##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F





(Mark One)

|☐ | Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------------------

or



|☒ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2016

or



|☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

or



|☐ | Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report

Commission file number 000-30702





Siliconware Precision Industries Co., Ltd.

(Exact Name of Registrant as Specified in Its Charter)





Taiwan,
Republic of China

(Jurisdiction of Incorporation or Organization)

No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, ROC

(Address of Principal Executive Offices)

Eva Chen, telephone: +886 (4) 2534-1525, fax: +886 (4) 2534-6278,

No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, ROC

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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



|                                                              |  |                                                               
|------------------------------------------------------------- |  | --------------------------------------------------------------
|Title of Each Class                                           |  | Name of Each Exchange On Which
Registered                     
|American Depositary Shares, each representing 5 Common Shares |  | The NASDAQ Stock Market LLC
(The NASDAQ Global Select Market) 
|Common Shares, par value NT$10 per share                      |  | The NASDAQ Stock Market LLC
(The NASDAQ Global Select Market)*



|* | Not for trading, but only in connection with the registration of American Depositary Shares representing such Common Shares pursuant to the requirements of the Securities and Exchange Commission.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

None

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

None





Indicate the number of outstanding shares of each of the Issuers classes of capital or common stock as of the close of the period
covered by the annual report.

3,116,361,139 Common Shares were outstanding as of December 31, 2016

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

Yes  ☒             No  ☐

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

Yes  ☐             No  ☒

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

Yes  ☒             No  ☐

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

Yes  ☐            
No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ☒    Accelerated
filer  ☐    Non-accelerated filer  ☐

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

U.S.
GAAP  ☐

International Financial Reporting Standards as issued by the International Accounting Standards
Board  ☒ Other  ☐

If Other has been checked in response to the previous question,
indicate by check mark which financial statement item the registrant has elected to follow. Item 17   ☐ Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes  ☐             No  ☒

{APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS}

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes  ☐             No  ☐









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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD.

FORM 20-F ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2016

TABLE OF CONTENTS



|                                                                      |  |                                                                              |   |      |    | 
|--------------------------------------------------------------------- |  | ---------------------------------------------------------------------------- | - | ---- | -- | 
|                                                                      |  |                                                                              |   | Page |   
|Supplemental Information                                              |  |                                                                              | 1 |     
|Forward-Looking Statements in This Annual Report
 May Not Be Accurate |  |                                                                              | 1 |     
|PART I                                                                |  |                                                                              |   |      | 2  | 
|Item 1.                                                               |  | Identity of Directors, Senior Management and Advisers                        |   |      | 2  | 
|Item 2.                                                               |  | Offer Statistics and Expected Timetable                                      |   |      | 2  | 
|Item 3.                                                               |  | Key Information                                                              |   |      | 2  | 
|Item 4.                                                               |  | Information on the Company                                                   |   |      | 19 | 
|Item 4A.                                                              |  | Unresolved Staff Comments                                                    |   |      | 34 | 
|Item 5.                                                               |  | Operating and Financial Review and Prospects                                 |   |      | 34 | 
|Item 6.                                                               |  | Directors, Senior Management and Employees                                   |   |      | 46 | 
|Item 7.                                                               |  | Major Shareholders and Related Party Transactions                            |   |      | 51 | 
|Item 8.                                                               |  | Financial Information                                                        |   |      | 52 | 
|Item 9.                                                               |  | The Offer and Listing                                                        |   |      | 54 | 
|Item 10.                                                              |  | Additional Information                                                       |   |      | 56 | 
|Item 11.                                                              |  | Quantitative and Qualitative Disclosures About Market Risk                   |   |      | 80 | 
|Item 12.                                                              |  | Description of Securities Other Than Equity Securities                       |   |      | 82 | 
|PART II                                                               |  |                                                                              |   |      | 83 | 
|Item 13.                                                              |  | Defaults, Dividend Arrearages and Delinquencies                              |   |      | 83 | 
|Item 14.                                                              |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |   |      | 83 | 
|Item 15.                                                              |  | Controls and Procedures                                                      |   |      | 83 | 
|Item 16A.                                                             |  | Audit Committee Financial Expert                                             |   |      | 84 | 
|Item 16B.                                                             |  | Code of Ethics                                                               |   |      | 84 | 
|Item 16C.                                                             |  | Principal Accountant Fees and Services                                       |   |      | 85 | 
|Item 16D.                                                             |  | Exemptions from the Listing Standards for Audit Committees                   |   |      | 85 | 
|Item 16E.                                                             |  | Purchase of Equity Securities by the Issuer and Affiliated Purchasers        |   |      | 85 | 
|Item 16F.                                                             |  | Change in Registrants Certifying Accountant                                 |   |      | 85 | 
|Item 16G.                                                             |  | Corporate Governance                                                         |   |      | 85 | 
|Item 16H.                                                             |  | Mine Safety Disclosure                                                       |   |      | 86 | 
|PART III                                                              |  |                                                                              |   |      | 87 | 
|Item 17.                                                              |  | Financial Statements                                                         |   |      | 87 | 
|Item 18.                                                              |  | Financial Statements                                                         |   |      | 87 | 
|Item 19.                                                              |  | Exhibit Index                                                                |   |      | 87 | 
|                                                                      | 
|Exhibit 1.1                                                           |  |                                                                              |   |     
|Exhibit 4.3                                                           |  |                                                                              |   |     
|Exhibit 4.4                                                           |  |                                                                              |   |     
|Exhibit 8.1                                                           |  |                                                                              |   |     
|Exhibit 12.1                                                          |  |                                                                              |   |     
|Exhibit 12.2                                                          |  |                                                                              |   |     
|Exhibit 13.1                                                          |  |                                                                              |   |     
|Exhibit 13.2                                                          |  |                                                                              |   |     
|Exhibit 99.1                                                          |  |                                                                              |   |     



i



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Supplemental Information

All references to we, us, our and our company in this annual report are to Siliconware
Precision Industries Co., Ltd. and its consolidated subsidiaries, unless the context otherwise requires. All references to shares and common shares are to our common shares, par value NT$10 per share, and to ADSs
are to our American depositary shares, each of which represents five of our common shares. We have an ADS facility with JPMorgan Chase Bank, N.A. acting as depositary under a third amended and restated deposit agreement, dated as of January 6,
2015. All references to Taiwan are to the island of Taiwan and other areas under the effective control of the Republic of China. All references to the government or the Republic of China government are to the
government of the Republic of China. All references to the Securities and Futures Bureau are to the Securities and Futures Bureau of the Republic of China or its predecessors, as applicable. ROC GAAP means the generally
accepted accounting principles of the Republic of China, and U.S. GAAP means the generally accepted accounting principles of the United States. All references to IFRS in this annual report are references to the International
Financial Reporting Standards as issued by the International Accounting Standard Board.

The financial statements included in this annual
report are prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. The consolidated financial statements included in our annual reports on Form 20-F previously filed with the U.S. Securities and Exchange Commission, or the SEC, in respect of the years before 2013 were prepared in accordance with U.S. GAAP.

In accordance with the requirements of the Republic of China Financial Supervisory Commission, or the FSC, beginning on January 1, 2013,
we have adopted IFRS as endorsed by the FSC, or Taiwan IFRS, for reporting our annual and interim consolidated financial statements in the ROC. There are certain material differences between Taiwan IFRS and IFRS. We will furnish a report on Form 6-K in March 2017 explaining the impacts of differences between Taiwan IFRS and IFRS with respect to our consolidated financial results in 2016.

Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Unless otherwise indicated, or the context
otherwise requires, references in this annual report to financial and operational data for a particular year refer to the fiscal year of our company ended December 31 of that year.

We publish our consolidated financial statements in New Taiwan dollars, the lawful currency of the Republic of China. In this annual report,
NT$, NTD and NT dollars mean New Taiwan dollars, $, US$ and U.S. dollars mean United States dollars.

Forward-Looking Statements in This Annual Report May Not Be Accurate

Our disclosure and analysis in this annual report contain or incorporate by reference some forward-looking statements. Our forward-looking
statements contain information regarding, among other things, our financial condition, future expansion plans and business strategy. We have based these forward-looking statements on our current expectations and projections about future events. You
can identify these statements by the fact that they do not relate strictly to historical or current facts. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks,
uncertainties and assumptions about us, including, among other things:



| |  |  | the intensely competitive semiconductor and personal computer industries and markets;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | risks associated with international business activities;
| | - |  | --------------------------------------------------------



| |  |  | our dependence on key personnel;
| | - |  | --------------------------------



| |  |  | natural disasters, such as earthquakes and droughts, which are beyond our control;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | general economic and political conditions, including those related to the semiconductor and personal computer industries;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



1



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| |  |  | possible disruptions in commercial activities caused by human-induced disasters, including terrorist activity and armed conflict, and outbreaks of contagious diseases, such as avian influenza which reduce end-user purchases relative to expectations and orders;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations in foreign currency exchange rates;
| | - |  | ------------------------------------------------



| |  |  | additional disclosures we make in our previous and future Form 20-F annual reports and Form 6-K periodic reports to the Securities and
Exchange Commission, or the SEC; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | those other risks identified in Item 3. Key InformationD. Risk Factors of this annual report.
| | - |  | ------------------------------------------------------------------------------------------------

The words anticipate, believe, estimate, expect, intend, plan,
will, shall and similar expressions, as they relate to us, are intended to identify a number of these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur and our actual results could differ materially from those
anticipated in these forward-looking statements.

PART I



|Item 1. | Identity of Directors, Senior Management and Advisers
|------- | -----------------------------------------------------

Not applicable.



|Item 2. | Offer Statistics and Expected Timetable
|------- | ---------------------------------------

Not applicable.



|Item 3. | Key Information
|------- | ---------------

A. Selected Financial Data

The selected consolidated financial data set forth below as of and for the years ended December 31, 2012, 2013, 2014, 2015 and 2016 have
been derived from our audited consolidated financial statements which have been prepared in accordance with IFRS.

The selected financial
data shown below should be read in conjunction with Item 5. Operating and Financial Review and Prospects, and the financial statements and the notes to those statements included elsewhere in this annual report.



2



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|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|---------------------------------------------------------------------------- |  | ---------------------------------------------------------------------- | ------- | ------ | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------- | ------ | ------ |  | ------- | - |  |  | -------- | -
|                                                                             |  | Years Ended December 31,                                               |        
|                                                                             |  | 2012                                                                   |         |        | 2013 |  |         | 2014 |  |  | 2015    |   |  | 2016 |        
|                                                                             |  | NT$                                                                    |         |        | NT$  |  |         | NT$  |  |  | NT$     |   |  | NT$  |         |        | US$(1) | 
|                                                                             |  | (in millions, except earnings or dividends per share
and per ADS data) |        
|Income Statement Data:                                                       |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Net operating revenues                                                       |  |                                                                        | 64,655  |        |      |  | 69,356  |      |  |  | 83,071  |   |  |      | 82,840  |        |        |  | 85,112  |   |  |  | 2,626.9  |  
|Operating costs                                                              |  |                                                                        | (52,916 | )      |      |  | (54,926 | )    |  |  | (62,081 | ) |  |      | (61,231 | )      |        |  | (65,762 | ) |  |  | (2,029.7 | )
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Gross profit                                                                 |  |                                                                        | 11,739  |        |      |  | 14,430  |      |  |  | 20,990  |   |  |      | 21,609  |        |        |  | 19,350  |   |  |  | 597.2    |  
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Operating expenses                                                           |  |                                                                        | (5,351  | )      |      |  | (7,391  | )    |  |  | (7,169  | ) |  |      | (8,355  | )      |        |  | (8,564  | ) |  |  | (264.3   | )
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Other income and expenses                                                    |  |                                                                        | 5       |        |      |  | 61      |      |  |  | 284     |   |  |      | (256    | )      |        |  | (117    | ) |  |  | (3.6     | )
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Operating profit                                                             |  |                                                                        | 6,392   |        |      |  | 7,100   |      |  |  | 14,105  |   |  |      | 12,998  |        |        |  | 10,669  |   |  |  | 329.3    |  
|Equity investment gain( loss)                                                |  |                                                                        | (9      | )      |      |  | (85     | )    |  |  | (172    | ) |  |      | (184    | )      |        |  | 3       |   |  |  | 0.1      |  
|Interest income                                                              |  |                                                                        | 118     |        |      |  | 103     |      |  |  | 156     |   |  |      | 155     |        |        |  | 148     |   |  |  | 4.6      |  
|Other gains and losses                                                       |  |                                                                        | 237     |        |      |  | 437     |      |  |  | 483     |   |  |      | 58      |        |        |  | (104    | ) |  |  | (3.2     | )
|Finance costs                                                                |  |                                                                        | (197    | )      |      |  | (271    | )    |  |  | (403    | ) |  |      | (565    | )      |        |  | (562    | ) |  |  | (17.4    | )
|Impairment loss                                                              |  |                                                                        | (95     | )      |      |  |        |      |  |  | (442    | ) |  |      | (1,856  | )      |        |  |        |   |  |  |         |  
|Gains (losses) on disposal of investments                                    |  |                                                                        | 231     |        |      |  | (4      | )    |  |  | 639     |   |  |      | 127     |        |        |  | 217     |   |  |  | 6.7      |  
|Gains (losses) on financial liabilities at fair value through profit or loss |  |                                                                        |        |        |      |  |        |      |  |  | (321    | ) |  |      | (703    | )      |        |  | 1,025   |   |  |  | 31.6     |  
|Dividends income                                                             |  |                                                                        | 115     |        |      |  | 169     |      |  |  | 223     |   |  |      | 347     |        |        |  | 278     |   |  |  | 8.6      |  
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Income before income tax                                                     |  |                                                                        | 6,792   |        |      |  | 7,449   |      |  |  | 14,268  |   |  |      | 10,377  |        |        |  | 11,674  |   |  |  | 360.3    |  
|Income tax expense                                                           |  |                                                                        | (1,230  | )      |      |  | (1,607  | )    |  |  | (3,050  | ) |  |      | (1,366  | )      |        |  | (1,867  | ) |  |  | (57.6    | )
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Net income                                                                   |  |                                                                        | 5,562   |        |      |  | 5,842   |      |  |  | 11,218  |   |  |      | 9,011   |        |        |  | 9,807   |   |  |  | 302.7    |  
|                                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Earnings per share                                                           |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Basic                                                                        |  |                                                                        | 1.81    |        |      |  | 1.89    |      |  |  | 3.60    |   |  |      | 2.89    |        |        |  | 3.15    |   |  |  | 0.10     |  
|Diluted                                                                      |  |                                                                        | 1.80    |        |      |  | 1.87    |      |  |  | 3.57    |   |  |      | 2.86    |        |        |  | 2.65    |   |  |  | 0.08     |  
|Shares used in per share calculation (average)                               |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Basic                                                                        |  |                                                                        | 3,078   |        |      |  | 3,098   |      |  |  | 3,116   |   |  |      | 3,116   |        |        |  | 3,116   |   |  |  | 3,116    |  
|Diluted                                                                      |  |                                                                        | 3,094   |        |      |  | 3,117   |      |  |  | 3,139   |   |  |      | 3,150   |        |        |  | 3,411   |   |  |  | 3,411    |  
|Earnings per ADS                                                             |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Basic                                                                        |  |                                                                        | 9.03    |        |      |  | 9.43    |      |  |  | 18.00   |   |  |      | 14.46   |        |        |  | 15.73   |   |  |  | 0.49     |  
|Diluted                                                                      |  |                                                                        | 8.99    |        |      |  | 9.37    |      |  |  | 17.87   |   |  |      | 14.30   |        |        |  | 13.23   |   |  |  | 0.41     |  
|Dividends per share                                                          |  |                                                                        | 1.67    | (Note) |      |  | 1.80    |      |  |  | 3.00    |   |  |      | 3.8     | (Note) |        |  | 1.75    |   |  |  | 0.05     |  
|ADSs used in per ADS calculation (average)                                   |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Basic                                                                        |  |                                                                        | 616     |        |      |  | 620     |      |  |  | 623     |   |  |      | 623     |        |        |  | 623     |   |  |  | 623      |  
|Diluted                                                                      |  |                                                                        | 619     |        |      |  | 623     |      |  |  | 628     |   |  |      | 630     |        |        |  | 682     |   |  |  | 682      |  
|Other Data:                                                                  |  |                                                                        |         |        |      |  |         |      |  |  |         |   |  |      |         |        |        |  |         |   |  |  |          |  
|Capital expenditures                                                         |  |                                                                        | 15,142  |        |      |  | 14,979  |      |  |  | 19,561  |   |  |      | 13,855  |        |        |  | 15,295  |   |  |  | 472.1    |  
|Depreciation and amortization                                                |  |                                                                        | 10,100  |        |      |  | 11,034  |      |  |  | 12,436  |   |  |      | 13,514  |        |        |  | 13,291  |   |  |  | 410.2    |  

Note: Cash dividends include earnings distribution and capital surplus.



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|                                                      |  |                                                                        |        |  |      |  |         |      |  |  |         |  |  |      |         |  |        |  |         |  |  |  |         | 
|----------------------------------------------------- |  | ---------------------------------------------------------------------- | ------ |  | ---- |  | ------- | ---- |  |  | ------- |  |  | ---- | ------- |  | ------ |  | ------- |  |  |  | ------- | 
|                                                      |  | As of December 31,                                                     |       
|                                                      |  | 2012                                                                   |        |  | 2013 |  |         | 2014 |  |  | 2015    |  |  | 2016 |        
|                                                      |  | NT$                                                                    |        |  | NT$  |  |         | NT$  |  |  | NT$     |  |  | NT$  |         |  | US$(1) | 
|                                                      |  | (in millions, except earnings or dividends per share and per
ADS data) |       
|Statement of Financial Position Data:                 |  |                                                                        |        |  |      |  |         |      |  |  |         |  |  |      |         |  |        |  |         |  |  |  |         | 
|Cash and cash equivalents                             |  |                                                                        | 15,852 |  |      |  | 16,975  |      |  |  | 30,155  |  |  |      | 25,191  |  |        |  | 24,476  |  |  |  | 755.4   | 
|Working capital                                       |  |                                                                        | 14,221 |  |      |  | 15,295  |      |  |  | 23,632  |  |  |      | 18,108  |  |        |  | 9,363   |  |  |  | 289.0   | 
|Total assets                                          |  |                                                                        | 91,853 |  |      |  | 101,819 |      |  |  | 129,752 |  |  |      | 123,209 |  |        |  | 123,727 |  |  |  | 3,818.7 | 
|Short-term debt and current portion of long-term debt |  |                                                                        | 5,617  |  |      |  | 5,688   |      |  |  | 9,660   |  |  |      | 8,781   |  |        |  | 18,955  |  |  |  | 585.0   | 
|Long-term debt                                        |  |                                                                        | 12,038 |  |      |  | 15,356  |      |  |  | 24,670  |  |  |      | 20,485  |  |        |  | 14,840  |  |  |  | 458.0   | 
|Total liabilities                                     |  |                                                                        | 32,935 |  |      |  | 39,947  |      |  |  | 58,979  |  |  |      | 53,680  |  |        |  | 58,607  |  |  |  | 1,808.8 | 
|Capital stock                                         |  |                                                                        | 31,164 |  |      |  | 31,164  |      |  |  | 31,164  |  |  |      | 31,164  |  |        |  | 31,164  |  |  |  | 961.8   | 
|Total stockholders equity                            |  |                                                                        | 58,918 |  |      |  | 61,872  |      |  |  | 70,774  |  |  |      | 69,529  |  |        |  | 65,120  |  |  |  | 2,009.9 | 



|(1) | Amounts translated for convenience at NT$32.40 to US$1.00, which was the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 30, 2016.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Currency Translations and Exchange Rates

We have translated certain New Taiwan dollars, or NT dollars, amounts included in this annual report into U.S. dollars for the convenience of
the readers. The rate we used for the translations was NT$32.40 = US$1.00, which was the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 30, 2016. The translation does not mean that NT
dollars could actually be converted into U.S. dollars at that rate. The following table shows the noon buying rates for NT dollars expressed in NT dollar per US$1.00.



|                        |  |            |       |  |      |  |       |     |  |  |              |  |  |  |       | 
|----------------------- |  | ---------- | ----- |  | ---- |  | ----- | --- |  |  | ------------ |  |  |  | ----- | 
|Year Ended December 31, |  | Average(1) |       |  | High |  |       | Low |  |  | At PeriodEnd | 
|2012                    |  |            | 29.47 |  |      |  | 30.28 |     |  |  | 28.96        |  |  |  | 29.05 | 
|2013                    |  |            | 29.73 |  |      |  | 30.20 |     |  |  | 28.93        |  |  |  | 29.83 | 
|2014                    |  |            | 30.38 |  |      |  | 31.80 |     |  |  | 29.85        |  |  |  | 31.60 | 
|2015                    |  |            | 31.80 |  |      |  | 33.17 |     |  |  | 30.37        |  |  |  | 32.79 | 
|2016                    |  |            | 32.22 |  |      |  | 33.74 |     |  |  | 31.05        |  |  |  | 32.40 | 
|October                 |  |            | 31.59 |  |      |  | 31.79 |     |  |  | 31.36        |  |  |  | 31.54 | 
|November                |  |            | 31.75 |  |      |  | 32.01 |     |  |  | 31.41        |  |  |  | 31.92 | 
|December                |  |            | 32.00 |  |      |  | 32.42 |     |  |  | 31.72        |  |  |  | 32.40 | 
|2017 (through March 31) |  |            | 30.74 |  |      |  | 32.37 |     |  |  | 30.14        |  |  |  | 30.38 | 
|January                 |  |            | 31.65 |  |      |  | 32.37 |     |  |  | 31.19        |  |  |  | 31.19 | 
|February                |  |            | 30.85 |  |      |  | 31.17 |     |  |  | 30.61        |  |  |  | 30.64 | 
|March                   |  |            | 30.65 |  |      |  | 31.03 |     |  |  | 30.14        |  |  |  | 30.38 | 



Source:
Federal Reserve Statistical Release, Board of Governors of the Federal Reserve System.



|(1) | Annual averages are calculated using the average of the exchange rates on the last day of each month during the period. Monthly averages are calculated using the average of the daily rates during the relevant period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B. Capitalization and Indebtedness

Not applicable.

C.
Reasons for the Offer and Use of Proceeds

Not applicable.



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D. Risk Factors

Our business and operations are subject to various risks, many of which are beyond our control. If any of the risks described below actually
occurs, our services, financial condition or results of operations could be seriously harmed.

Risks Relating to Our Financial
Condition and Business

There can be no assurance that the share purchase transaction with ASE will be successfully
consummated. Potential uncertainty involving this transaction may adversely affect our business and the market price of our shares and ADSs

On June 30, 2016, we entered into the Joint Share Exchange Agreement with Advanced Semiconductor Engineering, Inc., or ASE. If the Share
Purchase (as defined in Item 4  A. History and Development of the Company  Share Purchase Transaction with ASE) is completed, (i) each share of our company issued immediately prior to the effective time of the
transaction will be transferred to ASE Industrial Holding Co., Ltd., or HoldCo, a holding company incorporated by the shareholders of ASE, in exchange for the right to receive the Final Per Share Consideration (as defined in Item 4  A.
History and Development of the Company  Share Purchase Transaction with ASE), and (ii) each ADS of our company, representing five shares of our company, will be cancelled in exchange for the right to receive the Final Per ADS
Consideration (as defined in Item 4  A. History and Development of the Company  Share Purchase Transaction with ASE). After the completion of the Share Purchase, we will become a wholly-owned subsidiary of HoldCo and our
shares will no longer be listed on the Taiwan Stock Exchange and our ADSs will no longer be listed on NASDAQ. Completion of the Share Purchase is subject to the satisfaction or waiver of the conditions set forth in the Joint Share Exchange
Agreement, including approval by our shareholders of the Share Purchase at an extraordinary general meeting and receipt by us and ASE of the antitrust approvals or clearance by Taiwan Fair Trade Commission, or the TFTC, the Ministry of Commerce of
the PRC, or the MOFCOM, and the United States Federal Trade Commission, or the U.S. FTC, in respect of the Share Purchase. Currently, we have received the antitrust clearance from TFTC, but there can be no assurance as to if and when regulatory
approvals will be obtained in the PRC, if and when the U.S. FTC will complete its investigation without seeking an injunction, or the conditions or limitations that such regulatory authorities may seek to impose. The Share Purchase, whether or not
consummated, presents a risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters. Potential uncertainty involving the Share Purchase may adversely affect our business and
the market price of our shares and ADSs.

Any global systemic economic and financial crisis could negatively affect our business,
results of operations, and financial condition

In recent times, several major systemic economic and financial crises negatively
affected global business, banking and financial sectors, including the semiconductor industry and markets. These types of crises, including the prolonged decrease in economic growth or insolvency of major countries, could cause turmoil in global
markets, resulting in declines in demand for our semiconductor packaging and testing services from which we generate our revenue. For example, there could be knock-on effects from these types of crises on our
business, including significant decreases in orders from our customers, insolvency of key suppliers resulting in service delays, inability of customers to obtain credit to finance purchases of our services, customer insolvencies, weak consumer
confidence, diminished consumer and business spending and asset depreciation negatively impacting our operations. Any systemic economic or financial crisis could cause revenues for the semiconductor industry as a whole to decline dramatically and
could materially and adversely affect our results of operations.



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The cyclical nature of the semiconductor industry makes us particularly vulnerable to
economic downturns and changes in the semiconductor industry

Because our manufacturing services are, and will continue to be,
dependent on the requirements of semiconductor companies for independent testing and assembly services, any downturn in the highly cyclical semiconductor industry, caused by economic downturns or other reasons, may reduce demand for our
manufacturing services and adversely affect our results of operations. Variations in order levels from our customers and in service fee rates may result in volatility in our net operating revenues and earnings. The markets for semiconductors are
also characterized by rapid technological change, evolving industry standards and periods of heightened competition. If demand for semiconductor capacity does not keep pace with the growth of supply, or further declines, our manufacturing services
would be subject to more intense competition and our results of operations may suffer because of the resulting downward pricing pressure and capacity underutilization. Any increased competition may cause average selling prices of many of our
semiconductor packages and testing services to decrease significantly, which may lead to pressure on our gross margins and negatively affect our operating results. Future downturns in the semiconductor industry may be severe. In the event of any
future downturn, our average selling prices may decline without a corresponding decrease in our high fixed costs. This could lead to a decline in our profitability, which would seriously harm our manufacturing services.

Our operating results fluctuate significantly, which may affect the value of your investments

Our historical net operating revenues and other results of operations have varied, at times significantly, from quarter to quarter. Our future
net operating revenues and other results of operations may vary significantly due to a combination of factors. These factors include:



| |  |  | our ability to develop and implement new technologies. If we are unable to successfully implement new technologies in a timely manner, our operating results could suffer because we would allow our competitors to seize
the opportunities in developing new markets;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in our mix of manufacturing services or our customers preferences. When we discontinue or add manufacturing services or when our customers demand changes, our operating results usually fluctuate; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in capacity utilization. When capacity utilization is low, such as in times of market downturns, we may need to adjust our mix of manufacturing services to respond to changes in demand and to adjust our prices
sufficiently enough to maintain the level of our capacity utilization.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Moreover, the substrate packaging which uses
higher-cost raw materials has caused the costs of production for semiconductor packaging to rise significantly. If our revenues do not grow and we are unable to reduce our expenses, our profitability will suffer.

We do not have any significant backlog because our customers do not place purchase orders far in advance, which makes us vulnerable to
sudden changes in customer demand

Our customers generally do not place purchase orders far in advance, and our contracts with
major domestic customers do not generally require minimum purchase of our manufacturing services. In addition, our customers purchase orders have varied significantly from period to period because demand for their products is often volatile.
As a result, we do not typically operate with any significant backlog. The lack of a significant backlog makes it difficult for us to forecast our net operating revenues in future periods and causes our operating results to fluctuate from period to
period. Moreover, our expense levels are based in part on our expectations of future revenue and we may be unable to adjust costs in a timely manner to compensate for revenue shortfalls. We expect that in the future our net operating revenues in any
quarter will continue to be substantially dependent upon purchase orders received in that quarter. We cannot assure you that any of our customers will continue to place orders with us in the future at the same levels as in prior periods. We also
cannot assure you that our customers orders will be consistent with our expectations when we made or will make the necessary investments in raw materials, labor and equipment.

If we are unable to maintain a steady return to our former capacity utilization rates, our profitability would be adversely affected

Our profitability is affected by the capacity utilization rates for our machinery and equipment. Our capacity utilization in 2016
was affected by inconsistent demand from customers due to the continued competition in the global market for mobile devices and personal computers, which caused our customers to frequently change their market strategy and adjust inventory levels to
handle the pressure from their competitors. Although we improved our capacity utilization rate in 2016, compared with 2015, we cannot assure you that we will continue to improve our capacity utilization in the future. Our operations, in particular
our bumping, chip scale package and testing operations have high fixed costs. We cannot assure you that we will be able to maintain or surpass our past gross margin levels if we cannot consistently achieve or maintain relatively high capacity
utilization rates.



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Many uncontrollable factors have caused and will continue to cause diverse capacity utilization
in our different manufacturing processes. The continuing instability in demand has made it difficult to meet original planned weight in different services and sustain a high utilization rate. Any uncertainty in the semiconductor industry as a result
of such events would harm our capacity utilization, and as a result may adversely affect our profitability and results of operations in the future. Given the high fixed costs of our services, high capacity utilization allows us to maintain higher
gross margins because it allows us to allocate fixed costs over a greater number of units we package and test. Increases or decreases in capacity utilization rates will have a significant effect on our manufacturing services. Accordingly, our
ability to enhance our gross margins will depend, in part, on our ability to continue to increase our capacity utilization rates.

In
order to increase or sustain our capacity utilization, we must:



| |  |  | ensure that our packaging and testing technologies meet our customers demands;
| | - |  | -------------------------------------------------------------------------------



| |  |  | install advanced equipment in anticipation of new business; and
| | - |  | ---------------------------------------------------------------



| |  |  | prevent disruption of operations caused by fire, accidents, mechanical and technical failures, expansion, introduction of new packages or relocation of equipment.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

If demand for our manufacturing services does not meet our expectations, our capacity utilization would decrease and our profitability would
suffer.

We depend on a small number of customers for a substantial portion of our revenues and a loss of any one of these customers
would result in the loss of a significant portion of our revenues

We are dependent on a small group of customers for a
substantial portion of our manufacturing services. In 2014, 2015 and 2016, 69.5%, 73.3% and 75.5% of our net operating revenues, respectively, were derived from sales to our top ten customers. In 2016, our largest customer accounted for 18.8% of our
net operating revenues. We expect that we will continue to depend on a relatively small number of customers for a significant portion of our net operating revenues because of the concentration of demand in the semiconductor industry for our
manufacturing services. Our ability to maintain close and satisfactory relationships with our customers is important to the ongoing success and profitability of our manufacturing services. Few of our customers are presently obligated to purchase
packaging or testing services or to provide us with forecasts of product purchases for any period. If any of our significant customers reduces, delays or cancels its orders to a significant degree, our manufacturing services would be harmed because
each of these customers accounts for a significant portion of our net operating revenues.

If capital resources required for
our future expansion plans are not available, we may be unable to successfully implement our services strategy

We have engaged in
equipment and facilities expansion in recent years to upgrade our technology and equipment. Our business growth in the future will continue to require substantial capital expenditures to fund our expansion. We periodically review and adjust our
capital expenditure plans to address our expectation of demand for our services and prevailing industry trends. The growing demand for our manufacturing services has and will continue to require significant capital expenditures on packaging
technology and equipment. In making these planned capital expenditures, we may need to obtain additional capital. We may be unable to accurately estimate the timing and amount of our capital requirements, which depend on a number of factors,
including demand for our manufacturing services, availability of equipment and market conditions. In addition, we cannot assure you that additional financing will be available on satisfactory terms to us, or at all, when we require additional
financing, which could have a material adverse effect on our business and results of operations.



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If we cannot compete successfully in our industry, our current and potential customers
would likely decide not to use our services, which would seriously harm our business

Although the independent semiconductor
packaging and testing industry is very competitive, several segments of the industry, such as advanced packaging, are not as competitive because they are dominated by a few major players. We face substantial competition from established packaging
and testing companies, including Advanced Semiconductor Engineering, Inc. (Taiwan), Amkor Technology Inc. (USA) and Jiangsu Changjiang Electronics Technology Co., Ltd (China). We may face additional competition from new competitors in our industry
in emerging markets other than Taiwan, such as the Peoples Republic of China, or the PRC. For example, we may face increased competition from the PRC for assembly and testing services of integrated circuits. On June 24, 2014, the
PRCs National Development and Reform Commission, Ministry of Science, Ministry of Finance and Ministry of Industry and Information Technology simultaneously announced the National Program to Promote the Development of the Integrated Circuit
Industry. Under this policy, approximately RMB 100 billion (NT$467 billion or US$14.4 billion) of PRC government investment funds will be allocated to support the PRC semiconductor industry over the course of 10 years. As a result of such
influx of funding to semiconductor companies in the PRC, our existing PRC customers may be required to allocate a certain portion of their purchase orders to PRC companies, which could lead to a reduction in our business. Also, our PRC competitors
may be able to provide assembly and testing services for a lower price which could reduce our market share. To a lesser extent, we also compete with the internal packaging and testing capabilities of our customers who have in-house packaging and testing capabilities. Some of our competitors have greater technology resources or financial and other resources than we do, including established relationships with many large semiconductor
companies which are our current or potential customers. These relationships and lengthy qualification periods required by most of our potential customers may prevent us from securing new customers.

If the outsourcing trend for packaging and testing services does not continue, we could lose a significant number of our current
customers and we may be unable to implement our manufacturing services strategy plan in the future

We depend on outsourcing of
packaging and testing services by fabless semiconductor companies and integrated device manufacturers. In recent years, semiconductor companies have increasingly subcontracted parts of the semiconductor production process, including packaging and
testing, to independent companies to reduce costs and shorten production cycles. However, we cannot assure you that the outsourcing trend will continue. If integrated device manufacturers become dissatisfied with the services of independent
semiconductor packaging and testing companies, they may return to utilizing in-house packaging and testing capabilities. A reversal of, or slowdown in, the outsourcing trend would harm our business and make it
difficult for us to implement our growth plan in the future.

The trend of adopting protectionist measures in certain countries,
including the United States, could have a material adverse impact on our results of operations and financial condition

Governments in the United States, China, Europe and certain other countries have implemented fiscal and monetary programs to stimulate
economic growth as a result of the recent economic downturn, and many of these programs include protectionist measures that encourage the use of domestic products and labor. If the governments in the countries where our customers are located enact
protectionist measures that encourage the use of domestic products and labor, demand for our services could be adversely affected. Recent policy developments by the governments in China also suggest an increased unwillingness to allow international
companies to invest in or acquire local businesses. Since some of our direct customers and other downstream customers in the supply chain are located in or have operations in the countries where protectionist measures were adopted, such
protectionist measures could have a material adverse effect on our business in the future.



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Our production schedule may be delayed and our business may be adversely affected if we are
unable to obtain raw materials from our suppliers at acceptable prices, qualities and quantities

We must obtain sufficient
quantities of raw materials at acceptable prices in a timely manner. We source most of our raw materials, including critical materials, such as gold wire, bumping materials, substrates and lead-frames, from a limited group of suppliers. We purchase
all of our materials on a purchase order basis at prevailing market prices and have no long-term contracts with any of our suppliers. From time to time, suppliers may extend lead times or limit the supply of required materials to us because of
supply capacity constraints during market upturns for the semiconductor industry. Consequently, we have experienced, and may in the future experience, difficulty in obtaining acceptable 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. We cannot assure you that we will be able to obtain in the future sufficient quantities of raw materials and other supplies of
an acceptable quality. Our inability to obtain raw materials in a timely and cost effective manner would cause us to delay our production and delivery schedules, which may result in the loss of our customers and revenues.

Gold wire is a substantial raw material to us. The spot price of gold fluctuates and may be unpredictable. The increase in the price of gold
wire will result in the decrease in our gross margin. To the extent we are not able to offset any increases in our raw material costs, our gross margins may be adversely impacted.

If we are unable to obtain equipment from our suppliers, we may be forced to delay any future expansion plans

We need to purchase new packaging and testing equipment if we decide to expand our operations. From time to time, increased demand for new
equipment may cause lead times to extend beyond those normally required by equipment vendors. For example, in the past, increased demand for equipment caused some equipment suppliers to only partially satisfy our equipment orders in the normal lead
time frame during market upturns for the semiconductor industry. The unavailability of equipment or failures to deliver equipment could delay implementation of our future expansion plans and impair our ability to meet customer orders. If we are
unable to implement our future expansion plans or meet customer orders, we could lose potential and existing customers. Generally, we do not enter into binding equipment purchase agreements and we acquire our equipment on a purchase order basis,
which exposes us to substantial risks. For example, sudden changes in foreign currency exchange rates, particularly the U.S. dollar and Japanese yen, could result in increased prices for equipment purchased by us, which could harm our results of
operations.

If we are unable to manage our growth effectively, our expansion plans could be jeopardized

We have in the past and again recently experienced growth in the scope and complexity of our operations and in the number of our employees.
This growth has strained our managerial, financial, manufacturing and other resources. In order to manage our future growth, we must continue to implement additional operating and financial controls and hire and train additional personnel. We cannot
assure you that we will be able to do so in the future, and our failure to do so could jeopardize our future expansion plans.

Our
significant shareholder, Advanced Semiconductor Engineering Inc., or ASE, may have interests that are different from those of our other shareholders

We believe, as of March 31, 2017, ASE owned 1,037,300,000, or approximately 33.29%, of our issued and outstanding shares. ASE has the ability
to influence the outcome of matters that require shareholder votes, including the election of directors, the timing and payment of dividends, the adoption and amendments to our Articles of Incorporation and the approval of a merger or sale of
substantially all our assets. The interests of ASE may be different from or conflict with the interests of our other shareholders. ASE has taken actions in the past to delay or prevent the implementation of our business decisions, even if such
transactions may be beneficial to our other shareholders, and may take such actions again in the future.

We depend on key
management and the loss of any key management personnel may disrupt our manufacturing services

Our success depends upon the
continued service of key senior management. Members of our senior management have served us for an average of over ten years and have made substantial contributions to our growth. We do not have employment contracts with our senior management and
none of our senior management is bound by any non-competition agreement. If we lose the services of key senior management we would be unable to find and integrate replacement personnel, which could adversely
affect our services expansion.



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We depend on our technical personnel and the inability to attract and retain them would
jeopardize our operations and future expansion plans

Our business depends on technology and, accordingly, our success depends on
our ability to attract, retain and motivate highly skilled employees, particularly engineering and technical personnel. Without sufficient numbers of skilled employees, our operations would suffer, resulting in deteriorating ability to solve
operating and other issues in a timely and effective manner. Competition for qualified engineering and technical employees in Taiwan and China is intense and replacement of qualified employees is difficult. If we are unable to attract, retain and
motivate our technical personnel, our operations would be jeopardized and our operating efficiency would deteriorate.

Our failure
to comply with environmental regulations or to defend against environmental claims could expose us to serious liabilities

The
semiconductor packaging and testing processes produce wastewater, industrial waste (liquid waste and solid waste) and flue gas, which are regulated by the government. For example, wastewater is produced when silicon wafers are diced into chips using
diamond saws and cooled with running water. Wastewater is also produced from the lead-frame plating rinse process, the flux cleaning of die-attach, the ball-place process of flip-chip ball grid array
production, and rinsing in the bumping process. According to the nature of the different wastewater produced, we utilize specific treatment facilities to optimize the wastewater treatment effect and efficiency in our regulation compliance efforts.
However, we cannot assure you that we will fully eliminate the adverse effects on the environment from wastewater. Environmental claims or the failure to comply with any environmental regulations could result in damages or fines against us or
suspension of production. In May 2016, we were fined NT100,000 because of the delay of permit application for material usage change. We may be required by new regulations to acquire costly equipment or to incur other significant expenses. If we fail
to control the use of hazardous substances, we could incur future liabilities, including clean-up costs.

We and our customers and suppliers are vulnerable to natural disasters and other events beyond our control, the occurrence of which may
seriously harm our manufacturing services

Our operations and those of our customers and suppliers are particularly vulnerable to
fires, earthquakes, typhoons, droughts, floods, power losses, and similar events. Disruptions or delays in our supply chain may result in shortages of components we utilize which may in turn affect our ability to successfully perform our
semiconductor packaging and testing services. Any failure on our part to provide our services to customers may have an adverse effect on our financial condition and results of operations.

We cannot guarantee that future natural disasters will not cause material damage to our facilities or property, including work in progress, or
cause significant business interruptions. Although we maintain property and business interruption insurance for such risks, there is no guarantee that future damages or business loss from natural disasters will be covered by such insurance, that we
will be able to collect from our insurance carriers, should we choose to claim under our insurance policies, or that such coverage will be sufficient.

In addition, the production facilities of many of our suppliers and customers providers of complementary semiconductor manufacturing
services, including foundries, are located in Taiwan. If our customers are affected, it could result in a decline in the demand for our testing and assembly services. If our suppliers and providers of complementary semiconductor manufacturing
services are affected, our production schedule could be interrupted or delayed. As a result, a major earthquake, natural disaster or other disruptive event in Taiwan could severely disrupt the normal operation of business and have an adverse effect
on our financial condition and results of operations.



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Climate change, other environmental concerns and green initiatives present commercial
challenges, economic risks and physical risks that could harm our results of operations or affect the manner in which we conduct our business

Increasing climate change and environmental concerns could affect the results of our operations if any of our customers would request that we
exceed any standards set for environmentally compliant products and services. If we are unable to offer such products or offer products that are compliant, but are not as reliable due to the lack of reasonably available alternative technologies or
materials, we may lose market share to our competitors. Customers may request us to provide information on a particular products carbon footprint, which is expressed in terms of the carbon dioxide emission from our manufacture of a product. If
we are unable to provide the requested information to customers, or if we provide a higher carbon footprint figure than customers expect, we may also lose market share, which may have an adverse effect on our financial condition and results of
operations.

Further, energy costs in general could increase significantly due to climate change regulations. Therefore, our energy costs
may increase significantly if utility or power companies pass on their costs, fully or partially, such as those associated with carbon taxes, emission cap and carbon credit trading programs.

In addition, more frequent droughts and floods, extreme weather conditions and rising sea levels could occur due to climate change. The impact
of such changes could be significant as our facilities are located in Taiwan, which is an island. For example, transportation suspension caused by extreme weather conditions could harm the delivery of our supplies and the distribution of the
products to which we provide our services. We cannot predict the economic impact, if any, of disasters or climate change.

Disruptions in the international trading environment may seriously decrease our international sales

A substantial portion of our net operating revenues are derived from sales to customers located outside of Taiwan. In 2014, 2015 and 2016,
sales to our overseas customers, as determined by the jurisdiction in which each customers group is headquartered, accounted for 78.7%, 78.1% and 76.9%,respectively, of our net operating revenues. We expect sales to customers outside
of Taiwan to continue to represent a significant portion of our net operating revenues. As a result, our manufacturing services will continue to be vulnerable to disruptions in the international trading environment, including adverse changes in
foreign government regulations, political unrest and international economic downturns.

These disruptions in the international trading
environment affect the demand for our manufacturing services and change the terms upon which we provide our manufacturing services overseas, which could seriously decrease our international sales.

Compliance with laws relating to conflict minerals may increase our costs and lead to reputational challenges

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the
supply of certain minerals originating from the Democratic Republic of Congo, or the DRC, and adjoining countries that are believed to be benefiting armed groups. As a result, the SEC has adopted due diligence, disclosure and reporting requirements
for companies which manufacture products that include components containing gold, columbite-tantalite (tantalum), cassiterite (tin) and wolframite (tungsten), regardless of whether the minerals are actually mined in the DRC or adjoining countries.
We filed our first report in 2014 and we expect to file our report for the 2016 compliance year on or before the due date of May 31, 2017. In order to comply with the rules and regulations promulgated by the SEC, we will verify all relevant
factual data with our vendors in accordance with the industry accepted procedures and the Electronic Industry Citizenship Coalition and Global e-Sustainability conflict minerals reporting template, and file
the required reports annually. Although we expect that we and our vendors will be able to comply with the requirements, there can be no guarantee that we will be able to gather all the information required. In addition, such regulations could
decrease the availability and increase the prices of components used in our services, particularly if we choose (or are required by our customers) to source such components from different suppliers than we use now. Furthermore, as our supply chain
is complex, we expect that the compliance process will be both time-consuming and costly. We may face reputational challenges if we are unable to timely verify the origins of minerals contained in the components used in our services, or if our due
diligence process reveals that materials we source originate in the DRC or adjoining countries and benefit armed groups.



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Similarly, many countries are considering regulations concerning disclosure and enforcement of
human rights within supply chains. Although our own operations comply with the employment and employee rights requirements under the laws of the countries where we have operations, such proposals extend to the operations of suppliers, wherever they
may be located. While we require our suppliers and/or our supply chain to abide by the laws and/or requirements of being conflict free, and we believe our suppliers comply with applicable human rights requirements, there can be no guarantee that
they will continue to do so, or that we will be able to obtain the necessary information on their activities to comply with whatever future requirements may be enacted.

The accounting treatment for our outstanding convertible bonds, including the treatment for conversion option, redemption option and put
option embedded in our outstanding convertible bonds, could have a material effect on our reported financial results

In October
2014, we issued US$400 million unsecured convertible bonds due 2019. Since the convertible bonds are denominated in U.S. dollars which is different from our functional currency, under IFRS, we separated the conversion option, redemption option
and put option embedded in the convertible bonds, or the bond options, and recognized them as a freestanding derivative at fair value through profit or loss. To determine the fair value of the bond options of the convertible bonds, we are subject to
a mark-to-market accounting on the bond options embedded in the convertible bonds. The fair value of the bond options is determined by valuation techniques, and one of
the key assumptions used is the share price of our common shares. If the fair value of our common shares rises, mark-to-market of the bond options would lead to losses
in our financial statements. For each reporting period over the term of the convertible bonds, a gain (or loss) will be reported in our consolidated statement of comprehensive income to the extent the fair value of the bond options changes from the
previous period. Changes in fair value of the bond options generated a loss of NT$703 million in 2015 and a gain of NT$1,025 million (US$31.6 million) in 2016. See notes 15, 17 and 37 to our audited consolidated financial statements
included in this annual report.

Risks Relating to Our Technologies

If we cannot respond to rapid technology changes in the semiconductor packaging and testing industry, our profitability will suffer

The semiconductor packaging and testing industry is characterized by rapid increases in the diversity and complexity of
semiconductor packaging and testing services. As a result, we expect that we will need to continue to develop and offer more advanced packaging and testing processes in order to respond to our customers requirements as industry conditions
change. Developing and maintaining advanced packaging and testing processes requires significant research and development and capital expenditures.

In addition, advances in technology typically lead to rapid and significant price erosion and decreased margins for older manufacturing
services and may cause our current manufacturing services to become less competitive. Our failure to develop or obtain advanced packaging and testing technologies will materially and adversely affect our mix of manufacturing services and would harm
our profitability.

If we are unable to successfully perform manufacturing services within the acceptable range of precision, we
will not be able to achieve satisfactory production yields and our results of operations will suffer

The semiconductor packaging
and testing processes are complex and involve a number of precise steps. Defective packaging and testing can result from a number of factors, including:



| |  |  | the level of contaminants in the manufacturing environment;
| | - |  | -----------------------------------------------------------



| |  |  | human error;
| | - |  | ------------



| |  |  | equipment malfunction;
| | - |  | ----------------------



| |  |  | incorrect process condition setting;
| | - |  | ------------------------------------



| |  |  | use of defective raw materials; and
| | - |  | -----------------------------------



| |  |  | inadequate sample testing.
| | - |  | --------------------------



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From time to time, we expect to experience lower than anticipated production yields as a result
of the above factors, particularly in connection with the expansion of our capacity or change in our processing methods. In addition, our yield provided by new manufacturing services will be lower than average as we develop the necessary expertise
and experience to perform those manufacturing services. If we fail to maintain high quality production standards, our reputation may suffer and our customers may cancel their orders or ask for discount.

Disputes over intellectual property rights could be costly and could deprive us of technologies to stay competitive

We may suffer legal liabilities and damages if we infringe on the proprietary rights of others or incur costs resulting from legal claims and
adverse proceedings against us. For example, in April 2013, we agreed to pay US$30 million to settle a claim brought by Tessera against us in California alleging that some of our packaging services infringe patents owned by Tessera and that we
have breached license agreements with Tessera.

Despite the risk that we may infringe on the proprietary rights of others, we have no
means of knowing what patent applications have been filed in the United States or elsewhere until they are granted or published. The semiconductor industry is characterized by frequent litigation regarding patent and other intellectual property
rights, although such litigations in the semiconductor packaging and testing industry tend to not be so prevalent. If any third party were to make valid intellectual property infringement claims against us or our customers, we could be required to:



| |  |  | discontinue using disputed process technologies which would prevent us from offering some of our packaging and testing services;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | pay substantial monetary damages;
| | - |  | ---------------------------------



| |  |  | seek to develop non-infringing technologies, which may not be feasible; or
| | - |  | --------------------------------------------------------------------------



| |  |  | seek to acquire licenses to the infringed technology, which may not be available on commercially reasonable terms, if at all.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

We could also be required to expend substantial resources to defend any claim alleging our infringement of patents or other intellectual
property rights. If we fail to obtain necessary licenses or if litigation relating to patent infringement or other intellectual property matters occurs, it could seriously harm our company.

In addition, we have acquired patents and trademarks to protect some of our proprietary technologies and manufacturing services. We cannot
assure you, however, that these measures will provide meaningful protection of our intellectual property. For example, our competitors may be able to develop similar or superior manufacturing service technology, or we may not successfully protect or
enforce our intellectual property rights.

Political and Economic Risks

We face substantial political risks associated with doing business in Taiwan, particularly due to the tense relationship between the
Republic of China, or the ROC, and the PRC

Our principal executive offices and all of our assets are substantially located in
Taiwan. Accordingly, our services, financial condition and results of operations and the market price of our common shares and the ADSs may be affected by changes in ROC governmental policies, taxation, inflation or interest rates and by social
instability and diplomatic and social developments in or affecting Taiwan which are outside of our control. Taiwan has a unique international political status. Since 1949, Taiwan and the Chinese mainland have been separately governed. The PRC claims
that it is the sole government in China and that Taiwan is part of China. Although significant economic and cultural relations have been established during recent years between the ROC and the PRC, relations have often been strained. The PRC
government has refused to renounce the use of military force to gain control over Taiwan and, in March 2005, further passed an Anti-Secession Law that authorizes non-peaceful means and other necessary measures
should Taiwan move to gain independence from the PRC. Past developments in relations between the ROC and the PRC have on occasion depressed the market prices of the securities of companies in the ROC. The ROC also maintains important trade relations
with the U.S., which has sometimes led to increased friction between the U.S. and the PRC. Any deterioration in relations among the U.S., the ROC and the PRC and other factors affecting military, political or economic conditions in Taiwan could
materially and adversely affect our financial condition and results of operations, as well as the market price and the liquidity of our securities.



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The trading price of our American Depositary Shares may be adversely affected by the
general activities of the Taiwan Stock Exchange and U.S. stock exchanges, the trading price of our shares, fluctuations in interest rates and the economic performance of Taiwan and global markets

Our shares are listed on the Taiwan Stock Exchange. The trading price of our ADSs may be affected by the trading price of our shares on the
Taiwan Stock Exchange. The Taiwan Stock Exchange is a smaller market and, more volatile than the securities markets in the United States and a number of European countries. The Taiwan Stock Exchange has experienced substantial fluctuations in the
prices and volumes of sales of listed securities, and there are currently limits on the range of daily price movements on the Taiwan Stock Exchange. During 2016, the Taiwan Stock Exchange Index peaked at 9,392.68 on December 9 and reached a low
of 7,664.01 on January 21. From January 1, 2016 to December 31, 2016, daily closing values of our shares ranged from NT$43.30 per share to NT$53.40 per share. The Taiwan Stock Exchange is particularly volatile during times of political
instability, including when relations between Taiwan and the PRC are strained. Moreover, the Taiwan Stock Exchange has experienced problems including market manipulation, insider trading and settlement defaults. The recurrence of these or similar
problems could decrease the market price and liquidity of our shares and ADSs.

The market price of the ADSs may also be affected by
general trading activities on the U.S. stock exchanges, which have experienced significant price volatility with respect to shares of technology companies. Fluctuations in interest rates and other general economic conditions, such as recession and
economic downturns caused by the debt crisis, high energy costs and other concerns, in Taiwan and other countries where our services are provided may also have an effect on the market price of our ADSs. Daily closing values of our ADSs ranged from
US$1.88 to US$12.54 between June 7, 2000, the date on which our ADSs were listed on NASDAQ National Market, or NASDAQ, and December 31, 2016. Over the same period, the NASDAQ Composite Index ranged from 1,114.11 to 5,487.44.

Currency fluctuations could increase our costs relative to our revenues, which could adversely affect our profitability

Volatility in foreign exchange rates may have a material effect on our business. We are affected by fluctuations in exchange rates among the
U.S. dollar, the Japanese Yen, the NT dollar and other currencies. Some of our net operating revenues are denominated in currencies other than NT dollars, such as U.S. dollars, while more than half of our costs of direct labor, raw materials and
overhead are incurred in NT dollars.Therefore, any significant fluctuation in exchange rates could be harmful to our financial condition. In 2016, the foreign exchange rate between the U.S. dollar and the NT dollar has ranged from a
high of NT$33.74 per US$1.00 to a low of NT$31.05 per US$1.00. Fluctuations in the exchange rate between the U.S. dollar and the NT dollar will also affect the U.S. dollar value of the ADSs and the U.S. dollar value of any cash dividends we pay,
which could have a corresponding effect on the market price of the ADSs. See Item 11. Quantitative and Qualitative Disclosures About Market Risk  Foreign Exchange Risk.

Any future outbreak of contagious diseases may materially and adversely affect our manufacturing services and operations, as well as our
financial condition and results of operations

Any future outbreak of contagious diseases, such as severe acute respiratory
syndrome or H7N9 avian influenza, may affect our ability to maintain sufficient operating staff and services, and may generally disrupt our operations. An outbreak of influenza on the human population could result in a widespread health crisis which
could adversely affect the economies and financial markets of many countries, particularly in Asia. There is no guarantee that any future outbreak of contagious diseases or the measures taken by various countries of the world in response to a future
outbreak of contagious diseases will not seriously interrupt our operations or those of our suppliers and customers. 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. As a result, we may have to temporarily suspend part or all of our operations. Furthermore, any future outbreak may restrict the level of economic activity in affected regions,
including Taiwan and China, which may also adversely affect our manufacturing services and prospects. As a result, we cannot assure you that any future outbreak of contagious diseases would not have a material adverse effect on our financial
condition and results of operations.



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Our future tax obligations or reductions in tax exemptions may adversely affect our
profitability

The Industrial Development Bureau of Ministry of Economic Affairs has issued another permission for the five-year
income tax exemption of our 2007 registered capitalization plan in 2008. We acquired the work completion certificate from Taichung City Government Economic Development Bureau in 2013, and selected 2015 as the starting period for the income tax
exemption. Revenue arising from the assembly and testing of certain integrated circuit products are exempt from income tax. Without such exemption, the income tax rate for such revenue is 17%. However, we cannot assure you that we will obtain tax
exemptions in the future. Any expiration, reduction or elimination of our preferential tax benefits or tax exemptions would increase our tax obligations and could have an adverse effect on our results of operations.

Risks Relating to the PRC

Our operations in the PRC may expose us to political, regulatory, economic and foreign investment risks in the PRC

Some of our customers and foreign competitors have expanded their operations to the PRC. In order to remain competitive and to position
ourselves to gain market share, we established a subsidiary named Siliconware Technology (Suzhou) Limited, or Siliconware Suzhou, in 2002, which currently is primarily engaged in the assembly and testing service. Prior to 1978, the PRC operated
under a central economic planning system. All production and economic activities in the country were governed by the economic goals set out in the five-year plans and annual plans adopted by central authorities. Since 1978, the PRC government has
permitted foreign investment and implemented economic reforms, gradually changing from a planned economy to a market-oriented economy. However, many of the reforms and economic policies adopted or to be adopted by the PRC government are
unprecedented or experimental in nature and may have unforeseen results, which may have an adverse effect on enterprises with substantial business in the PRC, including us.

Since 1979, many laws and regulations dealing with general economic matters or particular economic activities have been promulgated in the
PRC. However, enforcement of existing laws and regulations may be uncertain and sporadic and implementation and interpretation thereof may be inconsistent. The PRC judiciary is relatively inexperienced and underdeveloped in enforcing the laws and
regulations that currently exist, leading to a degree of uncertainty as to the outcome of any litigation. Further, it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of a judgment by a court of another
jurisdiction. The PRCs legal system is based on written statutes and, therefore, decided legal cases do not have binding legal effect, although they are often followed by judges as guidance. The introduction of new PRC laws and regulations and
the interpretation of existing laws and regulations may be subject to policy changes reflecting domestic political or social changes. As the PRC legal system develops, there can be no assurance that changes in such legislation or interpretation
thereof would not have a material adverse effect on our business, financial condition, results of our operations and future prospects.

Changes in PRC foreign exchange regulations may adversely affect our results of operations and financial condition

The exchange rate between the Renminbi and the U.S. dollar and other foreign currencies is affected by, among other things, changes in
Chinas political and economic conditions. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy, the
Renminbi is permitted to fluctuate within a narrow and managed band against a basket of foreign currencies. Since July 2008, however, the Renminbi has traded within a narrow range against the US dollar. On June 20, 2010, the Peoples Bank
of China announced that the PRC government would further reform the Renminbi exchange rate regime and increase the flexibility of the exchange rate. In April 2012, the Peoples Bank of China announced that it would expand the floating range of
the trading price of the Renminbi against the U.S. dollar from 0.5% to 1.0%. In March 2014, the Peoples Bank of China announced that it would further expand the floating range of the trading price of the Renminbi against the U.S. dollar from
1.0% to 2.0%. The Renminbi appreciated 16.1% against the U.S. dollar between July 21, 2005 and December 31, 2016. Although it is difficult to predict how Renminbi exchange rates may change going forward, a more flexible currency policy
could result in a further and more significant appreciation of Renminbi against the U.S. dollar. Any increase in the value of the Renminbi might adversely affect the growth of the Chinese economy, increase our operating expenses as well as the
competitiveness of various industries in China, including our industry, which could in turn affect our financial condition and results of operations. See Item 11. Quantitative and Qualitative Disclosures About Market Risk  Foreign
Exchange Risk.



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An increase in labor costs may undermine our cost competitiveness, erode our profitability
and thus affect our financial performance

We, along with our suppliers and customers, rely on our workers in our various
manufacturing facilities. Labor costs in the various countries where we have manufacturing facilities may increase as those countries develop and have populations that are more affluent. For example, as factory workers have sought higher wages in
China, we have been adjusting the wages of our workers in line with market conditions. In addition, increased labor costs of our suppliers could be passed along to us.

These increases in labor cost may undermine our cost competitiveness, erode our profitability and materially harm our business, financial
condition and results of operations.

Risks Related to Ownership of Our Shares or ADSs

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

The ability to deposit shares into our ADS program is restricted by ROC law. Under current ROC law, no person or entity, including you and us,
may deposit shares into our ADS program without specific approval of the ROC Securities and Futures Bureau, or ROC SFB except for the deposit of the shares into our ADS program and for the issuance of additional ADSs in connection with:



| |  |  | distribution of share dividends or free distribution of our shares;
| | - |  | -------------------------------------------------------------------



| |  |  | exercise of the preemptive rights of ADS holders applicable to the shares evidenced by ADSs in the event of capital increases for cash; or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if permitted under the deposit agreement and the custody agreement, purchases of our shares in the domestic market in Taiwan by the investor directly or through the depositary or the surrender of shares under the
possession of investors and then delivery of such shares to the custodian for deposit into our ADS program, subject to the following conditions: (i) the depositary may accept deposit of those shares and issue the corresponding number of ADSs
with regard to such deposit only if the total number of ADSs outstanding after the deposit does not exceed the number of ADSs previously approved by ROC SFB, plus any ADSs issued pursuant to the events described in the above two bullet points; and
(ii) this deposit may only be made to the extent previously issued ADSs have been cancelled.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As a result of the
limited ability to deposit shares into our ADS program, the prevailing market price of our ADSs on NASDAQ, may differ from the prevailing market price of the equivalent number of our shares on the Taiwan Stock Exchange.

