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What changed in CHIPMOS TECHNOLOGIES INC's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of CHIPMOS TECHNOLOGIES INC's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+342 added−321 removedSource: 20-F (2024-04-11) vs 20-F (2023-04-13)

Top changes in CHIPMOS TECHNOLOGIES INC's 2023 20-F

342 paragraphs added · 321 removed · 280 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

63 edited+16 added−14 removed159 unchanged
Biggest changeWith respect to item (4) above, the depositary may issue our ADSs against the deposit of our shares only if the total number of our ADSs outstanding following the deposit will not exceed the number of our ADSs previously approved by the FSC, plus any our ADSs issued pursuant to the events described in items (1), (2) and (3) above. 16 In addition, in the case of a deposit of our shares requested under item (4) above, the depositary will refuse to accept deposit of such our shares if such deposit is not permitted under any legal, regulatory or other restrictions notified by the Company 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.
Biggest changeIn addition, in the case of a deposit of our shares requested under item (4) above, the depositary will refuse to accept deposit of such our shares if such deposit is not permitted under any legal, regulatory or other restrictions notified by the Company 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.
Under the ROC Company Act, except under limited circumstances, shareholders have one vote for each common share held. See “Item 10. Additional Information—Voting Rights” for a discussion of voting rights of holders of our common shares. Holders of our ADSs do not have the same voting rights as holders of our common shares.
Holders of Our ADSs do not have the same voting rights as holders of our common shares. Under the ROC Company Act, except under limited circumstances, shareholders have one vote for each common share held. See “Item 10. Additional Information—Voting Rights” for a discussion of voting rights of holders of our common shares.
Under the current ROC law, the depositary, even without obtaining approvals from the Central Bank of the Republic of China (Taiwan) or any other governmental authority or agency of the ROC, may still convert NT dollars into other currencies, including US dollars, for: • the proceeds of the sale of common shares represented by ADSs or received as stock dividends from our shares and deposited into the depositary receipt facility; and • any cash dividends or cash distributions received.
Under the current ROC law, the depositary may, even without obtaining approvals from the Central Bank of the Republic of China (Taiwan) or any other governmental authority or agency of the ROC, convert NT dollars into other currencies, including US dollars, for: • the proceeds of the sale of common shares represented by ADSs or received as stock dividends from our shares and deposited into the depositary receipt facility; and • any cash dividends or cash distributions received.
In particular, we depend on a number of skilled employees in connection with our LCD, OLED and other display panel driver semiconductor assembly and testing services, and the competition for such employees in Taiwan is intense. We may not be able to either retain our present personnel or attract additional qualified personnel as and when needed.
In particular, we depend on a number of skilled employees in connection with our LCD, OLED, automotive panel and other display panel driver semiconductor assembly and testing services, and the competition for such employees in Taiwan is intense. We may not be able to either retain our present personnel or attract additional qualified personnel as and when needed.
Nevertheless, depending on future developments of global trade tensions, such regulations, rules, or measures may have an adverse effect on our business and operations, and we may incur significant legal liability and financial losses as a result. 13 Further, changes in PRC’s economic, political or social conditions or government policies could adversely impact our business and operations.
Nevertheless, depending on future developments of global trade tensions, such regulations, rules, or measures may have an adverse effect on our business and operations, and we may incur significant legal liability and financial losses as a result. Further, changes in PRC’s economic, political or social conditions or government policies could adversely impact our business and operations.
We cannot assure you that there will not be further downturns in DRAM or NAND Flash prices in the future. 4 A decrease in market demand for LCD, OLED and other display panel driver semiconductors may adversely affect our capacity utilization rates and thereby negatively affect our profitability.
We cannot assure you that there will not be further downturns in DRAM or NAND Flash prices in the future. 4 A decrease in market demand for LCD, OLED, automotive panel and other display panel driver semiconductors may adversely affect our capacity utilization rates and thereby negatively affect our profitability.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market or satisfy other eligibility requirements that may be required of it in the future” and “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions”.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq or satisfy other eligibility requirements that may be required of it in the future” and “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions”.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market or satisfy other eligibility requirements that may be required of it in the future” for additional information on the Company’s listing on the main board of TWSE.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq or satisfy other eligibility requirements that may be required of it in the future” for additional information on the Company’s listing on the main board of TWSE.
Consequently, our businesses, financial condition and results of operations may be materially and adversely affected. Any future outbreak of radiation-related disease as a result of nuclear power plant reactors damage caused by the Great East Japan Earthquake of 2011 may materially adversely affect our operations and business.
Consequently, our businesses, financial condition and results of operations may be materially and adversely affected. 13 Any future outbreak of radiation-related disease as a result of nuclear power plant reactors damage caused by the Great East Japan Earthquake of 2011 may materially adversely affect our operations and business.
These agreements may increase the cost of a party seeking to effect a change in control of our company. Future sales, pledge or issuance of common shares or ADSs by us or our current shareholders could depress our share price or ADSs price and you may suffer dilution.
These agreements may increase the cost of a party seeking to effect a change in control of our company. 14 Future sales, pledge or issuance of common shares or ADSs by us or our current shareholders could depress our share price or ADSs price and you may suffer dilution.
See also “—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
See also “—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq Stock Market (“Nasdaq”) is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
See “—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
See “—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
See also “— A decrease in market demand for LCD, OLED and other display panel driver semiconductors may adversely affect our capacity utilization rates and thereby negatively affect our profitability”.
See also “— A decrease in market demand for LCD, OLED, automotive panel and other display panel driver semiconductors may adversely affect our capacity utilization rates and thereby negatively affect our profitability”.
Semiconductor assembly and testing also requires 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 negatively impact our financial condition and results of operations as well as our growth prospects.
Semiconductor assembly and testing also requires us to operate sizable 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 negatively impact our financial condition and results of operations as well as our growth prospects.
We carried out an evaluation, under the supervision and with the participation of management, including our President, the principal executive officer and Vice President of the Finance and Accounting Management Center, the principal financial officer of the effectiveness of the design and operation of our internal controls over financial reporting as of December 31, 2022, and concluded those internal controls over financial reporting were effective as of that date.
We carried out an evaluation, under the supervision and with the participation of management, including our President, the principal executive officer and Vice President of the Finance and Accounting Management Center, the principal financial officer of the effectiveness of the design and operation of our internal controls over financial reporting as of December 31, 2023, and concluded those internal controls over financial reporting were effective as of that date.
Disruptions in global inflation, interest rate rising, financial markets, trade tensions and COVID-19 may occur that causes diminished liquidity and limited availability of credit, reduced consumer confidence, reduced economic growth, increased unemployment rates and uncertainty about economic stability. Limited availability of credit in financial markets may lead consumers and businesses to postpone spending.
Disruptions in global inflation, interest rate rising, financial markets and trade tensions may occur that causes diminished liquidity and limited availability of credit, reduced consumer confidence, reduced economic growth, increased unemployment rates and uncertainty about economic stability. Limited availability of credit in financial markets may lead consumers and businesses to postpone spending.
We cannot assure you that foreign exchange controls or other restrictions will not be introduced in the future.
We cannot assure you that foreign exchange controls or other restrictions will not be introduced in the future. 16
For example, since March 31, 2017, the Company has owned 45.02% equity interests of Unimos Shanghai through its wholly-owned subsidiary ChipMOS BVI. We also conduct other activities through our affiliated entities.
For example, since March 31, 2017, the Company has owned 45.0242% equity interests of Unimos Shanghai through its wholly-owned subsidiary ChipMOS BVI. We also conduct other activities through our affiliated entities.
Currently, we are nearly half of revenue denominated in US dollars. Our cost of revenue and operating expenses, on the other hand, are incurred in several currencies, including NT dollars, Japanese yen and US dollars.
Currently, we are nearly 60% of revenue denominated in US dollars. Our cost of revenue and operating expenses, on the other hand, are incurred in several currencies, including NT dollars, Japanese yen and US dollars.
The Company became listed and commenced trading its common shares on the main board of Taiwan Stock Exchange (“TWSE”) on April 11, 2014 and its ADSs on the NASDAQ Stock Market (“NASDAQ”) on November 1, 2016.
The Company became listed and commenced trading its common shares on the main board of Taiwan Stock Exchange (“TWSE”) on April 11, 2014 and its ADSs on the Nasdaq on November 1, 2016.
We rely on a small group of customers for a substantial portion of our business. In 2022, our top five customers collectively accounted for 54% of our revenue. As part of our strategy, we have been focusing on sales to key customers through long-term service agreements.
We rely on a small group of customers for a substantial portion of our business. In 2023, our top five customers collectively accounted for 61% of our revenue. As part of our strategy, we have been focusing on sales to key customers through long-term service agreements.
For memory and logic/mixed-signal semiconductor testing services, our fixed costs represented 50%, 49% and 52% of our total cost of revenue in 2020, 2021 and 2022, respectively. For memory and logic/mixed-signal semiconductor assembly services, our fixed costs represented 20%, 19% and 22% of our total cost of revenue in 2020, 2021 and 2022, respectively.
For memory and logic/mixed-signal semiconductor testing services, our fixed costs represented 49%, 52% and 50% of our total cost of revenue in 2021, 2022 and 2023, respectively. For memory and logic/mixed-signal semiconductor assembly services, our fixed costs represented 19%, 22% and 26% of our total cost of revenue in 2021, 2022 and 2023, respectively.
In addition, a substantial portion of our capital expenditures, primarily for the purchase of LCD, OLED and other display panel driver semiconductor, assembly and testing equipment, has been, and is expected to continue to be, denominated in Japanese yen with much of the remainder in US dollars. We also have debt denominated in NT dollars, Japanese yen, and US dollars.
In addition, a substantial portion of our capital expenditures, primarily for the purchase of LCD, OLED, automotive panel and other display panel driver semiconductor, assembly and testing equipment, has been, and is expected to continue to be, denominated in Japanese yen with much of the remainder in US dollars.
If any third party succeeds in its intellectual property infringement claims against us or our customers, we could be required to: • discontinue using the disputed process technologies, which would prevent us from offering some of our assembly and testing services; • pay substantial monetary damages; • develop non-infringing technologies, which may not be feasible; or • acquire licenses to the infringed technologies, which may not be available on commercially reasonable terms, if at all.
If any third party succeeds in its intellectual property infringement claims against us or our customers, we could be required to: • discontinue using the disputed process technologies, which would prevent us from offering some of our assembly and testing services; • pay substantial monetary damages; • develop non-infringing technologies, which may not be feasible; or • acquire licenses to the infringed technologies, which may not be available on commercially reasonable terms, if at all. 7 Any one of these developments could impose substantial financial and administrative burdens on us and hinder our business.
In addition, we may need to increase employee compensation levels in order to retain our existing officers and employees and to attract additional personnel. As of February 28, 2023, 19% of the workforces at our facilities are foreign workers employed by us under work permits that are subject to government regulations on renewal and other terms.
In addition, we may need to increase employee compensation levels in order to retain our existing officers and employees and to attract additional personnel. As of February 29, 2024, 22% of the workforce at our facilities are foreign workers employed by us under work permits that are subject to government regulations on renewal and other terms.
Pursuant to Mainland investors regulations, only qualified domestic institutional investors (the “QDIIs”, each a “QDII”) 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.
Pursuant to Mainland investors regulations, only qualified domestic institutional investors (the “QDIIs”, each a “QDII”) or persons that have otherwise obtained the approval from the Ministry of Economic Affairs, ROC (the “MOEA”) and registered with the TWSE are permitted to withdraw and hold our shares from a depositary receipt facility.
Fluctuations in exchange rates, primarily among the US dollar, the NT dollar and the Japanese yen, will affect our costs and operating margins in NT dollar terms. In addition, these fluctuations could result in exchange losses and increased costs in NT dollar terms.
We also have debt denominated in NT dollars, Japanese yen, and US dollars. Fluctuations in exchange rates, primarily among the US dollar, the NT dollar and the Japanese yen, will affect our costs and operating margins in NT dollar terms. In addition, these fluctuations could result in exchange losses and increased costs in NT dollar terms.
For LCD, OLED and other display panel driver semiconductor assembly and testing services, our fixed costs represented 57%, 59% and 61% of our total cost of revenue in 2020, 2021 and 2022, respectively. For bumping services, our fixed costs represented 20%, 19% and 21% of our total cost of revenue in 2020, 2021 and 2022, respectively.
For Display panel driver semiconductor assembly and testing services, our fixed costs represented 59%, 61% and 59% of our total cost of revenue in 2021, 2022 and 2023, respectively. For bumping services, our fixed costs represented 19%, 21% and 19% of our total cost of revenue in 2021, 2022 and 2023, respectively.
This in turn may cause our customers to cancel, decrease or delay their existing and future orders with us. Particularly, the economics uncertainty caused by trade tensions and inflation will impact the end product market demand. It directly affects the inventory elimination of our customers.
This in turn may cause our customers to cancel, decrease or delay their existing and future orders with us. Particularly, the economics uncertainty caused by trade tensions and inflation, which led the weakness of macro-economic environment, will impact the end product market demand.
If the aggregate amount of our shares held by any QDII or shares received by any QDII upon a single withdrawal 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.
If the aggregate amount of our shares held by any QDII or shares received by any QDII upon a single withdrawal accounts for 10.0% of our total issued and outstanding shares, such QDII must obtain the prior approval from the MOEA.
Any security breach could result in disclosure of our trade secrets, confidential customer, supplier or employee data, which could result in legal liability, harm to our reputation and otherwise harm our business. 10 If our information technology systems succumb to cyberattacks by third parties, our business and operations may be severely interrupted or even shut down, and our results of operations, financial condition, prospects and reputation may also be materially and adversely affected.
This could result in legal liability, damage to our reputation, and other harm to our business. 10 If our information technology systems succumb to cyberattacks by third parties, our business and operations may be severely interrupted or even shut down, and our results of operations, financial condition, prospects and reputation may also be materially and adversely affected.
We invested NT$2,143 million, NT$2,749 million and NT$2,677 million (US$87 million) in 2020, 2021 and 2022, respectively, on equipment for chip-on-film, or COF and chip-on-glass, or COG, technologies, which are used in assembly and testing services for LCD, OLED and other display panel driver semiconductors. Most of this equipment may not be used for technologies other than COF or COG.
We invested NT$2,749 million, NT$2,677 million and NT$1,757 million (US$57 million) in 2021, 2022 and 2023, respectively, on equipment for chip-on-film, or COF and chip-on-glass, or COG, technologies, which are used in assembly and testing services for LCD, OLED, automotive panel and other display panel driver semiconductors.
Restriction on the ability to deposit our shares into our ADR facility may adversely affect the liquidity and price of our ADSs. The ability to deposit our shares into our ADR facility is restricted by the ROC law.
We cannot assure you that such approval would be granted. 15 Restriction on the ability to deposit our shares into our ADR facility may adversely affect the liquidity and price of our ADSs. The ability to deposit our shares into our ADR facility is restricted by the ROC law.
That may result in our inability to generate sufficient revenue to cover the depreciation expenses for the equipment used in testing and assembling LCD, OLED and other display panel driver semiconductors, thereby negatively affecting our profitability.
Any significant decrease in demand for these products and our related services would significantly impact our capacity utilization rates. That may result in our inability to generate sufficient revenue to cover the depreciation expenses for the equipment used in testing and assembling LCD, OLED, automotive panel and other display panel driver semiconductors, thereby negatively affecting our profitability.
Any one of these developments could impose substantial financial and administrative burdens on us and hinder our business. We are, from time to time, involved in litigation in respect of intellectual property rights. Any litigation, whether as plaintiff or defendant, is costly and diverts our resources.
We are, from time to time, involved in litigation in respect of intellectual property rights. Any litigation, whether as plaintiff or defendant, is costly and diverts our resources.
In order to effectively handle emergencies and natural disasters, at each facility management has developed comprehensive plans and procedures that focus on risk prevention, emergency response, crisis management and business continuity. All ChipMOS manufacturing factories have been ISO 14001 certified (environmental management system) and ISO 45001 certified (occupational health and safety management system).
In order to effectively handle emergencies and natural disasters, at each facility management has developed comprehensive plans and procedures that focus on risk prevention, emergency response, crisis management and business continuity.
They may do so in the future, particularly as we expand our capacity or change our processing steps. In addition, to be competitive, we must continue to expand our offering of packages. Our production yields on new packages typically are significantly lower than our production yields on our more established packages.
In addition, to be competitive, we must continue to expand our offering of packages. Our production yields on new packages typically are significantly lower than our production yields on our more established packages.
Any future outbreak of contagious diseases, such as avian influenza virus subtypes H5N1, H9N2 and H7N9 and swine influenza virus subtypes H1N1 and H3N2, New Influenza A or more commonly known as the “bird flu” and “swine flu”, Severe Acute Respiratory Syndrome (“SARS”), or Middle East respiratory syndrome coronavirus (“MERS-CoV”), for which there is inadequate treatment or no known cure or vaccine, may potentially result in a quarantine of infected employees and related persons, and adversely affect our operations at one or more of our facilities or the operations of our customers or suppliers.
Any future outbreak of contagious diseases, such as avian influenza virus subtypes H5N1, H9N2 and H7N9 and swine influenza virus subtypes H1N1 and H3N2, New Influenza A or more commonly known as the “bird flu” and “swine flu”, Severe Acute Respiratory Syndrome (“SARS”), Middle East respiratory syndrome coronavirus (“MERS-CoV”), or COVID-19, for which there is inadequate treatment or no known cure or vaccine, may potentially result in a quarantine of infected employees and related persons, or even significant governmental measures being implemented to control the spread, including, among others, restrictions on travel, manufacturing and the movement of employees in many regions of the world.
As of December 31, 2022, we had approximately NT$13,968 million (US$455 million) outstanding long-term indebtedness. Our long-term indebtedness as of December 31, 2022, represented bank loans with an interest rate from 1.075% to 1.625%. As of December 31, 2022, NT$10,762 million (US$350 million) of our indebtedness was secured by collateral comprised of our assets.
As of December 31, 2023, we had approximately NT$14,912 million (US$487 million) outstanding long-term indebtedness. Our long-term indebtedness as of December 31, 2023, represented bank loans with an interest rate from 1.2% to 1.75%. As of December 31, 2023, NT$11,271 million (US$368 million) of our indebtedness was secured by collateral comprised of our assets.
Consequently, we may, from time to time, experience difficulty in obtaining sufficient quantities of raw materials on a timely basis. In addition, from time to time, we may reject materials that do not meet our specifications, resulting in declines in output or yield.
In addition, from time to time, we may reject materials that do not meet our specifications, resulting in declines in output or yield.
As a result, we may have to suspend part or all of our operations temporarily. In addition, any future outbreak may restrict the level of economic activity in affected regions, which may also adversely affect our businesses.
In addition, any future outbreak may restrict the level of economic activity in affected regions, which may also adversely affect our businesses.
Despite our preparedness, there is no assurance that any such natural disaster would not severely disrupt our normal operation of business and have a material adverse effect on our financial condition and results of operations.
We have established a company-wide taskforce dedicated to managing the risk of a water or electricity shortage that might arise due to climate change. Despite our preparedness, there is no assurance that any such natural disaster would not severely disrupt our normal operation of business and have a material adverse effect on our financial condition and results of operations.
We cannot predict the probability of any future outbreak of radiation related diseases as a possible result of nuclear power plants damage caused by the Great East Japan Earthquake of 2011 or the extent of the material adverse impact that this could have on our business and results of operations. 14 Risks Relating to Our Common Shares or ADSs The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
We cannot predict the probability of any future outbreak of radiation related diseases as a possible result of nuclear power plants damage caused by the Great East Japan Earthquake of 2011 or the extent of the material adverse impact that this could have on our business and results of operations.
In addition, the testing process is subject to human error by our employees who operate our test equipment and related software. Any significant defect in our testing or conversion software, malfunction in our test equipment or human error could reduce our production yields and damage our customer relationships.
In addition, the testing process is subject to human error by our employees who operate our test equipment and related software.
