##### 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



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

For the fiscal year ended December 31, 2011

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, R.O.C.

(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, R.O.C.

(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.

3,078,319,139 Common Shares were outstanding as of December 31, 2011

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

Yes  x    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  
x

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  x    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  x    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  x

Indicate by check mark which financial statement item the registrant has elected to follow.
Item  17   ̈    Item  18  x

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  x









---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD.

FORM 20-F ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2011

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                                                   |    |  | 18 | 
|Item 4A.                                                             |  | Unresolved Staff Comments                                                    |    |  | 31 | 
|Item 5.                                                              |  | Operating and Financial Review and Prospects                                 |    |  | 31 | 
|Item 6.                                                              |  | Directors, Senior Management and Employees                                   |    |  | 45 | 
|Item 7.                                                              |  | Major Shareholders and Related Party Transactions                            |    |  | 50 | 
|Item 8.                                                              |  | Financial Information                                                        |    |  | 52 | 
|Item 9.                                                              |  | The Offer and Listing                                                        |    |  | 53 | 
|Item 10.                                                             |  | Additional Information                                                       |    |  | 55 | 
|Item 11.                                                             |  | Quantitative and Qualitative Disclosures About Market Risk                   |    |  | 71 | 
|Item 12.                                                             |  | Description of Securities Other Than Equity Securities                       |    |  | 72 | 
|                                                                     | 
|PART II                                                              |  |                                                                              | 73 | 
|Item 13.                                                             |  | Defaults, Dividend Arrearages and Delinquencies                              |    |  | 73 | 
|Item 14.                                                             |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |    |  | 74 | 
|Item 15.                                                             |  | Controls and Procedures                                                      |    |  | 74 | 
|Item 16A.                                                            |  | Audit Committee Financial Expert                                             |    |  | 75 | 
|Item 16B.                                                            |  | Code of Ethics                                                               |    |  | 75 | 
|Item 16C.                                                            |  | Principal Accountant Fees and Services                                       |    |  | 75 | 
|Item 16D.                                                            |  | Exemptions from the Listing Standards for Audit Committees                   |    |  | 75 | 
|Item 16E.                                                            |  | Purchase of Equity Securities by the Issuer and Affiliated Purchasers        |    |  | 76 | 
|Item 16F.                                                            |  | Change in Registrants Certifying Accountant                                 |    |  | 76 | 
|Item 16G.                                                            |  | Corporate Governance                                                         |    |  | 76 | 
|Item 16H.                                                            |  | Mine Safety Disclosure                                                       |    |  | 77 | 
|                                                                     | 
|PART III                                                             |  |                                                                              | 78 | 
|Item 17.                                                             |  | Financial Statements                                                         |    |  | 78 | 
|Item 18.                                                             |  | Financial Statements                                                         |    |  | 78 | 
|Item 19.                                                             |  | Exhibit Index                                                                |    |  | 79 | 
|                                                                     | 
|Exhibit 1.1                                                          |  |                                                                              |    | 
|Exhibit 8.1                                                          |  |                                                                              |    | 
|Exhibit 12.1                                                         |  |                                                                              |    | 
|Exhibit 12.2                                                         |  |                                                                              |    | 
|Exhibit 13.1                                                         |  |                                                                              |    | 
|Exhibit 13.2                                                         |  |                                                                              |    | 



i



---

##### Table of Contents

Supplemental Information

All references to we, us, our and our company in this annual report are to Siliconware
Precision Industries Co., Ltd. and our 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. The ADSs are issued under the deposit agreement, as amended, supplemented or modified from time to time, originally dated as of June 7, 2000, among
Siliconware Precision Industries Co., Ltd. and Citibank, N.A., as depository, and the holders and beneficial owners of American Depositary Receipts issued thereunder. 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. R.O.C. 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. 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$ and NT dollars mean New Taiwan
dollars, $, 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;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | 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.
| | - |  | ------------------------------------------------------------------------------------------------



1



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##### Table of Contents

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 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. The selected statement of income data for the years ended December 31, 2009, 2010 and
2011 and the selected balance sheet data as of December 31, 2010 and 2011 have been derived from our audited financial statements included elsewhere in this annual report. The selected statement of income data for the years ended
December 31, 2007 and 2008 and the selected balance sheet data as of December 31, 2007, 2008 and 2009 have been derived from our audited financial statements not included in this annual report. The financial statements have been prepared
and presented according to generally accepted accounting principles in the Republic of China, or R.O.C. GAAP, which differ in many important respects from generally accepted accounting principles in the United States, or U.S. GAAP. For a discussion
of the material differences, see note 31 to our financial statements included elsewhere in this annual report. Some of our statement of income and balance sheet data items have been reconciled to U.S. GAAP as shown below.



|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|----------------------------------------------------------- |  | --------------------------------------------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------- | - | ------ |  | ------- | - |  |  | -------- | -
|                                                            |  | Years Ended December 31,                                              |        
|                                                            |  | 2007                                                                  |         |   | 2008 |  |         | 2009 |  |  | 2010    |   |  | 2011 |        
|                                                            |  | NT$                                                                   |         |   | NT$  |  |         | NT$  |  |  | NT$     |   |  | NT$  |         |   | US$(5) | 
|                                                            |  | (in millions, except earnings or dividends per shareand per ADS data) |        
|Income Statement Data:                                      |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|R.O.C. GAAP                                                 |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Net operating revenues                                      |  |                                                                       | 66,177  |   |      |  | 62,403  |      |  |  | 59,295  |   |  |      | 63,857  |   |        |  | 61,237  |   |  |  | 2,023.0  |  
|Cost of goods sold                                          |  |                                                                       | (46,776 | ) |      |  | (49,454 | )    |  |  | (47,852 | ) |  |      | (54,041 | ) |        |  | (51,747 | ) |  |  | (1,709.5 | )
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Gross profit                                                |  |                                                                       | 19,401  |   |      |  | 12,949  |      |  |  | 11,443  |   |  |      | 9,816   |   |        |  | 9,490   |   |  |  | 313.5    |  
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Operating expenses                                          |  |                                                                       | (3,224  | ) |      |  | (4,003  | )    |  |  | (3,300  | ) |  |      | (3,440  | ) |        |  | (4,400  | ) |  |  | (145.3   | )
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Operating income                                            |  |                                                                       | 16,177  |   |      |  | 8,946   |      |  |  | 8,143   |   |  |      | 6,376   |   |        |  | 5,090   |   |  |  | 168.2    |  
|Equity investment income (loss)(1)                          |  |                                                                       | 246     |   |      |  |        |      |  |  |        |   |  |      | (4      | ) |        |  | (26     | ) |  |  | (0.9     | )
|Other non-operating income(1)                               |  |                                                                       | 3,353   |   |      |  | 718     |      |  |  | 2,261   |   |  |      | 341     |   |        |  | 715     |   |  |  | 23.6     |  
|Other non-operating expense                                 |  |                                                                       | (148    | ) |      |  | (3,140  | )    |  |  | (191    | ) |  |      | (323    | ) |        |  | (235    | ) |  |  | (7.7     | )
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Income before income tax(1)                                 |  |                                                                       | 19,628  |   |      |  | 6,524   |      |  |  | 10,213  |   |  |      | 6,390   |   |        |  | 5,544   |   |  |  | 183.2    |  
|Income tax expense                                          |  |                                                                       | (2,139  | ) |      |  | (210    | )    |  |  | (1,423  | ) |  |      | (763    | ) |        |  | (707    | ) |  |  | (23.4    | )
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Income from continuing operations                           |  |                                                                       | 17,489  |   |      |  | 6,314   |      |  |  | 8,790   |   |  |      | 5,627   |   |        |  | 4,837   |   |  |  | 159.8    |  
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Net income(1)                                               |  |                                                                       | 17,489  |   |      |  | 6,314   |      |  |  | 8,790   |   |  |      | 5,627   |   |        |  | 4,837   |   |  |  | 159.8    |  
|                                                            |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Earnings per share(2)                                       |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Basic                                                       |  |                                                                       | 5.66    |   |      |  | 2.03    |      |  |  | 2.82    |   |  |      | 1.81    |   |        |  | 1.56    |   |  |  | 0.05     |  
|Diluted                                                     |  |                                                                       | 5.63    |   |      |  | 2.01    |      |  |  | 2.80    |   |  |      | 1.80    |   |        |  | 1.55    |   |  |  | 0.05     |  
|Shares used in per share calculation (average, as adjusted) |  |                                                                       |         |   |      |  |         |      |  |  |         |   |  |      |         |   |        |  |         |   |  |  |          |  
|Basic                                                       |  |                                                                       | 3,092   |   |      |  | 3,115   |      |  |  | 3,116   |   |  |      | 3,116   |   |        |  | 3,103   |   |  |  | 3,103    |  
|Diluted                                                     |  |                                                                       | 3,115   |   |      |  | 3,139   |      |  |  | 3,138   |   |  |      | 3,133   |   |        |  | 3,122   |   |  |  | 3,122    |  