Holders of our ADSs will not have the same proposal or voting rights as the holders of our shares, which may affect the value of your
investment

Due to the amendment to the ROC Company Act and the amendment made to our articles of incorporation accordingly,
except for treasury shares, each common share is generally entitled to one vote and no voting discount will be applied. However, except as described in this annual report and in the deposit agreement, holders of our ADSs will not be able to exercise
voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs.
The voting rights attaching to the shares evidenced by our ADSs must be exercised as to all matters brought to a vote of shareholders collectively in the same manner.



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Moreover, holders of the ADSs do not have individual rights to propose any matter for
shareholders votes at our shareholders meetings. However, holders of at least 51% of the ADSs outstanding at the relevant record date may request the depositary to submit to us one proposal per year for consideration at our annual
ordinary shareholders meeting, provided that such proposal meets certain submission criteria and limitations, including the language and the length of the proposal, the time of submission, the required certification or undertakings, and the
attendance at the annual ordinary shareholders meeting. A qualified proposal so submitted by the depositary will still be subject to review by our board of directors and there is no assurance that the proposal will be accepted by our board of
directors for inclusion in the agenda of our annual ordinary shareholders meeting. Furthermore, if we determine, at our discretion, that the proposal submitted by the depositary does not qualify, we have no obligation to notify the depositary
or to allow the depositary to modify such proposal.

Furthermore, if holders of at least 51% of the ADSs outstanding at the relevant
record date instruct the depositary to vote in the same manner regarding a resolution, including election of directors, the depositary will appoint our Chairman, or his designee, to represent the ADS holders at the shareholders meetings and to
vote the shares represented by the ADSs outstanding in the manner so instructed. If by the relevant record date the depositary has not received instructions from holders of ADSs holding at least 51% of the ADSs to vote in the same manner for any
resolution, then the holders will be deemed to have instructed the depositary to authorize and appoint our Chairman, or his designee, to vote all the shares represented by ADSs at his sole discretion, which may not be in your interest.

Our ADS holders may experience dilution if we distribute rights to our shareholders or sell additional equity or equity-linked
securities

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the
deposit agreement, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the
Securities Act. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. Accordingly, holders of our ADSs may
be unable to participate in our rights offerings and may experience dilution in their holdings.

Furthermore, the sale of additional
equity or equity-linked securities may result in dilution to our ADS holders. In October 2014, we issued US$400 million unsecured zero coupon convertible bonds due 2019 to procure foreign currency-denominated raw materials and repay long-term
debt. The bonds are convertible by holders at any time on or after December 10, 2014 until 10 days before maturity. The current conversion price is NT$45.7579 per common share. As of March 31, 2017, none of the bonds has been converted into our
common shares, and the balance of the outstanding bonds was US$400 million.Upon full conversion, the outstanding bonds would be converted to 265,676,528 common shares if based on the current conversion price, representing
approximately 8.5% of our outstanding shares as of March 31, 2017. Any conversion of the bonds, in full or in part, would dilute the ownership interest of our existing shareholders and our earnings per share and could adversely affect the market
price of our ADSs.

Our public shareholders may have more difficulty protecting their interests than they would as shareholders of a
U.S. corporation

Our corporate affairs are governed by our articles of incorporation and by the laws governing ROC corporations.
The rights of our shareholders to bring shareholders suits against us or our board of directors under ROC law are much more limited than those of the shareholders of U.S. corporations. Therefore, our public shareholders may have more
difficulty protecting their interests in connection with actions taken by our management, members of our board of directors or controlling shareholders than they would as shareholders of a U.S. corporation. Please refer to Item 10. Additional
InformationB. Memorandum and Articles of Association included elsewhere in this annual report for a detailed discussion of the rights of our shareholders to bring legal actions against us or our directors under ROC law.



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Holders of our ADSs will be required to appoint several local agents in Taiwan if they
withdraw shares from our ADS program and become our shareholders, which may make ownership burdensome

Non-ROC persons wishing to withdraw shares represented by their ADSs from our ADS program and hold our shares represented by those ADSs are required to appoint a local agent or representative with qualifications set
forth by the ROC SFB to open a securities trading account with a local brokerage firm, pay ROC taxes, remit funds and exercise shareholders rights. In addition, the withdrawing holders are also required to appoint a custodian bank with
qualifications set forth by the Ministry of Finance to hold the securities in safekeeping, make confirmations, settle trades and report all relevant information. Without making this appointment and opening of the accounts, the withdrawing holders
would not be able to subsequently sell our shares withdrawn from a depositary receipt facility on the Taiwan Stock Exchange. Under ROC law and regulations, citizens of the PRC are not permitted to hold our shares or withdraw shares represented by
ADSs from our ADS program.

You may not be able to enforce a judgment of a foreign court in the ROC

We are a company limited by shares incorporated under the ROC Company Act. Most of our assets and most of our directors and executive officers
and experts named in the registration statement are located in Taiwan. As a result, it may be difficult for you to enforce judgments obtained outside Taiwan upon us or such persons in Taiwan. Any judgment obtained against us in any court outside the
ROC arising out of or relating to the ADSs will not be enforced by ROC courts if any of the following situations shall apply to such final judgment:



| |  |  | the court rendering the judgment does not have jurisdiction over the subject matter according to ROC law;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | the judgment or the court procedures resulting in the judgment is contrary to the public order or good morals of the ROC;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the judgment was rendered by default, except where the summons or order necessary for the commencement of the action was duly served on us within the jurisdiction of the court rendering the judgment within a reasonable
period of time and in accordance with the laws and regulations of such jurisdiction, or with judicial assistance of the ROC; or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the judgments of ROC courts are not recognized and enforceable in the jurisdiction of the court rendering the judgment on a reciprocal basis.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

We may become a passive foreign investment company, or PFIC, which could result in adverse U.S. tax consequences to U.S. investors

Based upon the past and projected composition of our income and valuation of our assets, including goodwill, we believe we were
not a passive foreign investment company, or PFIC, for 2016, and do not expect to become one in the future, although there can be no assurance in this regard. If, however, we were or were to become a PFIC, such characterization could result in
adverse U.S. tax consequences to you if you are a U.S. investor. For example, if we are a PFIC, our U.S. investors will become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting
requirements. The determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. Specifically, we will be classified as a PFIC for U.S. tax purposes if either:
(i) 75% or more of our gross income in a taxable year is passive income, or (ii) the average percentage of our assets by value in a taxable year which produce or are held for the production of passive income (which includes cash) is at
least 50%. The calculation of the value of our assets will be based, in part, on the quarterly market value of our shares, which is subject to change. We cannot assure you that we were not a PFIC for 2016 or that we will not be a PFIC in any future
taxable year. See Item 10. Additional Information  E. Taxation  U.S. Federal Income Tax Considerations for U.S. Persons  Passive Foreign Investment Company.



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|Item 4. | Information on the Company
|------- | --------------------------

A. History and Development of the Company

General Information

Our legal and commercial name is Siliconware Precision Industries Co., Ltd. We were incorporated under the ROC Company Act as a company
limited by shares on May 17, 1984. Our principal executive offices are located at No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, Republic of China. We provide services in Taiwan through our facilities located in Taichung, Hsinchu
and Changhua, and in the PRC through our facilities located in Suzhou, Jiangsu Province. We also conduct long term investments through our wholly-owned subsidiary, Siliconware Investment Co., Ltd. Our telephone number is 886-4-2534-1525 and website address is http://www.spil.com.tw. Our shares were listed on the Taiwan Stock Exchange in 1993. On June 7, 2000, we issued
30,000,000 ADSs, each representing five shares. Our ADSs have been listed on the NASDAQ National Market under the symbol SPIL since June 2, 2000.

The Share Purchase Transaction with ASE

On August 24, 2015, Advanced Semiconductor Engineering, Inc., or ASE, commenced an unsolicited tender offer to purchase up to 779,000,000
of our common shares, including those represented by ADSs, which represents approximately 24.99% of our issued and outstanding share capital, through concurrent tender offers in the United States and the ROC. ASE offered to pay NT$45 for each share,
or NT$225 for each ADS. ASEs tender offer was successful, and on September 22, 2015, ASE accepted for payment 725,749,060 shares and 10,650,188 ADSs. The purchase was funded by ASE with cash on hand of approximately NT$35.1 billion.
On December 29, 2015, ASE launched its second unsolicited public tender offer to purchase up to 770,000,000 of our shares, including those represented by ADSs, which represents approximately 24.71% of our issued and outstanding share capital,
through concurrent tender offers in the United States and the ROC. ASE offered to pay NT$55 for each share, or NT$275 for reach ADS. The second tender offer was unsuccessful because of failure to satisfy tender offer conditions as ASE did not
receive approval from the Taiwan Fair Trade Commission for its proposed combination with us before the expiration of the tender offer. On March 23, 2016, the Taiwan Fair Trade Commission announced that, given the failure of the tender offer, it
has terminated its review of the proposed combination.

Between March 24, 2016 and April 7, 2016, ASE acquired by way of market
purchases additional shares and ADSs amounting to an additional 8.30% of our issued and outstanding shares (including those represented by ADSs) for an aggregate purchase price of NT$13.7 billion.

On April 17, 2016, the possibility of a combination transaction was discussed between us and ASE. Between April 25, 2016 and
May 19, 2016, representatives of ASE and our company, together with their respective legal and financial advisors, held a series of in-person meetings and conference calls to discuss a variety of issues,
and explore whether it would be possible to develop the terms of a possible share purchase transaction by ASE of our company, or the Proposed Share Purchase, including the structure, price, board composition of the new holding company after the
Proposed Share Purchase, protection of our employee rights and the timing of any announcement. ASE furnished with us proposed draft transaction documents and presentation materials relating to the Proposed Share Purchase, which contemplated the
company and ASE entering into a share purchase transaction at a price of NT$55.0 per share and set forth the other terms of such transaction. There was no agreement with respect to the Proposed Share Purchase by the end of these meetings.

On April 28, 2016, upon consideration of subjective and objective factors of our company and Tsinghua Unigroup Ltd., our board of
directors resolved to terminate the Share Subscription Agreement entered into with Tsinghua Unigroup Ltd. in December 2015.

On
June 30, 2016, a Joint Share Exchange Agreement, or the Joint Share Exchange Agreement, was entered into between us and ASE. Under the terms of the Joint Share Exchange Agreement, it is expected that ASE will incorporate ASE Industrial Holding
Co., Ltd., or HoldCo, a holding company, which will (i) purchase our outstanding common shares in cash and (ii) issue new shares to the shareholders of ASE, or ASE Shareholders, in exchange for the common shares of ASE, or the Share
Purchase. HoldCo will be a company incorporated in Taiwan which, upon the completion of the Share Purchase, or the Effective Time, will be beneficially owned by the ASE Shareholders. If the Share Purchase is completed, we will continue our
operations as a privately held company and will be beneficially owned by HoldCo. As the result of the Share Purchase, our ADSs will no longer be listed on the NASDAQ and the American depositary shares program for the ADSs will terminate.



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If the Joint Share Exchange Agreement is approved by the requisite vote of the Companys
shareholders and the Share Purchase is completed:



| |  |  | each share issued immediately prior to the Effective Time, including the treasury shares of the Company and the Shares beneficially owned by ASE, will be transferred to HoldCo in exchange for the right to receive
NT$51.2, or the Final Per Share Consideration, which represents NT$55.0, the original per share consideration under the Joint Share Exchange Agreement, minus a cash dividend and a return of capital reserve of NT$3.8 per share distributed by us on
July 1, 2016. The Final Per Share Consideration will be paid to the holders of the shares in NT dollars in cash, without interest and net of any applicable withholding taxes; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | each ADS, representing five shares, including the ADSs beneficially owned by ASE, will be cancelled in exchange for the right to receive, through JPMorgan Chase Bank, N.A., or the ADS Depositary, the U.S. dollar
equivalent of NT$256 (representing five times the Final Per Share Consideration) minus the total of (i) all processing fees and expenses per ADS in relation to the conversion from NT dollars into U.S. dollars and (ii) US$0.05 per ADS
cancellation fees pursuant to the terms of the deposit agreement dated January 6, 2015 by and among the Company, the ADS Depositary, and the holders and beneficial owners from time to time of ADSs issued thereunder, or the Final Per ADS
Consideration. The Final Per ADS Consideration will be paid to the holders of ADSs in U.S. dollars in cash, without interest and net of any applicable withholding taxes.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our board of directors, acting upon the unanimous recommendation of the special committee, which was comprised solely of independent
directors, approved the Joint Share Exchange Agreement and the Share Purchase and resolved to recommend that our shareholders vote to authorize and approve the Joint Share Exchange Agreement and the Share Purchase. The special committee negotiated
the terms of the Joint Share Exchange Agreement with the assistance of its financial and legal advisors.

The Share Purchase is subject to
various closing conditions, including unconditional approval of the Share Purchase by the Company and ASEs shareholders meetings and approvals from all relevant competent government authorities.

We and ASE submitted required materials to the TFTC on July 29, 2016 and TFTC issued a no objection letter in respect of the Share
Purchase on November 16, 2016. The MOFCOM formally accepted the parties notification materials on December 14, 2016, starting Phase I of the review process. On January 16, 2016, ASE received MOFCOMs notice extending its
review to Phase II of the review process. In addition, the U.S. FTC has issued a subpoena and civil investigative demand relating to the Share Purchase. On January 17, 2017, each of ASE and SPIL certified that it has complied with the
FTCs requests for information. Prior to the filing of this annual report, we and ASE has continued to cooperate with the U.S. FTCs investigation.

We and ASE jointly filed the Schedule 13E-3 in respect of the Share Purchase on November 22, 2016
and Amendment No. 1 to the Schedule 13E-3 on January 6, 2017.

On February 24, we and
ASE jointly filed Amendment No. 2 to the registration on F-4 in respect of the Share Purchase.



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B. Business Overview

Our Business

We
are one of the worlds leading independent providers of semiconductor packaging and testing services. We offer a full range of packaging and testing solutions, including advanced packages, substrate packages and lead-frame packages, as well as
testing for logic and mixed signal devices. We also offer our customers turnkey service, from packaging and testing to shipment service.

We provide packaging and testing services to more than 100 customers worldwide. We currently target customers in the personal computer,
communications, consumer integrated circuits and non-commodity memory semiconductor markets. We strive to provide the highest level of customer service to meet and anticipate our customers current and
future requirements.

The manufacturing services we offer are customized to the needs of our individual customers. In 2016, 87.3% of our
net operating revenues were generated from packaging services and 12.0% of our net operating revenues were generated from testing. The following table shows, for the periods indicated, the amount and percentage of our revenues by categories of our
total net operating revenues:



|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|--------------------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                            |  | Years Ended December 31,          |       
|                            |  | 2014                              |        |  | 2015 |  |       | 2016 | 
|                            |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                            |  | (in millions, except percentages) |       
|Bumping and flip-chip       |  |                                   | 32,797 |  |      |  | 39.5  |      |  |  | 36,494 |  |  |     | 44.2  |  |   |  | 35,097 |  |  |  | 41.2  | 
|Substrate base              |  |                                   | 24,099 |  |      |  | 29.0  |      |  |  | 21,316 |  |  |     | 25.7  |  |   |  | 24,473 |  |  |  | 28.8  | 
|Lead-frame base             |  |                                   | 15,573 |  |      |  | 18.7  |      |  |  | 14,943 |  |  |     | 18.0  |  |   |  | 14,746 |  |  |  | 17.3  | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Subtotal packaging revenue  |  |                                   | 72,469 |  |      |  | 87.2  |      |  |  | 72,753 |  |  |     | 87.9  |  |   |  | 74,316 |  |  |  | 87.3  | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Testing                     |  |                                   | 9,852  |  |      |  | 11.9  |      |  |  | 9,551  |  |  |     | 11.5  |  |   |  | 10,228 |  |  |  | 12.0  | 
|Others(1)                   |  |                                   | 750    |  |      |  | 0.9   |      |  |  | 536    |  |  |     | 0.6   |  |   |  | 568    |  |  |  | 0.7   | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total net operating revenue |  |                                   | 83,071 |  |      |  | 100.0 |      |  |  | 82,840 |  |  |     | 100.0 |  |   |  | 85,112 |  |  |  | 100.0 | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 



|(1) | Primarily consists of revenues generated from change kit and socket design services for mixed signal and RF integrated circuits, and sales of raw materials to customers who buy back raw materials that the Company
purchased based on the customers previous forecast but did not place orders to the Company prior to the expiry dates of the raw materials.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In this annual report, we present our revenues using the five categories of (i) bumping and flip-chip, (ii) substrate base,
(iii) lead-frame base, (iv) testing and (v) others to better reflect our business.

Our objective is to be the leading
worldwide, full service independent provider of semiconductor packaging and testing services. Key elements of our strategy include:



| |  |  | providing a full range of packaging and testing services, including turnkey capabilities to simplify our customers supply chain management;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | offering leading packaging and testing technology to attract and retain customers;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | focusing on customer service and working with our customers on developing and fulfilling their current and future semiconductor packaging and testing needs;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | leveraging our existing foundry relationships and Taiwan location to enable our customers to easily integrate all of their outsourced semiconductor manufacturing needs; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | diversifying and expanding our customer base geographically, by customer type and by end-market application, to capitalize on growing markets including communications and
increased outsourcing from vertically integrated semiconductor device manufacturers and systems original equipment manufacturers.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because our services have been dependent on the requirements of semiconductor companies for independent testing and assembly services, any
downturn in the highly cyclical semiconductor industry may reduce demand for our services and adversely affect our result of operations. Therefore, our operations are subject to seasonal effects.

Our Services

We
offer a broad range of package formats designed to provide our customers with a full array of packaging solutions. The packaging solutions we currently offer to our customers include bumping and flip-chip ball grid array packages, substrate
packages, which include ball grid array and system in packages (incorporating multiple semiconductor chips),and lead-frame packages. Semiconductor packaging serves to protect semiconductor chips, to facilitate their integration into electronic
systems and to enable the dissipation of heat produced by the final product. The packaging process begins with dicing patterned silicon wafers into separated dies. Each die is attached to a substrate or lead-frame interposer with gold, copper or
silver wires or bumps. Each chip is then encapsulated, generally by molding compound or underfilled in a flip-chip ball grid array.

As
modern applications for semiconductor devices require smaller chips, the size of packages has also decreased. In leading-edge packages, the size of the package is miniaturized to just slightly larger than the size of the individual chip itself known
as chip scale packages. Semiconductor packages have evolved from lead-frame packages to substrate packages in response to the increasing demands of todays high-performance electronics products. The differentiating characteristics of these
packages include:



| |  |  | the size of the package;
| | - |  | ------------------------



| |  |  | the number of electrical connections the package can support; and
| | - |  | -----------------------------------------------------------------



| |  |  | the thermal and electrical requirements of the package.
| | - |  | -------------------------------------------------------

As semiconductor devices increase in
complexity, the number of required electrical connections also increases. Our lead-frame packaging has electrical connections from the semiconductor device to the electronic product through leads on the perimeter of the package. Our substrate
packaging has balls on the bottom of the package that create the electrical connections with the electronic system and can support larger numbers of electrical connections.

New methods of packaging have also enhanced the thermal and electrical characteristics of semiconductor packages to meet the high-bandwidth,
high-speed and high-power demands of modern semiconductor devices. Flip-chip packages enable direct interconnection from the chip to the substrate. Electrical connection is first deposited on one side of a chip; then, the chip is flipped onto the
substrate. Flip-chip technology replaces wire bonding with wafer bumping for interconnections within the package. Wafer bumping involves solder plating bumps and the placing of tiny solder balls, instead of wires, on top of dies for connection to
substrates. Flip-chip technology eliminates the need for wire bonding and provides superior electrical performance. Chip scale packages have been designed for devices which require reduced height, board space and weight by reducing the size of the
package to be only slightly larger than the size of the die and are ideally suited for the latest generation of wireless and consumer electronics. System in packages allow for the combination of multiple chips into a single package, enabling
increased application functionality while miniaturizing overall size.

We price our packaging on a per unit basis, taking into account the
complexity of the manufacturing required, the prevailing market conditions, the order size, the strength and history of our relationship with the customer and our capacity utilization at the time.



22



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##### Table of Contents

In order to reduce the impact from fluctuations in the price of gold wire, we have also been
improving our manufacturing process to reduce the diameters of the gold wire used. In addition, we have developed and currently offer copper wire and silver wire bonding processes to replace conventional processes based on gold wire. Copper wire and
silver wire bonding processes have gained popularity recently due to the fact that copper and silver prices do not fluctuate as widely as gold prices. Presently, copper wire and silver wire bonding is running at a high growth stage of production for
lead-frame and substrate packaging.

Bumping and Flip-Chip

To address the electronics market demand for higher frequency, higher input/output and better thermal performance, we have made efforts to
develop high value-added advanced packaging technologies, such as flip-chip and wafer bumping technologies. In addition to the development of the 8-inch wafer bumping technology, in order to meet the trend of
wafer size moving to 12-inch from 8-inch, we successfully established the first 12-inch wafer bumping technology in the world.
Flip-chip ball grid array is a high-end, high-growth packaging technology typically used in advanced semiconductor products such as microprocessor units, micro peripherals, field programmable gate arrays and
application specific integrated circuits. The flip-chip technology enables direct interconnection from the chip to the substrate, eliminates the need for wire bonding and provides superior electrical performance. We have also developed thin and
small packages, or CSPs, on flexible or rigid substrates as well as lead-frames, which are suitable for the portable consumer market.

Substrate Base

This
category generally employs the ball grid array design, which utilizes a laminated substrate rather than a lead-frame and places the electrical connections on the bottom of the package rather than around the perimeter.

The ball grid array format was developed to address the need for higher lead counts required by advanced semiconductor devices. Benefits of
ball grid array packaging over leaded packaging include:



| |  |  | smaller size;
| | - |  | -------------



| |  |  | greater pin count;
| | - |  | ------------------



| |  |  | greater reliability;
| | - |  | --------------------



| |  |  | better electrical signal integrity; and
| | - |  | ---------------------------------------



| |  |  | easier attachment to a printed circuit board.
| | - |  | ---------------------------------------------

As the number of leads surrounding the package
increased, the proximity of the leads to one another became closer in an attempt to maintain the size of the package. The close proximity of one lead to another resulted in electrical shorting problems, and required the development of increasingly
sophisticated and expensive techniques for producing circuit boards to accommodate the high number of leads.

The ball grid array format
solved this problem by effectively creating leads on the bottom of the package in the form of solder balls. These balls can be evenly distributed across the entire bottom surface of the package, allowing greater distance between the individual
leads. For the highest lead count devices, the ball grid array configuration can be manufactured less expensively and requires less delicate handling at installation.

Furthermore, we have developed module packages, with multiple chips integrated into one package, in order to meet the growing demand for SIP
for applications in personal computers, communications devices and consumer products.



23



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##### Table of Contents

Lead-Frame Base

Lead-frame packages are characterized by a semiconductor chip encapsulated in a plastic molding compound with metal leads on the perimeter.
This package category has evolved from a design where the leads are plugged into holes on the circuit board to a design where the leads are soldered to the surface of the circuit board. Lead-frame packages are divided into two general types of
packages: quad flat packages and small outline packages.

To satisfy the demand for miniaturization of portable electronic products, we
are developing increasingly smaller versions of lead-frame packages to keep pace with continually shrinking semiconductor device sizes. Our advanced lead-frame packages are similar in design to our older lead-frame packages. However, our advanced
lead-frame packages generally are thinner and smaller, have more leads and have advanced thermal and electrical characteristics. As a result of continued development of manufacturing service technology, we offer lead-frame packaging with a wide
range of lead counts and body sizes to satisfy variations in the size of customers semiconductor devices.

Testing

Semiconductor testing measures and ensures the performance, functionality and reliability of a packaged semiconductor device. Testing
semiconductor devices requires significant technical expertise and knowledge of the specific applications and functions of the device under testing. In addition to maintaining different types of advanced testing equipment which enable us to test a
variety of semiconductor device functions, we work closely with our customers to develop and convert programs to test particular semiconductor products on multiple equipment platforms effectively. The cost of any specific test is dependent on the
test time (usually measured in seconds) required to run a test which varies depending on the complexity of the semiconductor device and the customers specification with the percentage of fault coverage.

We also provide the following testing services:

Wafer Probing. Wafer probing is the step immediately before packaging of integrated circuits and involves sorting the processed wafer
for defects to ensure that it meets customer acceptance criteria. Integrated circuits on an accepted wafer are then individually inspected visually under microscopes before packaging and final testing.

Final Testing. We provide final testing services for a wide variety of logic and mixed signal and RF integrated circuit packages and
other integrated circuit packages, including complex and high-performance integrated circuits, as well as lower-performance ones. High-performance products include personal computer-related components such as CPU chipsets and graphic processors,
while major lower-performance products include integrated circuits used in consumer electronics products.

Burn in Services. We
also provide Burn in service for testing products in high temperature and high current. This testing process will stress devices for a certain burn in time to eliminate the root cause of early failures.

Other Testing Services. In addition to wafer probing, final testing services and burn in services described above, we also provide
system-level testing service for testing products on motherboards, lead/ball scanner service to screen out abnormal products, including bent lead or ball defective devices, so as to prevent them from being shipped to the end
customers, marking service to specify the unique customer logo and batch identification on products and tape and reel service to packaging devices into one complete reel for surface mount operation.

Customers

We
currently have more than 100 customers worldwide, and our customers include many of the largest semiconductor companies in the world. In 2014, 2015 and 2016, 69.5%, 73.3% and 75.5%of our net operating revenues were derived from sales to our
top ten customers, respectively. In 2016, our largest customer accounted for 18.8% of our net operating revenues.



24



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Industry-leading companies require early access to advanced packages because they manufacture
products which have first-to-market technologies. Our close relationships with industry-leading customers help us further develop their technologies and position us to
benefit from the high unit volumes of these major semiconductor customers.

Set forth below is a geographic breakdown of our net operating
revenues for the periods presented below, categorized by geographic region based on the jurisdiction in which each customers group is headquartered:



|              |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|              |  | Years Ended December 31,          |       
|              |  | 2014                              |        |  | 2015 |  |       | 2016 | 
|              |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|              |  | (in millions, except percentages) |       
|United States |  |                                   | 34,580 |  |      |  | 41.6  |      |  |  | 30,076 |  |  |     | 36.3  |  |   |  | 33,624 |  |  |  | 39.5  | 
|China         |  |                                   | 17,307 |  |      |  | 20.8  |      |  |  | 21,319 |  |  |     | 25.7  |  |   |  | 22,725 |  |  |  | 26.7  | 
|Taiwan        |  |                                   | 17,673 |  |      |  | 21.3  |      |  |  | 18,106 |  |  |     | 21.9  |  |   |  | 19,683 |  |  |  | 23.1  | 
|Europe(1)     |  |                                   | 7,149  |  |      |  | 8.6   |      |  |  | 8,471  |  |  |     | 10.2  |  |   |  | 6,795  |  |  |  | 8.0   | 
|Others        |  |                                   | 6,362  |  |      |  | 7.7   |      |  |  | 4,868  |  |  |     | 5.9   |  |   |  | 2,285  |  |  |  | 2.7   | 
|              |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total         |  |                                   | 83,071 |  |      |  | 100.0 |      |  |  | 82,840 |  |  |     | 100.0 |  |   |  | 85,112 |  |  |  | 100.0 | 
|              |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 



|(1) | Include primarily Germany.
|--- | --------------------------

In this annual report, we present our sales based on the
jurisdiction in which each customers group is headquartered to better reflect the geographic breakdown of our sales. In previous annual reports, we present the geographic break down of our sales based on the jurisdictions of customer
subsidiaries with whom we transact directly.

Sales from purchase orders received from outside of Taiwan, as determined by the
jurisdiction in which each customers group is headquartered, accounted for 78.7%, 78.1% and 76.9%of our net operating revenues in 2014, 2015 and 2016, respectively. We primarily target semiconductor companies that contract their wafer
foundry services to major independent ROC foundries. Our customers mainly require chip scale packages and flip-chip packages.

We receive
orders from both fabless and Integrated Device Manufacturer, or IDM, customer types. Due to our strategic plan to focus on high-end products, we have higher proportion of fabless revenue. The following table
shows, for the periods indicated, the amount and percentage of our revenues by categories of customer types:



|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|--------------------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                            |  | Years Ended December 31,          |       
|                            |  | 2014                              |        |  | 2015 |  |       | 2016 | 
|                            |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                            |  | (in millions, except percentages) |       
|Fabless                     |  |                                   | 78,698 |  |      |  | 94.7  |      |  |  | 78,906 |  |  |     | 95.3  |  |   |  | 80,193 |  |  |  | 94.2  | 
|IDM                         |  |                                   | 4,373  |  |      |  | 5.3   |      |  |  | 3,934  |  |  |     | 4.7   |  |   |  | 4,919  |  |  |  | 5.8   | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total net operating revenue |  |                                   | 83,071 |  |      |  | 100.0 |      |  |  | 82,840 |  |  |     | 100.0 |  |   |  | 85,112 |  |  |  | 100.0 | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 

Due to the fast-changing technology and functionality of semiconductor chip design, customers requiring
semiconductor packaging and testing services generally do not place purchase orders far in advance. However, we engage customers in advance of the placement of purchase orders based on each customers expected packaging and testing
requirements. In addition, we purchase materials based on customer forecasts, and our customers are generally responsible for any dedicated unused materials in excess of the quantity they indicated they would need to meet their product commitments.
Although we have long-term sales relationships with a number of customers, our customers generally may cancel or reschedule orders without significant penalties. In the past, very few customers have cancelled firm orders for our packaging and
testing services. This is due in part to the fact that firm orders usually immediately precede shipment of wafers to be packaged by us. Our customers, however, routinely change their forecasts for future purchases from us, and we adjust our
production plans accordingly. We do not maintain reserves for customer cancellations and variations in customer orders. Accordingly, our backlog as of any particular date may not be indicative of future sales.



25



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##### Table of Contents

In addition, packaging and testing service customers generally require that our facilities
undergo a stringent qualification process during which the customer evaluates our operations and production processes. The qualification process can take many weeks. Due to this lengthy qualification process, we believe that
semiconductor manufacturers are generally reluctant to switch semiconductor packaging and testing companies once these companies have been qualified. For test qualification, after we are qualified by a customer and before the customer delivers
wafers to us for testing in volume, a process known as correlation is undertaken. During the correlation process, the customer provides us with test criteria, information regarding process flow and sample semiconductors to be tested and
either provides us with the test program or requests that we develop a new or conversion program. In some cases, the customer also provides us with a data log of results of any testing of the semiconductor that the customer may have conducted
previously. The correlation process typically takes up to two weeks but can take longer depending on the requirements of the customer.

The end applications of our products are categorized into communication, consumer, computing, and memory. Communication comprises the highest
proportion of end applications for our products. We adjust our product portfolio from time to time in line with changes in market demand. The following table shows, for the periods indicated, the amount and percentage of our revenues by categories
of end applications of the products which we packaged and tested:



|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|--------------------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                            |  | Years Ended December 31,          |       
|                            |  | 2014                              |        |  | 2015 |  |       | 2016 | 
|                            |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                            |  | (in millions, except percentages) |       
|Communication               |  |                                   | 52,335 |  |      |  | 63.0  |      |  |  | 53,651 |  |  |     | 64.8  |  |   |  | 57,273 |  |  |  | 67.3  | 
|Computing                   |  |                                   | 10,115 |  |      |  | 12.2  |      |  |  | 8,076  |  |  |     | 9.7   |  |   |  | 9,394  |  |  |  | 11.0  | 
|Consumer                    |  |                                   | 17,297 |  |      |  | 20.8  |      |  |  | 18,427 |  |  |     | 22.2  |  |   |  | 16,743 |  |  |  | 19.7  | 
|Memory                      |  |                                   | 3,323  |  |      |  | 4.0   |      |  |  | 2,686  |  |  |     | 3.3   |  |   |  | 1,702  |  |  |  | 2.0   | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total net operating revenue |  |                                   | 83,071 |  |      |  | 100.0 |      |  |  | 82,840 |  |  |     | 100.0 |  |   |  | 85,112 |  |  |  | 100.0 | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 

Sales, Marketing and Customer Relationships

Our sales and marketing strategy is focused on providing high-quality semiconductor device packaging and testing services, consistent on-time delivery and competitive pricing. We believe that this strategy is best implemented by servicing a select number of customers whom we consider to have a high level of anticipated growth. We cooperate with
these customers to achieve their best needs.

We engage in semi-annual and quarterly reviews of all of our customers; we regularly collect
data from different segments of the semiconductor industry and, when possible, we work closely with our customers to design and develop packaging and testing solutions for their new products. These
co-development or sponsorship projects can be critical when customers seek large-scale, early market entry with a significant new product.

Our sales and marketing efforts are carried out by our sales teams in Taichung and Hsinchu among many of Taiwans leading domestic
semiconductor companies. Furthermore, our subsidiary Siliconware Suzhou mainly serves PRC customers.

In addition, our subsidiary
Siliconware U.S.A. has offices in San Jose, San Diego and Huntington Beach, California, Tempe, Arizona and Lewisville, Texas, which facilitate communications and maintain relationships with companies headquartered in North America. We also have
established our Japan office in Tokyo and Singapore office to give our customers support in closer proximity.



26



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##### Table of Contents

Quality Control

We employ quality control procedures at every critical manufacturing stage, with the aim of identifying and solving problems at the earliest
possible stage of the production process. Our quality control procedures include statistical process control, which involves sampling tests to control and monitor the production process. Such tests include optical scanning and reliability tests,
which include temperature and humidity tests, pressure and stress tests and test for resistance to solvents. If a problem is detected, failure analysis will be used to determine the cause. Visual inspection and optical scanning are performed on all
assembled semiconductor devices to test for lead coplanarity and integrity. Assembled chips are tested on a sample basis for open shorts in inter connections. To ensure that our quality control procedures are effectively applied, production line
employees are provided with periodic training. We have also implemented systems on our production floor which are designed to ensure the accurate use of required materials, parts, equipment and machinery for manufacturing each product.

Our comprehensive quality control and environmental protection programs have received numerous accredited International Standards Organization
certifications, including ISO 9002 in 1992, ISO 9001 in 1993, QS 9000 in 1999 and ISO 14001 in 1999. We undergo periodic audits to maintain our ISO certifications. Although some semiconductor companies view the ISO certification as a basis for
initiating contact with a potential subcontractor, they generally perform separate production and quality audits of the subcontractors themselves. We also received TS16949 certification for our quality control in 2003, OHSAS 18001 certification for
safety and health management system in 2004, QC080000 certification for hazardous substance process management in 2008, TL9000 certification for telecommunications quality management system in 2012, and ANSI/ESD S20.20 certification for ESD control
program to protect sensitive products from electrostatic discharge damage in 2013.

As a result of our ongoing focus on quality, we
achieved average quarterly packaging yields of 99.87% in 2016. Packaging yield, which is the industry standard for measuring production yield, is equal to the number of IC packages that are shipped for packaging divided by the number of individual
integrated circuits that are attached to substrates, lead-frames, wafer level packages or system in packages.

As part of our overall
focus on quality service, we also closely monitor our delivery performance against scheduled delivery times.

Research and
Development

We focus our research and development on developing advanced packaging technologies and also on improving the
efficiency and capability of our production processes in order to enhance our cost competitiveness in the industry.

Our packaging
technologies development includes:



| |  |  | reduction of the size and thickness of semiconductor device packages;
| | - |  | ---------------------------------------------------------------------



| |  |  | increasing input/output density of semiconductor device packages;
| | - |  | -----------------------------------------------------------------



| |  |  | enhancing the electrical, thermal and reliability performance of semiconductor device packages;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | increasing packaging yield, shortening production cycle times; and
| | - |  | ------------------------------------------------------------------



| |  |  | investigating the use of new or replacement raw materials with lower cost.
| | - |  | --------------------------------------------------------------------------

Our key areas for
research and development are:



| |  |  | advanced flip-chip packaging;
| | - |  | -----------------------------



| |  |  | lead-frame and substrate packaging;
| | - |  | -----------------------------------



| |  |  | copper pillar bumping and packaging;
| | - |  | ------------------------------------



| |  |  | integrated passive devices (IPD);
| | - |  | ---------------------------------



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##### Table of Contents

| |  |  | System in Package (SiP) design and process technologies;
| | - |  | --------------------------------------------------------



| |  |  | Through Silicon Via technology;
| | - |  | -------------------------------



| |  |  | Fan Out technology; and
| | - |  | -----------------------



| |  |  | 2.5D/ 3D IC packaging technologies.
| | - |  | -----------------------------------

We believe that technology development is one of the key
success factors in the semiconductor packaging and testing industry. We work with our customers, equipment manufacturers or materials suppliers to develop advanced processing capabilities. Moreover, we work with customers early in the process of
wafer design to ensure that their packaging needs are met and that our packaging services provide our customers with the flexibility they require. Our research and development personnel are divided among our technology and package development
department, design and characterization department and manufacturing technology development department. In addition, our quality assurance and manufacturing personnel also participate in research and development activities. In 2014, 2015 and 2016,
our research and development expenses amounted to NT$3,626 million, NT$3,739 million and NT$4,043 million (US$124.8 million), respectively.

We maintain laboratory facilities to analyze the characteristics of semiconductor device packages by computer simulation and verify their
performances by measurement devices. The use of computer-aided engineering tools substantially reduces the time required to validate the proper function of packages, as compared to physical testing methods.

Raw Materials and Equipment

Raw Materials

Our
packaging operations require adequate supplies of materials and equipment on a timely basis. The principal raw materials used in packaging are substrates, lead-frames, gold wire, copper wire and molding compound. We generally have not entered into
long-term supply agreements and purchase our raw materials on a purchase order basis at prevailing market prices. The price of gold wire has been volatile and has fluctuated with the spot price of gold in recent years. In 2016, the spot price of
gold fluctuated from a low of approximately US$1,072.7 per ounce to a high of approximately US$1,370.0 per ounce. We have continued to implement measures to reduce our dependency on certain raw materials, such as gold wire. For example, we are
continuing to develop improvements to our manufacturing process that will shorten the length and reduce the diameters of the gold wire used. In addition, we have continued to develop copper wire bonding processes. Our major suppliers of raw
materials, which include Nanya Printed Circuit Board Corp., Unimicron Technology Corp. and Kinsus Interconnect Technology Corp., are leading companies in the types of materials they supply. We work closely with them and provide them with rolling
forecasts. For 2014, 2015 and 2016, our raw material costs were 44.4%, 42.2% and 42.9%, respectively, of operating costs.

We do not
maintain large inventories of raw materials. We purchase materials based on customer forecasts, and our customers are generally responsible for any unused materials in excess of the quantity they indicated they would need to meet their product
commitments. Based upon regular estimates of orders from customers, we usually maintain limited inventories of raw materials. Our principal suppliers usually dedicate portions of their inventories as reserves to meet our production requirements.
Nevertheless, on occasion when customer orders have exceeded the supply of raw materials, we have typically been able to obtain extensions from our customers to allow sufficient supply to become available. Such arrangements help us remain cost
competitive.

Equipment

In addition to raw materials, the availability of packaging and testing equipment is critical to our services. We generally seek to maintain
equipment from different suppliers with broad functionality and flexibility for different packaging types to enhance capacity utilization. We purchase packaging equipment from major international manufacturers, including KULICKE & SOFFA PTE
LTD., TOWA CORPORATION and Applied Materials South East Asia Pte, Ltd.



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Testing equipment is one of the critical components of the wafer probing and device testing
process. We generally seek to maintain testers from different suppliers with similar functionality and the ability to test a variety of different semiconductors. In general, certain semiconductors can only be tested on a limited number of specially
configured testers. Our major suppliers of testing equipment include Advantest Taiwan Inc., Teradyne (Asia) Pte Ltd., and Hon. Tech. Inc.

As of December 31, 2016, we operated 5,999 wire bonders and 453 testers in Taiwan. In addition, our subsidiary, Siliconware Suzhou has
1,997 wire bonders and 101 testers in the PRC We must order equipment in advance of customer demand to expand our capacity, based on our expectation of future demand for our packaging and testing services.

Competition

We
face substantial competition from established packaging and testing service providers, including companies with greater manufacturing, financial and other resources. These companies include Advanced Semiconductor Engineering, Inc. (Taiwan), Amkor
Technology Inc. (USA), and Jiangsu Changjiang Electronics Technology Co., Ltd (China). These companies have also established relationships with many large semiconductor companies that are our current or potential customers. To a lesser extent, we
also compete with the internal semiconductor packaging and testing capabilities of many of our customers.

The principal elements of
competition in the independent semiconductor packaging and testing market include:



| |  |  | the breadth of package and test offerings;
| | - |  | ------------------------------------------



| |  |  | technical competence;
| | - |  | ---------------------



| |  |  | manufacturing yields;
| | - |  | ---------------------



| |  |  | manufacturing cycle times;
| | - |  | --------------------------



| |  |  | customer service; and
| | - |  | ---------------------



| |  |  | price.
| | - |  | ------

IDMs that use our services continually evaluate our performance against their own in-house testing and assembly capabilities. These IDMs may have access to more advanced technologies and greater financial and other resources than we do. We believe, however, that we can offer greater efficiency
and lower costs while maintaining an equivalent or higher level of quality for three reasons:



| |  |  | 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;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we generally have lower unit costs because of our higher utilization rates; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | we offer a wider range of services in terms of complexity and technology.
| | - |  | -------------------------------------------------------------------------

Strategic
Investments and Dispositions

We enter into equity joint ventures with and make strategic investments and dispositions in companies
located in Taiwan, Singapore and the United States that engaged in semiconductor packaging and testing related businesses. We believe that our participation in these companies allows us to enhance and complement our manufacturing services offerings,
secure access to raw materials and keep us up to date with technological changes in the semiconductor industry. As of the date of this annual report, our major outstanding investments included:



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| |  |  | Unimicron Technology Corporation, or Unimicron. On December 28, 2015, we announced our board resolution to dispose of our shares in Unimicron to better deploy our capital for operations. In February 2016, we
disposed all shares of Unimicron for NT$1,082 million (US$33.0 million) and recognized gains on disposal of NT$10 million (US$0.3 million).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ChipMOS Technologies (Bermuda) Ltd., or ChipMOS Bermuda, a semiconductor packaging and testing and LCD driver and IC manufacturing company. On October 20, 2016, the Board of Directors of ChipMOS Technologies Inc.,
have approved that October 31, 2016 is the merger date, with ChipMOS Technologies Inc., be the surviving company. Under the agreement, Shareholders of ChipMOS Bermuda, will receive US$3.71 dollars in cash and 0.9355 share of American Depository
Shares (ADS) in exchange for each share in ChipMOS Bermuda. Each ADS will represent 20 new common shares to be issued by ChipMOS Technologies Inc. As a result of a corporate restructuring, we recognizes premium from merger of available-for-sale financial assets of NT$52 million (US$1.6 million).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ChipMOS Technologies Inc., or ChipMOS Taiwan, a semiconductor packaging and testing services company for flat-panel display drivers and advanced memory products. As of December 31, 2016, we held a 18.22% equity
interest in ChipMOS Taiwan (including ADSs).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to develop new generation substrates and increase substrate supply sources, we had acquired shares in Interconnect Tech Pte. Ltd., or Interconnect. In October 2015, Interconnect sold its major assets and
liabilities to ASM Advanced Packaging Materials Pte. Ltd., or AAPM, a substrate supplier located in Singapore, in exchange for cash and 39% interests in AAPM. Interconnect subsequently reduced its capital in December 2015. The 39% interests in AAPM
were distributed to us as capital return. As of December 31, 2016, we held a 39% equity interest in AAPM.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to better deploy our capital to achieve a stable return, in November 2015, we acquired a long term investment of 48.0 million common shares of Yann Yuan Investment Co., Ltd., or Yann Yuan, an investment
company for NT$ 2.4 billion through our investment of NT$2.401 billion in our wholly-owned subsidiary, Siliconware Investment Co., Ltd. As of December 31, 2016, we held a 33.33% equity interest in Yann Yuan.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Intellectual Property

As of December 31, 2016, we held 611 Taiwan patents, 438 U.S. patents and 151 PRC patents related to various semiconductor packaging
technologies, including patents for improvements of thermal and electrical performance used in the semiconductor packaging process. As of December 31, 2016, we also had a total of 115 pending patent applications in the United States, 143 in
Taiwan and 300 in the PRC. In addition, SPIL is registered as a trademark and as a servicemark in Taiwan.

We have also
entered into other technology alliances by licensing package technologies, including:



| |  |  | Wafer Bumping and Redistribution technology, which enables us to form and/or redistribute bumps on the chip to make a silicon die, is able to be directly attached to the substrate using the aforementioned bumps rather
than wire bonding. This license does not have an expiration date.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Wafer Level CSP technology, which enables us to produce a chip scale package at the stage of wafer level. This license does not have an expiration date.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

Our ongoing royalty expenses to license intellectual property for the years ended December 31, 2014, 2015 and 2016 were immaterialcompared to our revenues.



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We expect to continue to file patent applications where appropriate to protect our proprietary
technologies. We may need to enforce our patents or other intellectual property rights or to defend ourselves against claimed infringement of the rights of others through litigation, which could result in substantial cost and diversion of our
resources.

The semiconductor industry is characterized by frequent claims regarding patent and other intellectual property rights. If a
third party were to bring a valid legal claim against us, we could be required to:



| |  |  | discontinue the use of disputed process technologies;
| | - |  | -----------------------------------------------------



| |  |  | pay substantial damages;
| | - |  | ------------------------



| |  |  | develop non-infringing technologies; or
| | - |  | ---------------------------------------



| |  |  | acquire licenses to the technologies that we had allegedly infringed.
| | - |  | ---------------------------------------------------------------------

Environmental
Matters

The principal pollutants produced during semiconductor packaging are wastewater, industrial waste (liquid waste and solid
waste) and flue gas from the processes including solder plating, wafer grinding and die sawing. During these processes, wastewater is produced when water is used for cooling and rinsing wafers being sawed and ground or for rinsing semiconductor
chips when lead-frames are being plated.

In addition, solid waste materials are produced during the packaging process including scraps
such as metal lead-frame, printed-circuit-board-like substrate and excessive molding resin.

As for the newly developed bumping process,
wastewater is produced when water is used for rinsing wafers in the processes of developing, etching and solder deposition. Flue gas comes from the emissions of solvents that are used for coating, developing during the bumping process. Liquid waste
is mainly derived from photo resistant strip and bumping plating.

To mitigate environmental claims, we maintain pollution control
facilities in good conditions at all of our factories. We have installed various types of pollution control equipment dedicated to different properties of pollutants for the best treatment of flue gas and wastewater in our factories. As part of our
pollution control programs, we also subcontract certain industrial waste disposal and recycling work to suppliers who are certified by the Environmental Protection Administration. Furthermore, we also actively monitor any changes in the
international environmental requirements in the electronics and semiconductor industries in order to quickly respond accordingly. We believe that we are in compliance with the applicable environmental requirements of semiconductor industries and
regulations in Taiwan in all respects.

We have consistently followed the environmental practice of reducing pollution from our
manufacturing processes and continual performance improvement. Our environmental management meets and complies with ROC and all international environmental requirements. We have implemented an international environmental management system since 1998
and received the ISO-14001 certification in 1999. Moreover, in November 2016, we have been certified by the new version of ISO-14001:2015. By continually improving our
environmental performance over the years, we have changed the pollution control method from production operations to source management, which focuses on prohibiting or restricting the use of environmentally hazardous substances in materials. We made
this change to meet the growing consumer trend for green products. In March 2003, we passed Sony Corporations Green Partner qualification with a perfect score. In addition, in 2008 our hazardous substance process management system has received
QC080000 certification, which is an industrial management standard for the production of environmentally friendly products. In order to verify our environmental management performance, we applied and passed the Clean Production Assessment system
certification. This is an honor to us for our sustainability commitment.



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We also have taken various energy saving and carbon reduction measures to reduce our greenhouse
gas emissions. Since 2010, we have implemented our greenhouse gas inventory and ISO 14064-1 verification of all factories and dormitories. We also have been disclosing through the Carbon Disclosure Project for
the past nine years. In 2016 we were evaluated as a B grade performance of Carbon Disclosure Project (CDP) in greenhouse management. In order to control energy usage, we have conducted and passed the ISO 50001 energy management system certification
since 2013.

Insurance

We have insurance policies covering physical damage to buildings, equipment and inventories caused by natural disasters and other perils, and
the loss of gross profit caused by the insured perils. We also insure ordinary transit and transportation risks for delivery of our inventories and products resulting from our services.

There is an emergency response team in place capable of responding to situations on a real time basis in order to prevent or minimize the
possibility of loss to personnel or our facilities, equipment, machinery and inventories.

We have directors and officers liability
insurance in place to cover losses that a director or officer becomes legally obligated to pay on account of a claim made against that director or officer from an alleged or actual wrongful act committed in an executive capacity.

Employees

See
Item 6. Directors, Senior Management and Employees  D. Employees for certain information relating to our employees.

Capital Expenditures and Divestitures

Our capital expenditures amounted to NT$19,561 million, NT$13,855 million and NT$15,295 million (US$472.1 million) in 2014, 2015
and 2016, respectively. Our initial budget for capital expenditures for 2017 is approximately NT$15,500 million (US$478.4 million), which is mostly funded from our retained earnings and borrowings. We expect our capital expenditures in 2017
will primarily consist of expanding our advanced packaging and testing capacity. We may adjust the amount of our capital expenditures upward or downward based on the progress of our capital projects, market conditions and our anticipation of future
business outlook. See Item 5. Operating and Financial Review and ProspectsB. Liquidity and Capital Resources.

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



|                                             |  |                          |        |  |      |  |        |      |  |  |        |  |  |  |       | 
|-------------------------------------------- |  | ------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  |  | ----- | 
|                                             |  | Years Ended December 31, |       
|                                             |  | 2014                     |        |  | 2015 |  |        | 2016 | 
|                                             |  | NT$                      |        |  | NT$  |  |        | NT$  |  |  | US$    | 
|                                             |  | (in millions)            |       
|Equipment purchases                          |  |                          | 12,533 |  |      |  | 11,535 |      |  |  | 12,422 |  |  |  | 383.4 | 
|Land and building construction and purchases |  |                          | 7,028  |  |      |  | 2,320  |      |  |  | 2,873  |  |  |  | 88.7  | 

Litigation

We filed a civil lawsuit against ASE in the Kaohsiung District Court in October 2015, requesting the courts confirmation that ASE does
not have the right to request registration as a shareholder in our shareholder register, on the ground that ASEs tender offer violated various laws and regulations in Taiwan. This civil lawsuit was subsequently dismissed in June 2016.



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C. Organizational Structure

The following table sets forth certain information as of December 31, 2016 regarding certain companies in which we consolidated and the
principal business of each such entity.



|                                        |  |                                                                                           |  |                        |  |                                    |       |     |                                |  |        |  
|--------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------------------- | ----- | --- | ------------------------------ |  | ------ | -
|Company                                 |  | Main Activities                                                                           |  | Location               |  | Total Paid-inCapital of SuchEntity |       |     | Direct/IndirectEquity Interest | 
|                                        |  |                                                                                           |  |                        |  | (in millions)                      |       |     |                                | 
|SPIL (B.V.I.) Holding Limited           |  | Investment activities                                                                     |  | British Virgin Islands |  | US$                                | 128.4 |     |                                |  | 100.00 | %
|Siliconware U.S.A. Inc.                 |  | Communicating and maintaining relationships with companies headquartered in North America |  | San Jose, CA, USA      |  | US$                                | 1.3   |     |                                |  | 100.00 | %
|SPIL (Cayman) Holding Limited           |  | Investment activities                                                                     |  | Cayman Islands         |  | US$                                | 130.2 |     |                                |  | 100.00 | %
|Siliconware Technology (Suzhou) Limited |  | Assembly and testing services                                                             |  | Suzhou, Jiangsu, China |  | US$                                | 145.0 | (1) |                                |  | 100.00 | %
|Siliconware Investment Co., Ltd.        |  | Investment activities                                                                     |  | Taipei, Taiwan         |  | NT$                                | 480   |     |                                |  | 100.00 | %





|(1) | Contributed capital includes new share issue through the capitalization of earnings in the amount of US$15 million.
|--- | -------------------------------------------------------------------------------------------------------------------

The following table sets forth certain information regarding our investees as of December 31, 2016.



|                                           |  |                                                                                       |  |                        |  |                                    |       |     |                                |  |       |     
|------------------------------------------ |  | ------------------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------------------- | ----- | --- | ------------------------------ |  | ----- | ----
|Company                                    |  | Main Activities                                                                       |  | Location               |  | Total Paid-inCapital of SuchEntity |       |     | Direct/IndirectEquity Interest | 
|                                           |  |                                                                                       |  |                        |  | (in millions)                      |       |     |                                | 
|ChipMOS Technologies Inc.                  |  | Assembly and testing services of integrated circuits                                  |  | Hsinchu, Taiwan        |  | NT$                                | 8,870 |     |                                |  | 18.22 | %(3)
|Mega Mission Limited Partnership           |  | Investment activities                                                                 |  | Cayman Islands         |  | US$                                | 150   | (1) |                                |  | 4.00  | %   
|Vertical Circuits, Inc.                    |  | Providing advanced packaging technology, products, services and intellectual property |  | Scotts Valley, CA, USA |  | US$                                | 0     | (2) |                                |  | 30.68 | %   
|ASM Advanced Packaging Materials Pte. Ltd. |  | Designing, manufacturing, and selling substrates                                      |  | Singapore              |  | US$                                | 10.8  |     |                                |  | 39.00 | %   
|Yann Yuan Investment Co., Ltd.             |  | Investment activities                                                                 |  | Taipei, Taiwan         |  | NT$                                | 1,440 |     |                                |  | 33.33 | %   



|(1) | Contributed capital.
|--- | --------------------

|(2) | Vertical Circuits, Inc. filed for bankruptcy protection in July 2012.
|--- | ---------------------------------------------------------------------

|(3) | Including ADSs.
|--- | ---------------

D. Property, Plants and Equipment

We provide services through our Taiwan facilities in Taichung, Hsinchu and Changhua. Our subsidiary Siliconware Suzhou engages in assembly and
testing service in the facility located Suzhou, China. The following table shows the location, size and wire bonding or testing capacity of each of the facilities and the property on which each facility is located as of December 31, 2016.



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|                 |  |                      |  |                  |         |  |                 |  |         |                                  |  |                                      
|---------------- |  | -------------------- |  | ---------------- | ------- |  | --------------- |  | ------- | -------------------------------- |  | -------------------------------------
|Facility(1)      |  | Location of Facility |  | Size of Facility |         |  | Size of Land    |  |         | Wire Bonding or
Testing Capacity
|                 |  |                      |  | (square meters)  |         |  | (square meters) |  |         |                                 
|DF Facility I    |  | Taichung, Taiwan     |  |                  | 95,000  |  |                 |  | 29,500  |                                  |  | 5,999 wire bonders and 453 testers(4)
|CS Facility II   |  | Taichung, Taiwan     |  |                  | 140,000 |  |                 |  | 47,000  |                                  |  |                                      
|ZK Facility III  |  | Taichung, Taiwan     |  |                  | 308,415 |  |                 |  | 121,000 | (3)                              |  |                                      
|CH Facility IV   |  | Changhua, Taiwan     |  |                  | 134,000 |  |                 |  | 43,000  |                                  |  |                                      
|HS Facility V(2) |  | Hsinchu, Taiwan      |  |                  | 97,000  |  |                 |  | 30,000  | (3)                              |  |                                      
|SZ Facility VI   |  | Suzhou, China        |  |                  | 74,000  |  |                 |  | 148,500 | (3)                              |  | 1,997 wire bonders and 101 testers   



|(1) | We own all of our facilities except otherwise noted.
|--- | ----------------------------------------------------

|(2) | We entered into an agreement with Integrated Service Technology Inc. in December 2016 to sell Hsinchu Phase II of this facility premised on the land in the total size of 20,074 square meters for the amount of
NT$412 million. This transaction was completed in March 2017.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Leased.
|--- | -------

|(4) | Includes wire bonders and testers for DF Facility I, CS Facility II, ZK Facility III, CH Facility IV and HS Facility V.
|--- | -----------------------------------------------------------------------------------------------------------------------

Our principal executive offices are located at Facility I in Taichung, Taiwan. Our research and development activities are located at Facility
II.



|Item 4A. | Unresolved Staff Comments
|-------- | -------------------------

Not applicable.



|Item 5. | Operating and Financial Review and Prospects
|------- | --------------------------------------------

Unless stated otherwise, the discussion
and analysis of our financial condition and results of operations in this section apply to our financial information as prepared according to IFRS. You should read the following discussion of our financial condition and results of operations
together with the financial statements and the notes to these statements included in this annual report.

A. Operating Results

Overview

We are one of the worlds leading independent providers of semiconductor packaging and testing services. We offer a full range of
packaging and testing solutions, including advanced packages, substrate packages, lead-frame packages, and testing services for logic and mixed signal devices. We also offer our customers complete turnkey solutions, including packaging, testing and
drop shipment service.

We recorded operating profit of NT$14,105 million, NT$12,998 million and NT$10,669 million
(US$329.3 million) in 2014, 2015 and 2016, respectively. See Results of Operations.

Intense competition in the semiconductor
industry worldwide resulted in decreases in the average selling prices of our manufacturing services. We expect that average selling prices for most of our semiconductor packages to continue to decline in the future. A decline in average selling
prices of our semiconductor packages, coupled with high depreciation cost resulting from our purchase of additional equipment during the previous periods, if not offset by reductions in the other cost of producing those packages, would decrease our
gross margins.



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To counter the effects of decreasing average selling prices, we will continue to attempt to:



| |  |  | negotiate better pricing terms with our suppliers, including quantity discounts;
| | - |  | --------------------------------------------------------------------------------



| |  |  | find less expensive alternative sources of raw materials;
| | - |  | ---------------------------------------------------------



| |  |  | maximize production efficiency of our equipment; and
| | - |  | ----------------------------------------------------



| |  |  | engage in utility conservation programs.
| | - |  | ----------------------------------------

We do not maintain reserves for cancellations or
variations in customer orders.

General Factors Affecting Our Results of Operations

General factors affecting our results of operations include the global economy and conditions in the semiconductor markets, gold prices, the
fluctuation of the New Taiwan dollar and rising wage levels. For information relating to risks associated with gold prices and foreign currency fluctuation, see Item 11. Quantitative and Qualitative Disclosures About Market Risk 
Commodity Price Risk and Item 11. Quantitative and Qualitative Disclosures About Market Risk  Foreign Exchange Risk.

Consolidation

In
accordance with IFRS, we consolidated five subsidiaries: SPIL (B.V.I.) Holding Limited, Siliconware U.S.A. Inc., SPIL (Cayman) Holding Limited, Siliconware Technology (Suzhou) Limited and Siliconware Investment Co., Ltd., in each of which we own a
100% equity interest.