Our assembly and testing services for LCD, OLED and other display panel driver semiconductors generated revenue of NT$7,023 million, NT$8,211 million and NT$7,289 million (US$237 million) in 2020, 2021 and 2022, respectively. Including gold bump, the revenue of LCD, OLED and other display panel driver semiconductors accounted for around 34% in 2022.
Our assembly and testing services for Display panel driver semiconductors generated revenue of NT$8,211 million, NT$7,289 million and NT$7,822 million (US$255 million) in 2021, 2022 and 2023, respectively.
As a result, a major earthquake, other natural disaster, industrial strike, industrial accident or other disruptive event occurring in or affecting Taiwan could severely disrupt our normal operation of business and have a material adverse effect on our financial condition and results of operations. 12 ChipMOS has occasionally suffered power outages or surges in Taiwan caused by difficulties encountered by its electricity supplier, the Taiwan Power Company, or other power consumers on the same power grid, which have resulted in interruptions to our operations.
As a result, a major earthquake, other natural disaster, industrial strike, industrial accident or other disruptive event occurring in or affecting Taiwan could severely disrupt our normal operation of business and have a material adverse effect on our financial condition and results of operations.
Any such litigation could also prevent us from testing and assembling particular products or using particular technologies, which could reduce our opportunities to generate revenue. 7 If we are unable to obtain raw materials and other necessary inputs from our suppliers in a timely and cost-effective manner, our production schedules would be delayed and we may lose customers and growth opportunities and become less profitable.
If we are unable to obtain raw materials and other necessary inputs from our suppliers in a timely and cost-effective manner, our production schedules would be delayed and we may lose customers and growth opportunities and become less profitable. Our operations require us to obtain sufficient quantities of raw materials at acceptable prices in a timely and cost-effective manner.
To implement our business strategy requires us to enter into acquisition, investment, joint venture and disposition transactions. These transactions may not be successful to maintain or grow our business. On November 30, 2016, the Company and Tsinghua Unigroup Ltd. (“Tsinghua Unigroup”) mutually agreed to form a joint-venture. Under the joint-venture, ChipMOS TECHNOLOGIES (BVI) LTD.
To implement our business strategy requires us to enter into acquisition, investment, joint venture and disposition transactions. These transactions may not be successful to maintain or grow our business.
We abide by the principles of ISO 27001 and carry out various information security enhancements and improvements. In addition, we will enhance the company's information security through the proposals of the management review committee, and continue to introduce effective and safe information security protection equipment or mechanisms to provide all employees with information security awareness and professional information security personnel.
Adhering to ISO 27001 principles, we implement various enhancements and improvements in information security. Additionally, we reinforce the Company’s information security through recommendations from the Management Review Committee, continually introducing effective and secure information security protection equipment or mechanisms to enhance information security awareness among all employees and foster professional information security personnel.
We purchase all of our materials on a purchase order basis and have no long-term contracts with any of our suppliers. From time to time, suppliers have extended lead times, increased the price or limited the supply of required materials to us because of market shortages.
From time to time, suppliers have extended lead times, increased the price or limited the supply of required materials to us because of market shortages. Consequently, we may, from time to time, experience difficulty in obtaining sufficient quantities of raw materials on a timely basis.
We cannot predict the impact that any further future outbreak of the aforementioned influenza viruses or other diseases could have on our business and results of operations. If any of our employees is suspected of having contracted any contagious disease, we may, under certain circumstances, be required to quarantine such employees and the affected areas of our premises.
If any of our employees is suspected of having contracted any contagious disease, we may, under certain circumstances, be required to quarantine such employees and the affected areas of our premises, or adhere to governmental measures to control the spread.
The assembly process involves a number of steps, each of which must be completed with precision. Defective packages primarily result from: • contaminants in the manufacturing environment; • human error; • equipment malfunction; • defective raw materials; or • defective plating services. 6 These and other factors have, from time to time, contributed to lower production yields.
Defective packages primarily result from: • contaminants in the manufacturing environment; • human error; • equipment malfunction; • defective raw materials; or • defective plating services. These and other factors have, from time to time, contributed to lower production yields. They may do so in the future, particularly as we expand our capacity or change our processing steps.
As a result, there is no assurance that any future outbreak of contagious diseases would not have a material adverse effect on our business, financial condition and results of operations. 11 The COVID-19 pandemic could adversely affect our business in a material way.
As a result, there is no assurance that any future outbreak of contagious diseases would not have a material adverse effect on our business, financial condition and results of operations. 11 We face substantial political risk associated with doing business in the ROC, particularly due to the strained relations between the ROC and the PRC, which could negatively affect our business and the market price of our common shares or ADSs.
We plan to issue, from time to time, additional shares in connection with employee compensation and to finance possible future capital expenditures, investments or acquisitions. See “Item 6. Directors, Senior Management and Employees—Restricted Shares” for a discussion of the plan of the Restricted Shares that we have adopted for the benefit of our employees.
We plan to issue, from time to time, additional shares in connection with employee compensation and to finance possible future capital expenditures, investments or acquisitions. The issuance of additional shares may have a dilutive effect on other shareholders and may cause the price of our common shares or ADSs to decrease.
Our operations require us to obtain sufficient quantities of raw materials at acceptable prices in a timely and cost-effective manner. We source most of our raw materials, including critical materials like leadframes, organic substrates, epoxy, gold wire and molding compound for assembly, and tapes for COF, from a limited group of suppliers.
We source most of our raw materials, including critical materials like leadframes, organic substrates, epoxy, gold wire and molding compound for assembly, and tapes for COF, from a limited group of suppliers. We purchase all of our materials on a purchase order basis and have no long-term contracts with any of our suppliers.
The market demand for LCD, OLED and other display panel driver semiconductors increased in 2018 particularly the wafer test for TDDI in the second half of 2020. Then demand went down in second half of 2022 due to customer inventory adjustment for market weakness.
Most of this equipment may not be used for technologies other than COF or COG. The market demand for LCD, OLED, automotive panel and other display panel driver semiconductors increased in 2018 particularly the wafer test for TDDI in the second half of 2020.
Our customers may also experience closures of their manufacturing facilities or inability to obtain other components, either of which could negatively impact demand for our solutions. COVID-19 has negatively impacted the overall economy.
As a result, we may have to suspend part or all of our operations temporarily, or may experience delays in product development, a decreased ability to support our customers, and overall lack of productivity. Our customers may also experience closures of their manufacturing facilities or inability to obtain other components, either of which could negatively impact demand for our solutions.
Our security measures may be breached as a result of third-party action, including computer hackers, employees error, malfeasance or otherwise, and result in unauthorized access to our customers’ data or our data, including our intellectual property and other confidential business information, or our information technology systems.
Our security measures could be compromised by various factors, including computer hackers, employee errors, and unfavorable actions by suppliers, resulting in unauthorized access to our or our customers’ data, including our intellectual property, other confidential business information, or information technology systems.
ChipMOS pays special attention to preparedness of emergency response to disasters, such as typhoons, floods and droughts caused by climate change, earthquakes and disruptions to water, electricity and other public utilities. We have established a company-wide taskforce dedicated to managing the risk of a water or electricity shortage that might arise due to climate change.
All ChipMOS manufacturing factories have been ISO 14001 certified (environmental management system) and ISO 45001 certified (occupational health and safety management system). 12 ChipMOS pays special attention to preparedness of emergency response to disasters, such as typhoons, floods and droughts caused by climate change, earthquakes and disruptions to water, electricity and other public utilities.
Hold annual regular management review meeting for annual work review, which included project execution, risk assessment, document compliance, education and training, major information security incidents, information security KPI, information security attack protection, internal and external issues of concern, disaster recovery drills and all staff Fishing drill effectiveness report.
Annual management review meetings are held regularly to review yearly tasks, including project execution, risk assessment, document compliance, education and training, significant information security incidents, key performance indicators in information security, information security attack prevention, internal and external concerns, disaster recovery drills, and the effectiveness report of company-wide phishing drills.
However, we observed some rebound sign for OLED, TDDI, and large panel driver IC demand since Lunar New Year holiday 2023. Any significant decrease in demand for these products and our related services would significantly impact our capacity utilization rates.
Then demand went down in second half of 2022 due to customer inventory adjustment for market weakness. However, we observed some rebound sign for OLED, TDDI, and large panel driver IC demand since Lunar New Year holiday 2023 but it is still fluctuation except OLED and automotive panel in 2023.
(“ChipMOS BVI”), a wholly-owned subsidiary of the Company, would sell, for the aggregate purchase price of approximately RMB 484 million, 54.98% of the equity interests of its wholly-owned subsidiary, Unimos Shanghai, to strategic investors, including Tibet Unigroup Guowei Investment Co., Ltd.
On December 21, 2023, the Company’s Board of Directors approved its wholly-owned subsidiary, ChipMOS TECHNOLOGIES (BVI) LTD., (“ChipMOS BVI”) to sell its entire 45.0242% equity interests in Unimos Microelectronics (Shanghai) Co., Ltd. (“Unimos Shanghai”) for a total sale price of RMB 979.3 million in cash.
On May 11, 2020, one of the strategic investor sold and transferred all equity interests of Unimos Shanghai to Yangtze Memory, which holds 50.94% equity interests of Unimos Shanghai after completed transaction. 15 Holders of Our ADSs do not have the same voting rights as holders of our common shares.
Holders of our ADSs do not have the same voting rights as holders of our common shares.
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(“Unigroup Guowei”), a subsidiary of Tsinghua Unigroup, which would hold 48% equity interests of Unimos Shanghai, and the other strategic investors, including a limited partnership owned by Unimos Shanghai’s employees, would own 6.98% equity interest of Unimos Shanghai. The transaction was completed in March 2017.
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The softness in broader market demand including smart phones, TVs, PC/servers and other consumer products, directly affects the inventory elimination of our customers.
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Unimos Shanghai is no longer the subsidiary of the Company following the completion of equity interest transfer. Please see “Item 4. Information on the Company—Agreements with Tsinghua Unigroup Ltd.” for additional information.
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The decrease in segment revenue was principally due to the weakness of macro-economic environment, softness in market demand and customer adjustment of inventory levels, all of which led to the decreased utilization rate of our production lines since the second half of 2022 till the first half of 2023.
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Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently, we may be unable to anticipate these techniques or to implement adequate preventative measures.
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Any significant defect in our testing or conversion software, malfunction in our test equipment or human error could reduce our production yields and damage our customer relationships. 6 The assembly process involves a number of steps, each of which must be completed with precision.
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External attacks are malicious hackers using various tools to conduct malicious attacks, such as advanced penetration attacks, phishing attacks, social engineering attacks, and denial of service attacks. We established an information security department with dedicated personnel responsible for information security maintenance and promotion.
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Any such litigation could also prevent us from testing and assembling particular products or using particular technologies, which could reduce our opportunities to generate revenue.
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For cyberattacks, although operations may be interrupted, we try our best to keep data properly to ensure post-attack recovery. In the event of the leakage of trade secrets and customer data, our commitments to customers and other stakeholders may be materially damaged, and our operating results, financial condition, prospects and reputation may also be materially and adversely affected.
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Under the proposed agreement, ChipMOS BVI will sell its entire remaining 45.0242% equity interests in Unimos Shanghai to Suzhou Oriza PuHua ZhiXin Equity Investment Partnership (L.P.) and other local Chinese investment management companies. The equity interest transfer is expected to be completed in the first half of 2024. Please see “Item 5.
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The COVID-19 pandemic has resulted in significant governmental measures being implemented to control the spread of COVID-19 and its variants, including, among others, restrictions on travel, manufacturing and the movement of employees in many regions of the world. Many suppliers in the semi-conductor industry have had work forces disrupted due to the quarantine requirements and restricted travel.
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Operating and Financial Review and Prospects—Recent Acquisition” for additional information.
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As a result, may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition. Our principal executive offices and our assembly and testing facilities are located in Taiwan and we maintain sales and marketing offices in Taiwan, the United States and Mainland China.
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Due to the frequent evolution of information technology and hacker techniques, we may be unable to anticipate these methods or implement adequate preventive measures. Any security vulnerability could lead to the disclosure of our trade secrets, confidential customer, supplier, or employee data.
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If the remote or work from home conditions in any of our offices continues for an extended period of time, we may experience delays in product development, a decreased ability to support our customers, and overall lack of productivity. Pandemics and epidemics such as the current COVID-19 outbreak or other widespread public health problems could negatively impact our business.
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Regarding the defense and strengthening of internal and external cybersecurity, we outline as follows: Internal cybersecurity reinforcement: We've established an Information Security Management Committee dedicated to maintaining and promoting information security.
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We face substantial political risk associated with doing business in the ROC, particularly due to the strained relations between the ROC and the PRC, which could negatively affect our business and the market price of our common shares or ADSs. Our principal executive offices and our assembly and testing facilities are located in the ROC.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

106 edited+18 added−8 removed154 unchanged
Biggest changeWe believe, however, that we can offer greater efficiency and lower costs while maintaining an equivalent or higher level of quality for three reasons: • firstly, we offer a broader and more complex range of services as compared to the IDMs, which tend to focus their resources on improving their front-end operations; • secondly, we generally have lower unit costs because of our higher utilization rates and thus enabling us to operate at a more cost-effective structure compared to the IDMs; and • finally, we offer a wider range of services in terms of complexity and technology. 38 Intellectual Property As of February 28, 2023, we held 305 patents in Taiwan, 103 patents in the United States, 186 patents in Mainland China, 1 patent in the United Kingdom and 2 patents in Korea and Japan, respectively, relating to various semiconductor assembly and testing technologies.
Biggest changeWe believe, however, that we can offer greater efficiency and lower costs while maintaining an equivalent or higher level of quality for three reasons: • firstly, we offer a broader and more complex range of services as compared to the IDMs, which tend to focus their resources on improving their front-end operations; • secondly, we generally have lower unit costs because of our higher utilization rates and thus enabling us to operate at a more cost-effective structure compared to the IDMs; and • finally, we offer a wider range of services in terms of complexity and technology.
Our projects include: • Ramped up high frequency testing capability of LCD, OLED and other display panel driver semiconductors; • Developing full temperature range (-40ºC~125ºC) of FT testing for automotive products; • Built up 12” fine pitch COF assembly capability for less than 18um inner lead pitch products; • Developing more flexible COF tape assembly for full-screen display application; • Developing “wafer level probing on copper pillar bump for 300mm wafers”; and • Developing centralized server test control system.
Our projects include: • Ramped up high frequency testing capability of LCD, OLED, automotive panel and other display panel driver semiconductors; • Developing full temperature range (-40ºC~125ºC) of FT testing for automotive products; • Built up 12” fine pitch COF assembly capability for less than 18um inner lead pitch products; • Developing more flexible COF tape assembly for full-screen display application; • Developing “wafer level probing on copper pillar bump for 300mm wafers”; and • Developing centralized server test control system.
And dual IC with high thermal dissipation COF packaging technology is ready for 8K TV market. 18um/16um inner lead pitch 2-metal layer COF package is in development for coming AR/VR gear requirement. And we can test display driver semiconductors with frequency up to 4Gbps and 6.5Gbps to fulfill high speed data rate requirement.
And dual IC with high thermal dissipation COF packaging technology is ready for 8K TV market. 18um/16um inner lead pitch 2-metal layer COF package is in development for coming AR/VR gear requirement. And we can test display driver semiconductors with frequency up to 6.5Gbps to fulfill high speed data rate requirement.
Small package suitable to apply on hand-held 3C electronic products Electronic Compass, audio converter, nor flash product, power control, sensor magnetometer, MEMS magnetometer, CMOS Image Sensor controller, Laser diode driver, power manager IC (PMIC) 28 Wafer Level CSP Wafer-level CSP (WLCSP) is the technology of packaging an integrated circuit at wafer level.
Small package suitable to apply on hand-held 3C electronic products Electronic Compass, audio converter, nor flash product, power control, sensor magnetometer, MEMS magnetometer, CMOS Image Sensor controller, Laser diode driver, power manager IC (PMIC) Wafer Level CSP Wafer-level CSP (WLCSP) is the technology of packaging an integrated circuit at wafer level.
Copper pillar also offers advantages with respect to better electrical and thermal conductivity, as well as increasing electromigration resistance and current carrying capability. We are developing taller bump height up to 110um for power devices, estimated adding it into mass production portfolio in the third quarter of 2023.
Copper pillar also offers advantages with respect to better electrical and thermal conductivity, as well as increasing electromigration resistance and current carrying capability. We are developing taller bump height up to 110um for power devices and adding it into mass production portfolio in the third quarter of 2023.
Our facilities at Hsinchu Science Park, Chupei, Hukou, Hsinchu Industrial Park and Southern Taiwan Science Park have won numerous awards including “Green Factory Label” from 2013 to 2022, “Enterprises Environmental Protection Gold Grade Award” in 2018 and 2019, “Occupational Safety and Health Excellent Award” in 2016, 2017, 2021 and 2022, “Green Building Label” in 2014 and 2017 up to now.
Our facilities at Hsinchu Science Park, Chupei, Hukou, Hsinchu Industrial Park and Southern Taiwan Science Park have won numerous awards including “Green Factory Label” from 2013 to 2023, “Enterprises Environmental Protection Gold Grade Award” in 2018 and 2019, “Occupational Safety and Health Excellent Award” in 2016, 2017, 2021, 2022 and 2023, “Green Building Label” in 2014 and 2017 up to now.
An analytical laboratory has been built out in our bumping line providing timely support to manufacturing operations. 36 Quality Control We believe that our reputation for high quality and reliable services have been an important factor in attracting and retaining leading international semiconductor companies as customers for our assembly and testing services.
An analytical laboratory has been built out in our bumping line providing timely support to manufacturing operations. Quality Control We believe that our reputation for high quality and reliable services have been an important factor in attracting and retaining leading international semiconductor companies as customers for our assembly and testing services.
Logic/mixed-signal semiconductors, such as LCD controller, power devices, fingerprint sensors and MEMS products, TV scaler and DVD controllers, are also used in consumer electronic products. Overview of the Semiconductor Manufacturing Process The manufacturing of semiconductors is a complex process that requires increasingly sophisticated engineering and manufacturing expertise.
Logic/mixed-signal semiconductors, such as LCD controller, power devices, fingerprint sensors and MEMS products, TV scaler and DVD controllers, are also used in consumer electronic products. 19 Overview of the Semiconductor Manufacturing Process The manufacturing of semiconductors is a complex process that requires increasingly sophisticated engineering and manufacturing expertise.
Many of these IDMs are continuously significantly reducing their investments in new semiconductor assembly and testing facilities. The availability of technologically advanced independent semiconductor manufacturing services has also enabled the growth of “fabless” semiconductor companies that focus exclusively on semiconductor design and marketing and outsource their fabrication, assembly and testing requirements to independent companies.
Many of these IDMs are continuously significantly reducing their investments in new semiconductor assembly and testing facilities. 20 The availability of technologically advanced independent semiconductor manufacturing services has also enabled the growth of “fabless” semiconductor companies that focus exclusively on semiconductor design and marketing and outsource their fabrication, assembly and testing requirements to independent companies.
The assembly yield, which is the industry standard for measuring production yield, is equal to the number of integrated circuit packages that are shipped back to customers divided by the number of individual integrated circuits that are attached to lead frames or organic substrate. 37 Raw Materials Semiconductor testing requires minimal raw materials.
The assembly yield, which is the industry standard for measuring production yield, is equal to the number of integrated circuit packages that are shipped back to customers divided by the number of individual integrated circuits that are attached to lead frames or organic substrate. Raw Materials Semiconductor testing requires minimal raw materials.
LCD, OLED and Other Display panel Driver Semiconductor Market Display panels are used in applications such as desktop monitors, notebooks, tables, television sets, cellular handsets and digital cameras. The end-user demand for LCD, OLED and other display panel driver semiconductors tends to very over time.
LCD, OLED, automotive panel and Other Display panel Driver Semiconductor Market Display panels are used in applications such as desktop monitors, notebooks, tables, television sets, cellular handsets and digital cameras. The end-user demand for LCD, OLED, automotive panel and other display panel driver semiconductors tends to very over time.
