have recently experienced, and may experience in the future, significant volatility. Any volatility may have a significant effect on USI Shanghai’s share price and may indirectly affect the market price of our common shares and ADSs.

Our global manufacturing and sales activitiessubject us to risks associated with legal, political, economic or other conditions or developments in various jurisdictions, includingin particular the R.O.C. and the P.R.C., which could negatively affect our business and financial status and therefore the marketvalue of your investment.

Our principal executive office and our principal production facilities are located in the R.O.C., and a substantial majority of our net revenues are derived from our operations in the R.O.C. and the P.R.C. In addition, we have operations worldwide and a significant percentage of our revenue comes from sales to locations outside the R.O.C. or the P.R.C. Operating in the R.O.C., P.R.C. and other overseas locations exposes us to changes in policies and laws, including environmental regulations, as well as the general political and economic conditions, security risks, health conditions and possible disruptions in transportation networks, in the various countries in which we operate, which could result in an adverse effect on our business operations in such countries. If any of our global operations are affected by the legal, political, economic or other conditions in the jurisdiction we operate, our results of operations as well as market price and the liquidity of our ADSs and common shares may be materially and adversely affected.

Any impairment charges may have a materialadverse effect on our net income.

Under IFRS, we are required to evaluate our assets, such as property, plant and equipment, intangible assets, including goodwill, and investments in financial instruments, for possible impairment at least annually or whenever there is an indication of impairment. If certain criteria are met, we are required to record an impairment charge.

With respect to assets, we recognized impairment charges of NT$764.9 million, NT$654.1 million and NT$601.2 million (US$20.1 million) in 2017, 2018 and 2019, respectively, primarily as a result of impairment charges related to property, plant and equipment, equity-method investments and goodwill. See “Item 5. Operating and Financial Review and Prospects—Operating Results and Trend Information—Critical Accounting Policies and Estimates—Impairment of Tangible and Intangible Assets Other Than Goodwill,” “Item 5. Operating and Financial Review and Prospects—Operating Results and Trend Information—Critical Accounting Policies and Estimates—Valuation of Investments” and “Item 5. Operating and Financial Review and Prospects—Operating Results and Trend Information—Critical Accounting Policies and Estimates—Goodwill.”

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We are unable to estimate the extent and timing of any impairment charges for future years and we cannot give any assurance that impairment charges will not be required in periods subsequent to December 31, 2019. Any impairment charge could have a material adverse effect on our net income. The determination of an impairment charge at any given time is based significantly on our expected results of operations over a number of years in the future. As a result, an impairment charge is more likely to occur during a period in which our operating results and outlook are otherwise already depressed.

Any failure to achieve and maintain effectiveinternal controls could have a material adverse effect on our business and results of operations.

We are subject to reporting obligations under the U.S. securities laws. The SEC as required by Section 404 of the Sarbanes-Oxley Act of 2002 adopted rules requiring every public company to include a management report on the effectiveness of such company’s internal control over financial reporting in its annual report. In addition, an independent registered public accounting firm must report on such company’s internal control over financial reporting.

As effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important to help prevent fraud, any failure to maintain effective internal control over financial reporting could harm our business and result in a loss of investor confidence in the reliability of our financial statements, which in turn could negatively impact the trading price of our common shares and ADSs. Furthermore, we may need to incur additional costs and use additional management and other resources in an effort to comply with Section 404 of the Sarbanes-Oxley Act and other requirements going forward. Please refer to “Item 15. Controls and Procedures” for details on our internal control over financial reporting.

Our insurance coverage may be inadequate to coverall of our business risks.

Although we seek to obtain insurance for some of our main operational risks, the amount of our insurance coverage may not be adequate to cover all potential claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. There is also no guarantee that we will be able to obtain insurance coverage when desired or that insurance will be available on commercially attractive terms. Any failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition and results of operations.

We could potentially face tax uncertaintiesarising from the decisions, activities and operations undertaken by us.

There are many business activities that may give rise to tax issues in our daily operations, ranging from procurement, research and development activities, manufacturing to product storage and distribution, among other activities. Additional tax liabilities such as double taxation, inapplicability of tax incentives, tax adjustment and related interest and penalties may arise if all these tax issues are not dealt with properly. The development and evolution of tax laws and regulations present considerable uncertainties in interpretation and enforcement, which could call for more onerous compliance measures and tax audits in the jurisdictions in which we operate. Failure to comply with any change in tax laws could result in unfavorable tax consequences to us and have an adverse impact on our business, financial condition and results of operations.

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We have business operations in multiple countries and our worldwide operations are taxed under the laws of the jurisdictions in which we operate. However, the integrated nature of our worldwide operations can produce conflicting claims from revenue authorities in different countries as to the profits to be taxed in the individual countries. Recently, tax authorities around the world have heightened their scrutiny of company tax filings and have adopted a more rigid regulatory posture. As part of this shift, the Organization for Economic Co-operation and Development has proposed a number of tax law changes under its Base Erosion and Profit Shifting Action Plans to address issues of transparency, coherence and substance. The Cayman Islands, one of our operating locations, was added into the EU list of non-cooperative jurisdictions for tax purposes in February 2020. Whether our operations will be negatively affected by the inclusion of the Cayman Islands into the EU List of non-cooperative jurisdictions for tax purposes remains uncertain and there can be no assurance that the Cayman Islands will be removed from the list or that any other countries where our operations are based will not be added into this list.

Uncertainty under United States corporate incometax reform legislation could adversely affect our operating results and financial condition.

The United States recently enacted tax reform legislation (the “Tax Reform Legislation”) that, among other things, reduced the U.S. federal corporate income tax rate from 35% to 21% and imposes an alternative “base erosion and anti-abuse tax” (“BEAT”) on U.S. corporations that make deductible payments to foreign related persons in excess of specified amounts. The reduction in the U.S. federal corporate income tax rate is expected to be beneficial to us in future years in which our consolidated U.S. subsidiaries have net income subject to U.S. tax.

There are a number of uncertainties and ambiguities as to the interpretation and application of many of the provisions in the Tax Reform Legislation, including the provisions relating to the BEAT. In the absence of guidance on these issues, we will use what we believe are reasonable interpretations and assumptions in interpreting and applying the Tax Reform Legislation for purposes of determining our income tax payable and results of operations, which may change as we receive additional clarification and implementation guidance. It is also possible that the U.S. Internal Revenue Service could issue subsequent guidance or take positions on audit that differ from the interpretations and assumptions that we previously made, which could have a material adverse effect on our cash tax liabilities, results of operations and financial condition.

We face risks related to public healthepidemics, including the recent novel coronavirus outbreaks.

Our financial condition and results of operations may be adversely affected if a public health epidemic interferes with our ability, or that of our employees, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations related to the conduct of our business. Since November 2019, a novel strain of coronavirus (COVID-19) has spread across the world. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. To date, the COVID-19 outbreak has caused significant disruption to the financial markets and international supply chains, which can substantially depress global business activities, restrict access to capital and result in a long-term economic downturn that would negatively affect our operating results. Any interruption to our supply chain can cause shortages in materials and labor supplies that are key to our commercial operations and negatively impact our business results. COVID-19 related factors, including facility shutdowns mandated by national or regional public health policies, could also prevent our sites from operating in full capacity and adversely affect our financial position.

To combat the impact of COVID-19, we continually update our preventative policies for our manufacturing facilities and provide constant monitoring of our operations. We go beyond just adopting control measures to comply with local government health and safety regulations. For example, we have implemented enhanced health and safety protocols across our sites, including temperature screening, mandatory and self-quarantine protocols, suspension of non-critical overseas business travel, remote work arrangements and social distancing guidelines in our employee cafeteria, changing rooms, conference rooms as well as other public common areas to reduce the risk of disease exposure. While we have leveraged corporate resources across our business platform and manufacturing sites to mitigate the potential impact that COVID-19 might have on our operations and there has been intensifying efforts to contain the spread of the COVID-19 by the governments of the countries and territories affected, the extent to which COVID-19 impacts our results remains highly uncertain and depends on future developments, including new information which may emerge concerning the severity of the COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

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We face uncertainties relating tothe phasing out of LIBOR.

In July 2017, the U.K. Financial Conduct Authority, which regulates the London interbank offered rate (LIBOR), announced that it intends to phase out LIBOR by the end of 2021. Discontinuation of LIBOR and uncertainty as to the nature of such potential changes, alternative reference rates or other reforms may adversely affect the amounts of interest we pay under our debt arrangements and our results of operations.

Escalation of tensions between South Koreaand North Korea could have an adverse effect on our operations in South Korea and the market value of our shares.

The political relationship between South Korea and North Korea has been tense throughout Korea’s modern history. The level of tension between the two countries has heightened and may increase abruptly as a result of current and future events. In recent years, there have been increasing security concerns stemming from North Korea’s nuclear weapons and ballistic missile programs and uncertainty regarding North Korea’s actions and possible responses from the international community. Although we do not derive any revenue from, nor sell any products in, North Korea, any further increase in tension between North and South Korea, for example, if North Korea experiences a leadership crisis, high-level contacts between South Korea and North Korea break down or military hostilities occur, could have a material adverse effect on our South Korea subsidiary, our business, financial condition, results of operations and the market value of our common stock.

Any attempt by the U.S. government to withdrawfrom or materially modify existing international trade agreements or take further actions against certain P.R.C. technology companiescould adversely affect our business, financial condition and results of operations.

The U.S. is currently undergoing major political changes, which has created uncertainty regarding future U.S. trade policies. The United States government has made certain comments that suggest the U.S. is not supportive of certain existing international trade agreements, such as the North America Free Trade Agreement. The United States government has also issued executive orders to withdraw the U.S. from the Trans-Pacific Partnership. The United States government has shown inclinations to withdraw the U.S. from the World Trade Organization, which can lead to greater economic instability. If the U.S. were to withdraw from or materially modify certain international trade agreements to which it is a party, or if tariffs continue to be raised on foreign-sourced goods imported to the U.S., our U.S. customers may seek new suppliers in the U.S. or other countries, and our business, financial condition and results of operations could be adversely affected.

In addition, the United States government has also escalated disputes with certain P.R.C. technology companies, some of which are our customers, over issues in cybersecurity. Since mid-2018, political tension has increased between the U.S. and the P.R.C. and has escalated into a tariff war. On January 15, 2020, the United States and the P.R.C. signed the Phase One trade deal, which officially agreed to the rollback of tariffs, expansion of trade purchases, and renewed commitments on intellectual property, technology transfer, and currency practices. Any future re-adoption or expansion of United States trade restrictions and tariffs, quotas and embargoes, or further escalation of the United States and the P.R.C. trade war can adversely impact our business operations.

We may not be successful in pursuing mergersand acquisitions. Any mergers or acquisitions we make may lead to a diversion of management resources.

Our future success may depend on acquiring businesses and technologies, making investments or forming joint ventures that complement, enhance or expand our current product offerings or otherwise offer us growth opportunities. In pursuing such acquisitions, we may face competition from other companies in the semiconductor industry. Our ability to acquire or invest in suitable targets may be limited by applicable laws and regulations in the R.O.C., P.R.C., the United States and other jurisdictions where we do business. For example, the completion of the FAFG Transaction that USIFR entered in December 2019 with FAFG remains subject to regulatory approvals, including, among others, clearance from the Committee on Foreign Investment in the United States, the Federal Ministry for Economic Affairs and Energy in Germany and the French Ministry for Economy and Finance. For details about the FAFG Transaction, see “Item 4. Information on the Company—History and Development of the Company—USI Group and USI Group Restructuring.” Even if we are successful in making such acquisitions or investments, we may have to expend substantial amounts of cash, incur debt, assume loss-making divisions and incur other types of expenses. We may also face challenges in successfully integrating any acquired companies into our existing organization or in creating the anticipated synergistic benefits. Each of these risks could have a material adverse effect on our business, financial condition and results of operations.

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Risks Relating to Taiwan, R.O.C.

Strained relations between the R.O.C. and theP.R.C. and disruptions in Taiwan’s political environment caused by domestic political events could negatively affect ourbusiness and the market value of your investment.

Our principal executive offices and our principal facilities are located in Taiwan and approximately 47.6%, 56.9% and 58.7% of our operating revenues in 2017, 2018 and 2019, respectively, were derived from our operations in Taiwan. Accordingly, our business and financial condition may be affected by changes in local governmental policies and political and social instability.

The R.O.C. has a unique international political status. The government of the P.R.C. asserts sovereignty over all of China, including Taiwan, and does not recognize the legitimacy of the R.O.C. government. Although significant economic and cultural relations have been established in recent years between the R.O.C. and the P.R.C., relations have often been strained. Any major change in the Taiwanese political environment, including the outcome of presidential or municipal elections, or potential shifts in government policy, may affect the direction of economic and political developments and negatively impact the economic and political environment in Taiwan. Past developments related to the interaction between the R.O.C. and the P.R.C., domestic political events or election results have on occasion depressed the market prices of the securities of Taiwanese or Taiwan-related companies, including our own. Relations between the R.O.C. and the P.R.C. and other factors affecting the political or economic conditions in Taiwan could have a material adverse effect on our financial condition and results of operations, as well as the market price and the liquidity of our common shares and ADSs.

Currently, we manufacture interconnect materials in the P.R.C. through our wholly owned subsidiary, ASE Shanghai. We also provide packaging and testing services in the P.R.C. through some of our subsidiaries. In addition, we engage in the P.R.C. in real estate development and the manufacture of computer peripherals and electronic components through our subsidiaries in the P.R.C. See “Item 4. Information on the Company—Organizational Structure—Our Consolidated Subsidiaries.” In the past, R.O.C. companies, including ourselves, were prohibited from investing in facilities for the packaging and testing of semiconductors in the P.R.C. Although the prohibitions have been relaxed since February 2010, the R.O.C. government currently still restricts certain types of investments by R.O.C. companies, including ourselves, in the P.R.C. We do not know when or if such laws and policies governing investment in the P.R.C. will be amended, and we cannot assure you that such R.O.C. investment laws and policies will permit us to make further investments of certain types in the P.R.C. in the future that we consider beneficial to us. Our growth prospects and profitability may be adversely affected if we are restricted from making certain additional investments in the P.R.C. and are not able to fully capitalize on the growth of the semiconductor industry in the P.R.C.

As a substantialportion of our business and operations is located in Taiwan, we are vulnerable to natural disasters including earthquakes, typhoons,drought, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our businessand adversely affect our results of operations. ****

Taiwan is susceptible to earthquakes and has experienced severe earthquakes which caused significant property damage and loss of life. Earthquakes have damaged production facilities and adversely affected the operations of many companies involved in the semiconductor and other industries. For example, in February 2016, an earthquake measuring 6.4 on the Richter magnitude scale occurred in Kaohsiung caused several deaths and property damages. However, the earthquake did not have a material impact on our operations. We have never experienced structural damage to our facilities or damage to our machinery and equipment as a result of these earthquakes. In the past, however, we have experienced interruptions to our production schedule primarily as a result of power outages caused by earthquakes.

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Taiwan is also susceptible to typhoons, which may cause damage and business interruptions to companies with facilities located in Taiwan. For example, on September 14, 2016, Taiwan experienced severe damage from typhoon Meranti that caused severe flooding, extensive property damage and loss of electricity for thousands of households. Taiwan has experienced severe droughts in the past. Although we have not been directly affected by droughts, we are dependent upon water for our packaging and substrates operations and a drought could interrupt such operations. In addition, a drought could interrupt the manufacturing process of the foundries located in Taiwan, in turn disrupting some of our customers’ production, which could result in a decline in the demand for our services.

The supply of electrical power in Taiwan, which is primarily provided by Taiwan Power Company, the state-owned electric utility, is susceptible to power disruptions that could be prolonged and frequent, caused by overload as a result of high demand or other reasons. For example, on August 15, 2017, Taiwan suffered a massive power blackout, which left millions of homes, offices and factories without power. Although the power blackout did not have a material impact on our operations, future power blackout may disrupt our business operations and adversely affect our results of operations.

In addition, we are also subject to the risk of industrial and workplace accidents that could lead to injury or loss of life, damages to our facilities, and adversely impact our business reputation, commercial prospects and operations, as well as our share price and dividends.

Our production facilities as well as many of our suppliers and customers and providers of complementary semiconductor manufacturing services, including wafer foundries, are located in Taiwan. If our customers are impacted by natural disasters including earthquake, typhoon, drought or industrial incidents including power outage and labor strikes, these events could cause a decline in the demand for our services. If our suppliers or providers of complementary semiconductor manufacturing services are affected by the aforementioned events, our production schedule could be interrupted, which can adversely impact our financial condition and results of operations.

Risks Relating to Ownership of Our Common Shares and theADSs

The market for our common shares and the ADSsmay not be liquid.

Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors, compared to less active and less liquid markets. Liquidity of a securities market is often a function of the volume of the underlying shares that are publicly held by unrelated parties.

There has been no trading market outside the R.O.C. for our common shares and the only trading market for our common shares is the TWSE. The outstanding ADSs are listed on the NYSE. There is no assurance that the market for our common shares or the ADSs will be active or liquid.

Although ADS holders are entitled to withdraw our common shares underlying the ADSs from the depositary at any time, R.O.C. law requires that our common shares be held in an account in the R.O.C. or sold for the benefit of the holder on the TWSE. In connection with any withdrawal of common shares from our ADS facility, the ADSs evidencing these common shares will be canceled. Unless additional ADSs are issued, the effect of withdrawals will be to reduce the number of outstanding ADSs. If a significant number of withdrawals are effected, the liquidity of our ADSs will be substantially reduced. We cannot assure you that the ADS depositary will be able to arrange for a sale of deposited shares in a timely manner or at a specified price, particularly during periods of illiquidity or volatility.

If a non-R.O.C. holder of ADSs withdraws andholds common shares, such holder of ADSs will be required to appoint a tax guarantor, local agent and custodian in the R.O.C. andregister with the TWSE or the Taipei Exchange in order to buy and sell securities on the TWSE.

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When a non-R.O.C. holder of ADSs elects to withdraw and hold common shares represented by ADSs, such holder of the ADSs will be required to appoint an agent for filing tax returns and making tax payments in the R.O.C. Such agent will be required to meet the qualifications set by the R.O.C. Ministry of Finance and, upon appointment, becomes the guarantor of the withdrawing holder’s tax payment obligations. Evidence of the appointment of a tax guarantor, the approval of such appointment by the R.O.C. tax authorities and tax clearance certificates or evidentiary documents issued by such tax guarantor may be required as conditions to such holder repatriating the profits derived from the sale of common shares. We cannot assure you that a withdrawing holder will be able to appoint, and obtain approval for, a tax guarantor in a timely manner.

In addition, under current R.O.C. law, such withdrawing holder is required to register with the TWSE or the Taipei Exchange and appoint a local agent in the R.O.C. to, among other things, open a bank account and open a securities trading account with a local securities brokerage firm, pay taxes, remit funds and exercise such holder’s rights as a shareholder. Furthermore, such withdrawing holder must appoint a local bank or a local securities firm to act as custodian for confirmation and settlement of trades, safekeeping of securities and cash proceeds and reporting and declaration of information. Without satisfying these requirements, non-R.O.C. withdrawing holders of ADSs would not be able to hold or otherwise subsequently sell our common shares on the TWSE or otherwise.

Pursuant to Mainland Investors Regulations, only QDIIs or persons that have otherwise obtained the approval from the MOEAIC and registered with the TWSE are permitted to withdraw and hold our shares from a depositary receipt facility. In order to hold our shares, such QDIIs are required to appoint an agent and custodian as required by the Mainland Investors Regulations. If the aggregate amount of our shares held by any QDII or shares received by any QDII upon a single withdrawal or in the aggregate accounts for 10.0% of our total issued and outstanding shares, such QDII must obtain the prior approval from the MOEAIC. We cannot assure you that such approval would be granted.

The market value of your investment may fluctuatedue to the volatility of the R.O.C. securities market.

The trading price of our ADSs may be affected by the trading price of our common shares on the TWSE. The R.O.C. securities market is smaller and more volatile than the securities markets in the United States and in many European countries. The TWSE has experienced substantial fluctuations in the prices and volumes of sales of listed securities and there are currently limits on the range of daily price movements on the TWSE. The TWSE Weighted Index peaked at 12,495.3 in February 1990, and subsequently fell to a low of 2,560.5 in October 1990. On March 13, 2000, the TWSE Weighted Index experienced a 617-point drop, which represented the single largest decrease in the TWSE Weighted Index in its history. During the period from January 1, 2019 to December 31, 2019, the TWSE Weighted Index peaked at 12,122.45 on December 18, 2019, and reached a low of 9,382.51 on January 4, 2019. During the period from January 1, 2019 to December 31, 2019, the trading price of our common shares ranged from NT$87.6 per share to NT$54.0 per share. On March 13, 2020, the TWSE Weighted Index closed at 10,128.87 and the closing value of our common shares was NT$61.00 per share.

The TWSE is particularly volatile during times of political instability, including when relations between Taiwan and the P.R.C. are strained. Several investment funds affiliated with the R.O.C. government have also from time to time purchased securities from the TWSE to support the trading level of the TWSE. Moreover, the TWSE has experienced problems such as market manipulation, insider trading and settlement defaults. The recurrence of these or similar problems could have an adverse effect on the market price and liquidity of the securities of R.O.C. companies, including our common shares and ADSs, in both the domestic and international markets.

We may not continue to declare cash dividendsin any particular amount.

We intend to continue to pay dividends. However, future dividends may be affected by, among other things, the best interests of our Company and our shareholders, our results of operations, cash balances and future cash requirements, financial condition, investments and acquisitions, legal risks, and other factors that the board of directors may consider relevant. Our dividend payments may change from time to time, and we cannot assure that we will continue to declare dividends in any particular amounts. A reduction in, a delay of, or elimination of our dividend payments could adversely affect our share price.

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Holders of common shares and ADSs may experiencedilution if we issue stock bonuses and stock options to employees or sell additional equity or equity-linked securities.

Similar to other R.O.C. technology companies, we issue bonuses from time to time in the form of common shares. Bonuses in the form of our common shares are valued at the closing price of our common shares on the day prior to our shareholders’ meeting. In addition, under the R.O.C. Company Law we may, upon approval from our board of directors and the R.O.C. Securities and Futures Bureau of the FSC, establish employee stock option plans provided that shareholders’ approval is required if the exercise price of an option would be less than the closing price of our common shares on the TWSE on the grant date of the option. ASE maintained 2010 and 2015 employee stock option plans before the combination with SPIL.

ASEH assumed ASE’s obligations for employee share options that were issued before the execution of the Joint Share Exchange Agreement on April 30, 2018; all terms and conditions of the issued ASE share options remain the same, except that each ASE share option represents the right to purchase 0.5 ordinary share of ASEH.

In August 2018, our board of directors and FSC both approved the ASEH first employee share option plan. As a result, ASEH currently maintains three employee stock option plans pursuant to which our full-time employees, including our domestic and foreign subsidiaries, are eligible to receive stock option grants. As of December 31, 2019, a total of 170,785,750 options assumed and granted by ASEH were outstanding. See “Item 6. Directors, Senior Management and Employees—Compensation—ASEH Employee Compensation and Stock Option Plans.” The issuance of our common shares pursuant to stock bonuses or stock options may have a dilutive effect on the holders of outstanding common shares and ADSs.

In addition, the issuance of additional equity or equity-linked securities may result in additional dilution to our shareholders. In September 2013, ASE issued 2018 Convertible Bonds to fund procurement of raw materials from overseas and in July 2015, ASE issued 2018 NTD-linked Convertible Bonds to fund procurement of equipment from overseas. In March 2017, ASE granted rights to the record holders of our existing common shares to subscribe for an aggregate of 240,000,000 of our common shares, par value NT$10.0 per share (the “Rights Offering”). Substantially concurrently with the Rights Offering, ASE also offered 30,000,000 of our common shares to our employees (the “Employee Offering”) and offered 30,000,000 of our common shares to the public in Taiwan (the “Taiwan Public Offering,” together with the Rights Offering and the Employee Offering, the “2017 Capital Increase”). See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources” for more information.

Restrictions on the ability to deposit ourcommon shares into our ADS facility may adversely affect the liquidity and price of our ADSs.

The ability to deposit common shares into our ADS facility is restricted by R.O.C. law. A significant number of withdrawals of common shares underlying our ADSs would reduce the liquidity of the ADSs by reducing the number of ADSs outstanding. As a result, the prevailing market price of our ADSs may differ from the prevailing market price of our common shares on the TWSE. Under current R.O.C. law, no person or entity, including you and us, may deposit our common shares in our ADS facility without specific approval of the FSC, unless:

(1)	we pay stock dividends on our common shares;
(2)	we make a free distribution of common shares;
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(3)	holders of ADSs exercise preemptive rights in the event of capital increases; or
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(4)	to the extent permitted under the deposit agreement and the relevant custody agreement, investors purchase our common shares, directly or through the depositary, on the TWSE, and deliver our common shares to the custodian for deposit into our ADS facility, or our existing shareholders deliver our common shares to the custodian for deposit into our ADS facility.
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With respect to item (4) above, the depositary may issue ADSs against the deposit of those common shares only if the total number of ADSs outstanding following the deposit will not exceed the number of ADSs previously approved by the FSC, plus any ADSs issued pursuant to the events described in items (1), (2) and (3) above.

In addition, in the case of a deposit of our common shares requested under item (4) above, the depositary will refuse to accept deposit of our common shares if such deposit is not permitted under any legal, regulatory or other restrictions notified by us to the depositary from time to time, which restrictions may include blackout periods during which deposits may not be made, minimum and maximum amounts and frequency of deposits.

The depositary will not offer holders of ADSs preemptive rights unless the distribution of both the rights and the underlying common shares to our ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act.

Holders of ADSs will not have the same votingrights as our shareholders, which may affect the value of their ADSs.

The voting rights of a holder of ADSs as to our common shares represented by its ADSs are governed by the deposit agreement. Holders of ADSs will not be able to exercise voting rights on an individual basis. If holders representing at least 51% of the ADSs outstanding at the relevant record date instruct the depositary to vote in the same manner regarding a resolution, including the election of directors, the depositary will cause all common shares represented by the ADSs to be voted in that manner. If the depositary does not receive timely instructions representing at least 51% of the ADSs outstanding at the relevant record date to vote in the same manner for any resolution, including the election of directors, holders of ADSs will be deemed to have instructed the depositary or its nominee to authorize all our common shares represented by the ADSs to be voted at the discretion of our chairman or his designee, which may not be in the interest of holders of ADSs. Moreover, while shareholders who own 1% or more of our outstanding shares are entitled to submit one proposal to be considered at our annual general meetings of shareholders, only holders representing at least 51% of our ADSs outstanding at the relevant record date are entitled to submit one proposal to be considered at our annual general meetings of shareholders. Hence, only one proposal may be submitted on behalf of all ADS holders.

The right of holders of ADSs to participatein our rights offerings is limited, which could cause dilution to your holdings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement, the depositary will not offer holders of ADSs those rights unless both the distribution of the rights and the underlying securities to all our ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. Although we may be eligible to take advantage of certain exemptions under the Securities Act available to certain foreign issuers for rights offerings, we can give no assurances that we will be able to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement for any of these rights. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings.

If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case holders of ADSs will receive no value for these rights.

For example, in March 2017, we granted rights to the record holders of our existing common shares to subscribe for an aggregate of 240,000,000 of our common shares (the “New Shares”), while the holders of ADSs were not given rights to subscribe for new ADSs and do not have the right to instruct the depositary to subscribe for the New Shares on their behalf. If a holder of ADSs wants the rights corresponding to the common shares underlying such ADSs to be exercised, such holder needs to surrender the ADSs to the depositary and instruct the depositary to deliver the underlying common shares to a securities brokerage account in Taiwan specified by such holder.

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Changes in exchange controls, which restrictyour ability to convert proceeds received from your ownership of ADSs, may have an adverse effect on the value of your investment.

Under current R.O.C. law, the depositary, without obtaining approvals from the Central Bank of the Republic of China (Taiwan) or any other governmental authority or agency of the R.O.C., may convert NT dollars into other currencies, including U.S. dollars, for:

·	the proceeds of the sale of common shares represented by ADSs or received as stock dividends from our common shares and deposited into the depositary receipt facility; and
·	any cash dividends or distributions received from our common shares.
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In addition, the depositary may also convert into NT dollars incoming payments for purchases of common shares for deposit in the ADS facility against the creation of additional ADSs. The depositary may be required to obtain foreign exchange approval from the Central Bank of the Republic of China (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights for new common shares. Although it is expected that the Central Bank of the Republic of China (Taiwan) will grant this approval as a routine matter, we cannot assure you that in the future any approval will be obtained in a timely manner, or at all.

Under the R.O.C. Foreign Exchange Control Act, the Executive Yuan of the R.O.C. government may, without prior notice but subject to subsequent legislative approval, impose foreign exchange controls in the event of, among other things, a material change in international economic conditions. We cannot assure you that foreign exchange controls or other restrictions will not be introduced in the future.

The value of your investment may be reducedby possible future sales of common shares or ADSs by us or our shareholders.

While we are not aware of any plans by any major shareholders to dispose of significant numbers of common shares, we cannot assure you that one or more existing shareholders or owners of securities convertible or exchangeable into or exercisable for our common shares or ADSs will not dispose of significant numbers of common shares or ADSs. In addition, several of our subsidiaries and affiliates hold common shares, depositary shares representing common shares and options to purchase common shares or ADSs. They may decide to sell those securities in the future. See “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders” for a description of our significant shareholders and affiliates that hold our common shares.

We cannot predict the effect, if any, that future sales of common shares or ADSs, or the availability of common shares or ADSs for future sale, will have on the market price of our common shares or the ADSs prevailing from time to time. Sales of substantial numbers of common shares or ADSs in the public market, or the perception that such sales may occur, could depress the prevailing market prices of our common shares or the ADSs.

Item 4. Information on the Company

HISTORY AND DEVELOPMENT OF THE COMPANY

ASE Technology Holding Co**.,** Ltd. was jointly established on April 30, 2018 as a company limited by shares under the R.O.C. Company Law, by the combination of Advanced Semiconductor Engineering, Inc., which was incoporated on March 23, 1984, and Siliconware Precision Industries Co., Ltd., which was incoporated on May 17, 1984.

ASEH directly controls ASE Group, SPIL Group and USI Group. ASEH’s manufacturing facilities are located in Taiwan, China, South Korea, Japan, Singapore, Malaysia, Mexico, America and Poland. Our principal executive offices are located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, R.O.C. and our telephone number at the above address is (886) 7-361-7131. Our common shares have been listed on the TWSE under the symbol “3711” and ADSs representing our common shares have been listed on the NYSE under the ticker symbol “ASX” since April 2018.

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SPIL Acquisition

In August 2015, ASE announced an offer to purchase 779,000,000 common shares (including those represented by American depositary shares) of SPIL through concurrent tender offers in the R.O.C. and the United States, at a price of NT$45 per SPIL common share and NT$225 per SPIL American depositary share. The Initial SPIL Tender Offer expired on September 22, 2015, with 1,147,898,165 common shares (including those represented by American depositary shares) validly tendered and not validly withdrawn, exceeding the offer cap, and as a result, after proration, 725,749,060 SPIL common shares and 10,650,188 SPIL American depositary shares were accepted for purchase. On October 1, 2015, ASE became a shareholder holding approximately 24.99% of the issued and outstanding share capital in SPIL.

In December 2015, following an announcement by SPIL that it plans to issue 1,033 million shares, if approved by SPIL shareholders, to a third party pursuant to a share placement agreement, ASE submitted a written proposal to SPIL’s board proposing to acquire all SPIL shares not otherwise owned by ASE, contingent upon the termination of the share placement agreement. The board of directors of SPIL did not respond to our acquisition proposal. Subsequently, ASE launched an offer to purchase 770,000,000 common shares (including those represented by American depositary shares) of SPIL through concurrent tender offers in the R.O.C. and the United States, at a price of NT$55 per SPIL common share and NT$275 per SPIL American depositary share. The Second SPIL Tender Offer expired on March 17, 2016. Because the TFTC did not render a decision before the expiration of the Second SPIL Tender Offer, resulting in the failure to satisfy one of the tender offer conditions, the Second SPIL Tender Offer was not successful. The TFTC subsequently suspended its review on March 23, 2016.

Notwithstanding the failure of the Second SPIL Tender Offer, ASE continued to seek control of SPIL, with the purpose of effecting an acquisition of 100% of the common shares and American depositary shares of SPIL. Simultaneously with the acquisition of SPIL, ASE planned to establish a holding company in Taiwan that would hold 100% of the equity interests of both ASE and SPIL such that ASE and SPIL would be wholly owned subsidiaries of such holding company, which would maintain all current operations of ASE and SPIL.

In March and April 2016, ASE acquired an additional 258,300,000 common shares of SPIL (including those represented by American depositary shares) through open market purchases.

In June 2016, ASE entered into the Joint Share Exchange Agreement with SPIL, pursuant to which ASEH was formed by means of a statutory share exchange pursuant to the laws of the Republic of China, and ASEH (i) acquired all issued shares of ASE in exchange for shares of ASEH, and (ii) acquired all issued shares of SPIL using cash consideration.

The Share Exchange was conditionally approved by the Anti-Monopoly Bureau under the State Administration for Market Regulation on November 23, 2017. Among other restrictive conditions imposed by the Anti-Monopoly Bureau, ASE and SPIL had to maintain independent operations for 24 months.

On January 16, 2018, ASE converted 9,690,452 American depositary shares of SPIL that it owned into 48,452,260 common shares.

On February 12, 2018, ASE and SPIL, respectively, held extraordinary general shareholders’ meetings and each approved the proposed Joint Share Exchange, pursuant to which, ASEH acquires 100% of both ASE and SPIL shares.

The Share Exchange consummated on April 30, 2018, and ASE and SPIL became privately held and wholly owned subsidiaries of ASEH concurrently. The common shares of ASE and SPIL were delisted from the TWSE and their respective ADSs were delisted from NYSE and NASDAQ.

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On March 25, 2020, the Anti-Monopoly Bureau officially lifted all restrictive conditions imposed on the Share Exchange.

USI Group and USI Group Restructuring

USI Group engages primarily in EMS in relation to computers and storage, consumer electronics, communications, industrial and automotive, among other services and businesses. We purchased 22.6% of the outstanding shares of Universal Scientific Industrial in 1999. We subsequently increased our holding to 23.3% in 2000. As of December 31, 2009, we held approximately 18.1% of Universal Scientific Industrial’s outstanding equity shares, which allowed us to exercise significant influence over Universal Scientific Industrial and therefore accounted for this investment by the equity method. In February 2010, we, along with our two subsidiaries, J&R Holding Limited and ASE Test, through a cash and stock tender offer, acquired 641,669,316 common shares of Universal Scientific Industrial at NT$21 per share, amounting to NT$13,475.1 million in total, resulting in our controlling ownership over Universal Scientific Industrial.

As a result, Universal Scientific Industrial became our subsidiary. The shares of Universal Scientific Industrial were delisted from the TWSE on June 17, 2010, where they were previously listed under the symbol “2350.” In August 2010, we acquired an additional 222,243,661 shares of Universal Scientific through another tender offer at NT$21 per share, amounting to NT$4,667.1 million in total. In September 2012, as part of our internal business restructuring, our subsidiaries transferred their shareholdings in Universal Scientific Industrial to ASE.

In February 2012, USI Shanghai completed its IPO on the Shanghai Stock Exchange. The total proceeds from the IPO was approximately RMB811.7 million prior to deducting underwriting discounts and commissions. In November 2014, USI Shanghai completed its capital increase by way of domestic private placements through a bidding process, raising a total of RMB2,063.0 million prior to deducting underwriting discounts and commissions. The issue price per share was RMB27.06.

On February 2, 2015, Universal Scientific Industrial’s shareholders passed a resolution at the shareholders’ meeting to spin off and assign Universal Scientific Industrial’s investment businesses with a then estimated value of NT$35,537.8 million to USI Inc. In April 2015, Universal Scientific Industrial completed a spin-off of its subsidiaries to USI Inc., a company incorporated under R.O.C. law. As part of our business realignment effort, we acquired 990.1 million shares in USI Inc. on the spin-off record date, which resulted in us holding 99.2% of the total then outstanding shares of USI Inc. Following Universal Scientific Industrial’s spin-off of its investment businesses to USI Inc., Universal Scientific Industrial carried out a capital reduction plan reducing its capital from NT$16,413.0 million to NT$400.0 million. As a result of such spin-off, as of April 1, 2015, we held approximately 99.0% of the outstanding common shares of Universal Scientific Industrial.

On September 24, 2015, as part of our corporate reorganization to align each business function to different legal entity groups, the board of directors of ASE passed a resolution to announce our intention to carry out the Universal Scientific Industrial Share Transfer. The Universal Scientific Industrial Share Transfer was approved by the MOEAIC on February 3, 2016. The majority of shares were transferred in March 2016, and the remaining shares were transferred in May 2016. Following the completion of the Universal Scientific Industrial Share Transfer, USI Group will operate under the legal entities directly and indirectly held under USI Inc.

In January 2017, Universal Scientific Industrial completed a cash capital increase of NT$1,000 million, and ASE’s shareholdings of Universal Scientific Industrial increased to 75.7%.

In January 2018, USI Enterprise Limited resolved during its shareholders’ meeting to repurchase its outstanding 3,738,000 ordinary shares at the price of US$17.49 per share and, as a result, ASE’s shareholdings of USI Enterprise Limited increased from 96.9% to 98.6%. In July 2018, the board of directors of ASE and UGTW approved the acquisition of the outstanding ordinary shares of USI Inc. and Universal Scientific Industrial at NT$35 and NT$18 per ordinary shares, respectively, as well as the purchase of ordinary shares from dissenting shareholders in August 2018. ASE and UGTW have completed the acquisition of USI Inc. and Universal Scientific Industrial in September 2018 and December 2018, respectively.

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In August 2018, in order to advance our global supply system and expand our commercial reach in Europe, our subsidiary, Universal Global Electronics Co., Ltd., entered into an equity transfer agreement with Chung Hong Electronics (Suzhou) Co., Ltd., intending to acquire the entire 60.0% equity in its Polish subsidiary, UGPL, in Eastern Europe for a consideration of RMB78.0 million. This agreement also stipulated that within six months after the audit of financial statements of the Polish subsidiary for the year ending 2020, Universal Global Electronics Co., Ltd. can acquire the remaining equity in such subsidiary at 10 times the static P/E ratio. In October 2019, UGPL became our subsidiary.

In October 2018, to enhance operational flexibility through organizational restructure, ASE’s board of directors resolved to spin off ASE’s investment department, which is responsible for managing the ordinary shares and assets of USI Inc., into USI Global, a newly established company. USI Global issued new ordinary shares to us as consideration for the spin-off. The spin-off consummated in November 2018 and we obtained control over ASE and USI Global. In December 2018, our board of directors and the board of director of USI Global resolved to merge USI Global and ASE Technology Holding Co., Ltd.. The merger consummated in January 2019 and ASE Technology Holding Co., Ltd. became the surviving entity after the merger and USI Global was thereby dissolved. Our financial position or financial performance was not materially affected by USI Global’s spin-off from ASE Inc. or USI Global’s merger with ASE Technology Holding Co., Ltd.

On December 12, 2019, USIFR, FAFG and the shareholders of FAFG entered into a share purchase agreement (the “FAFG Share Purchase Agreement”), and USI Shanghai and ASDI, one of the shareholders of FAFG and privately held company owned by FAFG’s founder, entered into a framework agreement for purchasing asset through issuing shares, pursuant to which USIFR and USI Shanghai will ultimately acquire 100.0% of the share capital (79,847,636 shares) of FAFG by way of a share purchase (the “FAFG Transaction”). The FAFG Transaction is a two-step transaction. In the first step, USIFR will directly purchase 89.6% of FAFG’s share capital in exchange for a cash payment. In the second step, USI Shanghai will acquire the remaining 10.4% of FAFG’s share capital from ASDI in exchange for newly issued shares (25,595,725 shares) of USI Shanghai at the issue price of RMB12.81 per share. At the conclusion of both steps, USI Shanghai will directly or indirectly own 100% of the share capital of FAFG. The base equity value of FAFG that USIFR and USI Shanghai have agreed to pay in the FAFG Transaction is US$450.0 million. The completion of this transaction remains subject to customary closing conditions precedent and applicable regulatory approvals, including, among others, clearance from the Committee on Foreign Investment in the United States, the Federal Ministry for Economic Affairs and Energy in Germany and the French Ministry for Economy and Finance. On March 26, 2020, the issuance of new shares for the FAFG Transaction was approved unconditionally by the M&A and Restructuring Committee of China Securities Regulatory Commission. As of the date of this filing, there can be no assurance that these conditions will be satisfied or the completion of the transaction will be achieved on a timely basis or at all. For details about the FAFG Share Purchase Agreement, see “Item 10. Additional information—Material Contract.”

Capital Expenditures

Our principal capital expenditures for the years ended December 31, 2017, 2018 and 2019 have been for machinery and equipment procurements and investments in buildings and improvement in connection with the expansion of our capacity expansion, for which we spent NT$23,677.7 million, NT$39,092.2 million and NT$63,073.9 million (US$2,108.8 million), respectively. We had commitments for capital expenditures of approximately NT$25,119.4 million (US$839.8 million), of which NT$5,145.3 million (US$172.0 million) had been prepaid as of December 31, 2019, mainly in connection with the expansion of our packaging and testing services operations primarily in the R.O.C. and the P.R.C. Any future expansion of our operating activities could result in additional capital expenditures. We anticipate our capital expenditures in 2020 will be financed through our existing cash, expected cash flow from operations and existing credit lines under our loan facilities and will consist of, among other things, additional machinery and equipment procurements for our capacity expansions. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources” for more information. Other than the SPIL Acquisition, there was no significant financial investments or divestitures in 2017, 2018 and 2019. See “—SPIL Acquisition” for information.

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For more information on our history and development, see “—Organizational Structure.”

BUSINESS OVERVIEW

ASEH is a leading provider of semiconductor manufacturing services in assembly and testing. Our services include semiconductor packaging, production of interconnect materials, front-end engineering testing, wafer probing and final testing services, as well as integrated solutions for EMS in relation to computers and storage, peripherals, communications, industrial, automotive and server applications.

We believe that, as a result of the following strengths, we are able to compete effectively to meet customers’ requirements across a wide range of end-use applications:

·	our ability to provide a broad range of cost-effective semiconductor packaging and testing services on a large-scale turnkey basis within key centers of semiconductor manufacturing;
·	our expertise in developing and providing cost-effective packaging, interconnect materials and testing technologies and solutions;
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·	our ability to provide proactive original design manufacturing services using innovative solution-based designs;
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·	our commitment to investing in capacity expansion and research and development, as well as selective acquisitions, that will benefit customers and our business;
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·	our geographic presence in key centers of outsourced semiconductor and electronics manufacturing; and
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·	our long-term relationships with providers of complementary semiconductor manufacturing services, including our strategic alliance with TSMC, one of the world’s largest dedicated semiconductor foundries.
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We believe that it is still the trend for semiconductor companies to outsource their packaging, testing and manufacturing requirements as semiconductor companies rely on independent providers of foundry, packaging and testing and EMS. In response to the increased pace of new product development and shortened product life and production cycles, semiconductor companies are increasingly seeking both independent packaging and testing companies that can provide turnkey services in order to reduce time to market and electronic manufacturing companies with proactive original design capabilities that can provide large-scale production. We believe that our technological expertise and scale and our ability to integrate our broad range of solutions into turnkey services and EMS allow us to benefit from the accelerated outsourcing trend and better serve our existing and potential customers.

We believe that we have benefited, and will continue to benefit, from our geographic location in Taiwan. Taiwan is currently the largest center for outsourced semiconductor manufacturing in the world and has a high concentration of EMS providers. Our close proximity to foundries and other providers of complementary semiconductor manufacturing services is attractive to our customers who wish to take advantage of the efficiencies of a total semiconductor manufacturing solution by outsourcing several stages of their manufacturing requirements. We believe that, as a result, we are well positioned to meet the advanced semiconductor engineering and manufacturing requirements of our customers.

Industry Background

General

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Semiconductors are the building blocks used to create an increasing variety of electronic products and systems. Continuous improvements in semiconductor process and design technologies have led to smaller, more complex and more reliable semiconductors at a lower cost per function. These improvements have resulted in significant performance and price benefits to manufacturers of electronic products. As a result, semiconductor demand has grown substantially in our primary end-user markets for communications, computing and consumer electronics, and has experienced increased growth in other markets such as automotive products and industrial automation and control systems.

The semiconductor industry is characterized by strong long-term growth, with periodic and sometimes severe cyclical downturns. The Semiconductor Industry Association reported that worldwide sales of semiconductors increased from approximately US$51.0 billion in 1990 to approximately US$412.1 billion in 2019. We believe that overall growth and cyclical fluctuations will continue over the long-term in the semiconductor industry.

EMS

EMS providers typically achieve large economies of scale in manufacturing by pooling together product design techniques and also provide value-added services such as warranties and repairs. Companies who do not need to manufacture a constant supply of products have increasingly outsourced their manufacturing to these service providers so that they can respond quickly and efficiently to sudden spikes in demand without having to maintain large inventories of products.

EMS are sought by companies in a wide range of industries including, among others, information, communications, computers and storage, consumer electronics, automotive electronics, medical treatment, industrial applications, aviation, navigation, national defense and transportation. Although affected by global economic fluctuations, we expect the EMS industry to continue to grow in the long-term, and we have enhanced our presence in the industry through USI Group since 2010.

Outsourcing Trends in Semiconductor Manufacturing

Historically, semiconductor companies designed, manufactured, packaged and tested semiconductors primarily within their own facilities. However, there is a clear trend in the industry to outsource the manufacturing process. Virtually every significant stage of the manufacturing process can be outsourced. Wafer foundry services, semiconductor packaging and testing services, and EMS are currently the largest segments of the independent semiconductor manufacturing services market.

The availability of technologically advanced independent manufacturing services has also enabled the growth of “fabless” semiconductor companies that focus on semiconductor design and marketing, while outsourcing their wafer fabrication, packaging and testing requirements to independent companies. We believe that the growth in the number and scale of fabless semiconductor companies that rely solely on independent companies to meet their manufacturing requirements will continue to be a driver of growth for us. Similarly, the availability of technologically advanced independent manufacturing services has encouraged integrated device manufacturers, which traditionally have relied on in-house semiconductor manufacturing capacity, to increasingly outsource their manufacturing requirements to independent semiconductor manufacturing companies.

We believe the outsourcing of semiconductor manufacturing services will increase in the future for many reasons, including the following:

Technological Expertise and Significant Capital Expenditure. Semiconductor manufacturing processes have become highly complex, requiring substantial investment in specialized equipment and facilities and sophisticated engineering and manufacturing expertise. In addition, product life cycles have been shortening, magnifying the need to continuously upgrade or replace manufacturing equipment to accommodate new products. As a result, new investments in in-house facilities are becoming less desirable to integrated device manufacturers because of the high investment costs as well as the inability to achieve sufficient economies of scale and utilization rates necessary to be competitive with the independent service providers. Independent packaging, testing, wafer foundry and EMS companies, on the other hand, are able to realize the benefits of specialization and achieve economies of scale by providing services to a large base of customers across a wide range of products. This enables them to reduce costs and shorten production cycles through high capacity utilization and process expertise. In the process, they are also able to focus on discrete stages of semiconductor manufacturing and deliver services of superior quality.

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Some semiconductor companies with in-house operations are under increasing pressure to rationalize these operations by relocating to locations with lower costs or better infrastructure, in order to lower manufacturing costs and shorten production cycle time. We expect semiconductor companies to increasingly outsource their requirements to take advantage of the advanced technology and scale of operations of independent packaging and testing companies and EMS providers.

·	Focus on Core Competencies. As the semiconductor industry becomes more competitive, semiconductor companies are expected to further outsource their semiconductor manufacturing requirements in order to focus their resources on core competencies, such as semiconductor design and marketing.
·	Time-to-Market Pressure. The increasingly short product life cycle has accelerated time-to-market pressure for semiconductor companies, leading them to rely increasingly on outsourced suppliers as a key source for effective manufacturing solutions.
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·	Capitalize on the High Growth Rates in Emerging Markets. Emerging markets, and China in particular, have become both major manufacturing centers for the technology industry and growing markets for technology-based products. Thus, in order to gain direct access to the Chinese market, many semiconductor companies are seeking to establish manufacturing facilities in China by partnering with local subcontractors. As a result, certain stages of the semiconductor manufacturing process that were previously handled in-house will be increasingly outsourced in order to improve efficiency.
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Trends of Mergers and Acquisitions in the SemiconductorIndustry

The global semiconductor industry is highly competitive, and such competitive landscape is changing as a result of a trend toward consolidation within the industry. In particular, packaging and testing service providers in the semiconductor industry have engaged in cross-border mergers and acquisitions in recent years as part of their expansion strategy, which has gradually changed the ecosystem of the semiconductor industry. Examples of mergers and acquisitions in recent years include mergers and acquisitions by and among semiconductor design companies or integrated device manufacturers, including Intel Corporation’s acquisition of Altera Corporation, ON Semiconductor Corporation’s acquisition of Fairchild Semiconductor International, Inc., NXP Semiconductors N.V.’s acquisition of Freescale Semiconductor, Inc., Avago Technologies Ltd.’s acquisition of Broadcom Corporation, several acquisitions of semiconductor design companies by MediaTek, Inc., Bain Capital’s acquisition of Toshiba Corporation’s memory chip business, Microchip Technology Inc.’s acquisition of Atmel Corporation and Microsemi Corporation, Qualcomm Incorporated’s attempted acquisition of NXP Semiconductors, Broadcom Limited’s attempted acquisition of Qualcomm Incorporated, Infineon’s acquisition of Cypress, NXP Semiconductors N.V.’s acquisition of Marvell’s Wi-Fi Connectivity Business, ON Semiconductor Corporation’s acquisition of Quantenna. Examples of mergers and acquisitions by and among semiconductor packaging and testing companies, including Jiangsu Changjiang Electronics Technology Co., Ltd.’s acquisition of STATS ChipPAC Ltd., Nantong Fujitsu Microelectronics Co., Ltd.’s acquisition of the packaging and testing factory of Advanced Micro Devices, Inc., and Amkor Technology, Inc.’s acquisition of J-Devices Corporation.

As a result of the aforementioned mergers and acquisitions, our competitors were able to further strengthen their competitive position by expanding their product offerings and combining their financial resources. We expect this consolidation trend to continue.

Overview of Semiconductor Manufacturing Process

The manufacturing of semiconductors is a complex process that requires increasingly sophisticated engineering and manufacturing expertise. The manufacturing process can be generally divided into the following stages:

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We are involved in all stages of the semiconductor manufacturing process except circuit design and wafer fabrication.

Process	Description
1. Circuit Design	The design of a semiconductor is developed by laying out circuit components and interconnections.
2. Engineering Test	Throughout and following the design process, prototype semiconductors undergo engineering testing, which involves software development, electrical design validation, and reliability and failure analysis.
3. Wafer Fabrication	Process begins with the generation of a photomask through the definition of the circuit design pattern on a photographic negative, known as a mask, by an electron beam or laser beam writer. These circuit patterns are transferred to the wafers using various advanced processes.
4. Wafer Probe	Each individual die is electrically tested, or probed, for defects. Dies that fail this test are marked to be discarded.
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5. Packaging (or Assembly)	Packaging, also called assembly, is the processing of bare semiconductors into finished semiconductors and serves to protect the die and facilitate electrical connections and heat dissipation. The patterned silicon wafers received from our customers are diced by means of diamond saws into separate dies, also called chips. Basically each die is attached to a leadframe or a laminate (plastic or tape) substrate by epoxy resin. A leadframe is a miniature sheet of metal, generally made of copper and silver alloys, on which the pattern of input/output leads has been cut. On a laminate substrate, typically used in ball grid array, or BGA, packages, the leads take the shape of small bumps or balls. Leads on the leadframe or the substrate are connected by extremely fine gold or copper wires or bumps to the input/output terminals on the chips, through the use of automated machines known as “bonders.” Each chip is then encapsulated, generally in a plastic casing molded from a molding compound, with only the leads protruding from the finished casing, either from the edges of the package as in the case of the leadframe-based packages, or in the form of small bumps on a surface of the package as in the case of BGA or other substrate-based packages.

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6. Final Test	Final testing is conducted to ensure that the packaged semiconductor meets performance specifications. Final testing involves using sophisticated testing equipment known as testers and customized software to electrically test a number of attributes of packaged semiconductors, including functionality, speed, predicted endurance and power consumption. The final testing of semiconductors is categorized by the functions of the semiconductors tested into logic/mixed-signal/RF/3D IC/discrete final testing and memory final testing. Memory final testing typically requires simpler test software but longer testing time per device tested.
7. Module, Board Assembly and Test	Module, board assembly and test refers to the combination of one or more packaged semiconductors with other components in an integrated module or board to enable increased functionality.
8. Material	Material refers to the interconnection of materials which connect the input/output on the semiconductor dies to the printed circuit board, such as substrate, leadframe and flip chip.

6. Final Test

Final testing is conducted to ensure that the packaged semiconductor meets performance specifications. Final testing involves using sophisticated testing equipment known as testers and customized software to electrically test a number of attributes of packaged semiconductors, including functionality, speed, predicted endurance and power consumption. The final testing of semiconductors is categorized by the functions of the semiconductors tested into logic/mixed-signal/RF/3D IC/discrete final testing and memory final testing. Memory final testing typically requires simpler test software but longer testing time per device tested.

7. Module, Board Assembly and Test

Module, board assembly and test refers to the combination of one or more packaged semiconductors with other components in an integrated module or board to enable increased functionality.

8. Material

Material refers to the interconnection of materials which connect the input/output on the semiconductor dies to the printed circuit board, such as substrate, leadframe and flip chip.

Strategy

Our objective is to provide integrated solutions that set industry standards, including packaging, testing services, interconnect materials design and production capabilities, and to lead and facilitate the industry trend toward outsourcing semiconductor manufacturing requirements. The principal elements of our strategy are to:

Grow Our Packaging Services and Expand OurRange of Offerings

We believe that an important factor to attract leading semiconductor companies as our customers has been our ability to fulfill demand for a broad range of packaging solutions on a large scale. We intend to continue to develop process and product technologies to meet the packaging requirements of clients. Our expertise in packaging technology has enabled us to develop sophisticated solutions such as flip chip packaging, bump chip carrier packaging, stacked die packaging and fine-pitch wire bonding. We are continuously investing in research and development in response to and in anticipation of migrations in technology and intend to continue to acquire access to new technologies through strategic alliances and licensing arrangements.

The increasing miniaturization of semiconductors and the growing complexity of interconnect technology have also resulted in the convergence of assembly processes at different levels of integration: chip, module, board and system. In response to this miniaturization and growing complexity, we have focused on providing module assembly services and, in addition, our subsidiary USI Group has provided us with access to process and product technologies at the levels of module, board and system assembly and testing, which helps us to better anticipate industry trends and take advantage of potential growth opportunities. We expect to continue to combine our packaging, testing and materials technologies with the expertise of USI Group at the systems level to develop our SiP business.

Strategically Expand and Streamline ProductionCapacity

To capitalize on the growing demand for packaging and testing services, we intend to strategically expand our production capacity, both through internal growth and selective acquisitions and joint ventures, with a focus on providing cost competitive and innovative packaging and testing services.

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We intend to invest in trends that are essential to the development of the industry. We plan to expand our capacity with respect to, but not limited to, bumping, FC-CSP, SiP products, Fan-Out technology, and 2.5D/3D packaging to meet demand for smaller form factors, higher performance and higher packaging density.

In addition, we intend to promote our copper wire solutions to our customers in addition to gold wire. Gold wire is a significant raw material for us. Gold prices, however, are subject to intense fluctuations and have in the past impacted our profitability. We believe that replacing gold wire in some of our packages with copper wire technology will not only improve our profitability but will also enable us to provide more value to our customers by providing lower cost solutions, which could enhance our competitiveness and market share. We are currently the industry leader in terms of copper wire capacity. We thus plan to capitalize on the overall industry trend of copper conversion by maintaining our leadership and focusing on integrating copper wire into a wider range of traditional leadframe-based packages and higher-end substrate-based packages.

We expect to focus our packaging and testing on providing cost-competitive services through better management of capacity utilization and efficiency improvements and offer our services on a large scale with the intention of driving more integrated device manufacturer outsourcing in the long run. Before the consummation of the Share Exchange, SPIL entered into an agreement to sell 30.0% of its equity interest in SZ to Tibet Zixi Electronic Technology Co., Ltd. In 2018, we also sold 30.0% of our equity interest in ASEN to Beijing Unis Capital Management Co., Ltd. Although we repurchased equity interest from Tibet Zixi Electronic Technology Co., Ltd. and Beijing Unis Capital Management Co., Ltd., respectively, in 2019, we still believe our strategic relationships with China-based companies will enable us to expand our commercial reach in the P.R.C.’s fast-growing semiconductor market.

We evaluate acquisition and joint venture opportunities on the basis of access to new markets and technology, the enhancement of our production capacity, improvement of research and development capabilities, economies of scale and management resources, and closer proximity to existing and potential customers. In 2010, we acquired controlling interests in USI Group to broaden our offerings to include integrated solutions for EMS in relation to computers and storage, peripherals, communications, industrial, automotive and server applications. In 2015, we entered into a joint venture agreement with TDK Corporation to invest in ASEEE and obtained control over ASEEE in April 2019 to further expand our business in embedded substrates. During the period from 2015 to 2018, we completed the step acquisition of SPIL to further broaden semiconductor packaging and testing service. In July 2016, we invested in DECA to advance our fan-out wafer level packaging technologies. In February 2018, we entered into a joint venture agreement with Qualcomm Incorporated to form Semicondutores Avancados do Brasil S.A. to expand our SiP business. In August 2018, we also entered into an equity transfer agreement with Chung Hong Electronics (Suzhou) Co., Ltd. to acquire its 60.0% equity in its Polish subsidiary UGPL to set up production base and to expand our business in Europe to build a much more complete global supply system. In August 2018, we also entered into a joint venture agreement with Cancon Information Industry Co., Ltd. to establish SUMA-USI Electronics Co., Ltd. to integrate the industrial resources to cooperate deeply in the field of secure and controllable high-performance server products for customers. In September 2018, we acquired whole shares of USI Inc. to consolidate the resources within ASEH and enhance operational efficiency. In January 2019, we entered into a project investment agreement with China Merchants Group of Huizhou Daya Bay Economic and Technological Development Zone of Guangdong Province to set up a subsidiary, Huanrong Electronics (Huizhou) Co., Ltd., in Huizhou Daya Bay Economic and Technological Development Zone to address the growing needs of our capacity expansion and the development of our business in South China. In April 2019, we obtained control over Advanced Microelectronic Products Inc. to diversify our business in manufacturing of integrated circuit. In Auguest 2019, we indirectly acquired 42.2% interest of Memtech International Ltd. by our equity method investee, M-Universe Investments Pte. Ltd., to enhance supply chain dynamics and raise competitiveness in mechanical components. In December 2019, we entered into the FAFG Share Purchase Agreement to further enhance our manufacturing capabilities, expand our EMS customer base and capture a wider range of opportunities throughout the product development lifecycle.

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Continue to Leverage Our Presence in Key Centersof Semiconductor and Electronics Manufacturing

We intend to continue leveraging our presence in key centers of semiconductor and electronics manufacturing to further grow our business. We have significant packaging, testing and EMS operations in Taiwan, currently one of the leading centers for outsourced semiconductor and electronics manufacturing in the world. This presence enables our engineers to work closely with our customers as well as wafer foundries and other providers of complementary semiconductor and EMS early in the design process, enhances our responsiveness to the requirements of our customers and shortens production cycles. In addition, as a turnkey service provider, we are able to offer our products to our customers and complementary service providers within relatively close geographic proximity. Besides our current operations in Taiwan, we intend to expand our operations in our other subsidiaries.

We have primary operations in the following locations in addition to our locations in Taiwan:

·	P.R.C. — a fast-growing market for semiconductor and electronics manufacturing in the world;
·	Korea — an important center for the manufacturing of memory and communications devices;
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·	Malaysia and Singapore — a center for outsourced semiconductor manufacturing in Southeast Asia;
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·	Silicon Valley in California — the preeminent center for semiconductor design, with a concentration of fabless customers;
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·	Japan — an emerging market for packaging and testing outsourcing services as Japanese integrated device manufacturers increasingly outsource their semiconductor manufacturing requirements;
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·	Mexico — a development and manufacturing center for electronic products across different industries with an auxiliary service depot to provide technical services; and
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·	Europe — an original equipment manufacturing solutions for the electronics industry.

Strengthen and Develop Strategic Relationshipswith Our Customers and Providers of Complementary Semiconductor Manufacturing Services

We intend to strengthen existing and develop new strategic relationships with our customers and providers of other complementary semiconductor manufacturing services, such as wafer foundries, as well as equipment vendors, raw material suppliers and technology research institutes, in order to offer our customers total semiconductor manufacturing solutions covering all stages of the manufacturing of their products from design to shipment. In addition, we are working with our customers to co-develop new packaging technologies and designs.

Since 1997, we have maintained a strategic alliance with TSMC, currently one of the world’s largest dedicated semiconductor foundries, which designates us as their nonexclusive preferred provider of packaging and testing services for semiconductors manufactured by TSMC. Through our strategic alliance with and close geographic proximity to TSMC, we are able to offer our customers a total semiconductor manufacturing solution that includes access to foundry services in addition to our packaging, testing and direct shipment services.

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Principal Products and Services

We offer a broad range of semiconductor packaging and testing services. In addition, we have provided EMS through USI Group since 2010. Our package types generally employ either leadframes or substrates as interconnect materials. The semiconductors we package are used in a wide range of end-use applications, including communications, computing, consumer electronics, industrial, automotive and other applications. Our testing services include front-end engineering testing, which is performed during and following the initial circuit design stage of the semiconductor manufacturing process, wafer probe, final testing and other related semiconductor testing services. We focus on packaging and testing semiconductors. We offer our customers turnkey services, which consist of packaging, testing and direct shipment of semiconductors to end users designated by our customers. Our EMS are used in a wide range of end-use applications, including, but not limited to, computers and storage, peripherals, communications, industrial applications, automotive electronics, and server applications. In 2019, our revenues generated from packaging, testing and EMS accounted for 48.2%, 10.3% and 40.1% of our operating revenues, respectively.

Packaging Services

We offer a broad range of package types to meet the requirements of our customers, including flip chip BGA, flip chip CSP, aCSP (advanced chip scale packages), quad flat packages (QFP), thin quad flat packages (TQFP), bump chip carrier (BCC), quad flat no-lead (QFN) packages, aQFN (advanced QFN) and Plastic BGA. In addition, we provide 3D chip packages, such as aMAP POP (advanced, laser ablation type), which enable our customers to mount packages more easily, and HB PoP (High-Band package on Package) for higher performance orientation and marketing requirement. We also offer other forms of stacked die solutions in different package types, e.g., stacked die QFN, hybrid BGAs containing stacked wire bond and FC die. Meanwhile, we are developing the cost-effective solutions to 3D packages, such as 2.1D (substrate layer modification) and 2.5D (substrate interposer), to fulfill current low-cost and high-performance requirements in parallel with 3D packages with TSV (Through Silicon Via) technology. Our first product has been a CMOS image sensor with TSV to minimize the form factor. In addition, to meet current trends toward low-cost solutions, we provide copper wire bonding solutions which can be applied to current gold wire products. We also provide a high-volume manufacturing experience with silver wire bonding for FCCSP Hybrid packages. Furthermore, we are one of the key providers of IoT (Internet of Things), server and automotive services. We believe we are among the leaders in such packaging processes and technologies and are well positioned to lead the technology migration in the semiconductor packaging industry.

To address the new demands of 5G wireless technology, we survey new material and structure based on developed package structures and focus our efforts on developing more integration solutions, such as AP (Application Processor) module and RFFE (RF front end) with customized SiP services.

Advanced Packages. The semiconductor packaging industry has evolved to meet the requirements of high-performance electronics products. We believe that there will continue to be growing demand for packaging solutions with increased input/output density, smaller size and a better heat dissipation characteristic.

We have focused on developing our capabilities in certain packaging solutions, such as aCSP (wafer-level chip scale package), flip chip BGA, Heat-Spreader FCBGA, flip-chip CSP, Hybrid FCCSP (Flip Chip + W/B), Flip Chip PiP (Package in Package), Flip Chip PoP (Package on Package), aS 3™ (Advanced Single Sided Substrate), HB POP (High-Bandwidth POP), Fan-Out Wafer-Level Packaging, SESUB and 2.5D. Flip-chip BGA technology replaces wire bonding with wafer bumping for interconnections within the package. Wafer bumping involves the placing of tiny solder balls, instead of wires, on top of dies for connection to substrates. As compared with more traditional packages, which allow input/output connection only on the boundaries of the dies, flip chip or wafer-level package solutions significantly enhance the input/output flow by allowing input/output connections over the entire surface of the dies.

Chip scale packages typically have an area no greater than 120% of the silicon die. For wafer level package, the electrical connections are plated or printed directly onto the wafer itself, resulting in a package very close to the size of the silicon die. Wafer-level packages do not include an interposer so they are unlike substrate-based packages, where the die is usually mounted on an interposer which contains electrical connections in the form of small bumps or balls.

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aEASI (Advance Embedded Assembly Substrate Integration) is a technology which allows the embedding thin chips into substrate build-up layers. aEASI can be used in various technologies tailored to clients’ demand, such as package solution of miniaturization, and has also been proven to have better electrical/thermal performance. It also provides flexibility in design (such as for MicroSiP), and the electrical contacts to the chips are realized by laser-drilled and metallized micro-vias to replace the traditional wire bonding process. aEASI is mainly used in power management applications.

WL MEMs (Wafer-Level MEMs) is advanced assembly for MEMs in wafer-level type instead of current LGA or leadframe types using TSV or chip-to-wafer technology. WL MEMs are mainly used in applications such as pressure, temperature, humidity and gyroscope sensors, among others.

FOWLP (Fan-Out Wafer-Level Packages) provides an extended solution and package type to integrate different functional chips or packages and to have good reduction in resistance and inductance over FCCSP, better thermal performance and smaller form factors of packages. FOWLP can be applied for different stack and SiP solutions.

We provide numerous technologies to meet various customer demands. The following table sets forth our principal advanced packages.

PackageTypes	Numberof Leads	Description	End-UseApplications
Wafer-Level Chip Scale Package (aCSP)	6-120	A wafer-level chip scale package that can be directly attached to the circuit board. Provides shortest electrical path from the die pad to the circuit board, thereby enhancing electrical performance.	Cellular phones, personal digital assistants, watches, MP3 players, digital cameras and camcorders.
Flip Chip Chip Scale Package (FC-CSP, a-fcCSP)	16-770	A lightweight package with a small, thin profile that provides better protection for chips and better solder joint reliability than other comparable package types.	RFICs and memory ICs such as digital cameras, DVDs, devices that utilize WiMAX technology, cellular phones, GPS devices and personal computer peripherals.
Flip Chip PiP (Package in Package) (FC-CSP PiP)	500-980	System-in-Package for Flip Chip+Memory die inside with a better electrical performance package types.	Application processor for smartphone and data modem on portable devices.
Flip Chip PoP (Package on Package) (FC-CSP PoP)	500-1100	SoC (System-on-Chip) die for Assembly to Bottom package and then applied for memory die on top inside with a better electrical performance package types.	High-tier application processor for smartphones and data modem on portable devices.
Flip Chip BGA/ HF FCBGA(High Performance / Heat Spreader / FCBGA)	16-2916	Using advanced interconnect technology, the flip chip BGA packages allow higher density of input/output connection over the entire surface of the dies. HF FCBGA is designed for the semiconductor high-performance requirement of high density of interconnects.	High-performance networking, graphics, server and data center processor applications.
Hybrid (Flip Chip and Wire Bonding)	49-608	A package technology that stacks a die on top of a probed good die to integrate ASIC and memory (flash, SRAM and DDR) into one package and interconnects them with wire bonding and molding. This technology suffers from known good die issues (i.e., one bad die will ruin the entire module). Rework is also not an option in hybrid packages.	Digital cameras, smartphones, bluetooth applications and personal digital assistants.

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PackageTypes	Numberof Leads	Description	End-UseApplications
aS3	up to 300	Ultra-thin profile package which is an excellent on middle pin-count alternative solution; standard BT material and manufacturing equipment; and lower cost via on pad.	High I/O and short wire length package solution in high-performance requirement.
Integrated Passive Device (IPD)	~ 20	IPD can provide a high-performance/high Q-factor inductor and single/double layers for lower cost and turnkey solutions and integrate passives into one IPD chip. IPD requires less involvement in the Surface Mount Technology (“SMT”) process, and is considered to be more compatible with current assembly process and suitable for all package solutions.	Cellular phones, Wi-Fi module, TV and personal digital assistants.
HB (High-Bandwidth)	~ 1000	High-Bandwidth POP can provide a data rate and good signal integrity for Cellular AP, a integration solution for ASIC and memory, decoupling functions for multiple memory mount applications.	Cellular phones and application processors.
POP (Package On Package)	~ 256L Memory
FOWLP (Fan-Out Wafer-Level Package)	~ 1,500+	FOWLP provides an extended solution/package type to integrate most different functional chips or packages and to have good reduction in resistance and inductance over FCCSP, better thermal performance and smaller form factors of packages, and can be applied for different stack or SiP solutions.	Cellular phones, logic devices, power management, RF, Codec, IoT, wearables and networking.

IC Wirebonding. We provide IC wirebonding, including leadframe-based packages and substrate-based packages. Leadframe-based packages are packaged by connecting the die, using wire bonders, to the leadframe with gold wire or copper wire. As packaging technology improves, the number of leads per package increases. In addition, improvements in leadframe-based packages have reduced the footprint of the package on the circuit board and improved the electrical performance of the package. To have higher interconnected density and better electrical performance, semiconductor packages have evolved from leadframe-based packages to substrate-based packages. The key differences of these package types are the size of the package; the density of electrical connections the package can support; flexibility at lower costs; the thermal and electrical characteristics of the package; and environmentally conscious designs. Substrate-based packages generally employ the BGA design. Whereas traditional leadframe technology places the electrical connection around the perimeter of the package, the BGA package type places the electrical connection at the bottom of the package surface in the form of small bumps or balls. These small bumps or balls are typically distributed evenly across the bottom surface of the package, allowing greater distance between individual leads and higher pin-counts. Our expertise in BGA packages also includes capabilities in stacked-die BGA, which assembles multiple dies into a single package.

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3D packaging has recently gained a lot of publicity because of the advent of TSV (Through Silicon Via) based chip stacking. Chip stacking has been implemented for many years, albeit without TSVs. Wire bond die is routinely stacked on leadframes as well as BGA substrates. A more recent implementation is the stacking of packages as package on package (PoP) and the more specialized package in package (PiP). We have advanced PoP by the invention of aMAPPoP which provides the package interconnects by exposing a molded in solder ball with a laser via. Aside from being cost effective due to block molding, this PoP also has much lower warpage, greatly improving the stacking yield.

The following table sets forth our principal IC wirebonding packages.

PackageTypes	Numberof Leads	Description	End-UseApplications
Advanced Quad Flat No-Lead Package (aQFN)	104-276	aQFN allows for leadless, multi-row and fine-pitch leadframe packaging and is characterized by enhanced thermal and electrical performance. aQFN is a cost-effective packaging solution due to its cost-effective materials and simpler packaging process.	Telecommunications products, wireless local access networks, personal digital assistants, digital cameras, low to medium lead count packaging information appliances.
Quad Flat Package (QFP)/Thin Quad Flat Package (TQFP)	44-256	Designed for advanced processors and controllers, application-specific integrated circuits and digital signal processors.	Multimedia applications, cellular phones, personal computers, automotive and industrial products, hard disk drives, communication boards such as ethernet, integrated services digital networks and notebook computers.
Quad Flat No-Lead Package (QFN)/ Dual-Row QFN (DR-QFN)/ Microchip Carrier (MCC)	12-160	QFN/DRQFN, also known as types of MCC, uses half-encapsulation technology to expose the rear side of the die pad and the tiny fingers, which are used to connect the chip and bonding wire with printed circuit boards. Dual-Row is to increase the lead counts for product requirement.	Cellular phones, wireless local access networks, personal digital assistant devices and digital cameras.
Bump Chip Carrier (BCC)	16-156	BCC packages use plating metal pads to connect with printed circuit boards, creating enhanced thermal and electrical performance.	Cellular phones, wireless local access networks, personal digital assistant devices and digital cameras.
Small Outline Plastic Package (SOP)/Thin Small Outline Plastic Package (TSOP)	8-56	Designed for memory devices including static random access memory, or SRAM, dynamic random access memory, or DRAM, fast static RAM, also called FSRAM, and flash memory devices.	Consumer audio/video and entertainment products, cordless telephones, pagers, fax machines, printers, copiers, personal computer peripherals, automotive parts, telecommunications products, recordable optical disks and hard disk drives.

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PackageTypes	Numberof Leads	Description	End-UseApplications
Small Outline Plastic J-Bend Package (SOJ)	20-44	Designed for memory and low pin-count applications.	DRAM memory devices, microcontrollers, digital analog conversions and audio/video applications.
Plastic Leaded Chip Carrier (PLCC)	28-84	Designed for applications that do not require low-profile packages with high density of interconnects.	Personal computers, scanners, electronic games and monitors.
Plastic Dual In-line Package (PDIP)	8-64	Designed for consumer electronic products.	Telephones, televisions, audio/video applications and computer peripherals.
Plastic BGA	119-1520	Designed for semiconductors which require the enhanced performance provided by plastic BGA, including personal computer chipsets, graphic controllers and microprocessors, application-specific integrated circuits, digital signal processors and memory devices.	Telecommunications products, global positioning systems, notebook computers, disk drives and video cameras.
Stacked-Die BGA	120-1520	Combination of multiple dies in a single package enables package to have multiple functions within a small surface area.	Telecommunications products, local area networks, graphics processor applications, digital cameras and pagers.
Package-on-Package (POP, aMAP POP)	136-904	This technology places one package on top of another to integrate different functionalities while maintaining a compact size. It offers procurement flexibility, low cost of ownership, better total system cost and faster time to market. Designers typically use the topmost package for memory applications and the bottommost package for ASICs. By using this technology, the memory known good die issue can be mitigated and the development cycle time and cost can be reduced.	Cellular phones, personal digital assistants and system boards.
Land Grid Array (LGA)	10-72	Leadless package, which is essentially a BGA package without the solder balls. Based on laminate substrate, land grid array packages allow flexible routing and are capable of multichip module functions.	High-frequency integrated circuits such as wireless communications products, computers servers, personal computer peripherals and MEMS sensors.

Heterogeneous Integration*.*Heterogeneous Integration refers to the integration of separately manufactured components into a higher-level assembly that, in the aggregate, provides enhanced functionality and improved operating characteristics:

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·	SiP and Modules.

The drive towards semiconductor miniaturization and integration is expanding the commercial potential of SiP, a package or module containing a functional electronic system or subsystem that is integrated and miniaturized through IC greater assembly technologies. With attributes that deliver higher performance, cost-effectiveness, and shorter time to market, SiP technology is enabling functionality and creating more commercial opportunities across a broader variety of electronics applications.

ASEH is a market leader in SiP technologies from design to assembly and high-volume manufacturing. SiP involves the integration of multiple components from IC chips and components including ASICs, Memory, Analog & mixed signals devices, passives, MEMs, sensors, antennas and other devices into one single package. SiP and Modules products are gaining significant traction within the industry, given growing demand for miniaturized electronic devices that deliver more functions and higher performance, lower power, greater speed and increased bandwidth. ASEH’s SiP portfolio includes flip chip and wirebond multichip packaging, embedding technologies such as SESUB and aEASI, and wafer-level technologies including fan-out and IPD. IPD uses a wafer-level process to integrate passive components on an individual substrate. Recent IPD innovation involves the extension of the RDL (Redistribution) process to build a high-quality factor (Q) inductor and RF circuits on top of silicon wafers. It can be used in the following three approaches to enhance product performance: several solutions to replace discrete components such as Balun and Filter, or to integrate other passive components and act as interposer, or to replace PWB and act as a substrate of the module. In addition, we leverage some of our SMT-based technologies, such as compartment shielding, double-sided module and antenna integration.

We also offer module assembly services, which combine one or more packaged semiconductors with other components in an integrated module to enable increased functionality for system-level assembly. End-use applications for modules include cellular phones and wireless LAN applications, Bluetooth applications, camera modules, automotive applications, toys, networking, storage and power management.

·	Fan-Out

Fan-out packaging continues to gain major prominence within the industry, based on significant technical advantages that have led to its broad commercialization. This advanced packaging platform is evolving to meet application demands for smaller form factors and improved electrical and thermal performance.

With the packaging done on singulated die formed into a reconstituted molded wafer or panel, fan-out packaging enables multi-die packages, through partitioning with different nodes and functionality. Fan-out can be done either chip first or chip last, with both options resulting in much higher-density interconnect and improved cost efficiency. Initially fan-out was used primarily for smaller, lower I/O count packages, until we introduced a very high-density fan-out alternative to 2.5D Interposer packages, fan-out on Substrate (FOCoS), a hybrid fan-out/FCBGA package. Today, fan-out is in high-volume applications for a wide variety of products, including PMICs, RF packages, Baseband processors and high-end networking systems. Key attributes include:

· Parallel Manufacturing Process in Wafer Form

· Smallest Package in X,Y and Z

· Excellent Mechanical, Electrical and Thermal Performance

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·	2.5D & 3D Packaging

As 5G, AI, and high-performance computing continue to make inroads into our world, we believe there is an increased demand for semiconductor devices that deliver enhanced performance, lower latency, increased bandwidth and greater power efficiency. ASEH strives to meet this demand by innovating 2.5D & 3D technologies that we believe are becoming more central within the semiconductor industry. We have established ourselves as a leader in 2.5D technology through our successful pioneering of 2.5D solutions that helped bring advanced ASIC and HBM products to the marketplace. In addition, ASEH is introducing high-density fan-out technology for die stacking and multi-die solutions to achieve high bandwidth & high-performance across the market landscape, addressing demand from high density data centers to consumer and mobile space.

Automotive Electronics. We assemble automotive electronic products based on our leading technology, good quality systems and automation. We provide a variety of products, such as leadframe base, substrate base, Flip Chip and Wafer-Level packages. We also provide robust package solutions to customers and end-users, including most types of industrial package solutions together with tailor-made solutions to meet customers’ and end-users’ requirements on automotive specifications.

Having accumulated production experience in using gold wire for automotive devices over several years, we collaborate with certain customers to develop and release copper wire for advanced wafer process (65nm for QFP and 40 nm for BGA) development that will fulfill criteria in AEC-G100 and in the early development of the 28 nm wafer process with hybrid packaging structure (FC bonding + wirebonding). In addition, we offer the FOWLP solution for radar products according to requests from some tier 1 customers.

Interconnect Materials. Interconnect materials connect the input/output on the semiconductor dies to the printed circuit board. Interconnect materials include substrate, which is a multilayer miniature printed circuit board, and is an important element of the electrical characteristics and overall performance of semiconductors. We produce substrates for use in our packaging operations.

The demand for higher-performance semiconductors in smaller packages will continue to spur the development of IC substrates that can support the advancement in circuit design and fabrication. As a result, we believe that the market for substrates will grow and the cost of substrates as a percentage of the total packaging process will increase. In the past, substrates we designed for our customers were produced by independent substrate manufacturers. Since 1997, we have been designing and producing a portion of our interconnect materials in-house. In 2019, our interconnect materials operations supplied approximately 10.0% of our consolidated substrate requirements by value.

The following table sets forth, for the periods indicated, the percentage of our packaging revenues accounted for by each principal type of packaging products or services.

	Year Ended December 31,
	2017		2018		2019
Bumping, Flip Chip, WLP and SiP		29.9%		36.1%		41.7%
IC Wirebonding^(1)^		59.2%		54.0%		48.2%
Discrete and other		10.9%		9.9%		10.1%
Total		100.0%		100.0%		100.0%

_____________________

(1)	Includes leadframe-based packages such as QFP/TQFP, QFN/MCC and PLCC/PDIP and substrate-based packages, such as various BGA package types and LGA.

Testing Services

We provide a complete range of semiconductor testing services, including front-end engineering testing, wafer probing, final testing of logic/mixed-signal/RF/(2.5D/3D) module and SiP/MEMS/Discrete and other test-related services.

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The testing of semiconductors requires technical expertise and knowledge of the specific applications and functions of the semiconductors tested as well as the testing equipment utilized. We believe that our testing services employ technology and expertise which are among the most sophisticated in the semiconductor industry. In addition to maintaining different types of testing equipment, which enables us to test a variety of semiconductor functions, we work closely with our customers to design effective testing solutions on multiple equipment platforms for particular semiconductors.

In recent years, complex, high-performance logic/mixed-signal/RF/(2.5D/3D) module and SiP/MEMS semiconductors have accounted for an increasing portion of our testing revenues.

Front-End Engineering Testing. We provide front-end engineering testing services, including customized software development, electrical design validation, and reliability and failure analysis.

·	Customized Software Development. Test engineers develop customized software to test the semiconductors using our equipment. Customized software, developed on specific test platforms, is required to test the conformity of each particular semiconductor type to its unique functionality and specification.
·	Electrical Design Validation. A prototype of the designed semiconductor is subjected to electrical tests using advanced test equipment and customized software. These tests assess whether the prototype semiconductor complies with a variety of different operating specifications, including functionality, frequency, voltage, current, timing and temperature range.
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·	Reliability Analysis. Reliability analysis is designed to assess the long-term reliability of the semiconductor and its suitability of use for intended applications. Reliability testing can include “burn-in” services, which electrically stress a device, usually at high temperature and voltage, for a period of time long enough to cause the failure of marginal devices.
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·	Failure Analysis. In the event that the prototype semiconductor does not function to specifications during either the electrical design validation or reliability testing processes, it is typically subjected to failure analysis to determine the cause of the failure to perform as anticipated. As part of this analysis, the prototype semiconductor may be subjected to a variety of analyses, including electron beam probing and electrical testing.
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Wafer Probing. Wafer probing is the step immediately before the packaging of semiconductors and involves visual inspection and electrical testing of the processed wafer for defects to ensure that it meets our customers’ specifications. Wafer probing services require expertise and testing equipment similar to that used in final testing, and most of our testers can also be used for wafer probing.

Logic/Mixed-signal/RF/(2.5D/3D) Moduleand SiP/Discrete Final Testing. We conduct final tests of a wide variety of logic/mixed-signal/RF/(2.5D/3D) module and SiP/MEMS/discrete semiconductors, with the number of leads or bumps ranging from the single digits to over 10 thousand and operating frequencies of over 32 Gbps for digital semiconductors and mmWave for radio frequency semiconductors, which are at the high end of the range for the industry. The products we test include semiconductors used for wired, wireless and mobile communications, automotive, home entertainment, personal computer, artificial intelligence, and high-performance computing applications, as well as a variety of consumer and application-specific integrated circuits for various specialized applications.

Other Test-Related Services. We provide a broad range of additional test-related services, such as:

·	Electric Interface Board and Mechanical Test Tool Design. Process of designing individualized testing apparatuses such as test load boards, sockets, handler change kits, and probe cards for unique semiconductor devices and packages.
·	Program Conversion. Process of converting a program from one-test platform to different test platforms to reduce testing costs or optimize testing capacity.
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·	Program Efficiency Improvement. Process of optimizing the program code or increasing site count of parallel tests to improve testing throughout.
·	Burn-In Testing. Burn-in testing is the process of electrically stressing a device, usually at high temperature and voltage, for a period of time to simulate the continuous use of the device to determine whether this use would cause the failure of marginal devices.
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·	Module and SiP Testing. We provide module and SiP testing through integrated bench solution or automatic test equipment to our customers with a complete solution with respect to finger print sensor module, camera module, 3D depth sensing module, wireless connectivity devices, global positioning system devices, personal navigation devices and digital video broadcasting devices.
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·	Tape and Reel. Process which involves transferring semiconductors from a tray or tube into a tape-like carrier for shipment to customers.
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Drop Shipment Services. We offer drop shipment services for shipment of semiconductors directly to end users designated by our customers. Drop shipment services are provided mostly in conjunction with logic/mixed-signal/RF/3D IC/discrete testing. We provide drop shipment services to a significant percentage of our testing customers. A substantial portion of our customers at each of our facilities have qualified these facilities for drop shipment services. Since drop shipment eliminates the additional step of inspection by the customer before shipment to the end user, quality of service is a key consideration. We believe that our ability to successfully execute our full range of services, including drop shipment services, is an important factor in maintaining existing customers as well as attracting new customers.

The following table sets forth, for the periods indicated, the percentage of our testing revenues accounted for by each type of testing service.

	Year Ended December 31,
	2017		2018		2019
Front-end engineering testing		3.4%		2.4%		1.8%
Wafer probing		16.7%		24.8%		26.2%
Final testing		79.9%		72.8%		72.0%
Total		100.0%		100.0%		100.0%

EMS. We provide integrated solutions for EMS in relation to computers and storage, peripherals, communications, industrial, automotive and server applications through USI Group since 2010. The key products and services we offer to our customers, for instance, include:

·	Computers: motherboards for server and desktop PC; peripheral; port replicator;
·	Communications: Wi-Fi; SiP;
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·	Consumer products: control boards for flat panel devices; SiP;
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·	Automotive electronics: automotive EMS; car LED lighting; regulator/rectifier;
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·	Industrial products: point-of-sale systems; smart handheld devices;
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·	Storage: network attached system; network video recorder; solid state drive; and
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·	Others: field replacement unit; return material authorization.
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Seasonality

See “Item 5. Operating and Financial Review and Prospects—Operating Results and Trend Information—Quarterly Operating Revenues, Gross Profit and Gross Margin.”

Sales and Marketing

Sales and Marketing Presence

We maintain sales and marketing offices in Taiwan, the United States, Belgium, Singapore, the P.R.C., Korea, Malaysia, Japan and a number of other countries. We also have sales representatives operating in certain other countries in which we do not have offices. Our sales and marketing offices in Taiwan are located in Hsinchu, Taichung and Kaohsiung. We conduct marketing research through our customer service personnel and through our relationships with our customers and suppliers to keep abreast of market trends and developments. We also provide advice in the area of production process technology to our major customers planning the introduction of new products. In placing orders with us, our customers specify which of our facilities these orders will go to. Our customers conduct separate qualification and correlation processes for each of our facilities that they use. See “—Qualification and Correlation by Customers.”

Customers

Our five largest customers together accounted for approximately 46.4%, 46.2% and 51.1% of our operating revenues in 2017, 2018 and 2019, respectively. One customer accounted for more than 10.0% of our operating revenues in 2017 and 2018. For our operating revenues in 2019, two of our customers individually accounted for more than 10.0% of our operating revenues.

We package and test for our customers a wide range of products with end-use applications in the communications, computing and consumer electronics/industrial/automotive sectors. The following table sets forth a breakdown of the percentage of our operating revenues generated from our packaging and testing services, for the periods indicated, by the principal end-use applications of the products that we packaged and tested.

	Year Ended December 31,
	2017		2018		2019
Communications		48.9%		49.9%		52.5%
Computing		11.5%		14.0%		14.6%
Consumer electronics/industrial/automotive/other		39.6%		36.1%		32.9%
Total		100.0%		100.0%		100.0%

Our EMS provide a wide range of products with end-use applications. The following table sets forth a breakdown of the percentage of our operating revenues generated from our EMS for the periods indicated by the principal end-use applications.

	Year Ended December 31,
	2017		2018		2019
Communications		45.5%		35.7%		37.4%
Computers and storage		15.0%		14.2%		11.3%
Consumer electronics		25.9%		34.3%		34.6%
Industrial		7.3%		10.0%		11.3%
Automotive		5.6%		5.0%		4.8%
Other		0.7%		0.8%		0.6%
Total		100.0%		100.0%		100.0%

We categorize our operating revenues geographically based on the country in which the customer is headquartered. The following table sets forth, for the periods indicated, the percentage breakdown by geographic regions of our operating revenues.

	Year Ended December 31,
	2017		2018		2019
United States		67.6%		62.2%		59.4%
Taiwan		12.2%		12.3%		12.4%
Asia		10.4%		15.1%		18.4%
Europe		9.1%		9.9%		9.4%
Other		0.7%		0.5%		0.4%
Total		100.0%		100.0%		100.0%

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Qualification and Correlation by Customers

Customers generally require that our facilities undergo a stringent qualification process during which the customer evaluates our operations and production processes, including engineering, delivery control and testing capabilities. The qualification process typically takes up to several weeks, but can take longer depending on the requirements of the customer. In the case of our testing operations, after we have been qualified by a customer and before the customer delivers semiconductors to us for testing in volume, a process known as correlation is undertaken. During the correlation process, the customer provides us with sample semiconductors to be tested and either provides us with the test program or requests that we develop a conversion program. In some cases, the customer also provides us with a data log of results of any testing of the semiconductors that the customer may have conducted previously. The correlation process typically takes up to two weeks, but can take longer depending on the requirements of the customer. We believe our ability to provide turnkey services reduces the amount of time spent by our customers in the qualification and correlation process. As a result, customers utilizing our turnkey services are able to achieve shorter production cycles.

Pricing

We price our packaging services and EMS, taking into account the actual costs, with reference to prevailing market prices. We price our testing services primarily on the basis of the amount of time, measured in central processing unit seconds, taken by the automated testing equipment to execute the test programs specific to the products being tested, as well as the cost of the equipment, with reference to prevailing market prices. Prices for our packaging, testing and EMS are confirmed at the time orders are received from customers, which is typically several weeks before delivery.

Raw Materials and Suppliers

Packaging

The principal raw materials used in our packaging processes are interconnect materials such as leadframes and substrates, gold wire and molding compound. The silicon die, which is the functional unit of the semiconductor to be packaged, is supplied in the form of silicon wafers. Each silicon wafer contains a number of identical dies. We receive the wafers from the customers or the foundries on a consignment basis. Consequently, we generally do not incur inventory costs relating to the silicon wafers used in our packaging process.

We do not maintain large inventories of leadframes, substrates, gold wire or molding compound, but generally maintain sufficient stock of each principal raw material based on blanket orders and rolling forecasts of near-term requirements received from customers. In addition, several of our principal suppliers dedicate portions of their inventories as reserves to meet our production requirements. However, shortages in the supply of materials experienced by the semiconductor industry have in the past resulted in occasional price adjustments and delivery delays. For example, in the first half of 2000, the industry experienced a shortage in the supply of IC substrates used in BGA packages, which, at the time, were only available from a limited number of suppliers located primarily in Japan. In order to reduce the adverse impact caused by the price fluctuations of raw materials, we have developed substitute raw materials, such as copper wire, the cost of which is much cheaper than that of gold wire. However, we cannot guarantee that we will not experience shortages or price increase in the near future or that we will be able to obtain adequate supplies of raw materials in a timely manner and at a reasonable price or to develop any substitute raw materials. In the event of a shortage and/or price increase, we generally inform our customers and work together to accommodate changes in delivery schedules and/or the price increase of raw materials.

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We produce substrates for use in our packaging operations. In 2019, our interconnect materials operations supplied approximately 10.0% of our consolidated substrate requirements by value. See “—Principal Products and Services—Interconnect Materials.”

As a result of the “Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment,” or RoHS, which became effective on July 1, 2006, we have adjusted our purchases of raw materials and our production processes in order to use raw materials that comply with this legislation for part of our production. This legislation restricts the use in the EU, of certain substances that the EU deems harmful to consumers, including certain grades of molding compounds, solder and other raw materials that are used in our products. Manufacturers of electrical and electronic equipment must comply with this legislation in order to sell their products in an EU member state. Any failure by us to comply with regulatory environmental standards such as Directive 2002/95/EC may have a material adverse effect on our results of operations.

Testing

For the functional and burn-in testing of semiconductors, no other raw materials are needed. However, we often design and outsource the manufacturing of test interface products such as load boards, probe cards and burn-in boards.

EMS

Our manufacturing processes use many raw materials in our EMS. For 2019, raw materials costs accounted for 81.3% of our operating revenues from EMS. Our principal raw materials include, among others, printed circuit boards, integrated chips, ink, semiconductor devices, computer peripherals and related accessories and electronic components. Our principal raw materials varied in the past, depending on the end-use products we provided.