2



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##### Table of Contents

|                                                               |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|-------------------------------------------------------------- |  | --------------------------------------------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | ---- | ------ | - | ------ |  | ------ | - |  |  | ------- | -
|                                                               |  | Years Ended December 31,                                              |       
|                                                               |  | 2007                                                                  |        |   | 2008 |  |        | 2009 |  |  | 2010   |   |  | 2011 |       
|                                                               |  | NT$                                                                   |        |   | NT$  |  |        | NT$  |  |  | NT$    |   |  | NT$  |        |   | US$(5) | 
|                                                               |  | (in millions, except earnings or dividends per share and perADS data) |       
|Earnings per ADS(2)                                            |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 28.30  |   |      |  | 10.15  |      |  |  | 14.10  |   |  |      | 9.05   |   |        |  | 7.80   |   |  |  | 0.26    |  
|Diluted                                                        |  |                                                                       | 28.15  |   |      |  | 10.05  |      |  |  | 14.00  |   |  |      | 9.00   |   |        |  | 7.75   |   |  |  | 0.26    |  
|Dividends per share(3)                                         |  |                                                                       | 3.55   |   |      |  | 4.60   |      |  |  | 1.80   |   |  |      | 2.58   |   |        |  | 1.62   |   |  |  | 0.05    |  
|ADSs used in per ADS calculation (average, as adjusted)(2)     |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 618    |   |      |  | 623    |      |  |  | 623    |   |  |      | 623    |   |        |  | 621    |   |  |  | 621     |  
|Diluted                                                        |  |                                                                       | 623    |   |      |  | 628    |      |  |  | 628    |   |  |      | 627    |   |        |  | 624    |   |  |  | 624     |  
|U.S. GAAP                                                      |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Net operating revenues                                         |  |                                                                       | 66,177 |   |      |  | 62,403 |      |  |  | 59,295 |   |  |      | 63,857 |   |        |  | 61,237 |   |  |  | 2,023.0 |  
|Operating Income                                               |  |                                                                       | 12,534 |   |      |  | 7,363  |      |  |  | 8,128  |   |  |      | 6,368  |   |        |  | 5,010  |   |  |  | 165.5   |  
|Income before income tax                                       |  |                                                                       | 15,214 |   |      |  | 4,661  |      |  |  | 10,199 |   |  |      | 6,382  |   |        |  | 5,464  |   |  |  | 180.5   |  
|Income tax expense                                             |  |                                                                       | (2,115 | ) |      |  | (267   | )    |  |  | (1,444 | ) |  |      | (785   | ) |        |  | (773   | ) |  |  | (25.5   | )
|Income from continuing operations                              |  |                                                                       | 13,099 |   |      |  | 4,394  |      |  |  | 8,755  |   |  |      | 5,597  |   |        |  | 4,691  |   |  |  | 155.0   |  
|Net income                                                     |  |                                                                       | 13,099 |   |      |  | 4,394  |      |  |  | 8,755  |   |  |      | 5,597  |   |        |  | 4,691  |   |  |  | 155.0   |  
|Earnings per share(4)                                          |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 4.33   |   |      |  | 1.42   |      |  |  | 2.81   |   |  |      | 1.80   |   |        |  | 1.51   |   |  |  | 0.05    |  
|Diluted                                                        |  |                                                                       | 4.32   |   |      |  | 1.42   |      |  |  | 2.81   |   |  |      | 1.80   |   |        |  | 1.51   |   |  |  | 0.05    |  
|Shares used in per share calculation (average, as adjusted)(4) |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 3,026  |   |      |  | 3,089  |      |  |  | 3,116  |   |  |      | 3,116  |   |        |  | 3,103  |   |  |  | 3,103   |  
|Diluted                                                        |  |                                                                       | 3,032  |   |      |  | 3,103  |      |  |  | 3,116  |   |  |      | 3,116  |   |        |  | 3,103  |   |  |  | 3,103   |  
|Earnings per ADS                                               |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 21.65  |   |      |  | 7.10   |      |  |  | 14.05  |   |  |      | 9.00   |   |        |  | 7.55   |   |  |  | 0.25    |  
|Diluted                                                        |  |                                                                       | 21.60  |   |      |  | 7.10   |      |  |  | 14.05  |   |  |      | 9.00   |   |        |  | 7.55   |   |  |  | 0.25    |  
|ADSs used in per ADS calculation (average, as adjusted)(4)     |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Basic                                                          |  |                                                                       | 605    |   |      |  | 618    |      |  |  | 623    |   |  |      | 623    |   |        |  | 621    |   |  |  | 621     |  
|Diluted                                                        |  |                                                                       | 606    |   |      |  | 621    |      |  |  | 623    |   |  |      | 623    |   |        |  | 621    |   |  |  | 621     |  
|                                                               |  |                                                                       |        |   |      | 
|Other Data:                                                    |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|R.O.C. GAAP                                                    |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Capital expenditures                                           |  |                                                                       | 12,151 |   |      |  | 10,048 |      |  |  | 5,303  |   |  |      | 15,321 |   |        |  | 10,982 |   |  |  | 362.8   |  
|Depreciation and amortization                                  |  |                                                                       | 8,169  |   |      |  | 9,432  |      |  |  | 8,954  |   |  |      | 8,913  |   |        |  | 9,646  |   |  |  | 318.7   |  
|Dividends declared per share                                   |  |                                                                       | 4.60   |   |      |  | 1.80   |      |  |  | 2.58   |   |  |      | 1.62   |   |        |  | 1.42   |   |  |  | 0.05    |  
|                                                               | 
|                                                               |  | As of December 31,                                                    |       
|                                                               |  | 2007                                                                  |        |   | 2008 |  |        | 2009 |  |  | 2010   |   |  | 2011 |       
|                                                               |  | NT$                                                                   |        |   | NT$  |  |        | NT$  |  |  | NT$    |   |  | NT$  |        |   | US$(5) | 
|                                                               |  | (in millions, except earnings or dividends per share and perADS data) |       
|Balance Sheet Data:                                            |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|R.O.C. GAAP                                                    |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Cash and cash equivalents                                      |  |                                                                       | 22,625 |   |      |  | 18,841 |      |  |  | 19,615 |   |  |      | 15,519 |   |        |  | 15,942 |   |  |  | 526.7   |  
|Working capital                                                |  |                                                                       | 26,363 |   |      |  | 18,481 |      |  |  | 20,978 |   |  |      | 14,648 |   |        |  | 16,769 |   |  |  | 554.0   |  
|Total assets                                                   |  |                                                                       | 85,773 |   |      |  | 73,380 |      |  |  | 78,311 |   |  |      | 82,557 |   |        |  | 83,691 |   |  |  | 2,764.8 |  
|Short-term debt and current portion of long-term debt          |  |                                                                       | 529    |   |      |  | 1,404  |      |  |  | 225    |   |  |      | 1,461  |   |        |  | 1,514  |   |  |  | 50.0    |  
|Long-term debt                                                 |  |                                                                       | 2,996  |   |      |  | 2,248  |      |  |  |       |   |  |      | 4,368  |   |        |  | 9,532  |   |  |  | 314.9   |  
|Total liabilities                                              |  |                                                                       | 16,865 |   |      |  | 14,066 |      |  |  | 15,229 |   |  |      | 21,261 |   |        |  | 24,896 |   |  |  | 822.5   |  
|Capital stock                                                  |  |                                                                       | 30,734 |   |      |  | 31,526 |      |  |  | 31,164 |   |  |      | 31,164 |   |        |  | 31,164 |   |  |  | 1,029.5 |  
|Total stockholders equity                                     |  |                                                                       | 68,908 |   |      |  | 59,314 |      |  |  | 63,081 |   |  |      | 61,296 |   |        |  | 58,795 |   |  |  | 1942.3  |  
|U.S. GAAP                                                      |  |                                                                       |        |   |      |  |        |      |  |  |        |   |  |      |        |   |        |  |        |   |  |  |         |  
|Total assets                                                   |  |                                                                       | 90,836 |   |      |  | 78,365 |      |  |  | 83,357 |   |  |      | 87,608 |   |        |  | 88,743 |   |  |  | 2,931.7 |  
|Total liabilities                                              |  |                                                                       | 19,140 |   |      |  | 14,448 |      |  |  | 15,899 |   |  |      | 21,988 |   |        |  | 25,684 |   |  |  | 848.5   |  
|Total stockholders equity                                     |  |                                                                       | 71,696 |   |      |  | 63,917 |      |  |  | 67,458 |   |  |      | 65,620 |   |        |  | 63,059 |   |  |  | 2,083.2 |  



|(1) | We recognized investment income of NT$246 million for the period between January 1, 2007 and March 27, 2007 from ChipMOS Taiwans financial results. In
2007, our investment income under U.S. GAAP from ChipMOS Taiwan was NT$253 million.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Pursuant to a Share Purchase and Subscription Agreement entered into among us, ChipMOS
Technologies (Bermuda) Ltd., or ChipMOS Bermuda and ChipMOS Taiwan, on March 27, 2007, we sold, and ChipMOS Bermuda and ChipMOS Taiwan purchased, all of the common shares of ChipMOS Taiwan, at par value NT$10 per share, owned by us for a total
cash consideration of US$191,147,464. In addition, we subscribed for 12,174,998 newly issued common shares of ChipMOS Bermuda, at par value US$0.01 per share, for an aggregate consideration of US$76,458,987, representing a purchase price of US$6.28
per common share of ChipMOS Bermuda. Upon the completion of the transaction, we owned 14.7% of ChipMOS Bermuda. From the date of the completion of the sale and purchase, we are required under both R.O.C. GAAP and U.S. GAAP to recognize our ownership
in ChipMOS Bermuda as available-for-sale financial assets and evaluate their fair market value on a quarterly basis (under R.O.C. GAAP) and on an annual basis (under U.S. GAAP) and reflect any difference in evaluation from the previous quarter as an
addition in or a deduction from unrealized gain or loss on available-for-sale financial assets.



|(2) | Retroactively adjusted for all subsequent stock dividends and employee share bonuses for 2007.
|--- | ----------------------------------------------------------------------------------------------

|(3) | Adjusted to reflect 77,892,337 shares, nil shares, nil shares, and nil shares distributed as stock dividends and employee stock bonuses in 2008, 2009, 2010, and 2011,
respectively, with respect to the earnings of 2007, 2008, 2009, and 2010.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Retroactively adjusted for all subsequent stock dividends only.
|--- | ---------------------------------------------------------------

|(5) | Amounts translated for convenience at NT$30.27 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, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Certain accounts in the consolidated financial statements for the years of 2007 and 2008 have been reclassified to conform to the 2009 consolidated financial statement
presentation due to the adoption of R.O.C. SFAS No. 10 Accounting for Inventories effective January 1, 2009.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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$30.27 = 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, 2011. 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 Period End | 
|2007                           |  |            | 32.85 |  |      |  | 33.41 |     |  |  | 32.26         |  |  |  | 32.43 | 
|2008                           |  |            | 31.51 |  |      |  | 33.55 |     |  |  | 29.99         |  |  |  | 32.76 | 
|2009                           |  |            | 32.96 |  |      |  | 35.21 |     |  |  | 31.95         |  |  |  | 31.95 | 
|2010                           |  |            | 31.39 |  |      |  | 32.43 |     |  |  | 29.14         |  |  |  | 29.14 | 
|2011                           |  |            | 29.42 |  |      |  | 30.67 |     |  |  | 28.50         |  |  |  | 30.27 | 
|October                        |  |            | 30.26 |  |      |  | 30.67 |     |  |  | 29.86         |  |  |  | 29.91 | 
|November                       |  |            | 30.22 |  |      |  | 30.43 |     |  |  | 30.02         |  |  |  | 30.31 | 
|December                       |  |            | 30.25 |  |      |  | 30.38 |     |  |  | 30.10         |  |  |  | 30.27 | 
|2012 (through April 13, 2012)  |  |            | 29.49 |  |      |  | 30.28 |     |  |  | 29.37         |  |  |  | 29.48 | 
|January                        |  |            | 29.99 |  |      |  | 30.28 |     |  |  | 29.61         |  |  |  | 29.61 | 
|February                       |  |            | 29.53 |  |      |  | 29.65 |     |  |  | 29.37         |  |  |  | 29.37 | 
|March                          |  |            | 29.52 |  |      |  | 29.61 |     |  |  | 29.37         |  |  |  | 29.50 | 
|April (through April 13, 2012) |  |            | 29.50 |  |      |  | 29.55 |     |  |  | 29.45         |  |  |  | 29.48 | 



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

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

The systemic economic and financial crisis in 2008 and 2009
that affected global businesses including the banking and financial sectors also had an impact on the semiconductor markets. The turmoil in global markets in 2008 resulted in sharp declines in demand for our semiconductor packaging and testing
services from which we generate our revenues. The global economy has been slowly recovering since the end of 2009. However, in light of the recent European debt crisis, the global economy is still uncertain and may continue to deteriorate in the
future. There were, and could be in the future, domino effects from such turmoil 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.

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 results of operations have varied, at times significantly, from quarter to quarter. Our future net operating revenues, gross profit and operating income 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 service or when our
customers demand changes, our operating results usually fluctuate.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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

Demand in the semiconductor industry has slowed down since the
beginning of 2011 as a result of general macroeconomic conditions, such as the European debt crisis, as well as natural disasters, such as the earthquake in Japan in March 2011 and the serious flooding in Thailand from July to November 2011. Such
unforeseen and uncontrollable events caused a decrease in our capacity utilization and our profitability, and continuing instability in demand has made it difficult for us to forecast demand and sustain a high utilization rate. Any lingering
downturn 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. See 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.