We intend to continue our focus on developing and providing advanced assembly and testing services for potential growth segments of the semiconductor industry, such as memory, logic/mixed-signal, MEMS, LCD, OLED and other display panel driver semiconductors and bumping services.
We intend to continue our focus on developing and providing advanced assembly and testing services for potential growth segments of the semiconductor industry, such as memory, logic/mixed-signal, MEMS, LCD, OLED, automotive panel and other display panel driver semiconductors and bumping services.
In addition, we have registered “ChipMOS” and its logo as trademarks in Taiwan, the United States, Mainland China, Singapore, Hong Kong, Korea, Japan, the United Kingdom and the European Community. We expect to continue to file patent applications where appropriate to protect our proprietary technologies.
In addition, we have registered “ChipMOS” and its logo as trademarks in Taiwan, the United States, Mainland China, Singapore, Hong Kong, Korea, Japan, the United Kingdom and the European Community. 37 We expect to continue to file patent applications where appropriate to protect our proprietary technologies.
Item 4. Information on the Company Overview of the Company We are one of the leading independent providers of semiconductor assembly and testing services. Specifically, we are one of the leading independent providers of testing and assembly services for LCD, OLED and other display panel driver semiconductors and advanced memory and logic/mixed-signal products in Taiwan.
Item 4. Information on the Company Overview of the Company We are one of the leading independent providers of semiconductor assembly and testing services. Specifically, we are one of the leading independent providers of testing and assembly services for LCD, OLED, automotive panel and other display panel driver semiconductors and advanced memory and logic/mixed-signal products in Taiwan.
The Company listed and commenced trading on the main board of TWSE on April 11, 2014. 17 According to the merger agreement, entered between the Company and ChipMOS Bermuda dated January 21, 2016 (the “Merger Agreement”), ChipMOS Bermuda merged with and into the Company, with the Company being the surviving company after the Merger.
The Company listed and commenced trading on the main board of TWSE on April 11, 2014. According to the merger agreement, entered between the Company and ChipMOS Bermuda dated January 21, 2016 (the “Merger Agreement”), ChipMOS Bermuda merged with and into the Company, with the Company being the surviving company after the Merger.
By using laser marker, the marking content were according to our customers’ specification, including the logo, part number, date code and lot number. 24 Final Testing. Assembled semiconductors are tested to ensure that the devices meet performance specifications.
By using laser marker, the marking content were according to our customers’ specification, including the logo, part number, date code and lot number. Final Testing. Assembled semiconductors are tested to ensure that the devices meet performance specifications.
Leadframe-based products have electrical connections from the semiconductor device to the electronic product through leads on the perimeter of the package. Organic substrate-based products have solder balls on the bottom of the package, which create the electrical connections with the product and can support large numbers of electrical connections. 25 Leadframe-Based Packages.
Leadframe-based products have electrical connections from the semiconductor device to the electronic product through leads on the perimeter of the package. Organic substrate-based products have solder balls on the bottom of the package, which create the electrical connections with the product and can support large numbers of electrical connections. Leadframe-Based Packages.
In assembly services, we compete primarily on the basis of: • production yield; • production cycle time; • process technology, including our COF technology for LCD, OLED and other display panel driver semiconductor assembly services; • quality of service; • capacity; • location; and • price.
In assembly services, we compete primarily on the basis of: • production yield; • production cycle time; • process technology, including our COF technology for LCD, OLED, automotive panel and other display panel driver semiconductor assembly services; • quality of service; • capacity; • location; and • price.
Gold Bumping, Assembly and Testing of LCD, OLED and Other Display Panel Driver Semiconductors We acquired TCP-related equipment from Sharp to begin our TCP-related services. We subsequently purchased additional TCP-related testers from Advantest Corporation and assembly equipment from Shibaura Mechatronics Corp.
Gold Bumping, Assembly and Testing of LCD, OLED, automotive panel and Other Display Panel Driver Semiconductors We acquired TCP-related equipment from Sharp to begin our TCP-related services. We subsequently purchased additional TCP-related testers from Advantest Corporation and assembly equipment from Shibaura Mechatronics Corp.
Our sales and marketing strategy is to focus on memory semiconductors in Taiwan, Japan, Singapore, Korea and the United States, logic/mixed-signal semiconductors in Taiwan, Japan and the United States, LCD, OLED and other display panel driver semiconductors in Japan, Korea, Taiwan, Hong Kong and Mainland China.
Our sales and marketing strategy is to focus on memory semiconductors in Taiwan, Japan, Singapore, Korea and the United States, logic/mixed-signal semiconductors in Taiwan, Japan and the United States, LCD, OLED, automotive panel and other display panel driver semiconductors in Japan, Korea, Taiwan, Hong Kong and Mainland China.
A customized software program is required to test the conformity of each particular semiconductor to its particular function and specification. • Electrical Design Validation. A prototype of the designed semiconductor is submitted to electrical tests using advanced test equipment, customized software programs and related hardware.
A customized software program is required to test the conformity of each particular semiconductor to its particular function and specification. 23 • Electrical Design Validation. A prototype of the designed semiconductor is submitted to electrical tests using advanced test equipment, customized software programs and related hardware.
Package Connections Description End-User Applications WLCSP 4-96 Very small package size (identical to die size), suitable for the low pin count and require the small package size application Memory, ASICs, PMIC, MEMS devices, controllers, for mobile phones, tablets, ultra book computers and wearable products 29 FC CSP FC Chip Scale Package (FC CSP) construction utilizes the flip chip bumping (with solder bump or Cu pillar bump) interconnection technology to replace the standard wire-bond interconnect.
Package Connections Description End-User Applications WLCSP 4-96 Very small package size (identical to die size), suitable for the low pin count and require the small package size application Memory, ASICs, PMIC, MEMS devices, controllers, for mobile phones, tablets, ultra book computers and wearable products 28 FC CSP FC Chip Scale Package (FC CSP) construction utilizes the flip chip bumping (with solder bump or Cu pillar bump) interconnection technology to replace the standard wire-bond interconnect.
Since 2020, we have consolidated the financial results of ChipMOS U.S.A., Inc. (“ChipMOS USA”), ChipMOS BVI, and ChipMOS SEMICONDUCTORS (Shanghai) LTD. (“ChipMOS Shanghai”), a wholly-owned subsidiary of ChipMOS BVI. 18 Agreements with Tsinghua Unigroup Ltd.
Since 2020, we have consolidated the financial results of ChipMOS U.S.A., Inc. (“ChipMOS USA”), ChipMOS BVI, and ChipMOS SEMICONDUCTORS (Shanghai) LTD. (“ChipMOS Shanghai”), a wholly-owned subsidiary of ChipMOS BVI. Agreements with Tsinghua Unigroup Ltd.
As part of our emphasis on customer service, these teams: • actively participate in the design process at the customers’ facilities; • resolve customer assembly and testing issues; and • promote timely and individualized resolutions to customers’ issues.
As part of our emphasis on customer service, these teams: • actively participate in the design process at the customers’ facilities; 33 • resolve customer assembly and testing issues; and • promote timely and individualized resolutions to customers’ issues.
In addition, auto inspection machines and manual work are used in the COG process, which is more labor-intensive than the COF processes. Item 4A. Unresolved Staff Comments Not applicable. 42
In addition, auto inspection machines and manual work are used in the COG process, which is more labor-intensive than the COF processes. Item 4A. Unresolved Staff Comments Not applicable.
The manufacturing process may be broadly divided into the following stages: 20 Process Description Circuit Design The design of a semiconductor is developed by laying out circuit patterns and interconnections.
The manufacturing process may be broadly divided into the following stages: Process Description Circuit Design The design of a semiconductor is developed by laying out circuit patterns and interconnections.
Wafer type includes Aluminum PAD, RDL PAD, Cu Pillar, WLCSP and prober test temperature between -55°~150° and provide 30MHz ~ 1066 MHz test speed for DRAM product, 50MHz ~ 400 MHz test speed for FLASH product. The memory semiconductors we tested were applying primarily in desktop computers, laptop, tablet computers, handheld consumer electronic, devices and wireless communication devices. Logic/Mixed-Signal.
Wafer type includes Aluminum PAD, RDL PAD, Cu Pillar, WLCSP and prober test temperature between -55°~150° and provide 30MHz ~ 143 MHz test speed for DRAM product, 50MHz ~ 400 MHz test speed for FLASH product. The memory semiconductors we tested were applying primarily in desktop computers, laptop, tablet computers, handheld consumer electronic, devices and wireless communication devices. Logic/Mixed-Signal.
As time-to-market and cost increasingly become sources of competitive advantage for our customers, they increasingly value our ability to provide them with comprehensive back-end services. We are able to offer vertically integrated services for a broad range of products, including memory, logic/mixed-signal and LCD, OLED and other display panel driver semiconductors.
As time-to-market and cost increasingly become sources of competitive advantage for our customers, they increasingly value our ability to provide them with comprehensive back-end services. 22 We are able to offer vertically integrated services for a broad range of products, including memory, logic/mixed-signal and LCD, OLED, automotive panel and other display panel driver semiconductors.
Package Connections Description End-User Applications FC CSP 8-1288 Superior electrical performance, smaller form factor Power devices, RF, High speed Logic devices, wireless, memory or portable applications 30 Display Driver Semiconductors and Gold MCB Bumping We also offer assembly and testing services for display driver semiconductors. We employ COF and COG technologies for testing and assembling display driver semiconductors.
Package Connections Description End-User Applications FC CSP 8-1288 Superior electrical performance, smaller form factor Power devices, RF, High speed Logic devices, wireless, memory or portable applications 29 Display Driver Semiconductors and Gold MCB Bumping We also offer assembly and testing services for display driver semiconductors. We employ COF and COG technologies for testing and assembling display driver semiconductors.
In assembly and bumping areas, our research and development efforts were directed to: • Au height reduction, as part of cost reduction drive, 10um bump height COF package and 8um bump height COG package was released for production; • Wafer-level chip scale packaging and 3P2M Cu RDL processes; • Fine-pitch Cu RDL process for WLCSP and RDL products; • Flip-chip CSP for DRAM and mixed-signal application; • 3P/2M Cu pillar bumping for 300mm wafers high pin count products; • Fine pitch copper pillar process for micro bump structure; • Developing fine pitch Cu RDL line width and space with 4um/4um for advanced re-distribution layer device design requirement; • Shrink ball size with ball mount technology and combine thinner wafer grind thickness to achieve thin WLCSP requirement; • Dual/Multi-chip assembly and module of flash products for SSD and eMMC applications; 35 • Hybrid package by integration of wire binding & flip-chip process with passive components to offer total solution for UFS device; • DBG/SDBG implementation to enhance the capability of ultra-thin wafer lapping and dicing capabilities for stacked-die chip scale package; • Advanced thin core/core-free, flex substrate solutions for thin and flip chip packages; • 2-metal layers COF assembly and COF SMT capabilities; • Qualified thermally enhanced COF and MCB COF and released for manufacturing; • Double-sided Heat Sink/ High conductivity material development is applied in thermal packaging services for high-resolution panels; • Source & Gate ICs integrated technology development is used in product applications with narrow border panels; • Develop new 2P2M RDL structure to use pure Cu RDL for fine pitch complex circuit and Improved Cu RDL undercut instead of Cu-Ni-Au composite structure; • Develop Ultra Fine Pitch (UFP) COF assembly and testing technology; • Implement new thermal conductive resin with higher conductivity for COF package; • Enhance Pb free ball level capability (temperature cycle > 1000 cycles); and • High Frequency & Low loss Product Substrate design for FCCSP.
In assembly and bumping areas, our research and development efforts were directed to: • Au height reduction, as part of cost reduction drive, 10um bump height COF package and 8um bump height COG package was released for production; • Wafer-level chip scale packaging and 3P2M Cu RDL processes; • Fine-pitch Cu RDL process for WLCSP and RDL products; • Flip-chip CSP for DRAM and mixed-signal application; • 3P/3M Cu pillar bumping for 300mm wafers high pin count products; • Fine pitch copper pillar process for micro bump structure; • Thicker Cu/Ni/Au RDL and 100im tall Cu pillar for PMIC application; • Developing fine pitch Cu RDL line width and space with 4um/4um for advanced re-distribution layer device design requirement; • Shrink ball size with ball mount technology and combine thinner wafer grind thickness to achieve thin WLCSP requirement; • Dual/Multi-chip assembly and module of flash products for SSD and eMMC applications; • Hybrid package by integration of wire binding & flip-chip process with passive components to offer total solution for UFS device; • DBG/SDBG implementation to enhance the capability of ultra-thin wafer lapping and dicing capabilities for stacked-die chip scale package; • Advanced thin core/core-free, flex substrate solutions for thin and flip chip packages; • 2-metal layers COF assembly and COF SMT capabilities; 34 • Qualified thermally enhanced COF and MCB COF and released for manufacturing; • Double-sided Heat Sink/ High conductivity material development is applied in thermal packaging services for high-resolution panels; • Source & Gate ICs integrated technology development is used in product applications with narrow border panels; • Develop new 2P2M RDL structure to use pure Cu RDL for fine pitch complex circuit and Improved Cu RDL undercut instead of Cu-Ni-Au composite structure; • Develop Ultra Fine Pitch (UFP) COF assembly and testing technology; • Implement new thermal conductive resin with higher conductivity for COF package; • Enhance Pb free ball level capability (temperature cycle > 1000 cycles); and • High Frequency & Low loss Product Substrate design for FCCSP.
We provide testing services for huge amount of varieties of memory semiconductors, such as SRAM, DRAM and Flash memory. To speed up the time-consuming process of memory product testing, we provide parallel test, which includes the completion of a tested wafer in one touchdown (up to 2,000 plus DUTs testing simultaneously).
We provide testing services for huge amount of varieties of memory semiconductors, such as SRAM, DRAM and Flash memory. To speed up the time-consuming process of memory product testing, we provide parallel test, which includes the completion of a tested wafer in one touchdown (up to 3,000 plus DUTs testing simultaneously).
Fulfillment of public welfare ChipMOS insists to the philosophy of “taking from the society and using it for the society”, by connecting various internal and external resources, the prioritized focus are “cares to underprivileged” and “cultivation of young talents” for the public welfare practice, with active collaborations with local communities, schools and social welfare organizations.
Fulfillment of public welfare ChipMOS insists to the philosophy of “taking from the society and using it for the society”, by connecting various internal and external resources, the prioritized focus are “cares for the disadvantaged” and “cultivation of young talents” for the public welfare practice, with active collaborations with local communities, schools and social welfare organizations.
In recent years, there has been an observable trend with which the average inner lead pitch of COF package went down to 23um with more than 70% of market demand. High thermal dissipation packaging technology is available for mass production.
In recent years, there has been an observable trend with which the average inner lead pitch of COF package went down to 23um with more than 80% of market demand. High thermal dissipation packaging technology is available for mass production.
Tests are conducted using specialized equipment with software customized for each application in different temperature conditions ranging from -55 degrees Celsius to 200 degrees Celsius. Wafer probing employs sophisticated design and manufacturing technologies to connect the terminals of each chip for testing.
Tests are conducted using specialized equipment with software customized for each application in different temperature conditions ranging from -55 degrees Celsius to 150 degrees Celsius. Wafer probing employs sophisticated design and manufacturing technologies to connect the terminals of each chip for testing.
The following diagram presents the basic component parts of a fine-pitch BGA package: 27 The following table presents the ball-count, description and end-user applications of organic substrate-based packages we currently assemble: Package Connections Description End-User Applications Mini BGA 24-400 Low-cost and space-saving assembly designed for low input/output count, suitable for semiconductors that require a smaller package size than standard BGA Memory, analog, flash memory, ASICs, radio frequency devices, personal digital assistants, cellular handsets, communication products, notebooks, wireless systems Fine-Pitch BGA 54-126 Our patented design for DRAM products that require high performance and chip scale package (CSP) Notebooks, cellular handsets, global positioning systems, personal digital assistants, wireless systems Very Thin Fine-Pitch BGA 48-176 Similar structure of Mini BGA package with thinner and finer ball pitch that is designed for use in a wide variety of applications requiring small size, high reliability and low unit cost Handheld devices, notebooks, disk drives, wireless and mobile communication products Land Grid Array (LGA) 8-52 Thinner and lighter assembly designed essential to standard BGA without solder balls, suitable for applications that require high electrical performance Disk drives, memory controllers, wireless, mobile communication products Multi-Chip BGA 48-153 Designed for assembly of two or more memory chips (to increase memory density) or combinations of memory and logic chips in one BGA package Notebooks, digital cameras, personal digital assistants, global positioning systems, sub-notebooks, board processors, wireless systems Stacked-Chip BGA 24-345 Designed for assembly of two or more memory chips or logic and memory chips in one CSP, reducing the space required for memory chips Cellular handsets, digital cameras, personal digital assistants, wireless systems, notebooks, global positioning systems FC Chip-scale Package (FC CSP) 16-1500+ Better IC protection and solder joint reliability compared to direct chip attach (DCA) and chip on board (COB) Memory, logic, microprocessor, application processor (AP), baseband (BB), solid state device, radio frequency (RF) Multi-Chip Hybrid Package (FC+WB) 153-345 Designed for assembly of two or more memory chips or combinations of memory and logic chips in one BGA package with both of flip chip and wire bonding Embedded Multi Media Card (eMMC), Universal Flash Storage (UFS), and BGA SSD Chip on Wafer (CoW) 5-30 Integrated two different functional chips to a closer form into a compact package.
Benefits of ball grid array assembly over leadframe-based assembly include: • smaller size; • smaller footprint on a printed circuit board; • better electrical signal integrity; and • easier attachment to a printed circuit board. 26 The following diagram presents the basic component parts of a fine-pitch BGA package: The following table presents the ball-count, description and end-user applications of organic substrate-based packages we currently assemble: Package Connections Description End-User Applications Mini BGA 24-400 Low-cost and space-saving assembly designed for low input/output count, suitable for semiconductors that require a smaller package size than standard BGA Memory, analog, flash memory, ASICs, radio frequency devices, personal digital assistants, cellular handsets, communication products, notebooks, wireless systems Fine-Pitch BGA 54-126 Our patented design for DRAM products that require high performance and chip scale package (CSP) Notebooks, cellular handsets, global positioning systems, personal digital assistants, wireless systems Very Thin Fine-Pitch BGA 48-176 Similar structure of Mini BGA package with thinner and finer ball pitch that is designed for use in a wide variety of applications requiring small size, high reliability and low unit cost Handheld devices, notebooks, disk drives, wireless and mobile communication products Land Grid Array (LGA) 8-52 Thinner and lighter assembly designed essential to standard BGA without solder balls, suitable for applications that require high electrical performance Disk drives, memory controllers, wireless, mobile communication products Multi-Chip BGA 48-153 Designed for assembly of two or more memory chips (to increase memory density) or combinations of memory and logic chips in one BGA package Notebooks, digital cameras, personal digital assistants, global positioning systems, sub-notebooks, board processors, wireless systems Stacked-Chip BGA 24-345 Designed for assembly of two or more memory chips or logic and memory chips in one CSP, reducing the space required for memory chips Cellular handsets, digital cameras, personal digital assistants, wireless systems, notebooks, global positioning systems FC Chip-scale Package (FC CSP) 16-872 Better IC protection and solder joint reliability compared to direct chip attach (DCA) and chip on board (COB) Memory, logic, microprocessor, application processor (AP), baseband (BB), solid state device, radio frequency (RF) Multi-Chip Hybrid Package (FC+WB) 153-345 Designed for assembly of two or more memory chips or combinations of memory and logic chips in one BGA package with both of flip chip and wire bonding Embedded Multi Media Card (eMMC), Universal Flash Storage (UFS), and BGA SSD 27 Package Connections Description End-User Applications Chip on Wafer (CoW) 5-30 Integrated two different functional chips to a closer form into a compact package.