To ensure quality, on-time delivery and pricing competitiveness, we have established both a standardized supplier assessment system and an evaluation mechanism, continued to maintain close working relationships with our suppliers and jointly created a stable and sustainable supply chain. In addition, we adjusted the procurement strategy in line with industry trends as well as the nature of raw materials, and we decentralized the sources of raw materials to lower our supply concentration risk. However, we cannot assure you that we will not experience any shortages or price increases in the near future. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Our revenues and profitability may decline if we are unable to obtain adequate supplies of raw materials in a timely manner and at a reasonable price.”

Equipment

Packaging

The wire bonding process is important for routing signal out of die to the system for the IC wire-bonding solutions. Thus, wire bonder is the important equipment used for such process. As products become finer and finer pitch, bumping process will replace wire bonding process for the signal routing purpose. Thus, sputter and plater will be the crucial equipment for this type of process.

Wire bonders connect the input/output terminals on the silicon die using extremely fine gold or copper wire to leads on leadframes or substrates. Typically, a wire bonder may be used, with minor modifications, for the packaging of different products. As of January 31, 2020, we operated an aggregate of 24,906 wire bonders, of which 24,853 were fine-pitch wire bonders. As of the same date, 21 of the wire bonders operated by us were consigned by customers and 5 of the wire bonders were leased. For the packaging of certain types of substrate-based packages, die bonders are used in place of wire bonders. The number of bonders at a given facility is commonly used as a measure of the packaging capacity of the facility. In addition to bonders, we maintain a variety of other types of packaging equipment, such as wafer grind, wafer mount, wafer saw, heat sink placement, automated molding machines, laser markers, solder plate, pad printers, dejunkers, trimmers, formers, substrate saws and scanners. We purchase our packaging equipment from major international manufactures, including KLA Corporation, Canon Semiconductor Equipment Inc., Tokyo Electron Limited, Grand Process Technology Corporation and TOWA Corporation.

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Testing

Testing equipment is the most capital-intensive component of the testing process. We generally seek to purchase testers from different suppliers with similar functionality and acquire the ability to test a variety of different semiconductors. We purchase testers from major international manufacturers, including Teradyne, Inc., Advantest Corporation, K-shine Technology Corporation, Tokyo Electron Limited, and Hon Precision, Inc. Upon acquisition of new testers, we install, configure, calibrate, perform burn-in diagnostic tests on and establish parameters for the testers based on the anticipated requirements of existing and potential customers and considerations relating to market trends. As of January 31, 2020, we operated an aggregate of 5,438 testers, of which 1,701 were consigned by customers and 84 were leased. In addition to testers, we maintain a variety of other types of testing equipment, such as automated handlers and probers (special handlers for wafer probing), scanners, reformers and computer workstations for use in software development. Each tester may be attached to a handler or prober. Handlers attach to testers and transport individual packaged semiconductors to the tester interface. Probers similarly attach to the tester and align each individual die on a wafer with the interface to the tester.

For the majority of our testing equipment, we often base our purchases on prior discussions with our customers about their forecast requirements. The balance consists of testing equipment on consignment from customers, and which is dedicated exclusively to the testing of these customers’ specific products.

Test programs, which consist of the software that drives the testing of specific semiconductors, are written for a specific testing platform. We sometimes perform test program conversions that enable us to test semiconductors on multiple test platforms. This portability between testers enables us to allocate semiconductors tested across our available test capabilities and thereby improve capacity utilization rates. In cases where a customer requires the testing of a semiconductor product that is not yet fully developed, the customer may provide computer workstations to us to test specific functions. In cases where a customer has specified testing equipment that was not widely applicable to other products that we test, we have required the customer to furnish the equipment on a consignment basis.

EMS

The SMT assembly line is the key facility of our electronic manufacturing operations, and generally includes a printer and one or two high-speed mounters and/or a multifunction mounter. The SMT assembly process primarily consists of the following three manufacturing steps: (i) solder paste stencil printing, (ii) component placement and (iii) solder reflow. High-speed SMT assembly systems offer both economic and technical advantages that may reduce both production cost and time while meeting quality requirements. Thus, SMT has become the most popular assembly method for sophisticated electronic devices. We had 145 SMT lines as of January 31, 2020.

Intellectual Property

As of January 31, 2020, we held 2,440 Taiwan patents, 1,689 U.S. patents, 1,545 P.R.C. patents and 33 patents in other countries related to various semiconductor packaging technologies and invention, utility and design on our EMS. In addition, as of January 31, 2020, we also had a total of 1,473 pending patent applications, 154 in Taiwan, 503 in the United States, 786 in P.R.C. and 30 patents in other countries. Moreover, we filed several trademarks applications in Taiwan, the United States, China and the EU. For example, “ASE,” “aCSP,” “ a-EASI,” “a-fcCSP,” “aQFN,” “a-QFN,” “a-S^3^, ” “a-TiV,” “aWLP,” “a-WLP,” “iSiP,” “iWLP,” “aSiM,” “SiP-id” and “SPIL” have been registered in Taiwan.

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We have also entered into various nonexclusive technology license agreements with other companies involved in the semiconductor manufacturing process, including Fujitsu Limited, Flip Chip International, L.L.C., Infineon Technologies AG, TDK Corporation and DECA. The technology we license from these companies includes solder bumping, redistribution, ultra CSP assembly, advanced QFN assembly, wafer-level packaging and other technologies used in the production of package types, such as BCC, flip chip BGA, film BGA, aQFN and chip embedding. Our license agreements with Flip Chip International, L.L.C. will not expire until the expiration of the patents licensed by the agreement. Our license agreement with Infineon Technologies AG will expire on November 5, 2020. Our license agreement with Fujitsu Limited renews automatically each year unless the parties to the agreement agree otherwise. Our license agreement with TDK Corporation will remain in effect until expiration of the TDK’s patents licensed by the agreement. Our license agreement with DECA will expire on January 13, 2026.

In addition, we improve our technological platform by licensing innovative package technologies. For example, through wafer bumping and redistribution technology, we are able to form and redistribute bumps on the chip to make a silicon die by directly attaching the substrate using bumps rather than wire bonding and through wafer level CSP technology, we are able to produce a chip scale package at the stage of wafer level.

Our success depends in part on our ability to obtain, maintain and protect our patents, licenses and other intellectual property rights, including rights under our license agreements with third parties.

Quality Control

We believe that our process technology and reputation for high quality and reliable services have been important factors in attracting and retaining leading international semiconductor companies as customers for our services and/or products. We maintain a quality control staff at each of our facilities. Our quality control staff typically includes engineers, technicians and other employees who monitor the processes in order to ensure high quality. Our quality assurance systems impose strict process controls, statistical in-line monitors, supplier control, data review and management, quality controls and corrective action systems. Our quality control employees operate quality control stations along production lines, monitor clean room environments and follow up on quality through outgoing product inspection and interaction with customer service staff. We have established quality control systems that are designed to ensure high-quality products/service to customers, high-testing reliability and high production yields at our facilities. We also have established an environmental management system in order to ensure that we can comply with the environmental standards of our customers and the countries within which they operate. See “—Raw Materials and Suppliers—Packaging.” In addition, our facilities have been qualified by all of our major customers after satisfying stringent quality standards prescribed by these customers.

Our packaging and testing operations are undertaken in clean rooms where air purity, temperature and humidity are controlled. To ensure stability and integrity of our operations, we maintain clean rooms at our facilities that meet U.S. Federal Standard 209E class 1,000, 10,000 and 100,000 standards.

ISE Labs’ testing facilities in Fremont, California, are considered suitably equipped by the Defense Logistics Agency to perform the MIL-STD-883 tests on monolithic microcircuits in accordance with the requirements of military specification MIL-PRF-38535.

We have also obtained many certifications on our packaging, testing and interconnect materials facilities. Some of these certifications are required by some semiconductor manufacturers as a threshold indicator of a company’s quality control standards or needed by many countries in connection with sales of industrial products. The table below sets forth the certifications we have for our packaging, testing and interconnect materials.

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Location	IATF 16949:2016^(1)^	ISO<br><br> <br>9001^(2)^	ISO<br><br> <br>14001^(3)^	ISO<br><br> <br>17025^(4)^	ISO<br><br> <br>14064^(5)^	ISO<br><br> <br>14067^(6)^	IECQ<br><br> <br>HSPM QC 080000^(7)^	Sony Green Partner^(8)^	OHSAS 18001/ ISO 45001^(9)^	TOSHMS^(10)^	ISO<br><br> <br>50001^(11)^	ISO 13485^(12)^	ISO 28000^(13)^	ISO 26262^(14)^	ISO<br><br> <br>15408-<br><br> <br>EAL6^(15)^	TL 9000^(16)^	ISO<br><br> <br>22301^(17)^
Taiwan	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü	ü
China	ü	ü	ü		ü		ü	ü	ü		ü			ü		ü
Korea	ü	ü	ü				ü	ü	ü
Japan	ü	ü	ü		ü		ü	ü
Malaysia	ü	ü	ü		ü		ü	ü						ü
Singapore	ü	ü	ü				ü		ü						ü
U.S.		ü	ü	ü

_____________________

(1)	IATF 16949:2016 standards were originally created by the International Automotive Task Force in conjunction with the International Standards Organization (ISO). These standards provide for continuous improvement with an emphasis on the prevention of defects and reduction of variation and waste in the supply chain.
(2)	ISO 9001 quality standards are related to quality management systems and designed to help organizations ensure that they meet the needs of customers and other stakeholders while meeting statutory and regulatory requirements related to the product.
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(3)	ISO 14001 sets out the criteria for an environmental management system. It can be used by any organization that wants to improve resource efficiency, reduce waste and drive down costs.
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(4)	ISO 17025 is the main ISO standard used by testing and calibration laboratories.
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(5)	ISO 14064 standard is part of the ISO 14000 series of International Standards for environmental management. The ISO 14064 standard provides governments, businesses, regions and other organizations with a complementary set of tools for programs to quantify, monitor, report and verify greenhouse gas emissions.
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(6)	ISO 14067 is a standard for the quantification and<br>communication of the carbon footprint of a product based on International Standards on life cycle assessment for quantification<br>and on environmental labels and declarations for communication.
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(7)	IECQ HSPM QC080000 is a certification designed to manage, reduce and eliminate hazardous substances.
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(8)	“Sony Green Partner” indicates our compliance with the “Sony Green Package” standard requirements.
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(9)	ISO 45001, which replaces OHSAS 18001 over three years following its publication in March 2018, is a standard for an occupational health and safety management system, and gives guidance for its use, to enable organizations to provide safe and healthy workplaces by preventing work-related injury and ill health, as well as by proactively improving its occupational health and safety performance.
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(10)	TOSHMS is the Taiwan Occupational and Health Management System.
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(11)	ISO 50001 is a standard for an energy management system. It can be used by any organization that wants to reduce energy costs and use energy more efficiently.
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(12)	ISO 13485 quality management system sets forth the quality requirements for organizations that are required to consistently meet customers’ requirements and regulatory requirements in the medical devices and related services industry.
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(13)	ISO 28000 is an international standard for security management system dealing with security assurance in a supply chain.
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(14)	ISO 26262 is an international standard for functional safety of electrical and electronic systems in production automobiles.
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(15)	ISO 15408-EAL6 is a framework that outlines the criteria for globally recognized standards and security inspections for IT products. It is designed for products and applications that are targeted for high-security-intensive markets, such as the government, banking or defense sectors.
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(16)	TL 9000 quality management system sets forth the supply chain quality requirements of the global communications industry.
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(17)	ISO 22301 is a standard for requirements to plan, establish, implement, operate, monitor, review, maintain and continually improve a documented management system to protect against, reduce the likelihood of occurrence, prepare for, respond to, and recover from disruptive incidents when they arise.
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We also have strict process controls in our EMS business. UGTW’s facilities in Nantou, Taiwan, are considered suitably equipped by the Defense Logistics Agency to perform the MIL-STD-883 tests on assemble, seal, and test hybrid microcircuits in compliance with MIL-PRF-38534 Classes H and K. UGPL is in compliance with VDA 6.3 audit, which focuses on process audit for planning and manufacturing of products and services, and VDA 6.5, which is a qualification for product audit. The table below sets forth the certifications we have obtained for our EMS facilities.

Location	IATF 16949:2016	ISO9001	ISO14001	ISO17025	ISO14064	IECQ HSPM QC 080000	OHSAS 18001/<br><br> <br>ISO 45001	TOSHMS	ISO50001	ISO13485	ISO26262	TL 9000
Taiwan	ü	ü	ü		ü	ü	ü	ü	ü
China	ü	ü	ü	ü	ü	ü	ü		ü	ü	ü	ü
Mexico	ü	ü	ü		ü	ü	ü		ü
Poland	ü	ü	ü

In addition, we have received several vendor awards from our customers for the quality of our products and services.

Competition

The global market for semiconductor packaging and testing markets is highly competitive. We face competition from a number of sources and integrated device manufacturers with in-house packaging and testing capabilities and fabless semiconductor design companies with their own in-house testing capabilities. Some of these integrated device manufacturers have commenced, or may commence, in-house packaging and testing operations in Asia. Substantially all of packaging and testing companies that compete with us have established operations in Taiwan and across the region.

Integrated device manufacturers that use our services continuously evaluate our performance against their own in-house packaging and testing capabilities. These integrated device manufacturers may have access to more sophisticated technologies and greater financial and other resources than we do. We believe, however, that we can offer greater efficiency at lower cost while maintaining equivalent or higher quality for several reasons. First, as we benefit from specialization and economies of scale by providing services to a large base of customers across a wide range of products, we are better able to reduce costs and shorten production cycles through high-capacity utilization and process expertise. Second, as a result of our customer base and product offerings, our equipment generally has a longer useful life. Third, as a result of the continuing reduction of investments in in-house packaging and testing capacity and technology at integrated device manufacturers, we are better positioned to meet their packaging and testing requirements on a large scale.

Our packaging and testing business also faces actual and potential competition from companies at other levels of the supply chain, which have the financial resources and technical capabilities to enter and compete effectively with us. For example, TSMC has launched integrated fan-out (“InFO”) technology, which put into mass production in 2016. InFO is expected to further intensify the competition in the packaging and testing industry.

Our EMS business faces significant competition from other EMS providers, such as Hon Hai Precision Ind. Co., Ltd., with comprehensive integration, wide geographic coverage and large production capabilities that enable them to achieve economies of scale. We believe, however, that we can still achieve satisfactory performance in the market given that we have been able to provide products with high quality and we are capable of designing new products by cooperating with our customers.

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Environmental Matters

Our operations of packaging, interconnect materials and EMS generate both hazardous and non-hazardous wastes. We have installed various types of anti-pollution equipment for the treatment of liquid and gaseous chemical waste. We have adopted comprehensive anti-pollution measures for the effective management of environmental protection that we believe are consistent with international standards. In addition, we believe we are in compliance in all material respects with present environmental laws and regulations applicable to all our operations and facilities.

Furthermore, in order to demonstrate our commitment to environmental protection, in December 2013, our board of directors approved contributions to environmental protection efforts in Taiwan in a total amount of not less than NT$3,000.0 million, to be made in the following 30 years. For each of the year ended December 31, 2017, 2018 and 2019, ASE has made contributions in the amount of NT$100.0 million (US$3.3 million), respectively, through ASE Cultural and Educational Foundation to fund various environmental projects, and ASE’s board of directors have resolved in a resolution in January 2020 to contribute NT$100.0 million (US$3.3 million) through ASE Cultural and Educational Foundation in environmental projects in 2020. Our estimated environmental capital expenditures for 2020 will be approximately US$24.3 million, of which 24.59% will be used in climate change adaptation.

In October 2019, we issued unsecured international corporate bonds in the aggregate amount of US$300.0 million with par value of US$1.0 million. The proceeds from this bonds offering were used to subscribe for a total of 465,360,000 new shares of ASE at NT$20 per share issued through a private placement to support ASE’s investment in green projects.

ASE Inc. Kaohsiung Facility

Our operations involving wafer-level process and requiring wastewater treatment at our K7 Plant have been subject to scrutiny by the Kaohsiung City Environmental Protection Bureau and the Kaohsiung District Prosecutors office as a result of alleged wastewater disposal violations that occurred on October 1, 2013.

On December 20, 2013, the Kaohsiung Environmental Protection Bureau (the “KEPB”) imposed an administrative fine of NT$102.0 million (the “Original Fine”) upon us for violation of the Water Pollution Control Act. After we sought administrative remedies against the Original Fine, the Original Fine was revoked by final judgment of the Supreme Administrative Court on June 8, 2017, and KEPB was ordered to refund the Original Fine to us. On December 27, 2019, KEPB refunded NT$55.1 million (US$1.8 million) to us. On February 10, 2020, KEPB re-imposed an administrative fine of NT$47.0 million (US$1.6 million) (the “New Fine”) upon us and offset the New Fine by the remaining amount which shall be refunded to us. On March 12, 2020, we filed an administrative appeal to the Kaohsiung City Government to revoke the New Fine. As of the date of this annual report, there is no additional payment outstanding for the New Fine.

In connection with the same alleged violations at our K7 plant, in October 2014, the Kaohsiung District Court ruled that we were in violation of the R.O.C. Waste Disposal Act and imposed upon us a criminal penalty of NT$3.0 million. In November 2014, we filed an appeal with the Taiwan High Court Kaohsiung District Branch against the Kaohsiung District Court’s ruling. On September 29, 2015, the Taiwan High Court Kaohsiung District Branch overturned the decision made by Kaohsiung District Court and found us to be not guilty. The criminal penalty that the Kaohsiung District Court imposed on us was thereby revoked. The Taiwan High Court Kaohsiung District Branch’s verdict was final and not appealable. For additional details of these administrative actions and judicial proceedings related to our K7 Plant, see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.” Defending against any of the pending or future actions will likely be costly and time-consuming and could significantly divert our management team’s efforts and resources.

Any future suspension of operations at K7 Plant or our other facilities may adversely affect our business, financial condition, results of operations and cash flows. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Any environmental claims or failure to comply with any present or future environmental regulations, as well as any fire or other industrial accident, may require us to spend additional funds and may materially and adversely affect our financial condition and results of operations.”

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Waste Disposal Discharge

There were five employees and a waste disposal supplier of a subsidiary in China accused by China People’s Procuratorate ( the “Procuratorate”) for committing the crime of environmental pollution in 2018. During the trial, the Procuratorate claimed that the subsidiary should also be charged with corporate crime which caused the subsidiary received a change and addition indictment in October 2019. As of the date that the consolidated financial statements were authorized for issue, the trial proceeding is pending Procuratorate’s judgments and, therefore, the final results could not be reliably measured.

Climate Change Management

To strengthen our focus on low-carbon development in response to climate change, we have established the Corporate Sustainability Committee (the “CSC”) as the highest level of management for sustainability management. The CSC is chaired by our chief operating officer and comprises of senior management executives, including six directors. The CSC is responsible for supervising corporate-wide sustainability affairs and reports directly to the board of directors. The CSC is driven by five sustainability taskforces, among which, the environmental and green innovation taskforce monitors climate change and water-related issues.

We are committed to reducing the emission of greenhouse gases from our business operations. We aim to address and integrate climate change into our business strategies by (i) establishing an overall carbon management system to implement low-carbon strategies and policies in accordance with our three guiding principles of energy saving, green energy and energy storage; (ii) investing in renewable energy; (iii) innovating and promoting low-carbon products and services; (iv) identifying our vulnerabilities to climate change and developing adaptation strategies; and (v) cultivating a “green” corporate culture and becoming a leading provider of low-carbon solutions.

We believe that there are opportunities associated with climate change related risks and have implemented the following strategies to evaluate the risks and identify the opportunities:

·	Management procedures. Since 2013, we have been using an ERM system to manage climate change-related risks. Consequently, potential risks induced by climate change are identified and assessed at a global scale. We have established monitoring and control mechanisms to reduce the adverse impacts of climate change on our business operation. The identified risks are managed by a variety of departments or risk functions across all parts of our organization.
·	Identification processes for risks and opportunities. The identification process for risks and opportunities is carried out both at the company and asset level. Our risk management programs are regularly updated and implemented in our manufacturing sites as well as all group-level functional departments and assets. Risk identification, assessment and response are three important steps in the ERM cycle. Risks and events that might have an influence on our business objectives are identified and evaluated to decide on appropriate responses.
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·	Prioritize the risks and opportunities identified. In accordance with a matrix analysis, the priority of climate change risks and opportunities are determined by the following criteria: time frame, likelihood, control effectiveness and magnitude of impact on our sustainable operation. A comprehensive methodology is designed to evaluate the cost of implementation, effectiveness (degree to which a response will reduce impact), feasibility (difficulty) and time needed for implementation. Furthermore, at least three climate scenario models are adopted to simulate the potential impact. Each facility will set its climate change scenario analytical framework to simulate various parameter changes to assess potential areas of impact. Through implementing preventative mechanisms, early warning and an emergency response system, we believe that we will be able to effectively address climate change risks.
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Transition to low-carbon economy

We are committed to establishing leadership in providing low carbon, sustainable solutions through a climate-friendly and cost effective approach. We actively monitor the financial implications of the risks and opportunities brought about by climate change as well as the implementation results of our climate change management.

We also explore potential pathways with environmental specialists to achieve carbon reduction targets and establish response systems to adapt to climate change. We are dedicated to providing high efficiency products as well as investing in the research and development of eco-friendly design. Starting from the product design stage, we actively incorporate environmentally friendly materials into production processes. We have also maintained a multi-site certification for ISO 14001 and ISO 50001, which regularly examines the effectiveness of our environment and energy management systems

We believe proactively engaging in supplier development is key to the sustainable development of our supply chain. We provide trainings, workshops, seminars and face-to-face consultation to reinforce our suppliers' capabilities to address sustainability issues and enhance their awareness of best practices for sustainability. In 2015, we joined the Responsible Business Alliance (RBA, previously known as the Electronic Industry Citizens Coalition) and every year, all of ASE’s facilities complete the RBA’s Self-Assessment Questionnaire to identify the labor, environmental, and ethical risks in their respective operations. For internal management, we have adopted the guidelines set out by the United Nations Framework Convention on Climate Change and encourage all our sites to submit their own self-initiated goals that are set according to their respective operation scale and capabilities.

Insurance

We have insurance policies covering property damage and damage to our production facilities, buildings and machinery. In addition, we have liability insurance policies, including but not limited to general liability insurance policies, product liability insurance policies for specified clients and products and directors’ and officers’ insurance policies.

We are not insured against the loss of key personnel.

ORGANIZATIONAL STRUCTURE

The following chart illustrates our corporate structure, including our principal manufacturing subsidiaries as of January 31, 2020. The following chart does not include wholly owned intermediate holding companies, internal trading companies and those companies without active operations and under construction.

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Our Consolidated Subsidiaries

ASE Group

ASE Inc.

ASE Inc., which was established on March 23, 1984, is our wholly owned subsidiary. It is incorporated in Taiwan and is dedicated to providing packaging and testing services, wafer sort testing, final testing service, substrate design and manufacturing.

ASE Test Taiwan

ASE Test Taiwan, which was acquired in 1990, is our wholly owned subsidiary. It is incorporated in Taiwan and is engaged in the testing of integrated circuits.

ASE Malaysia

ASE Malaysia, which was established in 1991, is our wholly owned subsidiary. It is incorporated in Malaysia and is engaged in the packaging and testing of integrated circuits.

ISE Labs

ISE Labs is our wholly owned subsidiary. It is a semiconductor company specializing in front-end engineering testing that is incorporated in the United States and has its principal facilities located in Fremont, California. We acquired 70.0% of the outstanding shares of ISE Labs in 1999 through ASE Test, and increased our holding to 100.0% through purchases made in 2000 and 2002.

ASE Singapore Pte. Ltd.

ASE Singapore Pte. Ltd., our wholly owned subsidiary, is incorporated in Singapore and provides packaging and testing services. We acquired ASE Singapore Pte. Ltd., which was wholly owned by ISE Labs, through our acquisition of ISE Labs in 1999. In January 2011, ASE Singapore II Pte. Ltd. (formerly, EEMS Test Singapore) merged into ASE Singapore Pte. Ltd. after we acquired ASE Singapore II Pte. Ltd. in August 2010.

ASE Electronics

ASE Material was established in 1997 as an R.O.C. company for the production of interconnect materials, such as substrates, used in the packaging of semiconductors. We initially held a majority stake in ASE Material, but acquired the remaining equity by means of a merger of ASE Material with and into us in August 2004. In August 2006, we spun off the operations originally conducted through ASE Material into our wholly owned subsidiary ASE Electronics. ASE Electronics currently supplies our packaging operations with a substantial portion of our substrate requirements. The facilities of ASE Electronics are primarily located in the Nantze Export Processing Zone near our packaging and testing facilities in Kaohsiung, Taiwan.

ASE Chung Li and ASE Korea

In July 1999, we purchased Motorola’s Semiconductor Products Sector operations in Chung Li, Taiwan and Paju, South Korea for the packaging and testing of semiconductors, thereby forming ASE Chung Li and ASE Korea. In August 2004, we acquired the remaining outstanding shares of ASE Chung Li that we did not already own and merged ASE Chung Li into us.

ASE Japan

ASE Japan, which we acquired from NEC Electronics Corporation in May 2004, is our wholly owned subsidiary. It is incorporated in Japan and is engaged in the packaging and testing of semiconductors.

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ASE Shanghai

ASE Shanghai was established in 2001 as a wholly owned subsidiary of ASE Inc. and began operations in June 2004. ASE Shanghai primarily manufactures and supplies interconnect materials for our packaging operations.

ASESH AT

We acquired 100.0% equity interest in GAPT, now known as ASESH AT, in January 2007 for a purchase price of US$60.0 million. ASESH AT is a P.R.C. company based in Shanghai, China that provides packaging and testing services for a wide range of semiconductors.

ASEN

In September 2007, we acquired 60.0% equity interest in ASEN, formerly known as NXP Semiconductors Suzhou Ltd., from NXP Semiconductors for a purchase price of US$21.6 million. In March 2018, we acquired the remaining 40.0% equity interest in ASEN for a purchase price of US$127.1 million. In August 2018, we sold 30.0% equity interest in ASEN to Beijing Unis Capital Management Co., Ltd. at US$95.3 million. In November 2019, we repurchased 30.0% equity interest from Beijing Unis Capital Management Co., Ltd. at US$97.7 million. We held 100.0% equity interest in ASEN, which is based in Suzhou, China and is engaged in semiconductor packaging and testing.

ASEWH

In May 2008, we acquired 100.0% of the shares of ASEWH from Aimhigh Global Corp. and TCC Steel. ASEWH is based in Weihai, Shandong, China and is engaged in semiconductor packaging and testing.

ASEKS

ASEKS was set up in 2004 and began operating in 2010. ASEKS is based in Kunshan, China and is engaged in semiconductor packaging and testing.

Wuxi Tongzhi

In May 2013, we, through our subsidiary ASESH AT, acquired 100.0% of the shares of Wuxi Tongzhi from Toshiba Semiconductor (Wuxi) Co, Ltd. Wuxi Tongzhi is based in Wuxi, China and is engaged in semiconductor packaging and testing.

ISE Shanghai

ISE Shanghai was established in 2018 and began operating in 2019. ISE Shanghai is based in Shanghai, China and is engaged in semiconductor testing.

SPIL Group

SPIL is a provider of semiconductor packaging and testing services. SPIL offers a full range of packaging and testing solutions, including advanced packages, substrate packages and leadframe packages, as well as testing for logic and mixed signal devices. SPIL also provides turnkey services, from packaging and testing to shipment service. The principal operating subsidiaries under SPIL Group are Siliconware Precision Industries Co., Ltd., SZ and SF.

SPIL and ASE entered into a Joint Share Exchange Agreement on June 30, 2016, pursuant to which ASE established ASEH through a statutory exchange and ASEH acquired all issued and outstanding shares of both ASE and SPIL. For details about the Joint Share Exchange Agreement, see “Item 10. Additional information—Material Contract.”

The Share Exchange consummated on April 30, 2018, and SPIL’s shares concurrently delisted from TWSE and NASDAQ on April 30, 2018. On April 30, 2018, ASE and SPIL became privately held wholly owned subsidiaries of ASEH. For details about the SPIL Acquisition, see “Item 4. Information on the Company— SPIL Acquisition.”

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USI Group

USI Group engages primarily in EMS in relation to computers and storage, consumer electronics, communications, industrial and automotive, among other services and businesses.

As of January 31, 2020, we held 75.3% interest in USI Shanghai through our subsidiaries USI Inc. and ASE Shanghai and held 74.5% interest in Universal Scientific Industrial and 100.0% interest in USI Inc. See “Item 4. Information on the Company—Information on the Company—History and Development of the Company— USI Group and USI Group Restructuring” for more information.

PROPERTY, PLANTS AND EQUIPMENT

We operate a number of packaging, testing and electronic manufacturing facilities in Asia, the United States and Europe. Our facilities provide varying types or levels of services with respect to different end-product focus, customers, technologies and geographic locations. With our diverse facilities we are able to tailor our packaging, testing and electronic manufacturing solutions closely to our customers’ needs. The following table sets forth the location, commencement of operation, primary use, approximate floor space and ownership of our principal facilities as of January 31, 2020.

Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
ASE Inc.	Kaohsiung, R.O.C.	March 1984	Our primary packaging facility, which offers complete semiconductor manufacturing solutions in conjunction with ASE Test Taiwan and foundries located in Taiwan. Focuses primarily on packaging services such as flip chip, wafer bumping and fine-pitch wire bonding.	7,337,000	Land: leased<br><br> Buildings: owned and leased
	Chung Li, R.O.C.	Acquired in July 1999	An integrated packaging and testing facility that specializes in semiconductors for communications and consumer applications.	4,162,000	Land and buildings: owned
ASE Test Taiwan	Kaohsiung, R.O.C.	Acquired in April 1990	Our primary testing facilities, which offer complete semiconductor manufacturing solutions in conjunction with ASE Inc.’s facility in Kaohsiung and foundries located in Taiwan. Focuses primarily on advanced logic/mixed-signal/RF/3D IC testing for integrated device manufacturers, fabless design companies and system companies.	1,048,000	Land: leased<br><br> Buildings: owned and leased

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Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
ASE Malaysia	Penang, Malaysia	February 1991	An integrated packaging and testing facility that focuses primarily on the requirements of integrated device manufacturers.	1,102,000	Land: leased<br><br> Buildings: owned
ASE Korea	Paju, Korea	Acquired in July 1999	An integrated packaging and testing facility that specializes in semiconductors for radio frequency, sensor and automotive applications.	1,294,000	Land and buildings: owned
ISE Labs	California, U.S.	Acquired in May 1999	Front-end engineering and final testing facilities located in Northern California in close proximity to some of the world’s largest fabless design companies.	80,000	Land and buildings: owned
ASE Singapore	Singapore	Acquired in May 1999	An integrated packaging and testing facility that specializes in semiconductors for communication, computers and consumer applications.	282,000	Land: leased<br><br> Buildings: owned and leased
ASE Shanghai	Shanghai, China	June 2004	Design and production of semiconductor packaging materials.	1,739,000	Land: leased<br><br> Buildings: owned
ASE Japan	Takahata, Japan	Acquired in May 2004	An integrated packaging and testing facility that specializes in semiconductors for cellular phone, household appliance and automotive applications.	108,000	Land and buildings: leased

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Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
ASE Electronics	Kaohsiung, R.O.C.	August 2006	Facilities for the design and production of interconnect materials such as substrates used in the packaging of semiconductors.	566,000	Land: leased<br><br> Buildings: owned
ASESH AT	Shanghai, China	Acquired in January 2007	An integrated packaging and testing facility that specializes in semiconductors for communications and consumer applications.	1,925,000	Land: leased<br><br> Buildings: owned
ASEN	Suzhou, China	Acquired in September 2007	An integrated packaging and testing facility that specializes in communication applications.	874,000	Land: leased<br><br> Buildings: owned
ASEWH	Shandong, China	Acquired in May 2008	An integrated packaging and testing facility that specializes in semiconductors for communications, computing and consumer applications.	828,000	Land: leased<br><br> Buildings: owned
ASEKS	Kunshan, China	July 2010	An integrated packaging and testing facility that specializes in semiconductors for communications and consumer applications.	2,089,000	Land: leased<br><br> Buildings: owned
Wuxi Tongzhi	Wuxi, China	Acquired in May 2013	An integrated packaging and testing facility that specializes in semiconductors for MP3, vehicle, household appliance and communications applications.	78,000	Land and buildings: leased

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Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
ISE Shanghai	Shanghai, China	October 2018	Testing facility for semiconductors.	3,000	Land and buildings: leased
Universal Scientific Industrial	Nantou, R.O.C.	Acquired in February 2010	Manufacture and marketing of electronic components, accessories and related products.	229,000	Land: owned<br><br> Buildings: owned and leased
USI Mexico	Guadalajara, Mexico	Acquired in February 2010	Manufacturing site, which offers motherboard manufacture and system assembly.	384,000	Land and buildings: owned
USISZ	Shenzhen, China	Acquired in February 2010	Manufacturing site for design, manufacture and marketing of motherboards, electronic components, accessories and related products in China.	683,000	Land: leased<br><br> Buildings: owned
USI Shanghai	Shanghai, China	Acquired in February 2010	Manufacturing site for design, manufacture and marketing of motherboards, electronic components, accessories and related products in China.	1,600,000	Land: leased Buildings: owned and leased
UGKS	Kunshan, China	August 2011	Manufacturing site for design, manufacture and marketing of motherboards, electronic components, accessories and related products in China.	1,105,000	Land and buildings: leased
UGTW	Nantou, R.O.C.	February 2010	Design, manufacture and marketing of electronic components, accessories and related products, and related research and development services.	956,000	Land: owned<br><br>Buildings: owned and leased

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Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
UGJQ	Shanghai, China	Established in September 2013	Design, manufacture and marketing of motherboards, electronic components, accessories and related products in China.	998,000	Land and buildings: leased
UGPL	Wroclaw-Kobierzyce, Poland	Acquired in October 2019	Design, manufacture miniaturization, material sourcing,<br>logistics operations, and provide after sales services of electronic devices and modules.	363,000	Land and buildings: owned
Siliconware Precision Industries Co., Ltd.	Taichung, R.O.C.	Acquired in April 2018	Packaging facility, which offers semiconductor packaging and testing turnkey services. This facility focuses primarily on packaging services, such as flip chip, wafer bumping and wire bonding.	5,926,000	Land: owned and leased<br><br>Buildings: owned
	Changhua, R.O.C.	Acquired in April 2018	Packaging facility, which focuses primarily on services such as SiP, flip chip, wafer bumping and wire bonding.	1,440,000	Land and buildings: owned
	Hsinchu, R.O.C.	Acquired in April 2018	Testing facility, which offers semiconductor testing services on wafer sorting and final testing. This facility focuses primarily on the requirement of wireless communication and consumer applications.	1,169,000	Land: leased<br><br> Buildings: owned

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Facility	Location	Commencementof Operation	PrimaryUse	ApproximateFloor Space(in sq. ft.)	Ownedor Leased
SZ	Suzhou, China	Acquired in April 2018	An integrated packaging and testing facility. This facility focuses primarily on packaging services, such as flip chip, wafer bumping and wire bonding.	1,447,000	Land: leased<br><br> Buildings: owned
SF	Fujian, China	Acquired in April 2018	An integrated packaging and testing facility. This facility focuses primarily on packaging services, such as flip chip, wafer bumping and wire bonding.	1,072,000	Land: leased<br><br> Buildings: owned

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We have leased land in the Kaohsiung Nantze Export Processing Zone from the Export Processing Zone Administration (the “EPZA”) with different lease terms for several years that will expire in January 2049. We have leased land from the Central Taiwan Science Park Administration in Taichung with 20-year terms that will expire in November 2038. We have leased land from Hsinchu Science Park Administrations in Hsinchu with 14-year to 40-year terms that will expire in December 2034. No sublease or lending of the land is allowed. The EPZA, the Central Taiwan Science Park Administration and the Hsinchu Science Park Administrations have the right to adjust the rental price in the event the government revalues the land. The leases are typically renewable with one-month to three-month notice prior to the termination date.

ASE Inc. Kaohsiung Facility

ASE Inc. Kaohsiung Facility is our operation headquarters and houses our industry-leading R&D center, which is dedicated to providing world-class assembly, wafer bumping and test services and also offers full turnkey services, including substrate design and manufacturing capabilities.

For administrative actions and judicial proceedings related to our ASE Inc. Kaohsiung Facility K7 Plant, see “—Environmental Matters” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.”

We currently do not have plans for significant expansion, but will reevaluate our need for future expansion based on market condition and future demand requirements to meet our expected future growth. For information on the aggregate capacity of our facilities we operate, see “—Business Overview—Equipment.”

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

OPERATING RESULTS AND TREND INFORMATION

The following discussion of our business,financial condition and results of operations should be read in conjunction with our consolidated financial statements, which areincluded elsewhere in this annual report. This discussion contains forward-looking statements that reflect our current views withrespect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-lookingstatements as a result of any number of factors, such as those set forth under “Item 3. Key Information—Risk Factors”and elsewhere in this annual report. See “Special Note Regarding Forward-Looking Statements.” Please refer to our Form20-F dated April 26, 2019 (File No. 001-16125) for our discussion of financial information and operating results for 2018.

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Overview

The following sections discuss our business, financial condition and results of operations. Our financial information for 2018 comprises operating results of: (a) ASE Technology Holding Co., Ltd. and SPIL for the period from April 30, 2018 through December 31, 2018; and (b) ASE, the predecessor entity of ASEH, for the 12 months ended December 31, 2018. Our financial information for 2019 reflects combined operations following the completion of SPIL Acquisition.

We offer a broad range of semiconductor packaging and testing services and we also offer EMS through USI Group since 2010. In addition to offering each service separately, we also offer turnkey services, which include integrated packaging, testing and direct shipment of semiconductors to end users designated by our customers and solution-based proactive original design manufacturing, for our customers. In addition, we have been generating revenues from our real estate business since 2010 and from the manufacturing of integrated circuits since 2019. Our operating revenues increased from NT$371,092.4 million in 2018 to NT$413,182.2 million (US$13,814.2 million) in 2019.

Discussed below are several factors that have had a significant influence on our financial results in recent years.

Pricing and Revenue Mix

We price our services taking into account the actual costs involved in providing these services, with reference to prevailing market prices. The majority of our prices and revenues is denominated in U.S. dollars. Any significant fluctuation in exchange rates, especially between NT dollars and U.S. dollars, will affect our costs and, in turn, our revenues.

In the case of semiconductor packaging, the cost of the silicon die, typically the most costly component of the packaged semiconductor, is usually not reflected in our costs (or revenues) since it is generally supplied by our customers on a consignment basis.

The semiconductor industry is characterized by a general trend toward declining prices for products and services of a given technology over time. In addition, during periods of intense competition and adverse conditions in the semiconductor industry, the pace of this decline may be more rapid than in other years. The average selling prices of our packaging and testing services have experienced sharp declines during such periods as a result of intense price competition from other market participants that attempt to maintain high-capacity utilization levels in the face of reduced demand.

Declines in average selling prices have been partially offset historically by changes in our revenue mix, and typically the selling price is largely dependable on the complexity of the services. In particular, revenues derived from more advanced package types, such as flip chip BGA, higher-density packages with finer lead-to-lead spacing, or pitch, and testing of more complex, high-performance semiconductors have increased as a percentage of total revenues. We intend to continue to focus on package types such as bumping, flip chip BGA and SiP, developing and offering new technologies in packaging and testing services and expanding our capacity to achieve economies of scale, as well as improving production efficiencies for older technologies, in order to mitigate the effects of declining average selling prices on our profitability.

Our profitability for a specific package type does not depend linearly on its average selling price. Some of our more traditional package types, which typically have low average selling prices, may well command steadier and sometimes higher margins than more advanced package types with higher average selling prices.

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High Fixed Costs

Our operations, in particular our testing operations, are characterized by relatively high fixed costs. We expect to continue to incur substantial depreciation and other expenses especially from our acquisitions of packaging and testing equipment and facilities. Our profitability depends in part not only on absolute pricing levels for our products/services, but also on utilization rates on equipment, commonly referred to as “capacity utilization rates.” In particular, increases or decreases in our capacity utilization rates could have a significant effect on gross margins since the unit cost of our products and/or services generally decreases as fixed costs are allocated over a larger number of units. The capacity utilization rates of the machinery and equipment installed at our production facilities typically depend on factors such as the volume and variety of products, the efficiency of our operations in terms of the loading and adjustment of machinery and equipment for different products, the complexity of the different products to be packaged or tested, the amount of time set aside for the maintenance and repair of the machinery and equipment, and the experience and schedule of work shifts of operators.

In 2018 and 2019, our depreciation, amortization and rental expenses included in operating costs as a percentage of operating revenues was 10.9% and 11.2%, respectively. The increase in depreciation, amortization and rental expenses as a percentage of operating revenues in 2019 compared to 2018 was primarily a result of an increase in capital expenditures in 2019. We begin depreciating our equipment when the machinery is placed into service. There may sometimes be a time lag between when our equipment is available for use and when it achieves high levels of utilization. In periods of depressed industry conditions, such as the fourth quarter of 2008, we experienced lower than expected demand from customers, resulting in an increase in depreciation relative to operating revenues. In particular, the capacity utilization rates for our testing equipment are more severely affected during an industry downturn as a result of a decrease in outsourcing demand from integrated device manufacturers, which typically maintain larger in-house testing capacity than in-house packaging capacity.

In addition to purchasing testers, we also lease a portion of our testers, which we believe allows us to better manage our capacity utilization rates and cash flow. Since leased testers can be replaced with more advanced testers upon the expiration of the lease, we believe that these leases have enabled us to improve our capacity utilization rates by allowing us to better align our capacity with changes in equipment technology and the needs of our customers. For more information about our testers, including the number of testers under lease, see “Item 4. Information on the Company—Business Overview—Equipment—Testing.”

Raw Material Costs

Substantially all of our raw material costs are accounted for by packaging, the production of interconnect materials and EMS. In particular, our EMS require more significant quantities of raw materials than our packaging and production of interconnect materials. In 2019, raw material costs accounted for 81.3% of our operating revenues from EMS, and our revenues generated from EMS contributed to 40.1% of our operating revenues. In 2018 and 2019, raw material cost as a percentage of our operating revenues was 49.1% and 49.3%, respectively.

We have developed copper wire to gradually replace gold wire in the packaging processes in order to benefit from the lower material cost of copper. However, gold wire is still and will continue to be one of the principal raw materials for us in our packaging processes. It may be difficult for us to adjust our average selling prices to account for fluctuations in the price of gold. Thus we expect our raw material costs to continue to be affected by fluctuations in the price of gold.

Recent Accounting Pronouncements

Adopted Standards for Current Period

In the current year, we have applied the following new, revised or amended standards and interpretations that have been issued and effective: Amendments to IFRSs AnnualImprovements to IFRSs 2015-2017 Cycle, Amendments to IFRS 9 Prepayment Features with Negative Compensation, IFRS 16 Leases, Amendments to IAS 19 Plan Amendment, Curtailment or Settlement, Amendments to IAS 28 Long-term Interestsin Associate and Joint Venture, and IFRIC 23 Uncertainty over Income Tax Treatments. Except for the following, the initial application of the aforementioned new, revised or amended standards and interpretations did not have effect on our accounting policies. Please refer to note 3 to our consolidated financial statements included in this annual report for more information.

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IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases,” IFRIC 4 “Determining whether an Arrangement contains a Lease,” and a number of related interpretations. Please refer to note 4 to our consolidated financial statements included in this annual report for information relating to the relevant accounting policies.

Definition of a lease

We elect to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

As a lessee

We recognize right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, we present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities.

Prior to the application of IFRS 16, payments under operating lease contracts, including property interest qualified as investment properties, were recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights were recognized as long-term prepayments for lease. Cash flows for operating leases were classified within operating activities on the consolidated statements of cash flows. Leased assets and finance lease payables were recognized on the consolidated balance sheets for contracts classified as finance leases.

We elect to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized in retained earnings on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments. We apply IAS 36 to all right-of-use assets.

We also apply the following practical expedients:

a) We account for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

b) We exclude initial direct costs from the measurement of right-of-use assets on January 1, 2019.

c) We use hindsight, such as in determining lease terms, to measure lease liabilities.

For leases previously classified as finance leases under IAS 17, the carrying amounts of right-of-use assets and lease liabilities on January 1, 2019 are determined as at the carrying amounts of the respective leased assets and finance lease payables on December 31, 2018.

The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 is 1.35%.

As a lessor

As a lessor, the application of IFRS 16 starting from January 1, 2019 did not have a material impact on our accounting treatments.

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Amendments to IAS 19 “Plan Amendment, Curtailmentor Settlement”

The amendments stipulate that, if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the remainder of the annual reporting period are determined using the actuarial assumptions used for the remeasurement of the net defined benefit liabilities (assets). In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. We applied the above amendments prospectively.

Standards Not Yet Adopted

Among the new, revised or amended standards and interpretations that have been issued but are not yet effective, except for the Amendments to IAS 1 “Classification of Liabilities as Current or Non-current,” we continue in evaluating the impact on our financial position and financial performance as a result of the initial application of the new, revised or amended standards and interpretations: Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture, Amendments to IFRS 3 Definitionof a Business, Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform, Amendments to IAS 1 and IAS 8 Definition of Material, Conceptual Framework Amendments to References to the Conceptual Framework in IFRS Standards and Amendments to IAS 1 Classification of Liabilities as Current or Non-current. The related impact will be disclosed when we complete the evaluation.

Amendments to IAS 1 “Classification of Liabilitiesas Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, we shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least 12 months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether we will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, we must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or our own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of our own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

Critical Accounting Policies and Estimates

Preparation of our consolidated financial statements requires us to make estimates and judgments in applying our critical accounting policies that have a significant impact on the results we report in our consolidated financial statements. Our principal accounting policies and critical accounting judgments and key sources of estimation uncertainty are set forth in detail in note 4 and note 5, respectively, to our consolidated financial statements included in this annual report. We continually evaluate these estimates and assumptions. Actual results may differ from these estimates under different assumptions and conditions. Significant accounting policies are summarized as follows.

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Revenue Recognition

Before 2018

Revenue is measured at the fair value of the consideration received or receivable and takes into account of estimated customer returns, rebates and other similar allowances. Revenue from the sale of goods and real estate properties is recognized when the goods and real estate properties are delivered and titles have passed, at the time all the following conditions are satisfied:

·	ASE has transferred to the buyer the significant risks and rewards of ownership of the goods and real estate properties;
·	ASE retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods and real estate properties sold;
---	---
·	the amount of revenue can be reliably measured;
---	---
·	it is probable that the economic benefits associated with the transaction will flow to ASE; and
---	---
·	the costs incurred or to be incurred in respect of the transaction can be reliably measured.
---	---

Service income is recognized when services are rendered.

Our customers bear the title and risk of loss for bare semiconductor wafers that we receive and package into finished semiconductors and/or those packaged semiconductors that we receive and test for performance specifications. Accordingly, the cost of customer-supplied semiconductor materials is not included in our consolidated financial statements.

A sales discount and return allowance is recognized in the period during which the sale is recognized, and is estimated based on historical experience, the management’s judgment and relevant factors.

Starting from 2018

We identify contracts with customers, allocate transaction prices to performance obligations, and when performance obligations are satisfied, recognize revenues at fixed amounts as agreed in the contracts with taking estimated volume discounts into consideration.

For contracts where the period between the date on which we transfer a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, we do not adjust the promised amount of consideration for the effects of a significant financing component. Our duration of contracts with customers is expected to be one year or less, and the consideration from contracts with customers is included in transaction price and, therefore, can apply the practical expedient not to disclose the performance obligations, including (i) the aggregate amount of the transaction price allocated to the performance obligations that are not fully satisfied or have partially completed at the end of the reporting period, and (ii) the expected timing for recognition of revenue. Our operating revenues include revenues from sale of goods and services as well as sale and leasing of real estate properties. When customers control goods while they are manufactured in progress, we measure the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Revenue and contract assets are recognized during manufacture and contract assets are reclassified to trade receivables when the manufacture is completed or when the goods are shipped upon customer’s request. The adoption of IFRS 15 did not result in any material changes in our daily accounting tasks, our internal controls and our commercial terms with customers. We continue to deliver goods or render services and invoice to customers based on the same commercial terms as we did before the adoption of IFRS 15. The adoption of IFRS 15 did not create a material impact on our financial condition and results of operations because packaging services and testing services generally have a short production cycle and the inventory levels of work in process and finished goods are not significant to our consolidated financial statements due to industry characteristics.

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For the revenues from EMS and sale of substrates, we recognize revenues and trade receivables when the goods are shipped or the goods are delivered to the customers’ specific locations because it is the time when customers have full discretion over the manner of distribution and price to sell the goods, have the primary responsibility for sales to future customers, and bear the risks of obsolescence.

The revenues from sale of real estate properties are recognized when customers purchase real estate properties and complete the transfer procedures. The revenues from leasing real estate properties are recognized during leasing periods on a straight-line basis.

Impairment of Tangible and IntangibleAssets Other Than Goodwill. At each balance sheet date, we review the carrying amounts of the tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Recoverable amount is the higher of fair value less cost of disposal and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. The process of evaluating the potential impairment of tangible and intangible assets other than goodwill requires significant judgment. We are required to make subjective judgments in determining the independent cash flows, useful lives, expected future revenue and expenses related to a specific asset group, taking its usage patterns and the nature of the semiconductor industry into consideration. Any changes in our estimates caused by changing economic conditions or business strategies could result in significant impairment charges in future periods.

In 2017, 2018 and 2019, we recognized impairment losses of NT$289.6 million, NT$133.1 million and NT$201.0 million (US$6.7 million), respectively, on property, plant and equipment. See note 15 to our consolidated financial statements included in this annual report.

Business Combinations and Acquisitionof Associate and Subsidiary. When we acquire businesses, goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the fair value of the identifiable assets and liabilities at the acquisition date. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets and liabilities at the acquisition date, especially with respect to intangible assets. These estimates are based on historical experience, information obtained from the management of the acquired companies and independent external service providers’ reports. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the synergistic benefits expected to be derived from the acquired business. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur, which may affect the accuracy or validity of such estimates.

For the associate accounted for using the equity method, goodwill is included within the carrying amount of the investment as the excess of cost of investments over the fair value share acquired at the respective investment dates. It involves critical accounting judgment and estimates when determining aforementioned fair values. We have engaged an independent external appraiser to assist us in identifying and evaluating the associate’s identifiable tangible assets, intangible assets and liabilities. The scope of such evaluation includes assumptions as current replacement cost of tangible assets, the categories of intangible assets and their expected economic benefits, growth rates for operating revenue and discount rates used in cash flow analysis. The amounts of differences between fair value of identified tangible and intangible assets and the carrying amount at each respective investment dates are depreciated or amortized over their remaining useful lives or expected future economic benefit lives and recognized immediately in profit or loss.

For example, we acquired shareholdings of a subsidiary and its associates in 2016 and identified the differences between the cost of the investment and our share of the net fair value of a subsidiary and its associates’ identifiable assets and liabilities in 2017. We retrospectively adjusted the comparative financial statement for the year ended December 31, 2016.

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For the acquisition of a subsidiary, we identify the difference between investment cost and our share of net fair value of the subsidiary’s identifiable assets and liabilities after the acquisition of a subsidiary. It involves critical judgments and estimations when determining aforementioned net fair values. The management engaged independent external appraiser to assist them in identifying and evaluating the subsidiary’s identifiable tangible assets, intangible assets and liabilities. The scope of such evaluation includes the type of intangible assets that may be identified and the related estimated cash flow or relief cost expenses.

The excess of the fair value over the carrying amount of identified tangible assets and intangible assets on the acquisition date will be depreciated or amortized over their remaining useful lives or expected future economic benefit lives. The management believes the related estimation and assumption appropriately reflect the net fair value of identifiable assets acquired and liabilities assumed. The total PPA effect, however, may still fluctuate due to shifts in general economic conditions of the semiconductor manufacturing industry.

As a result of the SPIL Acquisition, we identified the difference between investment cost and our share of net fair value of SPIL’s identifiable assets and liabilities, which caused the increase in the total of NT$5,918.2 million (US$197.8 million), of which an increase of NT$4,797.3 million (US$160.4 million) to depreciation and amortization in operating costs NT$1,012.7 million (US$33.8 million) to amortization in operating expenses and NT$108.2 million (US$3.6 million) to other operating income and expenses, net in 2019.

Goodwill. We did not monitor goodwill for internal management purpose but for financial reporting purpose only. Therefore, goodwill is allocated to the following cash-generating units for evaluation of impairment: packaging segment, testing segment, EMS segment and other segment. We perform evaluation of goodwill for impairment annually, or whenever there is an event that occurs or circumstances change that would indicated that the segment may be impaired. Determining whether goodwill is impaired requires an estimation of the recoverable amounts of the cash-generating units to which goodwill has been allocated. Recoverable amounts are assessed by value in use, which requires management to estimate the future cash flows expected to arise from cash-generating units and suitable discount rates in order to calculate its present value. When the actual future cash flows are less than expected, a material impairment loss may arise. In conducting the future cash flow valuation, we make assumptions about future operating cash flows, the discount rate used to determine present value of future cash flows, and capital expenditures. Future operating cash flows assumptions include sales growth assumptions, which are based on our historical trends and industry trends, and gross margin and operating expenses growth assumptions, which are based on the historical relationship of those measures compared to sales and certain cost-cutting initiatives. An impairment charge is incurred to the extent the carrying amount exceeds the recoverable amount. As of December 31, 2018 and 2019, we had goodwill of NT$49,974.4 million and NT$50,198.4 million (US$1,678.3 million), respectively. Our conclusion could, however, change in the future if actual results differ from our estimates and judgments are made under different assumptions and conditions. See note 18 to our consolidated financial statements included in this annual report.

Valuation of Investments. We hold investments in the shareholdings of public and nonpublic entities. We evaluate these investments periodically for impairment based on market prices, if available, the financial condition of the investees and economic conditions in the industry and estimate of future cash inflows from disposal (net of transaction cost). These assessments usually require a significant amount of judgment, as a significant decline in the market price may be a short-term drop and may not be the best indicator of impairment. Whenever triggering events or changes in circumstances indicate that an investment may be impaired and a carrying amount may not be recoverable, we measure the impairment based on the market prices, if available, or using a market approach based on the financial result of the investments and estimate of future cash inflows from disposal (net of transaction cost). Several of the investments held by us are recognized as equity method investments or financial assets. Any significant decline in the estimated future cash flows of the investments or financial assets could affect the value of the investment and indicate that an impairment charge may occur. In 2017, 2018 and 2019, we recognized impairment losses of NT$50.2 million, NT$521.0 million and NT$400.2 million (US$13.4 million), respectively, on our investments. See note 26 to our consolidated financial statements included in this annual report.

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Results of Operations

ASEH was formed pursuant to the consummation of the Share Exchange on April 30, 2018. The financial information for 2018 consists of the results of: (a) ASE Technology Holding Co., Ltd. and SPIL for the period from April 30, 2018 through December 31, 2018; and (b) ASE, the predecessor entity of ASEH for the 12 months ended December 31, 2018. The financial information for 2019 reflects combined operations following the completion of SPIL Acquisition.

The following table sets forth, for the periods indicated, financial data from our consolidated statements of comprehensive income, expressed as a percentage of operating revenues.

	Year Ended December 31,
	2017		2018		2019
Operating revenues		100.0%		100.0%		100.0%
Packaging		43.5%		48.1%		48.2%
Testing		9.0%		9.7%		10.3%
EMS		46.1%		40.9%		40.1%
Others		1.4%		1.3%		1.4%
Operating costs		(81.8)%		(83.5)%		(84.4)%
Gross profit		18.2%		16.5%		15.6%
Operating expenses		(9.5)%		(9.3)%		(9.9)%
Other operating income and expenses, net		0.0%		0.1%		(0.1)%
Profit from operations		8.7%		7.3%		5.6%
Non-operating expense, net		2.0%		1.3%		0.0%
Profit before income tax		10.7%		8.6%		5.6%
Income tax expense		(2.3)%		(1.2)%		(1.2)%
Profit for the year		8.4%		7.4%		4.4%
Attributable to
Owners of the Company		7.8%		7.1%		4.1%
Non-controlling interests		0.6%		0.3%		0.3%
		8.4%		7.4%		4.4%
Other comprehensive income, net of income tax		(1.6)%		(0.2)%		(1.0)%
Total comprehensive income for the year		6.8%		7.2%		3.4%
Attributable to
Owners of the Company		6.4%		6.9%		3.2%
Non-controlling interests		0.4%		0.3%		0.2%
		6.8%		7.2%		3.4%

The following table sets forth, for the periods indicated, the gross margins for our packaging, testing services and EMS and our total gross margin. Gross margin is calculated by dividing gross profits by operating revenues.

	Year Ended December 31,
	2017		2018		2019
	(Percentage of operating revenues)
Packaging		22.8%		18.9%		17.4%
Testing		35.6%		34.2%		34.1%
EMS		10.1%		9.4%		8.7%
Overall		18.2%		16.5%		15.6%

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The following table sets forth, for the periods indicated, a breakdown of our total operating costs and operating expenses, expressed as a percentage of operating revenues.

	Year Ended December 31,
	2017		2018		2019
Operating costs
Raw materials		49.2%		49.1%		49.3%
Labor		12.4%		12.6%		12.4%
Depreciation, amortization and rental expense		9.5%		10.9%		11.2%
Others		10.7%		10.9%		11.5%
Total operating costs		81.8%		83.5%		84.4%
Operating expenses
Selling		1.1%		1.4%		1.4%
General and administrative		4.3%		3.9%		4.0%
Research and development		4.1%		4.0%		4.5%
Total operating expenses		9.5%		9.3%		9.9%

Year Ended December 31, 2019 Compared to YearEnded December 31, 2018

Operating Revenues. Operating revenues increased 11.3% to NT$413,182.2 million (US$13,814.2 million) in 2019 from NT$371,092.4 million in 2018, primarily due to the SPIL Acquisition and an increase in revenue from our EMS business. Packaging revenues increased 11.6% to NT$198,916.9 million (US$6,650.5 million) in 2019 from NT$178,308.2 million in 2018, primarily due to an increase in demand of Bumping, Flip Chip, WLP & SiP products. Testing revenues increased 18.8% to NT$42,658.7 million (US$1,426.2 million) in 2019 from NT$35,903.2 million in 2018, primarily due to an increase in sales volume for our testing business. Revenues from our EMS business increased 9.2% to NT$165,789.5 million (US$5,542.9 million) in 2019 from NT$151,890.4 million in 2018, primarily due to an increase in orders for SiP communications products.

Gross Profit. Gross profit increased by 5.1% to NT$64,310.8 million (US$2,150.2 million) in 2019 from NT$61,163.0 million in 2018. Our gross profit as a percentage of operating revenues, or gross margin, was 15.6% in 2019 compared to 16.5% in 2018. The decrease was primarily driven by softer loading in our packaging services and an increase in our EMS business, which had a lower gross margin and partially offset by higher test product mix. Raw material costs in 2019 were NT$203,504.7 million (US$6,803.9 million) compared to NT$182,062.0 million in 2018. As a percentage of operating revenues, raw material costs increased to 49.3% in 2019 from 49.1% in 2018. Labor costs in 2019 were NT$51,179.0 million (US$1,711.1 million) compared to NT$46,656.6 million in 2018. As a percentage of operating revenues, labor cost decreased to 12.4% in 2019 from 12.6% in 2018. Depreciation, amortization and rental expenses were NT$46,218.0 million (US$1,545.2 million) in 2019 compared to NT40,471.8 million in 2018, primarily related to the investment in our capacity and PPA effects. As a percentage of operating revenues, depreciation, amortization and rental expenses increased to 11.2% in 2019 from 10.9% in 2018. Our gross margin for packaging business decreased to 17.4% in 2019 from 18.9% in 2018 and our gross margin for testing business decreased to 34.1% in 2019 from 34.2% in 2018, primarily due to softer loading in our packaging services and PPA effects. The PPA effects included in our gross profit were NT$3,212.7 million and NT$4,797.3 million (US$160.4 million) in 2018 and 2019, respectively. Our gross margin for EMS business decreased to 8.7% in 2019 from 9.4% in 2018, primarily due to an increase in the sale of products with lower gross margins.

Profit from Operations. Profit from operations decreased 13.9% to NT$23,257.8 million (US$777.6 million) in 2019 compared to NT$27,019.3 million in 2018. Our profit from operations as a percentage of operating revenues, or operating margin, decreased to 5.6% in 2019 from 7.3% in 2018, primarily due to an increase in operating expenses which increased 18.2% to NT$40,784.4 million (US$1,363.6 million) in 2019 compared to NT$34,515.3 million in 2018. The increase in operating expenses was primarily due to an increase in general and administrative expense, as well as research and development expense. General and administrative expenses increased 13.8% to NT$16,637.9 million (US$556.3 million) in 2019 from NT$14,618.9 million in 2018, primarily due to an increase in our professional fees incurred in relation to various investment strategies and an increase in salary expenses in connection with the cost related to stock options granted in the fourth quarter of 2018 and recognized in 2019 as well as an increase in the average number of employees and a small impact of the PPA effects. General and administrative expenses as a percentage of our operating revenues was 4.0% in 2019, compared to 3.9% in 2018. The PPA effects included in our general and administrative expenses were NT$8.5 million and NT$12.7 million (US$0.4 million), respectively, in 2018 and 2019. Research and development expenses increased 22.9% to NT$18,395.3 million (US$615.0 million) in 2019, compared to NT$14,962.8 million in 2018, accounting for 4.5% and 4.0% of operating revenues in 2019 and 2018, respectively. This increase in the research and development expense was primarily due to an increase in new advanced research projects costs and salary expenses in relation to stock options that granted in the fourth quarter of 2018 and recognized in 2019 as well as an increase in the average number of employees. Selling expenses increased 16.6% to NT$5,751.2 million (US$192.3 million) in 2019 from NT$4,933.6 million in 2018, primarily due to the PPA effects. The PPA effects included in our selling expenses were NT$666.7 million and NT$1,000.0 million (US$33.4 million), respectively, in 2018 and 2019. Selling expenses as percentages of operating revenues were both 1.4% in 2019 and 2018. We had a net other operating expense of NT$268.6 million (US$9.0 million) in 2019 compared to a net other operating income of NT$371.6 million in 2018. The decrease in net other operating income and expenses was primarily due to loss on damages and claims, which increased by NT$435.4 million (US$14.6 million) and loss on disposal of property, plant and equipment and other assets which increased by NT$149.5 million (US$5.0 million) in 2019 due to the PPA effects.

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Non-Operating Income and Expenses. We had a net non-operating income of NT$22.0 million (US$0.7 million) in 2019 compared to a net non-operating income of NT$4,918.4 million in 2018. The decrease of NT$4,896.4 million (US$163.7 million) was primarily due to a gain of NT$7,421.4 million from the remeasurement of investments in SPIL under the equity method in 2018 whereas similar transaction occurred in 2019, but the gain on remeasurement decreased to NT$319.7 million (US$10.7 million) and partially offset by foreign exchange gains, which increased by NT$2,141.3 million (US$71.6 million) in 2019.

Net Profit*.* Net profit, excluding non-controlling interests, decreased by 34.9% to NT$17,060.6 million (US$570.4 million) in 2019 compared to NT$26,220.7 million in 2018. Our diluted earnings per ADS decreased to NT$7.82 (US$0.26) in 2019 compared to diluted earnings per ADS of NT$12.14 in 2018. Our income tax expenses increased by 11.0% to NT$5,011.2 million (US$167.5 million) in 2019 compared to NT$4,513.4 million in 2018. This increase is primarily due to the reversal of the surtax imposed on unappropriated earnings under the amended Income Tax Law in 2018 and the decrease in the tax-exempt income which mainly comes from the gain on remeasurement of investments in SPIL under the equity method in 2018, which was partially offset by the decrease of profit in 2019.

Year ended December 31, 2018 Compared to YearEnded December 31, 2017

For a detailed description of the comparison of our operating results for the year ended December 31, 2018 to the year ended December 31, 2017, please refer to “Item 5. Operating and Financial Review and Prospects— Operating Results and Trend Information—Results of Operations—Year Ended December 31, 2018 Compared to Year Ended December 31, 2017” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 26, 2019.

Quarterly Operating Revenues, Gross Profit and Gross Margin

ASEH was formed pursuant to the consummation of the Share Exchange on April 30, 2018. ASE is the predecessor entity of ASEH. The financial results for the first quarter of 2018 reflect the operations of ASE prior to the establishment of ASEH. The financial results for second quarter of 2018 reflect the operations of ASE starting from April 1, 2018 and the operations of ASEH starting from April 30, 2018. The financial results including and after the third quarter of 2018 reflect combined operations of the business combination. As a result, the financial results of interim periods may not be comparable.

The following table sets forth our unaudited consolidated operating revenues, gross profit and gross margin for the quarterly periods indicated. The unaudited quarterly results reflect all adjustments, consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the amounts, on a basis consistent with the audited consolidated financial statements included elsewhere in this annual report. You should read the following table in conjunction with the audited consolidated financial statements and related notes included elsewhere in this annual report.

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Our operating revenues, gross profit and gross margin for any quarter are not necessarily indicative of the results for any future period. Our quarterly operating revenues, gross profit and gross margin may fluctuate significantly.

	Quarter Ended
	****	Mar. 31,	Jun. 30,	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,	Sep. 30,	Dec. 31,
		2018	2018	2018	2018	2019	2019	2019	2019
		NT$	NT$	NT$	NT$	NT$	NT$	NT$	NT$
	(in millions)
Consolidated Operating Revenues
Packaging		29,368.0	44,318.3	53,472.7	51,149.2	43,857.3	47,602.2	53,804.5	53,652.8
Testing		5,678.6	8,466.9	10,838.4	10,919.3	8,950.8	10,285.0	11,493.2	11,929.7
EMS		28,686.1	30,471.9	41,996.4	50,736.0	34,947.0	31,524.1	50,584.0	48,734.4
Others		1,233.0	1,244.0	1,289.8	1,223.8	1,106.4	1,329.6	1,675.6	1,705.6
Total		64,965.7	84,501.1	107,597.3	114,028.3	88,861.5	90,740.9	117,557.3	116,022.5
Consolidated Gross Profit
Packaging		5,754.4	8,070.5	10,250.3	9,593.8	5,801.6	7,491.3	10,181.5	11,064.6
Testing		1,743.5	2,628.3	3,814.7	4,103.0	2,485.2	3,449.3	4,287.2	4,315.2
EMS		2,689.2	2,859.1	4,141.8	4,588.7	2,904.8	2,850.2	4,462.4	4,274.0
Others		200.9	151.6	174.3	398.9	193.4	178.2	177.2	194.7
Total		10,388.0	13,709.5	18,381.1	18,684.4	11,385.0	13,969.0	19,108.3	19,848.5
Consolidated Gross Profit (%)
Packaging		19.6%	18.2%	19.2%	18.8%	13.2%	15.7%	18.9%	20.6%
Testing		30.7%	31.0%	35.2%	37.6%	27.8%	33.5%	37.3%	36.2%
EMS		9.4%	9.4%	9.9%	9.0%	8.3%	9.0%	8.8%	8.8%
Overall		16.0%	16.2%	17.1%	16.4%	12.8%	15.4%	16.3%	17.1%

Our results of operations are affected by seasonality. In general, our first quarter operating revenues have historically decreased over the preceding fourth quarter, primarily due to the combined effects of holidays in the United States, Taiwan and elsewhere in Asia. Moreover, the increase or decrease in operating revenues of a particular quarter as compared with the immediately preceding quarter varies significantly. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Our operating results are subject to significant fluctuations, which could adversely affect the market value of your investment.”

Exchange Rate Fluctuations

For quantitative and qualitative disclosure of our exposure to foreign currency exchange rate risk, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Market Risk—Foreign Currency Exchange Rate Risk.”

Taxation

The corporate income tax rate in the R.O.C. decreased from 25% to 17%, effective since January 1, 2010. The R.O.C. Statute for Upgrading Industries, which provided various tax incentives, including investment tax credits, tax exemptions and tax holidays for companies, expired on December 31, 2009. Under this statute, we had been granted tax holidays covering the portion of our income attributable to eligible machinery and equipment that were procured with cash infusions from our shareholders or after the capitalization of retained earnings through the issuance of stock dividends, and tax credits of 7% for the purchase of qualifying manufacturing equipment. We can continue to enjoy the tax holidays that have been granted to us by the R.O.C. tax authority. On April 16, 2010, the Legislative Yuan of R.O.C. passed the Industrial Innovation Act, effective from January 1, 2010 to December 31, 2019. Under the prevailing Industrial Innovation Act, a profit-seeking enterprise may deduct up to (i) 15% of its research and development expenditures from its income tax payable for the fiscal year in which these expenditures are incurred; or (ii) 10% of its research and development expenditures from its income tax payable for the fiscal year in which these expenditures are incurred or the following two years. However, the deduction may not exceed 30% of the income tax payable for that fiscal year. Under the Alternative Minimum Tax Act (the “AMT Act”) which took effect in January 2006 and was amended in August 2012, when the amount of the regular income tax calculated pursuant to the Income Tax Law of the R.O.C. (the “Income Tax Law”) is below the amount of the alternative minimum tax, or the AMT, a taxpayer is required to pay the difference between the AMT and the said regular income tax, which becomes the AMT payable. Taxable income for calculating the AMT includes most sources of income that are exempted from income tax under various legislations such as tax holidays. However, there are grandfathered treatments for the tax holidays approved by the tax authority before the AMT Act took effect. Under the amended AMT Act, the standard deduction for taxable income that applies to business entities decreased from NT$2.0 million to NT$0.5 million and the tax rate that applies to business entities increased from 10% to 12%. The amendment to the AMT Act became effective on January 1, 2013. Under the amendment to the Income Tax Law, which became effective on January 1, 2018, the corporate income tax rate increased from 17% to 20%.

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As of December 31, 2019, ASE Inc., ASE Test Taiwan and ASE Electronics had five-year tax holidays on income derived from a portion of their respective operations, which will expire in 2020, 2022 and 2020, respectively. The aggregate tax benefits of such exemptions for the years ended December 31, 2018 and 2019 were NT$1,001.1 million and NT$495.9 million (US$16.6 million), respectively. The effect of such tax exemption on basic earnings per share for the year ended December 31, 2018 and 2019 were NT$0.24 and NT$0.12 (US$0.00), respectively.

Since we have facilities located in special export zones such as the Nantze Export Processing Zone and Hsinchu Science Park in Taiwan, we enjoy exemptions from various import duties, commodity taxes and business taxes on imported machinery, equipment, raw materials and components which are directly used for manufacturing finished goods. We also enjoy exemptions from commodity and business taxes on finished goods exported or sold to others within the zones.

In addition, we will file a consolidated tax return to take advantage of the tax benefit for corporate income tax starting from 2019 and for unappropriated earnings starting from 2018.

Before December 31, 2018, when we declare a dividend out of those undistributed earnings on which the 10% undistributed earnings tax had been paid, up to 5% of such undistributed earnings tax may be credited against the withholding tax imposed on the dividends paid to foreign shareholders. Under the amended Income Tax Law, which became effective on January 1, 2018, the tax rate on unappropriated earnings is reduced from 10% to 5%. In addition, to encourage profit-seeking enterprises to use their earnings to make substantial investment or upgrade production technology or the quality of products or services, a company uses a certain amount of its undistributed earnings to construct or purchase buildings, software or hardware equipment, or technology for use in production or operation as needed for operation of its business or ancillary business within three years from the year after such earnings are derived, such investment amounts may be deducted from the undistributed earnings in calculation of the current year’s undistributed earnings for assessment of additional profit-seeking enterprise income tax leviable on undistributed earnings from the year 2018 under Article 66-9 of the Income Tax Act. We have deducted the amount of capital expenditure from the unappropriated earnings in 2018 that was reinvested when calculating the tax on unappropriated earnings based on this new amendment. However, we did not deduct such investment amounts from the undistributed earnings in calculation of income tax on unappropriated earnings in 2019.

In 2019, our effective income tax rate increased to 22% from 14% in 2018, primarily due to the decrease in tax-exempt income. In 2018, the tax-exempt income primarily comes from the gain on remeasurement of investments of NT$7,421.4 million in SPIL under the equity method, whereas similar transaction occurred in 2019, but the gain on remeasurement decreased to NT$319.7 million (US$10.7 million). We believe that our future estimated taxable income will be sufficient to utilize our deferred tax assets recorded as of December 31, 2019.

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Our non-R.O.C. subsidiaries are subject to taxation in their respective jurisdiction.

Inflation

We do not believe that inflation in Taiwan or elsewhere has had a material impact on our results of operations.

LIQUIDITY AND CAPITAL RESOURCES

We have historically been able to satisfy our working capital needs from our cash flow from operations. We have historically funded our capacity expansion from internally generated cash and, to the extent necessary, the issuance of equity securities and borrowings. If adequate funds are not available on satisfactory terms, we may be forced to curtail our expansion plans. Moreover, our ability to meet our working capital needs from cash flow from operations will be affected by the demand for our packaging services, testing services and EMS, which in turn may be affected by several factors. Many of these factors are outside of our control, such as economic downturns and declines in the prices of our services or products caused by a downturn in the industry. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Our operating results are subject to significant fluctuations, which could adversely affect the market value of your investment.” To the extent we do not generate sufficient cash flow from our operations to meet our cash requirements, we will have to rely on external financing.

Net cash provided by operating activities amounted to NT$72,303.3 million (US$2,417.4 million) in 2019, primarily as a result of (i) our operation performance with profit before income tax of NT$23,279.8 million (US$778.3 million) and (ii) our non-cash depreciation and amortization in the amount of NT$50,466.8 million (US$1,687.3 million). Net cash provided by operating activities amounted to NT$51,074.7 million in 2018, primarily as a result of (i) our operation performance with profit before income tax of NT$31,937.7 million and (ii) our non-cash depreciation and amortization in the amount of NT$42,688.9 million. The increase in net cash provided by operating activities in 2019 compared to 2018 was primarily due to an increase in non-cash items such as depreciation and amortization, decrease on gain on remeasurement of investments in SPIL under the equity method, partially offset by an increase in net gain on foreign currency exchange, and cash inflows from a decrease in trade receivables and inventories, partially offset by cash outflows from a decrease in trade payables.

Net cash used in investing activities amounted to NT$54,579.1 million (US$1,824.8 million) in 2019, primarily due to our acquisition of associates and joint ventures of NT$2,107.8 million (US$70.5 million) and our payment for property, plant and equipment of NT$56,810.2 million (US$1,899.4 million). Net cash used in investing activities amounted to NT$129,542.3 million in 2018, primarily due to our acquisition of subsidiaries of NT$95,241.9 million and our payment for property, plant and equipment of NT$41,386.4 million.

Net cash used in financing activities amounted to NT$6,498.8 million (US$217.3 million) in 2019. This amount comprises of net proceeds from short-term and long-term bank loans and bills payable in the amount of NT$15,740.6 million (US$526.3 million). Net cash inflow was partially offset by a decrease in non-controlling interests in the amount of NT$12,117.3 million (US$405.1 million) primarily due to financing cost from our repurchase of non-controlling interests of ASEN and SZ and the cost from the USI Enterprise Limited repurchase of its outstanding shares, as well as the distribution of cash dividends in the amount of NT$10,623.0 million (US$355.2 million). Net cash provided by financing activities amounted to NT$83,111.4 million in 2018. This amount comprises net proceeds from short-term and long-term bank loans and bills payable in the amount of NT$107,838.8 million. Net cash inflow was partially offset by (i) a decrease in non-controlling interests in the amount of NT$11,820.2 million primarily due to the repurchase of SPIL shares converted from SPIL’s convertible overseas bonds during May 1, 2018 to June 30, 2018 and the financing cost from our acquisition of 40% shareholding of ASEN from NXP B.V.; (ii) our distributed cash dividends to ASEH shareholders in the amount of NT$10,613.6 million; and (iii) our net repayment of bonds payable in the amount of NT$6,185.6 million.

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As of December 31, 2019, our primary source of liquidity was NT$60,130.9 million (US$2,010.4 million) of cash and cash equivalents and NT$4,127.6 million (US$138.0 million) of financial assets – current. Our financial assets – current primarily consisted of quoted ordinary shares and forward exchange contracts. As of December 31, 2019, we had total unused credit lines of NT$225,418.4 million (US$7,536.6 million). As of December 31, 2019, we had working capital of NT$47,700.8 million (US$1,594.8 million).

As of December 31, 2019, we had total debts of NT$220,748.7 million (US$7,380.4 million), of which NT$43,334.6 million (US$1,448.8 million) were short-term debts and NT$177,414.1 million (US$5,931.6 million) were long-term debts. In 2019, the maximum amount of our short-term debts was NT$78,659.0 million (US$2,629.9 million) and the average amount of our short-term debts was NT$61,851.8 million (US$2,067.9 million). The fluctuation was primarily because our working capital balance fluctuated during 2019 from time to time. The annual interest rate for borrowings under our short-term bank loans and bills payable ranged from 0.70% to 5.40% as of December 31, 2019. Our short-term bank loans are primarily revolving facilities with a term of one year, each of which may be extended on an annual basis with lender consent. Our long-term debts consist of bank loans, bills payable, bonds payable and lease liabilities. As of December 31, 2019, we had outstanding long-term debts, less current portion, of NT$177,414.1 million (US$5,931.6 million). As of December 31, 2019, the current portion of our long-term debts was NT$5,995.6 million (US$200.4 million). Our long-term bank loans and bills payable typically carried variable annual interest rates which ranged from 0.82% to 6.89% as of December 31, 2019. For the maturity information and interest rates by currencies, see “Item 11—Quantitative and Qualitative Disclosures about Market Risk—Market Risk—Interest Rate Risk.”

We have pledged a portion of our assets, with a carrying value of NT$19,007.7 million (US$635.5 million) as of December 31, 2019, to secure our obligations under our bank borrowings and tariff guarantees of imported raw materials or collateral.

In September 2013, ASE issued US$400.0 million aggregate principal amount of zero coupon convertible bonds due 2018. The 2018 Convertible Bonds were offered to persons outside of the United States in compliance with Regulation S under the Securities Act. The bonds are convertible by holders at any time on or after October 16, 2013 and up to (and including) August 26, 2018. The initial conversion price was NT$33.085 per common share, subject to certain adjustments, determined on the basis of a fixed exchange rate of NT$29.956 = US$1.00 (which represents an approximately 31.3% conversion premium over the closing trading price of our common shares on August 28, 2013 of NT$25.20 per common share). The conversion price is subject to adjustment upon the occurrence of certain events, such as the 2013 Capital Increase, the 2017 Capital Increase and cash dividend distribution. The bondholders have exercised conversion rights to convert 2018 Convertible Bonds of US$399.6 million into our ordinary shares at conversion prices ranging from NT$27.95 to NT$28.96 per common share. ASE’s board of directors resolved in July 2017 to issue a notice of early redemption to 2018 Convertible Bond holders. In the third quarter of 2017, the closing price of our common shares (translated into U.S. dollars at the prevailing rates) for a period of 20 consecutive trading days was higher than 130% of the conversion price in U.S. dollar translated at the fixed exchange rate of US$1 to NT$29.956 determined on pricing date per common share. As a result, ASE redeemed the outstanding 2018 Convertible Bonds of US$0.4 million in September 2017.

In July 2014, Anstock II Limited offered US$300.0 million aggregate principal amount of guaranteed bonds due 2017. The Green Bonds are unconditionally and irrevocably guaranteed by us. The Green Bonds were offered to persons outside of the United States in compliance with Regulation S under the Securities Act. The Green Bonds bear interest from and including July 24, 2014 at the rate of 2.125% per annum. Interest on the Green Bonds is payable semiannually in arrears on January 24 and July 24 of each year beginning on January 24, 2015. The net proceeds from the Green Bonds offering were used to fund projects that promote our transition to low-carbon and climate-resilient growth. The Green Bonds matured and were fully repaid by Anstock II Limited in July 2017.

In October 2014, SPIL offered the fourth unsecured convertible overseas bonds in US$400,000,000. The bonds are zero coupon bonds with a maturity of five years. From May 1, 2018 to June 30, 2018, all outstanding bonds of US$148,000,000 were converted into SPIL ordinary shares. We repurchased these ordinary shares for a consideration of NT$5,217.0 million (NT$51.2 per ordinary share, with undeducted 0.3% securities transaction tax) pursuant to the supplemental indenture.

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In July 2015, ASE issued US$200 million aggregate principal amount of NTD-linked zero coupon convertible bonds due 2018. The 2018 NTD-linked Convertible Bonds were offered to persons outside of the United States in compliance with Regulation S under the Securities Act. The initial conversion price was NT$54.5465 per common share, subject to certain adjustments, determined on the basis of a fixed exchange rate of NT$30.928 = US$1.00 (which represents an approximately 27.0% conversion premium over the closing trading price of our common shares on June 25, 2015 of NT$42.95 per common share). ASE used the net proceeds to fund procurement of equipment. The bonds expired in March 2018 and no conversion right was exercised. ASE redeemed the Currency Linked Bonds in cash. The redemption sum was arrived through converting the par value into New Taiwan dollar amount using a fixed exchange rate of US$1 to NT$30.928 and then back to U.S. dollar amount using the applicable prevailing rate at the time of redemption in March 2018.

As of the date of this annual report, we do not hold any convertible bonds.

In January 2016, ASE issued NT$7,000.0 million 1.30% unsecured corporate bonds with a five-year term and NT$2,000.0 million 1.50% unsecured corporate bonds with a seven-year term. The bonds bear an annual simple interest and payment by coupon rate from the issue date. The net proceeds from the bonds were used to repay the previous debts.

In January 2017, ASE issued NT$3,700.0 million 1.25% unsecured corporate bonds with a five-year term and NT$4,300.0 million 1.45% unsecured corporate bonds with a seven-year term. The bonds bear an annual simple interest and payment by coupon rate from the issue date. The net proceeds from the bonds were used to repay the previous debts.

In December 2017, AMPI issued its fifth secured domestic convertible bonds in NT$250.0 million with a nil coupon rate and a maturity of 3 years. The net proceeds from the bonds were used to repay the previous debts.

On April 26, 2019, we conducted a bonds offering and issued a NT$6,500.0 million (US$217.3 million) 0.9% unsecured domestic bond with a five-year term and a NT$3,500.0 million (US$117.0 million) 1.03% unsecured domestic bond with a seven-year term. Both bonds bear an annual simple interest and payment by coupon rate from the issue date. The net proceeds from the bonds will be used to repay our bank borrowings.

In October 2019, we conducted a second bonds offering and issued unsecured international corporate bonds in the aggregate amount of US$300.0 million with par value of US$1.0 million. The US$300.0 million unsecured international corporate bonds were bifurcated into two tranches, the first tranche was US$200.0 million at a coupon rate of 2.15% per annum with a term of three-year maturity, and the second tranche was US$100.0 million at a coupon rate of 2.50% per annum with a term of five-year maturity. The proceeds from this bonds offering were used to subscribe for a total of 465,360,000 new shares at NT$20 per share issued through a private placement to support ASE’s investment in green projects.

On March 30, 2020, our board of directors resolved to issue unsecured bonds in the aggregate amount up to NT$10,000.0 million (US$334.3 million) with par value of NT$1.0 million (US$0.03 million) at annual interest rates of not more than 1.0% and with maturity up to 7 years.

In March 2017, ASE granted rights to the record holders of our existing common shares to subscribe for an aggregate of 240,000,000 of our common shares, par value NT$10.0 per share. Substantially concurrently with the Rights Offering, we also offered 30,000,000 of our common shares to employees and offered 30,000,000 of our common shares to the public in Taiwan. A total of 300,000,000 of ASE common shares were offered under the 2017 Capital Increase, which were fully subscribed and raised NT$10,290.0 million. The net proceeds of the 2017 Capital Increase were used to repay ASE’s previous debts. Both the Employee Offering and the Taiwan Public Offering were made pursuant to an offer exempt from registration with the SEC pursuant to Regulation S of the Securities Act.

On March 30, 2020, our board of directors resolved to issue ordinary shares for cash capital increase in an amount up to NT$3,000.0 million (US$100.3 million) with par value NT$10.0 (US$0.3) per share to repay our previous debts and meet our operational needs.

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In July 2013, ASE entered into a US$400.0 million five-year syndicated credit facility, for which the Bank of Taiwan acted as the agent bank, for the purpose of funding the purchase of machinery and equipment at our facility and funding general operations. This syndicated loan agreement contains undertakings and restrictive covenants relating to the maintenance of certain financial ratios including: (i) current ratio (current assets to current liabilities) of not less than 100.0%; (ii) leverage ratio (total liabilities to tangible net worth) of not higher than 160.0%; (iii) interest coverage ratio (EBITDA to interest expense) of not less than 280.0%; and (iv) tangible net worth not less than NT$75,000.0 million. This syndicated loan was fully repaid in June 2018.

We currently have one syndicated loan agreement outstanding. In April 2018, we entered into a NT$90,000.0 million five-year syndicated credit facility, for which the Bank of Taiwan and Mega International Commercial Bank acted as the agent banks, for the purpose of financing our funding needs for the SPIL Acquisition. This syndicated loan agreement contains undertakings and restrictive covenants relating to the maintenance of certain financial ratios including: (i) current ratio (current assets to current liabilities) of not less than 100.0%; (ii) debt ratio (total liabilities to tangible net worth) of not higher than 180.0% in 2018 and 2019, and not higher than 160.0% after 2020; (iii) interest coverage ratio (EBITDA to interest expense) of not less than 280.0%; and (iv) net worth not less than NT$90,000.0 million. As of December 31, 2019, NT$20,000 million (US$668.7 million) was outstanding under this credit facility and this syndicated loan agreement is guaranteed by ASE in the amount of NT$20,027.6 million (US$669.6 million).

We have in the past failed to comply with certain financial covenants in some of our loan agreements. Such noncompliance may also have, through broadly worded cross-default provisions, resulted in default under some of the agreements governing our other existing debt. As of December 31, 2019, we were not in breach of any of the financial covenants under our existing loan agreements. If we are unable to timely remedy any of our noncompliance under such loan agreements or obtain applicable waivers or amendments, we would breach our financial covenants and our financial condition would be adversely affected. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Restrictive covenants and broad default provisions in our existing debt agreements may materially restrict our operations as well as adversely affect our liquidity, financial condition and results of operations.”

As of December 31, 2019, we have no contingent obligations, which normally consist of guarantees provided by us to our subsidiaries.

We have made, and expect to continue to make, substantial capital expenditures in connection with the expansion of our production capacity. The table below sets forth our principal capital expenditures incurred for the periods indicated.

	****	Year Ended December 31,
	****	2017	2018	2019
		NT$	NT$	NT$	US$
	(in millions)
Machinery and equipment		19,432.9	32,575.3	14,365.1	480.3
Building and improvements		4,244.8	6,516.9	48,708.8	1,628.5
Total		23,677.7	39,092.2	63,073.9	2,108.8

We had commitments for capital expenditures of approximately NT$25,119.4 million (US$839.8 million), of which NT$5,145.3 million (US$172.0 million) had been prepaid as of December 31, 2019, primarily in connection with the expansion of our packaging and testing services operations. We estimate that our environmental capital expenditures for 2020 will be approximately US$24.3 million, of which 24.59% will be used in climate change adaptation. We may adjust our capital expenditures based on market conditions, the progress of our expansion plans and cash flow from operations. In addition, due to the rapid changes in technology in the semiconductor industry, we frequently need to invest in new machinery and equipment, which may require us to raise additional capital. We cannot assure you that we will be able to raise additional capital should it become necessary on terms acceptable to us or at all. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—The packaging and testing businesses are capital intensive. If we cannot obtain additional capital when we need it, our growth prospects and future profitability may be adversely affected.”

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We believe that our existing cash, marketable securities, expected cash flow from operations and existing credit lines under our loan facilities will be sufficient to meet our capital expenditures, working capital, cash obligations under our existing debt and lease arrangements, and other requirements for at least the next 12 months. We currently hold cash primarily in U.S. dollars, RMB, New Taiwan dollars, Korean Won and Japanese yen. As of December 31, 2019, we had contractual obligations of NT$157,931.1 million (US$5,280.2 million) due in the next three years. We currently expect to meet our payment obligations through the expected cash flow from operations, long-term borrowings and the issuance of additional equity. We will continue to evaluate our capital structure and may decide from time to time to increase or decrease our financial leverage through equity offerings or borrowings. The issuance of additional equity securities may result in additional dilution to our shareholders.

From time to time, we evaluate possible investments, acquisitions or divestments and may, if a suitable opportunity arises, make an investment, acquisition or divestment.

Our treasury team, under the supervision of our chief financial officer, is responsible for setting our funding and treasury policies and objectives. Our exposure to financial market risks relates primarily to changes in interest rates and foreign currency exchange rates. To mitigate these risks, we utilize derivative financial instruments, the application of which is primarily to manage these exposures, and not for speculative purposes.

We have, from time to time, entered into interest rate swap transactions to hedge our interest rate exposure. In addition, we have, from time to time, entered into forward exchange contracts, swap contracts, cross-currency swap contracts and foreign currency options contracts to hedge our existing assets and liabilities denominated in foreign currencies. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk” and notes 7, 8 and 35 to our consolidated financial statements included in this annual report.

RESEARCH AND DEVELOPMENT

For 2018 and 2019, our research and development expenditures totaled approximately NT$14,962.8 million and NT$18,395.3 million (US$615.0 million), respectively. These expenditures represented approximately 4.0% and 4.5% of operating revenues in 2018 and 2019, respectively. As of December 31, 2019, we had a research and development team of 10,768 employees. ASEH cultivates and maintains a research and development engineering team that continuously surveys and adapts to the latest trends in technology. Our research and development activities are primarily directed toward optimizing relevant technologies in key components, manufacturing processes and product development. Our research and development objective is to enhance the performance of our products and drive greater business growth. To incentivize innovation and encourage our employees to engage in research and development, we offer cash rewards to employees that contribute significantly to our research efforts.

Packaging

We centralize our research and development efforts in packaging technology in our Kaohsiung and Taichung facilities in Taiwan. After initial phases of development, we conduct pilot runs in one of our facilities before new technologies or processes are implemented commercially at other sites. Facilities with special product expertise, such as ASE Korea, also conduct research and development of these specialized products and technologies at their sites. One of the areas of emphasis for our research and development efforts is improving the efficiency and technology of our packaging processes and these efforts are expected to continue. We are also investing significant research and development efforts into the development and adoption of innovative technology. We work closely with manufacturers of our packaging equipment and materials in designing and developing the equipment and materials used in our production process. We also collaborate with our significant customers to jointly develop new product and process technologies.

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In addition to investing in the development of more advanced packaging technology and improving production efficiency, a significant portion of our research and development efforts is focused on the development of IC substrate production technology for BGA packaging. Substrate is the principal raw material for BGA packages. Development and production of IC substrates involve complex technology. We are currently working closely with certain first-tier substrate suppliers in Asia, primarily including those located in Japan, Taiwan and Korea. We believe that our successful cooperation with substrate suppliers to enhance the overall substrate production capability and to meet future package requirements has enabled us to capture an increasingly important value-added component of the packaging process, helped ensure a stable and cost-effective supply of substrates for our BGA packaging operations and shortened time to market.

Testing

Our research and development efforts in the area of testing have focused primarily on developing testing solutions, including logic, mixed-signal, RF and discrete IC /module /SiP, Optical module, characterization of semiconductors, layout design and electrical simulation for high-frequency test board and developing software of parametric test data analysis. We work closely with our customers on the leading-edge test technologies, such as the 3D IC test, and advanced probe test technology, such as the very fine pitch probe card. Our research and development operations also include an equipment development group, which currently designs testing hardware and software for specific semiconductors to offer our customers cost-effective test solutions.

EMS

To further enhance the quality of our services and products, we focus on developing diversified and innovative products to improve our competitiveness. By leveraging our proprietary research and development expertise, we are able to optimize our product design, engineering and manufacturing capabilities to provide our customers with high-performance and cost-effective products and services. During the process of designing, as well as developing the technology for, our software and hardware, our research and development team also dedicates itself to discovering new know-how, and then applying such know-how to create new, advanced and improved products, processes, methodology and services. We are currently investing in the development of products used in EMS in relation to computers and peripherals, communications, consumer products, automotive, industrial, storage and server applications.

TREND INFORMATION

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2019 to December 31, 2019 that are reasonably likely to have a material effect on our operating revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

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TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table sets forth the maturity of our contractual obligations as of December 31, 2019.