Mix of Services

The following table shows, for the periods indicated, the amount and percentage of our packaging by package types and testing revenues, which
are more fully described in Item 4. Information on the CompanyB. Business OverviewOur Business.



|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|--------------------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                            |  | Years Ended December 31,          |       
|                            |  | 2014                              |        |  | 2015 |  |       | 2016 | 
|                            |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                            |  | (in millions, except percentages) |       
|Bumping and flip-chip       |  |                                   | 32,797 |  |      |  | 39.5  |      |  |  | 36,494 |  |  |     | 44.2  |  |   |  | 35,097 |  |  |  | 41.2  | 
|Substrate base              |  |                                   | 24,099 |  |      |  | 29.0  |      |  |  | 21,316 |  |  |     | 25.7  |  |   |  | 24,473 |  |  |  | 28.8  | 
|Lead-frame base             |  |                                   | 15,573 |  |      |  | 18.7  |      |  |  | 14,943 |  |  |     | 18.0  |  |   |  | 14,746 |  |  |  | 17.3  | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Subtotal packaging revenue  |  |                                   | 72,469 |  |      |  | 87.2  |      |  |  | 72,753 |  |  |     | 87.9  |  |   |  | 74,316 |  |  |  | 87.3  | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Testing                     |  |                                   | 9,852  |  |      |  | 11.9  |      |  |  | 9,551  |  |  |     | 11.5  |  |   |  | 10,228 |  |  |  | 12.0  | 
|Others(1)                   |  |                                   | 750    |  |      |  | 0.9   |      |  |  | 536    |  |  |     | 0.6   |  |   |  | 568    |  |  |  | 0.7   | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total net operating revenue |  |                                   | 83,071 |  |      |  | 100.0 |      |  |  | 82,840 |  |  |     | 100.0 |  |   |  | 85,112 |  |  |  | 100.0 | 
|                            |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 



|(1) | Primarily consists of revenues generated from change kit and socket design services for mixed signal and RF integrated circuits and sales of raw materials to customers the purchase orders of whom were anticipated due to
the customer pervious indication but were not placed, and the customers agreed to purchase such raw materials prior to their expiry dates
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Expansion and Utilization Rate

The number of our wire bonders decreased from 7,384 as of December 31, 2014 to 7,323 as of December 31, 2015 but increased to 7,996
as of December 31, 2016.Our operating results are affected by relatively high fixed costs. As a result, capacity utilization rates can significantly affect margins as the unit cost of packaging and testing services generally decreases
as fixed charges, including depreciation expenses on our equipment, are allocated over a larger number of units. Our utilization rates have varied from period to period as we have expanded our production capacity. We have been successful in
minimizing the industry-wide fluctuation in capacity utilization rates by deploying flexible equipment for different packages and also by utilizing our test equipment for both IC testing and wafers probing purposes. Our ability to maintain or
enhance our margins will continue to depend in part on our ability to effectively manage capacity utilization rates. The capacity utilization rates of our facilities were approximately 90%, 85% and 90% in 2014, 2015 and 2016, respectively.



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Applications of Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included
elsewhere in this annual report, which have been prepared in accordance with IFRS. The preparation of our audited consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our accounting estimates and judgement which may significantly impact the carrying value of our assets and liabilities,
including key assumptions applied to determine the value of our defined benefit pension plan obligation, fair value of conversion option derivatives and
available-for-sale equity investment. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates using different assumptions
or conditions. Further discussion of these critical accounting estimates and policies is included in Note 5 to our consolidated financial statements.

The accounting policies set out below have been applied consistently by us and our subsidiaries to all periods presented in these consolidated
annual financial statements, unless otherwise indicated.

We believe the following critical accounting policies involve the most
significant judgments and estimates used in the preparation of our audited consolidated financial statements. For further information on our significant accounting policies, please refer to Note 4 in our consolidated financial statements included in
this annual report.

Revenue Recognition

We principally provide assembly and testing services of integrated circuits, which may be assembly only, testing only or turnkey solutions. We
recognize revenues when:



| |  |  | the amount of revenue can be measured reliably;
| | - |  | -----------------------------------------------



| |  |  | it is probable that the economic benefits associated with the transaction will flow to the entity;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | the stage of completion of the transaction at the end of the reporting period can be measured reliably; and
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | the costs incurred for the transaction and the cost to complete the transaction can be measured reliably.
| | - |  | ---------------------------------------------------------------------------------------------------------

Services provided by us include wafer bumping, wafer sort, IC packaging and final testing. Our actual services and fees may vary by customers
and are pre-agreed before provision of services. We regard each of the captioned services as a separate stage. Fees for each stage of services are negotiated independently and the fee for a specific stage is
the market price for that stage. Revenue is recognized when each stage of services has been completed. Each stage is performed as a whole and may not be separated or proportioned. Sales allowance is estimated based on historical experiences and
recorded as a deduction to the revenue.

Impairment of Available-for-Sale Equity Securities

Investments in available-for-sale equity securities are
measured at fair value. A significant or prolonged decline in the fair value of the securities below their acquisition cost is considered as an indicator that the securities are other than temporarily impaired. We consider all available evidence
such as market conditions and prices, investee-specific factors and the duration as well as the extent to which fair value is less than acquisition cost in evaluating potential impairment of its available-for-sale financial assets. If any such evidence exists for available-for-sale financial assets, we recognize a
cumulative loss  measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the income statement. Impairment losses recognized in the income
statement on equity instruments are not reversed.



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Description of Revenue and Cost Items

Net Operating Revenues

We
generate our net operating revenues primarily from semiconductor packaging and testing operations. Net operating revenues from our semiconductor packaging activities consist of our service fees and the cost of raw materials we purchase to provide
semiconductor packaging services. We price our packaging services on a per unit basis taking into account the complexity of the services to be provided, the prevailing market conditions, the order size, the strength and history of our relationship
with the customer and our capacity utilization. We charge our testing services based on the specific test and the time, usually measured in seconds, to run a test, taking into account the complexity of the semiconductor device and the
customers test program. Our customers are generally invoiced at the time when services are rendered, with varying terms of credit between 30 and 90 days from the time of billing.

Operating Costs

Our
operating costs consist principally of:



| |  |  | cost of raw materials purchased for semiconductor packaging services;
| | - |  | ---------------------------------------------------------------------



| |  |  | direct labor costs; and
| | - |  | -----------------------



| |  |  | overhead, including depreciation and maintenance of production equipment, indirect labor costs, indirect material costs and utilities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses

Our
operating expenses consist of the following:



| |  |  | Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of salaries and related personnel expenses, other marketing expenses, fees for professional services, and the
cost of computers to support our operations.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Research and Development Expenses. Research and development expenses consist primarily of salaries, bonuses and related costs for technology development, technology license fees allocated to research and development,
and depreciation and maintenance of equipment and various materials used in our research and development processes. We expect our research and development expenses to grow as we hire additional staff and purchase additional equipment for research
and development purposes.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Taxation

The corporate income tax rate in Taiwan, which currently applies to us, is 17%. Based on our status as a company engaged in the semiconductor
packaging and testing business in Taiwan, we have been granted exemptions from income taxes in Taiwan because we used the proceeds raised through the capitalization of earning for the purpose of purchasing equipment. As permitted by Taiwan tax
regulation, we can use these exemptions for five years from the date when we begin to generate income from the use of this equipment.



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The Industrial Development Bureau of the Ministry of Economic Affairs has granted permission for
a five-year income tax exemption of our 2007 registered capitalization plan in 2008. We acquired the work completion certificate from the Taichung City Government Economic Development Bureau in 2013, and selected 2015 as the starting period for the
income tax exemption. As a result, our tax savings amounted to approximately NT$679 million and NT$488 million (US$15.1 million) in 2015 and 2016.

We also benefited from other tax incentives generally available to technology companies, including tax credits ranging from 30% to 50% for
research and development and employee training expenses and tax credits ranging from 7% to 11% for investment in automation equipment and technology and certain qualifying investments. However, according to the Industrial Innovation Actissued on May 12, 2010, the deductible rate of investment tax credit for qualifying research and development expenditures was reduced from 30% to 15% starting January 1, 2010. Historically, these tax incentives have resulted in
decreases of income tax payable by approximately NT$ 327 million in 2014. These tax incentives did not result in any decrease of income tax payable in 2015and 2016.

Results of Operations

The following table shows some of our results of operations data as a percentage of our net operating revenues for the periods indicated.



|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|----------------------------------- |  | ------------------------ | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                    |  | Years Ended December 31, |      
|                                    |  | 2014                     |       |   | 2015 |  |       | 2016 | 
|                                    |  | %                        |       |   | %    |  |       | %    | 
|Net operating revenues              |  |                          | 100.0 |   |      |  | 100.0 |      |  |  | 100.0 |  
|Operating costs                     |  |                          | 74.7  |   |      |  | 73.9  |      |  |  | 77.3  |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Gross profit                        |  |                          | 25.3  |   |      |  | 26.1  |      |  |  | 22.7  |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating expenses:                 |  |                          |       |   |      |  |       |      |  |  |       |  
|Selling expenses                    |  |                          | 1.1   |   |      |  | 1.2   |      |  |  | 1.2   |  
|General and administrative expenses |  |                          | 3.1   |   |      |  | 4.4   |      |  |  | 4.1   |  
|Research and development expenses   |  |                          | 4.4   |   |      |  | 4.5   |      |  |  | 4.8   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating expenses                  |  |                          | 8.6   |   |      |  | 10.1  |      |  |  | 10.1  |  
|Other income and expense            |  |                          | 0.3   |   |      |  | (0.3  | )    |  |  | (0.1  | )
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating profit                    |  |                          | 17.0  |   |      |  | 15.7  |      |  |  | 12.5  |  
|Net non-operating income (expense)  |  |                          | 0.2   |   |      |  | (3.2  | )    |  |  | 1.2   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Income before income tax            |  |                          | 17.2  |   |      |  | 12.5  |      |  |  | 13.7  |  
|Income tax expense                  |  |                          | (3.7  | ) |      |  | (1.6  | )    |  |  | (2.2  | )
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Net income                          |  |                          | 13.5  |   |      |  | 10.9  |      |  |  | 11.5  |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  

The Year Ended December 31, 2016 Compared to the Year Ended December 31, 2015

Net operating revenues. Net operating revenues increased by 2.7% from NT$82,840 million in 2015 to NT$85,112 million
(US$2,626.9 million) in 2016. The increase in net operating revenues was primarily due to the growth of sales volume in substrate base package as a result of an increase in demand in TV and smartphone market in China, but partially offset by the
price reduction.

In 2016, bumping and flip-chip revenues accounted for 41.2% of our net operating revenues, down from 44.2% in
2015.The decrease in bumping and flip-chip revenues was attributable to achange of certain customers product mix.

In 2016, substrate base package accounted for 28.8% of our net operating revenues, up from 25.7% in 2015. The increase in substrate base
package sales was due to an increase in demand in TV and smartphone market in China.



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In 2016, lead-frame base package accounted for 17.3% of our net operating revenues, down from
18.0% in 2015. The decrease in lead-frame base package sales was attributable to a decrease in demand as smaller and/or more efficient substitutes emerge.

In 2016, testing revenues accounted for 12.0% of our net operating revenues, up from 11.5% in 2015. The slight increase in testing revenue was
attributable to an increase in semiconductor demand.

Gross profit and gross margin. Our gross profit decreased by 10.5% from
NT$21,609 million in 2015 to NT$ 19,350 million (US$597.2 million) in 2016 mainly due to the increase of operating costs. Our gross margin (gross profit as a percentage of net operating revenues) decrease from 26.1% in 2015 to 22.7% in
2016, mainly affected by unfavorable product mix. Our operating costs increased by 7.4% from NT$61,231 million in 2015 to NT$65,762 million (US$2,029.7 million) in 2016, in line with our increase in operating revenues.

Operating expenses. Operating expenses increased by 2.5% from NT$8,355 million in 2015 to NT$8,564 million (US$264.3 million)
in 2016. Operating expenses as a percentage of net operating revenues was 10.1% for both 2015 and 2016.

Selling expenses.Selling
expenses increased by NT$80 million between these two years mainly due to an increase in miscellaneous expense which is related to our clients, such as business trip expense, sampling expense and freight expense.

General and administrative expenses.General and administrative expenses decreased by NT$176 million mainly due to a decrease in
employee bonuses.

Research and development expenses. Research and development expenses increased by NT$304 million mainly due
to an increase in the expense of new package development and salary expense.

Other income and expenses. Other expenses decreased
by NT$139 million mainly due to the decreased in loss on damages and claims.

Operating income and operating margin. We
recorded operating income of NT$12,998 million and an operating margin of 15.7% (operating income as a percentage of net operating revenues) in 2015 and generated operating income of NT$10,669 million (US$329.3 million) and an operating
margin of 12.5% in 2016. The decrease in operating margin was primarily due to decrease in gross profit.

Net non-operating income/loss. Werecorded a net non-operating loss of NT$2,621 million in 2015, compared to net
non-operating income of NT$1,005 million (US$31.0 million) in 2016. This change in net non-operating income was primarily due to a decrease in impairment loss of available-for-sale financial assets. We recorded a net loss on financial liabilities at fair value of NT$703 million in 2015, compared with a net gain of
NT$1,025 million (US$31.6 million) in 2016. We recorded a net foreign exchange loss of NT$77 million in 2015, compared with NT$104 million (US$3.2 million) in 2016. Finance costs decreased from NT$565 million in 2015 to
NT$562 million (US$17.4 million) in 2016.

Income tax expense. We recognized income tax expense of NT$1,366 million in
2015 compared to NT$1,867 million (US$57.6 million) in 2016 primarily due to increase in deferred income tax expense and decrease in tax holiday due to decline in taxable income.

Net income. As a result of the factors discussed above, our net income increased from NT$9,011 million in 2015 to
NT$9,807 million (US$302.7 million) in 2016.

The Year Ended December 31, 2015 Compared to the Year Ended
December 31, 2014

Net operating revenues. Net operating revenues decreased by 0.3% from NT$83,071 million in 2014
to NT$82,840 million in 2015. The decrease in net operating revenues was primarily due to excess inventory and a decline in average selling prices of our semiconductor packages.



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In 2015, bumping and flip-chip revenues accounted for 44.2% of our net operating revenues, up
from 39.5% in 2014.The increase in bumping and flip-chip revenues was attributable to the increased demand for portable devices.

In 2015, substrate base package accounted for 25.7% of our net operating revenues, down from 29.0% in 2014. The decrease in substrate base
package sales was due to decrease in demand as smaller, more efficient substitutes emerge, and flip-chip replacing substrate base package demand.

In 2015, lead-frame base package accounted for 18.0% of our net operating revenues, down from 18.7% in 2014. The decrease in lead-frame base
package sales was attributable to decrease in demand as smaller and/or more efficient substitutes emerge.

In 2015, testing revenues
accounted for 11.5% of our net operating revenues, down from 11.9% in 2014. The slight decrease in testing revenue was attributable to decrease in semiconductor demand.

Gross profit and gross margin. Our gross profit increased by 2.9% from NT$ 20,990 million in 2014 to NT$ 21,609 million in
2015 mainly due to the decrease of operating costs. Our gross margin (gross profit as a percentage of net operating revenues) increased from 25.3% in 2014 to 26.1% in 2015, mainly attributable to favorable product mix. Our operating costs decreased
by 1.4% from NT$62,081 million in 2014 to NT$ 61,231 million in 2015, in line with our decrease in operating revenues.

Operating expenses. Operating expenses increased by 16.5% from NT$7,169 million in 2014 to NT$8,355 million in 2015.
Operating expenses as a percentage of net operating revenues was 8.6% and 10.1% in 2014 and 2015, respectively.

Selling expenses.Selling expenses increased by NT$7 million between these two years mainly due to an increase in employee bonuses.

General and
administrative expenses.General and administrative expenses increased by NT$1,066 million mainly due to an increase in preparations for the new plant and expansion costs and employee bonuses.

Research and development expenses. Research and development expenses increased by NT$113 million mainly due to an increase in the
expense of new package development.

Other income and expenses. Other expenses increased by NT$540 million mainly due to the
increase in loss on damages and claims.

Operating income and operating margin. We recorded operating income of
NT$14,105 million and an operating margin of 17.0% (operating income as a percentage of net operating revenues) in 2014 and generated operating income of NT$12,998 million and an operating margin of 15.7% in 2015. The decrease in operating
margin was primarily due to increase in operating expenses.

Net non-operating income.We
recorded net non-operating income of NT$163 million in 2014, compared to a net-operating loss of NT$2,621 million in 2015. The decrease in net non-operating income was primarily due to an increase in impairment loss of available-for-sale financial assets. Net foreign exchange
gain/loss decreased from a gain of NT$483 million in 2014 to a loss of NT$77 million in 2015. Finance costs increased from NT$403 million in 2014 to NT$565 million in 2015. The increase was primarily due to interest from
amortization of Convertible bond. We recognized the full year effect on interest amortization in 2015, compared to the 3-month worth of interest expense incurred (i.e., convertible bond was issued in October
2014).

Income tax expense. We recognized income tax expense of NT$3,050 million in 2014 compared to NT$1,366 million in
2015 primarily due to decrease in taxable income.

Net income. As a result of the factors discussed above, our net income decreased
from NT$11,218 million in 2014 to NT$9,011 million in 2015.



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##### Table of Contents

B. Liquidity and Capital Resources

We need cash primarily for capacity expansion, equipment purchases and working capital. We believe that our working capital is sufficient for
our requirements for the next year. Although we have historically been able to satisfy our working capital needs from cash flow from operations, our ability to expand our capacity has been largely dependent upon, and will continue to depend upon,
our ability to finance these activities through the issuance of equity securities, long-term borrowings and the issuance of convertible and other debt securities. Our ability to meet our working capital needs from cash flow from operations will be
affected by the demand for our manufacturing services, which in turn may be affected by several factors, many of which are outside of our control, such as economic downturns and declines in the average selling prices of our manufacturing services
caused by oversupply in the market. To the extent that we do not generate sufficient cash flow from our operations to meet our cash requirements, we may rely on external borrowings and securities offerings. Pursuant to our loan agreements, we should
maintain, on a semi-annual and annual basis, certain financial covenants, such as current ratio, liability to tangible net worth ratio as well as the ratio of interest coverage. As of December 31, 2016, we were in full compliance with all the
financial covenants. We have not historically relied, and we do not plan to rely in the foreseeable future, on off-balance sheet financing arrangements to finance our operations or expansion. We paid cash
dividends of NT$3.00 and NT$3.80 per share in 2014 and 2015. On March 23, 2017, our board of directors approved a proposal to distribute cash dividends of NT$1.75 per share for 2016. This proposed dividend is subject to shareholders
approval. We may continue our trend of paying cash dividends, which may cause our liquidity to decrease.

Liquidity

As of December 31, 2016, our primary source of liquidity was NT$24,476 million (US$755.4 million) of cash and cash equivalents. As of
December 31, 2016, we had total availability under existing short-term lines of credit of NT$8,370 million (US$258.3 million) from six domestic and foreign financial institutions, of which NT$2,865 million (US$88.4 million) were used
as letters of credit, guarantees and short-term borrowings. All of our short-term facilities are revolving facilities with a term of one year, which may be extended for terms of one year each with lenders consent.

In addition to our short-term facilities, we also have long-term borrowings and loans. Below is a summary of our long-term borrowings and
loans as of December 31, 2016:



| |  |  | In August 2012, we entered into a credit facility led by Mega International Commercial Bank in the amounts of NT$3,257 million and US$250 million for capacity expansion. This facility is a long-term floating
interest rate credit facility expiring in August 2017 and repayable in six semi-annual installments starting from February 2015. As of December 31, 2016, we had drawn down the full amount from this credit facility, and repaid aggregate amounts
of NT$2,171 million and US$216.7 million, respectively.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In December 2013, we entered into a credit facility led by The Hongkong and Shanghai Banking Corporation Limited in the amount of NT$850 million for capacity expansion purposes. This facility is a long-term
floating interest rate credit facility expiring in December 2018 and repayable in six semi-annual installments starting from December 2016. As of December 31, 2016, we had drawn down the full amount from this credit facility, and repaid
aggregate amounts of NT$170 million.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In December 2013, we entered into a credit facility led by Bank of Taiwan in the amount of NT$1.5 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility
expiring in December 2018 and repayable in six semi-annual installments starting from June 2016. As of December 31, 2016, we had drawn down the full amount from this credit facility, and repaid aggregate amounts of NT$500 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | In November 2013, we entered into a credit facility led by Mega International Commercial Bank in the amount of NT$1.5 billion for capacity expansion purposes. This facility is a long-term floating interest rate
credit facility expiring in August 2019 and repayable in six semi-annual installments starting from February 2017. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In November 2013, we entered into a credit facility led by CTBC Bank in the amount of NT$1.5 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility expiring in
July 2020 and repayable in six semi-annual installments starting from February 2018. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In November 2013, we entered into a credit facility led by Taiwan Cooperative Bank in the amount of NT$1 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility
expiring in November 2020 and repayable in six semi-annual installments starting from June 2018. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In October 2014, we issued an aggregate of US$400 million zero coupon convertible bonds due 2019 to procure foreign currency-denominated raw materials and repay long-term debt. Please refer to Note 17 to our
consolidated financial statements for more detailed information.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In January 2016, we entered into a credit facility led by Bank of Taiwan in the amount of NT$3 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility expiring
in January 2021 and repayable in six semi-annual installments starting from July 2018. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In January 2016, we entered into a credit facility led by Chang Hwa Bank in the amount of NT$1.5 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility expiring
in July 2021 and repayable in six semi-annual installments starting from January 2019. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In January 2016, we entered into a credit facility led by Taiwan Cooperative Bank in the amount of NT$1 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility
expiring in July 2021 and repayable in six semi-annual installments starting from January 2019. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In January 2016, we entered into a credit facility led by CTBC Bank in the amount of NT$1.5 billion for capacity expansion purposes. This facility is a long-term floating interest rate credit facility expiring in
July 2021 and repayable in six semi-annual installments starting from January 2019. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In February 2016, we entered into a credit facility led by Mega International Commercial Bank in the amount of NT$2 billion for capacity expansion purposes. This facility is a long-term floating interest rate
credit facility expiring in December 2021 and repayable in six semi-annual installments starting from June 2019. As of December 31, 2016, we had drawn down the full amount from this credit facility.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In December 2016, we entered into a credit facility led by KGI Bank in the amount of NT$2.5 billion for working capital purposes. This facility is a long-term floating interest rate credit facility expiring and
repayable in December 2019. As of December 31, 2016, we had drawn down NT$1.5 billion from this credit facility.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2016, we had short-term and long-term borrowings of NT$2,741 million (US$84.6 million) and NT$18,342 million
(US$566.1 million), exclusive of loan arrangement fees of NT$2 million, respectively, outstanding under these facilities.



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The following table sets forth 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.



|                                                     |  |                          |         |   |      |  |         |      |  |  |         |   |  |  |        |  
|---------------------------------------------------- |  | ------------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  |  | ------ | -
|                                                     |  | Years Ended December 31, |        
|                                                     |  | 2014                     |         |   | 2015 |  |         | 2016 | 
|                                                     |  | NT$                      |         |   | NT$  |  |         | NT$  |  |  | US$     |  
|                                                     |  | (in millions)            |        
|Net cash provided by operating activities            |  |                          | 24,945  |   |      |  | 26,784  |      |  |  | 20,845  |   |  |  | 643.3  |  
|Net cash used in investing activities                |  |                          | (19,243 | ) |      |  | (16,587 | )    |  |  | (14,042 | ) |  |  | (433.4 | )
|Net cash provided (used) in financing activities     |  |                          | 7,292   |   |      |  | (15,096 | )    |  |  | (7,161  | ) |  |  | (221.0 | )
|Effect of exchange rate changes on cash              |  |                          | 185     |   |      |  | (64     | )    |  |  | (357    | ) |  |  | (11.0  | )
|                                                     |  |                          |         |   |      |  |         |      |  |  |         |   |  |  |        |  
|Net (decrease) increase in cash and cash equivalents |  |                          | 13,179  |   |      |  | (4,963  | )    |  |  | (715    | ) |  |  | (22.1  | )
|                                                     |  |                          |         |   |      |  |         |      |  |  |         |   |  |  |        |  

Net Cash Provided by Operating Activities

In 2016, net cash provided by operations was NT$20,845 million (US$643.3 million) compared to NT$26,784 million in 2015. The decrease
in net cash provided by operating activities was primarily due to inflows from an increase in trade receivables and a decrease of net income, exclude non-cash transactions.

In 2015, net cash provided by operations was NT$26,784 million compared to NT$24,945 million in 2014. The increase in net cash
provided by operating activities was primarily the result of the collection of overdue accounts receivables in 2015.

Net Cash Used
in Investing Activities

In 2016, cash used in investing activities was NT$14,042 million (US$433.4 million) compared to
NT$16,587 million in 2015. The decrease in net cash used in investing activities was primarily the result of an acquisition of investment in Yann Yuan Investment Co., Ltd. in 2015.

In 2015, cash used in investing activities was NT$16,587 million compared to NT$19,243 million in 2014. The decrease in net cash
used in investing activities was primarily the result of decrease in capital expenditures.

Net Cash Provided by (Used in) Financing
Activities

Net cash used in financing activities was NT$7,161 million (US$221.0 million) in 2016. In 2016, net cash used in
financing activities reflected primarily the payment of stockholders dividends of NT$11,842 million (US$365.5 million), repayment of long-term loans of NT$4,229 million (US$130.5 million) and proceeds from long-term loans of
NT$9,000 million (US$277.8 million).

Net cash used in financing activities was NT$15,096 million in 2015. In 2015, net cash
used in financing activities reflected primarily the payment of stockholders dividends of NT$9,349 million and long-term loans of NT$8,236 million.

Net cash provided by financing activities was NT$7,292 million in 2014. In 2014, net cash provided in financing activities reflected
primarily the issuance of convertible bonds of NT$12,089 million.

Capital Resources

We have made, and expected to continue to make, substantial capital expenditures in connection with the expansion of our equipment purchases
and building improvements in Taichung, Hsinchu, Changhua and Suzhou. See Item 4. Information on the CompanyB. Business OverviewCapital Expenditures and Divestitures. Our initial budget for capital expenditures for 2017 is
approximately NT$15,500 million (US$478.4 million), which is mostly funded from our retained earnings and borrowings. We expect that our capital expenditures in 2017 will primarily consist of expanding our advanced packaging and testing
capacity. We may adjust the amount of our capital expenditures upward or downward based on the progress of our capital projects, market conditions and our anticipation of future business outlook. As a result, we may need to invest in new capacity to
improve our economies of scale and reduce our production cost, which would require us to raise additional capital. We cannot assure you that we will be able to raise additional capital should it become necessary on terms acceptable to us or at all.
See Liquidity above for details of the anticipated sources of funds to fulfill our commitments.



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Transactions with Related Parties

We have not extended any loans or credit to any of our directors or executive officers, and we have not provided guarantees for borrowings by
any of these persons. We have not entered into any fee-paying contract with any of these persons to provide services not within the capacity of director or executive officer of our company.

We have, from time to time, purchased raw materials from, sold our manufacturing services to and engaged in other transactions with our
affiliated companies. We believe that these transactions with related parties have been conducted either on arms-length terms or on terms more favorable to us than
arms-length terms. See Item 7. Major Shareholders and Related Party Transactions B. Related Party Transactions.

On June 30, 2016, we and ASE entered into a Joint Share Exchange Agreement. For details of this agreement, please see Item 10.
Additional InformationC. Material Contracts-Joint Share Exchange Agreement with ASE.

Inflation

The inflation rate in Taiwan was 1.20% in 2014, -0.31% in 2015 and 1.40% in 2016. We do not believe
that inflation in Taiwan has had a material impact on our results of operations.

Recent Accounting Pronouncements

IFRS 9 Financial instruments, addresses the classification, measurement and recognition of financial assets and financial
liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and
establishes three primary measurement categories for financial assets, namely, amortised cost, fair value through other comprehensive income and fair value through profit and loss. The basis of classification depends on the entitys business
model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss, with the irrevocable option at inception to present changes in fair value
in other comprehensive income not recycled to profit and loss. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities, there were no changes to classification and
measurement except for the recognition of changes in own credit risk in other comprehensive income for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line
hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the hedged ratio to be the same as the one management actually use for risk management purposes. Contemporaneous
documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after January 1, 2018. Early adoption is permitted.

IFRS 15 Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entitys contracts with customers. Revenue is recognized when a customer obtains control of a good or
service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. The standard is
effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 16, Leases
addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising
from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. The standard replaces IAS 17 Leases, and related interpretations. An entity shall apply IFRS 16 for annual periods beginning on or after
1 January, 2019 and earlier application is permitted subject to the entity adopting IFRS 15 Revenue from contracts with customers at the same time.



44



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##### Table of Contents

We are assessing the potential impact of the new rules on our financial statements. We will
continue in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the standards or interpretations. The related impact will be disclosed when we complete the evaluation.

C. Research and Development, Patents and Licenses, etc.

See Item 4. Information on our Company  B. Business Overview  Research and Development and Item 4. Information on
our Company  B. Business Overview  Intellectual Property.

D. Trend Information

Please refer to  A. Operating Results  Overview for a discussion of the most significant recent trends in our
production, sales and inventory, costs and selling prices since the end of 2016. In addition, please refer to discussions included in this Item for a discussion of known trends, uncertainties, demands, commitments or events that we believe are
reasonably likely to have a material effect on our net sales or operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative
of future operating results or financial condition.

E. Off-Balance Sheet Arrangements

As of December 31, 2016, we did not have any off-balance sheet arrangements.

F. Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations and commitments with definitive payment terms which will require significant cash
outlays in the future as of December 31, 2016.



|                                     |  |                        |        |  |                 |  |        |          |  |  |          |  |  |                  |       |  |  |  |     | 
|------------------------------------ |  | ---------------------- | ------ |  | --------------- |  | ------ | -------- |  |  | -------- |  |  | ---------------- | ----- |  |  |  | --- | 
|                                     |  | Payments Due by Period |       
|Contractual
Obligations(1)           |  | Total                  |        |  | Less Than1 Year |  |        | 1-3Years |  |  | 4-5Years |  |  | More Than5 Years |      
|                                     |  | (in NT$ millions)      |       
|Unsecured long-term loans(2)         |  |                        | 18,342 |  |                 |  | 3,502  |          |  |  | 8,507    |  |  |                  | 6,333 |  |  |  |    | 
|Unsecured overseas convertible bonds |  |                        | 13,313 |  |                 |  | 13,313 |          |  |  |         |  |  |                  |      |  |  |  |    | 
|Short-term loans                     |  |                        | 2,741  |  |                 |  | 2,741  |          |  |  |         |  |  |                  |      |  |  |  |    | 
|Purchase obligations(3)              |  |                        | 9,440  |  |                 |  | 9,440  |          |  |  |         |  |  |                  |      |  |  |  |    | 
|Operating leases(4)                  |  |                        | 1,235  |  |                 |  | 141    |          |  |  | 177      |  |  |                  | 159   |  |  |  | 758 | 
|                                     |  |                        |        |  |                 |  |        |          |  |  |          |  |  |                  |       |  |  |  |     | 
|Total contractual cash obligations   |  |                        | 45,071 |  |                 |  | 29,137 |          |  |  | 8,684    |  |  |                  | 6,492 |  |  |  | 758 | 
|                                     |  |                        |        |  |                 |  |        |          |  |  |          |  |  |                  |       |  |  |  |     | 



|(1) | Excludes interest payments and loan arrangement fees.
|--- | -----------------------------------------------------

|(2) | The interest expenses for long-term loans are calculated based on floating interest rates.
|--- | ------------------------------------------------------------------------------------------

|(3) | Represents account payable and unpaid commitments for construction. These commitments were not recorded on our consolidated balance sheets as of December 31, 2016, as we have not received related goods or taken
title of the property. See Note 33 to our consolidated financial statements included in this annual report. Total contractual amounts of buildings were approximately NT$2,920 million (US$90.1 million), of which NT$1,245 million (US$38.4
million) remained unpaid as of December 31, 2016.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents our obligations to make lease payments to use the equipment and the land on which our facilities are located, primarily in Hsinchu, Taiwan and California, U.S.A.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



45



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In addition to the contractual obligations mentioned in the above table, other non-current liabilities recorded in our consolidated statement of financial position as of December 31, 2016 include NT$1,436 million (US$44.3 million) of pension plan obligations for which the timing and
actual amount of funding required have not been determined. We expect to contribute NT$51 million (US$1.6 million) to the pension plan in 2017.



|Item 6. | Directors, Senior Management and Employees
|------- | ------------------------------------------

A. Directors and Senior Management

Pursuant to ROC Securities and Exchange Act, a public company is required to either establish an audit committee or to have
supervisors. 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.

Our audit committee, which is composed of all of our three independent directors, assumes the responsibilities of supervisors pursuant to the
ROC Securities and Exchange Act.

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. A director who serves as the representative of a legal entity may be removed or replaced at any time at the discretion of that legal entity, and the replacement director may serve the remainder of the term
of office of the replaced director. Of our nine current directors, one is a representative of Yang Fong Investment Co., Ltd.

The following
table shows information regarding all of our directors and executive officers as of March 31, 2017. The business address of our directors and executive officers is the same as our registered address.



|                  |  |     |  |                                                          |  |              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------------- |  | --- |  | -------------------------------------------------------- |  | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Age |  | Position                                                 |  | Yearswith us |  | Principal Business Activities Performed
Outside Our Company                                                                                                                                                                                                                                                                                                                                                                                                             
|Bough Lin         |  | 65  |  | Chairman; Executive Vice President                       |  | 33           |  | Director of SPILs subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Chi-Wen Tsai      |  | 69  |  | Vice Chairman; President                                 |  | 33           |  | Director of SPILs subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Wen-Lung Lin      |  | 65  |  | Director                                                 |  | 12           |  | Chairman of Ku-Ming Investment Co.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Yen-Chun Chang    |  | 62  |  | Director; Senior Vice President; Chief Operating Officer |  | 33           |  | Director of SPILs subsidiary.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Randy Hsiao-Yu Lo |  | 60  |  | Director                                                 |  | 19           |  | President & CEO, Siliconware, USA, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Teresa Wang(1)    |  | 61  |  | Director                                                 |  | 7            |  | Director of Unimicron Technology Corporation
CFO of Phoenix Precision Technology                                                                                                                                                                                                                                                                                                                                                                                        
|John Hsuan        |  | 65  |  | Independent Director(2)                                  |  | 2            |  | Representative of Chairman of D-Link Corporation
Chairman of Meridigen Biotech Co,, Ltd.
ChairmanChairman of Maxima Venture Capital I Chairman of Maxima
Venture Capital II Chairman of Taiwan Memory Company
Independent Director of Wistron Corp. Independent Director of
Compal Electronics, Inc Director of General Biologicals Corp.
Director of Clientron Corp. Director of SoC Innovative Product
Partnership Director of Pacgen Biopharmaceuticals Corp.(Canada)
|Tsai-Ding Lin     |  | 64  |  | Independent Director(2)                                  |  | 2            |  | Professor of Department of International Business, Tunghai University                                                                                                                                                                                                                                                                                                                                                                                                   



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|                 |  |     |  |                                         |  |              |  |                                                                                                                                                                                                                                                                                                                                                  
|---------------- |  | --- |  | --------------------------------------- |  | ------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name             |  | Age |  | Position                                |  | Yearswith us |  | Principal Business Activities Performed
Outside Our Company                                                                                                                                                                                                                                                                                      
|William W. Sheng |  | 57  |  | Independent Director(2)                 |  | 2            |  | Professor of Department of Public Finance and Taxation of National Taichung University of Science and Technology
Independent Director of Advanced Lithium Electrochemistry (Cayman) Co., Ltd.
Independent Director of Episil-Precision Inc. Independent
Director of Epistar Corporation. Supervisor of Elite Semiconductor Memory Technology Inc.
|Kun-Yi Chien     |  | 61  |  | Senior Vice President                   |  | 28           |  | None                                                                                                                                                                                                                                                                                                                                             
|Chien-Hua Chen   |  | 62  |  | Vice President                          |  | 18           |  | None                                                                                                                                                                                                                                                                                                                                             
|Eric Wu          |  | 51  |  | Vice President                          |  | 16           |  | None                                                                                                                                                                                                                                                                                                                                             
|C.S Hsiao        |  | 58  |  | Vice President                          |  | 30           |  | None                                                                                                                                                                                                                                                                                                                                             
|John Yu          |  | 52  |  | Vice President                          |  | 25           |  | None                                                                                                                                                                                                                                                                                                                                             
|Patrick Lin      |  | 60  |  | Vice President                          |  | 16           |  | None                                                                                                                                                                                                                                                                                                                                             
|Eva Chen         |  | 59  |  | Vice President; Chief Financial Officer |  | 12           |  | None                                                                                                                                                                                                                                                                                                                                             
|Ching-Yu Hsu     |  | 54  |  | Vice President                          |  | 29           |  | None                                                                                                                                                                                                                                                                                                                                             
|River Gu         |  | 58  |  | Vice President                          |  | 29           |  | None                                                                                                                                                                                                                                                                                                                                             
|David Tseng      |  | 54  |  | Vice President                          |  | 32           |  | None                                                                                                                                                                                                                                                                                                                                             
|Rick Lee         |  | 52  |  | Vice President                          |  | 9            |  | None                                                                                                                                                                                                                                                                                                                                             
|Michael Chang    |  | 55  |  | Vice President                          |  | 18           |  | None                                                                                                                                                                                                                                                                                                                                             



|(1) | Representing Yang Fong Investment Co., Ltd.
|--- | -------------------------------------------

|(2) | Our independent directors independency complies with SECs and NASDAQs independency requirements.
|--- | ---------------------------------------------------------------------------------------------------

Bough Lin is our chairman and executive vice president. He has been our director since August 1984. Mr. Lin is also currently a
director of our subsidiaries, SPIL (B.V.I.) Holding Ltd. and Siliconware U.S.A., Inc., as our representative. He graduated from National Chiao Tung University in Taiwan in 1973 with a Bachelors degree in electronic physics and was also awarded
an honorary Ph.D. from National Chiao Tung University in 2014.

Chi-Wen Tsai is our vice
chairman and president. He has been our director since August 1984. Mr. Tsai is also a director of our subsidiaries, SPIL (Cayman) Holding Ltd., Siliconware Technology (Suzhou) Ltd. and Siliconware U.S.A., Inc., as our representative. He
graduated from the National Taipei Institute of Technology in Taiwan in 1969 with a Bachelors degree in electrical engineering.

Wen-Lung Lin has been our director since June 2005. He graduated from Taichung Commercial College in Taiwan with a Bachelors degree. Mr. Lin is currently the chairman of
Ku-Ming Investment Co.

Yen-Chun Chang is our
senior vice president and chief operating officer. He has been our director since August 1984. He is also currently a director of our subsidiary, Siliconware Technology (Suzhou) Ltd. as our representative. Mr. Chang graduated from Nan Tai
College in Taiwan in 1976 with a Bachelors degree in electronic engineering.

Randy
Hsiao-Yu Lo has been our director since June 2011. He received a Ph.D. in chemical engineering from Purdue University in the United States. He previously served as the vice president of our Advanced
Package R&D division. Mr. Lo is also currently the President and CEO of our subsidiary, Siliconware U.S.A., Inc.

Teresa
Wang has been our director since June 2014. Ms. Wang is a director of Unimicron Technology Corporation. She received a Bachelors degree in accounting and statistics from Ming Chuang College in 1978.

John Hsuan has been our independent director and the chairperson of our Audit Committee and Compensation Committee since June 2014.
Mr. Hsuan, who was formerly the president and chief executive officer of United Microelectronics Corporation, has a career spanning over 30 years in the semiconductor industry. He received a Bachelors degree in electronics engineering and
an Honorary Ph.D. from National Chiao Tung University in Taiwan.



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Tsai-Ding Lin has been our independent director since June 2014. He received a Ph.D. in
psychology from the University of Texas at Arlington in the United States. He is a professor in the department of international business in Tunghai University in Taiwan.

William W. Sheng has been our independent director since June 2014. He received a Ph.D. in accounting from Purdue University in the
United States. He is a professor in the department of public finance and taxation in National Taichung University of Science and Technology in Taiwan.

Kun-Yi Chien is our senior vice president of Administration Management Center. He graduated
from Tunghai University in Taiwan in 2009 with an EMBA.

Chien-Hua Chen is our vice
president of Europe Sales/North America Customer Service. Before joining us, Mr. Chen was the general manager of Ling Sheng Co. He graduated from Arizona State University in the U.S.A. in 1984 with a Masters degree in electrical
engineering.

Eric Wu is our vice president of Operation Business Unit 6. Before joining us, Mr. Wu was the director in charge
of test development division of Caesar Tech. Inc. He graduated from Chung Yuan Christian University in Taiwan in 1989 with a Bachelors degree in electronic engineering.

C.S Hsiao is our vice president of Research Development & Engineering Center. He graduated from Feng Chia University in Taiwan
in 1982 with a Bachelors degree in chemical engineering.

John Yu is our vice president of Asia District Sales. He graduated
from National Taiwan University of Science and Technology in Taiwan in 1992 with a Bachelors degree in industrial engineering and management.

Patrick Lin is our vice president of Operation Supporting Division. Before joining us, Mr. Lin was the director in charge of
operation support of Orient Semiconductor Electronics. He graduated from Tamkang University in Taiwan in 1981 with a Bachelors degree in international trade.

Eva Chen has been our chief financial officer since 2005. She graduated from National Chung Cheng University in Taiwan in 2007 with a
Masters degree in accounting and information technology.

Ching-Yu Hsu is our vice
president of Operation Business Unit 2. He graduated from Chin-Yi College of Technology in Taiwan in 1983 with a Bachelors degree in electronic engineering.

River Gu is our vice president of Operation Business Unit 1. He graduated from Feng Chia University in Taiwan in 1985 with a
Bachelors degree in electronic engineering.

David Tseng is our vice president of Operation Business Unit 5. He graduated
from Oriental Institute of Technology in Taiwan in 1983 with a Bachelors degree in electrical engineering.

Rick Lee is our
vice president of Operation Business Unit 3. He graduated from Tunghai University in Taiwan in 1989 with a Bachelors degree in industrial engineering.

Michael Chang is our vice president of Operation Business Unit 6. He graduated from Chung Yuan Christian University in Taiwan in 1984
with a Bachelors degree in industrial engineering.

B. Compensation of Directors and Executive Officers

The aggregate compensation paid and in-kind benefits granted to our directors and executive officers in
2016 was NT$509 million (US$15.7 million).



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According to our articles of incorporation, compensation provided to our directors shall not
exceed 1% of the balance of net income after the payment of income taxes, recovery of past losses and deduction of 10% as legal reserve. Pursuant to an amendment to the ROC Company Act in May 2015, director compensation is no longer considered as
earnings distribution. Instead, a company shall stipulate in its articles of incorporation that a fixed amount or ratio of annual profit, after reserving the amount necessary to cover accumulated deficit, if any, be distributed as director
compensation. The annual profit is defined as income before income tax, employee bonuses and director compensation. As required by this amendment to the ROC Company Act, our board of directors approved an amendment to our articles of incorporation
in December 2015, to set aside 1% or less of our annual profit, after covering any accumulated deficit, as director compensation, and we determined the amount of director compensation in 2015 accordingly. The amended articles of incorporation had
been approved by the stockholders in the meeting held on May 16, 2016.

C. Board Practices

All of our directors were elected on June 20, 2014 for a term of three years. Neither we nor any of our subsidiaries have entered into a
contract with any of our directors by which our directors are expected to receive benefits upon termination of their employment.

Audit Committee

At the date of this annual report, we had three independent directors, John Hsuan, Tsai-Ding Lin and William W. Sheng, to form our audit
committee. We require our audit committee members to be financially literate with accounting or related financial management expertise in accordance with the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our audit committee
charter is in accordance with Rule 10A-3 of the Exchange Act and NASDAQ Listing Rule 5605(b). We have been in compliance with the requirements thereunder since July 27, 2005.

Compensation Committee

We currently follow the practice under the ROC Securities and Exchange Act, as amended on November 24, 2010, which requires all publicly
listed companies in the ROC, including our company, to establish a compensation committee for director and executive compensation, which includes salary, stock options and other rewards. The current members of our compensation committee are our
independent directors, John Hsuan, Tsai-Ding Lin and William W. Sheng.

Differences between NASDAQ Corporate Governance Requirements
and Home Country Practices

See Item 16G.Corporate Governance.

D. Employees

As
of December 31, 2014, 2015 and 2016, we, together with our subsidiaries, had 23,611, 23,851 and 24,353 full-time employees, respectively. Of these employees, as of December 31, 2016, 20,790 were located in Taiwan, 3,501 were located in the
PRC, and 62 were located in the United States. Employee salaries are reviewed once or twice a year. Salaries are adjusted based on industry standards, inflation and individual performance. As an incentive, additional bonuses in cash may be paid at
the discretion of the management based on the performance of individuals. In addition, ROC law requires that employees be given preemptive rights to subscribe to between 10% and 15% of any of our rights issues or share offerings.

According to ROC Labor Pension Act effective since July 1, 2005, we contribute 6% of our employees monthly salaries to the Bureau
of Labor Insurance for those employees who choose to participate in the portable pension schemes. For our employees who choose to apply for the pension mechanism under the Labor Standards Act, we contribute 2% of their monthly salaries
to the Workers Retirement Reserve Funds maintained by the Bank of Taiwan. Before year end, we review the funding level of the Retirement Funds. If the balance is less than the accrued retirement benefit for employees who are eligible to retire
within a year, the shortfall will be made up before March of the following year and submit to companies Supervisory Committee of Labor Retirement Fund.



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We accrued employee compensation of NT$1,271 million (US$39.2 million)in 2016.
Previously, employee bonuses were considered part of our earnings distribution under our articles of incorporation. Pursuant to an amendment to the ROC Company Act in May 2015, employee bonuses are no longer considered as earnings distribution.
Instead, a company shall stipulate in its articles of incorporation a fixed amount or ratio of annual profit, after reserving the amount necessary to cover accumulated deficit, if any, to distribution as employee compensation. The annual profit is
defined as income before income tax, employee and director compensation. As required by this amendment to the ROC Company Act, our board of directors approved an amendment to our articles of incorporation in December 2015, to set aside 10% of our
annual profit, after covering any accumulated deficit, as employee compensation, and we determined the amount of employee compensation in 2015 accordingly. The amended Articles of Incorporation had been approved by the stockholders in the meeting
held on May 16, 2016.

We do not have any collective bargaining arrangement with our employees, and we have never experienced a work
stoppage caused by our employees. We believe we have good relations with our employees. We have a labor union since 2016.

E. Share
Ownership

Each of our directors and executive officers holds our shares either directly for their own account or indirectly as the
representative of another legal entity on our board of directors. The following table sets forth the share ownership of our directors and executive officers as of March 31, 2017.



|                  |  |                       |            |  |                           |      
|----------------- |  | --------------------- | ---------- |  | ------------------------- | -----
|Name              |  | Number of SharesOwned |            |  | Percentage ofShares Owned
|Bough Lin         |  |                       | 64,674,075 |  |                           | 2.08%
|Chi-Wen Tsai      |  |                       | 24,775,555 |  |                           | *    
|Wen-Lung Lin      |  |                       | 13,154,751 |  |                           | *    
|Yen-Chun Chang    |  |                       | 6,663,417  |  |                           | *    
|Randy Hsiao-Yu Lo |  |                       | 472        |  |                           | *    
|Teresa Wang(1)    |  |                       | 6,200,000  |  |                           | *    
|John Hsuan        |  |                       | 0          |  |                           | *    
|Tsai-Ding Lin     |  |                       | 0          |  |                           | *    
|William W. Sheng  |  |                       | 0          |  |                           | *    
|Kun-Yi Chien      |  |                       | 290,029    |  |                           | *    
|Chien-Hua Chen    |  |                       | 0          |  |                           | *    
|C.S Hsiao         |  |                       | 90,408     |  |                           | *    
|John Yu           |  |                       | 219,894    |  |                           | *    
|Eric Wu           |  |                       | 32,737     |  |                           | *    
|Ching-Yu Hsu      |  |                       | 0          |  |                           | *    
|Patrick Lin       |  |                       | 125,039    |  |                           | *    
|Eva Chen          |  |                       | 600,164    |  |                           | *    
|River Gu          |  |                       | 21,000     |  |                           | *    
|David Tseng       |  |                       | 0          |  |                           | *    
|Rick Lee          |  |                       | 0          |  |                           | *    
|Michael Chang     |  |                       | 560        |  |                           | *    



|* | Less than 1%.
|- | -------------

|(1) | Represents shares held by Yang Fong Investment Co., Ltd.
|--- | --------------------------------------------------------



50



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##### Table of Contents

|Item 7. | Major Shareholders and Related Party Transactions
|------- | -------------------------------------------------

A. Major Shareholders

The following table presents information known to us concerning the record ownership of our shares as of July 22, 2014,
September 16, 2015 and July 1, 2016 (our most recent record date) (i) the ten largest shareholders of our company as of such record date and (ii) all directors, supervisors and executive officers as a group.



|                                            |  |                       |             |     |                           |  |      |                       |  |  |                           |     |  |                       |      |      |                           |  |             |     |  |  |       |     
|------------------------------------------- |  | --------------------- | ----------- | --- | ------------------------- |  | ---- | --------------------- |  |  | ------------------------- | --- |  | --------------------- | ---- | ---- | ------------------------- |  | ----------- | --- |  |  | ----- | ----
|                                            |  | July 22, 2014         |             |     | September 16, 2015        |  |      | July 1, 2016(1)       | 
|Name of beneficial
owner                    |  | Number ofShares Owned |             |     | Percentage ofShares Owned |  |      | Number ofShares Owned |  |  | Percentage ofShares Owned |     |  | Number ofShares Owned |      |      | Percentage ofShares Owned | 
|Advanced Semiconductor Engineering,
Inc.(2) |  |                       | *           |     |                           |  | *    |                       |  |  | *                         |     |  |                       | *    |      |                           |  | 988,847,740 |     |  |  | 31.73 | %   
|Depositary(3)                               |  |                       | 267,014,365 |     |                           |  | 8.57 | %                     |  |  | 291,590,180               |     |  |                       | 9.36 | %    |                           |  | 214,738,715 |     |  |  | 6.89  | %   
|Chih Sheng Investment Co., Ltd.             |  |                       | *           |     |                           |  | *    |                       |  |  | *                         |     |  |                       | *    |      |                           |  | 107,774,000 |     |  |  | 3.46  | %   
|Shih Kai Investment Co., Ltd.               |  |                       | *           |     |                           |  | *    |                       |  |  | *                         |     |  |                       | *    |      |                           |  | 106,700,000 |     |  |  | 3.42  | %   
|Shin Kong Life Insurance Company Ltd.       |  |                       | *           |     |                           |  | *    |                       |  |  | 61,032,000                |     |  |                       | 1.96 | %    |                           |  | 80,186,249  |     |  |  | 2.57  | %   
|Government of Singapore                     |  |                       | 56,689,463  |     |                           |  | 1.82 | %                     |  |  | 90,452,133                |     |  |                       | 2.90 | %    |                           |  | 73,785,778  |     |  |  | 2.37  | %   
|Chunghwa Post Co.,Ltd.                      |  |                       | *           |     |                           |  | *    |                       |  |  | 55,269,000                |     |  |                       | 1.77 | %    |                           |  | 69,747,000  |     |  |  | 2.24  | %   
|Bough Lin.                                  |  |                       | 68,674,075  |     |                           |  | 2.20 | %                     |  |  | 78,674,075                |     |  |                       | 2.52 | %    |                           |  | 64,674,075  |     |  |  | 2.08  | %   
|Ku-Ming Investment Company Ltd(4)           |  |                       | 56,112,878  |     |                           |  | 1.80 | %                     |  |  | 65,190,878                |     |  |                       | 2.09 | %    |                           |  | 55,690,878  |     |  |  | 1.79  | %   
|Yann Yuan Investment Co., Ltd.              |  |                       | *           |     |                           |  | *    |                       |  |  | *                         |     |  |                       | *    |      |                           |  | 45,900,000  |     |  |  | 1.47  | %   
|Directors and Supervisors as a
group(5)     |  |                       | 150,888,270 | (6) |                           |  | 4.84 | %(6)                  |  |  | 115,468,270               | (7) |  |                       | 3.71 | %(7) |                           |  | 115,468,270 | (8) |  |  | 3.71  | %(8)



|* | Was not one of the ten largest shareholders of our company as of the applicable record date.
|- | --------------------------------------------------------------------------------------------

|(1) | Our most recent record date.
|--- | ----------------------------

|(2) | As of this date, Advanced Semiconductor Engineering, Inc. also owned 9,690,452 ADSs that represented 48,452,260 of our shares representing 1.56% of our share capital. Thus, Advanced Semiconductor Engineering, Inc. owned
33.29% of our issued and outstanding share capital.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | As record owner of our ADSs. Before January 6, 2015, Citibank, N.A. acted as depositary. With effect from January 6, 2015, JPMorgan Chase Bank, N.A. is acting as depositary.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Wen-Lung Lin is the chairman of Ku-Ming Investment Company Ltd.
|--- | ---------------------------------------------------------------

|(5) | Calculated as the sum of: (a) with respect to directors and supervisors who are serving in their personal capacity, the number of shares held by such director or supervisor and (b) with respect to directors
who are serving in the capacity as legal representatives, the number of shares owned by such institutional or corporate shareholder for which such director is a legal representative.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | As of March 31, 2015.
|--- | ---------------------

|(7) | As of March 31, 2016.
|--- | ---------------------

|(8) | As of March 31, 2017.
|--- | ---------------------

Except for holders of our ADSs, none of our major shareholders have
different voting rights from those of other shareholders.

As of March 31, 2017, a total of 37,455,112 ADSs and 3,116,361,139 of our
shares (including the shares represented by these ADSs) were outstanding. With certain limited exceptions, holders of common shares that are not ROC persons are required to hold these commons shares through a brokerage or custodial account in the
ROC. As of March 31, 2017, 187,275,560 common shares were registered in the name of a nominee of JPMorgan Chase Bank, N.A., the depositary of our ADS facility. JPMorgan Chase Bank, N.A. has advised us that as of March 31, 2017, 37,455,112 ADSs,
representing 187,275,560 common shares, were held of record by Cede & Co. and 14 other registered shareholders. We have no further information as to common shares held, or beneficially owned, by U.S. persons.



51



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None of our major shareholders have different voting rights from those of other shareholders.

B. Related Party Transactions

We from time to time have engaged in a variety of transactions with our affiliates. We conduct transactions with our affiliates on terms
substantially as favorable to us as would be obtainable at the time in a comparable arms-length transaction with non-affiliates. We did not engage in any material
related party transaction in 2016, other than (i) on June 30, 2016, we and ASE entered into a Joint Share Exchange Agreement and (ii) in August 2016, we sold 57,810,000 shares of Hsieh Yong Capital Co., Ltd. to Yann Yuan Investment
Co., Ltd., in which we own a 33.33% equity interest, for NT$377 million (US$11.6 million) in order to simplify our investment portfolios and consolidate our non-core business investments. For details of
the Joint Share Exchange Agreement, please see Item 10. Additional InformationC. Material Contracts-Joint Share Exchange Agreement with ASE.

C. Interests of Experts and Counsel

Not applicable.



|Item 8. | Financial Information
|------- | ---------------------

A. Consolidated Statements and Other Financial
Information

Please refer to Item 18 for a list of all financial statements filed as part of this annual report on Form
20-F.

Litigation

See Item 4. Information on the CompanyB. Business OverviewLitigation.

Dividend Policy and Distributions

For our policy on dividend distributions, see Item 10. Additional Information  Memorandum and Articles of Association 
Dividends and Distributions. The following table sets forth the stock dividends per share and total number of shares issued as stock dividend adopted by the annual shareholders meeting and shares outstanding at the end of each such year,
except as otherwise noted.



|        |  |                        |      |     |                            |  |      |                                                  |  |  |                               |  |  |  |               | 
|------- |  | ---------------------- | ---- | --- | -------------------------- |  | ---- | ------------------------------------------------ |  |  | ----------------------------- |  |  |  | ------------- | 
|        |  | Cash Dividend pershare |      |     | Stock Dividend pershare(1) |  |      | Total Number ofShares Issued asStock Dividend(2) |  |  | Outstanding Sharesat Year End | 
|        |  | (NT$)                  |      |     | (NT$)                      |  |      |                                                  |  |  |                               | 
|1996    |  |                        | 0    |     |                            |  | 6.00 |                                                  |  |  | 168,400,800                   |  |  |  | 457,800,000   | 
|1997    |  |                        | 0    |     |                            |  | 4.00 |                                                  |  |  | 183,120,000                   |  |  |  | 654,200,000   | 
|1998    |  |                        | 0    |     |                            |  | 3.60 |                                                  |  |  | 235,512,000                   |  |  |  | 904,162,000   | 
|1999    |  |                        | 0    |     |                            |  | 2.30 |                                                  |  |  | 207,957,260                   |  |  |  | 1,127,092,402 | 
|2000    |  |                        | 0    |     |                            |  | 1.40 |                                                  |  |  | 157,793,537                   |  |  |  | 1,449,882,870 | 
|2001    |  |                        | 0    |     |                            |  | 1.45 |                                                  |  |  | 235,421,212                   |  |  |  | 1,852,761,683 | 
|2002(3) |  |                        | 0    |     |                            |  | 0    |                                                  |  |  |                              |  |  |  | 1,853,668,683 | 
|2003(4) |  |                        | 0    |     |                            |  | 0    |                                                  |  |  |                              |  |  |  | 1,876,625,683 | 
|2004    |  |                        | 0.35 |     |                            |  | 1.00 |                                                  |  |  | 189,447,578                   |  |  |  | 2,105,073,060 | 
|2005    |  |                        | 0.75 |     |                            |  | 0.80 |                                                  |  |  | 168,889,805                   |  |  |  | 2,328,919,337 | 
|2006    |  |                        | 1.73 |     |                            |  | 1.00 |                                                  |  |  | 241,014,905                   |  |  |  | 2,887,757,426 | 
|2007    |  |                        | 3.40 |     |                            |  | 0.20 |                                                  |  |  | 58,672,538                    |  |  |  | 3,073,424,534 | 
|2008    |  |                        | 4.50 |     |                            |  | 0.10 |                                                  |  |  | 30,746,975                    |  |  |  | 3,152,589,871 | 
|2009    |  |                        | 1.80 |     |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 
|2010    |  |                        | 2.58 |     |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 
|2011    |  |                        | 1.62 |     |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,078,319,139 | 
|2012    |  |                        | 1.42 |     |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,078,319,139 | 
|2013    |  |                        | 1.67 | (5) |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 
|2014    |  |                        | 1.80 |     |                            |  | 0    |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 



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|     |  |                        |      |     |                            |  |   |                                                  |  |  |                               |  |  |  |               | 
|---- |  | ---------------------- | ---- | --- | -------------------------- |  | - | ------------------------------------------------ |  |  | ----------------------------- |  |  |  | ------------- | 
|     |  | Cash Dividend pershare |      |     | Stock Dividend pershare(1) |  |   | Total Number ofShares Issued asStock Dividend(2) |  |  | Outstanding Sharesat Year End | 
|     |  | (NT$)                  |      |     | (NT$)                      |  |   |                                                  |  |  |                               | 
|2015 |  |                        | 3.00 |     |                            |  | 0 |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 
|2016 |  |                        | 3.80 | (6) |                            |  | 0 |                                                  |  |  | 0                             |  |  |  | 3,116,361,139 | 



|(1) | Our stock dividend is declared in NT dollar amount per share. The number of shares received by a shareholder equals to the NT dollar amount per share of dividend declared multiplied by the number of shares owned by the
shareholder and divided by the par value of NT$10 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Total number of shares issued as stock dividends include shares issued from retained earnings and from capital reserve.
|--- | -----------------------------------------------------------------------------------------------------------------------

|(3) | We did not declare a dividend in 2002 because we incurred a net loss in 2001.
|--- | -----------------------------------------------------------------------------

|(4) | We did not declare a dividend in 2003 because our shareholders did not resolve to declare such dividend, even though we generated net income in 2002.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Of which NT$0.30 per share is from our capital reserve and NT$1.37 per share is from earnings distribution.
|--- | -----------------------------------------------------------------------------------------------------------

|(6)   Of | which NT$1.0 per share is from our capital reserve and NT$2.80 per share is from earnings distribution.
|-------- | -------------------------------------------------------------------------------------------------------

B. Significant Change

Our net operating revenues on a consolidated basis for the three months ended March 31, 2017 amounted to NT$19,552 million. Our net
operating revenues for the first three months of 2017 are not indicative of our financial performance on either an unconsolidated or a consolidated basis for the remaining months of 2017. In addition, we cannot predict whether the demand for our
services will continue to improve in the near future.