Operating and Financial Review and Prospects—Taxation” for certain information regarding the effect of ROC tax regulations on our operations. Facilities We provide testing services through our facilities in Taiwan at following locations: Chupei, the Hsinchu Industrial Park, the Hsinchu Science Park, and the Southern Taiwan Science Park. We provide assembly services through our facility at the Southern Taiwan Science Park.
Operating and Financial Review and Prospects—Taxation” for certain information regarding the effect of ROC tax regulations on our operations. 40 Facilities We provide testing services through our facilities in Taiwan at following locations: Chupei, the Hsinchu Industrial Park, the Hsinchu Science Park, and the Southern Taiwan Science Park.
The memory market is dominated by two segments-DRAM and flash memory. Potential growth in the DRAM and NAND Flash market is expected to be driven by continued growth in both the commodity and niche DRAM market, as well as growth opportunities in mobile DRAM as memory requirements significantly increase for mobile applications and storage requirement for data center application.
Potential growth in the DRAM and NAND Flash market is expected to be driven by continued growth in both the commodity and niche DRAM market, as well as growth opportunities in mobile DRAM as memory requirements significantly increase for mobile applications and storage requirement for data center application.
Tests are conducted using specialized equipment with software customized for each application in different temperature conditions ranging from -40 degrees Celsius to 175 degrees Celsius. Final Inspection and Packing. Final inspection involves visual or auto-inspection of the devices to check any bent leads, ball damage, inaccurate markings or other package defects.
Tests are conducted using specialized equipment with software customized for each application in different temperature conditions ranging from -55 degrees Celsius to 125 degrees Celsius. Final Inspection and Packing. Final inspection involves visual or auto-inspection of the devices to check any bent leads, ball damage, inaccurate markings or other package defects.
ChipMOS is committed to building solar power generation system up to 8% of the contracted power generation in 2023, planning various energy saving goals and achieve a company-wide energy saving rate more than 1%, and implementing products’ Carbon and Water Footprint and Material Flow Cost Accounting and more.
ChipMOS is committed to building solar power generation system up to 10% of the contracted power generation in 2024, planning various energy saving goals and achieve a company-wide energy saving rate more than 1%, and implementing products’ Carbon and Water Footprint and Material Flow Cost Accounting and more.
As a result of our ongoing focus on quality, in 2022, we achieved monthly assembly yields of an average of 99.91% for our memory and logic/mixed-signal assembly packages, 99.98% for our COF packages, 99.98% for our COG packages and 99.96% for our bumping products (including gold bump, RDL and WLCSP).
As a result of our ongoing focus on quality, in 2023, we achieved monthly assembly yields of an average of 99.93% for our memory and logic/mixed-signal assembly packages, 99.98% for our COF packages, 99.96% for our COG packages and 99.96% for our bumping products (including gold bump, RDL and WLCSP).
Customers We believe that the following factors have been, and will continue to be, important factors in attracting and retaining customers: • our advanced assembly and testing technologies; • our strong capabilities in testing and assembling DDIC/TDDI and other display panel driver semiconductors; • our focus on high-density memory products and logic/mixed-signal communications products; and • our reputation for high quality and reliable customer-focused services. 33 The number of our customers as of February 28 of 2021, 2022 and 2023, respectively, was 74, 72 and 73.
Customers We believe that the following factors have been, and will continue to be, important factors in attracting and retaining customers: • our advanced assembly and testing technologies; • our strong capabilities in testing and assembling DDIC/TDDI and other display panel driver semiconductors; • our focus on high-density memory products and logic/mixed-signal communications products; and • our reputation for high quality and reliable customer-focused services. 32 The number of our customers as of February 28 of 2022, 2023 and February 29, 2024, respectively, was 72, 73 and 67.
Year ended December 31, 2020 2021 2022 Taiwan 80% 79% 79% Japan 5% 6% 9% PRC 5% 7% 8% Singapore 8% 6% 2% Others 2% 2% 2% Total 100% 100% 100% Qualification and Correlation by Customers Our customers generally require that our facilities undergo a stringent “qualification” process during which the customer evaluates our operations, production processes and product reliability, including engineering, delivery control and testing capabilities.
Year ended December 31, 2021 2022 2023 Taiwan 79% 79% 81% Japan 6% 9% 6% PRC 7% 8% 8% Singapore 6% 2% 3% Others 2% 2% 2% Total 100% 100% 100% Qualification and Correlation by Customers Our customers generally require that our facilities undergo a stringent “qualification” process during which the customer evaluates our operations, production processes and product reliability, including engineering, delivery control and testing capabilities.
It is hoped to exert the full forces as a corporate, and invite ChipMOS employees to jointly support the public welfare activities, continue to inject positive power into the society, and extend the influence of public welfare to all corners of Taiwanese society through more diverse methods, for achieving common prosperity of the society, and implementing the spirit of corporate social citizen.
It is hoped to exert the full forces as a corporate, and invite ChipMOS employees to jointly support the public welfare activities, and extend the influence of public welfare to all corners of Taiwanese society through more diverse methods, for achieving common prosperity of the society, and implementing the spirit of corporate social citizen.
Package Lead- count Description End-User Applications Thin Small Outline Package I (TSOP I) 48-56 Designed for high volume production of low lead-count memory devices, including flash memory, SRAM and MROM Notebooks, personal computers, still and video cameras and standard connections for peripherals for computers Thin Small Outline Package II (TSOP II) 44-86 Designed for memory devices, including flash memory, SRAM, SDRAM and DDR DRAM Disk drives, recordable optical disk drives, audio and video products, consumer electronics, communication products Quad Flat No Lead (QFN) 8-132 Thermal enhanced quad flat no lead package providing small footprint (chip scale), light weight with good thermal and electrical performance Wireless communication products, notebooks, PDAs, consumer electronics Low-Profile Quad Flat Package (LQFP) 48 Low-profile and light weight package designed for ASICs, digital signal processors, microprocessors/ controllers, graphics processors, gate arrays, SSRAM, SDRAM, personal computer chipsets and mixed-signal devices Wireless communication products, notebooks, digital cameras, cordless/radio frequency devices Small Outline Package (SOP) 8 Designed for low lead-count memory and logic semiconductors, including SRAM and micro-controller units Personal computers, consumer electronics, audio and video products, communication products 26 Package Lead- count Description End-User Applications Multi-Chip Package (TSOP) 44-86 Our patented design for memory devices, including flash memory, SRAM, DRAM, SDRAM and DDR DRAM Notebooks, personal computers, disk drives, audio and video products, consumer products, communication products Flip Chip Quad Flat No Lead (FCQFN) 6-35 Thermal enhanced quad flat no lead package providing small footprint (chip scale), light weight with good thermal and electrical performance Flip chip process is designed for better electrical performance compared to wire bonding process Wireless communication products, notebooks, PDAs, consumer electronics Organic Substrate-based Packages.
The following table presents our principal leadframe-based packages, including the number of leads in each package, commonly known as lead-count, a description of each package and the end-user applications of each package. 25 Package Lead- count Description End-User Applications Thin Small Outline Package I (TSOP I) 48-56 Designed for high volume production of low lead-count memory devices, including flash memory, SRAM and MROM Notebooks, personal computers, still and video cameras and standard connections for peripherals for computers Thin Small Outline Package II (TSOP II) 44-86 Designed for memory devices, including flash memory, SRAM, SDRAM and DDR DRAM Disk drives, recordable optical disk drives, audio and video products, consumer electronics, communication products Quad Flat No Lead (QFN) 8-132 Thermal enhanced quad flat no lead package providing small footprint (chip scale), light weight with good thermal and electrical performance Wireless communication products, notebooks, PDAs, consumer electronics Low-Profile Quad Flat Package (LQFP) 48 Low-profile and light weight package designed for ASICs, digital signal processors, microprocessors/ controllers, graphics processors, gate arrays, SSRAM, SDRAM, personal computer chipsets and mixed-signal devices Wireless communication products, notebooks, digital cameras, cordless/radio frequency devices Small Outline Package (SOP) 8 Designed for low lead-count memory and logic semiconductors, including SRAM and micro-controller units Personal computers, consumer electronics, audio and video products, communication products Multi-Chip Package (TSOP) 44-86 Our patented design for memory devices, including flash memory, SRAM, DRAM, SDRAM and DDR DRAM Notebooks, personal computers, disk drives, audio and video products, consumer products, communication products Flip Chip Quad Flat No Lead (FCQFN) 6-35 Thermal enhanced quad flat no lead package providing small footprint (chip scale), light weight with good thermal and electrical performance Flip chip process is designed for better electrical performance compared to wire bonding process Wireless communication products, notebooks, PDAs, consumer electronics Organic Substrate-based Packages.
We employ the most advanced equipment for manufacturing quality and reliability control, including: • Temperature cycling tester (TCT), thermal shock tester (TST) and pressure cook tester (PCT), and highly accelerated temperature/humidity stress tester (HAST) for reliability analyses; • Scanning acoustic tomography (SAT) and scanning electronic microscope (SEM) for physical failure analysis; • Semi-Auto prober, curve tracer and DC tester station for electrical failure analysis; • Atomic absorption spectrometer (AA), inductively coupled plasma optical emission spectrometer (ICP-OES) and automatic potentiometric titrator (AP) for chemical analysis In addition, to enhance our performance and our research and development capabilities, we also installed a series of high-cost equipment, such as temperature humidity bias testers, low temperature storage-life testers and highly accelerated stress testers.
We employ the most advanced equipment for manufacturing quality and reliability control, including: • Temperature cycling tester (TCT), thermal shock tester (TST) and pressure cook tester (PCT), and highly accelerated temperature/humidity stress tester (HAST) for reliability analyses; • Scanning acoustic tomography (SAT) and scanning electronic microscope (SEM) for physical failure analysis; • Semi-Auto prober, curve tracer and DC tester station for electrical failure analysis; • Atomic absorption spectrometer (AA), inductively coupled plasma optical emission spectrometer (ICP-OES) and automatic potentiometric titrator (AP), UV-Visible Spectrophotometer (UV-VIS), Cyclic Voltammetric Stripping (CVS) and Ultra Performance Liquid Chromatography (UPLC) for chemical analysis In addition, to enhance our performance and our research and development capabilities, we also installed a series of high-cost equipment, such as temperature humidity bias testers, low temperature storage-life testers and highly accelerated stress testers.
Upon the acquisition of new test equipment, we install, configure, calibrate and perform burn-in diagnostic tests on the equipment. We also establish parameters for the test equipment based on anticipated requirements of existing and potential customers and considerations relating to market trends. As of February 28, 2023, we operated 615 testers for testing memory and logic/mixed-signal semiconductors.
Upon the acquisition of new test equipment, we install, configure, calibrate and perform burn-in diagnostic tests on the equipment. We also establish parameters for the test equipment based on anticipated requirements of existing and potential customers and considerations relating to market trends. As of February 29, 2024, we operated 631 testers for testing memory and logic/mixed-signal semiconductors.
These insurance policies cover property damages due to all risks, including but not limited to, fire, lightning and earthquakes. The maximum coverage of property insurance for the Company is approximately NT$126,755 million.
These insurance policies cover property damages due to all risks, including but not limited to, fire, lightning and earthquakes. The maximum coverage of property insurance for the Company is approximately NT$128,389 million.
Our top 15 customers in terms of revenue in 2022 were (in alphabetical order): Asahi Kasei Microdevices Corporation Chipone Technology (Beijing) Co., Ltd. Elite Semiconductor Microelectronics Technology Inc. GigaDevice Semiconductor (HK) Limited Himax Technologies, Inc. ILI Technology Corporation Integrated Circuit Solution Inc. Macronix International Co., Ltd. MediaTek Inc. Micron Technology, Inc. Novatek Microelectronics Corp. Phison Electronics Corp.
Our top 15 customers in terms of revenue in 2023 were (in alphabetical order): Asahi Kasei Microdevices Corporation Chipone Technology (Beijing) Co., Ltd. Cypress Semiconductor Corporation Elite Semiconductor Microelectronics Technology Inc. GigaDevice Semiconductor (HK) Limited Himax Technologies, Inc. ILI Technology Corporation Integrated Circuit Solution Inc. Macronix International Co., Ltd. Micron Technology, Inc. Novatek Microelectronics Corp.
Location of Facility Primary Use Floor Area (m2) Principal Equipment Chupei, Hsinchu Testing/Gold Bumping 38,166 10 steppers 19 sputters 323 testers Hsinchu Industrial Park Testing 25,864 109 testers 27 burn-in ovens Hsinchu Science Park Testing 31,168 183 testers 53 burn-in ovens Southern Taiwan Science Park Assembly/Testing 173,129 967 wire bonders 113 inner-lead bonders 650 testers Equipment Testing of Memory and Logic/Mixed-Signal Semiconductors Test equipment is the most capital-intensive component of the memory and logic/mixed-signal semiconductors test business.
Location of Facility Primary Use Floor Area (m2) Principal Equipment Chupei, Hsinchu Testing/Gold Bumping 38,166 10 steppers 19 sputters 331 testers Hsinchu Industrial Park Testing 25,864 112 testers 27 burn-in ovens Hsinchu Science Park Testing 31,168 188 testers 53 burn-in ovens Southern Taiwan Science Park Assembly/Testing 173,129 948 wire bonders 113 inner-lead bonders 691 testers Equipment Testing of Memory and Logic/Mixed-Signal Semiconductors Test equipment is the most capital-intensive component of the memory and logic/mixed-signal semiconductors test business.
On May 11, 2020, one of the strategic investor sold and transferred all equity interests of Unimos Shanghai to Yangtze Memory, which holds 50.94% equity interests of Unimos Shanghai after completed transaction.
On May 11, 2020, one of the strategic investor sold and transferred all equity interests of Unimos Shanghai to Yangtze Memory Technologies Co., Ltd. (“Yangtze Memory”), which holds 50.94% equity interests of Unimos Shanghai after completed transaction.
Research and Development To maintain our competitive edge for continued business growth, we continue our focus of our investment in new technology research and development. In 2020, 2021 and 2022, we spent approximately NT$1,016 million, or 4.4%, NT$1,139 million, or 4.2% and NT$1,159 million (US$38 million), or 4.9%, respectively, of our revenue on research and development.
Research and Development To maintain our competitive edge for continued business growth, we continue our focus of our investment in new technology research and development. In 2021, 2022 and 2023, we spent approximately NT$1,139 million, or 4.2%, NT$1,159 million, or 4.9% and NT$1,093 million (US$36 million), or 5.1%, respectively, of our revenue on research and development.
As of February 28, 2023, our sales and marketing efforts were primarily carried out by teams of sales professionals, application engineers and technicians, totaling 34 staff members. Each of these teams focuses on specific customers and/or geographic regions.
As of February 29, 2024, our sales and marketing efforts were primarily carried out by teams of sales professionals, application engineers and technicians, totaling 32 staff members. Each of these teams focuses on specific customers and/or geographic regions.
In 2019, we launched SDBG technology to implement multi-chip assembly and module of flash products for NAND Flash applications for SSD and eMMC applications. As of February 28, 2023 we employed 670 employees in our research and development activities.
In 2019, we launched SDBG technology to implement multi-chip assembly and module of flash products for NAND Flash applications for SSD and eMMC applications. As of February 29, 2024 we employed 698 employees in our research and development activities.
We are committed to delivering semiconductors that meet or exceed our customers’ specifications on time and at a competitive cost. We maintain quality control staff at each of our facilities. As of February 28, 2023, we employed 48 personnel for our quality control activities.
We are committed to delivering semiconductors that meet or exceed our customers’ specifications on time and at a competitive cost. We maintain quality control staff at each of our facilities. 35 As of February 29, 2024, we employed 51 personnel for our quality control activities.
As of February 28, 2023, we operated 10 steppers and 19 sputters for gold bumping, 113 inner-lead bonders for assembly and 650 testers for LCD, OLED and other display panel driver semiconductors. We are currently in the process of purchasing additional test equipment.
As of February 29, 2024, we operated 10 steppers and 19 sputters for gold bumping, 113 inner-lead bonders for assembly and 691 testers for LCD, OLED, automotive 41 panel and other display panel driver semiconductors. We are currently in the process of purchasing additional test equipment.
As of February 28, 2023, we operated 967 wire bonders. In addition to wire bonders, we maintain a variety of other types of assembly equipment, such as wafer grinders, wafer mounters, wafer saws, die bonders, automated molding machines, laser markers, solder platers, pad printers, dejunkers, trimmers, formers, substrate saws and lead scanners.
As of February 29, 2024, we operated 948 wire bonders. In addition to wire bonders, we maintain a variety of other types of assembly equipment, such as wafer grinders, wafer mounters, wafer saws, stealth dicing, die separator, die bonders, automated molding machines, laser markers, solder platers, pad printers, dejunkers, trimmers, formers, substrate saws and lead scanners.
Year ended December 31, 2020 2021 2022 Testing 21.7% 21.5% 22.3% Assembly 26.1% 29.1% 28.5% LCD, OLED and other display panel driver semiconductor assembly and testing revenue 30.5% 30.0% 31.0% Bumping 21.7% 19.4% 18.2% Total revenue 100.0% 100.0% 100.0% 23 Memory and Logic/Mixed-Signal Semiconductors Testing We provide testing services for memory and logic/mixed-signal semiconductors: Memory.
Year ended December 31, 2021 2022 2023 Testing 21.5% 22.3% 20.6% Assembly 29.1% 28.5% 21.7% Display panel driver semiconductor assembly and testing 30.0% 31.0% 36.6% Bumping 19.4% 18.2% 21.1% Total revenue 100.0% 100.0% 100.0% Memory and Logic/Mixed-Signal Semiconductors Testing We provide testing services for memory and logic/mixed-signal semiconductors: Memory.
Dejunking and Trimming Mold flash is removed from between the lead shoulders through dejunking, and the dambar is cut during the trimming process. Electrical Plating A solderable coating is added to the package leads to prevent oxidization and to keep solder wettability of the package leads.
Marking Each individual package is marked to provide product identification. 24 Dejunking and Trimming Mold flash is removed from between the lead shoulders through dejunking, and the dambar is cut during the trimming process. Electrical Plating A solderable coating is added to the package leads to prevent oxidization and to keep solder wettability of the package leads.
Based on the major product portfolio (judged by internal metal composition), we provide: • Gold Family (Au bump, Au metal composite bump and Au RDL) Gold bumping technology, which is in high demand for LCD driver ICs. This and stronger TDDI demand resulted in higher utilization levels in 2019.
Based on the major product portfolio (judged by internal metal composition), we provide: • Gold Family (Au bump, Au metal composite bump and Au RDL) Gold bumping technology, which is in high demand for LCD driver ICs.
It primarily engaged in providing marketing of semiconductors and electronic related produces, for its parent company and affiliates, throughout Mainland China. ChipMOS U.S.A., Inc. ChipMOS USA was incorporated in the United States of America in October 1999.
ChipMOS Shanghai was incorporated in Mainland China in March 2020, which is a wholly-owned subsidiary of ChipMOS BVI. It primarily engaged in providing marketing of semiconductors and electronic related produces, for its parent company and affiliates, throughout Mainland China. ChipMOS U.S.A., Inc. ChipMOS USA was incorporated in the United States of America in October 1999.
Flip Chip Bonding Using solder bumps or Cu pillar bumps on die, to connect the leadframe or substrate pad via soldering reflow. Molding The die and wires are encapsulated to provide physical support and protection. Marking Each individual package is marked to provide product identification.
Flip Chip Bonding Using solder bumps or Cu pillar bumps on die, to connect the leadframe or substrate pad via soldering reflow. Molding The die and wires are encapsulated to provide physical support and protection.
We do not maintain large inventories of leadframes, organic substrates, gold wire or molding compound, but generally maintain sufficient stock of each principal raw material for approximately two to three month’s production based on blanket orders and rolling forecasts of near-term requirements received from customers.
Cost of raw materials represented 20%, 19% and 19% of our revenue in 2021, 2022 and 2023, respectively. 36 We do not maintain large inventories of leadframes, organic substrates, gold wire or molding compound, but generally maintain sufficient stock of each principal raw material for approximately two to three month’s production based on blanket orders and rolling forecasts of near-term requirements received from customers.