		Payments Due by Period
	Total	Under1 Year	1 to 3 Years	3 to 5 Years	After5 Years
	(in millions)
Contractual Obligations:
Long-term debt^(1)^	186,574.8	8,185.4	137,999.7	29,626.7	10,763.0
Lease liabilities^(2)^	6,672.9	723.4	892.0	644.6	4,412.9
Purchase obligations^(3)^	10,130.6	10,130.6	-	-	-
Total^(4)(5)(6)(7)^	203,378.3	19,039.4	138,891.7	30,271.3	15,175.9

_____________________

(1)	Includes long-term borrowings and bonds payable (before the deduction of unamortized arrangement fees, unamortized issuance cost and discounts on bonds payable) and interest payments.
(2)	Represents our commitments under leases liabilities and imputed interest which are mainly from land and buildings and improvements. See note 16 to our consolidated financial statements included in this annual report.
---	---
(3)	Represents unpaid commitments for construction. These commitments were not recorded on our consolidated balance sheets as of December 31, 2019. See note 38 to our consolidated financial statements included in this annual report. Total commitments for construction of buildings were approximately NT$14,653.2 million (US$489.9 million), of which NT$4,522.5 million (US$151.2 million) had been paid as of December 31, 2019.
---	---
(4)	Excludes non-binding commitments to purchase machinery and equipment of approximately NT$10,466.2 million (US$349.9 million), of which NT$622.8 million (US$20.8 million) had been paid as of December 31, 2019. See note 38 to our consolidated financial statements included in this annual report.
---	---
(5)	Excludes unpaid amounts that we were contracted for the construction related to our real estate business of approximately NT$1,393.9 million (US$46.6 million) as of December 31, 2019, since the schedule of payments is difficult to determine. See note 38 to our consolidated financial statements included in this annual report.
---	---
(6)	Excludes our unfunded defined benefit obligation since the schedule of payments is difficult to determine. Under defined benefit pension plans, we made pension contributions of approximately NT$514.6 million (US$17.2 million) in 2019, and we estimate that we will contribute approximately NT$533.8 million (US$17.8 million) in 2020. See note 24 to our consolidated financial statements included in this annual report.
---	---
(7)	Excludes uncertain tax liabilities. We recognized additional taxes payable of NT$85.8 million (US$2.9 million) and accrued interest and penalties of NT$15.9 million (US$0.5 million) related to uncertain tax positions as of or for the year ended December 31, 2019. Because we were unable to make a reasonable estimate of the timing of the tax audits, such balances were not included in the table.
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SAFE HARBOR

Please see the section entitled “Special Note Regarding Forward-Looking Statements.”

Item 6. Directors, Senior Management and Employees

DIRECTORS AND SENIOR MANAGEMENT

Directors

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Our board of directors is elected by our shareholders in a shareholders’ meeting at which a quorum, consisting of a majority of all issued and outstanding common shares, not including treasury stocks and common shares held by our subsidiaries, is present. The chairman is elected by the board from among the directors. Our 13-member board of directors, including three independent directors, is responsible for the management of our business.

We currently have 13 directors, serving a three-year term. The current board of directors were elected in an extraordinary general shareholders’ meeting on June 21, 2018 and began serving on June 22, 2018. Directors may serve any number of consecutive terms and may be removed from office at any time by a resolution adopted at a meeting of shareholders. Normally, all board members are elected at the same meeting of shareholders, except where the posts of one-third or more of the directors are vacant, at which time an extraordinary general shareholders’ meeting shall be convened to elect directors to fill the vacancies. We and our subsidiaries do not have service contracts with our directors that provide for benefits upon termination of employment.

Our audit committee currently consists of our independent directors, Shen-Fu Yu, Ta-Lin Hsu and Mei-Yueh Ho, who are independent under Rule 10A-3 and the R.O.C. Securities and Exchange Act and are financially literate with accounting or related financial management expertise. The audit committee is responsible for overseeing the qualifications, independence and performance of our independent auditors, the integrity of our financial statements, and our compliance with legal and regulatory requirements. Our audit committee is entrusted with the same duties and responsibilities as set out in Rule 10A-3(b) under the Exchange Act.

Our compensation committee currently consists of Shen-Fu Yu and Ta-Lin Hsu, our independent directors, and Hsiao-Ying Ku. Our board of directors established a compensation committee to satisfy the requirements under the R.O.C. Securities and Exchange Act. According to the Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers, a majority of compensation committee's members shall be independent directors. In addition, according to the R.O.C Securities and Exchange Act and the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock Is Listed on the TWSE or the Taipei Exchange, compensation committee members shall have at least one independent director who is considered independent. We do not assess the independence of our compensation committee member(s) under the independence requirements of the NYSE listing standards but adopt the independence standard as promulgated under the R.O.C. Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock Is Listed on the TWSE or the Taipei Exchange. See “Item 16G. Corporate Governance” for more information. Our compensation committee meets at least twice a year. Our board of directors has adopted a compensation committee charter for our compensation committee. The compensation committee has responsibility for, among other things, setting forth and reviewing policies, systems, standards and structures regarding performance evaluation and compensation of the directors, managerial personnel, and evaluating compensation of the directors and managerial personnel.

Our risk management committee currently consists of Shen-Fu Yu, our independent director and the chair of our audit committee and compensation committee, Mei-Yueh Ho, our independent director and member of our audit committee, and Du-Tsuen Uang, our chief administration officer and chief corporate governance officer. In December 2019, our board of directors established a risk management committee and approved its charter to enable us to discover and preempt internal and external operational risks. The risk management committee is responsible for overseeing overall risk management, implementing the decisions of the board of directors in connection to risk management, coordinating and promoting interdepartmental risk management plans, supervising and managing overall risk control and remedial mechanisms, and auditing and integrating each risk control report. The risk management committee files an annual report to our board of directors to inform the board about the status of risk management implementation and share insights for optimization.

The following table sets forth information regarding all of our directors as of January 31, 2020. In accordance with R.O.C. law, each of our directors is elected either in his or her capacity as an individual or as an individual representative of a corporation or government. Persons designated to represent corporate or government shareholders as directors are nominated by such shareholders at the shareholders’ meeting and may be replaced as representatives by such shareholders at will. Of the current directors, nine represent ASE Enterprises Limited. The remaining directors serve in their capacity as individuals.

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Name	Position	DirectorSince	Age	Other Significant<br><br>Positions Held Outside of ASEH
Jason C.S. Chang^(1)(2)^	Director, Chairman and Chief Executive Officer	2018	75	None
Richard H.P. Chang^(1)(2)^	Director, Vice Chairman and President	2018	73	Chairman, Sino Horizon Holdings Ltd.
Bough Lin^(2)^	Director; Chairman and Executive Vice President, SPIL	2018	68	None
Chi-Wen Tsai^(2)^	Director; Vice Chairman and President, SPIL	2018	72	None
Tien Wu^(2)^	Director and Chief Operating Officer	2018	62	None
Joseph Tung^(2)^	Director and Chief Financial Officer	2018	61	None
Raymond Lo^(2)^	Director; General Manager, Kaohsiung packaging facility	2018	65	None
Tien-Szu Chen^(2)^	Director; General Manager, ASE Inc. Chung-Li branch	2018	58	None
Jeffrey Chen^(2)^	Director; Chairman, Universal Scientific Industrial (Shanghai) Co., Ltd.	2018	55	Independent Director and a member of the compensation committee, Mercuries & Associates Holding Ltd.
Rutherford Chang^(3)^	Director; General Manager, China Region	2018	40	None
Shen-Fu Yu	Independent Director and Member, Audit Committee, Compensation Committee and Risk Management Committee	2018	75	Director, Arima Communications; Independent Director, TaiGen Biopharmaceuticals Holdings Ltd.; supervisor, Dynapack International Technology Corporation and San Fu Chemical Co., Ltd.
Ta-Lin Hsu	Independent Director and Member, Audit Committee and Compensation Committee	2018	76	Chairman and founder, H&Q Asia Pacific; Chairman, H&Q Taiwan Co. Ltd.
Mei-Yueh Ho	Independent Director and Member, Audit Committee and Risk Management Committee	2018	69	Independent Director, Bank of Kaohsiung, Ltd., KINPO Electronics Inc. and AU Optronics Corp.

_____________________

(1)	Jason C.S. Chang and Richard H.P. Chang are brothers.
(2)	Representative of ASE Enterprises Limited, a company organized under the laws of Hong Kong, which held 15.80% of our total outstanding shares as of January 31, 2020. All of the outstanding shares of ASE Enterprises Limited are held through intermediary holding companies and under a revocable trust established under the laws of the Bailiwick of Guernsey for the benefit of our Chairman and chief executive officer, Jason C.S. Chang, and his family.
---	---
(3)	Rutherford Chang is the son of Jason C.S. Chang.
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Audit Committee

For a discussion of our audit committee, see “—Directors and Senior Management—Directors.”

Executive Officers

The following table sets forth information regarding all of our executive officers as of January 31, 2020.

Name	Position	Years with the Company	Age
Jason C.S. Chang	Chairman and Chief Executive Officer	35	75
Richard H.P. Chang	Vice Chairman and President	35	73
Bough Lin	Chairman and Executive Vice President, SPIL	1	68
Chi-Wen Tsai	Vice Chairman and President, SPIL	1	72
Tien Wu	Chief Operating Officer	19	62
Joseph Tung	Chief Financial Officer	25	61
Raymond Lo	General Manager, ASE Test Taiwan and Kaohsiung packaging facility	33	65
Tien-Szu Chen	General Manager, ASE Inc. Chung-Li branch	31	58
Rutherford Chang	General Manager, China Region	14	40
Du-Tsuen Uang	Chief Administration Officer	17	60
Chun-Che Lee	General Manager, ASE Electronics	35	60
Chung Lin	General Manager, ASE Shanghai	15	56
Gichol Lee	General Manager, ASE Korea	22	57
Chih-Hsiao Chung	General Manager, ASE Japan and Wuxi Tongzhi	20	55
Chiu-Ming Cheng	General Manager, ASESH AT	29	59
Yen-Chieh Tsao	General Manager, ASEWH	8	62
Shih-Kang Hsu	Chief Executive Officer, ASEN and General Manager, ASEKS	19	54
Kwai Mun Lee	President, ASE South-East Asia operations	21	57
Yean Peng Chen	General Manager, ASE Singapore Pte. Ltd.	21	48
Heng Ee Ooi	General Manager, ASE Malaysia	25	51
Kenneth Hsiang	Chief Executive Officer, ISE Labs and ISE Shanghai	20	49
Randy Hsiao-Yu Lo	General Manager, Siliconware USA, Inc.	1	63
M.S. Chang	General Manager, SZ	1	59
Rick Lee	General Manager, SF	1	55
Jeffrey Chen	Chairman, Universal Scientific Industrial (Shanghai) Co., Ltd.	25	55
Chen-Yen Wei	Chairman, Universal Scientific Industrial Co., Ltd. and President, Universal Scientific Industrial (Shanghai) Co., Ltd.	40	65
Feng-Ta Chen	General Manager, UGJQ	22	57
Jack Hou	General Manager, UGTW	25	63
Ta-I Lin	General Manager, UGKS	32	56
Yueh-Ming Lin	General Manager, USISZ	24	54
Omar Anaya Galván	General Manager, USI Mexico	16	50

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Biographies of Directors and Executive Officers

Jason C.S. Chang has served as chairman and chief executive officer of ASEH since its founding in April 2018. He is also chairman of ASE Inc. Mr. Chang holds a bachelor’s degree in Electrical Engineering from National Taiwan University in Taiwan and a master’s degree from Illinois Institute of Technology. He is the brother of Richard H.P. Chang, our vice chairman and president.

Richard H.P. Chang has served as vice chairman and president of ASEH since its founding in April 2018. Mr. Chang holds a bachelor’s degree in Industrial Engineering from Chung Yuan Christian University in Taiwan. He is the brother of Jason C.S. Chang, our chairman and chief executive officer.

Bough Lin has served as a director of ASEH since its founding in April 2018. Mr. Lin is chairman and executive vice president of SPIL. Mr. Lin has been SPIL's director since August 1984. Mr. Lin holds a bachelor’s degree in Electronic Physics from National Chiao Tung University in Taiwan and was awarded an honorary Ph.D. from National Chiao Tung University in 2014.

Chi-Wen Tsai has served as a director of ASEH since its founding in April 2018. Mr. Tsai is vice chairman and president of SPIL. Mr. Tsai has been SPIL's director since August 1984. Mr. Tsai holds a bachelor’s degree in Electrical Engineering from National Taipei Institute of Technology in Taiwan.

Tien Wu has served as a director and chief operating officer of ASEH since its founding in April 2018. Mr. Wu is currently the chief executive officer of ASE Inc. Prior to joining ASE Inc. in March 2000, Mr. Wu had worked at IBM. Mr. Wu holds a bachelor’s degree in Civil Engineering from National Taiwan University in Taiwan, and a master’s and a doctorate degree in Mechanical Engineering and Applied Mechanics from the University of Pennsylvania.

Joseph Tung has served as a director and chief financial officer of ASEH since its founding in April 2018. He has also served as a director of ASE Inc. since April 1997 and chief financial officer of ASE Inc. since December 1994. He was an independent director of Ta Chong Bank Ltd. from October 2007 to December 2017. Before joining ASE Inc., Mr. Tung was a vice president at Citibank, N.A. Mr. Tung holds a bachelor’s degree in Economics from National Chengchi University in Taiwan and a master’s degree in Business Administration from the University of Southern California.

Raymond Lo has served as a director of ASEH since its founding in April 2018 and general manager of our packaging facility in Kaohsiung, Taiwan since April 2006. Mr. Lo also served as a supervisor of ASE Inc. between July 2000 and May 2006 and director of ASE Inc. since May 2006. Before joining ASE Inc., Mr. Lo was a director of quality assurance at Zeny Electronics Co. Mr. Lo holds a bachelor’s degree in Electronic Physics from National Chiao Tung University in Taiwan.

Tien-Szu Chen has served as a director of ASEH since its founding in April 2018. Mr. Chen has served as a director of ASE Inc. since June 2015 and general manager of ASE Inc. Chung-Li branch since August 2015. He has also served as a supervisor of ASE Inc. from June 2006 to June 2015 and president of PowerASE Technology Inc. from June 2006 to May 2012. Prior to joining ASE Inc. in June 1988, Mr. Chen worked at TSMC and Philips Semiconductor Kaohsiung. Mr. Chen holds a bachelor’s degree in Industrial Engineering from Chung Yuan Christian University in Taiwan.

Jeffrey Chen has served as a director of ASEH since its founding in April 2018 and he has also served as a director of ASE Inc. since June 2003. Mr. Chen has served as chairman of Universal Scientific Industrial (Shanghai) Co., Ltd. since June 2018. Prior to joining ASE Inc., he worked in the corporate banking department of Citibank, N.A. in Taipei and as a vice president of corporate finance at Bankers Trust in Taipei. Mr. Chen holds a bachelor’s degree in Finance and Economics from Simon Fraser University in Vancouver Canada and a master’s degree in Business Administration from the University of British Columbia in Canada.

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Rutherford Chang has served as a director of ASEH since its founding in April 2018. He has also served as a director of ASE Inc. since June 2009 and general manager of China Region of ASE Inc. since June 2010. Mr. Chang holds a bachelor’s degree in Psychology from Wesleyan University in Connecticut. He is the son of Jason C.S. Chang, our chairman and chief executive officer.

Shen-Fu Yu has served as an independent director of ASEH since June 2018. Mr. Yu is also a member of the audit committee, compensation committee and risk management committee of ASEH. He is a director of Arima Communications, an independent director of TaiGen Biopharmaceuticals Holdings Ltd., and a supervisor of Dynapack International Technology Corporation and San Fu Chemical Co., Ltd. He worked at the Deloitte & Touche accounting firm as a consultant from June 2003 to November 2006. Mr. Yu holds a bachelor’s degree in Accounting from National Taiwan University in Taiwan and a master’s degree in Accounting from National Chengchi University in Taiwan.

Ta-Lin Hsu has served as an independent director of ASEH since June 2018. He is also a member of the audit committee and compensation committee of ASEH. He is currently the chairman and founder of H&Q Asia Pacific and chairman of H&Q Taiwan Co. Ltd. Mr. Hsu holds a bachelor’s degree in Physics from National Taiwan University, a master’s degree in Electrophysics from Polytechnic Institute of Brooklyn and a doctorate degree in Electrical Engineering from the University of California, Berkeley.

Mei-Yueh Ho has served as an independent director of ASEH since June 2018. She is also a member of the audit committee and risk management committee of ASEH. Ms. Ho is an independent director and a member of the audit committee of the Bank of Kaohsiung, Ltd., KINPO Electronics Inc. and AU Optronics Corp. She is also a member of the compensation committee of the Bank of Kaohsiung, Ltd. and KINPO Electronics Inc. Ms. Ho served as Minister of Ministry of Economic Affairs, R.O.C. from May 2004 to January 2006. She was also Chairperson of the Council for Economic Planning and Development, R.O.C. from May 2007 to May 2008. Ms. Ho holds a bachelor’s degree in Agricultural Chemistry from National Taiwan University in Taiwan.

Du-Tsuen Uang has served as chief administration officer and chief corporate governance officer of ASEH since its founding in April 2018 and March 2019, respectively. Mr. Uang is also chief administration officer of ASE Inc. since August 2017, chief executive officer and director of ASE Cultural & Educational Foundation and director of ASE Inc., USI Shanghai, Hung Ching and Sino Horizon Holdings Ltd., as well as a professor at Ming Chuan University in the law department. Mr. Uang was a senior chief secretary of the Taiwan Ministry of Economic Affairs Central Bureau of Standards, commissioner of Taiwan FTC, independent director of First commercial Bank, and legal counsel at Hung Ching. Mr. Uang received a Ph.D. in Law from National Cheng-Chi University in Taiwan.

Chun-Che Lee has served as general manager of ASE Electronics since August 2011, prior to which he was vice president, director and manager of research and development of ASE Inc. since 1984. Mr. Lee holds a bachelor’s degree in Aeronautics from Tamkung University in Taiwan.

Chung Lin has served as general manager of ASE Shanghai since May 2018 and vice president of ASESH AT since May 2012, after serving as vice president of ASEWH since 2010 and ASE Shanghai since May 2005. Mr. Lin holds a master’s degree in Computer Science from Columbia University.

Gichol Lee has served as general manager of ASE Korea since November 2019. Mr. Lee was previously the VP of Business Systems with Motorola and then ASE Korea. Prior to his current position, he has held various managerial positions with DuPont and Unilever. He holds a master's degree from Columbia University.

Songwoon Kim has served as general manager of ASE Korea since February 2017 and retired in December 2019, after serving as senior vice president of ASE Korea since July 1999. Mr. Kim was a senior manager of Motorola Korea, Limited before joining ASE Korea when we acquired Motorola Korea, Limited. He holds a bachelor’s degree in Mechanical Engineering from A-Jou University in Korea.

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Chih-Hsiao Chung has served as general manager of ASE Japan since March 2011 and general manager of Wuxi Tongzhi since June 2013. Mr. Chung has also managed the sales and marketing of the ASE Japan region since April 2007. Before joining ASE Inc., Mr. Chung was a senior manager of sales and marketing at Kimberly Clark Co.,Taiwan. He holds a master’s degree in Business Administration from the University of Wisconsin-Madison.

Chiu-Ming Cheng has served as general manager of ASESH AT since September 2012, after serving as vice president of ASE’s Kaohsiung packaging facility since October 2004. He joined ASE Inc. in April 1990. Mr. Cheng holds a master’s degree in Public Policy from National Sun Yat-Sen University in Taiwan.

Yen-Chieh Tsao has served as general manager of ASEWH since October 2013 after serving as vice president of ASE Inc. Chung-Li branch since October 2011. Prior to joining ASE Inc., Mr. Tsao was a vice president of Motorola Electronics Taiwan Ltd. He holds a bachelor’s degree in Physics from Chinese Culture University in Taiwan.

Shih-Kang Hsu has served as chief executive officer of ASEN since August 2010 and general manager of ASEKS since October 2018, after serving as senior vice president of ASE (U.S.) Inc. since June 2006. He joined ASE Inc. in June 2000. Mr. Hsu holds a master’s degree in Mechanical Engineering from Case Western Reserve University.

Kwai Mun Lee has served as president of our Southeast Asia operations, with responsibility for the operations of our Penang, Malaysia and Singapore manufacturing facilities, since March 2006. Before joining ASE Inc., Mr. Lee held senior management positions at Chartered Semiconductor and STATS ChipPAC. He started his career as an engineer at Intel. He holds a degree in Engineering from Swinburne Institute of Technology in Australia.

Yean Peng Chen has served as general manager of ASE Singapore Pte. Ltd. since January 2019. He has also worked in ISE Labs before being appointed as vice president of operations in ASE Singapore in July 2015. He started his career as an equipment engineer at STATS ChipPAC Ltd. Mr. Chen holds a diploma in Electronic and Computer Engineering from Ngee Ann Polytechnic in Singapore.

Heng Ee Ooi has served as general manager of ASE Malaysia since July 2016 after serving as vice president of operations since July 2015. He joined ASE Inc. in July 1994. Before joining ASE Inc., he worked as a process engineer at AMD, Penang. Mr. Ooi holds a bachelor’s degree in Chemical Engineering from Universiti Teknologi Malaysia.

Kenneth Hsiang has served as chief executive officer of ISE Labs and ISE Shanghai since 2019 and served as general manager of ISE Labs from June 2004 to 2019. Prior to joining ASE Inc. in November 1999, Mr. Hsiang worked in various management positions within finance and strategic analysis in the healthcare and biotech industries in the San Francisco Bay area in California. He also worked for Price Waterhouse LLP as a certified public accountant. Mr. Hsiang received a bachelor’s degree in Economics and Rhetoric from the University of California, Berkeley.

Randy Hsiao-Yu Lo has served as general manager of Siliconware U.S.A., Inc. since January 2001. He has served as SPIL’s director since June 2011. He previously served as vice president of SPIL’s Advanced Package R&D division. He received a Ph.D. in Chemical Engineering from Purdue University.

M.S. Chang has served as general manager of Siliconware Technology (Suzhou) Limited since October 2015. He holds a master’s degree in Industrial Engineering and Systems Management from Feng Chia University in Taiwan.

Rick Lee has served as general manager of Siliconware Electronics (Fujian) Co., Limited since November 2018. He holds a bachelor’s degree in Industrial Engineering from Tunghai University in Taiwan.

Chen-Yen Wei has served as chairman of Universal Scientific Industrial Co., Ltd. since July 2014 and president of Universal Scientific Industrial (Shanghai) Co., Ltd. since April 2008. He joined Universal Scientific Industrial as an engineer in August 1979. He holds a bachelor’s degree in Communication Engineering from National Chiao Tung University in Taiwan.

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Feng-Ta Chen has served as general manager of UGJQ since September 2013. He joined USI as a Wireless Product PLM Department head in July 1997. He holds a bachelor’s degree in Literature from Chinese Culture University in Taiwan.

Jack Hou has served as general manager of UGTW since January 2010 and senior vice president of the Automotive Electronics BU and Module Turnkey Management of USI since January 2019. He joined USI as a section manager in February 1994. He holds a master’s degree in Biomedical Engineering from Ohio State University and a master’s degree in Computer Science from the University of Dayton in Ohio.

Ta-I Lin has served as general manager of UGKS since August 2011. He joined USI as an engineer in August 1987. He holds a bachelor’s degree in Electrical Engineering from National Cheng Kung University in Taiwan and an executive master’s degree in Business Administration from Peking University in China.

Yueh-Ming Lin has served as general manager of USISZ since January 2015 and vice president of the Global Operation Management (Shenzhen) Division of USISZ since February 2017. He joined USI as a section manager in October 1995. He holds a bachelor’s degree in Electrical Engineering from Feng Chia University in Taiwan.

Omar Anaya Galván has served as general manager of USI Mexico since March 2015. He has worked in the electronics industry for over 30 years and has experience in various technical, quality and manufacturing management roles. He has been working at USI Shanghai and its directly and indirectly held subsidiaries since March 2003. He holds a bachelor’s degree in Electronic Systems Engineering from Monterrey Institute of Technology and Higher Education in Mexico.

The business address of our directors and executive officers is our registered office.

COMPENSATION

In 2019, we recorded expenses of approximately NT$1,163.9 million (US$38.9 million) as remuneration to our directors and executive officers. In 2019, we accrued pension costs of NT$11.6 million (US$0.4 million) for retirement benefits for our management. According to our Articles of Incorporation, the remuneration of our independent directors is set at NT$3.0 million (US$0.1 million) per person per year. We set aside 0.01% to 1.00% of net profit before income tax, employees’ compensation and remuneration to the directors as employees’ compensation and no more than 0.75% as remuneration to the directors. The difference between the actual amount of remuneration to directors paid and the amount recognized in the consolidated financial statements for the year ended December 31, 2019 was not material.

We have not provided any loans to, or guarantees for, the benefit of any of our directors or executive officers. For information regarding our pension and other retirement plans and those of our subsidiaries, see note 24 to our consolidated financial statements included in this annual report.

ASEH Employee Compensation and Stock OptionPlans

We award bonuses to employees of ASEH and its subsidiaries who are located in Taiwan based on overall income and individual performance targets. Employees are eligible to receive bonuses in the form of our common shares valued at the closing price (after adjustment with consideration of the effects on the share price, if any, brought by cash and stock dividends resolved at shareholders’ meetings) of our common shares on the day prior to our shareholders’ meeting. Actual amounts of compensation to individual employees are determined based upon the employee meeting specified individual performance objectives. We granted aggregate values of NT$45.4 million and NT$34.4 million (US$1.2 million) as cash bonus to our employees for the period from April 30, 2018 through December 31, 2018 and for the year ended December 31, 2019, respectively. On March 30, 2020, our board of directors approved the employees’ compensation in the amount of NT$34.4 million (US$1.2 million) in cash. The difference between the actual amount of employees’ compensation and the amount recognized in the consolidated financial statements for the year ended December 31, 2019 was not material.

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ASE maintained 2010 and 2015 employee stock option plans before the SPIL Acquisition. ASEH assumed ASE’s obligations of share options, which were granted before entering into and executing the Joint Share Exchange Agreement on April 30, 2018. In August 2018, our board of directors and FSC both approved the first ASEH employee share option plan, under which 131,862,500 options were granted in November 2018. The total number of options registered under this option plan is 150,000,000 options. As a result, ASEH currently maintains three employee stock option plans, adopted in 2010, 2015 and 2018. The option plan adopted in 2004 and 2007 expired in May 2015 and December 2017, respectively. Pursuant to these plans, our full-time employees, including domestic and foreign subsidiaries, are eligible to receive stock option grants. Each option entitles the holder to purchase one ASEH common share at a price not less than the closing market price on the date of the option issuance, such exercise price being subject to retroactive adjustment in the event of certain capital transactions in subsequent periods. Each option is valid for 10 years from the date of the grant. Forty percent of the options originally granted vest upon the second anniversary of the grant date, and an additional 10.0% of the options originally granted vest every six months thereafter. Each option expires at the end of the 10th year following its grant date. The options are generally not transferable. As of December 31, 2019, a total of 10,276,750 options were outstanding under the 2010 plan, 8,328,250 of which had an exercise price of NT$40.8 per share and 1,948,500 of which has an exercise price of NT$45.2 per share. As of December 31, 2019, a total of 31,056,500 options were outstanding with an exercise price of NT$73.0 per share under the 2015 plan. As of December 31, 2019, a total of 129,452,500 options were outstanding with an exercise price of NT$54.4 per share under the 2018 plan.

ASE Mauritius Inc. Share Option Plan

ASE Mauritius Inc. maintained one option plan adopted in 2007. Under this plan, certain employees of the Company are granted options to purchase ordinary shares of ASE Mauritius Inc. at an exercise price of US$1.70, which exercise price was determined by taking into account a fairness opinion rendered by an independent appraiser and was reviewed by our accountants. Each option is valid for 10 years from the date of the grant. All 30,000,000 options granted under this plan expired in December 2017.

USI Enterprise Limited Share Option Plans

As of December 31, 2019, USI Enterprise Limited maintained three option plans adopted in 2007, 2010 and 2011, under which certain employees of Universal Scientific Industrial and our employees were granted options to purchase common shares of USI Enterprise Limited. Each option under these three plans is valid for 10 to 13 years from the date of the grant. As of December 31, 2019, we had 3,811,600 options outstanding with an exercise price of US$1.53 per share and 4,537,280 options outstanding with an exercise price of US$2.94 per share under these three plans, respectively.

USI Shanghai Option Plans

As of December 31, 2019, USI Shanghai maintained three option plans: a share option plan in 2015, a share option plan in 2019, and a restricted share plan in 2019.

Under the share option plan in 2015, certain employees of USI Shanghai are granted options to purchase ordinary shares of USI Shanghai at an exercise price of RMB15.5 per share. Each option is valid for 10 years from the date of the grant.

In November 2019, the shareholders’ meeting of USI Shanghai approved a share option plan and granted 17,167 thousand share options to its employees. Each unit represents the right to purchase one ordinary share of USISH when exercised. The options are valid for five years and are exercisable at certain percentages within 12 months subsequent to the second, third and fourth anniversary of the grant date with the satisfaction of certain performance conditions within each respective vesting period.

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In addition, in November 2019, the shareholders’ meeting of USI Shanghai approved a restricted share plan and granted 6,156 thousand ordinary shares to its directors (excluding independent directors), supervisors and employees. The restricted share plan consists of three phases starting from November 2019. Each phase will last for one year with a validity period of 4.5 years, 3.5 years and 2.5 years, respectively. Upon satisfaction of certain performance conditions within the validity period of each phase, participants are entitled to subscribe a certain percentage of USISH’s ordinary shares issued under the plan with a lock-up period of one year.

As of December 31, 2019, we had 41,232,850 options outstanding, 17,929,850 of which had an exercise price of RMB15.5 per share under the share option plan in 2015, 17,147,000 of which has an exercise price of RMB13.3 per share under the share option plan in 2019 and 6,156,000 of which has an exercise price of RMB13.3 per share under the restricted share plan in 2019.

BOARD PRACTICES

General

For a discussion of the term of office of the board of directors, see “—Directors and Senior Management.” No benefits are payable to members of the board or the executive officers upon termination of their relationship with us.

Compensation Committee

For a discussion of our compensation committee, see “—Directors and Senior Management—Directors.”

EMPLOYEES

The following table sets forth certain information concerning our employees as of the dates indicated.

	As of December 31,
	2017		2018		2019
Total		68,753		93,891		96,528
Function
Direct labor		38,362		50,877		51,389
Indirect labor (manufacturing)		16,971		25,002		26,335
Indirect labor (administration)		5,850		7,729		8,036
Research and development		7,570		10,283		10,768
Location
Taiwan		35,828		55,679		57,543
P.R.C.		24,005		28,123		28,920
Korea		2,558		2,429		2,472
Malaysia		3,680		3,867		3,493
Mexico		1,017		2,140		2,419
Singapore		852		887		781
Japan		429		340		362
United States		384		426		426
Poland		-		-		112

Eligible employees may participate in our employee share bonus plan and stock option plans and our subsidiaries’ share option plans, such as the option plans adopted by ASEH, USI Enterprise Limited and USI Shanghai. See “—Compensation.”

We have never experienced a work stoppage caused by our employees. We believe that our relationship with our employees is good.

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SHARE OWNERSHIP

The following table sets forth certain information with respect to our common shares and options of ASEH exercisable for our common shares held by our directors and executive officers as of January 31, 2020. Percentage of beneficial ownership is based on 4,331,603,182 common shares outstanding as of January 31, 2020.

Director or Executive Officer	Number of ASEH Common Shares Beneficially Held^(1)^	Percentage of ASEH Total Common Shares Issued and Outstanding	Number of Options Exercisable^(2)^	Exercise Price of Options (NT$)	Expiration Date of Options
Jason C.S. Chang	949,352,706^(3)^	21.92%	0	-	-
Richard H. P. Chang	124,175,228	2.87%	0	-	-
Bough Lin	6,238,000	*	0	-	-
Chi-Wen Tsai	12,200,000	*	0	-	-
Tien Wu	3,877,473	*	0	-	-
Joseph Tung	2,740,411	*	0	-	-
Raymond Lo	1,783,430	*	*	40.8	2020/5/6
Tien-Szu Chen	1,181,821	*	0	-	-
Jeffrey Chen	1,083,000	*	0	-	-
Rutherford Chang	1,577,647	*	0	-	-
Shen-Fu Yu	2,388	*	0	-	-
Ta-Lin Hsu	0	0.00%	0	-	-
Mei-Yueh Ho	0	0.00%	0	-	-
Du-Tsuen Uang	50,000	*	0	-	-
Chun-Che Lee	2,172,251	*	0	-	-
Chung Lin	2,278	*	0	-	-
Gichol Lee	0	0.00%	0	-	-
Chih-Hsiao Chung	190,489	*	*	40.8	2020/5/6
Chiu-Ming Cheng	514,310	*	0	-	-
Yen-Chieh Tsao	0	0.00%	*	73	2025/9/10
Shih-Kang Hsu	165,000	*	0	-	-
Kwai Mun Lee	209,528	*	0	-	-
Yean Peng Chen	0	0.00%	0	-	-
Heng Ee Ooi	0	0.00%	0	-	-
Kenneth Hsiang	245,000	*	*	40.8	2020/5/6
Randy Hsiao-Yu Lo	0	0.00%	0	-	-
M.S. Chang	47,750	*	0	-	-
Rick Lee	0	0.00%	0	-	-
Chen-Yen Wei	366,115	*	0	-	-
Feng-Ta Chen	0	0.00%	0	-	-
Jack Hou	50,458	*	0	-	-
Ta-I Lin	0	0.00%	0	-	-
Yueh-Ming Lin	0	0.00%	0	-	-
Omar Anaya Galvan	0	0.00%	0	-	-

_____________________

(1)	Including shares directly held and shares beneficially owned through spouse and minor children.
(2)	Each option may be converted into one of our common shares. The figures referred herein include options convertible into our common shares scheduled to vest within 60 days as of the date hereof.
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(3)	Including 684,327,886 common shares Jason C.S. Chang beneficially owned through ASE Enterprises Limited, Aintree Limited and JC Holdings Limited, 260,188,142 common shares beneficially owned through Value Tower Limited and JC Holdings Limited, and 4,836,678 common shares Jason C.S. Chang directly owned. See “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders.”
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* The sum of the number of common shares held and the number of common shares issuable upon exercise of all options held is less than 1.0% of our total outstanding shares.

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Item 7. Major Shareholders and Related Party Transactions

MAJOR SHAREHOLDERS

The following table sets forth information known to us with respect to the beneficial ownership of our common shares, as of January 31, 2020, by each shareholder known by us to beneficially own more than 5.0% of our total outstanding shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Percentage of beneficial ownership is based on 4,331,603,182 common shares outstanding as of January 31, 2020. In addition, in computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

	Common Shares Beneficially Owned
Name of Shareholder or Group	Number		Percentage
Jason C.S. Chang^(1)^		949,352,706		21.92	%

_____________________

(1)

Jason C.S. Chang is our chairman and chief executive officer. Jason C.S. Chang beneficially owned 684,327,886 common shares through ASE Enterprises Limited, Aintree Limited and JC Holdings Limited, 260,188,142 common shares through Value Tower Limited and JC Holdings Limited, and 4,836,678 common shares Jason C.S. Chang directly owned. As a result, Jason C.S. Chang beneficially owned 949,352,706 common shares, representing 21.92% of our total outstanding shares (based on 4,331,603,182 common shares as of January 31, 2020). ASE Enterprises Limited is a company organized under the laws of Hong Kong. All of the outstanding shares of ASE Enterprises Limited are held by Aintree Limited. Aintree Limited is a company organized under the laws of the British Virgin Islands. All of the shares of Aintree Limited are held by JC Holdings Limited. Value Tower Limited is a company organized under the laws of the British Virgin Islands. Jason C.S. Chang is the sole director of Value Tower Limited and JC Holdings Limited is the sole shareholder of Value Tower Limited. The shares of JC Holdings Limited are held through intermediary holding companies and under a revocable trust established under the laws of the Bailiwick of Guernsey for the benefit of our chairman and chief executive officer, Jason C.S. Chang, and his family. There were no significant changes in the percentage of ownership beneficially owned by Jason C.S. Chang in 2017, 2018 and 2019.

The following table sets forth information relating to our common shares held directly by our consolidated subsidiaries and our equity method investee as of January 31, 2020.

	Common Shares Beneficially Owned
Name of Shareholder	Number		Percentage
ASE Test^(1)^		44,100,236		1.02	%
ASE Test Taiwan^(2)^		5,489,388		0.13	%
J&R Holding Limited^(3)^		23,351,881		0.54	%
Hung Ching^(4)^		44,130,751		1.02	%

_____________________

(1)	ASE Test is our wholly owned subsidiary. ASE Test’s ownership of our common shares is the result of the merger of ASE Chung Li with and into us in August 2004, and subsequent dividends upon shares received in connection with this merger. In order to comply with Singapore Companies Act, a trust was established to hold and dispose our common shares issued to ASE Test, a Singaporean Company, upon completion of the merger. The trustee appointed under such trust arrangement is currently a registered shareholder for our common shares issued to ASE Test. See “—Related Party Transactions.”
(2)	ASE Test Taiwan is our wholly owned subsidiary. ASE Test Taiwan’s ownership of our common shares is mainly the result of the merger of ASE Material with and into us in August 2004, and subsequent dividends upon shares received in connection with this merger. In order to comply with Singapore Companies Act, a trust had been established to hold and dispose our common shares issued to ASE Test Taiwan, which had been a subsidiary of ASE Test, upon completion of the merger. In December 2014, the trust established to hold the common shares issued to ASE Test Taiwan had been terminated because ASE Test Taiwan was no longer a subsidiary owned by ASE Test and therefore no longer subject to Singapore Companies Act requirements. As a result, ASE Test Taiwan directly owned 5,489,388 of our common shares as of January 31, 2020. See “—Related Party Transactions.”
---	---
(3)	J&R Holding Limited is our wholly owned subsidiary. J&R Holding Limited’s ownership of our common shares is the result of the merger of ASE Chung Li with and into us in August 2004, and subsequent dividends upon shares received in connection with this merger.
---	---
(4)	Hung Ching is our equity method investee. As of January 31, 2020, we held 26.2% of the outstanding shares of Hung Ching. Hung Ching acquired our common shares in open market transactions, subsequent dividends upon the acquired shares and shares purchase pursuant to the rights offered by the Company.
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As of January 31, 2020, none of our major shareholders had voting rights different from those of our other shareholders. We are not aware of any arrangement that may at a subsequent date result in a change of control of us. Furthermore, other than disclosed above, we are not aware of any significant changes in the percentage of ownership held by our major shareholders in 2017, 2018 and 2019.

As of January 31, 2020, a total of 4,331,603,182 common shares were outstanding. With certain limited exceptions, holders of common shares that are not R.O.C. persons are required to hold their common shares through a brokerage account in the R.O.C. As of January 31, 2020, 251,084,330 common shares were registered in the name of a nominee of Citibank, N.A. the depositary under our ADS deposit agreement. Citibank, N.A., has advised us that, as of January 31, 2020, 125,541,810 ADSs, representing 251,083,620 common shares, were held of record by Cede & Co., and 355 ADSs, representing 710 common shares, were held by five other U.S. persons.

RELATED PARTY TRANSACTIONS

In recent years, we have awarded cash bonuses to the employees of our subsidiaries as part of their compensation, based in part on our consolidated net income and the subsidiaries’ contribution to our consolidated income. We expect to continue this practice in the future.

In order to comply with Singapore law and other applicable laws and regulations, trusts organized under R.O.C. law were established to hold and dispose of our common shares issued to ASE Test and ASE Test Taiwan in connection with the merger of ASE Chung Li and ASE Material into our company in August 2004. Under Section 76(1)(b)(ii) of Singapore’s Companies Act, Chapter 50, ASE Test, a Singapore company, may not purport to acquire, directly or indirectly, shares or units of shares in our company, ASE Test’s parent company. Pursuant to the applicable trust agreements, the trustee under each trust is (1) the registered owner of our common shares, (2) authorized to exercise all of the rights as a shareholder of our common shares, (3) authorized to sell our common shares, subject to market conditions, when such common shares become available for resale under R.O.C. law and in accordance with volume limitations under R.O.C. law, at its sole discretion; provided such common shares are sold (i) in compliance with R.O.C. laws and regulations, (ii) in an orderly manner in order to minimize the impact on the trading price of our common shares, and (iii) in a manner consistent with its fiduciary duties owed to ASE Test, and (4) able to transfer and deliver to ASE Test or ASE Test Taiwan the proceeds from the sale of our common shares and any cash dividends distributed, as the case may be. In February 2010, to complete the tender offer to acquire Universal Scientific Industrial, ASE Test transferred 141,808,499 shares to the shareholders of Universal Scientific Industrial. Neither ASE Test nor ASE Test Taiwan have any rights with respect to our common shares held in trust pursuant to the applicable trust agreements other than the right to receive the proceeds from the sale of such common shares and cash dividends declared while the shares remain in trust. In December 2014, the trust established to hold the common shares issued to ASE Test Taiwan had been terminated because ASE Test Taiwan was no longer a subsidiary owned by ASE Test and therefore no longer subject to the Singapore Companies Act requirements. As a result, ASE Test Taiwan directly owned 5,489,388 of our common shares as of January 31, 2020 and the trust established to hold the common shares issued to ASE Test held 44,100,236 of our common shares.

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In order to demonstrate our commitment to environmental protection, in December 2013, our board of directors approved contributions to environmental protection efforts in Taiwan in a total amount of not less than NT$3,000.0 million, to be made in the next 30 years. For each of the years ended December 31, 2017, 2018 and 2019, we have made contributions in the amount of NT$100.0 million (US$3.3 million), respectively, through the ASE Cultural and Educational Foundation to fund various environmental projects and our board of directors have resolved in a resolution in January 2020 to contribute NT$100.0 million (US$3.3 million) through the ASE Cultural and Educational Foundation in environmental projects in 2020.

In September 2019, we acquired a production facility in the Nantze Export Processing Zone, Taiwan, from Hung Ching for a consideration of NT$2,326.0 million (US$77.8 million).

In February 2018 and July 2019, our subsidiary, USI Enterprise Limited, repurchased its own 1,283 thousand and 2,805 thousand ordinary shares from our key management personnel with approximately NT$653.2 million and NT$1,247.2 million (US$41.7 million), respectively.

INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

Item 8. Financial Information

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Consolidated financial statements are set forth under “Item 18. Financial Statements.”

Export Sales

We categorize our revenues geographically based on the country in which the customer is headquartered. Revenues from our export sales were NT$255,027.6 million, NT$325,462.5 million and NT$361,937.7 million (US$12,100.9 million) in 2017, 2018 and 2019, respectively, which contributed 87.8%, 87.7% and 87.6% of our total sales volume for those periods, respectively. See “Item 4. Information on the Company—Business Overview—Sales and Marketing” for information on our export sales.

Legal Proceedings

K7 Plant Wastewater Discharge

On December 20, 2013, the KEPB imposed an administrative fine of NT$102.0 million (the “Original Fine”) upon us for violation of the Water Pollution Control Act. After we sought administrative remedies against the Original Fine, the Original Fine has been revoked by final judgment of Supreme Administrative Court on June 8, 2017, and KEPB was ordered to refund the Original Fine to us. On December 27, 2019, KEPB refunded NT$55.1 million (US$1.8 million) to us. On February 10, 2020, KEPB re-imposed an administrative fine of NT$47.0 million (US$1.6 million) (the “New Fine”) upon us and offset the New Fine by the outstanding refund amount from the Original Fine. As of the date of this annual report, there is no outstanding amount owed for the New Fine. On March 12, 2020, we filed an administrative appeal to the Kaohsiung City Government to revoke the New Fine.

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Broadcom Patent Dispute

In May 2019, Broadcom Corporation, Broadcom Singapore PTE, Ltd. and Broadcom Limited (collectively “Broadcom”) filed a request for arbitration with the American Arbitration Association for a dispute over a Semiconductor Packaging Agreement that Broadcom and SPIL entered into in September 2012 (the “Semiconductor Packaging Agreement”). The Semiconductor Packaging Agreement stipulates that in the event the products provided by SPIL to Broadcom infringe upon third-party patent rights, SPIL must indemnify Broadcom for relevant loss suffered. In connection to the 2016 patent dispute between Broadcom and Tessera, Broadcom requested SPIL to indemnify Broadcom pursuant to the Semiconductor Packaging Agreement. In February 2020, Broadcom and SPIL settled this matter for a total amount of US$5.0 million.

Waste Disposal Discharge

Five employees and a waste disposal supplier of a subsidiary in China were accused by China People’s Procuratorate of committing the crime of environmental pollution in 2018. During the trial, the Procuratorate claimed that the subsidiary should also be charged with corporate crime, which caused the subsidiary to receive a charge and additional indictment in October 2019. As of the date of this annual report, the trial proceeding is pending Procuratorate’s judgments and, therefore, the final results could not be reliably measured.

Any penalties, fines, damages or settlements made in connection with these criminal, civil, and/or administrative investigations and/or lawsuits may divert management’s attention and resources, which may cause a material adverse effect on our results of operations, financial condition and business. We are also unable to quantify the harm to our reputation should any adverse findings be made against us. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Any environmental claims or failure to comply with any present or future environmental regulations, as well as any fire or other industrial accident, may require us to spend additional funds and may materially and adversely affect our financial condition and results of operations,” and “Item 4. Information on the Company—Business Overview—Environmental Matters.”

Dividends and Dividend Policy

The following table sets forth the stock dividends paid during each of the years indicated and related information. On March 30, 2020, our board of directors adopted resolutions to pay cash dividends of NT$2.00 per share based on 4,334,165,382 shares, which equals the number of issued shares shown in the shareholders’ roster as of March 19, 2020. This proposal is subject to shareholders’ approval at the annual general shareholders meeting in June 2020 and the actual cash dividends per share may be adjusted by fluctuations in the number of our shares due to factors such as the exercise of share options, capital increase in cash, cancellation and repurchase of treasury stocks.

	Cash Dividends per Common Share	Stock Dividends per Common Share	Outstanding Common Shares on Record Date^(1)^	Percentage of Outstanding Common Shares Represented by Stock Dividends
	NT$	NT
2015	2.00	-	7,900,130,996	-
2016	1.60	-	7,931,725,946	-
2017	1.40	-	8,405,972,044	-
2018	2.50^(2)^	-	4,319,674,282	-
2019	2.50	-	4,324,861,082	-

All values are in US Dollars.

___________________

(1)	Aggregate number of common shares outstanding on the record date applicable to the dividend payment. Includes common shares issued in the previous year under our employee bonus plan.
(2)	Cash dividend from capital surplus. ASEH, the continuing entity of ASE, was established on April 30, 2018 and as such has no retained earnings. In June 2018, to protect shareholder’s interest, we resolved to distribute cash from capital surplus that was assumed from ASE’s retained earnings and generated from the Share Exchange process.
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In order to meet the needs of our present and future capital expenditures, we anticipate paying both stock and cash dividends in the future. The form, frequency and amount of future cash or stock dividends on our common shares will depend upon our net income, cash flow, financial condition, shareholders’ requirement for cash inflow and other factors. According to our Articles of Incorporation, we have a general policy that cash dividend distribution should not be lower than 30% of the total dividend amount and the remainder be distributed as stock dividends. See “Item 10. Additional information––Articles of Incorporation––Dividends and Distributions.”

In general, we are not permitted to distribute dividends or make other distributions to shareholders in any given year in which we did not have either earnings or retained earnings. Before distribution of dividends, we shall offset the losses incurred in prior years, and then set aside 10% of remaining net earnings as a legal reserve until the accumulated legal reserve equals our paid-in capital, and then allocate or reverse a special surplus reserve in accordance with laws or regulations set forth by the authorities concerned.

According to our Articles of Incorporation, the remuneration of our independent directors is set at NT$3.0 million (US$0.1 million) per person per year. For those that do not serve a full year, the remuneration will be calculated in proportion to the number of days of the term that were actually served. If our annual net income (after offsetting any losses incurred in prior years and deducting the legal reserve and special reserve provisions as required under R.O.C. law, if any) remains, a proposal for the distribution of such amount together with a part or all of the accumulated undistributed profits in previous years shall be prepared by the board of directors and submit to the shareholders’ meeting for resolution. In addition, we set aside 0.01% to 1.00% of net profit before income tax, employees’ compensation and remuneration to the directors as employees’ compensation and no more than 0.75% as remuneration to the directors.

Holders of ADSs will be entitled to receive dividends, subject to the terms of the deposit agreement, to the same extent as the holders of our common shares. Cash dividends will be paid to the depositary in NT dollars and, except as otherwise provided in the deposit agreement, will be converted by the depositary into U.S. dollars and paid to holders of ADSs according to the terms of the deposit agreement. Stock dividends will be distributed to the depositary and, except as otherwise provided in the deposit agreement, will be distributed by the depositary, in the form of additional ADSs, to holders of ADSs according to the terms of the deposit agreement.

Holders of outstanding common shares on a dividend record date will be entitled to the full dividend declared without regard to any prior or subsequent transfer of common shares. Holders of outstanding ADSs are entitled to receive dividends, subject to the terms of the deposit agreement, to the same extent as the holders of outstanding common shares.

For information relating to R.O.C. withholding taxes payable on dividends, see “Item 10. Additional Information—Taxation—R.O.C. Taxation—Dividends.”

SIGNIFICANT CHANGES

Other than as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of the annual financial statements.

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Item 9. The Offer and Listing

OFFER AND LISTING DETAILS

Our common shares have been listed on the TWSE under the symbol “3711” since April 30, 2018. The TWSE is an auction market where the securities traded are priced according to supply and demand through announced bid and ask prices. As of January 31, 2020, there were an aggregate of 4,331,603,182 of our common shares outstanding.

The performance of the TWSE has in recent years been characterized by extreme price volatility. There are currently limits on the range of daily price movements on the TWSE. In the case of equity securities traded on the TWSE, such as our common shares, fluctuations in the price of a particular security may not exceed a 10.0% change either above or below the previous day’s closing price of such security.

Our ADSs have been listed on the NYSE under the symbol “ASX” since April 30, 2018. The outstanding ADSs are identified by the CUSIP number 00215W100. As of January 31, 2020, a total of 125,542,165 ADSs were outstanding.

PLAN OF DISTRIBUTION

Not applicable.

MARKETS

The principal trading market for our common shares is the TWSE and the principal trading market for ADSs representing our common shares is the NYSE.

SELLING SHAREHOLDERS

Not applicable.

DILUTION

Not applicable.

EXPENSES OF THE ISSUE

Not applicable.

Item 10. Additional Information

SHARE CAPITAL

Not applicable.

ARTICLES OF INCORPORATION

General

We are a company limited by shares organized under the laws of the R.O.C. Our organizational document is our Articles of Incorporation. We have no by-laws.

Our Articles of Incorporation provide, in Article 2, that we may engage in the General Investment Business, which includes investments in various businesses including agriculture, forestry, fishery, animal husbandry, industry, mining and merchandising business, investments in service companies, securities companies, bank insurance companies, trading companies, cultural companies, construction of residential buildings, commercial building, recreation businesses and tourist hotels related business.

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We were incorporated on April 30, 2018 as a company limited by shares under the R.O.C. Company Law. Our authorized share capital registered with the Kaohsiung Export Processing Zones Administration was NT$50 billion, divided into five billion common shares with a face value of NT$10.0 per share, 4,331,603,182 of which were outstanding as of January 31, 2020. Our authorized share capital under our Articles of Incorporation is NT$50 billion, divided into five billion common shares. We do not have any equity in the form of preference shares or otherwise outstanding as of the date of this annual report.

Subject to limited exceptions, with the approval of our board of directors and the FSC, we may grant stock options to our employees; stock options worth NT$4 billion are reserved for employee subscription. We may issue new shares to employees with restricted rights after the resolutions of the shareholders’ meeting. See “Item 6. Directors, Senior Management and Employees—Compensation—ASEH Employee Compensation and Stock Option Plans.”

Directors

Our Articles of Incorporation provide that we are to have 13 directors with tenures of three years who are elected at a shareholders’ meeting. In addition, three of our directors will be required to be independent directors. Our audit committee replaced the function of supervisors in accordance with the R.O.C. Securities and Exchange Act to exercise the powers and duties of supervisors.

There is no minimum amount of shares necessary to stand for election to a directorship. Many of our directors are representatives appointed by corporate shareholders, which appoint individual representatives. Re-elections are allowed. The board of directors has certain powers and duties, including devising operations strategy, proposing to distribute dividends or make up losses, proposing to increase or decrease capital, reviewing material internal rules and contracts, hiring and discharging the general manager, establishing and dissolving branch offices, reviewing budgets and financial statements and other duties and powers granted by or in accordance with the R.O.C. Company Law, our Articles of Incorporation or shareholders resolutions.

The board of directors is constituted by the directors, who elect a chairman from among the directors to preside over the meeting of the board. Meetings of the board may be held in the R.O.C. or by videoconference. A director may appoint another director to attend a meeting and vote by proxy, but a director may accept only one proxy.

Dividends and Distributions

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At the annual general meeting of shareholders, our board of directors submits to the shareholders for their approval any proposal for the distribution of dividends or the making of any other distribution to shareholders from our net income for the preceding fiscal year. All common shares outstanding and fully paid as of the relevant record date are entitled to share equally in any dividend or other distribution so approved. Dividends may be distributed in cash, in the form of common shares or a combination of the two, as determined by the shareholders at the meeting. According to our Articles of Incorporation, we have a general policy that cash dividend distribution should not be lower than 30% of the total dividend amount and the remainder be distributed as stock dividends. See “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends and Dividend Policy.”

We are also permitted to make distributions to our shareholders in cash or in the form of common shares from reserves if we have no accumulated loss. However, the distribution payable out of our legal reserve can only come from the amount exceeding 25% of the total paid-in capital.

For information on the dividends we paid in recent years, see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends and Dividend Policy.” For information as to R.O.C. taxes on dividends and distributions, see “—Taxation—R.O.C. Taxation—Dividends.”

Preemptive Rights

Under the R.O.C. Company Law, when an R.O.C. company issues new shares for cash, existing shareholders who are listed on the shareholders’ register as of the record date have preemptive rights to subscribe for the new issue in proportion to their existing shareholdings, while a company’s employees, whether or not they are shareholders of the company, have rights to subscribe for 10% to 15% of the new issue. Any new shares that remain unsubscribed at the expiration of the subscription period may be freely offered, subject to compliance with applicable R.O.C. law.

In addition, in accordance with the R.O.C. Securities and Exchange Act, a public company that intends to offer new shares for cash must offer to the public at least 10% of the shares to be sold, except under certain circumstances or when exempted by the FSC. This percentage can be increased by a resolution passed at a shareholders’ meeting, which would diminish the number of new shares subject to the preemptive rights of existing shareholders.

These preemptive rights provisions do not apply to offerings of new shares through a private placement approved at a shareholders’ meeting.

Meetings of Shareholders

We are required to hold an annual general meeting of our shareholders within six months following the end of each fiscal year. These meetings are generally held in Kaohsiung, Taiwan. Any shareholder who holds 1% or more of our issued and outstanding shares may submit one proposal for discussion at our annual general meeting. Extraordinary general shareholders’ meetings may be convened by resolution of the board of directors or by the board of directors upon the written request of any shareholder or shareholders who have held 3% or more of the outstanding common shares for a period of one year or longer or shareholders who have held 50% or more of the outstanding common shares for three months or longer. Shareholders’ meetings may also be convened by member(s) of the audit committee. Notice in writing of meetings of shareholders, stating the place, time and purpose, must be dispatched to each shareholder at least 30 days, in the case of annual general meetings, and 15 days, in the case of extraordinary meetings, before the date set for each meeting. A majority of the holders of all issued and outstanding common shares present at a shareholders’ meeting constitutes a quorum for meetings of shareholders.

Voting Rights

Under the R.O.C. Company Law, except under limited circumstances, shareholders have one vote for each common share held. Under the R.O.C. Company Law, our directors are elected at a shareholders’ meeting through cumulative voting.

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In general, a resolution can be adopted by the holders of at least a majority of our common shares represented at a shareholders’ meeting at which the holders of a majority of all issued and outstanding common shares are present. Under R.O.C. Company Law, the approval by at least a majority of our common shares represented at a shareholders’ meeting in which a quorum of at least two-thirds of all issued and outstanding common shares are represented is required for major corporate actions, including:

·	amendment to the Articles of Incorporation, including increase of authorized share capital and any changes of the rights of different classes of shares;
·	execution, amendment or termination of any contract through which the company leases its entire business to others, or the company appoints others to operate its business, or the company operates its business with others on a continuous basis;
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·	transfer of its entire business or assets or a substantial part of its business or assets;
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·	acquisition of the entire business or assets of any other company, which would have a significant impact on the company’s operations;
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·	distribution of any stock dividend;
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·	dissolution, merger or spin-off of the company;
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·	issuance of restricted shares to employees; and
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·	removal of the directors.
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However, in the case of a listed company such as us, the resolution may be adopted by the holders of at least two-thirds of our issued and outstanding common shares represented at a shareholders’ meeting at which the holders of at least a majority of all issued and outstanding common shares are present.

A shareholder may be represented at an annual general or extraordinary meeting by proxy if a valid proxy form is delivered to us five days before the commencement of the annual general or extraordinary general shareholders’ meeting. Shareholders may exercise their voting rights by way of a written ballot or by way of electronic transmission if the voting decision is delivered to us two days before the commencement of the annual general or extraordinary general shareholders’ meeting.

Holders of ADSs do not have the right to exercise voting rights with respect to the underlying common shares, except as described in the deposit agreement.

Other Rights of Shareholders

Under the R.O.C. Company Law, dissenting shareholders are entitled to appraisal rights in certain major corporate actions such as a proposed amalgamation by the company. If agreement with the company cannot be reached, dissenting shareholders may seek a court order for the company to redeem all of their shares. Shareholders may exercise their appraisal rights by serving written notice on the company prior to or at the related shareholders’ meeting and/or by raising and registering an objection at the shareholders’ meeting. In addition to appraisal rights, shareholders have the right to sue for the annulment of any resolution adopted at a shareholders’ meeting where the procedures were legally defective within 30 days after the date of the shareholders’ meeting. One or more shareholders who have held 1% or more of the issued and outstanding shares of a company for a period of six months or longer may require an independent director to bring a derivative action on behalf of the company against a director as a result of the director’s unlawful actions or failure to act.

Rights of Holders of Deposited Securities

Except as described below, holders of ADSs generally have no right under the deposit agreement to instruct the depositary to exercise the voting rights for our common shares represented by the ADSs. Instead, by accepting ADSs or any beneficial interest in ADSs, holders of ADSs are deemed to have authorized and directed the depositary to appoint our chairman or his designee to represent them at our shareholders’ meetings and to vote our common shares deposited with the custodian according to the terms of the deposit agreement.

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The depositary will mail to holders of ADSs any notice of a shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the securities represented by ADSs.

If we fail to timely provide the depositary with an English-language translation of our notice of meeting or other materials related to any meeting of owners of common shares, the depositary will endeavor to cause all the deposited securities represented by ADSs to be present at the applicable meeting, insofar as practicable and permitted under applicable law, but will not cause those securities to be voted.

If the depositary timely receives voting instructions from owners of at least 51.0% of the outstanding ADSs to vote in the same direction regarding one or more resolutions to be proposed at the meeting, including election of directors, the depositary will notify our chairman or his designee to attend the meeting and vote all the securities represented by the holders’ ADSs in accordance with the direction received from owners of at least 51.0% of the outstanding ADSs.

If we have timely provided the depositary with the materials described in the deposit agreement and the depositary has not timely received instructions from holders of at least 51.0% of the outstanding ADSs to vote in the same direction regarding any resolution to be considered at the meeting, then, holders of ADSs will be deemed to have authorized and directed the depositary bank to give a discretionary proxy to our chairman or his designee to attend and vote at the meeting our common shares represented by the ADSs in any manner our chairman or his designee may wish, which may not be in the interests of holders.

The ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure ADS holders that they will receive voting materials in time to enable them to return voting instructions to the depositary in a timely manner.

While shareholders who own 1% or more of our outstanding shares are entitled to submit one proposal to be considered at our annual general meetings, only holders representing at least 51% of our ADSs outstanding at the relevant record date are entitled to submit one proposal to be considered at our annual general meetings. Hence, only one proposal may be submitted on behalf of all ADS holders.

Register of Shareholders and Record Dates

Our share registrar, President Securities Corp., maintains our register of shareholders at its offices in Taipei, Taiwan. Under the R.O.C. Company Law and our Articles of Incorporation, we may, by giving advance public notice, set a record date and close the register of shareholders for a specified period in order for us to determine the shareholders or pledgees that are entitled to rights pertaining to our common shares. The specified period required is as follows:

·	annual general meeting—60 days;
·	extraordinary general shareholders’ meeting—30 days; and
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·	relevant record date for distribution of dividends, bonuses or other interests—5 days.
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Annual Financial Statements

At least 10 days before the annual general meeting, our annual financial statements, which are prepared in conformity with Taiwan IFRS, must be available at our principal executive office in Kaohsiung, Taiwan for inspection by the shareholders.

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Transfer of Common Shares

The transfer of common shares in registered form is effected by endorsement and delivery of the related share certificates, but, in order to assert shareholders’ rights against us, the transferee must have his name and address registered on our register of shareholders. Shareholders are required to file their respective specimen seals, also known as chops, with us. Chops are official stamps widely used in Taiwan by individuals and other entities to authenticate the execution of official and commercial documents. The settlement of trading in our common shares is normally carried out on the book-entry system maintained by the Taiwan Depository & Clearing Corporation.

Acquisition of Common Shares by ASEH

Under the R.O.C. Securities and Exchange Act, we may purchase our own common shares for treasury stock under limited circumstances, including:

·	to transfer shares to our employees;
·	to deliver shares upon the conversion or exercise of bonds with warrants, preferred shares with warrants, convertible bonds, convertible preferred shares or warrants issued by us; and
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·	to maintain our credit and our shareholders’ equity, provided that the shares so purchased shall be canceled.
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We may purchase our common shares on the TWSE or by means of a public tender offer. These transactions require the approval of a majority of our board of directors at a meeting in which at least two-thirds of the directors are in attendance. The total amount of common shares purchased for treasury stock may not exceed 10.0% of the total issued shares. In addition, the total cost of the purchased shares shall not exceed the aggregate amount of our retained earnings, any premium from share issuances and the realized portion of our capital reserve.

We may not pledge or hypothecate any of our shares purchased by us. In addition, we may not exercise any shareholders’ right attaching to such shares. In the event that we purchase our shares on the TWSE, our affiliates, directors, managers and shareholders, together with their respective spouse, minor children and/or nominees who hold 10% or more of our total issued shares (as well as such respective spouses, minor children and/or nominees) are prohibited from selling any of our shares during the period in which we are purchasing our shares.

Pursuant to the R.O.C. Company Law, an entity in which our company directly or indirectly owns more than 50.0% of the voting shares or paid-in capital, which is referred to as a controlled entity, may not purchase our shares. Also, if our company and a controlled entity jointly own, directly or indirectly, more than 50.0% of the voting shares or paid-in capital of another entity, which is referred to as a third entity, the third entity may not purchase shares in either our company or a controlled entity.

Liquidation Rights

In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed pro rata to the shareholders in accordance with the relevant provisions of the R.O.C. Company Law.

Transfer Restrictions

Substantial Shareholders

The R.O.C. Securities and Exchange Act currently requires:

·	each director, manager, or substantial shareholder (that is, a shareholder who holds more than 10.0% shares of a company), together with their respective spouses, minor children or nominees, to report any change in that person’s shareholding (as well as such respective spouses, minor children or nominees), on a monthly basis, to the issuer of the shares; and

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each director, manager, or substantial shareholder, together with their respective spouses, minor children or nominees, after acquiring the status of director, manager, or substantial shareholder for a period of six months, to report his or her intent to transfer any shares (as well as such respective spouses, minor children or nominees) on the TWSE or on the Taipei Exchange to the FSC at least three days before the intended transfer, unless the number of shares to be transferred does not exceed 10,000 shares.

In addition, the number of shares that can be sold or transferred on the TWSE or on the Taipei Exchange by any person subject to the restrictions described above on any given day may not exceed the greater of:

·	0.2% of the outstanding shares of the company in the case of a company with no more than 30 million outstanding shares; or
·	0.2% of 30 million shares plus 0.1% of the outstanding shares exceeding 30 million shares in the case of a company with more than 30 million outstanding shares; and
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·	5.0% of the average trading volume (number of shares) on the TWSE for the 10 consecutive trading days preceding the reporting day on which the director, manager or substantial shareholder reports the intended share transfer to the FSC.
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These restrictions do not apply to sales or transfers of our ADSs.

MATERIAL CONTRACT

Share Purchase Agreement between USIShanghai and the shareholders of Financiere AFG S.A.S.

On December 12, 2019, the shareholders of FAFG and USI Shanghai entered into a share purchase agreement and a framework agreement pursuant to which the shareholders of FAFG undertook to sell the control of FAFG to USI Shanghai under the following terms and conditions:

pursuant to the FAFG Share Purchase Agreement, USIFR would acquire 71,530,174 shares, representing approximately 89.6% of the share capital and voting rights of FAFG, as at the closing date (“First FAFG Closing Date”) provided under the FAFG Share Purchase Agreement for the transfer of such shares (“FAFG First Transaction”);

pursuant to the framework agreement, as from the First FAFG Closing Date, ASDI would keep 8,317,462 shares, representing approximately 10.4% of the share capital and voting rights of FAFG, which would be (i) subsequently exchanged by ASDI against new shares issued by USI Shanghai, (ii) or alternatively, if such exchange is not possible, against a cash payment in an amount corresponding to the price per FAFG share used in the context of the First FAFG Transaction (the “Second FAFG Transaction” and, together with the First FAFG Transaction, the “FAFG Transaction”). In case of exchange of shares, the USI Shanghai shares granted to ASDI would be locked-up for a period of time to be agreed upon with the Chinese listing authorities, but which shall not exceed 36 months as from the completion of the Second FAFG Transaction.

The price for 100% of the shares of FAFG is equal to US$450.0 million, corresponding to a price per FAFG share equal to approximately US$5.63, subject to the adjustments provided under the FAFG Share Purchase Agreement, it being specified that such amounts in dollar would be converted into EUR and, with respect to the First FAFG Transaction, paid to the relevant selling shareholders of FAFG on the First FAFG Closing Date.

·	The aggregate closing consideration is the difference<br>of (i) the sum of the base equity value of US$450.0 million, plus the transaction tax benefit, minus (ii) the sum of the aggregate<br>amount of all seller transaction expenses incurred, paid or payable by FAFG or its subsidiaries after the locked box date, plus<br>the aggregate option share net repurchase amount.
·	The earn-out amount is based on the cumulative net<br>income after taxes of FAFG and its subsidiaries for a two-year period.

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Since the contemplated FAFG Transaction involves the indirect sale of all of the subsidiaries of the group Asteelflash, including in Europe and throughout the world, the FAFG Transaction would have an international scope, involving many different jurisdictions. The closing of the First FAFG Transaction is subject to various conditions precedent, including customary regulatory authorizations with respect to antitrust and foreign investment. For antitrust approval, the FAFG Transaction will require an authorization in European Union, the United States, Taiwan and China. For foreign investment authorizations, the FAFG Transaction will require an authorization in Germany, France, and the United States. The FAFG Transaction is also subject to the approval of Chinese authorities.

The closing of the First FAFG Transaction is also subject to other closing conditions including but not limited to:

·	there is no event, until the First FAFG Closing Date,<br>which would materially and adversely affect the activities of the group Asteelflash or the US market for electronic cigarettes;
·	the debt financing shall have been provided to USIFR<br>pursuant to the debt commitment letter;
·	not less than 70% of the key employees shall continue<br>to be employed and the chief executive officer of FAFG shall continue to provide the same services to FAFG and all its subsidiaries;<br>and
·	the consolidated net income of FAFG and its subsidiaries<br>as reflected in the closing net income financial statements shall be at least 80% of the target consolidated net income for 2019.

Syndicated Loan Agreement between ASEHand banking syndicates led by Bank of Taiwan, Mega International Commercial Bank, and Citibank, N.A., Taipei Branch

On April 30, 2018, we entered into a NT$90,000.0 million five-year syndicated credit facility, for which the Bank of Taiwan, Mega International Commercial Bank and Citibank, N.A., Taipei Branch acted as the agent banks, for the purpose of financing our funding needs for the SPIL Acquisition.

Joint Share Exchange Agreement betweenASE and SPIL

ASE and SPIL entered into the Joint Share Exchange Agreement pursuant to which a holding company, ASEH, was formed by means of a statutory share exchange, and ASEH (i) acquired all issued shares of ASE in exchange for shares of ASEH using the Exchange Ratio as described below, and (ii) acquired all issued shares of SPIL using the Cash Consideration as described below. Upon the consummation of the Share Exchange, ASE and SPIL became wholly owned subsidiaries of ASEH concurrently.

Pursuant to the terms and subject to the conditions set forth in the Joint Share Exchange Agreement, at the effective time of the Share Exchange (the “Effective Time”):

for SPIL shareholders:

each SPIL common share, par value NT$10 per share, was issued immediately prior to the Effective Time (including SPIL’s treasury shares and the common shares of SPIL beneficially owned by ASE), and was transferred to ASEH in consideration for the right to receive NT$51.2, which represented NT$55, minus a cash dividend and a return of capital reserve of NT$3.8 per common share of SPIL distributed by SPIL on July 1, 2016, payable in cash in NT dollars, without interest and net of any applicable withholding taxes (“SPIL Common Shares Cash Consideration”); and

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·	each SPIL American depositary share, representing five common shares of SPIL was canceled in exchange for the right to receive through JPMorgan Chase Bank, N.A., as depositary for the SPIL American depositary shares (“SPIL Depositary”), the U.S. dollar equivalent of NT$256 (representing five times of the SPIL Common Shares Cash Consideration) minus (i) all processing fees and expenses per SPIL American depositary shares in relation to the conversion from NT dollars into U.S. dollars, and (ii) US$0.05 per SPIL American depositary shares cancellation fees pursuant to the terms of the deposit agreement dated January 6, 2015 by and among SPIL, SPIL Depositary and the holders and beneficial owners from time to time of the SPIL American depositary shares issued thereunder, payable in cash in U.S. dollars, without interest and net of any applicable withholding taxes (“SPIL ADS Cash Consideration,” together with the SPIL Common Shares Cash Consideration, “Cash Consideration”).
ii.	for ASE shareholders:
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·	each common share of ASE, par value NT$10 per share, issued immediately prior to the Effective Time (including ASE’s treasury shares), was transferred to ASE Technology Holding in consideration for the right to receive 0.5 ASE Technology Holding common shares, par value NT$10 per share; and
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·	each ASE ADS, representing five common shares of ASE, represented the right to receive 1.25 ASEH ADS. Each ASEH ADS represents two ASEH common shares upon surrender for cancellation to Citibank, N.A., as depositary for the ASE ADSs, after the Effective Time. The ratio at which the common shares of ASE was exchanged for the common shares of ASEH and ASE ADSs was exchanged for ASEH American depositary shares is hereinafter referred to as the “Exchange Ratio.”
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Under Republic of China law, if any fractional ASEH common shares that represented less than one common share was otherwise allotted to former holders of ASE common shares in connection with the Share Exchange, those fractional shares would not be issued to those shareholders. Pursuant to the Joint Share Exchange Agreement, ASE aggregated the fractional entitlements and sold the aggregated ASE common shares using the closing price of ASE common shares on the TWSE on the ninth R.O.C. Trading Day prior to the Effective Time, to an appointee of the Chairman of ASEH. The cash proceeds from the sale was distributed to the former holders of ASE common shares by ASEH on a proportionate basis in accordance with their respective fractions at the Effective Time.

On February 12, 2018, ASE held an extraordinary general shareholders’ meeting and approved the Joint Share Exchange Agreement and approved ASEH’s share capital to be NT$50,000,000,000.

On March 26, 2018, TWSE approved the delisting of common shares of ASE and SPIL on April 30, 2018 and the listing of common shares of ASEH on the same day. On April 30, 2018, the Share Exchange consummated, ASE and SPIL became wholly owned subsidiaries of ASEH, and ASEH begun trading on TWSE under the stock symbol “3711” and on NYSE under the same ticker symbol “ASX.”

FOREIGN INVESTMENT IN THE R.O.C.

Historically, foreign investment in the R.O.C. securities market has been restricted. Since 1983, the R.O.C. government has from time to time enacted legislation and adopted regulations to permit foreign investment in the R.O.C. securities market.

On September 30, 2003, the Executive Yuan approved an amendment to the Regulations Governing Investment in Securities by Overseas Chinese and Foreign National, or the Regulations, which took effect on October 2, 2003. Pursuant to the Regulations, the FSC abolished the mechanism of the “qualified foreign institutional investors” and “general foreign investors” as stipulated in the Regulations before the amendment.

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Under the Regulations, foreign investors (other than P.R.C. persons) are classified as either “onshore foreign investors” or “offshore foreign investors” according to their respective geographical location. Both onshore and offshore foreign investors are allowed to invest in R.O.C. securities after they register with the TWSE or the Taiwan Futures Exchange. The Regulations further classify foreign investors into foreign institutional investors and foreign individual investors. “Foreign institutional investors” refer to those investors incorporated and registered in accordance with foreign laws outside of the R.O.C. (i.e., offshore foreign institutional investors) or their branches set up and recognized within the R.O.C. (i.e., onshore foreign institutional investors). Offshore overseas Chinese and foreign individual investors may be subject to a maximum investment ceiling that will be separately determined by the FSC, after consultation with the Central Bank of the Republic of China (Taiwan). Currently, there is no maximum investment ceiling for offshore overseas Chinese and foreign individual investors. On the other hand, foreign institutional investors are not subject to any ceiling for investment in the R.O.C. securities market.

Except for certain specified industries, such as telecommunications, investments in R.O.C. listed companies by foreign investors are not subject to individual or aggregate foreign ownership limits. Custodians for foreign investors are required to submit to the Central Bank of the Republic of China (Taiwan) and the TWSE a monthly report of trading activities and status of assets under custody and other matters. Capital remitted to the R.O.C. under these guidelines may be remitted out of the R.O.C. at any time after the date the capital is remitted to the R.O.C. Capital gains and income on investments may be remitted out of the R.O.C. at any time.

Foreign investors (other than P.R.C. persons) who wish to make (i) direct investments in the shares of R.O.C. private companies or (ii) investment in 10.0% or more of the equity interest of a R.O.C. company listed on the TWSE or the Taipei Exchange in any single transaction are required to submit a foreign investment approval application to the MOEAIC or other applicable government authority. The MOEAIC or such other government authority reviews each foreign investment approval application and approves or disapproves each application after consultation with other governmental agencies (such as the Central Bank of the Republic of China (Taiwan) and the FSC).

Under current R.O.C. law, any non-R.O.C. person possessing a foreign investment approval may remit capital for the approved investment and is entitled to repatriate annual net profits, interest and cash dividends attributable to the approved investment. Dividends attributable to such investment may be repatriated upon submitting certain required documents to the remitting bank, and investment capital and capital gains attributable to such investment may be repatriated after approvals of the MOEAIC or other government authorities have been obtained.

In addition to the general restriction against direct investment by foreign investors in securities of R.O.C. companies, foreign investors (except in certain limited cases) are currently prohibited from investing in certain industries in the R.O.C. pursuant to a “negative list,” as amended by the Executive Yuan. The prohibition on foreign investment in the prohibited industries specified in the negative list is absolute in the absence of a specific exemption from the application of the negative list. Pursuant to the negative list, certain other industries are restricted so that foreign investors (except in limited cases) may invest in these industries only up to a specified level and with the special approval of the relevant competent authority that is responsible for enforcing the relevant legislation that the negative list is intended to implement.

The FSC announced the P.R.C. Regulations on April 30, 2009. According to the P.R.C. Regulations, a P.R.C. QDII is allowed to invest in R.O.C. securities (including less than 10.0% of shareholding of a R.O.C. company listed on the TWSE or the Taipei Exchange), provided that the total investment amount of any QDII does not exceed US$500 million. The custodians of QDIIs must apply with the TWSE for the remittance amount for each QDII, which cannot exceed US$100 million, and QDII can only invest in R.O.C. securities at an amount approved by the TWSE. In addition, QDIIs are currently prohibited from investing in certain industries, and their investment in any company of certain other industries is restricted to a certain percentage pursuant to a list promulgated by the FSC and amended from time to time. P.R.C. investors other than QDII are prohibited from making investments in a R.O.C. company listed on the TWSE or the Taipei Exchange if the investment is less than 10.0% of the equity interest of such R.O.C. company.

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In addition to investments permitted under the P.R.C. Regulations, P.R.C. investors who wish to make (i) a direct investment in the shares of R.O.C. private companies or (ii) investments, individually or in the aggregate, in 10.0% or more of the equity interest of a R.O.C. company listed on the TWSE or the Taipei Exchange, are required to submit an investment approval application to the MOEAIC or other government authority. The MOEAIC or such other government authority reviews each investment approval application and approves or disapproves each application after consultation with other governmental agencies.

In addition to the general restriction against a direct investment by P.R.C. investors in securities of R.O.C. companies, P.R.C. investors may only invest in certain industries on the “positive list” promulgated by the Executive Yuan. Furthermore, a P.R.C. investor who wishes to be elected as a R.O.C. company’s director or supervisor shall submit an investment approval application to the MOEAIC or other government authority for approval.

EXCHANGE CONTROLS

R.O.C. Exchange Controls

The R.O.C. Foreign Exchange Control Act and regulations provide that all foreign exchange transactions must be executed by banks designated by the FSC and by the Central Bank of the Republic of China (Taiwan) to engage in such transactions. Current regulations favor trade-related or service-related foreign exchange transactions. Consequently, foreign currency earned from exports of merchandise and services may now be retained and used freely by exporters, and all foreign currency needed for the importation of merchandise and services may be purchased freely from the designated foreign exchange banks.

Apart from trade-related or service-related foreign exchange transactions, R.O.C. companies and individual residents of the R.O.C. reaching the age of 20 years old may, without foreign exchange approval, remit foreign currency of up to US$50 million (or its equivalent) and US$5 million (or its equivalent) to and from the R.O.C., respectively, in each calendar year. The above limits apply to remittances involving either a conversion of NT dollars into a foreign currency or a conversion of foreign currency into NT dollars. In addition, a requirement is also imposed on all enterprises to register medium- and long-term foreign debt with the Central Bank of the Republic of China (Taiwan).

In addition, foreign persons may, subject to specified requirements, but without foreign exchange approval of the Central Bank of the Republic of China (Taiwan), remit to and from the R.O.C. foreign currencies of up to US$100,000 (or its equivalent) per remittance if the required documentation is provided to the R.O.C. authorities. The above limit applies to remittances involving either a conversion of NT dollars into a foreign currency or a conversion of foreign currency into NT dollars. The above limit does not, however, apply to the conversion of NT dollars into other currencies, including U.S. dollars, from the proceeds of a sale of any underlying shares withdrawn from a depositary receipt facility.

TAXATION

R.O.C. Taxation

The following discussion describes the material R.O.C. tax consequences of the ownership and disposition of our common shares or ADSs by and to a non-resident individual or non-resident entity holder that owns our common shares or ADSs (referred to here as a “non-R.O.C. holder”). As used in the preceding sentence, a “non-resident individual” is a non-R.O.C. national who owns our common shares or ADSs and is not physically present in the R.O.C. for 183 days or more during any calendar year, and a “non-resident entity” is a corporation or a non-corporate body that owns our common shares or ADSs, is organized under the laws of a jurisdiction other than the R.O.C. and has no fixed place of business or business agent in the R.O.C.

Dividends

Dividends (whether in cash or common shares) declared by us out of retained earnings and distributed to a non-R.O.C. holder are subject to R.O.C. withholding tax at 21% (unless a preferable tax rate is provided under a tax treaty between the R.O.C. and the jurisdiction where the non-R.O.C. holder is a resident) on the amount of the distribution (in the case of cash dividends) or on the par value of the distributed common shares (in the case of stock dividends).

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Distributions of common shares or cash out of capital reserves will not be subject to withholding tax, except under limited circumstances.

Capital Gains

Starting from January 1, 2016, capital gains realized upon the sale or other disposition of common shares are exempt from R.O.C. income tax.

Sales of ADSs are not regarded as sales of R.O.C. securities, and thus any gains derived from transfers of ADSs by non-R.O.C. holders are not currently subject to R.O.C. income tax.

Securities Transaction Tax

Securities transaction tax will be imposed on the seller at the rate of 0.3% of the transaction price upon a sale of common shares. Transfers of ADSs are not subject to R.O.C. securities transaction tax. During the one-year period from April 28, 2017 to April 27, 2018, the tax rate for day trading of shares meeting certain criteria was reduced to 0.15%. The Legislative Yuan approved on April 13, 2018 is an extension of the aforesaid reduction in the tax rate. Under the amended Securities Transaction Tax Act, which became effective on April 27, 2018, the aforesaid reduction in the tax rate applies until December 31, 2021.

Subscription Rights

Distributions of statutory subscription rights for our common shares in compliance with the R.O.C. Company Law are currently not subject to R.O.C. tax. Sales of statutory subscription rights evidenced by securities are subject to securities transaction tax, currently at the rate of 0.3% of the gross amount received. Holders are exempt from income tax on capital gains from the sale of statutory subscription rights evidenced by securities. Proceeds derived from sales of statutory subscription rights, which are not evidenced by securities, are not subject to securities transaction tax but are subject to income tax at a fixed rate of 20% of the income if the seller is a non-R.O.C. holder. Subject to compliance with R.O.C. law, we, in our sole discretion, may determine whether statutory subscription rights are evidenced by securities.

Estate and Gift Tax

R.O.C. estate tax is payable on any property within the R.O.C. left by a deceased non-resident individual, and R.O.C. gift tax is payable on any property within the R.O.C. donated by a non-resident individual. Estate tax and gift tax are currently imposed at the progressive rates of 10%, 15% and 20%. Under the R.O.C. Estate and Gift Tax Act, common shares issued by R.O.C. companies are deemed property located in the R.O.C. without regard to the location of the owner. It is unclear whether a holder of ADSs will be considered to own common shares for this purpose.

Tax Treaty

At present, the R.O.C. has income tax treaties with Indonesia, Singapore, New Zealand, Australia, the United Kingdom, South Africa, Gambia, eSwatini (Swaziland), Malaysia, Macedonia, the Netherlands, Senegal, Sweden, Belgium, Denmark, Israel, Vietnam, Paraguay, Hungary, France, India, Slovakia, Switzerland, Germany, Thailand, Kiribati, Luxembourg, Austria, Italy, Japan, Canada and Poland. These tax treaties may limit the rate of R.O.C. withholding tax on dividends paid with respect to common shares issued by R.O.C. companies. A non-R.O.C. holder of ADSs may or may not be considered as the beneficial owner of common shares for the purposes of such treaties. Accordingly, holders of ADSs who wish to apply a reduced withholding tax rate that is provided under a tax treaty should consult their own tax advisers concerning such application. The United States does not have an income tax treaty with the R.O.C.

United States Federal Income Taxation

The following discussion describes the material U.S. federal income tax consequences of the ownership and disposition of our common shares or ADSs to those U.S. Holders described below who hold such common shares or ADSs as capital assets for U.S. federal income tax purposes. As used herein, a “U.S. Holder” is a beneficial owner of our common shares or ADSs that is for U.S. federal income tax purposes:

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·	a citizen or individual resident of the United States;
·	a corporation, or other entity taxable as a corporation, created or organized under the laws of the United States or of any political subdivision of the United States; or
---	---
·	an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
---	---

This discussion assumes that we are not a passive foreign investment company, as discussed below.

This discussion does not address all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances. In particular, it does not address all of the tax consequences that may be relevant to holders subject to special rules, including:

·	persons subject to the alternative minimum tax;
·	persons subject to taxation under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), known as the Medicare contribution tax;
---	---
·	insurance companies;
---	---
·	tax-exempt entities, including “individual retirement accounts” or “Roth IRAs”;
---	---
·	dealers or traders in securities who use a mark-to-market method of accounting for U.S. federal income tax purposes;
---	---
·	certain financial institutions;
---	---
·	partnerships or other entities classified as partnerships for U.S. federal income tax purposes;
---	---
·	persons holding common shares or ADSs in connection with a trade or business conducted outside of the U.S.;
---	---
·	persons who hold or will hold common shares or ADSs as part of a straddle, hedge, conversion transaction, integrated transaction or similar transaction;
---	---
·	persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
---	---
·	persons who own or are deemed to own 10% or more of the voting power or value of our stock; or
---	---
·	persons who acquired our common shares or ADSs pursuant to the exercise of any employee stock option or otherwise as compensation.
---	---

If an entity that is classified as a partnership for U.S. federal income tax purposes holds our common shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding our common shares or ADSs and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of holding and disposing of our common shares or ADSs.

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This discussion is based on the Code, final, temporary and proposed Treasury regulations, administrative pronouncements and judicial decisions, all as of the date hereof. These laws and regulations are subject to change, possibly with retroactive effect. This discussion is also based in part on representations by the depositary bank and assumes that each obligation under the Deposit Agreement and any related agreement will be performed in accordance with its terms.

In general, for U.S. federal income tax purposes, a U.S. Holder who owns ADSs should be treated as the owner of the common shares represented by the ADSs. Accordingly, no gain or loss should be recognized if a U.S. Holder exchanges ADSs for the common shares represented by those ADSs.

The U.S. Treasury has expressed concerns that parties to whom American depositary shares are released before delivery of shares to the depositary bank (“pre-release”), or intermediaries in the chain of ownership between holders and the issuer of the security underlying the American depositary shares, may be taking actions that are inconsistent with the claiming of foreign tax credits by the holders of American depositary shares. Such actions would also be inconsistent with the claiming of the preferential rates of tax applicable to dividends received by certain non-corporate U.S. Holders. Accordingly, the creditability of R.O.C. taxes and the availability of the preferential tax rates for dividends received by certain non-corporate U.S. Holders, both described below, could be affected by actions that may be taken by such parties or intermediaries.

U.S. Holders should consult their tax advisers with regard to the application of the U.S. federal income tax laws to their common shares or ADSs, as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.

Dividends

Distributions paid on our common shares or ADSs (other than certain pro rata distributions of our common shares to all shareholders, including holders of ADSs), including the amount of any R.O.C. taxes withheld thereon, reduced by any credit against the withholding tax on account of the retained earnings tax imposed on us, generally will constitute foreign-source dividend income to the extent paid out of our current or accumulated earnings and profits as determined in accordance with U.S. federal income tax principles. Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. The amount a U.S. Holder will be required to include in income for any dividend paid in NT dollars will be equal to the U.S. dollar value of the NT dollars paid, calculated by reference to the exchange rate in effect on the date the payment is received by the depositary (in the case of ADSs) or by a U.S. Holder (in the case of common shares), regardless of whether the payment is in fact converted into U.S. dollars on the date of receipt. If a U.S. Holder does not convert the NT dollars so received into U.S. dollars on the date of receipt, any gain or loss recognized on a subsequent sale or other disposition of the NT dollars generally will be U.S.-source ordinary income or loss. The amount of any taxable distribution of property other than cash will be the fair market value of such property on the date of distribution. Dividends will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code.

Subject to applicable limitations and the discussion above regarding concerns expressed by the U.S. Treasury, under current law, certain dividends paid by qualified foreign corporations to certain non-corporate U.S. Holders are taxable at the preferential rates applicable to long-term capital gain. A foreign corporation is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares (or ADSs representing such shares) that are readily tradable on a securities market in the United States, such as the NYSE, where our ADSs are traded. U.S. Holders should consult their tax advisers to determine whether these preferential rates may apply to dividends they receive and whether they are subject to any special rules that limit their ability to be taxed at these preferential rates.

Subject to applicable limitations and restrictions, some of which vary depending upon the U.S. Holder’s circumstances, and the discussion above regarding concerns expressed by the U.S. Treasury, the R.O.C. taxes withheld from dividend distributions, reduced by any credit against the withholding tax that is paid by us on account of the retained earnings tax, will be eligible for credit against the U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The rules governing foreign tax credits are complex and, therefore, U.S. Holders should consult their tax advisers regarding the availability of foreign tax credits in their particular circumstances. Instead of claiming a credit, U.S. Holders may, at their election, deduct otherwise creditable R.O.C. taxes in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States.

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Certain pro rata distributions of common shares by a company to its shareholders, including Holders of ADSs, will not be subject to U.S. federal income tax. Accordingly, these distributions will not give rise to U.S. federal income against which the R.O.C. tax imposed on these distributions may be credited. U.S. Holders should consult their tax advisers as to whether any R.O.C. tax imposed on such distributions may be creditable against their U.S. federal income tax on foreign-source income from other sources.

Capital Gains

A U.S. Holder generally will recognize U.S.-source capital gain or loss for U.S. federal income tax purposes on the sale or exchange of our common shares or ADSs, which will be long-term capital gain or loss if our common shares or ADSs were held by the U.S. Holder for more than one year. The amount of gain or loss will be equal to the difference between the U.S. Holder’s tax basis in our common shares or ADSs disposed of and the amount realized on disposition, in each case as determined in U.S. dollars. A U.S. Holder’s basis in our common shares or ADSs will generally equal the U.S. Holder’s cost of such common shares or ADSs. If a U.S. Holder receives our common shares or ADSs in a non-taxable pro rata distribution with respect to its ADSs or common shares (the “new securities”), the basis of such new securities must be determined by allocating the basis of the common shares or ADSs with respect to which the new securities were issued (the “old securities”) between the old securities and new securities in proportion to their fair market values on the date of distribution. U.S. Holders should consult their tax advisers about the treatment of capital gains, which may be taxed at lower rates than ordinary income for non-corporate taxpayers, and capital losses, the deductibility of which may be limited.

Passive Foreign Investment CompanyRules

We believe that we were not a passive foreign investment company, or “PFIC,” for U.S. federal income tax purposes for our 2019 taxable year. However, since PFIC status depends upon the composition of a company’s income and assets and the market value of its assets (including, among others, less than 25 percent owned equity investments) from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year.

If we were a PFIC for any taxable year during which a U.S. Holder held a common share or an ADS, certain adverse consequences could apply to that U.S. Holder. If we are a PFIC for any taxable year during which a U.S. Holder owns a common share or an ADS, such U.S. Holder will generally be required to file Internal Revenue Service Form 8621 with their annual U.S. federal income tax returns, subject to certain exceptions.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is an exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

DIVIDENDS AND PAYING AGENTS

Not applicable

STATEMENT BY EXPERTS

Not applicable.

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DOCUMENTS ON DISPLAY

We file annual reports on Form 20-F and periodic reports on Form 6-K with the SEC. You can read and copy these reports and other information at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can also request copies of the documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. The reports and other information we file electronically with the SEC are also available to the public from the SEC’s website at http://www.sec.gov. Information about ASEH is also available to the public on our website at http://www.aseglobal.com.

SUBSIDIARY INFORMATION

Not applicable.

Item 11. Quantitative and Qualitative Disclosures about MarketRisk

Market Risk

Our exposure to financial market risks relates primarily to changes in interest rates and foreign currency exchange rates.

Interest Rate Risk. Our exposure to interest rate risks relates primarily to our long-term floating rate loans, which are normally incurred to support our corporate activities and capital expenditures. See note 35 to our consolidated financial statements included in this annual report for details on interest rate sensitivity analysis.

The tables below set forth information relating to our significant obligations, including short-term borrowings and long-term borrowings, including bank loans, bills payable, lease liabilities and bonds payable, that are sensitive to interest rate fluctuations as of December 31, 2019.