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.



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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 2009, 2010 and 2011, 60.0%, 56.4% and 57.8% of our net operating revenues, respectively, were derived from sales to our top ten customers. In 2011,
our largest customer accounted for over 10% of our net operating revenues. We expect that we will continue to depend on a relatively limited 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 such equipment and facilities expansions. 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. In addition, 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 and availability of equipment and
whether or when the market will recover. 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.

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

The
independent semiconductor packaging and testing industry is very competitive. We face substantial competition from established packaging and testing companies, including Advanced Semiconductor Engineering, Inc. (Taiwan), Amkor Technology Inc. (USA)
and STATS ChipPAC Ltd. (Singapore). We may face additional competition from new competitors in our industry in emerging countries, such as the Peoples Republic of China, or the P.R.C., where demand is expected to grow for our manufacturing
services. 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. Some of our
competitors have greater 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.



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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.

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, 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 have extended lead times or limited the supply of required materials to us because of supply capacity constraints during market upturns
for the semiconductor industry. Consequently, we have experienced from time to time 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.

The price of gold wire has been volatile and has fluctuated with the spot price of gold in recent years. In 2011, the spot price of gold fluctuated from a low of approximately US$1,312.2 per ounce to a
high of approximately US$1,900.1 per ounce. The increase in the price of gold wire resulted in the decrease in our gross margin in 2011. 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.



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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 many of 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.

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 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 liquid waste and solid waste, which are regulated by the government. For example, liquid waste is produced when silicon wafers are diced into chips using diamond saws and cooled with running
water. Liquid waste is also produced when lead-frames are plated with solder and cleansed with water after wafer chips are bonded onto them and capsulated by mold resin. Moreover, excess materials between leads of lead-frames are removed in the trim
and form process. Environmental claims or the failure to comply with any environmental regulations could result in damages or fines against us or suspension of production. 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. In March 2011, Japan was struck by a 9.0-magnitude earthquake. Although the earthquake together with the resulting tsunami and radiation leak at the Fukushima nuclear power plant have not had an immediate direct
impact on our operations, our supply chain was adversely affected as the production facilities of some suppliers to our suppliers are located in Japan. 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 us to exceed any standard(s) 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 affect 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 our
products. 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 is derived from sales to customers located outside of Taiwan. In 2009, 2010 and 2011, sales to our overseas customers accounted for 66.1%, 67.9% and 77.8%, 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.

The differences between Taiwan and U.S. accounting standards resulted in different amounts of our net income under those standards,
which makes evaluating our financial performance difficult

Our financial statements are prepared under R.O.C. GAAP,
which differ in many respects from U.S. GAAP. Year-to-year comparison of our financial results under R.O.C. GAAP may significantly differ from year-to-year comparison under U.S. GAAP. Largely as a result of the differences in accounting for 10% tax
on undistributed earnings as well as compensated absences for 2009, 2010 and 2011, our net incomes in 2009, 2010 and 2011 under U.S. GAAP were NT$8,755 million, NT$5,597 million and NT$4,691 million (US$155.0 million), respectively, as compared to
net income under R.O.C. GAAP of NT$8,790 million, NT$5,627 million and NT$4,837 million (US$159.8 million), respectively.



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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.
| | - |  | --------------------------

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.

We rely on
technology provided by third parties

We rely on certain technologies that we have obtained through alliances or
licenses. For example, we have licensed from Freescale Semiconductor Inc., or Freescale, formerly part of Motorola, Inc., or Motorola, the technology for ball grid array. We make royalty payments to Freescale and have the license to use this
technology until December 2015. We implement new package technologies by entering into technology alliances and by licensing package technologies from certain technology companies. There can be no assurance that third parties will continue to
license advanced technologies to us on terms satisfactory or acceptable to us after these licensing agreements expire, or at all. In the event that we are unable to license such advanced technologies from the third parties, we may be required to
develop designed around technologies internally. There can be no assurance that we will be able to develop such technologies internally.

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. Despite this, 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;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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.

On March 1, 2006, we were informed of a lawsuit, or the California
Litigation, brought by Tessera Inc., or Tessera, in the United States District Court for the Northern District of California against us, our subsidiary Siliconware U.S.A., Inc. and five other semiconductor companies and their subsidiaries. Tessera
alleges that some of our packaging services infringe patents owned by Tessera and that we have breached license agreements with Tessera. In May 2007, the parties stipulated a stay pending a final determination of an investigation directed against
other parties (including certain co-defendants in the California Litigation) conducted by the U.S. International Trade Commission, or the ITC. Pursuant to the stipulation, the court has stayed the litigation. In February 2007, we filed requests for
reexamination of five patents with the U.S. Patent and Trademark Office, or the PTO, four of which were asserted by Tessera against us in the California Litigation. The PTO has rejected part of the asserted patent claims on the grounds that each
claim is invalid in view of certain prior art, and part of the asserted patent claims have been confirmed by the PTO. Tessera has appealed some of these decisions to the Board of Patent Appeals and Interferences. As of December 2011, the stipulated
stay has been lifted and the case is expected to move forward with ongoing discovery in 2012. Because litigation is inherently unpredictable, we are unable to predict the ultimate outcome of any dispute. We are vigorously defending against
Tesseras allegations. If the Tessera disputes are not resolved in our favor, we may be forced to pay significant monetary damages, which could have a material adverse effect on our business and results of operations. For more information, see
Item 4. Information on the Company  B. Business Overview  Litigation.

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 R.O.C., and the P.R.C.

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 R.O.C. 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 P.R.C. 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 R.O.C. and the
P.R.C., relations have often been strained. The P.R.C. 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 P.R.C. Past developments in relations between the R.O.C. and the P.R.C. have on occasion depressed the market prices of the securities of companies in the R.O.C. The R.O.C. also
maintains important trade relations with the U.S., which has sometimes led to increased friction between the U.S. and the P.R.C. Any deterioration in relations among the U.S., the R.O.C. and the P.R.C. 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 2011, the Taiwan Stock Exchange Index peaked at 9145.35 on January 28, 2011 and
reached a low of 6633.33 on December 19, 2011. From January 1, 2011 to December 31, 2011, daily closing values of our shares ranged from NT$23.05 per share to NT$41.90 per share. The Taiwan Stock Exchange is particularly volatile
during times of political instability, including when relations between Taiwan and the P.R.C. 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 products are sold 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, 2011. Over the same period, the NASDAQ Composite Index ranged
from 1,114.11 to 4,274.67.

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 2011, the foreign exchange rate between the U.S.
dollar and the NT dollar has ranged from a high of NT$30.67 per US$1.00 to a low of NT$28.50 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.

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, H1N1 swine influenza or 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, 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 may adversely affect our profitability

The Amendments of the Income Tax Law promulgated on May 27, 2009 reduced the income
tax rate for profit-seeking enterprises from 25% to 20%, which is effective from January 1, 2010. However, the corporate income tax rate is further reduced from 20% to 17%, which is effective from January 1, 2010, based on the
Amendments of the Income Tax Law promulgated on June 15, 2010. In addition, according to theIndustrial Innovation Act issued 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. Any reduction or elimination of our preferential tax benefits would increase our tax obligations and could have an
adverse effect on our results of operations.

Risks Relating to the P.R.C.

Our operations in the P.R.C. may expose us to political, regulatory, economic and foreign investment risks in the P.R.C.

Some of our customers and foreign competitors have expanded their operations to the P.R.C. 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 P.R.C. 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 P.R.C. 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
P.R.C. 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 P.R.C., including us.

Since 1979, many laws and regulations dealing with general economic matters or particular economic activities have been promulgated in
the P.R.C. However, enforcement of existing laws and regulations may be uncertain and sporadic and implementation and interpretation thereof may be inconsistent. The P.R.C. 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 P.R.C.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 P.R.C. 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 P.R.C. 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.

The discontinuation of any preferential tax treatment currently available to us and the increase in the enterprise income tax in the P.R.C. could adversely affect our results of operations

Prior to January 1, 2008, the basic income tax rate for foreign-invested enterprises in the P.R.C. was 33% (30%
enterprise income tax and 3% local income tax). However, the P.R.C. government provided various incentives, including reduced tax rates and other measures, to foreign-invested enterprises and companies that meet certain criteria. Our subsidiary
Siliconware Suzhou was qualified for the favorable tax treatment and was entitled to a preferential enterprise income tax rate of 15%. In addition, Siliconware Suzhou is a foreign-invested manufacturing enterprise with an approved term of more than
ten years. Thus, Siliconware Suzhou is entitled to a two-year exemption from the enterprise income tax from the first profitable year of operation, and a 50% relief from the enterprise income tax for the subsequent three years. Under the P.R.C.
Enterprise Income Tax Law, or the EIT Law, which took effect on January 1, 2008, the P.R.C. adopted a uniform income tax rate of 25% for all enterprises in China (including foreign-invested enterprises) and revoked many of the current tax
exemption, reduction and preferential treatments applicable to foreign-invested enterprises. However, a transition period for enterprises, whether foreign-invested or domestic, that was subject to an enterprise income tax rate lower than 25% prior
to the effective date allows these enterprises to continue enjoying the lower rate and gradually transit to the new tax rate within five years after the effective date of the EIT Law. Enterprises that are currently entitled to exemptions or
reductions from the standard income tax rate for a fixed term may continue to enjoy such treatment until the fixed term expires. However, for foreign-invested enterprises, which are currently entitled to the two-year exemption and the subsequent
three-year 50% relief from enterprise income tax but have not yet experienced the first profitable year, the two-year exemption begins from January 1, 2008, regardless of whether such enterprise is profitable at that time.



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We cannot assure you that the current preferential tax treatments and the current level of
the enterprise income tax enjoyed by our P.R.C. operating subsidiary will continue, and any legislative changes to the tax regime could discontinue any preferential tax treatment applicable to our subsidiary in the P.R.C.

Changes in P.R.C. 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 P.R.C. 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 P.R.C. government would further reform the Renminbi exchange rate regime and increase the flexibility of the exchange rate. Following the removal of the U.S. dollar peg, the Renminbi appreciated 24% against the U.S. dollar between July 21,
2005 and December 31, 2011. Although it is difficult to predict how this new policy may impact the Renminbi exchange rates, 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.

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 R.O.C. law. Under current R.O.C. law, no person or
entity, including you and us, may deposit shares into our ADS program without specific approval of the R.O.C. Securities and Futures Bureau, or R.O.C. 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;
| | - |  | -------------------------------------------------------------------



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| |  |  | 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 R.O.C. 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 R.O.C. 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.

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 ADS 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.

The rights of holders of our ADSs to participate in our rights offerings may be
limited, which may cause dilution to their holdings

We may from time to time distribute rights to our shareholders,
including rights to acquire our securities. Under the deposit agreement, the depositary will not offer 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.



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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 laws governing R.O.C. corporations. The rights of our shareholders to bring shareholders suits against us or our board of directors under R.O.C. 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 R.O.C. law.