C. Other Matters

In the section of Audit Report of Independent Accountants contained in our financial statements, or the 2016 Financial Statements, prepared
under Taiwan IFRS for and as of the years ended December 31, 2015 and 2016 published in Taiwan on March 1, 2017, our accountants were required under auditing standards generally accepted in the Republic of China and the Rules Governing the
Examination of Financial Statements by Certified Public Accountants to assess certain key audit matters that, in our accountants professional judgment, were of most significance in their audit of our and subsidiaries consolidated
financial statements for the current period. These matters were addressed in the context of our accountants audit of the consolidated financial statements as a whole and, in forming their opinion thereon, they do not provide a separate opinion
on these matters. The key audit matters identified by our accountants and addressed in the 2016 Financial Statements include (1) revenue recognition and (2) fair value valuation of derivatives. Please refer to the 2016 Financial Statements, which
are available for inspection on our website at www.spil.com.tw for a complete description of such key audit matters.



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##### Table of Contents

|Item 9. | The Offer and Listing
|------- | ---------------------

A. Offer and Listing Details

Market Price Information for Our Shares

Our shares have been listed on the Taiwan Stock Exchange since April 7, 1993. The table below shows, for the periods indicated, the high
and low closing prices and the average daily volume of trading activity on the Taiwan Stock Exchange for our shares and the highest and lowest of the daily closing values of the Taiwan Stock Exchange Index.



|                        |  |                                 |       |  |               |  |       |                             |  |  |        |  |  |     |          |  |  |  |          | 
|----------------------- |  | ------------------------------- | ----- |  | ------------- |  | ----- | --------------------------- |  |  | ------ |  |  | --- | -------- |  |  |  | -------- | 
|                        |  | Closing Price for Each Share(1) |       |  | Average Daily |  |       | Taiwan Stock Exchange Index | 
|Period                  |  | High                            |       |  | Low           |  |       | Trading Volume              |  |  | High   |  |  | Low |         
|                        |  | NT$                             |       |  | NT$           |  |       | (in thousands of shares)    |  |  |        |  |  |     |         
|2012                    |  |                                 | 36.50 |  |               |  | 26.80 |                             |  |  | 8,535  |  |  |     | 8,144.04 |  |  |  | 6,894.66 | 
|2013                    |  |                                 | 39.00 |  |               |  | 30.20 |                             |  |  | 9,511  |  |  |     | 8,623.43 |  |  |  | 7,616.64 | 
|2014                    |  |                                 | 55.30 |  |               |  | 35.40 |                             |  |  | 14,883 |  |  |     | 9,569.17 |  |  |  | 8,264.48 | 
|2015                    |  |                                 | 56.20 |  |               |  | 33.10 |                             |  |  | 15,660 |  |  |     | 9,973.12 |  |  |  | 7,410.34 | 
|First Quarter           |  |                                 | 56.20 |  |               |  | 47.20 |                             |  |  | 13,696 |  |  |     | 9,758.09 |  |  |  | 9,048.34 | 
|Second Quarter          |  |                                 | 52.40 |  |               |  | 45.00 |                             |  |  | 12,930 |  |  |     | 9,973.12 |  |  |  | 9,189.83 | 
|Third Quarter           |  |                                 | 47.45 |  |               |  | 33.10 |                             |  |  | 24,193 |  |  |     | 9,379.24 |  |  |  | 7,410.34 | 
|Fourth Quarter          |  |                                 | 52.40 |  |               |  | 39.65 |                             |  |  | 11,614 |  |  |     | 8,857.02 |  |  |  | 8,040.16 | 
|2016                    |  |                                 | 53.40 |  |               |  | 43.30 |                             |  |  | 7,816  |  |  |     | 9,392.68 |  |  |  | 7,664.01 | 
|First Quarter           |  |                                 | 52.70 |  |               |  | 48.35 |                             |  |  | 14,607 |  |  |     | 8,812.70 |  |  |  | 7,664.01 | 
|Second Quarter          |  |                                 | 53.40 |  |               |  | 43.30 |                             |  |  | 10,847 |  |  |     | 8,716.25 |  |  |  | 8,053.69 | 
|Third Quarter           |  |                                 | 48.55 |  |               |  | 46.30 |                             |  |  | 3,454  |  |  |     | 9,284.62 |  |  |  | 8,575.75 | 
|Fourth Quarter          |  |                                 | 48.60 |  |               |  | 46.00 |                             |  |  | 3,152  |  |  |     | 9,392.68 |  |  |  | 8,931.03 | 
|October                 |  |                                 | 47.75 |  |               |  | 47.10 |                             |  |  | 1,642  |  |  |     | 9,385.65 |  |  |  | 9,165.17 | 
|November                |  |                                 | 48.60 |  |               |  | 46.00 |                             |  |  | 5,444  |  |  |     | 9,272.70 |  |  |  | 8,931.03 | 
|December                |  |                                 | 48.25 |  |               |  | 46.65 |                             |  |  | 2,232  |  |  |     | 9,392.68 |  |  |  | 9,078.64 | 
|2017 (through March 31) |  |                                 | 49.90 |  |               |  | 47.25 |                             |  |  | 2,362  |  |  |     | 9,972.49 |  |  |  | 9,272.88 | 
|First Quarter           |  |                                 | 49.90 |  |               |  | 47.25 |                             |  |  | 2,362  |  |  |     | 9,972.49 |  |  |  | 9,272.88 | 
|January                 |  |                                 | 48.10 |  |               |  | 47.35 |                             |  |  | 1,661  |  |  |     | 9,447.95 |  |  |  | 9,272.88 | 
|February                |  |                                 | 49.00 |  |               |  | 47.25 |                             |  |  | 2,650  |  |  |     | 9,799.76 |  |  |  | 9,428.97 | 
|March                   |  |                                 | 49.90 |  |               |  | 48.10 |                             |  |  | 2,623  |  |  |     | 9,972.49 |  |  |  | 9,627.89 | 



Sources: Taiwan Stock Exchange Statistical Data 1999-2017, Taiwan Stock Exchange and Bloomberg.



|(1) | As reported.
|--- | ------------

There is no public market outside U.S. and Taiwan for our shares. The Taiwan
Stock Exchange has experienced significant fluctuations in the prices of listed securities and there are currently limits on the range of daily price movements.



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Market Price Information for Our American Depositary Shares

Our ADSs have been listed on the NASDAQ Stock Markets National Market since June 7, 2000. The table below shows, for the periods
indicated, the high and low closing prices and the average daily volume of trading activity on the NASDAQ Stock Markets National Market.



|                        |  |                               |      |  |               |  |      |                |  |  |           | 
|----------------------- |  | ----------------------------- | ---- |  | ------------- |  | ---- | -------------- |  |  | --------- | 
|                        |  | Closing Price for Each ADS(1) |      |  | Average Daily | 
|Period                  |  | High                          |      |  | Low           |  |      | Trading Volume | 
|                        |  | US$                           |      |  | US$           |  |      |                | 
|2012                    |  |                               | 6.04 |  |               |  | 4.52 |                |  |  | 969,389   | 
|2013                    |  |                               | 6.50 |  |               |  | 5.06 |                |  |  | 620,944   | 
|2014                    |  |                               | 8.88 |  |               |  | 5.62 |                |  |  | 703,991   | 
|2015                    |  |                               | 9.09 |  |               |  | 5.06 |                |  |  | 1,040,034 | 
|First Quarter           |  |                               | 9.09 |  |               |  | 7.46 |                |  |  | 1,289,538 | 
|Second Quarter          |  |                               | 8.49 |  |               |  | 7.30 |                |  |  | 863,011   | 
|Third Quarter           |  |                               | 7.55 |  |               |  | 5.06 |                |  |  | 1,232,356 | 
|Fourth Quarter          |  |                               | 8.05 |  |               |  | 6.16 |                |  |  | 784,161   | 
|2016                    |  |                               | 8.27 |  |               |  | 6.62 |                |  |  | 491,043   | 
|First Quarter           |  |                               | 8.21 |  |               |  | 7.16 |                |  |  | 1,046,311 | 
|Second Quarter          |  |                               | 8.27 |  |               |  | 6.62 |                |  |  | 534,357   | 
|Third Quarter           |  |                               | 7.68 |  |               |  | 7.19 |                |  |  | 204,102   | 
|Fourth Quarter          |  |                               | 7.57 |  |               |  | 7.13 |                |  |  | 201,584   | 
|October                 |  |                               | 7.52 |  |               |  | 7.33 |                |  |  | 227,138   | 
|November                |  |                               | 7.56 |  |               |  | 7.13 |                |  |  | 221,824   | 
|December                |  |                               | 7.57 |  |               |  | 7.13 |                |  |  | 155,790   | 
|2017 (through March 31) |  |                               | 8.13 |  |               |  | 7.24 |                |  |  | 141,866   | 
|First Quarter           |  |                               | 8.13 |  |               |  | 7.24 |                |  |  | 141,866   | 
|January                 |  |                               | 7.60 |  |               |  | 7.24 |                |  |  | 162,490   | 
|February                |  |                               | 7.97 |  |               |  | 7.63 |                |  |  | 122,784   | 
|March                   |  |                               | 8.13 |  |               |  | 7.69 |                |  |  | 139,696   | 



Source: NASDAQ Stock Exchange.



|(1) | As reported.
|--- | ------------

B. Plan of Distribution.

Not applicable.

C.
Markets

Our shares are listed on the Taiwan Stock Exchange and our ADSs are quoted on the NASDAQ National Market.

D. Selling Shareholders

Not applicable.

E.
Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.



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##### Table of Contents

|Item 10. | Additional Information
|-------- | ----------------------

A. Share Capital

Not applicable.

B.
Memorandum and Articles of Association

The following statements summarize the material elements of our capital structure and
the more important rights and privileges of our shareholders conferred by Taiwan law and our articles of incorporation.

Objects
and Purpose

The scope of business of our company as set forth in Article 2 of our articles of incorporation includes:

(a) The production, processing and purchase and sale of products, including IC, transistors, light emitting diode digital displays, light
emitting diode display lamps, liquid crystal clock cores, photo diodes, hybrid circuits, thin film circuits and thick film circuits; and

(b) The import and export of the products mentioned in the preceding paragraph.

Directors

The ROC
Company Act and our articles of incorporation provide that our board of directors is elected by shareholders and is responsible for the management of our services. Our board of directors is composed of nine directors. The Chairman of our board is
elected by our directors. The Chairman presides at all meetings of our board of directors and also has the authority to represent us. The term of office for our directors is three years and our directors are elected by our shareholders by means of
cumulative voting. The last election for all the directors was held in June 2014. Our board is required by the ROC Company Act, the Securities and Exchange Act and other relevant laws and regulations to consist of at least three independent
directors, comprising not less than 20% of the total number of directors. A person may serve as our director in his personal capacity or as the representative of one of our shareholder entities. A director who serves as the representative of a legal
entity may be removed or replaced at any time, and the replacement director may serve the remainder of the term of office of the replaced director. Currently, one of our directors is a representative of a legal entity, as shown in Item 6
 Directors, Senior Management and EmployeesA. Directors and Senior Management. Our audit committee consists of three independent directors, John Hsuan, Tsai-Ding Lin and William W. Sheng. In order to facilitate the function of our
board of directors, our audit committee and board of directors have established procedures for handling complaints pursuant to Rule 10A-3(b)(3) under the Exchange Act and have established a means for
communicating with the non-management members of our board of directors.

According to the ROC
Company Act, a director who has a personal interest in a matter to be discussed at the meeting of the board of directors, the outcome of which may impair the companys interests, shall abstain from voting on such matter. Our articles of
incorporation also provide that the traveling expenses for all directors shall be determined at the board of directors meeting based on common practice regardless of the profit or loss to our company. In addition, according to our articles of
incorporation, we should distribute no more than 1% of the balance of our earnings after deduction of payment of all taxes and dues, deduction of any past losses and allocation of 10% of our net income as a legal reserve as compensation to
directors. As required by an amendment to the ROC Company Act in May 2015, our board of directors approved an amendment to our articles of incorporation in December 2015, to set aside 1% or less of our annual profit, after covering any accumulated
deficit, as director compensation. The amended Articles of Incorporation 2016 had been approved by the stockholders in the meeting held on May 16, 2016. Our board of directors is authorized to determine the compensation for directors by taking
into consideration their respective contributions to our company as well as international industry practice. Our articles of incorporation do not impose a mandatory retirement age limit for our directors. Furthermore, our articles of incorporation
do not impose a shareholding qualification for each director; however, our articles of incorporation require that our directors hold our issued shares at the ratios as required by the regulatory authority.

Shares

As of
March 31, 2017, our authorized share capital was NT$36.0 billion, divided into 3.6 billion shares, of which NT$31.16 billion was issued. As of March 31, 2017, no option rights remained outstanding. Other than our shares and ADSs,
we do not have any other equity interests outstanding, including any preferential subscription rights, exchangeable debt securities or warrants as of March 31, 2017. All shares presently issued are fully paid and in registered form, and existing
shareholders are not obligated to contribute additional capital. The shares underlying the ADSs are fully paid, in registered form and will not be obligated by any capital calls. We generally are not permitted to directly acquire our shares, except
under limited circumstances as permitted by ROC law.



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In October 2014, we issued US$400 million unsecured zero coupon convertible bonds due 2019
to procure foreign currency-denominated raw materials and repay long-term debt. The bonds are convertible by holders at any time until 10 days before maturity. The current conversion price is NT$45.7579 per common share. As of March 31, 2017, none
of the bonds has been converted into our common shares, and the balance of the outstanding bonds was US$400 million. Upon full conversion, the outstanding bonds would be converted to 265,676,528 common shares if based on the current conversion
price, representing approximately 8.5% of our outstanding shares as of March 31, 2017. See Item 3. Key Information  D. Risk Factors  Risks Related to Ownership of Our Shares or ADSs  Our ADS holders may experience dilution if
we distribute rights to our shareholders or sell additional equity or equity-linked securities.

New Shares and Preemptive
Rights

New shares may only be issued with the prior approval of our board of directors. If our issuance of any new shares will
result in any change in our authorized share capital, we are required under ROC law to amend our articles of incorporation and obtain approval of our shareholders in a shareholders meeting. We must also obtain the approval of, or submit a
registration with, the ROC SFB and the Ministry of Economic Affairs. According to the ROC Company Act, when a company issues capital stock for cash, 10% to 15% of the issue must be offered to its employees. In addition, if a listed company intends
to offer new shares for cash, at least 10% of the issue must also be offered to the public pursuant to the Securities and Exchange Law. This percentage can be increased by a resolution passed at a shareholders meeting, which will reduce the
number of new shares in which existing shareholders may have preemptive rights. Unless the percentage of the shares offered to the public is increased by a resolution, existing shareholders of the company have a preemptive right to acquire the
remaining 75% to 80% of the issue in proportion to their existing shareholdings.

Shareholders

We only recognize persons registered in our register as our shareholders. We may set a record date and close our register of shareholders for
specified periods to determine which shareholders are entitled to various rights pertaining to our shares.

Transfer of Shares

Under the ROC Company Act, a public company, such as us, may issue individual share certificates, one master certificate or
scripless shares to evidence common shares. Shares in registered form are transferred by endorsement and delivery of the related share certificates. Transferees must have their names and addresses registered on our register in order to assert
shareholders rights against us. Our shareholders are required to file their respective specimen seals with our share registrar, CTBC Bank.

Shareholders Meetings

We are required to hold an annual ordinary shareholders meeting once every fiscal year and within six months after the end of each fiscal
year. Our board of directors may convene an extraordinary meeting whenever the directors think fit, and they must do so if requested in writing by shareholders holding not less than 3% of our paid-in share
capital who have held these shares for more than a year. At least 15 days advance written notice must be given of every extraordinary shareholders meeting and at least 30 days advance written notice must be given of every annual ordinary
shareholders meeting. Unless otherwise required by law or by our articles of incorporation, voting for an ordinary resolution requires an affirmative vote of a simple majority of those present. A distribution of cash dividends would be an
example of an ordinary resolution. The ROC Company Act also provides that in order to approve certain major corporate actions, including but not limited to any amendment of our articles of incorporation, dissolution, merger or spin-off, the transfer of the whole or major part of the business or assets, removing directors or the distribution of any stock dividend, a special resolution may be adopted by the holders of at least two-thirds of our shares represented at a meeting of shareholders at which holders of at least a majority of our issued and outstanding shares are present. However, if we are the controlling company and hold not
less than 90% of our subordinate companys outstanding shares, our merger with the subordinate company can be approved by a board resolution adopted by majority consent at a meeting with two-thirds of our
directors present without shareholders approval.

Voting Rights

Except for treasury shares, each share is generally entitled to one vote. Except as otherwise provided for by law or by our articles of
incorporation, a resolution can be adopted by the holders of a simple majority of the total issued and outstanding shares represented at a shareholders meeting. The quorum for a shareholders meeting to discuss the ordinary resolutions is
a majority of the total issued and outstanding shares. The election of directors by our shareholders may be conducted by means of cumulative voting or other voting mechanisms adopted in our articles of incorporation. In all other matters, a
shareholder must cast all his votes in the same manner when voting on any of these matters.



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Our shareholders may be represented at an ordinary or extraordinary shareholders meeting by
proxy if a valid proxy form is delivered to us five days before the commencement of the ordinary or extraordinary shareholders meeting. Voting rights attached to our shares exercised by our shareholders proxy are subject to the proxy
regulation promulgated by the ROC SFB.

Any shareholder who has a personal interest in a matter to be discussed at our shareholders
meeting, the outcome of which may impair our interests, shall not vote or exercise voting rights on behalf of another shareholder on such matter.

Any holder of our ADSs generally will not be able to exercise voting rights on the shares underlying its holding of ADSs on an individual
basis.

Dividends and Distributions

We may distribute dividends in any year in which we have current or retained earnings (excluding reserves). Before distributing a dividend to
shareholders, we must recover any past losses, pay all outstanding taxes and set aside a legal reserve equivalent to 10% of our net income until our legal reserve equals our paid-in capital.

At the shareholders annual ordinary meeting, our board of directors submits to the shareholders for their approval proposals for the
distribution of a dividend or the making of any other distribution to shareholders from our net retained earnings or reserves. Dividends are paid to shareholders proportionately. Dividends may be distributed either in cash or in shares or a
combination of cash and shares, as determined by the shareholders at such meeting. Distribution of stock dividends requires approvals from the ROC SFB and the Ministry of Economic Affairs, as necessary.

Our articles of incorporation provide that our earnings after payment of all income taxes and deduction of any past losses shall be
distributed as follows:



| |  |  | allocation of 10% of our net income as legal reserve; and
| | - |  | ---------------------------------------------------------



| |  |  | payment of no more than 1% of the balance after deducting the 10% legal reserve as compensation to our directors. The remaining amount may be distributed or reserved in a ratio of 10% and 90%, respectively, to our
employees as their bonuses and to our shareholders as their dividends.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pursuant to an amendment to the ROC Company Act in
May 2015, director compensation and employee bonuses are no longer qualified for earnings distribution. To reflect this change and as required by this amendment to the ROC Company Act, our board of directors approved an amendment to our articles of
incorporation in December 2015. The amended Articles of Incorporation had been approved by the stockholders in the meeting held on May 16, 2016.

For dividend distributions, the surplus dividend policy will be adopted based on the future operational planning, business development,
capital expenditure budget and requirement of capital fund.

Distribution of dividends may be made by cash dividends or by stock
dividends, provided that the percentage of cash dividends shall exceed 50% of total distributed dividends, and the plan of distribution shall be proposed by the Board of Directors and shall be implemented after the distribution plan is approved by
our shareholders meetings.

In addition to permitting dividends to be paid out of net income, we are permitted under the ROC Company
Act to make distributions to our shareholders of additional shares by capitalizing reserves, including the legal reserve and capital surplus of premiums from issuing stock and earnings from gifts received if we do not have losses. However, the
amount of legal reserve that may be used to distribute cash dividends shall be limited to the portion of the reserve balance that exceeds 25% of capital stock.

Acquisition of Our Shares by Us

An ROC company may not acquire its own common shares except under certain exceptions provided in the ROC Company Act or the ROC Securities and
Exchange Law.

Under the Securities and Exchange Law, we may, by a board resolution adopted by majority consent at a meeting with two-thirds of our directors presence, purchase up to 10% of our issued shares on the Taiwan Stock Exchange or by a tender offer, in accordance with the procedures prescribed by the ROC SFB, for the following
purposes:



| |  |  | to transfer shares to our employees;
| | - |  | ------------------------------------



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| |  |  | to transfer upon conversion of bonds with warrants, preferred shares with warrants, convertible bonds, convertible preferred shares or certificates of warrants issued by us; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if necessary, to maintain our credit and our shareholders interests; provided that the shares so purchased shall be cancelled thereafter.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

In addition, we may not spend more than the aggregate amount of the retained earnings, the premium from issuing stock and the realized portion
of the capital reserve to purchase our shares.

We may not pledge or hypothecate any purchased shares. In addition, we may not exercise
any shareholders rights attaching to such shares. In the event that we purchase our shares on the Taiwan Stock Exchange, our affiliates, directors, managers and their respective spouses and minor children and/or nominees are prohibited from
selling any of our shares during the period in which we purchase our shares.

Liquidation Rights

In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes and distributions to holders of
preferred shares, if any, will be distributed pro rata to our shareholders in accordance with the ROC Company Act.

Other Rights of
Shareholders

Under the ROC Company Act, dissenting shareholders are entitled to appraisal rights in the event of a spin-off or a merger and various other major corporate actions. Dissenting shareholders may request us to redeem all their shares at a fair price to be determined by mutual agreement. If no agreement can be reached,
the valuation will be determined by a court. Subject to applicable law, dissenting shareholders may, among other things, exercise their appraisal rights by notifying us before the related shareholders meeting and /or by raising and registering
their dissent at the shareholders meeting.

One or more shareholders who have held more than 3% of the issued and outstanding shares
for more than one year may require our board of directors to call an extraordinary shareholders meeting by sending a written request to our board of directors.

In addition, the ROC Company Act allows shareholders holding 1% or more of the total issued shares of a company to submit, during the period
of ten days or more prescribed by the company, one proposal in writing containing no more than three hundred Chinese characters for discussion at the annual ordinary shareholders meeting.

Voting of Deposited Securities

A holder may direct the exercise of voting rights regarding the shares represented by the ADSs only pursuant to the deposit agreement as
described below and applicable ROC law. See Risk factorsHolders of our ADSs will not have the same voting rights as the holders of our shares, which may affect the value of your investment.

Except as described below, a holder generally will not be able to exercise voting rights attaching to the shares on an individual basis.
According to the ROC Company Act, a shareholders voting rights must, as to all matters brought to a vote of shareholders, other than the election of directors, be exercised as to all shares held by the shareholder in the same manner.
Accordingly, the voting rights of the shares represented by ADSs must be exercised collectively in the same manner, except in the case of an election of directors, which may be conducted by means of cumulative voting or other mechanisms adopted in
our articles of incorporation. Pursuant to ROC Company Act and our articles of incorporation, the election of directors is by means of cumulative voting.

By accepting and continuing to hold ADSs or any interest therein, a holder will authorize and direct the depositary to appoint our chairman or
the chairmans designee as his representative to exercise the voting rights attaching to the shares underlying the ADSs.

Once
notified of a shareholders meeting, the depositary will, subject to the terms of the deposit agreement, fix a record date for determining the owners entitled to receive information about this meeting. The depositary will mail to the owners:



| |  |  | the notice of the meeting sent by us; and
| | - |  | -----------------------------------------



| |  |  | a statement that the owners will be entitled to instruct the depositary or its nominee as to the exercise of the voting rights.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



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If the depositary timely receives voting instructions from holders of at least 51% of the
outstanding ADSs to vote in the same manner on a resolution, including election of directors, the depositary will cause all of the shares underlying the outstanding ADSs to be voted in the manner instructed. If for any reason, other than our failure
to provide timely notice to the depositary of a shareholders meeting, the depositary does not receive timely instructions from holders of at least 51% of all ADSs outstanding to vote in the same manner on a resolution, including a resolution
for the election of directors, the holders of all ADSs outstanding shall be deemed, subject to our satisfying the applicable requirements of the deposit agreement, to have authorized and directed the depositary to give a discretionary proxy to the
chairman of our board of directors, or the chairmans designee, to vote the shares on deposit in respect of their ADSs in his discretion, which may not be in the interest of the holders of ADSs.

An ADS holder will not be able to exercise cumulative voting rights on an individual basis in the elections of directors under the deposit
agreement. This means that if at least 51% of the votes represented by outstanding ADSs are cast for a particular director for a particular open position in an election, the depositary shall, subject to the terms of the deposit agreement, cause all
of the shares underlying the outstanding ADSs to be voted in favor of the director.

By accepting and continuing to hold ADSs or any
interest therein, a holder will be deemed to have agreed to the voting provisions set forth in the deposit agreement, as such provisions may be amended from time to time to comply with applicable ROC law.

There can be no assurance that a holder will receive notice of shareholders meetings sufficiently prior to the date established by the
depositary for receipt of instructions to enable him to give timely voting instructions.

C. Material Contracts

Share Subscription Agreement with Tsinghua Unigroup Ltd.

In connection with our strategic alliance with Unigroup, we and Unigroup entered into a Share Subscription Agreement in December 2015, pursuant
to which Unigroup agreed to subscribe for 1,033 million of our newly issued common shares, which represented approximately 24.9% of our issued and outstanding share capital, at NT$55 per share. The transaction was subject to closing conditions,
including shareholder and regulatory approval. On April 28, 2016, upon consideration of subjective and objective factors of the Company and Unigroup, our board of directors resolved to terminate this agreement.

Joint Share Exchange Agreement with ASE

On June 30, 2016, we and ASE entered into the Joint Share Exchange Agreement. Under the terms of the Joint Share Exchange Agreement, it is
expected that ASE will incorporate HoldCo, a holding company, which will (i) purchase our outstanding shares in cash and (ii) issue new shares to the ASE Shareholders in exchange for the shares of ASE. HoldCo will be a company incorporated
in Taiwan which, upon the Effective Time, will be beneficially owned by the ASE Shareholders. If the Share Purchase is completed, we will continue our operations as a privately held company and will be beneficially owned by HoldCo. As the result of
the Share Purchase, our ADSs will no longer be listed on the NASDAQ and the American depositary shares program for the ADSs will terminate.

Below is a summary of certain provisions of the Joint Share Exchange Agreement. The summary is qualified in its entirety by reference to the
Joint Share Exchange Agreement itself, which is the legal document governing the Share Purchase. For more information, see Item 4  Information on the Company  A. History and Development of the Company  the Share Purchase
Transaction.

Structure of the Share Purchase

Pursuant to the Joint Share Exchange Agreement, all of the issued and outstanding shares of our company and ASE will be transferred to a newly
formed holding company, HoldCo, incorporated by ASE. HoldCo will issue new shares to ASE shareholders and pay the cash consideration to our shareholders, each as described below. At the Effective Time, we and ASE will become wholly owned
subsidiaries of HoldCo, retaining their respective legal personalities, and we will cease to be a publicly traded company.



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Directors and Officers of the Company

Upon completion of the Share Purchase, the directors of our company will continue to serve as directors for their respective terms, and ASE has
undertaken to reelect or appoint the directors whose terms end in June 2017, if they have not been found to violate their respective fiduciary duties. Our chairman (being Mr. Bough Lin or his successor) and president (being Mr. Chi-Wen Tsai or his successor) are expected to serve as directors of the HoldCo. The directors of our company are also authorized to retain the executive officers of our company as long as the fiduciary
duties of the directors can be discharged.

Consideration

At the closing of the Share Purchase: (i) each issued Share immediately prior to the closing of the Share Purchase (including our treasury
shares), will automatically be transferred to HoldCo and converted into the right to receive the NT$51.2, or the Per Share Consideration, which represents NT$55.0, the original per share consideration under the Joint Share Exchange Agreement, minus
a cash dividend and a return of capital reserve of NT$3.8 per share distributed by us on July 1, 2016; and (ii) each ADS issued and outstanding immediately prior to the closing of the Share Purchase, will be surrendered and converted into
the right to receive the NT$256 (representing five times the Per Share Consideration).

Treatment of the Bonds

If any of the convertible bonds have not been redeemed or repurchased by us and cancelled or converted by holders of the bonds prior to the
Effective Time, ASE and HoldCo jointly warrant to us that HoldCo, as co-obligors with us pursuant to a supplemental indenture to be entered into among us, HoldCo and the trustee of the bonds, will pay the
Final Per Share Consideration (subject to additional adjustments according to the terms of the Joint Share Exchange Agreement and applicable laws) to such holders of the bonds for each Share they are entitled to receive if they exercise their
conversion rights after the Effective Time.

Adjustments to the Consideration

The Original Per Share Consideration and the Original Per ADS Consideration will be adjusted if we issue any shares or cash dividends between
the date of the Joint Share Exchange Agreement and the Effective Time, provided, that the cash consideration will not be so adjusted if our cash dividends in 2017, in aggregate, are less than 85% of our
after-tax net profit for the year 2016.

ASE and we will negotiate changes to the cash
consideration in good faith as a result of the occurrence of the events set forth below to the extent such events occur prior to the Effective Time and result in a reduction, individually or in aggregate, in our consolidated net book value by 10% or
more compared to our net book value in its consolidated audited financial statements as of March 31, 2016 (excluding any such decrease resulting from dividends distributed by us):



| |  |  | issuance of equity-linked securities by us (except for any Shares issued as a result of the exercise of conversion rights by the holders of the Bonds);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | disposal of material assets by us;
| | - |  | ----------------------------------



| |  |  | occurrence of a major disaster causing a material adverse effect to us, material technical changes or other circumstances affecting the shareholders interests or the share price of Shares; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | repurchase of treasury shares by us, except for the repurchase of Shares following the exercise of appraisal rights by our shareholders in connection with the Share Purchase.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Appraisal Rights

Without prejudice to the appraisal rights described below in the section entitled Dissenters Rights, if a shareholder
exercises its appraisal rights, we will repurchase such shares in accordance with applicable law and regulations.

Closing of the Share
Purchase

Subject to the satisfaction or waiver (as applicable) of the conditions to closing of the Share Purchase, the Share Purchase
is expected to occur on a date to be agreed by HoldCos board of directors and our and ASE boards of directors, which date will be agreed upon and approved by such parties within 10 days of receipt of the approvals of their respective general
shareholders meetings to effect the Share Purchase.

Within three (3) business days after the Effective Time, ASE and HoldCo
will pay the full Share Purchase consideration to a dedicated capital account opened by our stock agent. ASE and HoldCo shall be jointly and severally liable for such payment obligation.

Representations and Warranties

The Share Exchange Agreement contains representations and warranties made by us to ASE and representations and warranties made by ASE to us, in
each case as of specific dates. The statements embodied in those representations and warranties were made for purposes of the Share Exchange Agreement and are subject to important qualifications and limitations agreed to by the parties in connection
with negotiating the terms of the Share Exchange Agreement. In addition, some of those representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from that generally applicable
to shareholders and may have been made for the principal purpose of establishing circumstances in which a party to the Share Exchange Agreement may have the right not to close the Share Purchase if the representations and warranties of the other
party prove to be untrue due to a change in circumstance or otherwise and allocating risk between the parties to the Share Exchange Agreement rather than establishing matters as facts. Moreover, information concerning the subject matter of the
representations and warranties, which does not purport to be accurate as of the date of this proxy statement, may have changed since the date of the Share Exchange Agreement, and subsequent developments or new information qualifying a representation
or warranty may have been included in this proxy statement.

The Joint Share Exchange Agreement contains various customary representations
and warranties that we make to ASE relating to, among other things:



| |  |  | our due incorporation, valid existence and authority to carry on its business operations;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | our capitalization;
| | - |  | -------------------



| |  |  | absence of violations of: (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii) organizational documents, or (iv) contracts, representations, warranties
or our other obligations, in each case as a result of entry into the Joint Share Exchange Agreement;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | authority to enter into the Joint Share Exchange Agreement;
| | - |  | -----------------------------------------------------------



| |  |  | enforceability of the Joint Share Exchange Agreement;
| | - |  | -----------------------------------------------------



| |  |  | approval of the Board and/or shareholders meeting in connection with the Share Purchase;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | financial statements;
| | - |  | ---------------------



| |  |  | taxes;
| | - |  | ------



| |  |  | the absence of litigation;
| | - |  | --------------------------



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| |  |  | the absence of undisclosed liabilities;
| | - |  | ---------------------------------------



| |  |  | title to assets;
| | - |  | ----------------



| |  |  | absence of new material debts since December 31, 2015;
| | - |  | ------------------------------------------------------



| |  |  | intellectual property;
| | - |  | ----------------------



| |  |  | labor matters;
| | - |  | --------------



| |  |  | environmental matters;
| | - |  | ----------------------



| |  |  | material contracts;
| | - |  | -------------------



| |  |  | absence of default under contracts;
| | - |  | -----------------------------------



| |  |  | compliance with laws; and
| | - |  | -------------------------



| |  |  | accuracy of materials provided to prepare and file this proxy statement/prospectus.
| | - |  | -----------------------------------------------------------------------------------

The Joint
Share Exchange Agreement contains various customary representations and warranties that ASE makes to us relating to, among other things:



| |  |  | ASEs due incorporation, valid existence and authority to carry on its business operations ;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | capitalization of ASE;
| | - |  | ----------------------



| |  |  | absence of violations of: (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii) organizational documents, or (iv) contracts, representations, warranties
or other obligations of ASE, in each case as a result of entry into the Joint Share Exchange Agreement;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | authority to enter into the Joint Share Exchange Agreement;
| | - |  | -----------------------------------------------------------



| |  |  | enforceability of the Joint Share Exchange Agreement; and
| | - |  | ---------------------------------------------------------



| |  |  | approval of the ASE Board and/or meeting of ASEs shareholders in connection with the Share Purchase.
| | - |  | -----------------------------------------------------------------------------------------------------

The Joint Share Exchange Agreement contains various customary representations and warranties that ASE agrees to cause HoldCo to make to us
relating to, among other things:



| |  |  | HoldCos due incorporation, valid existence and authority to carry on its business operations;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | absence of violations of (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii) organizational documents, or (iv) contracts, representations, warranties
or other obligations of HoldCo, in each case as a result of entry into the Joint Share Exchange Agreement; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | approval of HoldCos promoters meeting in connection with the Share Purchase.
| | - |  | ------------------------------------------------------------------------------

Many
of the representations and warranties of each party in the Joint Share Exchange Agreement are qualified by knowledge, materiality thresholds or material adverse effect. Our representations and warranties are also qualified by information
in disclosure schedules and its publicly available disclosures filed with the Taiwan Financial Supervisory Commission, the TWSE and the SEC.



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For purposes of the Joint Share Exchange Agreement, a material adverse effect to ASE
or us means any change, development, incident, matter, effect or fact that, individually or in aggregate, results in a material adverse effect on us and our subsidiaries, or ASE and its subsidiaries, as applicable, taken as a whole, where
material means the occurrence of such events that, individually or in the aggregate, result in a decrease in the consolidated net book value of us, or ASE, as applicable, by 10% or more, compared to our or ASEs, as applicable,
consolidated audited financial statements as of March 31, 2016; provided that, for the purposes of this definition, in no event will any of the following, individually or in the aggregate, be regarded as having or be taken into account in
determining whether there has been a material adverse effect:



| |  |  | a change in capital market conditions or general economic conditions;
| | - |  | ---------------------------------------------------------------------



| |  |  | a change in geopolitical conditions occurring after the date the Joint Share Exchange Agreement was executed, or outbreak or escalation of any conflict, or any acts of terrorism or war;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a force majeure event occurring after the date the Joint Share Exchange Agreement was executed;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | any change in applicable law after the date the Joint Share Exchange Agreement was executed;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | any change of the industry in which the party or its subsidiaries operate;
| | - |  | --------------------------------------------------------------------------



| |  |  | the failure, in and of itself, to meet any predictions, forecasts, projections or estimates of revenue, profits or other financial or operational targets, or a change of market price, credit rating or trading volume of
the partys securities, provided that the directors of the party have met their duties of care and loyalty;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the announcement of the execution of the Joint Share Exchange Agreement or the consummation of the Share Purchase, including any transaction-related litigation, any actions required by the covenants in the Joint Share
Exchange Agreement, any loss of or change of relationship with any customer, supplier, distributor or other business partners of the party or its subsidiaries, or any loss of any employees or senior management, provided that the directors of the
party have met their duties of care and loyalty; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in the case of ASE only, any internal restructuring of ASE and/or its subsidiaries.
| | - |  | -----------------------------------------------------------------------------------

The
representations and warranties of each of the parties to the Joint Share Exchange Agreement will terminate upon the Effective Time or termination of the Joint Share Exchange Agreement in accordance with its terms

Pre-Closing Covenants for Us

Conduct of Our Business

From the date of execution of the Joint Share Exchange Agreement until the Effective Time, we will not, and will not procure its subsidiaries
to, among other matters:



| |  |  | issue any equity-linked securities (other than shares issued as a result of the exercise of conversion rights by holders of the Bonds); or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | directly or indirectly repurchase, individually or through any third party, any shares or equity-linked securities, or reduce its share capital or enter into any plan of dissolution, or make any filings in connection
with restructuring, settlement or bankruptcy, except for the repurchase of shares from shareholders exercising appraisal rights or in connection with the redemption of our foreign convertible bonds.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Superior Proposals

Except (i) if required by a court judgment, arbitral award, approval or order, administrative decision or burden/condition approved by
both ASE and us by competent authorities (including the TWSE, TFTC, U.S. FTC, the MOFCOM or the SEC), or (ii) if we receive a Superior Proposal (as described below), we have agreed that between the date of the Joint Share Exchange Agreement and
the Effective Time, we will not, and we will not procure our subsidiaries to, and none of its directors, managers, employees, agents or representatives may, offer or agree to enter into, or execute, any contract, agreement or other arrangement with
any third party in respect of any of the following transactions (an Alternate Transaction):



| |  |  | any transaction that may involve a spin-off, purchase or sale of our company or any other companys shares of a non-financial
investment nature;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a lease of all our businesses to a third party, a joint operation with a third party, or the acquisition of the entire business or assets from a third party (except for the acquisition of the entire business or assets
from a third party in an aggregate amount less than NT$500,000,000);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any merger or acquisition that does not involve the issue of shares in HoldCo;
| | - |  | ------------------------------------------------------------------------------



| |  |  | any sale of any or all material assets or businesses of our wholly owned subsidiaries; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | any disposal of any interest in any material assets or businesses, or exclusive licenses of material patents or technologies, in each case of our wholly owned subsidiaries.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For purposes of the Joint Share Exchange Agreement, Superior Proposal means abona fide, unsolicited written offer to us to
enter into any Alternate Transaction, made by a party other than ASE, we or any of our directors, managers, employees, agents or representatives, where the terms and conditions of such an offer are considered to be more favorable to us and our
shareholders than the terms and conditions of the Share Purchase, as evidenced by opinions separately issued by a renowned investment bank and law firm appointed by our audit committee. If we receive a Superior Proposal from a third party the
conditions of which, in the respective opinions of our audit committee and our board of directors, are more favorable than those of the Share Purchase, we will notify ASE in writing of such superior proposal and furnish ASE with details of the
entire Superior Proposal. From the fifth business day following the delivery of such notice to ASE, we will be permitted to negotiate with, propose to, inquire with, deliberate with, contact, discuss with, offer to or consult with such third party.
ASE and we agree that if we do not consummate the Share Purchase due to our acceptance of a Superior Proposal, we will pay to ASE a termination fee in the amount of NT$17 billion.

Other Pre-closing Covenant for Us

After ASE issues to us, in connection with the payment of entire amount of the cash consideration under the Joint Share Exchange Agreement, the
financing plan and a highly confident letter in respect of the financing of the Transaction issued by banks conforming to the market practice, we shall in our SEC filings recommend to our shareholders to vote in favor of approving the Joint Share
Exchange Agreement and the Transaction.

Pre-Closing Covenants for ASE

Except (i) if we have materially breached any of our representations, warranties or covenants under the Joint Share Exchange
Agreement, (ii) if there is any action taken by us that would prevent the consummation of the Share Purchase without just cause, or (iii) where our directors have breached their duty of care or loyalty in relation to the Share Purchase, in
each case during the period from the execution of the Joint Share Exchange Agreement to the Effective Time, ASE (and, if applicable, HoldCo) have agreed to:



| |  |  | support the candidates for our 13th board of directors nominated by the Board when we re-elect our board of directors in June
2017;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



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| |  |  | not intervene in the operation of us and to support the motions put forward by the Board at our shareholders meeting, including by abstaining from voting on any motion that threatens our interests and to not
solicit proxies or seek to replace our directors, including by convening an extraordinary general meeting of our shareholders, and no current or former director of ASE or any of its subsidiaries, or their spouses, other relatives and certain other
persons may serve as a director of ours;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintain the competition between, and the respective independence of, ASE and us, without the hiring of any of our employees by ASE; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | not purchase or acquire shares in us or increase its interest in us in any manner that violates applicable law; provided that, for any shares in us acquired by ASE in accordance with applicable law between the date the
Joint Share Exchange Agreement was executed and the Effective Time, (i) ASE may dispose of such shares freely for financial purposes, provided that the disposed shares are in aggregate less than 10% of the total issued and outstanding share
capital of ours, and (ii) ASE may transfer our shares to persons who do not operate any businesses in the integrated circuit packaging industry; provided that if the transferred shares are in aggregate more than 10% of the total issued and
outstanding share capital of ours, ASE will obtain our prior written consent to such a transfer.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Shareholders Meeting

We and ASE, respectively, will cause an extraordinary general meeting of its shareholders to be duly called and held, on the same date, to
approve the Share Exchange Agreement and the Share Purchase. We and ASE will jointly determine the date of such extraordinary general meetings upon receiving antitrust clearance or approvals from any two of the TFTC, MOFCOM and U.S. FTC. Such date
shall be no later than seventy (70) calendar days after antitrust clearance or approvals from each of the TFTC, MOFCOM and U.S. FTC have been obtained.

In addition, from the business day immediately following the date on which the SEC confirms that it has no further comments on the respective
SEC filing documents required for us and ASE, each of us and ASE will take all necessary action to call an extraordinary general meeting of its shareholders. The date of such extraordinary general meetings shall be no later than seventy
(70) calendar days after the date on which the SEC confirms that it has no further comments on the respective SEC filings documents required for us and ASE.

Regulatory Approvals

ASE and HoldCo have agreed to use commercially reasonable efforts to, and we have agreed to use reasonable efforts to, in each case, obtain all
approvals relating to the Share Purchase from competent authorities. We have agreed to use commercially reasonable efforts to assist ASE and HoldCo in making all filings and notifications and providing all information to competent authorities,
including making all required filings with the TFTC, MOFCOM and the U.S. FTC. In addition, we, ASE and HoldCo have agreed to comply with the Taiwan Fair Trade Act and all relevant laws.

ASE, HoldCo and we have agreed to act in good faith and with goodwill in deciding, jointly, whether to accept any conditions or burdens
imposed by any of TFTC, U.S. FTC or MOFCOM as a condition to obtaining approvals or avoiding a legal challenge from such authorities. ASE and we have agreed to comply with any such conditions or burdens agreed by ASE and us. Following the Effective
Time, ASE, HoldCo and we will comply with any conditions or burdens imposed by TFTC, U.S. FTC or MOFCOM, which ASE and we have agreed to.

Financing of the Share Purchase

ASE shall, before our submission of Schedule 13E-3 to the SEC, confirm with us the types and composition of ASEs and HoldCos
funding sources and present documents evidencing the funding sources (including, but not limited to, the financing plan and a highly confident letter conforming to the market practice and issued by bank(s) financing the Share Purchase) that can
demonstrate ASEs and HoldCos ability to fully pay for the consideration of the Share Purchase.



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Conditions to Consummation of the Share Purchase

The obligations of ASE, ours and HoldCo to consummate the Share Purchase are subject to the satisfaction of the following conditions:



| |  |  | the unconditional approval of the Share Purchase at their respective general shareholders meetings;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | receipt of approvals from all relevant competent authorities, including, but not limited to, (i) the TWSE and the SEC, (ii) the TFTC and MOFCOM and (iii) the FTC completing its investigation without
seeking an injunction (in the case of (ii) and (iii), including approvals or consents of conditions imposed by such authorities that both ASE and we have agreed to accept); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no order (or agreement with the FTC) is in effect and enforceable prohibiting, enjoining or rendering illegal the consummation of the Share Purchase, and no law shall have been enacted or enforced after the date the
Joint Share Exchange Agreement was executed rendering illegal or prohibiting the consummation of the Share Purchase; provided that the enforcement of an order or law shall not include the decision by a governmental entity to extend the waiting
period or initiate an investigation under antitrust laws or other applicable law.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, ASEs and HoldCos
obligations to consummate the Share Purchase are subject to the satisfaction or waiver by ASE and HoldCo of the following additional conditions:



| |  |  | all representations and warranties of ours are true and accurate as of the date the Joint Share Exchange Agreement was executed and as of the Effective Time, except to the extent no material adverse effect on us has
occurred;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we have performed in all material respects all obligations and undertakings required to be performed by it under the Joint Share Exchange Agreement prior to the Effective Time;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no material adverse effect to us shall have occurred prior to the Effective Time; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease in our consolidated net book value by 30% or more, relative to our net book value in its
consolidated audited financial statements as of March 31, 2016.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, our obligation to consummate the Share
Purchase is subject to the satisfaction or waiver of the following additional conditions:



| |  |  | all representations and warranties of ASE are true and accurate as of the date the Joint Share Exchange Agreement was executed and as of the Effective Time, except to the extent no material adverse effect on ASE has
occurred;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | all representations and warranties of HoldCo are true and accurate as of the Effective Time, except to the extent no material adverse effect on HoldCo has occurred;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ASE and HoldCo have performed in all material respects all obligations and undertakings required to be performed by each of them under the Joint Share Exchange Agreement prior to the Effective Time;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no material adverse effect to ASE will have occurred prior to the Effective Time; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease in ASEs consolidated net book value by 30% or more, relative to ASEs net book
value in its consolidated audited financial statements as of March 31, 2016.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The consummation of the Share Purchase is subject to the satisfaction or waiver of all the
conditions set forth above on or prior to the Long Stop Date. If the closing of the Share Purchase cannot be completed due to the failure to satisfy the conditions set forth above on or prior to the Long Stop Date, the Joint Share Exchange Agreement
will automatically terminate at midnight on the day immediately following the Long Stop Date.

Termination and Events of
Default

Termination of Joint Share Exchange Agreement

The Joint Share Exchange Agreement may be terminated prior to the Effective Time by either ASE or us if any of the following occurs:



| |  |  | a law, judgment, court order or administrative decision issued by a competent authority restricts or prohibits the consummation of the Share Purchase, and such restriction or prohibition has been confirmed and cannot be
remedied by amending the Joint Share Exchange Agreement; or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Joint Share Exchange Agreement and Share Purchase are not approved by ASEs shareholders or our shareholders at their respective shareholder meetings.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

The Joint Share Exchange Agreement may also be terminated at any time prior to the Effective Time by ASE if we have breached or failed to
perform any of its representations, warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy the conditions to the consummation and is by its nature not capable of being cured,
or is not cured by us within 30 business days of receiving written notice of such breach, and is not waived in writing by ASE.

The Joint
Share Exchange Agreement may also be terminated at any time prior to the Effective Time by us if ASE has breached or failed to perform any of its representations, warranties, undertakings or obligations under the Joint Share Exchange Agreement and
such breach leads to the failure to satisfy the conditions to the consummation and is by its nature not capable of being cured, or is not cured by ASE within 30 business days of receiving written notice of such breach, and is not waived in writing
by us.

If the Share Purchase is not consummated on or before the Long Stop Date, the Joint Share Exchange Agreement will automatically
terminate at midnight on the day immediately following the Long Stop Date.

Events of Default, Remedies and Liquidated
Damages

An event of default will occur if ASE, HoldCo or we breach any of their obligations, undertakings,
representations or warranties under the Joint Share Exchange Agreement, and such breach is by its nature not capable of being cured or, if such breach is by its nature capable of being cured, the
non-defaulting party requests the defaulting party cure such breach within 15 days and such breach is not cured within 15 days; provided that HoldCo and ASE are jointly and severally liable for breaches
committed by either party, and a breach of any representation or warranty made prior to the Effective Time will no longer constitute an event of default as of the Effective Time.

Upon the occurrence of an event of default that prevents the consummation of the Share Purchase on or prior to the Long Stop Date, the non-defaulting Party will be entitled to terminate the Joint Share Exchange Agreement and claim from the defaulting party all necessary expenses incurred in connection with entering into the Joint Share Exchange
Agreement and the performance of the obligations thereunder, in addition to any rights, remedies and damages under applicable law, subject to any adjustments for the contributory negligence of the non-defaulting party. The percentage of such
contributory negligence may be determined by an expert appraiser appointed by both ASE and us without being determined by arbitration. In addition to any right of termination and claims for expenses, upon the occurrence of certain prescribed
material events of default, the non-defaulting party will also be entitled to liquidated damages in the amount of NT$8.5 billion from the defaulting party, subject to adjustments for contributory
negligence by the non-defaulting party.



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Post-Termination Obligations

Unless ASE terminates the Joint Share Exchange Agreement due to the breach by us, ASE has agreed to comply with the ASE Surviving Covenants and
we have agreed to be bound by the provisions relating to a Superior Proposal, and the payment of the break fee, in each case for six (6) months from the date of termination of the Joint Share Exchange Agreement. In addition, ASE has agreed to
maintain its position as solely a financial investor in us without intervening with our independent operations during such six (6) month period.

Post-Closing Operation and Corporate Governance

Board and Management of HoldCo

The directors of HoldCo will be comprised of nine to thirteen non-independent directors, appointed at a
meeting of HoldCos incorporators, and three supervisors, who will be future independent directors. Our chairman and president will each be appointed (non-independent) directors of HoldCo. ASE and we will
jointly nominate one independent director, when HoldCo appoints independent directors.

Independent Operation of Our
Company

ASE and we have agreed to comply with certain post-closing covenants to ensure the continued independence of
us following the consummation of the Share Purchase, including that we will become a wholly owned subsidiary of HoldCo but its independent operations and the competition between ASE and we will be maintained. In addition, subject to applicable law,
the duties of our directors and the interests of HoldCo, HoldCo agrees to comply with the following covenants:



| |  |  | the operations of we will be managed by the Board, who will maintain control over our organizational documents, personnel, payroll or welfare systems, financial budgets, audit, technology research and development,
operations and marketing; and other matters, in each case so as to maintain our independent operations;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any matter relating to our rights and obligations will be controlled by the Board or under its authorization, and the operation of our businesses will be conducted by the Board or under its direction;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | HoldCo will, to the extent that it is capable, provide guaranties, funding or other support sufficient to enable us to obtain financing from third parties (including, but not limited to, guarantee documentation
acceptable to financing parties), in order to meet our funding needs, including but not limited to capital expenditure and working capital;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our management, employees, current organizational structure, compensation and relevant benefits as of the date of execution of the Joint Share Exchange Agreement will be maintained;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | for so long as we are a subsidiary of HoldCo, the Board will nominate and appoint our directors and supervisors in its sole discretion (and HoldCo will appoint such candidates), and such directors will not be replaced
or otherwise removed without the consent of the Board; and the compensation and benefits of our directors as of the date of execution of the Joint Share Exchange Agreement will be maintained; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | HoldCo may not dispose of any shares in us without our consent.
| | - |  | ---------------------------------------------------------------

ASE, HoldCo and we have
agreed that, following the Effective Time, none of ASE, we or any of the other wholly owned subsidiaries of HoldCo, or any of their directors, managers or agents, without the consent of HoldCo, will offer, agree or enter into any agreement with any
third party regarding an Alternate Transaction.



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In addition, HoldCo and its subsidiaries (other than ASE and we) will not provide ASE with
customer details or competitively sensitive information obtained from us, including but not limited to production and sales costs, product price/quantity and details of suppliers, without our consent and in accordance with applicable antitrust laws.

We have the right to initiate arbitration against HoldCo or its subsidiaries if ASE commits an event of default under the Joint Share
Exchange Agreement.

Employee Benefits and Rights

HoldCo has agreed that, for all of our employees as of the Effective Time, HoldCo will ensure that, subject to certain exceptions set forth in
the Joint Share Exchange Agreement, they continue to receive existing employee benefits, work under the conditions and be subject to the same personnel regulations. The employment rights for our employees will be protected, except where such
employee committed a material breach of applicable law or the personnel regulations of ours.

In addition, HoldCo will reserve a portion
of HoldCos employee stock options for our management and employees. HoldCo will determine the plan and terms for the issue of employee stock options and the proportion to be reserved for our employees based on the number of employees; each
employees contribution and performance results, and the profitability of HoldCos future subsidiaries. We will determine, in accordance with its personnel regulations, the proportion of such HoldCos employee stock options to be
distributed to our management and its other employees.

ASE and HoldCo have agreed that our management team may, in its sole discretion
and within three months after the completion of the Share Purchase, implement reasonable and appropriate one-off plans to retain members of our management and/or determine whether or not to accept resignations
from our employees who choose to resign after the Effective Time and the terms of such resignations; provided that our management team does not violate its duty of loyalty or duty of care.

Expenses

Except as otherwise explicitly provided for in the Joint Share Exchange Agreement, all costs and expenses incurred by the parties in connection
with the Share Purchase will be paid by the party incurring such costs and expenses.

Governing Law and
Jurisdiction

The Joint Share Exchange Agreement is governed by and is to be construed, in all respects, with the law of
ROC, including as to interpretation, effectiveness and performance. The parties have agreed to submit disputes arising out of the Joint Share Exchange Agreement to the Chinese Arbitration Association in Taipei.

D. Exchange Controls

We have extracted from publicly available documents the information presented in this section. Please note that citizens of the
Peoples Republic of China and entities organized in the Peoples Republic of China are subject to special Republic of China laws, rules and regulations, which are not discussed in this section.

General

Historically, foreign investments in the securities market of Taiwan were restricted. However, commencing in 1983, the Taiwan government has
from time to time enacted legislation and adopted regulations to make foreign investment in the Taiwan securities market possible. Initially, only overseas investment trust funds of authorized securities investment trust enterprises established in
Taiwan were permitted to invest in the Taiwan securities market. Since January 1, 1991, qualified foreign institutional investors are allowed to make investments in the Taiwan listed securities market. Since March 1, 1996, overseas
Chinese, non-resident foreign institutional and individual investors (other than qualified foreign institutional investors), called general foreign investors, are permitted to make direct
investments in the Taiwan securities market.



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On September 30, 2003, the Executive Yuan amended the Regulations Governing Investment in
Securities by Overseas Chinese and Foreign Nationals, or the Investment Regulations, under which the Qualified Foreign Institutional Investors, or QFII, designations have been abolished and the restrictions on foreign portfolio investors
have been revised. According to the Investment Regulations, Foreign Institutional Investor means an entity which is incorporated under the laws of countries other than the ROC or the branch of a foreign entity which is established within
the territory of the ROC, and Foreign Individual Investor means an overseas Chinese or a foreign natural person. In addition, the Investment Regulations also lifted some restrictions and simplified procedures of investment application.

On April 30, 2009, the FSC promulgated regulations allowing qualified domestic institutional investors, or QDIIs, under PRC
regulations and certain other PRC persons to invest in the securities of ROC companies. However, prior approval from the Investment Commission of the ROC Ministry of Economic Affairs is required for a PRC persons ownership of 10% or more of
the issued and outstanding shares of a listed ROC company.

Foreign Investment in Taiwan Securities Market

Certain individual and foreign institutional investors which meet certain qualifications set by the Securities and Futures Bureau may invest in
the shares of Taiwan Stock Exchange-listed companies, Taipei Exchange (formerly known as Over-The-Counter Securities Exchange) traded companies, emerging market
companies or other Taiwan securities approved by the Securities and Futures Bureau up to a limit of US$50 million (in the case of institutional investors) and US$5 million (in the case of individual investors) after obtaining permission
from the Taiwan Stock Exchange.

For foreign investors to invest in Taiwans securities market, registration with the Taiwan Stock
Exchange, instead of the approval of the Securities and Futures Bureau, is required. The Taiwan Stock Exchange may withdraw or rescind the registration if the application documents submitted by foreign investors are untrue or incomplete, or if any
material violation of the relevant regulations exists.

Off-shore foreign investors may provide
the securities they hold as the underlying shares of depositary receipts and act as selling stockholders in depositary receipts offerings.

Off-shore foreign institutional investors are required to appoint their agent or nominee to attend the
stockholders meeting of the invested company.

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

Currently, subject to the specific restriction
imposed by relevant regulations, the off-shore foreign institutional investors may invest in the Taiwan securities market without any amount restriction. However, a ceiling will be separately determined by the
Securities and Futures Bureau after consultation with the Central Bank of the Republic of China (Taiwan) for investment by offshore oversea Chinese and foreign individual investors.

Foreign Investment Approval

Other than:



| |  |  | foreign institutional investors;
| | - |  | --------------------------------



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| |  |  | foreign individual investors; and
| | - |  | ---------------------------------



| |  |  | investors in overseas convertible bonds and depositary receipts,
| | - |  | ----------------------------------------------------------------

Foreign investors who wish
to make direct investments in the shares of Taiwan companies may submit a foreign investment approval application to the Investment Commission of the Ministry of Economic Affairs of Taiwan or other government authority to qualify for
benefits granted under the Statute for Investment by Foreign Nationals. The Investment Commission or other government authority reviews each foreign investment approval application and approves or disapproves the application after consultation with
other governmental agencies. Any non-Taiwan person possessing a foreign investment approval may remit capital for the approved investment and repatriate annual net profits and interests and cash dividends
attributable to an approved investment. Stock dividends, investment capital and capital gains attributable to the investment may be repatriated with approval of the Investment Commission or other government authority.

In addition to the general restrictions against direct investment by non-Taiwan persons in Taiwan
companies, non-Taiwan persons are currently prohibited from investing in prohibited industries in Taiwan under the Negative List promulgated by the Executive Yuan from time to time. The prohibition on direct
foreign investment in the prohibited industries in the Negative List is absolute with the consequence of certain specific exemption from the application of the Negative List. Under the Negative List, some other industries are restricted so that non-Taiwan persons may directly invest only up to a specified level and with the specific approval of the relevant authority which is responsible for enforcing the legislation which the negative list is intended to
implement.

The FSC announced on April 30, 2009 the Regulations Governing Mainland Chinese Investors Securities Investments, or
the PRC Regulations. According to the PRC Regulations, a QDII is allowed to invest in Taiwan Securities (including up to 10% shareholding of a Taiwan company listed on Taiwan Stock Exchange or Over-the-Counter (Taipei exchange). Nevertheless, the total investment amount of QDIIs cannot exceed US$500 million. For each QDII, the custodians of such QDIIs must apply with the Taiwan Stock Exchange
for the remittance amount for each QDII, which cannot exceed US$100 million, and QDII can only invest in the Taiwan securities market with the amount approved by the Taiwan Stock Exchange. There is no assurance that in the future, there will
not be further restrictions or prohibitions imposed on PRC persons (including QDIIs) from investing in certain industries in Taiwan. In addition to investments permitted under the PRC Regulations, PRC investors other than QDII are prohibited from
making investments in a Taiwan company listed on the Taiwan Stock Exchange or the Over-the-Counter Taipei exchange if the investment is less than 10% of the equity
interest of such Taiwan company.

In addition to the general restriction against direct investment by PRC investors in securities of
Taiwan companies, PRC investors may only invest in certain industries in the Positive List, as promulgated by the ROC. Executive Yuan in June of 2009. In the semiconductor packaging and testing industry, PRC investors are allowed to invest up to 10%
in existing Taiwan companies, and up to 50% in new ventures, but are not allowed to be controlling shareholders of the Taiwan companies in which they invest.