		Expected Maturity Date
	2020	2021	2022	2023	2024	Thereafter	Total	Fair Value
	(in millions, except percentages)
Short-term borrowings:
Variable rate (NT$)	15,121.0	-	-	-	-	-	15,121.0	15,121.0
Average interest rate	0.95%	-	-	-	-	-	0.95%	-
Fixed rate (NT$)	4,850.0	-	-	-	-	-	4,850.0	4,850.0
Average interest rate	1.07%	-	-	-	-	-	1.07%	-
Variable rate (US$)	148.8	-	-	-	-	-	148.8	148.8
Average interest rate	1.97%	-	-	-	-	-	1.97%	-
Fixed rate (US$)	226.2	-	-	-	-	-	226.2	226.2
Average interest rate	2.50%	-	-	-	-	-	2.50%	-
Variable rate (RMB)	1,251.1	-	-	-	-	-	1,251.1	1,251.1
Average interest rate	4.17%	-	-	-	-	-	4.17%	-
Fixed rate (RMB)	50.0	-	-	-	-	-	50.0	50.0
Average interest rate	3.82%	-	-	-	-	-	3.82%	-
Fixed rate (EUR)	0.3	-	-	-	-	-	0.3	0.3
Average interest rate	0.70%	-	-	-	-	-	0.70%	-
Variable rate (HKD)	136.0	-	-	-	-	-	136.0	136.0
Average interest rate	4.16%	-	-	-	-	-	4.16%	-
Long-term borrowings:
Variable rate (NT$)	3,571.5	54,037.1	6,225.1	9,490.1	596.3	2,733.1	76,653.2	76,653.2
Average interest rate	1.69%	0.92%	1.58%	1.85%	0.40%	(0.63)%	1.06%	-
Fixed rate (NT$)	-	7,000.0	9,904.8	2,000.0	13,902.4	3,500.0	36,307.2	36,307.2
Average interest rate	-	1.30%	1.81%	1.50%	1.43%	1.03%	1.47%	-
Variable rate (US$)	35.2	1,099.4	364.4	47.1	-	-	1,546.1	1,546.1
Average interest rate	2.21%	2.17%	2.23%	2.34%	-	-	2.19%	-
Variable rate (PLN$)	2.6	2.6	2.6	1.3	-	-	9.1	9.1
Average interest rate	2.97%	2.94%	3.01%	3.06%	-	-	2.99%	-
Variable rate (RMB)	88.5	253.5	357.1	138.9	155.2	717.9	1,711.1	1,711.1
Average interest rate	4.30%	4.43%	4.80%	5.28%	5.34%	2.30%	3.76%	-

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Foreign Currency Exchange Rate Risk. Our foreign currency exposure gives rise to market risk associated with exchange rate movements against the NT dollar, our functional currency. Currently, the majority of our revenues are denominated in U.S. dollars, with a portion denominated in NT dollars and Japanese yen. Our costs of revenues and operating expenses are incurred in several currencies, primarily in NT dollars, U.S. dollars, RMB, Japanese yen, Korean won, as well as, to a lesser extent, Singapore dollars, Malaysian ringgit and Polish zloty. In addition, a substantial portion of our capital expenditures, primarily for the purchase of packaging and testing equipment, has been, and is expected to continue to be, denominated primarily in U.S. dollars with the remainder in Japanese yen. The majority of our borrowings are denominated in NT dollars, U.S. dollars and RMB. Fluctuations in exchange rates, primarily among the U.S. dollar and Japanese yen against the NT dollar and RMB, will affect our costs and operating margins and could result in exchange losses and increased costs in NT dollar and other local currency terms. See note 35 to our consolidated financial statements included in this annual report for details on foreign currency exchange rate sensitivity analysis.

Despite hedging and mitigating techniques implemented by us, fluctuations in exchange rates have affected, and may continue to affect, our financial condition and results of operations. We recorded net foreign exchange gains of NT$3,502.6 million in 2017, net foreign exchange losses of NT$1,015.6 million in 2018 and net foreign exchange gains of NT$1,125.7 million (US$37.6 million) in 2019. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign currency exchange rates, we hold a variety of derivative financial instruments, including currency forward exchange contracts and swap contracts, to reduce the impact of foreign currency fluctuations on our results of operations.

Our hedging strategy was to lift foreign currency borrowings to avoid 100% exchange rate exposure from its equity instruments denominated in foreign currency, which was designated as fair value hedges. Hedge adjustments were made to totally offset the foreign exchange gains or losses from those equity instruments denominated in foreign currency when they were evaluated based on the exchange rates on each balance sheet date. The source of hedge ineffectiveness in these hedging relationships was the material difference between the notional amounts of borrowings denominated in foreign currency and the cost of those equity instruments denominated in foreign currency. No other sources of ineffectiveness is expected to emerge from these hedging relationships.

The table below sets forth our outstanding forward exchange contracts and swap contracts, for which the expected maturity dates are in 2020, in aggregate terms by type of contract as of December 31, 2019.

Forward Exchange Contracts and Swap Contracts

	Swap Contracts
Buy US against NT
Notional Amount	US$1,660.0 million
Weighted Average Strike Price	US$/NT$30.266
Fair Value	Negative US$28.786 million
Buy US against RMB
Notional Amount	-
Weighted Average Strike Price	-
Fair Value	-
Buy US against HKD
Notional Amount	-
Weighted Average Strike Price	-
Fair Value	-

All values are in US Dollars.

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Sell US against NT
Notional Amount	US$190.0 million
Weighted Average Strike Price	US$/NT$30.109
Fair Value	US$0.929 million
Sell US against RMB
Notional Amount	US$49.7 million
Weighted Average Strike Price	US$/RMB7.043
Fair Value	US$0.460 million
Sell US against JP
Notional Amount	US$45.9 million
Weighted Average Strike Price	US$/JP¥108.985
Fair Value	US$0.306 million
Sell US against MYR
Notional Amount	US$11.0 million
Weighted Average Strike Price	US$/MYR4.137
Fair Value	US$0.109 million
Sell US against SGD
Notional Amount	-
Weighted Average Strike Price	-
Fair Value	-
Sell US against KRW
Notional Amount	US$28.0 million
Weighted Average Strike Price	US$/KRW1,159.100
Fair Value	US$0.035 million

All values are in US Dollars.

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Other Market Risk. Our exposure to other market risk relates primarily to our investments in quoted ordinary shares, open-end mutual funds, unquoted preferred shares, private-placement funds, and financial assets at fair value through other comprehensive income for the year ended December 31, 2019. The value of these investments may fluctuate based on various factors including prevailing market conditions. Moreover, the fair value of investments in unlisted securities may be significantly different from their carrying value. As of December 31, 2019, our investments in quoted ordinary shares, open-end mutual funds, unquoted preferred shares and private-placement funds classified as financial assets at fair value through profit or loss were NT$5,103.6 million (US$170.6 million). As of December 31, 2019, our investments classified as financial assets at fair value through other comprehensive income were NT$1,770.8 million (US$59.2 million), primarily consisting of unquoted ordinary shares, unsecured subordinate corporate bonds, unquoted preferred shares and limited partnership interests. If equity price was 1.0% higher or lower, profit before income tax would have increased or decreased approximately by NT$51.0 million (US$1.7 million) for the same period and other comprehensive income before income tax would have increased or decreased approximately by NT$8.0 million (US$2.7 million) for the same period. Furthermore, fluctuations in gold prices may also affect the price at which we have been able to purchase gold wire. How this will impact the results of our operations depends on whether such costs can be transferred onto our customers.

Item 12. Description of Securities Other Than Equity Securities

DEBT SECURITIES

Not applicable.

WARRANTS AND RIGHTS

Not applicable.

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OTHER SECURITIES

Not applicable.

AMERICAN DEPOSITARY SHARES

Depositary Fees and Charges

As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:

Service	Fees
Issuance of ADSs (e.g., an issuance upon a deposit of shares, upon a change in ADS(s)-to-common shares(s) ratio, or for any other reason), excluding issuances as a result of distributions of common shares	Up to U.S. $5.00 per 100 ADSs issued
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited common shares, upon a change in the ADS(s)-to-common share(s) ratio, or for any other reason)	Up to U.S. $5.00 per 100 ADSs cancelled
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)	Up to U.S. $5.00 per 100 ADSs held
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs	Up to U.S. $5.00 per 100 ADSs held
Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)	Up to U.S. $5.00 per 100 ADSs held
ADS Services	Up to U.S. $5.00 per 100 ADSs held on the applicable record date(s) established by the Depositary

As an ADS holder you will also be responsible to pay certain charges such as:

·	taxes (including applicable interest and penalties) and other governmental charges;
·	the registration fees as may from time to time be in effect for the registration of common shares on the share register and applicable to transfers of common shares to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
---	---
·	certain cable, telex and facsimile transmission and delivery expenses;
---	---
·	the expenses and charges incurred by the Depositary in the conversion of foreign currency;
---	---
·	the fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, ADSs and ADRs; and
---	---
·	the fees and expenses incurred by the Depositary, the custodian or any nominee in connection with the servicing or delivery of deposited property.
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ADS fees and charges payable upon (i) the issuance of ADSs and (ii) cancellation of ADSs will be payable by the person to whom the ADSs are so issued (in the case of ADS issuances) and by the person whose ADSs are being cancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or held via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC participant(s) receiving the ADSs or whose ADSs are being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account(s) of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs.

In the event of refusal to pay the Depositary fees, the Depositary may, under the terms of the Deposit Agreement, refuse the requested service until payment is received or may set off the amount of the Depositary fees from any distribution to be made to the ADS holder. Certain of the depositary fees and charges (such as the ADS services fee) may become payable shortly after the Closing Date. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the Depositary. You will receive prior notice of such changes. The Depositary may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the Depositary agree from time to time.

Depositary Payments

In 2019, we received the following payments from Citibank, N.A., the depositary bank for our ADR programs. The table below sets forth details of the amount we received from Citibank, N.A.

Items		Depositary Payments
Reimbursement of SEC Filing Fees	US$	633.00
Direct reimbursement	US$	2,010,642.25
Net payment received by us^(1)^	US$	2,011,275.25

__________________

(1)	Net of U.S. withholding tax.

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PARTII

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of SecurityHolders and Use of Proceeds

Not applicable.

Item 15. Controls and Procedures

Disclosure Controls and Procedures

As of December 31, 2019, our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance regarding management’s control objectives. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective for recording, processing, summarizing and reporting, within the time periods specified in the SEC’s rules and forms, for information required to be disclosed in the reports we file or submit under the Exchange Act, and for accumulating and communicating such information to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control overFinancial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on this assessment, management concluded that, as of December 31, 2019, our internal control over financial reporting is effective based on those criteria.

Our evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2019 did not include an evaluation of the internal control over financial reporting of ASEEE, AMPI and UGPL, which we acquired on April 26, 2019, April 30, 2019 and October 31, 2019, respectively, and whose financial statements constituted 2% and 1% of net and total assets, respectively, 0% of operating revenues, and -4% of profit of the consolidated financial statement amounts as of and for the year ended December 31, 2019.

Our independent registered public accounting firm, Deloitte & Touche, independently assessed the effectiveness of our internal control over financial reporting. Deloitte & Touche has issued an attestation report, which is included below. SPIL’s independent registered public accounting firm, PricewaterhouseCoopers, independently assessed the effectiveness of SPIL’s internal control over financial reporting. PricewaterhouseCoopers has issued an attestation report, which is included below.

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REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM

To the shareholders and the Board of Directors of

ASE Technology Holding Co., Ltd.

Opinion on Internal Control over FinancialReporting

We have audited the internal control over financial reporting of ASE Technology Holding Co., Ltd. (a corporation incorporated under the laws of the Republic of China) and its subsidiaries (collectively, the “Group”) as of December 31, 2019, based on criteria established in InternalControl - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, based on our audit and the report of other auditors, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - IntegratedFramework (2013) issued by COSO.

We did not audit the effectiveness of internal control over financial reporting of Siliconware Precision Industries Co., Ltd. and its subsidiaries (collectively, “SPIL”), a wholly owned subsidiary, whose consolidated financial statements reflect total assets and operating revenues constituting 23% and 22%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2019. The effectiveness of SPIL’s internal control over financial reporting was audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the effectiveness of SPIL’s internal control over financial reporting, is based solely on the report of other auditors.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019 of the Group and our report dated March 27, 2020, expressed an unqualified opinion on those consolidated financial statements based on our audit and the report of other auditors.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at ASE Embedded Electronics Inc., Advanced Microelectronic Products Inc. and Chung Hong Electronics Poland Sp. z o.o. which were acquired on April 26, 2019, April 30, 2019 and October 31, 2019, respectively, and whose financial statements constituted 2% and 1% of net and total assets, respectively, 0% of operating revenues, and -4% of profit of the consolidated financial statement amounts as of and for the year ended December 31, 2019. Accordingly, our audit did not include the internal control over financial reporting at ASE Embedded Electronics Inc., Advanced Microelectronic Products Inc. and Chung Hong Electronics Poland Sp. z o.o..

Basis for Opinion

The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion.

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Definition and Limitations of InternalControl over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche

Taipei, Taiwan

Republic of China

March 27, 2020

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of Siliconware Precision Industries Co., Ltd.

Opinions on the Financial Statements and Internal Controlover Financial Reporting

We have audited the consolidated balance sheets of Siliconware Precision Industries Co., Ltd. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”)(not presented herein). We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31 ,2019, based on criteria established in Internal Control- Integrated Framework (2013) issued by the COSO.

Change in Accounting Principles

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting (not presented herein). Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over FinancialReporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

/s/PricewaterhouseCoopers, Taiwan

Taipei, Taiwan

March 19, 2020

We have served as the Company’s auditor since 1994.

Changes in Internal Control over Financial Reporting

Other than as explained below, there has been no change in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during 2019.

On April 26, 2019, April 30, 2019 and October 31, 2019, we acquired of ASEEE, AMPI and UGPL, respectively. As a result of the timing, breadth and complexity of the transaction, we increased the level of resources involved in the application of our internal processes and controls to the financial closing. During 2020, we expect the following will occur with respect to these acquired businesses: (1) they will continue the transition to our accounting and reporting policies and processes, (2) they will assess the design and operating effectiveness of their internal control system based on criteria established in Internal Control- Integrated Framework (2013) issued by the COSO, and (3) their control systems and processes will be integrated into our framework of internal controls over financial reporting. These actions may precipitate changes in processes or controls.

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Item 16. [Reserved]

Item 16A. Audit Committee Financial Expert

Our board of directors determined that Shen-Fu Yu, Ta-Lin Hsu and Mei-Yueh Ho are audit committee financial experts as defined under the applicable rules of the SEC issued pursuant to Section 407 of the Sarbanes-Oxley Act of 2002 and are independent for the purposes of Rule 10A-3 of the Exchange Act.

Item 16B. Code of Ethics

We have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”), which satisfies the requirements of Item 16B of Form 20-F and applies to all employees, officers, supervisors and directors of our Company and subsidiaries, including our chief executive officer, chief financial officer and principal accounting officer. The Code of Ethics contains the policies with respect to anti-corruption, fair competition, anti-money laundering, whistleblowing and regulatory compliance. The Code of Ethics has built robust and effective policies and procedures to enable high ethical standards of business conduct that can be persistently maintained. We have continued to implement the Code of Ethics through promoting awareness and educational activities among our employees, officers, supervisors and directors of our Company and subsidiaries in daily operation. The Code of Ethics is available on our website at: http://ir.aseglobal.com/html/ir_doc.php

Item 16C. Principal Accountant Fees and Services

Policy on Pre-Approval of Audit and Non-Audit Services ofIndependent Registered Public Accounting Firm

Our audit committee pre-approves all audit and non-audit services provided by our independent registered public accounting firm, including audit services, audit-related services, tax services and other services, on a case-by-case basis.

Independent Registered Public Accounting Firm’s Fees

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Deloitte & Touche. We did not pay any other fees to our independent registered public accounting firm during the periods indicated below.

	Year Ended December 31,
	2017
		NT	NT	NT$	US$
Audit fees^(1)^		158,872.5	157,244.5	168,874.7	5,646.1
Audit-related fees^(2)^		1,032.6	9,319.9	41,035.3	1,372.0
Tax fees^(3)^		16,087.7	31,394.8	23,532.4	786.8
All other fees^(4)^		19,024.7	19,776.7	7,063.0	236.1
Total		195,017.5	217,735.9	240,505.4	8,041.0

All values are in US Dollars.

_____________________

(1)	Audit fees are defined as the standard audit and review work that needs to be performed each year in order to issue an opinion on our consolidated financial statements and to issue reports on the local statutory financial statements. It also includes services that can only be provided by our auditor such as statutory audits required by the Tax Bureau of the R.O.C. and the Customs Bureau of the R.O.C., consents, and comfort letters and any other audit services required for SEC or other regulatory filings.
(2)	Audit-related fees consist of assurance and related services by Deloitte & Touche that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under Audit Fees. The service for the fees disclosed under this category relate to cash capital increase and bonds offering.
---	---
(3)	Tax fees consist of professional services rendered by Deloitte & Touche for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
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(4)	Other fees primarily consist of a risk management advisory fee and a business operation and process advisory fee, among others.
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Item 16D. Exemptions from the Listing Standards for AuditCommittees

Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer andAffiliated Purchasers

Share Repurchase

On February 26, 2015, we announced a share repurchase program, or Seventh Share Repurchase, approved by our board of directors, to repurchase up to 120.0 million of our common shares, which accounts for 1.53% of our total issued shares, at prices between NT$32.0 to NT$55.0 per share during the period from March 2, 2015 to April 30, 2015. The program authorized us to repurchase up to NT$6,600 million worth of our issued common shares in open market transactions. This share repurchase program concluded on March 27, 2015. A total of 120.0 million of our common shares had been repurchased pursuant to this program. In March 2018, pursuant to the R.O.C. Business Mergers and Acquisitions Act, ASE’s board of directors resolved to repurchase its 1,852,000 common shares at the price of NT$38.5 per share from dissenting shareholders of the Share Exchange; all of the repurchased common shares from dissenting shareholders of the Share Exchange were canceled in April, 2018.

Item 16F. Change In Registrant’s Certifying Accountant

Not applicable.

Item 16G. Corporate Governance

As a company listed on the NYSE, we are subject to certain corporate governance rules of the NYSE. The application of the NYSE’s corporate governance rules is limited for foreign private issuers, recognizing that they have to comply with domestic requirements. As a foreign private issuer, we must comply with the following NYSE corporate governance rules: 1) satisfy the audit committee requirements of the SEC; 2) the chief executive officer must promptly notify the NYSE in writing upon becoming aware of any material noncompliance with applicable NYSE corporate governance rules; 3) submit annual and interim affirmations to the NYSE regarding compliance with applicable NYSE corporate governance requirements; and 4) provide a brief description of any significant differences between our corporate governance practices and those required of U.S. companies under the NYSE listing standards. The table below sets forth the significant differences between our corporate governance practices and those required of U.S. companies under the NYSE listing standards.

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NewYork Stock Exchange CorporateGovernance Rules Applicable to U.S. Companies	Descriptionof Significant Differences between OurGovernance Practices and the NYSE CorporateGovernance Rules Applicable to U.S. Companies
Director independence
Listed companies must have a majority of independent directors, as defined under the NYSE listing standards.	Three members of our board of directors are independent as defined in Rule 10A-3 under the Exchange Act. We do not assess the independence of our directors under the independence requirements of the NYSE listing standards. Pursuant to relevant laws and regulations of the R.O.C., we have three independent directors on our board of directors that were elected through the candidate nomination system at our extraordinary general shareholders’ meeting on June 21, 2018.
To empower non-management directors to serve as a more effective check on management, the non-management directors of each company must meet at regularly scheduled executive sessions without management.	All of our directors attend the meetings of the board of directors. Our non-management directors do not meet at regularly scheduled executive sessions without management. The R.O.C. Company Law does not require companies incorporated in the R.O.C. to have their non-management directors meet at regularly scheduled executive sessions without management.
Nominating/Corporate governance committee
---	---
Listed companies must have a nominating/corporate governance committee composed entirely of independent directors and governed by a written charter that provides for certain responsibilities of the committee set out in the NYSE listing standards.	We do not have a nominating/corporate governance<br> committee. The R.O.C. Company Law does not require companies incorporated in the R.O.C. to have a nominating/corporate governance<br> committee. Currently, our board of directors performs the duties of a corporate governance committee and regularly reviews our<br> corporate governance principles and practices.<br><br> <br><br><br> <br>The R.O.C. Company Law requires that<br>directors be elected by shareholders. Under R.O.C. law and regulations, companies that have independent directors are required<br>to adopt a candidate nomination system for the election of independent directors. Our three independent directors were elected<br>through the candidate nomination system provided in our Articles of Incorporation. However, starting from 2021, the directors<br>(including Independent directors) of the company listed on the TWSE or the Taipei Exchange shall be nominated by adopting the<br>candidate nomination system.
Compensation committee
---	---
Listed companies must have a compensation committee composed entirely of independent directors and governed by a written charter that provides for certain responsibilities of the committee set out in the NYSE listing standards.	We have a compensation committee as required by the regulations promulgated by the FSC. The charter of such committee contains similar responsibilities as those provided under NYSE listing standards.
In addition to any requirement of Rule 10A-3(b)(1), all compensation committee members must satisfy the independence requirements for independent directors set out in the NYSE listing standards.	We do not assess the independence of our compensation committee member under the independence requirements of the NYSE listing standards but adopt the independence standard as promulgated under the R.O.C. Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the TWSE or the Taipei Exchange.

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Audit committee
Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act.	We have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act and the requirements under R.O.C. Securities and Exchange Act.
The audit committee must have a minimum of three members. In addition to any requirement of Rule 10A-3(b)(1), all audit committee members must satisfy the independence requirements for independent directors set out in the NYSE listing standards.	We currently have three members on our audit committee. Our audit committee members satisfy the independence requirements of Rule 10A-3 under the Exchange Act. We do not assess the independence of our audit committee member under the independence requirements of the NYSE listing standards.
The audit committee must have a written charter that provides for the duties and responsibilities set out in Rule 10A-3 and addresses certain other matters required by the NYSE listing standards.	Our audit committee charter provides for the audit<br> committee to assist our board of directors in its oversight of (i) the integrity of our financial statements, (ii) the qualifications,<br> independence and performance of our independent auditor and (iii) our compliance with legal and regulatory requirements and provides<br> for the duties and responsibilities set out in Rule 10A-3. Our audit committee charter does not address all the matters required<br> by the NYSE listing standards beyond the requirements of Rule 10A-3.<br><br> <br><br><br> <br>Because the appointment and retention of our independent<br> auditor are the responsibility of our entire board of directors under R.O.C. law and regulations, our audit committee charter provides<br> that the audit committee shall make recommendations to the board of directors with respect to these matters.
Each listed company must have an internal audit function.	We have an internal audit function. Under the R.O.C. Regulations for the Establishment of Internal Control Systems by Public Companies, a public company is required to set out its internal control systems in writing, including internal audit implementation rules, which must be approved by the board of directors. Our entire board of directors and the chief executive officer are responsible for the establishment of the internal audit functions, compliance with the internal audit implementation rules and oversight of our internal control systems, including the appointment and retention of our independent auditor.
Equity compensation plans
Shareholders must be given the opportunity to vote on all equity compensation plans and material revisions thereto, except for employment inducement awards, certain grants, plans and amendments in the context of mergers and acquisitions, and certain specific types of plans.	The board of directors has authority under R.O.C. laws and regulations to approve (i) the distribution of employee compensation and (ii) employee stock option plans by a majority vote of the board of directors at a meeting where at least two-thirds of all directors are present and to grant options to employees pursuant to such plans, provided that shareholders’ approval is required if the exercise price of an option would be less than the closing price of the common shares on the TWSE on the grant date of the option, subject to the approval of the Securities and Futures Bureau of the FSC, and to approve treasury stock programs and the transfer of shares to employees under such programs by a majority vote of the board of directors in a meeting where at least two-thirds of all directors are present.

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Corporate governance guidelines
Listed companies must adopt and disclose corporate governance guidelines.	We currently comply with the domestic non-binding Corporate Governance Best-Practice Principles for TWSE and Taipei Exchange Listed Companies promulgated by the TWSE and the Taipei Exchange, and we provide an explanation of the differences between our practice and the principles, if any, in our R.O.C. annual report.
Code of ethics for directors, officers and employees
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.	We have adopted a code of ethics that satisfies the requirements of Item 16B of Form 20-F and applies to all employees, officers, supervisors and directors of our company and our subsidiaries and will disclose any waivers of the code as required by Item 16B of Form 20-F. We have posted our code of ethics on our website.
Description of significant differences
Listed foreign private issuers must disclose any significant ways in which their corporate governance practices differ from those followed by domestic companies under NYSE listing standards.	This table contains the significant differences between our corporate governance practices and those required of U.S. companies under the NYSE listing standards.
CEO certification
Each listed company CEO must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary.	As a foreign private issuer, we are not required to comply with this rule; however, our chief executive officer provides certifications under Sections 302 and 906 of the Sarbanes-Oxley Act.
Each listed company CEO must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A.	We intend to comply with this requirement.
Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation each time a change occurs to the board or any of the committees subject to Section 303A. The annual and interim Written Affirmations must be in the form specified by the NYSE.	We have complied with this requirement to date and intend to continue to comply going forward.

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Website
Listed companies must have and maintain a publicly accessible website.	We have and maintain a publicly accessible website.

Item 16H. Mine Safety Disclosure

Not applicable.

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PARTIII

Item 17. Financial Statements

The Company has elected to provide financial statements for fiscal year 2019 and the related information pursuant to Item 18.

Item 18. Financial Statements

Reference is made to pages F-1 to F-127 of this annual report.

The consolidated financial statements of the Company and the report thereon by its independent registered public accounting firm listed below are attached hereto as follows:

(a)	Report of Independent Registered<br>Public Accounting Firm of the Company dated March 27, 2020 (pages F-1 to F-2).
(b)	Report of Independent Registered Public Accounting Firm of SPIL dated March 19, 2020 (page F-3).
---	---
(c)	Consolidated Balance Sheets of the Company and subsidiaries as of December 31, 2018 and 2019 (page F-4 to F-5).
---	---
(d)	Consolidated Statements of Comprehensive Income of the Company and subsidiaries for the years ended December 31, 2017, 2018 and 2019 (page F-6 to F-7).
---	---
(e)	Consolidated Statements of Changes in Equity of the Company and subsidiaries for the years ended December 31, 2017, 2018 and 2019 (page F-8 to F-9).
---	---
(f)	Consolidated Statements of Cash Flows of the Company and subsidiaries for the years ended December 31, 2017, 2018 and 2019 (pages F-10 to F-12).
---	---
(g)	Notes to Consolidated Financial Statements of the Company and subsidiaries (pages F-13 to F-127).
---	---

Item 19. Exhibits

1.	Articles of Incorporation of the Registrant (English translation of Chinese version) (incorporating all amendments as of June 27, 2019).

(a)	*Deposit Agreement, dated as of April 30, 2018, by and among ASE Technology Holding Co., Ltd., a company organized under the laws of the Republic of China and previously known as “ASE Industrial Holding Co., Ltd.”, Citibank, N.A., as Depositary, and the Holders and Beneficial Owners of American Depositary Shares issued thereunder.

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(b)	*Description of Securities
4.
---
(a)	^ Asset Purchase Agreement dated as of July 3, 1999 among ASE<br> (Chung Li) Inc., ASE Inc., Motorola Electronics Taiwan, Ltd. and Motorola, Inc. (incorporated by reference to Exhibit 10.2 to<br> ASE Test’s registration statement on Form F-3 (File No. 333-10892) filed on September 27, 1999 (the “ASE Test<br> 1999 Form-3”)).
---	---
(b)	Agreement<br>dated as of June 5, 2002 among ASE (Chung Li) Inc., ASE Inc., Motorola Electronics Taiwan, Ltd. and Motorola, Inc. amending certain<br>earn-out arrangements provided for in Section 2.09(b)(ii)(D) of the Asset Purchase Agreement dated as of July 3, 1999 among the same parties (incorporated by reference to Exhibit 4(b) to our annual<br>report on Form 20-F (File No. 001-16125) for the year ended December 31, 2002 filed on June 30, 2003).
---	---
(c)	^ Stock Purchase Agreement dated as of July 3, 1999 among ASE<br> Investment (Labuan) Inc., ASE Inc., Motorola Asia Ltd. and Motorola, Inc. relating to the purchase and sale of 100.0% of the<br> common stock of Motorola Korea Ltd. (incorporated by reference to Exhibit 10.3 to the ASE Test 1999 Form F-3).
---	---
(d)	† BGA Immunity Agreement dated as of January 25, 1994 between ASE Inc. and Motorola, Inc. (incorporated by reference to Exhibit 10.6 to the Form F-1).
---	---
(e)	† Amendment dated March 18, 2003 renewing the BGA Immunity Agreement dated as of January 25, 1994 between ASE Inc. and Motorola, Inc. (incorporated by reference to Exhibit 4(g) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2003 filed on June 30, 2004).
---	---
(f)	Consent dated June 9, 2004 to the Assignment of the BGA Immunity Agreement between ASE Inc. and Motorola, Inc. dated January 25, 1994 (incorporated by reference to Exhibit 4(h) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2003 filed on June 30, 2004).
---	---
(g)	Asset Purchase Agreement by and among Flextronics Manufacturing (M) Sdn Bhd, as Buyer, ASE Electronics (M) Sdn. Bhd. as Company, dated as of October 3, 2005 (incorporated by reference to Exhibit 4(g) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2005 filed on June 19, 2006).
---	---
(h)	Joint Venture Agreement dated as of July 14, 2006 among ASE and Powerchip Semiconductor Corp. relating to the establishment of, and our investment of 60.0% in, PowerASE (incorporated by reference to Exhibit 4(r) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2006 filed on June 25, 2007, as amended).
---	---
(i)	Sale and Purchase Agreement dated January 11, 2007 among J&R Holding Limited and Seacoast Profits Limited relating to our acquisition of 100% of GAPT (incorporated by reference to Exhibit 4(s) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2006 filed on June 25, 2007, as amended).
---	---
(j)	Equity Interests Transfer Agreement dated August 6, 2007 by and among NXP B.V., NXP Semiconductors Suzhou Ltd. and J&R Holding Limited relating to our acquisition of 60% of ASEN, our joint venture with NXP Semiconductors (incorporated by reference to Exhibit 4(j) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2008 filed on June 24, 2009).
---	---
(k)	Scheme Implementation Agreement dated September 4, 2007 between ASE and ASE Test Limited relating to our acquisition of all the outstanding ordinary shares of, and the privatization of, ASE Test (incorporated by reference to Appendix A to Exhibit (a)(1) to Schedule 13E-3 (File No. 005-55723) filed by ASE Test on January 4, 2008).
---	---
(l)	Syndicated Loan Agreement in the amount of NT$24,750 million dated March 3, 2008 among ASE, Citibank, N.A., Taipei Branch and the banks and banking institutions listed on Schedule I thereto relating to our acquisition of all the outstanding ordinary shares of, and the privatization of, ASE Test (incorporated by reference to Exhibit 4(l) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2008 filed on June 24, 2009).
---	---
(m)	Equity Purchase Agreement dated March 17, 2008 between Aimhigh Global Corp., TCC Steel and J&R Holding Limited in respect of Weihai Aimhigh Electronic Co. Ltd. relating to our acquisition of 100% of ASE (Weihai), Inc. (incorporated by reference to Exhibit 4(m) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2008 filed on June 24, 2009).
---	---
(n)	Syndicated Loan Agreement in the amount of US$200 million dated May 29, 2008 among ASE, Citibank, N.A., Taipei Branch and the banks and banking institutions listed on Schedule I thereto relating to our acquisition of all the outstanding ordinary shares of, and the privatization of, ASE Test (incorporated by reference to Exhibit 4(n) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2008 filed on June 24, 2009).
---	---
(o)	Equity Purchase Agreement dated October 25, 2011 between PowerASE Technology, Inc. and certain shareholders of Lu-Chu Development Corporation relating to our acquisition of 72.97% of all the outstanding ordinary shares of Lu-Chu Development Corporation (incorporated by reference to Exhibit 4(o) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2011 filed on April 20, 2012).
---	---

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(p)	Equity Purchase Agreement dated October 25, 2011 between PowerASE Technology, Inc. and shareholders of Lu-Chu Development Corporation listed on Schedule I thereto relating to our acquisition of 9.3% of all the outstanding ordinary shares of Lu-Chu Development Corporation (incorporated by reference to Exhibit 4(p) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2011 filed on April 20, 2012).
(q)	Equity Purchase Agreement dated November 17, 2011 between ASE Assembly & Test (Shanghai) Limited and Kunshan Ding Yao Real Estate Development Co., Ltd. Relating to our acquisition of 10% equity of Shanghai Ding Hui Real Estate Development Co., Ltd. (incorporated by reference to Exhibit 4(q) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2011 filed on April 20, 2012).
---	---
(r)	Equity Purchase Agreement dated January 13, 2012 between ASE and shareholders of Yang Ting Tech Co., Ltd. listed on Schedule I thereto relating to our acquisition of 61.63% of all the outstanding ordinary shares of Yang Ting Tech Co., Ltd. (incorporated by reference to Exhibit 4(r) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2011 filed on April 20, 2012).
---	---
(s)	Equity Purchase Agreement dated January 13, 2012 between ASE and shareholders of Yang Ting Tech Co., Ltd. listed on Schedule I thereto relating to our acquisition of 38.37% of all the outstanding ordinary shares of Yang Ting Tech Co., Ltd. (incorporated by reference to Exhibit 4(s) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2011 filed on April 20, 2012).
---	---
(t)	Joint Share Exchange Agreement dated June 30, 2016 between ASE and SPIL relating to our proposed acquisition of 100% of the common shares and American depositary shares of SPIL (incorporated by reference to Annex A to our registration statement on Form F-4 (File No. 333-214752) filed on November 22, 2016).
---	---
(u)	Syndicated Loan Agreement in the amount of NT$90,000 million dated April 30, 2018 among ASE Technology Holding Co., Ltd. and Bank of Taiwan, Mega International Commercial Bank, Citibank, N.A., Taipei Branch, and banks and banking institutions listed on Schedule I thereto relating to our financing needs for the SPIL Acquisition (incorporated by reference to Exhibit 4(u) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2018 filed on April 26, 2019).
---	---
8.	*List<br>of Subsidiaries
---	---
12.
---
(a)	*Certification of Jason C.S. Chang, required by Rule 13a-14(a) of the Exchange Act.
---	---
(b)	*Certification of Joseph Tung, required by Rule 13a-14(a) of the Exchange Act.
13.	*Certification of the Chief<br>Executive Officer and the Chief Financial Officer of ASE Technology Holdings Co. Ltd. required by Rule 13a-14(b) of the Exchange<br>Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.
---	---

15.

(a)	*Consent of Deloitte & Touche.
(b)	*Consent of PricewaterhouseCoopers.
101.INS	XBRL Instance Document
---	---
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

___________________

†	Does not contain portions for which confidential treatment has been granted.
^	Filed in paper.
---	---
*	Filed herewith.
---	---

The Company agrees to furnish to the SEC upon request a copy of any instrument which defines the rights of holders of long-term debt of the Company and its consolidated subsidiaries.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

ASE TECHNOLOGY HOLDING CO., LTD.
By:	/s/ Joseph Tung
	Name: Joseph Tung
	Title: Chief Financial Officer

Date: March 31, 2020

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ASETechnology Holding Co., Ltd.

andSubsidiaries

ConsolidatedFinancial Statements as of December 31, 2018 and 2019 and for the Years Ended December 31, 2017, 2018 and 2019 and

Reportsof Independent Registered Public

AccountingFirms

Table of Contents

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of

ASE Technology Holding Co., Ltd.

Opinionon the Financial Statements

We have audited the accompanying consolidated balance sheets of ASE Technology Holding Co., Ltd. (a corporation incorporated under the laws of the Republic of China) and its subsidiaries (collectively, the “Group”) as of December 31, 2018 and 2019, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “Consolidated Financial Statements”) (all expressed in New Taiwan Dollars). In our opinion, based on our audits and the report of other auditors, the Consolidated Financial Statements present fairly, in all material respects, the financial position of the Group as of December 31, 2018 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We did not audit the consolidated financial statements of Siliconware Precision Industries Co., Ltd. and its subsidiaries (collectively, “SPIL”), in which the Group’s investment was accounted for (1) as an investment accounted for using the equity method for the year ended December 31, 2017 and the period from January 1, 2018 through April 29, 2018 and (2) as a consolidated subsidiary as of December 31, 2018 and 2019, and for the period from April 30, 2018 through December 31, 2018 and for the year ended December 31, 2019. The accompanying Consolidated Financial Statements included its share of profit in SPIL of NT$ 915,253 thousand and NT$127,266 thousand for the year ended December 31, 2017 and the period from January 1, 2018 through April 29, 2018. The total assets of SPIL constituted 22% and 23% of the Group’s total assets as of December 31, 2018 and 2019, respectively, and the revenues of SPIL for the period from April 30, 2018 through December 31, 2018 and for the year ended December 31, 2019 constituted 17% and 22% of the Group’s revenues for each of the two years in the period ended December 31, 2019. The consolidated financial statements of SPIL were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SPIL, is based solely on the report of other auditors.

Our audits also comprehended the translation of New Taiwan dollar amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 4 to the Consolidated Financial Statements. Such U.S. dollar amounts are presented solely for the convenience of the readers outside the Republic of China.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Group’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 27, 2020, expressed an unqualified opinion on the Group’s internal control over financial reporting based on our audit and the report of other auditors.

F-1
Table of Contents

Basisfor Opinion

These Consolidated Financial Statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the Group’s Consolidated Financial Statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the Consolidated Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the Consolidated Financial Statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Consolidated Financial Statements. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

CriticalAudit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the Consolidated Financial Statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill- Packaging and Testing Segments - Refer to Notes 4, 5 and 18 to the Consolidated Financial Statements

CriticalAudit Matter Description

The Group’s evaluation of goodwill for impairment involves the comparison of the value in use of each segment to its carrying value. The Group used the discounted cash flow model to estimate value in use, which requires management to make significant estimates and assumptions related to discount rates and forecasts of future revenues. Changes in these assumptions could have a significant impact on either the value in use, the amount of any goodwill impairment charge, or both. The goodwill balance was NT$50,198,436 thousand (US$1,678,316 thousand) as of December 31, 2019, of which NT$35,717,828 thousand (US$1,194,177 thousand) and NT$13,421,321 thousand (US$448,724 thousand) were allocated to the packaging segment and the testing segment, respectively. Both the value in use of the packaging segment and the testing segment exceeded their carrying values as of the measurement date and, therefore, no impairment was recognized.

We identified the valuation of goodwill for the Group’s packaging segment and testing segment as a critical audit matter due to the significant estimates and assumptions management makes to estimate the value in use of both the packaging segment and the testing segment and the sensitivity of their operations to changes in demand. Auditing management’s judgments related to the selection of the discount rates and forecasts of future revenues for the packaging segment and the testing segment required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the CriticalAudit Matter Was Addressed in the Audit

Our audit procedures related to the discount rates and forecasts of future revenues used by management to estimate the value in use of the packaging segment and the testing segment included the following, among others:

·	We<br> tested the design and operating effectiveness of controls over management’s goodwill<br> impairment evaluation, including those over the determination of the value in use of<br> the packaging segment and the testing segment, such as controls related to management’s<br> selection of the discount rate and assessment on the reasonableness of forecasts of future<br> revenue.
·	We<br> evaluated management’s ability to accurately forecast future revenues by comparing<br> actual results to management’s historical forecasts.
---	---
·	We<br> performed sensitivity analyses to evaluate the risk of impairment if key assumptions<br> are changed.
---	---
·	With<br> the assistance of our fair value specialists, we evaluated the reasonableness of the<br> discount rate selected by performing certain procedures, including:
---	---
–	Testing<br> the source information underlying the determination of the discount rate and the mathematical<br> accuracy of the calculation.
---	---
–	Developing<br> a range of independent estimates and comparing those to the discount rate selected by<br> management.
---	---

/s/Deloitte & Touche

Taipei, Taiwan

Republic of China

March 27, 2020

We have served as the Group’s auditor since 1984.

F-2
Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

Siliconware Precision Industries Co., Ltd.

Opinionson the Financial Statements and Internal Control over Financial Reporting

We have audited the consolidated balance sheets of Siliconware Precision Industries Co., Ltd. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”)(not presented herein). We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Integrated Framework (2013) issued by the COSO.

Changein Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basisfor Opinions

Definitionand Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

/s/PricewaterhouseCoopers, Taiwan

Taipei, Taiwan

March 19, 2020

We have served as the Company’s auditor since 1994.

F-3
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDBALANCE SHEETS

(Amountsin Thousands)

	December<br> 31, 2018	December<br> 31, 2019
ASSETS	NT	NT	US (Note 4)
CURRENT ASSETS
Cash and cash equivalents (Note 6)
Financial assets at fair value through profit
or loss - current (Note 7)
Contract assets - current (Note 42)
Trade receivables, net (Note 10)
Other receivables
Current tax assets (Note 27)
Inventories (Note 11)
Inventories related to real estate business (Notes 12 and<br> 37)
Other financial assets - current (Notes 13 and 37)
Other current assets
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss -<br> non-current (Note 7)
Financial assets at fair value through other comprehensive income<br> - non-current (Note 8)
Investments accounted for using the equity method (Note 14)
Property, plant and equipment (Notes 15, 26, 37 and<br> 38)
Right-of-use assets (Notes 3 and 16)
Investment properties (Notes 17, 26 and 37)
Goodwill (Notes 18 and 30)
Other intangible assets (Notes 19, 26 and 30)
Deferred tax assets (Note 27)
Other financial assets - non-current (Notes 13 and 37)
Long-term prepayments for lease (Notes 20 and 37)
Other non-current assets
Total non-current assets
TOTAL

All values are in US Dollars.

(Continued)

F-4
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDBALANCE SHEETS

(Amountsin Thousands)

	December<br> 31, 2018		December<br> 31, 2019
LIABILITIES AND EQUITY	NT		NT		US (Note 4)
CURRENT LIABILITIES
Short-term borrowings (Note 21)
Financial liabilities at fair value through profit or loss<br> - current (Note 7)
Financial liabilities for hedging - current (Note 35)
Trade payables
Other payables (Note 23)
Current tax liabilities (Note 27)
Lease liabilities - current (Note 16)
Current portion of bonds payable (Note 22)
Current portion of long-term borrowings (Notes 21 and<br> 37)
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Bonds payable (Note 22)
Long-term borrowings (Notes 21 and 37)
Deferred tax liabilities (Note 27)
Lease liabilities - non-current (Note 16)
Net defined benefit liabilities (Note 24)
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 25)
Share capital
Ordinary shares
Shares subscribed in<br>advance
Total share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total<br> retained earnings
Other equity		)		)		)
Treasury shares		)		)		)
Equity attributable to owners of the Company
NON-CONTROLLING INTERESTS (Note 25)
Total equity
TOTAL

All values are in US Dollars.

The accompanying notes are an integral<br> part of the consolidated financial statements.	(Concluded)

F-5
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME

(Amountsin Thousands Except Earnings Per Share)

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
OPERATING REVENUES (Note 42)
OPERATING COSTS (Notes 12 and 26)
GROSS PROFIT
OPERATING EXPENSES (Note 26)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
OTHER OPERATING INCOME AND EXPENSES, NET<br> (Note 26)						)		)
PROFIT FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Other income (Note 26)
Other gains, net (Note 26)
Finance costs (Note 26)		)		)		)		)
Share of the profit or loss of associates and joint ventures				)
Total non-operating income and expenses
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Note 27)
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME (LOSS)
Items that<br> will not be reclassified subsequently to profit or loss:
Remeasurement<br> of defined benefit obligation				)		)		)
Unrealized loss on equity instruments at<br> fair value through<br><br> other comprehensive<br> income				)		)		)
Share of other comprehensive income (loss)<br> of<br><br> associates and joint ventures				)
Income<br> tax relating to items that will
not<br> be reclassified subsequently
to<br> profit or loss		)				)		)
				)

All values are in US Dollars.

(Continued)

F-6
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME

(Amountsin Thousands Except Earnings Per Share)

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Items that may be reclassified subsequently to profit or<br> loss:
Exchange differences on translating<br> foreign operations		)				)		)
Unrealized gain on available-for-sale
financial assets
Unrealized loss on investments in
debt instruments at fair value
through other comprehensive income				)		)		)
Share of other comprehensive
income (loss) of associates
and joint ventures						)		)
		)				)		)
Other comprehensive<br> loss for the
year,<br> net of income tax		)		)		)		)
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
PROFIT FOR THE YEAR ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interests

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ATTRIBUTABLE
TO:
Owners of the Company
Non-controlling interests

EARNINGS PER SHARE (Note 28)
Basic
Diluted
EARNINGS PER AMERICAN DEPOSITARY SHARE (“ADS”) (Note 28)
Basic
Diluted

All values are in US Dollars.

The accompanying notes are an integral<br> part of the consolidated financial statements.	(Concluded)

F-7
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY

(Amountsin Thousands)

	Equity<br> Attributable to Owners of the Company
																					Other<br> Equity
																								Unrealized			Unrealized<br><br> Gain
																					Exchange			Gain<br><br> (Loss) on			(Loss) on <br><br>Financial
	Share<br> Capital									Retained<br> Earnings											Differences<br><br><br> on			Available<br><br> -for-			Assets at<br><br><br> Fair Value
	Shares																				Translating			sale			Through Other
	(In<br><br> Thousands)			Amounts			Capital<br><br> Surplus			Legal<br><br> Reserve			Special<br><br> Reserve		Unappropriated<br><br> Earnings			Total			Foreign<br><br> Operations			Financial<br><br> Assets			Comprehensive <br><br>Income			Total			Treasury<br><br> Shares			Total			Non-controlling<br><br> Interests			Total <br><br>Equity
BALANCE AT JANUARY 1, 2017		7,946,184		$	79,568,040		$	22,266,500		$	14,597,032		$	3,353,938	$	44,188,554		$	62,139,524		$	(1,643,623	)	$	(197,314	)	$	—		$	(1,840,937	)	$	(7,292,513	)	$	154,840,614		$	12,000,551		$	166,841,165
Appropriation of 2016 earnings
Legal reserve		—			—			—			2,168,034			—		(2,168,034	)		—			—			—			—			—			—			—			—			—
Cash dividends distributed<br> by the Company		—			—			—			—			—		(11,415,198	)		(11,415,198	)		—			—			—			—			—			(11,415,198	)		—			(11,415,198)
		—			—			—			2,168,034			—		(13,583,232	)		(11,415,198	)		—			—			—			—			—			(11,415,198	)		—			(11,415,198)
Net profit for the year ended December 31, 2017		—			—			—			—			—		22,819,119			22,819,119			—			—			—			—			—			22,819,119			1,677,941			24,497,060
Other comprehensive income (loss) for the year ended
December 31, 2017, net of income tax		—			—			—			—			—		175,100			175,100			(5,090,036	)		619,884			—			(4,470,152	)		—			(4,295,052	)		(342,881	)		(4,637,933)
Total comprehensive income (loss) for the year
ended December 31,<br> 2017		—			—			—			—			—		22,994,219			22,994,219			(5,090,036	)		619,884			—			(4,470,152	)		—			18,524,067			1,335,060			19,859,127
Change from investments in associates accounted for
using the equity method		—			—			1,490			—			—		—			—			—			—			—			—			—			1,490			—			1,490
Issue of ordinary shares for capital increase<br> by cash		300,000			3,000,000			7,290,000			—			—		—			—			—			—			—			—			—			10,290,000			—			10,290,000
Issue of ordinary shares under conversion of bonds
(Notes 22 and 25)		424,258			4,242,577			9,657,905			—			—		—			—			—			—			—			—			—			13,900,482			—			13,900,482
Cash dividends received by subsidiaries from<br> the Company		—			—			200,977			—			—		—			—			—			—			—			—			—			200,977			—			200,977
Changes in percentage of ownership interest<br> in subsidiaries		—			—			3,055			—			—		—			—			—			—			—			—			—			3,055			(3,055	)		—
Issue of ordinary shares under employee share
options (Note 29)		67,637			570,170			1,256,789			—			—		—			—			—			—			—			—			—			1,826,959			(159,200	)		1,667,759
Cash dividends distributed by subsidiaries		—			—			—			—			—		—			—			—			—			—			—			—			—			(246,440	)		(246,440)
Additional non-controlling interest arising on issue of
employee share<br> options by subsidiaries (Note 29)		—			—			(52,388	)		—			—		—			—			—			—			—			—			—			(52,388	)		263,213			210,825
BALANCE AT DECEMBER 31, 2017		8,738,079		$	87,380,787		$	40,624,328		$	16,765,066		$	3,353,938	$	53,599,541		$	73,718,545		$	(6,733,659	)	$	422,570		$	—		$	(6,311,089	)	$	(7,292,513	)	$	188,120,058		$	13,190,129		$	201,310,187
Effect of retrospective applications		—			—			—			—			—		886,316			886,316			—			(422,570	)		135,517			(287,053	)		—			599,263			5,183			604,446
ADJUSTED BALANCE AT JANUARY 1, 2018		8,738,079			87,380,787			40,624,328			16,765,066			3,353,938		54,485,857			74,604,861			(6,733,659	)		—			135,517			(6,598,142	)		(7,292,513	)		188,719,321			13,195,312			201,914,633
Change from investments in associates accounted for
using the equity method		—			—			1,411,899			—			—		88,201			88,201			—			—			—			—			—			1,500,100			—			1,500,100
Cash dividends paid from capital surplus (Note<br> 25)		—			—			(10,795,980	)		—			—		—			—			—			—			—			—			—			(10,795,980	)		—			(10,795,980)
Other changes in the capital surplus		—			—			872			—			—		—			—			—			—			—			—			—			872			—			872
Net profit for the year ended December 31, 2018		—			—			—			—			—		26,220,721			26,220,721			—			—			—			—			—			26,220,721			1,203,588			27,424,309
Other comprehensive income (loss) for the year ended
December 31, 2018,<br> net of income tax		—			—			—			—			—		(146,194	)		(146,194	)		562,794			—			(1,016,860	)		(454,066	)		—			(600,260	)		(252,372	)		(852,632)
Total comprehensive income (loss) for the year
ended December 31,<br> 2018		—			—			—			—			—		26,074,527			26,074,527			562,794			—			(1,016,860	)		(454,066	)		—			25,620,461			951,216			26,571,677
Effect of the joint share exchange (Note 25)		(4,318,392	)		(43,183,919	)		117,693,658			(16,765,066	)		—		(57,744,673	)		(74,509,739	)		—			—			—			—			—			—			—			—
Buy-back of ordinary shares		—			—			—			—			—		—			—			—			—			—			—			(71,302	)		(71,302	)		—			(71,302)
Cancellation of treasury shares		(121,852	)		(1,218,520	)		(1,480,903	)		—			—		(2,705,285	)		(2,705,285	)		—			—			—			—			5,404,708			—			—			—
Cash dividends received by subsidiaries from<br> the Company		—			—			182,354			—			—		—			—			—			—			—			—			—			182,354			—			182,354
Disposal of interest in associates and joint ventures
accounted for using<br> the equity method (Note 15)		—			—			(1,408,495	)		—			—		204,450			204,450			282,291			—			(133,364	)		148,927			—			(1,055,118	)		—			(1,055,118	)

(Continued)

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ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY

(Amountsin Thousands)

	Equity<br> Attributable to Owners of the Company
																		Other<br> Equity
																					Unrealized <br><br>Gain		Unrealized<br><br> Gain
																		Exchange			(Loss) <br><br> on		(Loss) on<br><br> Financial
	Share<br> Capital							Retained<br> Earnings										Differences<br><br> on			Available-<br><br> for-		Assets at<br> <br><br>Fair Value
	Shares																	Translating			sale		Through Other
	(In<br><br> Thousands)		Amounts		Capital<br><br> Surplus			Legal<br><br> Reserve		Special<br><br> Reserve		Unappropriated<br><br> Earnings			Total			Foreign<br><br> Operations			Financial<br><br> Assets		Comprehensive <br><br>Income			Total			Treasury <br><br>Shares			Total			Non-controlling<br><br> Interests			Total <br><br>Equity
Differences between consideration and carrying amount
arising from<br> acquisition or disposal of subsidiaries (Note 33)		—	$	—	$	(1,142,856	)	$	—	$	—	$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	(1,142,856	)	$	2,783,015		$	1,640,159
Changes in percentage of ownership interest in
subsidiaries (Note<br> 33)		—		—		(1,118,102	)		—		—		—			—			—			—		—			—			—			(1,118,102	)		(801,884	)		(1,919,986	)
Issue of ordinary shares under employee share
options (Note 29)		23,879		238,796		549,345			—		—		—			—			—			—		—			—			—			788,141			—			788,141
Cash dividends distributed by subsidiaries		—		—		—			—		—		—			—			—			—		—			—			—			—			(424,815	)		(424,815	)
Additional non-controlling interest arising on issue of
employee share<br> options by subsidiaries (Note 29)		—		—		(1,239,456	)		—		—		—			—			—			—		—			—			—			(1,239,456	)		1,936,643			697,187
Fair value through other comprehensive income
- equity instruments		—		—		—			—		—		400			400			—			—		(400	)		(400	)		—			—			—			—
BALANCE AT DECEMBER 31, 2018		4,321,714		43,217,144		143,276,664			—		3,353,938		20,403,477			23,757,415			(5,888,574	)		—		(1,015,107	)		(6,903,681	)		(1,959,107	)		201,388,435			17,639,487			219,027,922
BALANCE AT JANUARY 1, 2019		4,321,714		43,217,144		143,276,664			—		3,353,938		20,403,477			23,757,415			(5,888,574	)		—		(1,015,107	)		(6,903,681	)		(1,959,107	)		201,388,435			17,639,487			219,027,922
Appropriation of 2018 earnings
Legal reserve		—		—		—			2,203,895		—		(2,203,895	)		—			—			—		—			—			—			—			—			—
Special reserve		—		—		—			—		3,548,844		(3,548,844	)		—			—			—		—			—			—			—			—			—
Cash dividends distributed<br> by the Company		—		—		—			—		—		(10,806,454	)		(10,806,454	)		—			—		—			—			—			(10,806,454	)		—			(10,806,454	)
		—		—		—			2,203,895		3,548,844		(16,559,193	)		(10,806,454	)		—			—		—			—			—			(10,806,454	)		—			(10,806,454	)
Change from investments in associates and joint ventures
accounted for using<br> the equity method		—		—		3,604			—		—		—			—			—			—		—			—			—			3,604			—			3,604
Other changes in the capital surplus		—		—		1,070			—		—		—			—			—			—		—			—			—			1,070			—			1,070
Net profit for the year ended December 31, 2019		—		—		—			—		—		17,060,591			17,060,591			—			—		—			—			—			17,060,591			1,207,974			18,268,565
Other comprehensive income (loss) for the year ended
December 31, 2019,<br> net of income tax		—		—		—			—		—		(280,461	)		(280,461	)		(4,874,110	)		—		1,216,165			(3,657,945	)		—			(3,938,406	)		(432,205	)		(4,370,611	)
Total comprehensive income (loss) for the year
ended December 31,<br> 2019		—		—		—			—		—		16,780,130			16,780,130			(4,874,110	)		—		1,216,165			(3,657,945	)		—			13,122,185			775,769			13,897,954
Cash dividends received by subsidiaries from<br> the Company		—		—		182,354			—		—		—			—			—			—		—			—			—			182,354			—			182,354
Disposal of interest in associates and joint ventures
accounted for using<br> the equity method (Note 15)		—		—		(75,276	)		—		—		1,392			1,392			—			—		—			—			—			(73,884	)		—			(73,884	)
Actual disposal or acquisition of interests in
subsidiaries (Note<br> 33)		—		—		(2,779,613	)		—		—		—			—			—			—		—			—			—			(2,779,613	)		(4,335,090	)		(7,114,703	)
Changes in percentage of ownership interest in
subsidiaries (Note<br> 33)		—		—		(1,960,167	)		—		—		—			—			—			—		—			—			—			(1,960,167	)		(2,017,319	)		(3,977,486	)
Issue of ordinary shares under employee share
options (Note 29)		8,814		88,143		1,137,020			—		—		—			—			—			—		—			—			—			1,225,163			—			1,225,163
Cash dividends distributed by subsidiaries		—		—		—			—		—		—			—			—			—		—			—			—			—			(360,245	)		(360,245	)
Additional non-controlling interest arising on issue of
employee share<br> options by subsidiaries (Note 29)		—		—		(875,293	)		—		—		—			—			—			—		—			—			—			(875,293	)		1,672,310			797,017
Disposal of investments in equity instruments at fair value
through other<br> comprehensive income		—		—		—			—		—		404,156			404,156			—			—		(404,156	)		(404,156	)		—			—			—			—
BALANCE AT DECEMBER 31, 2019		4,330,528	$	43,305,287	$	138,910,363		$	2,203,895	$	6,902,782	$	21,029,962		$	30,136,639		$	(10,762,684	)	$	—	$	(203,098	)	$	(10,965,782	)	$	(1,959,107	)	$	199,427,400		$	13,374,912		$	212,802,312
US DOLLARS (Note 4)
BALANCE AT DECEMBER 31, 2019		4,330,528	$	1,447,853	$	4,644,279		$	73,684	$	230,785	$	703,108		$	1,007,577		$	(359,836	)	$	—	$	(6,790	)	$	(366,626	)	$	(65,500	)	$	6,667,583		$	447,172		$	7,114,755
The accompanying notes are an integral<br> part of the consolidated financial statements.	(Concluded)
---	---

F-9
Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

(Amountsin Thousands)

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before income tax
Adjustments for:
Depreciation expense
Amortization expense
Net loss (gain) on fair value change of
financial assets<br> and liabilities at fair value
through profit<br> or loss				)		)		)
Finance costs
Interest income		)		)		)		)
Dividend income		)		)		)		)
Compensation cost of employee share options
Share of loss (profit) of associates and
joint ventures		)				)		)
Loss (gain) on disposal of property,
plant and equipment		)
Impairment loss recognized on financial assets
Reversal of impairment loss recognized on
financial assets						)		)
Impairment loss recognized on non-
financial assets
Reversal of impairment loss recognized
on non-financial assets				)
Gain on disposal of subsidiaries		)
Gain on remeasurement of investments accounted
for using the<br> equity method				)		)		)
Net loss (gain) on foreign currency exchange		)				)		)
Others						)		)
Changes in operating assets and liabilities
Financial assets held for trading		)
Financial assets mandatorily at fair value
through profit or loss
Contract assets				)		)		)
Trade receivables		)		)
Other receivables		)				)		)
Inventories		)		)
Other current assets		)		)		)		)
Financial liabilities held for trading		)		)		)		)
Trade payables						)		)
Other payables
Other current liabilities
Other operating activities<br> items				)
Cash generated from operations
Interest received
Dividend received
Interest paid		)		)		)		)
Income tax paid		)		)		)		)
Net cash generated from operating
activities

All values are in US Dollars.

(Continued)

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Table of Contents

ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

(Amountsin Thousands)

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of financial assets at fair value<br> through
other<br> comprehensive income				)		)		)
Proceeds on sale of financial assets at fair<br> value
through<br> other comprehensive income
Return of capital from financial assets at<br> fair value through
other comprehensive<br> income
Purchase of financial assets designated as<br> at
fair value through<br> profit or loss		)
Proceeds on sale of financial assets designated
as at fair value<br> through profit or loss
Purchase of available-for-sale financial<br> assets		)
Proceeds on sale of available-for-sale
financial assets
Cash received from return of capital by
available-for-sale<br> financial assets
Purchase of financial assets at fair value
through profit or<br> loss						)		)
Acquisition of associates and joint ventures				)		)		)
Net cash outflow on acquisition of subsidiaries				)		)		)
Cash received from return of capital by investee
accounted for using<br> the equity method
Net cash inflow from disposal of subsidiaries
Payments for property, plant and equipment		)		)		)		)
Proceeds from disposal of property, plant
and equipment
Payments for intangible assets		)		)		)		)
Proceeds from disposal of intangible assets
Payments for right-of-use assets						)		)
Payments for investment properties		)		)		)		)
Proceeds from disposal of investment properties
Increase in other financial assets		)		)		)		)
Decrease in other financial assets
Increase in other non-current assets		)		)		)		)
Decrease in other non-current assets
Increase in financial liabilities for hedging
Other investing activities<br> items
Net cash used in investing<br> activities		)		)		)		)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from (repayment of) short-term
borrowings		)				)		)
Proceeds from bonds offering
Repayment of bonds payable		)		)
Proceeds from long-term borrowings
Repayment of long-term borrowings		)		)		)		)
Repayment of the principle portion of lease<br> liabilities						)		)
Dividends paid		)		)		)		)

All values are in US Dollars.

(Continued)

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ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

(Amountsin Thousands)

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Proceeds from issue of ordinary<br> shares
Proceeds from exercise of employee share<br> options
Payments for buy-back of ordinary shares				)
Proceeds from disposal of interests in subsidiaries
Decrease in non-controlling interests		)		)		)		)
Other financing activities<br> items				)		)		)
Net cash generated from (used in)
financing<br> activities		)				)		)
EFFECTS OF EXCHANGE<br> RATE CHANGES ON THE BALANCE OF CASH<br> AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCY		)				)		)
NET INCREASE IN CASH AND
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE<br> YEAR
CASH AND CASH EQUIVALENTS AT
THE END OF THE YEAR

All values are in US Dollars.

The accompanying notes are an integral<br> part of the consolidated financial statements.	(Concluded)

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ASETechnology Holding Co., Ltd. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(Amountsin Thousands, Unless Stated Otherwise)

1.	GENERAL INFORMATION

ASE Technology Holding Co**.,** Ltd. (the “Company”) is a corporation incorporated in Nantze Export Processing Zone under the laws of Republic of China (“R.O.C.”) starting from April 30, 2018 (date of incorporation). The Company and its subsidiaries (collectively referred to as the “Group”) offer a comprehensive range of semiconductors packaging, testing, and electronic manufacturing services (“EMS”).

The board of directors of the Company’s subsidiaries, Advanced Semiconductor Engineering, Inc. (symbol “2311”, “ASE”) and Siliconware Precision Industries Co., Ltd. (symbol “2325”, “SPIL”), approved in June 2016 to enter into and execute a joint share exchange agreement to establish the Company and the Company acquired all issued and outstanding ordinary shares of ASE and SPIL in the way of share exchange. The share exchange was conducted at an exchange ratio of 1 ordinary share of ASE for 0.5 ordinary share of the Company, and at NT$51.2 in cash per SPIL’s ordinary share. The share exchange transaction has been approved both at ASE’s and SPIL’s special shareholders’ meeting on February 12, 2018 and has been completed on April 30, 2018. As a result, ASE and SPIL became wholly-owned subsidiaries of the Company on April 30, 2018, and both of ASE’s and SPIL’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3711”. In addition, ASE’s ordinary shares that have been traded on the New York Stock Exchange (the “NYSE”) under the symbol “ASX” in the form of American Depositary Shares (“ADS”) starting from September 2000 were exchanged as the Company’s ADSs under the same symbol “ASX” starting from April 30, 2018.

For enhancing operational flexibility through organization restructure, the board of directors of ASE resolved in October 2018 to spin off its investment department which was responsible for managing the ordinary shares and assets of USI Inc. (“USIINC”) as well as relevant assets (including assets, liabilities and business) into a newly established company, USI Global Inc. (the “USI Global”). USI Global then issued new ordinary shares to the Company as a consideration. In November 2018, the spin off has been completed and the Company has obtained control over ASE and USI Global. In December 2018, the board of directors of the Company and USI Global further resolved to proceed with the merger which was completed in January 2019. After the merger, the Company is the surviving company while USI Global is the dissolving company. The aforementioned spin off and merger have no material effect on the Group’s financial position and financial performance.

The ordinary shares of the Company’s subsidiary, Universal Scientific Industrial (Shanghai) Co., Ltd. (“USISH”), have been listed on the Shanghai Stock Exchange (the “SSE”) under the symbol “601231” since February 2012.

The consolidated financial statements are presented in the Company’s functional currency, New Taiwan dollar (NT$).

2.	APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved for issue by the management on March 23, 2020.

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3.	APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS BOARD (“IASB”) (collectively, “IFRSs”)
a.	Amendments<br> to IFRSs that are mandatorily effective for the current year
---	---

In the current year, the Group has applied the following new, revised or amended standards and interpretations that have been issued and effective:

New, Revised or Amended Standards and Interpretations		Effective Date Issued by IASB
Amendments<br> to IFRSs	Annual<br> Improvements to IFRSs<br><br> <br>2015-2017<br> Cycle	January<br> 1, 2019
Amendments<br> to IFRS 9	Prepayment<br> Features with Negative Compensation	January<br> 1, 2019
IFRS<br> 16	Leases	January<br> 1, 2019
Amendments<br> to IAS 19	Plan<br> Amendment, Curtailment or Settlement	January<br> 1, 2019
Amendments<br> to IAS 28	Long-term<br> Interests in Associate and Joint Venture	January<br> 1, 2019
IFRIC<br> 23	Uncertainty<br> over Income Tax Treatments	January<br> 1, 2019

Except for the following, the initial application of the aforementioned new, revised or amended standards and interpretations did not have effect on the Group’s accounting policies:

1)	IFRS<br> 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Group elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Group as lessee

The Group recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value assets and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities.

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The Group elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized in retained earnings on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rates on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments. The Group applies IAS 36 to all right-of-use assets.

The Group also applies the following practical expedients:

a)	The<br> Group accounts for those leases for which the lease term ends on or before December 31,<br> 2019 as short-term leases.
b)	The<br> Group excludes initial direct costs from the measurement of right-of-use assets on January<br> 1, 2019.
---	---
c)	The<br> Group uses hindsight, such as in determining lease terms, to measure lease liabilities.
---	---

The weighted average lessee’s incremental borrowing rates applied to lease liabilities recognized on January 1, 2019 was 1.35%. The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:


The future<br> minimum lease payments of non-cancellable operating lease commitments on December 31, 2018
Less: Recognition<br> exemption for short-term leases	)	)
Less:<br> Recognition exemption for leases of low-value assets	)	)
Undiscounted<br> amounts on January 1, 2019
Discounted amounts<br> using the incremental borrowing rates on January 1, 2019
Add: Finance lease<br> liabilities (excluding the amounts applied for the exemption for short-term leases and leases of low-value assets) on December<br> 31, 2018
Add:<br> Adjustments as a result of a different treatment of extension
Lease<br> liabilities recognized on January 1, 2019

All values are in US Dollars.

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The Group as lessor

The application of IFRS 16 starting from January 1, 2019 did not have a material impact on the accounting treatments of the Group as lessor.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

	As<br> Originally Stated on January 1, 2019			Adjusted<br> on <br><br>January 1, 2019
		NT	NT		NT$
Other financial assets - current	$	6,539,467	(31	$	6,539,436
Other current assets		3,773,384	(385,014		3,388,370
Long-term prepayments for lease		10,764,835	(10,764,835		—
Property, plant and equipment		214,592,588	(277,079		214,315,509
Right-of-use assets		—	10,720,769		10,720,769
Investment properties		7,738,379	6,599,225		14,337,604
Other financial assets - non-current		1,044,294	(2,745		1,041,549
Other intangible assets		30,897,700	(59,667		30,838,033
Total effect on assets	$	275,350,647	5,830,623	$	281,181,270
Obligation under leases - current	$	—	489,984	$	489,984
Other current liabilities		5,984,156	(17,144		5,967,012
Obligation under leases - non-current		—	5,594,745		5,594,745
Other non-current liabilities		1,371,302	(236,962		1,134,340
Total effect on liabilities	$	7,355,458	5,830,623	$	13,186,081

All values are in US Dollars.

	As<br> Originally Stated on January 1, 2019	Adjustments<br> Arising from Initial Application		Adjusted<br> on <br>January 1, 2019
	US (Note 4)	US (Note 4)		US (Note 4)
Other financial assets - current			)
Other current assets			)
Long-term prepayments for lease			)
Property, plant and equipment			)
Right-of-use assets
Investment properties
Other financial assets - non-current			)
Other intangible assets			)
Total effect on assets
Obligation under leases - current
Other current liabilities			)
Obligation under leases - non-current
Other non-current liabilities			)
Total effect on liabilities

All values are in US Dollars.

2)	Amendments<br> to IAS 19 “Plan Amendment, Curtailment or Settlement”

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b.	New,<br> revised or amended standards and interpretations in issue but not yet effective

The Group has not applied the following new, revised or amended standards and interpretations that have been issued but are not yet effective:

New, Revised or Amended Standards and Interpretations		Effective Date<br><br> <br><br><br> <br>Issued by IASB
Amendments<br> to IFRS 10<br><br> <br><br><br> <br>and<br> IAS 28	Sale<br> or Contribution of Assets between<br><br> <br><br><br> <br>an<br> Investor and its Associate or Joint Venture	To be determined by<br> IASB
Amendments to IFRS<br> 3	Definition of a Business	January 1, 2020 (Note<br> 1)
Amendments to IFRS<br> 9, IAS 39 and IFRS 7	Interest Rate Benchmark<br> Reform	January 1, 2020 (Note<br> 2)
Amendments to IAS<br> 1 and IAS 8	Definition of Material	January 1, 2020 (Note<br> 3)
Conceptual Framework	Amendments to References<br> to the Conceptual Framework in IFRS Standards	January 1, 2020
Amendments to IAS 1	Classification of<br> Liabilities as Current or Non-current	January 1, 2022

Note 1: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January, 2020 and to asset acquisitions that occur on or after the beginning of that period.

Note 2: The Group shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

c.	Significant<br> changes in accounting policy resulted from new, revised and amended standards and interpretations<br> in issue but not yet effective

Except for the following, as of the date that the accompanying consolidated financial statements were authorized for issue, the Group continues in evaluating the impact on its financial position and financial performance as a result of the initial application of the aforementioned new, revised or amended standards and interpretations. The related impact will be disclosed when the Group completes the evaluation.

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Group shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Group will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Group must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Group’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Group’s own equity

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instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a.	Statement<br> of compliance
---	---

The consolidated financial statements have been prepared in accordance with IFRSs as issued by the IASB.

b.	Basis<br> of preparation

As disclosed in Note 1, the share exchange between the Company and ASE was an organization restructure under common control that the Company was essentially the continuation of ASE. The related assets and liabilities in the Company’s consolidated financial statements, before the date of incorporation, were recognized based on the carrying amounts of those in ASE’s consolidated financial statements. The consolidated financial statements of the Company before the date of incorporation are prepared under the assumption that the Company owned 100% shareholdings of ASE at the very beginning.

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1)	Level<br> 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2)	Level<br> 2 inputs are inputs other than quoted prices included within Level 1 that are observable<br> for an asset or a liability, either directly (i.e. as prices) or indirectly (i.e. derived<br> from prices); and
---	---
3)	Level<br> 3 inputs are unobservable inputs for an asset or a liability.
---	---
c.	Classification<br> of current and non-current assets and liabilities
---	---

Current assets include cash and cash equivalents and those assets held primarily for trading purposes or expected to be realized within twelve months after the balance sheet date, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than twelve months after the balance sheet date. Current liabilities are obligations incurred for trading purposes or to be settled within twelve months after the balance sheet date (even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the consolidated financial statements are authorized for issue) and liabilities that do not have an unconditional right to defer settlement for at least 12 months after the balance sheet date (terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification). Assets and liabilities that are not classified as current are classified as non-current.

The Group engages in the construction business which has an operating cycle of over one year. The normal operating cycle applies when considering the classification of the Group’s construction-related assets and liabilities.

d.	Basis<br> of consolidation

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1)	Principles<br> for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e. its subsidiaries, including structured entities).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Group directly disposed of the related assets or liabilities.

2)	Subsidiaries<br> included in consolidated financial statements were as follows:
		Establishment and	Percentage of<br><br> <br>Ownership (%)<br><br> <br>December 31
---	---	---	---	---
Name of Investee	Main Businesses	Operating Location	2018	2019
ASE	Engaged<br> in the packaging and testing of semiconductors	R.O.C.	100.0	100.0
A.S.E.<br> Holding Limited	Holding<br> company	Bermuda	100.0	100.0
J<br> & R Holding Limited (“J&R Holding”)	Holding<br> company	Bermuda	100.0	100.0
Innosource<br> Limited	Holding<br> company	British<br> Virgin Islands	100.0	100.0
Omniquest<br> Industrial Limited	Holding<br> company	British<br> Virgin Islands	100.0	100.0
ASE<br> Marketing & Service Japan Co., Ltd.	Engaged<br> in marketing and sales services	Japan	100.0	100.0
ASE<br> Test, Inc.	Engaged<br> in the testing of semiconductors	R.O.C.	100.0	100.0
Luchu<br> Development Corporation	Engaged<br> in the development of real estate properties	R.O.C.	86.1	86.1

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		Establishment and	Percentage of<br><br> <br><br><br> <br>Ownership(%)<br><br> <br>December31
Name of Investee	Main Businesses	Operating Location	2018	2019
TLJ Intertech Inc.	Engaged in information<br> software services	R.O.C.	60.0	60.0
MingFeng Information Service<br> Corp., Ltd.	Engaged in information<br> software services, and was established in May 2018.	R.O.C.	100.0	100.0
ASE Embedded Electronics<br> Inc. (“ASEEE”)	Engaged in the sale and<br> manufacturing of embedded substrate	R.O.C.	-	100.0
Advanced Microelectronic<br> Products Inc. (“AMPI”)	Engaged in the manufacturing<br> of integrated circuit	R.O.C.	-	51.0
Alto Enterprises Limited	Holding company	British Virgin Islands	100.0	100.0
Super Zone Holdings Limited	Holding company	Hong Kong	100.0	100.0
ASE (Kun Shan) Inc.	Engaged in the packaging<br> and testing of semiconductors	Kun Shan, China	100.0	100.0
ASE Investment (Kun Shan)<br> Limited	Holding company	Kun Shan, China	100.0	100.0
Advanced Semiconductor<br> Engineering (China) Ltd.	Will engage in the packaging<br> and testing of semiconductors	Shanghai, China	100.0	100.0
ASE Investment (Labuan)<br> Inc.	Holding company	Malaysia	100.0	100.0
ASE Test Limited (“ASE<br> Test”)	Holding company	Singapore	100.0	100.0

(Continued)

F-20
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		Establishment and	Percentage of<br><br> <br>Ownership (%)<br><br> <br>December 31
Name of Investee	Main Businesses	Operating Location	2018	2019
ASE<br> Japan Co., Ltd. (“ASE Japan”)	Engaged<br> in the packaging and testing of semiconductors	Japan	100.0	100.0
ASE<br> (U.S.) Inc.	After-sales<br> service and sales support	U.S.A.	100.0	100.0
Global<br> Advanced Packaging Technology Limited	Holding<br> company	British<br> Cayman Islands	100.0	100.0
ASE<br> WeiHai Inc.	Engaged<br> in the packaging and testing of semiconductors	Shandong,<br> China	100.0	100.0
Suzhou<br> ASEN Semiconductors Co., Ltd. (“ASEN”)	Engaged<br> in the packaging and testing of semiconductors	Suzhou,<br> China	70.0	100.0
Anstock<br> Limited	Engaged<br> in financing activity	British<br> Cayman Islands	100.0	100.0
Anstock<br> II Limited	Engaged<br> in financing activity	British<br> Cayman Islands	100.0	100.0
ASE<br> (Shanghai) Inc.	Engaged<br> in the production of substrates	Shanghai,<br> China	100.0	100.0
ASE<br> Corporation	Holding<br> company	British<br> Cayman Islands	100.0	100.0
ASE<br> Mauritius Inc.	Holding<br> company	Mauritius	100.0	100.0
ASE<br> Labuan Inc.	Holding<br> company	Malaysia	100.0	100.0
Shanghai<br> Ding Hui Real Estate Development Co., Ltd.	Engaged<br> in the development, construction and sale of real estate properties	Shanghai,<br> China	100.0	100.0
Shanghai<br> Ding Qi Property Management Co., Ltd.	Engaged<br> in the management of real estate properties	Shanghai,<br> China	100.0	100.0
Advanced<br> Semiconductor Engineering (HK) Limited	Engaged<br> in the trading of substrates	Hong<br> Kong	100.0	100.0
Shanghai<br> Ding Wei Real Estate Development Co., Ltd.	Engaged<br> in the development, construction and leasing of real estate properties	Shanghai,<br> China	100.0	100.0
Shanghai<br> Ding Yu Real Estate Development Co., Ltd.	Engaged<br> in the development, construction and leasing of real estate properties	Shanghai,<br> China	100.0	100.0
Shanghai<br> Ding Fan Department Store Co., Ltd.	Engaged<br> in department store business	Shanghai,<br> China	100.0	100.0
Kun<br> Shan Ding Hong Real Estate Development Co., Ltd.	Engaged<br> in the development, construction and leasing of real estate properties	Kun<br> Shan, China	100.0	100.0
Shanghai<br> Ding Xu Property Management Co., Ltd.	Engaged<br> in the management of real estate properties	Shanghai,<br> China	100.0	100.0
ASE<br> Electronics Inc.	Engaged<br> in the production of substrates	R.O.C.	100.0	100.0
ASE<br> Test Holdings, Ltd.	Holding<br> company	British<br> Cayman Islands	100.0	100.0
ASE<br> Holdings (Singapore) Pte. Ltd.	Holding<br> company	Singapore	100.0	100.0

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ASE<br> Singapore Pte. Ltd.	Engaged<br> in the packaging and testing of semiconductors	Singapore	100.0	100.0
ISE<br> Labs, Inc.	Engaged<br> in the testing of semiconductors	U.S.A.	100.0	100.0
ASE<br> Electronics (M) Sdn. Bhd.	Engaged<br> in the packaging and testing of semiconductors	Malaysia	100.0	100.0
ASE<br> Assembly & Test (Shanghai) Limited	Engaged<br> in the packaging and testing of semiconductors	Shanghai,<br> China	100.0	100.0
ISE<br> Labs, China, Ltd.	Engaged<br> in the testing of semiconductors, and was established in October 2018	Shanghai,<br> China	100.0	100.0
Wuxi<br> Tongzhi Microelectronics Co., Ltd.	Engaged<br> in the packaging and testing of semiconductors	Wuxi,<br> China	100.0	100.0
USI<br> Global	Merged<br> by the Company in January 2019	R.O.C.	100.0	-
USIINC	Engaged<br> in investing activity	R.O.C.	100.0	100.0
Huntington<br> Holdings International Co. Ltd.	Holding<br> company	British<br> Virgin Islands	100.0	100.0

(Continued)

F-22
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		Establishment and	Percentage of<br><br> <br><br><br> <br>Ownership(%)<br><br> <br>December 31
Name of Investee	Main Businesses	Operating Location	2018	2019
Unitech Holdings International<br> Co., Ltd.	Holding company	British Virgin Islands	100.0	100.0
Real Tech Holdings Limited	Holding company	British Virgin Islands	100.0	100.0
Universal ABIT Holding<br> Co., Ltd.	In the process of liquidation	British Cayman Islands	100.0	100.0
Rising Capital Investments<br> Limited	Liquidated in November<br> 2019	British Virgin Islands	100.0	-
Rise Accord Limited	Liquidated in December<br> 2019	British Virgin Islands	100.0	-
Universal Scientific Industrial<br> (Kunshan) Co., Ltd.	Engaged in the manufacturing<br> and sale of computer assistance system and related peripherals	Kun Shan, China	100.0	100.0
USI Enterprise Limited<br> (“USIE”)	Engaged in the services<br> of investment advisory and warehousing management	Hong Kong	95.4	95.8
USISH	Engaged in the designing,<br> manufacturing and sale of electronic components	Shanghai, China	74.6	75.3
Universal Global Technology<br> Co., Limited	Holding company	Hong Kong	74.6	75.3
Universal Global Technology<br> (Kunshan) Co., Ltd.	Engaged in the designing<br> and manufacturing of electronic components	Kun Shan, China	74.6	75.3
Universal Global Technology<br> (Shanghai) Co., Ltd.	Engaged in the processing<br> and sales of computer and communication peripherals as well as business in import and export of goods and technology	Shanghai, China	74.6	75.3
Universal Global Electronics<br> (Shanghai) Co., Ltd.	Engaged in the sale of<br> electronic components and telecommunications equipment	Shanghai, China	74.6	75.3
USI<br> America Inc.	Engaged<br> in the manufacturing and processing of motherboards and wireless network communication and provision of related technical<br> service	U.S.A.	74.6	75.3
Universal Global Industrial<br> Co., Limited	Engaged in manufacturing,<br> trading and investing activity	Hong Kong	74.6	75.3

(Continued)

F-23
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		Establishment and	Percentage of<br><br> <br><br><br> <br>Ownership(%)<br><br> <br>December 31
Name of Investee	Main Businesses	Operating Location	2018	2019
Universal Global Scientific<br> Industrial Co., Ltd. (“UGTW”)	Engaged in the manufacturing<br> of components of telecomm and cars and provision of related R&D services	R.O.C.	74.6	75.3
Universal Scientific Industrial<br> De Mexico S.A. De C.V.	Engaged in the assembling<br> of motherboards and computer components	Mexico	74.6	75.3
USI Japan Co., Ltd.	Engaged in the manufacturing<br> and sale of computer peripherals, integrated chip and other related accessories	Japan	74.6	75.3
USI Electronics (Shenzhen)<br> Co., Ltd.	Engaged in the design,<br> manufacturing and sale of motherboards and computer peripherals	Shenzhen, China	74.6	75.3
Universal Global Electronics<br> Co., Ltd.	Engaged in accepting and<br> outsourcing orders as well as sales of electronic components and service of technical advisory, and was established in February<br> 2018	Hong Kong	74.6	75.3
Universal Scientific Industrial<br> Co., Ltd. (“USI”)	Engaged in the manufacturing,<br> processing and sale of computers, computer peripherals and related accessories	R.O.C.	74.4	75.3
Semicondutores Avancados<br> do Brasil S.A.	Engaged in the research<br> and manufacturing of multi-functional system-in-package products, and was established in March 2019 and then invested in May<br> 2019	Brasil	-	56.5
Huanrong Electronics (Huizhou)<br> Co., Ltd.	Engaged in the research<br> and manufacturing of new electronic applications, communications, computers and other electronics products and also provided<br> auxiliary technical services as well as import and export services, and was established in April 2019 and then invested in<br> May 2019	Huizhou, China	-	75.3

(Continued)

F-24
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		Establishment and	Percentage of<br><br> <br><br><br> <br>Ownership(%)<br><br> <br>December 31
Name of Investee	Main Businesses	Operating Location	2018	2019
Universal Scientific Industrial<br> (France) (“USIFR”)	Engaged in investing activities<br> and was established in August 2019	France	-	75.3
Chung Hong Electronics<br> Poland Sp. z o.o. (“UGPL”)	Engaged in designing,<br> miniaturization, material sourcing, manufacturing, logistics, and after services of electronic devices and modules and was<br> established in October 2019	Poland	-	45.2
SPIL	Engaged in the assembly,<br> testing and turnkey services of integrated circuits	R.O.C.	100.0	100.0
SPIL (B.V.I.) Holding<br> Limited	Engaged in investing activities	British Virgin Islands	100.0	100.0
Siliconware Investment<br> Co., Ltd.	Engaged in investing activities	R.O.C.	100.0	100.0
Siliconware USA, Inc.	Engaged in marketing activities	U.S.A.	100.0	100.0
SPIL (Cayman) Holding<br> Limited	Engaged in investing activities	British Cayman Islands	100.0	100.0
Siliconware Technology<br> (Suzhou) Limited (“SZ”)	Engaged in the packaging<br> and testing of semiconductors	Suzhou, China	70.0	100.0
Siliconware Electronics<br> (Fujian) Co., Limited	Engaged in the packaging<br> and testing of semiconductors	Fujian, China	100.0	100.0

(Concluded)

e.	Business<br> combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after re-assessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss or other comprehensive income. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are recognized on the same basis as would be required if that interest were directly disposed of by the Group.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted retrospectively during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

Business combination involving entities under common control is not accounted for by acquisition method but accounted for at the carrying amounts of the entities.

f.	Foreign<br> currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.

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Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction, and are not retranslated.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including subsidiaries, associates and joint ventures in other countries that use currencies which are different from the currency of the Company) are translated into the New Taiwan dollars using exchange rates prevailing at each balance sheet date. Income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income and accumulated in equity attributed to the owners of the Company and non-controlling interests as appropriate.

On the disposal of the Group’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to the non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

g.	Inventories<br> and inventories related to real estate business

Inventories, including raw materials (materials received from customers for processing, mainly semiconductor wafers, are excluded from inventories as title and risk of loss remain with the customers), supplies, work in process, finished goods, and materials and supplies in transit are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling prices of inventories less all estimated costs of completion and estimated costs necessary to make the sale. Raw materials and supplies are recorded at moving average cost while work in process and finished goods are recorded at standard cost.

Inventories related to real estate business include land and buildings held for sale, land held for construction and construction in progress. Land held for development is recorded as land held for construction upon obtaining the title of ownership. Prior to the completion, the borrowing costs directly attributable to construction in progress are capitalized as part of the cost of the asset. Construction in progress is transferred to land and buildings held for sale upon completion. Land and buildings held for sale, construction in progress and land held for construction are stated at the lower of cost or net realizable value and related write-downs are made by item. The amounts received in advance for real estate properties are first recorded as advance receipts and then recognized as revenue when the construction is completed and the title and significant risk of the real estate properties are transferred to customers. Cost of sales of land and buildings held for sale are recognized based on the ratio of property sold to the total property developed.

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h.	Investments<br> in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Group applies the equity method to investments in an associate and joint venture.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of equity of associates and joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition after reassessment is recognized immediately in profit or loss.

When the Group subscribes for additional new shares of an associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate and joint venture), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations or constructive obligations, or made payments on behalf of that associate and joint venture.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

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When a group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’ consolidated financial statements only to the extent that interests in the associate and the joint venture are not related to the Group.

i.	Property,<br> plant and equipment

Except for land which is stated at cost, property, plant and equipment (including assets held under finance leases) are stated at cost less accumulated depreciation and accumulated impairment. Before January 1, 2019, property, plant and equipment also included assets held under finance leases.

Properties in the course of construction are carried at cost, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Freehold land is not depreciated.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. For assets which were held under finance leases before January 1, 2019, if their respective lease terms are shorter than their useful lives, such assets are depreciated over their lease terms. The estimated useful lives, residual values and depreciation method are reviewed at each balance sheet date, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

j.	Investment<br> properties

Investment properties are properties held to earn rental and/or for capital appreciation. Beginning January 1, 2019, investment properties include right-of-use assets if the definition of investment properties is met; before January 1, 2019, investment properties included properties under construction if the definition of investment properties was met.

Freehold investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.

Beginning January 1, 2019, investment properties acquired through leases are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made on or before the commencement date, plus initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. These investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment loss and adjusted for any remeasurement of the lease liabilities.

Depreciation is recognized using the straight-line method.

Investment properties under construction are measured at cost less accumulated impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Depreciation of these assets commences when the assets are ready for their intended use.

For a transfer of classification from investment properties to property, plant and equipment and to right-of-use assets, the deemed cost of the property for subsequent accounting is its carrying amount at the commencement of owner-occupation.

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For a transfer of classification from investment properties to inventories, the deemed cost of an item of property for subsequent accounting is its carrying amount at the commencement of development with a view to future sale.

For a transfer of classification from property, plant and equipment and right-of-use assets to investment properties, the deemed cost of an item of property for subsequent accounting is its carrying amount at the end of owner-occupation.

For a transfer of classification from inventories to investment properties, the deemed cost of an item of property for subsequent accounting is its carrying amount at the inception of an operating lease.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

k.	Goodwill

Goodwill arising from an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating unit”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

l.	Other<br> intangible assets
1)	Separate<br> acquisition
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Other intangible assets with finite useful lives acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Other intangible assets are amortized using the straight-line method over their estimated useful lives. The estimated useful lives, residual values, and amortization methods are reviewed at each balance sheet date, with the effect of any changes in estimate being accounted for on a prospective basis.

2)	Acquired<br> through business combinations

Other intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date which is regarded as their cost. Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

3)	Derecognition

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset are recognized in profit or loss.

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m.	Impairment<br> of tangible and intangible assets other than goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation. The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

n.	Financial<br> instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1)	Financial<br> assets

All regular way purchases or sales of financial assets are recognized and derecognized on a settlement date basis.

a)	Measurement<br> category

Before 2018

The classification of financial assets held by ASE and its subsidiaries includes financial assets at FVTPL, available-for-sale financial assets, and loans and receivables.

i.	Financial<br> assets at FVTPL

Financial assets are classified as at FVTPL when the financial assets are either held for trading or they are designated as at FVTPL.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

i)	Such<br> designation eliminates or significantly reduces a measurement or recognition inconsistency<br> that would otherwise arise; or
ii)	The<br> financial asset forms part of a group of financial assets or financial liabilities or<br> both, which is managed and has performance evaluated on a fair value basis in accordance<br> with ASE and its subsidiaries’ documented risk management or investment strategy,<br> and information about the grouping is provided internally on that basis; or
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iii)	The<br> contract contains one or more embedded derivatives so that the entire hybrid (combined)<br> contract can be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset.

Fair value is determined in the manner described in Note 35.

ii.	Available-for-sale<br> financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as (1) loans and receivables, (2) held-to-maturity investments or (3) financial assets at fair value through profit or loss.

Available-for-sale financial assets are stated at fair value at each balance sheet date. Changes in the carrying amount of available-for-sale monetary financial assets relating to changes in foreign currency rates, interest income calculated using the effective interest method and dividends on available-for-sale equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and accumulated under the heading of unrealized gain (loss) on available-for-sale financial assets. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the unrealized gain (loss) on available-for-sale financial assets is reclassified to profit or loss.

Dividends on available-for-sale equity instruments are recognized in profit or loss when ASE and its subsidiaries’s right to receive the dividends is established.

iii.	Loans<br> and receivables

Loans and receivables including cash and cash equivalents, trade receivables, other receivables and other financial assets are measured at amortized cost using the effective interest method, less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Starting from 2018

Financial assets held by the Group are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, and investments in debt instruments and equity instruments at FVTOCI.

i.	Financial<br> asset at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or it is designated as at FVTPL. The Group’s financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

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Financial assets at FVTPL are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in other gains or losses.

Fair value is determined in the manner described in Note 35.

ii.	Financial<br> assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i)	The<br> financial asset is held within a business model whose objective is to hold financial<br> assets in order to collect contractual cash flows; and
ii)	The<br> contractual terms of the financial asset give rise on specified dates to cash flows that<br> are solely payments of principal and interest on the principal amount outstanding.
---	---

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost, other receivables and other financial assets, are measured at amortized cost, which equals to gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

i)	Purchased<br> or originated credit-impaired financial assets, for which interest income is calculated<br> by applying the credit-adjusted effective interest rate to the amortized cost of the<br> financial asset; and
ii)	Financial<br> assets that are not credit-impaired on purchase or origination but have subsequently<br> become credit-impaired, for which interest income is calculated by applying the effective<br> interest rate to the amortized cost of such financial assets in subsequent reporting<br> periods.
---	---

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii.	Investments<br> in debt instruments at FVTOCI

For the Group’s debt instruments that meet the following conditions are subsequently measured at FVTOCI:

i)	the<br> debt instrument is held within a business model whose objective is achieved by both the<br> collecting of contractual cash flows and the selling of the financial assets; and
ii)	the<br> contractual terms of the debt instrument give rise on specified dates to cash flows that<br> are solely payments of principal and interest on the principal amount outstanding.
---	---

Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.

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iv.	Investments<br> in equity instruments at FVTOCI

On initial recognition, the Group make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

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b)	Impairment<br> of financial assets and contract assets

Before 2018

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investments have been affected.

For financial assets carried at amortized cost, such as trade receivables and other receivables, assets that are assessed not to be impaired individually are, further, assessed for impairment on a collective basis. ASE and its subsidiaries assess the collectability of receivables based on their past experience of collecting payments and observable changes that correlate with default on receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the assets’ carrying amounts and the present value of estimated future cash flows, discounted at the financial assets’ original effective interest rates. If, in a subsequent period, the amount of the impairment loss decreases and the decreases can be objectively related to an event occurring after the impairment loss recognized, the previously recognized impairment loss is reversed either directly or by adjusting an allowance account through profit or loss. The reversal shall not result in carrying amounts of financial assets that exceed what the amortized cost would have been at the date the impairment is reversed.

For any available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss is not reversed through profit or loss. Any increase in fair value subsequent to impairment is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment loss is subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables where the carrying amount is reduced through the use of an allowance account. When trade and other receivables are considered uncollectible, they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible trade receivables and other receivables that are written off against the allowance account.

Starting from 2018

At each balance sheet date, the Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments that are measured at FVTOCI as well as contract assets.