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-R.O.C.
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 R.O.C. SFB to open a
securities trading account with a local brokerage firm, pay R.O.C. 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 R.O.C. law and regulations, citizens of the P.R.C. 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 R.O.C.

We are a company limited by shares incorporated under the R.O.C. Company Act. Most of our assets and most of our directors, supervisors
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 R.O.C. arising out of or relating to the ADSs will not be enforced by R.O.C. 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 R.O.C. law;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | the judgment or the court procedures resulting in the judgment is contrary to the public order or good morals of the R.O.C.;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 R.O.C.; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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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 2011, 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 will not
be a PFIC for 2012 or any future taxable year. See Taxation  U.S. Federal Income Tax Considerations for U.S. Persons  Passive Foreign Investment Company.



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

A. History and Development of the Company

Our legal and commercial name is Siliconware Precision Industries Co., Ltd. We were incorporated under the R.O.C. Company Act as a company limited by shares on May 17, 1984. We provide services in
Taiwan through our facilities located in Taichung, Hsinchu and Changhua. Our principal executive offices are located at No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, Republic of China, and the telephone number is 886-4-2534-1525. Our
Internet website address is 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. In 2002, we established Siliconware Suzhou in P.R.C., a wholly-owned subsidiary to provide assembling and testing service in Suzhou, China. On August 31, 2009, we merged our
wholly-owned subsidiary, Siliconware Investment Company Ltd., in order to simplify our investment structure and reduce management costs.

Taiwan is home to the worlds largest independent wafer foundries and as such is home to one of the worlds leading suppliers of outsourcing semiconductor manufacturing. Our close proximity to
and relationships with Taiwans leading wafer foundries allow us to benefit significantly from the trend towards outsourcing in the semiconductor industry and to quickly respond to our customers needs. Our location in Taiwan also enables
our customers to secure seamless services within Taiwan for all of their manufacturing needs, thereby minimizing the time required to deliver finished semiconductor devices to the market.

For information relating to our capital expenditure, see  B. Business Overview  Capital Expenditures and
Divestitures.

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 substrate packages and
lead-frame packages, as well as testing for logic, mixed signal and embedded memory 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. For 2011, our top customers included the following
leading semiconductor suppliers: Advanced Micro Devices Inc., Broadcom Corporation, Intel Corporation, MediaTek Inc., Marvell Semiconductor Inc., NVIDIA Corp., SanDisk Corporation and Xilinx, Inc. We currently target customers in the personal
computer, communications, consumer Integrated Circuits (ICs) 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.



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The manufacturing services we offer are customized to the needs of our individual
customers. In 2011, 84.7% of our net operating revenues were from packaging services and 15.3% of our net operating revenues were from testing and other services. The following table shows, for the periods indicated, the amount of our packaging and
testing revenues by categories of manufacturing services and the revenues from the manufacturing services we provide as a percentage of our total net operating revenues:



|                             |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|---------------------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                             |  | Years Ended December 31,          |       
|                             |  | 2009                              |        |  | 2010 |  |       | 2011 | 
|                             |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                             |  | (in millions, except percentages) |       
|Substrate base packages      |  |                                   | 30,242 |  |      |  | 51.0  |      |  |  | 32,816 |  |  |     | 51.4  |  |   |  | 31,660 |  |  |  | 51.7  | 
|Lead-frame base packages     |  |                                   | 18,235 |  |      |  | 30.8  |      |  |  | 18,793 |  |  |     | 29.4  |  |   |  | 17,299 |  |  |  | 28.2  | 
|Other packages               |  |                                   | 2,880  |  |      |  | 4.8   |      |  |  | 2,531  |  |  |     | 4.0   |  |   |  | 2,936  |  |  |  | 4.8   | 
|Total packaging revenues     |  |                                   | 51,357 |  |      |  | 86.6  |      |  |  | 54,140 |  |  |     | 84.8  |  |   |  | 51,895 |  |  |  | 84.7  | 
|Testing and other revenues   |  |                                   | 7,938  |  |      |  | 13.4  |      |  |  | 9,717  |  |  |     | 15.2  |  |   |  | 9,342  |  |  |  | 15.3  | 
|Total net operating revenues |  |                                   | 59,295 |  |      |  | 100.0 |      |  |  | 63,857 |  |  |     | 100.0 |  |   |  | 61,237 |  |  |  | 100.0 | 

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
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 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 may reduce demand for our services and adversely affect our results of operations. Therefore, our operations are subject to seasonal effects.

Our Packaging 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 substrate packages, which include ball grid array and system in packages (incorporating multiple
semiconductor chips) and flip-chip ball grid array packages, together with 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 or copper wires or bumps. Each chip is then
encapsulated, generally by molding compound or underfilled in a flip chip ball grid array.

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;
| | - |  | ------------------------



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



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

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.

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 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.

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 bonding processes to replace conventional processes based on gold wire. Copper wire bonding processes has gained popularity recently due to the fact that copper prices do not fluctuate as widely as gold
prices. Presently, copper wire bonding is running at a high growth stage of production for lead-frame and substrate packaging.

Substrate Packages

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.



20



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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.

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 ICs. 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 package, or CSPs, on flexible or rigid substrates as well as lead-frames, which
are suitable for the portable consumer market. Furthermore, we have developed module packages, with multiple chips integrated into one package, in order to meet the growing demand for System-in-Package, or SiP, for applications in
personal computers, communications devices and consumer products.

Lead-Frame Packages

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 and Other Services

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 a variety of testing services as the
following:

Wafer Probing. Wafer probing is the step immediately before packaging of ICs and involves sorting the
processed wafer for defects to ensure that it meets customer acceptance criteria. ICs 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 ICs packages, Memory card and
other IC packages, including complex and high-performance ICs, 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 ICs used in consumer electronics products.



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Tooling Design. We provide change kit and socket design services for mixed signal
and RF ICs.

Other Testing Services. In addition to wafer probing and final testing 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

Although we sell and perform our services in Taiwan, our customers send us orders from their offices worldwide. We currently have more
than 100 customers worldwide, and our customers include many of the largest semiconductor companies in the world. In 2009, 2010 and 2011, 60.0%, 56.4% and 57.8% of our net operating revenues were derived from sales to our top ten customers,
respectively. In 2011, our largest customer accounted for over 10% of our net operating revenues. Our representative customers as of December 31, 2011 include Advanced Micro Devices Inc., Broadcom Corporation, Intel Corporation, MediaTek Inc.,
Marvell Semiconductor Inc., NVIDIA Corp., SanDisk Corporation and Xilinx, Inc.

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 is headquartered:



|                |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|--------------- |  | --------------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ |  |  | --- | ----- |  | - |  | ------ |  |  |  | ----- | 
|                |  | Years Ended December 31,          |       
|                |  | 2009                              |        |  | 2010 |  |       | 2011 | 
|                |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                |  | (in millions, except percentages) |       
|                |  |                                   |        |  |      | 
|U.S. and Canada |  |                                   | 29,875 |  |      |  | 50.4  |      |  |  | 31,324 |  |  |     | 49.1  |  |   |  | 33,723 |  |  |  | 55.1  | 
|Taiwan          |  |                                   | 20,098 |  |      |  | 33.9  |      |  |  | 20,512 |  |  |     | 32.1  |  |   |  | 13,594 |  |  |  | 22.2  | 
|Others(1)       |  |                                   | 9,322  |  |      |  | 15.7  |      |  |  | 12,021 |  |  |     | 18.8  |  |   |  | 13,920 |  |  |  | 22.7  | 
|                |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 
|Total           |  |                                   | 59,295 |  |      |  | 100.0 |      |  |  | 63,857 |  |  |     | 100.0 |  |   |  | 61,237 |  |  |  | 100.0 | 
|                |  |                                   |        |  |      |  |       |      |  |  |        |  |  |     |       |  |   |  |        |  |  |  |       | 



|(1) | Include primarily Singapore, Germany and Korea.
|--- | -----------------------------------------------

Sales from purchase orders received from outside of Taiwan accounted for 66.1%, 67.9% and 77.8% of our net operating revenues in 2009, 2010 and 2011, respectively. We primarily target semiconductor
companies that contract their wafer foundry services to major independent R.O.C. foundries. Our customers, including AMD and NVIDIA Corp., are world-leading suppliers of graphic chipsets. Our customers mainly require quad flat packages and substrate
packages. We also focus on marketing our packaging and testing services in Japan and Europe to increase sales to these two areas.

We believe we have benefited from our location in Taiwan where outsourced semiconductor manufacturing infrastructure is well established. Our long-term relationships with two of the worlds largest
independent wafer foundries are important to the continued growth of our services. A very large portion of the semiconductor devices we package and test is manufactured in Taiwans leading wafer foundries. As these wafer foundries grow, we
expect that their demand for our services will continue to grow. Moreover, we believe that we can leverage these relationships to jointly market seamless outsourced semiconductor manufacturing services from design to drop shipment and remain at the
forefront in semiconductor technology. We also believe that our close proximity and close relationships to wafer foundries enable our customers to more efficiently manage their supply chains and find comprehensive solutions to their semiconductor
needs.



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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.

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.

Sales and Marketing

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 team in Taichung and Hsinchu among many of Taiwans leading domestic semiconductor companies. In addition, our subsidiary Siliconware U.S.A., with offices in San Jose 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.

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 wire connections. To ensure that our quality control procedures are effectively applied, production line employees are provided with periodic training.



23



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##### Table of Contents

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 May 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 and QC080000 certification for hazardous substance process management in August 2008.

As a result of our ongoing focus on quality, we achieved average quarterly packaging yields of 99.8% in 2011. 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 ICs that are attached to substrates, lead-frames, or wafer level 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:



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



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



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



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



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



| |  |  | wafer level micro-electromechanical system (MEMS) packaging;
| | - |  | ------------------------------------------------------------



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



| |  |  | Wafer Level Fan Out technology;
| | - |  | -------------------------------



| |  |  | vertical connection interconnection technology; and
| | - |  | ---------------------------------------------------



| |  |  | 3D IC design and testing technologies.
| | - |  | --------------------------------------



24



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##### Table of Contents

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 2009, 2010 and 2011, our research and
development expenses amounted to NT$1,276 million, NT$1,538 million and NT$2,001 million (US$66.1 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 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 2011, the spot price of gold fluctuated from a low of approximately US$1,312.2 per ounce to a high of approximately US$1,900.1 per ounce. The volatility in the price of gold wire resulted in decrease in our gross margin in 2011 compared to
2010. 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
diameter of the gold wire used. In addition, we are continuing to develop copper wire bonding processes. Our major suppliers of raw materials, which include Chang Wah Electromaterials Inc., Kinsus Interconnect Technology Corp., MK ELECTRON CO.,
LTD., Nanya Printed Circuit Board Corp., Unimicron Technology Corp. and Sumitomo Metal Mining Co., Ltd. are leading companies in the types of materials they supply. We work closely with them and provide them with rolling forecasts. For 2009, 2010
and 2011, our raw material costs were 56.1%, 56.9% and 53.2%, respectively, of cost of goods sold.

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 Apic Yamada Corporation, Kulicke & Soffa Industries Inc. and TOWA Corporation.

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 Verigy Ltd., which took over the semiconductor testing business of Agilent Technologies, Inc. in June 2006, Advantest Taiwan Inc., and Teradyne Inc.