Depositary Receipts

In April 1992, the Securities and Futures Bureau began allowing Taiwan companies listed on the Taiwan Stock Exchange, with the prior approval
of the Securities and Futures Bureau, to sponsor the issuance and sale of depositary receipts evidencing depositary shares. In December 1994, the Republic of China Ministry of Finance began allowing companies whose shares are traded on the Taipei
exchange also to sponsor the issuance and sale of depositary receipts evidencing depositary shares representing shares of its capital stock. Approvals for these issuances are still required.

After the issuance of a depositary share, a holder of the depositary receipt evidencing the depositary shares may request the depositary
issuing the depositary share to cause the underlying shares to be sold in Taiwan and to distribute the proceeds of the sale to or to withdraw the shares and deliver the shares to the depositary receipt holder. A citizen of the Peoples Republic
of China is not permitted to withdraw and hold our shares.



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If you are an offshore foreign institutional investor holding the depositary receipts, you must
register with the Taiwan Stock Exchange as a foreign investor before you will be permitted to withdraw the shares represented by the depositary receipts. In addition to obtaining registration with the Taiwan Stock Exchange, you must also
(i) appoint a qualified local agent to, among other things, open a securities trading account with a local securities brokerage firm and a bank account to remit funds, exercise stockholders rights and perform other functions as holders of
ADSs may designate, (ii) appoint a custodian bank to hold the securities and cash proceeds, confirm transactions, settle trades and report and declare other relevant information and; (iii) appoint a tax guarantor as guarantor for the full
compliance of the withdrawing depositary receipt holders tax filing and payment obligations in the Republic of China. A depositary receipt holder not registered as a foreign investor with the Taiwan Stock Exchange, or not has made the
necessary appointments as outlined above, will be unable to hold or subsequently transfer the shares withdrawn from the depositary receipt facility.

No deposits of shares may be made in a depositary receipt facility and no depositary shares may be issued against deposits without specific
Securities and Futures Bureau approval, unless they are:



| | (i) | stock dividends;
| | --- | ----------------



| | (ii) | free distributions of shares;
| | ---- | -----------------------------



| | (iii) | due to the exercise by the depositary receipt holder preemptive rights in the event of capital increases for cash; or
| | ----- | ---------------------------------------------------------------------------------------------------------------------



| | (iv) | if permitted under the deposit agreement and custody agreement and within the amount of depositary receipts which have been withdrawn, due to the direct purchase by investors or purchase through the depositary on the
Taiwan Stock Exchange or the Taipei exchange or delivery by investors of the shares for deposit in the depositary receipt facility. In this event, the total number of depositary receipts outstanding after an issuance cannot exceed the number of
issued depositary receipts previously approved by the Securities and Futures Bureau of the FSC in connection with the offering plus any ADSs issued pursuant to the events described in (i), (ii) and (iii) above.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

An ADS holder or the depositary, without obtaining further approvals from the Central Bank of the Republic of China (Taiwan) or any other
governmental authority or agency of the Republic of China, may convert NT dollars into other currencies, including U.S. dollars, in respect of:



| |  |  | the proceeds of the sale of common shares represented by ADSs or received as share dividends with respect to the common shares and deposited into the depositary receipt facility; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any cash dividends or distributions received from the common shares.
| | - |  | --------------------------------------------------------------------

In addition, the
depositary may also convert into NT dollars incoming payments for purchases of common shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the common shares underlying your ADSs and become a
holder of our common shares, you may convert into NT dollars subscription payment for rights offerings. The depositary may be required to obtain foreign exchange payment approval from the Central Bank of the Republic of China (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of new common shares. Although it is
expected that the Central Bank of the Republic of China (Taiwan) will grant approval as a routine matter, required approvals may not be obtained in a timely manner, or at all.

Exchange Controls

Taiwans Foreign Exchange Control Statute and regulations provide that all foreign exchange transactions must be executed by banks
designated to handle foreign exchange transactions by the FSC and by the Central Bank of the Republic of China (Taiwan). Current regulations favor trade-related foreign exchange transactions. Consequently, foreign currency earned from exports of
merchandise and services may now be retained and used freely by exporters. All foreign currency needed for the importation of merchandise and services may be purchased freely from the designated foreign exchange banks.



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Aside from trade-related foreign exchange transactions, Taiwan companies and residents may remit
to and from Taiwan foreign currencies of up to US$50 million (or its equivalent) and US$5 million, (or its equivalent), respectively, in each calendar year. These limits apply to remittances involving a conversion between New Taiwan
dollars and U.S. dollars or other foreign currencies. A requirement is also imposed on all private enterprises to register all medium and long-term foreign debt with the Central Bank of the Republic of China (Taiwan).

In addition, a foreign person without an alien resident card or an unrecognized foreign entity may remit to and from Taiwan foreign currencies
of up to US$100,000 per remittance if required documentation is provided to Taiwan authorities. This limit applies only to remittances involving a conversion between New Taiwan dollars and U.S. dollars or other foreign currencies.

E. Taxation

ROC Tax Considerations

The following summarizes the principal ROC tax consequences of owning and disposing of ADSs and shares for
non-residents of Taiwan. Investors in our ADSs or shares are advised to consult their own tax advisers as to United States, Taiwan or other tax consequences of the purchase, ownership and disposition of ADSs
or shares.

The following is a general summary of the principal ROC tax consequences of the ownership and disposition of shares and
ADSs representing common shares to a non-resident individual or entity. The summary description applies only to a holder that is:



| |  |  | an individual who is not an ROC citizen, who owns ADSs or shares and who is not physically present in the ROC for 183 days or more during any calendar year; or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a corporation or a non-corporate body that is organized under the laws of a jurisdiction other than the ROC for profit-making purposes and has no fixed place of business or other
permanent establishment in the ROC.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Holders of ADSs and shares are urged to consult their own tax advisors as to their
particular ROC tax consequences from owning the ADSs and shares.

Dividends

Dividends declared by us out of our retained earnings and distributed to the holders are subject to ROC withholding tax, currently at the rate
of 20%, on the amount of the distribution, in the case of cash dividends, or on the par value of the common shares in the case of stock dividends. However, half of the amount of the 10% ROC retained earnings tax paid by us on our undistributed after-tax earnings, if any, would provide a credit of up to 10% of the gross amount of any dividends declared out of those earnings that would reduce the 20% ROC withholding tax imposed on those distributions.

Capital Gains

Under ROC
law, capital gains on transactions in the common shares are currently exempt from income tax. In addition, transfers of ADSs are not regarded as a sale of an ROC security and, as a result, any gains on such transactions are not subject to ROC income
tax.



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Securities Transaction Tax

A securities transaction tax, at the rate of 0.3% of the sales proceeds, will be withheld upon a sale of common shares in the ROC Transfers of
ADSs are not subject to ROC securities transaction tax. Withdrawal of common shares from the deposit facility is not subject to ROC securities transaction tax.

Estate and Gift Tax

ROC estate tax is payable on any property within the ROC of a deceased who is an individual, and ROC gift tax is payable on any property within
the ROC donated by an individual. Estate tax is currently payable at rate of 10%. Gift tax is payable at rate of 10%. Under ROC estate and gift tax laws, common shares issued by ROC companies are deemed located in the ROC regardless of the location
of the holder. It is unclear whether a holder of ADSs will be considered to hold common shares for this purpose.

Certain ROC estate and
gift taxes may be imposed on holders of ADSs. Holders should consult their own tax advisor regarding the effect of such taxes on their particular situation.

Tax Treaty

The ROC does
not have a double taxation treaty with the United States. On the other hand, the ROC has double taxation treaties with Australia, Belgium, Denmark, France, Gambia, Germany, Hungary, India, Indonesia, Israel, Macedonia, Malaysia, the Netherlands, New
Zealand, Paraguay, Senegal, Singapore, Slovakia, South Africa, Swaziland, Sweden, Switzerland, UK and Vietnam which may limit the rate of ROC withholding tax on dividends paid with respect to common shares in ROC companies. It is unclear whether ADS
holders will be considered holders of common shares for the purposes of these treaties. Accordingly, if the holders may otherwise be entitled to the benefits of the relevant income tax treaty, the holders should consult their tax advisors concerning
their eligibility for the benefits with respect to the ADSs.

U.S. Federal Income Tax Considerations for U.S. Persons

The following is a summary of the material U.S. federal income tax consequences for beneficial owners of our shares or ADSs that hold the
shares or ADSs as capital assets, and that are U.S. holders and non-residents of the ROC. You are a U.S. holder if you are, for U.S. federal income tax purposes, any of the following:



| |  |  | an individual citizen or resident of the United States;
| | - |  | -------------------------------------------------------



| |  |  | a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate the income of which is subject to U.S. federal income taxation regardless of its source;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | a trust that is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a trust that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
| | - |  | ----------------------------------------------------------------------------------------------------------------------

This summary is based on the provisions of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and regulations, rulings and
judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. It is for general purposes only and you
should not consider it to be tax advice. In addition, it is also based in part on representations by the depositary and assumes that each obligation under the deposit agreement and any related agreement will be performed in accordance with its
terms. This summary does not represent a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income or the effects of any
state, local or non-U.S. tax laws (or other U.S. federal tax consequences, such as U.S. federal estate or gift tax consequences). In addition, it does not represent a detailed description of the U.S. federal
income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:



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| |  |  | a dealer in securities or currencies;
| | - |  | -------------------------------------



| |  |  | a trader in securities if you elect to use a mark-to-market method of accounting for your securities holdings;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | a financial institution or an insurance company;
| | - |  | ------------------------------------------------



| |  |  | a tax-exempt organization;
| | - |  | --------------------------



| |  |  | a regulated investment company;
| | - |  | -------------------------------



| |  |  | a real estate investment trust;
| | - |  | -------------------------------



| |  |  | a person liable for alternative minimum tax;
| | - |  | --------------------------------------------



| |  |  | a person holding shares or ADSs as part of a hedging, integrated or conversion transaction, constructive sale or straddle;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | a partnership or other pass-through entity for U.S. federal income tax purposes;
| | - |  | --------------------------------------------------------------------------------



| |  |  | a person owning, actually or constructively, 10% or more of our voting stock; or
| | - |  | --------------------------------------------------------------------------------



| |  |  | a U.S. holder whose functional currency is not the United States dollar.
| | - |  | --------------------------------------------------------------------------

We
cannot assure you that a later change in law will not alter significantly the tax considerations that we describe in this summary.

If a
partnership holds our shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our shares or ADSs, you should consult
your tax advisor.

You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the
ownership and disposition of the shares or ADSs, as well as the consequences to you arising under the laws of any other taxing jurisdiction.

In general, for U.S. federal income tax purposes, a U.S. person who is the beneficial owner of an ADS will be treated as the owner of the
shares underlying its ADS. Deposits or withdrawals of shares by U.S. holders for ADSs generally will not be subject to U.S. federal income tax.

Taxation of Dividends

Except as discussed below with respect to the passive foreign investment company rules, the amount of distributions you receive on your shares
or ADSs, including net amounts withheld in respect of ROC withholding taxes, will generally be treated as dividend income to you if the distributions are made from our current and accumulated earnings and profits as calculated according to U.S.
federal income tax principles. Such income (including any ROC taxes withheld) will be includible in your gross income as ordinary income on the day you actually or constructively receive it, which in the case of an ADS will be the date actually or
constructively received by the depositary. The amount of any distribution of property other than cash will be the fair market value of such property on the date it is distributed. You will not be entitled to claim a dividend received deduction with
respect to distributions you receive from us.



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With respect to non-corporate U.S. holders , including
individuals, certain dividends received from a foreign corporation on shares (or ADSs backed by such shares) that are readily tradable on an established securities market in the United States may be subject to reduced rates of taxation. U.S.
Treasury Department guidance indicates that our ADSs, which are listed on the NASDAQ, are readily tradable on an established securities market in the United States. Thus, subject to the discussion below with respect to the passive foreign investment
company rules, we believe that dividends we pay on our ADSs will meet the conditions required for these reduced tax rates. Since we do not expect that our shares will be listed on an established securities market in the United States, we do not
believe that dividends that we pay on our shares that are not backed by ADSs currently meet the conditions required for these reduced tax rates. There can be no assurance that our ADSs will continue to be readily tradable on an established
securities market in later years (or that our shares will be readily tradable on an established securities market in any given year). Non-corporate U.S. holders that do not meet a minimum holding period
requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as investment income pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation
regardless of the trading status of our shares or ADSs. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related
property. This disallowance applies even if the minimum holding period has been met. Holders should consult their own tax advisors regarding the application of these rules given their particular circumstances.

The amount of any dividend paid in a currency other than the United States dollar, such as NT dollars, which we refer to as foreign
currency, will equal the U.S. dollar value of the foreign currency you receive, calculated by reference to the exchange rate in effect on the date you actually or constructively receive the dividend, which in the case of an ADS will be the
date actually or constructively received by the depositary, regardless of whether the foreign currency is actually converted into U.S. dollars. If the foreign currency received as a dividend is converted into U.S. dollars on the date of receipt, you
generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the foreign currency received as a dividend is not converted into U.S. dollars on the date of receipt, you will have a basis in the
foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss you realize if you subsequently sell or otherwise dispose of the foreign currency will be ordinary income or loss from sources within the United States for
foreign tax credit limitation purposes.

Subject to certain limitations under the Code, you may be entitled to a credit or deduction
against your United States federal income tax liability for the net amount of any ROC taxes that are withheld from dividend distributions made to you. The election to receive a credit or deduction must be made annually, and applies to all foreign
taxes for the applicable tax year. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends we pay with respect to the shares or ADSs will generally be
considered passive category income from sources outside the U.S. Furthermore, you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on the shares or ADSs if you (1) have held the shares or ADSs for less than a
specified minimum period during which you are not protected from risk of loss, or (2) are obligated to make payments related to the dividends. The rules governing the foreign tax credit are complex. We therefore urge you to consult your tax
advisor regarding the availability of the foreign tax credit under your particular circumstances.

To the extent that the amount of any
distribution you receive exceeds our current and accumulated earnings and profits for a taxable year as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free
return of capital, causing a reduction in your adjusted basis in the shares or ADSs and thereby increasing the amount of gain, or decreasing the amount of loss, you will recognize on a subsequent disposition of the shares or ADSs. The balance in
excess of adjusted basis, if any, will be taxable to you as capital gain recognized on a sale or exchange. However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect
that a distribution will generally be treated as a dividend, as discussed above.

It is possible that pro rata distributions of shares or
ADSs to all shareholders may be made in a manner that is not subject to U.S. federal income tax. In the event that such distributions are tax-free, the basis of any new shares or ADSs so received will
generally be determined by allocating the U.S. holders basis in the old shares or ADSs between the old shares or ADSs and the new shares or ADSs, based on their relative fair market values on the date of distribution. Any such distributions
generally would not result in foreign source income to you. Consequently, you may not be able to use the foreign tax credit associated with any ROC withholding tax imposed on such distributions unless you can use the credit against United States
federal income tax due on other foreign source income in the appropriate category for foreign tax credit purposes. You should consult your own tax advisors regarding all aspects of the foreign tax credit.



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Taxation of Capital Gains

Except as discussed below with respect to the passive foreign investment company rules, when you sell or otherwise dispose of your shares or
ADSs, you will generally recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of the amount realized for the shares or ADSs and your basis in the shares or ADSs, determined in U.S. dollars. For foreign
tax credit limitation purposes, such gain or loss will generally be treated as U.S. source. If you are a non-corporate U.S. holder, including an individual, and the shares or ADSs being sold or otherwise
disposed of are capital assets that you have held for more than one year, your gain recognized will be eligible for reduced rates of taxation. Your ability to deduct capital losses is subject to limitations.

If you pay any ROC securities transaction tax, such tax is not treated as an income tax for U.S. federal income tax purposes, and therefore
will not be a creditable foreign tax for U.S. federal income tax purposes. However, subject to limitations under the Code, such tax may be deductible. You are urged to consult your tax advisors regarding the U.S. federal income tax consequences of
these taxes.

Passive Foreign Investment Company

Based on the composition of our income and valuation of our assets, including goodwill, we do not believe we were a passive foreign investment
company, or PFIC, for 2016 and do not expect to become one in the future, although there can be no assurance in this regard.

In general,
a non-U.S. company is considered a PFIC for any taxable year if either:



| |  |  | at least 75% of its gross income is passive income, which generally includes income derived from certain dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade
or business or not derived from a related person), annuities and certain property transactions; or
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

The 50% of value test is based on the average of the value of our assets for each quarter during the taxable year. If we own at least 25% by
value of another companys stock, we will be treated, for purposes of the PFIC rules, as owning our proportionate share of the assets and receiving our proportionate share of the income of that company.

The determination of whether we are a PFIC is based on a current valuation of our assets, including goodwill. In calculating goodwill, we have
valued our total assets based on our total market value, which is based on the market value of our shares and is subject to change.

In
addition, the determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may become a PFIC in the current or any future taxable year due to changes in our asset or income composition.

If we are a PFIC for any taxable year during which you hold our shares or ADSs, you will be subject to special tax rules with respect to any
excess distribution that you receive and any gain you realize from a sale or other disposition (including a pledge) of our shares or ADSs. Distributions you receive in a taxable year that are greater than 125% of the average annual
distributions you received during the shorter of the three preceding taxable years or your holding period for our shares or ADSs will be treated as excess distributions. Under these special tax rules:



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| |  |  | the excess distribution or gain will be allocated ratably over your holding period for our shares or ADSs;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax
attributable to each such year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If you hold our shares or ADSs in any year in which we are a PFIC, you will generally be
required to file Internal Revenue Service Form 8621.

If we are a PFIC for any taxable year in which you hold our shares or ADSs and any
of our non-U.S. subsidiaries is also a PFIC, a U.S. holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. You
are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.

In certain circumstances, a
U.S. holder, in lieu of being subject to the PFIC rules discussed above, may make an election to include gain on the stock of a PFIC as ordinary income under a
mark-to-market method provided that such stock is regularly traded on a qualified exchange. Under this method, any difference between the stocks fair market value
and its adjusted basis at the end of the year is accounted for by either an inclusion in income or a deduction from income, as described below. Under current U.S. Treasury Department guidance, the mark-to-market election may be available to you because the ADSs are listed on the NASDAQ which constitutes a qualified exchange, although there can be no assurance that the ADSs will be regularly
traded for the purposes of the mark-to-market election. You should also note that only the ADSs and not the shares are listed on the NASDAQ. The shares are listed
on the Taiwan Stock Exchange, which must meet certain trading, listing, financial disclosure and other requirements to be treated as a qualified exchange under applicable U.S. Treasury regulations for purposes of the
mark-to-market election, and no assurance can be given that the shares will be regularly traded for purposes of the mark-to-market election.

If you make an effective mark-to-market election, you will include in income each year as ordinary income the excess of the fair market value of your shares or ADSs at the end of the year over your adjusted tax basis in the shares or
ADSs. You will be entitled to deduct as an ordinary loss each year the excess of your adjusted tax basis in the shares or ADSs over their fair market value at the end of the year, but only to the extent of the net amount previously included in
income as a result of the mark-to-market election. If you make an effective
mark-to-market election, in each year that we are a PFIC any gain you recognize upon the sale or other disposition of your shares or ADSs will be treated as ordinary
income and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.

Your adjusted tax basis in the shares or ADSs will be increased by the amount of any income inclusion and decreased by the amount of any
deductions under the mark-to-market rules. If you make a mark-to-market election, it will
be effective for the taxable year for which the election is made and all subsequent taxable years, unless the shares or ADSs are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the
election. You should consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your
particular circumstances.

Alternatively, a U.S. holder of shares or ADSs in a PFIC can sometimes avoid the rules described above by
electing to treat the PFIC as a qualified electing fund under section 1295 of the Code. This option is not available to you because we do not intend to comply with the requirements necessary to permit you to make this election.

U.S. holders who are individuals will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the
taxable year in which such dividends are paid or in the preceding taxable year. You should consult your own tax advisors concerning the U.S. federal income tax consequences of holding our shares or ADSs if we are considered a PFIC in any taxable
year.



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Information Reporting and Backup Withholding

In general, unless you are an exempt recipient, information reporting will apply to dividends in respect of the shares or ADSs and to the
proceeds from the sale, exchange or redemption of your shares or ADSs that are paid to you within the United States (and in some cases, outside of the United States). Additionally, if you fail to provide your taxpayer identification number, or fail
either to report in full dividend and interest income or to make the necessary certifications of other exempt status, you may be subject to backup withholding.

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax
liability, provided you furnish the required information to the Internal Revenue Service.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H.
Documents on Display

We have filed this annual report on Form 20-F, including exhibits,
with the SEC. As allowed by the SEC, in Item 19 of this annual report, we incorporate by reference certain information we filed with the SEC. This means that we can disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is considered to be part of this annual report.

You may read and
copy this annual report, including the exhibits incorporated by reference in this annual report, at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and at the SECs regional offices in New York, New York, and
Chicago, Illinois. You can also request copies of this annual report, including the exhibits incorporated by reference in this annual report, upon payment of a duplicating fee, by writing to the SECs Public Reference Room for information.

The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file
electronically with the SEC. Our annual report and some of the other information submitted by us to the SEC may be accessed through this website.

I. Subsidiary Information

Not applicable.



|Item 11. | Quantitative and Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

Market risk is the risk of
loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. We are exposed to various types of market risks, including changes in interest rates, foreign currency exchange rates
and commodity price risk, in the normal course of business.

Foreign Exchange Risk

Substantial portions of our revenues and expenses are denominated in currencies other than the NT dollar. In 2016, sales in the amount of
US$2,224.9 million were denominated in U.S. dollars. In 2016, material purchases in the amounts of US$535.7 million and ¥4,829 million were denominated in U.S. dollars and Japanese yen, respectively. As of December 31, 2016,
we had certificates of deposit, bank deposits and accounts receivable denominated in U.S. dollars of US$818.1 million. As of December 31, 2016, we also had accounts payable, convertible bonds and other liabilities denominated in U.S.
dollars and the Japanese yen of US$709.9 million and of ¥4,435 million, respectively. Our foreign currency revenues in general exceed our foreign currency expenses. We use the policy of natural hedging to reduce our foreign exchange
exposure arising out of changes in the rates of exchange among the Japanese Yen, the U.S. dollar and the NT dollar. Based on a sensitivity analysis performed on our financial position as of December 31, 2016, a hypothetical, unfavorable 1%
movement in the levels of foreign currency exchange rates relative to the NT dollar, after taking into account hedges and offsetting positions, would have increased our net unrealized gains by NT$22 million. The table below presents our
financial instruments with material foreign exchange risk as of December 31, 2016:



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|                                                               |  |                        |       |  |      |  |   |      |  |  |            |  |  |       |   |  |            |  |       |  |  |  |       | 
|-------------------------------------------------------------- |  | ---------------------- | ----- |  | ---- |  | - | ---- |  |  | ---------- |  |  | ----- | - |  | ---------- |  | ----- |  |  |  | ----- | 
|Expressed in US$ amount                                        |  | Expected Maturity Date |      
|(in millions)                                                  |  | 2017                   |       |  | 2018 |  |   | 2019 |  |  | Thereafter |  |  | Total |   |  | Fair value | 
|On-balance sheet financial instruments                         |  |                        |       |  |      |  |   |      |  |  |            |  |  |       |   |  |            |  |       |  |  |  |       | 
|Assets:                                                        |  |                        |       |  |      |  |   |      |  |  |            |  |  |       |   |  |            |  |       |  |  |  |       | 
|Time Deposit (NTD functional currency)                         |  |                        | 345.3 |  |      |  |  |      |  |  |           |  |  |       |  |  |            |  | 345.3 |  |  |  | 345.3 | 
|Time Deposit (RMB functional currency)                         |  |                        | 14.0  |  |      |  |  |      |  |  |           |  |  |       |  |  |            |  | 14.0  |  |  |  | 14.0  | 
|Liabilities:                                                   |  |                        |       |  |      |  |   |      |  |  |            |  |  |       |   |  |            |  |       |  |  |  |       | 
|Short-term Loans (RMB functional currency)                     |  |                        | 85.0  |  |      |  |  |      |  |  |           |  |  |       |  |  |            |  | 85.0  |  |  |  | 85.0  | 
|Long-term Loans (NTD functional currency)                      |  |                        | 33.5  |  |      |  |  |      |  |  |           |  |  |       |  |  |            |  | 33.5  |  |  |  | 33.5  | 
|Unsecured overseas convertible bonds (NTD functional currency) |  |                        | 412.2 |  |      |  |  |      |  |  |           |  |  |       |  |  |            |  | 412.2 |  |  |  | 396.3 | 

Interest Rate Risk

Our major market risk exposure is changing interest rates. Our exposure to market risk for changes in interest rates relates primarily to our
long-term debt obligations. We primarily enter into debt obligations to support general corporate purposes including capital expenditures and working capital needs. We have not entered into any interest rate swaps, caps or any contracts hedge to
modify our exposure to interest rate movements. The table below presents our financial instruments with material interest rate risk as of December 31, 2016:



|                                       |  |                        |       |  |      |  |      |      |  |  |            |  |  |       |       |  |            |  |       |  |  |  |       | 
|-------------------------------------- |  | ---------------------- | ----- |  | ---- |  | ---- | ---- |  |  | ---------- |  |  | ----- | ----- |  | ---------- |  | ----- |  |  |  | ----- | 
|Expressed in US$ amount                |  | Expected Maturity Date |      
|(in millions)                          |  | 2017                   |       |  | 2018 |  |      | 2019 |  |  | Thereafter |  |  | Total |       |  | Fair value | 
|On-balance sheet financial instruments |  |                        |       |  |      |  |      |      |  |  |            |  |  |       |       |  |            |  |       |  |  |  |       | 
|Liabilities:                           |  |                        |       |  |      |  |      |      |  |  |            |  |  |       |       |  |            |  |       |  |  |  |       | 
|Short-term Loans                       |  |                        | 85.0  |  |      |  |     |      |  |  |           |  |  |       |      |  |            |  | 85.0  |  |  |  | 85.0  | 
|Long-term Loans (1)                    |  |                        | 114.8 |  |      |  | 88.0 |      |  |  | 183.9      |  |  |       | 231.1 |  |            |  | 617.8 |  |  |  | 617.8 | 



|(1) | Our long-term borrowings had a weighted average interest rate of 1.4357% per annum during 2016.
|--- | -----------------------------------------------------------------------------------------------

As of December 31, 2015 and 2016, if the interest rate had been increased or decreased by 10 points, income before income tax for the
period would have been NT$17 million and NT$21 million (US$0.7 million) higher or lower, respectively.

Commodity Price
Risk

The price of gold wire has been volatile and has fluctuated with the spot price of gold in recent years. We generally do not
entered into long-term supply agreements and our purchase of raw materials is on a purchase order basis at the prevailing market price. In addition, we do not employ financial instruments to hedge such commodity price risk. Therefore, in order to
effectively mitigate the risk, we have continued to implement measures to reduce our dependency on gold wire, such as the development of copper wire bonding process. As of December 31, 2016, we did not hold material gold wire inventory. As a
result, we believe we were not exposed to significant commodity price risk.

Other Price Risk

Our exposure to other market risk relates primarily to our investments in publicly-traded stock. Pursuant to the objective of strategic
investments, we are exposed equity securities price risk in public market because of investments held by us and classified on the consolidated balance sheet as
available-for-sale financial assets. As of December 31, 2016 if the market price had increased or decreased by 10% with all other variables held constant, other
comprehensive income would have increased or decreased by NT$353 million (US$10.9 million).



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|Item 12. | Description of Securities Other Than Equity Securities
|-------- | ------------------------------------------------------

A. Debt Securities

Not applicable

B. Warrants and Rights

Not applicable

C. Other
Securities

Not applicable

D. American Depositary Shares

Depositary Fees

Under the terms of the deposit agreement for our ADSs, an ADS holder may have to pay the following service fees to the depositary:



|                                                                                                  |  |                                
|------------------------------------------------------------------------------------------------- |  | -------------------------------
|Service                                                                                           |  | Fees                           
|Issuance of ADSs                                                                                  |  | Up to US$0.05 per ADS issued   
|Cancellation of ADSs                                                                              |  | Up to US$0.05 per ADS cancelled
|Distribution of cash dividends or other cash distributions                                        |  | Up to US$0.05 per ADS held     
|Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of
rights |  | Up to US$0.05 per ADS held     

Depositary Charges

In addition, an ADS holder shall be responsible for the following charges:



| |  |  | taxes (including applicable interest and penalties) and other governmental charges;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | such registration fees as may from time to time be in effect for the registration of common shares or other deposited securities on the share register and applicable to transfers of common shares or other deposited
securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of ADS holders and beneficial owners of ADSs;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the expenses and charges incurred by the depositary in the conversion of foreign currency;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | such fees and expenses as are incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, deposited securities, ADSs and
ADRs; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the fees and expenses incurred by the depositary, the custodian or any nominee in connection with the servicing or delivery of deposited securities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



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Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the
depositary by the brokers (on behalf of their clients) receiving the newly-issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these
transaction fees to their clients.

Depositary fees payable in connection with distributions of cash or securities to ADS holders and the
depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date. The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of
distributions other than cash (i.e., stock dividends, rights offerings), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether
certificated or un-certificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts via the central
clearing and settlement system, The Depository Trust Company, or DTC, the depositary generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians
holding ADSs in their DTC accounts. The brokers and custodians who hold their clients ADSs in DTC accounts in turn charge their clients accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service
until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

The fees
and charges ADS holders may be required to pay may vary over time and may be changed by us and by the depositary. ADS holders will receive prior notice of such changes.

Payments by Depositary

In 2016, we received the following payments (subject to applicable withholding tax) from JPMorgan Chase Bank, N.A.:



|                                                 |  |                   |         | 
|------------------------------------------------ |  | ----------------- | ------- | 
|Item                                             |  | US$(in thousands) |        
|Reimbursement of investor relations efforts      |  |                   | 66.1    | 
|Reimbursement of legal and consulting fees       |  |                   | 85.2    | 
|Reimbursement of listing fees                    |  |                   | 468.0   | 
|Reimbursement of proxy process expenses          |  |                   | 560.3   | 
|Reimbursement of SEC filing and maintenance fees |  |                   | 355.0   | 
|                                                 |  |                   |         | 
|Total                                            |  |                   | 1,534.6 | 
|                                                 |  |                   |         | 

PART II



|Item 13. | Defaults, Dividend Arrearages and Delinquencies
|-------- | -----------------------------------------------

None of these events occurred in any of
the years ended December 31, 2014, 2015 and 2016.



|Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds
|-------- | ----------------------------------------------------------------------------

See
Item 10. Additional Information for a description of the rights of securities holders, which remain unchanged.



|Item 15. | Controls and Procedures
|-------- | -----------------------

Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, our management, with the participation of our Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934, as amended, as
of December 31, 2016. Based on that evaluation, our management has concluded that, as of December 31, 2016, our disclosure controls and procedures were effective.



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Managements Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. A companys internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with International Financial Reporting Standards as issued by IASB. A companys internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by IASB, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the companys assets that could have a material effect on the financial statements.

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

Management assessed the effectiveness of our internal control
over financial reporting as of December 31, 2016 utilizing the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31,
2016. The effectiveness of internal control over financial reporting has been audited by PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm, which also audited our consolidated financial statements for the year ended
December 31, 2016, as stated in their report included on page F-2.

Changes in Internal
Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the
year ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



|Item 16A. | Audit Committee Financial Expert
|--------- | --------------------------------

William W. Sheng is our audit committee financial
expert and an independent director. See Item 6. Directors, Senior Management and EmployeesC. Board PracticesAudit Committee.



|Item 16B. | Code of Ethics
|--------- | --------------

We have adopted a code of ethics which applies to our directors,
employees and officers, including our Chief Executive Officer and Chief Financial Officer (our principal accounting officer). No changes have been made to the code of ethics since its adoption and no waivers have been granted therefrom to our
directors or employees. We have filed this code of ethics as an exhibit to our annual report on Form 20-F for the fiscal year ended December 31, 2003, which exhibit is incorporated by reference as an
exhibit to this annual report, and a copy is available to any shareholder upon request. This code of ethics is also available on our website at www.spil.com.tw.



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|Item 16C. | Principal Accountant Fees and Services
|--------- | --------------------------------------

PricewaterhouseCoopers, Taiwan has served as our
independent public accountant for each of the fiscal years in the three-year period ended December 31, 2016, for which audited financial statements appear in this annual report.

The following table presents the aggregate fees for professional services and other services rendered by PricewaterhouseCoopers, Taiwan to us
in 2015 and 2016.



|                      |  |                |        |  |      |  |        |      |  |  |         | 
|--------------------- |  | -------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------- | 
|                      |  | 2015           |        |  | 2016 |  |        | 2016 | 
|                      |  | NT$            |        |  | NT$  |  |        | US$  | 
|                      |  | (in thousands) |       
|Audit Fees(1)         |  |                | 20,541 |  |      |  | 23,717 |      |  |  | 732.0   | 
|Audit-related Fees(2) |  |                |       |  |      |  | 6,553  |      |  |  | 202.3   | 
|Tax Fees(3)           |  |                | 4,805  |  |      |  | 5,890  |      |  |  | 181.8   | 
|All Other Fees(4)     |  |                | 50     |  |      |  | 2,252  |      |  |  | 69.5    | 
|                      |  |                |        |  |      |  |        |      |  |  |         | 
|Total                 |  |                | 25,396 |  |      |  | 38,412 |      |  |  | 1,185.6 | 
|                      |  |                |        |  |      |  |        |      |  |  |         | 



|(1) | Audit fees consist of fees billed for the audit or review of our annual financial statements, internal control over financial reporting, quarterly financial statements, and related statutory and regulatory filings.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported above as Audit
Fees.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax fees include fees billed for tax compliance services and tax advice services.
|--- | ---------------------------------------------------------------------------------

|(4) | All other fees consist of fees billed for professional consulting services.
|--- | ---------------------------------------------------------------------------

Pre-approval Policies and Procedures

Our audit committee is responsible for the oversight of our
independent accountants work. All audit and non-audit services performed by PricewaterhouseCoopers, Taiwan for 2015 and 2016 were pre-approved by our audit
committee.



|Item 16D. | Exemptions from the Listing Standards for Audit Committees
|--------- | ----------------------------------------------------------

None.



|Item 16E. | Purchase of Equity Securities by the Issuer and Affiliated Purchasers
|--------- | ---------------------------------------------------------------------

None.



|Item 16F. | Change in Registrants Certifying Accountant
|--------- | --------------------------------------------

Not applicable.



|Item 16G. | Corporate Governance
|--------- | --------------------

In general, corporate governance principles for Taiwanese
companies are set forth in the ROC Company Act, the ROC Securities and Exchange Act and, to the extent they are listed on the Taiwan Stock Exchange, listing rules of the Taiwan Stock Exchange. Corporate governance principles under provisions of ROC
law may differ in significant ways to corporate governance standards for U.S. NASDAQ-listed companies. Under the latest amendment to the NASDAQ Listing Rule 5615, foreign private issuers are permitted to follow certain home country corporate
governance practices in lieu of the requirements of the NASDAQ corporate governance rules. Under the amendment, foreign private issuers must disclose alternative home country practices they follow. The following are the requirements of the NASDAQ
corporate governance rules we do not follow and the home country practices we follow.



85



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Under the NASDAQ Listing Rule 5605(b)(1), a majority of the board of directors must comprise of
independent directors. We have three independent directors out of a total of nine directors on our board. Our standards in determining director independence substantially comply with the NASDAQ requirements, which include detailed tests for
determining director independence. In Taiwan, in order to strengthen corporate governance of Taiwanese companies, the ROC Securities and Exchange Act Article 14-2 provides that public companies may appoint
independent directors in accordance with its articles of incorporation, as long as it is compliant with related requirements and regulations of the ROC. The government authority, however, may require a company to appoint two or more independent
directors, who shall account for one-fifth or more of its total directors, depending on such companys scale, shareholder structure, type of operations and other essential factors.

Under NASDAQ Listing Rule 5605(b)(2), the company is required to have regularly scheduled meetings at which only independent directors are
present. We do not hold executive sessions of non-management directors as the election of independent directors is not required by the ROC Company Act. However, once our independent directors are elected, they
will participate in committee meetings of which they are committee members. In particular, we expect our independent directors to serve on our audit committee. Our audit committee will meet regularly.

NASDAQ Listing Rule 5605(d) requires that compensation of the chief executive officer of the company must be determined, or recommended to the
board, either by a majority of the independent director or an independent compensation committee. We currently follow the practice under the ROC Securities and Exchange Act, as amended on November 24, 2010, which requires all publicly listed
companies in the ROC, including our company, to establish a compensation committee for directors and managers compensation, which includes salary, stock options and other rewards. On March 18, 2011, the FSC promulgated Regulations
Governing the Appointment and Exercise of Powers by the Compensation Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter, according to which publicly listed companies of our size were required to
establish a compensation committee composed of no less than three members appointed by the board of directors. Such committee members must meet certain professional qualification requirements and must not have served as an employee or non-independent director of the company in the two years prior to their appointment. Pursuant to such regulations, on August 25, 2011, we established a compensation committee. Our current compensation committee
comprises our independent directors, John Hsuan, Tsai-Ding Lin and William W. Sheng.

Under NASDAQ Listing Rule 5605(e), director nominees
must either be selected, or recommended for the Boards selection, either by a majority of the independent directors or an independent nominations committee. The ROC Company Act expressly grants the power of nomination to the shareholders, as
well as to the board of directors. Under the ROC Company Act and the interpretations thereof, candidates to serve as directors are nominated either by the board of directors prior to the shareholders meeting or by the shareholders during the
election of the director. Therefore, the requirement of a nominations committee is in conflict with the ROC Company Act. We currently follow the home country practice.

Under NASDAQ Listing Rule 5635(c), each issuer shall require shareholder approval when a stock option or purchase plan is to be established or
materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants. Under the corresponding domestic requirements in the ROC Company Act
and the ROC Securities and Exchange Act, shareholders approval is required for the distribution of employee bonuses in the form of stock, while the board of director has authority, subject to the approval of the ROC SFB, to approve employee
stock option plans and to grant options to employees pursuant to such plans. We follow the home country practice. ROC law provides for specific safeguards on employee stock option grants. Options granted under the plans are subject to certain
statutory volume limitations. Under the ROC Company Act, the directors of a company may not receive stock options because they are not considered employees of the company.



|Item 16H. | Mine Safety Disclosure
|--------- | ----------------------

Not applicable.



86



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##### Table of Contents

PART III



|Item 17. | Financial Statements
|-------- | --------------------

We have provided the financial statements and related information
specified in Item 18.



|Item 18. | Financial Statements
|-------- | --------------------

The following is a list of the audited financial statements and
report of independent registered public accounting firm included in this annual report beginning on page F-1.



|                                                                                                    |  |      |      | 
|--------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                    |  | Page |     
|SILICONWARE PRECISION INDUSTRIES CO., LTD.                                                          |  |      |      | 
|Report of Independent Registered Public Accounting Firm                                             |  |      | F-2  | 
|Consolidated Balance Sheets as of December 31, 2015 and 2016                                        |  |      | F-3  | 
|Consolidated Statements of Comprehensive Income for the Years Ended December 31 2014, 2015
and 2016 |  |      | F-4  | 
|Consolidated Statements of Changes in Equity for the Years Ended December 31, 2014, 2015 and
2016   |  |      | F-5  | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2015 and
2016          |  |      | F-6  | 
|Notes to Consolidated Financial Statements                                                          |  |      | F-8  | 
|Financial Statement Schedule: Valuation and Qualifying Accounts                                     |  |      | F-52 | 



|Item 19. | Exhibit Index
|-------- | -------------



|              |  |                                                                                                                                                                                                                                                                              
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibits                                                                                                                                                                                                                                                      
|              | 
|*1.1          |  | Articles of Incorporation of Siliconware Precision Industries Co., Ltd., as amended on May 16, 2016 (English translation)                                                                                                                                                    
|              | 
|2.1           |  | Form of the Third Amended and Restated Deposit Agreement among Siliconware Precision Industries Co., Ltd., JPMorgan Chase Bank, N.A., as Depositary, and the Holders of American Depositary Receipts issued thereunder, including the
form of American Depositary Receipts(1)
|              | 
|4.1           |  | License Agreement with Flip Chip Technologies, L.L.C.(2)                                                                                                                                                                                                                     
|              | 
|4.2           |  | Share Subscription Agreement with Tsinghua Unigroup Ltd. (English translation)(3)                                                                                                                                                                                            
|              | 
|*4.3          |  | Termination Agreement with Tsinghua Unigroup Ltd. (English translation)                                                                                                                                                                                                      
|              | 
|*4.4          |  | Joint Share Exchange Agreement with Advanced Semiconductor Engineering, Inc. (English translation)                                                                                                                                                                           
|              | 
|*8.1          |  | List of Significant Subsidiaries of Siliconware Precision Industries Co., Ltd.                                                                                                                                                                                               
|              | 
|11.1          |  | Code of Ethics(4)                                                                                                                                                                                                                                                            
|              | 
|*12.1         |  | Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                       
|              | 
|*12.2         |  | Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                       
|              | 
|*13.1         |  | Certification by our Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                         
|              | 
|*13.2         |  | Certification by our Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                         
|              | 
|*99.1         |  | Consent of PricewaterhouseCoopers, Taiwan                                                                                                                                                                                                                                    



|* | filed herewith.
|- | ---------------

|(1) | Incorporated by reference to Exhibit 99.(A) to our Registration Statement on Form F-6 (File No. 333-201043) filed with the SEC on
December 18, 2014.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Exhibit 10.5 to our Registration Statement on Form F-1 (File No. 333-11812) filed with the SEC on
April 29, 2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Exhibit 4.3 to our Annual Report on Form 20-F filed with the SEC on April 25, 2016.
|--- | ----------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Exhibit 11.1 to our Annual Report on Form 20-F filed with the SEC on June 28, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------



87



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##### Table of Contents

SIGNATURES

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



SILICONWARE PRECISION INDUSTRIES CO., LTD.By:

/s/ Eva ChenName:

Eva ChenTitle:

Chief Financial Officer


Date: April 11, 2017



88



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##### Table of Contents

INDEX TO THE FINANCIAL STATEMENTS



|                                                                                                      |  |      |      | 
|----------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                      |  | Page |     
|SILICONWARE PRECISION INDUSTRIES CO., LTD.                                                            |  |      |      | 
|Report of Independent Registered Public Accounting
Firm                                               |  |      | F-2  | 
|Consolidated Balance Sheets as of December 
31, 2015 and 2016                                         |  |      | F-3  | 
|Consolidated Statements of Comprehensive Income for the Years Ended
 December 31, 2014, 2015 and 2016 |  |      | F-4  | 
|Consolidated Statements of Changes in Equity for the Years Ended
 December 31, 2014, 2015 and 2016    |  |      | F-5  | 
|Consolidated Statements of Cash Flows for the Years Ended December 31,
 2014, 2015 and 2016           |  |      | F-6  | 
|Notes to Consolidated Financial Statements                                                            |  |      | F-8  | 
|Financial Statement Schedule: Valuation and Qualifying Account                                        |  |      | F-52 | 



F-1



---

##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Siliconware Precision Industries Co., Ltd.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, of changes in equity and of cash
flows present fairly, in all material respects, the financial position of Siliconware Precision Industries Co., Ltd., and its subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2016 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal ControlIntegrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Companys management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in Managements Annual Report on Internal Control Over Financial Reporting under Item 15 of this Annual Report on Form 20-F. Our responsibility is to express opinions on these financial
statements and on the Companys internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material
respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.

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

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

/s/ PricewaterhouseCoopers, Taiwan

Taipei,
Taiwan

March 23, 2017



F-2



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|------------------------------------------------------------------ |  | ------------------ | ---------- |  | ---- | - | ----------- | ---- |  | - | ------------ |  |  | - | --------- | 
|                                                                   |  | As of December 31, |           
|                                                                   |  | Note               |            |  | 2015 |   |             | 2016 | 
|                                                                   |  |                    |            |  | NT$  |   |             | NT$  |  |   | US$
(Note 4) | 
|Current Assets                                                     |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Cash and cash equivalents                                          |  |                    | 6,12       |  |      | $ | 25,191,374  |      |  | $ | 24,476,270   |  |  | $ | 755,440   | 
|Available-for-sale financial assets, current                       |  |                    | 10, 12, 37 |  |      |   | 1,067,204   |      |  |   | 178,176      |  |  |   | 5,499     | 
|Notes receivable, net                                              |  |                    | 12         |  |      |   | 11,403      |      |  |   | 23,591       |  |  |   | 728       | 
|Accounts receivable, net                                           |  |                    | 7, 12, 35  |  |      |   | 15,825,728  |      |  |   | 17,354,883   |  |  |   | 535,645   | 
|Other receivables                                                  |  |                    | 12         |  |      |   | 473,431     |      |  |   | 581,630      |  |  |   | 17,952    | 
|Inventories                                                        |  |                    | 8          |  |      |   | 4,502,319   |      |  |   | 6,498,832    |  |  |   | 200,581   | 
|Non-current assets held for sale                                   |  |                    | 9, 13      |  |      |   |            |      |  |   | 387,503      |  |  |   | 11,960    | 
|Other current assets-other                                         |  |                    | 12, 32     |  |      |   | 1,713,753   |      |  |   | 950,410      |  |  |   | 29,334    | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|                                                                   |  |                    |            |  |      |   | 48,785,212  |      |  |   | 50,451,295   |  |  |   | 1,557,139 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Non-current Assets                                                 |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Available-for-sale financial assets, non-current                   |  |                    | 10, 12, 37 |  |      |   | 5,526,412   |      |  |   | 3,615,658    |  |  |   | 111,594   | 
|Investments accounted for using the equity method                  |  |                    | 11         |  |      |   | 2,522,658   |      |  |   | 2,401,531    |  |  |   | 74,121    | 
|Property, plant and equipment                                      |  |                    | 13         |  |      |   | 64,305,608  |      |  |   | 65,380,409   |  |  |   | 2,017,914 | 
|Intangible assets                                                  |  |                    | 14         |  |      |   | 192,774     |      |  |   | 175,862      |  |  |   | 5,428     | 
|Deferred income tax assets                                         |  |                    | 27         |  |      |   | 912,054     |      |  |   | 752,712      |  |  |   | 23,232    | 
|Other non-current assets-other                                     |  |                    | 12         |  |      |   | 964,534     |      |  |   | 949,840      |  |  |   | 29,316    | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|                                                                   |  |                    |            |  |      |   | 74,424,040  |      |  |   | 73,276,012   |  |  |   | 2,261,605 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|TOTAL ASSETS                                                       |  |                    |            |  |      | $ | 123,209,252 |      |  | $ | 123,727,307  |  |  | $ | 3,818,744 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Current Liabilities                                                |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Short-term loans                                                   |  |                    | 12, 18     |  |      | $ | 2,790,125   |      |  | $ | 2,741,250    |  |  | $ | 84,606    | 
|Financial liability at fair value through profit or loss - current |  |                    | 12, 15, 37 |  |      |   | 1,798,920   |      |  |   | 773,908      |  |  |   | 23,886    | 
|Accounts payable                                                   |  |                    | 12         |  |      |   | 6,942,527   |      |  |   | 8,194,647    |  |  |   | 252,921   | 
|Other payables                                                     |  |                    | 12, 16, 29 |  |      |   | 11,512,740  |      |  |   | 11,896,517   |  |  |   | 367,176   | 
|Current income tax liabilities                                     |  |                    | 27         |  |      |   | 911,324     |      |  |   | 653,222      |  |  |   | 20,161    | 
|Current portion of convertible bonds                               |  |                    | 12, 17, 37 |  |      |   |            |      |  |   | 12,712,651   |  |  |   | 392,366   | 
|Current portion of long-term loans                                 |  |                    | 12, 18     |  |      |   | 5,991,128   |      |  |   | 3,500,747    |  |  |   | 108,048   | 
|Other current liabilities-other                                    |  |                    | 12         |  |      |   | 730,475     |      |  |   | 615,497      |  |  |   | 18,997    | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|                                                                   |  |                    |            |  |      |   | 30,677,239  |      |  |   | 41,088,439   |  |  |   | 1,268,161 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Non-current Liabilities                                            |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Convertible bonds                                                  |  |                    | 12, 17, 37 |  |      |   | 12,627,311  |      |  |   |             |  |  |   |          | 
|Long-term loans                                                    |  |                    | 12, 18     |  |      |   | 7,858,036   |      |  |   | 14,840,000   |  |  |   | 458,025   | 
|Deferred income tax liabilities                                    |  |                    | 27         |  |      |   | 334,585     |      |  |   | 264,360      |  |  |   | 8,159     | 
|Other non-current liabilities                                      |  |                    | 12, 19, 22 |  |      |   | 2,182,856   |      |  |   | 2,414,050    |  |  |   | 74,508    | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|                                                                   |  |                    |            |  |      |   | 23,002,788  |      |  |   | 17,518,410   |  |  |   | 540,692   | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Total Liabilities                                                  |  |                    |            |  |      |   | 53,680,027  |      |  |   | 58,606,849   |  |  |   | 1,808,853 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Shareholders Equity                                               |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Capital stock                                                      |  |                    | 20         |  |      |   | 31,163,611  |      |  |   | 31,163,611   |  |  |   | 961,840   | 
|Capital reserve                                                    |  |                    | 21         |  |      |   | 15,758,358  |      |  |   | 12,641,997   |  |  |   | 390,185   | 
|Retained earnings                                                  |  |                    | 22         |  |      |   |             |      |  |   |              |  |  |   |           | 
|Legal reserve                                                      |  |                    |            |  |      |   | 9,967,775   |      |  |   | 10,844,001   |  |  |   | 334,691   | 
|Unappropriated earnings                                            |  |                    |            |  |      |   | 9,132,550   |      |  |   | 9,337,450    |  |  |   | 288,193   | 
|Accumulated Other Comprehensive Income                             |  |                    | 23         |  |      |   | 3,506,931   |      |  |   | 1,133,399    |  |  |   | 34,982    | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|Total Shareholders Equity                                         |  |                    |            |  |      |   | 69,529,225  |      |  |   | 65,120,458   |  |  |   | 2,009,891 | 
|                                                                   |  |                    |            |  |      |   |             |      |  |   |              |  |  |   |           | 
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                         |  |                    |            |  |      | $ | 123,209,252 |      |  | $ | 123,727,307  |  |  | $ | 3,818,744 | 

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



F-3



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|---------------------------------------------------------------------------------------------- |  | --------- |  | -------------------------------- | ----------- | - | ---- | - | ----------- | ---- |  | - | ----------- | - |  | - | ---------- | -
|                                                                                               |  |           |  | For the years ended December 31, |            
|                                                                                               |  | Note      |  | 2014                             |             |   | 2015 |   |             | 2016 | 
|                                                                                               |  |           |  | NT$                              |             |   | NT$  |   |             | NT$  |  |   | US$         |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   | (Note 4)    |  
|Operating Revenues                                                                             |  |           |  | $                                | 83,071,441  |   |      | $ | 82,839,922  |      |  | $ | 85,111,913  |   |  | $ | 2,626,911  |  
|Operating Costs                                                                                |  | 8, 14, 24 |  |                                  | (62,081,265 | ) |      |   | (61,230,622 | )    |  |   | (65,762,191 | ) |  |   | (2,029,697 | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Gross Profit                                                                                   |  |           |  |                                  | 20,990,176  |   |      |   | 21,609,300  |      |  |   | 19,349,722  |   |  |   | 597,214    |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Operating Expenses                                                                             |  | 14, 24    |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Selling expenses                                                                               |  |           |  |                                  | (937,884    | ) |      |   | (944,499    | )    |  |   | (1,024,689  | ) |  |   | (31,626    | )
|General and administrative expenses                                                            |  |           |  |                                  | (2,605,527  | ) |      |   | (3,671,161  | )    |  |   | (3,495,613  | ) |  |   | (107,889   | )
|Research and development expenses                                                              |  |           |  |                                  | (3,625,622  | ) |      |   | (3,739,109  | )    |  |   | (4,043,290  | ) |  |   | (124,793   | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|                                                                                               |  |           |  |                                  | (7,169,033  | ) |      |   | (8,354,769  | )    |  |   | (8,563,592  | ) |  |   | (264,308   | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Other income and expenses                                                                      |  | 25        |  |                                  | 284,251     |   |      |   | (255,817    | )    |  |   | (117,006    | ) |  |   | (3,612     | )
|Operating Profit                                                                               |  |           |  |                                  | 14,105,394  |   |      |   | 12,998,714  |      |  |   | 10,669,124  |   |  |   | 329,294    |  
|Non-operating Income and Expenses                                                              |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Interest income                                                                                |  |           |  |                                  | 155,804     |   |      |   | 155,524     |      |  |   | 148,484     |   |  |   | 4,583      |  
|Other gains and losses                                                                         |  | 11, 26    |  |                                  | 483,325     |   |      |   | 57,553      |      |  |   | (104,365    | ) |  |   | (3,221     | )
|Finance costs                                                                                  |  |           |  |                                  | (403,468    | ) |      |   | (565,450    | )    |  |   | (562,337    | ) |  |   | (17,356    | )
|Impairment loss of
available-for-sale equity securities                                        |  | 10        |  |                                  |            |   |      |   | (1,856,442  | )    |  |   |            |   |  |   |           |  
|Share of (losses) gains of associates and joint ventures accounted for using the equity
method |  | 11        |  |                                  | (171,591    | ) |      |   | (183,708    | )    |  |   | 3,221       |   |  |   | 99         |  
|Impairment losses of investments accounted for using the equity method                         |  |           |  |                                  | (442,385    | ) |      |   |            |      |  |   |            |   |  |   |           |  
|Dividends income                                                                               |  |           |  |                                  | 223,235     |   |      |   | 347,408     |      |  |   | 277,798     |   |  |   | 8,574      |  
|Gains on disposal of investments                                                               |  | 10, 11    |  |                                  | 639,103     |   |      |   | 127,291     |      |  |   | 217,199     |   |  |   | 6,704      |  
|(Losses)/ Gains on financial liabilities at fair valuethrough profit or loss                   |  | 15        |  |                                  | (321,233    | ) |      |   | (703,368    | )    |  |   | 1,025,012   |   |  |   | 31,636     |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|                                                                                               |  |           |  |                                  | 162,790     |   |      |   | (2,621,192  | )    |  |   | 1,005,012   |   |  |   | 31,019     |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Income before Income Tax                                                                       |  |           |  |                                  | 14,268,184  |   |      |   | 10,377,522  |      |  |   | 11,674,136  |   |  |   | 360,313    |  
|Income Tax Expense                                                                             |  | 22, 27    |  |                                  | (3,050,097  | ) |      |   | (1,366,059  | )    |  |   | (1,867,199  | ) |  |   | (57,630    | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Net Income                                                                                     |  |           |  | $                                | 11,218,087  |   |      | $ | 9,011,463   |      |  | $ | 9,806,937   |   |  | $ | 302,683    |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Other Comprehensive Income                                                                     |  | 23, 27    |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Items that may be subsequently reclassified to profit or loss                                  |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Exchange difference on translation of foreign financial statements                             |  |           |  |                                  | 555,285     |   |      |   | (227,905    | )    |  |   | (908,801    | ) |  |   | (28,049    | )
|Unrealized gain (loss) on
available-for-sale financial assets                                  |  |           |  |                                  | 2,948,369   |   |      |   | (549,845    | )    |  |   | ( 1,469,105 | ) |  |   | (45,343    | )
|Share of other comprehensive income of associates and joint ventures                           |  |           |  |                                  |            |   |      |   |            |      |  |   | (121,957    | ) |  |   | (3,764     | )
|Income tax relating to items that may be reclassified to profit or loss                        |  |           |  |                                  | (165,478    | ) |      |   | 20,244      |      |  |   | 273,910     |   |  |   | 8,454      |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|                                                                                               |  |           |  |                                  | 3,338,176   |   |      |   | (757,506    | )    |  |   | (2,225,953  | ) |  |   | (68,702    | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Items that will not be reclassiflied to profit or loss                                         |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Remeasurements of post-employment benefit obligations                                          |  |           |  |                                  | (53,911     | ) |      |   | (179,842    | )    |  |   | (177,806    | ) |  |   | (5,488     | )
|Income tax relating to items that will not be reclassified to profit or loss                   |  |           |  |                                  | 9,165       |   |      |   | 30,572      |      |  |   | 30,227      |   |  |   | 933        |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|                                                                                               |  |           |  |                                  | (44,746     | ) |      |   | (149,270    | )    |  |   | (147,579    | ) |  |   | (4,555     | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Other Comprehensive Income (Loss) for the year, net of tax                                     |  |           |  |                                  | 3,293,430   |   |      |   | (906,776    | )    |  |   | (2,373,532  | ) |  |   | (73,257    | )
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Total Comprehensive Income for the year                                                        |  |           |  | $                                | 14,511,517  |   |      | $ | 8,104,687   |      |  | $ | 7,433,405   |   |  | $ | 229,426    |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Net Income Attributable to:                                                                    |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Owners of the parent                                                                           |  |           |  | $                                | 11,218,087  |   |      | $ | 9,011,463   |      |  | $ | 9,806,937   |   |  | $ | 302,683    |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Total Comprehensive Income Attributable to:                                                    |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Owners of the parent                                                                           |  |           |  | $                                | 14,511,517  |   |      | $ | 8,104,687   |      |  | $ | 7,433,405   |   |  | $ | 229,426    |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Earnings Per Share (in New Taiwan dollars)                                                     |  | 28        |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Basic                                                                                          |  |           |  | $                                | 3.60        |   |      | $ | 2.89        |      |  | $ | 3.15        |   |  | $ | 0.10       |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  
|Diluted                                                                                        |  |           |  | $                                | 3.57        |   |      | $ | 2.86        |      |  | $ | 2.65        |   |  | $ | 0.08       |  
|                                                                                               |  |           |  |                                  |             |   |      |   |             |      |  |   |             |   |  |   |            |  