The Group always recognizes lifetime Expected Credit Loss (“ECL”) for trade receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

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Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

c)	Derecognition<br> of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Before 2018, on derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss.

Starting from 2018, on derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2)	Equity<br> instruments

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

3)	Financial<br> liabilities
a)	Subsequent<br> measurement
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Except the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.

Financial liabilities held for trading are stated at fair value, and any gains or losses on such financial liabilities are recognized in other gains or losses.

b)	Derecognition<br> of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

4)	Derivative<br> financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including forward exchange contracts and swap contracts.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Before 2018, derivatives embedded in non-derivative host contracts were treated as separate derivatives when they met the definition of a derivative; their risks and characteristics were not closely related to those of the host contracts; and the contracts were not measured at FVTPL. Starting from 2018, derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL.

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o.	Hedge<br> Accounting

The Group designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges.

1)	Fair<br> value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognized in profit or loss in the line item relating to the hedged item.

2)	Cash<br> flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion are recognized immediately in profit or loss.

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The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecasted transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the non-financial asset or non-financial liability.

Before 2018, hedge accounting was discontinued prospectively when ASE and its subsidiaries revoked the designated hedging relationship; when the hedging instrument expired or was sold, terminated, or exercised; or when the hedging instrument no longer met the criteria for hedge accounting. From 2018, the Group discontinues hedge accounting only when the hedging relationship cease to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated, or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

p.	Revenue<br> recognition

Before 2018

Revenue is measured at the fair value of the consideration received or receivable take into account of estimated customer returns, rebates and other similar allowances.

1)	Revenue<br> from sale of goods and real estate properties

Revenue from the sale of goods and real estate properties is recognized when all the following conditions are satisfied:

a)	ASE<br> and its subsidiaries has<br> transferred to the buyer the significant risks and rewards of ownership of the goods;
b)	ASE<br> and its subsidiaries retains neither continuing managerial involvement to the<br> degree usually associated with ownership nor effective control over the goods sold;
---	---
c)	The<br> amount of revenue can be measured reliably;
---	---
d)	It<br> is probable that the economic benefits associated with the transaction will flow to ASE<br> and its subsidiaries; and
---	---
e)	The<br> costs incurred or to be incurred in respect of the transaction can be measured reliably.
---	---
2)	Revenue<br> from rendering of services
---	---

Service income is recognized when services are rendered.

3)	Revenue<br> from dividend and interest income

Dividend income from investments and interest income from financial assets are recognized when they are probable that the economic benefits will flow to ASE and its subsidiaries and the amount of income can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

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Starting from 2018

The Group identifies the contracts with customers, allocates transaction prices to performance obligations and, when performance obligations are satisfied, recognizes revenues at fixed amounts as agreed in the contracts with taking estimated volume discounts into consideration.

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

The Group’s duration of contracts with customers is expected to be one year or less, and the consideration from contracts with customers is included in transaction price and, therefore, can apply the practical expedient that not to disclose the performance obligations including (i) the aggregate amount of the transaction price allocated to the performance obligations that are not fully satisfied or have partially completed at the end of the reporting period, and (ii) the expected timing for recognition of revenue.

The Group’s operating revenues include revenues from sale of goods and services as well as sale and leasing of real estate properties.

When customers control goods while they are manufactured in progress, the Group measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Revenue and contract assets are recognized during manufacture and contract assets are reclassified to trade receivables when the manufacture is completed or when the goods are shipped upon customer’s request.

The Group recognizes revenues and trade receivables when the goods are shipped or when the goods are delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence.

Revenues from sale of real estate properties are recognized when customers purchase real estate properties and complete the transfer procedures. Revenues from leasing real estate properties are recognized during leasing periods on the straight-line basis.

q.	Leases

Before 2019

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

1)	The<br> Group as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

2)	The<br> Group as lessee

Assets held under finance leases are initially recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated balance sheets as a finance lease obligation.

Finance expenses implicit in lease payments for each period are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets; in which case, they are capitalized.

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Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

Starting from 2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

For a contract that contains a lease component and non-lease components, the Group elects to account for the lease and non-lease components as a single lease component.

1)	The<br> Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2)	The<br> Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

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Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made on or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets. With respect to the recognition and measurement of right-of-use assets that meet the definition of investment properties, refer to the aforementioned accounting policies for investment properties.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. However, if leases transfer ownership of the underlying assets to the Group by the end of the lease terms or if the costs of right-of-use assets reflect that the Group will exercise a purchase option, the Group depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, residual value guarantees, the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the amounts expected to be payable under a residual value guarantee, a change in the assessment of an option to purchase an underlying asset, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

r.	Borrowing<br> costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

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s.	Government<br> grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the consolidated financial statements and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

The benefit of a government loan received at a below-market rate of interest is treated as a government grant measured as the difference between the proceeds received and the fair value of the loan based on prevailing market interest rates.

t.	Employee<br> benefits
1)	Short-term<br> employee benefits
---	---

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2)	Retirement<br> benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

u.	Employee<br> share options

The fair value at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Group’s best estimate of the number of options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options and non-controlling interests. It is recognized as an expense in full at the grant date if vesting immediately. The grant date of issued ordinary shares for cash which are reserved for employees is the date on which the number of shares that the employees purchase is confirmed.

At each balance sheet date, the Group reviews its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the capital surplus - employee share options and non-controlling interests.

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The grant by the Company of its equity instruments to the employees of a subsidiary under options is treated as a capital contribution. The fair value of employee services received under the arrangement is measured by reference to the grant-date fair value and is recognized over the vesting period as an addition to the investment in the subsidiary, with a corresponding credit to capital surplus - employee share options.

v.	Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1)	Current<br> tax

According to the Income Tax Law of the R.O.C., an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2)	Deferred<br> tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. If a temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit, the resulting deferred tax asset or liability is not recognized. In addition, a deferred tax liability is not recognized on taxable temporary differences arising from the initial recognition of goodwill.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carryforwards and unused tax credits for purchases of machinery and equipment to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary difference associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at each balance sheet date and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

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3)	Current<br> and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

w.	U.S.<br> Dollar Amounts

A translation of the consolidated financial statements into U.S. dollars is included solely for the convenience of the readers, and has been translated from New Taiwan dollar (NT$) at the exchange rate as set forth in the statistical release by the U.S. Federal Reserve Board of the United States, which was NT$29.91 to US$1.00 as of December 31, 2019. The translation should not be construed as a representation that the NT$ amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

5.	CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

a.	Impairment<br> of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The calculation of the value in use requires management to estimate the future cash flows expected to be generated from the cash-generating units and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

b.	Acquisition<br> of subsidiaries

After the acquisition of a subsidiary, the Group should identify the difference between the investment cost and the Group’s share of the net fair value of the subsidiary’s identifiable assets acquired and liabilities assumed. It involves critical judgments and estimations when determining the aforementioned net fair values, including the type of intangible assets that may be identified and the related estimated cash flows or the relief from expenses. The related estimation and assumption, which were adopted by the management, may be of high uncertainty related to the semiconductor industry varied by economic trends.

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6.	CASH AND CASH EQUIVALENTS
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Cash on<br> hand
Checking accounts<br> and demand deposits
Cash<br> equivalents

All values are in US Dollars.

7.	FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Financial assets<br> <br> <br>mandatorily classified as at FVTPL
Derivative instruments (non-designated hedges)
Forward exchange<br> contracts
Swap contracts
Call option (Note 30)
Non-derivative financial<br> assets
Quoted ordinary shares
Open-end mutual funds

All values are in US Dollars.

(Continued)

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Private-placement<br> funds
Unquoted preferred shares
Hybrid financial assets
Private-placement<br> convertible bonds

Current
Non-current

All values are in US Dollars.

(Concluded)

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Financial liabilities held for<br> trading
Derivative instruments (non-designated hedging)
Swap contracts
Forward<br> exchange contracts

All values are in US Dollars.

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At each balance sheet date, the outstanding swap contracts not accounted for hedge accounting were as follows:

		Notional Amount
Currency	Maturity Period	(In Thousands)
December<br> 31, 2018
Sell<br> NT$/Buy US$	2019.01-2019.12	NT$49,570,469/US$1,687,400
Sell<br> US$/Buy CNY	2019.01	US$50,292/CNY349,800
Sell<br> US$/Buy JPY	2019.01	US$54,203/JPY6,090,000
Sell<br> US$/Buy NT$	2019.01	US$208,800/NT$6,423,242
December<br> 31, 2019
Sell<br> NT$/Buy US$	2020.01-2020.12	NT$50,241,799/US$1,660,000
Sell<br> US$/Buy CNY	2020.02	US$49,666/CNY349,800
Sell<br> US$/Buy JPY	2020.02-2020.03	US$45,878/JPY5,000,000
Sell<br> US$/Buy KRW	2020.01	US$28,000/KRW32,454,800
Sell<br> US$/Buy MYR	2020.01	US$11,000/MYR45,507
Sell<br> US$/Buy NT$	2020.01	US$189,960/NT$5,719,478

At each balance sheet date, the outstanding forward exchange contracts not accounted for hedge accounting were as follow:

		Notional Amount
Currency	Maturity Period	(In Thousands)
December<br> 31, 2018
Sell<br> NT$/Buy US$	2019.01-2019.02	NT$2,453,540/US$80,000
Sell<br> US$/Buy CNY	2019.01	US$29,000/CNY200,108
Sell<br> US$/Buy EUR	2019.01	US$4,103/EUR3,600
Sell<br> US$/Buy JPY	2019.01-2019.02	US$37,733/JPY4,231,754
Sell<br> US$/Buy MYR	2019.01-2019.02	US$14,000/MYR58,430
Sell<br> US$/Buy SGD	2019.01-2019.02	US$13,400/SGD18,391
December<br>31, 2019
Sell<br> CNY/Buy US$	2020.01-2020.02	CNY2,224,491/US$316,896
Sell<br> HKD/Buy US$	2020.01	HKD1,705,281/US$218,297
Sell<br> NT$/Buy US$	2020.01	NT$2,275,860/US$75,000
Sell<br> US$/Buy CNY	2020.01-2020.03	US$109,000/CNY767,277
Sell<br> US$/Buy JPY	2020.01-2020.04	US$87,398/JPY9,509,491
Sell<br> US$/Buy MYR	2020.01-2020.05	US$26,000/MYR108,330
Sell<br> US$/Buy NT$	2020.01-2020.02	US$170,000/NT$5,142,441
Sell<br> US$/Buy SGD	2020.01-2020.02	US$8,600/SGD11,691

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8.	FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Investments<br> in equity instruments at FVTOCI
Investments<br> in debt instruments at FVTOCI

All values are in US Dollars.

a.	Investments<br> in equity instruments at FVTOCI
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Unquoted ordinary<br> shares
Unquoted preferred shares
Limited<br> partnership

All values are in US Dollars.

b.	Investments<br> in debt instruments at FVTOCI
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Unsecured<br> subordinate corporate bonds

All values are in US Dollars.

In June 2016, the Group purchased 1,000 units of perpetual unsecured subordinate corporate bonds in the amount of NT$1,000,000 thousand. The corporate bonds are in denomination of NT$1,000 thousand (US$33 thousand) with annual interest rate at 3.5% as well as effective interest rate at 3.2% both as of December 31, 2018 and 2019.

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9.	CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

The Group’s investment in unsecured subordinate corporate bonds is rated the equivalent of investment grade or higher and has low credit risk for the purpose of impairment assessment.

There was no significant increase in credit risk of such debt instrument since initial recognition leading to changes in interest rates and terms, and there was also no significant change in bond issuer’s operation affecting the ability performing debt obligation. We evaluated that no expected credit losses existed. The Group reviews changes in bond yields and other public information periodically and makes an assessment whether there has been a significant increase in lifetime Expected Credit Loss (“ECL”) since initial recognition.

10.	TRADE RECEIVABLES, NET
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
At amortized cost
Gross<br> carrying amount
Less:<br> Allowance for impairment loss

At<br> FVTOCI

All values are in US Dollars.

a.	Trade<br> receivables
1)	At<br> amortized cost
---	---

The Group’s average credit terms were 30 to 90 days. The Group evaluates the risk and probability of credit loss by reference to the Group’s past experiences, financial condition of each customer, as well as general economic conditions, competitive advantage and future development of the industry in which the customer operates. The Group then reviews the recoverable amount of each individual trade receivable at each balance sheet date to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, management believes the Group’s credit risk was significantly reduced. In addition, the Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at each balance sheet date. As the Group’s historical credit loss experience shows significantly different loss patterns for different customer segments, the provision matrix for expected credit loss allowance based on trade receivables due status is further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

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December 31, 2018

	Not<br> Past Due		Overdue<br> <br>1 to 30 days		Overdue<br> <br>31 to 90 Days		Overdue<br> <br>Over 91 Days		Individually<br> Impaired		Total
		NT		NT		NT		NT		NT		NT
Expected credit loss rate		0%		0%~10%		0%~50%		1%~100%		0%~100%		—
Gross carrying amount	$	71,819,583	$	6,537,819	$	778,799	$	405,707	$	94,840	$	79,636,748
Loss<br> allowance (Lifetime ECLs)		(7,119		(4,463		(14,949		(40,080		(88,778		(155,389
	$	71,812,464	$	6,533,356	$	763,850	$	365,627	$	6,062	$	79,481,359

All values are in US Dollars.

December 31, 2019

	Not<br> Past Due		Overdue<br> <br>1 to 30 days		Overdue<br> <br>31 to 90 Days		Overdue<br> <br>Over 91 Days		Individually<br> Impaired		Total
		NT		NT		NT		NT		NT		NT
Expected credit loss rate		0%		0%~10%		1%~70%		1%~100%		50%~100%		—
Gross carrying amount	$	70,042,018	$	6,111,309	$	695,384	$	153,458	$	53,111	$	77,055,280
Loss<br> allowance (Lifetime ECLs)		(12,379		(841		(26,587		(53,629		(43,061		(136,497
	$	70,029,639	$	6,110,468	$	668,797	$	99,829	$	10,050	$	76,918,783

All values are in US Dollars.

	Not<br> Past Due		Overdue<br> <br>1 to 30 days		Overdue<br> <br><br> <br>31 to 90 Days		Overdue<br> <br>Over 91 Days		Individually<br> Impaired		Total
		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)
Expected credit loss rate		0%		0%~10%		1%~70%		1%~100%		50%~100%		—
Gross carrying amount	$	2,341,759	$	204,323	$	23,249	$	5,131	$	1,776	$	2,576,238
Loss<br> allowance (Lifetime ECLs)		(414		(28		(889		(1,793		(1,440		(4,564
	$	2,341,345	$	204,295	$	22,360	$	3,338	$	336	$	2,571,674

All values are in US Dollars.

Movement of the allowance for doubtful trade receivables for the year ended December 31, 2017 was as follows:

	Impaired Individually		Impaired Collectively		Total
	NT		NT
Balance at January 1, 2017					$	53,709
Impairment losses recognized						13,629
Amounts written off				)		(34	)
Effect<br> of foreign currency exchange differences		)		)		(2,403	)
Balance<br> at December 31, 2017					$	64,901

All values are in US Dollars.

The movements of the loss allowance of trade receivables for the years ended December 31, 2018 and 2019 were as follows:

	December<br> 31
	2018		2019
	NT		NT		US (Note 4)
Balance<br> at January 1
Net remeasurement<br> of loss allowance				)		)
Reclassification to<br> loss allowance of other receivables				)		)
Acquisition through business combinations
Amounts written off		)
Effects of foreign currency<br> exchange differences		)		)		)
Balance<br> at December 31

All values are in US Dollars.

2)	At<br> FVTOCI

For the trade receivables due from certain customers, the Group decides whether to factor these trade receivables to banks without recourse based on its level of working capital. These trade receivables are classified as at FVTOCI because they are held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of financial assets.

The following table details the loss allowance of trade receivables at FVTOCI based on the Group’s provision matrix.

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December 31, 2019

	Not<br> Past Due		Overdue<br> 1<br> to 30 days	Overdue<br> 31<br> to 90 Days		Overdue<br> Over<br> 91 Days		Individually<br> Impaired	Total
	NT		NT	NT		NT		NT	NT
Expected credit loss rate		%			%		%
Gross carrying amount
Loss<br> allowance (Lifetime ECLs)							)			)

All values are in US Dollars.

	Not<br> Past Due		Overdue<br> 1<br> to 30 days	Overdue<br> 31<br> to 90 Days		Overdue<br> Over<br> 91 Days		Individually<br> Impaired	Total
	US (Note 4)		US (Note 4)	US (Note 4)		US (Note 4)		US (Note 4)	US (Note 4)
Expected credit loss rate		%			%		%
Gross carrying amount
Loss<br> allowance (Lifetime ECLs)

All values are in US Dollars.

b.	Transfers<br> of financial assets

The followings were the Group’s outstanding trade receivables transferred but not yet due as of December 31, 2019:

Counterparties	Receivables<br> Factoring Proceeds	Reclassified<br> to Other Receivables	Advances<br> Received- Unused	Advances<br> Received- Used	Interest<br> Rates on Advances Received
	NT	NT	NT	NT
First Commercial<br> Bank						2.2	%

All values are in US Dollars.

Counterparties	Receivables<br> Factoring Proceeds	Reclassified<br> to Other Receivables	Advances<br> Received- Unused	Advances<br> Received- Used	Interest<br> Rates on Advances Received
	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)
First Commercial<br> Bank						2.2	%

All values are in US Dollars.

Pursuant to the factoring agreements, losses from commercial disputes (such as sales returns and discounts) are borne by the Group, while losses from credit risk are borne by banks.

11.	INVENTORIES
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Finished<br> goods
Work in process
Raw materials
Supplies
Raw<br> materials and supplies in transit

All values are in US Dollars.

The cost of inventories recognized as operating costs for the years ended December 31, 2017, 2018 and 2019 were NT$237,193,286 thousand, NT$309,020,850 thousand and NT$347,877,603 thousand (US$11,630,813 thousand), respectively, which included write-downs of inventories at NT$398,824 thousand, NT$980,927 thousand and NT$452,134 thousand (US$15,117 thousand), respectively.

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12.	INVENTORIES RELATED TO REAL ESTATE BUSINESS
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Land and<br> buildings held for sale
Construction in progress
Land<br> held for construction

All values are in US Dollars.

Construction in progress is mainly located on Hutai Road in Shanghai, China and Lidu Road in Kun Shan, China. The capitalized borrowing costs for the years ended December 31, 2017, 2018 and 2019 are disclosed in Note 26.

As of December 31, 2018 and 2019, inventories related to real estate business of NT$10,060,608 thousand and NT$11,416,726 thousand (US$381,703 thousand), respectively, are expected to be recovered longer than twelve months.

Refer to Note 37 for the carrying amount of inventories related to real estate business that had been pledged by the Group to secure bank borrowings.

13.	OTHER FINANCIAL ASSETS
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Guarantee<br> deposits
Pledged time deposits<br> (Note 37)
Time deposits with original maturity of over three<br> months
Others<br> (Note 37)

Current
Non-current

All values are in US Dollars.

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14.	INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Investments<br> in associates
Investments<br> in joint ventures

All values are in US Dollars.

a.	Investments<br> in associates
1)	Investments in associates accounted for using the equity method<br>that was not individually material consisted of the following:
---	---

consisted of the following:

			Carrying<br> Amount as of December 31
			2018	2019
		Operating	NT	NT	US (Note 4)
Name of Associate	Main Business	Location
ChipMOS Technologies<br> Inc. (“ChipMOS”)	Engaged in<br> the packaging and testing of semiconductors	R.O.C.
Yann Yuan<br> Investment Co., Ltd. (“Yann Yuan”)	Engaged in investing activities	R.O.C.
M-Universe Investments<br> Pte. Ltd. (“MU”)	Investment company	Singapore
Hung Ching<br> Development & Construction Co. (“HC”)	Engaged in the development,<br> construction and leasing of real estate properties	R.O.C.
Deca Technologies<br> Inc. (”DECA”）	Holding company and the<br> group engaged in manufacturing, development and marketing of wafer level packaging and interconnect technology	British Cayman Islands
Hung Ching<br> Kwan Co. (“HCK”)	Engaged in the leasing<br> of real estate properties	R.O.C.
AMPI	Engaged in the manufacturing<br> of integrated circuit	R.O.C.

	Less: Deferred gain<br> on transfer of land

All values are in US Dollars.

2)	At<br> each balance sheet date, the percentages of ownership held by the Group’s subsidiary<br> were as follows:
	December<br> 31
---	---	---	---	---
	2018		2019
ChipMOS		20.47%		20.48%
Yann Yuan		32.21%		32.21%
MU		—		42.23%
HC		26.22%		26.22%
DECA		22.04%		22.02%
HCK		27.31%		27.31%
AMPI		38.76%		—
3)	In<br> March 2019, the board of directors of ChipMOS resolved to cancel its issued employee<br> restricted shares, which resulted in an increase in the percentage of ownership in ChipMOS<br> from 20.47% to 20.48% and an increase in capital surplus of NT$2,016 thousand (US$67<br> thousand).
---	---
4)	The<br> Group evaluated the recoverable amount of its investment in DECA using the value in use<br> and fair value less costs of disposal in 2018 and 2019, respectively. The recoverable<br> amount was lower than the carrying amount of investment in DECA and, therefore, the Group<br> recognized an impairment loss of NT$521,010 thousand and NT$400,201 thousand (US$13,380<br> thousand) under the line item of other gains, net (Note 26) for the years ended December<br> 31, 2018 and 2019, respectively. The value in use was the discounted cash flow based<br> on the future projections made by DECA’s management with a discount rate of 14.1%,<br> while the fair value was the estimated transaction price of DECA’s preferred shares,<br> of which the fair value hierarchy was Level 3. In addition, due to the exercise of employee<br> share options issued by DECA, the Group’s percentage of ownership in DECA decreased<br> to 22.02%.
---	---

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5)	In April 2019, the Group’s subsidiary, ASE Test, Inc.,<br>subscribed for 100,000 thousand ordinary shares of AMPI from its private placement with NT$250,000 thousand (US$8,358 thousand)<br>in cash. The percentage of the Group’s ownership in AMPI then increased to 50.97% and, therefore, the Group obtained control<br>over AMPI. The investments in ordinary shares of AMPI originally accounted for using the equity method were remeasured to the fair<br>value at the acquisition date and the Group recognized remeasurement gain of NT$243,057 thousand (US$8,126 thousand) under the<br>line item of other gains, net (Note 26).
6)	In July 2019, the Group’s subsidiary, Universal Global<br>Technology Co., Limited, invested SGD79,863 thousand (equivalent to NT$1,824,608 thousand (US$61,003 thousand)) in MU, and then<br>MU acquired the ordinary shares of Memtech International Ltd. (“Memtech”), a listed company in Singapore, from the<br>public market. At the same time, MU issued new ordinary shares to the former shareholder of Memtech, Keytech Investment Pte. Ltd.<br>(“Keytech”), in exchange for Memtech’s ordinary shares held by Keytech. The aforementioned share exchange resulted<br>the Group’s percentage of ownership in MU decreased to 42.23%.
---	---
7)	Fair<br> values (Level 1) of investments in associates with available published price quotation<br> are summarized as follows:
---	---
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
ChipMOS
HC
AMPI

All values are in US Dollars.

8)	Aggregate<br> information of associates that are not individually material
	For<br> the Year Ended December 31
---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT	US (Note 4)
The Group’s share of:
Net profit<br> (loss)		)
Other<br> comprehensive income (loss)				)
Total<br> comprehensive income (loss)		)		)

All values are in US Dollars.

b.	Investments<br> in joint ventures
1)	Investments<br> in joint ventures that were not individually material and accounted for using the equity<br> method consisted of the following:
---	---
				Carrying<br> Amount as of December 31
---	---	---	---	---	---	---
				2018	2019
		Operating		NT	NT	US (Note 4)
Name of Joint Venture	Main Business	Location
ASEEE	Engaged in<br> the production of embedded substrate		R.O.C.
SUMA-USI Electronics Co.,<br> Ltd. (“SUMA-USI”)	Engaged in the design<br> and production of electronic products		China

All values are in US Dollars.

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2)	At<br> each balance sheet date, the percentages of ownership held by the Group’s subsidiary<br> were as follows:
	December<br> 31
---	---	---	---	---	---	---
	2018			2019
ASEEE		51.00	%		—
SUMA-USI		—			49.00	%
3)	In<br> March 2019, UGKS entered into a joint venture agreement with Cancon Information Industry<br> Co., Ltd. to establish SUMA-USI with an estimated total consideration of CNY107,800 thousand<br> and obtained 49.00% ownership of SUMA-USI. As of December 31, 2019, the Group has invested<br> CNY65,170 thousand (NT$283,236 thousand (US$9,470 thousand)). Based on the joint venture<br> agreement, both investors jointly lead the relevant operation activities of SUMA-USI,<br> which resulted in that the investment in SUMA-USI was accounted for using the equity method.
---	---
4)	In April 2019, ASE entered into a memorandum of understanding<br>with TDK Corporation (“TDK”) in relation to ASEEE that was incorporated by a joint venture agreement entered into by<br>the Group and TDK. In addition to a reduction of one legal representative director of TDK, which resulted in that the Group obtained<br>control over ASEEE starting from April 2019 and the investments in ASEEE originally accounted for using the equity method was remeasured<br>to fair value at the acquisition date with a remeasurement gain of NT$76,655 thousand (US$2,563 thousand) under the line item of<br>other gains, net for the year ended December 31,2019 (Note 26), the memorandum of understanding set out that, after ASEEE offset<br>its accumulated deficits against its capital in an amount of NT$1,147,595 thousand (US$38,368 thousand), ASE subscribed all of<br>150,000 thousand ordinary shares newly issued by ASEEE through its capital increase by cash in an amount of NT$1,500,000 thousand<br>(US$50,150 thousand) in May 2019 and then repurchased all of ASEEE’s ordinary shares held by TDK in an amount of US$6,000<br>thousand in July 2019. As a result, the Group eventually held 100.00% of ownership in ASEEE (Note 32). Furthermore, the board of<br>directors of ASE further resolved to merge with ASEEE in December 2019. The record date of merger was February 1, 2020 and was<br>completed.
---	---
5)	Aggregate<br> information of joint ventures that were not individually material
---	---
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
The<br> Group’s share of net loss and total comprehensive loss

All values are in US Dollars.

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15.	PROPERTY, PLANT AND EQUIPMENT

The carrying amounts of each class of property, plant and equipment were as follows:

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Land
Buildings and improvements
Machinery and equipment
Other equipment
Construction<br> in progress and machinery in transit

All values are in US Dollars.

For the year ended December 31, 2017

	Land		Buildings<br> and Improvements		Machinery<br> and Equipment		Other<br> Equipment		Construction<br> in Progress and Machinery in<br> Transit		Total
	NT		NT		NT		NT		NT		NT
Cost
Balance at January<br> 1, 2017
Additions
Disposals				)		)		)		)		)
Reclassification		)								)		)
Effect of foreign<br> currency exchange differences		)		)		)		)				)
Balance at December<br> 31, 2017
Accumulated<br> depreciation and impairment
Balance at January<br> 1, 2017
Depreciation expenses
Impairment losses<br> recognized
Disposals				)		)		)		)		)
Reclassification				)				)				)
Effect of foreign<br> currency exchange differences				)		)		)				)
Balance at December<br> 31, 2017

All values are in US Dollars.

For the year ended December 31, 2018

	Land	Buildings<br> and Improvements		Machinery<br> and Equipment		Other<br> Equipment		Construction<br> in Progress and Machinery in<br> Transit		Total
	NT	NT		NT		NT		NT		NT
Cost
Balance at January<br> 1, 2018
Additions
Disposals			)		)		)		)		)
Reclassification									)		)
Acquisition through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences			)		)		)				)
Balance<br> at December 31, 2018

All values are in US Dollars.

Accumulated<br> depreciation and impairment
Balance at January 1, 2018	$	—	$	41,915,064		$	187,012,805		$	6,223,967		$	—	$	235,151,836
Depreciation expenses		—		6,325,948			31,751,251			1,816,587			—		39,893,786
Impairment losses recognized		—		29,531			97,680			5,860			—		133,071
Disposals		—		(491,033	)		(25,704,778	)		(2,070,302	)		—		(28,266,113	)
Reclassification		—		(265	)		—			—			—		(265	)
Acquisition through business<br> combinations (Note 30)		—		15,097,920			53,210,063			6,428,174			—		74,736,157
Effect of foreign currency exchange differences		—		(133,091	)		(616,601	)		(29,279	)		—		(778,971	)
Balance at December 31, 2018	$	—	$	62,744,074		$	245,750,420		$	12,375,007		$	—	$	320,869,501

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For the year ended December 31, 2019

	Land		Buildings<br> and Improvements		Machinery<br> and Equipment		Other<br> Equipment		Construction<br> in Progress and Machinery in<br> Transit		Total
	NT		NT		NT		NT		NT		NT
Cost
Balance at January<br> 1, 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)				)
Adjusted balance<br> at January 1, 2019
Additions
Disposals				)		)		)				)
Reclassification										)
Acquisitions through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences		)		)		)		)				)
Balance<br> at December 31, 2019
Accumulated<br> depreciation and impairment
Balance at January 1,<br> 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)				)
Adjusted balance at<br> January 1, 2019
Depreciation expense
Impairment losses recognized
Disposals				)		)		)				)
Reclassification								)
Acquisitions through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences				)		)		)				)
Balance<br> at December 31, 2019

All values are in US Dollars.

	Land		Buildings<br> and Improvements		Machinery<br> and Equipment		Other<br> Equipment		Construction<br> in Progress and Machinery in<br> Transit		Total
	US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)
Cost
Balance at January<br> 1, 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)				)
Adjusted balance<br> at January 1, 2019
Additions
Disposals				)		)		)				)
Reclassification										)
Acquisitions through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences		)		)		)		)				)
Balance<br> at December 31, 2019

All values are in US Dollars.

Accumulated depreciation and impairment
Balance at January 1,<br> 2019	$	-	$	2,097,762		$	8,216,330		$	413,741		$	-	$	10,723,833
Adjustments<br> on initial application of IFRS 16 (Note 3)		-		-			-			(6,050	)		-		(6,050	)
Adjusted balance at<br> January 1, 2019		-		2,097,762			8,216,330			407,691			-		10,721,783
Depreciation expense		-		233,681			1,195,162			83,717			-		1,512,560
Impairment losses recognized		-		2,626			3,412			682			-		6,720
Disposals		-		(29,460	)		(623,212	)		(83,699	)		-		(736,371	)
Reclassification		-		7,040			2,801			(3	)		-		9,838
Acquisitions through<br> business combinations (Note 30)		-		14,901			133,746			636			-		149,283
Effect<br> of foreign currency exchange differences		-		(34,227	)		(110,159	)		(6,502	)		-		(150,888	)
Balance<br> at December 31, 2019	$	-	$	2,292,323		$	8,818,080		$	402,522		$	-	$	11,512,925

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Based on the future operation plans and the capacity evaluation, the Group assessed that a portion of plant and equipment in the packaging segment and the testing segment were not qualified for the production needs and, therefore, recognized an impairment loss of NT$289,558 thousand, NT$133,071 thousand and NT$201,006 thousand (US$6,721 thousand) under the line item of other operating income and expenses (Note 26) for the years ended December 31, 2017, 2018 and 2019, respectively. The recoverable amount of a portion of the impaired plant and equipment was determined by its fair value less costs of disposal, of which the fair value was based on the recent quoted prices of assets with similar age and obsolescence that were provided by the vendors in secondary market which represent a Level 3 input because the secondary market was not very active. The recoverable amount of the other portion of the impaired plant and equipment was determined using value in use and the Group expected to derive zero future cash flows from these assets.

Each class of property, plant and equipment was depreciated on a straight-line basis over the following useful lives:

Buildings<br> and improvements
Main<br> plant buildings	10-55<br> years
Cleanrooms	10-20<br> years
Others	3-20<br> years
Machinery<br> and equipment	2-10<br> years
Other<br> equipment	2-20<br> years

The capitalized borrowing costs for the years ended December 31, 2017, 2018 and 2019 are disclosed in Note 26.

16.	LEASE ARRANGEMENTS
a.	Right-of-use<br> assets – 2019
---	---
	December<br> 31, 2019
---	---	---
	NT	US (Note 4)
Carrying amounts
Land
Buildings and improvements
Machinery and equipment
Other<br> equipment

All values are in US Dollars.

	For<br> the Year Ended December<br> 31, 2019
	NT	US (Note 4)
Additions to right-of-use<br> assets
Depreciation charge for right-of-use assets
Land
Buildings and improvements
Machinery and equipment
Other<br> equipment

All values are in US Dollars.

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The amounts disclosed above with respect to the right-of-use assets did not include the right-of-use assets that meet the definition of investment properties.

b.	Lease<br> liabilities - 2019
	December<br> 31, 2019
---	---	---
	NT	US (Note 4)
Carrying amounts
Current
Non-current

All values are in US Dollars.

The Group’s lease liabilities were mainly from land and buildings and improvements. The range of discount rates for lease liabilities was as follows:

	December 31, 2019
Land<br> (%)	0.54-4.90
Buildings<br> and improvements (%)	0.30-8.62
c.	Material<br> lease-in activities and terms
---	---

The Group leases land and buildings for the use of plants and offices with remaining lease terms of 1-69 years and 1-31 years, respectively. For the leasehold land located in the R.O.C., the Group has extension options at the expiry of the lease periods. However, the government has the right to adjust the lease payments on the basis of changes in announced land value prices and also has the right to terminate the lease contract under certain circumstances. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the expiry of the lease periods. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d.	Subleases

In addition to the sublease transactions described in Note 17, the Group did not have other sublease transactions.

e.	Other<br> lease information
1)	Lease<br> arrangements under operating leases for the leasing out of investment properties and<br> freehold property, plant and equipment are set out in Note 17.
---	---
2)	Other<br> related lease information
---	---

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	For<br> the Year Ended December<br> 31, 2019
	NT		US (Note 4)
Expenses<br> relating to short-term leases
Expenses<br> relating to low-value assets leases
Expenses relating to variable<br> lease payments not included in the measurement of lease liabilities
Total<br> cash outflow for leases		)		)

All values are in US Dollars.

The Group leased certain machinery and equipment which qualify as short-term leases and certain other equipment which qualify as low-value asset leases. The Group elected to apply the recognition exemption and, thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments were as follows:

	December 31,<br> <br>2018
		NT$
Less than<br> 1 year	$	509,994
1 to 5 years		828,482
More<br> than 5 years		1,047,626
	$	2,386,102

The minimum lease payments recognized in profit or loss for the year ended December 31, 2018 was NT$785,295 thousand.

17.	INVESTMENT PROPERTIES

For the year ended December, 2017

	Land	Buildings<br> and Improvements		Total
	NT	NT		NT
Cost
Balance at January<br> 1, 2017
Additions
Disposals			)		)
Reclassification
Effects<br> of foreign currency exchange differences
Balance<br> at December 31, 2017
Accumulated<br> depreciation and impairment
Balance at January<br> 1, 2017
Depreciation expenses
Disposals			)		)
Reclassification
Effects<br> of foreign currency exchange differences
Balance<br> at December 31, 2017
Carrying<br> amount at December 31, 2017

All values are in US Dollars.

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For the year ended December, 2018

	Land	Buildings<br> and Improvements		Total
	NT	NT		NT
Cost
Balance<br> at January 1, 2018
Additions
Reclassification
Effects<br> of foreign currency exchange differences			)		)
Balance<br> at December 31, 2018
Accumulated<br> depreciation and impairment
Balance at January<br> 1, 2018
Depreciation expenses
Reclassification
Effects<br> of foreign currency exchange differences			)		)
Balance<br> at December 31, 2018
Carrying amount at December<br> 31, 2018

All values are in US Dollars.

For the year ended December, 2019

	Land	Buildings<br> and Improvements		Right-of-use<br> Assets		Total
	NT	NT		NT		NT
Cost
Balance<br> at January 1, 2019
Adjustments<br> on initial application of IFRS<br> 16 (Note 3)
Adjusted<br> balance at January 1, 2019
Additions
Reclassification			)		)		)
Disposals			)				)
Effects<br> of foreign currency exchange differences			)		)		)
Balance<br> at December 31, 2019

All values are in US Dollars.

Accumulated<br> depreciation<br> <br>and<br> impairment
Balance<br> at January 1, 2019	$	—	$	707,376		$	—		$	707,376
Adjustments<br> on initial application of IFRS 16 (Note 3)		—		—			292,722			292,722
Adjusted<br> balance at January 1, 2019		—		707,376			292,722			1,000,098
Depreciation expenses		—		377,536			216,574			594,110
Reclassification		—		(210,455	)		543			(209,912	)
Disposals		—		(1,240	)		—			(1,240	)
Effects<br> of foreign currency exchange differences		—		99,354			(22,355	)		76,999
Balance<br> at December 31, 2019	$	—	$	972,571		$	487,484		$	1,460,055
Carrying<br> amount at December 31, 2019	$	35,965	$	6,737,798		$	6,080,308		$	12,854,071

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	Land	Buildings<br> and Improvements		Right-of-use<br> Assets		Total
	US (Note 4)	US (Note 4)		US (Note 4)		US (Note 4)
Cost
Balance<br> at January 1, 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)
Adjusted balance at<br> January 1, 2019
Additions
Reclassification			)		)		)
Disposals			)				)
Effects<br> of foreign currency exchange differences			)		)		)
Balance<br> at December 31, 2019

All values are in US Dollars.

Accumulated<br> depreciation<br> <br>and<br> impairment
Balance<br> at January 1, 2019	$	—	$	23,650		$	—		$	23,650
Adjustments<br> on initial application of IFRS 16 (Note 3)		—		—			9,787			9,787
Adjusted balance at<br> January 1, 2019		—		23,650			9,787			33,437
Depreciation expenses		—		12,622			7,241			19,863
Reclassification		—		(7,036	)		18			(7,018	)
Disposals		—		(41	)		—			(41	)
Effects<br> of foreign currency exchange differences		—		3,322			(747	)		2,575
Balance<br> at December 31, 2019	$	—	$	32,517		$	16,299		$	48,816
Carrying<br> amount at December 31, 2019	$	1,202	$	225,269		$	203,287		$	429,758

(Concluded)

Right-of-use assets included in investment properties were leasehold land located in Shanghai and were subleased under operating leases.

The abovementioned investment properties were leased out for 1 to 15 years, with an option to extend for an additional years. The lease contracts contain market review clauses in the event that the lessees exercise their options to extend. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

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In addition to fixed lease payments, the lease contracts also indicated that the lessees should make variable payments determined at a specific percentage of the excess of respective lessee’s monthly revenues over a specific amount.

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

	December<br> 31, 2019
	NT	US (Note 4)
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 onwards

All values are in US Dollars.

The future lease payments of non-cancellable operating lease commitments were as follows:

	December<br> 31, 2018
	NT
Not later<br> than 1 year
Later than 1 year<br> and not later than 5 years
Later<br> than 5 years

All values are in US Dollars.

The investment properties were depreciated on a straight-line basis over the following useful lives:

Main<br> buildings	10-40<br> years
Right-of-use<br> assets	15-50<br> years
Others	3-20<br> years

The fair value of the investment properties was measured using the market approach and the income approach based on level 3 inputs by independent professional appraisers. The significant unobservable inputs were discount rates. The fair value of the investment properties was as follows:

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Fair<br> value

All values are in US Dollars.

Refer to Note 37 for the carrying amount of the investment properties that had been pledged by the Group to secure borrowings.

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18.	GOODWILL
	Cost		Accumulated<br> Impairment	Carrying<br> Amount
---	---	---	---	---	---
	NT		NT	NT
Balance<br> at January 1, 2017
Impairment losses recognized					)
Effect<br> of foreign currency exchange differences		)			)
Balance<br> at December 31, 2017
Acquisition through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences
Balance<br> at December 31, 2018
Acquisition through<br> business combinations (Note 30)
Effect<br> of foreign currency exchange differences		)			)
Balance<br> at December 31, 2019

All values are in US Dollars.

	Cost		Accumulated<br> Impairment	Carrying<br> Amount
	US (Note 4)		US (Note 4)	US (Note 4)
Balance<br> at January 1, 2019
Acquisition through business combinations (Note 30)
Effect of foreign currency exchange differences		)			)
Balance at December 31, 2019

All values are in US Dollars.

a.	Allocating<br> goodwill to cash-generating units

The Group did not monitor goodwill for internal management purpose but for financial reporting purpose and, therefore, the goodwill was allocated to the following cash-generating units for evaluation of impairment: packaging segment, testing segment, EMS segment and other segment. The carrying amounts of goodwill allocated to cash-generating units were as follows:

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	December<br> 31
	2018	2019
Cash-generating units	NT	NT	US (Note 4)
Packaging<br> segment
Testing segment
Others

All values are in US Dollars.

b.	Impairment<br> assessment

At the end of each year, the Group performs evaluation of goodwill for impairment by reviewing the recoverable amounts based on value in use which incorporates cash flow projections estimated by management covering a five-year period. The cash flows beyond that five-year period are extrapolated using a steady per annum growth rate. In assessing value in use, the estimated future cash flows are discounted to their present value using annual pre-tax discount rates which were 10.82%-12.42%, 9.74%-10.22% and 9.59%-14.99% as of December 31, 2017, 2018 and 2019, respectively. As of December 31, 2017, the recoverable amount of other segment was lower than its carrying amount since its actual growth in revenue did not meet its forecast previously made by management. The review led to the recognition of an impairment loss of NT$425,117 thousand under the line item of other operating income and expenses, net (Note 26) for the year ended December 31, 2017. For the years ended December 31, 2018 and 2019, no impairment loss was recognized. The key assumption used in calculating each segment’s value in use also included the growth rates for operating revenues, which were based on the forecast for the Group and the industry as well as the Group’s historical performance.

Management believes that any reasonably possible change in the key assumptions on which the recoverable amount was based would not cause the carrying amount of the cash-generating unit to exceed its recoverable amount.

19.	OTHER INTANGIBLE ASSETS

The carrying amounts of each class of other intangible assets were as follows:

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Customer relationships
Computer software
Patents and acquired specific<br> technology
Others

All values are in US Dollars.

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For the year ended December 31, 2017

	Customer<br> Relationships	Computer<br> Software		Patents<br> and Acquired Specific Technology		Others		Total
	NT	NT		NT		NT		NT
Cost
Balance at<br> January 1, 2017
Additions
Disposals			)		)		)		)
Effect<br> of foreign currency exchange differences			)		)		)		)
Balance<br> at December 31, 2017
Accumulated<br> amortization
Balance at January 1,<br> 2017
Amortization expense
Disposals			)		)				)
Effect<br> of foreign currency exchange differences			)		)				)
Balance<br> at December 31, 2017

All values are in US Dollars.

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For the year ended December 31, 2018

	Customer<br> Relationships	Computer<br> Software		Patents<br> and Acquired Specific Technology		Others		Total
	NT	NT		NT		NT		NT
Cost
Balance at<br> January 1, 2018
Additions
Disposals			)		)		)		)
Acquisition through business<br> combinations (Note 30)
Effect<br> of foreign currency exchange differences					)		)
Balance<br> at December 31, 2018

All values are in US Dollars.

Accumulated amortization
Balance at<br> January 1, 2018	$	801,860	$	2,822,121		$	70,084		$	89,398		$	3,783,463
Amortization expense		746,979		373,536			1,263,309			18,626			2,402,450
Disposals		—		(95,202	)		(231	)		(4,000	)		(99,433	)
Acquisition through business<br> combinations (Note 30)		—		137,799			—			15,483			153,282

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Effect<br> of foreign currency exchange differences	$	—	$	3,109	$	(475	)	$	939	$	3,573
Balance<br> at December 31, 2018	$	1,548,839	$	3,241,363	$	1,332,687		$	120,446	$	6,243,335

For the year ended December 31, 2019

	Customer<br> Relationships		Computer<br> Software		Patents<br> and Acquired Specific Technology		Others		Total
	NT		NT		NT		NT		NT
Cost
Balance at<br> January 1, 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)		)
Adjusted balance at January<br> 1, 2019
Additions								)
Disposals or derecognization		)		)				)		)
Acquisition through business<br> combinations (Note 30)
Effect<br> of foreign currency exchange differences				)		)		)		)
Balance<br> at December 31, 2019
Accumulated<br> amortization
Balance at January 1,<br> 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)		)
Adjusted balance at January<br> 1, 2019
Amortization expense
Disposals or derecognization		)		)				)		)
Acquisition through business<br> combinations (Note 30)
Effect<br> of foreign currency exchange differences				)		)		)		)
Balance<br> at December 31, 2019

All values are in US Dollars.

(Concluded)

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	Customer<br> Relationships		Computer<br> Software		Patents<br> and Acquired Specific Technology		Others		Total
	US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)
Cost
Balance at<br> January 1, 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)		)
Adjusted balance at January<br> 1, 2019
Additions								)
Disposals or derecognization		)		)				)		)
Acquisition through business<br> combinations (Note 30)
Effect<br> of foreign currency exchange differences				)		)		)		)
Balance<br> at December 31, 2019
Accumulated<br> amortization
Balance at January 1,<br> 2019
Adjustments<br> on initial application of IFRS 16 (Note 3)								)		)
Adjusted balance at January<br> 1, 2019
Amortization expense
Disposals or derecognization		)		)				)		)
Acquisition through business<br> combinations (Note 30)
Effect<br> of foreign currency exchange differences				)		)		)		)
Balance<br> at December 31, 2019

All values are in US Dollars.

(Concluded)

Each class of other intangible assets was amortized on the straight-line basis over the following useful lives:

Customer<br> relationships	11<br> years
Computer<br> software	2-10<br> years
Patents<br> and acquired specific technology	5-17<br> years
Others	5-32<br> years
20.	LONG-TERM PREPAYMENTS FOR LEASE
---	---

Long-term prepayments for lease mainly represented land use rights located in China with periods for use from 30 to 70 years and will expire through 2048 to 2089. Starting from 2019, the Group reclassified the amount of NT$6,599,225 thousand (US$220,636 thousand) and NT$4,165,610 thousand (US$139,271 thousand) to investment properties and right-of-use assets, respectively, upon initial application of IFRS 16.

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21.	BORROWINGS
a.	Short-term<br> borrowings
---	---

Short-term borrowings mainly represented unsecured revolving bank loans and letters of credit with annual interest rates at 0.76%-5.10% and 0.70%-5.40% as of December 31, 2018 and 2019, respectively.

b.	Long-term<br> borrowings
1)	Bank<br> loans
---	---
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Revolving bank loans
Syndicated<br> bank loans - repayable through May 2020 to May 2023, annual interest rates both were 1.80% as of December 31, 2018 and 2019
Others - repayable through<br> January 2020 to July 2029, annual interest rates were 0.75%-3.77% and 0.82%-4.13% as of December 31, 2018 and 2019, respectively
Mortgage loans
Repayable<br> through January 2020 to December 2033, annual interest rates were 5.39% and 2.43%-4.90% as of December 31, 2018 and 2019,<br> respectively

Less:<br> unamortized arrangement fee

Less: current portion

All values are in US Dollars.

Pursuant to some of the above revolving bank loans agreements, the Company and its subsidiaries should meet certain financial covenants which are calculated based on each of their annual audited consolidated financial statements or semi-annual reviewed consolidated financial statements. The Company and its subsidiaries were in compliance with all of the financial covenants as of December 31, 2018 and 2019.

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2)	Long-term<br> bills payable
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
China Bills<br> Finance Corporation, repayable in February and March 2021, annual interest rates were 0.99% and 1.02%-1.05% as of December<br> 31, 2018 and 2019, respectively
International Bills Finance<br> Corporation, repayable in March 2021, annual interest rates were 1.00% and 1.02%-1.05% as of December 31, 2018 and 2019, respectively
Ta Ching Bills Finance<br> Corporation, repayable through January 2021 to March 2022, annual interest rates were 0.98% and 1.01%-1.03% as of December<br> 31, 2018 and 2019, respectively
Mega Bills Finance<br> Corporation, repayable in March 2022, annual interest rate was 1.04% as of December 31, 2019

Less: unamortized discounts

All values are in US Dollars.

3)	Long-term<br> notes payable

The Company’s subsidiary funded NT$100,016 thousand (US$3,344 thousand) from leasing companies by after-sales repurchasing its inventory and machinery. The subsidiary issued notes to those leasing companies for monthly installments through February 2021. As of December 31, 2019, the unamortized discounts were NT$2,137 thousand (US$72 thousand), current portion of long-term notes payable was NT$94,798 thousand (US$3,169 thousand), and the annual interest rates were 5.02%-6.89%.

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22.	BONDS PAYABLE

---	---	---
	2019
	NT	US (Note 4)
Unsecured<br> domestic bonds
Repayable<br> at maturity in January 2021 and interest due annually with annual interest rate at 1.30%
Repayable<br> at maturity in January 2023 and interest due annually with annual interest rate at 1.50%
Repayable<br> at maturity in January 2022 and interest due annually with annual interest rate at 1.25%
Repayable<br> at maturity in January 2024 and interest due annually with annual interest rate at 1.45%
Repayable<br> at maturity in April 2024 and interest due annually with annual interest rate at 0.90%
Repayable<br> at maturity in April 2026 and interest due annually with annual interest rate at 1.03%
Unsecured international bonds
US200,000<br> thousand (linked to New Taiwan dollar), repayable at maturity in October 2022 and interest due quarterly with annual interest<br> rate at 2.15%
US100,000<br> thousand (linked to New Taiwan dollar), repayable at maturity in October 2024 and interest due quarterly with annual interest<br> rate at 2.50%
Secured<br> domestic bonds
Repayable<br> at maturity in December 2020 and interest due annually with nil annual interest rate

Less:<br> discounts on bonds payable

Less:<br> current portion of bonds payable

All values are in US Dollars.

(Concluded)

a.	In August 2017, AMPI offered its third private-placement unsecured<br>domestic convertible bonds in NT$100,000 thousand with a coupon rate of 3.5% and a maturity of 3 years. The conversion price was<br>NT$3 per share at offering date and all the bonds were subscribed by ASE. Such convertible bonds were deemed as a hybrid financial<br>instrument under IFRS 9 and, therefore, ASE classified them as financial assets designated at FVTPL. As disclosed in Notes 14 and<br>30, the Group obtained control over AMPI starting from April 30, 2019 and the aforementioned contractual obligations assumed by<br>AMPI and the contractual rights entitled to ASE were extinguished. The assets and liabilities related to the convertible bonds<br>were eliminated upon the Group’s preparation of the consolidated financial statements.
b.	In December 2017, AMPI offered the fifth secured domestic convertible bonds in NT$250,000 thousand with nil coupon rate and<br>a maturity of 3 years. Each holder of the bonds has the right to convert the bonds into ordinary shares of AMPI at the conversion<br>price at any time from the 3 months after the offering date to the maturity date. The initial conversion price was NT$4.8<br>per share at offering date and the conversion price will be subject to adjustment in the event of the conversion provisions<br>due to anti-dilution clause. As of December 31, 2019, the conversion prices was NT$4.8 (US$0.2) per share. The bonds may be<br>early redeemed at the option of AMPI, in whole or in part, at any time provided that (1) if the closing price of AMPI’s<br>ordinary shares on the Taipei Exchange exceeds the conversion price by 30% or more for 30 consecutive business days in the<br>period starting from 3 months after the offering to 40 days before the maturity or (2) the outstanding amount of the bonds<br>falls below 10% of the originally offered in the period aforementioned.
---	---
c.	In October 2019, the Company offered the second unsecured international<br>bonds in the aggregate amount of US$300,000 thousand with par value of US$1,000 thousand. These unsecured international bonds were<br>divided into tranche A, in the amount of US$200,000 thousand with maturity of 3 years, and tranche B, in the amount of US$100,000<br>thousand with maturity of 5 years. The annual interest rates of tranche A and tranche B were 2.15% and 2.50%, respectively. All<br>the proceeds from bonds offering were used to support ASE’s green investments by subscribing for ASE’s newly issued<br>ordinary shares from its private placement.
---	---

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23.	OTHER PAYABLES
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Payables for property, plant and equipment
Accrued salary and bonus
Accrued employees’<br> compensation and remuneration to directors
Accrued employee insurance
Accrued utilities
Others

All values are in US Dollars.

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24.	RETIREMENT BENEFIT PLANS
a.	Defined<br> contribution plans
---	---
1)	The<br> pension plan under the R.O.C. Labor Pension Act (“LPA”) for the Group’s<br> R.O.C. resident employees is a government-managed defined contribution plan. Based on<br> the LPA, the Company and its subsidiaries in Taiwan makes monthly contributions to employees’<br> individual pension accounts at 6% of their monthly salaries.
---	---
2)	The<br> subsidiaries located in China, U.S.A., Malaysia, Singapore and Mexico also make contributions<br> at various ranges according to relevant local regulations.
---	---
b.	Defined<br> benefit plans
---	---
1)	The Company and its subsidiaries in Taiwan joined the defined benefit pension plan under the R.O.C. Labor Standards Law operated<br>by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the<br>last six months before retirement. The Company and its subsidiaries in Taiwan make contributions based on a certain percentage<br>of their domestic employees’ monthly salaries to a pension fund administered by the pension fund monitoring committee.<br>Before the end of each year, the Company and its subsidiaries in Taiwan assess the balance in the pension fund. If the amount<br>of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements<br>in the next year, the Company and its subsidiaries in Taiwan are required to fund the difference in one appropriation that<br>should be made by the end of March in the next year. Pension contributions are deposited in the Bank of Taiwan in the committee’s<br>name and are managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company and its subsidiaries<br>in Taiwan have no right to influence the investment policy and strategy.
---	---
2)	ASE Japan has a pension plan under which eligible employees with<br>more than ten years of service are entitled to receive pension benefits based on their length of service and salaries at the time<br>of termination of employment. ASE Japan makes contributions based on a certain amount of pension cost to employees. ASE Korea also<br>has a pension plan under which eligible employees and directors with more than one year of service are entitled to receive a lump-sum<br>payment upon termination of their service with ASE Korea, based on their length of service and salaries at the time of termination.<br>ASE Korea makes contributions based on a certain percentage of employees’ salaries to an external financial institution in<br>the names of employees and were administered by the management.
---	---
3)	ASE,<br> SPIL, ASE Test, Inc. and ASE Electronics Inc. maintain pension plans for executive managers.<br> Pension costs under the plans were NT$3,171 thousand, NT$11,137 thousand and NT$11,567<br> thousand (US$387 thousand) for the years ended December 31, 2017, 2018 and 2019, respectively.<br> As of December 31, 2018 and 2019, accrued pension liabilities for executive managers<br> were NT$320,542 thousand and NT$335,109 thousand (US$11,204 thousand), respectively.
---	---
4)	The<br> amounts included in the consolidated balance sheets arising from the Group’s obligation<br> in respect of its defined benefit plans excluding those for executive managers were as<br> follows:
---	---
	December<br> 31
---	---	---	---	---	---	---
	2018		2019
	NT		NT		US (Note 4)
Present<br> value of the defined benefit obligation
Fair<br> value of the plan assets		)		)		)

All values are in US Dollars.

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Present<br> value of unfunded defined benefit obligation	$	4,805,016		$	4,926,396		$	164,707
Recorded under other<br> payables		(18,791	)		(19,014	)		(636	)
Recorded<br> under other non-current assets		11,910			11,910			399
Net<br> defined benefit liability	$	4,798,135		$	4,919,292		$	164,470

Movements in net defined benefit liability (asset) were as follows:

	Present<br> Value of<br> the Defined Benefit Obligation		Fair<br> Value of the Plan Assets		Net<br> Defined Benefit Liability<br> (Asset)
	NT		NT		NT
Balance<br> at January 1, 2017				)
Service<br> cost
Current<br> service cost
Past<br> service cost and gain on settlements		)				)
Net<br> interest expense (income)				)
Recognized<br> in profit or loss				)
Remeasurement
Return<br> on plan assets (excluding amounts included in net interest)
Actuarial<br> loss arising from changes in financial assumptions

All values are in US Dollars.

(Continued)

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	Present Value<br> <br>of the Defined Benefit Obligation		Fair<br> Value of the Plan Assets		Net Defined Benefit<br> <br>Liability (Asset)
		NT		NT		NT
Actuarial gain arising from<br> experience adjustments	$	(315,090	$	—	$	(315,090
Actuarial<br> loss arising from changes in demographic assumptions		762		—		762
Recognized<br> in other comprehensive income		(257,468		52,124		(205,344
Contributions from the<br> employer		—		(484,790		(484,790
Benefits paid from the<br> pension fund		(690,830		690,830		—
Benefits paid from the<br> Group		(96,575		—		(96,575
Exchange<br> differences on foreign plans		198,790		(78,429		120,361
Balance<br> at December 31, 2017		7,910,638		(4,341,373		3,569,265
Service cost
Current service cost		224,126		—		224,126
Net<br> interest expense (income)		178,779		(122,709		56,070
Recognized<br> in profit or loss		402,905		(122,709		280,196
Remeasurement
Return on plan assets (excluding<br> amounts included in net interest)		—		(16,589		(16,589
Actuarial gain arising from<br> changes in financial assumptions		(8,643		—		(8,643
Actuarial loss arising from<br> experience adjustments		302,499		—		302,499
Actuarial loss arising from<br> changes in demographic assumptions		8,190		—		8,190
Actuarial<br> loss arising from changes in other assumptions		22,723		—		22,723
Recognized<br> in other comprehensive income		324,769		(16,589		308,180
Contributions from the<br> employer		—		(364,237		(364,237
Benefits paid from the<br> pension fund		(541,989		541,989		—
Benefits paid from the<br> Group		(295,953		—		(295,953
Business combinations		2,522,805		(1,210,524		1,312,281
Exchange<br> differences on foreign plans		(26,036		21,320		(4,716
Balance<br> at December 31, 2018		10,297,139		(5,492,123		4,805,016
Service cost
Current service cost		211,226		—		211,226
Net<br> interest expense (income)		151,635		(97,387		54,248
Recognized<br> in profit or loss		362,861		(97,387		265,474

All values are in US Dollars.

Remeasurement
Return on plan assets<br> (excluding amounts included in net interest)		—			(104,516	)		(104,516	)
Actuarial gain arising<br> from changes in financial assumptions		398,732			—			398,732
Actuarial loss arising<br> from experience adjustments		70,374			—			70,374
Actuarial<br> loss arising from changes in demographic assumptions		(2,329	)		—			(2,329	)
Recognized<br> in other comprehensive income	$	466,777		$	(104,516	)	$	362,261
Contributions from the<br> employer		—			(514,617	)		(514,617	)
Benefits paid from the<br> pension fund		(393,897	)		393,897			—
Benefits paid from the<br> Group		(21,439	)		—			(21,439	)
Business combinations		62,857			(28,380	)		34,477
Exchange<br> differences on foreign plans		(105,724	)		100,948			(4,776	)
Balance<br> at December 31, 2019	$	10,668,574		$	(5,742,178	)	$	4,926,396

(Continued)

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	Present Value<br> <br>of the Defined Benefit Obligation		Fair<br> Value of the Plan Assets		Net Defined Benefit<br> <br>Liability (Asset)
		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)
Balance<br> at January 1, 2019	$	344,271	$	(183,621	$	160,650
Service cost
Current service cost		7,062		—		7,062
Net<br> interest expense (income)		5,070		(3,256		1,814
Recognized<br> in profit or loss		12,132		(3,256		8,876
Remeasurement
Return on plan assets (excluding<br> amounts included in net interest)		—		(3,494		(3,494
Actuarial gain arising from<br> changes in financial assumptions		13,331		—		13,331
Actuarial loss arising from<br> experience adjustments		2,353		—		2,353
Actuarial<br> loss arising from changes in demographic assumptions		(78		—		(78
Recognized<br> in other comprehensive income		15,606		(3,494		12,112
Contributions from the<br> employer		—		(17,206		(17,206
Benefits paid from the<br> pension fund		(13,169		13,169		—
Benefits paid from the<br> Group		(717		—		(717
Business combinations		2,101		(949		1,152
Exchange<br> differences on foreign plans		(3,535		3,375		(160
Balance<br> at December 31, 2019	$	356,689	$	(191,982	$	164,707

All values are in US Dollars.

(Concluded)

5)	The<br> fair value of the plan assets by major categories at each balance sheet date was as follows:
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Cash
Debt instruments
Equity instruments
Others
Total

All values are in US Dollars.

6)	Through<br> the defined benefit plans under the Labor Standards Law of the R.O.C., the Group in Taiwan<br> are exposed to the following risks:
a)	Investment<br> risk
---	---

The plan assets are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

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b)	Interest<br> risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

c)	Salary<br> risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

7)	The<br> management of ASE Korea is responsible for the administration of the fund and determination<br> of the investment strategies according to related local regulations. ASE Korea is responsible<br> for the shortfall between the fund and the defined benefit obligation. The plan assets<br> are invested in the certificates of deposits.
8)	The<br> present value of the defined benefit obligation and the related current service cost<br> and past service cost were measured using the Projected Unit Credit Method. Except the<br> pension plans for executive managers, the key assumptions used for the actuarial valuations<br> were as follow:
---	---
	December 31
---	---	---
	2018	2019
Discount<br> rates (%)	0.05-3.02	0.08-2.85
Expected rates of<br> salary increase (%)	1.75-4.06	1.00-4.01

The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions occurring at each balance sheet date, while holding all other assumptions constant.

	December<br> 31
	2018		2019
	NT		NT		US (Note 4)
Discount Rate
0.5%<br> higher		)		)		)
0.5%<br> lower
Expected rates of<br> salary increase
0.5%<br> higher
0.5%<br> lower		)		)		)

All values are in US Dollars.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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9)	Maturity<br> analysis of undiscounted pension benefit
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
No later<br> than 1 year
Later than 1 year<br> but not later than 5 years
Later<br> than 5 years

All values are in US Dollars.

The Group expected to make contributions of NT$484,247 thousand and NT$533,777 thousand (US$17,846 thousand) to the defined benefit plans in the next year starting from January 1, 2019 and 2020, respectively.

As of December 31, 2018 and 2019, the average duration of the defined benefit obligation excluding those for executive managers of the Group was 9 to 15 years and 10 to 14 years, respectively.

25.	EQUITY
a.	Share<br> capital
---	---

Ordinary shares

	December<br> 31
	2018		2019
Numbers<br> of shares authorized (in thousands)		5,000,000		5,000,000
Numbers of shares<br> reserved (in thousands)
Employee<br> share options		400,000		400,000
Number<br> of shares issued and fully paid (in thousands)		4,321,714		4,330,528
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Share<br> capital authorized
Share capital reserved
Employee<br> share options
Share<br> capital issued and fully paid

All values are in US Dollars.

American Depositary Receipts

The Company’s ADS represents 2 ordinary shares of the Company. As of December 31, 2018 and 2019, 140,042 thousand and 125,542 thousand ADSs were outstanding and represented approximately 280,085 thousand and 251,084 thousand ordinary shares of the Company, respectively.

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b.	Capital<br> surplus
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
May be used<br> to offset a deficit, <br>distributed as cash dividends, <br>or transferred to share capital (1)
Issuance of<br> ordinary shares
Merger by share exchange
Difference<br> between consideration and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition

May<br> be used to offset a deficit only
Changes in percentage of<br> ownership interest in subsidiaries (2)
Treasury share transactions
Exercised employee share<br> options
Expired share options (Note<br> 29)
Share of changes in capital<br> surplus of associates
Dividends<br> that the claim period has elapsed and unclaimed by shareholders

May<br> not be used for any purpose
Employee share options
Others<br> (3)

All values are in US Dollars.

(Concluded)

1)	Such<br> capital surplus may be used to offset a deficit; in addition, when the Company has no<br> deficit, such capital surplus may be distributed as cash dividends or transferred to<br> share capital (limited to a certain percentage of the Company’s capital surplus<br> and once a year).
2)	Such<br> capital surplus arises from the effect of changes in ownership interest in a subsidiary<br> resulted from equity transactions other than actual disposal or acquisition, or from<br> changes in capital surplus of subsidiaries accounted for using the equity method.
---	---
3)	Such<br> capital surplus represents the excess of the carrying amount of related accounts over<br> the par value due to employee share options exercised and the Company has not completed<br> registration formalities.
---	---

The Company’s special shareholders’ meeting held in June 2018 resolved to distribute cash to its shareholders in the amount of NT$10,795,980 thousand from capital surplus arising from issuance of ordinary shares.

c.	Retained<br> earnings and dividend policy

The amended Articles of Incorporation of the Company (the “Articles”) approved in shareholders’ meeting in June 2019 provides that annual net income shall be distributed in the following order:

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1)	Replenishment<br> of deficits;
2)	10.0%<br> as legal reserve;
---	---
3)	Special<br> reserve appropriated or reversed in accordance with laws or regulations set forth by<br> the authorities concerned;
---	---

For the policies on the distribution of employees’ compensation and remuneration of directors, refer to employees’ compensation and remuneration of directors in Note 26(g).

The Company is currently in the mature growth stage. To meet the capital needs for business development now and in the future and satisfy the shareholders’ demand for cash inflows, the Company shall use residual dividend policy to distribute dividends, of which the cash dividend is not lower than 30% of the total dividend distribution, with the remainder to be distributed in shares. A distribution plan is also to be made by the board of directors and passed for resolution in the shareholders’ meeting.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s share capital. Legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s share capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865 and Rule No. 1010047490 issued by the Financial Supervisory Commission R.O.C. and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

The appropriation of earnings for 2018 resolved at the Company’s shareholders’ meeting in June 2019, was as follows:

	Appropriation<br> of Earnings		Dividends<br> Per Share
	NT	US (Note 4)	NT	US (Note 4)
			(in dollars)	(in dollars)
Legal reserve
Special reserve
Cash dividends

All values are in US Dollars.

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d.	Others<br> equity items
1)	Exchange<br> differences on translating foreign operations
---	---
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Balance at<br> January 1		)		)		)		)
Exchange differences<br> on translating foreign operations		)				)		)
Share from associates<br> and joint venture accounted for using the equity method		)				)		)
Disposal<br> of associates and joint venture accounted for using the equity method
Balance<br> at December 31		)		)		)		)

All values are in US Dollars.

2)	Unrealized<br> gain (loss) on available-for-sale financial assets
	For<br> the Year Ended December 31, 2017
---	---	---
	NT
Balance at<br> January 1, 2017		)
Unrealized gain arising on revaluation of available-for-sale<br> financial assets
Cumulative loss reclassified<br> to profit or loss on impairment of available-for-sale financial assets
Cumulative gain reclassified to profit or loss<br> on disposal of available-for-sale financial assets		)
Share from associates<br> and joint venture accounted for using the equity method
Balance<br> at December 31, 2017

All values are in US Dollars.

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3)	Unrealized<br> gain (loss) on financial assets at FVTOCI
	For<br> the Year Ended December 31
---	---	---	---	---	---	---
	2018		2019
	NT		NT		US (Note 4)
Balance<br> at January 1				)		)
Adjustment<br> on initial application of IFRS 9		)
Balance at January<br> 1 as adjusted				)		)
Unrealized gain (loss)<br> recognized during the year
Debt instruments		)		)		)
Equity instruments		)		)		)
Share from associates and<br> joint venture accounted for using the equity method		)
Realized loss (gain)<br> recognized during the year
Disposal of equity<br> instruments and transferred cumulative gain to retained earnings		)
Disposal of associates and<br> joint venture accounted for using the equity method		)
Share<br> from associates and joint venture accounted for using the equity method				)		)
Balance<br> at December 31		)		)		)

All values are in US Dollars.

e.	Treasury<br> shares (in thousand shares)
	Balance at							Balance at
---	---	---	---	---	---	---	---	---	---
	January<br> 1		Addition		Decrease			December<br> 31
2017
Shares<br> held by subsidiaries		145,883		—		—			145,883
Shares<br> reserved for bonds conversion		120,000		—		—			120,000
		265,883		—		—			265,883
2018
Shares held by subsidiaries		145,883		—		(72,942	)		72,941
Shares reserved for<br> bonds conversion		120,000		—		(120,000	)		—
Shares<br> repurchased from dissenting shareholders in accordance with Business Mergers And Acquisitions Act		—		1,852		(1,852	)		—
		265,883		1,852		(194,794	)		72,941
2019
Shares<br> held by subsidiaries		72,941		—		—			72,941

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The Company’s shares held by its subsidiaries at each balance sheet date were as follows:

	Shares<br> <br>Held By Subsidiaries		Carrying<br> Amount	Carrying<br> Amount	Fair<br> Value	Fair<br> Value
	(in thousand shares)		NT	US (Note<br> 4)	NT	US (Note<br> 4)
December 31, 2018
ASE Test		44,100
J&R Holding		23,352
ASE Test, Inc.		5,489
		72,941
December 31, 2019
ASE Test		44,100
J&R Holding		23,352
ASE Test, Inc.		5,489
		72,941

All values are in US Dollars.

Fair value (Level 1) of the Company’s shares held by subsidiaries is based on the closing price from an available published price quotation.

In March 2018, ASE’s board of directors approved, in accordance with Business Mergers and Acquisitions Act, to repurchase ASE’s 1,852 thousand ordinary shares at $38.5 per share held by the shareholders dissenting on the share exchange transaction which has been approved by both of ASE and SPIL’s special shareholders’ meetings on February 12, 2018. In addition, ASE’s board of directors approved a capital reduction in April 2018 to cancel ASE’s 121,852 thousand treasury shares and the record date was April 9, 2018. ASE has completed the registration formalities before April 30, 2018.

ASE issued ordinary shares in connection with its merger with its subsidiaries. The shares held by its subsidiaries were reclassified to treasury shares on the proportion owned by ASE. As disclosed in Note 1, ASE’s ordinary shares held by subsidiaries were exchanged to the Company’s ordinary shares on April 30, 2018 in accordance with the joint share exchange agreement.

The subsidiaries holding the aforementioned treasury shares retain shareholders’ rights except the rights to participate in any capital increase by cash and voting.

f.	Non-controlling<br> interests
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Balance<br> at January 1
Adjustment<br> on initial application of IFRS 15
Balance at January<br> 1 as adjusted
Share of profit for<br> the year
Other comprehensive<br> income (loss)
Exchange difference<br> on translating foreign operations		)		)		)		)
Unrealized gain on<br> available-for-sale financial assets
Unrealized loss on<br> equity instruments at FVTOCI				)		)		)
Remeasurement on defined<br> benefit plans		)		)		)		)
Non-controlling interests<br> arising from acquisition of subsidiaries (Note 30)
Subscribing for ordinary<br> shares form subsidiaries’ cash capital increase
Acquisition of non-controlling<br> interests in subsidiaries (Note 32)				)		)		)
Partial disposal of<br> subsidiaries (Note 32)		)
Subsidiaries’<br> buy back of their own outstanding ordinary shares (Note 32)				)		)		)

All values are in US Dollars.

(Continued)

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	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Non-controlling<br> interest relating to outstanding vested employee share options granted by subsidiaries
Non-controlling interest<br> relating to outstanding expired employee share options granted by subsidiaries		)
Cash<br> dividends to non-controlling interests		)		)		)		)
Balance<br> at December 31

All values are in US Dollars.

(Concluded)

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26.	PROFIT BEFORE INCOME TAX
a.	Other<br> operating income and expenses, net
---	---
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Rental<br> income
Gains (losses) on<br> disposal of property, plant and equipment and other assets				)		)		)
Impairment losses<br> on property, plant and equipment and goodwill		)		)		)		)
Loss on damages and<br> claims		)		)		)		)
Others
						)		)

All values are in US Dollars.

b.	Other<br> income
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Government subsidy
Interest income
Dividends income

All values are in US Dollars.

c.	Other<br> gains, net
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Remeasurement<br> gain on investments accounted for using the equity method due to step acquisition (Note 14)
Net gains on financial<br> assets mandatorily at FVTPL
Gain on disposal of<br> subsidiaries (Note 31)
Net losses arising<br> on financial instruments held for trading		)		)		)		)
Net gains on financial<br> assets designated as at FVTPL
Foreign exchange gains<br> (losses), net				)
Impairment losses<br> on financial assets		)		)		)		)

All values are in US Dollars.

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Others	$	1,518	$	—	$	(8,025	)	$	(268	)
	$	6,259,453	$	7,874,273	$	2,683,989		$	89,735

(Concluded)

In addition to the remeasurement gain on investments accounted for using the equity method due to the step acquisition disclosed in Note 14, the Company, as disclosed in Note 1, acquired all issued and outstanding ordinary shares of SPIL on April 30, 2018 (the acquisition date) in accordance with the joint share exchange agreement and had the control over SPIL. The investment in SPIL originally accounted for using the equity method was remeasured to the fair value at the acquisition date and the Group recognized a remeasurement gain of NT$7,421,408 thousand for the year ended December 31, 2018.

d.	Finance<br> costs
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---	---
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Interest<br> on lease liabilities
Total interest expense<br> for financial liabilities measured at amortized cost
Less: Amounts included<br> in the cost of qualifying assets
Inventories related to<br> real estate business		)		)		)		)
Property, plant and equipment		)		)		)		)
Investment properties		)		)

Other<br> finance costs

All values are in US Dollars.

Information relating to the capitalized borrowing costs was as follows:

	For<br> the Year Ended December 31
	2017		2018		2019
Annual interest capitalization<br> rates
Inventories<br> related to real estate business (%)		4.35-5.39		4.35		4.35-4.85
Property, plant and<br> equipment (%)		1.26-5.49		1.84-4.52		0.96-4.03
Investment properties<br> (%)		1.26-1.97		1.84-2.23		—
e.	Depreciation<br> and amortization
---	---
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Property,<br> plant and equipment
Right-of-use assets
Investment properties
Other<br> intangible assets
Total

All values are in US Dollars.

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Summary of depreciation<br> by function
Operating<br> costs	$	26,731,714	$	37,903,050	$	43,749,333	$	1,462,699
Operating<br> expenses		2,015,804		2,383,403		3,140,902		105,012
	$	28,747,518	$	40,286,453	$	46,890,235	$	1,567,711
Summary of amortization<br> by function
Operating costs	$	140,175	$	1,394,664	$	2,092,074	$	69,946
Operating<br> expenses		317,491		1,007,786		1,484,532		49,633
	$	457,666	$	2,402,450	$	3,576,606	$	119,579
Operating<br> expenses directly related to investment properties
---
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Direct<br> operating expenses of investment properties that generated rental income

All values are in US Dollars.

f.	Employee<br> benefits expense
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Post-employment benefits
Defined<br> contribution plans
Defined<br> benefit plans

Equity-settled share-based<br> payments
Other<br> employee benefits

Summary of employee benefits<br> expense by function
Operating costs
Operating<br> expenses

All values are in US Dollars.

g.	Employees’<br> compensation and the remuneration to directors

The Articles before and after the amendment approved in shareholders’ meeting in June 2019 both stipulates to distribute employees’ compensation and remuneration to directors at the rates in 0.01%-1.00% and no higher than 0.75%, respectively, of net profit before income tax, employees’ compensation and remuneration to directors.

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	For<br> the Year Ended December 31
	2018
		Accrual Rate		Accrual<br> Amount	Accrual Rate		Accrual<br> Amount
				(NT)			NT	US$ (Note 4)
Employees’<br> compensation		0.20%	$	45,430	0.20%	$	34,400	1,150
Remuneration to directors		0.15%		34,073	0.40%		68,803	2,300

All values are in US Dollars.

If there is a change in the proposed amounts after the consolidated financial statement authorized for issue, the differences are recorded as a change in accounting estimate and will be adjusted in the following year.

In March 2019, the board of directors resolved the appropriations of employees’ compensation and remuneration to directors in cash for 2018. The differences between the resolved amounts and the accrued amounts reflected in the consolidated financial statements for the years ended December 31, 2018 were deemed changes in estimates. The difference was NT$3 thousand (US$0.1 thousand) and was adjusted in net profit for the year ended December 31, 2019.

	For<br> Year 2018
	Employees’<br> compensation	Remuneration<br> to directors
	NT	NT
Resolved by the board of directors
Recognized in the consolidated financial<br> statements

All values are in US Dollars.

Information on the employees’ compensation and the remuneration to directors resolved by the board of directors are available on the Market Observation Post System website of the Taiwan Stock Exchange (the “TSE”).

27.	INCOME TAX

The Company and its subsidiaries expected to file a consolidate tax return for corporate income tax starting from 2019 and for unappropriated earnings starting from 2018.

a.	Income<br> tax recognized in profit or loss

The major components of income tax were as follows:

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Current income tax
In respect<br> of the current year
Income tax on unappropriated<br> earnings				)
Changes<br> in estimate for prior years		)		)		)		)

Deferred income tax
In respect of the<br> current year				)
Effect of tax rate<br> changes
Changes in estimate<br> for prior years						)		)
Effect<br> of foreign currency exchange differences		)		)		)		)

Income<br> tax expense recognized in profit or loss

All values are in US Dollars.

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A reconciliation of income tax expense calculated at the statutory rates and income tax expense recognized in profit or loss was as follows:

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Profit<br> before income tax
Income tax expense calculated<br> at the statutory rates
Nontaxable expense in<br> determining taxable income
Tax-exempt income		)		)		)		)
Additional income tax<br> on unappropriated earnings				)

All values are in US Dollars.

(Continued)

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	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Loss carry-forward<br> and income tax credits currently used		)		)		)		)
Remeasurement of deferred<br> income tax assets, net		)		)		)		)
Changes in estimate<br> for prior periods		)		)		)		)
Withholding<br> tax
Income<br> tax expense recognized in profit or loss

All values are in US Dollars.

(Concluded)

For the year ended December 31, 2017, the Group applied a tax rate of 17% for resident entities subject to the Income Tax Law of the R.O.C. The Income Tax Act in the R.O.C. was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%. The subsidiaries located in China applied tax rate of 25%. For other jurisdictions, the Group measures taxes by using the applicable tax rate for each individual jurisdiction.

In July 2019, the President of the R.O.C. announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. The Group has already deducted the amount of capital expenditure from the unappropriated earnings in 2018 that was reinvested when calculating the tax on unappropriated earnings. However, the Group did not deduct such investment amounts from the undistributed earnings in calculation of income tax on unappropriated earnings in 2019.

b.	Income<br> tax recognized directly in equity
	For<br> the Year Ended December 31
---	---	---	---	---	---
	2017	2018		2019
	NT	NT		NT	US (Note 4)
Deferred<br> income tax
Related<br> to employee share options			)

All values are in US Dollars.

c.	Income<br> tax recognized in other comprehensive income
	For<br> the Year Ended December 31
---	---	---	---	---	---	---	---
	2017		2018	2019
	NT		NT	NT		US (Note 4)
Deferred income tax
Related<br> to remeasurement of defined benefit plans		)
Unrealized loss on equity instruments at fair <br><br>value through other comprehensive income					)		)

All values are in US Dollars.

(Continued)

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	For<br> the Year Ended December 31
	2017		2018	2019
	NT		NT	NT		US (Note 4)
Effect<br> of tax rate changes
Income<br> tax recognized in other comprehensive income		)			)		)

All values are in US Dollars.

(Concluded)

d.	Current<br> tax assets and liabilities
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Current<br> tax assets
Tax refund receivable

All values are in US Dollars.

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Prepaid<br> income tax		473,807		462,523		15,464
	$	524,263	$	553,092	$	18,492
Current tax liabilities
Income<br> tax payable	$	6,781,136	$	4,858,578	$	162,440
e.	Deferred<br> tax assets and liabilities
---	---

The Group offset certain deferred tax assets and deferred tax liabilities which met the offset criteria.

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2017

	Balance<br> at January 1		Recognized<br> in Profit or Loss		Recognized<br> in Other Comprehensive Income		Recognized<br> in Equity	Exchange<br> Differences		Balance<br> at December 31
	NT		NT		NT		NT	NT		NT
Deferred tax assets (liabilities)
Temporary differences
Property, plant and<br> equipment		)		)					)		)
Defined benefit obligation				)		)			)
FVTPL financial instruments		)		)							)
Others				)					)
		)		)		)			)		)
Loss carry-forward				)
Investment<br> credits
		)		)		)			)		)

All values are in US Dollars.

For the year ended December 31, 2018

	Balance<br> at January 1		Adjustment<br> on initial Application of IFRS 15	Recognized<br> in<br> Profit or Loss		Recognized<br> in Other Comprehensive Income	Recognized<br> in <br>Equity	Exchange<br><br> Differences		Acquisitions<br><br> Through Business Combinations		Balance<br> at<br> December 31
	NT		NT	NT		NT	NT	NT		NT		NT
Deferred tax assets (liabilities)
Temporary<br> differences
Property, plant and<br> equipment		)			)				)		)		)
Defined benefit obligation					)

All values are in US Dollars.

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FVTPL financial instruments		(104,903	)		—			284,659			—		—			(137		27,402		207,021
Others		1,028,409			(97,358	)		(26,147	)		—		(1,099	)		74,327		294,540		1,272,672
		(2,175,320	)		(97,358	)		(473,404	)		126,101		(1,099	)		80,928		538,355		(2,001,797	)
Loss<br> carry-forward		681,441			—			(50,059	)		—		—			28,293		12,600		672,275
Investment<br> credits		534,213			—			91,021			—		—			5,932		—		631,166
	$	(959,666	)	$	(97,358	)	$	(432,442	)	$	126,101	$	(1,099	)	$	115,153	$	550,955	$	(698,356	)

For the year ended December 31, 2019

	Balance<br> at January 1		Recognized<br> in Profit or Loss		Recognized<br> in<br> Other Comprehensive Income		Recognized<br> in<br> Equity	Exchange<br> Differences		Acquisitions<br> through Business Combinations		Balance<br> at <br>December 31
	NT		NT		NT		NT	NT		NT		NT
Deferred<br> tax assets (liabilities)
Temporary<br> differences
Property,<br> plant and equipment		)		)					)		)		)
Defined<br> benefit obligation				)					)
FVTPL<br> financial instruments
Others						)			)
		)		)		)			)		)		)
Loss<br> carry-forward				)					)
Investment<br> credits				)					)
		)		)		)			)				)
	Balance<br> at January 1		Recognized<br> in Profit or Loss		Recognized<br> in<br> Other Comprehensive Income		Recognized<br> in<br> Equity	Exchange<br> Differences		Acquisitions<br> through Business Combinations		Balance<br> at <br>December 31
	US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)	US (Note 4)		US (Note 4)		US (Note 4)
Deferred<br> tax assets (liabilities)
Temporary<br> differences
Property,<br> plant and equipment		)		)					)		)		)
Defined<br> benefit obligation				)					)
FVTPL<br> financial instruments
Others						)			)
		)		)		)			)		)		)
Loss<br> carry-forward				)					)
Investment<br> credits				)					)
		)		)		)			)				)

All values are in US Dollars.

f.	Items<br> for which no deferred tax assets have been recognized for loss carry-forward, investment<br> credits and deductible temporary differences
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Loss carry-forward
Investment credits
Deductible<br> temporary differences

All values are in US Dollars.

The unrecognized loss carry-forward will expire through 2030.

g.	Information<br> about unused loss carry-forward, unused investment credits, tax-exemption and other tax<br> relief

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As of December 31, 2019, the unused loss carry-forward comprised of:

Expiry Year	NT	US
		(Note 4)
2020
2021

All values are in US Dollars.

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2022		140,301		4,691
2023		298,669		9,986
2024<br> and thereafter		888,255		29,698
	$	1,509,564	$	50,471

As of December 31, 2019, unused investment credits comprised of:

	Remaining<br> Creditable Amount
Tax Credit Source	NT	US	Expiry Year

Purchase<br> of machinery and equipment			2025
Others			2025 and thereafter

All values are in US Dollars.

As of December 31, 2019, profits attributable to the following expansion projects were exempted from income tax for a 5-year period:

	Tax-exemption Period
Construction<br> and expansion of 2007 by ASE	2016.01-2020.12
Construction<br> and expansion of 2009 by ASE Test Inc.	2018.01-2022.12
Construction<br> and expansion of 2008 by ASE Electronics Inc.	2016.01-2020.12

Some China subsidiaries qualified as high technology enterprises were entitled to a reduced income tax rate of 15% and were eligible to deduct certain times of research and development expenses from their taxable income.

h.	Unrecognized<br> deferred tax liabilities associated with investments

As of December 31, 2018 and 2019, the taxable temporary differences associated with the investments in subsidiaries for which no deferred tax liabilities have been recognized were NT$28,810,874 thousand and NT$27,139,427 thousand (US$907,370 thousand), respectively.

i.	Income<br> tax assessments

The tax returns of the Company and its R.O.C. subsidiaries through 2017 have been examined by the tax authorities.

28.	EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

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Net profit for the year

	For<br> the Year Ended December 31
	2017		2018		2019
	NT		NT		NT		US (Note 4)
Profit for<br> the year attributable to owners of the Company
Effect of potentially<br> dilutive ordinary shares:
From subsidiaries’<br> potentially dilutive ordinary shares		)		)		)		)
From the investments<br> in associates		)
From<br> convertible bonds
Earnings<br> used in the computation of diluted earnings per share

All values are in US Dollars.

Weighted average number of ordinary shares outstanding (in thousand shares):

	For<br> the Year Ended December 31
	2017		2018		2019
Weighted<br> average number of ordinary shares in computation of basic earnings per share		4,080,443		4,245,247		4,251,964
Effect of potentially<br> dilutive ordinary shares:
From convertible bonds		62,456		—		—
From employee share<br> options		19,934		5,103		10,232
From<br> employees’ compensation		21,787		779		570
Weighted<br> average number of ordinary shares in computation of diluted earnings per share		4,184,620		4,251,129		4,262,766

For the computation of earnings per ADS, the denominators were the half of the aforementioned weighted average outstanding shares (1 ADS represents 2 ordinary shares) while the numerators held constant.

The Group is able to settle the employees’ compensation by cash or shares. The Group assumed that the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of ordinary shares outstanding used in the computation of diluted earnings per share if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders approve the number of shares to be distributed to employees at their meeting in following year.

The third unsecured convertible overseas bonds issued by ASE were of anti-dilutive effect for the year ended December 31, 2017 and, therefore, were excluded from the computation of diluted earnings per share for the respective year.

29.	SHARE-BASED PAYMENT ARRANGEMENTS
a.	Employee<br> share option plans of the Company
---	---

The Company’s Option Plan

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In order to attract, retain and reward employees, the Company has its employee share option plan for the Group’s full-time employees and registered 150,000 thousand share options in 2018. Each share option represents the right to purchase one ordinary share of the Company when exercised. Under the terms of the plan, share options are granted at an exercise price equal to or not less than the closing price of the ordinary shares listed on the TSE at the issue date. The right of those share options granted under the plan is valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the second anniversary of the grant date. For any subsequent changes in the Company’s capital structure or when cash dividend per ordinary share exceeds 1.5% of the market price per ordinary share, the exercise price is accordingly adjusted.

ASE’s Option Plans assumed by the Company

ASE had five employee share option plans for the Group’s full-time employees. Each share option represents the right to purchase one ordinary share of ASE when exercised. Under the terms of the plans, share options are granted at an exercise price equal to or not less than the closing price of the ordinary shares listed on the TSE at the issue date. The option rights of these plans are valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the second anniversary of the grant date. For any subsequent changes in ASE’s capital structure, the exercise price was accordingly adjusted. As disclosed in Note 1, the Company assumed ASE’s obligations of outstanding employee share option plans starting from April 30, 2018 and each share option represents the right to purchase 0.5 ordinary share of the Company with all other terms and conditions held constant.

Information about the share option plans that ASE granted for the year ended December 31, 2017 and for the period from January 1, 2018 through April 29, 2018 was as follows:

	For the Year Ended<br> <br>December 31, 2017				For the Period from<br> <br>January 1, 2018 to<br> <br>April 29, 2018
				Weighted				Weighted
				Average				Average
	Number of			Exercise	Number of			Exercise
	Options			Price	Options			Price
	(In			Per Share	(In			Per Share
	Thousands)			(NT)	Thousands)			(NT)
Balance, beginning<br> of period		210,795				135,961
Options forfeited		(5,407	)			(1,692	)
Options expired		(1,790	)			—
Options exercised		(67,637	)			(20,557	)
Options<br> transferred to the Company in accordance with the joint share exchange agreement		—				(113,712	)
Balance,<br> end of period		135,961				—
Options<br> exercisable, end of period		85,642				—

All values are in US Dollars.

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Information about the share option plans that the Company granted and assumed for the period from April 30, 2018 through December 31, 2018 and for the year ended December 31, 2019 was as follows:


			2019
		Weighted				Weighted
		Average				Average
		Exercise	Number of			Exercise
		Price	Options			Price
		Per Share	(In			Per Share
		(NT)	Thousands)			(NT)
Balance, beginning<br> of year	—			183,814
Options assumed on April<br> 30, 2018	56,856			—
Options granted	131,863			—
Options forfeited	(1,582			(4,214	)
Options<br> exercised	(3,323			(8,814	)
Balance,<br> end of year	183,814			170,786
Options<br> exercisable, end of year	36,354			33,822
Fair<br> value of options granted (NT)	16.28-19.12		$	—

All values are in US Dollars.

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The weighted average share prices at exercise dates of share options for the year ended December 31, 2017, the period from January 1, 2018 to April 29, 2018, the period from April 30, 2018 to December 31, 2018, and the year ended December 31, 2019 were NT$37.6, NT$41.0, NT$68.5 and NT$69.3 (US$2.3), respectively. The options granted in 2007 were expired in December 2017 and, therefore, NT$47,087 thousand was reclassified from capital surplus arising from employee share options to capital surplus arising from expired share options.

Information about the outstanding share options that the Company granted and assumed at each balance sheet date was as follows:

	Range of Exercise Price Per Share<br><br> <br>(NT$)	Weighted Average Remaining Contractual Life (Years)
December<br> 31, 2018
ASE<br> 4^th^ share options	40.8-45.2	1.5
ASE<br> 5^th^ share options	73.0	6.7
The<br> Company 1^st^ share options	56.4	9.9
December<br> 31, 2019
ASE<br> 4^th^ share options	40.8-45.2	0.5
ASE<br> 5^th^ share options	73.0	5.7
The<br> Company 1^st^ share options	54.4	8.9
b.	Employee<br> share option plans of subsidiaries
---	---

ASE Mauritius Inc.

ASE Mauritius Inc. has an employee share option plan for full-time employees of the Group which granted 30,000 thousand units in December 2007. Under the terms of the plan, each unit represents the right to purchase one ordinary share of ASE Mauritius Inc. when exercised. The option rights of the plan are valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the second anniversary of the grant date. The option rights of the plan was expired in December 2017, of which shares had not been exercised and, therefore, NT$159,200 thousand was reclassified from non-controlling interest to capital surplus arising from expired employee share options.

Information about share options was as follows:

	For<br> the Year Ended December 31, 2017
	Number of			Exercise
	Options			Price
	(In			Per Share
	Thousands)			(US)
Balance at January 1		28,470
Options forfeited		(250	)
Options expired		(28,220	)
Balance at December 31		—
Options exercisable, end of year		—

All values are in US Dollars.

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USIE

The terms of the plans issued by USIE were the same with those option plans previously granted by ASE.

Information about share options was as follows:

	For<br> the Year Ended December 31
	2017				2018				2019
	Number of<br> <br>Options<br> <br>(In<br> <br>Thousands)			Weighted Average Exercise Price Per<br> Share (US)	Number of<br> <br>Options<br> <br>(In<br> <br>Thousands)			Weighted Average Exercise Price Per<br> Share (US)	Number of<br> <br>Options<br> <br>(In<br> <br>Thousands)			Weighted Average Exercise Price Per<br> Share (US)
Balance at January 1		25,933				25,556				16,711
Options<br> exercised		(377	)			(8,845	)			(8,362	)
Balance<br> at December 31		25,556				16,711				8,349
Options<br> exercisable, end of year		25,556				16,711				8,349

All values are in US Dollars.

Information about USIE’s outstanding share options at each balance sheet date was as follows:

	Range of Exercise Price Per Share<br><br> <br>(US$)	Weighted Average Remaining<br><br> <br>Contractual Life (Years)
December<br> 31, 2018
1^st^ share options	1.5	2.0
2^nd^ and 3^rd^ share<br> options	2.4-2.9	2.1
December<br> 31, 2019
1^st^ share options	1.5	1.0
3^rd^ share options	2.9	1.4

In 2017, 2018 and 2019, the Group’s shareholdings in USIE decreased because USIE’s share options were exercised. The transaction was accounted for as an equity transaction since the Group did not cease to have control over USIE and, as a result, capital surplus was decreased in NT$52,388 thousand, NT$1,239,456 thousand and NT$981,078 thousand (US$32,801 thousand) for the years ended December 31, 2017, 2018 and 2019, respectively.