25



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##### Table of Contents

As of December 31, 2011, we operated 5,520 wire bonders and 258 testers in Taiwan. In
addition, our subsidiary, Siliconware Suzhou has 1,015 wire bonders and 61 testers in the P.R.C. 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 STATS ChipPAC Ltd. (Singapore). 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.
| | - |  | ------

Integrated Device Manufacturers, or 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 and the United States engaged in related semiconductor packaging and testing
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. These participations include:



| |  |  | On December 1, 2009, one of our investees, Phoenix Precision Technology Corporation, or PPT, merged with Unimicron Technology Corporation, or
Unimicron, a supplier of semiconductor raw materials, including substrates. Unimicron was the surviving entity and PPT was dissolved. Each common share of PPT was converted into 0.628 common shares of Unimicron. The common shares of PPT held by us
were converted to common shares Unimicron. As of December 31, 2011, we held a 4.97% equity interest in Unimicron.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | ChipMOS Technologies (Bermuda) Ltd., or ChipMOS Bermuda. As of December 31, 2011, we held a 9.11% equity interest in ChipMOS Bermuda, a
semiconductor packaging and testing and LCD driver and IC manufacturing company.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ChipMOS Taiwan. As of December 31, 2011, we held a 15.78% equity interest in ChipMOS Taiwan, which is engaged in packaging and testing services
for flat-panel display drivers and advanced memory products. We acquired this equity interest in 2010 as part of a share purchase / sales agreement with ChipMOS Bermuda.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to enhance our assembly-related techniques, we purchased preferred stock of Vertical Circuits, Inc. (VCI) for US$5 million in December 2010.
Our percentage of ownership in VCI is approximately 30.69%.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to develop our SiP (System in Package) module business, we purchased 1.75 million common shares of AcSiP Technology Corp. (AcSiP) for
NT$50.75 million (US$1.68 million) in May 2011. Our percentage of ownership in AcSiP is approximately 16.73%.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Intellectual Property

As of December 31, 2011, we held 340 Taiwan patents, 332 U.S. patents and 84 P.R.C. 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, 2011, we also had a total of 76 pending patent applications in the United States, 159 in Taiwan and 90 in the P.R.C. In addition, we had registered
SPIL as a trademark and as a servicemark in Taiwan.

We have licensed from Freescale, formerly part of Motorola
prior to April 2004, the technology for ball grid array packages. This license will expire in December 2015.

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 were immaterial compared to our
revenues in any of the years ended December 31, 2009, 2010 and 2011.

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;
| | - |  | -----------------------------------------------------



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| |  |  | 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 waste water and gases from the processes including solder plating, wafer grinding and die sawing. During these processes, waste water
is produced when water is used for cooling and rinsing wafers while they are 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 excess molding resin.

As for the newly developed bumping process, waste water is produced when water is used for rinsing wafers in the processes of etching and
solder deposition. Gases come from the emissions of solvents that are used for cleansing wafers during the bumping process.

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 gaseous waste and waste water in our facilities. As part of our pollution control programs, we also subcontract certain waste
disposal and recycling work to suppliers who are qualified by the Environmental Protection Administration. Furthermore, we also actively monitor any changes in the international environmental requirements in the electronic and semiconductor
industries in order to respond quickly to such changes. 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 R.O.C. and all international environmental requirements. We have implemented an international environmental management system since 1998 and received the ISO-14001 certification in
1999. 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 a new industrial management standard for the production of environmentally friendly products.

We also have taken various energy saving and carbon reduction measures to reduce our green house gas emissions. Since 2005, we have conducted annual green house gas emission inventories. We also have been
disclosing through the Carbon Disclosure Project since 2007. In 2010, we completed our green house gas inventory and verification of all factories and dormitories in Taiwan according to the ISO 14064-1 standard. Moreover, we completed product carbon
footprint inventory and verification for a particular product (TFBGA) in 2011, in accordance with the PAS 2050 standard.

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.



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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$5,303 million, NT$15,321 million and NT$10,982 million (US$362.8 million) in 2009, 2010 and 2011, respectively. Our initial budget for capital expenditures for 2012
is approximately NT$17,500 million (US$578.1 million), which is mostly funded from our retained earnings and borrowings. We expect our capital expenditures in 2012 will primarily consist of purchasing equipment and improving our facilities. 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, paid or committed, for the periods indicated.



|                                             |  |                          |       |  |      |  |        |      |  |  |       |  |  |  |       | 
|-------------------------------------------- |  | ------------------------ | ----- |  | ---- |  | ------ | ---- |  |  | ----- |  |  |  | ----- | 
|                                             |  | Years Ended December 31, |      
|                                             |  | (in millions)            |      
|                                             |  | 2009                     |       |  | 2010 |  |        | 2011 |  |  | 2011  | 
|                                             |  | NT$                      |       |  | NT$  |  |        | NT$  |  |  | US$   | 
|Equipment purchases                          |  |                          | 3,561 |  |      |  | 12,347 |      |  |  | 8,496 |  |  |  | 280.7 | 
|Land and building construction and purchases |  |                          | 1,742 |  |      |  | 2,974  |      |  |  | 2,486 |  |  |  | 82.1  | 

Litigation

On March 1, 2006, we were informed of a lawsuit, or the California Litigation, brought by Tessera Inc., or Tessera, in the United States District Court for the Northern District of California against
us, our subsidiary Siliconware U.S.A., Inc. and five other semiconductor companies and their subsidiaries. Tessera alleged that some of our packaging services infringe patents owned by Tessera and that we breached a license agreement with Tessera.
In May 2007, the parties stipulated a stay pending a final determination of an investigation directed against other parties (including certain co-defendants in the California Litigation) conducted by the U.S. International Trade Commission. Pursuant
to the stipulation, the court stayed the litigation.

In February 2007, we filed requests for reexamination of five patents
with the U.S. Patent and Trademark Office, or the PTO, four of which being asserted by Tessera against us in the California Litigation. The PTO has rejected part of the asserted patent claims on the grounds that each claim is invalid in view of
certain prior art and part of the asserted patent claims have been confirmed by the PTO. Tessera has appealed some of these decisions to the Board of Patent Appeals and Interferences. As of December 2011, the stipulated stay has been lifted and the
case is expected to move forward with ongoing discovery in 2012.

Because litigation is inherently unpredictable, we are
unable to predict the ultimate outcome of any dispute. See Item 3. Key Information  D. Risk Factors  Risks Relating to Our Technologies  Disputes over intellectual property rights could be costly and could deprive us of
technologies to stay competitive.



29



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##### Table of Contents

C. Organizational Structure

The following table sets forth certain information as of December 31, 2011 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$                                | 130.0 | (1) |                                |  | 100.00 | %



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

The
following table sets forth certain information regarding our investees as of December 31, 2011.



|                                    |  |                                                                                       |  |                        |  |                                    |        |     |                                |  |       |  
|----------------------------------- |  | ------------------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------------------- | ------ | --- | ------------------------------ |  | ----- | -
|Company                             |  | Main Activities                                                                       |  | Location               |  | Total Paid-inCapital of SuchEntity |        |     | Direct/IndirectEquity Interest | 
|                                    |  |                                                                                       |  |                        |  | (in millions)                      |        |     |                                | 
|ChipMOS Technologies (Bermuda) Inc. |  | Investment activities                                                                 |  | Hsinchu, Taiwan        |  | US$                                | 1.3    |     |                                |  | 9.11  | %
|Unimicron Technology Corp.          |  | Researching, developing, manufacturing and selling ball grid array substrate          |  | Taoyuan, Taiwan        |  | NT$                                | 15,386 |     |                                |  | 4.97  | %
|ChipMOS Technologies Inc.           |  | Assembly and testing services of integrated circuits.                                 |  | Hsinchu, Taiwan        |  | NT$                                | 8,429  |     |                                |  | 15.78 | %
|Hsieh Yong Capital Co., Ltd.        |  | Investment activities                                                                 |  | Taipei, Taiwan         |  | NT$                                | 7,631  |     |                                |  | 7.58  | %
|Mega Mission Limited Partnership    |  | Investment activities                                                                 |  | Cayman Islands         |  | US$                                | 150    | (1) |                                |  | 4.00  | %
|AcSiP Technology Corp.              |  | Researching, designing and selling RF modules                                         |  | Taoyuan, Taiwan        |  | NT$                                | 138    |     |                                |  | 16.73 | %
|Vertical Circuits, Inc.             |  | Providing advanced packaging technology, products, services and intellectual property |  | Scotts Valley, CA, USA |  | US$                                | 0.005  |     |                                |  | 30.69 | %



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

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. We began construction of plant C in Changhua in December 2009 and completed the construction in April 2011. 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, 2011.



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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  |                                  |  | 5,520 wire bonders and 258 testers(3)
|CS Facility II  |  | Taichung, Taiwan     |  |                  | 141,000 |  |                 |  | 47,000  |                                  |  |                                      
|HS Facility III |  | Hsinchu, Taiwan      |  |                  | 95,000  |  |                 |  | 26,500  | (2)                              |  |                                      
|CH Facility IV  |  | Changhua, Taiwan     |  |                  | 130,000 |  |                 |  | 42,000  |                                  |  |                                      
|SZ Facility V   |  | Suzhou, China        |  |                  | 74,000  |  |                 |  | 148,500 | (2)                              |  | 1,015 wire bonders and 61 testers    



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

|(2) | Leased.
|--- | -------

|(3) | Includes wire bonders and testers for DF Facility I, CS Facility II, HS Facility III and CH Facility IV.
|--- | --------------------------------------------------------------------------------------------------------

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



|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 R.O.C. GAAP. 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. Our financial statements are prepared according to
R.O.C. GAAP, which differ from U.S. GAAP. For a discussion of the material differences, see note 31 to our financial statements included elsewhere 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 substrate packages such as flip-chip ball grid packages, together with lead-frame packages, and testing services for logic, mixed signal and embedded memory devices. We also offer our customers
complete turnkey solutions, including packaging, testing and drop shipment service.

We recorded operating income of NT$8,143
million, NT$6,376 million and NT$5,090 million (US$168.2 million) in 2009, 2010 and 2011, respectively. Decreases in our operating income for 2011 compared to 2009 and 2010 were mainly attributable to a reduction in general demand in 2011 due to the
global economic downturn, the increase in gold prices, the appreciation of the New Taiwan Dollar against the U.S. Dollar and the increase in operating expenses. 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.

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;
| | - |  | --------------------------------------------------------------------------------



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| |  |  | find alternative, less expensive 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 are the global economy and conditions in the financial and credit markets. Although the global economy and conditions in the financial and credit
markets moved steadily toward recovery in the first quarter of 2011, the European debt crisis and natural disasters, including the Japan earthquake and Thailand floods, in the second half of 2011, had a significant impact on economic growth and
consumer confidence. These uncertainties have contributed to a slowdown in the market demand for semiconductor-based products and other products that use our services, which has led to a decrease in demand for our services. We therefore experienced
a flat season in place of the traditional peak season for the industry in the second half of 2011.

In addition, our results
of operations were also affected by the increase in gold prices, the time-consuming process of copper wire bonding, the fluctuation of the New Taiwan Dollar and rising wage levels.