The majorities of our customers purchase our services through purchase orders and provide us three-month non-binding rolling forecasts on a monthly basis. The price for our services is typically agreed upon at the time when a purchase order is placed.
In 2023, our top three customers accounted for approximately 25%, 13% and 9% of our revenue, respectively. The majorities of our customers purchase our services through purchase orders and provide us three-month non-binding rolling forecasts on a monthly basis. The price for our services is typically agreed upon at the time when a purchase order is placed.
We will continue to invest our resources to recruit and retain experienced research and development personnel. As of February 28, 2023, our research and development team comprised 670 employees. Build on Our Strong Presence in Taiwan and Strong Industrial Position Outside Taiwan.
In 2023, we spent approximately 5.1% of our revenue on research and development. We will continue to invest our resources to recruit and retain experienced research and development personnel. As of February 29, 2024, our research and development team comprised 698 employees. Build on Our Strong Presence in Taiwan and Strong Industrial Position Outside Taiwan.
We continue to introduce various energy efficient technologies and facilities, and on top of Tainan fab’s voluntary introduction of ISO 50001 Energy Management System in 2014, Hsinchu fab also achieved the ISO 50001 Energy Management System certification in 2017.
Upholding our principle of treasuring energy consumption, we began to systematically initiate energy conservation actions in 2012. We continue to introduce various energy efficient technologies and facilities, and on top of Tainan fab’s voluntary introduction of ISO 50001 Energy Management System in 2014, Hsinchu fab also achieved the ISO 50001 Energy Management System certification in 2017.
Other Services Drop Shipment We offer drop shipment of semiconductors directly to end-users designated by our customers. We provide drop shipment services, including assembly in customer-approved and branded boxes, to a majority of our assembly and testing customers.
In WLCSP backend, we take efforts to non-backside coating requirement for customer to cost reduction. Other Services Drop Shipment We offer drop shipment of semiconductors directly to end-users designated by our customers. We provide drop shipment services, including assembly in customer-approved and branded boxes, to a majority of our assembly and testing customers.
By referencing the Task Force on Climate-related Financial Disclosures (“TCFD”) framework developed by the Financial Stability Board (“FSB”) and began in 2021, we have identified the management needed over risks and opportunities associated with climate change, and further attained a comprehensive overview on the effects of climate change. 39 Besides depleting the Earth of her resources, energy consumption also generates carbon dioxide, leading to greenhouse effects.
By referencing the Task Force on Climate-related Financial Disclosures (“TCFD”) framework developed by the Financial Stability Board (“FSB”) and began in 2021, we have identified the management needed over risks and opportunities associated with climate change, and further attained a comprehensive overview on the effects of climate change.
Raw materials used in the LCD, OLED and other display panel driver semiconductor assembly and testing process include gold, carrier tape, resin, spacer tape, plastic reel, aluminum bags, and inner and outer boxes. Cost of raw materials represented 20%, 20% and 19% of our revenue in 2020, 2021 and 2022, respectively.
Raw materials used in the LCD, OLED, automotive panel and other display panel driver semiconductor assembly and testing process include gold, carrier tape, resin, spacer tape, plastic reel, aluminum bags, and inner and outer boxes.
China's COVID-19 lock downs have further aggravated the problem of consumer electronics macro softness. 19 Memory Semiconductor Market The potential for memory market growth is linked to anticipated memory content increases in consumer electronics, data center, wireless base-station, PC and smartphone applications due to updated system requirements (such as 5G & wifi 6), increasing use of storage, graphics in gaming and other applications.
Memory Semiconductor Market The potential for memory market growth is linked to anticipated memory content increases in consumer electronics, data center, wireless base-station, PC and smartphone applications due to updated system requirements (such as 5G & wifi 6), increasing use of storage, graphics in gaming and other applications. The memory market is dominated by two segments-DRAM and flash memory.
Social Inclusion and Local Community Partnership With the two major visions, namely “Environmental Sustainability” and “Public Welfare Practice”, ChipMOS has developed four major development aspects, including “Environment-Friendly”, “Community Feedback”, “Care to Underprivileged” and “Talent Incubation”, echoing the 17 UN SDGs, while focusing on three SDGs (SDG 3, SDG 4 and SDG 11). 40 Environmental Sustainability Various plans are conducted based on the two major aspects, “environmental friendliness” and “community feedback”.
Social Inclusion and Local Community Partnership With the two major visions, namely “Environmental Sustainability” and “Public Welfare Practice”, ChipMOS has developed four major development aspects, including “Environment-Friendly”, “Community Feedback”, “Care for the disadvantaged” and “Talent Cultivation”, linking the 17 UN SDGs, while focusing on three SDGs (SDG 3, SDG 4 and SDG 11).
In addition, the COG technology reduces assembly cost as it does not use tapes for interconnection between the LCD, OLED panel and the printed circuit board.
Compared to the traditional bonding process for COF, the new COG technology requires lower bonding temperature. In addition, the COG technology reduces assembly cost as it does not use tapes for interconnection between the LCD, OLED panel and the printed circuit board.
Our Principal Consolidated Subsidiaries Below is a description of our principal consolidated subsidiaries: ChipMOS TECHNOLOGIES (BVI) LTD., or formerly known as MODERN MIND TECHNOLOGY LIMITED ChipMOS BVI was incorporated in the British Virgin Islands in January 2002. ChipMOS SEMICONDUCTORS (Shanghai) LTD. ChipMOS Shanghai was incorporated in Mainland China in March 2020, which is a wholly-owned subsidiary of ChipMOS BVI.
Operating and Financial Review and Prospects—Recent Acquisition”. Our Principal Consolidated Subsidiaries Below is a description of our principal consolidated subsidiaries: ChipMOS TECHNOLOGIES (BVI) LTD., or formerly known as MODERN MIND TECHNOLOGY LIMITED ChipMOS BVI was incorporated in the British Virgin Islands in January 2002. ChipMOS SEMICONDUCTORS (Shanghai) LTD.
Our Strategy Our goal is to reinforce our position as a leading independent provider of semiconductor assembly and testing services, concentrating principally on memory, logic/mixed-signal and LCD, OLED and other display panel driver semiconductors. The principal components of our business strategy are set forth below. Focus on Providing Our Services to Potential Growth Segments of the Semiconductor Industry.
Our Strategy Our goal is to reinforce our position as a leading independent provider of semiconductor assembly and testing services, concentrating principally on memory, logic/mixed-signal and LCD, OLED, automotive panel and other display panel driver semiconductors.
Note: (1) Under IFRS 10 “Consolidated Financial Statements”, we are required to consolidate the financial results of any subsidiaries in which we hold a controlling interest or voting interest in excess of 50% or we have the power to direct or cause the direction of the management and policies, notwithstanding the lack of majority ownership.
The following chart illustrates our corporate structure and our equity interest in each of our principal subsidiaries as of the date of this Annual Report on Form 20-F. 17 Note: (1) Under IFRS 10, “Consolidated Financial Statements”, we are required to consolidate the financial results of any subsidiaries in which we hold a controlling interest or voting interest in excess of 50% or we have the power to direct or cause the direction of the management and policies, notwithstanding the lack of majority ownership.
The Semiconductor Industry and Conditions of Outsourcing in Taiwan and Mainland China Taiwan is one of the world’s leading locations for outsourced semiconductor manufacturing. The semiconductor industry supply chain in Taiwan has developed such that the various stages of the semiconductor manufacturing process have been disaggregated, thus allowing for specialization.
The semiconductor industry supply chain in Taiwan has developed such that the various stages of the semiconductor manufacturing process have been disaggregated, thus allowing for specialization.
The dies are packed within a reel into an aluminum bag after completion of the inspection process. 31 Chip-on-Glass (COG) Technology COG technology is an electronic assembly technology that is used in assembling display driver semiconductors including TV/monitor, mobile and wearable products. Compared to the traditional bonding process for COF, the new COG technology requires lower bonding temperature.
Inspection and Packing Each individual die with tape is visually or auto inspected for defects. The dies are packed within a reel into an aluminum bag after completion of the inspection process. 30 Chip-on-Glass (COG) Technology COG technology is an electronic assembly technology that is used in assembling display driver semiconductors including TV/monitor, mobile and wearable products.
Raydium Semiconductor Corporation Synaptics Incorporated Winbond Electronics Corporation In 2020, our top three customers accounted for approximately 22%, 12% and 10% of our revenue, respectively. In 2021, our top three customers accounted for approximately 21%, 10% and 9% of our revenue, respectively. In 2022, our top three customers accounted for approximately 20%, 10% and 9% of our revenue, respectively.
OmniVision Touch and Display Technologies Pte. Ltd. Phison Electronics Corp. Raydium Semiconductor Corporation Winbond Electronics Corporation In 2021, our top three customers accounted for approximately 21%, 10% and 9% of our revenue, respectively. In 2022, our top three customers accounted for approximately 20%, 10% and 9% of our revenue, respectively.
Increasingly short product life cycles have amplified time-to-market pressure for semiconductor companies, leading them to rely increasingly on independent companies as a key source for effective wafer fabrication, assembly and testing services. 21 Semiconductor Assembly and Testing Services Industry Growth in the semiconductor assembly and testing services industry is driven by increased outsourcing of the various stages of the semiconductor manufacturing process by IDMs and fabless semiconductor companies.
Increasingly short product life cycles have amplified time-to-market pressure for semiconductor companies, leading them to rely increasingly on independent companies as a key source for effective wafer fabrication, assembly and testing services.
We own the land for our Hsinchu Industrial Park testing facility and Chupei facility and we lease two parcels of land for our Hsinchu Science Park testing facility with lease expiration in year 2027 and 2034, respectively, and two parcels of land for our Southern Taiwan Science Park facility with lease expiration in year 2024 and 2032. 41 The following table shows the location, primary use and size of each of our facilities, and the principal equipment installed at each facility, as of February 28, 2023.
We own the land for our Hsinchu Industrial Park testing facility and Chupei facility and we lease two parcels of land for our Hsinchu Science Park testing facility with lease expiration in year 2027 and 2034, respectively, and two parcels of land for our Southern Taiwan Science Park facility with lease expiration in year 2024 and 2032.
Environmental, Social and Governance (“ESG”) Initiatives and Sustainable Development Goals (“SDGs”) Linkings ChipMOS adheres to the mission of “Honesty and Integrity, Environmental Friendliness, and Care for the Disadvantaged” and has formulated the “Sustainable Development Principles” and “Corporate Sustainability Policy”, which are adopted by the Board of Directors as the highest principle for the Company to promote sustainable development.
We actively promoted the use of renewable energy sources in 2020 and built solar power generation facilities to continuously increase the consumption ratio of renewable energies. 38 Environmental, Social and Governance (“ESG”) Initiatives and Sustainable Development Goals (“SDGs”) Linkings ChipMOS adheres to the mission of “Acting with Integrity, Strengthening Environmental Protection, and Care for the Disadvantaged” and has formulated the “Sustainable Development Principles” and “Corporate Sustainability Policy”, which are adopted by the Board of Directors as the highest principle for the Company to promote sustainable development.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeYear ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ (in millions) Interest income $ 27.8 $ 10.0 $ 57.2 $ 1.8 Other income 21.2 34.5 67.0 2.2 Other gains and losses (323.3 ) (65.8 ) 386.6 12.6 Financial costs (171.5 ) (131.2 ) (153.3 ) (5.0 ) Share of (loss) profit of associates and joint ventures accounted for using equity method (147.3 ) 625.7 453.7 14.8 Total non-operating income (expenses), net $ (593.1 ) $ 473.2 $ 811.2 $ 26.4 Non-Operating Income (Expenses), Net Non-operating income, net increased by NT$338 million, or 71%, to NT$811 million (US$26 million) in 2022 from NT$473 million in 2021, primarily due to the appreciation of US dollars and interest hike resulted in increasing of the foreign exchange gains of NT$537 million (US$17 million) and interest income of NT$47 million (US$2 million), respectively.
Biggest changeYear ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ (in millions) Interest income $ 10.0 $ 57.2 $ 193.2 $ 6.3 Other income 34.5 67.0 77.6 2.6 Other gains and losses (65.8 ) 386.6 135.5 4.4 Financial costs (131.2 ) (153.3 ) (266.4 ) (8.7 ) Share of profit of associates and joint ventures accounted for using equity method 625.7 453.7 219.9 7.2 Total non-operating income (expenses), net $ 473.2 $ 811.2 $ 359.8 $ 11.8 Non-Operating Income (Expenses), Net Non-operating income, net decreased by NT$451 million, or 56%, to NT$360 million (US$12 million) in 2023 from NT$811 million in 2022, primarily due to the decrease of the foreign exchange gains of NT$370 million (US$12 million) and share of profit of associates and joint ventures accounted for using equity method of NT$234 million (US$8 million) which is primarily due to the investment in Unimos Shanghai and partially offset by the increase of interest income of NT$136 million (US$4 million) due to the increase of the time deposits.
Market Conditions for the End-User Applications for Semiconductors. Market conditions in the semiconductor industry, to a large degree, track those for their end-user applications. Any deterioration in the market conditions for the end-user applications of semiconductors that we test and assemble may reduce demand for our services and, in turn, materially adversely affect our financial condition and results of operations.
Market conditions in the semiconductor industry, to a large degree, track those for their end-user applications. Any deterioration in the market conditions for the end-user applications of semiconductors that we test and assemble may reduce demand for our services and, in turn, materially adversely affect our financial condition and results of operations.
We also offer WLCSP products and turn-key flip chip assembly and testing services using variety of leadframe and organic substrate carries. In addition, we provide gold bumping, reel to reel assembly and testing services for LCD, OLED and other display panel driver semiconductors by employing COF and COG technologies.
We also offer WLCSP products and turn-key flip chip assembly and testing services using variety of leadframe and organic substrate carries. In addition, we provide gold bumping, reel to reel assembly and testing services for LCD, OLED, automotive panel and other display panel driver semiconductors by employing COF and COG technologies.
We offer assembly and testing services for memory and logic/mixed-signal semiconductors, assembly and testing services for LCD, OLED and other display panel driver semiconductors and bumping services. Most of our customers do not place purchase orders far in advance and our contracts with customers generally do not require minimum purchases of our products or services.
We offer assembly and testing services for memory and logic/mixed-signal semiconductors, assembly and testing services for LCD, OLED, automotive panel and other display panel driver semiconductors and bumping services. Most of our customers do not place purchase orders far in advance and our contracts with customers generally do not require minimum purchases of our products or services.
See “Item 3. Key Information—Risk Factors—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
See “Item 3. Key Information—Risk Factors—Risks Relating to Our Common Shares or ADSs—The Company’s ability to maintain its listing and trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq is dependent on factors outside of the Company’s control and satisfaction of stock exchange requirements.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the NASDAQ Stock Market or satisfy other eligibility requirements that may be required of it in the future” for additional information.
The Company may not be able to overcome such factors that disrupt its trading status of common shares on the Taiwan Stock Exchange or ADSs on the Nasdaq or satisfy other eligibility requirements that may be required of it in the future” for additional information.
Due to the cyclical nature of the semiconductor industry, customer orders may change significantly, causing fluctuation in our capacity utilization rate and average selling prices for our service. 46 Most of our labor and overhead costs are denominated in NT dollars.
Due to the cyclical nature of the semiconductor industry, customer orders may change significantly, causing fluctuation in our capacity utilization rate and average selling prices for our service. Most of our labor and overhead costs are denominated in NT dollars.
Revenue We conduct our business according to the following main business segments: (1) testing services for memory and logic/mixed-signal semiconductors; (2) assembly services for memory and logic/mixed-signal semiconductors; (3) LCD, OLED and other display panel driver semiconductor assembly and testing services; and (4) bumping services for memory, logic/mixed-signal and LCD, OLED and other display panel driver semiconductors.
Revenue We conduct our business according to the following main business segments: (1) testing services for memory and logic/mixed-signal semiconductors; (2) assembly services for memory and logic/mixed-signal semiconductors; (3) LCD, OLED, automotive panel and other display panel driver semiconductor assembly and testing services; and (4) bumping services for memory, logic/mixed-signal and LCD, OLED, automotive panel and other display panel driver semiconductors.
Other Income Our other income principally consists of rental income, grant income and dividend income. 47 Other Gains and Losses Our other gains principally consist of foreign exchange gains, reimbursement of ADSs service charge, gain on valuation of financial assets at fair value through profit or loss and compensation income.
Other Income Our other income principally consists of rental income, grant income and dividend income. Other Gains and Losses Our other gains principally consist of foreign exchange gains, gain on valuation of financial assets at fair value through profit or loss, reimbursement of ADSs service charge and compensation income.
The Company has obtained the qualification from the MOEA, and signed loan agreements with financial institutions during January 2020 to September 2022 with the line of credit amounted to NT$23.73 billion (US$772 million) and terms from seven to ten years.
The Company has obtained the qualification from the MOEA, and signed loan agreements with financial institutions during January 2020 to September 2022 with the line of credit amounted to NT$23.73 billion (US$775 million) and terms from seven to ten years.
As of December 31, 2022, we had no short-term loans outstanding. 52 We believe our current cash and cash equivalents, cash flows from operations and available credit facilities will be sufficient to meet our capital spending, commitments and other capital needs through the one year after the issuance date of financial statements.
As of December 31, 2023, we had no short-term loans outstanding. We believe our current cash and cash equivalents, cash flows from operations and available credit facilities will be sufficient to meet our capital spending, commitments and other capital needs through the one year after the issuance date of financial statements.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 For a detailed description of the comparison of our operating results for the year ended December 31, 2021 to the year ended December 31, 2020, please refer to “Item 5.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For a detailed description of the comparison of our operating results for the year ended December 31, 2022 to the year ended December 31, 2021, please refer to “Item 5.
For a detailed description of the comparison of our cash flows for the year ended December 31, 2021 to the year ended December 31, 2020, please refer to “Item 5. Operating and Financial Review and Prospects —Liquidity and Capital Resources” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 14, 2022.
For a detailed description of the comparison of our cash flows for the year ended December 31, 2022 to the year ended December 31, 2021, please refer to “Item 5. Operating and Financial Review and Prospects —Liquidity and Capital Resources” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 13, 2023.
In 2020, 2021 and 2022, AMT Act had no effects on the tax expenses of the Company since the income tax payable is above the minimum amount prescribed under the AMT Act. 53
In 2021, 2022 and 2023, AMT Act had no effects on the tax expenses of the Company since the income tax payable is above the minimum amount prescribed under the AMT Act.
In particular, the capacity utilization rates for our LCD, OLED and other display panel driver semiconductors assembly and testing equipment may be severely adversely affected during a semiconductor industry downturn as a result of the decrease in outsourcing demand from integrated device manufacturers, or IDMs, which typically maintain larger in-house testing capacity than in-house assembly capacity.
In particular, the capacity utilization rates for our Display panel driver semiconductors assembly and testing equipment may be severely adversely affected during a semiconductor industry downturn as a result of the decrease in outsourcing demand from integrated device manufacturers, or IDMs, which typically maintain larger in-house testing capacity than in-house assembly capacity. Highly Cyclical Nature of the Semiconductor Industry .
We currently expect that research and development expenses will increase in the future as we continue to explore new technologies and service offerings. We also expect to hire additional employees in our research and development department.
Research and development expenses are recognized as they are incurred. We currently expect that research and development expenses will increase in the future as we continue to explore new technologies and service offerings. We also expect to hire additional employees in our research and development department.
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, 2022 to December 31, 2022 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.
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, 2023 to December 31, 2023 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. 52 Off-Balance Sheet Arrangements As of December 31, 2023, we had no off-balance sheet arrangements.
However, the deduction may not exceed 30% of the income tax payable for that fiscal year. In 2020, 2021 and 2022, tax credits resulted in tax savings for the Company of approximately NT$6 million, NT$9 million and NT$12 million (US$390 thousand), respectively.
However, the deduction may not exceed 30% of the income tax payable for that fiscal year. In 2021, 2022 and 2023, tax credits resulted in tax savings for the Company of approximately NT$9 million, NT$12 million and NT$12 million (US$392 thousand), respectively.