USISH

Under the share option plan issued in 2015 (“2015 share options”), each unit represents the right to purchase one ordinary share of USISH when exercised. The options are valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the second anniversary of the grant date incorporated with certain performance conditions. For any subsequent changes in USISH’s capital structure, the exercise price is accordingly adjusted.

IIn November 2019, the shareholders’ meeting of USISH approved a share option plan (“2019 share options”) and granted 17,167 thousand share options to its employees. Each unit represents the right to purchase one ordinary share of USISH when exercised. The options are valid for 5 years and are exercisable at certain percentages within 12 months subsequent to the second, third and fourth anniversary of the grant date with the satisfaction of certain performance conditions within each respective vesting period. For any subsequent changes in USISH’s capital structure, the exercisable share option units and the exercise price are accordingly adjusted.

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In addition, in November 2019, the shareholders’ meeting of USISH approved a restricted share plan (“2019 restricted shares”) and granted 6,156 thousand ordinary shares to its directors (excluding independent directors), supervisors and employees. The plan was of 3 phases starting from November 2019 and each phase lasts for 1 year with valid period of 4.5 years, 3.5 years and 2.5 years, respectively. Upon satisfaction of certain performance conditions within each phase, participants are entitled to subscribe a certain percentage of the total USISH’s ordinary shares issued under the plan with a lock-up period of 1 year. For any subsequent changes in USISH’s capital structure, the exercise price is accordingly adjusted.

Information about share options was as follows:

	For<br> the Year Ended December 31
	2017					2018					2019
	Number of			Exercise		Number of			Exercise		Number of		Exercise
	Options			Price		Options			Price		Options		Price
	(In			Per Share		(In			Per Share		(In		Per Share
	Thousands)			(CNY)		Thousands)			(CNY)		Thousands)		(CNY)
Balance at<br> January 1		24,997		$	15.5		22,341		$	15.5		21,537	$	15.5
Options granted		—			—		—			—		23,323		13.3
Options exercised		—			—		—			—		(3,164		15.5
Options<br> forfeited		(2,656	)		15.5		(804	)		15.5		(463		15.4
Balance<br> at December 31		22,341			15.5		21,537			15.5		41,233		14.3
Options<br> exercisable, end of year		8,896			15.5		12,884			15.5		13,694		15.5
Fair<br> value of options granted (CNY)	$	—				$	—					6.27-13.47

All values are in US Dollars.

Information about USISH’s outstanding share options at each balance sheet date was as follows:


December 31, 2018
2015 share options	15.5	6.9
December<br> 31, 2019
2015 share options	15.5	5.9
2019 share options	13.3	4.9
2019 restricted shares	13.3	4.3

The Group’s shareholdings in USISH decreased because the abovementioned 2015 share options were exercised in 2019. The transaction was accounted for as an equity transaction since the Group did not cease to have control over USISH and, as a result, capital surplus increased by NT$105,785 thousand (US$3,537 thousand).

c.	New<br> shares reserved for subscription by employees under cash capital increase

The board of directors of ASE approved the cash capital increase in December 2016 and, as required under the Company Act in the R.O.C., simultaneously granted options to employees to purchase 10% of such newly issued shares. The grant of the options was accounted for as employee options, accordingly a share-based compensation, and was measured at fair value in accordance with IFRS 2. ASE recognized employee benefits expense and capital surplus arising from exercised employee share options of NT$84,000 thousand in full at the grant date (also the vested date), of which 4,836 thousand shares were not exercised and, therefore, NT$13,541 thousand was reclassified from capital surplus arising from exercised employee share options to capital surplus arising from expired share options.

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Information about ASE’s employee share options related to the aforementioned newly issued shares was as follows:

	Number of Options<br> <br>(In Thousand)
Options granted for the year ended 2017		30,000
Options exercised for the year ended 2017		25,164
Fair value of options granted		NT$2.80 per share

Fair value was measured using the Black-Scholes Option Pricing Model and the inputs to the model were as follows:

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Share price at the grant date	NT36.55 per share
Exercise price	NT34.30 per share
Expected volatility (%)
Expected lives
Expected dividend yield
Risk free interest rate (%)

All values are in US Dollars.

d.	The<br> fair value of USISH’s 2019 restricted shares were measured at the grant date by<br> using the Black-Scholes Option Pricing Model incorporated with the effect of the lock-up<br> period, while the fair value of USISH’s 2019 share options and the Company’s<br> 1^st^share options granted in 2019 and 2018, respectively, were measured at<br> the grant date by using the trinomial tree model. The inputs to the models were as follows:
	The<br> Company 1^st^share options	USISH<br><br> <br>2019<br> share options	USISH<br><br> <br>2019<br> restricted shares
---	---	---	---
Share<br> price at the grant date	NT$58.80<br> per share	CNY15.84<br> per share	CNY16.30<br> per share
Exercise<br> price	NT$56.40<br> per share	CNY13.34<br> per share	CNY13.34<br> per share
Expected<br> volatility (%)	27.77-28.86	45.07-51.80	47.77
Expected<br> lives	4.8<br> years-7.0 years	3.0<br> years-5.0 years	-
Expected<br> dividend yield	-	-	-
Risk<br> free interest rate (%)	0.73-0.80	2.80-2.97	2.70

Expected volatilities were based on ASE’s, the Company’s and USISH’s historical share prices annualized volatilities.

For the years ended December 31, 2017, 2018 and 2019, employee benefits expense recognized on the aforementioned employee share option plans and the restricted share plan were NT$354,765 thousand, NT$215,648 thousand and NT$871,699 thousand (US$29,144 thousand), respectively.

30.	BUSINESS COMBINATIONS
a.	Subsidiaries<br> acquired
---	---
	Principal<br> Activity	Date<br> of Acquisition	Proportion<br> of Voting Equity Interests Acquired (%)	Consideration<br> Transferred
---	---	---	---	---	---
				NT	US (Note<br> 4)
SPIL	Engaged<br> in the assembly, testing and turnkey services of integrated circuits	April<br> 30, 2018	100.00
AMPI	Engaged<br> in the manufacturing of integrated circuit	April<br> 30, 2019	50.97
ASEEE	Engaged<br> in the production of embedded substrate	April<br> 26, 2019	51.00
UGPL	Engaged<br> in designing, miniaturization, material sourcing, manufacturing, logistics, and after services of electronic devices and modules	October<br> 31, 2019	60.00

All values are in US Dollars.

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As disclosed in Note 1, the Company acquired 100% shareholdings of SPIL at NT$51.2 in cash per SPIL’s ordinary share in accordance with the joint share exchange agreements between ASE and SPIL.

As disclosed in Note 14, the Group obtained control over AMPI and ASEEE in April 2019, respectively.

In October 2019, The Group’s subsidiary, Universal Global Electronics Co., Ltd., acquired 60% shareholdings of UGPL with a total consideration based on independent professional appraisal reports.

a.	Assets<br> acquired and liabilities assumed at the date of acquisition
	SPIL		AMPI	ASEEE	UGPL
---	---	---	---	---	---
	NT		NT	NT	NT
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and<br> equipment
Intangible assets
Others
Liabilities
Trade and other payables		)
Borrowings and bonds payables		)
Others		)
Fair<br> value of identifiable net assets acquired


Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and<br> equipment
Intangible assets
Others
Liabilities
Trade and other payables
Borrowings and bonds payables
Others
Fair<br> value of identifiable net assets acquired

All values are in US Dollars.

The initial accounting for the acquisition of UGPL was tentative as of December 31, 2019. In addition, a call option on the remaining 40% non-controlling interests was also stipulated in the equity transfer agreement and recognized by the Group under the line item of financial assets at FVTPL.

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b.	Non-controlling<br> interest

Non-controlling interests of SPIL were measured at fair value at the acquisition date by using market approach based on the valuation multiples of comparable companies and the discount rate for lack of marketability. The significant unobservable inputs is the discount rate for lack of marketability of 25%.

Non-controlling interests of AMPI and ASEEE were measured at their proportionate share of the fair value of AMPI’s and ASEEE’s identifiable net assets, respectively.

Non-controlling interests of UGPL were measured at fair value at the acquisition date by using market approach incorporating transaction prices of comparable companies and the discount rate for lack of control. The significant unobservable inputs is the discount rate for lack of control of 31%. As aforementioned, such non-controlling interests measurements were tentative as of December 31, 2019.

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c.	Goodwill<br> recognized on acquisitions
	SPIL		AMPI		ASEEE		UGPL
---	---	---	---	---	---	---	---	---
	NT		NT		NT		NT
Consideration<br> transferred
Add: Fair value of<br> investments previously owned
Add: Non-controlling<br> interests
Less: Fair value of<br> identifiable net assets acquired		)		)		)		)
Goodwill<br> recognized on acquisition

All values are in US Dollars.

	AMPI		ASEEE		UGPL
		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)
Consideration<br> transferred	$	8,358	$	—	$	10,467
Add: Fair value of<br> investments previously owned		10,563		3,932		—
Add: Non-controlling<br> interests		13,932		3,526		4,764
Less: Fair value of<br> identifiable net assets acquired		(28,414		(7,196		(11,073
Goodwill<br> recognized on acquisition	$	4,439	$	262	$	4,158

All values are in US Dollars.

The goodwill form acquisitions mainly represents the control premium. In addition, the consideration paid for acquisitions effectively included amounts attributed to the benefits of expected synergies, such as revenue growth and future market expansions. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The goodwill recognized on acquisition is not expected to be deductible for tax purpose.

As of December 31, 2019, the Group has completed the identification of the difference between the cost of the investment and the Group’s share of the net fair value of identifiable assets and liabilities of AMPI and ASEEE. Due to the necessary valuations and calculations not yet finalized, the initial accounting for the acquisition of UGPL was tentative based on the Group’s and the independent professional’s best estimates as of December 31, 2019.

d.	Net<br> cash outflow (inflow) on acquisition of subsidiaries
	SPIL		AMPI		ASEEE		UGPL
---	---	---	---	---	---	---	---	---
	NT		NT		NT		NT
Consideration paid in cash
Less: Payable for<br> consideration representing the ordinary shares originally held by ASE		)
Less:<br> Cash and cash equivalent acquired		)		)		)		)
Net<br> cash outflow (inflow) on acquisition of subsidiaries				)		)

All values are in US Dollars.

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	AMPI		ASEEE		UGPL
		US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)
Consideration<br> paid in cash	$	8,358	$	—	$	10,467
Less: Cash and cash equivalent acquired		(11,685		(775		(3,635
Net cash outflow (inflow) on acquisition<br> of subsidiaries	$	(3,327	$	(775	$	6,832

All values are in US Dollars.

e.	Impact<br> of acquisitions on the results of the Group

The results of operations since the acquisition date were included in the consolidated statements of comprehensive income and were as follows:

	SPIL<br> (For<br> the Period from April 30, 2018 through December 31, 2018)	AMPI<br> (For<br> the Period from April 30, 2019 through December 31, 2019)		ASEEE<br> (For<br> the Period from April 26, 2019 through December 31, 2019)		UGPL<br> (For the Period from October 31, 2019 through December 31, 2019)
	NT	NT		NT		NT
Operating revenue					)
Net profit (loss)			)		)		)

All values are in US Dollars.

	AMPI<br> (For<br> the Period from April 30, 2019 through December 31, 2019)		ASEEE<br> (For<br> the Period from April 26, 2019 through December 31, 2019)		UGPL<br> (For the Period from October 31, 2019 through December 31, 2019)
	US (Note 4)		US (Note 4)		US (Note 4)
Operating revenue				)
Net loss		)		)		)

All values are in US Dollars.

Had these business combinations been in effect at the beginning of each annual reporting period and the investments originally accounted for using the equity method, as disclosed in Notes 14 and 26, been remeasured to their fair value as of January 1 of each respective annual reporting period, the Group’s operating revenues and profit for the year would have been NT$397,261,461 thousand and NT$25,687,447 thousand for the year ended December 31, 2018, and NT$413,782,708 thousand (US$13,834,260 thousand) and NT$18,030,506 thousand (US$602,825 thousand) for the year ended December 31, 2019, respectively. This pro-forma information is for illustrative purposes only and is not necessarily an indication of the operating revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed at the beginning of each annual reporting period, nor is it intended to be a projection of future results.

In determining the pro-forma operating revenue and profit for the year had each subsidiary been acquired at the beginning of each respective annual reporting period, the management:

1)	Calculated<br> the depreciation of property, plant and equipment and the amortization of intangible<br> assets acquired on the basis of the fair values at the initial accounting for the business<br> combination rather than the carrying amounts recognized in the respective pre-acquisition<br> financial statements; and

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2)	Calculated<br> borrowing costs based on the funding status, credit ratings and debt/equity ratios of<br> the Group after the business combination.
31.	DISPOSAL OF SUBSIDIARIES
---	---

The Group disposed of its subsidiary, Kun Shan Ding Yue Real Estate Development Co., Ltd. (“KSDY”), in June 2017 and, as a result, the Group lost its control over KSDY.

a.	Gain<br> on disposal of subsidiaries
	NT
---	---	---
Total consideration
Net assets disposed of		)
Gain on disposal of KSDY

All values are in US Dollars.

b.	Analysis<br> of assets and liabilities on the date control was lost
	NT
---	---
Current assets
Cash and cash equivalents
Inventories related<br> to real estate business
Net assets disposed of

All values are in US Dollars.

32.	EQUITY TRANSACTION WITH NON-CONTROLLING INTERESTS
a.	USIE
---	---

In January 2018, the shareholders’ meeting of USIE resolved to repurchase its own outstanding 3,738 thousand ordinary shares at US$17.49 per share, and, as a result, the Group’s shareholdings in USIE increased from 96.9% to 98.6%. The transaction was accounted for as an equity transaction since the transaction did not change the Group’s control over USIE and capital surplus decreased by NT$1,127,632 thousand in 2018. In February 2018, the board of directors of USIE resolved February 26, 2018 was the record date for capital reduction and then the repurchased ordinary shares were subsequently cancelled.

In July 2019, the shareholders’ meeting of USIE resolved to repurchase its own outstanding 7,378 thousand ordinary shares at US$14.30 per share, and, as a result, the Group’s shareholdings in USIE increased from 95.42% to 98.72%. The transaction was accounted for as an equity transaction since the transaction did not change the Group’s control over USIE and capital surplus decreased by NT$1,625,448 thousand (US$54,345 thousand) in 2019. In July 2019, the board of directors of USIE resolved July 23, 2019 was the record date for capital reduction and then the repurchased ordinary shares were subsequently cancelled.

b.	ASEN<br> and SZ

In March 2018, ASE’s board of directors resolved to acquire 40% shareholdings of ASEN from NXP B.V. at US$127,113 thousand by its subsidiary, J&R Holding. In addition, in August 2018, J&R Holding’s board of directors further resolved to sell 30% shareholdings of ASEN to Beijing Unis Capital Management Co., Ltd. at US$95,335 thousand. The aforementioned transaction resulted the Group’s shareholdings in ASEN to increase from 60% to 70%, and such transactions were accounted for as an equity transaction since the Group did not cease to have control over ASEN. The Group recognized a decrease in capital surplus by NT$622,811 thousand in 2018.

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In July 2019, ASE’s board of directors resolved to acquire 30% shareholdings of ASEN from Beijing Unis Capital Management Co., Ltd. at US$97,748 thousand by its subsidiary, J&R Holding. In addition, in July 2019, SPIL’s board of directors also resolved to acquire 30% shareholdings of SZ from Tibet Zixi Electronic Technology Co., Ltd. at US$162,870 thousand by its subsidiary, SPIL (Cayman) Holding Limited. Both the aforementioned transactions resulted the Group’s shareholdings in ASEN and SZ to increase from 70% to 100%, and such transactions were accounted for as an equity transaction since the Group did not cease to have control over ASEN and SZ. The Group recognized a decrease in capital surplus by NT$2,650,950 thousand (US$88,631 thousand) in 2019.

c.	ASEEE

As disclosed in Note 14, ASE purchased ASEEE’s 150,000 thousand ordinary shares at par value through its capital increase by cash at NT$1,500,000 thousand (US$50,150 thousand) in May 2019. In July 2019, ASE further purchased all of ASEEE’s ordinary shares held by TDK in the amount of US$6,000 thousand. The Group eventually held 100% shareholdings of ASEEE and recognized a decrease in capital surplus by NT$128,805 thousand (US$4,306 thousand).

d.	Others

In January 2017, USI completed its cash capital increase of NT$1,000,000 thousand and the Group’s shareholdings in USI increased from 75.2% to 75.7% since the Group did not proportionally subscribe for additional new shares. The transaction was accounted for as an equity transaction since the transaction did not change the Company’s control over USI and capital surplus increased by NT$3,055 thousand in 2017.

In July 2018, ASE and UGTW’s board of directors have approved to acquire the outstanding ordinary shares of USIINC and USI at NT$35 and NT$18 per ordinary shares, respectively. ASE and UGTW also purchased the ordinary shares from dissenting shareholders in August 2018 and recognized an increase in capital surplus by NT$9,530 thousand. UGTW and ASE completed the acquisition of USI and USIINC’s remaining outstanding ordinary shares in 2018 and 2019, respectively, and recognized a decrease in capital surplus by NT$28,152 thousand in 2018 and an increase in capital surplus by NT$142 thousand (US$5 thousand) in 2019.

USISH repurchased its own 13,037 thousand outstanding ordinary shares during the year ended December 31, 2019 and, as a result, the Group’s shareholdings in USISH increased from 74.6% to 77.7%. The transaction was accounted for as an equity transaction since the Group did not cease to have control over USISH and capital surplus decreased by NT$334,719 thousand (US$11,191 thousand).

33.	CASH FLOWS INFORMATION
a.	Non-cash<br> investing activities
---	---

In addition to other notes, the Group entered into the following non-cash investing activities which were not reflected in the consolidated statements of cash flows

	For<br> the Year Ended December 31
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Payments<br> for property, plant and equipment
Purchase of property,<br> plant and equipment

All values are in US Dollars.

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Increase in other<br> non-current assets	$	90,560		$	402,255		$	68,560		$	2,292
Decrease (increase)<br> in other payables		982,260			1,942,259			(6,254,579	)		(209,113	)
Capitalized<br> borrowing costs		(51,262	)		(50,309	)		(77,715	)		(2,598	)
	$	24,699,240		$	41,386,443		$	56,810,153		$	1,899,370
Proceeds from disposal<br> of property, plant and equipment
Consideration from<br> disposal of property, plant and equipment	$	1,487,334		$	1,133,435		$	441,444		$	14,759
Decrease<br> (increase) in other receivables		876			(5,791	)		7,495			251
	$	1,488,210		$	1,127,644		$	448,939		$	15,010
Payments for investment<br> properties
Purchase of investment properties	$	186,535		$	125,853		$	2,532		$	85
Capitalized<br> borrowing costs		(13	)		(89	)		—			—
	$	186,522		$	125,764		$	2,532		$	85
Payments for other intangible<br> assets
Purchase of other intangible<br> assets	$	277,825		$	537,659		$	1,350,908		$	45,166
Decrease<br> in other payables		60,159			40,106			60,160			2,011
	$	337,984		$	577,765		$	1,411,068		$	47,177
Net cash inflow from<br> disposal of subsidiaries
Consideration from<br> disposal of subsidiaries	$	7,046,464		$	—		$	—		$	—
Increase in other payables		3,552			—			—			—
Cash<br> and cash equivalents disposed of		(29,133	)		—			—			—
	$	7,020,883		$	—		$	—		$	—

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b.	Changes<br> in liabilities arising from financing activities

For the year ended December 31, 2017

	Short-term<br> borrowings		Bonds<br> payable		Long-term<br> borrowings		Total
	NT		NT		NT		NT
Balance at January 1, 2017
Financing cash flows		)		)		)		)
Non-cash changes
Bonds conversion				)				)
Amortization of issuance cost
Effects<br> of foreign currency exchange		)		)		)		)
Balance at December 31, 2017

All values are in US Dollars.

For the year ended December 31, 2018

	Short-term<br> Borrowings		Bonds<br> Payable		Long-term<br> Borrowings	Total
	NT		NT		NT	NT
Balance at January 1, 2018
Net financing cash flows				)
Non-cash changes
Acquisition through<br> business combinations (Note 30)
Bonds conversion				)			)
Reclassification for the application of IFRS<br> 9		)					)
Amortization of issuance cost
Effects of foreign currency<br> exchange
Balance at December 31, 2018

All values are in US Dollars.

For the year ended December 31, 2019

	Short-term<br> Borrowings (including financial liabilities for hedging)		Bonds<br> Payable			Lease Liabilities		Total
		NT		NT	NT		NT		NT
Balance at January 1, 2019	$	47,163,103	$	16,985,936	137,898,329	$	—	$	202,047,368
Adjustments<br> on initial application of IFRS 16 (Note 3)		—		—	—		6,084,729		6,084,729
Adjusted balance at January<br> 1, 2019		47,163,103		16,985,936	137,898,329		6,084,729		208,132,097
Net financing cash flows		(4,683,142		19,279,033	1,144,731		(636,556		15,104,066
Interest under operating activities		—		—	—		1,766		1,766
Non-cash changes
Lease liabilities		—		—	—		536,216		536,216
Acquisition through business<br> combinations (Note 30)		656,820		245,664	1,523,968		81,649		2,508,101
Amortization of issuance cost		—		11,522	189,151		—		200,673
Lease modifications		—		—	—		(239,321		(239,321
Reclassification of borrowings<br> from short-term to long-term		(1,499,000		—	1,499,000		—		—
Effects of foreign currency<br> exchange		(1,065,452		—	(1,176,581		(19,559		(2,261,592
Balance at December 31, 2019	$	40,572,329	$	36,522,155	141,078,598	$	5,808,924	$	223,982,006

All values are in US Dollars.

	Short-term<br> Borrowings (including financial liabilities for hedging)		Bonds<br> Payable			Lease Liabilities		Total
		US<br> (Note 4)		US<br> (Note 4)	US<br> (Note 4)		US<br> (Note 4)		US<br> (Note 4)
Balance at January 1, 2019	$	1,576,834	$	567,902	4,610,442	$	—	$	6,755,178
Adjustments<br> on initial application of IFRS 16 (Note 3)		—		—	—		203,435		203,435
Adjusted<br> balance at January 1, 2019		1,576,834		567,902	4,610,442		203,435		6,958,613
Net<br> financing cash flows		(156,574		644,568	38,272		(21,282		504,984
Interest<br> under operating activities		—		—	—		59		59
Non-cash<br> changes
Lease liabilities		—		—	—		17,928		17,928
Acquisition through business<br> combinations (Note 30)		21,960		8,213	50,952		2,730		83,855
Amortization of issuance<br> cost		—		385	6,324		—		6,709
Lease modifications		—		—	—		(8,002		(8,002
Reclassification of<br> borrowings from short-term to long-term		(50,117		—	50,117		—		—
Effects of foreign currency<br> exchange		(35,622		—	(39,338		(654		(75,614
Balance at December 31, 2019	$	1,356,481	$	1,221,068	4,716,769	$	194,214	$	7,488,532

All values are in US Dollars.

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34.	CAPITAL MANAGEMENT

The capital structure of the Group consists of debt and equity. The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. Key management personnel of the Group periodically reviews the cost of capital and the risks associated with each class of capital. In order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

The Group is not subject to any externally imposed capital requirements except those discussed in Note 21.

35.	FINANCIAL INSTRUMENTS
a.	Fair<br> value of financial instruments that are not measured at fair value
---	---
1)	Fair<br> value of financial instruments not measured at fair value but for which fair value is<br> disclosed
---	---

Except bonds payable measured at amortized cost, the management considered that the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values. The carrying amounts and fair value of bonds payable as of December 31, 2018 and 2019, respectively, were as follows:

	Carrying<br> Amount		Fair<br> Value
	NT	US (Note 4)	NT	US (Note 4)
December 31, 2018
December 31, 2019

All values are in US Dollars.

2)	Fair<br> value hierarchy

The aforementioned fair value hierarchy of bonds payable was Level 3 which was determined based on discounted cash flow analysis with the applicable yield curve for the duration. The significant unobservable inputs is discount rates that reflected the credit risk of various counterparties.

b.	Fair<br> value of financial instruments that are measured at fair value on a recurring basis
1)	Fair<br> value hierarchy
---	---
	Level<br> 1	Level<br> 2	Level<br> 3	Total
---	---	---	---	---
	NT	NT	NT	NT
December 31, 2018
Financial assets at<br> FVTPL
Derivative financial<br> assets
Swap contracts
Forward exchange contracts
Non-derivative financial<br> assets
Quoted ordinary shares
Open-end mutual funds
Unquoted preferred<br> shares
Private-placement<br> funds
Hybrid financial assets
Private-placement<br> convertible bonds

Financial assets at<br> FVTOCI
Investments in equity<br> instruments
Unquoted ordinary<br> shares
Limited partnership
Investments in debt<br> instruments
Unsecured<br> subordinate corporate bonds

Financial liabilities<br> at FVTPL
Derivative financial<br> liabilities
Swap contracts
Forward<br> exchange contracts

All values are in US Dollars.

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	Level<br> 1		Level<br> 2		Level<br> 3		Total
	NT	US (Note<br> 4)	NT	US (Note<br> 4)	NT	US (Note<br> 4)	NT	US (Note<br> 4)
December<br> 31, 2019
Financial<br> assets at FVTPL
Derivative<br> financial assets
Forward<br> exchange contracts
Swap<br> contracts
Call<br> option
Non-derivative<br> financial assets
Quoted<br> ordinary shares
Open-end<br> mutual funds
Private-placement<br> funds
Unquoted<br> preferred shares

Financial<br> assets at FVTOCI
Investments<br> in equity instruments
Unquoted<br> ordinary shares
Unquoted<br> preferred shares
Limited<br> partnership
Investments<br> in debt instruments
Unsecured<br> subordinate corporate bonds
Trade<br> receivables, net

Financial<br> liabilities at FVTPL
Derivative<br> financial liabilities
Swap<br> contracts
Forward<br> exchange contracts

All values are in US Dollars.

For the financial assets and liabilities that were measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2018 and 2019.

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2)	Reconciliation<br> of Level 3 fair value measurements of financial assets

For the year ended December 31, 2018

	Financial<br> Assets at FVTPL		Financial<br> Assets at FVTOCI				Total
Financial Assets	Equity<br> Instruments		Equity<br> Instruments		Debt<br> Instruments
	NT		NT		NT		NT
Balance at<br> January 1
Recognized in profit or<br> loss		)						)
Recognized in other comprehensive<br> income (included in unrealized losses on financial assets at FVTOCI)				)		)		)
Purchases
Disposals				)				)
Balance<br> at December 31

All values are in US Dollars.

For the year ended December 31, 2019

	FVTPL				FVTOCI
Financial<br> Assets	Equity<br> Instruments				Equity<br> Instruments				Debt<br> Instruments				Total
	NT		US (Note<br> 4)		NT		US (Note<br> 4)		NT		US (Note<br> 4)		NT		US (Note<br> 4)
Balance<br> at January 1
Recognized in profit or loss
Recognized<br> in other comprehensive income
Included<br> in unrealized losses on financial assets at FVTOCI						)		)		)		)		)		)
Effects<br> of foreign currency exchange		)		)		)		)						)		)
Net increase in trade receivables
Trade receivables factoring										)		)		)		)
Purchases
Disposals						)		)						)		)
Balance at December 31

All values are in US Dollars.

(Concluded)

3)	Valuation<br> techniques and assumptions applied for the purpose of measuring fair value
a)	Valuation<br> techniques and inputs applied for the purpose of measuring Level 2 fair value measurement
---	---
Financial Instruments	Valuation Techniques and Inputs
---	---
Derivatives<br> - swap contracts and forward exchange contracts	Discounted<br> cash flows - Future cash flows are estimated based on observable forward exchange rates at balance sheet dates and contract<br> forward exchange rates, discounted at rates that reflected the credit risk of various counterparties.
Private-placement<br> convertible bonds	Discounted<br> cash flows - Future cash flows are estimated based on observable stock prices at balance sheet<br> dates<br><br> <br><br><br> <br>and<br> contract conversion prices, discounted at rates that reflected the credit risk of various counterparties.
b)	Valuation<br> techniques and inputs applied for the purpose of measuring Level 3 fair value measurement
---	---

The fair value of unquoted ordinary shares, unquoted preferred shares, limited partnership and private-placement funds were determined by using market approach and asset-based approach. The significant unobservable inputs were the discount rates for lack of marketability of 20% to 30%. If the discount rates for lack of marketability to the valuation model increased by 1% to reflect reasonably possible alternative assumptions while all other variables held constant, the fair value of unquoted shares would have decreased approximately by NT$7,700 thousand and NT$7,200 thousand (US$241 thousand) as of December 31, 2018 and 2019, respectively.

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The fair values of the unsecured subordinate corporate bonds were determined using income approach based on a discounted cash flow analysis. The significant unobservable input was the discount rate that reflects the credit risk of the counterparty. If the discount rate increased by 0.1% while all other variables held constant, the fair value of the bonds would have decreased approximately by NT$7,000 thousand and NT$6,000 thousand (US$201 thousand) as of December 31, 2018 and 2019, respectively.

The fair value of accounts receivables measured at FVTOCI are determined based on the present value of future cash flows that reflect the credit risk of counterparties. Since the discount effect was not significant, the Group measured its fair value by using the nominal values.

The fair value of the call option was determined using Black-Scholes Options Pricing Model, of which the significant unobservable input was the discount rate for lack of marketability of 20%. If the discount rate increased by 0.1% while all other variables held constant, the fair value of the call option would have decreased approximately by NT$855 thousand (US$29 thousand) as of December 31, 2019.

c.	Categories<br> of financial instruments
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Financial<br> assets
FVTPL
Mandatorily<br> at FVTPL
Measured at amortized<br> cost (Note 1)
FVTOCI
Equity instruments
Debt instruments
Trade receivables, net
Financial<br> liabilities
FVTPL
Held for trading
Financial liabilities for hedging
Measured at amortized cost (Note 2)

All values are in US Dollars.

Note 1: The balances included financial assets measured at amortized cost which comprised cash and cash equivalents, trade and other receivables and other financial assets.

Note 2: The balances included financial liabilities measured at amortized cost which comprised short-term borrowings, trade and other payables, bonds payable and long-term borrowings.

d.	Financial<br> risk management objectives and policies

The derivative instruments used by the Group were to mitigate risks arising from ordinary business operations. All derivative transactions entered into by the Group were designated as either hedging or trading. Derivative transactions entered into for hedging purposes must hedge risk against fluctuations in foreign exchange rates and interest rates arising from operating activities. The currencies and the amount of derivative instruments held by the Group must match its hedged assets and liabilities denominated in foreign currencies.

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The Group’s risk management department monitored risks to mitigate risk exposures, reported unsettled position, transaction balances and related gains or losses to the Group’s chief financial officer on monthly basis.

1)	Market<br> risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. Gains or losses arising from fluctuations in foreign currency exchange rates of a variety of derivative financial instruments were approximately offset by those of hedged items. Interest rate risk was not significant due to the cost of capital was expected to be fixed.

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

a)	Foreign<br> currency exchange rate risk

The Group had sales and purchases as well as financing activities denominated in foreign currency which exposed the Group to foreign currency exchange rate risk. The Group entered into a variety of derivative financial instruments to hedge foreign currency exchange rate risk to minimize the fluctuations of assets and liabilities denominated in foreign currencies.

The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities (including those eliminated upon consolidation) as well as derivative instruments which exposed the Group to foreign currency exchange rate risk at each balance sheet date are presented in Note 40.

The Group was mainly subject to the impact from the exchange rate fluctuation in US$ and JPY against NT$ or CNY. 1% is the sensitivity rate used when reporting foreign currency exchange rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign currency exchange rates. The sensitivity analysis included financial assets and liabilities and inter-company receivables and payables within the Group. The changes in profit before income tax due to a 1% change in US$ and JPY both against NT$ and CNY would be NT$101,000 thousand, NT$129,000 thousand and NT$82,000 thousand (US$2,742 thousand) for the years ended December 31, 2017, 2018 and 2019, respectively. Hedging contracts and hedged items have been taken into account while measuring the changes in profit before income tax. The abovementioned sensitivity analysis mainly focused on the foreign currency monetary items at the end of each year. As the year-end exposure did not reflect the exposure for the years ended December 31, 2017, 2018 and 2019, the abovementioned sensitivity analysis was unrepresentative of those respective years.

Hedge accounting

The Group’s hedging strategy was to lift foreign currency borrowings to avoid 100% exchange rate exposure from its equity instruments denominated in foreign currency, which was designated as fair value hedges. Hedge adjustments were made to totally offset the foreign exchange gains or losses from those equity instruments denominated in foreign currency when they were evaluated based on the exchange rates on each balance sheet date.

The source of hedge ineffectiveness in these hedging relationships was the material difference between the notional amounts of borrowings denominated in foreign currency and the cost of those equity instruments denominated in foreign currency. No other sources of ineffectiveness is expected to emerge from these hedging relationships.

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b)	Interest<br> rate risk

Except a portion of long-term borrowings and bonds payable at fixed interest rates, the Group was exposed to interest rate risk because group entities borrowed funds at floating interest rates. Changes in market interest rates led to variances in effective interest rates of borrowings from which the future cash flow fluctuations arise. The Group utilized financing instruments with low interest rates and favorable terms to maintain low financing cost, adequate banking facilities, as well as to hedge interest rate risk.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at each balance sheet date were as follows:

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	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Fair value interest<br> rate risk
Financial liabilities
Cash flow interest<br> rate risk
Financial assets
Financial liabilities

All values are in US Dollars.

For assets and liabilities with floating interest rates, a 100 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel. If interest rates had been 100 basis points (1%) higher or lower and all other variables held constant, the Group’s profit before income tax for the years ended December 31, 2017, 2018 and 2019 would have decreased or increased approximately by NT$24,000 thousand, NT$1,398,000 thousand and NT$1,232,000 thousand (US$41,190 thousand), respectively. Hedging contracts and hedged items have been taken into account while measuring the changes in profit before income tax. The abovementioned sensitivity analysis mainly focused on the interest rate items at the end of each year. As the year-end exposure did not reflect the exposure for the years ended December 31, 2017, 2018 and 2019, the abovementioned sensitivity analysis was unrepresentative of those respective periods.

c)	Other<br> price risk

The Group was exposed to equity price risk through its investments in financial assets at FVTPL (except swap contracts and forward exchange contracts) and financial assets at FVTOCI. If equity price was 1% higher or lower, profit before income tax for the years ended December 31, 2017, 2018 and 2019 would have increased or decreased approximately by NT$52,000 thousand, NT$64,000 thousand and NT$51,000 thousand (US$1,705 thousand), respectively, and other comprehensive income before income tax for the years ended December 31, 2017, 2018 and 2019 would have increased or decreased approximately by NT$13,000 thousand, NT$16,000 thousand and NT$8,000 thousand (US$267 thousand), respectively.

2)	Credit<br> risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s credit risk arises from cash and cash equivalents, trade and other receivables and other financial assets. The Group’s maximum exposure to credit risk was the carrying amounts of financial assets in the consolidated balance sheets.

As of December 31, 2018 and 2019, the Group’s five largest customers accounted for 36% and 37% of trade receivables, respectively. The Group transacts with a large number of unrelated customers and, thus, no concentration of credit risk was observed.

3)	Liquidity<br> risk

The Group manages liquidity risk by maintaining adequate working capital and banking facilities to fulfill the demand for cash flow used in the Group’s operation and capital expenditure. The Group also monitors its compliance with all the loan covenants. Liquidity risk is not considered to be significant.

In the table below, financial liabilities with a repayment on demand clause were included in the earliest time band regardless of the probability of counter-parties choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

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To the extent that interest flows are floating rate, the undiscounted amounts were derived from the interest rates at each balance sheet date.

December 31, 2018

	On<br> Demand or Less than 1<br> Month	1<br> to 3 Months	3<br> Months to 1<br> Year	1<br> to 5 Years	More<br> than 5<br> Years
	NT	NT	NT	NT	NT
Non-derivative financial liabilities
Non-interest bearing
Floating interest rate liabilities
Fixed interest rate liabilities

All values are in US Dollars.

December 31, 2019

	On<br> Demand or Less than 1<br> Month	1<br> to 3 Months	3<br> Months to 1<br> Year	1<br> to 5 Years	More<br> than 5<br> Years
	NT	NT	NT	NT	NT
Non-derivative financial liabilities
Non-interest bearing
Obligation under leases
Floating interest rate liabilities
Fixed interest rate liabilities

All values are in US Dollars.

	On<br> Demand or Less than 1<br> Month	1<br> to 3 Months	3<br> Months to 1<br> Year	1<br> to 5 Years	More<br> than 5<br> Years
	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)
Non-derivative financial liabilities
Non-interest bearing
Obligation under leases
Floating interest rate liabilities
Fixed interest rate liabilities

All values are in US Dollars.

Further information for maturity analysis of obligation under leases was as follows:

	Less<br> than 1<br> Year	1<br> to 5 Years	5<br> to 10 Years	10<br> to 15 Years	15<br> to 20 Years	More<br> than 20<br> Years
	NT	NT	NT	NT	NT	NT
Obligation<br> under leases

All values are in US Dollars.

	Less<br> than 1<br> Year	1<br> to 5 Years	5<br> to 10 Years	10<br> to 15 Years	15<br> to 20 Years	More<br> than 20<br> Years
	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)	US (Note 4)
Obligation<br> under leases

All values are in US Dollars.

The amounts included above for floating interest rate instruments for non-derivative financial liabilities were subject to change if changes in floating interest rates differ from those estimates of interest rates determined at each balance sheet date.

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The following table detailed the Group’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments settled on a net basis, and the undiscounted gross cash inflows and outflows on those derivatives that require gross settlement. When the amounts payable or receivable are not fixed, the amounts disclosed have been determined by reference to the projected interest rates as illustrated by the yield curves at each balance sheet date.

	On<br> Demand or Less than 1<br> Month		1<br> to 3 Months		3<br> Months to 1<br> Year
	NT		NT		NT
December 31, 2018
Net settled
Forward exchange<br> contracts
Gross settled
Forward exchange contracts
Inflows
Outflows		)		)

Swap contracts
Inflows
Outflows		)		)		)

All values are in US Dollars.

	On<br> Demand or Less than 1<br> Month		1<br> to 3 Months		3<br> Months to 1<br> Year
	NT		NT		NT
December 31, 2019
Net settled
Forward exchange<br> contracts		)		)
Gross settled
Forward exchange contracts
Inflows
Outflows		)		)		)

Swap contracts
Inflows
Outflows		)		)		)
				)		)
						)

All values are in US Dollars.

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	On<br> Demand or Less than 1<br> Month		1<br> to 3 Months		3<br> Months to 1<br> Year
	US (Note 4)		US (Note 4)		US (Note 4)
December 31, 2019
Net settled
Forward<br> exchange contracts		)		)

All values are in US Dollars.

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Gross settled
Forward exchange contracts
Inflows		310,803			147,784			7,701
Outflows		(309,205	)		(146,843	)		(7,618	)
		1,598			941			83
Swap contracts
Inflows		340,595			502,345			1,147,680
Outflows		(339,818	)		(502,594	)		(1,162,616	)
		777			(249	)		(14,936	)
	$	2,375		$	692		$	(14,853	)
36.	RELATED<br> PARTY TRANSACTIONS
---	---

Balances and transactions within the Group had been eliminated upon consolidation. Details of transactions between the Group and other related parties were disclosed as follows:

a.	Related<br> parties

In addition to those disclosed in Note 14, the related parties were as follows:

Related Parties	Relationship with the Company
ASE<br> Cultural and Educational Foundation	Substantial<br> related party
b.	The<br> Group contributed NT$100,000 thousand (US$3,343 thousand) to ASE Cultural and Educational<br> Foundation in 2017, 2018 and 2019, respectively, for environmental charity in promoting<br> the related domestic environmental protection and public service activities (Note 38).
---	---
c.	As<br> disclosed in Note 32, USIE repurchased its own 1,283 thousand and 2,805 thousand ordinary<br> shares from the Group’s key management personnel with approximately NT$653,244<br> thousand and NT$1,247,187 thousand (US$41,698 thousand) in February 2018 and July 2019,<br> respectively.
---	---
d.	In<br> 2019, ASE purchased real estate properties from associates with the amount of NT$2,326,000<br> thousand (US$77,767 thousand), which was primarily based on the independent professional<br> appraisal reports and has been fully paid in September 2019.
---	---

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f.	Compensation<br> to key management personnel
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Short-term<br> employee benefits
Post-employment benefits
Share-based<br> payments

All values are in US Dollars.

The compensation to the Group’s key management personnel was determined according to personal performance and market trends.

37.	ASSETS<br> PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, tariff guarantees of imported raw materials or collateral:

	December<br> 31
	2018	2019
	NT	NT	US (Note 4)
Inventories<br> related to real estate business
Property, plant and<br> equipment
Investment properties
Long-term prepayments<br> for lease
Other financial assets (including current and<br>non-current)

All values are in US Dollars.

38.	SIGNIFICANT<br> CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of each balance sheet date were as follows:

a.	As<br> of December 31, 2018 and 2019, unused letters of credit of the Group were approximately<br> NT$634,000 thousand and NT$394,000 thousand (US$13,173 thousand), respectively.
b.	As<br> of December 31, 2018 and 2019, the Group’s commitments to purchase property, plant<br> and equipment were approximately NT$17,039,458 thousand and NT$25,119,371 thousand (US$839,832<br> thousand), respectively, of which NT$2,339,308 thousand and NT$5,145,345 thousand (US$172,028<br> thousand) had been prepaid, respectively. As of December 31, 2018 and 2019, the commitment<br> that the Group has contracted for the construction related to our real estate business<br> were approximately NT$888,052 thousand and NT$1,393,859 thousand (US$46,602 thousand),<br> respectively.
---	---
c.	As<br> of December 31, 2019, letters of credits were provided to customs by banks for the importation<br> of goods, and the banking facilities granted to the Group were approximately NT$952,001<br> thousand (US$31,829 thousand).
---	---
d.	In<br> consideration of corporate social responsibility for environmental protection, the board<br> of directors of ASE, in December 2013, approved contributions to be made in the next<br> 30 years, at a total amount of NT$3,000,000 thousand (US$100,301 thousand), at the minimum,<br> to environmental protection efforts in Taiwan. In February 2019 and January 2020, the<br> board of directors of ASE approved to contribute NT$100,000 thousand (US$3,343 thousand)<br> to ASE Cultural & Educational Foundation for environmental charity in promoting the<br> related domestic environmental protection and public service activities continuously.
---	---

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39.	OTHERS
a.	Broadcom<br> Corporation, Broadcom Singapore PTE, Ltd. and Broadcom Limited (collectively, “Broadcom”),<br> have filed a request for arbitration, which the Group received in May 2019, with the<br> American Arbitration Association in dispute over an indemnity clause within the Semiconductor<br> Packaging Agreement (the “Agreement”) entered into by Broadcom and SPIL in<br> September 2012. The Agreement stipulates that in the event the packaging products provided<br> by SPIL infringe upon third party patent rights and cause Broadcom to suffer losses,<br> SPIL must indemnify Broadcom for loss suffered. Based on the Agreement, Broadcom has<br> requested that SPIL indemnify Broadcom in connection with the patent infringement between<br> Broadcom and Tessera Technologies, Inc. As of the date that the consolidated financial<br> statements were authorized for issue, such patent infringement proceeding was settled<br> in the amount of US$5,000 thousand which was recognized under the line item of other<br> operating income and expenses, net for the year end December 31, 2019.
---	---
b.	There<br> were five employees and a waste disposal supplier of a subsidiary in China accused by<br> China People’s Procuratorate ( the “Procuratorate”) for committing<br> the crime of environmental pollution in 2018. During the trial, the Procuratorate claimed<br> that the subsidiary should also be charged with corporate crime which caused the subsidiary<br> received a change and addition indictment in October 2019. As of the date that the consolidated<br> financial statements were authorized for issue, the trial proceeding is pending Procuratorate’s<br> judgments and, therefore, the final results could not be reliably measured.
---	---
c.	On December 20, 2013, the Kaohsiung Environmental Protection<br>Bureau (the “KEPB”) imposed an administrative fine of NT$102,014 thousand (the “Original Fine”) upon ASE<br>for violation of the Water Pollution Control Act. After ASE sought administrative remedies against the Original Fine, the Original<br>Fine has been revoked by final judgment of Supreme Administrative Court on June 8, 2017, and KEPB is ordered to refund the Original<br>Fine to ASE. On December 27, 2019, KEPB refunded NT$55,062 thousand (US$1,841 thousand) to ASE. On February 10, 2020, KEPB re-imposed<br>an administrative fine of NT$46,952 thousand (US$1,570 thousand) (the “New Fine”) upon ASE and offset the New Fine<br>by the remaining amount which shall be refunded to ASE. Therefore, no additional payment that ASE should make for the New Fine.<br>On March 12, 2020, ASE has filed an administrative appeal against the New Fine.
---	---
d.	In December 2019, USISH entered into an equity acquisition agreement<br>with Financiere AFG S.A.S. (“FAFG”). USISH contemplates to pay approximately US$403,125 thousand (the final consideration<br>will be adjusted according to the equity acquisition agreement) through USIFR and issue approximately its own 25,596 thousand new<br>ordinary shares (at CNY12.81 per share) to acquire 100% shareholdings (79,848 thousand ordinary shares outstanding) of FAFG. The<br>aforementioned transaction is still pending for the related authorities’ approval.
---	---

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40.	SIGNIFICANT<br> ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the group entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant financial assets and liabilities denominated in foreign currencies were as follows:


December 31, 2018
Monetary financial assets
US	3,730,484	US1=NT30.715	114,581,814
US	1,299,391	US1=CNY6.8632	39,910,801
	4,412,591	1=NT0.2782	1,227,583
	6,568,657	1=US0.0091	1,827,400
Monetary financial liabilities
US	3,361,523	US1=NT30.715	103,249,185
US	1,216,654	US1=CNY6.8632	37,369,521
	7,401,621	1=NT0.2782	2,059,131
	7,035,704	1=US0.0091	1,957,333

All values are in US Dollars.

December 31, 2019
Monetary financial assets
US$	4,125,872	US$1=NT$29.98	123,693,628
US$	1,189,539	US$1=CNY6.9762	35,662,384
JPY	13,889,872	JPY1=NT$0.2760	3,833,605
JPY	771,392	JPY1=US$0.0092	212,904
Monetary financial liabilities
US$	3,823,359	US$1=NT$29.98	114,624,313
US$	1,211,472	US$1=CNY6.9762	36,319,926
JPY	14,628,543	JPY1=NT$0.2760	4,037,478
JPY	815,929	JPY1=US$0.0092	225,197

The significant realized and unrealized foreign exchange gain (loss) were as follows:


			2018			2019
Functional<br> Currencies			Exchange<br> Rate			Exchange<br> Rate
									US (Note 4)
US	US1=NT29.76	)		US1=NT30.715	)		US1=NT29.98	)		)
NT					)
CNY	CNY1=NT4.5545	)		CNY1=NT4.4753	)		CNY1=NT4.2975
					)

All values are in US Dollars.

41.	OPERATING<br> SEGMENTS INFORMATION

The Group has the following reportable segments: Packaging, Testing and EMS. The Group packages bare semiconductors into finished semiconductors with enhanced electrical and thermal characteristics; provides testing services, including front-end engineering testing, wafer probing and final testing services; engages in the designing, assembling, manufacturing and sale of electronic components and telecommunications equipment motherboards. Information about other business activities and operating segments that are not reportable are combined and disclosed in “Others.” The Group engages in other activities such as substrate production as well as sale and leasing of real estate properties.

The accounting policies for segments are the same as those described in Note 4. The measurement basis for resources allocation and performance evaluation is based on profit before income tax.

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a.	Segment<br> revenues and operation results
									Adjustments
---	---	---	---	---	---	---	---	---	---	---	---	---
	Packaging		Testing		EMS		Others		and<br> Eliminations		Total
	NT		NT		NT		NT		NT		NT
For the year ended December 31,<br> 2017
Revenue from external customers
Inter-group revenue (Note 1)										)
Segment revenue
Interest income										)
Interest expense		)		)				)				)
Depreciation and amortization		)		)		)		)				)
Share of the profit or loss<br> of associates and joint ventures				)
Impairment loss		)		)				)				)
Segment profit before income tax
Expenditures for segment assets
December<br> 31, 2017
Investments accounted for<br> using the equity method

All values are in US Dollars.

For the year ended December 31,<br> 2018
Revenue from external customers	$	178,308,222		$	35,903,202		$	151,890,384		$	4,990,613		$	—		$	371,092,421
Inter-group revenues (Note 1)		3,531,431			212,310			58,836,465			7,637,053			(70,217,259	)		—
Segment revenues		181,839,653			36,115,512			210,726,849			12,627,666			—			441,309,680
Interest income		166,761			55,108			354,343			352,232			(462,233	)		466,211
Interest expense		(3,647,601	)		(101,338	)		—			(249,180	)		462,233			(3,535,886	)
Depreciation and amortization		(29,491,977	)		(9,560,610	)		(2,065,590	)		(1,570,726	)		—			(42,688,903	)
Share of the profit or loss<br> of associates and joint ventures		(456,846	)		(23,398	)		—			—			—			(480,244	)
Impairment loss		(654,081	)		—			—			—			—			(654,081	)
Segment profit before income tax		17,866,431			7,952,484			6,225,984			(107,221	)		—			31,937,678
Expenditures for segment assets		22,787,190			12,991,023			2,529,771			784,254			—			39,092,238
December<br> 31, 2018
Investments accounted for<br> using the equity method		9,152,290			160,018			—			—			—			9,312,308
Contract assets		3,488,372			1,000,128			—			—			—			4,488,500
For the year ended December 31,<br> 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Revenue from external customers	$	198,916,897		$	42,658,686		$	165,789,479		$	5,817,122		$	—		$	413,182,184
Inter-group revenues (Note 1)		5,370,963			231,399			60,638,567			7,431,399			(73,672,328	)		—
Segment revenues		204,287,860			42,890,085			226,428,046			13,248,521			—			486,854,512
Interest income		186,291			90,091			249,487			284,458			(260,646	)		549,681
Interest expense		(3,403,475	)		(545,609	)		(255,404	)		(243,013	)		260,646			(4,186,855	)
Depreciation and amortization		(33,456,831	)		(12,379,703	)		(2,534,825	)		(2,095,482	)		—			(50,466,841	)
Share of the profit or loss<br> of associates and joint ventures		75,303			39,852			67,120			—			—			182,275
Impairment loss		(601,066	)		(141	)		—			—			—			(601,207	)
Segment profit before income tax		7,572,763			10,321,537			6,082,106			(696,595	)		—			23,279,811
Expenditures for segment assets		35,462,305			23,966,051			2,770,129			875,402			—			63,073,887
December<br> 31, 2019
Investments accounted for<br> using the equity method		8,867,316			1,123,490			2,094,401			—			—			12,085,207
Contract assets		4,162,124			1,735,192			—			—			—			5,897,316
									Adjustments
---	---	---	---	---	---	---	---	---	---	---	---	---
	Packaging		Testing		EMS		Others		and<br> Eliminations		Total
	US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)		US (Note 4)
For the year ended December 31,<br> 2019
Revenue from external customers
Inter-group revenues (Note 1)										)
Segment revenues
Interest income										)
Interest expense		)		)		)		)				)
Depreciation and amortization		)		)		)		)				)
Share of the profit or loss<br> of associates and joint ventures
Impairment loss		)		)								)
Segment profit before income tax								)
Expenditures for segment assets
December<br> 31, 2019
Investments accounted for<br> using the equity method
Contract assets

All values are in US Dollars.

Note 1: Inter-group revenues were eliminated upon consolidation.

Note 2: The disaggregated product and service type from the Group's contract with customer is the same as those disclosed in above reportable segment.

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b.	Revenue<br> from major products and services
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
Packaging<br> service
Testing service
Electronic components<br> manufacturing service
Others

All values are in US Dollars.

c.	Geographical<br> information

The Group’s revenue from external customers by location of headquarter and information about its non-current assets by location of assets are detailed below.

1)	Net<br> revenues from external customers
	For<br> the Year Ended December 31
---	---	---	---	---
	2017	2018	2019
	NT	NT	NT	US (Note 4)
United States
Taiwan
Asia
Europe
Others

All values are in US Dollars.

2)	Non-current<br> assets
	December<br> 31
---	---	---	---
	2018	2019
	NT	NT	US (Note 4)
Taiwan
China
Others

All values are in US Dollars.

Non-current assets exclude financial instruments, post-employment benefit assets, and deferred tax assets.

d.	Major<br> customers

Except customer A from which the operating revenues generated from packaging and EMS segments were NT$83,873,393, NT$92,117,839 thousand and NT$103,987,781 thousand (US$3,476,689 thousand) for the years ended December 31, 2017, 2018 and 2019, respectively, and customer B from which the operating revenues generated from packaging and testing segments was NT$44,653,072 thousand (US$1,492,914 thousand) for the year ended December 31, 2019, the Group did not have other single customer from which the operating revenues exceeded 10% of operating revenues for the years ended December 31, 2017, 2018 and 2019.

F-127

Exhibit 1

ASE Technology Holding Co., Ltd.

Articlesof Incorporation

Chapter One: General Principals

Article 1*.*

The Company is called and is registered as a company limited by shares according to the ROC Company Act. The English name of the Company is ASE Technology Holding Co., Ltd.

Article 2.

The Company is engaged in the following businesses:

H201010 General Investment Business.

Article 3.

The investment made by the Company in other companies as a limited liability shareholder thereof is not subject to the limitation that such investment shall not exceed a certain percentage of the paid-in capital as set forth in the ROC Company Act.

Article 4.

The Company may provide external guaranty.

Article 5.

The Company’s headquarter is located in Kaohsiung, Taiwan, ROC and may set up domestic or foreign branches, offices or business establishments as resolved by the Board of Directors, if necessary.

Chapter Two: Shares

Article 6.

The Company’s total capital is NT$50 billion divided into 5 billion shares with a par value of NT$10 per share. Stock options worth of NT$4 billion are set aside for employee subscription. The Board of Directors is authorized to issue the unissued shares in installments if deemed necessary for business purposes.

“Employees” referred to in the preceding paragraph include employees of the parent or subsidiaries of the Company that meet certain requirements, which are to be prescribed by the Board of Directors.

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[TRANSLATION TO JUNE 27, 2019 CHINESE VERSION]

Article 6-1.

Unless otherwise approved specifically by the central authority of the respective industry or other laws and regulations, when the Company issues new shares, there shall be 10 to 15% of such new shares reserved for subscription by employees of the Company.

The Company may issue new shares to employees with restricted rights after the resolutions of the Shareholders’ Meeting.

The Company may buy back its shares and transfer them to employees in accordance with relevant laws and regulations.

Employees referred to in the three preceding subparagraphs include employees of parent or subsidiary companies that meet certain conditions, which are to be prescribed by the Board of Directors.

Article 7.

According to Article 161-2 of the ROC Company Act, the Company may be exempted from printing any share certificate for the shares issued but shall register the issued shares with a centralized securities depositary enterprise and follow the regulations of that enterprise.

Article 8.

No registration of share transfer shall be made within sixty days before each ordinary general shareholders’ meeting, or within thirty days before each extraordinary general shareholders’ meeting or five days before the record date for dividends, bonuses or other distributions as determined by the Company.

Article 9.

The rules governing stock affairs of the Company shall be made pursuant to the laws and the regulations of the relevant authorities.

Chapter Three: General Shareholders’ Meeting

Article 10.

General shareholders’ meetings include ordinary meetings and extraordinary meetings. Ordinary meetings shall be convened according to law by the Board of Directors once annually within 6 months after the end of each fiscal year. Extraordinary meetings will be held according to the law whenever necessary.

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[TRANSLATION TO JUNE 27, 2019 CHINESE VERSION]

Article 11.

General shareholders’ meetings shall be convened by written notice stating the date, place and purpose dispatched to each shareholder at least 30 days, in the case of ordinary meetings, and 15 days, in the case of extraordinary meetings, prior to the date set for such meeting.

Article 12.

Unless otherwise required by the ROC Company Act, shareholders’ resolutions shall be adopted by at least half of the votes of the shareholders present at a general shareholders’ meeting who hold at least half of all issued and outstanding shares of the Company.

Article 13.

Each shareholder of the Company shall have one vote per share, unless otherwise provided by Article 179 of the ROC Company Act.

Article 14.

Any shareholder, who for any reason is unable to attend general shareholders’ meetings, may execute a proxy printed by the Company, in which the authorized matters shall be expressly stated, to authorize a proxy to attend the meeting for him/her. Such proxy shall be submitted to the Company at least 5 days prior to the general shareholders’ meeting.

Article 15.

The general shareholders’ meeting shall be convened by the Board of Directors unless otherwise stipulated in the ROC Company Act, and the person presiding over the meeting will be the Chairman of the Board of Directors (the “Chairman”). If the Chairman is on leave or for any reason cannot discharge his duty, Paragraph 3 of Article 208 of the ROC Company Act should apply. If the general shareholders’ meeting is convened by a person entitled to do so other than a member of the Board of Directors, that person shall act as the person presiding over the meeting . If two or more persons are entitled to call the general shareholders’ meeting, those persons shall elect one to act as the person presiding over the meeting.

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[TRANSLATION TO JUNE 27, 2019 CHINESE VERSION]

Chapter Four: Director

Article 16.

The Company shall have 13 directors , of which there shall be 3 independent directors and 10 non-independent directors to be elected by the general shareholders’ meeting from candidates with legal capacity. Each director shall hold office for a term of three years, and may continue to serve in the office if re-elected.

The election of the directors of the Company shall be conducted pursuant to Article 198 of the ROC Company Act and relevant regulations.

When handling the aforementioned election of directors, the election of independent directors and non-independent directors should be held together, provided, however, that the number of independent directors and non-independent directors elected shall be calculated separately; those that receive votes representing more voting rights will be elected as independent directors or non-independent directors.

The Company shall then establish an audit committee in lieu of supervisors in accordance with Article 14-4 of the ROC Securities and Exchange Act to exercise the powers and duties of supervisors stipulated in the ROC Company Act, the ROC Securities and Exchange Act, and other applicable laws and regulations. The audit committee shall comprise solely of the independent directors. The responsibilities, powers and other related matters of the audit committee shall be separately stipulated in rules adopted by the Board of Directors in accordance with applicable laws and regulations.

Article 16-1.

The election of the Company’s directors uses the candidate nomination system. Shareholders who hold 1% or more of the Company’s issued shares and the Board of Directors may nominate a list of candidates for directors. After the Board of Directors examines and confirms the qualifications of the candidate(s) for serving as a director, the name(s) is/are sent to the general shareholders’ meeting for election. If the general shareholders’ meeting is convened by a person entitled to do so other than a member of the Board of Directors, after such person examines and confirms the qualifications of the candidate(s) for serving as a director, the name(s) is/are sent to the general shareholders’ meeting for election. All matters regarding the acceptance method and announcement of the nomination of candidates for directors will be handled according to the ROC Company Act, the ROC Securities and Exchange Act, and other relevant laws and regulations.

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Article 16-2.

The remuneration of the Company’s independent directors is set at NT$3 million per person annually. For those that do not serve a full year, the remuneration will be calculated in proportion to the number of days of the term that were actually served. The additional remuneration of the Company’s independent directors who are also the members of the Company’s Compensation Committee is set at NT$ 360,000 per person annually. For those that do not serve a full year, the additional remuneration will be calculated in proportion to the number of days of the term that were actually served.

Article 17.

The Board of Directors is constituted by directors. Their powers and duties are as follows:

(1).	Preparing business plans;
(2).	Preparing surplus distribution<br>or loss make-up proposals;
---	---
(3).	Preparing proposals to<br>increase or decrease capital;
---	---
(4).	Reviewing material internal<br>rules and contracts;
---	---
(5).	Hiring and discharging<br>the general manager;
---	---
(6).	Establishing and dissolving<br>branch offices;
---	---
(7).	Reviewing budgets and audited<br>financial statements; and
---	---
(8).	Other duties and powers<br>granted by or in accordance with the ROC Company Act or shareholders’ resolutions.
---	---

Article 18.

The Board of Directors is constituted by directors, and the Chairman and Vice Chairman are elected by more than half of the directors at a board meeting at which two-thirds or more of the directors are present. If the Chairman is on leave or for any reason cannot discharge his duties, his/her acting proxy shall be elected in accordance with Article 208 of the ROC Company Act.

Article 19.

Board of Directors meetings shall be convened according to the law by the Chairman, unless otherwise stipulated by the ROC Company Act. Board of Directors meetings can be held at the place that the Company is headquartered, or at any place that is convenient for the directors to attend and appropriate for the meeting to be convened, or via video conference.

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[TRANSLATION TO JUNE 27, 2019 CHINESE VERSION]

Article 19-1.

Directors shall be notified of Board of Director meetings no later than seven days prior to the meetings. However, in case of any emergency, a Board of Directors meeting may be convened at any time.

Notifications of Board of Directors meetings may be in writing or via email or fax.

Article 20.

A director may execute a proxy to appoint another director to attend the Board of Directors meeting and to exercise his/her voting right, but a director can accept only one proxy.

Chapter Five: Manager

Article 21.

The Company has one general manager. The appointment, discharge and salary of the general manager shall be managed in accordance with Article 29 of ROC Company Act.

Chapter Six: Accounting

Article 22.

The fiscal year of the Company starts from January 1 and ends on December 31 every year. At the end of each fiscal year, the Board of Directors shall prepare financial and accounting books in accordance with the ROC Company Act and submit them according to law to the ordinary general shareholders’ meeting for approval.

Article 23.

If the Company is profitable, 0.1% (inclusive) to 1% (inclusive) of the profits shall be allocated as compensation to employees and 0.75% (inclusive) or less of the profits should be allocated as compensation to directors. While the Company has accumulated losses, the profit shall be set aside to compensate losses before distribution.

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The compensation being distributed to employees in the form of stock or cash shall be approved by more than half of the directors at a board meeting at which two-thirds or more of the directors are present and report to the general shareholders’ meeting.

The Company distributes profit to employees in the form of shares by a resolution of a meeting of Board of Directors, and in accordance with the provision of the preceding paragraph, may resolve, at the same meeting of the Board of Directors, to distribute the shares by way of new shares to be issued by the Company or existing shares to be repurchased by the Company.

“Employees” referred to in the three preceding paragraphs include employees of controlling or subsidiary companies that meet certain conditions, which are to be prescribed by the Board of Directors.

Article 24.

The annual net income (“Income”) shall be distributed in the order of sequences below:

(1)	Making up for losses, if<br>any.
(2)	10% being set aside as<br>legal reserve.
---	---
(3)	Allocation or reversal<br>of a special surplus reserve in accordance with laws or regulations set forth by the authorities concerned.
---	---

The remainder plus the undistributed earnings shall be distributed in accordance with the proposal submitted by the Board of Directors and adopted by the general shareholders’ meeting.

Article 25.

The Company is at the stage of stable growth. In order to accommodate the capital demand for the present and future business development and satisfy the shareholder’s demand for the cash inflow, the Residual Dividend Policy is adopted for the dividend distribution of the Company. The ratio for cash dividends shall be not less than 30% of the total dividends; and the residual dividends shall be distributed in form of stocks in accordance with the distribution plan proposed by the Board of Directors and resolved by the general shareholders’ meeting.

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[TRANSLATION TO JUNE 27, 2019 CHINESE VERSION]

Chapter Seven: Appendix

Article 26.

The bylaws and rules of procedure of the Company shall be stipulated separately.

Article 27.

Any matter not covered by these Articles of Incorporation shall be subject to the ROC Company Act.

Article 28.

These Articles of Incorporation were made on February 12, 2018 as approved by all the promoters.

The first amendment was made on June 21, 2018.

The second amendment was made on June 27, 2019.

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**** Exhibit 2(a)

EXECUTION COPY

DEPOSIT AGREEMENT

by and among

ASE INDUSTRIAL HOLDING CO., LTD.

AND

CITIBANK, N.A.,

as Depositary,

AND

THE HOLDERS AND BENEFICIAL OWNERS OF

AMERICAN DEPOSITARY SHARES

ISSUED HEREUNDER

Dated as of April 30, 2018

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS		1
Section 1.1	“ADS Record Date”	1
Section 1.2	“Affiliate”	1
Section 1.3	“American Depositary Receipt(s)”, “ADR(s)”<br> and “Receipt(s)”	1
Section 1.4	“American Depositary Share(s)” and “ADS(s)”	2
Section 1.5	“ADS Record Date”	2
Section 1.6	“Applicant”	2
Section 1.7	“Beneficial Owner”	2
Section 1.8	“Business Day”	3
Section 1.9	“Certificate(s) of Payment”	3
Section 1.10	“Certificated ADS(s)”	3
Section 1.11	“Commission”	3
Section 1.12	“Company”	3
Section 1.13	“Custodian”	3
Section 1.14	“Deliver” and “Delivery”	3
Section 1.15	“Deposit Agreement”	4
Section 1.16	“Depositary”	4
Section 1.17	“Deposited Property”	4
Section 1.18	“Deposited Securities”	4
Section 1.19	“Dollars” and “$”	4
Section 1.20	“DTC”	4
Section 1.21	“DTC Participant”	4
Section 1.22	“Eligible Securities”	5
Section 1.23	“Eligible Securities Registrar”	5
Section 1.24	“Exchange Act”	5
Section 1.25	“FSC”	5
Section 1.26	“Foreign Currency”	5
Section 1.27	“Full Entitlement ADR(s)”, “Full Entitlement<br> ADS(s)” and “Full Entitlement Deposited Securities”	5
Section 1.28	“Holder(s)”	5
Section 1.29	“Partial Entitlement ADR(s)”, “Partial Entitlement<br> ADS(s)” and “Partial Entitlement Deposited Securities”	5
Section 1.30	“Pre-Release Transaction”	5
Section 1.31	“Principal Office”	5
Section 1.32	“Registrar”	5
Section 1.33	“Republic of China”; “ROC” and “Taiwan”<br> shall mean the Republic of China	6
Section 1.34	“Restricted Securities”	6
Section 1.35	“Restricted ADR(s)”, “Restricted ADS(s)”<br> and “Restricted Shares”	6
Section 1.36	“Securities Act”	6
Section 1.37	“Shares”	6
Section 1.38	“Share American Depositary Share(s)” and “Share<br> ADS(s)”	6
Section 1.39	“Share American Depositary Receipt(s)” and “Share<br> ADR(s)”	7

Section 1.40	"Taiwan Depository & Clearing Corporation"<br> and "TDCC"	7
Section 1.41	“Taiwan Stock Exchange” and “TSE”	7
Section 1.42	“Temporary ADS(s)”	7
Section 1.43	“Temporary ADR(s)”	7
Section 1.44	“Uncertificated ADS(s)”	7
Section 1.45	“United States” and “U.S.”	7
ARTICLE II
APPOINTMENT<br> OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF<br> ELIGIBLE SECURITIES; EXECUTION AND
DELIVERY, TRANSFER<br> AND SURRENDER OF RECEIPTS		7
Section 2.1	Appointment of Depositary	8
Section 2.2	Form and Transferability of ADSs	8
Section 2.3	Deposit of Eligible Securities	9
Section 2.4	Registration and Safekeeping of Deposited Securities	12
Section 2.5	Issuance of ADSs	12
Section 2.6	Transfer, Combination and Split-up of ADRs	13
Section 2.7	Surrender of ADSs and Withdrawal of Deposited Securities	14
Section 2.8	Limitations on Execution and Delivery, Transfer, etc. of ADSs;<br> Suspension of Delivery, Transfer, etc.	17
Section 2.9	Lost ADRs, etc	19
Section 2.10	Cancellation and Destruction of Surrendered ADRs; Maintenance<br> of Records	19
Section 2.11	Escheatment	19
Section 2.12	Partial Entitlement ADSs	20
Section 2.13	Certificated/Uncertificated ADSs	20
Section 2.14	Restricted ADSs	22
Section 2.15	Temporary ADSs	23
ARTICLE III
CERTAIN OBLIGATIONS<br> OF HOLDERS
AND BENEFICIAL<br> OWNERS OF ADSs		25
Section 3.1	Proofs, Certificates and Other Information	25
Section 3.2	Liability for Taxes and Other Charges	26
Section 3.3	Representations and Warranties on Deposit of Eligible Securities	26
Section 3.4	Compliance with Information Requests	28
Section 3.5	Ownership Restrictions	28
Section 3.6	Reporting Obligations and Regulatory Approvals	28
ARTICLE IV
THE DEPOSITED<br> SECURITIES		28
Section 4.1	Cash Distributions	29
Section 4.2	Distribution in Eligible Securities	30
Section 4.3	Elective Distributions in Cash or Eligible Securities	30

ii

Section 4.4	Distribution of Rights to Purchase Additional ADSs	31
Section 4.5	Distributions Other Than Cash, Shares or Rights to Purchase Shares	33
Section 4.6	Distributions with Respect to Deposited Securities in Bearer Form	34
Section 4.7	Redemption	34
Section 4.8	Conversion of Foreign Currency	35
Section 4.9	Fixing of ADS Record Date	37
Section 4.10	Voting of Deposited Securities	37
Section 4.11	Changes Affecting Deposited Securities	40
Section 4.12	Available Information	41
Section 4.13	Reports	42
Section 4.14	List of Holders	42
Section 4.15	Taxation	42
Section 4.16	Right to Submit Proposals at Annual Ordinary Meeting of Shareholders	43
ARTICLE V
THE DEPOSITARY,<br> THE CUSTODIAN AND THE COMPANY		46
Section 5.1	Maintenance of Office and Transfer Books by the Registrar	46
Section 5.2	Exoneration	46
Section 5.3	Standard of Care	47
Section 5.4	Resignation and Removal of the Depositary; Appointment of Successor<br> Depositary	48
Section 5.5	The Custodian	49
Section 5.6	Notices and Reports	50
Section 5.7	Issuance of Additional Eligible Securities, ADSs etc	50
Section 5.8	Indemnification	51
Section 5.9	ADS Fees and Charges	52
Section 5.10	Pre-Release Transactions	53
Section 5.11	Restricted Securities Owners	54
ARTICLE VI
AMENDMENT AND<br> TERMINATION		54
Section 6.1	Amendment/Supplement	54
Section 6.2	Termination	55
ARTICLE VII
MISCELLANEOUS		56
Section 7.1	Counterparts	56
Section 7.2	No Third-Party Beneficiaries	56
Section 7.3	Severability	57
Section 7.4	Holders and Beneficial Owners as Parties; Binding Effect	57
Section 7.5	Notices	57
Section 7.6	Governing Law and Jurisdiction	58
Section 7.7	Assignment	60
Section 7.8	Compliance with U.S. Securities Laws	60

iii

Section 7.9	Republic of China Law References	60
Section 7.10	Titles and References	60

EXHIBITS

Form of ADR.	A-1
Fee Schedule.	B-1
Form of Certification Upon Withdrawal	C-1
Form of Certification Upon Withdrawal (Short Form)	C-2

iv

DEPOSIT AGREEMENT

DEPOSITAGREEMENT, dated as of April 30, 2018, by and among (i) ASE INDUSTRIAL HOLDING CO., LTD., a company organized under the laws of the Republic of China, and its successors (the “Company”), (ii) CITIBANK, N.A., a national banking association organized under the laws of the United States of America acting in its capacity as depositary, and any successor depositary hereunder (the “Depositary”), and (iii) all Holders and Beneficial Owners of American Depositary Shares issued hereunder (all such capitalized terms as hereinafter defined).

W I TN E S S E T H T H A T:

WHEREAS, the Company desires to establish with the Depositary an ADR facility to provide inter alia for the deposit of the Shares (as hereinafter defined) and the creation of American Depositary Shares representing the Shares so deposited; and

WHEREAS, the Depositary is willing to act as the Depositary for such ADR facility upon the terms set forth in the Deposit Agreement (as hereinafter defined); and

WHEREAS, any American Depositary Receipts issued pursuant to the terms of the Deposit Agreement are to be substantially in the form of Exhibit A attached hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in the Deposit Agreement; and

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:

Section1.1 “ADS Record Date” shall have the meaning given to such term in Section 4.9.

Section1.2 “Affiliate” shall have the meaning assigned to such term by the Commission (as hereinafter defined) under Regulation C promulgated under the Securities Act (as hereinafter defined), or under any successor regulation thereto.

Section1.3“American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)” shall mean the certificate(s) issued by the Depositary to evidence the American Depositary Shares issued under the terms of the Deposit Agreement in the form of Certificated ADS(s) (as hereinafter defined), as such ADRs may be amended from time to time in accordance with the provisions of the Deposit Agreement. An ADR may evidence any number of ADSs and may, in the case of ADSs held through a central depository such as DTC, be in the form of a “Balance

Certificate.” Unless otherwise specifically set forth herein, the term “Receipts” shall include the Temporary ADRs evidencing the Temporary ADSs issued hereunder.

Section1.4“American Depositary Share(s)” and “ADS(s)” shall mean the rights and interests in the Deposited Property (as hereinafter defined) granted to the Holders and Beneficial Owners pursuant to the terms and conditions of the Deposit Agreement and, if issued as Certificated ADS(s) (as hereinafter defined), the ADR(s) issued to evidence such ADSs. ADS(s) may be issued under the terms of the Deposit Agreement in the form of (a) Certificated ADS(s) (as hereinafter defined), in which case the ADS(s) are evidenced by ADR(s), or (b) Uncertificated ADS(s) (as hereinafter defined), in which case the ADS(s) are not evidenced by ADR(s) but are reflected on the direct registration system maintained by the Depositary for such purposes under the terms of Section 2.13. Unless otherwise specified in the Deposit Agreement or in any ADR, or unless the context otherwise requires, any reference to ADS(s) shall include Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as the context may require. Each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the number of Shares specified in the form of ADR attached hereto as Exhibit A (as amended from time to time) that are on deposit with the Depositary and/or the Custodian, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 or a change in Deposited Securities referred to in Section 4.11 with respect to which additional ADSs are not issued, and thereafter each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the applicable Deposited Property on deposit with the Depositary and the Custodian determined in accordance with the terms of such Sections, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS). In addition, the ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement (which may give rise to Depositary fees). Unless otherwise specifically set forth in this Deposit Agreement or the applicable ADR, the terms “American Depositary Shares” and “ADSs” shall include Share ADSs and Temporary ADSs.

Section1.5 “ADS Record Date” shall have the meaning given to such term in Section 4.9.

Section1.6“Applicant” shall have the meaning given to such term in Section 5.10.

Section1.7“Beneficial Owner” shall mean, as to any ADS, any person or entity having a beneficial interest deriving from the ownership of such ADS. Notwithstanding anything else contained in the Deposit Agreement, any ADR(s) or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the Depositary, the Custodian and their respective nominees are intended to be, and shall at all times during the term of the Deposit Agreement be, the record holders only of the Deposited Property represented by the ADSs for the benefit of the Holders and Beneficial Owners of the corresponding ADSs. The Depositary, on its own behalf and on behalf of the Custodian and their respective nominees, disclaims any beneficial ownership interest in the Deposited Property held on behalf of the Holders and Beneficial Owners of ADSs. The beneficial ownership interests in the Deposited Property are intended to be, and shall at all times during the term of the Deposit Agreement

continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property. The beneficial ownership interests in the Deposited Property shall, unless otherwise agreed by the Depositary, be exercisable by the Beneficial Owners of the ADSs only through the Holders of such ADSs, by the Holders of the ADSs (on behalf of the applicable Beneficial Owners) only through the Depositary, and by the Depositary (on behalf of the Holders and Beneficial Owners of the corresponding ADSs) directly, or indirectly through the Custodian or their respective nominees, in each case upon the terms of the Deposit Agreement and, if applicable, the terms of the ADR(s) evidencing the ADSs. A Beneficial Owner of ADSs may or may not be the Holder of such ADSs. A Beneficial Owner shall be able to exercise any right or receive any benefit hereunder solely through the person who is the Holder of the ADSs owned by such Beneficial Owner. Unless otherwise identified to the Depositary, a Holder shall be deemed to be the Beneficial Owner of all the ADSs registered in his/her/its name. The manner in which a Beneficial Owner owns ADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, and the manner in which services are made available to, Beneficial Owners pursuant to the terms of the Deposit Agreement.

Section1.8 “Business Day” shall mean any day on which both the banks in the Republic of China and the banks in New York are open for business.

Section1.9 “Certificate(s) of Payment” shall mean the single global Certificate of Payment issued by the Company evidencing the irrevocable right to receive definitive share certificates representing the Shares delivered by the Company in connection with any offerings or distributions of Shares by the Company.

Section1.10 “Certificated ADS(s)” shall have the meaning set forth in Section 2.13.

Section1.11“Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency thereto in the United States.

Section1.12“Company” shall mean ASE Industrial Holding Co., Ltd., a company incorporated and existing under the laws of the Republic of China, and its successors.

Section1.13“Custodian” shall mean (i) as of the date hereof, Citibank Taiwan Limited, having its principal office at 9F, No. 16 Nanking E. Road, Section 4, Taipei 105, Taiwan, ROC, as the custodian of Deposited Property for the purposes of the Deposit Agreement, (ii) Citibank, N.A., acting as custodian of Deposited Property pursuant to the Deposit Agreement, and (iii) any other entity that may be appointed by the Depositary pursuant to the terms of Section 5.5 as successor, substitute or additional custodian hereunder. The term “Custodian” shall mean any Custodian individually or all Custodians collectively, as the context requires.

Section1.14“Deliver” and “Delivery” shall mean (x) when used in respectof Shares and other Deposited Securities, either (i) the physical delivery of the certificate(s) representing such securities, or (ii) the book-entry transfer and recordation of such securities on the books of by means of book-entry transfer, if available, and (y) when used in respect of ADSs, either (i) the physical delivery of ADR(s) evidencing the ADSs, or (ii) the book-entry transfer and recordation

of ADSs on the books of the Depositary or any book-entry settlement system in which the ADSs are settlement-eligible.

Section1.15“Deposit Agreement” shall mean this Deposit Agreement and all exhibits hereto, as the same may from time to time be amended and supplemented from time to time in accordance with the terms of the Deposit Agreement.

Section1.16“Depositary” shall mean Citibank, N.A., a national banking association organized under the laws of the United States, in its capacity as depositary under the terms of the Deposit Agreement, and any successor depositary hereunder.

Section1.17 “Deposited Property” shall mean the Deposited Securities and any cash and other property held on deposit by the Depositary and the Custodian in respect of the ADSs under the terms of the Deposit Agreement, subject, in the case of cash, to the provisions of Section 4.8. All Deposited Property shall be held by Custodian, the Depositary and their respective nominees for the benefit of the Holders and Beneficial Owners of the ADSs representing the Deposited Property. The Deposited Property is not intended to, and shall not, constitute proprietary assets of the Depositary, the Custodian or their nominees. Beneficial ownership in the Deposited Property is intended to be, and shall at all times during the term of the Deposit Agreement continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property. Notwithstanding the foregoing, the collateral delivered in connection with Pre-Release Transactions described in Section 5.10 shall not constitute Deposited Property.

Section1.18 “Deposited Securities” shall mean collectively or individually, as the context may require and unless otherwise specifically set forth herein, (a) with respect to Share ADSs (as such term is hereinafter defined), Shares and (b) with respect to Temporary ADSs (as such term is hereinafter defined), interests in the single global Certificate of Payment, in each case held on deposit by the Custodian from time to time under the Deposit Agreement and constituting Deposited Property.

Section1.19“Dollars” and “$” shall refer to the lawful currency of the United States.

Section1.20“DTC” shall mean The Depository Trust Company, a national clearinghouse and the central book-entry settlement system for securities traded in the United States and, as such, the custodian for the securities of DTC Participants (as hereinafter defined) maintained in DTC, and any successor thereto.

Section1.21“DTC Participant” shall mean any financial institution (or any nominee of such institution) having one or more participant accounts with DTC for receiving, holding and delivering the securities and cash held in DTC. A DTC Participant may or may not be a Beneficial Owner. If a DTC Participant is not the Beneficial Owner of the ADSs credited to its account at DTC, or of the ADSs in respect of which the DTC Participant is otherwise acting, such DTC Participant shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owner(s) of the ADSs credited to its account at DTC or in respect of which the DTC Participant is so acting.

Section1.22 “Eligible Securities” shall mean, collectively or individually as the context may require and unless otherwise specifically set forth herein, (a) with respect to Share ADSs (as such term is hereinafter defined), Shares, and (b) with respect to Temporary ADSs (as such term is hereinafter defined), interests in the Certificate of Payment, in each case to the extent eligible for deposit hereunder at any time and from time to time from and after the date hereof.

Section1.23 “Eligible Securities Registrar” shall mean President Securities Corp. or any other institution organized under the laws of the Republic of China appointed by the Company to carry out the duties of registrar for (a) the Shares and/or (b) any Certificates of Payment, and any successor thereto.

Section1.24“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from time to time.

Section1.25 “FSC” shall mean the Financial Supervisory Commission of the Republic of China.

Section1.26“Foreign Currency” shall mean any currency other than Dollars.

Section1.27 “Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full EntitlementDeposited Securities” shall have the respective meanings set forth in Section 2.12.

Section1.28“Holder(s)” shall mean the person(s) in whose name the ADSs are registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. If a Holder is not the Beneficial Owner of the ADS(s) registered in its name, such person shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owners of the ADSs registered in its name. The manner in which a Holder holds ADSs (e.g., in certificated vs. uncertificated form) may affect the rights and obligations of, and the manner in which the services are made available to, Holders pursuant to the terms of the Deposit Agreement.

Section1.29 “Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “PartialEntitlement Deposited Securities” shall have the respective meanings set forth in Section 2.12.

Section1.30“Pre-Release Transaction” shall have the meaning set forth in Section 5.10.

Section1.31“Principal Office” shall mean, when used with respect to the Depositary, the principal office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of the Deposit Agreement, is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

Section1.32“Registrar” shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed

by the Depositary to register issuances, transfers and cancellations of ADSs as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes. Registrars (other than the Depositary) may be removed and substitutes appointed by the Depositary. Each Registrar (other than the Depositary) appointed pursuant to the Deposit Agreement shall be required to give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of the Deposit Agreement.

Section1.33 “Republic of China”; “ROC” and “Taiwan” shall mean the Republic of China.

Section1.34“Restricted Securities” shall mean Eligible Securities, Deposited Securities or ADSs which (i) have been acquired directly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any public offering and are subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held directly or indirectly by an executive officer or director (or persons performing similar functions) or other Affiliate of the Company, or (iii) are subject to other restrictions on sale or deposit under the laws of the United States, the Republic of China, or under a shareholder agreement or the Articles of Incorporation of the Company or under the regulations of an applicable securities exchange unless, in each case, such Eligible Securities, Deposited Securities or ADSs are being transferred or sold to persons other than an Affiliate of the Company in a transaction (a) covered by an effective resale registration statement, or (b) exempt from the registration requirements of the Securities Act (as hereinafter defined), and the Eligible Securities, Deposited Securities or ADSs are not, when held by such person(s), Restricted Securities.

**Section1.35 “Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares”**shall have the respective meanings set forth in Section 2.14.

Section1.36“Securities Act” shall mean the United States Securities Act of 1933, as amended from time to time.

Section1.37 “Shares” shall mean the Company’s common shares, each having a par value of NT$10.00 per share, validly issued and outstanding and fully paid and may, if the Depositary so agrees after consultation with the Company, include evidence of the right to receive Shares; provided that in no event shall Shares include evidence of the right to receive Shares with respect to which the full purchase price has not been paid or Shares as to which preemptive rights have theretofore not been validly waived or exercised; provided further, however, that, if there shall occur any change in par value, split-up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.11 in respect of the Shares of the Company, the term “Shares” shall thereafter, to the maximum extent permitted by law, represent the successor securities resulting from such event.

Section1.38 “Share American Depositary Share(s)” and “Share ADS(s)” shall mean the rights and interests in deposited Shares granted to Holders and Beneficial Owners pursuant to the terms and conditions of the Deposit Agreement and, if applicable, the Share ADRs issued hereunder to evidence such Share ADSs. Share ADSs shall, unless otherwise

specifically set forth herein, be deemed to be American Depositary Shares or ADSs, as the context may require, for all purposes under this Deposit Agreement.

Section1.39 “Share American Depositary Receipt(s)” and “Share ADR(s)****” shall mean the Receipts issued by the Depositary to evidence Share ADSs issued under the terms of this Deposit Agreement, as such Share ADRs may be amended from time to time in accordance with the provisions hereof. A Share ADR may evidence any number of Share ADSs and may, in the case of Share ADSs held through a central depository such as DTC, be in the form of a “Balance Certificate”. Share ADRs shall, unless otherwise specifically set forth herein or in the applicable ADR(s), be deemed to be Receipts for all purposes under this Deposit Agreement.

Section1.40 "Taiwan Depository & Clearing Corporation" and "TDCC" shall mean the central depository for Shares in the Republic of China, and any successor thereto.

Section1.41“Taiwan Stock Exchange” and “TSE” shall mean the stock exchange in the Republic of China, upon which the Company’s Shares are listed for trading and any successor stock exchange thereto.

Section1.42 “Temporary ADS(s)” shall mean the rights and interests in any deposited Certificate of Payment granted to Holders and Beneficial Owners pursuant to the terms and conditions of this Deposit Agreement (including, without limitation, Section 2.12 hereof) and the applicable Temporary ADR(s) issued hereunder to evidence such Temporary ADSs. Temporary ADSs shall, unless otherwise specifically set forth herein or in the applicable Temporary ADR(s), be deemed to be American Depositary Shares or ADSs, as the context may require, for all purposes under this Deposit Agreement.

Section1.43 “Temporary ADR(s)” shall mean the ADRs issued by the Depositary to evidence Temporary ADSs issued under the terms of this Deposit Agreement (including, without limitation, Section 2.12 hereof), as such Temporary ADRs may be amended from time to time in accordance with the terms hereof. A Temporary ADR may evidence any number of Temporary ADSs and may, in the case of Temporary ADSs held through a central depository such as DTC, be in the form of a “Balance Certificate”. Temporary ADRs shall, unless otherwise specifically set forth herein or in the applicable Temporary ADR(s), be deemed to be ADRs for all purposes under this Deposit Agreement.

Section1.44 “Uncertificated ADS(s)” shall have the meaning set forth in Section 2.13.

Section1.45“United States” and “U.S.” shall have the meaning assigned to it in Regulation S as promulgated by the Commission under the Securities Act.

ARTICLE II

APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;

DEPOSIT OF ELIGIBLE SECURITIES; EXECUTION AND

DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

Section2.1 Appointment of Depositary. The Company hereby appoints the Depositary as depositary for the Deposited Property and hereby authorizes and directs the Depositary to act in accordance with the terms and conditions set forth in the Deposit Agreement and the applicable ADRs. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

Section2.2 Form and Transferability of ADSs.

**(a) Form.**Certificated ADSs shall be evidenced by definitive ADRs which shall be engraved, printed, lithographed or produced in such other manner as may be agreed upon by the Company and the Depositary. ADRs may be issued under the Deposit Agreement in denominations of any whole number of ADSs. The ADRs shall be substantially in the form set forth in Exhibit A to the Deposit Agreement, with any appropriate insertions, modifications and omissions, in each case as otherwise contemplated in the Deposit Agreement or required by law. ADRs shall be (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADSs. No ADR and no Certificated ADS evidenced thereby shall be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company, unless such ADR shall have been so dated, signed, countersigned and registered. ADRs bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the delivery of such ADR by the Depositary. The Share ADRs and the Temporary ADRs shall each bear a separate and distinct CUSIP number that is different from one another and from any CUSIP number that was, is or may be assigned to any depositary receipts previously or subsequently issued pursuant to any other arrangement between the Depositary (or any other depositary) and the Company and which are not ADRs outstanding hereunder.

**(b) Legends.**The ADRs may be endorsed with, or have incorporated in the text thereof, such legends or recitals not inconsistent with the provisions of the Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise, or (iv) required by any book-entry

system in which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.

**(c) Title.**Subject to the limitations contained herein and in the ADR, title to an ADR (and to each Certificated ADS evidenced thereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, such ADR has been properly endorsed or is accompanied by proper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of an ADS (that is, the person in whose name an ADS is registered on the books of the Depositary) as the absolute owner thereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or any ADR to any holder or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.

(d) Book-EntrySystems. The Depositary shall make arrangements for the acceptance of the ADSs into DTC. All ADSs held through DTC will be registered in the name of the nominee for DTC (currently “Cede & Co.”). As such, the nominee for DTC will be the only “Holder” of all ADSs held through DTC. Unless issued by the Depositary as Uncertificated ADSs, the ADSs registered in the name of Cede & Co. will be evidenced by one or more ADR(s) in the form of a “Balance Certificate,” which will provide that it represents the aggregate number of ADSs from time to time indicated in the records of the Depositary as being issued hereunder and that the aggregate number of ADSs represented thereby may from time to time be increased or decreased by making adjustments on such records of the Depositary and of DTC or its nominee as hereinafter provided. Citibank, N.A. (or such other entity as is appointed by DTC or its nominee) may hold the “Balance Certificate” as custodian for DTC. Each Beneficial Owner of ADSs held through DTC must rely upon the procedures of DTC and the DTC Participants to exercise or be entitled to any rights attributable to such ADSs. The DTC Participants shall for all purposes be deemed to have all requisite power and authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC Participants’ respective accounts in DTC and the Depositary shall for all purposes be authorized to rely upon any instructions and information given to it by DTC Participants. So long as ADSs are held through DTC or unless otherwise required by law, ownership of beneficial interests in the ADSs registered in the name of the nominee for DTC will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC or its nominee (with respect to the interests of DTC Participants), or (ii) DTC Participants or their nominees (with respect to the interests of clients of DTC Participants).

Section2.3 Deposit of Eligible Securities. The Depositary and the Company have been advised that under ROC law, as in effect as of the date hereof, no deposits of Eligible Securities may be made in the ADR facility, and no ADSs may be issued against such deposits, without receipt of specific approval of the FSC or TSE, as the case may be, except in connection

with (i) the distribution by the Company of additional Eligible Securities in connection with dividends or free distributions of Eligible Securities, (ii) the exercise by Holders of their preemptive rights applicable to Eligible Securities represented by ADSs in the event of capital increases for cash, (iii) subject in each case to receipt of all applicable approvals in the ROC, to the extent that the Company issues securities convertible for ADSs as approved by the FSC, the conversion of such securities into ADSs, and (iv) the purchase, as permitted hereunder, directly by any person or through the Depositary of Shares on the TSE for deposit in the ADR facility, or delivery of Shares to the Custodian for deposit in the ADR facility; provided that the total number of ADSs outstanding after an issuance described in clause (iv) does not exceed the number of issued ADSs previously approved by the FSC or TSE, subject to any adjustment due to capital restructuring or capital reduction, (plus any ADSs created pursuant to clauses (i), (ii) and (iii) above, subject to any adjustment in the number of Deposited Securities represented by each ADS). The Depositary and the Company have been advised that under ROC law, as in effect as of the date hereof, issuances under clause (iv) above will be permitted only to the extent that previously issued ADSs have been canceled. Any issuance under clause (iv) above will be subject to entering into a separate agreement with the Depositary to cover the terms of purchase of Shares on the TSE through the Depositary or delivery of Shares to Custodian for deposit in ADR facility. Except as contemplated by Section 2.14 hereof, the Depositary will not accept any Shares for deposit pursuant to clause (iii) unless it receives satisfactory opinions of ROC and U.S. counsel to the Company to the effect that such Eligible Securities may lawfully be deposited pursuant to the Deposit Agreement and are not Restricted Securities. The laws of the Republic of China applicable to the deposit of Eligible Securities may change from time to time. There can be no assurance that current law will continue in effect or that future changes of Republic of China law will not adversely affect the ability to deposit Eligible Securities hereunder.