Consolidation

For 2008, we consolidated five subsidiaries: Siliconware Investment Company Ltd., SPIL (B.V.I.) Holding Limited, Siliconware U.S.A. Inc., SPIL (Cayman) Holding Limited and Siliconware Technology (Suzhou)
Limited, each in which we own a 100% equity interest. On August 31, 2009, we merged our wholly-owned subsidiary, Siliconware Investment Company Ltd., hence reducing the number of our consolidated subsidiaries to four. Upon adoption of the Order
of the Financial Supervisory Commission, Executive Yuan No. 0930154140 in January 2005, we were required to prepare consolidated financial statements pursuant to R.O.C. SFAS No. 7 on a semiannual basis. However, the Commission released the
Order No. 0960064020 in November 2007, which requires us to prepare consolidated financial statements on a quarterly basis commencing January 2008.

Transactions with ChipMOS Taiwan and ChipMOS Bermuda

On February 26,
2010, pursuant to a resolution by our board of directors, we entered into an equipment purchase / sales agreement with ChipMOS Taiwan, to sell certain equipment to ChipMOS Taiwan for an aggregate consideration of NT$1,631 million. The aggregate
consideration was determined based on the appraisal report issued by China Credit Information Service, Ltd. as well as negotiations between us and ChipMOS Taiwan. Under the terms of the equipment purchase agreement, we commit not to purchase DRAM
testers and LCD driver assembly and test equipment for five years from February 26, 2010. The equipment was transferred to ChipMOS Taiwan in four installments, the last one of which was completed in August 2010. On January 7, 2011, we
received the final payment from ChipMos Taiwan as the proceeds of selling such equipment.

On February 26, 2010, pursuant
to a resolution by our board of directors, we entered into a share purchase / sales agreement with ChipMOS Bermuda to purchase 133,000,000 common shares of ChipMOS Taiwan, for an aggregate consideration of NT$1,631 million. ChipMOS Taiwan is a 100%
owned subsidiary of ChipMOS Bermuda. The share purchase represents approximately 15.78% of the outstanding shares of ChipMOS Taiwan. The aggregate consideration was determined based on the valuation report provided by Horizon Securities Ltd. as well
as negotiations between us and ChipMOS Bermuda.

Change in Mix of Services

Beginning in 2004, our substrate packages accounted for a majority of our net operating revenues in relation to our packaging business.
Our lead-frame packages, which had been our major packaging technology since January 1998, still account for a substantial percentage of our net operating revenues.



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The following table shows, for the periods indicated, the amount 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,          |       
|                             |  | 2009                              |        |  | 2010 |  |       | 2011 | 
|                             |  | NT$                               |        |  | %    |  |       | NT$  |  |  | %      |  |  | NT$ |       |  | % | 
|                             |  | (in millions, except percentages) |       
|                             |  |                                   |        |  |      | 
|Substrate base packages      |  |                                   | 30,242 |  |      |  | 51.0  |      |  |  | 32,816 |  |  |     | 51.4  |  |   |  | 31,660 |  |  |  | 51.7  | 
|Lead-frame base packages     |  |                                   | 18,235 |  |      |  | 30.8  |      |  |  | 18,793 |  |  |     | 29.4  |  |   |  | 17,299 |  |  |  | 28.2  | 
|Other packages               |  |                                   | 2,880  |  |      |  | 4.8   |      |  |  | 2,531  |  |  |     | 4.0   |  |   |  | 2,936  |  |  |  | 4.8   | 
|Total packaging revenues     |  |                                   | 51,357 |  |      |  | 86.6  |      |  |  | 54,140 |  |  |     | 84.8  |  |   |  | 51,895 |  |  |  | 84.7  | 
|Testing and other revenues   |  |                                   | 7,938  |  |      |  | 13.4  |      |  |  | 9,717  |  |  |     | 15.2  |  |   |  | 9,342  |  |  |  | 15.3  | 
|Total net operating revenues |  |                                   | 59,295 |  |      |  | 100.0 |      |  |  | 63,857 |  |  |     | 100.0 |  |   |  | 61,237 |  |  |  | 100.0 | 

Expansion and Utilization Rate

As we continue to expand our capacity in order to meet demand from our customers, the number of our wire bonders increased to 5,613 as of
December 31, 2009, 6,312 as of December 31, 2010, and 6,535 as of December 31, 2011.

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 95%, 91% and 89% in 2009, 2010 and 2011, respectively.

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 R.O.C. GAAP. R.O.C. GAAP varies in certain significant
respects from U.S. GAAP. These differences and their effects on our financial statements are described in note 31 to our audited consolidated financial statements included in this annual report. 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 estimates,
including those related to revenue recognition, accounts receivable and allowance for doubtful accounts, inventory reserves, deferred tax asset valuation allowance, employee bonuses, impairment of long-lived assets and equity investments, and
goodwill impairment. 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.

We believe the following critical accounting policies involve significant judgments and estimates used in the preparation of our audited consolidated financial statements.

Revenue Recognition

We principally provide packaging and testing services of ICs, which may be packaging only, test only or turnkey solutions. Revenues are recognized when services have been provided based on transaction
terms and when collectibility is reasonably assured. If turnkey services are negotiated in one contract, we recognize revenues based on the quoted prices when all of the revenue recognition criteria are met.



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Accounts Receivable and Allowances for Doubtful Accounts

We record accounts receivable expected to be collected over one year 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. The allowance for doubtful accounts is provided based on the estimated allowance to be incurred and is recorded as deduction of accounts receivable.

Inventory Reserves

In general, raw materials are purchased based on
the customers forecasted demand. If our customers change their forecasted requirements and we are unable to cancel our excess raw material orders, we would experience a build up in our raw material inventory. We could either seek to recover
the cost of the materials from our customers or utilize the inventory in production. However, we may not be successful in recovering the cost from our customers or in using such excess inventory in production, which we would consider as part of our
reserve estimate. Our reserve for excess and obsolete inventory is based on forecasted demand we receive from our customers. When a determination is made that the inventory would not be utilized in production, it is written off and disposed of.
Actual demand may differ from our forecast and may result in additional reserve.

Inventories are recorded at cost when
acquired under a perpetual inventory system. Cost is determined using the weightedaverage method. The allowance for loss on obsolescence and decline in market value is recorded based on inventory aging and obsolescence, when necessary. Prior
to January 1, 2009, inventories were stated by category at the lower of aggregate cost or market value and total inventory approach as of the balance sheet date. Effective January 1, 2009, inventories are stated at the lower of cost or net
realizable value by item, except where it may be appropriate to group similar 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.

Impairment of Long-Lived Assets

We review long-lived assets for the purpose of determining the amount of impairment quarterly under R.O.C. GAAP. We perform impairment
test whenever an event occurs or evidence indicates that the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is measured as the higher of the fair value less cost to sale or value in use. The fair value less cost to
sale is the amount obtainable from the sale of an asset in an arms-length transaction after deducting any direct incremental disposal costs. The value in use is the present value of estimated future cash flows expected to arise in its remained
useful life.

An impairment loss recognized in prior years is reversed if such impairment loss caused by a specific external
event of an exceptional nature is not expected to recur. However, the restored amount is limited to the amount of impairment loss previously recognized. Impairment loss for goodwill cannot be reversed.

In 2009, 2010 and 2011, we recognized an impairment charge of NT$74 million, NT$118 million and NT$134 million (US$4.4 million),
respectively, for packaging and testing assets to be disposed of to reduce the carrying value of the assets to their estimated fair value less cost of sale. The fair value of the assets to be disposed of was determined by the estimated net
realizable value of the assets. We determined the estimated net realizable value of these assets based on the condition and anticipated future cash flows of these assets. The impairment charge was mainly related to our decision to dispose certain
machinery and equipment due to technology phase out and replacement in 2009, 2010 and 2011.

Impairment of Equity
Investments

We evaluate quarterly our equity investments for impairment due to declines in the fair value that are
considered other than temporary under R.O.C. GAAP. Such evaluations include an assessment of general economic and company-specific considerations, such as customer forecasts and regularly updated projections of operating results. The evaluation,
which requires considerable management judgment, of whether there is a decline in fair value is based on the objective evidence of impairment, which includes significant or prolonged decline in fair value below cost, or significant adverse changes
in technological, market economic, or legal environment. After the evaluation, any loss identified from the evaluation is recognized in the current years income. For an investee who resolves to liquidate or dissolve, a one-time write-off would
be recorded to the extent that the estimated proceeds would be obtained and the amount of investment balance would not be recovered.



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Provision for Income Taxes and Deferred Tax Asset Valuation Allowances

As of December 31, 2011, we had approximately NT$1,582 million (US$52.3 million) of net deferred income tax
assets related principally to investment tax credits that expire at various dates through 2015, and the unrealized loss on idle assets. A valuation allowance was provided to reduce the deferred income tax assets to the amount that we believe is more
likely than not to be realized. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowances. In the event we determined that we would be able to realize our
deferred income tax assets in the future in excess of our net recorded amount, an adjustment to our deferred income tax assets would increase income in the period such determination was made. Similarly, should we determine that we would not be able
to realize all or part of our net deferred income tax assets in the future, an adjustment of our deferred tax assets would be charged to income in the period such determination was made.

Goodwill

Goodwill arising from business combination is recognized under U.S. GAAP as the difference between the fair value of shares issued or other consideration and the fair value of net assets acquired. ASC
Topic 350, Intangibles  Goodwill and Other, or ASC Topic 350, requires that we perform an impairment review, at the reporting unit level, at least annually thereafter. Based on the comparison of the fair value and carrying value of
the reporting unit, we concluded that goodwill was not impaired as of December 31, 2011.

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.

Net operating revenues are recognized when services are rendered and the collection is realized or realizable. 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.

Cost of Goods Sold

Our cost of goods sold consists 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, utilities and royalties.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

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 on 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 has been reduced from 25% to 17% since January 1, 2010. Therefore, 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 business in Taiwan, we have been granted exemptions from income taxes in Taiwan because we used the proceeds raised
through the offering of American depository receipts and 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. As a result, we began to use these exemptions in 2004. These tax exemptions resulted in tax savings of approximately NT$307 million, NT$120 million and NT$85 million (US$2.8 million) in 2009, 2010 and 2011,
respectively. We also benefit 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$863 million, NT$252 million and
NT$255 million (US$8.4 million) in 2009, 2010 and 2011, respectively. In 2009, 2010 and 2011, our effective income tax rates were 12.50%, 11.30% and 11.17%, respectively.

ASC Topic 740, Income Tax, or ASC Topic 740, requires the recognition of the impact of a tax position in our financial statements if that
position is more likely than not of being sustained on audit. Two-step process is required for the evaluation. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination based on the
technical merits of the position. The second step is to determine the amount of benefit to recognize in the financial statements if the more-likely-than-not recognition threshold is met. The tax position is measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon settlement. We adopted the provisions of ASC Topic 740 in January 2007 and performed our evaluation pursuant to the interpretation.