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



F-4



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|------------------------------------------ |  | -- |  | ------------ | ---------- |  | -------------- | - | ----------- | ----------------- |  | - | -------------------------- |  |  | ---------------------- | -------- | - | --------------------------------------------------------------- | - | ---------- | ------------------------------------------------------------ |  | - | -------------------------------------------------- | - |  | ----- | ---------- | - |  | -- | -------- | - |  | - | ----------- | -
|                                           |  |    |  |              |            |  |                |   |             | Retained Earnings |  |   | Other Comprehensive Income |  |  |                        |         
|                                           |  |    |  | CapitalStock |            |  | CapitalReserve |   |             | LegalReserve      |  |   | SpecialReserve             |  |  | UnappropriatedEarnings |          |   | UnrealizedGain onValuation ofAvailable-for-sale FinancialAssets |   |            | ExchangeDifferenceonTranslationof ForeignFinancialStatements |  |   | Remeasurementsof Post-employmentBenefitObligations |   |  | Total |           
|                                           |  |    |  | NT$          |            |  | NT$            |   |             | NT$               |  |   | NT$                        |  |  | NT$                    |          |   | NT$                                                             |   |            | NT$                                                          |  |   | NT$                                                |   |  | NT$   |           
|For the year endedDecember 31, 2014        |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at January 1, 2014                 |  |    |  | $            | 31,163,611 |  |                | $ | 15,758,479  |                   |  | $ | 8,207,777                  |  |  | $                      | 244,604  |   |                                                                 | $ | 5,376,927  |                                                              |  | $ | 884,504                                            |   |  | $     | 167,688    |   |  | $  | 68,085   |   |  |   | $61,871,675 |  
|Appropriation of earnings for prior years: |  | 22 |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Legal reserve                              |  |    |  |              |           |  |                |   |            |                   |  |   | 589,228                    |  |  |                        |         |   |                                                                 |   | (589,228   | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   |            |  
|Reversal of special reserve                |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        | (244,604 | ) |                                                                 |   | 244,604    |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   |            |  
|Cash dividends                             |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | (5,609,450 | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | ( 5,609,450 | )
|Net income                                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 11,218,087 |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | 11,218,087  |  
|Other comprehensive income (loss)          |  | 23 |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   |           |                                                              |  |   | 2,785,611                                          |   |  |       | 552,565    |   |  |    | (44,746  | ) |  |   | 3,293,430   |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Total comprehensive income                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 11,218,087 |                                                              |  |   | 2,785,611                                          |   |  |       | 552,565    |   |  |    | (44,746  | ) |  |   | 14,511,517  |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at December 31, 2014               |  |    |  | $            | 31,163,611 |  |                | $ | 15,758,479  |                   |  | $ | 8,797,005                  |  |  | $                      |         |   |                                                                 | $ | 10,640,940 |                                                              |  | $ | 3,670,115                                          |   |  | $     | 720,253    |   |  | $  | 23,339   |   |  | $ | 70,773,742  |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|For the year ended December 31, 2015       |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at January 1, 2015                 |  |    |  | $            | 31,163,611 |  |                | $ | 15,758,479  |                   |  | $ | 8,797,005                  |  |  | $                      |         |   |                                                                 | $ | 10,640,940 |                                                              |  | $ | 3,670,115                                          |   |  |       | $720,253   |   |  | $  | 23,339   |   |  | $ | 70,773,742  |  
|Appropriation of earnings for prior years: |  | 22 |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Legal reserve                              |  |    |  |              |           |  |                |   |            |                   |  |   | 1,170,770                  |  |  |                        |         |   |                                                                 |   | (1,170,770 | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   |            |  
|Cash dividends                             |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | (9,349,083 | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | ( 9,349,083 | )
|Subsidiarys share issue transaction costs |  |    |  |              |           |  |                |   | ( 121       | )                 |  |   |                           |  |  |                        |         |   |                                                                 |   |           |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | ( 121)      |  
|Net income                                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 9,011,463  |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | 9,011,463   |  
|Other comprehensive income (loss)          |  | 23 |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   |           |                                                              |  |   | (530,235                                           | ) |  |       | (227,271   | ) |  |    | (149,270 | ) |  |   | ( 906,776   | )
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Total comprehensive income                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 9,011,463  |                                                              |  |   | (530,235                                           | ) |  |       | (227,271   | ) |  |    | (149,270 | ) |  |   | 8,104,687   |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at December 31, 2015               |  |    |  | $            | 31,163,611 |  |                | $ | 15,758,358  |                   |  | $ | 9,967,775                  |  |  | $                      |         |   |                                                                 | $ | 9,132,550  |                                                              |  | $ | 3,139,880                                          |   |  | $     | 492,982    |   |  | ($ | 125,931  | ) |  | $ | 69,529,225  |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|For the year endedDecember 31, 2016        |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at January 1, 2016                 |  |    |  | $            | 31,163,611 |  |                | $ | 15,758,358  |                   |  | $ | 9,967,775                  |  |  | $                      |         |   |                                                                 | $ | 9,132,550  |                                                              |  | $ | 3,139,880                                          |   |  |       | $492,982   |   |  | ($ | 125,931  | ) |  | $ | 69,529,225  |  
|Appropriation of earnings for prior years: |  | 22 |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Legal reserve                              |  |    |  |              |           |  |                |   |            |                   |  |   | 876,226                    |  |  |                        |         |   |                                                                 |   | (876,226   | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   |            |  
|Cash dividends                             |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | (8,725,811 | )                                                            |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | ( 8,725,811 | )
|Cash distribution from capital reserve     |  | 21 |  |              |           |  |                |   | ( 3,116,361 | )                 |  |   |                           |  |  |                        |          |   |                                                                 |   |           |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | ( 3,116,361 | )
|Net income                                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 9,806,937  |                                                              |  |   |                                                   |   |  |       |           |   |  |    |         |   |  |   | 9,806,937   |  
|Other comprehensive income (loss)          |  | 23 |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   |           |                                                              |  |   | (1,317,722                                         | ) |  |       | (908,231   | ) |  |    | (147,579 | ) |  |   | ( 2,373,532 | )
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Total comprehensive income                 |  |    |  |              |           |  |                |   |            |                   |  |   |                           |  |  |                        |         |   |                                                                 |   | 9,806,937  |                                                              |  |   | (1,317,722                                         | ) |  |       | (908,231   | ) |  |    | (147,579 | ) |  |   | 7,433,405   |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at December 31, 2016               |  |    |  | $            | 31,163,611 |  |                | $ | 12,641,997  |                   |  | $ | 10,844,001                 |  |  | $                      |         |   |                                                                 | $ | 9,337,450  |                                                              |  | $ | 1,822,158                                          |   |  |       | ($415,249) |   |  | ($ | 273,510  | ) |  | $ | 65,120,458  |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  
|Balance at December 31, 2016, in US$       |  | 4  |  | $            | 961,840    |  |                | $ | 390,185     |                   |  | $ | 334,691                    |  |  | $                      |         |   |                                                                 | $ | 288,193    |                                                              |  | $ | 56,240                                             |   |  |       | ($12,816)  |   |  | ($ | 8,442    | ) |  | $ | 2,009,891   |  
|                                           |  |    |  |              |            |  |                |   |             |                   |  |   |                            |  |  |                        |          |   |                                                                 |   |            |                                                              |  |   |                                                    |   |  |       |            |   |  |    |          |   |  |   |             |  

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



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                                      |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|----------------------------------------------------------------------------------------------------- |  | ------ |  | -------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | - | ------- | -
|                                                                                                      |  |        |  | For the years ended December 31, |           
|                                                                                                      |  | Note   |  | 2014                             |            |   | 2015 |   |            | 2016 | 
|                                                                                                      |  |        |  | NT$                              |            |   | NT$  |   |            | NT$  |  |   | US$        |  
|                                                                                                      |  |        |  |                                  |            |   |      |   |            |      |  |   | (Note 4)   |  
|Cash flows from operating activities                                                                  |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Consolidated income before tax                                                                        |  |        |  | $                                | 14,268,184 |   |      | $ | 10,377,522 |      |  | $ | 11,674,136 |   |  | $ | 360,313 |  
|Adjustments to reconcile consolidated income before tax to net cash provided by operating
activities: |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Depreciation                                                                                          |  | 13, 24 |  |                                  | 11,840,340 |   |      |   | 12,903,772 |      |  |   | 12,905,830 |   |  |   | 398,328 |  
|Amortization                                                                                          |  | 14, 24 |  |                                  | 595,475    |   |      |   | 610,213    |      |  |   | 385,360    |   |  |   | 11,894  |  
|Losses/ (Gains) on financial liabilities at fair value through profit or loss                         |  | 15     |  |                                  | 321,233    |   |      |   | 703,368    |      |  |   | (1,025,012 | ) |  |   | (31,636 | )
|Interest expense                                                                                      |  |        |  |                                  | 403,080    |   |      |   | 564,540    |      |  |   | 561,613    |   |  |   | 17,334  |  
|Interest income                                                                                       |  |        |  |                                  | (155,804   | ) |      |   | (155,524   | )    |  |   | (148,484   | ) |  |   | (4,583  | )
|Dividend income                                                                                       |  |        |  |                                  | (223,235   | ) |      |   | (347,408   | )    |  |   | (277,798   | ) |  |   | (8,574  | )
|Share of losses (gains) of associates and joint ventures accounted for using the equity
method        |  | 11     |  |                                  | 171,591    |   |      |   | 183,708    |      |  |   | (3,221     | ) |  |   | (99     | )
|Impairment loss of investments accounted for                                                          |  |        |  |                                  | 442,385    |   |      |   |           |      |  |   |           |   |  |   |        |  
|using the equity method                                                                               |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Impairment loss of
available-for-sale financial assets                                                |  |        |  |                                  |           |   |      |   | 1,856,442  |      |  |   |           |   |  |   |        |  
|Gains on reversal of impairment loss of non-financial
assets                                          |  |        |  |                                  |           |   |      |   | (134,992   | )    |  |   |           |   |  |   |        |  
|Gains on disposal of property, plant and equipment                                                    |  | 25     |  |                                  | (287,947   | ) |      |   | (31,293    | )    |  |   | (32,615    | ) |  |   | (1,007  | )
|Gains on disposal of investment                                                                       |  | 10, 11 |  |                                  | (639,103   | ) |      |   | (127,291   | )    |  |   | (217,199   | ) |  |   | (6,704  | )
|Impairment loss on property, plant and equipment                                                      |  | 25     |  |                                  | 63,722     |   |      |   | 64,996     |      |  |   | 91,247     |   |  |   | 2,816   |  
|Foreign currency exchange loss (gain) on convertible bonds payable                                    |  |        |  |                                  | 516,543    |   |      |   | 451,156    |      |  |   | (221,082   | ) |  |   | (6,823  | )
|Foreign currency exchange loss (gain) on long-term loan                                               |  |        |  |                                  | 581,518    |   |      |   | (28,790    | )    |  |   | (105,712   | ) |  |   | (3,263  | )
|Premium from merger of
available-for-sale financial assets                                            |  | 10, 29 |  |                                  |           |   |      |   |           |      |  |   | (51,923    | ) |  |   | (1,602  | )
|Changes in assets and liabilities related to the operation                                            |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Notes receivable                                                                                      |  |        |  |                                  | 7,290      |   |      |   | (1,325     | )    |  |   | (13,195    | ) |  |   | (407    | )
|Accounts receivable                                                                                   |  |        |  |                                  | (3,043,597 | ) |      |   | 2,658,604  |      |  |   | (1,794,834 | ) |  |   | (55,396 | )
|Other receivables                                                                                     |  |        |  |                                  | (152,479   | ) |      |   | 295,714    |      |  |   | 1,301      |   |  |   | 40      |  
|Inventories                                                                                           |  |        |  |                                  | (696,646   | ) |      |   | (132,271   | )    |  |   | (1,321,346 | ) |  |   | (40,782 | )
|Other current assets-other                                                                            |  |        |  |                                  | (73,773    | ) |      |   | (384,471   | )    |  |   | (2,590     | ) |  |   | (80     | )
|Other non-current assets-other                                                                        |  |        |  |                                  | 43,354     |   |      |   | (95,494    | )    |  |   | 23,405     |   |  |   | 722     |  
|Accounts payable                                                                                      |  |        |  |                                  | 707,657    |   |      |   | (321,445   | )    |  |   | 1,359,898  |   |  |   | 41,972  |  
|Other payables                                                                                        |  |        |  |                                  | 1,191,269  |   |      |   | 410,903    |      |  |   | 392,429    |   |  |   | 12,112  |  
|Other current liabilities                                                                             |  |        |  |                                  | 270,943    |   |      |   | 30,821     |      |  |   | (23,780    | ) |  |   | (734    | )
|Other non-current liabilities                                                                         |  |        |  |                                  | (4,361     | ) |      |   | (6,277     | )    |  |   | 58,033     |   |  |   | 1,791   |  
|                                                                                                      |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Cash provided by operations                                                                           |  |        |  |                                  | 26,147,639 |   |      |   | 29,345,178 |      |  |   | 22,214,461 |   |  |   | 685,632 |  
|Interest received                                                                                     |  |        |  |                                  | 146,544    |   |      |   | 162,742    |      |  |   | 150,419    |   |  |   | 4,642   |  
|Dividend received                                                                                     |  |        |  |                                  | 223,478    |   |      |   | 347,408    |      |  |   | 277,798    |   |  |   | 8,574   |  
|Interest paid                                                                                         |  |        |  |                                  | (343,152   | ) |      |   | (257,415   | )    |  |   | (247,829   | ) |  |   | (7,649  | )
|Income tax paid                                                                                       |  |        |  |                                  | (1,229,336 | ) |      |   | (2,813,747 | )    |  |   | (1,550,297 | ) |  |   | (47,849 | )
|                                                                                                      |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  
|Net cash provided by operating activities                                                             |  |        |  |                                  | 24,945,173 |   |      |   | 26,784,166 |      |  |   | 20,844,552 |   |  |   | 643,350 |  
|                                                                                                      |  |        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |         |  

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

(Continued)



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|--------------------------------------------------------------------------- |  | ---- | ------ |  | -------------------------------- | - | ----------- | ---- |  | - | ----------- | - |  | -------- | ----------- | - |  | - | -------- | -
|                                                                            |  |      |        |  | For the years ended December 31, |  
|                                                                            |  | Note |        |  | 2014                             |   |             | 2015 |  |   | 2016        |  
|                                                                            |  |      |        |  | NT$                              |   |             | NT$  |  |   | NT$         |   |  | US$      |            
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  | (Note 4) |            
|Cash flows from investing activities                                        |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Proceeds from disposal of
available-for-sale financial assets               |  |      | 10     |  |                                  | $ | 674,622     |      |  | $ |            |   |  | $        | 1,454,403   |   |  | $ | 44,889   |  
|Proceeds from disposal of investments accounted for using the equity method |  |      | 11     |  |                                  |   |            |      |  |   | 29,645      |   |  |          |            |   |  |   |         |  
|Acquisition of investments accounted for using the equity method            |  |      | 11     |  |                                  |   | (63,818     | )    |  |   | (2,400,000  | ) |  |          |            |   |  |   |         |  
|Acquisition of property, plant, and equipment                               |  |      | 29     |  |                                  |   | (19,560,740 | )    |  |   | (13,855,431 | ) |  |          | (15,295,121 | ) |  |   | (472,071 | )
|Proceeds from disposal of property, plant, and equipment                    |  |      |        |  |                                  |   | 315,556     |      |  |   | 111,274     |   |  |          | 167,021     |   |  |   | 5,155    |  
|Increase in refundable deposits                                             |  |      |        |  |                                  |   | (19,555     | )    |  |   | (162,225    | ) |  |          | (561,010    | ) |  |   | (17,315  | )
|Decrease in refundable deposits                                             |  |      |        |  |                                  |   | 10,350      |      |  |   | 65,326      |   |  |          | 237,007     |   |  |   | 7,315    |  
|Acquisition of intangible assets                                            |  |      | 14     |  |                                  |   | (65,802     | )    |  |   | (112,692    | ) |  |          | (71,011     | ) |  |   | (2,192   | )
|(Increase) decrease in pledged deposits                                     |  |      | 32     |  |                                  |   | (2,900      | )    |  |   | (44,800     | ) |  |          | 27,000      |   |  |   | 833      |  
|Increase in other non-current assets                                        |  |      |        |  |                                  |   | (530,516    | )    |  |   | (218,536    | ) |  |          |            |   |  |   |         |  
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Net cash used in investing activities                                       |  |      |        |  |                                  |   | (19,242,803 | )    |  |   | (16,587,439 | ) |  |          | (14,041,711 | ) |  |   | (433,386 | )
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Cash flows from financing activities                                        |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Proceeds from long-term loans                                               |  |      |        |  |                                  |   | 3,850,000   |      |  |   | 2,500,000   |   |  |          | 9,000,000   |   |  |   | 277,778  |  
|Repayment of long-term loans                                                |  |      |        |  |                                  |   | (3,178,166  | )    |  |   | (8,235,833  | ) |  |          | (4,228,721  | ) |  |   | (130,516 | )
|Proceeds from the issuance of convertible bonds                             |  |      |        |  |                                  |   | 12,089,536  |      |  |   |            |   |  |          |            |   |  |   |         |  
|Payment for issuance of subsidiarys stock                                  |  |      |        |  |                                  |   |            |      |  |   | (121        | ) |  |          |            |   |  |   |         |  
|Increase in deposit-in                                                      |  |      |        |  |                                  |   | 146,993     |      |  |   | 65,112      |   |  |          | 35,889      |   |  |   | 1,107    |  
|Decrease in deposit-in                                                      |  |      |        |  |                                  |   | (6,747      | )    |  |   | (76,366     | ) |  |          | (126,329    | ) |  |   | (3,899   | )
|Payment for cash dividends and cash distribution from capital reserve       |  |      | 21, 22 |  |                                  |   | (5,609,436  | )    |  |   | (9,349,083  | ) |  |          | (11,842,172 | ) |  |   | (365,499 | )
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Net cash provided by (used in) financing activities                         |  |      |        |  |                                  |   | 7,292,180   |      |  |   | (15,096,291 | ) |  |          | (7,161,333  | ) |  |   | (221,029 | )
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Effect on foreign currency exchange                                         |  |      |        |  |                                  |   | 184,916     |      |  |   | (63,775     | ) |  |          | (356,612    | ) |  |   | (11,007  | )
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Net increase (decrease) in cash and cash equivalents                        |  |      |        |  |                                  |   | 13,179,466  |      |  |   | (4,963,339  | ) |  |          | (715,104    | ) |  |   | (22,072  | )
|Cash and cash equivalents at the beginning of the year                      |  |      |        |  |                                  |   | 16,975,247  |      |  |   | 30,154,713  |   |  |          | 25,191,374  |   |  |   | 777,512  |  
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  
|Cash and cash equivalents at the end of the year                            |  |      | 6      |  |                                  | $ | 30,154,713  |      |  | $ | 25,191,374  |   |  | $        | 24,476,270  |   |  | $ | 755,440  |  
|                                                                            |  |      |        |  |                                  |   |             |      |  |   |             |   |  |          |             |   |  |   |          |  

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



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|1. | History and Organization
|-- | ------------------------

Siliconware Precision Industries Co., Ltd. (the
Company) was incorporated as a company limited by shares under the Company Law of the Republic of China (R.O.C.) in May 1984, and has been listed on the Taiwan Stock Exchange since April 1993, and on the NASDAQ National Market under the
trading symbol of SPIL since June 2000. The Company is mainly engaged in the assembly, testing and turnkey services of integrated circuits. The address of the registered office is No. 123, Sec. 3, Da Fong Rd., Tantzu, Taichung 427, Taiwan,
R.O.C.



|2. | The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for Authorization
|-- | ----------------------------------------------------------------------------------------------------------------

The consolidated financial statements have been authorized for issue by the Audit Committee on March 23, 2017.



|3. | The Adoption of New and Amended Standards and Interpretations
|-- | -------------------------------------------------------------



| | A. | New Standards and Interpretations Not Yet Adopted
| | -- | -------------------------------------------------



|                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                
|--------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------
|New Standards, Amendments,
and Interpretations                  |  | Content                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | EffectiveDate  
|IFRS 15, Revenue from contracts with customers and amendments |  | The standard deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an
entitys contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18
Revenue and IAS 11 Construction contracts and related interpretations. The amendments to IFRS 15 clarify how to identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract;
determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and determine whether the revenue from granting a license should be recognized at a point
in time or over time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | January 1, 2018
|                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|IFRS 9, Financial instruments                                 |  | The complete version of IFRS 9 was issued in July 2014 . It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and
establishes three primary measurement categories for financial assets, namely, amortised cost, fair value through other comprehensive income and fair value through profit and loss. The basis of classification depends on the entitys business
model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss, with the irrevocable option at inception to present changes in fair value
in other comprehensive not recycled to profit and loss. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities, there were no changes to classification and
measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line
hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the hedged ratio to be the same as the one management actually use for risk management purposes. Contemporaneous
documentation is still required but is different to that currently prepared under IAS 39. |  | January 1, 2018
|                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|IFRS 16, Leases                                               |  | Leases addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees
and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. The standard replaces IAS 17 Leases, and related interpretations. An entity shall apply IFRS 16 for annual
periods beginning on or after January 1, 2019 and earlier application is permitted subject to the entity adopting IFRS 15 Revenue from contracts with customers at the same time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | January 1, 2019





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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



At this stage, the Company and its subsidiaries (the Group) is assessing the
potential impact of the new rules on the Groups financial statements. The Group will continue in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the standards or interpretations.
The related impact will be disclosed when the Group completes the evaluation.

The Group does not expect to early adopt the new standards
before 1 January 2018.



| | B. | New Standards and Interpretations Adopted
| | -- | -----------------------------------------

The Group has applied the following standards
and amendments for the first time for their annual reporting period commencing January 1, 2016:



| |  |  | Accounting for acquisitions of interests in joint operations-Amendments to IFRS 11
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Clarification of acceptable methods of depreciation and amortisation-Amendments to IAS 16 and IAS 38
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | Annual improvements to IFRSs 2012-2014 cycle, and
| | - |  | -------------------------------------------------



| |  |  | Disclosure initiative-amendments to IAS 1.
| | - |  | ------------------------------------------

The adoption of these amendments did not have any
impact on the current period or any prior period and is not likely to affect future periods.



|4. | Summary of Significant Accounting Policies
|-- | ------------------------------------------



|(1) | Basis of Preparation
|--- | --------------------



| | A. | Compliance with IFRS
| | -- | --------------------

The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards and the interpretations of the IFRS interpretations committee (IFRIC). The accompanying consolidated financial statements are prepared in conformity with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).



| | B. | Historical cost convention
| | -- | --------------------------

The consolidated financial statements have been prepared on a
historical cost basis, except for the following:



| |  |  | available-for-sale financial assets, financial assets and liabilities (including derivative instruments) - measured at fair value
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | defined benefit pension plans - net amount of pension fund assets less present value of defined benefit obligation measured at fair value.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

The preparation requires the use of certain critical accounting estimates and also requires management to exercise its judgement in the process
of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.



|(2) | Principles of Consolidation
|--- | ---------------------------

Pursuant to IFRS 10, Consolidated financial
statements, subsidiaries are those entities controlled by the Company or its subsidiaries. The Company controls an entity when the Company is exposed to, or has right to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



Consolidated subsidiaries:



|                              |  |                                         |  |                                                                                           |  |                                                              |     |   |      |  |     |  
|----------------------------- |  | --------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ------------------------------------------------------------ | --- | - | ---- |  | --- | -
|                              |  |                                         |  |                                                                                           |  | % of ownership held by the namedinvestors as of December 31, |    
|Name of investor              |  | Name of subsidiaries                    |  | Main operating activities                                                                 |  | 2015                                                         |     |   | 2016 | 
|The Company                   |  | SPIL (B.V.I.) Holding Limited           |  | Investment activities                                                                     |  |                                                              | 100 | % |      |  | 100 | %
|The Company                   |  | Siliconware Investment Co., Ltd         |  | Investment activities                                                                     |  |                                                              | 100 | % |      |  | 100 | %
|SPIL (B.V.I.) Holding Limited |  | Siliconware USA, Inc. (SUI)             |  | Communications and relationship maintenance with companies headquartered in North America |  |                                                              | 100 | % |      |  | 100 | %
|SPIL (B.V.I.) Holding Limited |  | SPIL (Cayman) Holding
Limited           |  | Investment activities                                                                     |  |                                                              | 100 | % |      |  | 100 | %
|SPIL (Cayman) Holding Limited |  | Siliconware Technology
(Suzhou) Limited |  | Assembly and testing
services                                                             |  |                                                              | 100 | % |      |  | 100 | %



|(3) | Segment Reporting
|--- | -----------------

Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker. The chief operating decision maker assesses performance and allocates resources based on the economic environment. All of the Companys segments have similar economic
characteristics and meet the criteria of aggreggation. As a result, the Company discloses a single reporting segment by aggregating all the operating segments.



|(4) | Foreign Currency Translation
|--- | ----------------------------



| | A. | Convenience Translation into US Dollars
| | -- | ---------------------------------------

The Group maintains its accounting records and
prepares its financial statements in New Taiwan (NT) dollars. The United States (US) dollar amounts disclosed in the 2016 financial statements are presented solely for the convenience of the reader and were translated at the
rate of NT$32.40 (in dollars) to US$1.00 (in dollars), which was the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 30, 2016 as the last quoted rate at the balance sheet date. Such
translation amounts are unaudited and should not be construed that the NT dollar amounts represent, or have been, or could be, converted into US dollars at that or any other rate.



| | B. | Items included in the financial statements of each of the Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The
consolidated financial statements are presented in New Taiwan Dollar (NTD), which is the presentation currency of the Group and the functional currency of the Company.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognized as other gains and losses in the statement of comprehensive income.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the
fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as
available-for-sale, are included in other comprehensive income. However, non-monetary assets and liabilities denominated in
foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | The results and financial position of the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency. Assets and liabilities for each balance
sheet presented are translated at the closing rate at the date of that balance sheet, income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions), and all resulting exchange differences are recognized in other comprehensive
income. Those differences would be recorded as gain or loss of disposal of investments in statement of comprehensive income if disposed.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-10



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|(5) | Classification of Current and Noncurrent Assets / Liabilities
|--- | -------------------------------------------------------------



| | A. | Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as noncurrent assets:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------



| | (a) | Assets arising from operating activities that are expected to be realized or consumed, or are intended to be sold within the normal operation cycle;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Assets held mainly for trading purposes;
| | --- | ----------------------------------------



| | (c) | Assets expected to be realized within twelve months from the balance sheet date;
| | --- | --------------------------------------------------------------------------------



| | (d) | Cash or cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as noncurrent liabilities:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | Liabilities arising from operating activities that are expected to be paid off within the normal operating cycle;
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (b) | Liabilities arising mainly from trading activities;
| | --- | ---------------------------------------------------



| | (c) | Liabilities that are to be paid off within twelve months from the balance sheet date;
| | --- | -------------------------------------------------------------------------------------



| | (d) | Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------



|(6) | Cash and Cash Equivalents
|--- | -------------------------

Cash and cash equivalents include cash on hand, deposits held
at call with banks, time deposits that meet operating short-term cash commitments and that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, and other short-term highly liquid investments.



|(7) | Accounts Receivable
|--- | -------------------

Accounts receivable is recognized initially at fair value and
subsequently measured at amortized cost using the effective interest method, less provision for impairment. Accounts receivable expected to be collected over one year is recorded at present value by using predetermined interest rate whereas those
expected to be collected within one year are not reported at present value due to the fact that the difference between the maturity value and the fair value discounted by implicit interest rate is immaterial and the frequency of transactions is
high.



|(8) | Inventories
|--- | -----------

Inventories are recorded at cost when acquired under a perpetual inventory
system. Cost is determined using the weighted-average method. The cost of work in process comprises raw materials, direct labor, other direct costs and related production overheads based on normal operting capacity. As of the balance sheet date,
inventories are stated at the lower of cost or net realizable value by item, except where it may be appropriate to similar groups or related items. Net realizable value is the estimated selling price in the ordinary course of business less all
estimated costs of completion and necessary selling expenses.



F-11



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



In the service agreements with and/or purchase orders from customers, the Group and the
customer both agree what materials are to be provided by the customer and what materials are to be provided by the Group. Materials provided by the customers are considered consigned materials. According to the service agreement and/or purchase
order, title (ownership) of the consigned materials belongs to the customers. The Group does not take title to these consigned materials. The Group does not have any rights or obligations with respect to the consigned materials other than keeping
them in good care while under the Groups custody, and therefore the risk does not transfer to the Group. In addition, the customers are informed of the status and locations of integrated circuits being assembled and/or tested by the Group
which provides further evidence that the customers are taking control or monitoring those consigned materials. As such, the Group does not book the consigned materials into its inventory account.



|(9) | Non-current Assets Held for Sale
|--- | --------------------------------

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the non-current asset held for sale is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of
management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their previous carrying
amount and fair value less costs to sell. Recognition of depreciation would cease.



|(10) | Financial Assets
|---- | ----------------



| | A. | Classification
| | -- | --------------

The classification depends on the nature and purpose of acquiring the financial
assets and the classification is determined at the time of initial recognition.



| | (a) | Loans and receivables
| | --- | ---------------------

Loans and receivables are
non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.



| | (b) | Available-for-sale financial assets
| | --- | -----------------------------------

Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. Except for those that are expected to be disposed more than one year after the end of the
reporting period, which are classified as non-current assets, otherwise, they are classified as current assets.



| | B. | Recognition and Measurement
| | -- | ---------------------------



| | (a) | Regular purchases and sales of financial assets are recognized on the trade date (the date on which the Group commits to purchase or sell the asset).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in
the statement of comprehensive income. Other financial assets not carried at fair value through profit or loss are initially recognized at fair value plus transaction costs. Financial assets are derecognized when the rights to receive cash flows
from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.



| | (b) | Financial assets at fair value through profit or loss and available-for-sale financial assets are subsequently carried at fair value. Gains
or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the statement of comprehensive income within other gains and losses in the period in
which they arise. Changes in the fair value of securities classified as available-for-sale are recognized in other comprehensive income. Dividend income from these two
assets is recognized in the statement of comprehensive income when the Groups right to receive payments is established.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-12



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (c) | Loans and receivables are subsequently carried at amortized cost using the effective interest method. The interest arising subsequently is recognized in interest income in the statement of comprehensive
income.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognized in equity are
included in the statement of comprehensive income as gains and losses from investment securities and impairment losses, respectively.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Offsetting financial instruments
| | -- | --------------------------------

Financial assets and liabilities are offset and the net
amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.



|(11) | Impairment of Financial Assets
|---- | ------------------------------



| | A. | Loans and receivables
| | -- | ---------------------



| | (a) | The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial asset is impaired and
impairment losses are incurred only if:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | There is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a loss event), and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | That loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------

Evidence of impairment includes:



| | i. | The debtor or the issuer is experiencing significant financial difficulty;
| | -- | --------------------------------------------------------------------------



| | ii. | Default or delinquency in interest or principal payment;
| | --- | --------------------------------------------------------



| | iii. | Concessions made to the insolvent debtor by creditors owing to economic or legal considerations;
| | ---- | ------------------------------------------------------------------------------------------------



| | iv. | The probability that the debtor or debtors will enter bankruptcy or other financial reorganization;
| | --- | ---------------------------------------------------------------------------------------------------



| | v. | The disappearance of an active market for that financial asset because of financial difficulties;
| | -- | -------------------------------------------------------------------------------------------------



| | vi. | Where observable data indicates that there is a measurable decrease in the estimated future cash flow, such as:
| | --- | ---------------------------------------------------------------------------------------------------------------



| |  |  | The repayment condition of the debtor to the Group of assets deteriorated
| | - |  | -------------------------------------------------------------------------



| |  |  | Changes in areas or economic conditions that correlate with defaults
| | - |  | --------------------------------------------------------------------



| | (b) | The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not
individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses them for impairment. For these assets, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial assets original effective interest rate. The carrying amount of the asset is reduced through the allowance account and the amount of the loss is recognized in the
consolidated statement of comprehensive income. In a subsequent period, if the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in
the debtors credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated statement of comprehensive income.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | Available-for-sale assets
| | -- | -------------------------

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial
assets is impaired. In the case of equity investments classified as available-for-sale, any significant unfavorable change that takes place in the technical, market,
economic, or legal environments where the issuer operates indicates the possibility that the investment cost of the equity instrument may not be recovered and a significant or prolonged decline in the fair value of the security below its cost are
evidences that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative lossmeasured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss is removed from equity and recognized in profit or loss. Impairment losses recognized in the consolidated
statement of comprehensive income on equity instruments are not reversed through the consolidated statement of comprehensive income in a subsequent period.



|(12) | Equity Method Investments (Investments in Associate and Joint Arrangements)
|---- | ---------------------------------------------------------------------------

Investment in associate



| | A. | Associates, which are accounted for using the equity method of accounting, are all entities over which the Group has significant influence, which means the power to participate in the financial and operating policy
decisions of the investees, but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Under the equity method, the investment is initially recognized at cost, and the carrying amount is
increased or decreased to recognize the investors share of the profit or loss of the investee after the date of acquisition. The Groups investment in associates includes goodwill identified on acquisition.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Groups share of post-acquisition profit or loss is recognized in the statement of comprehensive income, and its share of post-acquisition movements in other comprehensive income is recognized in other
comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Groups share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the
Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss
where appropriate. Dilution gains and losses arising in investments in associates are recognized in the statement of comprehensive income.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investment in joint arrangements



| | A. | Investments in joint arrangement are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Group has assessed the nature of its joint arrangement and determined it to be a joint venture which is accounted for using the equity method.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Groups share of the post-acquisition profits or losses and movements in
other comprehensive income. When the Groups share of losses in a joint venture equals or exceeds its interests in the joint ventures, the Group does not recognize further losses, unless it has incurred obligation or made payments on behalf of
the joint ventures.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other significant policies of the equity method

Profits and losses resulting from upstream and downstream transactions between the Group and its associates or joint ventures are recognized in
the Groups financial statements only to the extent of unrelated investors interests in the associates or joint ventures. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Material accounting policy differences between associates or joint ventures and the Group were properly assessed and changed where necessary to ensure consistency with those adopted by the Group.



F-14



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



The Group determines at each reporting date whether there is any objective evidence that the
investment in the associate or joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value in accordance with
the policy described in Note 4(15).



|(13) | Property, Plant and Equipment
|---- | -----------------------------



| | A. | Property, plant and equipment are stated at historical cost less accumulated depreciation and impairments. The acquisition costs include the purchase price, any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating, and the obligations to dismantle and remove the items and restore the site on which they are located. The subsequent costs will only be recognized under the conditions that future
economic benefits associated with the item will flow to the Group and the item cost can be measured reliably. The carrying amount of the replaced part is derecognized.
Day-to-day servicing costs and repairment expenditures are recognized as expenses as incurred.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Group capitalizes borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The capitalized borrowing costs will be
depreciated through the residual useful lives of related items. Borrowing costs which do not qualify for capitalization are recognized in profit or loss.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | If material part of replacing items of property, plant and equipment has different useful life from the main asset, it should be recognized and depreciated separately. Land is not depreciated. Depreciation on other
assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives. The estimated useful lives of property, plant and equipment are as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                |  |                        |             | 
|------------------------------- |  | ---------------------- | ----------- | 
|Property, plant and equipment   |  | Estimated useful lives |            
|Buildings                       |  |                        |             | 
|- Main buildings                |  |                        | 20-55 years | 
|- Construction and improvements |  |                        | 3-15 years  | 
|Machinery and equipment         |  |                        | 5-6 years   | 
|Other equipment                 |  |                        | 2-10 years  | 



| | D. | The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each fiscal year.
| | -- | -----------------------------------------------------------------------------------------------------------------------

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within Other income
and expenses in the statement of comprehensive income.



|(14) | Intangible Assets
|---- | -----------------

Intangible assets are the expenditures of license fees and computer
software. License fees are capitalized at historical cost. Acquired computer software is capitalized on the basis of the costs incurred to acquire and bring to use the specific software. Both license fees and computer software are intangible assets
with limited useful lives. They are subsequently measured at cost less accumulated amortization and impairment. Computer software is amortized over three years whereas license fees are amortized over their economic lives or the contract years using
straight-line method. Subsequent measurements are measured using costs less accumulated amortization.



F-15



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|(15) | Impairment of Non-financial Assets
|---- | ----------------------------------



| | A. | Intangible assets with definite useful life and other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognized for the amount by which the assets carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash-generating
units). The recoverable amount is the higher of an assets fair value, defined as the price that would be received to dispose an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date, less costs to dispose, or its value in use. The value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | An impairment loss recognized in prior periods for an asset shall be reversed if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was
recognized. The carrying amount of the asset shall be reversed to its recoverable amount. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined
had no impairment loss been recognized for the asset in prior years.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(16) | Accounts Payable
|---- | ----------------

Accounts payable are obligations to pay for goods or services that
have been acquired in the ordinary course of business from suppliers. Accounts payable are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. Accounts payable of which payment due is
within one year or less are not discounted while their fair value are close to the value in maturity and they are transacted actively.



|(17) | Financial liabilities at fair value through profit or loss
|---- | ----------------------------------------------------------



| | A. | Financial liability is classified in fair value through profit or loss while it is held for trading or identified at fair value through profit or loss on initial recognition. A financial liability is held for trading if
it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term, or if it is a derivative that is neither classified as a financial guarantee contract nor designated and effective as a hedging instrument. A
financial liability is designated as at fair value through profit or loss upon initial recognition if:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | Such designation eliminates or significantly reduces a measurement or recognition in consistency that would otherwise arise; or
| | -- | -------------------------------------------------------------------------------------------------------------------------------



| | ii. | The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Groups documented
risk management or investment strategy, and information about the grouping is provided internally on that basis; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | It forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract to be designated as at fair value through profit or loss.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Financial liabilities at fair value through profit or loss are stated at fair value upon initial recognition, and the related transaction cost are expensed immediately. In subsequent measurement, the Group measures fair
value fluctuation in current profit or loss.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(18) | Convertible Bonds
|---- | -----------------

Convertible bonds issued by the Company contain liability, conversion
option, redemption option and put option (collectively the Bonds Options) components. The Company assesses if the economic characteristics and risks of the redemption option and put embedded in the convertible bonds are closely related
to the economic characteristics and risk of the host contract before separating the equity component. For the embedded derivative that is not closely related to the host contract, it is classified as a liability component and subsequently measured
at fair value through profit or loss unless it qualifies as an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability
component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IAS 39. The
conversion option that will be settled other than by the exchange of a fixed amount of cash or other financial asset for a fixed number of the Companys own equity instruments is classified as a conversion option derivative.



F-16



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



At the date of offering, the Bonds Options components are classified as a derivative
liability and subsequently measured at fair value through profit and loss. The liability component excluding the Bonds Options is measured at amortized cost using the effective interest method. Transaction costs that relate to the offering of the
convertible bonds are allocated to the liability and the Bonds Options components in proportion to their relative fair values. Transaction costs relating to the Bonds Options are recognized immediately in profit or loss. Transaction costs relating
to the liability component are included in the carrying amount of the liability component and amortized using the effective interest method.

If the convertible bondholders exercise their conversion right before maturity, the Company shall adjust the carrying amount of the liability
components. The adjusted carrying amounts of the liability components at conversion are credited to capital stock and capital reserve. In addition, the liability components of convertible bonds is classified as a current liability if within 12
months the bondholders may exercise the put right. After the put right expires, the liability component of the convertible bonds should be reclassified as a non-current liability if it meets the definition of
a non-current liability in all other respects.



|(19) | Borrowings
|---- | ----------

Borrowings are recognized initially at fair value, net of transaction costs
incurred, and subsequently carried at amortized cost. Any difference between the proceeds, net of transaction costs, and the redemption value is recognized in the statement of comprehensive income over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to
which it relates.



|(20) | Derecognition of financial liabilities
|---- | --------------------------------------



| | A. | The Group derecognizes a financial liability from its balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Group derecognizes an original financial liability and recognizes a new financial liability if the terms of an existing financial liability have substantial modifications and such modifications make significant
differences (10%) to the original terms. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in profit or loss.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(21) | Income Tax
|---- | ----------



| | A. | The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statment, except to the extent that it relates to items recognized in other comprehensive income or directly in equity.
In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The current income tax is calculated on the basis of the tax law enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Additional 10% undistributed earnings tax is estimated and recognized during the period when income is earned.
| | -- | --------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | D. | Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and joint arrangements where the company is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | Deferred income tax assets and liabilties are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate
to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balance on a net basis.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | G. | Deferred income tax assets are recognized only if it is probable that future taxable profit will be available to utilize those temporary differences and losses. The investment tax credits relating to the acquisition
cost of qualifying equipment or technology, qualifying research and development expenditure, qualifying personnel training expenditure and qualifying investments in significant technology companies are recognized as income tax adjustments in the
period the tax credits arise.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(22) | Employee Benefits
|---- | -----------------



| | A. | Pensions
| | -- | --------



| | (a) | For defined contribution plans, the Group pays contributions to a publicly or privately administered pension fund. The contributions are recognized as employee benefit expenses when they are due. The Group has no legal
or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | For defined benefit plan, the liability recognized in the balance sheet is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension obligation.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of
plan assets. This cost is included in employee benefit expense in the statement of profit or loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they
occur, directly in other comprehensive income. They are included in other equity in the statement of changes in equity and in the balance sheet. Past-service costs are recognized immediately in profit or loss.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in
profit or loss as past service costs.



| | B. | Employees and directors remuneration
| | -- | --------------------------------------

The Group recognizes related expenses and
liabilities when the Group has legal or constructive obligation and could reasonably estimate such amount. Any difference between estimated amount and distributed amount resolved in the Board of Directors in the subsequent year shall be adjusted in
the profit or loss of the following year.



F-18



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|(23) | Provision
|---- | ---------



| | A. | Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount
has been reliably estimated. Provisions are not recognized for future operating losses. Damages and claims on customers consigned materials that arise from the course of packaging and/or testing services are recognized as a provision. Related
expenditure that is reimbursed under an arrangement with a third party (e.g., a supplier warranty agreement) is presented net under Other income and expenses.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | A contingent liability is a possible obligation that arises from past events and whose existence will be confrimed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the entity. A present obligation that arises from past events but is not recognized because either that it is not probable that an outflow of resources embodying economic benefits will be
required to settle the obligation or that the amount of the obligation cannot be measured with sufficient reliability.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(24) | Revenue Recognition
|---- | -------------------

The Group provides assembly, testing, and turnkey services for
integrated circuits. The Group recognizes revenue when:



| | A. | the amount of revenue can be measured reliably;
| | -- | -----------------------------------------------



| | B. | it is probable that the economic benefits associated with the transaction will flow to the entity;
| | -- | --------------------------------------------------------------------------------------------------



| | C. | the stage of completion of the transaction at the end of the reporting period can be measured reliably;
| | -- | -------------------------------------------------------------------------------------------------------



| | D. | the costs incurred for the transaction and the cost to complete the transaction can be measured reliably.
| | -- | ---------------------------------------------------------------------------------------------------------

Services provided by the Group include wafer bumping, wafer sort, IC packaging and final testing. Actual services and fees of the Group may
vary by customers and are pre-agreed before provision of services. The Group regards each of the captioned services as a separate stage. Fees for each stage of services are negotiated independently and the fee
for a specific stage is the then market price for that stage. Revenue is recognized when each stage of services has been completed. Each stage is performed as a whole and may not be separated or proportioned. The sales discount allowance is
estimated by historical experiences and recorded as a deduction to the revenue.



|(25) | Lease
|---- | -----

Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under operating leases (net of incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.



|5. | Critical Accounting Estimates and Judgments
|-- | -------------------------------------------

The Group makes estimates and assumptions
concerning the future. The resulting accounting estimates may differ from the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are addressed below.



| | (1) | Pension Benefits
| | --- | ----------------

The present value of the pension obligations is determined on an
actuarial basis. When calculating the present value of defined pension obligations, the Company must apply judgments and estimates to determine a number of actuarial assumptions, including discount rate and future salary growth rate. Any changes in
these assumptions could significantly impact the carrying amount of defined pension obligations. For relevant sensitivity analysis, please refer to Note 19.



F-19



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (2) | Fair Value of Derivatives and Other Financial Instruments
| | --- | ---------------------------------------------------------

The fair value of derivatives
and other financial instruments that are not traded in active market is determined by using valuation techniques. The Group applies professional judgment to select a variety of methods and make assumptions that are mainly based on market conditions
existing at the end of each reporting period. For valuing these derivatives and other financial instruments, the Group maximizes the use of observable market data where it is available and rely as little as possible on entity specific estimates. For
sensitivity analyses, please refer to Note 37C(4).



| | (3) | Impairment of available-for-sale equity investments
| | --- | ---------------------------------------------------

The Company follows the guidance of IAS 39 to determine when an
available-for-sale equity investment is impaired. This determination requires significant judgment. In making this judgment, the Company evaluates, among other factors,
the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and short-term business outlook for the investee. If the declines in fair value below cost were considered significant or prolonged,
the Company would transfer the accumulated fair value adjustments recognized in equity on the impaired available-for-sale financial assets to the statement of
comprehensive income. Please refer to Note 10.



|6. | Cash and Cash Equivalents
|-- | -------------------------



|                                       |  |                    |            |  |      |  |            | 
|-------------------------------------- |  | ------------------ | ---------- |  | ---- |  | ---------- | 
|                                       |  | As of December 31, |           
|                                       |  | 2015               |            |  | 2016 | 
|                                       |  | NT$                |            |  | NT$  | 
|Cash on hand and petty cash            |  |                    | 1,008      |  |      |  | 1,072      | 
|Cash equivalents                       |  |                    | 4,145      |  |      |  |           | 
|Savings accounts and checking accounts |  |                    | 3,825,387  |  |      |  | 3,876,568  | 
|Time deposits                          |  |                    | 21,360,834 |  |      |  | 20,598,630 | 
|                                       |  |                    |            |  |      |  |            | 
|                                       |  |                    | 25,191,374 |  |      |  | 24,476,270 | 
|                                       |  |                    |            |  |      |  |            | 



|7. | Accounts Receivable, Net
|-- | ------------------------



|                                    |  |                    |            |   |      |  |            |  
|----------------------------------- |  | ------------------ | ---------- | - | ---- |  | ---------- | -
|                                    |  | As of December 31, |           
|                                    |  | 2015               |            |   | 2016 | 
|                                    |  | NT$                |            |   | NT$  | 
|Accounts receivable                 |  |                    | 15,841,479 |   |      |  | 17,359,584 |  
|Less: Allowance for sales discounts |  |                    | (14,056    | ) |      |  | (3,006     | )
|Allowance for doubtful accounts     |  |                    | (1,695     | ) |      |  | (1,695     | )
|                                    |  |                    |            |   |      |  |            |  
|                                    |  |                    | 15,825,728 |   |      |  | 17,354,883 |  
|                                    |  |                    |            |   |      |  |            |  

The Group assessed the carrying value of receivables mentioned above are highly likely to be recovered;
therefore the credit risk is low. Please refer to Note 35 B for relevant analysis.

Movements on the Groups allowance for doubtful
accounts are as follows:



|                                     |  |                                  |       |  |      |  |       | 
|------------------------------------ |  | -------------------------------- | ----- |  | ---- |  | ----- | 
|                                     |  | For the years ended December 31, |      
|                                     |  | 2015                             |       |  | 2016 | 
|                                     |  | NT$                              |       |  | NT$  | 
|Balance at January 1 and December 31 |  |                                  | 1,695 |  |      |  | 1,695 | 
|                                     |  |                                  |       |  |      |  |       | 



F-20



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|8. | Inventories
|-- | -----------



|                           |  |                    |           |  |      |  |           | 
|-------------------------- |  | ------------------ | --------- |  | ---- |  | --------- | 
|                           |  | As of December 31, |          
|                           |  | 2015               |           |  | 2016 | 
|                           |  | NT$                |           |  | NT$  | 
|Raw materials and supplies |  |                    | 3,914,377 |  |      |  | 5,885,054 | 
|Work in process            |  |                    | 587,942   |  |      |  | 613,778   | 
|                           |  |                    |           |  |      |  |           | 
|                           |  |                    | 4,502,319 |  |      |  | 6,498,832 | 
|                           |  |                    |           |  |      |  |           | 

Amounts recognized in profit or loss are as follows:



|                                                 |  |                                  |            |   |      |  |            |      |  |  |            |  
|------------------------------------------------ |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                                                 |  | For the years ended December 31, |           
|                                                 |  | 2014                             |            |   | 2015 |  |            | 2016 | 
|                                                 |  | NT$                              |            |   | NT$  |  |            | NT$  | 
|Expense / loss incurred related to inventories : |  |                                  |            |   |      |  |            |      |  |  |            |  
|Cost of goods sold                               |  |                                  | 62,070,282 |   |      |  | 61,196,890 |      |  |  | 65,744,357 |  
|Decline in market value and loss on obsolescence |  |                                  | 31,258     |   |      |  | 20,320     |      |  |  | 54,853     |  
|Others                                           |  |                                  | ( 20,275   | ) |      |  | 13,412     |      |  |  | (37,019    | )
|                                                 |  |                                  |            |   |      |  |            |      |  |  |            |  
|                                                 |  |                                  | 62,081,265 |   |      |  | 61,230,622 |      |  |  | 65,762,191 |  
|                                                 |  |                                  |            |   |      |  |            |      |  |  |            |  



|9. | Non-current Assets Held for Sales
|-- | ---------------------------------



|                    |  |                    |   |  |      |  |         | 
|------------------- |  | ------------------ | - |  | ---- |  | ------- | 
|                    |  | As of December 31, |  
|                    |  | 2015               |   |  | 2016 | 
|                    |  | NT$                |   |  | NT$  | 
|Plant held for sale |  |                    |  |  |      |  | 387,503 | 
|                    |  |                    |   |  |      |  |         | 

On November 3, 2016, the Board of Directors of the Company resolved to sale the plant and its affiliated
equipment of Hsinchu facility phase II (No.15/17, Park Ave. 2, Science-Based Industrial Park, Hsinchu). On December 16, 2016, the Company entered into an agreement to sell the plant to a non-related
party. As of December 31, 2016, the Company has not transferred the title of the plant.



|10. | Available-for-sale Financial Assets
|--- | -----------------------------------



|                   |  |                    |           |  |      |  |           | 
|------------------ |  | ------------------ | --------- |  | ---- |  | --------- | 
|                   |  | As of December 31, |          
|                   |  | 2015               |           |  | 2016 | 
|Current Item:      |  | NT$                |           |  | NT$  | 
|Common Stock       |  |                    | 1,067,204 |  |      |  |          | 
|Fund               |  |                    |          |  |      |  | 178,176   | 
|                   |  |                    |           |  |      |  |           | 
|                   |  |                    | 1,067,204 |  |      |  | 178,176   | 
|                   |  |                    |           |  |      |  |           | 
|Non-current Items: |  |                    |           |  |      |  |           | 
|Common Stock       |  |                    | 5,336,887 |  |      |  | 3,087,019 | 
|Depositary Shares  |  |                    |          |  |      |  | 528,639   | 
|Fund               |  |                    | 189,525   |  |      |  |          | 
|                   |  |                    |           |  |      |  |           | 
|                   |  |                    | 5,526,412 |  |      |  | 3,615,658 | 
|                   |  |                    |           |  |      |  |           | 



| | A. | The Company disposed 1,225 thousand shares of available-for-sale financial assets and recognized gains on disposal of $639,103 for the
year ended December 31, 2014.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-21



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | In 2015, the stock price of domestic listed stocks declined significantly below its cost. The company recognized impairment loss of $1,856,442 as a result of the decline in stock price. These impaired equity securities
were subsequently sold in February 2016 and recognized gains on disposal of $10,256. Accordingly, they were classified from non-current to current assets as of December 31, 2015. The foreign fund matured
in one year was classified from non-current to current assets in the second quarter of 2016. The Company disposed common stock of
available-for-sale financial assets and recognized gains on disposal of $206,943 in the third quarter of 2016.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | On October 20, 2016, the Board of Directors of ChipMOS Technologies Inc., have approved that October 31, 2016 is the merger date, with ChipMOS Technologies Inc., be the surviving company. Under the agreement,
Shareholders of ChipMOS Technologies (Bermuda) Ltd., will receive US$3.71 dollars in cash and 0.9355 share of American Depository Shares (ADS) in exchange for each share in ChipMOS Technologies (Bermuda) Ltd. Each ADS will represent 20
new common shares to be issued by ChipMOS Technologies Inc. The Company regarded the merger as a business reorganization in substance and recognized only the premium from the merger of $51,923 as other income.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11. Investments Accounted for Using the Equity Method



|                                                  |  |                |  |                   |  |                   |                         |  |                  |        |                  |       
|------------------------------------------------- |  | -------------- |  | ----------------- |  | ----------------- | ----------------------- |  | ---------------- | ------ | ---------------- | ------
|                                                  |  |                |  | Carrying Amount   |  |                   | % of ownership interest
|Associates                                        |  | Registration   |  | December 31, 2015 |  | December 31, 2016 |                         |  | December 31,2015 |        | December 31,2016
|                                                  |  |                |  | NT$               |  |                   | NT$                     |  |                  |        |                  |       
|Individually immaterial:                          |  |                |  |                   |  |                   |                         |  |                  |        |                  |       
|Yann Yuan Investment Co., Ltd                     |  | Taiwan, R.O.C. |  | 2,399,910         |  |                   | 2,383,512               |  |                  | 33.33% |                  | 33.33%
|ASM Advanced Packaging Materials Pte. Ltd. (AAPM) |  | Singapore      |  | 122,748           |  |                   | 18,019                  |  |                  | 39.00% |                  | 39.00%
|                                                  |  |                |  |                   |  |                   |                         |  |                  |        |                  |       
|                                                  |  |                |  | 2,522,658         |  |                   | 2,401,531               |  |                  |        |                  |       
|                                                  |  |                |  |                   |  |                   |                         |  |                  |        |                  |       



| | A. | The Company acquired common shares of AcSiP Technology Corp. (AcSiP) to upgrade assembly related technology. In December 2015, the Company disposed all of its shareholdings in AcSip and recognized a disposal gain of
$1,059.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | In December 2015, Siliconware Investment Co., Ltd. (which is the Companys subsidiary) invested in Yann Yuan Investment Co., Ltd with cash of $2,400,000.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | In order to develop new generation substrates and increase substrate supply sources, the Company acquired the shares in Interconnect, as of September 30, 2015, the carrying amount of investment in Interconnect was
$0 and unrecognized share of loss was $133,583 due to the sustained losses of Interconnect. In October 2015, Interconnect sold major assets and liabilities to a newly established company, AAPM, in exchange for cash and 39% interests in AAPM.
Concurrently, another third party shareholder contributed cash to acquire 61% interests in AAPM. As a result, the Company evaluated the recoverable amounts of investment in Interconnect using the fair value less cost of disposal model, and reversed
the previous impairment charges in other gains and losses amounted to $134,992 (Note 26). The recoverable amount was determined by referencing to AAPMs per share price issued to the third party shareholder, therefore, it is
considered a Level 2 non-recurring fair value measurement. The Company also recognized previously unrecognized share of loss in Interconnect amounted to $133,583. Interconnect subsequently reduced its
capital in December 2015. The 39% interests in AAPM were distributed to the Company as capital return. Accordingly, the Company derecognized the investment in Interconnect and recognized a disposal gain of $139,567.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Set out below are the aggregate carrying value and aggregate amount of the Companys share of operating results of individually immaterial associates.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



F-22



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                  |  |                                  |          |   |      |  |          |      |  |  |          |  
|--------------------------------- |  | -------------------------------- | -------- | - | ---- |  | -------- | ---- |  |  | -------- | -
|                                  |  | For the years ended December 31, |         
|                                  |  | 2014 (Note)                      |          |   | 2015 |  |          | 2016 | 
|                                  |  | NT$                              |          |   | NT$  |  |          | NT$  | 
|Net (Loss) Income                 |  |                                  | (171,591 | ) |      |  | (183,708 | )    |  |  | 3,221    |  
|Other Comprehensive Income (Loss) |  |                                  | 12,121   |   |      |  | 1,304    |      |  |  | (112,797 | )
|                                  |  |                                  |          |   |      |  |          |      |  |  |          |  
|Total Comprehensive Loss          |  |                                  | (159,470 | ) |      |  | (182,404 | )    |  |  | (109,576 | )
|                                  |  |                                  |          |   |      |  |          |      |  |  |          |  

Note: Since Interconnect has been reclassified from Joint Venture to Associate,
related financial information for the fiscal year 2014 is disclosed in Investments in Associates.



| | E. | Yann Yuan Investment Co., Ltd held 0 and 45,900 thousands shares of SPILs common stock as of December 31, 2015 and 2016, respectively.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------

12. Financial Instruments by Category



|                                                                                              |  |                    |            |  |      |  |            | 
|--------------------------------------------------------------------------------------------- |  | ------------------ | ---------- |  | ---- |  | ---------- | 
|                                                                                              |  | As of December 31, |           
|                                                                                              |  | 2015               |            |  | 2016 | 
|                                                                                              |  | NT$                |            |  | NT$  | 
|Financial Assets                                                                              |  |                    |            |  |      |  |            | 
|Loans and receivables                                                                         |  |                    |            |  |      |  |            | 
|Cash and cash equivalents                                                                     |  |                    | 25,191,374 |  |      |  | 24,476,270 | 
|Notes receivable                                                                              |  |                    | 11,403     |  |      |  | 23,591     | 
|Accounts receivable                                                                           |  |                    | 15,825,728 |  |      |  | 17,354,883 | 
|Other receivables                                                                             |  |                    | 473,431    |  |      |  | 581,630    | 
|Time deposit pledged as collateral (shown as other current assets-other)                      |  |                    | 384,400    |  |      |  | 357,400    | 
|Refundable deposit (shown as other non-current
assets-other)                                  |  |                    | 185,834    |  |      |  | 501,924    | 
|Available-for-sale
financial assets, current                                                  |  |                    | 1,067,204  |  |      |  | 178,176    | 
|Available-for-sale
financial assets, non-current                                              |  |                    | 5,526,412  |  |      |  | 3,615,658  | 
|                                                                                              |  |                    |            |  |      |  |            | 
|                                                                                              |  |                    | 48,665,786 |  |      |  | 47,089,532 | 
|                                                                                              |  |                    |            |  |      |  |            | 
|Financial Liabilities                                                                         |  |                    |            |  |      |  |            | 
|Financial liabilities at amortised cost                                                       |  |                    |            |  |      |  |            | 
|Short-term loans                                                                              |  |                    | 2,790,125  |  |      |  | 2,741,250  | 
|Accounts payable                                                                              |  |                    | 6,942,527  |  |      |  | 8,194,647  | 
|Other payables                                                                                |  |                    | 11,512,740 |  |      |  | 11,896,517 | 
|Receipts under custody (shown as other current liabilities-other)                             |  |                    | 94,442     |  |      |  | 76,231     | 
|Deposit received (shown as other current liabilities-other and other non-current liabilities) |  |                    | 130,180    |  |      |  | 38,907     | 
|Convertible bonds (including the current portion)                                             |  |                    | 12,627,311 |  |      |  | 12,712,651 | 
|Long-term loans (including the current portion)                                               |  |                    | 13,849,164 |  |      |  | 18,340,747 | 
|Long-term payable (shown as other non-current
liabilities)                                    |  |                    | 177,525    |  |      |  | 63,215     | 
|Financial liability at fair value through profit or loss                                      |  |                    | 1,798,920  |  |      |  | 773,908    | 
|                                                                                              |  |                    |            |  |      |  |            | 
|                                                                                              |  |                    | 49,922,934 |  |      |  | 54,838,073 | 
|                                                                                              |  |                    |            |  |      |  |            | 



F-23



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|13. | Property, Plant and Equipment
|--- | -----------------------------



| | A. | Carrying amount by category:
| | -- | ----------------------------



|                                                               |  |                    |            |  |      |  |            | 
|-------------------------------------------------------------- |  | ------------------ | ---------- |  | ---- |  | ---------- | 
|                                                               |  | As of December 31, |           
|                                                               |  | 2015               |            |  | 2016 | 
|                                                               |  | NT$                |            |  | NT$  | 
|Land                                                           |  |                    | 2,903,192  |  |      |  | 2,903,192  | 
|Buildings                                                      |  |                    | 19,663,930 |  |      |  | 19,939,679 | 
|Machinery and equipment                                        |  |                    | 33,130,757 |  |      |  | 32,145,342 | 
|Other equipment                                                |  |                    | 4,498,187  |  |      |  | 4,674,862  | 
|Construction in progress and equipment awaiting for inspection |  |                    | 4,109,542  |  |      |  | 5,717,334  | 
|                                                               |  |                    |            |  |      |  |            | 
|                                                               |  |                    | 64,305,608 |  |      |  | 65,380,409 | 
|                                                               |  |                    |            |  |      |  |            | 



| | B. | Movement from period beginning to period end
| | -- | --------------------------------------------



| | (a) | From January 1, 2014 to December 31, 2014
| | --- | -----------------------------------------



|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |         |  |  |  |             | 
|-------------------------------------------------------------- |  | ------------------- | ----------- |  | --------- |  | ---------- | --------- |  |  | ---------- | - |  | ------------------------ | ---------- | - | --------------------- |  | ------- |  |  |  | ----------- | 
|i. Cost                                                        |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       | 
|                                                               |  | Balance atJanuary 1 |             |  | Additions |  |            | Disposals |  |  | Transfers  |   |  | Exchangedifferences, net |            |   | Balance atDecember 31 | 
|                                                               |  | NT$                 |             |  | NT$       |  |            | NT$       |  |  | NT$        |   |  | NT$                      |            |   | NT$                   | 
|Land                                                           |  |                     | 2,903,192   |  |           |  |           |           |  |  |           |   |  |                          |           |   |                       |  |        |  |  |  | 2,903,192   | 
|Buildings                                                      |  |                     | 21,020,767  |  |           |  | 329,570    |           |  |  | (330       | ) |  |                          | 1,308,922  |   |                       |  | 130,423 |  |  |  | 22,789,352  | 
|Machinery and equipment                                        |  |                     | 68,744,533  |  |           |  | 8,966,134  |           |  |  | (7,902,085 | ) |  |                          | 1,582,215  |   |                       |  | 531,809 |  |  |  | 71,922,606  | 
|Other equipment                                                |  |                     | 6,876,500   |  |           |  | 813,781    |           |  |  | (581,141   | ) |  |                          | 451,234    |   |                       |  | 69,499  |  |  |  | 7,629,873   | 
|Construction in progress and equipment awaiting for inspection |  |                     | 3,583,051   |  |           |  | 9,760,058  |           |  |  | (1,342     | ) |  |                          | (3,357,944 | ) |                       |  | 34,822  |  |  |  | 10,018,645  | 
|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |         |  |  |  |             | 
|                                                               |  |                     | 103,128,043 |  |           |  | 19,869,543 |           |  |  | (8,484,898 | ) |  |                          | (15,573    | ) |                       |  | 766,553 |  |  |  | 115,263,668 | 
|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |         |  |  |  |             | 