Other Income (Expenses), Net Our other income principally consists of gain on disposal of property, plant and equipment, gain on disposal of scrapped materials, gain on disposal of items purchased on behalf of others and gains from lease modifications. Our other expenses principally consist of impairment loss on property, plant and equipment.
Other Income (Expenses), Net Our other income principally consists of gain on disposal of scrapped materials, gain on disposal of property, plant and equipment and gain on disposal of items purchased on behalf of others. Our other expenses principally consist of impairment loss on property, plant and equipment.
General and Administrative General and administrative expenses consist of salaries and related expenses for executive, finance and accounting, and management information systems personnel, professional service fees, depreciation expenses, tax and duty fee, bad debt provision and other corporate expenses.
General and Administrative General and administrative expenses consist of salaries and related expenses for executive, finance and accounting, and management information systems personnel, professional service fees, depreciation expenses, tax and duty fee, property insurance fees and other corporate expenses.
The Company has obtained the qualification from the MOEA, and signed loan agreements with financial institutions during January 2020 to September 2022 with the line of credit amounted to NT$23.73 billion (US$772 million) and terms from seven to ten years. As of the issue date of this report, the Company has used NT$15,236 million (US$496 million) of the credit line.
The Company has obtained the qualification from the MOEA, and signed loan agreements with financial institutions during January 2020 to September 2022 with the line of credit amounted to NT$23.73 billion (US$775 million) and terms from seven to ten years. As of the issue date of this report, the Company has used NT$16,495 million (US$539 million) of the credit line.
Operating and Financial Review and Prospects—Results of Operations—Year Ended December 31, 2021 Compared to Year Ended December 31, 2020” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 14, 2022.
Operating and Financial Review and Prospects—Results of Operations—Year Ended December 31, 2022 Compared to Year Ended December 31, 2021” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 13, 2023.
See “— Cost of Revenue and Gross Profit” for more information concerning our assembly and testing capacity utilization rates and the impact on our revenue, gross profit and profitability from any increases or decreases in our capacity utilization rate.
In addition, our average capacity utilization rate for bumping was 63% in 2022 and 58% in 2023. See “— Cost of Revenue and Gross Profit” for more information concerning our assembly and testing capacity utilization rates and the impact on our revenue, gross profit and profitability from any increases or decreases in our capacity utilization rate.
On January 1, 2019, MOEA implemented the Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan and companies are subsidized with preferential interest loans for qualified investment projects.
The syndicated loan was fully repaid in advance in March 2022. On January 1, 2019, MOEA implemented the Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan and companies are subsidized with preferential interest loans for qualified investment projects.
On May 11, 2020, one of the strategic investor sold and transferred all equity interests of Unimos Shanghai to Yangtze Memory, which holds 50.94% equity interests of Unimos Shanghai after completed transaction. See “Item 4. Information on the Company—Our Structure and History” for more details.
On July 24, 2023, Yangtze Memory sold and transferred all equity interests of Unimos Shanghai to Yangtze Memory Holding, which holds 50.94% equity interests of Unimos Shanghai after completed transaction. See “Item 4. Information on the Company—Our Structure and History” for more details.
This amount comprises net proceeds from short-term, long-term bank loans and lease liabilities in the amount of NT$2,094 million and the distribution of cash dividends in the amount of NT$1,600 million.
This amount comprises net proceeds from short-term, long-term bank loans and lease liabilities in the amount of NT$3,544 million and the distribution of cash dividends in the amount of NT$3,127 million.
Net Cash Used in Investing Activities Net cash used in investing activities amounted to NT$5,062 million (US$165 million) in 2022, primarily due to net payment for property, plant and equipment of NT$4,622 million (US$150 million) and increase in other non-current assets of NT$401 million (US$13 million).
Net cash used in investing activities amounted to NT$5,062 million in 2022, primarily due to net payment for property, plant and equipment of NT$4,622 million and increase in other non-current assets of NT$401 million. Net Cash Generated from (Used in) Financing Activities Net cash used in financing activities amounted to NT$1,059 million (US$35 million) in 2023.
Our copper bumping technology supports non-driver type of products, such as RDL, copper pillar, WLCSP etc. In 2022, our consolidated revenue was NT$23,517 million (US$765 million) and our profit for the year attributable to equity holders of the Company was NT$3,440 million (US$112 million). The Company listed and commenced trading on the main board of TWSE on April 11, 2014.
Our copper bumping technology supports non-driver type of products, such as RDL, copper pillar, WLCSP etc. In 2023, our consolidated revenue was NT$21,356 million (US$698 million) and our profit for the year attributable to equity holders of the Company was NT$1,968 million (US$64 million). The Company listed and commenced trading on the main board of TWSE on April 11, 2014.
Profit for the Year Attributable to Equity Holders of the Company Our profit for the year attributable to equity holders of the Company were NT$2,379 million, NT$4,937 million and NT$3,440 million (US$112 million) in 2020, 2021 and 2022, respectively.
Profit for the Year Attributable to Equity Holders of the Company Our profit for the year attributable to equity holders of the Company were NT$4,937 million, NT$3,440 million and NT$1,968 million (US$64 million) in 2021, 2022 and 2023, respectively.
These macro headwinds impacted the worldwide semiconductor demand and lifted the inventory level, causing memory and panel demand soft and marketing price down in the second half of 2022. Declining Average Selling Prices of Our Assembly and Testing Services.
These macro headwinds impacted the worldwide semiconductor demand and lifted the inventory level, causing memory and panel demand soft and marketing price down since the second half of 2022 till the first half of 2023. It was getting stable by the end of 2023. Declining Average Selling Prices of Our Assembly and Testing Services.
As a result of the foregoing operations, the profit for the year attributable to the Company was NT$3,440 million (US$112 million) in 2022, compared to NT$4,937 million in 2021.
As a result of the foregoing operations, the profit for the year attributable to the Company was NT$1,968 million (US$64 million) in 2023, compared to NT$3,440 million in 2022.
We had an income tax expense of NT$588 million (US$19 million) in 2022 compared to income tax expense of NT$1,098 million for 2021, primarily due to the decreased of the profit before income tax in 2022. Profit for the Year Attributable to Equity Holders of the Company .
We had an income tax expense of NT$300 million (US$10 million) in 2023 compared to income tax expense of NT$588 million for 2022, primarily due to the decrease of the profit before income tax in 2023. 49 Profit for the Year Attributable to Equity Holders of the Company .
Year ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ (in millions) Gross profit: Testing $ 1,651.0 $ 2,188.0 $ 1,637.2 $ 53.3 Assembly 533.3 1,370.1 467.4 15.2 LCD, OLED and other display panel driver semiconductor assembly and testing 1,996.3 2,725.9 2,136.9 69.6 Bumping 851.6 970.0 670.6 21.8 Total $ 5,032.2 $ 7,254.0 $ 4,912.1 $ 159.9 Gross profit margin: Testing 33.0 % 37.1 % 31.2 % 31.2 % Assembly 8.9 % 17.2 % 7.0 % 7.0 % LCD, OLED and other display panel driver semiconductor assembly and testing 28.4 % 33.2 % 29.3 % 29.3 % Bumping 17.1 % 18.2 % 15.7 % 15.7 % Overall 21.9 % 26.5 % 20.9 % 20.9 % Operating Expenses Sales and Marketing Sales and marketing expenses consist primarily of shipping and handling expenses incurred in delivering products to our customers’ designated locations and other marketing expenses, salaries and related expenses for sales and marketing personnel, professional service fees and service support expenses.
Year ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ (in millions) Gross profit (loss): Testing $ 2,188.0 $ 1,637.2 $ 873.3 $ 28.5 Assembly 1,370.1 467.4 (671.5 ) (21.9 ) Display panel driver semiconductor assembly and testing 2,725.9 2,136.9 2,446.4 79.9 Bumping 970.0 670.6 901.2 29.4 Total $ 7,254.0 $ 4,912.1 $ 3,549.4 $ 115.9 Gross profit (loss) margin: Testing 37.1 % 31.2 % 19.9 % 19.9 % Assembly 17.2 % 7.0 % -14.5 % -14.5 % Display panel driver semiconductor assembly and testing 33.2 % 29.3 % 31.3 % 31.3 % Bumping 18.2 % 15.7 % 20.0 % 20.0 % Overall 26.5 % 20.9 % 16.6 % 16.6 % Operating Expenses Sales and Marketing Sales and marketing expenses consist primarily of shipping and handling expenses incurred in delivering products to our customers’ designated locations and other marketing expenses, salaries and related expenses for sales and marketing personnel, depreciation expenses and entertainment fees.
Our gross profit margin for assembly services decreased to 7.0% in 2022 from 17.2% in 2021, primarily due to the decrease in revenue resulted from the decreased customer demand.
Our gross profit margin for testing services decreased to 19.9% in 2023 from 31.2% in 2022, primarily due to the decrease in revenue resulted from the decreased customer demand. Our gross profit margin for assembly services decreased to -14.5% in 2023 from 7.0% in 2022, primarily due to the decrease in revenue resulted from the decreased customer demand.
Set forth below are the maturities of our long-term bank loans outstanding as of December 31, 2022: As of December 31, 2022 NT$ US$ (in millions) During 2023 $ 1,523 $ 50 During 2024 2,247 73 During 2025 3,120 102 During 2026 3,331 108 During 2027 and onwards 3,747 122 $ 13,968 $ 455 As of December 31, 2022, certain of our property, plant and equipment and non-current financial assets at amortized cost with an aggregate net book value of NT$14,043 million (US$457 million) and NT$37 million (US$1 million), respectively, were pledged as collateral mainly for long-term bank loans and leases.
Set forth below are the maturities of our long-term bank loans outstanding as of December 31, 2023: As of December 31, 2023 NT$ US$ (in millions) During 2024 $ 2,264 $ 74 During 2025 3,314 108 During 2026 3,877 127 During 2027 2,417 79 During 2028 and onwards 3,040 99 $ 14,912 $ 487 As of December 31, 2023, certain of our property, plant and equipment and non-current financial assets at amortized cost with an aggregate net book value of NT$13,928 million (US$455 million) and NT$37 million (US$1 million), respectively, were pledged as collateral mainly for long-term bank loans and leases.
Net cash generated from operating activities amounted to NT$7,320 million in 2021, primarily as a result of (i) profit before income tax of NT$6,036 million and (ii) our non-cash depreciation in the amount of NT$4,634 million, partially offset by the non-cash share of profit of associates and joint ventures accounted for using equity method of NT$626 million, and (iii) the changes in accounts and notes receivable and inventories of NT$2,086 million and (iv) income tax paid of NT$692 million.
Net cash generated from operating activities amounted to NT$8,616 million in 2022, primarily as a result of (i) profit before income tax of NT$4,028 million, (ii) our non-cash depreciation in the amount of NT$4,752 million, partially offset by the non-cash share of profit of associates and joint ventures accounted for using equity method of NT$454 million, (iii) the changes in accounts and notes receivable and accounts and notes payable of NT$1,511 million and (iv) income tax paid of NT$1,355 million.
Profit before Income Tax . As a result of the foregoing, profit before income tax decreased by 33% to NT$4,028 million (US$131 million) in 2022 from NT$6,036 million in 2021. Income Tax Expense .
Profit before Income Tax . As a result of the foregoing, profit before income tax decreased by 44% to NT$2,268 million (US$74 million) in 2023 from NT$4,028 million in 2022. Income Tax Expense .
Year ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ (in millions) Sales and marketing expenses $ 57.0 $ 73.9 $ 128.0 $ 4.2 General and administrative expenses 528.8 604.1 538.7 17.5 Research and development expenses 1,015.5 1,139.2 1,158.6 37.7 Total operating expenses $ 1,601.3 $ 1,817.2 $ 1,825.3 $ 59.4 Sales and Marketing Expenses .
Year ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ (in millions) Sales and marketing expenses $ 73.9 $ 128.0 $ 135.7 $ 4.4 General and administrative expenses 604.1 538.7 497.7 16.3 Research and development expenses 1,139.2 1,158.6 1,093.5 35.7 Total operating expenses $ 1,817.2 $ 1,825.3 $ 1,726.9 $ 56.4 Sales and Marketing Expenses .
As of December 31, 2022, our primary sources of liquidity were cash and cash equivalents of NT$9,897 million (US$322 million), short-term bank loans of NT$7,130 million (US$232 million) available to us in undrawn facilities, which have expired or will expire from March 2023 to December 2023, and long-term bank loans of NT$9,672 million (US$315 million) available to us in undrawn facilities, which will expire from December 2023 to July 2025.
As of December 31, 2023, our primary sources of liquidity were cash and cash equivalents of NT$12,354 million (US$403 million), short-term bank loans of NT$6,424 million (US$210 million) available to us in undrawn facilities, which have expired or will expire from March 2024 to December 2024, and long-term bank loans of NT$7,233 million (US$236 million) available to us in undrawn facilities, which will expire in July 2025.
Our gross profit margin for LCD, OLED and other display panel driver semiconductor assembly and testing services decreased to 29.3% in 2022 from 33.2% in 2021, primarily due to the decrease in revenue resulted from the decreased customer demand.
Our gross profit margin for Display panel driver semiconductor assembly and testing services increased to 31.3% in 2023 from 29.3% in 2022, primarily due to the increase in revenue resulted from the increased customer demand.
In 2022, tax credits resulted in tax savings for the Company of approximately NT$50 million (US$2 million).
In 2023, tax credits resulted in tax savings for the Company of approximately NT$38 million (US$1 million).
To offset the effects of decreasing average selling prices, we will continue to seek to: • improve production efficiency and attain high capacity utilization rates; • concentrate on testing of potentially high-demand, high-growth semiconductors; • develop new assembly technologies; and • implement new technologies and platforms to shift into potentially higher margin services.
To enhance the competitiveness and increase the revenue, we will continue to seek to: • improve production efficiency and attain high capacity utilization rates; • concentrate on testing of potentially high-demand, high-growth semiconductors; • develop new assembly technologies; and • implement new technologies and platforms to shift into potentially higher margin services. Market Conditions for the End-User Applications for Semiconductors.
Our gross revenue is generally the product of the progress towards completion multiplied by the average selling price per deliverable unit from our assembly or testing services, as the case may be.
The assembly capacity utilization rate generally increases in correlation to increases in the total volume of our customer orders, and generally decreases in correlation to decreases in the total volume of our customer orders. 45 Our gross revenue is generally the product of the progress towards completion multiplied by the average selling price per deliverable unit from our assembly or testing services, as the case may be.
Year ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ Earnings per share—basic $ 3.27 $ 6.79 $ 4.73 $ 0.15 Earnings per share—diluted 3.23 6.65 4.63 0.15 Earnings per equivalent ADS—basic 65.42 135.78 94.60 3.08 Earnings per equivalent ADS—diluted 64.57 132.93 92.63 3.01 Weighted average number of shares outstanding (in million shares): Basic 727.2 727.2 727.2 727.2 Diluted 736.9 742.9 742.6 742.6 Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenue .
Year ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ Earnings per share—basic $ 6.79 $ 4.73 $ 2.71 $ 0.09 Earnings per share—diluted 6.65 4.63 2.68 0.09 Earnings per equivalent ADS—basic 135.78 94.60 54.11 1.77 Earnings per equivalent ADS—diluted 132.93 92.63 53.54 1.75 Weighted average number of shares outstanding (in million shares): Basic 727.2 727.2 727.2 727.2 Diluted 742.9 742.6 734.9 734.9 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue .
Other operating income, net increased by NT$4 million, or 3%, to NT$130 million (US$4 million) in 2022 from NT$126 million in 2021, primarily due to the increase of gain on disposal of property, plant and equipment and partially offset by the decrease of gain on disposal of scrapped material and the income from waste recycling and sale of idle assets and increase of impairment loss on property, plant and equipment in 2022.
Other operating income, net decreased by NT$44 million, or 34%, to NT$86 million (US$3 million) in 2023 from NT$130 million in 2022, primarily due to the decrease of gain on disposal of property, plant and equipment and partially offset by the increase of gain on disposal of scrapped material in 2023.
Year ended December 31, 2020 2021 2022 NT$ Percentage NT$ Percentage NT$ US$ Percentage (in millions, except percentage) Revenue $ 23,011.4 100.0 % $ 27,400.0 100.0 % $ 23,517.1 $ 765.3 100.0 % Cost of revenue (17,979.2 ) (78.1 )% (20,146.0 ) (73.5 )% (18,605.0 ) (605.4 ) (79.1 )% Gross profit 5,032.2 21.9 % 7,254.0 26.5 % 4,912.1 159.9 20.9 % Operating expenses (1,601.3 ) (7.0 )% (1,817.2 ) (6.7 )% (1,825.3 ) (59.4 ) (7.8 )% Other income (expenses), net 135.6 0.6 % 125.6 0.5 % 129.9 4.2 0.6 % Operating profit 3,566.5 15.5 % 5,562.4 20.3 % 3,216.7 104.7 13.7 % Non-operating income (expenses), net (593.1 ) (2.6 )% 473.2 1.7 % 811.2 26.4 3.4 % Profit before income tax 2,973.4 12.9 % 6,035.6 22.0 % 4,027.9 131.1 17.1 % Income tax expense (594.4 ) (2.6 )% (1,098.3 ) (4.0 )% (588.2 ) (19.2 ) (2.5 )% Profit for the year $ 2,379.0 10.3 % $ 4,937.3 18.0 % $ 3,439.7 $ 111.9 14.6 % Total comprehensive income for the year $ 2,494.3 10.8 % $ 5,021.5 18.3 % $ 3,624.0 $ 117.9 15.4 % The following table sets forth, for the periods indicated, earnings per common share and ADS.
Year ended December 31, 2021 2022 2023 NT$ Percentage NT$ Percentage NT$ US$ Percentage (in millions, except percentage) Revenue $ 27,400.0 100.0 % $ 23,517.1 100.0 % $ 21,356.2 $ 697.5 100.0 % Cost of revenue (20,146.0 ) (73.5 )% (18,605.0 ) (79.1 )% (17,806.8 ) (581.6 ) (83.4 )% Gross profit 7,254.0 26.5 % 4,912.1 20.9 % 3,549.4 115.9 16.6 % Operating expenses (1,817.2 ) (6.7 )% (1,825.3 ) (7.8 )% (1,726.9 ) (56.4 ) (8.1 )% Other income (expenses), net 125.6 0.5 % 129.9 0.6 % 85.9 2.8 0.4 % Operating profit 5,562.4 20.3 % 3,216.7 13.7 % 1,908.4 62.3 8.9 % Non-operating income (expenses), net 473.2 1.7 % 811.2 3.4 % 359.8 11.8 1.7 % Profit before income tax 6,035.6 22.0 % 4,027.9 17.1 % 2,268.2 74.1 10.6 % Income tax expense (1,098.3 ) (4.0 )% (588.2 ) (2.5 )% (300.6 ) (9.8 ) (1.4 )% Profit for the year $ 4,937.3 18.0 % $ 3,439.7 14.6 % $ 1,967.6 $ 64.3 9.2 % Total comprehensive income for the year $ 5,021.5 18.3 % $ 3,624.0 15.4 % $ 1,796.6 $ 58.7 8.4 % 47 The following table sets forth, for the periods indicated, earnings per common share and ADS.
This amount comprises net proceeds from short-term, long-term bank loans and lease liabilities in the amount of NT$3,544 million (US$115 million) and the distribution of cash dividends in the amount of NT$3,127 million (US$102 million). Net cash generated from financing activities amounted to NT$494 million in 2021.
This amount comprises net proceeds from long-term bank loans and lease liabilities in the amount of NT$614 million (US$20 million) and the distribution of cash dividends in the amount of NT$1,673 million (US$55 million). Net cash generated from financing activities amounted to NT$417 million in 2022.