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, |      
|                                    |  | 2009                     |       |   | 2010 |  |       | 2011 | 
|                                    |  | %                        |       |   | %    |  |       | %    | 
|Net operating revenues              |  |                          | 100.0 |   |      |  | 100.0 |      |  |  | 100.0 |  
|Cost of goods sold                  |  |                          | 80.7  |   |      |  | 84.6  |      |  |  | 84.5  |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Gross profit                        |  |                          | 19.3  |   |      |  | 15.4  |      |  |  | 15.5  |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating expenses:                 |  |                          |       |   |      |  |       |      |  |  |       |  
|Selling expenses                    |  |                          | 1.1   |   |      |  | 0.6   |      |  |  | 1.2   |  
|General and administrative expenses |  |                          | 2.4   |   |      |  | 2.4   |      |  |  | 2.7   |  
|Research and development expenses   |  |                          | 2.1   |   |      |  | 2.4   |      |  |  | 3.3   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating expenses                  |  |                          | 5.6   |   |      |  | 5.4   |      |  |  | 7.2   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Operating income                    |  |                          | 13.7  |   |      |  | 10.0  |      |  |  | 8.3   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Investment income                   |  |                          |      |   |      |  |      |      |  |  |      |  
|Net non-operating (loss) income     |  |                          | 3.5   |   |      |  |      |      |  |  | 0.8   |  
|Income before income tax            |  |                          | 17.2  |   |      |  | 10.0  |      |  |  | 9.1   |  
|Income tax expense                  |  |                          | (2.4  | ) |      |  | (1.2  | )    |  |  | (1.2  | )
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  
|Net income                          |  |                          | 14.8  |   |      |  | 8.8   |      |  |  | 7.9   |  
|                                    |  |                          |       |   |      |  |       |      |  |  |       |  



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The Year ended December 31, 2011 compared to the Year Ended December 31,
2010

Net operating revenues. Net operating revenues decreased by 4.1% from NT$63,857 million in 2010 to
NT$61,237 million (US$2,023.0 million) in 2011. The decrease in net operating revenues was primarily due to a decline in demand in the semiconductor industry, which was a result of the slowdown of the global economy as caused by the European debt
crisis and natural disasters such as the earthquake in Japan and floods in Thailand, and the appreciation of the New Taiwan Dollar against the U.S. Dollar.

Substrate base package sales decreased by 3.5% from NT$32,816 million in 2010 to NT$31,660 million (US$1,045.9 million) in 2011. The decrease in substrate base package sales was due to the slowdown of the
outsourced semiconductor assembling and testing industry. In 2011, substrate base package accounted for 51.7% of our net operating revenues, up from 51.4% in 2010.

Lead-frame base package sales decreased by 7.9% from NT$18,793 million in 2010 to NT$17,299 million (US$571.5 million) in 2011. The decrease in lead-frame base package sales was attributable to the weak
demand of the DRAM market. In 2011, lead-frame base package accounted for 28.2% of our net operating revenues, down from 29.4% in 2010.

Gross profit and gross margin. Our gross profit decreased by 3.3% from NT$9,816 million in 2010 to NT$9,490 million (US$313.5 million) in 2011 mainly due to the decrease in sales revenues. Although
gold prices increased, our gross margin (gross profit as a percentage of net operating revenues) remained stable from 15.4% in 2010 to 15.5% in 2011, mainly attributed to our efficient internal cost management and the migration to copper bonding.
Our cost of goods sold decreased by 4.2% from NT$54,041 million in 2010 to NT$51,747 million (US$1,709.5 million) in 2011, in line with the decrease in our sales revenues.

Operating expenses. Operating expenses increased by 27.9% from NT$3,440 million in 2010 to NT$4,400 million (US$145.4 million) in 2011. Operating expenses as a percentage of net operating revenues
was 5.4% and 7.2% in 2010 and 2011, respectively.

Selling expenses. Selling expenses increased by NT$338 million
between these two years mainly due to reversal of bad debt in 2010 of NT$261 million upon receipt of payment for overdue invoices and an increase in salary expenses in 2011 of NT$45 million.

General and administrative expenses. General and administrative expenses increased by NT$159 million mainly due to increases in
salary and depreciation expenses.

Research and development expenses. Research and development expenses increased by
NT$463 million mainly due to increases in salary expenses and development expenses for new products.

Operating income and
operating margin. We recorded operating income of NT$6,376 million and an operating margin of 10.0% (operating income as a percentage of net operating revenues) in 2010 and generated operating income of NT$5,090 million (US$168.2 million) and
operating margin of 8.3% in 2011. The decrease in operating margin was primarily due to an increase in our operating expenses.



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Net non-operating income. Our net non-operating income increased from NT$14 million
in 2010 to NT$454 million (US$15.0 million) in 2011. The increase in net non-operating income was primarily due to a gain on foreign exchange of NT$202 million recognized in 2011 as a result of depreciation of the Taiwanese dollar against the U.S.
dollar and an increase of NT$91 million on cash dividends received from our investee.

Income tax expense. We
recognized income tax expense of NT$763 million in 2010 compared to NT$707 million (US$23.4 million) in 2011 primarily due to a decrease in taxable income.

Net income. As a result of the factors discussed above, our net income decreased from NT$5,627 million in 2010 to NT$4,837 million (US$159.8 million) in 2011.

The Year ended December 31, 2010 compared to the Year Ended December 31, 2009

Net operating revenues. Net operating revenues increased by 7.7% from NT$59,295 million in 2009 to NT$63,857 million in 2010. Since
a substantial portion of our sales are denominated in U.S. dollars, our operating revenues in 2010 were affected by the depreciation in the foreign currency exchange rate of the U.S. dollar against N.T. dollar, which is our reporting currency.
However, because of the strong recovery of the global economy, which boosted business spending and consumer confidence, our overall net operating revenues in 2010 increased compared the net operating revenues in 2009.

Substrate base package sales increased by 8.5% from NT$30,242 million in 2009 to NT$32,816 million in 2010. The increase in substrate
base package sales was due to an increase in demand. In 2010, substrate base package accounted for 51.4% of our net operating revenues, up from 51.0% in 2009.

Lead-frame base package sales increased by 3.1% from NT$18,235 million in 2009 to NT$18,793 million in 2010. The increase in lead-frame base package sales was attributable to the increase in demand. In
2010, lead-frame base package accounted for 29.4% of our net operating revenues, down from 30.8% in 2009.

Gross profit and
gross margin. Our gross profit decreased by 14.2% from NT$11,443 million in 2009 to NT$9,816 million in 2010 mainly due to the increase of cost of goods sold. Our gross margin (gross profit as a percentage of net operating revenues) decreased
from 19.3% in 2009 to 15.4% in 2010. Our cost of goods sold increased by 12.9% from NT$47,852 in 2009 to NT$54,041 million in 2010 primarily because of surging price of gold wire.

Operating expenses. Operating expenses increased by 4.2% from NT$3,300 million in 2009 to NT$3,440 million in 2010. Operating
expenses as a percentage of net operating revenues was 5.6% and 5.4% in 2009 and 2010, respectively.

Selling expenses.
Selling expenses decreased by NT$230 million between these two years mainly due to reversal of bad debt upon receipt of payment for overdue invoices. The net amount of reversal of bad debt in 2010 was NT$261 million.

General and administrative expenses. General and administrative expenses increased by NT$108 million between these two years
mainly due to increase in salary expenses.

Research and development expenses. Research and development expenses
increased by NT$262 million between these two years mainly due to increase in salary expenses.

Operating income and
operating margin. We recorded an operating income of NT$8,143 million and an operating margin of 13.7% (operating income as a percentage of net operating revenues) in 2009 and generated operating income of NT$6,376 million and operating margin
of 10.0% in 2010. The decrease in operating margin was primarily due to increase in our cost of goods sold in 2010.



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Net non-operating income. Our net non-operating income decreased from NT$2,070
million in 2009 to NT$14 million in 2010. The decrease in net non-operating income was primarily due to a gain on disposal of investments of NT$1,948 million recognized in 2009.

Income tax expense. We recognized an income tax expense of NT$1,423 million in 2009 and NT$763 million in 2010 primarily due to
the decrease of taxable income and change of corporate income tax rate from 25% to 17%.

Net income. As a result of the
factors discussed above, our net income decreased from NT$8,790 million in 2009 to NT$5,627 million in 2010.

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. 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.

Liquidity

As of December 31, 2011, our primary source of liquidity was NT$15,942 million (US$526.7 million) of cash and cash equivalents. As of
December 31, 2011, we had total availability under existing short-term lines of credit of NT$8,002 million (US$265.3 million) available from seven domestic and foreign financial institutions, of which NT$1,574 million (US$52.0 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. We entered into a
multi-purpose credit facility led by Mega International Commercial Bank in October 2010 in the amounts of NT$5,000 million and US$150 million for capacity expansion and working capital purposes. This facility is a long-term credit facility expiring
in October 29, 2015. On November 5, 2010, we drew down NT$4,377 million (US$144.6 million) from this credit facility. On September 30, 2011, we drew down NT$5,000 million (US$165.2 million) from this credit facility. As of
December 31, 2011, we had short-term and long-term borrowings of NT$1,514 million (US$50.1 million) and NT$9,549 million (US$315.45 million), exclusive of loan arrangement fees of NT$17 million, respectively, outstanding under these facilities.

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, |       
|                                                     |  | 2009                     |        |   | 2010 |  |         | 2011 | 
|                                                     |  | NT$                      |        |   | NT$  |  |         | NT$  |  |  | US$     |  
|                                                     |  | (in millions)            |       
|Net cash provided by operating activities            |  |                          | 15,492 |   |      |  | 14,407  |      |  |  | 13,035  |   |  |  | 430.6  |  
|Net cash used in investing activities                |  |                          | (5,621 | ) |      |  | (16,083 | )    |  |  | (11,903 | ) |  |  | (393.2 | )
|Net cash used in financing activities                |  |                          | (9,054 | ) |      |  | (2,266  | )    |  |  | (924    | ) |  |  | (30.5  | )
|Effect of exchange rate changes on cash              |  |                          | (43    | ) |      |  | (154    | )    |  |  | 215     |   |  |  | 7.1    |  
|                                                     |  |                          |        |   |      |  |         |      |  |  |         |   |  |  |        |  
|Net (decrease) increase in cash and cash equivalents |  |                          | 774    |   |      |  | (4,096  | )    |  |  | 423     |   |  |  | 14.0   |  
|                                                     |  |                          |        |   |      |  |         |      |  |  |         |   |  |  |        |  



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Net Cash Provided by Operating Activities

In 2011, net cash provided by operations was NT$13,035 million (US$430.6 million) compared to NT$14,407 million in 2010. The decrease in
net cash provided by operating activities was primarily the result of decrease in net income in 2011.

In 2010, net cash
provided by operations was NT$14,407 million compared to NT$15,492 million in 2009. The decrease in net cash provided by operating activities was primarily the result of a decrease in net income in 2010.

Net Cash Used in Investing Activities

In 2011, cash used in investing activities was NT$11,903 million (US$393.2 million) compared to NT$16,083 million in 2010. The decrease in net cash used in investing activities was primarily the result of
decreases in fixed assets expenditures in 2011, compared to those of 2010. These capital expenditures were primarily funded with net cash provided by operating and financing activities. We are at times required to prepay our purchases of land and
equipment. As of December 31, 2010 and 2011, we did not have any outstanding balance of any prepayments for purchases of land. Prepayments for purchases of equipment result from contractual agreements involving down payments to suppliers when
we place an order for the equipment. As of December 31, 2010 and 2011, outstanding balances of prepayments for purchases of equipment amounted to NT$4,127 million and NT$3,362 million (US$111.1 million), respectively. We do not have any written
options on non-financial assets.