Pursuant to future operating expansion, the Group issued non-interest
bearing notes payables to acquire a factory building from ProMos Technologies Inc. at a price of $6,400,000 in August 2014. The factory building is located at Taiwan Central Science Park, No. 19, Keya Road, Daya District, Taichung City, Taiwan.
As of December 31, 2014, the facility building and related equipment were classified under Construction in progress and equipment awaiting for inspection, and the remaining notes payables are $735,000, which are due in January 2015.



|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                         |  |        |                       |  |  |         |  |  |  |            | 
|------------------------------------------- |  | ------------------- | ---------- |  | ------------------- |  | ---------- | ---------------- |  |  | --------- |  |  | --------- | ---------- | - | ----------------------- |  | ------ | --------------------- |  |  | ------- |  |  |  | ---------- | 
|ii. Accumulated depreciation and impairment |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                         |  |       
|                                            |  | Balance atJanuary 1 |            |  | Depreciationexpense |  |            | Impairmentlosses |  |  | Disposals |  |  | Transfers |            |   | Exchangedifferences,net |  |        | Balance atDecember 31 | 
|                                            |  | NT$                 |            |  | NT$                 |  |            | NT$              |  |  | NT$       |  |  | NT$       |            |   | NT$                     |  |        | NT$                   | 
|Buildings                                   |  |                     | 8,209,595  |  |                     |  | 1,398,880  |                  |  |  |          |  |  |           | (331       | ) |                         |  | (758   | )                     |  |  | 29,286  |  |  |  | 9,636,672  | 
|Machinery and equipment                     |  |                     | 36,244,935 |  |                     |  | 9,504,967  |                  |  |  | 56,349    |  |  |           | (7,894,369 | ) |                         |  | 9,873  |                       |  |  | 311,548 |  |  |  | 38,233,303 | 
|Other equipment                             |  |                     | 3,476,762  |  |                     |  | 936,493    |                  |  |  | 7,373     |  |  |           | (579,130   | ) |                         |  | (9,115 | )                     |  |  | 40,639  |  |  |  | 3,873,022  | 
|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                         |  |        |                       |  |  |         |  |  |  |            | 
|                                            |  |                     | 47,931,292 |  |                     |  | 11,840,340 |                  |  |  | 63,722    |  |  |           | (8,473,830 | ) |                         |  |       |                       |  |  | 381,473 |  |  |  | 51,742,997 | 
|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                         |  |        |                       |  |  |         |  |  |  |            | 



F-24



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (b) | From January 1, 2015 to December 31, 2015
| | --- | -----------------------------------------



|                                                               |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            
|-------------------------------------------------------------- |  | ------------------- | ---------- | ---------- | ------------------- |  | ----------- | ---------------- |  | ---------- | - |  | ----------- | ---------- | - | ------------------------ | --------- | -------- | ---------------------- |  | ---------- | - |  | -----------
|i. Cost                                                        |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            
|                                                               |  |                     |            |            | Balance atJanuary 1 |  |             | Additions        |  | Disposals  |   |  | Transfers   |            |   | Exchangedifferences, net |           |          | Balance atDecember 31 
|                                                               |  |                     |            |            | NT$                 |  |             | NT$              |  | NT$        |   |  | NT$         |            |   | NT$                      |           |          | NT$                   
|Land                                                           |  |                     |            |            |                     |  | 2,903,192   |                  |  |           |   |  |            |            |   |                          |          |          |                        |  |           |   |  | 2,903,192  
|Buildings                                                      |  |                     |            |            |                     |  | 22,789,352  |                  |  | 1,423,338  |   |  |            |            |   |                          | 6,798,051 |          |                        |  | (57,827    | ) |  | 30,952,914 
|Machinery and equipment                                        |  |                     |            | 71,922,606 |                     |  | 7,675,210   |                  |  | (7,055,018 | ) |  |             | 2,074,177  |   |                          |           | (232,752 | )                      |  | 74,384,223
|Other equipment                                                |  |                     |            |            |                     |  | 7,629,873   |                  |  | 1,192,144  |   |  | (629,015    | )          |   |                          | 737,087   |          |                        |  | (29,765    | ) |  | 8,900,324  
|Construction in progress and equipment awaiting for inspection |  |                     |            | 10,018,645 |                     |  | 3,719,296   |                  |  |           |   |  |             | (9,609,315 | ) |                          |           | (19,084  | )                      |  | 4,109,542 
|                                                               |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            
|                                                               |  |                     |            |            |                     |  | 115,263,668 |                  |  | 14,009,988 |   |  | (7,684,033  | )          |   |                          |          |          |                        |  | (339,428   | ) |  | 121,250,195
|                                                               |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            
|                                                               |  |                     |            |            |                    
|ii. Accumulated depreciation and impairment                    |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |          
|                                                               |  | Balance atJanuary 1 |            |            | Depreciationexpense |  |             | Impairmentlosses |  | Disposals  |   |  | Transfers   |            |   | Exchangedifferences, net |           |          | Balance at
December 31
|                                                               |  | NT$                 |            |            | NT$                 |  |             | NT$              |  | NT$        |   |  | NT$         |            |   | NT$                      |           |          | NT$                   
|Buildings                                                      |  |                     | 9,636,672  |            |                     |  | 1,665,873   |                  |  |           |   |  |            |            |   |                          |          |          |                        |  | (13,561    | ) |  | 11,288,984 
|Machinery and equipment                                        |  |                     | 38,233,303 |            |                     |  | 10,086,128  |                  |  | 46,198     |   |  | (6,977,590) |            |   |                          | 966       |          |                        |  | (135,539   | ) |  | 41,253,466 
|Other equipment                                                |  |                     | 3,873,022  |            |                     |  | 1,151,771   |                  |  | 18,798     |   |  | (623,394    | )          |   |                          | (966      | )        |                        |  | (17,094    | ) |  | 4,402,137  
|                                                               |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            
|                                                               |  |                     | 51,742,997 |            |                     |  | 12,903,772  |                  |  | 64,996     |   |  | (7,600,984  | )          |   |                          |          |          |                        |  | (166,194   | ) |  | 56,944,587 
|                                                               |  |                     |            |            |                     |  |             |                  |  |            |   |  |             |            |   |                          |           |          |                        |  |            |   |  |            



| | (c) | From January 1, 2016 to December 31, 2016
| | --- | -----------------------------------------



|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |            |   |  |  |             | 
|-------------------------------------------------------------- |  | ------------------- | ----------- |  | --------- |  | ---------- | --------- |  |  | ---------- | - |  | ------------------------ | ---------- | - | --------------------- |  | ---------- | - |  |  | ----------- | 
|i. Cost                                                        |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |            |   |  |  |             | 
|                                                               |  | Balance atJanuary 1 |             |  | Additions |  |            | Disposals |  |  | Transfers  |   |  | Exchangedifferences, net |            |   | Balance atDecember 31 | 
|                                                               |  | NT$                 |             |  | NT$       |  |            | NT$       |  |  | NT$        |   |  | NT$                      |            |   | NT$                   | 
|Land                                                           |  |                     | 2,903,192   |  |           |  |           |           |  |  |           |   |  |                          |           |   |                       |  |           |   |  |  | 2,903,192   | 
|Buildings                                                      |  |                     | 30,952,914  |  |           |  | 1,445,512  |           |  |  | (83,778    | ) |  |                          | 428,540    |   |                       |  | (220,178   | ) |  |  | 32,523,010  | 
|Machinery and equipment                                        |  |                     | 74,384,223  |  |           |  | 7,815,011  |           |  |  | (7,204,489 | ) |  |                          | 1,542,650  |   |                       |  | (962,141   | ) |  |  | 75,575,254  | 
|Other equipment                                                |  |                     | 8,900,324   |  |           |  | 1,283,475  |           |  |  | (713,787   | ) |  |                          | 342,751    |   |                       |  | (120,433   | ) |  |  | 9,692,330   | 
|Construction in progress and equipment awaiting for inspection |  |                     | 4,109,542   |  |           |  | 4,703,546  |           |  |  | (420       | ) |  |                          | (2,984,597 | ) |                       |  | (110,737   | ) |  |  | 5,717,334   | 
|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |            |   |  |  |             | 
|                                                               |  |                     | 121,250,195 |  |           |  | 15,247,544 |           |  |  | (8,002,474 | ) |  |                          | (670,656   | ) |                       |  | (1,413,489 | ) |  |  | 126,411,120 | 
|                                                               |  |                     |             |  |           |  |            |           |  |  |            |   |  |                          |            |   |                       |  |            |   |  |  |             | 



|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                          |  |          |                       |  |  |          |   |  |  |            | 
|------------------------------------------- |  | ------------------- | ---------- |  | ------------------- |  | ---------- | ---------------- |  |  | --------- |  |  | --------- | ---------- | - | ------------------------ |  | -------- | --------------------- |  |  | -------- | - |  |  | ---------- | 
|ii. Accumulated depreciation and impairment |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                          |  |         
|                                            |  | Balance atJanuary 1 |            |  | Depreciationexpense |  |            | Impairmentlosses |  |  | Disposals |  |  | Transfers |            |   | Exchangedifferences, net |  |          | Balance atDecember 31 | 
|                                            |  | NT$                 |            |  | NT$                 |  |            | NT$              |  |  | NT$       |  |  | NT$       |            |   | NT$                      |  |          | NT$                   | 
|Buildings                                   |  |                     | 11,288,984 |  |                     |  | 1,715,407  |                  |  |  |          |  |  |           | (83,778    | ) |                          |  | (278,570 | )                     |  |  | (58,712  | ) |  |  | 12,583,331 | 
|Machinery and equipment                     |  |                     | 41,253,466 |  |                     |  | 9,849,149  |                  |  |  | 72,655    |  |  |           | (7,155,398 | ) |                          |  | 3,407    |                       |  |  | (593,367 | ) |  |  | 43,429,912 | 
|Other equipment                             |  |                     | 4,402,137  |  |                     |  | 1,341,274  |                  |  |  | 18,592    |  |  |           | (663,349   | ) |                          |  | (9,450   | )                     |  |  | (71,736  | ) |  |  | 5,017,468  | 
|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                          |  |          |                       |  |  |          |   |  |  |            | 
|                                            |  |                     | 56,944,587 |  |                     |  | 12,905,830 |                  |  |  | 91,247    |  |  |           | (7,902,525 | ) |                          |  | (284,613 | )                     |  |  | (723,815 | ) |  |  | 61,030,711 | 
|                                            |  |                     |            |  |                     |  |            |                  |  |  |           |  |  |           |            |   |                          |  |          |                       |  |  |          |   |  |  |            | 



| | C. | There is no interest capitalized for the years ended December 31, 2014, 2015 and 2016.
| | -- | --------------------------------------------------------------------------------------



| | D. | For idle equipment, the Group adopted fair value less cost of disposal method to measure their recoverable amount and recognized impairment loss of $63,722, $64,996 and $91,247 for the years ended December 31,
2014, 2015 and 2016, respectively. The recoverable amount of major impaired property, plant and equipment is determined based on the recent quoted prices of assets with similar age and obsolescence that provided by the vendors in secondary market.
The recent quoted prices of assets are a level 2 input in terms of IFRS 13 because the secondary market is not very active.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | The Company reclassified the plant held for sale as non-current assets held for sale with cost of $670,656 and accumulated depreciation of $284,613.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------



F-25



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|14. | Intangible Assets
|--- | -----------------



| | A. | Carrying amount by category:
| | -- | ----------------------------



|            |  |                    |         |  |      |  |         | 
|----------- |  | ------------------ | ------- |  | ---- |  | ------- | 
|            |  | As of December 31, |        
|            |  | 2015               |         |  | 2016 | 
|            |  | NT$                |         |  | NT$  | 
|License Fee |  |                    | 53,569  |  |      |  | 31,460  | 
|Software    |  |                    | 139,205 |  |      |  | 144,402 | 
|            |  |                    |         |  |      |  |         | 
|            |  |                    | 192,774 |  |      |  | 175,862 | 
|            |  |                    |         |  |      |  |         | 



| | B. | Movement from period beginning to period end
| | -- | --------------------------------------------



| | (a) | From January 1, 2014 to December 31, 2014
| | --- | -----------------------------------------



|                             |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|---------------------------- |  | -------------------- | ------- |  | --------- | ------- | --------- |  | -------- | ------------------------ |  | --------------------- |  | -------
|i. Cost                      |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|Item                         |  | Balance at January 1 |         |  | Additions |         | Disposals |  |          | Exchangedifferences, net |  | Balance atDecember 31
|                             |  | NT$                  |         |  | NT$       |         | NT$       |  |          | NT$                      |  | NT$                  
|License Fee                  |  |                      | 582,504 |  |           | 32,177  |           |  | (6,543   | )                        |  |                      |  | 608,138
|Software                     |  |                      | 235,713 |  |           | 33,625  |           |  | (95,368  | )                        |  | 888                   |  | 174,858
|                             |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|                             |  |                      | 818,217 |  |           | 65,802  |           |  | (101,911 | )                        |  | 888                   |  | 782,996
|                             |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|                             |  |                      |         |  |          
|ii. Accumulated amortization |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|Item                         |  | Balance at January 1 |         |  | Additions |         | Disposals |  |          | Exchangedifferences, net |  | Balance atDecember 31
|                             |  | NT$                  |         |  | NT$       |         | NT$       |  |          | NT$                      |  | NT$                  
|License Fee                  |  |                      | 325,384 |  |           | 115,035 |           |  | (6,543   | )                        |  |                      |  | 433,876
|Software                     |  |                      | 137,520 |  |           | 57,506  |           |  | (95,368  | )                        |  | 292                   |  | 99,950 
|                             |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        
|                             |  |                      | 462,904 |  |           | 172,541 |           |  | (101,911 | )                        |  | 292                   |  | 533,826
|                             |  |                      |         |  |           |         |           |  |          |                          |  |                       |  |        



| | (b) | From January 1, 2015 to December 31, 2015
| | --- | -----------------------------------------



|                             |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        
|---------------------------- |  | ------------------- | ------- |  | --------- | ------- | --------- |  | -------- | ------------------------- |  |  | --------------------- | - |  | -------
|i. Cost                      |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        
|Item                         |  | Balance atJanuary 1 |         |  | Additions |         | Disposals |  |          | Exchange differences, net |  |  | Balance atDecember 31
|                             |  | NT$                 |         |  | NT$       |         | NT$       |  |          | NT$                       |  |  | NT$                  
|License Fee                  |  |                     | 608,138 |  |           |        |           |  | (495,890 | )                         |  |  |                      |   |  | 112,248
|Software                     |  |                     | 174,858 |  |           | 112,692 |           |  | (84,826  | )                         |  |  | (410                  | ) |  | 202,314
|                             |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        
|                             |  |                     | 782,996 |  |           | 112,692 |           |  | (580,716 | )                         |  |  | (410                  | ) |  | 314,562
|                             |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        
|                             |  |                     |         | 
|ii. Accumulated amortization |  |                     |         |  |           |         |           |  |          |                           |  |  |                      
|Item                         |  | Balance atJanuary 1 |         |  | Additions |         | Disposals |  |          | Exchange differences, net |  |  | Balance atDecember 31
|                             |  | NT$                 |         |  | NT$       |         | NT$       |  |          | NT$                       |  |  | NT$                  
|License Fee                  |  |                     | 433,876 |  |           | 120,693 |           |  | (495,890 | )                         |  |  |                      |   |  | 58,679 
|Software                     |  |                     | 99,950  |  |           | 48,111  |           |  | (84,826  | )                         |  |  | (126                  | ) |  | 63,109 
|                             |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        
|                             |  |                     | 533,826 |  |           | 168,804 |           |  | (580,716 | )                         |  |  | (126                  | ) |  | 121,788
|                             |  |                     |         |  |           |         |           |  |          |                           |  |  |                       |   |  |        



F-26



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (c) | From January 1, 2016 to December 31, 2016
| | --- | -----------------------------------------



|                             |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        
|---------------------------- |  | ------------------- | ------- |  | --------- | ------ | --------- |  | ------- | ------------------------ |  |  | ---------------------- | - |  | -------
|i. Cost                      |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        
|Item                         |  | Balance atJanuary 1 |         |  | Additions |        | Disposals |  |         | Exchangedifferences, net |  |  | Balance at
December 31
|                             |  | NT$                 |         |  | NT$       |        | NT$       |  |         | NT$                      |  |  | NT$                   
|License Fee                  |  |                     | 112,248 |  |           |       |           |  | (4,354  | )                        |  |  |                       |   |  | 107,894
|Software                     |  |                     | 202,314 |  |           | 71,011 |           |  | (32,320 | )                        |  |  | (1,818                 | ) |  | 239,187
|                             |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        
|                             |  |                     | 314,562 |  |           | 71,011 |           |  | (36,674 | )                        |  |  | (1,818                 | ) |  | 347,081
|                             |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        
|                             |  |                     |         | 
|ii. Accumulated amortization |  |                     |         |  |           |        |           |  |         |                          |  |  |                       
|Item                         |  | Balance atJanuary 1 |         |  | Additions |        | Disposals |  |         | Exchangedifferences, net |  |  | Balance at
December 31
|                             |  | NT$                 |         |  | NT$       |        | NT$       |  |         | NT$                      |  |  | NT$                   
|License Fee                  |  |                     | 58,679  |  |           | 22,109 |           |  | (4,354  | )                        |  |  |                       |   |  | 76,434 
|Software                     |  |                     | 63,109  |  |           | 64,616 |           |  | (32,320 | )                        |  |  | (620                   | ) |  | 94,785 
|                             |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        
|                             |  |                     | 121,788 |  |           | 86,725 |           |  | (36,674 | )                        |  |  | (620                   | ) |  | 171,219
|                             |  |                     |         |  |           |        |           |  |         |                          |  |  |                        |   |  |        

For the years ended December 31, 2014, 2015 and 2016, amortizations of $7,441, $14,208 and $24,539 are
included in operating cost, and amortizations of $165,100, $154,596 and $62,186 are included in operating expense in the statement of comprehensive income.



|15. | Financial Liabilities at Fair Value Through Profit or Loss
|--- | ----------------------------------------------------------

As of December 31, 2015
and 2016, the detail of financial liabilities at fair value through profit or loss is as follow:



|                                                                                                           |  |                    |           |  |      |  |         |  
|---------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- |  | ---- |  | ------- | -
|                                                                                                           |  | As of December 31, |          
|                                                                                                           |  | 2015               |           |  | 2016 | 
|                                                                                                           |  | NT$                |           |  | NT$  | 
|Conversion option, redemption option and put option of convertible bonds upon initial
recognition(Note 17) |  |                    | 774,319   |  |      |  | 774,319 |  
|Valuation adjustments                                                                                      |  |                    | 1,024,601 |  |      |  | (411    | )
|                                                                                                           |  |                    |           |  |      |  |         |  
|                                                                                                           |  |                    | 1,798,920 |  |      |  | 773,908 |  
|                                                                                                           |  |                    |           |  |      |  |         |  

For the years ended December 31, 2015 and 2016, the Company recognized net losses of $703,368 and gains of
$1,025,012 on financial liabilities at fair value through profit or loss, respectively.



|16. | Other Payables
|--- | --------------



|                                      |  |                    |            |  |      |  |            | 
|------------------------------------- |  | ------------------ | ---------- |  | ---- |  | ---------- | 
|                                      |  | As of December 31, |           
|                                      |  | 2015               |            |  | 2016 | 
|                                      |  | NT$                |            |  | NT$  | 
|Payables for equipment                |  |                    | 3,576,455  |  |      |  | 3,486,635  | 
|Payables for employees compensations |  |                    | 3,929,214  |  |      |  | 3,880,980  | 
|Others                                |  |                    | 4,007,071  |  |      |  | 4,528,902  | 
|                                      |  |                    |            |  |      |  |            | 
|                                      |  |                    | 11,512,740 |  |      |  | 11,896,517 | 
|                                      |  |                    |            |  |      |  |            | 

Others represent individually insignificant items such as supplies, maintenance charges, professional service
fees and etc., which are presented on an aggregate basis.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|17. | Convertible Bonds
|--- | -----------------

As of December 31, 2015 and 2016, the detail of convertible
bonds is as follow:



|                                     |  |                    |            |   |      |  |             |  
|------------------------------------ |  | ------------------ | ---------- | - | ---- |  | ----------- | -
|                                     |  | As of December 31, |           
|                                     |  | 2015               |            |   | 2016 | 
|                                     |  | NT$                |            |   | NT$  | 
|Unsecured overseas convertible bonds |  |                    | 13,821,965 |   |      |  | 13,580,212  |  
|Less: Discounts on bonds payable     |  |                    | (1,194,654 | ) |      |  | (867,561    | )
|Current portion                      |  |                    |           |   |      |  | (12,712,651 | )
|                                     |  |                    |            |   |      |  |             |  
|                                     |  |                    | 12,627,311 |   |      |  |            |  
|                                     |  |                    |            |   |      |  |             |  

In October 2014, the Company issued the fourth unsecured overseas convertible bonds (the Bonds) in
US$400,000 thousand. The Bonds are zero coupon bonds with a maturity of 5 years, with par value of US$250 thousand or in any integral multiples thereof.

Key terms and conditions of the Bonds are as follows:



| | A. | Each holder of the Bonds has the right to convert at any time starting from the day immediately following 40 days after the issue date to 10 days prior to the maturity date, except during legal lock-up period, into newly issued listed common shares or American Depository shares (ADSs) at the conversion price NT$53.1038 dollars, determined on the basis of a fixed exchange rate of US$1 to
NT$30.392 (in dollar). The conversion price was adjusted to $45.7579 dollars as of December 31, 2016.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Unless previously redeemed, repurchased and cancelled, or converted, the Bonds will be redeemed by the Company on the maturity date at an amount equal to 105.11% of the principals, with repayment made in US dollars.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Each holder shall have the right to request the Company repurchase all or any portion of the principal amount thereof of a holders Bonds (1) at 103.04% of the principal amount on the third anniversary of the
issuance date or (2) at principal amount plus 1% interest compounded semiannually (Early Redemption Amount) in the event of a change in control or delisting.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | The Company may redeem the Bonds in whole or in part, from 3 years after the issuance date, at a price equal to the Early Redemption Amount, provided that the closing price of the Companys common shares on the
Taiwan Stock Exchange, converted into US dollars at the prevailing exchange rate, on 20 trading days within a period of 30 consecutive trading days, is at least 130% of the Early Redemption Amount divided by the conversion ratio. The Company may, in
whole but not in part, redeem all of the Bonds at the Early Redemption Amount in the event that more than 90% of the Bonds have been previously redeemed, converted, or repurchased or cancelled, or in the event of changes in the R.O.C.s tax
rules which result in significant unfavorable tax consequences to the Company.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | The Bonds contained a debt host contract, recognized as convertible bonds, and the Bonds Options were aggregately recognized as financial liabilities at fair value through profit or loss. The effective interest rate of
the debt host contract was 2.407% and the aggregate fair value of the Bonds Options was $774,319 on initial recognition.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|18. | Loans
|--- | -----



| | A. | Short-term Loans
| | -- | ----------------



|               |  |                    |           |  |      |  |           | 
|-------------- |  | ------------------ | --------- |  | ---- |  | --------- | 
|               |  | As of December 31, |          
|               |  | 2015               |           |  | 2016 | 
|               |  | NT$                |           |  | NT$  | 
|Credit loans   |  |                    | 2,790,125 |  |      |  | 2,741,250 | 
|               |  |                    |           |  |      |  |           | 
|Interest rates |  |                    | 1.3130%   |  |      |  | 1.6440%   | 
|               |  |                    |           |  |      |  |           | 



F-28



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | Long-term Loans
| | -- | ---------------



|                                                                                                                                                                 |      |                    |                 |      |     |  |                 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------------------ | --------------- | ---- | --- |  | --------------- | -
|Loan period and repayment method                                                                                                                                 |      | As of December 31, |                
|                                                                                                                                                                 | 2015 |                    |                 | 2016 |    
|                                                                                                                                                                 |      | NT$                |                 |      | NT$ | 
|Syndicated bank loans:                                                                                                                                           |      |                    |                 |      |     |  |                 |  
|2012.08.10-2017.08.10 Including US$116,667 thousand and
US$33,333 thousand respectively. Repayables in 6 semi- annually installments starting from February 2015 |      |                    | 6,006,750       |      |     |  | 2,162,333       |  
|Other bank loans:                                                                                                                                                |      |                    |                 |      |     |  |                 |  
|2013.12.31-2016.12.31 Extendible to 2019.12.30, Repayables when due                                                                                              |      |                    | 1,500,000       |      |     |  | 1,500,000       |  
|2014.08.11-2018.12.13 Repayables in 5 semi-annually installments starting from
December 2016                                                                     |      |                    | 850,000         |      |     |  | 680,000         |  
|2014.08.11-2018.12.10 Repayables in 6 semi-annually installments starting from
June 2016                                                                         |      |                    | 1,500,000       |      |     |  | 1,000,000       |  
|2014.08.11-2019.08.11 Repayables in 6 semi-annually installments starting from
February 2017                                                                     |      |                    | 1,500,000       |      |     |  | 1,500,000       |  
|2015.07.01-2020.07.01 Repayables in 6 semi-annually installments starting from
February 2018                                                                     |      |                    | 1,500,000       |      |     |  | 1,500,000       |  
|2015.11.13-2020.11.13 Repayables in 6 semi-annually installments starting from
June 2018                                                                         |      |                    | 1,000,000       |      |     |  | 1,000,000       |  
|2016.07.19-2021.01.10 Repayables in 6 semi-annually installments starting from
July 2018                                                                         |      |                    |                |      |     |  | 3,000,000       |  
|2016.07.19-2021.07.19 Repayables in 6 semi-annually installments starting from
January 2019                                                                      |      |                    |                |      |     |  | 4,000,000       |  
|2016.12.30-2021.12.30 Repayables in 6 semi-annually installments starting from
June 2019                                                                         |      |                    |                |      |     |  | 2,000,000       |  
|Less:                                                                                                                                                            |      |                    |                 |      |     |  |                 |  
|Arrangement fee of syndicated loans                                                                                                                              |      |                    | (7,586          | )    |     |  | (1,586          | )
|Current portion                                                                                                                                                  |      |                    | (5,991,128      | )    |     |  | (3,500,747      | )
|                                                                                                                                                                 |      |                    |                 |      |     |  |                 |  
|                                                                                                                                                                 |      |                    | 7,858,036       |      |     |  | 14,840,000      |  
|                                                                                                                                                                 |      |                    |                 |      |     |  |                 |  
|Interest rate                                                                                                                                                    |      |                    | 1.2217%-1.6173% |      |     |  | 1.1287%-2.3890% |  
|                                                                                                                                                                 |      |                    |                 |      |     |  |                 |  



|(1) | In order to fulfill the requirements of operational and capital expenditures, the Company entered into syndicated loan agreements with eleven financial institutions, including Mega International Commercial Bank, the
management bank, in August 2012. All long-term loans are with credit periods of five years and are floating interest rate loans.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Pursuant to the loan agreement, the Company should maintain, on a semi-annual and annual basis, certain debt covenants, such as current ratio, liability to tangible net worth ratio as well as the ratio of interest
coverage. For the years ended December 31, 2016, the Company has been in compliance with all the debt covenants.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|19. | Post-employment Benefit
|--- | -----------------------



| | A. | Defined Benefit Plan
| | -- | --------------------

In accordance with the Labor Standards Law, the Company has a
funded defined benefit pension plan covering all eligible employees prior to the enforcement of the Labor Pension Act (the Act), which becomes effective on July 1, 2005, and those employees who choose to stay with the pension
mechanism under the Labor Standards Law after the enforcement of the Act. Pension benefits are generally based on service years and six-month average wages and salaries before retirement of the employee. Two
units are earned per year for the first 15 years of service and one unit is earned for each additional year of service with a maximum of 45 units. Under the funding policy of the plan, the Company contributes monthly an amount equal to 2% of the
employees monthly salaries and wages to the pension fund, which is administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. Also, the Company would assess
the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method, to the labors expected to be qualified for
retirement next year, the Company will make contribution for the deficit by next March.

The Company established pension plans for
executive officers in 2016 and recognized $63,007 net of pension costs for the years ended December 31, 2016. As of December 31, 2016, the net defined benefit obligation of executive officers was $64,929.

The pension plans for executive officers are excluded from the disclosures below.

(1) The amounts arising from the defined benefit obligation recognized on the balance sheets are as follows:



|                                             |  |                    |            |   |      |  |            |  
|-------------------------------------------- |  | ------------------ | ---------- | - | ---- |  | ---------- | -
|                                             |  | As of December 31, |           
|                                             |  | 2015               |            |   | 2016 | 
|                                             |  | NT$                |            |   | NT$  | 
|Present value of defined benefit obligations |  |                    | 2,392,281  |   |      |  | 2,550,824  |  
|Fair value of plan assets                    |  |                    | (1,184,971 | ) |      |  | (1,177,592 | )
|                                             |  |                    |            |   |      |  |            |  
|Net defined benefit liability                |  |                    | 1,207,310  |   |      |  | 1,373,232  |  
|                                             |  |                    |            |   |      |  |            |  



|(2) | Movements in net defined benefit liabilities are as follows:
|--- | ------------------------------------------------------------



| | (a) | For the year ended December 31, 2014
| | --- | ------------------------------------



|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|------------------------- |  | ------------------------------------------ | --------- | - | ------------------------ |  | ---------- | ---------------------------- |  |  | --------- | -
|                          |  | Present value ofdefined benefitobligations |           |   | Fair value ofplan assets |  |            | Net definedbenefit liability | 
|                          |  | NT$                                        |           |   | NT$                      |  |            | NT$                          | 
|Balance at January 1      |  |                                            | 2,188,740 |   |                          |  | (1,204,615 | )                            |  |  | 984,125   |  
|Current service cost      |  |                                            | 23,380    |   |                          |  |           |                              |  |  | 23,380    |  
|Interest expense (income) |  |                                            | 48,940    |   |                          |  | (27,364    | )                            |  |  | 21,576    |  
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|                          |  |                                            | 72,320    |   |                          |  | (27,364    | )                            |  |  | 44,956    |  
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|Remeasurements:           |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|Experience adjustments    |  |                                            | 54,556    |   |                          |  |           |                              |  |  | 54,556    |  
|Return of plan assets     |  |                                            |          |   |                          |  | (645       | )                            |  |  | (645      | )
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|                          |  |                                            | 54,556    |   |                          |  | (645       | )                            |  |  | 53,911    |  
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|Pension fund contribution |  |                                            |          |   |                          |  | (49,253    | )                            |  |  | (49,253   | )
|Paid Pension              |  |                                            | ( 89,681  | ) |                          |  | 89,681     |                              |  |  |          |  
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  
|Balance at December 31    |  |                                            | 2,225,935 |   |                          |  | (1,192,196 | )                            |  |  | 1,033,739 |  
|                          |  |                                            |           |   |                          |  |            |                              |  |  |           |  



F-30



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (b) | For the year ended December 31, 2015
| | --- | ------------------------------------



|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|---------------------------------- |  | ---------------- | --------- | - | ------------- |  | ---------- | ----------------- |  |  | --------- | -
|                                   |  | Present value of |           |   |               |  |            |                   | 
|                                   |  | defined benefit  |           |   | Fair value of |  |            | Net defined       | 
|                                   |  | obligations      |           |   | plan assets   |  |            | benefit liability | 
|                                   |  | NT$              |           |   | NT$           |  |            | NT$               | 
|Balance at January 1               |  |                  | 2,225,935 |   |               |  | (1,192,196 | )                 |  |  | 1,033,739 |  
|Current service cost               |  |                  | 20,475    |   |               |  |           |                   |  |  | 20,475    |  
|Interest expense (income)          |  |                  | 49,670    |   |               |  | (26,976    | )                 |  |  | 22,694    |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|                                   |  |                  | 70,145    |   |               |  | (26,976    | )                 |  |  | 43,169    |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|Remeasurements:                    |  |                  |           |   |               |  |            |                   |  |  |           |  
|Experience adjustments             |  |                  | 10,493    |   |               |  |           |                   |  |  | 10,493    |  
|Changes in demographic assumptions |  |                  | 18,021    |   |               |  |           |                   |  |  | 18,021    |  
|Changes in financial assumptions   |  |                  | 145,514   |   |               |  |           |                   |  |  | 145,514   |  
|Return of plan assets              |  |                  |          |   |               |  | 5,814      |                   |  |  | 5,814     |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|                                   |  |                  | 174,028   |   |               |  | 5,814      |                   |  |  | 179,842   |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|Pension fund contribution          |  |                  |          |   |               |  | (49,440    | )                 |  |  | ( 49,440  | )
|Paid Pension                       |  |                  | ( 77,827  | ) |               |  | 77,827     |                   |  |  |          |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  
|Balance at December 31             |  |                  | 2,392,281 |   |               |  | (1,184,971 | )                 |  |  | 1,207,310 |  
|                                   |  |                  |           |   |               |  |            |                   |  |  |           |  



| | (c) | For the year ended December 31, 2016
| | --- | ------------------------------------



|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|-------------------------------- |  | ---------------- | --------- | - | ------------- |  | ---------- | ----------------- |  |  | --------- | -
|                                 |  | Present value of |           |   |               |  |            |                   | 
|                                 |  | defined benefit  |           |   | Fair value of |  |            | Net defined       | 
|                                 |  | obligations      |           |   | plan assets   |  |            | benefit liability | 
|                                 |  | NT$              |           |   | NT$           |  |            | NT$               | 
|Balance at January 1             |  |                  | 2,392,281 |   |               |  | (1,184,971 | )                 |  |  | 1,207,310 |  
|Current service cost             |  |                  | 19,165    |   |               |  |           |                   |  |  | 19,165    |  
|Interest expense (income)        |  |                  | 41,441    |   |               |  | (20,754    | )                 |  |  | 20,687    |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|                                 |  |                  | 60,606    |   |               |  | (20,754    | )                 |  |  | 39,852    |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|Remeasurements:                  |  |                  |           |   |               |  |            |                   |  |  |           |  
|Experience adjustments           |  |                  | 19,709    |   |               |  |           |                   |  |  | 19,709    |  
|Changes in financial assumptions |  |                  | 149,878   |   |               |  |           |                   |  |  | 149,878   |  
|Return of plan assets            |  |                  |          |   |               |  | 6,297      |                   |  |  | 6,297     |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|                                 |  |                  | 169,587   |   |               |  | 6,297      |                   |  |  | 175,884   |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|Pension fund contribution        |  |                  |          |   |               |  | (49,814    | )                 |  |  | ( 49,814  | )
|Paid Pension                     |  |                  | ( 71,650  | ) |               |  | 71,650     |                   |  |  |          |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  
|Balance at December 31           |  |                  | 2,550,824 |   |               |  | (1,177,592 | )                 |  |  | 1,373,232 |  
|                                 |  |                  |           |   |               |  |            |                   |  |  |           |  



| | (2) | Under the Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the
government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The plan assets are held in a commingled fund which is operated and managed by the governments designated authorities;
as such, the Company does not have any right to intervene in the investments of the Funds. The constitution of fair value of plan assets as of December 31, 2015 and 2016 is as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-31



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|                   |  |                    |           |  |      |  |           | 
|------------------ |  | ------------------ | --------- |  | ---- |  | --------- | 
|                   |  | As of December 31, |          
|                   |  | 2015               |           |  | 2016 | 
|                   |  | NT$                |           |  | NT$  | 
|Cash               |  |                    | 240,312   |  |      |  | 268,962   | 
|Equity instruments |  |                    | 615,237   |  |      |  | 580,435   | 
|Debt instruments   |  |                    | 329,422   |  |      |  | 328,195   | 
|                   |  |                    |           |  |      |  |           | 
|                   |  |                    | 1,184,971 |  |      |  | 1,177,592 | 
|                   |  |                    |           |  |      |  |           | 



| | (4) | Principal actuarial assumptions for the reporting period are as follows:
| | --- | ------------------------------------------------------------------------



|                        |  |                    |      |   |      |  |      |  
|----------------------- |  | ------------------ | ---- | - | ---- |  | ---- | -
|                        |  | As of December 31, |     
|                        |  | 2015               |      |   | 2016 | 
|Discount rate           |  |                    | 1.75 | % |      |  | 1.50 | %
|                        |  |                    |      |   |      |  |      |  
|Future salary increases |  |                    | 2.00 | % |      |  | 2.25 | %
|                        |  |                    |      |   |      |  |      |  



| | (5) | For the years ended December 31, 2015 and 2016, if the aforementioned discount rate and future salary increase rate are 0.5% higher (lower) than managements estimates, the impact on the carrying amounts of
defined benefit obligation is as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                        |  |                                      |          |   |                            |  |          |  
|----------------------- |  | ------------------------------------ | -------- | - | -------------------------- |  | -------- | -
|                        |  | Impact on defined benefit obligation |         
|As of December 31, 2015 |  | 0.5% increase inassumption           |          |   | 0.5% decrease inassumption | 
|                        |  | NT$                                  |          |   | NT$                        | 
|Discount rate           |  |                                      | (145,514 | ) |                            |  | 158,584  |  
|                        |  |                                      |          |   |                            |  |          |  
|Future salary increase  |  |                                      | 157,428  |   |                            |  | (145,896 | )
|                        |  |                                      |          |   |                            |  |          |  
|                        | 
|                        |  | Impact on defined benefit obligation |         
|As of December 31, 2016 |  | 0.5% increase inassumption           |          |   | 0.5% decrease inassumption | 
|                        |  | NT$                                  |          |   | NT$                        | 
|Discount rate           |  |                                      | (150,030 | ) |                            |  | 163,143  |  
|                        |  |                                      |          |   |                            |  |          |  
|Future salary increase  |  |                                      | 161,138  |   |                            |  | (149,723 | )
|                        |  |                                      |          |   |                            |  |          |  

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method has been applied as
when calculating the defined benefit obligation recognized in the balance sheet.



| | (6) | The Company expects to pay $50,935 as contribution to the pension plan in 2017.
| | --- | -------------------------------------------------------------------------------



| | (7) | As of December 31, 2016, the weighted average duration of the defined benefit plan is 12.3 year. Expected maturity analysis of undiscounted defined benefit obligation was as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|              |  |     |           | 
|------------- |  | --- | --------- | 
|              |  | NT$ |          
|Within 1 year |  |     | 59,374    | 
|1- 2 year(s)  |  |     | 66,806    | 
|2-3 years     |  |     | 75,233    | 
|Over 3 years  |  |     | 2,997,358 | 
|              |  |     |           | 
|              |  |     | 3,198,771 | 
|              |  |     |           | 



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | Defined Contribution Plans
| | -- | --------------------------



| | (1) | In accordance with the Labor Pension Act (LPA), effective July 1, 2005, the Company has a defined contribution pension plan covering all regular employees witch R.O.C. nationality. The Company makes
monthly contributions to the employees individual pension accounts on a basis no less than 6% of each employees monthly salary or wage. The principal and accumulated gains or losses from an employees personal pension account may be
claimed on a monthly basis or on lump sum.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | SUI has established a 401(K) pension plan (the Plan) covering substantially all employees. The Plan provides voluntary salary reduction contributions by eligible participants in accordance with Section
401(K) of the U.S. Internal Revenue Code, as well as discretionary matching contributions determined annually by its Board of Directors to employees individual pension accounts.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | In accordance with the regulatory requirements in Suzhou, PRC, Siliconware Technology (Suzhou) Limited contributes monthly an amount equal to certain percentage of employees monthly salaries and wages to the
Bureau of Social Insurance. Other than the monthly contributions, Siliconware Technology (Suzhou) Limited has no further obligations.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The expenses recognized for the Groups defined contribution pension plans are $538,818, $533,905 and $552,706 for the years ended December 31, 2014, 2015 and 2016, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|20. | Capital Stock
|--- | -------------



| | A. | As of December 31, 2015 and 2016, the authorized capital of the Company was $36,000,000 and the paid-in-capital was $31,163,611 with
par value of $10 (in dollars) per share.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Company issued $1,500,000 American Depositary Shares (ADSs), represented by 30,000,000 units of ADSs. Each ADS represents five shares of common stock of the Company with an offering price of US$8.49 (in
dollars) per ADS. As of December 31, 2015 and 2016, the outstanding ADSs amounted to 51,404,643 units and 37,783,392 units, respectively. Major terms and conditions of the ADSs are summarized as follows:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Voting Rights:
| | --- | --------------

ADS holders will have no rights to vote directly in stockholders
meetings with respect to the Deposited Shares. The Depositary shall provide voting instruction to the Chairman of the Company and vote on behalf of the Deposited shares evidenced by ADSs. If the Depositary receives voting instructions from holders
of at least 51% of the outstanding ADSs to vote in the same direction on a resolution, the Depositary will vote in the manner as instructed.



| | (2) | Distribution of Dividends:
| | --- | --------------------------

ADS holders are deemed to have the same rights as holders
of common shares with respect to the distribution of dividends.



|21. | Capital Reserve
|--- | ---------------



| | A. | Pursuant to the Company Law of the R.O.C., the capital reserve arising from paid-in capital in excess of par on the issuance of stocks, from merger, from the conversion of
convertible bonds and from donation shall be exclusively used to cover accumulated deficits or transferred to capital proportionally either in issuing common stock or in returning cash. Other capital reserves shall be exclusively used to cover
accumulated deficits. The amount of capital reserve used to increase capital is limited to 10% of the common stock each year when the Company has no accumulated deficits. The capital reserve can only be used to cover accumulated deficits when the
legal reserve is insufficient to cover the deficits.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-33



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | According to the Company Law of the R.O.C., capital reserve is allowed to be transferred to share capital in the following year after the registration of capitalization is approved by the government authority.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Distribution of capital reserve of $3,116,361 (NT$ 1.0 dollar per share) had been resolved at the stockholders meeting on May 16, 2016 and it was resolved in the board meeting that July 1st of the same year
was the ex-dividend date.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|22. | Retained Earnings
|--- | -----------------



| | A. | According to the Companys Articles of Incorporation, current years earnings before tax, if any, shall be distributed in the following order:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Pay all taxes and duties;
| | --- | -------------------------



| | (2) | Offset prior years operating losses, if any;
| | --- | ---------------------------------------------



| | (3) | Set aside 10% of the remaining amount after deducting (1) and (2) as legal reserve;
| | --- | -----------------------------------------------------------------------------------



| | (4) | Set aside no more than 1% of the remaining amount after deducting items (1), (2), and (3) as directors and supervisors remunerations.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



| | (5) | After items (1), (2), (3), and (4) were deducted, 10% of the remaining amount may be allocated as employee bonus and 90% as stockholders dividend subject to the resolution adopted by the Board of Directors
and approved at the Shareholders Meeting.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Dividends may be distributed by way of cash dividend and stock dividend. Distribution shall be made preferably by way of cash dividend while cash dividend shall be more than 50% of total dividends to be distributed. The
amount is subject to the resolution adopted by the Board of Directors and approved at the Shareholders Meeting. Dividend distribution to the Companys shareholders is recognized as liability in the Companys financial statements in
the period in which the dividends are approved.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Companys amended Articles of Incorporation had been approved by the stockholders in the meeting held on May 16, 2016, under which current years earnings, if any, shall be distributed in the
following order:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Payment of taxes and dues;
| | --- | --------------------------



| | (2) | Completing the deficit and losses;
| | --- | ----------------------------------



| | (3) | Set aside 10% for statutory surplus reserve, unless the statutory surplus reserve has reached the total capital;
| | --- | ----------------------------------------------------------------------------------------------------------------



| | (4) | Set aside or reverse special reserves;
| | --- | --------------------------------------



| | (5) | Any further remaining amount shall be added to the unallocated surplus from the prior year as shareholder dividend and bonus. The Board of Directors shall draft a proposal to distribute the surplus, which shall be
approved at a shareholders meeting.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Legal reserve can only be used to offset deficits or increase capital in issuing common stock or in distributing cash. The amount of legal reserve that may be used to increase capital shall be limited to the portion of
the reserve balance exceeding 25% of the capital stock.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | In accordance with the R.O.C. Securities and Future Bureau (SFB) regulations, in addition to legal reserve, the Company should set aside a special reserve from the debit balance on other equity items at the balance
sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reserved amount could be included in the distributable earnings.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | The Taiwan imputation tax system requires that any undistributed current earnings of a company derived on or after January 1, 1998 to be subject to an additional 10% corporate income tax if the earnings are not
distributed in the following year. As of December 31, 2015 and 2016, the undistributed earnings derived on or after the implementation of the imputation tax system were $9,921,153, and $10,252,276, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-34



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | G. | As of December 31, 2015 and 2016, the balances of shareholders imputation tax credit account of the Company were $875,437, and $482,903, respectively. The rate of shareholders imputation tax credit to
undistributed earnings for the earnings distributed in 2015 was 17.19%. The rate of shareholders imputation tax credit to undistributed earnings for the earnings to be distributed in 2016 is expecting to be approximately 10.38%.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

However, the rate is subject to changes based on the balance of shareholders imputation tax credit account, the
undistributed earnings, and other tax credit amount in accordance with the R.O.C. tax law at the dividend distribution date. Effective from January 1, 2015, the creditable ratio for individual shareholders residing in the R.O.C. will be half of
the original creditable ratio according to the revised Article 66-6 of the Income Tax Law.



| | H. | The distributions of 2014 and 2015 dividends were resolved at the Shareholders meeting on June 16, 2015 and May 16, 2016, respectively. Details are summarized below:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                           |  |                                  |           |  |                                   |  |      |        |  |  |                                   |  |  |  |      | 
|-------------------------- |  | -------------------------------- | --------- |  | --------------------------------- |  | ---- | ------ |  |  | --------------------------------- |  |  |  | ---- | 
|                           |  | For the Years Ended December 31, |          
|                           |  | 2014                             |           |  | 2015                              | 
|                           |  | Amount                           |           |  | Dividendsper share(in NT dollars) |  |      | Amount |  |  | Dividends pershare(in NT dollars) | 
|                           |  | NT$                              |           |  |                                   |  |      | NT$    |  |  |                                   | 
|Provision of Legal reserve |  |                                  | 1,170,770 |  |                                   |  |      |        |  |  | 876,226                           |  |  |  |      | 
|Cash dividends             |  |                                  | 9,349,083 |  |                                   |  | 3.00 |        |  |  | 8,725,811                         |  |  |  | 2.80 | 

Please refer to Note 24C for information on employees cash bonuses and directors and
supervisors remunerations.



| | I. | On March 23, 2017, the Companys Board of Directors proposed the following earnings distribution for 2016:
| | -- | ----------------------------------------------------------------------------------------------------------



|                                           |  |                       |           | 
|------------------------------------------ |  | --------------------- | --------- | 
|                                           |  | Earnings distribution |          
|                                           |  | NT$                   |          
|Legal reserve                              |  |                       | 993,316   | 
|Cash dividends (NT$1.75 dollars per share) |  |                       | 5,453,632 | 
|                                           |  |                       |           | 
|                                           |  |                       | 6,446,948 | 
|                                           |  |                       |           | 



| | J. | Since the 2017 Shareholders meeting has yet to be held, there is uncertainty on the 2016 earnings distribution. In accordance with IAS 12, the Group accrued additional 10% tax on undistributed earnings in full.
Income tax effect on dividend distribution is reversed and adjusted to tax expenses and related income tax payables in the following year when shareholders resolve the earnings distribution plan. As of December 31, 2016, the additional 10% tax
payable of $904,395 was recognized in Other non-current liabilities on the balance sheet. Potential income tax consequence on dividend distribution adjust based on the approved earnings
distribution by the shareholders meeting.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-35



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|23. | Other Equity Items
|--- | ------------------



|                                                                                                                                    |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------ | ---------- | - | ---------------------------------------------------------------- |  | -------- | --------------------------------------------------- |  |  | -------- | -
|                                                                                                                                    |  | Unrealized Gain onValuation of Available-for-sale Financial Assets |            |   | Exchange Difference onTranslation of ForeignFinancial Statements |  |          | Remeasurements ofPost-employmentBenefit Obligations | 
|                                                                                                                                    |  | NT$                                                                |            |   | NT$                                                              |  |          | NT$                                                 | 
|As of January 1, 2014                                                                                                               |  |                                                                    | 884,504    |   |                                                                  |  | 167,688  |                                                     |  |  | 68,085   |  
|Changes in fair value of financial instruments                                                                                      |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    | 3,628,169  |   |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                                                                               |  |                                                                    | (277,292   | ) |                                                                  |  |         |                                                     |  |  |         |  
|Recognition of changes in fair value of financial instruments in profit or loss                                                     |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    | (679,800   | ) |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                                                                               |  |                                                                    | 114,534    |   |                                                                  |  |         |                                                     |  |  |         |  
|Differences in translation- equity method investments                                                                               |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    |           |   |                                                                  |  | 555,285  |                                                     |  |  |         |  
|- tax                                                                                                                               |  |                                                                    |           |   |                                                                  |  | (2,720   | )                                                   |  |  |         |  
|Remeasurements of post-employment benefit obligations                                                                               |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | (53,911  | )
|- tax                                                                                                                               |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | 9,165    |  
|                                                                                                                                    |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|As of December 31, 2014                                                                                                             |  |                                                                    | 3,670,115  |   |                                                                  |  | 720,253  |                                                     |  |  | 23,339   |  
|                                                                                                                                    |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|                                                                                                                                    |  |                                                                    |           
|                                                                                                                                    |  | Unrealized Gain onValuation of Available-for-sale Financial Assets |            |   | Exchange Difference onTranslation of ForeignFinancial Statements |  |          | Remeasurements ofPost-employmentBenefit Obligations | 
|                                                                                                                                    |  | NT$                                                                |            |   | NT$                                                              |  |          | NT$                                                 | 
|As of January 1, 2015                                                                                                               |  |                                                                    | 3,670,115  |   |                                                                  |  | 720,253  |                                                     |  |  | 23,339   |  
|Changes in fair value of financial instruments                                                                                      |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    | (2,406,287 | ) |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                                                                               |  |                                                                    | 19,610     |   |                                                                  |  |         |                                                     |  |  |         |  
|Recognition of changes in fair value of financial instruments in profit or loss                                                     |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    | 1,856,442  |   |                                                                  |  |         |                                                     |  |  |         |  
|Differences in translation- equity method investments                                                                               |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    |           |   |                                                                  |  | (223,940 | )                                                   |  |  |         |  
|- tax                                                                                                                               |  |                                                                    |           |   |                                                                  |  | (40      | )                                                   |  |  |         |  
|Other comprehensive income/losses reclassified to profit or loss upon disposal of investments
accounted for using the equity method |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    |           |   |                                                                  |  | (3,965   | )                                                   |  |  |         |  
|- tax                                                                                                                               |  |                                                                    |           |   |                                                                  |  | 674      |                                                     |  |  |         |  
|Remeasurements of post-employment benefit obligations                                                                               |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                                                                            |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | (179,842 | )
|- tax                                                                                                                               |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | 30,572   |  
|                                                                                                                                    |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|As of December 31, 2015                                                                                                             |  |                                                                    | 3,139,880  |   |                                                                  |  | 492,982  |                                                     |  |  | (125,931 | )
|                                                                                                                                    |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  



F-36



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                                                                |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|------------------------------------------------------------------------------- |  | ------------------------------------------------------------------ | ---------- | - | ---------------------------------------------------------------- |  | -------- | --------------------------------------------------- |  |  | -------- | -
|                                                                                |  | Unrealized Gain onValuation of Available-for-sale Financial Assets |            |   | Exchange Difference onTranslation of ForeignFinancial Statements |  |          | Remeasurements ofPost-employmentBenefit Obligations | 
|                                                                                |  | NT$                                                                |            |   | NT$                                                              |  |          | NT$                                                 | 
|As of January 1, 2016                                                           |  |                                                                    | 3,139,880  |   |                                                                  |  | 492,982  |                                                     |  |  | (125,931 | )
|Changes in fair value of financial instruments                                  |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                        |  |                                                                    | (1,229,348 | ) |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                           |  |                                                                    | 242,555    |   |                                                                  |  |         |                                                     |  |  |         |  
|Recognition of changes in fair value of financial instruments in profit or loss |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                        |  |                                                                    | (239,757   | ) |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                           |  |                                                                    | 19,804     |   |                                                                  |  |         |                                                     |  |  |         |  
|Share of other comprehensive income of associates                               |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                        |  |                                                                    | (121,957   | ) |                                                                  |  |         |                                                     |  |  |         |  
|- tax                                                                           |  |                                                                    | 10,981     |   |                                                                  |  |         |                                                     |  |  |         |  
|Differences in translation- equity method investments                           |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                        |  |                                                                    |           |   |                                                                  |  | (908,801 | )                                                   |  |  |         |  
|- tax                                                                           |  |                                                                    |           |   |                                                                  |  | 570      |                                                     |  |  |         |  
|Remeasurements of post-employment benefit obligations                           |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|                                                                                |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|- pretax                                                                        |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | (177,806 | )
|- tax                                                                           |  |                                                                    |           |   |                                                                  |  |         |                                                     |  |  | 30,227   |  
|                                                                                |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  
|As of December 31, 2016                                                         |  |                                                                    | 1,822,158  |   |                                                                  |  | (415,249 | )                                                   |  |  | (273,510 | )
|                                                                                |  |                                                                    |            |   |                                                                  |  |          |                                                     |  |  |          |  



|24. | Expenses by Nature
|--- | ------------------



|                                       |  |                                  |            |  |      |  |            |      |  |  |            | 
|-------------------------------------- |  | -------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                                       |  | For the Years Ended December 31, |           
|                                       |  | 2014                             |            |  | 2015 |  |            | 2016 | 
|                                       |  | NT$                              |            |  | NT$  |  |            | NT$  | 
|Employee benefit expenses              |  |                                  |            |  |      |  |            |      |  |  |            | 
|Salaries and bonuses                   |  |                                  | 14,894,813 |  |      |  | 15,339,459 |      |  |  | 16,155,821 | 
|Post employment benefits               |  |                                  | 583,774    |  |      |  | 577,074    |      |  |  | 655,565    | 
|Directors remuneration                |  |                                  | 105,369    |  |      |  | 112,801    |      |  |  | 127,111    | 
|Others                                 |  |                                  | 1,995,112  |  |      |  | 2,026,237  |      |  |  | 2,190,194  | 
|                                       |  |                                  |            |  |      |  |            |      |  |  |            | 
|                                       |  |                                  | 17,579,068 |  |      |  | 18,055,571 |      |  |  | 19,128,691 | 
|                                       |  |                                  |            |  |      |  |            |      |  |  |            | 
|Depreciation and amortization expenses |  |                                  | 12,435,815 |  |      |  | 13,513,985 |      |  |  | 13,291,190 | 
|                                       |  |                                  |            |  |      |  |            |      |  |  |            | 



| | A. | In accordance with Article 235 and 235-1 of the Company Act as amended in May 2015, and Jing-Shang-Zi Letter No. 10402413890,
employees compensation (bonus), and directors remuneration shall not be considered as earnings distribution. An entity shall stipulate a fixed amount or ratio of annual profit to be distributed as employee compensation. The annual profit
is defined as income before income tax, employees compensation and directors remuneration. If an entity has accumulated deficit, annual profit should be appropriated to cover such losses.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | In accordance with the Companys Articles of Incorporation that had been resolved at the Shareholders meeting on May 16, 2016, after covering accumulated losses, 10% of the annual profit shall be set
aside as employees compensation. Additionally, 1% or less of the annual profit shall be set aside as directors remuneration. Employees compensation (bonus) is payable, in the form of cash or shares, to the payroll employees of the
Company or its domestic or foreign subsidiaries over which the Company has 50% or more of voting power, who work substantially during the fiscal year in which the annual profit is generated.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | For the years ended December 31, 2014, 2015 and 2016, employee compensation (bonus) was accrued at $1,038,787 , $1,128,007 and $1,271,115, respectively; directors remuneration was accrued at $105,369,
$112,801 and $127,111, respectively. Both are paid/ payable in the form of cash. In 2015 and 2016, the employees compensation and directors remuneration were estimated and accrued based on the annual profits for the year ended
December 31, 2015 and 2016; while in 2014, related expenses were accrued based on the post tax income of 2014 and the percentages stipulated in the Article of Incorporation, taking into account of other factors such as legal reserve.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-37



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|25. | Other Income and Expenses
|--- | -------------------------



|                                                                    |  |                                  |          |   |      |  |          |      |  |  |          |  
|------------------------------------------------------------------- |  | -------------------------------- | -------- | - | ---- |  | -------- | ---- |  |  | -------- | -
|                                                                    |  | For the Years Ended December 31, |         
|                                                                    |  | 2014                             |          |   | 2015 |  |          | 2016 | 
|                                                                    |  | NT$                              |          |   | NT$  |  |          | NT$  | 
|Loss on damages and claims                                          |  |                                  | (110,236 | ) |      |  | (374,613 | )    |  |  | (298,778 | )
|Gains on disposal of property, plant and equipment and other assets |  |                                  | 287,947  |   |      |  | 31,293   |      |  |  | 32,615   |  
|Impairment loss on property, plant and equipment                    |  |                                  | (63,722  | ) |      |  | (64,996  | )    |  |  | (91,247  | )
|Others                                                              |  |                                  | 170,262  |   |      |  | 152,499  |      |  |  | 240,404  |  
|                                                                    |  |                                  |          |   |      |  |          |      |  |  |          |  
|                                                                    |  |                                  | 284,251  |   |      |  | (255,817 | )    |  |  | (117,006 | )
|                                                                    |  |                                  |          |   |      |  |          |      |  |  |          |  



|26. | Other Gains and Losses, Net
|--- | ---------------------------



|                                                                          |  |                                  |         |  |      |  |         |      |  |  |          |  
|------------------------------------------------------------------------- |  | -------------------------------- | ------- |  | ---- |  | ------- | ---- |  |  | -------- | -
|                                                                          |  | For the Years Ended December 31, |        
|                                                                          |  | 2014                             |         |  | 2015 |  |         | 2016 | 
|                                                                          |  | NT$                              |         |  | NT$  |  |         | NT$  | 
|Foreign exchange gain (loss)net                                          |  |                                  | 483,325 |  |      |  | (77,439 | )    |  |  | (104,365 | )
|Gains on reversal of impairment loss of non-financial
assets (Note 11(C)) |  |                                  |        |  |      |  | 134,992 |      |  |  |         |  
|                                                                          |  |                                  |         |  |      |  |         |      |  |  |          |  
|                                                                          |  |                                  | 483,325 |  |      |  | 57,553  |      |  |  | (104,365 | )
|                                                                          |  |                                  |         |  |      |  |         |      |  |  |          |  



|27. | Income Tax
|--- | ----------



| | A. | Income taxes recognized in profit or loss for the years ended December 31, 2014, 2015 and 2016 are as follows:
| | -- | --------------------------------------------------------------------------------------------------------------



|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  
|------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- |  | ---------- | ---- |  |  | --------- | -
|                                                                                      |  | For the Years Ended December 31, |          
|                                                                                      |  | 2014                             |           |   | 2015 |  |            | 2016 | 
|                                                                                      |  | NT$                              |           |   | NT$  |  |            | NT$  | 
|Current income tax expense                                                            |  |                                  |           |   |      |  |            |      |  |  |           |  
|Recognition for the current period                                                    |  |                                  | 2,350,321 |   |      |  | 1,741,385  |      |  |  | 1,356,232 |  
|Provision of additional 10% tax on undistributed earnings                             |  |                                  | 1,057,158 |   |      |  | 906,273    |      |  |  | 904,395   |  
|Reversal of additional 10% tax on undistributed earnings due to dividend distribution |  |                                  |          |   |      |  | (1,056,043 | )    |  |  | (788,603  | )
|Income tax adjustments for prior years                                                |  |                                  | 3,357     |   |      |  | (39,435    | )    |  |  | (6,336    | )
|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  
|                                                                                      |  |                                  | 3,410,836 |   |      |  | 1,552,180  |      |  |  | 1,465,688 |  
|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  
|Deferred income tax expense                                                           |  |                                  |           |   |      |  |            |      |  |  |           |  
|Temporary differences                                                                 |  |                                  | (156,234  | ) |      |  | (186,121   | )    |  |  | 401,511   |  
|Reversal of additional 10% tax on undistributed earnings due to dividend distribution |  |                                  | (531,407  | ) |      |  |           |      |  |  |          |  
|Income tax credits                                                                    |  |                                  | 326,902   |   |      |  |           |      |  |  |          |  
|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  
|                                                                                      |  |                                  | (360,739  | ) |      |  | (186,121   | )    |  |  | 401,511   |  
|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  
|Income tax expense recognized in profit or loss                                       |  |                                  | 3,050,097 |   |      |  | 1,366,059  |      |  |  | 1,867,199 |  
|                                                                                      |  |                                  |           |   |      |  |            |      |  |  |           |  



| | B. | The tax on the Groups profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                            |  |                                  |           |   |      |  |            |      |  |  |           |  
|------------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- |  | ---------- | ---- |  |  | --------- | -
|                                                                                            |  | For the Years Ended December 31, |          
|                                                                                            |  | 2014                             |           |   | 2015 |  |            | 2016 | 
|                                                                                            |  | NT$                              |           |   | NT$  |  |            | NT$  | 
|Income tax expense calculated at the statutory tax rates applicable to respective
countries |  |                                  | 2,703,678 |   |      |  | 2,057,890  |      |  |  | 2,300,048 |  
|Expenses not deductible for tax purposes                                                    |  |                                  | 9,870     |   |      |  | 319,835    |      |  |  | 113,971   |  
|Tax exempt income                                                                           |  |                                  | ( 31,353  | ) |      |  | (736,103   | )    |  |  | (572,372  | )
|Temporary difference not recognized as defferred tax liability                              |  |                                  | (162,897  | ) |      |  | (179,130   | )    |  |  | (156,588  | )
|Change in assessment of realization of deferred tax assets                                  |  |                                  |          |   |      |  | (1,071     | )    |  |  |          |  
|Effect from Alternative Minimum Tax                                                         |  |                                  |          |   |      |  | 88,944     |      |  |  | 72,684    |  
|Provision of additional 10% tax on undistributed earnings                                   |  |                                  | 1,057,158 |   |      |  | 906,273    |      |  |  | 904,395   |  
|Adjustment: over provision from prior years                                                 |  |                                  | (526,359  | ) |      |  | (1,090,579 | )    |  |  | (794,939  | )
|                                                                                            |  |                                  |           |   |      |  |            |      |  |  |           |  
|Income tax expense recognized in profit or loss                                             |  |                                  | 3,050,097 |   |      |  | 1,366,059  |      |  |  | 1,867,199 |  
|                                                                                            |  |                                  |           |   |      |  |            |      |  |  |           |  



F-38



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



The weighted average statutory tax rates applicable to respective countries for the years
ended December 31, 2014, 2015 and 2016 were 18.95%, 19.83% and 19.70%, respectively.