Subject to applicable laws and regulations of the Republic of China and to the terms and conditions of this Deposit Agreement and applicable law, Eligible Securities or evidence of rights to receive Eligible Securities (other than Restricted Securities) may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7 hereof) at any time, whether or not the transfer books of the Company or the Eligible Securities Registrar, if any, are closed, by Delivery of the Eligible Securities to the Custodian. Every deposit of Eligible Securities shall be accompanied by the following: (A) (i) in the case of Eligible Securities represented by certificates issued in registeredform, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case ofEligible Securities represented by certificates in bearer form, the requisite coupons and talons pertaining thereto, and (iii) in the case of Eligible Securities delivered by book-entry transfer, confirmation of such book-entry transfer to the Custodian or that irrevocable instructions have been given to cause such Eligible Securities to be so transferred, (B) such certifications and payments (including, without limitation, the Depositary’s fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Eligible Securities by way of receipt) as may be reasonably required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement and applicable law, (C) if the Depositary so requires, a written order directing the Depositary to execute and deliver to, or upon the written order of, the person(s) stated in such order a Receipt or Receipts for the number of American Depositary Shares

representing the Eligible Securities so deposited, (D) evidence reasonably satisfactory to the Depositary (which may be an opinion of counsel) that all necessary approvals have been granted by, or there has been compliance with the rules and regulations of, any applicable governmental agency in the Republic of China, and (E) if the Depositary so requires, (i) an agreement, assignment or instrument reasonably satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Eligible Securities are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Eligible Securities or to receive other property in respect of any such deposited Eligible Securities or, in lieu thereof, such indemnity or other agreement as shall be reasonably satisfactory to the Depositary or the Custodian and (ii) if the Eligible Securities are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Eligible Securities for any and all purposes until the Eligible Securities so deposited are registered in the name of the Depositary, the Custodian or any nominee.

Except as contemplated by Section 2.14, without limiting any other provision of this Deposit Agreement, the Depositary shall instruct the Custodian not to, and neither the Depositary nor the Custodian, nor any nominee, agent or person acting on their behalf shall knowingly, accept for deposit (a) any Restricted Securities nor (b) any fractional Eligible Securities nor (c) a number of Eligible Securities which upon application of the ADS-to-Eligible Securities ratio would give rise to fractional ADSs. No Eligible Securities shall be accepted for deposit unless accompanied by evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Eligible Securities under the laws and regulations of the Republic of China and any necessary governmental approval has been granted in the Republic of China, if any. The Depositary may issue ADSs against evidence of rights to receive Eligible Securities from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Eligible Securities. Such evidence of rights may consist of, without limitation, written specific guarantees of ownership of Eligible Securities furnished by the Company or any such custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Eligible Securities.

Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Eligible Securities required to be registered pursuant to the provisions of the Securities Act, unless a registration statement under the Securities Act is in effect as to such Eligible Securities, or any Eligible Securities the deposit of which would violate any provisions of the Articles of Incorporation of the Company. For purposes of the foregoing sentence, the Depositary shall be entitled to rely upon representations and warranties made or deemed made pursuant to this Deposit Agreement and shall not be required to make any further investigation. The Depositary will comply with written instructions of the Company (received by the Depositary reasonably in advance) not to accept for deposit hereunder any Eligible Securities identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company's compliance with the securities laws of the United States or applicable ROC laws.

Section2.4 Registration and Safekeeping of Deposited Securities. The Depositary shall instruct the Custodian upon each Delivery of registered Eligible Securities being deposited hereunder with the Custodian (or other Deposited Securities pursuant to Article IV hereof), together with the other documents above specified, to present such registered Eligible Securities, together with the appropriate instrument(s) of transfer or endorsement, duly stamped, to the Eligible Securities Registrar for transfer and registration of the Eligible Securities (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary, or by a Custodian for the account and to the order of the Depositary or a nominee of the Depositary, in each case, on behalf of the Holders and Beneficial Owners, at such place(s) as the Depositary or the Custodian shall determine. Notwithstanding anything else contained in the Deposit Agreement, any ADR(s), or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the registration of the Deposited Securities in the name of the Depositary, the Custodian or any of their respective nominees, shall, to the maximum extent permitted by applicable law, vest in the Depositary, the Custodian or the applicable nominee the record ownership in the applicable Deposited Securities with the beneficial ownership rights and interests in such Deposited Securities being at all times vested with the Beneficial Owners of the ADSs representing the Deposited Securities. Notwithstanding the foregoing, the Depositary, the Custodian and the applicable nominee shall at all times be entitled to exercise the beneficial ownership rights in all Deposited Property, in each case only on behalf of the Holders and Beneficial Owners of the ADSs representing the Deposited Property, upon the terms set forth in the Deposit Agreement and, if applicable, the ADR(s) representing the ADSs. The Depositary, the Custodian and their respective nominees shall for all purposes be deemed to have all requisite power and authority to act in respect of Deposited Property on behalf of the Holders and Beneficial Owners of ADSs representing the Deposited Property, and upon making payments to, or acting upon instructions from, or information provided by, the Depositary, the Custodian or their respective nominees all persons shall be authorized to rely upon such power and authority.

Section2.5 Issuance of ADSs. The Depositary has made arrangements for the Custodian to confirm to the Depositary upon receipt of a deposit of Shares (i) that a deposit of Eligible Securities has been made pursuant to Section 2.3, (ii) that such Deposited Securities have been recorded in the name of the Depositary, the Custodian or a nominee of either on the shareholders’ register maintained by or on behalf of the Company by the Eligible Securities Registrar if registered Eligible Securities have been deposited or if deposit is made by book entry transfer, confirmation of such transfer in the books of the Taiwan Securities Central Depository, (iii) that all required documents have been received, and (iv) the person(s) to whom or upon whose order ADSs are deliverable in respect thereof and the number of ADSs to be so delivered. Such notification may be made by letter, cable, telex, SWIFT message or, at the risk and expense of the person making the deposit, by facsimile or other means of electronic transmission. Upon receiving such notice from the Custodian, the Depositary, subject to the terms and conditions of the Deposit Agreement and applicable law, shall issue the ADSs representing the Eligible Securities so deposited to or upon the order of the person(s) named in the notice delivered to the Depositary and, if applicable, shall execute and deliver at its Principal Office Receipt(s) registered in the name(s) requested by such person(s) and evidencing the aggregate number of ADSs to which such person(s) are entitled, but, in each case, only upon payment to the

Depositary of the charges of the Depositary for accepting a deposit of Shares and issuing ADSs (as set forth in Section 5.9 and Exhibit B hereto) and all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the Eligible Securities and the issuance of the ADS(s). The Depositary shall only issue ADSs in whole numbers and deliver, if applicable, ADR(s) evidencing whole numbers of ADSs. Nothing herein shall prohibit any Pre-Release Transaction upon the terms set forth in the Deposit Agreement.

Section2.6 Transfer, Combination and Split-up of ADRs.

**(a) Transfer.**The Registrar shall promptly register the transfer of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall promptly (x) cancel such ADRs and execute new ADRs evidencing the same aggregate number and type of ADSs as those evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) the surrendered ADRs have been properly endorsed or are accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) the surrendered ADRs have been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

(b) Combination& Split-Up. The Registrar shall register the split-up or combination of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination thereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

**Section2.7 Surrender of ADSs and Withdrawal of Deposited Securities.**ROC Requirements. The Depositary and the Company have been advised that under ROC law, as in effect as of the date hereof, a Holder who is a non-ROC person (other than a PRC person, except for a QDII (as defined below), or a person with prior approval from the Investment Commission of the Ministry of Economic Affairs, ROC) wishing to withdraw Deposited Securities from the ADR Facility is required to (i) register with the TSE for making investment in the ROC securities market, (ii) obtain a foreign investor investment identification (the "Foreign Investor Investment I.D.") issued pursuant to the ROC Regulations Governing Securities Investment by Overseas Chinese and Foreign Nationals and (iii) appoint an eligible agent in the ROC to open (a) a securities trading account, (b) a TDCC book-entry account and (c) a bank account (the securities trading account, the TDCC book-entry account, and the bank account, collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise shareholders' rights and perform such other functions as may be designated by such withdrawing Holder. In addition, such withdrawing Holder is also required to appoint a custodian bank to hold the securities in safekeeping, make confirmations and settle trades and report all relevant information. Without obtaining the Foreign Investor Investment I.D. and opening such Accounts, the withdrawing Holder would be unable to hold or subsequently sell the Deposited Securities withdrawn from the ADR Facility on the TSE or otherwise. No assurance can be given that a withdrawing Holder will be able to obtain the Foreign Investor Investment I.D. in a timely manner. In addition, such withdrawing Holders will be required to appoint an eligible agent in the ROC for filing tax returns and making tax payments (a "Tax Guarantor"). Such Tax Guarantor will be required to meet the qualifications set by the Ministry of Finance of the ROC and will act as the guarantor of the withdrawing Holder's tax payment obligations. Subject to certain limited exceptions, under current ROC law, repatriation of profits by a non-ROC withdrawing Holder is subject to the submission of evidence of the appointment of a Tax Guarantor to, and approval thereof by, the tax authority. Under the Regulations Governing Mainland China Investor's Securities Investments and Futures Trading in Taiwan promulgated by the FSC, a PRC qualified domestic institutional investor ("QDII") is allowed to invest in ROC securities. The custodians of QDIIs must apply with the TSE for the remittance amount of each QDII which cannot exceed US$100 million, the total investment amount of all QDIIs may not exceed US$500 million, and such QDII can only invest in the ROC securities market with the amount approved by the TSE. Additionally, PRC investors (including QDIIs) in the aggregate shall not hold 10% or more of such ROC company's issued and outstanding voting shares. The laws of the Republic of China applicable to the withdrawal of Deposited Securities may change from time to time. There can be no assurance that current law will remain in effect or that future changes of ROC law will not adversely affect the ability of Holders to withdraw Deposited Securities hereunder.

The Company has informed the Depositary that no Shares may be withdrawn upon presentation of ADSs (and if applicable, the ADRs evidencing such ADSs) for cancellation under this Section 2.7 until (i) the Company has delivered written confirmation that the number of Shares requested for withdrawal have been listed for trading on the TSE (such Shares, the “Listed Shares”) to the Depositary and the Custodian, (ii) the Listed Shares have been de-materialised (such Shares, the “De-Materialised Shares,” and Shares that are both Listed Shares and De-Materialised Shares, hereinafter referred to as the “Final Shares”), and (iii) an equivalent number of Final Shares are on deposit with the Custodian. The Company has further informed the Depositary that it is expected that newly issued Shares which may be deposited by the

Company from time to time and which are not listed for trading on the TSE at the time of such deposit will be listed on the TSE for trading and will be fully de-materialised, thereby becoming Final Shares, no later than five (5) business days after any such deposit. The parties hereto acknowledge and agree that (a) the Depositary will deliver Shares represented by ADSs (and if applicable, the ADRs representing such ADSs) presented for cancellation pursuant to this Section 2.7 only to the extent of the number of Final Shares then on deposit with the Custodian, (b) the Depositary will process presentations of ADSs for withdrawal of Final Shares under this Section 2.7 on a first come, first served basis, (c) the Depositary will complete requests for cancellation of ADSs and withdrawal of the Shares represented thereby only to the extent of the number of Final Shares at such time on deposit with the Custodian, (d) the Depositary will refuse to complete a request for cancellation of ADSs and withdrawal of Shares to the extent the number of Shares requested for withdrawal exceeds the number of Final Shares at such time deposited with the Custodian, and (e) the Depositary reserves the right to suspend withdrawals of Shares under this Section 2.7 until such time as the requisite number of Final Shares are deposited with the Custodian. The Company agrees to deliver to the Depositary and/or the Custodian, as applicable, written confirmation of the number of Listed Shares deposited with the Custodian under this Deposit Agreement promptly upon the receipt of confirmation of listing from the TSE of such Shares.

**(b)**Sale of Deposited Securities. Upon surrender of ADSs at the Principal Office and upon payment of any fees, reasonable expenses, taxes or other governmental charges as provided hereunder, subject to the terms of this Deposit Agreement and the Company’s Articles of Incorporation, and the transfer restrictions applicable to the Deposited Securities, if any, Holders may request that the Deposited Securities represented by such Holders’ ADSs be sold on such Holder’s behalf. Any Holder requesting a sale of Deposited Securities may be required by the Depositary to deliver, or cause to be delivered, to the Depositary a written order requesting the Depositary to sell, or cause to be sold, such Deposited Securities. Any such sale of Deposited Securities will be conducted in accordance with applicable ROC law through a securities company in the ROC on the TSE or in such other manner as is or may be permitted under applicable ROC law. Any such sale of Deposited Securities will be at the expense and risk of the Holder requesting such sale. Any Holder requesting the Depositary to sell the Deposited Securities represented by such Holder’s ADSs may be required to enter into a separate agreement to cover the terms of the sale of such Deposited Securities.

Upon receipt of any proceeds from any such sale, the Depositary shall, subject to any restrictions imposed by ROC law and regulations, and as provided hereunder, convert or cause to be converted any such proceeds into U.S. dollars and distribute any such proceeds to the Holders entitled thereto after deduction or payment of any fees, reasonable expenses, taxes or governmental charges (including, without limitation, any ROC and U.S. taxes) incurred in connection with such sale, as provided under the Deposit Agreement. Any such sale may be subject to ROC taxation on capital gains, if any, and will be subject to a securities transaction tax in the ROC. The ROC does not, as of the date hereof, impose tax on capital gains arising from ROC securities transactions, but there can be no assurance that a capital gains tax on ROC securities transactions will not be imposed in the future or as to the manner in which any ROC capital gains tax in respect of a sale of Deposited Securities would be imposed or calculated.

(c) Withdrawalof Deposited Securities. The Holder of ADSs shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADS(s) upon satisfaction of each of the following conditions: (i) the Holder (or a duly authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and if applicable, the Receipts evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities represented thereby, (ii) if so required by the Depositary, the Receipts Delivered to the Depositary for such purpose have been properly endorsed in blank or are accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, (iv) the Holder has delivered to the Depositary the applicable certification contemplated in Exhibit C hereof, duly completed by or on behalf of the Beneficial Owner(s) of the ADSs surrendered for withdrawal (unless the Depositary is otherwise instructed by the Company), and (v) all applicable fees and charges of, and reasonable expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereof) have been paid, subject, however, in each case, to the terms and conditions of the Receipts evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Incorporation and of any applicable laws and regulations of the Republic of China and of the United States and the rules of the TDCC, and to any provisions of or governing the Deposited Securities, in each case as in effect at the time thereof.

Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the Receipts evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs so Delivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver (without unreasonable delay) at the Custodian’s designated office the Deposited Securities represented by the ADSs so canceled together with any certificate or other document of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or upon the written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however,in each case, to the terms and conditions of the Deposit Agreement, of the Receipts evidencing the ADSs so canceled, of the Articles of Incorporation of the Company, of applicable laws and regulations of the Republic of China and of the United States and of the rules of the TDCC, and to the terms and conditions of or governing the Deposited Securities, in each case as in effect at the time thereof.

The Depositary shall not accept for surrender ADSs representing less than a whole number of Eligible Securities. In the case of Delivery to it of ADSs representing a number other than a whole number of Eligible Securities, the Depositary shall cause ownership of the appropriate whole number of Eligible Securities to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return to the person surrendering such ADSs the number of ADSs representing any remaining fractional Eligible Security, or (ii) sell or cause to be sold the fractional Eligible Security represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and

expenses incurred by, the Depositary and (b) taxes withheld) to the person surrendering the ADSs.

Notwithstanding anything else contained in any ADR or the Deposit Agreement, the Depositary may make delivery at the Principal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceeds from the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securities represented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrendering ADSs, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any Deposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to the Depositary for delivery at the Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission.

Section2.8 Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery, Transfer, etc.

(a) AdditionalRequirements. As a condition precedent to the execution and delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Eligible Securities or presenter of ADSs or of an ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Eligible Securities being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and delivery of ADRs or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of the representative ADR, if applicable, the Deposit Agreement and applicable law.

(b) AdditionalLimitations. The issuance of ADSs against deposits of Eligible Securities generally or against deposits of particular Eligible Securities may be suspended, or the deposit of particular Eligible Securities may be refused, or the registration of transfer of ADSs in particular instances may be refused, or the registration of transfers of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Eligible Securities Registrar are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Eligible Securities are listed, or under any provision of the Deposit Agreement or the representative ADR(s), if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.8.

(c) RegulatoryRestrictions. Notwithstanding any provision of the Deposit Agreement or any ADR(s) to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated herewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Eligible Securities in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time).

Section2.9 Lost ADRs, etc. In case any ADR shall be mutilated, destroyed, lost, or stolen, the Depositary shall execute and deliver a new ADR of like tenor at the expense of the Holder (a) in the case of a mutilated ADR, in exchange of and substitution for such mutilated ADR upon cancellation thereof, or (b) *in the case of a destroyed, lost or stolen ADR,*in lieu of and in substitution for such destroyed, lost, or stolen ADR, after the Holder thereof (i) has submitted to the Depositary a written request for such exchange and substitution before the Depositary has notice that the ADR has been acquired by a bona fide purchaser, (ii) has provided such security or indemnity (including an indemnity bond) as may be required by the Depositary to save it and any of its agents harmless, and (iii) has satisfied any other reasonable requirements imposed by the Depositary, including, without limitation, evidence satisfactory to the Depositary of such destruction, loss or theft of such ADR, the authenticity thereof and the Holder’s ownership thereof.

Section2.10 Cancellation and Destruction of Surrendered ADRs; Maintenance of Records. All ADRs surrendered to the Depositary shall be canceled by the Depositary. Canceled ADRs shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable against the Depositary for any purpose. The Depositary is authorized to destroy ADRs so canceled, provided the Depositary maintains a record of all destroyed ADRs. Any ADSs held in book-entry form (i.e., through accounts at DTC) shall be deemed canceled when the Depositary causes the number of ADSs evidenced by the Balance Certificate to be reduced by the number of ADSs surrendered (without the need to physically destroy the Balance Certificate). The Depositary agrees to maintain records of all Receipts surrendered and Deposited Securities withdrawn, substitute Receipts delivered and canceled or destroyed Receipts in accordance with procedures ordinarily followed by such transfer agents located in The City of New York, or as required by the laws or regulations governing the Depositary. Upon the reasonable request of the Company, the Depositary shall provide a copy of such records to the Company.

Section2.11 Escheatment. In the event any unclaimed property relating to the ADSs, for any reason, is in the possession of Depositary and has not been claimed by the Holder thereof or cannot be delivered to the Holder thereof through usual channels, the Depositary shall, upon expiration of any applicable statutory period relating to abandoned property laws, escheat such unclaimed property to the relevant authorities in accordance with the laws of each of the relevant States of the United States.

Section2.12 Partial Entitlement ADSs. In the event any Eligible Securities are deposited which entitle the holders thereof to receive a per Deposited Security distribution or other entitlement in an amount different from the Deposited Securities then on deposit (the Deposited Securities then on deposit collectively, “Full Entitlement Deposited Securities” and the Deposited Securities with different entitlement collectively, “Partial Entitlement Deposited Securities”), the Depositary shall (i) cause the Custodian to hold Partial Entitlement Deposited Securities separate and distinct from Full Entitlement Deposited Securities, and (ii) subject to the terms of this Deposit Agreement, issue ADSs and deliver ADRs representing Partial Entitlement Deposited Securities which are separate and distinct from the ADSs and ADRs representing Full Entitlement Deposited Securities, by means of separate CUSIP numbering and legending (if necessary) (“Partial Entitlement ADSs/ADRs” and “Full Entitlement ADSs/ADRs”, respectively). If and when the Company informs the Depositary in writing that the Partial Entitlement Deposited Securities become Full Entitlement Deposited Securities, the Depositary shall (a) give notice thereof to Holders of Partial Entitlement ADSs and give Holders of Partial Entitlement ADRs the opportunity to exchange such Partial Entitlement ADRs for Full Entitlement ADRs, (b) cause the Custodian to transfer the Partial Entitlement Deposited Securities into the account of the Full Entitlement Deposited Securities, and (c) take such actions as are necessary to remove the distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and Beneficial Owners of Partial Entitlement ADSs shall only be entitled to the entitlements of Partial Entitlement Deposited Securities. Holders and Beneficial Owners of Full Entitlement ADSs shall be entitled only to the entitlements of Full Entitlement Deposited Securities. All provisions and conditions of this Deposit Agreement shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full Entitlement ADRs and ADSs, except as contemplated by this Section 2.12. The Depositary is authorized to take any and all other actions as may be necessary (including, without limitation, making the necessary notations on Receipts) to give effect to the terms of this Section 2.12. The Company agrees to give timely written notice to the Depositary if any Eligible Securities issued or to be issued are Partial Entitlement Deposited Securities and shall assist the Depositary with the establishment of procedures enabling the identification of Partial Entitlement Deposited Securities upon Delivery to the Custodian.

Section2.13 Certificated/Uncertificated ADSs. Notwithstanding any other provision of the Deposit Agreement, the Depositary may, at any time and from time to time, issue ADSs that are not evidenced by ADRs (such ADSs, the “Uncertificated ADS(s)” and the ADS(s) evidenced by ADR(s), the “Certificated ADS(s)”). When issuing and maintaining Uncertificated ADS(s) under the Deposit Agreement, the Depositary shall at all times be subject to (i) the standards applicable to registrars and transfer agents maintaining direct registration systems for equity securities in New York and issuing uncertificated securities under New York law, and (ii) the terms of New York law applicable to uncertificated equity securities. Uncertificated ADSs shall not be represented by any instruments but shall be evidenced by registration in the books of the Depositary maintained for such purpose. Holders of Uncertificated ADSs, that are not subject to any registered pledges, liens, restrictions or adverse claims of which the Depositary has notice at such time, shall at all times have the right to exchange the Uncertificated ADS(s) for Certificated ADS(s) of the same type and class, subject in each case to (x) applicable laws and any rules and regulations the Depositary may have established in respect of the Uncertificated ADSs, and (y) the continued availability of Certificated ADSs in the U.S.

Holders of Certificated ADSs shall, if the Depositary maintains a direct registration system for the ADSs, have the right to exchange the Certificated ADSs for Uncertificated ADSs upon (i) the due surrender of the Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation of a written request to that effect to the Depositary, subject in each case to (a) all liens and restrictions noted on the ADR evidencing the Certificated ADS(s) and all adverse claims of which the Depositary then has notice, (b) the terms of the Deposit Agreement and the rules and regulations that the Depositary may establish for such purposes hereunder, (c) applicable law, and (d) payment of the Depositary fees and expenses applicable to such exchange of Certificated ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all material respects be identical to Certificated ADS(s) of the same type and class, except that (i) no ADR(s) shall be, or shall need to be, issued to evidence Uncertificated ADS(s), (ii) Uncertificated ADS(s) shall, subject to the terms of the Deposit Agreement, be transferable upon the same terms and conditions as uncertificated securities under New York law, (iii) the ownership of Uncertificated ADS(s) shall be recorded on the books of the Depositary maintained for such purpose and evidence of such ownership shall be reflected in periodic statements provided by the Depositary to the Holder(s) in accordance with applicable New York law, (iv) the Depositary may from time to time, upon notice to the Holders of Uncertificated ADSs affected thereby, establish rules and regulations, and amend or supplement existing rules and regulations, as may be deemed reasonably necessary to maintain Uncertificated ADS(s) on behalf of Holders, provided that (a) such rules and regulations do not conflict with the terms of the Deposit Agreement and applicable law, and (b) the terms of such rules and regulations are readily available to Holders upon request, (v) the Uncertificated ADS(s) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless such Uncertificated ADS(s) is/are registered on the books of the Depositary maintained for such purpose, (vi) the Depositary may, in connection with any deposit of Shares resulting in the issuance of Uncertificated ADSs and with any transfer, pledge, release and cancellation of Uncertificated ADSs, require the prior receipt of such documentation as the Depositary may deem reasonably appropriate, and (vii) upon termination of the Deposit Agreement, the Depositary shall not require Holders of Uncertificated ADSs to affirmatively instruct the Depositary before remitting proceeds from the sale of the Deposited Property represented by such Holders' Uncertificated ADSs under the terms of Section 6.2 of the Deposit Agreement. When issuing ADSs under the terms of the Deposit Agreement, including, without limitation, issuances pursuant to Sections 2.5, 4.2, 4.3, 4.4, 4.5 and 4.11, the Depositary may in its discretion determine to issue Uncertificated ADSs rather than Certificated ADSs, unless otherwise specifically instructed by the applicable Holder to issue Certificated ADSs. All provisions and conditions of the Deposit Agreement shall apply to Uncertificated ADSs to the same extent as to Certificated ADSs, except as contemplated by this Section 2.13. The Depositary is authorized and directed to take any and all actions and establish any and all procedures deemed reasonably necessary to give effect to the terms of this Section 2.13. Any references in the Deposit Agreement or any ADR(s) to the terms “American Depositary Share(s)” or “ADS(s)” shall, unless the context otherwise requires, include Certificated ADS(s) and Uncertificated ADS(s). Except as set forth in this Section 2.13 and except as required by applicable law, the Uncertificated ADSs shall be treated as ADSs issued and outstanding under the terms of the Deposit Agreement. In the event that, in determining the rights and obligations of parties hereto with respect to any Uncertificated ADSs, any conflict arises between (a) the

terms of the Deposit Agreement (other than this Section 2.13) and (b) the terms of this Section 2.13, the terms and conditions set forth in this Section 2.13 shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the Uncertificated ADSs.

Section2.14 Restricted ADSs. The Depositary shall, at the request and expense of the Company, establish procedures enabling the deposit hereunder of Shares that are Restricted Securities in order to enable the holder of such Shares to hold its ownership interests in such Restricted Securities in the form of ADSs issued under the terms hereof (such Shares, “Restricted Shares”). Upon receipt of a written request from the Company to accept Restricted Shares for deposit hereunder, the Depositary agrees to establish procedures permitting the deposit of such Restricted Shares and the issuance of ADSs representing the right to receive, subject to the terms of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), such deposited Restricted Shares (such ADSs, the “Restricted ADSs,” and the ADRs evidencing such Restricted ADSs, the “Restricted ADRs”). Notwithstanding anything contained in this Section 2.14, the Depositary and the Company may, to the extent not prohibited by law, agree to issue the Restricted ADSs in uncertificated form (“Uncertificated Restricted ADSs”) upon such terms and conditions as the Company and the Depositary may deem necessary and appropriate. The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and satisfactory to the Depositary to ensure that the establishment of such procedures does not violate the provisions of the Securities Act or any other applicable laws. The depositors of such Restricted Shares and the Holders of the Restricted ADSs may be required prior to the deposit of such Restricted Shares, the transfer of the Restricted ADRs and Restricted ADSs or the withdrawal of the Restricted Shares represented by Restricted ADSs to provide such written certifications or agreements as the Depositary or the Company may require. The Company shall provide to the Depositary in writing the legend(s) to be affixed to the Restricted ADRs (if the Restricted ADSs are to be issued as Certificated ADSs), or to be included in the statements issued from time to time to Holders of Uncertificated ADSs (if issued as Uncertificated Restricted ADSs), which legends shall (i) be in a form reasonably satisfactory to the Depositary and (ii) contain the specific circumstances under which the Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, may be transferred or the Restricted Shares withdrawn. The Restricted ADSs issued upon the deposit of Restricted Shares shall be separately identified on the books of the Depositary and the Restricted Shares so deposited shall, to the extent required by law, be held separate and distinct from the other Deposited Securities held hereunder. The Restricted Shares and the Restricted ADSs shall not be eligible for Pre-Release Transactions. The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall not in any way be fungible with the ADSs issued under the terms hereof that are not Restricted ADSs. The Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, shall be transferable only by the Holder thereof upon delivery to the Depositary of (i) all documentation otherwise contemplated by the Deposit Agreement and (ii) an opinion of counsel satisfactory to the Depositary setting forth, inter alia, the conditions upon which the Restricted ADSs presented, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, are transferable by the Holder thereof under applicable securities laws and the transfer restrictions contained in the legend applicable to the Restricted ADSs presented for transfer. Except as set forth in this Section 2.14, and except as required by applicable law, the

Restricted ADSs and the Restricted ADRs evidencing Restricted ADSs shall be treated as ADSs and ADRs issued and outstanding under the terms of the Deposit Agreement. In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.14) and (b) the terms of (i) this Section 2.14 or (ii) the applicable Restricted ADR, the terms and conditions set forth in this Section 2.14 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.

If the Restricted ADRs, the Restricted ADSs and the Restricted Shares cease to be Restricted Securities, the Depositary, upon receipt of (x) an opinion of counsel satisfactory to the Depositary setting forth, inter alia, that the Restricted ADRs, the Restricted ADSs and the Restricted Shares are not as of such time Restricted Securities, and (y) instructions from the Company to remove the restrictions applicable to the Restricted ADRs, the Restricted ADSs and the Restricted Shares, shall (i) eliminate the distinctions and separations that may have been established between the applicable Restricted Shares held on deposit under this Section 2.14 and the other Shares held on deposit under the terms of the Deposit Agreement that are not Restricted Shares, (ii) treat the newly unrestricted ADRs and ADSs on the same terms as, and fully fungible with, the other ADRs and ADSs issued and outstanding under the terms of the Deposit Agreement that are not Restricted ADRs or Restricted ADSs, and (iii) take all actions necessary to remove any distinctions, limitations and restrictions previously existing under this Section 2.14 between the applicable Restricted ADRs and Restricted ADSs, respectively, on the one hand, and the other ADRs and ADSs that are not Restricted ADRs or Restricted ADSs, respectively, on the other hand, including, without limitation, by making the newly-unrestricted ADSs eligible for Pre-Release Transactions and for inclusion in the applicable book-entry settlement systems.

Section2.15 Temporary ADSs. In the event that, in determining the rights and obligations of parties hereto with respect to any Temporary ADSs, any conflict arises between (a) the terms of this Deposit Agreement (other than this Section 2.15) and (b) the terms of (i) the Temporary ADSs issued hereunder as set forth in this Section 2.15 or (ii) the applicable Temporary ADR, the terms and conditions set forth in this Section 2.15 or the applicable Temporary ADR shall be controlling and shall govern the rights and obligations of the parties to this Deposit Agreement pertaining to the Certificate of Payment, the Temporary ADSs and the Temporary ADRs.

Whenever the Company proposes to issue any Certificate of Payment eligible for deposit hereunder (in connection with the Offering or otherwise), the Company shall timely notify the Depositary thereof and provide the Depositary with written instructions to the effect that, inter alia, (i) the Certificate of Payment has been or is to be issued pursuant to a bona fide purchase of Shares from the Company, (ii) the Certificate of Payment is not, and shall not be deemed to be upon its deposit, and the Shares issuable pursuant to the terms of the Certificate of Payment will not be, Restricted Securities, (iii) a description of the rights (if any) to any distribution upon Deposited Securities to be made to Holders of Temporary ADSs representing such Certificates of Payment upon the terms set forth in Article IV hereof, and (iv) the date established by the

Company upon which the Company shall convert or cause to be converted the Certificate of Payment into Shares on its records and on the records of the Eligible Securities Registrar.

Subject always to the laws and regulations of the Republic of China, upon deposit of any Certificate of Payment hereunder and payment to the Depositary of the charges of the Depositary for accepting a deposit, issuing ADSs and issuing and delivering Receipts (as set forth in Section 5.9 and Exhibit B hereto), the Depositary shall (i) cause the Custodian to hold such Certificate of Payment separate and distinct from the Shares, any other Certificate(s) of Payment and any other Deposited Securities and (ii) issue and deliver Temporary ADSs representing interests in the Certificate of Payment so deposited. The Temporary ADSs so issued shall be identified and treated separately and distinctly from any other ADSs representing Deposited Securities hereunder by means, inter alia, of separate CUSIP numbering and legending (if necessary). The Depositary may issue Temporary ADSs in one or multiple series as the Depositary in its sole discretion deems necessary and appropriate. No Temporary ADS shall be fungible with any other ADSs issued hereunder.

The Depositary shall deliver Temporary ADSs in book-entry form only. No certificated Temporary ADRs will be issued except for a “Balance Certificate” evidencing all Temporary ADSs held in DTC, which shall be substantially in the form of Temporary ADR set forth in Exhibit A hereto, except as may be necessary to identify and treat the Temporary ADSs as separate and distinct from any other ADSs issued under the terms of this Deposit Agreement. The Depositary shall make arrangements for the acceptance of such Temporary ADSs into DTC upon the terms set forth in Section 2.2(d) hereof. The Temporary ADSs and the Temporary ADRs evidenced thereby are identical to and confer all of the rights and obligations set forth herein relating to Receipts and ADSs represented thereby except that (i) in accordance with the applicable laws and regulations of the Republic of China, Holders of Temporary ADRs will have no right to withdraw the Deposited Securities represented by their Temporary ADSs, (ii) Temporary ADRs shall bear separate CUSIP numbers that shall be different from any CUSIP number that is or may be assigned to the other ADSs issued hereunder, (iii) neither Temporary ADSs nor interests in any Certificate of Payment shall be eligible for any Pre-Cancellation Sale Transactions or Pre-Release Transactions described in Section 5.10 hereof and (iv) in the event that the Company makes any distributions upon Deposited Securities upon the terms of Article IV of this Deposit Agreement, the Depositary shall make distributions to Holders of Temporary ADSs on the basis of the distribution(s) received from the Company in respect of the Certificate(s) of Payment corresponding to the series of Temporary ADSs held by such Holder. Nothing herein shall impose any obligation upon the Depositary to make any distributions to Holders of any series of Temporary ADSs on the same basis as Holders of Share ADSs or any other Series of Temporary ADSs issued hereunder.

The Company undertakes to make Shares available in exchange for any specified Certificate of Payment, as soon as possible after the issuance of the Certificate of Payment and to provide timely notice thereof to the Depositary. Upon receipt of such notice from the Company, the Depositary shall instruct the Custodian to surrender any such Certificate of Payment then eligible for exchange to the Company against delivery of Shares to the Depositary in exchange therefor. Upon receipt by the Depositary of (i) notice of the exchange of Shares for such Certificate of Payment and (ii) confirmation from the Company that the Shares so received rank

in all respects pari passu with the Deposited Securities evidenced by Share ADSs, the Depositary shall give notice thereof to the applicable Holders of Temporary ADSs and thereafter Temporary ADSs shall be eligible for exchange into Share ADSs. Interests in Temporary ADSs in DTC will be automatically exchanged for beneficial interests in Share ADSs as follows: with no further action by Holders, the Depositary shall instruct DTC to automatically transfer any position held by a DTC participant under the CUSIP number assigned to the Temporary ADSs to the CUSIP number assigned to the Share ADSs. Holders and Beneficial Owners of such Temporary ADSs shall thereafter be Holders and Beneficial Owners of Share ADSs issued hereunder and shall have all the rights and obligations specified in this Deposit Agreement and in the Receipts pertaining to Share ADSs. The Depositary will charge no fee for the cancellation of the Temporary ADSs and issuance of Share ADSs in exchange therefor.

Notwithstanding anything in the Deposit Agreement to the contrary, the Depositary shall have no obligation to any party to exchange Temporary ADSs for Share ADSs as provided herein unless and until, upon delivery by the Depositary of the related Certificate of Payment, the Company shall have delivered Shares in respect thereof to the Depositary.

ARTICLE III

CERTAIN OBLIGATIONS OF HOLDERS

AND BENEFICIAL OWNERS OF ADSs

Section3.1 Proofs, Certificates and Other Information. Any person presenting Eligible Securities for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or the ADR(s) evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and the applicable ADR(s). The Depositary and the Registrar, as applicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by the terms of Section 7.8, the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction. The Depositary shall provide the Company, in a timely manner, with copies or originals if necessary and appropriate of (i) any such proofs of citizenship or residence, taxpayer status, or exchange control approval or copies of written representations and warranties which it receives from Holders and Beneficial Owners, and (ii) any other information or documents which the Company may reasonably request and which the Depositary shall request and receive

from any Holder or Beneficial Owner or any person presenting Eligible Securities for deposit or ADSs for cancellation, transfer or withdrawal. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.

Section3.2 Liability for Taxes and Other Charges. Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or ADRs shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property, and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and ADRs, the Holder and the Beneficial Owner remaining liable for any deficiency. The Custodian may refuse the deposit of Eligible Securities and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split-up or combination of ADRs and (subject to Section 7.8) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. The obligations of Holders and Beneficial Owners under this section 3.2 shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

**Section3.3 Representations and Warranties on Deposit of Eligible Securities.**Deposit of Shares. Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14), and (vi) the Shares presented for deposit have not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs.

**(b)**Deposit of Certificate(s) of Payment. Whenever the Company shall deposit any Certificate of Payment under this Deposit Agreement the Company shall be deemed thereby to represent and warrant that (i) such Certificate of Payment is, and the Shares to be received in exchange for the Certificate of Payment will be, duly authorized, validly issued, fully paid, non-assessable and legally obtained, (ii) all preemptive (and similar) rights, if any, with respect to such Certificate of Payment has been, and with respect to the Shares to be received in exchange for the Certificate of Payment will have been, validly waived or exercised, (iii) the Company has

duly authorized the issuance of the Shares to be delivered in exchange for the Payment Certificate so presented for deposit, (iv) the Certificate of Payment presented for deposit is, and the Shares to be deposited upon the exchange of the Certificates of Payment for Shares will be, free and clear of any lien, encumbrance, security interest, change, mortgage or adverse claim, and are not, and the Temporary ADSs issuable upon such deposit will not be, Restricted Securities and (v) the Certificate of Payment presented for deposit has not been, and the Shares to be deposited upon the exchange for the Certificate of Payment will not have been, stripped of any rights or entitlements. Such representations and warranties shall survive the deposit of any Certificate of Payment, the issuance and cancellation of Temporary ADSs in respect thereof and the transfer of such Temporary ADSs.

**(c)**If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

Section3.4 Compliance with Information Requests. Notwithstanding any other provision of the Deposit Agreement or any ADR(s), each Holder and Beneficial Owner agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of the TSE, and any other stock exchange on which the Eligible Securities or ADSs are, or will be, registered, traded or listed or the Articles of Incorporation of the Company, which are made to provide information, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and Eligible Securities as the case may be) and regarding the identity of any other person(s) interested in such ADSs and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request. The Depositary agrees to use its reasonable efforts to forward, upon the request of the Company and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

Section3.5 Ownership Restrictions. Notwithstanding any other provision in the Deposit Agreement or any ADR, the Company may restrict transfers of the Shares or Eligible Securities where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Incorporation of the Company. The Company may also restrict, in such manner as it deems appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Incorporation of the Company. Nothing herein shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described in this Section 3.5.

Section3.6 Reporting Obligations and Regulatory Approvals. Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

ARTICLE IV

THE DEPOSITED SECURITIES

Section4.1 Cash Distributions. Whenever the Company intends to make a distribution of a cash dividend or other cash distribution in respect of any Deposited Securities, the Company shall give notice thereof to the Depositary at least twenty (20) days prior to the proposed distribution specifying, inter alia, the record date applicable for determining the holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9. Upon receipt of confirmation of the receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms hereof, the Depositary will (i) if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (pursuant to Section 4.8), be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.8), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9, and (iii) distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary or the Custodian, as the case may be, will forward to the Company or its agent such information from its records as the company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Custodian, as the case may be, or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for Holders of ADSs. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.1, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.1, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.1 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section4.2 Distribution in Eligible Securities. Whenever the Company intends to make a distribution that consists of a dividend in, or free distribution of, Eligible Securities, the Company shall give notice thereof to the Depositary at least twenty (20) days prior to the proposed distribution, specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice from the Company, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Eligible Securities received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Eligible Securities or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1. In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company in the fulfillment of its obligation under Section 5.7, has furnished an opinion of U.S. counsel determining that Eligible Securities must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (z) the deposit of Eligible Securities is not permitted under the laws or regulations of the Republic of China, the Depositary may dispose of all or a portion of such property (including Eligible Securities and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.2, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.2, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.2 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section4.3 Elective Distributions in Cash or Eligible Securities. Whenever the Company intends to make a distribution payable at the election of the holders of Deposited Securities in cash or in additional Eligible Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such elective

distribution and whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7. If the above conditions are not satisfied, or if the Company requests such elective distribution not to be made available to Holders of ADSs ,the Depositary shall establish the ADS Record Date on the terms described in Section 4.9 and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the Republic of China in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 or (Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 and establish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1, or (Y) in ADSs, the distribution shall be made upon the terms described in Section 4.2. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Eligible Securities (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Deposited Securities. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.3, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.3, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.3 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section4.4 Distribution of Rights to Purchase Additional ADSs.

(a) Distributionto ADS Holders. Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Eligible Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution and whether or not it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely

requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below. In the event all conditions set forth above are satisfied, the Depositary shall establish the ADS Record Date (upon the terms described in Section 4.9) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights. The Company shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Eligible Securities (rather than ADSs).

(b) Saleof Rights. If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7, or determines it is not lawful or not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine in its discretion but after consultation with the Company whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as it may deem practicable. The Company shall assist the Depositary to the extent necessary to determine such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms set forth in Section 4.1.

(c) Lapseof Rights. If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) or to arrange for the sale of the rights upon the terms described in Section 4.4(b), the Depositary shall allow such rights to lapse.

The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.

Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case

satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws.

In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amount distributed to the Holders of ADSs shall be reduced accordingly. In the event that the Depositary determines that any distribution of Deposited Property (including Eligible Securities and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Eligible Securities and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes or charges.

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Deposited Securities or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Eligible Securities or other securities to be acquired upon the exercise of such rights.

Section4.5 Distributions Other Than Cash, Shares or Rights to Purchase Shares.

**(a)**Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Eligible Securities or rights to purchase additional Eligible Securities, the Company shall give timely notice thereof to the Depositary and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution to be made to Holders of ADSs, the Depositary shall consult with the Company, and the Company shall assist the Depositary, to determine whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable.

**(b)**Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes withheld. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.

**(c)**If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7, or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms of Section 4.1. If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.

**(d)**Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful or practicable to make the property described in this Section 4.5 available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.

Section4.6 Distributions with Respect to Deposited Securities in Bearer Form. Subject always to the laws and regulations of the Republic of China and to the terms of this Article IV, distributions in respect of Deposited Securities that are held by the Depositary in bearer form shall be made to the Depositary for the account of the respective Holders of ADS(s) with respect to which any such distribution is made upon due presentation by the Depositary or the Custodian to the Company of any relevant coupons, talons, or certificates. The Company shall promptly notify the Depositary of such distributions. The Depositary or the Custodian shall promptly present such coupons, talons or certificates, as the case may be, in connection with any such distribution.

Section4.7 Redemption. If the Company intends to exercise any right of redemption in respect of any of the Deposited Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the intended date of redemption which notice shall set forth the particulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by the Company to the Depositary within the terms of Section 5.7, and only if the Depositary shall have determined that such proposed redemption is reasonably practicable, the Depositary shall provide to each Holder a notice setting forth the intended exercise by the Company of the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary. The redemption price per ADS shall be the

dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 and the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed redemption provided for in this Section 4.7, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.7, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.7 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section4.8 Conversion of Foreign Currency. Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of Deposited Property, which in the judgment of the Depositary can at such time be converted on a practicable basis, by sale or in any other manner that it may determine in accordance with applicable law, into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shall, subject to the laws and regulations of the Republic of China, convert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of any applicable fees, any reasonable and customary expenses incurred in such conversion and any expenses incurred on behalf of the Holders in complying with currency exchange control or other governmental requirements) in accordance with the terms of the applicable sections of the Deposit Agreement. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of any application of exchange restrictions or otherwise.

If such conversion or distribution generally or with regard to a particular Holder can be effected only with the approval or license of any government or agency thereof, the Depositary shall have authority to file such application for approval or license, if any, as it may deem desirable. In no event, however, shall the Depositary be obligated to make such a filing.

If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practicable or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied or, in the opinion of the Depositary, not obtainable at a reasonable cost or within a reasonable period, the Depositary may, in its discretion, (i) make such conversion and distribution in Dollars to the Holders for whom such conversion, transfer and distribution is lawful and practicable, (ii) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) to Holders for whom this is lawful and

practicable, or (iii) hold (or cause the Custodian to hold) such Foreign Currency (without liability for interest thereon) for the respective accounts of the Holders entitled to receive the same.

Section4.9 Fixing of ADS Record Date. Whenever the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Eligible Securities, rights, or other distribution), or whenever for any reason the Depositary causes a change in the number of Deposited Securities that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ADS Record Date”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Deposited Securities represented by each ADS. The Depositary shall make reasonable efforts to establish the ADS Record Date as closely as practicable to the applicable record date for the Deposited Securities (if any) set by the Company in the Republic of China and shall not announce the establishment of any ADS Record Date prior to the relevant corporate action having been made public by the Company (if such corporate action affects the Deposited Securities). Subject to applicable law and the provisions of Section 4.1 through 4.8 and to the other terms and conditions of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action. The Depositary shall, so long as the ADSs are listed in a securities exchange in the U.S., promptly notify such securities exchange of any action to fix an ADS Record Date or to close the transfer books for the ADSs.

Section4.10 Voting of Deposited Securities.(a) Voting by Shareholders The Depositary has been advised that the Articles of Incorporation of the Company and the ROC Company Law, as in effect on the date of the Deposit Agreement, provide that: (i) except for Shares held by the Company, a holder of Shares (including holders of interests in any Certificate of Payment evidencing the irrevocable right to receive Shares) is entitled to one vote for each Share held, (ii) the election of directors and supervisors takes place by means of cumulative voting, and (iii) a shareholder must, as to all matters subject to a vote of shareholders (other than the election of directors and supervisors), exercise the voting rights for all Deposited Securities held by such shareholder in the same manner (e.g., a holder of 1,000 Shares cannot split his/her votes but must vote all 1,000 Shares in the same manner except in the event of cumulative voting for an election of directors and supervisors). Deposited Securities which have been withdrawn from the ADR Facility and timely transferred on the Company's register of shareholders to a person other than the Depositary's nominee may be voted by the registered holder(s) thereof directly, subject, in each case, to the limitations of ROC Law and the Articles of Incorporation of the Company. Holders may not receive sufficient advance notice of shareholders' meetings to enable them to timely withdraw the Deposited Securities and vote at such meetings and may not be able to re-deposit the withdrawn securities under the terms of the Deposit Agreement.

(b) Votingby ADS Holders. Holders of ADSs have no individual voting rights with respect to the Shares represented by their ADSs. Each Holder and Beneficial Owner shall be deemed, by acceptance of ADSs or acquisition of any beneficial interest therein, to have

authorized and directed the Depositary's nominee, without liability, to appoint the Chairman of the Company (or his/her designate) (the "Voting Representative"), as representative of the Depositary's nominee who is registered in the Republic of China as representative of the Depositary and the Holders and Beneficial Owners in respect of the Deposited Securities (the “Registered Holder”) to vote the Deposited Securities in accordance with the terms hereof.

The Company agrees to timely notify the Depositary of any proposed shareholders' meeting and to provide to the Depositary in New York, at least 24 calendar days before any shareholders' meeting, sufficient copies as the Depositary may reasonably request of English language translations of the Company's notice of shareholders' meeting and the agenda of the materials to be voted on (in the form the Company generally makes available to holders of Shares in the Republic of China) (such materials collectively, the "Shareholder Notice"). As soon as practicable after receipt by the Depositary of the requisite number of Shareholder Notices, the Depositary shall establish the ADS Record Date (upon the terms of Section 4.9 hereof) and shall, at the Company's expense and, provided no U.S. legal prohibitions exist, distribute to Holders as of the applicable ADS Record Date, (i) the Shareholder Notice, (ii) a Depositary notice setting forth the manner in which Holders of ADSs may instruct the Depositary to cause the Deposited Securities represented by their ADSs to be voted under the terms of this Deposit Agreement including, a description of the Management Authorization (as defined below), together with a form of voting instructions and/or other means to provide voting instructions (the Depositary notice and the related materials prepared by the Depositary collectively, the "Depositary Notice"). The Depositary is under no obligation to distribute the Shareholder Notice or the Depositary Notice to Holders if the Company has failed to provide to the Depositary in New York the requisite number of Shareholder Notices at least 24 calendar days prior to the date of any shareholders' meeting. If the Depositary has not delivered the Shareholder Notice or the Depositary Notice to Holders, it will endeavor to cause all Deposited Securities represented by ADSs to be present at the relevant shareholders' meeting insofar as practicable and permitted under applicable law but will not cause the Deposited Securities to be voted; provided, however, that the Depositary may determine, at its discretion, to distribute such Shareholder Notice or Depositary Notice to the Holders and/or cause the Shares or other Deposited Securities to be voted as it deems appropriate. There can be no assurance that Holders generally or any Holder in particular will receive Shareholder Notices or Depositary Notices with sufficient time to enable the return of voting instructions to the Depositary in a timely manner.

Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).

(c) Votingof Deposited Securities Upon ADS Holders' Instructions. If Holders of ADSs together holding at least 51% of all ADSs (including Temporary ADSs) outstanding as of

the relevant ADS Record Date shall instruct the Depositary prior to the date established for such purpose by the Depositary to vote in the same manner in respect of one or more resolutions to be proposed at a shareholders' meeting **(**including resolutions for the election of directors and/or supervisors), the Depositary shall notify the Voting Representative and cause the Depositary's nominee as Registered Holder to appoint the Voting Representative as the representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners) to attend such shareholders' meeting and vote all Deposited Securities evidenced by ADSs (including Temporary ADSs) then outstanding in the manner so instructed by such Holders. If voting instructions are received by the Depositary on or before the date established by the Depositary for the receipt of such instructions from any Holder as of the ADS Record Date, which are signed but without further indication as to voting instructions, the Depositary shall deem such Holder to have instructed a vote in favor of the items set forth in such instructions. The Depositary and Custodian shall not have any obligation to monitor, and shall not incur any liability for, the actions, or the failure to act, of the Voting Representative as representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners).

(d) ManagementAuthorization. If, for any reason (other than a failure by the Company to supply the requisite number of Shareholder Notices to the Depositary within the requisite time period provided in this Section 4.10) the Depositary has not, prior to the date established for such purpose by the Depositary received instructions from Holders together holding at least 51% of all ADSs (including Temporary ADSs) outstanding at the relevant ADS Record Date, to vote in the same manner in respect of any resolution (including resolutions for the election of directors and/or supervisors) then, subject to the following paragraph, the Holders shall be deemed to have instructed the Depositary's nominee to give a discretionary authorization (a "Management Authorization") to the Voting Representative as the representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners) to attend and vote at such meeting all the Deposited Securities represented by ADSs (including Temporary ADSs) then outstanding in his or her discretion. In such circumstances, the Voting Representative shall be free to exercise the votes attaching to the Deposited Securities in any manner he or she wishes, which may not be in the best interests of the Holders and Beneficial Owners.

The Depositary's grant of a Management Authorization in the manner and circumstances described in the preceding paragraph shall be subject to the receipt by the Depositary prior to each shareholders' meeting of an opinion of ROC counsel addressed to, and in form and substance satisfactory to, the Depositary to the effect that under ROC law (i) the arrangements relating to the Management Authorization are permissible, and (ii) the Depositary will not be deemed to be authorized to exercise any discretion when causing the voting in accordance with this Section 4.10 and will not (in the absence of negligence, bad faith or breach of contract, and subject to general principles of agency) be subject to any liability under ROC law for losses arising from the exercise of the voting arrangements set out in this Section 4.10 on the grounds that voting in accordance with this Section 4.10 is in violation of ROC law. In the event the Depositary does not receive such opinion, or the Voting Representative informs the Depositary that he or she does not wish to be so authorized, the Depositary will not grant the Management Authorization but will cause the Deposited Securities to be present at the shareholders' meeting to the extent practicable and permitted by applicable law for the purpose of satisfying quorum

requirements but will not cause the Deposited Securities to be voted or the Management Authorization to be granted.

(e) General. The Depositary shall not, and the Depositary shall ensure that the Custodian and its nominees do not, vote or attempt to exercise the right to vote that attaches to the Deposited Securities other than in accordance with instructions given in accordance with this Section 4.10. The terms of this Section 4.10 may be amended from time to time in accordance with the terms of this Deposit Agreement. By continuing to hold ADSs after the effective time of such amendment all Holders and Beneficial Owners shall be deemed to have agreed to the terms of this Section 4.10 as so amended. Notwithstanding anything else contained in the Deposit Agreement, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies or instructions, of holders of Deposited Securities if the taking of such action would violate U.S. or ROC laws. The Company agrees to take any and all actions reasonably necessary to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. or ROC counsel, as applicable, addressing any actions requested to be taken if so reasonably requested by the Depositary.

Section4.11 Changes Affecting Deposited Securities. Upon any change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and the ADSs shall, subject to the provisions of the Deposit Agreement, any ADR(s) evidencing such ADSs and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement and receipt of an opinion of counsel to the Company provided pursuant to Section 5.7 hereof and satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as are appropriate to reflect the transaction with respect to the ADSs. The Company agrees to, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of ADRs. Notwithstanding the foregoing, in the event that any Deposited Property so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account

of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such Deposited Property.

Section4.12 Available Information.

As of the date of this Deposit Agreement the Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or submit certain reports with the Commission. These reports can be retrieved from the Commission's website (www.sec.gov) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549. If at any time the Company files a Form 15F or any successor form thereto, with the Commission, which suspends the Company's duty under the Exchange Act to file or submit reports required under Sections 13(a) or 15(d) of the Exchange Act, upon the effectiveness of such Form 15F, the Company's duty to file or submit reports under Sections 13(a) or 15(d) of the Exchange Act will terminate. At that time, pursuant to Rule 12g3-2(b)(1), the Company will be exempt from the reporting obligations of the Exchange Act. In order to satisfy the conditions of Rule 12g3-2(b), the Company will publish an English translation of the information contemplated in Rule 12g3-2(b)(2)(i) under the Exchange Act on its internet website or through an electronic information delivery system generally available to the public in the Company’s primary trading market. The Company will specify in Form 15F the internet website or the electronic information delivery system on which it intends to publish such information. The information so published by the Company cannot be retrieved from the Commission’s internet website, and cannot be inspected or copied at the public reference facilities maintained by the Commission. If the Form 15F is not declared effective, the Company will again be subject to the periodic reporting requirements of the Exchange Act and will be required to file with the Commission, and submit to the Commission, certain reports that can be retrieved from the Commission’s internet website at www.sec.gov, and can be inspected and copied at the public reference facilities maintained by the Commission.

Section4.13 Reports. The Depositary shall make available for inspection by Holders at its Principal Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company. The Depositary shall also provide or make available to Holders copies of such reports when furnished by the Company pursuant to Section 5.6.

Section4.14 List of Holders. Promptly upon written request by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of ADSs of all Holders.

Section4.15 Taxation. The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may reasonably request to enable the Company or its agents to file the necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Property under applicable tax treaties or laws for the Holders and Beneficial Owners. In accordance with instructions from the Company and to the extent practicable, the Depositary or the Custodian will take reasonable administrative actions to obtain tax refunds, reduced withholding of tax at source on dividends and other benefits under applicable tax treaties or laws with respect to dividends and other distributions on the Deposited Property. As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs may be required from time to time, and in a timely manner, to file such proof of taxpayer status, residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligations under applicable law. The Depositary and the Company shall have no obligation or liability to any person if any Holder or Beneficial Owner fails to provide such information or if such information does not reach the relevant tax authorities in time for any Holder or Beneficial Owner to obtain the benefits of any tax treatment. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian and any of their respective directors, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

If the Company (or any of its agents) withholds from any distribution any amount on account of taxes or governmental charges, or pays any other tax in respect of such distribution (i.e., stamp duty tax, capital gains or other similar tax), the Company shall (and shall cause such agent to) remit promptly to the Depositary information about such taxes or governmental charges withheld or paid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor, in each case, in a form satisfactory to the Depositary. The Depositary shall, to the extent required by U.S. law, report to Holders any taxes withheld by it or the Custodian, and, if such information is provided to it by the Company, any taxes withheld by the Company. The Depositary and the Custodian shall not be required to provide the Holders

with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary or the Custodian, as applicable. Neither the Depositary nor the Custodian shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.

The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the ADSs, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (in each case as defined in the U.S. Internal Revenue Code and the regulations issued thereunder) or otherwise.

Section4.16 Right to Submit Proposals at Annual Ordinary Meeting of Shareholders.

(a) Proposalsby Shareholders. The Company has informed the Depositary that under ROC Company Law, as in effect as of the date of the Deposit Agreement, holders of one percent (1%) or more of the total issued and outstanding Shares of the Company as of the applicable record date for determining holders of Shares with the right to vote at an annual ordinary meeting of the Company’s shareholders (the “Shareholder Proposal Record Date”), are entitled to submit one (1) written proposal (the “Proposal”) each time for consideration at the annual ordinary meeting of the Company’s shareholders, provided that: (i) the Proposal is in the Chinese language and does not exceed 300 Chinese characters (including the reason(s) for the Proposal and all punctuation marks) in length, (ii) the Proposal is submitted to the Company prior to the expiration of the period for submission of Proposals (the “Submission Period”) announced by the Company (which Submission Period and the place for eligible shareholders to submit the Proposal the Company undertakes to announce publicly each year prior to the commencement of the 60 days closed period prior to the annual ordinary meeting of the Company’s shareholders), (iii) only one (1) matter for consideration at the annual ordinary meeting of the Company’s shareholders shall be allowed in each Proposal, and (iv) the proposing shareholder shall attend, in person or by a proxy, such annual ordinary meeting of the Company’s shareholders whereat his or her or its Proposal is to be discussed and such proposing shareholder, or his or her or its proxy, shall take part in the discussion of such Proposal. As the holder of the Deposited Securities, the Depositary or its nominee is entitled, provided the conditions of ROC law are satisfied, to submit only one (1) Proposal each year in respect of all of the Shares held on deposit as of the applicable Shareholder Proposal Record Date. Holders and Beneficial Owners of ADSs do not under ROC law have individual rights to submit Proposals to the Company for consideration at the annual ordinary meeting of the Company’s shareholders but may be able to submit Proposals to the Company for consideration at the annual ordinary meeting of the Company’s shareholders if the Holders and Beneficial Owners (i) timely present their ADSs to the Depositary for cancellation pursuant to the terms of the Deposit

Agreement and become holders of Shares in the ROC prior to the expiration of the Submission Period and prior to the applicable Shareholder Proposal Record Date, and (ii) otherwise satisfy the conditions of ROC law applicable to the submission of Proposals to the Company for consideration at an annual ordinary meeting of the Company’s shareholders. Beneficial Owners of ADSs may not receive sufficient advance notice of an annual ordinary meeting of the Company’s shareholders to enable the timely withdrawal of Shares to make a Proposal to the Company and may not be able to re-deposit under the Deposit Agreement the Shares so withdrawn. The Company has informed the Depositary that a Proposal shall only be voted upon at the annual ordinary meeting of the Company’s shareholders if the Proposal is accepted by the board of directors of the Company as eligible in accordance with Article 172-1 of the ROC Company Law and the Company's Articles of Incorporation for consideration at an annual ordinary meeting of the Company’s shareholders.

(b) SingleProposal by Depositary or its Nominee on behalf of Beneficial Owners. Holders and Beneficial Owners of ADSs do not have individual proposal rights. The Depositary will, if so requested by (a) Beneficial Owner(s) as of the applicable ADS Record Date that own(s), individually or as a group, at least 51% of the ADSs outstanding as of the applicable ADS Record Date (such Beneficial Owner(s), the “Submitting Holder(s)”), submit to the Company for consideration at the annual ordinary meeting of the Company’s shareholders one (1) Proposal each year, provided that: (i) the Proposal submitted to the Depositary by the Submitting Holder(s) is in the Chinese language and does not exceed 300 Chinese characters (including the reason(s) for the Proposal and all punctuation marks) in length, (ii) the Proposal from the Submitting Holder(s) is received by the Depositary at least two (2) Business Days prior to the expiration of the Submission Period, (iii) the Proposal is accompanied by a written certificate signed by each Submitting Holder, addressed to the Depositary and the Company and in a form satisfactory to the Depositary and the Company (the “First Proposal Certificate”), certifying, inter alia, (w) that each Submitting Holder has only certified the said Proposal, (x) that the Submitting Holder(s) own(s), individually or in the aggregate, at least 51% of the ADSs outstanding as of the date the Proposal is submitted by the Submitting Holder(s) to the Depositary (the “Proposal Submission Date”), (y) if the Proposal Submission Date is (i) on or after the applicable ADS Record Date, that the Submitting Holder(s) owned at least 51% of the ADSs outstanding as of the applicable ADS Record Date, and (ii) prior to the applicable ADS Record Date, that the Submitting Holder(s) will continue to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date and will provide the Second Proposal Certificate, as defined below, and (z) the name(s) and address(es) of the Submitting Holder(s) and the number of ADSs owned by each Submitting Holder (together with certified evidence of each Submitting Holder’s ownership of the applicable ADSs as of the Proposal Submission Date, in the case of (y)(ii) above, and the applicable ADS Record Date, in the case of (y)(i) above), (iv) if the Proposal Submission Date is prior to the applicable ADS Record Date, the Depositary must also receive from the Submitting Holder(s), within five (5) Business Days after the applicable ADS Record Date, a second written certificate signed by each Submitting Holder, addressed to the Depositary and the Company and in a form satisfactory to the Depositary and the Company (the “Second Proposal Certificate”), certifying, inter alia, that the Submitting Holder(s) continued to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date (together with certified evidence of each Submitting Holder’s ownership of the applicable ADSs

as of such applicable ADS Record Date), (v) the Proposal is accompanied by a joint and several irrevocable undertaking of all Submitting Holders (which undertaking may be contained in the First Proposal Certificate or the Second Proposal Certificate) that each such Submitting Holder shall pay all fees and expenses incurred in relation to the submission of the Proposal for voting at the annual ordinary meeting of the Company’s shareholders (including, but not limited to, the costs and expenses of the Submitting Holder(s), or his, her, its or their representative, to attend the annual ordinary meeting of the Company’s shareholders), (vi) the Shares registered in the name of the Depositary or its nominee as representative of the Holders and Beneficial Owners constitute one percent (1%) or more of the total issued and outstanding Shares of the Company as of the Shareholder Proposal Record Date, (vii) such Proposal contains only one (1) matter for consideration at the annual ordinary meeting of the Company’s shareholders, and (viii) the Submitting Holder(s), or his, her, its or their representative, upon the authorization by the Depositary, attend(s) the annual ordinary meeting of the Company’s shareholders and take(s) part in the discussions of the Proposal in the Chinese language, provided further that only one (1) individual may attend, and take part in the discussion of the Proposal at such annual ordinary meeting on behalf of a Submitting Holder or group of Submitting Holders. Each Beneficial Owner hereby agrees and acknowledges that (i) the chairman of the annual ordinary meeting of the Company’s shareholders will treat the Proposal in accordance with the ROC Company Law and the rules governing the proceeding of such meeting, including but not limited to, having such Proposal discussed and voted at such meeting, regardless of whether the Submitting Holder(s) attends such meeting, and (ii) in no event shall a Submitting Holder’s, or his, her, its or their representative's, presence at an annual ordinary meeting of the Company’s shareholders entitle such Submitting Holder(s), or his, her, its or their representative, to vote the Shares represented by such Submitting Holder’s ADSs (or any other ADSs) at such annual ordinary meeting of the Company’s shareholders.

Upon the timely receipt by the Depositary of any Proposal which the Depositary reasonably believes to be in full compliance with the immediately preceding paragraph, the Depositary shall submit a copy of such Proposal and of the other materials received from the Submitting Holder(s) to the Company prior to the expiration of the Submission Period. Any Proposal so submitted as to which the Depositary has not received within five (5) Business Days after the applicable ADS Record Date any Second Proposal Certificate required under the immediately preceding paragraph shall be deemed irrevocably withdrawn at the expiration of such five (5) Business Day period. In the event the Depositary receives more than one (1) Proposal by a Submitting Holder, or a group of Submitting Holders, each of which appears to satisfy the requirements set forth in the immediately preceding paragraph, the Depositary is hereby authorized and instructed to disregard all Proposals received from such Submitting Holder(s), except for the first Proposal received by the Depositary from such Submitting Holder(s) and shall submit such Proposal to the Company for consideration at the annual ordinary meeting of the Company's shareholders in accordance with the terms hereof. The Depositary shall not have any obligation to verify the accuracy of the information contained in any document submitted to it by the Submitting Holder(s). Neither the Depositary nor its nominee shall be obligated to attend and speak at the annual ordinary meeting of the Company’s shareholders on behalf of the Submitting Holder(s).

Notwithstanding anything contained in the Deposit Agreement or any ADR and except that the Depositary shall arrange, at the request of the Company and at the Company's expense, for the distribution to Holders of copies of materials that the Company has made available to the Depositary for such purpose, the Depositary shall not be obligated to provide to the Holders or Beneficial Owners of ADSs any notices relating to the proposal rights, including, without limitation, notice of the Submission Period, or the receipt of any Proposal(s) from Submitting Holders, or of the holdings of any ADSs by any persons, except that the Depositary shall, upon a Holder's request, inform such Holder of the total number of ADSs then issued and outstanding.

ARTICLE V

THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY

Section5.1 Maintenance of Office and Transfer Books by the Registrar. Until termination of the Deposit Agreement in accordance with its terms, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the issuance and delivery of ADSs, the acceptance for surrender of ADS(s) for the purpose of withdrawal of Deposited Securities, the registration of issuances, cancellations, transfers, combinations and split-ups of ADS(s) and, if applicable, to issue ADRs evidencing the ADSs so issued, transferred, combined or split-up, in each case in accordance with the provisions of the Deposit Agreement.

The Registrar shall keep books for the registration of issues and transfers of ADSs which at all reasonable times shall be open for inspection by the Company and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purpose of communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the ADSs.

The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Section 7.8.

If any ADSs are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of issuances, cancellations, transfers, combinations and split-ups of ADSs and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary.

Section5.2 Exoneration. Notwithstanding anything contained in the Deposit Agreement or any ADR, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (i) if the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement, by reason

of any provision of any present or future law or regulation of the United States, the Republic of China or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Incorporation of the Company or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Incorporation of the Company or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, or (v) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.

The Depositary, its controlling persons, its agents, any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement.

Section5.3 Standard of Care. The Company and the Depositary assume no obligation and shall not be subject to any liability under the Deposit Agreement or any ADRs to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or the applicable ADRs without negligence or bad faith. The Depositary and the Company undertake to perform such duties and only such duties as are specifically set forth in the Deposit Agreement, and no implied covenants and obligations should be read into the Deposit Agreement against the Depositary or the Company or their respective agents.

Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).

The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in good faith and in accordance with the terms of the Deposit Agreement. The Depositary shall not incur any liability for any failure to accurately determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property or for any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any notice from the Company, or for the failure of the Company to exchange any Certificate of Payment into Shares, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant.. The Depositary shall not be obligated in any way to monitor or enforce the obligations of the Company, including, without limitation, in respect of any Certificate of Payment, the conversion of such Certificate of Payment into Shares.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

Section5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 60th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 60th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) upon the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law),

shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9). The predecessor depositary, upon payment of all sums due it and on the written request of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders.

Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

Section5.5 The Custodian. The Depositary has initially appointed Citibank Taiwan Limited as Custodian for the purpose of the Deposit Agreement. The Custodian or its successors in acting hereunder shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Property for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Property and no other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian that is authorized to act as custodian under the laws of the Republic of China. The Depositary shall require such resigning or discharged Custodian to Deliver, or cause the Delivery of, the Deposited Property held by it, together with all such records maintained by it as Custodian with respect to such Deposited Property as the Depositary may request, to the Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional custodian with respect to any Deposited Property, or discharge the Custodian with respect to any Deposited Property and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Property. Immediately upon any such change, the Depositary shall give notice thereof in writing to all Holders of ADSs, each other Custodian and the Company.

Citibank, N.A. may at any time act as Custodian of the Deposited Property pursuant to the Deposit Agreement, in which case any reference to Custodian shall mean Citibank, N.A. solely in its capacity as Custodian pursuant to the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary shall not be obligated to give notice to the Company, any Holders of ADSs or any other Custodian of its acting as Custodian pursuant to the Deposit Agreement.

Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Property without any further act or writing, and shall be subject to the direction of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.

Section5.6 Notices and Reports. On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in the English language but otherwise in the form given or to be given to holders of Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Articles of Incorporation of the Company that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.

The Company will also transmit to the Depositary an English language version of the other notices, reports and communications which are made generally available by the Company to holders of its Deposited Securities. The Depositary shall arrange, at the request of the Company and at the Company’s expense, to provide copies thereof to all Holders or make such notices, reports and other communications available to all Holders on a basis similar to that for holders of Shares or other Deposited Securities or on such other basis as the Company may advise the Depositary or as may be required by any applicable law, regulation or stock exchange requirement.

The Depositary will, at the expense of the Company, make available a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the ADSs at the Depositary’s Principal Office, at the office of the Custodian and at any other designated transfer office.

Section5.7 Issuance of Additional Eligible Securities, ADSs etc. The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Eligible Securities, (ii) an offering of rights to subscribe for Eligible Securities or other Deposited Securities, (iii) an issuance or assumption of securities convertible into or exchangeable for Eligible Securities, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Eligible Securities, (v) an elective dividend of cash or Eligible Securities, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger or consolidation or transfer of assets, (viii) any assumption, reclassification, recapitalization, reorganization, merger, consolidation or sale of assets which affects the Deposited Securities, or (ix) a distribution of securities other than Eligible Securities, it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the laws and regulations of the Republic of China and the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.). In support of the foregoing, the Company will, at the request of the Depositary, furnish to the Depositary (a) a written opinion of U.S. counsel (reasonably satisfactory to the Depositary) stating whether the application of such transaction to Holders and Beneficial Owners (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act; providedhowever, that no such opinion shall be required in

the event of an issuance of Eligible Securities as a bonus, share split or similar event, and (b) an opinion of the Republic of China counsel stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of the Republic of China and (2) all requisite regulatory consents and approvals have been obtained in the Republic of China. If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared effective. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in the Deposit Agreement, to prevent such transaction from violating the registration requirements of the Securities Act. The Company agrees with the Depositary that neither the Company nor any of its Affiliates will at any time (i) deposit any Eligible Securities, either upon original issuance or upon a sale of Eligible Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Eligible Securities, rights to subscribe for such Eligible Securities, securities convertible into or exchangeable for Eligible Securities or rights to subscribe for such securities or distribute securities other than Eligible Securities, unless such transaction and the securities issuable in such transaction do not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.).

Notwithstanding anything else contained in the Deposit Agreement, nothing in the Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.

Section5.8 Indemnification. The Depositary agrees to indemnify the Company and its directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) which may arise out of acts performed or omitted by the Depositary under the terms hereof due to the negligence or bad faith of the Depositary.

The Company agrees to indemnify the Depositary, the Custodian and any of their respective directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) that may arise (a) out of, or in connection with, any offer, issuance, sale, resale, transfer, deposit or withdrawal of ADRs, ADSs, the Shares, the Eligible Securities, or other Deposited Securities, as the case may be, (b) out of, or as a result of, any offering documents in respect thereof or (c) out of acts performed or omitted, including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company in connection with the Deposit Agreement, the ADRs, the ADSs, the Shares, the Eligible Securities, or any Deposited Property, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents and Affiliates, except to the extent such loss, liability, tax, charge or expense is due to the

negligence or bad faith of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates except to the extent that such liability or expense arises out of or is based upon an untrue statement of material fact or material omission that is made in reliance upon and in conformity with information relating to the Depositary or the Custodian, as the case may be, furnished in writing to the Company by the Depositary or the Custodian expressly for use in any document relating to the ADSs.

The obligations set forth in this Section shall survive the termination of the Deposit Agreement and the succession or substitution of any party hereto.

Any person seeking indemnification hereunder (an “indemnified person”) shall notify the person from whom it is seeking indemnification (the “indemnifying person”) of the commencement of any indemnifiable action or claim promptly after such indemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect such indemnified person’s rights to seek indemnification except to the extent the indemnifying person is materially prejudiced by such failure) and shall consult in good faith with the indemnifying person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable in the circumstances. No indemnified person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the indemnifying person, which consent shall not be unreasonably withheld.

Section5.9 ADS Fees and Charges. The Company, the Holders, the Beneficial Owners, and persons receiving ADSs upon issuance or whose ADSs are being cancelled shall be required to pay the ADS fees and charges identified as payable by them respectively in the ADS fee schedule attached hereto as Exhibit B. All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or its designee, and may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1. The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.

ADS fees and charges payable upon (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by the person to whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person whose ADSs are being cancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositary via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from the Depositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will be invoiced for

the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to the Beneficial Owners for whom they hold ADSs.

The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay to the Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and the Company may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to time be changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present its statement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.

Section5.10 Pre-Release Transactions. Subject to the further terms and provisions of this Section 5.10, the Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. In its capacity as Depositary, the Depositary shall not lend Deposited Securities or ADSs; provided, however, that, subject to Republic of China rules and regulations, the Depositary may (i) issue ADSs prior to the receipt of Eligible Securities pursuant to Section 2.3 and (ii) deliver Deposited Securities prior to the receipt of ADSs for cancellation upon withdrawal of Deposited Securities pursuant to Section 2.7, including ADSs which were issued under (i) above but for which Eligible Securities may not have been received (each such transaction a “Pre-Release Transaction”). The Depositary may receive ADSs in lieu of Eligible Securities under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to a written agreement whereby the person or entity (the “Applicant”) to whom ADSs or Shares are to be delivered (w) represents that at the time of the Pre-Release Transaction the Applicant or its customer owns the Eligible Securities or ADSs that are to be delivered by the Applicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such Eligible Securities or ADSs in its records and to hold such Eligible Securities or ADSs in trust for the Depositary until such Eligible Securities or ADSs are delivered to the Depositary or the Custodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Eligible Securities or ADSs, and (z) agrees to any additional restrictions or requirements that the Depositary deems appropriate, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, (c)

terminable by the Depositary on not more than five (5) business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Eligible Securities involved in such Pre-Release Transactions at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.

The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release Transactions with any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensation received by it in conjunction with the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be held for the benefit of the Holders (other than the Applicant).

Section5.11 Restricted Securities Owners. The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.14) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.14).

ARTICLE VI

AMENDMENT AND TERMINATION

Section6.1 Amendment/Supplement. Subject to the terms and conditions of this Section 6.1 and applicable law, the ADRs outstanding at any time, the provisions of the Deposit Agreement and the form of ADR attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice

any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and the ADR, if applicable, as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and any ADRs at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and any ADRs in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

Section6.2 Termination. The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. If sixty (60) days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement.

If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after the Termination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement.

At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement.

Notwithstanding anything contained in the Deposit Agreement or any ADR, in connection with the termination of the Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.

ARTICLE VII

MISCELLANEOUS

Section7.1Counterparts. The Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts together shall constitute one and the same agreement. Copies of the Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.

Section7.2 No Third-Party Beneficiaries. The Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in the Deposit Agreement. Nothing in the Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge and agree that (i) the Depositary and its Affiliates may at any time have multiple banking relationships with the

Company and its Affiliates, (ii) the Depositary and its Affiliates may be engaged at any time in transactions in which parties adverse to the Company or the Holders or Beneficial Owners may have interests and (iii) nothing contained in the Deposit Agreement shall (a) preclude the Depositary or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, and (b) obligate the Depositary or any of its Affiliates to disclose such transactions or relationships or to account for any profit made or payment received in such transactions or relationships.

Section7.3 Severability. In case any one or more of the provisions contained in the Deposit Agreement or in the ADRs should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

Section7.4 Holders and Beneficial Owners as Parties; Binding Effect. The Holders and Beneficial Owners from time to time of ADSs issued hereunder shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any ADR evidencing their ADSs by acceptance thereof or any beneficial interest therein.

Section7.5 Notices. Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier, addressed to Advanced Semiconductor Engineering, Inc., TWTC International Trade Building, 19F, 333 Keelung Road, Section 1, Taipei 110, Taiwan, the Republic of China, Attention: Alan Li, Group Treasurer (facsimile number: +886 229576121), or to any other address which the Company may specify in writing to the Depositary.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier, addressed to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, U.S.A., Attention: Depositary Receipts Department, or to any other address which the Depositary may specify in writing to the Company.

Any and all notices to be given to any Holder shall be deemed to have been duly given (a) if personally delivered or sent by mail or cable, telex or facsimile transmission, confirmed by letter, addressed to such Holder at the address of such Holder as it appears on the books of the Depositary or, if such Holder shall have filed with the Depositary a request that notices intended for such Holder be mailed to some other address, at the address specified in such request, or (b) if a Holder shall have designated such means of notification as an acceptable means of notification under the terms of the Deposit Agreement, by means of electronic messaging addressed for delivery to the e-mail address designated by the Holder for such purpose. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of the Deposit Agreement. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the Beneficial Owners of ADSs held by such other Holders.

Delivery of a notice sent by mail, air courier or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service, without regard for the actual receipt or time of actual receipt thereof by a Holder. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it from any Holder, the Custodian, the Depositary, or the Company, notwithstanding that such cable, telex or facsimile transmission shall not be subsequently confirmed by letter.

Delivery of a notice by means of electronic messaging shall be deemed to be effective at the time of the initiation of the transmission by the sender (as shown on the sender’s records), notwithstanding that the intended recipient retrieves the message at a later date, fails to retrieve such message, or fails to receive such notice on account of its failure to maintain the designated e-mail address, its failure to designate a substitute e-mail address or for any other reason.

Section7.6 Governing Law and Jurisdiction. The Deposit Agreement and the ADRs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Notwithstanding anything contained in the Deposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of Republic of China (or, if applicable, such other laws as may govern the Deposited Securities).

Except as set forth in the following paragraph of this Section 7.6, the Company and the Depositary agree that the federal or state courts in the City of New York shall have jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with the Deposit Agreement and, for such purposes, each irrevocably submits to the non-exclusive jurisdiction of such courts. The Company hereby irrevocably designates, appoints and empowers National Corporate Research, Ltd. (the “Agent”) now at 10 E. 40^th^ Street, 10^th^ floor, New York, NY 10016 as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in any federal or state court as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Agent shall cease to be available to act as such, the Company agrees to designate a new agent in New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Agent (whether or not the appointment of such Agent shall for any reason prove to be ineffective or such Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5. The Company agrees that the failure of the Agent to give any notice of such service to it shall not impair or affect in

any way the validity of such service or any judgment rendered in any action or proceeding based thereon.

Notwithstanding the foregoing, the Depositary and the Company unconditionally agree that in the event that a Holder or Beneficial Owner brings a suit, action or proceeding against (a) the Company, (b) the Depositary in its capacity as Depositary under the Deposit Agreement or (c) against both the Company and the Depositary, in any such case, in any state or federal court of the United States, and the Depositary or the Company have any claim, for indemnification or otherwise, against each other arising out of the subject matter of such suit, action or proceeding, then the Company and the Depositary may pursue such claim against each other in the state or federal court in the United States in which such suit, action, or proceeding is pending and, for such purposes, the Company and the Depositary irrevocably submit to the non-exclusive jurisdiction of such courts. The Company agrees that service of process upon the Agent in the manner set forth in the preceding paragraph shall be effective service upon it for any suit, action or proceeding brought against it as described in this paragraph.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, and agrees not to plead or claim, any right of immunity from legal action, suit or proceeding, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, from execution of judgment, or from any other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, and consents to such relief and enforcement against it, its assets and its revenues in any jurisdiction, in each case with respect to any matter arising out of, or in connection with, the Deposit Agreement, any ADR or the Deposited Property.

EACH OFTHE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION, EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TOTHE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING AGAINST THE COMPANYAND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO, THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN(WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE).

No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement. The provisions of this Section 7.6 shall survive any termination of the Deposit Agreement, in whole or in part.

Section7.7 Assignment. Subject to the provisions of Section 5.4, the Deposit Agreement may not be assigned by either the Company or the Depositary.

Section7.8 Compliance with U.S. Securities Laws. Notwithstanding anything in the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

Section7.9 Republic of China Law References. Any summary of Republic of China laws and regulations and of the terms of the Company’s Articles of Incorporation set forth in the Deposit Agreement have been provided by the Company solely for the convenience of Holders, Beneficial Owners and the Depositary. While such summaries are believed by the Company to be accurate as of the date of the Deposit Agreement, (i) they are summaries and as such may not include all aspects of the materials summarized applicable to a Holder or Beneficial Owner, and (ii) these laws and regulations and the Company’s Articles of Incorporation may change after the date of the Deposit Agreement. Neither the Depositary nor the Company has any obligation under the terms of the Deposit Agreement to update any such summaries.

Section7.10 Titles and References.

(a) DepositAgreement. All references in the Deposit Agreement to exhibits, articles, sections, subsections, and other subdivisions refer to the exhibits, articles, sections, subsections and other subdivisions of the Deposit Agreement unless expressly provided otherwise. The words “the Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to the Deposit Agreement as a whole as in effect at the relevant time between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of the Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in the Deposit Agreement. References to “applicable laws and regulations” shall refer to laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.

**(b) ADRs.**All references in any ADR(s) to paragraphs, exhibits, articles, sections, subsections, and other subdivisions refer to the paragraphs, exhibits, articles, sections, subsections and other subdivisions of the ADR(s) in question unless expressly provided otherwise. The words “the Receipt”, “the ADR”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import used in any ADR refer to the ADR as a whole and as in effect at the relevant time, and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender in any ADR shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to paragraphs of any ADR are included for

convenience only and shall be disregarded in construing the language contained in the ADR. References to “applicable laws and regulations” shall refer to laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.

IN WITNESS WHEREOF, ASE INDUSTRIAL HOLDING CO., LTD. and CITIBANK, N.A. have duly executed the Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of ADSs issued in accordance with the terms hereof, or upon acquisition of any beneficial interest therein.

ASE INDUSTRIAL HOLDING CO., LTD.
By:
	Name:
	Title:
CITIBANK, N.A.
By:
	Name:
	Title:

EXHIBIT A

[FORM OF ADR]

Number	CUSIP NUMBER: _______

_____________

[American Depositary Shares (each American Depositary Share representing<br> the right to receive two (2) fully paid common shares, each having a par value of NT$10.00 per share)]
[Temporary American Depositary Shares (each Temporary American Depositary Share representing<br> an undivided interest in a global certificate of payment, each interest representing the irrevocable right to receive two<br> (2) fully paid common shares, each having a par value of NT$10.00 per share)]

AMERICAN DEPOSITARY RECEIPT

FOR

AMERICAN DEPOSITARY SHARES

representing

[DEPOSITED COMMON SHARES]

[INTERESTS IN THE DEPOSITED CERTIFICATE OF PAYMENT]

ASE INDUSTRIAL HOLDING CO., LTD.

(Organized under the laws of the Republic of China)

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CITIBANK, N.A., a national banking association organized and existing under the laws of the United States of America, as depositary (the “Depositary”), hereby certifies that _____________is the owner of ______________ American Depositary Shares (hereinafter “ADS”) representing deposited [common shares] [interests in a global Certificate of Payment representing the irrevocable right to receive common shares], par value NT$10.00 per share, including evidence of rights to receive such [common shares (the “Shares”)] [interests in the Certificate of Payment (the “Certificate of Payment”)] (such [Shares are] [Certificate of Payment is] hereafter called “Eligible Securities”), of ASE Industrial Holding Co., Ltd., a company organized under the laws of the Republic of China (the “Company”). As of the date hereof, each ADS represents [the right to receive two (2)] [an interest in a global Certificate of Payment, each interest representing the irrevocable right to receive two (2)] Shares deposited under the Deposit Agreement with the Custodian, which at the date of execution of the Deposit Agreement is Citibank, Taiwan Ltd. (the “Custodian”). The ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement. The Depositary’s Principal Office is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

(1) TheDeposit Agreement. This American Depositary Receipt is one of an issue of American Depositary Receipts (“ADRs”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of April 30, 2018 (as amended and supplemented from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of ADSs issued thereunder. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of ADSs and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other Deposited Property (as defined in the Deposit Agreement) from time to time received and held on deposit in respect of the ADSs. Copies of the Deposit Agreement are on file at the Principal Office of the Depositary and with the Custodian. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

The statements made on the face and reverse of this ADR are summaries of certain provisions of the Deposit Agreement and the Articles of Incorporation of the Company (as in effect on the date of the signing of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement and the Articles of Incorporation, to which reference is hereby made.

All capitalized terms not defined herein shall have the meanings ascribed thereto in the Deposit Agreement.

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The Depositary makes no representation or warranty as to the validity or worth of the Deposited Property. The Depositary has made arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such ADSs. The Depositary may issue Uncertificated ADSs subject, however, to the terms and conditions of Section 2.13 of the Deposit Agreement.

(2) Surrenderof ADSs and Withdrawal of Deposited Securities. (a) ROC Requirements: The Depositary and the Company have been advised that under ROC law, as in effect as of the date hereof, a Holder who is a non-ROC person (other than a PRC person, except for a QDII (as defined below), or a person with prior approval from the Investment Commission of the Ministry of Economic Affairs, ROC) wishing to withdraw Deposited Securities from the ADR Facility is required to (i) register with the TSE for making investment in the ROC securities market, (ii) obtain a foreign investor investment identification (the "Foreign Investor Investment I.D.") issued pursuant to the ROC Regulations Governing Securities Investment by Overseas Chinese and Foreign Nationals and (iii) appoint an eligible agent in the ROC to open (a) a securities trading account, (b) a TDCC book-entry account and (c) a bank account (the securities trading account, the TDCC book-entry account, and the bank account, collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise shareholders' rights and perform such other functions as may be designated by such withdrawing Holder. In addition, such withdrawing Holder is also required to appoint a custodian bank to hold the securities in safekeeping, make confirmations and settle trades and report all relevant information. Without obtaining the Foreign Investor Investment I.D. and opening such Accounts, the withdrawing Holder would be unable to hold or subsequently sell the Deposited Securities withdrawn from the ADR Facility on the TSE or otherwise. No assurance can be given that a withdrawing Holder will be able to obtain the Foreign Investor Investment I.D. in a timely manner. In addition, such withdrawing Holders will be required to appoint an eligible agent in the ROC for filing tax returns and making tax payments (a "Tax Guarantor"). Such Tax Guarantor will be required to meet the qualifications set by the Ministry of Finance of the ROC and will act as the guarantor of the withdrawing Holder's tax payment obligations. Subject to certain limited exceptions, under current ROC law, repatriation of profits by a non-ROC withdrawing Holder is subject to the submission of evidence of the appointment of a Tax Guarantor to, and approval thereof by, the tax authority. Under the Regulations Governing Mainland China Investor's Securities Investments and Futures Trading in Taiwan promulgated by the FSC, a PRC qualified domestic institutional investor ("QDII") is allowed to invest in ROC securities. The custodians of QDIIs must apply with the TSE for the remittance amount of each QDII which cannot exceed US$100 million, the total investment amount of all QDIIs may not exceed US$500 million, and such QDII can only invest in the ROC securities market with the amount approved by the TSE. Additionally, PRC investors (including QDIIs) in the aggregate shall not hold 10% or more of such ROC company's issued and outstanding voting shares. The laws of the Republic of China applicable to the withdrawal of Deposited Securities may change from time to time. There can be no assurance that current law will remain in effect or that future changes of ROC law will not adversely affect the ability of Holders to withdraw Deposited Securities hereunder.

The Company has informed the Depositary that no Shares may be withdrawn upon presentation of ADSs (and if applicable, the ADRs evidencing such ADSs) for cancellation

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under Section 2.7 of the Deposit Agreement until (i) the Company has delivered written confirmation that the number of Shares requested for withdrawal have been listed for trading on the TSE (such Shares, the “Listed Shares”) to the Depositary and the Custodian, (ii) the Listed Shares have been de-materialised (such Shares, the “De-Materialised Shares,” and Shares that are both Listed Shares and De-Materialised Shares, hereinafter referred to as the “Final Shares”), and (iii) an equivalent number of Final Shares are on deposit with the Custodian. The Company has further informed the Depositary that it is expected that newly issued Shares which may be deposited by the Company from time to time and which are not listed for trading on the TSE at the time of such deposit will be listed on the TSE for trading and will be fully de-materialised, thereby becoming Final Shares, no later than five (5) business days after any such deposit. The parties hereto acknowledge and agree that (a) the Depositary will deliver Shares represented by ADSs (and if applicable, the ADRs representing such ADSs) presented for cancellation pursuant to Section 2.7 of the Deposit Agreement only to the extent of the number of Final Shares then on deposit with the Custodian, (b) the Depositary will process presentations of ADSs for withdrawal of Final Shares under Section 2.7 of the Deposit Agreement on a first come, first served basis, (c) the Depositary will complete requests for cancellation of ADSs and withdrawal of the Shares represented thereby only to the extent of the number of Final Shares at such time on deposit with the Custodian, (d) the Depositary will refuse to complete a request for cancellation of ADSs and withdrawal of Shares to the extent the number of Shares requested for withdrawal exceeds the number of Final Shares at such time deposited with the Custodian, and (e) the Depositary reserves the right to suspend withdrawals of Shares under Section 2.7 of the Deposit Agreement until such time as the requisite number of Final Shares are deposited with the Custodian. The Company agrees to deliver to the Depositary and/or the Custodian, as applicable, written confirmation of the number of Listed Shares deposited with the Custodian under the Deposit Agreement promptly upon the receipt of confirmation of listing from the TSE of such Shares.

(b) Saleof Deposited Securities. Upon surrender of ADSs at the Principal Office and upon payment of any fees, reasonable expenses, taxes or other governmental charges as provided under the Deposit Agreement, subject to the terms of the Deposit Agreement and the Company’s Articles of Incorporation, and the transfer restrictions applicable to the Deposited Securities, if any, Holders may request that the Deposited Securities represented by such Holders’ ADSs be sold on such Holder’s behalf. Any Holder requesting a sale of Deposited Securities may be required by the Depositary to deliver, or cause to be delivered, to the Depositary a written order requesting the Depositary to sell, or cause to be sold, such Deposited Securities. Any such sale of Deposited Securities will be conducted in accordance with applicable ROC law through a securities company in the ROC on the TSE or in such other manner as is or may be permitted under applicable ROC law. Any such sale of Deposited Securities will be at the expense and risk of the Holder requesting such sale. Any Holder requesting the Depositary to sell the Deposited Securities represented by such Holder’s ADSs may be required to enter into a separate agreement to cover the terms of the sale of such Deposited Securities.

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connection with such sale, as provided under the Deposit Agreement. Any such sale may be subject to ROC taxation on capital gains, if any, and will be subject to a securities transaction tax in the ROC. The ROC does not, as of the date hereof, impose tax on capital gains arising from ROC securities transactions, but there can be no assurance that a capital gains tax on ROC securities transactions will not be imposed in the future or as to the manner in which any ROC capital gains tax in respect of a sale of Deposited Securities would be imposed or calculated.

(c) Withdrawalof Deposited Securities: The Holder of ADSs shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADS(s) upon satisfaction of each of the following conditions: (i) the Holder (or a duly authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and if applicable, the Receipts evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities represented thereby, (ii) if so required by the Depositary, the Receipts Delivered to the Depositary for such purpose have been properly endorsed in blank or are accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, (iv) the Holder has delivered to the Depositary the applicable certification contemplated in Exhibit C to the Deposit Agreement, duly completed by or on behalf of the Beneficial Owner(s) of the ADSs surrendered for withdrawal (unless the Depositary is otherwise instructed by the Company), and (v) all applicable fees and charges of, and reasonable expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of the Receipts evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Incorporation and of any applicable laws and regulations of the Republic of China and of the United States and the rules of the TDCC, and to any provisions of or governing the Deposited Securities, in each case as in effect at the time thereof.

The Depositary shall not accept for surrender ADSs representing less than a whole number of Eligible Securities. In the case of Delivery to it of ADSs representing a number other

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than a whole number of Eligible Securities, the Depositary shall cause ownership of the appropriate whole number of Eligible Securities to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return to the person surrendering such ADSs the number of ADSs representing any remaining fractional Eligible Security, or (ii) sell or cause to be sold the fractional Eligible Security represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to the person surrendering the ADSs.

(3) Transfer,Combination and Split-up of ADRs. The Registrar shall promptly register the transfer of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall promptly (x) cancel this ADR and execute new ADRs evidencing the same aggregate number and type of ADSs as those evidenced by this ADR when canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) this surrendered ADR has been properly endorsed or is accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) this surrendered ADR has been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

The Registrar shall register the split-up or combination of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by this ADR (canceled), (y) cause the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary

A-6

at its Principal Office for the purpose of effecting a split-up or combination hereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

(4) Limitationson Execution and Delivery, Transfer, Etc. As a condition precedent to the execution and delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Eligible Securities or presenter of ADSs or of this ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Eligible Securities being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B to the Deposit Agreement and in this ADR, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 of the Deposit Agreement, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and delivery of this ADR or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of this ADR, the Deposit Agreement and applicable law.