The following table sets forth, for the periods indicated, our consolidated revenue for each segment. 44 Year ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ (in millions) Testing $ 5,002.7 $ 5,899.6 $ 5,244.0 $ 170.7 Assembly 6,002.0 7,963.7 6,705.9 218.2 LCD, OLED and other display panel driver semiconductor assembly and testing 7,023.0 8,211.1 7,288.7 237.2 Bumping 4,983.7 5,325.6 4,278.5 139.2 Total $ 23,011.4 $ 27,400.0 $ 23,517.1 $ 765.3 Our revenue consists primarily of service fees for testing and assembling semiconductors, and to a lesser extent, fees from equipment rentals to semiconductor manufacturers for engineering testing, less allowances for product returns.
Year ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ (in millions) Testing $ 5,899.6 $ 5,244.0 $ 4,394.7 $ 143.5 Assembly 7,963.7 6,705.9 4,629.4 151.2 Display panel driver semiconductor assembly and testing 8,211.1 7,288.7 7,821.7 255.5 Bumping 5,325.6 4,278.5 4,510.4 147.3 Total $ 27,400.0 $ 23,517.1 $ 21,356.2 $ 697.5 Our revenue consists primarily of service fees for testing and assembling semiconductors, and to a lesser extent, fees from equipment rentals to semiconductor manufacturers for engineering testing, less allowances for product returns.
We had entered into the following syndicated loan and long-term loans facilities: • On May 15, 2018, we obtained a syndicated loan from banks in Taiwan in the amount of NT$12 billion with a term of five years. This loan facility is secured by existing land and buildings and equipment.
Government granted bank loan is repayable monthly from March 2023 to October 2032. 51 We had entered into the following syndicated loan and long-term loans facilities: • On May 15, 2018, we obtained a syndicated loan from banks in Taiwan in the amount of NT$12 billion with a term of five years.
We price our assembly services on a per unit basis, taking into account the complexity of the package, our costs, including the costs of the required material and components, the depreciation expenses relating to the equipment involved and our overhead expenses, prevailing market conditions, the order size, the strength and history of our relationship with the customer and our capacity utilization.
In addition, TDDI as a multi-functional product which is DDIC with touch function, its testing process required longer testing time than traditional DDIC, thus the testing cost also will be higher than DDIC product. 44 We price our assembly services on a per unit basis, taking into account the complexity of the package, our costs, including the costs of the required material and components, the depreciation expenses relating to the equipment involved and our overhead expenses, prevailing market conditions, the order size, the strength and history of our relationship with the customer and our capacity utilization.
We conduct testing operations in our facilities at the Hsinchu Science Park, the Hsinchu Industrial Park and Chupei, gold bumping and wafer testing in our facility at Chupei, and assembly and testing operations in our facility at the Southern Taiwan Science Park. We also conduct operations in Mainland China through Unimos Shanghai, a 45.02%-owned affiliate of ChipMOS BVI.
We conduct testing operations in our facilities at the Hsinchu Science Park, the Hsinchu Industrial Park and Chupei, gold bumping and wafer testing in our facility at Chupei, and assembly and testing operations in our facility at the Southern Taiwan Science Park.
Our average capacity utilization rate for assembly of memory and logic/mixed-signal semiconductors was 83% in 2020, 85% in 2021 and 62% in 2022. Our average capacity utilization rate for LCD, OLED and other display panel driver semiconductor assembly and testing was 76% in 2020, 80% in 2021 and 67% in 2022.
Our average capacity utilization rate for testing of memory and logic/mixed-signal semiconductors was 83% in 2021, 66% in 2022 and 58% in 2023. Our average capacity utilization rate for assembly of memory and logic/mixed-signal semiconductors was 85% in 2021, 62% in 2022 and 46% in 2023.
We also generate revenue from customers in Singapore, Japan and other countries. As we generate most of our revenue from Taiwanese customers using our Taiwanese operations, and since most of our labor and overhead costs are denominated in NT dollars, we consider the NT dollar to be our functional currency.
As we generate most of our revenue from Taiwanese customers using our Taiwanese operations, and since most of our labor and overhead costs are denominated in NT dollars, we consider the NT dollar to be our functional currency. See Note 41 to our consolidated financial statements contained in this Annual Report on Form 20-F and “Item 11.
On January 21, 2016, ChipMOS Bermuda and the Company entered into the Merger Agreement, pursuant to which ChipMOS Bermuda merged with and into the Company, with the latter being the surviving company after the Merger.
On January 21, 2016, ChipMOS Bermuda and the Company entered into the Merger Agreement, pursuant to which ChipMOS Bermuda merged with and into the Company, with the latter being the surviving company after the Merger. Upon completion of the Merger, the Company and its subsidiaries owned continued to conduct the business that they conducted in substantially the same manner.
Upon completion of the Merger, the Company and its subsidiaries owned continued to conduct the business that they conducted in substantially the same manner. For additional information regarding the Merger see “Item 4. Information on the Company”. On November 30, 2016, the Company and Unigroup Guowei executed the Equity Interest Transfer Agreement.
For additional information regarding the Merger see “Item 4. Information on the Company”. On November 30, 2016, the Company and Unigroup Guowei executed the Equity Interest Transfer Agreement.
We expect general and administrative expenses to increase in absolute terms as we add personnel and incur additional expenses related to the growth of our business and operations.
We expect general and administrative expenses to increase in absolute terms as we add personnel and incur additional expenses related to the growth of our business and operations. 46 Research and Development Research and development expenses consist primarily of personnel expenses, depreciation, maintenance and repair expenses, facilities expenses, utilities expenses and other consulting fees and certification fees paid to third parties.
Research and development expenses increased by NT$19 million, or 2%, to NT$1,158 million (US$38 million) in 2022 from NT$1,139 million in 2021, primarily due to the increase of employee benefit expenses, expendable equipment expense, bank, agency, license fee and professional service fee and partially offset by the decrease of utilities expenses. 49 Other Income (Expenses), Net .
Research and development expenses decreased by NT$65 million, or 6%, to NT$1,093 million (US$36 million) in 2023 from NT$1,158 million in 2022, primarily due to the decrease of employee benefit expenses, expendable equipment expenses and partially offset by the increase of maintenance and repair expense and depreciation expense. Other Income (Expenses), Net .
Year ended December 31, 2020 2021 2022 2022 NT$ NT$ NT$ US$ (in millions) Capital expenditures $ 4,133.6 $ 6,552.7 $ 4,918.5 $ 160.1 Depreciation and amortization 4,175.5 4,634.1 4,751.9 154.6 Net cash generated from (used in): Operating activities $ 5,940.2 $ 7,319.7 $ 8,616.4 $ 280.4 Investing activities (3,799.3 ) (6,015.4 ) (5,061.9 ) (164.7 ) Financing activities (2,720.2 ) 494.4 416.9 13.6 Effect of exchange rate changes (11.1 ) (6.2 ) 19.0 0.6 Net (decrease) increase in cash and cash equivalents $ (590.4 ) $ 1,792.5 $ 3,990.4 $ 129.9 Net Cash Generated from Operating Activities Net cash generated from operating activities amounted to NT$8,616 million (US$280 million) in 2022, primarily as a result of (i) profit before income tax of NT$4,028 million (US$131 million) and (ii) our non-cash depreciation in the amount of NT$4,752 million (US$155 million), partially offset by the non-cash share of profit of associates and joint ventures accounted for using equity method of NT$454 million (US$15 million), and (iii) the changes in accounts and notes receivable and accounts and notes payable of NT$1,511 million (US$49 million), and (iv) income tax paid of NT$1,355 million (US$44 million).
Year ended December 31, 2021 2022 2023 2023 NT$ NT$ NT$ US$ (in millions) Capital expenditures $ 6,552.7 $ 4,918.5 $ 3,228.5 $ 105.4 Depreciation and amortization 4,634.1 4,751.9 4,779.3 156.1 Net cash generated from (used in): Operating activities $ 7,319.7 $ 8,616.4 $ 6,607.5 $ 215.8 Investing activities (6,015.4 ) (5,061.9 ) (3,090.2 ) (100.9 ) Financing activities 494.4 416.9 (1,059.1 ) (34.6 ) Effect of exchange rate changes (6.2 ) 19.0 (0.8 ) — Net increase in cash and cash equivalents $ 1,792.5 $ 3,990.4 $ 2,457.4 $ 80.3 Net Cash Generated from Operating Activities Net cash generated from operating activities amounted to NT$6,607 million (US$216 million) in 2023, primarily as a result of (i) profit before income tax of NT$2,268 million (US$74 million), (ii) our non-cash depreciation in the amount of NT$4,779 million (US$156 million), and (iii) the changes in accounts and notes receivable and inventories of NT$303 million (US$10 million).
Loans As of December 31, 2022, we had long-term bank loans of NT$13,968 million (US$455 million) (including current portions of such long-term bank loans of NT$1,523 million (US$50 million)). As of December 31, 2022, NT$10,762 million (US$350 million) of our long-term bank loans were collateralized by land, buildings and equipment.
Loans As of December 31, 2023, we had long-term bank loans of NT$14,912 million (US$487 million) (including current portions of such long-term bank loans of NT$2,264 million (US$74 million)). As of December 31, 2023, NT$11,271 million (US$368 million) of our long-term bank loans were collateralized by land, buildings and equipment.
Revenue from LCD, OLED and other display panel driver semiconductor assembly and testing services decreased by NT$922 million, or 11%, to NT$7,289 million (US$237 million) in 2022 from NT$8,211 million in 2021. This decrease was principally as a result of a decrease in customer demand.
Revenue from Display panel driver semiconductor assembly and testing services increased by NT$533 million, or 7%, to NT$7,822 million (US$256 million) in 2023 from NT$7,289 million in 2022. This increase was principally as a result of an increase in customer demand. The sales quantity increased around 6% compared to 2022.
Our long-term bank loans were floating rate loans with a rate between 1.075% to 1.625% as of December 31, 2022. Government granted bank loan is repayable monthly from March 2023 to October 2032.
Our long-term bank loans were floating rate loans with a rate between 1.2% to 1.75% as of December 31, 2023.
In particular, increases or decreases in our capacity utilization rates could significantly affect our gross margins since the unit cost of assembly and testing services generally decreases as fixed costs are allocated over a larger number of units. 43 The current generation of advanced testers typically cost between US$0.7 million and US$1.1 million each, while die bonders used in assembly typically cost approximately US$270 thousand each wire bonders in assembly cost approximately US$67 thousand each and package saw in assembly cost approximately US$750 thousand each and WB plating cost approximately US$4.5 million each.
In particular, increases or decreases in our capacity utilization rates could significantly affect our gross margins since the unit cost of assembly and testing services generally decreases as fixed costs are allocated over a larger number of units.
Due to the weakness of macro-economic environment, softness in market demand and customer adjustment of inventory level, the utilization rate of our production lines has decreased since second half of 2022. Our average capacity utilization rate for testing of memory and logic/mixed-signal semiconductors was 78% in 2020, 83% in 2021 and 66% in 2022.
Our profitability depends in part not only on absolute pricing levels for our services, but also on our capacity utilization rates. Due to the weakness of macro-economic environment, softness in market demand and customer adjustment of inventory level, the utilization rate of our production lines has decreased since second half of 2022.
In addition, our average capacity utilization rate for bumping was 82% in 2020, 85% in 2021 and 63% in 2022.
Our average capacity utilization rate for Display panel driver semiconductor assembly and testing was 80% in 2021, 67% in 2022 and 69% in 2023. In addition, our average capacity utilization rate for bumping was 85% in 2021, 63% in 2022 and 58% in 2023.
The following table summarizes our contractual obligations and commitments as of December 31, 2022, or the periods indicated: Payments Due by Period Contractual Obligations Total Within 1 year 1 to 3 years 3 to 5 years Over 5 years NT$ NT$ NT$ NT$ NT$ (in millions) Long-term bank loans (1) $ 14,643 $ 1,699 $ 5,675 $ 5,355 $ 1,914 Lease liabilities (1) 1,119 174 183 57 705 Capital commitments 1,704 1,704 — — — Total contractual cash obligations $ 17,466 $ 3,577 $ 5,858 $ 5,412 $ 2,619 Note: (1) Includes interest payments.
The following table summarizes our contractual obligations and commitments as of December 31, 2023, or the periods indicated: Payments Due by Period Contractual Obligations Total Within 1 year 1 to 3 years 3 to 5 years Over 5 years NT$ NT$ NT$ NT$ NT$ (in millions) Long-term bank loans (1) $ 15,581 $ 2,470 $ 7,507 $ 4,273 $ 1,331 Lease liabilities (1) 1,258 268 250 58 682 Capital commitments 21 — — — 21 Total contractual cash obligations $ 16,860 $ 2,738 $ 7,757 $ 4,331 $ 2,034 Note: (1) Includes interest payments.
Unimos Shanghai operates an assembly and testing facility at the Qingpu Industrial Zone in Shanghai. The following key trends are important to understand our business: Capital Intensive Nature of Our Business. Our operations, in particular our testing operations, are characterized by relatively high fixed costs.
The equity interest transfer is expected to be completed in the first half of 2024. 42 The following key trends are important to understand our business: Capital Intensive Nature of Our Business. Our operations, in particular our testing operations, are characterized by relatively high fixed costs.
We provide assembly and testing services based on customer’s specification, thus, the input costs incurred to assembly and testing volume completed in testing services are not linear over the duration of these services. 45 Geography and Currency The majority of our revenue is generated from customers headquartered in Taiwan, which represented 80%, 79% and 79% of our revenue in 2020, 2021 and 2022, respectively.
The progress towards completion on testing services is measured by the actual incurred testing volume. We provide assembly and testing services based on customer’s specification, thus, the input costs incurred to assembly and testing volume completed in testing services are not linear over the duration of these services.
The following table sets forth capital expenditures, depreciation and amortization and our cash flows with respect to operating activities, investing activities, financing activities and the effect of exchange rate changes on cash for the periods indicated.
In addition to the commitments set forth in the contractual obligations table above, we have certain outstanding purchase orders relating to the procurement of raw materials for which there are no definite delivery dates or deadlines. 50 The following table sets forth capital expenditures, depreciation and amortization and our cash flows with respect to operating activities, investing activities, financing activities and the effect of exchange rate changes on cash for the periods indicated.
Cost of revenue decreased by NT$1,541 million, or 8%, to NT$18,605 million (US$605 million) in 2022 from NT$20,146 million in 2021, primarily due to the decrease of direct material expense, direct labor expense, operating supplies expense and inventories supplies of NT$1,006 million (US$33 million), NT$285 million (US$9 million), NT$136 million (US$4 million) and NT$118 million (US$4 million), respectively.
Cost of Revenue and Gross Profit . Cost of revenue decreased by NT$798 million, or 4%, to NT$17,807 million (US$582 million) in 2023 from NT$18,605 million in 2022, primarily due to the decrease of direct material expense and direct labor expense of NT$521 million (US$17 million) and NT$298 million (US$10 million), respectively.
Cost of Revenue and Gross Profit Our cost of revenue consists primarily of the following: depreciation expenses, raw material costs, and labor and overhead expenses, which primarily include expendable equipment, utilities expenses and inventory supplies. Our operations, in particular our testing, are characterized by relatively high fixed costs.
Quantitative and Qualitative Disclosure about Market Risk—Market Risks—Foreign Currency Exchange Rate Risks” for certain information on our exchange rate risks. Cost of Revenue and Gross Profit Our cost of revenue consists primarily of the following: depreciation expenses, raw material costs, and labor and overhead expenses, which primarily include expendable equipment, utilities expenses and inventory supplies.
Both the operating expenses from above subsidiaries and the remaining sales and marketing expenses increased primarily due to the increase of entertainment expenses as a result of easing COVID-19 related restrictions and the increase of employee benefit expenses. General and Administrative Expenses .
Sales and marketing expenses increased by NT$8 million, or 6%, to NT$136 million (US$5 million) in 2023 from NT$128 million in 2022, primarily due to the increase of employee benefit expenses, entertainment expenses, travel expenses and rental expenses. As a result of easing COVID-19 related restrictions, entertainment expenses and travel expenses were increased compared to 2022.
The increase in net cash generated from operating activities in 2022 compared to 2021 was primarily due to cash inflows from the changes in accounts and notes receivable, inventories and financial assets at fair value through profit or loss and cash outflows from decrease in profit before income tax, other payables and increase in income tax paid.
The decrease in net cash generated from operating activities in 2023 compared to 2022 was primarily due to the decrease in profit before income tax and the cash outflows from changes in accounts and notes receivables. The accounts and notes receivable were higher compared to prior year due to year-end revenue growth and customer payment schedule.
Key Information—Risk Factors—Risks Relating to Our Business—Our significant amount of indebtedness and interest expense will limit our cash flow and could adversely affect our operations” for additional information. 50 On January 1, 2019, MOEA implemented the Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan and companies are subsidized with preferential interest loans for qualified investment projects.
See “Item 3. Key Information—Risk Factors—Risks Relating to Our Business—Our significant amount of indebtedness and interest expense will limit our cash flow and could adversely affect our operations” for additional information.
Revenue from bumping services decreased by NT$1,048 million, or 20%, to NT$4,278 million (US$139 million) in 2022 from NT$5,326 million in 2021. This decrease was principally due to the decreased customer demand. Cost of Revenue and Gross Profit .
Revenue from bumping services increased by NT$232 million, or 5%, to NT$4,510 million (US$147 million) in 2023 from NT$4,278 million in 2022. This increase was principally due to the increased average selling price.
We use inner-lead bonders for the assembly of LCD, OLED and other display panel driver semiconductors using COF technology, and wire bonders for TSOP, BGA, and some other package assembly technologies. Our profitability depends in part not only on absolute pricing levels for our services, but also on our capacity utilization rates.
As of February 29, 2024, we had 1,322 testers, 80 burn-in ovens, 948 wire bonders, 113 inner-lead bonders, 10 steppers and 19 sputters. We use inner-lead bonders for the assembly of LCD, OLED, automotive panel and other display panel driver semiconductors using COF technology, and wire bonders for TSOP, BGA, and some other package assembly technologies.
As of March 2022, this loan facility was drawn of NT$8,400 million and fully repaid. Certain of our loan agreements and indentures contain covenants that, if violated, could result in the obligations under these agreements becoming due prior to the originally scheduled maturity dates.
As of the issue date of this report, the Company has used the credit line of the aforementioned project loans for amount of NT$16,495 million (US$539 million). Our 2018 syndicated loan agreement contains covenants that, if violated, could result in the obligations under these agreements becoming due prior to the originally scheduled maturity dates.
We expect to continue to incur substantial depreciation and other expenses as a result of our previous and future acquisitions of assembly and testing equipment and facilities. As of February 28, 2023, we had 1,265 testers, 80 burn-in ovens, 967 wire bonders, 113 inner-lead bonders, 10 steppers and 19 sputters.
Our operations, in particular our testing, are characterized by relatively high fixed costs. We expect to continue to incur substantial depreciation and other expenses as a result of our previous and future acquisitions of assembly and testing equipment and facilities.
Revenue from testing services decreased by NT$655 million, or 11%, to NT$5,244 million (US$171 million) in 2022 from NT$5,899 million in 2021, principally due to the decreased customer demand. 48 Revenue from assembly services decreased by NT$1,258 million, or 16%, to NT$6,706 million (US$218 million) in 2022 from NT$7,964 million in 2021, primarily as a result of the decreased customer demand.
Revenue from assembly services decreased by NT$2,077 million, or 31%, to NT$4,629 million (US$151 million) in 2023 from NT$6,706 million in 2022, primarily as a result of the decreased customer demand. The sales quantity decreased around 30% compared to 2022.
Our gross profit decreased to NT$4,912 million (US$160 million) in 2022 from NT$7,254 million in 2021. Our gross margin was 20.9% in 2022, compared to 26.5% in 2021. Our gross profit margin for testing services decreased to 31.2% in 2022 from 37.1% in 2021, primarily due to the decrease in revenue resulted from the decreased customer demand.
The decrease in cost of revenue was primary due to softness in market demand and decreased sales volume, which impacted our related costs. Our gross profit decreased to NT$3,549 million (US$116 million) in 2023 from NT$4,912 million in 2022. Our gross margin was 16.6% in 2023, compared to 20.9% in 2022.