Adjustment for over provision from prior years
mainly relates to the reversal of additional 10% income tax effect on dividend distribution. Refer to Note 22(J) for more information.



| | C. | Income taxes recognized in other comprehensive income for the years ended December 31, 2014, 2015 and 2016 are as follows:
| | -- | --------------------------------------------------------------------------------------------------------------------------



|                                                                   |  |                                  |          |   |      |  |        |      |  |  |         | 
|------------------------------------------------------------------ |  | -------------------------------- | -------- | - | ---- |  | ------ | ---- |  |  | ------- | 
|                                                                   |  | For the Years Ended December 31, |         
|                                                                   |  | 2014                             |          |   | 2015 |  |        | 2016 | 
|                                                                   |  | NT$                              |          |   | NT$  |  |        | NT$  | 
|Unrealized gain on
available-for-sale financial assets             |  |                                  | (162,758 | ) |      |  | 19,610 |      |  |  | 262,359 | 
|Share of other comprehensive income of associates                  |  |                                  |         |   |      |  |       |      |  |  | 10,981  | 
|Exchange difference on translation of foreign financial statements |  |                                  | (2,720   | ) |      |  | 634    |      |  |  | 570     | 
|Remeasurements of post-employment benefit obligation               |  |                                  | 9,165    |   |      |  | 30,572 |      |  |  | 30,227  | 
|                                                                   |  |                                  |          |   |      |  |        |      |  |  |         | 
|                                                                   |  |                                  | (156,313 | ) |      |  | 50,816 |      |  |  | 304,137 | 
|                                                                   |  |                                  |          |   |      |  |        |      |  |  |         | 



| | D. | Changes in deferred tax assets and liabilities for the years ended December 31, 2014, 2015 and 2016 are as follows:
| | -- | -------------------------------------------------------------------------------------------------------------------



|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|------------------------------------------------------------------------------- |  | ------------------------------------ | -------- | - | ------------- |  | -------- | ------------------------ |  |  | -------------------------------- | - |  | ----------- | ------ | - |  |  | -------- | -
|                                                                                |  | For the Year Ended December 31, 2014 |         
|                                                                                |  | January 1                            |          |   | Profit orLoss |  |          | OtherComprehensiveIncome |  |  | Effect ofForeignCurrencyExchange |   |  | December 31 |       
|                                                                                |  | NT$                                  |          |   | NT$           |  |          | NT$                      |  |  | NT$                              |   |  | NT$         |       
|Deferred tax assets                                                             |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Investment tax credit                                                           |  |                                      | 326,902  |   |               |  | (326,902 | )                        |  |  |                                 |   |  |             |       |   |  |  |         |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Unrealized sales allowance                                                      |  |                                      | 17,828   |   |               |  | 29,777   |                          |  |  |                                 |   |  |             | 117    |   |  |  | 47,722   |  
|Unrealize foreign currency exchange loss                                        |  |                                      |         |   |               |  | 87,302   |                          |  |  |                                 |   |  |             |       |   |  |  | 87,302   |  
|Post-employment benefit obligations                                             |  |                                      | 155,942  |   |               |  | 264      |                          |  |  | 9,165                            |   |  |             |       |   |  |  | 165,371  |  
|Unrealized gain on
available-for-sale financial assets                          |  |                                      | 98,718   |   |               |  | (98,718  | )                        |  |  |                                 |   |  |             |       |   |  |  |         |  
|Unrealized losses on financial liabilities at fair value through profit or loss |  |                                      |         |   |               |  | 54,610   |                          |  |  |                                 |   |  |             |       |   |  |  | 54,610   |  
|Exchange difference on translation of foreign financial statements              |  |                                      | 1,711    |   |               |  |         |                          |  |  | (1,711                           | ) |  |             |       |   |  |  |         |  
|Others                                                                          |  |                                      | 236,484  |   |               |  | 105,896  |                          |  |  |                                 |   |  |             | (1,273 | ) |  |  | 341,107  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | 837,585  |   |               |  | (147,771 | )                        |  |  | 7,454                            |   |  |             | (1,156 | ) |  |  | 696,112  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Deferred tax liabilities                                                        |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Unrealize foreign currency exchange gain                                        |  |                                      | (22,306  | ) |               |  | 22,306   |                          |  |  |                                 |   |  |             |       |   |  |  |         |  
|Unrealized gain on
available-for-sale financial assets                          |  |                                      |         |   |               |  | (54,846  | )                        |  |  | (227,802                         | ) |  |             |       |   |  |  | (282,648 | )
|Exchange difference on translation of foreign financial statements              |  |                                      |         |   |               |  |         |                          |  |  | (1,009                           | ) |  |             |       |   |  |  | (1,009   | )
|Depreciation expense                                                            |  |                                      | (29,150  | ) |               |  | (3,569   | )                        |  |  |                                 |   |  |             | (1,093 | ) |  |  | (33,812  | )
|Additional 10% tax on undistributed earnings                                    |  |                                      | (596,451 | ) |               |  | 531,407  |                          |  |  | 65,044                           |   |  |             |       |   |  |  |         |  
|Others                                                                          |  |                                      | (51,961  | ) |               |  | 13,212   |                          |  |  |                                 |   |  |             |       |   |  |  | (38,749  | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | (699,868 | ) |               |  | 508,510  |                          |  |  | (163,767                         | ) |  |             | (1,093 | ) |  |  | (356,218 | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  
|Net deferred tax assets                                                         |  |                                      | 137,717  |   |               |  | 360,739  |                          |  |  | (156,313                         | ) |  |             | (2,249 | ) |  |  | 339,894  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |   |  |             |        |   |  |  |          |  



F-39



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|------------------------------------------------------------------------------- |  | ------------------------------------ | -------- | - | ------------- |  | -------- | ------------------------ |  |  | -------------------------------- |  |  | ----------- | ------ | - |  |  | -------- | -
|                                                                                |  | For the Year Ended December 31, 2015 |         
|                                                                                |  | January 1                            |          |   | Profit orLoss |  |          | OtherComprehensiveIncome |  |  | Effect ofForeignCurrencyExchange |  |  | December 31 |       
|                                                                                |  | NT$                                  |          |   | NT$           |  |          | NT$                      |  |  | NT$                              |  |  | NT$         |       
|Deferred tax assets                                                             |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Unrealized sales allowance                                                      |  |                                      | 47,722   |   |               |  | (43,330  | )                        |  |  |                                 |  |  |             | (40    | ) |  |  | 4,352    |  
|Convertible bonds                                                               |  |                                      | 95,623   |   |               |  | 125,131  |                          |  |  |                                 |  |  |             |       |   |  |  | 220,754  |  
|Post-employment benefit obligations                                             |  |                                      | 165,371  |   |               |  | (2,254   | )                        |  |  | 30,572                           |  |  |             |       |   |  |  | 193,689  |  
|Unrealized losses on financial liabilities at fair value through profit or loss |  |                                      | 54,610   |   |               |  | 119,572  |                          |  |  |                                 |  |  |             |       |   |  |  | 174,182  |  
|Others                                                                          |  |                                      | 332,786  |   |               |  | (13,352  | )                        |  |  | 634                              |  |  |             | (991   | ) |  |  | 319,077  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | 696,112  |   |               |  | 185,767  |                          |  |  | 31,206                           |  |  |             | (1,031 | ) |  |  | 912,054  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Deferred tax liabilities                                                        |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Unrealized gains on
available-for-sale financial assets                         |  |                                      | (282,648 | ) |               |  |         |                          |  |  | 19,610                           |  |  |             |       |   |  |  | (263,038 | )
|Unrealized gains on property, plant and equipment                               |  |                                      | (13,567  | ) |               |  | (14,828  | )                        |  |  |                                 |  |  |             | 697    |   |  |  | (27,698  | )
|Others                                                                          |  |                                      | (60,003  | ) |               |  | 15,182   |                          |  |  |                                 |  |  |             | 972    |   |  |  | (43,849  | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | (356,218 | ) |               |  | 354      |                          |  |  | 19,610                           |  |  |             | 1,669  |   |  |  | (334,585 | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Net deferred tax assets                                                         |  |                                      | 339,894  |   |               |  | 186,121  |                          |  |  | 50,816                           |  |  |             | 638    |   |  |  | 577,469  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|                                                                                | 
|                                                                                |  | For the Year Ended December 31, 2016 |         
|                                                                                |  | January 1                            |          |   | Profit orLoss |  |          | OtherComprehensiveIncome |  |  | Effect ofForeignCurrencyExchange |  |  | December 31 |       
|                                                                                |  | NT$                                  |          |   | NT$           |  |          | NT$                      |  |  | NT$                              |  |  | NT$         |       
|Deferred tax assets                                                             |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Unrealized sales allowance                                                      |  |                                      | 4,352    |   |               |  | (1,807   | )                        |  |  |                                 |  |  |             | (151   | ) |  |  | 2,394    |  
|Convertible bonds                                                               |  |                                      | 220,754  |   |               |  | 11,828   |                          |  |  |                                 |  |  |             |       |   |  |  | 232,582  |  
|Post-employment benefit obligations                                             |  |                                      | 193,689  |   |               |  | 19,610   |                          |  |  | 30,227                           |  |  |             |       |   |  |  | 243,526  |  
|Unrealized losses on financial liabilities at fair value through profit or loss |  |                                      | 174,182  |   |               |  | (174,182 | )                        |  |  |                                 |  |  |             |       |   |  |  |         |  
|Others                                                                          |  |                                      | 319,077  |   |               |  | (43,697  | )                        |  |  | 570                              |  |  |             | (1,740 | ) |  |  | 274,210  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | 912,054  |   |               |  | (188,248 | )                        |  |  | 30,797                           |  |  |             | (1,891 | ) |  |  | 752,712  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Deferred tax liabilities                                                        |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Temporary differences                                                           |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Unrealized gains on
available-for-sale financial assets                         |  |                                      | (263,038 | ) |               |  | (139,835 | )                        |  |  | 262,359                          |  |  |             |       |   |  |  | (140,514 | )
|Unrealized gains on property, plant and equipment                               |  |                                      | (27,698  | ) |               |  | (39,646  | )                        |  |  |                                 |  |  |             | 4,828  |   |  |  | (62,516  | )
|Others                                                                          |  |                                      | (43,849  | ) |               |  | (33,782  | )                        |  |  | 10,981                           |  |  |             | 5,320  |   |  |  | (61,330  | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|                                                                                |  |                                      | (334,585 | ) |               |  | (213,263 | )                        |  |  | 273,340                          |  |  |             | 10,148 |   |  |  | (264,360 | )
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  
|Net deferred tax assets                                                         |  |                                      | 577,469  |   |               |  | (401,511 | )                        |  |  | 304,137                          |  |  |             | 8,257  |   |  |  | 488,352  |  
|                                                                                |  |                                      |          |   |               |  |          |                          |  |  |                                  |  |  |             |        |   |  |  |          |  



| | E. | Unrecognized deferred tax liabilities relating to the taxable temporary differences for investments in foreign subsidiaries are:
| | -- | --------------------------------------------------------------------------------------------------------------------------------



|                                   |  |                    |           |  |      |  |           | 
|---------------------------------- |  | ------------------ | --------- |  | ---- |  | --------- | 
|                                   |  | As of December 31, |          
|                                   |  | 2015               |           |  | 2016 | 
|                                   |  | NT$                |           |  | NT$  | 
|Investment in foreign subsidiaries |  |                    | 6,679,093 |  |      |  | 6,693,787 | 
|                                   |  |                    |           |  |      |  |           | 



F-40



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | F. | The Company has met the requirement of Incentives for Emerging Important Strategic Industries in Manufacturing and Technology Services for its capitalization plans in 2007 and is exempted from income tax for
revenues arising from the assembly and testing of certain integrated circuit products for a five-year period. The Company selected 2015 as the starting periods of the five-year income tax exemptions with December 2019 as the expiration date. As a
result of the above tax holiday, the net income was higher by $679,075 ($0.22 per share), $488,100 ($0.16 per share) for the years ended December 31, 2015 and 2016, respectively.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | G. | The income tax returns of the Company have been assessed and approved by the Tax Authority through 2014.
| | -- | --------------------------------------------------------------------------------------------------------



| | H. | According to the amended Enterprise Income Tax Law of the Peoples Republic of China, effective January 1, 2008, the tax rate applicable to entities like Siliconware Technology (Suzhou) Limited is 25%.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|28. | Earnings Per Share (EPS)
|--- | ------------------------



|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|---------------------------------------- |  | ------------------------------------ | ---------- | - | --------------------------------------- |  | --------- | ------------------------------ |  |  | ---- | 
|                                         |  | For the year ended December 31, 2014 |           
|                                         |  | Income after tax                     |            |   | Weighted averageoutstandingcommon stock |  |           | Earnings per share(in dollars) | 
|                                         |  | NT$                                  |            |   | (in thousands)                          |  |           | NT$                            | 
|Basic earnings per share                 |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Net income                               |  |                                      | 11,218,087 |   |                                         |  | 3,116,361 |                                |  |  | 3.60 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Dilutive effect of employee bonus        |  |                                      |           |   |                                         |  | 23,110    |                                |  |  |      | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Diluted earnings per share               |  |                                      | 11,218,087 |   |                                         |  | 3,139,471 |                                |  |  | 3.57 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|                                         | 
|                                         |  | For the year ended December 31, 2015 |           
|                                         |  | Income after tax                     |            |   | Weighted averageoutstandingcommon stock |  |           | Earnings per share(in dollars) | 
|                                         |  | NT$                                  |            |   | (in thousands)                          |  |           | NT$                            | 
|Basic earnings per share                 |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Net income                               |  |                                      | 9,011,463  |   |                                         |  | 3,116,361 |                                |  |  | 2.89 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Dilutive effect of employee compensation |  |                                      |           |   |                                         |  | 33,769    |                                |  |  |      | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Diluted earnings per share               |  |                                      | 9,011,463  |   |                                         |  | 3,150,130 |                                |  |  | 2.86 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|                                         | 
|                                         |  | For the year ended December 31, 2016 |           
|                                         |  | Income after tax                     |            |   | Weighted averageoutstandingcommon stock |  |           | Earnings per share(in dollars) | 
|                                         |  | NT$                                  |            |   | (in thousands)                          |  |           | NT$                            | 
|Basic earnings per share                 |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Net income                               |  |                                      | 9,806,937  |   |                                         |  | 3,116,361 |                                |  |  | 3.15 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Dilutive effect of employee compensation |  |                                      |           |   |                                         |  | 28,643    |                                |  |  |      | 
|Convertible bonds                        |  |                                      | ( 779,928  | ) |                                         |  | 265,677   |                                |  |  |      | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 
|Diluted earnings per share               |  |                                      | 9,027,009  |   |                                         |  | 3,410,681 |                                |  |  | 2.65 | 
|                                         |  |                                      |            |   |                                         |  |           |                                |  |  |      | 



| | A. | Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period excluding ordinary shares held as
treasury stocks.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Diluted earnings per share is calculated by adjusting the weighted average ordinary shares oustanding to assume conversion of all dilutive potential ordinary shares. The convertible bonds were not included in the
calculation of diluted earnings per share for the years ended December 31, 2014 and 2015 because they were antidilutive.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | As employees compensation (bonus) could be distributed in the form of stock, the diluted EPS computation shall include those estimated shares that would be increased from employees stock bonus issuance in
the weighted-average number of common shares outstanding during the reporting year, which taking into account the dilutive effects of stock bonus on potential common shares; whereas, basic EPS shall be calculated based on the weighted-average number
of common shares outstanding during the reporting year that include the shares of employees stock bonus for the appropriation of prior year earnings, which have already been resolved at the stockholders meeting held in the reporting
year. Since capitalization of employees compensation (bonus) no longer belongs to distribution of stock dividends (or retained earnings and capital reserve capitalized), the calculation of basic EPS and diluted EPS for all periods presented
shall not be adjusted retroactively.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|29. | Non-Cash Transactions
|--- | ---------------------



| | A. | The investment activities partially paid by cash are as follows:
| | -- | ----------------------------------------------------------------



|                                                      |  |                                  |            |   |      |  |            |      |  |  |            |  
|----------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                                                      |  | For the years ended December 31, |           
|                                                      |  | 2014                             |            |   | 2015 |  |            | 2016 | 
|                                                      |  | NT$                              |            |   | NT$  |  |            | NT$  | 
|Purchase of property, plant and equipment             |  |                                  | 19,869,543 |   |      |  | 14,009,988 |      |  |  | 15,247,544 |  
|(Decrease)/ increase in prepayment for equipment      |  |                                  |           |   |      |  | (4,798     | )    |  |  | 21,754     |  
|Decrease/ (increase) in equipment payable, net        |  |                                  | 367,547    |   |      |  | (838,740   | )    |  |  | 89,820     |  
|(Increase)/ decrease in notes payable of construction |  |                                  | (699,900   | ) |      |  | 699,900    |      |  |  |           |  
|Effect of foreign currency exchange                   |  |                                  | 23,550     |   |      |  | (10,919    | )    |  |  | (63,997    | )
|                                                      |  |                                  |            |   |      |  |            |      |  |  |            |  
|Current cash payment                                  |  |                                  | 19,560,740 |   |      |  | 13,855,431 |      |  |  | 15,295,121 |  
|                                                      |  |                                  |            |   |      |  |            |      |  |  |            |  



| | B. | Non-cash investing activities:
| | -- | ------------------------------



| | (1) | As mentioned in Note 10(C), as a result of the merge between ChipMOS Technologies Inc., and ChipMOS Technologies (Bermuda) Ltd., shareholders of ChipMOS Technologies (Bermuda) Ltd. received US$3.71 dollars in cash and
0.9355 share of American Depository Shares (ADS) in exchange for each share in ChipMOS Technologies (Bermuda) Ltd. Each ADS represents 20 new common shares issued by ChipMOS Technologies Inc.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                              |  |                                    |          |  
|------------------------------------------------------------- |  | ---------------------------------- | -------- | -
|                                                              |  | For the year endedDecember 31,2016 |         
|                                                              |  | NT$                                |         
|Available- for-sale financial assets, non- current            |  |                                    |          |  
|- ADS of ChipMOS Technologies Inc.                            |  |                                    | 655,066  |  
|Available- for-sale financial assets, non- current            |  |                                    |          |  
|- ChipMOS Technologies (Bermuda) Ltd. :                       |  |                                    |          |  
|Decrease in
available-for- sale financial assets, non-current |  |                                    | (748,540 | )
|Other income                                                  |  |                                    | (51,923  | )
|Increase in other receivables                                 |  |                                    | 145,397  |  
|                                                              |  |                                    |          |  
|                                                              |  |                                    |         |  
|                                                              |  |                                    |          |  



| | (2) | As mentioned in Note 11(C), Interconnect made a capital reduction in December 2015. The 39% interests in AAPM were distributed to the Company as capital return.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                      |  |                                    |          |  
|--------------------------------------------------------------------- |  | ---------------------------------- | -------- | -
|                                                                      |  | For the year endedDecember 31,2015 |         
|                                                                      |  | NT$                                |         
|Acquisition of investments accounted for using the equity method-AAPM |  |                                    | 137,011  |  
|Disposal of Associate- Interconnect:                                  |  |                                    |          |  
|Decrease in difference on translation (Show as other equity item)     |  |                                    | 3,291    |  
|Decrease in deferred tax liabilities                                  |  |                                    | 674      |  
|Decrease in investments accounted for using the equity method         |  |                                    | (1,409   | )
|Gains on disposal of investments                                      |  |                                    | (139,567 | )
|                                                                      |  |                                    |          |  
|                                                                      |  |                                    |         |  
|                                                                      |  |                                    |          |  



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|30. | Operating Leases
|--- | ----------------

The Company leases several parcels of land from the Science Park
Administration with expiration dates between December 2023 and December 2034. The Company can renew the leases upon expiration. The Company also entered into lease agreements for its buildings and certain machinery and equipment. Siliconware
Technology (Suzhou) Limited also entered into lease agreements for its land use right and certain machinery and equipment. For years ended December 31, 2014, 2015 and 2016, the Company recognized rental expense amounted to $617,467, $490,132
and $662,839, respectively.



|31. | Related Party Transactions
|--- | --------------------------

Inter-company transactions and balance on transactions
between group companies are eliminated when preparing this consolidated financial statement and are not disclosed in this footnote. The transactions between the Company and other related parties are as follows:



| | A. | Disposal of Financial Assets
| | -- | ----------------------------



|           |  |                                                   |  |                |        |  |                       |                                      |        |         |          |        
|---------- |  | ------------------------------------------------- |  | -------------- | ------ |  | --------------------- | ------------------------------------ | ------ | ------- | -------- | -------
|           |  | For the year ended December 31,
2016             
|           |  | Financial Statement                               |  | Shares         |        |  | Marketable Securities |                                      |        |         | Gain on 
|           |  | Account                                           |  | (In Thousands) |        |  | Type and Name         |                                      | Amount |         | Disposal
|           |  |                                                   |  |                |        |  |                       |                                      | NT$    |         | NT$     
|Associates |  | Available-for-sale financial assets  non-current |  |                | 57,810 |  |                       | Hsieh Yong Capital Co., Ltd. (Stock) |        | 376,943 |          | 206,943
|           |  |                                                   |  |                |        |  |                       |                                      |        |         |          |        



| | B. | On June 30, 2016, the Companys board of directors has adopted resolution to approve the entering into and execution of a joint share exchange agreement (the Agreement) with Advanced
Semiconductor Engineering, Inc. ( the ASE) and agrees to establish a new holding company (the Holdco). The collaboration between the parties will result in synergies that can create a competitive advantages and opportunities
for the future development and sustained growth of the semiconductor industry by enhancing efficiency and economies of scale as well deeply strengthening research and development and innovation capabilities, thereby providing customers with higher
quality, more efficient, and well-rounded packaging and testing services. The Agreement will be conducted (1) at an exchange ratio of one ASE common share for 0.5 HoldCo common share, and (2) at NT$55 in cash for each of SPILs common
shares, with ASE and SPIL becoming wholly-owned subsidiaries of HoldCo.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The cash consideration of NT$55 has been adjusted to
NT$51.2 after excluding the NT$2.8 per share cash dividend distribution approved by resolution at SPILs annual shareholders meeting in 2016 as well as a NT$1.0 per share payment from capital reserve. The NT$51.2 cash consideration
aforementioned will not be subject to further adjustment if the cash dividends distribution by SPIL in 2017 is less than 85% of SPILs after-tax net profit for the year 2016.

The closing of the transaction will be subject to the necessary approvals by relevant domestic and foreign competent authorities, the approvals
by ASE and SPILs respective shareholders meeting as well as the satisfaction of other conditions precedent.

The long stop date
of the Agreement (the Long Stop Date), which means the expiration of the Agreement, is set at 18 months after the execution date of the Agreement (i.e., December 31, 2017) or a later date otherwise agreed upon in writing by both
parties. If the closing of this transaction cannot be consummated due to failure of the conditions precedent to be satisfied on or before the Long Stop Date, the Agreement shall be terminated automatically at 0:00 on the day immediately following
the Long Stop Date, except as otherwise agreed thereof.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | C. | Personnel compensations to Directors, Supervisors, and Managements
| | -- | ------------------------------------------------------------------



|                             |  |                                  |         |  |      |  |         |      |  |  |         | 
|---------------------------- |  | -------------------------------- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                             |  | For the Years Ended December 31, |        
|                             |  | 2014                             |         |  | 2015 |  |         | 2016 | 
|                             |  | NT$                              |         |  | NT$  |  |         | NT$  | 
|Short-term employee benefits |  |                                  | 352,560 |  |      |  | 370,943 |      |  |  | 443,802 | 
|Post-employment benefits     |  |                                  | 2,686   |  |      |  | 2,866   |      |  |  | 65,217  | 
|                             |  |                                  |         |  |      |  |         |      |  |  |         | 
|                             |  |                                  | 355,246 |  |      |  | 373,809 |      |  |  | 509,019 | 
|                             |  |                                  |         |  |      |  |         |      |  |  |         | 



|32. | Assets Pledged as Collateral
|--- | ----------------------------

The following assets have been pledged as collateral
against certain obligations of the Company:



|                                                         |  |                    |         |  |      |  |         |                       |  |                                                                               
|-------------------------------------------------------- |  | ------------------ | ------- |  | ---- |  | ------- | --------------------- |  | ------------------------------------------------------------------------------
|                                                         |  | As of December 31, |         |  |     
|Assets                                                   |  | 2015               |         |  | 2016 |  |         | Subject of collateral
|                                                         |  |                    | NT$     |  |      |  | NT$     |                       |  |                                                                               
|Time deposits (shown as other financial assets, current) |  |                    | 384,400 |  |      |  | 357,400 |                       |  | Guarantees for customs duties and land
leased from Science Park Administration
|                                                         |  |                    |         |  |      |  |         |                       |  |                                                                               



|33. | Commitments and Contingencies
|--- | -----------------------------



| | A. | According to the Agreement between the company and ASE , if any of the events described below occurs during the period from the Execution Date until the Share Exchange Record Date, except the prior written consent of
ASE, the Company shall not, nor induce the Companys subsidiaries to:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Issue any equity-linked securities (except for any share(s) newly issued as a result of the exercise of conversion rights by holders of the Companys Foreign Convertible Bonds).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Except for the repurchase of shares from the shareholders exercising appraisal rights in connection with this Transaction in accordance with laws and regulations and Article 13 of the Agreement or redemption of the
Companys Foreign Convertible Bonds as contractually agreed, directly or indirectly repurchase, individually or through any third party, its issued and outstanding shares or equity-linked securities, decrease capital, resolve for dissolution,
or file for restructuring, settlement or bankruptcy.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Except subject to affirmative court judgments, arbitration awards or approvals, orders, administrative decisions or approved conditions/burdens or other requirements imposed by competent authorities (including, but not
limited to, the Taiwan Stock Exchange, the Taiwan Fair Trade Commission, the United States Federal Trade Commission, the SEC, and the Antitrust Law Enforcement Authorities of Relevant Countries and Regions), none of the Company or any of its
directors, managers, employees, agents or representatives may offer, agree, enter into or sign with any third party any contract, agreement or other arrangements in respect of any following matter: (a) any transaction that may involve a spin-off, a purchase or a sale of shares of non-financial investment nature, or any other transaction of similar nature; (b) a lease of all businesses or an entrustment,
a joint operation, or an assumption of the entire business or assets from others (except for an assumption of the entire business or assets from others in an aggregated transaction amount less than NT$500,000,000); or (c) any merger and
acquisition without issuing HoldCos shares, any sale of all or material assets or businesses of 100% Subsidiaries, any disposal of interest in material assets or businesses of 100% Subsidiaries, or exclusive licensing of all or material
patents or technologies of 100% Subsidiaries, provided.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

However, if the Company receives a proposal from a third party the
conditions of which are more favorable than those of this Transaction (a Superior Proposal) that cannot complete the Share Exchange under this Agreement due to its acceptance of a Superior Proposal as set forth above, the Company shall
pay to ASE the amount of NT$17 billion as a termination fee for the Transaction.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | For the needs of future operation expansion, the Group entered into several significant agreements amounting to $2,920,213, of which $1,244,904 remained unpaid as of December 31, 2016.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Group entered into several contracts for the use of certain technologies and patents in exchange of royalty payments. Contracts are valid until the expiry of patents or upon termination by both parties.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Future minimum lease payments under the non-cancellable operating leases are as follows:
| | -- | ----------------------------------------------------------------------------------------



|              |  |                         |           | 
|------------- |  | ----------------------- | --------- | 
|              |  | As of December 31, 2016 |          
|              |  | NT$                     |          
|Within 1 year |  |                         | 141,578   | 
|1- 5 year(s)  |  |                         | 335,970   | 
|Over 5 years  |  |                         | 757,809   | 
|              |  |                         |           | 
|              |  |                         | 1,235,357 | 
|              |  |                         |           | 



|34. | Significant Event After the Reporting Period.
|--- | ---------------------------------------------

On March 22, 2017, the Company
completed the ownership transfer of the plant and its affiliated equipment of Hsinchu facility phaseII (No.15/17, Park Ave. 2, Science-Based Industrial Park, Hsinchu). The Company transferred substantially all the risks and rewards of ownership to
the buyer, and recognized a gain on disposal of $ 19,402.



|35. | Financial Risk Management
|--- | -------------------------

The Groups activities expose it to a variety of
financial risk: market risk (including currency risk, interest rate risk, and price risk), credit risk and liquidity risk. The Groups overall risk management program focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the Groups financial performance.



| | A. | Market risk
| | -- | -----------



| | (1) | Currency risk
| | --- | -------------

The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the USD and the JPY. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. The Group
implements the policy of natural hedging and monitors the foreign exchange rate fluctuation closely to manage the risk. The Groups exposure to foreign exchange risk is as follows:



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                                  |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|------------------------------------------------- |  | ----------------------------- | --------- |  | ------------- |  | ------ | -------------------- |  |  | ---------------------------------- | - |  |  | ------- | 
|                                                  |  | As of December 31, 2015       |          
|                                                  |  |                               |           |  |               |  |        | Sensitivity analysis | 
|(Foreign currencies: functional currencies)       |  | ForeignCurrencies inthousands |           |  | Exchangerates |  |        | Movement             |  |  | Impact toprofit and lossbefore tax |  
|                                                  |  |                               |           |  |               |  |        |                      |  |  | (NT$)                              |  
|Financial assets                                  |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|Monetary assets                                   |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 793,731   |  |               |  | 32.775 |                      |  |  | 1                                  | % |  |  | 260,145 | 
|USD:RMB                                           |  |                               | 16,231    |  |               |  | 6.4936 |                      |  |  | 1                                  | % |  |  | 5,320   | 
|Nonmonetary assets                                |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 30,409    |  |               |  | 32.775 |                      |  |  | N/A                                |   |  |  | N/A     | 
|Investments accounted for using the equity method |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 3,739     |  |               |  | 32.825 |                      |  |  | N/A                                |   |  |  | N/A     | 
|Financial Liabilities                             |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|Monetary liabilities                              |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 660,413   |  |               |  | 32.875 |                      |  |  | 1                                  | % |  |  | 217,111 | 
|USD:RMB                                           |  |                               | 120,271   |  |               |  | 6.4936 |                      |  |  | 1                                  | % |  |  | 39,539  | 
|JPY:NTD                                           |  |                               | 3,549,618 |  |               |  | 0.2747 |                      |  |  | 1                                  | % |  |  | 9,751   | 
|JPY:RMB                                           |  |                               | 165,246   |  |               |  | 0.0539 |                      |  |  | 1                                  | % |  |  | 454     | 
|                                                  | 
|                                                  |  | As of December 31, 2016       |          
|                                                  |  |                               |           |  |               |  |        | Sensitivity analysis | 
|(Foreign currencies: functional currencies)       |  | ForeignCurrencies inthousands |           |  | Exchangerates |  |        | Movement             |  |  | Impact toprofit and lossbefore tax |  
|                                                  |  |                               |           |  |               |  |        |                      |  |  | (NT$)                              |  
|Financial assets                                  |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|Monetary assets                                   |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 800,272   |  |               |  | 32.200 |                      |  |  | 1                                  | % |  |  | 257,688 | 
|USD:RMB                                           |  |                               | 17,786    |  |               |  | 6.9370 |                      |  |  | 1                                  | % |  |  | 5,727   | 
|Nonmonetary assets                                |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 21,951    |  |               |  | 32.200 |                      |  |  | N/A                                |   |  |  | N/A     | 
|Investments accounted for using the equity method |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 559       |  |               |  | 32.250 |                      |  |  | N/A                                |   |  |  | N/A     | 
|Financial Liabilities                             |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|Monetary liabilities                              |  |                               |           |  |               |  |        |                      |  |  |                                    |   |  |  |         | 
|USD:NTD                                           |  |                               | 596,659   |  |               |  | 32.300 |                      |  |  | 1                                  | % |  |  | 192,721 | 
|USD:RMB                                           |  |                               | 113,280   |  |               |  | 6.9370 |                      |  |  | 1                                  | % |  |  | 36,589  | 
|JPY:NTD                                           |  |                               | 3,838,753 |  |               |  | 0.2776 |                      |  |  | 1                                  | % |  |  | 10,656  | 
|JPY:RMB                                           |  |                               | 596,668   |  |               |  | 0.0596 |                      |  |  | 1                                  | % |  |  | 1,656   | 

Note: Currency risk does not arise from financial instruments that are nonmonetary items and thus are not
subject to sensitivity analysis.



| | (2) | Price risk
| | --- | ----------

Pursuant to strategic investments objective, the Company is exposed to equity
securities price risk in public market because of investments held by the Company, which are classified on the consolidated balance sheet as available-for-sale financial
assets. To manage its market price risk, the Company monitors the future development of the investees and the market trend. Most investees of the Company are in electronic industry, of which Unimicron Technology Co. Ltd.( sold in February 2016),
ChipMOS Technologies Inc. and ChipMOS Technologies (Bermuda) Ltd (merged with ChipMOS Technologies Inc. on October 31, 2016, with US$3.71 dollars in cash and 0.9355 shares of ADSs in exchange for each share in ChipMOS Technologies (Bermuda)
Ltd.) are traded publicly in the market. Unimicron Technology Co. and ChipMOS Technologies Inc. are listed on Taiwan Stock Exchange, and ChipMOS Technologies (Bermuda) Ltd. and ADS of ChipMOS Technologies Inc. are listed on NASDAQ. For other equity
investees that are not traded in public market, the Company implements suitable techniques to perform the assessments. As of December 31, 2015 and 2016, if the market price had increased/decreased by 10% with all other variables held constant,
other comprehensive income would have increased/decreased by $585,978 and $352,579, respectively.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (3) | Interest rate risk
| | --- | ------------------

The Groups interest rate risk arises from cash, interest bearing
time deposits, and borrowings. Mostly, residual cash will be held as deposit. As of December 31, 2015 and 2016, the Group held financial assets with cash flow interest rate risk of $41,592 and $6,092, respectively, and financial liabilities
with cash flow interest rate risk of $16,646,875, and $21,083,583, respectively. As of December 31, 2015 and 2016, if the interest rate had been increased/ decreased by 10 points (0.1%), income before income tax for the period would have been
$16,605 and $21,077 lower / higher, respectively.



| | B. | Credit risk
| | -- | -----------

The Groups credit risk mainly arises from cash and cash equivalents
(deposits with banks or financial institutions), accounts and notes receivable, other receivables and refundable deposits and etc.



| | (1) | For risks from banks and financial institutions, the Group periodically assesses their credit ratings based on information provided by external independent rating institutes. Furthermore, to minimize the credit risk,
the Group allocates deposits based on each banks rating results. After the assessment, most of banks and financial institutions the Group transacts with are with minimum rating of A, which represents low credit default risks.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | For risks from accounts and notes receivable, the Group assesses customers credit quality through internal risk assessment, taking into account of their current financial conditions and past transaction
experiences. After the assessment, management does not expect significant losses from non-performance by these counterparties.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Aging analysis of accounts receivables that were past due is as follows:
| | --- | ------------------------------------------------------------------------



|              |  |                         |         |  |          |  |       |            |  |  |         | 
|------------- |  | ----------------------- | ------- |  | -------- |  | ----- | ---------- |  |  | ------- | 
|              |  | As of December 31, 2015 |        
|              |  | Total                   |         |  | Impaired |  |       | Unimpaired | 
|              |  | NT$                     |         |  | NT$      |  |       | NT$        | 
|1- 90 days    |  |                         | 767,130 |  |          |  |      |            |  |  | 767,130 | 
|91- 180 days  |  |                         | 9,005   |  |          |  |      |            |  |  | 9,005   | 
|Over 180 days |  |                         | 14,015  |  |          |  | 1,695 |            |  |  | 12,320  | 
|              |  |                         |         |  |          |  |       |            |  |  |         | 
|              |  |                         | 790,150 |  |          |  | 1,695 |            |  |  | 788,455 | 
|              |  |                         |         |  |          |  |       |            |  |  |         | 
|              | 
|              |  | As of December 31, 2016 |        
|              |  | Total                   |         |  | Impaired |  |       | Unimpaired | 
|              |  | NT$                     |         |  | NT$      |  |       | NT$        | 
|1- 90 days    |  |                         | 933,715 |  |          |  |      |            |  |  | 933,715 | 
|91- 180 days  |  |                         | 54,947  |  |          |  |      |            |  |  | 54,947  | 
|Over 180 days |  |                         | 5,401   |  |          |  | 1,695 |            |  |  | 3,706   | 
|              |  |                         |         |  |          |  |       |            |  |  |         | 
|              |  |                         | 994,063 |  |          |  | 1,695 |            |  |  | 992,368 | 
|              |  |                         |         |  |          |  |       |            |  |  |         | 

Note: As of December 31, 2015 and 2016, no impairment loss incurred on accounts
receivables that are not past due.



| | (4) | As of December 31, 2015 and 2016, the Groups ten largest customers accounted for 67% and 65% of accounts receivables, respectively. The Group considers the concentration of credit risk for the remaining
accounts receivable is immaterial.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | C. | Liquidity risk
| | -- | --------------

The objective of liquidity risk management is to ensure the Group has
sufficient liquidity to fund its business needs, and to maintain adequate cash, banking facilities to repay the borrowings. By considering its debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets, and other
important factors, the finance department of the Company monitors the Group cash requirements and forecasts its future cash flow.

The
table below summarizes the maturity profile of the Groups financial liabilities based on contractual terms (including principals and interests), which is presented on an undiscounted basis:



|                                                |  |                         |            |  |           |  |            |           |  |  |              |  |  |       |           |  |  |  |            | 
|----------------------------------------------- |  | ----------------------- | ---------- |  | --------- |  | ---------- | --------- |  |  | ------------ |  |  | ----- | --------- |  |  |  | ---------- | 
|                                                |  | As of December 31, 2015 |           
|                                                |  | Less than 1 year        |            |  | 1-2 years |  |            | 2-3 years |  |  | Over 3 years |  |  | Total |          
|                                                |  | NT$                     |            |  | NT$       |  |            | NT$       |  |  | NT$          |  |  | NT$   |          
|Short-term Loans                                |  |                         | 2,822,367  |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 2,822,367  | 
|Accounts Payable                                |  |                         | 6,942,527  |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 6,942,527  | 
|Other Payables                                  |  |                         | 11,512,740 |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 11,512,740 | 
|Other Current Liabilities-Others                |  |                         | 215,304    |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 215,304    | 
|Convertible Bonds                               |  |                         |           |  |           |  | 13,549,760 |           |  |  |             |  |  |       |          |  |  |  | 13,549,760 | 
|Long-term Loans (include the current portion)   |  |                         | 6,163,404  |  |           |  | 3,604,387  |           |  |  | 2,220,940    |  |  |       | 2,192,170 |  |  |  | 14,180,901 | 
|Other Non-Current Liabilities                   |  |                         |           |  |           |  | 118,580    |           |  |  | 59,175       |  |  |       | 9,088     |  |  |  | 186,843    | 
|                                                |  |                         |            |  |           |  |            |           |  |  |              |  |  |       |           |  |  |  |            | 
|                                                |  |                         | 27,656,342 |  |           |  | 17,272,727 |           |  |  | 2,280,115    |  |  |       | 2,201,258 |  |  |  | 49,410,442 | 
|                                                |  |                         |            |  |           |  |            |           |  |  |              |  |  |       |           |  |  |  |            | 
|                                                | 
|                                                |  | As of December 31, 2016 |           
|                                                |  | Less than 1 year        |            |  | 1-2 years |  |            | 2-3 years |  |  | Over 3 years |  |  | Total |          
|                                                |  | NT$                     |            |  | NT$       |  |            | NT$       |  |  | NT$          |  |  | NT$   |          
|Short-term Loans                                |  |                         | 2,761,041  |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 2,761,041  | 
|Accounts Payable                                |  |                         | 8,194,647  |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 8,194,647  | 
|Other Payables                                  |  |                         | 11,896,517 |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 11,896,517 | 
|Other Current Liabilities-Others                |  |                         | 106,859    |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 106,859    | 
|Convertible Bonds (include the current portion) |  |                         | 13,312,768 |  |           |  |           |           |  |  |             |  |  |       |          |  |  |  | 13,312,768 | 
|Long-term Loans (include the current portion)   |  |                         | 3,714,850  |  |           |  | 2,851,419  |           |  |  | 5,959,549    |  |  |       | 6,402,421 |  |  |  | 18,928,239 | 
|Other Non-Current Liabilities                   |  |                         |           |  |           |  | 63,215     |           |  |  |             |  |  |       | 8,279     |  |  |  | 71,494     | 
|                                                |  |                         |            |  |           |  |            |           |  |  |              |  |  |       |           |  |  |  |            | 
|                                                |  |                         | 39,986,682 |  |           |  | 2,914,634  |           |  |  | 5,959,549    |  |  |       | 6,410,700 |  |  |  | 55,271,565 | 
|                                                |  |                         |            |  |           |  |            |           |  |  |              |  |  |       |           |  |  |  |            | 



|36. | Capital Risk Management
|--- | -----------------------



| | A. | The capital includes common share, capital reserve, legal reserve, and other equity items. The Groups objectives in managing capital are to maintain sufficient capital to expand production capacity and equipment,
and ensure the Group has sufficient and necessary financial resources to deal with operating capital demand, capital expenditure, research and development expenditure, dividend expenditure, loan repayment, and other operating demand.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Except for those mentioned in Note 18, the Company does not have to follow any restrictions of outside capital.
| | -- | ---------------------------------------------------------------------------------------------------------------



|37. | Fair Value Information on Financial Instruments
|--- | -----------------------------------------------



| | A. | Fair value of financial instruments not carried at fair value
| | -- | -------------------------------------------------------------

Except for convertible bonds
which are measured at amortized cost, the management considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate to their fair values. The fair value of the
Groups short-term financial instruments including cash and cash equivalents, receivables, time deposits, short-term loans, current portion of long-term loans, payables, receipts under custody and deposits received approximated their carrying
amount due to their maturities within one year. The Groups non-current financial instruments including non-interest bearing refundable deposits, receipts under
custody, bank loans carried at floating interest rates and long-term payables. The fair value of these financial instruments are approximated to its carrying amount due to the impact of discounting is not significant, or because the floating
interest rates reset periodically to reflect the market conditions and the Groups credit rating.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



Convertible bonds (include the current portion):



|                  |  |                 |            |  |                      |  |            | 
|----------------- |  | --------------- | ---------- |  | -------------------- |  | ---------- | 
|                  |  | Carrying Amount |            |  | Fair Value (Level 3) | 
|                  |  | NT$             |            |  | NT$                  | 
|December 31, 2015 |  |                 | 12,627,311 |  |                      |  | 12,785,745 | 
|                  |  |                 |            |  |                      |  |            | 
|December 31, 2016 |  |                 | 12,712,651 |  |                      |  | 12,841,188 | 
|                  |  |                 |            |  |                      |  |            | 

The fair value was determined using discounted cash flow analysis with the applicable yield curve for the
duration and recent transaction prices.



| | B. | The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------



|         |  |                                                                                                                                       
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------
|Level 1: |  | Quoted prices (unadjusted) in active markets for identical assets or liabilities.                                                     
|         | 
|Level 2: |  | Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
|         | 
|Level 3: |  | Inputs for the asset or liability that are not based on observable market data.                                                       



| | C. | The Companys financial instruments measured at fair value are as follows:
| | -- | --------------------------------------------------------------------------

Recurring
basis:



|                                                         |  |                         |           |  |         |   |         |         |  |   |           | 
|-------------------------------------------------------- |  | ----------------------- | --------- |  | ------- | - | ------- | ------- |  | - | --------- | 
|                                                         |  | As of December 31, 2015 |          
|                                                         |  | Level 1                 |           |  | Level 2 |   |         | Level 3 | 
|                                                         |  | NT$                     |           |  | NT$     |   |         | NT$     | 
|Available-for-sale financial assets                      |  | $                       | 5,996,993 |  |         | $ | 596,623 |         |  | $ |          | 
|                                                         |  |                         |           |  |         |   |         |         |  |   |           | 
|Financial liability at fair value through profit or loss |  | $                       |          |  |         | $ |        |         |  | $ | 1,798,920 | 
|                                                         |  |                         |           |  |         |   |         |         |  |   |           | 
|                                                         | 
|                                                         |  | As of December 31, 2016 |          
|                                                         |  | Level 1                 |           |  | Level 2 |   |         | Level 3 | 
|                                                         |  | NT$                     |           |  | NT$     |   |         | NT$     | 
|Available-for-sale financial assets                      |  | $                       | 3,615,658 |  |         | $ | 178,176 |         |  | $ |          | 
|                                                         |  |                         |           |  |         |   |         |         |  |   |           | 
|Financial liability at fair value through profit or loss |  | $                       |          |  |         | $ |        |         |  | $ | 773,908   | 
|                                                         |  |                         |           |  |         |   |         |         |  |   |           | 

Non-recurring basis:

None.



| | (1) | The fair value of financial instruments traded in active markets is based on quoted market price at the balance sheet date. For financial instruments with fair value not traded in active markets, the Company uses
valuation techniques, which maximize the use of observable market data where it is available and relies as little as possible on entity specific estimates. The valuation technique currently used for unlisted available-for-sale securities is the market approach. The valuation is based on the benchmark companies stock prices and other specific indexes. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Specific valuation techniques used to value financial instruments include:



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



| | A. | Quoted market prices or dealer quotes for similar instruments;
| | -- | --------------------------------------------------------------



| | B. | Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------



| | (2) | There were no transfers between Level 1 and 2 for the years ended December 31, 2015 and 2016.
| | --- | ---------------------------------------------------------------------------------------------



| | (3) | The fair value measurements for the Companys derivative instruments are carried out on the basis of a binomial model, with measurement on a quarterly basis. In the course of the valuation process, the required
market data are collected and the non-observable parameters are examined and updated as required on the basis of internally available current information. In particular, the premises of the enterprise value of
the Companys derivative instruments, as well as any significant changes in the input parameters and their respective effects on the value of the option, are reported to management on a quarterly basis.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Parameters with a significant influence on the measurement of the option are the value of the Companys derivative instruments as determined with the use of a discounted cash flow method and the expected volatility
of that value. The approach for volatility estimation was changed to a direct analysis of the historical volatility. The higher the volatility, the fair value of the Companys derivative instrument will be higher. The volatility as of
December 31, 2015 and 2016 is 34.80% and 26.83%, respectively.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Reconciliation of Level 3 fair value measurements of financial liabilities
| | --- | --------------------------------------------------------------------------



|                                            |  |      |           |  |      |  |           |      |  |  |            |  
|------------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | ---------- | -
|                                            |  | 2014 |           |  | 2015 |  |           | 2016 | 
|                                            |  | NT$  |           |  | NT$  |  |           | NT$  | 
|As of January 1                             |  |      |          |  |      |  | 1,095,552 |      |  |  | 1,798,920  |  
|Issuance                                    |  |      | 774,319   |  |      |  |          |      |  |  |           |  
|Losses (Gains) recognized in profit or loss |  |      | 321,233   |  |      |  | 703,368   |      |  |  | (1,025,012 | )
|                                            |  |      |           |  |      |  |           |      |  |  |            |  
|As of December 31                           |  |      | 1,095,552 |  |      |  | 1,798,920 |      |  |  | 773,908    |  
|                                            |  |      |           |  |      |  |           |      |  |  |            |  

The total gains or losses for the years ended December 31, 2014, 2015 and 2016 included losses of
$321,233, $703,368, and a gain of $1,025,012, respectively, relating to the financial liabilities at fair value on Level 3 fair value measurement and held at balance sheet date.



| | (6) | The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, using different valuation models or assumptions may result in difference in fair value measurement. For
financial assets and liabilities categorized within Level 3, a 10% increase in the value of stock market price would lead to a decrease in income before tax by $723,250 and $662,796 for the years ended December 31, 2015 and 2016,
respectively. On the other hand, a 10% decrease in the value of the stock market price would increase income before tax by $665,390 and $549,100 for the years ended December 31, 2015 and 2016, respectively. A 5% increase in the expected
volatility of the value of the derivative instrument would lead to a decrease in income before tax by $253,795 and $258,400 for the years ended December 31, 2015 and 2016, respectively. A 5% decrease in the expected volatility of the value of
derivative instrument would increase income before tax by $365,570 and $276,488, for the years ended December 31, 2015 and 2016, respectively.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)



|38. | Segment Information
|--- | -------------------

The Groups packaging and testing services are provided in
Taiwan and China. The chief operating decision maker determines the groups performance based on the geographic perspective. The nature of services, production process, type of customers and service delivery model at these two geographical
locations are similar. While the chief operating decision maker receives separate reports for each location, these two operating segments have been aggregated into one reportable segment as they have similar long-term average gross margins and have
similar economic characteristics. As a result, the Group discloses a single reporting segment.



| | A. | Breakdown of the revenue from different products and services:
| | -- | --------------------------------------------------------------



|          |  |                                  |            |  |      |  |            |      |  |  |            | 
|--------- |  | -------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|          |  | For the Years Ended December 31, |           
|          |  | 2014 (Note)                      |            |  | 2015 |  |            | 2016 | 
|          |  | NT$                              |            |  | NT$  |  |            | NT$  | 
|Packaging |  |                                  | 72,469,155 |  |      |  | 72,752,428 |      |  |  | 74,315,486 | 
|Testing   |  |                                  | 9,851,951  |  |      |  | 9,551,025  |      |  |  | 10,227,996 | 
|Others    |  |                                  | 750,335    |  |      |  | 536,469    |      |  |  | 568,431    | 
|          |  |                                  |            |  |      |  |            |      |  |  |            | 
|          |  |                                  | 83,071,441 |  |      |  | 82,839,922 |      |  |  | 85,111,913 | 
|          |  |                                  |            |  |      |  |            |      |  |  |            | 

Note: For the year ended December 31, 2014, revenue from Bumping services was reclassified from
Testing and Others to Packaging due to the increasingly growth in revenue.



| | B. | Operations in different geographic areas:
| | -- | -----------------------------------------

Revenues are summarized by the areas where our
customers group headquarters locate. In prior years, this information was summarized based on the location of customers regional headquarters. Accordingly, prior year information was recast to reflect the change in methodology for
determining revenue by geography. Non-current assets, including equity method investment, property, plant and equipment, refundable deposits, and other assets, but not including financial instruments and
deferred tax assets, are categorized by their locations.



|              |  |                                  |            |  |                   |  |            |          |  |  |                   |  |  |          |            |  |                   |  |            |  |  |  |            | 
|------------- |  | -------------------------------- | ---------- |  | ----------------- |  | ---------- | -------- |  |  | ----------------- |  |  | -------- | ---------- |  | ----------------- |  | ---------- |  |  |  | ---------- | 
|              |  | For the Years Ended December 31, |           
|              |  | 2014                             |            |  | 2015              |  |            | 2016     | 
|              |  | Revenues                         |            |  | Noncurrent Assets |  |            | Revenues |  |  | Noncurrent Assets |  |  | Revenues |            |  | Noncurrent Assets | 
|              |  | NT$                              |            |  | NT$               |  |            | NT$      |  |  | NT$               |  |  | NT$      |            |  | NT$               | 
|United States |  |                                  | 34,579,750 |  |                   |  | 1,750      |          |  |  | 30,076,050        |  |  |          | 1,553      |  |                   |  | 33,624,139 |  |  |  | 1,728      | 
|China         |  |                                  | 17,307,318 |  |                   |  | 7,552,578  |          |  |  | 21,318,660        |  |  |          | 8,068,694  |  |                   |  | 22,724,680 |  |  |  | 9,014,191  | 
|Taiwan        |  |                                  | 17,672,929 |  |                   |  | 57,179,713 |          |  |  | 18,106,693        |  |  |          | 59,606,745 |  |                   |  | 19,683,484 |  |  |  | 59,371,230 | 
|Europe        |  |                                  | 7,149,007  |  |                   |  |           |          |  |  | 8,470,707         |  |  |          |           |  |                   |  | 6,794,827  |  |  |  |           | 
|Others        |  |                                  | 6,362,437  |  |                   |  | 23,627     |          |  |  | 4,867,812         |  |  |          | 122,748    |  |                   |  | 2,284,783  |  |  |  | 18,019     | 
|              |  |                                  |            |  |                   |  |            |          |  |  |                   |  |  |          |            |  |                   |  |            |  |  |  |            | 
|              |  |                                  | 83,071,441 |  |                   |  | 64,757,668 |          |  |  | 82,839,922        |  |  |          | 67,799,740 |  |                   |  | 85,111,913 |  |  |  | 68,405,168 | 
|              |  |                                  |            |  |                   |  |            |          |  |  |                   |  |  |          |            |  |                   |  |            |  |  |  |            | 



| | C. | Major Customers:
| | -- | ----------------

In 2014, 2015 and 2016, operating revenues of $10,715,199, $15,096,281 and
$15,979,382 were from customer A, respectively, and the operating revenues of $8,619,699, $10,053,063 and $11,794,072 were from customer B, respectively.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

FINANCIAL STATEMENT SCHEDULE: VALUATION AND QUALITYING ACCOUNT

FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)



|                                                                            |  |                              |         |  |                           |  |         |                      |  |  |                                                               |  |  |                        |        |   |  |  |         | 
|--------------------------------------------------------------------------- |  | ---------------------------- | ------- |  | ------------------------- |  | ------- | -------------------- |  |  | ------------------------------------------------------------- |  |  | ---------------------- | ------ | - |  |  | ------- | 
|Description                                                                 |  | Balance atbeginningof period |         |  | AdditionsChargedtoExpense |  |         | DeductionsWrite-offs |  |  | Exchangedifference ontranslation offoreign financialstatement |  |  | Balanceat end ofperiod |       
|                                                                            |  | NT$                          |         |  | NT$                       |  |         | NT$                  |  |  | NT$                                                           |  |  | NT$                    |       
|For the year ended 2014                                                     |  |                              |         |  |                           |  |         |                      |  |  |                                                               |  |  |                        |        |   |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 2,539   |  |                           |  |        |                      |  |  |                                                              |  |  |                        | (844   | ) |  |  | 1,695   | 
|Allowance for sales discounts                                               |  |                              | 188,154 |  |                           |  | 391,082 |                      |  |  | 304,375                                                       |  |  |                        | 844    |   |  |  | 275,705 | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 111,608 |  |                           |  | 30,040  |                      |  |  |                                                              |  |  |                        | 1,700  |   |  |  | 143,348 | 
|Allowance for loss on idle assets                                           |  |                              | 221,995 |  |                           |  | 63,722  |                      |  |  | 194,559                                                       |  |  |                        | 2,203  |   |  |  | 93,361  | 
|For the year ended 2015                                                     |  |                              |         |  |                           |  |         |                      |  |  |                                                               |  |  |                        |        |   |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 1,695   |  |                           |  |        |                      |  |  |                                                              |  |  |                        |       |   |  |  | 1,695   | 
|Allowance for sales discounts                                               |  |                              | 275,705 |  |                           |  | 152,224 |                      |  |  | 413,668                                                       |  |  |                        | (205   | ) |  |  | 14,056  | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 143,348 |  |                           |  | 20,480  |                      |  |  |                                                              |  |  |                        | (772   | ) |  |  | 163,056 | 
|Allowance for loss on idle assets                                           |  |                              | 93,361  |  |                           |  | 64,996  |                      |  |  | 45,220                                                        |  |  |                        | (580   | ) |  |  | 112,557 | 
|For the year ended 2016                                                     |  |                              |         |  |                           |  |         |                      |  |  |                                                               |  |  |                        |        |   |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 1,695   |  |                           |  |        |                      |  |  |                                                              |  |  |                        |       |   |  |  | 1,695   | 
|Allowance for sales discounts                                               |  |                              | 14,056  |  |                           |  |        |                      |  |  | 11,050                                                        |  |  |                        |       |   |  |  | 3,006   | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 163,056 |  |                           |  | 112,374 |                      |  |  |                                                              |  |  |                        | (3,978 | ) |  |  | 271,452 | 
|Allowance for loss on idle assets                                           |  |                              | 112,557 |  |                           |  | 91,247  |                      |  |  | 76,822                                                        |  |  |                        | (1,623 | ) |  |  | 125,359 | 



F-52