The issuance of ADSs against deposits of Eligible Securities generally or against deposits of particular Eligible Securities may be suspended, or the deposit of particular Eligible Securities may be refused, or the registration of transfers of ADSs in particular instances may be refused, or the registration of transfer of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Eligible Securities Registrar are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Eligible Securities are listed, or under any provision of the Deposit Agreement or this ADR, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases to paragraph (25) of this ADR. Notwithstanding any provision of the Deposit Agreement or this ADR to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated therewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Eligible Securities in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time).

(5) ComplianceWith Information Requests. Notwithstanding any other provision of the Deposit Agreement or this ADR, each Holder and Beneficial Owner of the ADSs

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represented hereby agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of TSE, and of any other stock exchange on which the Eligible Securities or ADSs are, or will be, registered, traded or listed, or the Articles of Incorporation of the Company, which are made to provide information, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and the Eligible Securities represented by such ADSs, as the case may be) and regarding the identity of any other person(s) interested in such ADSs (and the Shares represented by such ADSs, as the case may be) and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request.

(6) OwnershipRestrictions. Notwithstanding any other provision of this ADR or of the Deposit Agreement, the Company may restrict transfers of the Shares or Eligible Securities where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Incorporation of the Company. The Company may also restrict, in such manner as it deems appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Incorporation of the Company. Nothing herein or in the Deposit Agreement shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described herein or in Section 3.5 of the Deposit Agreement.

(7) ReportingObligations and Regulatory Approvals. Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and for obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

(8) Liabilityfor Taxes and Other Charges. Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or this ADR shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Property and apply such distributions and sale proceeds in payment of any taxes (including applicable interest and penalties) or charges that are or may be

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payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and this ADR, the Holder and the Beneficial Owner hereof remaining liable for any deficiency. The Custodian may refuse the deposit of Eligible Securities and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split-up or combination of ADRs and (subject to paragraph (25) of this ADR) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. The obligations of Holders and Beneficial Owners under this paragraph 8 shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

(9) Representationsand Warranties of Depositors. Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14 of the Deposit Agreement), and (vi) the Shares presented for deposit have not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs.

Whenever the Company shall deposit any Certificate of Payment under this Deposit Agreement the Company shall be deemed thereby to represent and warrant that (i) such Certificate of Payment is, and the Shares to be received in exchange for the Certificate of Payment will be, duly authorized, validly issued, fully paid, non-assessable and legally obtained, (ii) all preemptive (and similar) rights, if any, with respect to such Certificate of Payment has been, and with respect to the Shares to be received in exchange for the Certificate of Payment will have been, validly waived or exercised, (iii) the Company has duly authorized the issuance of the Shares to be delivered in exchange for the Payment Certificate so presented for deposit, (iv) the Certificate of Payment presented for deposit is, and the Shares to be deposited upon the exchange of the Certificates of Payment for Shares will be, free and clear of any lien, encumbrance, security interest, change, mortgage or adverse claim, and are not, and the Temporary ADSs issuable upon such deposit will not be, Restricted Securities and (v) the Certificate of Payment presented for deposit has not been, and the Shares to be deposited upon the exchange for the Certificate of Payment will not have been, stripped of any rights or entitlements. Such representations and warranties shall survive the deposit of any Certificate of Payment, the issuance and cancellation of Temporary ADSs in respect thereof and the transfer of such Temporary ADSs.

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If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

(10) FilingProofs, Certificates and Other Information. Any person presenting Eligible Securities for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or this ADR evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and this ADR. The Depositary and the Registrar, as applicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by paragraph (25), the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made or such other documentation or information are provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction.

(11) ADSFees and Charges. The following ADS fees are payable under the terms of the Deposit Agreement:

(i)	ADS Issuance Fee:<br> by any person depositing Shares or to whom ADSs are issued upon the deposit of Shares<br> (excluding issuances as a result of distributions described in paragraph (iv) below),<br> a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) so issued under<br> the terms of the Deposit Agreement;
(ii)	ADS Cancellation Fee:<br> by any person surrendering ADSs for cancellation and withdrawal of Deposited Property<br> or by any person to whom Deposited Property is delivered, a fee not in excess of U.S.<br> $5.00 per 100 ADSs (or fraction thereof) surrendered;
---	---
(iii)	Cash Distribution Fee:<br> by any Holder of ADSs, a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof)<br> held for the distribution of cash dividends or other cash distributions (i.e.,<br> sale of rights and other entitlements);
---	---
(iv)	Stock Distribution /Rights<br> Exercise Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100<br> ADSs (or fraction thereof) held for
---	---

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(a) the distribution of stock dividends or other free stock distributions or (b) the exercise of rights to purchase additional ADSs;

(v)	Other Distribution Fee:<br> by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction<br> thereof) held for the distribution of securities other than ADSs or rights to purchase<br> additional ADSs;
(vi)	Depositary Services<br> Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or<br> fraction thereof) held on the applicable record date(s) established by the Depositary;<br> and
---	---
(vii)	ADR Transfer Fee:<br> by any person presenting ADR(s) for transfer, a fee not in excess of U.S. $1.50 per ADR<br> so presented for transfer.
---	---

In addition, Holders, Beneficial Owners, persons depositing Shares for issuance of ADSs, and persons surrendering ADSs for cancellation and for the purpose of withdrawing Deposited Securities will be responsible for the payment of the following ADS charges under the terms of the Deposit Agreement:

(a)	taxes<br> (including applicable interest and penalties) and other governmental charges;
(b)	such<br> registration fees as may from time to time be in effect for the registration of Shares<br> or other Deposited Securities on the share register and applicable to transfers of Shares<br> or other Deposited Securities to or from the name of the Custodian, the Depositary or<br> any nominees upon the making of deposits and withdrawals, respectively;
---	---
(c)	such<br> cable, telex and facsimile transmission and delivery expenses as are expressly provided<br> in the Deposit Agreement to be at the expense of the person depositing Shares or withdrawing<br> Deposited Securities or of the Holders and Beneficial Owners of ADSs;
---	---
(d)	the<br> expenses and charges incurred by the Depositary in the conversion of foreign currency;
---	---
(e)	such<br> fees and expenses as are incurred by the Depositary in connection with compliance with<br> exchange control regulations and other regulatory requirements applicable to Shares,<br> Deposited Securities, ADSs and ADRs; and
---	---
(f)	the<br> fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection<br> with the delivery or servicing of Deposited Property.
---	---

All ADS fees and charges may, at any time and from time to time, be changed by agreement between the Depositary and Company but, in the case of ADS fees and charges

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payable by Holders and Beneficial Owners, only in the manner contemplated by paragraph (23) of this ADR and as contemplated in the Deposit Agreement. The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.

ADS fees and charges payable upon (i) deposit of Shares against issuance of ADSs and (ii) surrender of ADSs for cancellation and withdrawal of Deposited Property, will be payable by the person to whom the ADSs so issued are delivered by the Depositary (in the case of ADS issuances) and by the person who delivers the ADSs for cancellation to the Depositary (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositary via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from the Depositary or the DTC Participant(s) surrendering the ADSs to the Depositary for cancellation, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC Participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will be invoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC and may be charged to the DTC Participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to the Beneficial Owners for whom they hold ADSs.

The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 of the Deposit Agreement, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.

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(12) Titleto ADRs. Subject to the limitations contained in the Deposit Agreement and in this ADR, it is a condition of this ADR, and every successive Holder of this ADR by accepting or holding the same consents and agrees, that title to this ADR (and to each Certificated ADS evidenced hereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, this ADR has been properly endorsed or is accompanied by proper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of this ADR (that is, the person in whose name this ADR is registered on the books of the Depositary) as the absolute owner thereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or this ADR to any holder of this ADR or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder of this ADR registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.

(13) Validityof ADR. The Holder(s) of this ADR (and the ADSs represented hereby) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless this ADR has been (i) dated, (ii) signed by the manual or facsimile signature of a duly-authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly-authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADRs. An ADR bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the delivery of such ADR by the Depositary.

(14) AvailableInformation; Reports; Inspection of Transfer Books.

As of the date of the Deposit Agreement, the Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission. These reports can be retrieved from the Commission's website (www.sec.gov) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549. If at any time the Company files a Form 15F or any successor form thereto, with the Commission, which suspends the Company's duty under the Exchange Act to file or submit reports required under Sections 13(a) or 15(d) of the Exchange Act, upon the effectiveness of such Form 15F, the Company's duty to file or submit reports under Sections 13(a) or 15(d) of the Exchange Act will terminate. At that time, pursuant to Rule 12g3-2(b)(1), the Company will be exempt from the reporting obligations of the Exchange Act. In order to satisfy the conditions of Rule 12g3-2(b), the Company will publish an English translation of the information contemplated in Rule 12g3-2(b)(2)(i) under the Exchange Act on its internet website or through an electronic information delivery system generally available to the public in the Company’s primary trading market. The Company will specify in Form 15F the internet website or the electronic information delivery system on which it intends to publish such information. The information so published by the Company cannot be retrieved from the Commission’s

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internet website, and cannot be inspected or copied at the public reference facilities maintained by the Commission. If the Form 15F is not declared effective, the Company will again be subject to the periodic reporting requirements of the Exchange Act and will be required to file with the Commission, and submit to the Commission, certain reports that can be retrieved from the Commission’s internet website at www.sec.gov, and can be inspected and copied at the public reference facilities maintained by the Commission.

The Depositary shall make available for inspection by Holders at its Principal Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company.

The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by the Company and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purpose of communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the ADSs.

Dated:

CITIBANK, N.A.<br> Transfer Agent and Registrar		CITIBANK, N.A.<br> as Depositary
By:		By:
	Authorized Signatory		Authorized Signatory

The address of the Principal Office of the Depositary is 388 Greenwich Street, New York, New York 10013, U.S.A.

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[FORMOF REVERSE OF ADR]

SUMMARY OF CERTAIN ADDITIONAL PROVISIONS

OF THE DEPOSIT AGREEMENT

(15) Dividendsand Distributions in Cash, Shares, etc. (a) Cash Distributions: Whenever the Company it intends to make a distribution of a cash dividend or other cash distribution in respect of any Deposited Securities, the Company shall give notice thereof to the Depositary at least twenty (20) days prior to the proposed distribution specifying, inter alia, the record date applicable for determining the holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation of the receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms of the Deposit Agreement, the Depositary will (i) if at the time of receipt thereof any amounts received in a Foreign Currency can in the judgment of the Depositary (pursuant to Section 4.8 of the Deposit Agreement), be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.8 of the Deposit Agreement), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement, and (iii) distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary or the Custodian, as the case may be, will forward to the Company or its agent such information from its records as the company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Custodian, as the case may be, or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for Holders of ADSs. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything

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contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.1 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.1 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(b) ShareDistributions: Whenever the Company intends to make a distribution that consists of a dividend in, or free distribution of Eligible Securities, the Company shall give notice thereof to the Depositary at least twenty(20) days prior to the proposed distribution, specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice from the Company, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9 of the Deposit Agreement, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Eligible Securities received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Eligible Securities or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1 of the Deposit Agreement.

In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company in the fulfillment of its obligation under Section 5.7 of the Deposit Agreement, has furnished an opinion of U.S. counsel determining that Eligible Securities must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (z) the deposit of Eligible Securities is not permitted under the laws or regulations of the Republic of China, the Depositary may dispose of all or a portion of such property (including Eligible Securities and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for

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above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.2 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.2 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(c) ElectiveDistributions in Cash or Eligible Securities: Whenever the Company intends to make a distribution payable at the election of the holders of Deposited Securities in cash or in additional Eligible Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such elective distribution and whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of the Deposit Agreement. If the above conditions are not satisfied, or if the Company requests such elective distribution not to be made available to Holders of ADSs, the Depositary shall establish the ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the Republic of China in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 of the Deposit Agreement or (Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2 of the Deposit Agreement. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement and establish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1 of the Deposit Agreement, or (Y) in ADSs, the distribution shall be made upon the terms described in Section 4.2 of the Deposit Agreement. Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to Holder hereof a method to receive the elective distribution in Eligible Securities (rather than ADSs). There can be no assurance that the Holders hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Deposited Securities. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.3 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.3 of the Deposit

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Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(d) Distributionof Rights to Purchase Additional ADSs: Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Eligible Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution and whether or not it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) of the Deposit Agreement. In the event all conditions set forth above are satisfied, the Depositary shall establish the ADS Record Date (upon the terms described in Section 4.9 of the Deposit Agreement) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights. The Company shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Eligible Securities (rather than ADSs). If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement or determines it is not lawful or not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine in its discretion but after consultation with the Company whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public and private sale) as it may deem practicable. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms hereof and of Section 4.1 of the Deposit Agreement. If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) of the Deposit Agreement or to arrange for the sale of the rights upon the terms described in Section 4.4(b) of the Deposit Agreement, the Depositary shall allow such rights to lapse. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or exercise, or (iii) the content of any

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materials forwarded to the ADS Holders on behalf of the Company in connection with the rights distribution.

Notwithstanding anything herein or in the Deposit Agreement to the contrary, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amount distributed to the Holders of ADSs shall be reduced accordingly. In the event that the Depositary determines that any distribution of Deposited Property (including Eligible Securities and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Eligible Securities and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes or charges.

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Deposited Securities or be able to exercise such rights. Nothing herein or in the Deposit Agreement shall obligate the Company to file any registration statement in respect of any rights or Eligible Securities or other securities to be acquired upon the exercise of such rights.

(e) Distributionsother than Cash, Shares or Rights to Purchase Shares: Upon receipt of a notice indicating that the Company wishes property other than cash, Eligible Securities or rights to purchase additional Eligible Securities, to be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received the documentation contemplated in the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth above, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes withheld. The Depositary may dispose of all or a portion of the property

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so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.

If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement, or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.

Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful or practicable to make the property described in Section 4.5 of the Deposit Agreement available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.

**(16) Redemption.**If the Company intends to exercise any right of redemption in respect of any of the Deposited Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days prior to the intended date of redemption which notice shall set forth the particulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by the Company to the Depositary within the terms of Section 5.7 of the Deposit Agreement, and only if the Depositary shall have determined that such proposed redemption is reasonably practicable, the Depositary shall provide to each Holder a notice setting forth the intended exercise by the Company of the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2 of the Deposit Agreement. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary. The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 of the Deposit Agreement and the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to

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give the Depositary timely notice of the proposed redemption provided for in Section 4.7 of the Deposit Agreement, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.7 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.7 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(17) Fixingof ADS Record Date. Whenever the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Eligible Securities, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Deposited Securities that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ADS Record Date”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Deposited Securities represented by each ADS. The Depositary shall make reasonable efforts to establish the ADS Record Date as closely as practicable to the applicable record date for the Deposited Securities (if any) set by the Company in the Republic of China and shall not announce the establishment of any ADS Record Date prior to the relevant corporate action having been made public by the Company (if such corporate action affects the Deposited Securities). Subject to applicable law, the terms and conditions of this ADR and Sections 4.1 through 4.8 of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action. The Depositary shall, so long as the ADSs are listed in a securities exchange in the U.S., promptly notify such securities exchange of any action to fix an ADS Record Date or to close the transfer books for the ADSs.

(18) Votingof Deposited Securities. (a) Voting by Shareholders. The Depositary has been advised that the Articles of Incorporation of the Company and the ROC Company Law, as in effect on the date of the Deposit Agreement, provide that: (i) except for Shares held by the Company, a holder of Shares (including holders of interests in any Certificate of Payment evidencing the irrevocable right to receive Shares) is entitled to one vote for each Share held, (ii) the election of directors and supervisors takes place by means of cumulative voting, and (iii) a shareholder must, as to all matters subject to a vote of shareholders (other than the election of directors and supervisors), exercise the voting rights for all Deposited Securities held by such shareholder in the same manner (e.g., a holder of 1,000 Shares cannot split his/her votes but must vote all 1,000 Shares in the same manner except in the event of cumulative voting for an election of directors and supervisors). Deposited Securities which have been withdrawn from the ADR Facility and timely transferred on the Company's register of shareholders to a person other than the Depositary's nominee may be voted by the registered holder(s) thereof directly, subject, in

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each case, to the limitations of ROC Law and the Articles of Incorporation of the Company. Holders may not receive sufficient advance notice of shareholders' meetings to enable them to timely withdraw the Deposited Securities and vote at such meetings and may not be able to re-deposit the withdrawn securities under the terms of the Deposit Agreement.

(b) Voting by ADS Holders. Holders of ADSs have no individual voting rights with respect to the Shares represented by their ADSs. Each Holder and Beneficial Owner shall be deemed, by acceptance of ADSs or acquisition of any beneficial interest therein, to have authorized and directed the Depositary's nominee, without liability, to appoint the Chairman of the Company (or his/her designate) (the “Voting Representative”), as representative of the Depositary's nominee who is registered in the Republic of China as representative of the Depositary and the Holders and Beneficial Owners in respect of the Deposited Securities (the “Registered Holder”) to vote the Deposited Securities in accordance with the terms hereof.

The Company agrees to timely notify the Depositary of any proposed shareholders' meeting and to provide to the Depositary in New York, at least 24 calendar days before any shareholders' meeting, sufficient copies as the Depositary may reasonably request of English language translations of the Company's notice of shareholders' meeting and the agenda of the materials to be voted on (in the form the Company generally makes available to holders of Shares in the Republic of China) (such materials collectively, the "Shareholder Notice"). As soon as practicable after receipt by the Depositary of the requisite number of Shareholder Notices, the Depositary shall establish the ADS Record Date (upon the terms of Section 4.9 of the Deposit Agreement) and shall, at the Company's expense and, provided no U.S. legal prohibitions exist, distribute to Holders as of the applicable ADS Record Date, (i) the Shareholder Notice, (ii) a Depositary notice setting forth the manner in which Holders of ADSs may instruct the Depositary to cause the Deposited Securities represented by their ADSs to be voted under the terms of this Deposit Agreement including, a description of the Management Authorization (as defined below), together with a form of voting instructions and/or other means to provide voting instructions (the Depositary notice and the related materials prepared by the Depositary collectively, the "Depositary Notice"). The Depositary is under no obligation to distribute the Shareholder Notice or the Depositary Notice to Holders if the Company has failed to provide to the Depositary in New York the requisite number of Shareholder Notices at least 24 calendar days prior to the date of any shareholders' meeting. If the Depositary has not delivered the Shareholder Notice or the Depositary Notice to Holders, it will endeavor to cause all Deposited Securities represented by ADSs to be present at the relevant shareholders' meeting insofar as practicable and permitted under applicable law but will not cause the Deposited Securities to be voted; provided, however, that the Depositary may determine, at its discretion, to distribute such Shareholder Notice or Depositary Notice to the Holders and/or cause the Shares or other Deposited Securities to be voted as it deems appropriate. There can be no assurance that Holders generally or any Holder in particular will receive Shareholder Notices or Depositary Notices with sufficient time to enable the return of voting instructions to the Depositary in a timely manner.

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the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).

(c) Voting of Deposited Securities Upon ADS Holders' Instructions. If Holders of ADSs together holding at least 51% of all ADSs (including Temporary ADSs) outstanding as of the relevant ADS Record Date shall instruct the Depositary prior to the date established for such purpose by the Depositary to vote in the same manner in respect of one or more resolutions to be proposed at a shareholders' meeting **(**including resolutions for the election of directors and/or supervisors), the Depositary shall notify the Voting Representative and cause the Depositary's nominee as Registered Holder to appoint the Voting Representative as the representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners) to attend such shareholders' meeting and vote all Deposited Securities evidenced by ADSs (including Temporary ADSs) then outstanding in the manner so instructed by such Holders. If voting instructions are received by the Depositary on or before the date established by the Depositary for the receipt of such instructions from any Holder as of the ADS Record Date, which are signed but without further indication as to voting instructions, the Depositary shall deem such Holder to have instructed a vote in favor of the items set forth in such instructions. The Depositary and Custodian shall not have any obligation to monitor, and shall not incur any liability for, the actions, or the failure to act, of the Voting Representative as representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners).

(d) Management Authorization. If, for any reason (other than a failure by the Company to supply the requisite number of Shareholder Notices to the Depositary within the requisite time period provided in Section 4.10 of the Deposit Agreement) the Depositary has not, prior to the date established for such purpose by the Depositary received instructions from Holders together holding at least 51% of all ADSs (including Temporary ADSs) outstanding at the relevant ADS Record Date, to vote in the same manner in respect of any resolution (including resolutions for the election of directors and/or supervisors) then, subject to the following paragraph, the Holders shall be deemed to have instructed the Depositary's nominee to give a discretionary authorization (a "Management Authorization") to the Voting Representative as the representative of the Registered Holder (and indirectly of the Depositary, the Holders and the Beneficial Owners) to attend and vote at such meeting all the Deposited Securities represented by ADSs (including Temporary ADSs) then outstanding in his or her discretion. In such circumstances, the Voting Representative shall be free to exercise the votes attaching to the Deposited Securities in any manner he or she wishes, which may not be in the best interests of the Holders and Beneficial Owners.

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Section 4.10 of the Deposit Agreement and will not (in the absence of negligence, bad faith or breach of contract, and subject to general principles of agency) be subject to any liability under ROC law for losses arising from the exercise of the voting arrangements set out in Section 4.10 of the Deposit Agreement on the grounds that voting in accordance with Section 4.10 of the Deposit Agreement is in violation of ROC law. In the event the Depositary does not receive such opinion, or the Voting Representative informs the Depositary that he or she does not wish to be so authorized, the Depositary will not grant the Management Authorization but will cause the Deposited Securities to be present at the shareholders' meeting to the extent practicable and permitted by applicable law for the purpose of satisfying quorum requirements but will not cause the Deposited Securities to be voted or the Management Authorization to be granted.

(e) General. The Depositary shall not, and the Depositary shall ensure that the Custodian and its nominees do not, vote or attempt to exercise the right to vote that attaches to the Deposited Securities other than in accordance with instructions given in accordance with Section 4.10 of the Deposit Agreement. The terms of Section 4.10 of the Deposit Agreement may be amended from time to time in accordance with the terms of this Deposit Agreement. By continuing to hold ADSs after the effective time of such amendment all Holders and Beneficial Owners shall be deemed to have agreed to the terms of Section 4.10 of the Deposit Agreement as so amended. Notwithstanding anything else contained in the Deposit Agreement, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies or instructions, of holders of Deposited Securities if the taking of such action would violate U.S. or ROC laws. The Company agrees to take any and all actions reasonably necessary to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. or ROC counsel, as applicable, addressing any actions requested to be taken if so reasonably requested by the Depositary.

(19) ChangesAffecting Deposited Securities. Upon any change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and this ADR shall, subject to the provisions of the Deposit Agreement, this ADR and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement and receipt of an opinion of counsel to the Company provided pursuant to Section 5.7 of the Deposit Agreement and satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as are appropriate to reflect the transaction with respect to the ADSs.

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Notwithstanding the foregoing, in the event that any Deposited Property so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1 of the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such Deposited Property.

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**(20) Exoneration.**Notwithstanding anything contained in the Deposit Agreement or any ADR, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (i) if the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement and this ADR, by reason of any provision of any present or future law or regulation of the United States, the Republic of China or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Incorporation of the Company or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Incorporation of the Company or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, or (v) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement. The Depositary, its controlling persons, its agents, any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement or this ADR.

(21) Standardof Care. The Company and the Depositary assume no obligation and shall not be subject to any liability under the Deposit Agreement or this ADR to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or this ADR without negligence or bad faith. The Depositary and the Company undertake to perform such duties and only such duties as are specifically set forth in the Deposit Agreement, and no implied covenants and obligations should be read into the Deposit Agreement against the Depositary or the Company or their respective agents. Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).

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The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in good faith and in accordance with the terms of the Deposit Agreement. The Depositary shall not incur any liability for any failure to accurately determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property or for any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any notice from the Company, or for the failure of the Company to exchange any Certificate of Payment into Shares, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant. The Depositary shall not be obligated in any way to monitor or enforce the obligations of the Company, including, without limitation, in respect of any Certificate of Payment, the conversion of such Certificate of Payment into Shares.

(22) Resignationand Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 60th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 60th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement). The predecessor depositary, upon payment of all sums due it and on the written request of the Company shall (i) execute and deliver an instrument transferring to such successor all rights and

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powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders. Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

**(23) Amendment/Supplement.**Subject to the terms and conditions of this paragraph 21, the Deposit Agreement and applicable law, this ADR and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and this ADR as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and this ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and this ADR in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

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**(24) Termination.**The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. If sixty (60) days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement. If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after the Termination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement. At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement.

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(25) Compliancewith U.S. Securities Laws. Notwithstanding any provisions in this ADR or the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to the Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

(26) CertainRights of the Depositary; Limitations. Subject to the further terms and provisions of this paragraph (26), the Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Eligible Securities from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Eligible Securities. Such evidence of rights shall consist of written blanket or specific guarantees of ownership of Eligible Securities. In its capacity as Depositary, the Depositary shall not lend Deposited Securities or ADSs; provided, however, that, subject to Republic of China rules and regulations, the Depositary may (i) issue ADSs prior to the receipt of Eligible Securities pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver Deposited Securities prior to the receipt of ADSs for cancellation upon withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit Agreement, including ADSs which were issued under (i) above but for which Eligible Securities may not have been received (each such transaction a “Pre-Release Transaction”). The Depositary may receive ADSs in lieu of Eligible Securities under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to a written agreement whereby the person or entity (the “Applicant”) to whom ADSs or Shares are to be delivered (w) represents that at the time of the Pre-Release Transaction the Applicant or its customer owns the Eligible Securities or ADSs that are to be delivered by the Applicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such Eligible Securities or ADSs in its records and to hold such Eligible Securities or ADSs in trust for the Depositary until such Eligible Securities or ADSs are delivered to the Depositary or the Custodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Eligible Securities or ADSs and (z) agrees to any additional restrictions or requirements that the Depositary deems appropriate, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Eligible Securities involved in such Pre-Release Transactions at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release Transactions with any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensation received by it in conjunction with the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be held for the benefit of the Holders (other than the Applicant).

(27) GoverningLaw / Waiver of Jury Trial. The Deposit Agreement and the ADRs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions

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hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Notwithstanding anything contained in the Deposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of the Republic of China (or, if applicable, such other laws as may govern the Deposited Securities). EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION,EACH HOLDER AND BENEFICIAL OWNER) WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURYIN ANY LEGAL PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO, THE DEPOSIT AGREEMENT, ANY ADRAND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE).

(28) Rightto Submit Proposals at Annual Ordinary Meeting of Shareholders. (a) Proposals by Shareholders: The Company has informed the Depositary that under ROC Company Law, as in effect as of the date of the Deposit Agreement, holders of one percent (1%) or more of the total issued and outstanding Shares of the Company as of the applicable record date for determining holders of Shares with the right to vote at an annual ordinary meeting of the Company’s shareholders (the “Shareholder Proposal Record Date”), are entitled to submit one (1) written proposal (the “Proposal”) each year for consideration at the annual ordinary meeting of the Company’s shareholders, provided that: (i) the Proposal is in the Chinese language and does not exceed 300 Chinese characters (including the reason(s) for the Proposal and all punctuation marks) in length, (ii) the Proposal is submitted to the Company prior to the expiration of the period for submission of Proposals (the “Submission Period”) announced by the Company (which Submission Period and the place for eligible shareholders to submit the Proposal the Company undertakes to announce publicly each year in a report on Form 6-K submitted to the Commission prior to the commencement of the 60 days closed period prior to the annual ordinary meeting of the Company’s shareholders), (iii) only one (1) matter for consideration at the annual ordinary meeting of the Company’s shareholders shall be allowed in each Proposal, and (iv) the proposing shareholder shall attend, in person or by a proxy, such annual ordinary meeting of the Company’s shareholders whereat his or her or its Proposal is to be discussed and such proposing shareholder, or his or her or its proxy, shall take part in the discussion of such Proposal. As the holder of the Deposited Securities, the Depositary or its nominee is entitled, provided the conditions of ROC law are satisfied, to submit only one (1) Proposal each year in respect of all of the Shares held on deposit as of the applicable Shareholder Proposal Record Date. Holders and Beneficial Owners of ADSs do not under ROC law have individual rights to submit Proposals to the Company for consideration at the annual ordinary meeting of the Company’s shareholders but may be able to submit Proposals to the Company for consideration at the annual ordinary meeting of the Company’s shareholders if the Beneficial Owners (i) timely present their ADSs to the Depositary for cancellation pursuant to the terms of the Deposit Agreement and become holders of Shares in the ROC prior to the expiration of the Submission Period and prior to the applicable Shareholder Proposal Record Date, and (ii) otherwise satisfy the conditions of ROC law applicable to the submission of Proposals to the Company for consideration at an annual ordinary meeting of the Company’s

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shareholders. Beneficial Owners of ADSs may not receive sufficient advance notice of an annual ordinary meeting of the Company’s shareholders to enable the timely withdrawal of Shares to make a Proposal to the Company and may not be able to re-deposit under the Deposit Agreement the Shares so withdrawn. The Company has informed the Depositary that a Proposal shall only be voted upon at the annual ordinary meeting of the Company’s shareholders if the Proposal is accepted by the board of directors of the Company as eligible in accordance with Article 172-1 of the ROC Company Law and the Company's Articles of Incorporation for consideration at an annual ordinary meeting of the Company’s shareholders.

(b) SingleProposal by Depositary or its Nominee on behalf of Beneficial Owners. Holders **** and Beneficial Owners of ADSs do not have individual proposal rights. The Depositary will, if so requested by (a) Beneficial Owner(s) as of the applicable ADS Record Date that own(s), individually or as a group, at least 51% of the ADSs outstanding as of the applicable ADS Record Date (such Beneficial Owner(s), the “Submitting Holder(s)”), submit to the Company for consideration at the annual ordinary meeting of the Company’s shareholders one (1) Proposal each year, provided that: (i) the Proposal submitted to the Depositary by the Submitting Holder(s) is in the Chinese language and does not exceed 300 Chinese characters (including the reason(s) for the Proposal and all punctuation marks) in length, (ii) the Proposal from the Submitting Holder(s) is received by the Depositary at least two (2) Business Days prior to the expiration of the Submission Period, (iii) the Proposal is accompanied by a written certificate signed by each Submitting Holder, addressed to the Depositary and the Company and in a form satisfactory to the Depositary and the Company (the “First Proposal Certificate”), certifying, inter alia, (w) that each Submitting Holder has only certified the said Proposal, (x) that the Submitting Holder(s) own(s), individually or in the aggregate, at least 51% of the ADSs outstanding as of the date the Proposal is submitted by the Submitting Holder(s) to the Depositary (the “Proposal Submission Date”), (y) if the Proposal Submission Date is (i) on or after the applicable ADS Record Date, that the Submitting Holder(s) owned at least 51% of the ADSs outstanding as of the applicable ADS Record Date, and (ii) prior to the applicable ADS Record Date, that the Submitting Holder(s) will continue to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date and will provide the Second Proposal Certificate, as defined below, and (z) the name(s) and address(es) of the Submitting Holder(s) and the number of ADSs owned by each Submitting Holder (together with certified evidence of each Submitting Holder’s ownership of the applicable ADSs as of the Proposal Submission Date, in the case of (y)(ii) above, and the applicable ADS Record Date, in the case of (y)(i) above)), (iv) if the Proposal Submission Date is prior to the applicable ADS Record Date, the Depositary must also receive from the Submitting Holder(s), within five (5) Business Days after the applicable ADS Record Date, a second written certificate signed by each Submitting Holder, addressed to the Depositary and the Company and in a form satisfactory to the Depositary and the Company (the “Second Proposal Certificate”), certifying, inter alia, that the Submitting Holder(s) continued to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date (together with certified evidence of each Submitting Holder’s ownership of the applicable ADSs as of such applicable ADS Record Date), (v) the Proposal is accompanied by a joint and several irrevocable undertaking of all Submitting Holders (which undertaking may be contained in the First Proposal Certificate or the Second Proposal Certificate) that each such Submitting Holder shall pay all fees and expenses incurred in relation to the submission of the Proposal for voting at the annual ordinary meeting of the Company’s shareholders (including,

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but not limited to, the costs and expenses of the Submitting Holder(s), or his, her, its or their representative, to attend the annual ordinary meeting of the Company’s shareholders), (vi) the Shares registered in the name of the Depositary or its nominee as representative of the Holders and Beneficial Owners constitute one percent (1%) or more of the total issued and outstanding Shares of the Company as of the Shareholder Proposal Record Date, (vii) such Proposal contains only one (1) matter for consideration at the annual ordinary meeting of the Company’s shareholders, and (viii) the Submitting Holder(s), or his, her, its or their representative, upon the authorization by the Depositary, attend(s) the annual ordinary meeting of the Company’s shareholders and take(s) part in the discussions of the Proposal in the Chinese language, provided further that only one (1) individual may attend, and take part in the discussion of the Proposal at such annual ordinary meeting on behalf of a Submitting Holder or a group of Submitting Holders. Each Beneficial Owner hereby agrees and acknowledges that (i) the chairman of the annual ordinary meeting of the Company’s shareholders will treat the Proposal in accordance with the ROC Company Law and the rules governing the proceeding of such meeting, including but not limited to, having such Proposal discussed and voted at such meeting, regardless of whether the Submitting Holder(s) attends such meeting, and (ii) in no event shall a Submitting Holder’s, or his, her, its or their representative's, presence at an annual ordinary meeting of the Company’s shareholders entitle such Submitting Holder(s), or his, her, its or their representative, to vote the Shares represented by such Submitting Holder’s ADSs (or any other ADSs) at such annual ordinary meeting of the Company’s shareholders.

Upon the timely receipt by the Depositary of any Proposal which the Depositary reasonably believes to be in full compliance with the immediately preceding paragraph, the Depositary shall submit a copy of such Proposal and of the other materials received from the Submitting Holder(s) to the Company prior to the expiration of the Submission Period. Any Proposal so submitted as to which the Depositary has not received within five (5) Business Days after the applicable ADS Record Date any Second Proposal Certificate required under the immediately preceding paragraph shall be deemed irrevocably withdrawn at the expiration of such five (5) Business Day period. In the event the Depositary receives more than one (1) Proposal by a Submitting Holder, or a group of Submitting Holders, each of which appears to satisfy the requirements set forth in the immediately preceding paragraph, the Depositary is hereby authorized and instructed to disregard all Proposals received from such Submitting Holder(s), except for the first Proposal received by the Depositary from such Submitting Holder(s) and shall submit such Proposal to the Company for consideration at the annual ordinary meeting of the Company's shareholders in accordance with the terms of the Deposit Agreement. The Depositary shall not have any obligation to verify the accuracy of the information contained in any document submitted to it by the Submitting Holder(s). Neither the Depositary nor its nominee shall be obligated to attend and speak at the annual ordinary meeting of the Company’s shareholders on behalf of the Submitting Holder(s).

Notwithstanding anything contained in the Deposit Agreement or any ADR and except that the Depositary shall arrange, at the request of the Company and at the Company's expense, for the mailing to Holders of copies of materials that the Company has made available to the Depositary for such purpose, the Depositary shall not be obligated to provide to the Holders or Beneficial Owners of ADSs any notices relating to the proposal rights, including, without limitation, notice of the Submission Period, or the receipt of any Proposal(s) from

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Submitting Holders, or of the holdings of any ADSs by any persons, except that the Depositary shall, upon a Holder's request, inform such Holder of the total number of ADSs then issued and outstanding.

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(ASSIGNMENTAND TRANSFER SIGNATURE LINES)

FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ________________, the within ADR and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney-in-fact to transfer said ADR on the books of the Depositary with full power of substitution in the premises.

Dated:	Name:
		By:
		Title:
NOTICE: The signature of the Holder to this assignment must correspond<br> with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or<br> any change whatsoever.
---
If the endorsement be executed by an attorney, executor, administrator, trustee or guardian,<br> the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act<br> in such capacity, if not on file with the Depositary, must be forwarded with this ADR.
SIGNATURE GUARANTEED
---
All endorsements or assignments of ADRs must be guaranteed by a member<br> of a Medallion Signature Program approved by the Securities Transfer Association, Inc.
---

Legends[The ADRs issued in respect of Partial Entitlement American Depositary Shares shall bear the following legend on the face of theADR: “This ADR evidences ADSs representing 'partial entitlement' [common shares] [interests in the Certificate of Payment]of ASE Industrial Holding Co., Ltd. and as such do not entitle the holders thereof to the same per-share entitlement as other[common shares] [interests in the Certificate of Payment] (which are 'full entitlement' [common shares] [interests in the Certificateof Payment]) issued and outstanding at such time. The ADSs represented by this ADR shall entitle holders to distributions andentitlements identical to other ADSs when the [common shares] [interests in the Certificate of Payment] represented by such ADSsbecome 'full entitlement' [common shares] [interests in the Certificate of Payment].”]

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EXHIBIT B

FEE SCHEDULE

ADS FEES AND RELATED CHARGES

All capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Deposit Agreement.

I. ADSFees

The following ADS fees are payable under the terms of the Deposit Agreement:

Service	Rate	By Whom Paid
(1) Issuance<br> of ADSs (e.g., an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other<br> reason), excluding issuances as a result of distributions described in paragraph (4) below.	Up to U.S. $5.00 per<br> 100 ADSs (or fraction thereof) issued.	Person receiving ADSs.
(2) Cancellation<br> of ADSs (e.g., a cancellation of ADSs for delivery of deposited Shares, upon a change in the ADS(s)-to-Share(s)<br> ratio, or for any other reason).	Up to U.S. $5.00 per<br> 100 ADSs (or fraction thereof) cancelled.	Person whose ADSs<br> are being cancelled.
(3) Distribution<br> of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements).	Up to U.S. $5.00 per<br> 100 ADSs (or fraction thereof) held.	Person to whom the<br> distribution is made.
(4) Distribution<br> of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) an exercise of rights to purchase<br> additional ADSs.	Up to U.S. $5.00 per<br> 100 ADSs (or fraction thereof) held.	Person to whom the<br> distribution is made.
(5) Distribution<br> of securities other than ADSs or rights to purchase additional ADSs (e.g., spin-off shares).	Up to U.S. $5.00 per<br> 100 ADSs (or fraction thereof) held.	Person to whom the<br> distribution is made.

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6) ADS Services.	Up<br> to U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary.	Person<br> holding ADSs on the applicable record date(s) established by the Depositary.
II.	Charges
---	---

The Company, Holders, Beneficial Owners, persons receiving ADSs upon issuance and persons whose ADSs are being cancelled shall be responsible for the following ADS charges under the terms of the Deposit Agreement:

(i)	taxes (including applicable interest<br> and penalties) and other governmental charges;
(ii)	such registration fees as may from<br> time to time be in effect for the registration of Shares or other Deposited Securities<br> on the share register and applicable to transfers of Shares or other Deposited Securities<br> to or from the name of the Custodian, the Depositary or any nominees upon the making<br> of deposits and withdrawals, respectively;
---	---
(iii)	such cable, telex and facsimile<br> transmission and delivery expenses as are expressly provided in the Deposit Agreement<br> to be at the expense of the person depositing Shares or withdrawing Deposited Securities<br> or of the Holders and Beneficial Owners of ADSs;
---	---
(iv)	the expenses and charges incurred<br> by the Depositary in the conversion of foreign currency;
---	---
(v)	such fees and expenses as are incurred<br> by the Depositary in connection with compliance with exchange control regulations and<br> other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs;<br> and
---	---
(vi)	the fees and expenses incurred by<br> the Depositary, the Custodian, or any nominee in connection with the servicing or delivery<br> of Deposited Property.
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EXHIBITC-1LONG FORM

Certificationand Agreement of Persons Surrendering ADSsfor the Purpose of Withdrawal of Deposited SecuritiesPursuant to Section 2.7 of the Deposit Agreement

Citibank, N.A.

Depositary Receipts Department

388 Greenwich Street, 14^th^ Floor

New York, New York 10013

Re: ASE INDUSTRIAL HOLDING CO., LTD.

We refer to the Deposit Agreement, dated as of April 30, 2018 (as amended from time to time, the "Deposit Agreement"), among ASE INDUSTRIAL HOLDING CO., LTD. (the "Company"), CITIBANK, N.A., as Depositary thereunder, and Holders and Beneficial Owners from time to time of American Depositary Shares (the "ADSs") issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement. We are providing the information herein to enable the Company to comply with its reporting obligations under the laws and regulations of the Republic of China and understand that the Company will rely upon the information provided herein for such purpose.

1. We are surrendering ADSs for the purpose of withdrawal of the Deposited Securities represented by the ADSs pursuant to Section 2.7 of the Deposit Agreement.

2. We agree (or if we are acting for the account of another person, such person has confirmed to us that it agrees) to comply with all requests from the Company pursuant to ROC laws or regulations, the rules and requirements of the TSE, any other stock exchange on which the ADSs or the Deposited Securities are, or may be, traded or listed, and the Articles of Incorporation and Bylaws of the Company, which are made to provide information, inter alia, as to the capacity in which we (or our client) hold(s) or own(s) the ADSs or Deposited Securities and regarding the identity of any other person then or previously interested in such ADSs or Deposited Securities, the nature of such interest and various related matters, whether or not we (they) are holders and/or beneficial owners of ADSs or Deposited Securities at the time of such request.

**3.**We certify (or if we are acting for the account of another person, such person has confirmed to us that it certifies) that:

Pleasecheck the applicable box in (a) below and complete (b) in its entirety.

(a)(i) ☐ Recipient of Deposited Securities withdrawn hereby ("Recipient") is a "Related Person" of the Company (as defined below).

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(ii) ☐ The aggregate number of Deposited Securities to be received by the Recipient upon the surrender of ADSs for the withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit Agreement will exceed ten percent (10%) of the total number of Deposited Securities currently on deposit with the Custodian.*

* To determine the number of Deposited Securities on deposit, please visit the TSE's website at: http://emops.twse.com.tw/server-java/t47hsc01_e?step=0

AND

(b)(i) Recipient hereby withdraws ____________ Deposited Securities of the Company,

AND

(ii) Recipient has withdrawn an aggregate of _________ Deposited Securities of the Company during this calendar month.

AND

(iii) We hereby certify (or if we are acting for the account of another person, such person has confirmed to us that it certifies) that the following information is true and correct:

Name of Beneficial Owner of ADSs:
Address of Beneficial Owner of ADSs:
---
Nationality of Beneficial Owner of ADSs:
---
Name of Recipient:
---
Nationality of Recipient:
---
Identity Number of Recipient (only required if Recipient is a ROC person):
---
Number of ADSs surrendered hereby:
---
Number of Deposited Securities withdrawn hereby:
---

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The aggregate number of Deposited Securities Recipient has received upon<br> all withdrawals since execution of the Deposit Agreement:
TDCC Book-Entry Account Number of Recipient:
---
TDCC Book-Entry Account Name:
---
Name of Custodian (only required if Recipient is a non-ROC person):
---
Address of Custodian:
---
Contact Person at Custodian:
---
Telephone Number of Custodian:
---
Facsimile Number of Custodian:
---
Foreign Investor Investment I.D. (only required if Recipient is a non-ROC<br> person):
---

4. If we are a broker-dealer, we further certify that we are acting for the account of our customer and that our customer has confirmed the accuracy of the information contained in paragraph 3 hereof that is applicable to it.

Date: ____________________

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Name
	Title:

A person or entity is deemed to be a "Related Person" of the Company if the person or entity is:

(a)	(i)	a<br>company of which the chairman of the board of directors or the general manager serves as the chairman of the board of directors<br>or the general manager of the Company, or is the spouse or a relative by blood or marriage to the chairman of the board of directors<br>or general manager of

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the Company within the second degree (as defined under the Civil Code of the Republic of China);

(ii)	a foundation of which the funds<br> donated from the Company exceeds one-third of the foundation’s total funds;
(iii)	a director, supervisor or general<br> manager, vice-general manager, assistant general manager, or departmental head of the<br> Company directly reporting to the general manager of the Company;
---	---
(iv)	the spouse of a director, supervisor<br> or general manager of the Company; or
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(v)	a relative by blood or marriage<br> to the Company's chairman of the board of directors or general manager within the second<br> degree (as defined under the Civil Code of the Republic of China).
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(b) A person or entity in which the Company has invested, which investment is accounted for by the equity method of accounting under generally accepted accounting principles in the Republic of China (the "Equity Method"), or a person or entity which uses the Equity Method to account for an investment in the Company.

C-4

EXHIBITC-2SHORT FORM

Certificationand Agreement of Persons Surrendering ADSsfor the Purpose of Withdrawal of Deposited SecuritiesPursuant to Section 2.7 of the Deposit Agreement

Citibank, N.A.

Depositary Receipts Department

388 Greenwich Street, 14^th^ Floor

New York, New York 10013

Re: ASEINDUSTRIAL HOLDING CO., LTD.

1. We are surrendering ADSs for the purpose of withdrawal of the Deposited Securities represented by the ADSs pursuant to Section 2.7 of the Deposit Agreement.

3. We certify (or if we are acting for the account of another person, such person has confirmed to us that it certifies) that the aggregate number of Deposited Securities to be received by us (it) upon the surrender of ADSs for the withdrawal of Deposited Securities pursuant to the Deposit Agreement does not exceed ten percent (10%) of the total number of Deposited Securities currently on deposit with the Custodian.^1^

^1^Please note that in order to ascertain the total numberof DEposited Securities currently on deposit with the Custodian, please visit the

C-2-1

4. We certify (or if we are acting for the account of another person, such person has confirmed to us that it certifies) that we are (it is) not a "Related Person" of the Company (as defined below).^2^

Date: ____________________

Very truly yours,

[NAME OF CERTIFYING ENTITY]

By: _____________________________ Name Title:

A person or entity is deemed to be a "Related Person" of the Company if the person or entity is:

(a)	(i)	a<br>company of which the chairman of the board of directors or the general manager serves as the chairman of the board of directors<br>or the general

TAIWANSTOCK EXCHANGE'S WEBSITE AT: http://emops.twse.com.tw/server-java/t47hsc01_e?step=0

PleaseFURTHER note that if you cannot certify (or if you are acting for the account of another person, such person has confirmed toyou that it cannot certify) that THE AGGREGATE NUMBER OF Deposited securities to be received upon the surrender of ADSsfor the withdrawal of Deposited Securities pursuant to the Deposit Agreement will notexceed ten percent (10%) of the total number of Deposited Securities currently on deposit with the Custodian, you (it) will notbe able to surrender ADSs In order to withdraw Deposited Securities (or give instructionsto do so) USING THIS SHORT FORM OF WITHDRAWAL CERTIFication and instead, you (it) must complete and deliver to the DepositaryA long form of withdrawal certification THAT CAN be FOUND ON THE DEPOSITARY'S WEBSITE.

^2^PLEASE NOTE THAT IF YOU CANNOT CERTIFY (OR IF YOU ARE ACTING FOR THE ACCOUNT OFANOTHER PERSON, SUCH PERSON HAS CONFIRMED TO YOU THAT IT CANNOT CERTIFY) THAT YOU ARE (IT IS) NOT A "RELATED PERSON"OF THE COMPANY (AS DEFINED BELOW) AS SET FORTH IN PARAGRAPH 4 ABOVE AND YOU (IT) WISH(ES) TO SURRENDER ADSs OR GIVE WITHDRAWALINSTRUCTIONS FOR THE PURPOSE OF WITHDRAWAL OF THE DEPOSITED SECURITIES PURSUANT TO THE DEPOSIT AGREEMENT, YOU (IT) WILL NOT BEABLE TO SURRENDER ADSs IN ORDER TO WITHDRAW DEPOSITED SECURITIES (OR GIVE INSTRUCTIONS TO DO SO) USING THIS SHORT FORM OF WITHDRAWALCERTIFICATION AND INSTEAD, YOU (IT) MUST COMPLETE AND DELIVER TO THE DEPOSITARY A LONG FORM OF WITHDRAWAL CERTIFICATION THAT CANBE FOUND ON THE DEPOSITARY'S WEBSITE.

C-2-2

manager of the Company, or is the spouse or a relative by blood or marriage to the chairman of the board of directors or general manager of the Company within the second degree (as defined under the Civil Code of the Republic of China);

(ii)	a foundation of which the funds<br> donated from the Company exceeds one-third of the foundation’s total funds;
(iii)	a director, supervisor or general<br> manager, vice-general manager, assistant general manager, or departmental head of the<br> Company directly reporting to the general manager of the Company;
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(iv)	the spouse of a director, supervisor<br> or general manager of the Company; or
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(v)	a relative by blood or marriage<br> to the Company's chairman of the board of directors or general manager within the second<br> degree (as defined under the Civil Code of the Republic of China).
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C-2-3

Exhibit 2(b)

DESCRIPTION OF SECURITIES

REGISTERED UNDER SECTION 12 OF THE EXCHANGEACT

As of December 31, 2019, ASE Technology Holding Co., Ltd. (“ASEH,” the “Company,” “we,” “us” or “our”) had the following securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Shares, par value NT$10.00 each	ASX	The New York Stock Exchange*

* Traded in the form of American Depositary Receipts evidencing American Depositary Shares (the “ADSs”), each representing two common shares of ASE Technology Holding Co., Ltd.

Capitalized terms used but not defined herein have the meanings given to them in ASEH’s annual report on Form 20-F for the fiscal year ended December 31, 2019.

COMMON SHARES

Except as otherwise stated, set forth below is information relating to ASEH’s common shares, including brief summaries of the relevant provisions of ASEH’s Articles of Incorporation, as currently in effect, and of the R.O.C. Company Law and related legislation.

General

Our authorized share capital registered with the Kaohsiung Export Processing Zones Administration was NT$50 billion, divided into 5 billion common shares with a face value of NT$10.0 per share, 4,331,603,182 of which were outstanding as of January 31, 2020. Our authorized share capital under our Articles of Incorporation is NT$50 billion, divided into 5 billion common shares. We do not have any equity in the form of preference shares or otherwise outstanding as of January 31, 2020.

Register of Shareholders and Record Dates

·	annual general meeting—60 days;
·	extraordinary general shareholders’ meeting—30 days; and
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·	relevant record date for distribution of dividends, bonuses or other interests—5 days.
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Transfer of Common Shares

The transfer of common shares in registered form is effected by endorsement and delivery of the related share certificates but, in order to assert shareholders’ rights against us, the transferee must have his name and address registered on our register of shareholders. Shareholders are required to file their respective specimen seals, also known as chops, with us. Chops are official stamps widely used in Taiwan by individuals and other entities to authenticate the execution of official and commercial documents. The settlement of trading in our common shares is normally carried out on the book-entry system maintained by the Taiwan Depository & Clearing Corporation.

Dividends and Distributions

Voting Rights

·	amendment to the Articles of Incorporation, including increase of authorized share capital and any changes of the rights of<br>different classes of shares;
·	execution, amendment or termination of any contract through which the company leases its entire business to others, or the<br>company appoints others to operate its business or the company operates its business with others on a continuous basis;
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·	transfer of entire business or assets or a substantial part of its business or assets;
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·	acquisition of the entire business or assets of any other company, which would have a significant impact on the company’s<br>operations;
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·	distribution of any stock dividend;
---	---
·	dissolution, merger or spin-off of the company;
---	---
·	issuance of restricted shares to employees; and
---	---
·	removal of the directors.
---	---

Holders of ADSs do not have the right to exercise voting rights with respect to the underlying common shares, except as described in the deposit agreement.

Other Rights of Shareholders

Preemptive Rights

In addition, in accordance with the R.O.C. Securities and Exchange Act, a public company that intends to offer new shares for cash must offer to the public at least 10% of the shares to be sold, except under certain circumstances or when exempted by the Financial Supervisory Commission of the R.O.C. (the “FSC”). This percentage can be increased by a resolution passed at a shareholders’ meeting, which would diminish the number of new shares subject to the preemptive rights of existing shareholders.

These preemptive rights provisions do not apply to offerings of new shares through a private placement approved at a shareholders’ meeting.

Acquisition of Common Shares by ASEH

Under the R.O.C. Securities and Exchange Act, we may purchase our own common shares for treasury stock under limited circumstances, including:

·	to transfer shares to our employees;
·	to deliver shares upon the conversion or exercise of bonds with warrants, preferred shares with warrants, convertible bonds,<br>convertible preferred shares or warrants issued by us; and
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·	to maintain our credit and our shareholders’ equity, provided that the shares so purchased shall be canceled.
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We may purchase our common shares on the Taiwan Stock Exchange (the “TWSE”) or by means of a public tender offer. These transactions require the approval of a majority of our board of directors at a meeting in which at least two-thirds of the directors are in attendance. The total amount of common shares purchased for treasury stock may not exceed 10.0% of the total issued shares. In addition, the total cost of the purchased shares shall not exceed the aggregate amount of our retained earnings, any premium from share issuances and the realized portion of our capital reserve.

Liquidation Rights

Transfer Restrictions

The R.O.C. Securities and Exchange Act currently requires:

each director, manager, or substantial shareholder (that is, a shareholder who holds more than 10.0% shares of a company), together with their respective spouses, minor children or nominees, to report any change in that person’s shareholding (as well as such respective spouses, minor children or nominees), on a monthly basis, to the issuer of the shares; and

each director, manager, or substantial shareholder, together with their respective spouses, minor children or nominees, after acquiring the status of director, manager, or substantial shareholder for a period of six months, to report his or her intent to transfer any shares (as well as such respective spouses, minor children or nominees) on the TWSE or on the Taipei Exchange to the FSC at least three days before the intended transfer, unless the number of shares to be transferred does not exceed 10,000 shares.

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·	0.2% of the outstanding shares of the company in the case of a company with no more than 30 million outstanding shares; or
·	0.2% of 30 million shares plus 0.1% of the outstanding shares exceeding 30 million shares in the case of a company with more<br>than 30 million outstanding shares; and
---	---
·	5.0% of the average trading volume (number of shares) on the TWSE for the ten consecutive trading days preceding the reporting<br>day on which the director, manager or substantial shareholder reports the intended share transfer to the FSC.
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These restrictions do not apply to sales or transfers of our ADSs.

AMERICAN DEPOSITARY SHARES

We have appointed Citibank, N.A. as the depositary bank for the American Depositary Shares pursuant to a deposit agreement (the “Deposit Agreement”). A copy of the Form of Deposit Agreement is on file with the SEC as exhibit 2(a) to our annual report on Form 20-F (File No. 001-16125) for the year ended December 31, 2019. You may obtain a copy of the Form of Deposit Agreement from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SEC’s website (www.sec.gov). Citibank, N.A. when acting as depositary bank for the American Depositary Shares is referred to as the “depositary bank” or as the “Depositary.” Citibank, N.A.’s depositary offices are located at 388 Greenwich Street, New York, New York 10013. The American Depositary Shares are referred to as “ADSs” and represent ownership interests in securities that are on deposit with the Depositary. The ADSs may be represented by certificates that are commonly known as “American Depositary Receipts” or “ADRs.” The Depositary has appointed Citibank Taiwan Ltd., located at 9F, No. 16 Nanking East Road, Section 4, Taipei 10553, Taiwan, R.O.C. as custodian to safe keep the securities on deposit.

The following is a summary description of the material terms of ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by reference to the terms of the Deposit Agreement and not by this summary. We urge you to review the Deposit Agreement in its entirety. The portions of this summary description that are italicized describe matters that may be relevant to the ownership of ADSs but that may not be contained in the Deposit Agreement.

Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, two common shares that are on deposit with the Depositary and/or the custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the Depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. We and the Depositary may agree to change the ADS-to-common share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the Depositary and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the Depositary, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the Deposit Agreement be vested in the beneficial owners of the ADSs. The Depositary, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of the ADSs may or may not be the holder of ADSs. Beneficial owners of the ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the Depositary, and the Depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms of the Deposit Agreement.

If you become an owner of ADSs, you will become a party to the Deposit Agreement and therefore will be bound to its terms and to the terms of any ADR that evidences your ADSs. The Deposit Agreement and the ADR specify the rights and obligations of as well as your rights and obligations as owner of ADSs and those of the Depositary. As an ADS holder you appoint the Depositary to act on your behalf in certain circumstances. The Deposit Agreement and the ADRs are governed by New York law. However, our obligation to the holders of common shares will continue to be governed by R.O.C. laws, which may be different from the laws in the United States. In addition, we note that R.O.C. law and regulations may restrict the deposit and withdrawal of the common shares into or from the depositary receipt facilities.

The manner in which you own the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the Depositary’s services are made available to you. As an owner of the ADSs, you may hold your ADSs by means of a ADR registered in your name, or through a brokerage or safekeeping account, or through an account established by the Depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the Depositary (commonly referred to as the “direct registration system” or “DRS”). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the Depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the Depositary to the holders of the ADSs. The direct registration system includes automated transfers between the Depositary and DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of a ADS registered in your name and, as such, we will refer to you as the “holder.” When we refer to “you,” we assume the reader owns ADSs and will own ADSs at the relevant time.

The registration of the common shares in the name of the Depositary or the custodian shall, to the maximum extent permitted by applicable law, vest in the Depositary or the custodian the record ownership in the applicable common shares with the beneficial ownership rights and interests in such common shares being at all times vested with the beneficial owners of the ADSs representing the common shares. The Depositary or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.

Dividends and Distributions

As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the Deposit Agreement in proportion to the number of ADSs held as of the specified record date, after deduction the applicable fees, taxes and expenses.

Distributions of Cash

Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the Depositary will arrange for the funds received in a currency other than U.S. dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to R.O.C. law and regulations.

The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The Depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.

The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.

Distributions of Shares

Whenever we make a free distribution of common shares for the securities on deposit with the custodian, we will deposit the applicable number of common shares with the custodian. Upon receipt of confirmation of such deposit, the Depositary will either distribute to holders new ADSs representing the common shares deposited or modify the ADS-to-common shares ratio, in which case each ADS you hold will represent rights and interests in the additional common shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-common share ratio upon a distribution of common shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes or governmental charges, the Depositary may sell all or a portion of the new common shares so distributed.

No such distribution of new ADSs will be made if it would violate a law (i.e., the U.S. securities laws) or if it is not operationally practicable. If the Depositary does not distribute new ADSs as described above, it may sell the common shares received upon the terms described in the Deposit Agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.

Distributions of Rights

Whenever we intend to distribute rights to subscribe for additional common shares, we will give prior notice to the Depositary and we will assist the Depositary in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.

The Depositary will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the Deposit Agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The Depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new common shares other than in the form of ADSs.

The Depositary will not distribute the rights to you if:

·	We do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or
·	We fail to deliver satisfactory documents to the Depositary; or
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·	It is not reasonably practicable to distribute the rights.
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The Depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the Depositary is unable to sell the rights, it will allow the rights to lapse.

Elective Distributions

Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional common shares, it will give prior notice thereof to the Depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the Depositary in determining whether such distribution is lawful and reasonably practicable.

The Depositary will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the Deposit Agreement. In such case, the Depositary will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the Deposit Agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in the R.O.C. would receive upon failing to make an election, as more fully described in the Deposit Agreement.

Other Distributions

Whenever we intend to distribute property other than cash, common shares or rights to purchase additional common shares, it will notify the Depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the Depositary in determining whether such distribution to holders is lawful and reasonably practicable.

If it is reasonably practicable to distribute such property to you and if we provide all of the documentation contemplated in the Deposit Agreement, the Depositary will distribute the property to the holders in a manner it deems practicable.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, the Depositary may sell all or a portion of the property received.

The Depositary will not distribute the property to you and will sell the property if:

·	We do not request that the property be distributed to you or if we ask that the property not be distributed to you; or
·	We do not deliver satisfactory documents to the Depositary; or
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·	The Depositary determines that all or a portion of the distribution to you is not reasonably practicable.
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The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

Redemption

Whenever we decide to redeem any of the securities on deposit with the custodian, it will notify the Depositary in advance. If it is practicable and if we provide all of the documentation contemplated in the Deposit Agreement, the Depositary will provide notice of the redemption to the holders.

The custodian will be instructed to surrender the common shares being redeemed against payment of the applicable redemption price. The Depositary will convert the redemption funds received into U.S. dollars upon the terms of the Deposit Agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the Depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the Depositary may determine.

Changes Affecting Common Shares

The common shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of such common shares or a recapitalization, reorganization, merger, consolidation or sale of assets of the Company.

If any such change were to occur, your ADSs would, to the extent permitted by law and the Deposit Agreement, represent the right to receive the property received or exchanged in respect of the common shares held on deposit. The Depositary may in such circumstances deliver new ADSs to you, amend the Deposit Agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the common shares. If the Depositary may not lawfully distribute such property to you, the Depositary may sell such property and distribute the net proceeds to you as in the case of a cash distribution.

Issuance of ADSs upon Deposit of Common Shares

Subject to limitations set forth in the Deposit Agreement, the Depositary may create ADSs on your behalf if you or your broker deposit common shares with the custodian. The Depositary will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the common shares to the custodian and you provide the applicable deposit certification. Your ability to deposit common shares and receive ADSs may be limited by U.S. and R.O.C. legal considerations applicable at the time of deposit.

Under the laws and regulations of the R.O.C., as currentlyin effect, without obtaining regulatory approval from the FSC, no common shares may be accepted for deposit and no ADSs may beissued under the terms of the Deposit Agreement except in the following circumstances:

(1)	upon a stock dividend on, or a free distribution of, common shares to existing shareholders;
(2)	upon the exercise by existing shareholders of their preemptive rights in connection with capital increases for cash;
(3)	subject in each case to receipt of all applicable approvals in the R.O.C., the issuance of common shares by us to holders of bonds in connection with the exercise of conversion rights of such bond holders; and
(4)	as permitted under the Deposit Agreement, the purchase directly by a person or through the depositary of common shares on the TWSE or the delivery by any person of common shares held by such person for deposit in the depositary receipt facility, provided that the total number of ADSs outstanding after an issuance described in clause (4) does not exceed the number of ADSs issued and previously approved by the FSC in connection with the offering plus any ADSs created under clauses (1), (2) and (3) described above; provided that the Depositary will refuse to accept common shares for deposit under clause (4) if such deposit is not permitted under any restriction notified by the company to the Depositary from time to time, which restriction may specify blackout periods during which deposits may not be made, time periods during which deposits may be made, and minimum size and frequency of deposits.

The Depositary and the custodian will refuse to accept commonshares for deposit whenever they are notified in writing that such deposit would result in any violation of applicable laws, includingownership restrictions under the laws of the R.O.C.

The issuance of ADSs may be delayed until the Depositary or the custodian receives confirmation that all required approvals have been given and that the common shares have been duly transferred to the custodian. The Depositary will only issue ADSs in whole numbers.

When you make a deposit of common shares, you will be responsible for transferring good and valid title to the Depositary. As such, you will be deemed to represent and warrant that:

·	The common shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.
·	All preemptive (and similar) rights, if any, with respect to such common shares have been validly waived or exercised.
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·	You are duly authorized to deposit common shares.
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·	The common shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or<br>adverse claim, and are not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined<br>in the Deposit Agreement).
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·	The common shares presented for deposit have not been stripped of any rights or entitlements.
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If any of the representations or warranties are incorrect in any way, we and the Depositary may, at your cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.

Transfer, Combination and Split Up of the ADSs

As a ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the Depositary and also must:

·	ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;
·	provide such proof of identity and genuineness of signatures as the Depositary deems appropriate;
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·	provide any transfer stamps required by the State of New York or the United States; and
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·	pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms<br>of the Deposit Agreement, upon the transfer of ADRs.
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To have your ADRs either combined or split up, you must surrender the ADRs in question to the Depositary with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the Deposit Agreement, upon a combination or split up of ADRs.

Withdrawal of Common Shares Upon Cancellation of ADSs

Subject to the relevant provisions of the Deposit Agreement, a holder may apply to withdraw the underlying common shares, or request the Depositary, acting pursuant to the Deposit Agreement, to sell or cause to be sold on behalf of such holders of the underlying common shares. Your ability to withdraw the common shares may be limited by U.S. and R.O.C. law considerations applicable at the time of withdrawal.

Subject to the withdrawal of deposited property being permitted under R.O.C. law and regulations, you may also request that our common shares represented by your ADSs be sold on your behalf. The Depositary may require that you deliver your request for sale in writing. Any sale of our common shares will be conducted according to applicable R.O.C. law through a securities company in the R.O.C. on the TWSE or in another manner as is permitted under applicable R.O.C. law. Any sale will be at your risk and expense. You may also be required to enter into a separate agreement to cover the terms of the sale of our common shares.

Upon receipt of any proceeds from any sale, subject to any restrictions imposed by R.O.C. law and regulations, the Depositary shall convert the proceeds into US dollars and distribute the proceeds to you, net of any fees, expenses, taxes or governmental charges (including, without limitation, any R.O.C. and U.S. taxes) incurred in connection with the sale.

Although sales of ADSs by a non-resident individual or acorporation that has no fixed place of business or other permanent establishment or business agent in the territory of the R.O.C.are not currently subject to R.O.C. taxation, sales of common shares by such individual or corporation will be subject to 0.3%securities transaction tax on the transfer amount in the R.O.C.

In order to withdraw or instruct the sale of the common shares represented by your ADSs, you will be required to pay to the Depositary the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the common shares being withdrawn and you will be required to provide to the Depositary the applicable withdrawal certification. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the Deposit Agreement.

If you hold a ADR registered in your name, the Depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the Depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the common shares represented by your ADSs may be delayed until the Depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the Depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.

We currently have reporting obligations under R.O.C. law in respect of the ADS facility. In order to enable us to gather the information necessary for these reporting obligations, you will be asked to complete and sign a certification upon withdrawal of common shares from the ADS facility. In this certification you will be asked to disclose, among other information, the name, nationality and address of the beneficial owner of the ADSs presented for cancellation, the number of common shares owned by the beneficial owner and whether certain affiliations exist between the beneficial owner and us. The Depositary will refuse to release common shares to you until you deliver a completed and signed certification to it.

In addition, the Depositary shall not deliver common shares to a surrendering holder of ADSs unless such holder presents evidence of payment of any securities transaction tax which may be imposed under R.O.C. law unless we shall have advised the Depositary that no such tax is assessable in connection with the withdrawal of common shares hereunder.

Under the laws and regulations of the R.O.C., the commonshares deposited under the Deposit Agreement may be withdrawn upon cancellation of the corresponding ADSs pursuant to the DepositAgreement subject to the following conditions:

·	the appointment of an eligible agent in the R.O.C. to open (1) a securities trading account with an R.O.C. brokerage firmwith R.O.C. approval and (2) a bank account to pay R.O.C. taxes, remit funds, exercise shareholders’ rights and perform suchother functions as you may designate upon such withdrawal;
·	the appointment of a custodian bank to hold the securities in safekeeping, make confirmations, settle trades and reportrelevant information;
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·	registration with the TWSE for making investments in the R.O.C. securities market and receipt of a foreign investor investmentidentification prior to withdrawing common shares; and
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·	the appointment of a tax agent in the R.O.C. for filing tax returns and making tax payments in the R.O.C. Such tax agentmust meet certain qualifications set by the R.O.C. Financial Supervisory Commission and, upon appointment, becomes a guarantorof such withdrawing owner’s R.O.C. tax obligations. Evidence of the appointment of such tax agent and the approval of suchappointment by the R.O.C. tax authorities may be required as conditions to such withdrawing holder’s repatriation of theproceeds from the sale of the withdrawn common shares. There can be no assurance that such withdrawing holder will be able to appointand obtain approval for such tax agent in a timely manner.
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These conditions may change from time to time. We cannotassure you that current R.O.C. law will remain in effect or that future changes in R.O.C. law will not adversely affect your abilityto withdraw our common shares from the ADS facility.

If the common shares are withdrawn from the depositary facility,such holder will be required to provide information to enable the compliance with our obligations set forth under the laws andregulations of the R.O.C., including a certification that:

·	the holder is or is not a “related person,” as such term is defined in the Deposit Agreement, to us;
·	the holder will own a certain number of our common shares after cancellation of the ADSs surrendered thereby;
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·	the holder, or the person on whose account he acts, is the beneficial owner of the ADSs surrendered to the Depositary thereby;
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·	the name, address and nationality of the beneficial owner of the ADSs, as included upon presentation of ADSs for cancellation,is true and correct;
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·	the number of ADSs surrendered and the number of common shares withdrawn, as included upon presentation of ADSs for cancellation,is true and correct; and
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·	if the presenter is a broker-dealer, the owner of the account for which he is acting has confirmed the accuracy of the aboverepresentations.
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You may also be required to certify to other information that we or the Depositary may deem necessary or desirable to comply with any R.O.C. disclosure or reporting requirement. The Depositary will refuse to release common shares to you until you deliver a completed and signed certification to it.

You will have the right to withdraw the securities represented by your ADSs at any time except for:

·	Temporary delays that may arise because (i) the transfer books for the common shares or ADSs are closed, or (ii) commonshares are immobilized on account of a shareholders’ meeting or a payment of dividends.
·	Obligations to pay fees, taxes and similar charges.
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·	Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.
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·	Other instructions specifically contemplated by Instruction (1) of the General Instructions to Form F-6 (as may be amendedfrom time to time).
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The Deposit Agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.

Voting Rights

Except as described below, you generally have no right under the Deposit Agreement to instruct the Depositary to exercise the voting rights for the common shares represented by your ADSs. Instead, by accepting ADSs or any beneficial interest in ADSs, you will be deemed to have authorized and directed the Depositary to appoint our Chairman or his designee to represent you at our shareholders’ meeting and to vote, without liability, the common shares of we deposited with the custodian according to the terms of the ADSs. The voting rights of holders of common shares are described in the above “Description of Securities Registered Under Section 12 of the Exchange Act – Common Shares — Voting Rights.”

The Depositary will distribute to you notices of shareholders’ meetings received from us together with information explaining how to instruct the Depositary to exercise the voting rights of the securities represented by the ADSs.

If we fail to timely provide the Depositary with its notice of meeting or other materials related to any meeting of owners of common shares, the Depositary will endeavor to cause all the deposited securities represented by the ADSs to be present at the applicable meeting, insofar as practicable and permitted under applicable law, but will not cause those securities to be voted. According to the R.O.C. Company Law, except under limited circumstances described below, generally a shareholder’s voting rights must, as to all matters brought to a vote of shareholders, be exercised as to all common shares held by the shareholder in the same manner, except in the case of an election of directors (including independent directors), which may be conducted by means of cumulative voting or other mechanisms adopted in our Articles of Incorporation. Pursuant to R.O.C. Company Law and our Articles of Incorporation, the election of directors (including independent directors) is by means of cumulative voting.

If the Depositary timely receives voting instructions from holders of at least 51% of the outstanding ADSs to vote in the same manner regarding one or more resolutions to be considered at the meeting, including the election of directors, the Depositary will, subject to its receipt of satisfactory opinions of counsel, notify and instruct our Chairman or his designee of the instructions to attend the meeting and vote all the securities represented by the holders’ ADSs in accordance with the direction received from holders at least 51% of the outstanding ADSs.

If we have timely provided the Depositary with the materials described in the applicable Deposit Agreement and the Depositary has not timely received instructions from holders of at least 51% of the outstanding ADSs to vote in the same direction regarding any resolution to be considered at the meeting, including the election of directors, and, provided the Deposit Agreement allows the holder of ADSs to exercise its voting right on an individual basis, and any other matter where R.O.C. law does not require a holder of the our common shares to vote all common shares in the same manner and subject to its receipt of satisfactory opinions of counsel, and the Depositary has secured satisfactory opinion of counsel, then you will be deemed to have authorized and directed the Depositary to give a discretionary proxy to our Chairman or his designee to attend and vote at the meeting the common shares represented by your ADSs in any manner such person may wish (which may not be in the interests of holders) unless the Chairman, or such designated person, shall have informed the Depositary that he does not wish to be so authorized and directed.

Proposal Rights

Holders of one percent or more of the total and issued outstanding common shares will be entitled to submit one written proposal each year for consideration at our annual ordinary meeting of stockholders provided that (i) the proposal is in the Chinese language and does not exceed 300 Chinese characters, (ii) the proposal is submitted to us prior to the expiration of the period for submission of proposals (the “Submission Period”) announced by us, (iii) only one (1) matter for consideration at our annual ordinary meeting of shareholders is allowed in each proposal, and (iv) the proposing shareholder shall attend, in person or by a proxy, such annual ordinary meeting whereat his or her or its proposal is to be discussed and such proposing shareholder, or his or her or its proxy, shall take part in the discussion of such proposal.

As the holder of common shares, the Depositary is entitled, provided the conditions of R.O.C. law are satisfied, to submit only one (1) proposal each year in respect of all of the common shares held on deposit. Holders and beneficial owners of ADSs do not under R.O.C. law have individual rights to submit proposals to us but may be able to submit proposals to us for consideration at the annual ordinary meeting of shareholders if the beneficial owners (i) timely present their ADSs to the Depositary for cancellation pursuant to the terms of the Deposit Agreement and become holders of common shares in the R.O.C. prior to the expiration of the Submission Period and prior to the applicable shareholder proposal record date, and (ii) otherwise satisfy the conditions of R.O.C. law applicable to the submission of proposals to us for consideration at an annual ordinary meeting of our shareholders.

The Depositary will, if so requested by (a) beneficial owner(s) as of the applicable ADS record date that own(s), individually or as a group, at least 51% of the ADSs outstanding as of the applicable ADS record date, submit to us for consideration at the annual ordinary meeting of our shareholders one (1) proposal each year, provided that certain terms and conditions as set forth in the Deposit Agreement are met.

The Depositary will not be obligated to provide to holders and beneficial owners of the ADSs any notices relating to the proposal rights, including, without limitation, notice of submission period, or the receipt of any proposal(s) from submitting holders, or of the holdings of any ADSs by any persons, except that the Depositary shall, upon a ADS holder’s request, inform such holder of the total number of ADSs the issued.

Fees and Charges

As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:

Service	Fees
Issuance of ADSs (e.g., an issuance upon a deposit of shares, upon a change in ADS(s)-to-common shares(s) ratio, or for any other reason), excluding issuances as a result of distributions of common shares	Up to U.S. $5.00 per 100 ADSs issued
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited common shares, upon a change in the ADS(s)-to-common share(s) ratio, or for any other reason)	Up to U.S. $5.00 per 100 ADSs cancelled
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)	Up to U.S. $5.00 per 100 ADSs held
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs	Up to U.S. $5.00 per 100 ADSs held
Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)	Up to U.S. $5.00 per 100 ADSs held
ADS Services	Up to U.S. $5.00 per 100 ADSs held on the applicable record date(s) established by the Depositary

As an ADS holder you will also be responsible to pay certaincharges such as:

·	taxes (including applicable interest and penalties) and other governmental charges;
·	the registration fees as may from time to time be in effect for the registration of common shares on the share register and applicable to transfers of common shares to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
·	certain cable, telex and facsimile transmission and delivery expenses;
·	the expenses and charges incurred by the Depositary in the conversion of foreign currency;
·	the fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, ADSs and ADRs; and
·	the fees and expenses incurred by the Depositary, the custodian or any nominee in connection with the servicing or delivery of deposited property.

Books of Depositary

The Depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the Deposit Agreement.

The Depositary will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.

Amendments and Termination

We may agree with the Depositary to modify the Deposit Agreement at any time without your consent. We will undertake to give holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the Deposit Agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.

You will be bound by the modifications to the Deposit Agreement if you continue to hold your ADSs after the modifications to the Deposit Agreement become effective. The Deposit Agreement cannot be amended to prevent you from withdrawing the common shares represented by your ADSs (except as permitted by law).

We have the right to direct the Depositary to terminate the Deposit Agreement. Similarly, the Depositary may in certain circumstances on its own initiative terminate the Deposit Agreement. In either case, the Depositary must give notice to the holders at least 30 days before termination. Until termination, your rights under the Deposit Agreement will be unaffected.

After termination, the Depositary will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the Depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest-bearing account. At that point, the Depositary will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).

Limitations on Obligations and Liabilities

The Deposit Agreement limits our obligations and the Depositary’s obligations to you. Please note the following:

·	we and the Depositary are obligated only to take the actions specifically stated in the Deposit Agreement without negligence<br>or bad faith;
·	the Depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is<br>cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the Deposit Agreement;
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·	the Depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content<br>of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks<br>associated with investing in common shares, for the validity or worth of the common shares, for any tax consequences that result<br>from the ownership of ADSs, for the credit worthiness of any third party, for allowing any rights to lapse under the terms of the<br>Deposit Agreement, for the timeliness of any of our notices or for our failure to give notice;
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·	we and the Depositary will not be obligated to perform any act that is inconsistent with the terms of the Deposit Agreement;
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·	we and the Depositary disclaim any liability if we or the Depositary are prevented or forbidden from or subject to any civil<br>or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the<br>Deposit Agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision<br>of our Articles of Incorporation, or any provision of or governing the securities on deposit, or by reason of any act of God or<br>war or other circumstances beyond our control;
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·	we and the Depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided<br>for in the Deposit Agreement or in our Articles of Incorporation or in any provisions of or governing the securities on deposit;
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·	we and the Depositary further disclaim any liability for any action or inaction in reliance on the advice or information received<br>from legal counsel, accountants, any person presenting common shares for deposit, any holder of ADSs or authorized representatives<br>thereof, or any other person believed by either of us in good faith to be competent to give such advice or information;
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·	we and the Depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering, right<br>or other benefit that is made available to holders of common shares but is not, under the terms of the Deposit Agreement, made<br>available to you;
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·	we and the Depositary may rely without any liability upon any written notice, request or other document believed to be genuine<br>and to have been signed or presented by the proper parties;
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·	we and the Depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the<br>Deposit Agreement;
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·	no disclaimer of any Securities Act liability is intended by any provision of the Deposit Agreement.
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Taxes

You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the Depositary and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.

The Depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The Depositary and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the Depositary and to the custodian proof of taxpayer status and residence and such other information as the Depositary and the custodian may require to fulfill legal obligations. You are required to indemnify us, the Depositary and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.

Pre-Release Transactions

Subject to the terms and conditions of the Deposit Agreement, the Depositary may issue to broker/dealers ADSs before receiving a deposit of common shares. These transactions are commonly referred to as “pre-release transactions,” and are entered into between the Depositary and the applicable broker/dealer. The Deposit Agreement limits the aggregate size of pre-release transactions (not to exceed 30% of the common shares on deposit in the aggregate) and imposes a number of conditions on such transactions (i.e., the need to receive collateral, the type of collateral required, the representations required from brokers, etc.). The Depositary may retain the compensation received from the pre-release transactions.

Foreign Currency Conversion

The Depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the Deposit Agreement (net of any fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements).

If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the Depositary may take the following actions in its discretion:

·	convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the<br>conversion and distribution is lawful and practical;
·	distribute the foreign currency to holders for whom the distribution is lawful and practical;
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·	hold the foreign currency (without liability for interest) for the applicable holders.
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Governing Law and Waiver of Jury Trial

The Deposit Agreement and the ADRs shall be interpreted in accordance with the laws of the State of New York. The rights of holders of common shares (including common shares represented by ADSs) are governed by the laws of the R.O.C.

AS A PARTY TO THE DEPOSIT AGREEMENT, YOU IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST US AND/OR THE DEPOSITARY.

Exhibit 8

ASE Technology Holding Co., Ltd.

List of Subsidiaries

(As of January 31, 2020)

A.	Advanced Semiconductor Engineering, Inc., a corporation organized under the laws of the Republic of China, and its subsidiaries:
(1)	A.S.E. Holding Limited, a holding company organized under the laws of Bermuda, has a subsidiary, ASE Investment (Labuan) Inc.,<br>a holding company organized under the laws of Malaysia, which directly holds a wholly owned subsidiary, ASE (Korea) Inc., a corporation<br>organized under the laws of Korea, and has a wholly owned subsidiary, ASE (Weihai), Inc., a corporation organized under the laws<br>of the People’s Republic of China.
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(2)	ASE Marketing and Service Japan Co., Ltd., a corporation organized under the laws of Japan.
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(3)	ASE Test, Inc., a corporation organized under the laws of the Republic of China, and its subsidiaries:
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(a)	Alto Enterprises Limited, a holding company organized under the laws of the British Virgin Islands, holds a subsidiary, ASE<br>Investment (KunShan) Limited, a holding company organized under the laws of the People’s Republic of China;
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(b)	Super Zone Holdings Limited, a holding company organized under the laws of Hong Kong, has a wholly owned subsidiary, Advanced<br>Semiconductor Engineering (China) Ltd., a corporation organized under the laws of the People’s Republic of China;
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(c)	TLJ Intertech Inc., a corporation organized under the laws of the Republic of China;
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(d)	MingFung Information Service Corp., Ltd., a corporation organized under the laws of the Republic of China; and
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(e)	Advanced Microelectronic Products Inc., a corporation organized under the laws of the Republic of China.
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(4)	Omniquest Industrial Limited, a holding company organized under the laws of the British Virgin Islands, directly holds a wholly<br>owned subsidiary, ASE Corporation, a holding company organized under the laws of the Cayman Islands, which directly holds two subsidiaries:
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(a)	ASE Mauritius Inc., a holding company organized under the laws of Mauritius, and its subsidiaries:
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(I)	ASE (Shanghai) Inc., a corporation organized under the laws of the People’s Republic of China, holds a subsidiary, Advanced<br>Semiconductor Engineering (HK) Limited, a corporation organized under the laws of Hong Kong; and
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(II)	ASE (Kunshan) Inc., a corporation organized under the laws of the People’s Republic of China.
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(b)	ASE Labuan Inc., a holding company organized under the laws of Malaysia, holds a sole subsidiary, ASE Electronics Inc., a corporation<br>organized under the laws of the Republic of China.
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(5)	Innosource Limited, a holding company organized under the laws of the British Virgin Islands.
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(6)	J&R Holding Limited, a holding company organized under the laws of Bermuda, and its subsidiaries:
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(a)	J&R Industrial Inc., a corporation organized under the laws of the Republic of China;
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(b)	ASE Japan Co., Ltd., a corporation organized under the laws of Japan;
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(c)	ASE (U.S.) Inc., a corporation organized under the laws of the State of California, U.S.A.;
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(d)	Global Advanced Packaging Technology Ltd., a holding company organized under the laws of the Cayman Islands, and its sole direct<br>wholly owned subsidiary, ASE Assembly & Test (Shanghai) Limited, a corporation incorporated under the laws of the People’s<br>Republic of China, which has three direct holding subsidiaries:
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(I)	Wuxi Tongzhi Microelectronics Co., Ltd., a corporation incorporated under the laws of the People’s Republic of China;
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(II)	Shanghai Ding Hui Real Estate Development Co., Ltd., a corporation organized under the laws of the People’s Republic<br>of China, and its five subsidiaries, Shanghai Ding Yu Real Estate Development Co., Ltd., KunShan Ding Hong Real Estate Development<br>Co., Ltd., Shanghai Ding Qi Property Management Co., Ltd., Shanghai Ding Xu Property Management Co., Ltd. and Shanghai Ding Wei<br>Real Estate Development Co., Ltd. and its subsidiary, Shanghai Ding Fan Department Store Co., Ltd., all corporations organized<br>under the laws of the People’s Republic of China; and
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(III)	ISE labs, China. Ltd., a corporation incorporated under the laws of the People’s Republic of China.
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(e)	Suzhou ASEN Semiconductors Co., Ltd., a corporation organized under the laws of the People’s Republic of China;
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(f)	ASE Test Limited, a holding company organized under the laws of Singapore, directly has three wholly owned subsidiaries:
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(I)	ASE Holdings (Singapore) Pte. Ltd., a holding company organized under the laws of Singapore and its wholly owned subsidiary,<br>ASE Electronics (M) SDN. BHD., a corporation organized under the laws of Malaysia;
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(II)	ASE Test Holdings, Ltd., a holding company organized under the laws of the Cayman Islands and its wholly owned subsidiary,<br>ISE Labs, Inc., a corporation organized under the laws of the State of California, U.S.A.; and
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(III)	ASE Singapore Pte. Ltd., a corporation organized under the laws of Singapore.
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(g)	Anstock Limited, a corporation organized under the laws of the Cayman Islands; and
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(h)	Anstock II Limited, a corporation organized under the laws of the Cayman Islands.
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(7)	LuChu Development Corporation, a corporation organized under the laws of the Republic of China.
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(8)	ASE Embedded Electronics Inc., a corporation organized under the laws of the Republic of China.
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(9)	Advanced Semiconductor Engineering, Inc. has significant interests in the following companies:
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(a)	Hung Ching Development & Construction Co. Ltd., a corporation organized under the laws of the Republic of China;
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(b)	Hung Ching Kwan Co., a corporation organized under the laws of the Republic of China; and
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(c)	Deca Technologies Inc., a corporation organized under the laws of the Cayman Islands.
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B.	Siliconware Precision Industries Co., Ltd., a corporation organized under the laws of the Republic of China, directly has two<br>wholly owned subsidiaries:
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(1)	Siliconware Investment Co., Ltd. (Taiwan), an investment corporation organized under the laws of the Republic of China, and<br>has a significant interest in Yann Yuan Investment Co., Ltd., a corporation organized under the laws of the Republic of China.
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(2)	SPIL (B.V.I.) Holding Limited, a holding company organized under the laws of the British Virgin Islands, directly has two wholly<br>owned subsidiaries:
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(a)	Siliconware USA, Inc., a corporation organized under the laws of the State of California, U.S.A.; and
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(b)	SPIL (Cayman) Holding Limited, a holding company organized under the laws of the Cayman Islands, and its subsidiaries:
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(I)	Siliconware Technology (Suzhou) Limited, a corporation organized under the laws of the People’s Republic of China; and
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(II)	Siliconware Electronics (Fujian) Co., Limited, a corporation organized under the laws of the People’s Republic of China.
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(3)	Siliconware Precision Industries Co., Ltd., has significant interests in two companies:
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(I)	Vertical Circuits, Inc.^(i)^, a corporation<br>organized under the laws of the State of California, U.S.A.; and
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(II)	ChipMOS Technologies Inc., a corporation organized under the laws of the Republic of China.
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C.	USI Inc., a corporation organized under the laws of the Republic of China, directly has a wholly owned subsidiary, Huntington<br>Holdings International Co., Ltd., a holding company organized under the laws of the British Virgin Islands, and its wholly owned<br>subsidiaries:
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(1)	Unitech Holdings International Co., Ltd., an investment corporation organized under the laws of the British Virgin Islands.
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(2)	Universal ABIT Holding Co., Ltd., a holding company organized under the laws of the Cayman Islands.
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(3)	Real Tech Holdings Ltd., a holding company organized under the laws of the British Virgin Islands, has two direct holding subsidiaries:
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(a)	Universal Scientific Industrial (Kunshan) Co., Ltd., a corporation organized under the laws of the People’s Republic<br>of China; and
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(b)	USI Enterprise Limited, a holding company organized under the laws of Hong Kong, has a direct holding subsidiary, Universal<br>Scientific Industrial (Shanghai) Co., Ltd., a corporation organized under the laws of the People’s Republic of China, which<br>has the following subsidiaries:
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(I)	Universal Global Technology (Shanghai) Co., Ltd., a corporation organized under the laws of the People’s Republic of<br>China;
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(II)	USI Electronics (Shenzhen) Co., Ltd., a corporation organized under the laws of the People’s Republic of China, and has<br>a subsidiary, Huanrong Electronics (Huizhou) Co., Ltd., a corporation organized under the laws of the People’s Republic of<br>China;
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(III)	Universal Global Technology (Kunshan) Co., Ltd., a corporation organized under the laws of the People’s Republic of China,<br>and has joint venture interests in SUMA-USI Electronics Co., Ltd., a corporation organized under the laws of the People’s<br>Republic of China;
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(IV)	Universal Global Electronics (Shanghai) Co., Ltd., a corporation organized under the laws of the People’s Republic of<br>China; and
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(V)	Universal Global Technology Co., Ltd., a corporation organized under the laws of Hong Kong, and has significant interests in<br>M-Universe Investments Pte. Ltd., a corporation organized under the laws of Singapore and the following subsidiaries:
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(i)	Universal Global Industrial Co., Limited, a corporation organized under the laws of Hong Kong;
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(ii)	Universal Global Scientific Industrial Co., Ltd., a corporation organized under the laws of the Republic of China, has a subsidiary,<br>Universal Scientific Industrial Co., Ltd., a corporation organized under the laws of the Republic of China;
---	---
(iii)	USI America, Inc., a corporation organized under the laws of the State of California, U.S.A.;
---	---
(iv)	Universal Scientific Industrial De Mexico S.A. De C.V., a corporation organized under the laws of Mexico;
---	---
(v)	USI Japan Co., Ltd., a corporation organized under the laws of Japan;
---	---
(vi)	Universal Scientific Industrial (France), a simplified limited liability company (société par actions simplifiée)<br>organized under the laws of France; and
---	---
(vii)	Universal Global Electronics Co., Ltd., a corporation organized under the laws of Hong Kong, has two subsidiary, Semicondutores<br>Avancados do Brasil S.A., a corporation organized under the laws of Brasil and Chung Hong Electronics Poland Sp.z o.o. a corporation<br>organized under the laws of Poland.
---	---

^(i)^ Vertical Circuits, Inc. filed for bankruptcy protection in July 2012.

Exhibit 12(a)

Executive Officers’ CertificationPursuant toSection 302 of the Sarbanes-Oxley Act

I, Jason C.S. Chang, the Chief Executive Officer of ASE Technology Holding Co., Ltd., certify that:

1.	I have reviewed this annual report on Form 20-F of ASE Technology Holding Co., Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
---	---

Date: March 31, 2020

By:	/s/ Jason C.S. Chang
	Name:	Jason C.S. Chang
	Title:	Chief Executive Officer

Exhibit 12(b)

Executive Officers’ CertificationPursuant toSection 302 of the Sarbanes-Oxley Act

I, Joseph Tung, the Chief Financial Officer of ASE Technology Holding Co., Ltd., certify that:

1.	I have reviewed this annual report on Form 20-F of ASE Technology Holding Co., Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
---	---

Date: March 31, 2020

By:	/s/ Joseph Tung
	Name:	Joseph Tung
	Title:	Chief Financial Officer

Exhibit 13

906 Certification

The certification set forth below is being submitted in connection with the Annual Report on Form 20-F for the year ended December 31, 2019 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code. This certification is not to be deemed filed for purposes of Section 18 of the Exchange Act and is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act.

Jason C.S. Chang, the Chief Executive Officer, and Joseph Tung, the Chief Financial Officer of ASE Technology Holding Co., Ltd., each certifies that, to the best of his knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of ASE Technology Holding Co., Ltd.
---	---

Date: March 31, 2020

By:	/s/ Jason C.S. Chang
	Name:	Jason C.S. Chang
	Title:	Chief Executive Officer
By:	/s/ Joseph Tung
---	---	---
	Name:	Joseph Tung
	Title:	Chief Financial Officer

Exhibit15(a)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement on Forms S-8 (Nos. 333-208276 and 333-178183) of Advanced Semiconductor Engineering, Inc. and Form S-8 (No. 333-229860) of ASE Technology Holding Co., Ltd. of our reports dated March 27, 2020, relating to the consolidated financial statements of ASE Technology Holding Co., Ltd. and its subsidiaries (which report expresses an unqualified opinion based on our audit and the report of other auditors); and the effectiveness of ASE Technology Holding Co., Ltd. and its subsidiaries’ internal control over financial reporting (which report also expresses an unqualified opinion based on our audit and the report of other auditors), appearing in this Annual Report on Form 20-F of ASE Technology Holding Co., Ltd. for the year ended December 31, 2019.

_____________________________

/s/ Deloitte & Touche

Taipei, Taiwan

Republic of China

March 31, 2020

Exhibit15(b)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (No. 333-215126) and Form S-8 (Nos. 333-208276 and 333-178183) of Advanced Semiconductor Engineering, Inc. and Form S-8 (No. 333-229860) of ASE Technology Holding Co., Ltd. of our report dated March 19, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting of Siliconware Precision Industries Co., Ltd, which appears in this Form 20-F of ASE Technology Holding Co., Ltd.

/s/PricewaterhouseCoopers, Taiwan<br><br><br><br><br><br><br><br>Taipei, Taiwan<br><br><br><br>Republic of China<br><br>March 31, 2020

ASE Technology Holding Co., Ltd 20-F for FY2019

About this 20-F