Highly Cyclical Nature of the Semiconductor Industry . The worldwide semiconductor industry has experienced peaks and troughs over the last decade. Since the second quarter of 2020, work-from-home and study-from-home demand had explosive growth, by worldwide loose economic policy to save COVID-19 impact, semiconductor face a strong demand from 2020 till first half of 2022.
The worldwide semiconductor industry has experienced peaks and troughs over the last decade. Due to COVID-19, work-from-home and study-from-home demand had explosive growth, semiconductor face a strong demand for two years. However, the semiconductor supply chain inventory level increases and end-demand rapidly decrease influenced by geopolitics and global inflationary pressures. Demand soft caused customers’ inventory adjustments and macro weakness.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeEmployees The following table sets forth, as of the dates indicated, the number of our full-time employees serving in the functions indicated: As of December 31, As of February 28, Function 2020 2021 2022 2023 General operations 2,891 2,995 2,761 2,701 Quality control 185 55 50 48 Engineering 1,352 1,436 1,425 1,419 Research and development 671 680 677 670 Sales, administration and finance 132 132 145 142 Others 241 230 232 230 Total 5,472 5,528 5,290 5,210 The following table sets forth, as of the dates indicated, a breakdown of the number of our full-time employees by geographic location: As of December 31, As of February 28, Location 2020 2021 2022 2023 Hsinchu Production Group 2,116 2,158 2,082 2,065 Southern Taiwan Production Group 3,349 3,363 3,201 3,138 Shanghai 3 3 3 3 United States 4 4 4 4 Total 5,472 5,528 5,290 5,210 Our employees are not covered by any collective bargaining agreements.
Biggest changeEmployees The following table sets forth, as of the dates indicated, the number of our full-time employees serving in the functions indicated: As of December 31, As of February 29, Function 2021 2022 2023 2024 General operations 2,995 2,761 2,801 2,819 Quality control 55 50 45 51 Engineering 1,436 1,425 1,480 1,488 Research and development 680 677 704 698 Sales, administration and finance 132 145 142 141 Others 230 232 224 223 Total 5,528 5,290 5,396 5,420 The following table sets forth, as of the dates indicated, a breakdown of the number of our full-time employees by geographic location: As of December 31, As of February 29, Location 2021 2022 2023 2024 Hsinchu Production Group 2,158 2,082 2,028 2,034 Southern Taiwan Production Group 3,363 3,201 3,361 3,379 Shanghai 3 3 3 3 United States 4 4 4 4 Total 5,528 5,290 5,396 5,420 Our employees are not covered by any collective bargaining agreements.
He served in Philips Electronic Building Elements (Taiwan) Ltd and National Cheng Kung University. He received a master’s degree in Electrical Engineering from National Sun Yat-sen University in Taiwan. D.Y. Tsai has served as the executive vice president since July 2020. He has been our vice president of Q.R.A. center of the Company from June 2014 to June 2020.
He served in Philips Electronic Building Elements (Taiwan) Ltd and National Cheng Kung University. He received a master’s degree in Electrical Engineering from National Sun Yat-sen University in Taiwan. 55 D.Y. Tsai has served as the executive vice president since July 2020. He has been our vice president of Q.R.A. center of the Company from June 2014 to June 2020.
Tsai 262,572 0.04 % 56 Compensation Committee We do not provide our directors with any benefits upon termination of employment. Our compensation committee currently consists of Mr. Yeong-Her Wang, Mr. Chin-Shyh Ou and Ms. Kuei-Ann Wen, all of whom are independent directors. This committee reviews and recommends to our board of directors the compensation of all our directors and officers.
Tsai 262,572 0.04 % Compensation Committee We do not provide our directors with any benefits upon termination of employment. Our compensation committee currently consists of Mr. Yeong-Her Wang, Mr. Chin-Shyh Ou and Ms. Kuei-Ann Wen, all of whom are independent directors. This committee reviews and recommends to our Board of Directors the compensation of all our directors and officers.
He has a Ph.D. degree from Electrical Engineering at National Tsing Hua University in Taiwan. 55 Vincent Hsu has served as the executive vice president since July 2020. He has been our vice president of LCDD production group of the Company since March 2012. He has been the director of JMC since October 2014.
He has a Ph.D. degree from Electrical Engineering at National Tsing Hua University in Taiwan. Vincent Hsu has served as the executive vice president since July 2020. He has been our vice president of LCDD production group of the Company since March 2012. He has been the director of JMC since October 2014.
Ou holds several professional licenses and qualifications, including U.S. Certified Public Accountant and Certified Internal Auditor and Taiwan Certified Public Accountant. Kuei-Ann Wen has served as one of our directors since June 2015. Ms.
Ou holds several professional licenses and qualifications, including U.S. Certified Public Accountant and Certified Internal Auditor and Taiwan Certified Public Accountant. 54 Kuei-Ann Wen has served as one of our directors since June 2015. Ms.
Tsai 52 Executive Vice President — Shih-Jye Cheng has served as a director and president of the Company since July 1997 and the chairman of the Company since June 2003. He is the sibling of president of ChipMOS USA. He also has been the director of ChipMOS USA since its inception.
Tsai 53 Executive Vice President — Shih-Jye Cheng has served as a director and president of the Company since July 1997 and the chairman of the Company since June 2003. He is the sibling of president of ChipMOS USA. He also has been the director of ChipMOS USA since its inception.
Share Ownership The following table sets forth certain information as of April 1, 2023, our most recent record date, with respect to our common shares owned by our directors and executive officers.
Share Ownership The following table sets forth certain information as of April 1, 2024, our most recent record date, with respect to our common shares owned by our directors and executive officers.
Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 9 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 3 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Compensation The aggregate compensation paid in 2022 to our directors and our executive officers, including cash and accrued pension payable upon retirement, was approximately NT$121 million (US$4 million).
Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 9 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 3 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Compensation The aggregate compensation paid in 2023 to our directors and our executive officers, including cash and accrued pension payable upon retirement, was approximately NT$101 million (US$3 million).
He served as the independent director and audit committee member of the Company from June 2007 to June 2013. He was the independent director and audit committee member of ChipMOS Bermuda, since July 2004 and December 2004, respectively, until ChipMOS Bermuda was merged with and into the Company.
He served as the independent director and audit committee member of the Company from June 2007 to June 2013. He was the independent director, audit committee member and nomination committee chairman of ChipMOS Bermuda, since July 2004, December 2004 and May 2004, respectively, until ChipMOS Bermuda was merged with and into the Company.
Since July 12, 2021, of our current nine directors, two directors are representatives of Siliconware Precision which is our largest shareholder. The following table sets out the names of our directors and executive officers, their positions with our company and their ages as of February 28, 2023.
Since July 12, 2021, of our current nine directors, two directors are representatives of Siliconware Precision which is our largest shareholder. The following table sets out the names of our directors and executive officers, their positions with our company and their ages as of February 29, 2024.
The compensation committee is required to meet at least semi-annually. Audit Committee The audit committee currently consists of Mr. Chin-Shyh Ou, Ms. Kuei-Ann Wen, Ms. Hui-Fen Chan, Mr. Yeong-Her Wang, and Mr. Hong-Tzer Yang, all of whom are independent directors. Mr. Chin-Shyh Ou serves as a financial expert to the audit committee.
The compensation committee is required to meet at least twice a year. 56 Audit Committee The audit committee currently consists of Mr. Chin-Shyh Ou, Ms. Kuei-Ann Wen, Ms. Hui-Fen Chan, Mr. Yeong-Her Wang, and Mr. Hong-Tzer Yang, all of whom are independent directors. Mr. Chin-Shyh Ou serves as a financial expert to the audit committee.
Hui-Fen Chan has served as one of our directors since July 2021. She has been the independent director, audit committee member and compensation committee member of ITEQ Corporation since June 2009. She has been the independent director of FORMOSA I WIND POWER CO., LTD. since February 2020.
Hui-Fen Chan has served as one of our directors since July 2021. She has been the independent director, audit committee member and compensation committee member of ITEQ Corporation since June 2009. She has been the independent director of FORMOSA I WIND POWER CO., LTD. and the director of Uniconn Interconnections Technology Co., Ltd. since February 2020 and June 2023, respectively.
Our audit committee charter was adopted on June 28, 2007 and amended on November 10, 2020. The audit committee is required to meet at least once every quarter. Our audit committee charter grants the audit committee the authority to conduct any investigation which it deems appropriate to fulfill its responsibilities.
Our audit committee charter was adopted on June 28, 2007. The audit committee is required to meet at least once quarterly. Our audit committee charter grants the audit committee the authority to conduct any investigation which it deems appropriate to fulfill its responsibilities.
Board Diversity Matrix (As of February 28, 2023) Country of Principal Executive Offices Taiwan, R.O.C.
Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices Taiwan, R.O.C.
The chairman of our board is appointed among the members of our board. The term of office for directors is three years. Pursuant to ROC Securities and Exchange Act, a public company is required to either establish an audit committee or to have supervisors.
The chairman of our board is appointed among the members of our board. The term of office for directors is three years. Pursuant to ROC Securities and Exchange Act, we are required to establish an audit committee and a compensation committee.
He has been the director of Taiwan Electric Research & Testing Center since March 2021. He also has been the independent director, audit committee member, compensation committee member, and corporate governance committee member of Padauk Technology Co., Ltd., since July 2021, July 2021, June 2021, and November 2021, respectively.
He also has been the independent director, audit committee member, compensation committee member, and corporate governance committee member of Padauk Technology Co., Ltd., since July 2021, July 2021, June 2021, and November 2021, respectively. He has been the director of AeroVision Avionics Inc. since July 2021.
He also was the independent director, audit committee member, and compensation committee member of Spirox Corporation from June 2002 to June 2012 and from June 2015 to August 2017, June 2015 to August 2017, and June 2015 to August 2017, respectively.
He also was the independent director, audit committee member, and compensation committee member of Spirox Corporation from June 2002 to June 2012 and from June 2015 to August 2017, June 2015 to August 2017, and June 2015 to August 2017, respectively. He was the director of Taiwan Electric Research & Testing Center from March 2021 to December 2023.
He served as the senior director of Europe & Asia district sales division of Siliconware Precision from April 2010 to June 2020 and the deputy director of global marketing division of United Microelectronics Corporation from June 2000 to April 2010.
He served as the senior director of Europe & Asia district sales division of Siliconware Precision from April 2010 to June 2020 and the deputy director of global marketing division of United Microelectronics Corporation from June 2000 to April 2010. He graduated from National Chiao-Tung University with a master’s degree in Electronics.
Name Age Position Term Expires Shih-Jye Cheng 64 Chairman and Director / President 2024 Kun-Yi Chien 67 Director (representative, Siliconware Precision) 2024 David Chang 53 Director (representative, Siliconware Precision) 2024 Silvia Su 52 Director / Vice President, Finance and Accounting Management Center / Corporate Governance Officer 2024 Chin-Shyh Ou 65 Independent Director 2024 Kuei-Ann Wen 62 Independent Director 2024 Hui-Fen Chan 54 Independent Director 2024 Yeong-Her Wang 66 Independent Director 2024 Hong-Tzer Yang 62 Independent Director 2024 Vincent Hsu 54 Executive Vice President — D.Y.
The business address for our directors and executive officers is No. 1, R&D Road 1, Hsinchu Science Park, Hsinchu, Taiwan, ROC. 53 Name Age Position Term Expires Shih-Jye Cheng 65 Chairman and Director / President 2024 Kun-Yi Chien 68 Director (representative, Siliconware Precision) 2024 David Chang 54 Director (representative, Siliconware Precision) 2024 Silvia Su 53 Director / Vice President, Finance and Accounting Management Center / Corporate Governance Officer 2024 Chin-Shyh Ou 66 Independent Director 2024 Kuei-Ann Wen 63 Independent Director 2024 Hui-Fen Chan 55 Independent Director 2024 Yeong-Her Wang 67 Independent Director 2024 Hong-Tzer Yang 63 Independent Director 2024 Vincent Hsu 55 Executive Vice President — D.Y.
He has been the director of AeroVision Avionics Inc. since July 2021. He was the professor of the Department of Electrical Engineering at Chung Yuan Christian University from August 2000 to July 2007.
He was the professor of the Department of Electrical Engineering at Chung Yuan Christian University from August 2000 to July 2007.
She also has been the independent director, audit committee member and compensation committee member of Taiwan Mask Corp., since May 2022, May 2022 and August 2022, respectively.
She also has been the independent director, audit committee member and compensation committee member of Taiwan Mask Corp., since May 2022, May 2022 and August 2022, respectively. She has been the attorney of R&S Intel. Attorneys at Law since February 2024.
He graduated from National Chiao-Tung University with a master’s degree in Electronics. 54 Silvia Su has served as one of our directors since July 2021. She has served as the vice president of finance and accounting management center of the Company since July 2018 and as the corporate governance officer since March 2021.
Silvia Su has served as one of our directors since July 2021. She has served as the vice president of finance and accounting management center of the Company since July 2018 and as the corporate governance officer since March 2021.
We have not experienced any strikes or work stoppages by our employees and believe that our relationship with our employees is good. 57
We have not experienced any strikes or work stoppages by our employees and believe that our relationship with our employees is good. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
A public company’s audit committee should be composed of all of its independent directors but not less than three, of which at least one member should have accounting or related financial management expertise, and the relevant provisions under the ROC Securities and Exchange Act, the ROC Company Act and other laws applicable to the supervisors are also applicable to the audit committee.
The audit committee should be composed of all of our independent directors but not less than three, of which at least one member should have accounting or related financial management expertise. The compensation committee must be composed of qualified independent members as defined under local law. The Company has established its audit committee, compensation committee and nomination committee.
We are also required to establish a compensation committee which must be composed of qualified independent members as defined under local law. The Company has established its audit committee and compensation committee. Pursuant to the ROC Company Act, a person may serve as our director in his or her personal capacity or as the representative of another legal entity.
Pursuant to the ROC Company Act, a person may serve as our director in his or her personal capacity or as the representative of another legal entity.
Removed
The business address for our directors and executive officers is No. 1, R&D Road 1, Hsinchu Science Park, Hsinchu, Taiwan, ROC.
Added
He also has been the independent director, audit committee member, risk management committee member, corporate governance and sustainable development committee member, merger and acquisition special committee member, and ESG execution committee member of Chailease Holding Company Limited, since May 2023, May 2023, May 2023, May 2023, June 2023 and July 2023, respectively.
Added
Nomination Committee The Board of Directors established a nomination committee and the nomination committee charter was adopted on November 2, 2023. The nomination committee consists of Mr. Yeong-Her Wang, Ms. Hui-Fen Chan, and Mr. Hong-Tzer Yang all of whom are independent directors.
Added
The objectives of our nomination committee include: (i) to laying down the standards of independence and a diversified background covering the expertise, skills, experience, gender, etc. of members of the board, and finding, reviewing, and nominating candidates for directors based on such standards, (ii) to establishing and developing the organizational structure of the board and each functional committee, and (iii) to establishing and reviewing on the succession plans of directors.
Added
At no time during or after the last completed fiscal year were we required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to our Incentive-Based Compensation Recovery Policy. 57

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

5 edited+4 added−0 removed2 unchanged
Biggest changeApril 2, 2021 March 28, 2022 April 1, 2023 (1) Name of Beneficial Owners Numbers of Shares Owned Percentage of Shares Owned Numbers of Shares Owned Percentage of Shares Owned Numbers of Shares Owned Percentage of Shares Owned Depositary (2) 84,417,014 11.61 % 88,642,054 12.19 % 87,425,054 12.02 % Siliconware Precision Industries Co., Ltd. 78,910,390 10.85 % 78,910,390 10.85 % 78,910,390 10.85 % Yann Yuan Investment Co., Ltd. 55,000,000 7.56 % 41,200,000 5.67 % 41,200,000 5.67 % Directors and executive officers, as a group (3) 86,246,467 (4) 11.87% (4) 85,883,354 (5) 11.82% (5) 85,883,354 11.82 % Notes: (1) Our most recent record date.
Biggest changeMarch 28, 2022 April 1, 2023 April 1, 2024 (1) Name of Beneficial Owners Numbers of Shares Owned Percentage of Shares Owned Numbers of Shares Owned Percentage of Shares Owned Numbers of Shares Owned Percentage of Shares Owned Depositary (2) 88,642,054 12.19 % 87,425,054 12.02 % 87,129,434 11.98 % Siliconware Precision Industries Co., Ltd. 78,910,390 10.85 % 78,910,390 10.85 % 78,910,390 10.85 % Yann Yuan Investment Co., Ltd. 41,200,000 5.67 % 41,200,000 5.67 % 41,200,000 5.67 % Directors and executive officers, as a group (3) 85,883,354 (4) 11.82% (4) 85,883,354 11.82 % 85,883,354 11.82 % Notes: (1) Our most recent record date.
Major Shareholders and Related Party Transactions Major Shareholders The following table and information set out certain information known to us concerning the record ownership of our shares as of April 2, 2021, March 28, 2022 and April 1, 2023 (our most recent record date) (1) beneficially owned five percent or more of our common shares as of such record date and (2) our directors and executive officers as a group.
Major Shareholders and Related Party Transactions Major Shareholders The following table and information set out certain information known to us concerning the record ownership of our shares as of March 28, 2022, April 1, 2023 and April 1, 2024 (our most recent record date) (1) beneficially owned five percent or more of our common shares as of such record date and (2) our directors and executive officers as a group.
(4) As of March 31, 2021. (5) As of March 31, 2022. Except for holders of our ADSs, none of our major shareholders have different voting rights from those of other shareholders. As of February 28, 2023, a total of 727,240,126 common shares were outstanding.
(4) As of March 31, 2022. Except for holders of our ADSs, none of our major shareholders have different voting rights from those of other shareholders. As of February 29, 2024, a total of 727,240,126 common shares were outstanding.
With certain limited exceptions, holders of common shares that are not ROC persons are required to hold their common shares through their custodians in the ROC. As of February 28, 2023, 87,815,054 common shares were registered in the name of a nominee of Citibank, N.A., the depositary under our ADSs Deposit Agreement.
With certain limited exceptions, holders of common shares that are not ROC persons are required to hold their common shares through their custodians in the ROC. As of February 29, 2024, 85,853,414 common shares were registered in the name of a nominee of Citibank, N.A., the Depositary under our ADSs Deposit Agreement.
Citibank, N.A., has advised us that, as of February 28, 2023, 4,390,752 ADSs, representing 87,815,054 common shares, were held of record by Cede & Co. and 30 other registered shareholders domiciled in and outside of the United States. We have no further information as to common shares held, or beneficially owned, by US persons. Related Party Transactions None.
Citibank, N.A., has advised us that, as of February 29, 2024, 4,292,670 ADSs, representing 85,853,414 common shares, were held of record by Cede & Co. and 29 other registered shareholders domiciled in and outside of the United States. We have no further information as to common shares held, or beneficially owned, by US persons.
Added
Related Party Transactions Unimos Microelectronics (Shanghai) Co., Ltd. We conducted our PRC operations through Unimos Shanghai, the 45.0242%-owned affiliate of ChipMOS BVI, our controlled subsidiary. On December 21, 2023, the Board of Directors of the Company has approved the proposed RMB 979.3 million sale of the equity interests in Unimos Shanghai by ChipMOS BVI.
Added
Under the proposed agreement, ChipMOS BVI will sell its entire remaining 45.0242% equity interests in Unimos Shanghai to Suzhou Oriza PuHua ZhiXin Equity Investment Partnership (L.P.) and other local Chinese investment management companies.
Added
Total consideration under the proposed all-cash sale of RMB 979.3 million will be paid to ChipMOS BVI in two installments, with the second installment to be paid six months after the first installment.
Added
As of December 31, 2023, the equity transfer was not completed, and therefore, the assets and the equity related to Unimos Shanghai have been reclassified to non-current assets held for sale according to IFRS 5, “Non-current Assets Held for Sale and Discontinued Operations”. See Note 14 to our consolidated financial statements contained in this Annual Report on Form 20-F.

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