In 2010, cash used in investing activities was NT$16,083 million compared to NT$5,621
million in 2009. The increase in net cash used in investing activities was primarily the result of increases in capital expenditures for property, plants and equipment in 2010. These capital expenditures were primarily funded with net cash provided
by operating and financing activities. We are at times required to prepay our purchases of land and equipment. As of December 31, 2009 and 2010, we did not have any outstanding balance of any prepayments for purchases of land. Prepayments for
purchases of equipment result from contractual agreements involving down payments to suppliers when we place an order for the equipment. As of December 31, 2009 and 2010, outstanding balances of prepayments for purchases of equipment amounted
to NT$1,182 million and NT$4,127 million, respectively. We do not have any written options on non-financial assets.

Net
Cash Used in Financing Activities

Net cash used in financing activities was NT$2,266 million and NT$924 million (US$30.5
million) in 2010 and 2011, respectively. In 2010, net cash used in financing activities reflected primarily our payment of stockholders dividends of NT$8,040 million and proceeds from long-term borrowings of NT$4,525 million. In 2011, net cash
used in financing activities reflected primarily our payment of stockholders dividends of NT$5,048 million (US$166.8 million) and proceeds from long-term borrowings of NT$5,000 million (US$165.2 million) and the cost of repurchasing our common
stock of NT$964 million (US$31.8 million).

Net cash used in financing activities was NT$9,054 million and NT$2,266 million in
2009 and 2010, respectively. In 2009, net cash used in financing activities reflected primarily our payment of stockholders dividends of NT$5,609 million and our repayment of long-term borrowings of NT$3,000 million. In 2010, net cash used in
financing activities reflected primarily our payment of stockholders dividends of NT$8,040 million and proceeds from long-term borrowings of NT$4,525 million and increase in short-term borrowings of NT$ 1,249 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 2012 is approximately NT$17,500 million (US$578.1 million), which is
mostly funded from our retained earnings. We expect that our capital expenditures in 2012 will primarily consist of purchasing equipment and improving our facilities. We may adjust the amount of our capital expenditures upward or downward based on
the progress of our capital projects, market conditions and our anticipation of future business outlook. As a result, we may need to invest in new capacity to improve our economies of scale and reduce our production cost, which would require us to
raise additional capital. We cannot assure you that we will be able to raise additional capital should it become necessary on terms acceptable to us or at all. We entered into a multi-purpose credit facility led by Mega International Commercial Bank
in October 2010 in the amounts of NT$ 5,000 million and US$ 150 million for capacity expansion and working capital purposes. This facility is a long-term credit facility expiring on October 29, 2015. On November 5, 2010, we drew
down NT$4,377 million (US$144.6 million) from this credit facility. On September 30, 2011, we drew down NT$5,000 million (US$165.2 million) from this credit facility.



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##### Table of Contents

Transactions with Related Parties

We have not extended any loans or credit to any of our directors, supervisors 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, supervisor or executive officer of our company.

We have, from time to time, purchased raw materials and sold our manufacturing services to 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.

Inflation/Deflation

The inflation rate in Taiwan was -0.87% in 2009, 0.96% in 2010 and 1.42% in 2011. We do not believe that inflation in Taiwan has had a material impact on our results of operations.

U.S. GAAP Reconciliation

Our financial statements have been prepared in accordance with R.O.C. GAAP, which differ in certain significant respects from U.S. GAAP. The U.S. GAAP information in note 31 to the consolidated financial
statements summarize the principal differences between the amounts determined in accordance with our accounting policy, which is based on R.O.C. GAAP, and determined in accordance with U.S. GAAP together with reconciliation of net income and
shareholders equity from a R.O.C. GAAP basis to a U.S. GAAP basis. The following table shows a comparison of our net income and stockholders equity according to R.O.C. GAAP and U.S. GAAP for the periods indicated.

Reconciliation of Consolidated Net Income



|                                                       |  |                                  |       |   |      |  |       |      |  |  |       |   |  |  |       |  
|------------------------------------------------------ |  | -------------------------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                       |  | For the Years Ended December 31, |      
|                                                       |  | 2009                             |       |   | 2010 |  |       | 2011 | 
|                                                       |  | NT$                              |       |   | NT$  |  |       | NT$  |  |  | US$   |  
|                                                       |  | (in millions)                    |      
|Net income as reported under R.O.C. GAAP               |  |                                  | 8,790 |   |      |  | 5,627 |      |  |  | 4,837 |   |  |  | 159.8 |  
|U.S. GAAP adjustments:                                 |  |                                  |       |   |      |  |       |      |  |  |       |   |  |  |       |  
|Compensated absences                                   |  |                                  | (15   | ) |      |  | (8    | )    |  |  | (80   | ) |  |  | (2.6  | )
|Defined benefit pension plan-net periodic pension cost |  |                                  | 1     |   |      |  | (1    | )    |  |  |      |   |  |  |      |  
|                                                       |  |                                  |       |   |      |  |       |      |  |  |       |   |  |  |       |  
|Total U.S. GAAP adjustments                            |  |                                  | (14   | ) |      |  | (9    | )    |  |  | (80   | ) |  |  | (2.6  | )
|Taxation effect                                        |  |                                  | (21   | ) |      |  | (21   | )    |  |  | (66   | ) |  |  | (2.2  | )
|                                                       |  |                                  |       |   |      |  |       |      |  |  |       |   |  |  |       |  
|Net income under U.S. GAAP                             |  |                                  | 8,755 |   |      |  | 5,597 |      |  |  | 4,691 |   |  |  | 155.0 |  
|                                                       |  |                                  |       |   |      |  |       |      |  |  |       |   |  |  |       |  

Reconciliation of Consolidated Stockholders Equity

The following are the most significant differences between R.O.C. GAAP and U.S. GAAP as they relate to our net income and
stockholders equity. For other GAAP differences, please refer to note 31 to our consolidated financial statements included elsewhere in this annual report.



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|                                                         |  |                                  |        |   |      |  |        |      |  |  |        |   |  |  |         |  
|-------------------------------------------------------- |  | -------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ------- | -
|                                                         |  | For the Years Ended December 31, |       
|                                                         |  | 2009                             |        |   | 2010 |  |        | 2011 | 
|                                                         |  | NT$                              |        |   | NT$  |  |        | NT$  |  |  | US$    |  
|                                                         |  | (in millions)                    |       
|Total stockholders equity as reported under R.O.C. GAAP |  |                                  | 63,081 |   |      |  | 61,296 |      |  |  | 58,795 |   |  |  | 1,942.3 |  
|U.S. GAAP adjustments:                                   |  |                                  |        |   |      |  |        |      |  |  |        |   |  |  |         |  
|Compensated absences                                     |  |                                  | (73    | ) |      |  | (81    | )    |  |  | (161   | ) |  |  | (5.3    | )
|Defined benefit pension plan                             |  |                                  | (363   | ) |      |  | (386   | )    |  |  | (300   | ) |  |  | (9.9    | )
|Acquisition of Siliconware Corporation                   |  |                                  | 4,874  |   |      |  | 4,874  |      |  |  | 4,874  |   |  |  | 161.0   |  
|Taxation effect                                          |  |                                  | (61    | ) |      |  | (83    | )    |  |  | (149   | ) |  |  | (4.9    | )
|                                                         |  |                                  |        |   |      |  |        |      |  |  |        |   |  |  |         |  
|Stockholders equity under U.S. GAAP                     |  |                                  | 67,458 |   |      |  | 65,620 |      |  |  | 63,059 |   |  |  | 2,083.2 |  
|                                                         |  |                                  |        |   |      |  |        |      |  |  |        |   |  |  |         |  

The following are the most significant differences between R.O.C. GAAP and U.S. GAAP as they relate
to our net income and stockholders equity. For other GAAP differences, please refer to note 31 to our consolidated financial statements included elsewhere in this annual report.

Defined Benefit Pension Plan

Net periodic pension cost under U.S. GAAP may differ from the one under R.O.C. GAAP due to differences in, but not limited to, service cost, interest cost, expected return on assets and the amortization
in net gain (loss). Reconciliation the difference between U.S. GAAP and R.O.C. GAAP is required before reaching U.S. GAAP funding status.

Under R.O.C. GAAP, pension liability is accrued without reflecting the funded status and additional minimum liability is used when the fair value of pension assets is less than the amount of accumulated
benefit obligation. Under U.S. GAAP, additional pension liability or asset is accrued pursuant to ASC Topic 715, which requires the recognition of the overfunded or underfunded status of a defined benefit postretirement plan through other
comprehensive income, net of tax, at the balance sheet date and eliminates the use of additional minimum liability. Gains and loss, prior service costs, or transition assets and liabilities unrecognized as components of net periodic benefit cost of
the period in accordance with ASC Topic 715 are now recognized as a component of other comprehensive income.

10% Tax on
Undistributed Earnings and Tax Effect of U.S. GAAP Adjustments

Under R.O.C. GAAP, a 10% tax on undistributed earnings
is recognized as a tax expense in the period during which the amount of undistributed earnings is approved by the shareholders. Under U.S. GAAP, the 10% tax on undistributed earnings should be accrued in the period during which the earnings are
generated and should be adjusted to the extent that distributions are approved by the shareholders in the following year. Moreover, additional tax benefit (expense) and deferred tax assets or liabilities would be adjusted for the reconciled items
resulting in income differences between R.O.C. GAAP and U.S. GAAP.

Goodwill Acquired through Acquisition

The fair value of the net assets we received was used as the value of the consideration for the acquisition of the
remaining interests in Siliconware Corp. on December 31, 2000 and reflected in the common stock and capital reserve in our balance sheet. As the consideration is equal to the fair value of the net assets received, no goodwill is recorded under
R.O.C. GAAP. Under U.S. GAAP, the acquisition has been accounted for using the purchase method of accounting, and the purchase price was determined using the market value of our shares issued in connection with the acquisition. The difference
between the fair value of our shares issued in connection with the acquisition and the fair value of the net assets acquired results in goodwill. Before 2002, goodwill was amortized on a straight-line basis over ten years.

In accordance with ASC Topic 350, Intangible  Goodwill and Other (ASC Topic 350), we no longer amortize goodwill since
2002. We perform our annual impairment review in each fiscal year. We have completed our annual goodwill impairment test for fiscal 2009, 2010 and 2011, and concluded that there was no impairment in these three years.



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Impairment of Long-lived Assets

R.O.C. SFAS No. 35 regarding impairment of long-lived assets is effective for financial statements issued for fiscal years ended
after December 31, 2005 and the interim periods within such fiscal years. Under both R.O.C. GAAP and U.S. GAAP, we are required to evaluate whether long-lived assets are subject to impairment. Impairment test is performed whenever an event
occurs or evidence indicates the carrying amount of an asset may not be recoverable. Under R.O.C. GAAP, a long-lived asset is considered impaired when the anticipated recoverable amount is less than the assets carrying value. Recoverable
amount is measured as the higher of fair value less cost to sale or value in use (discounted cash flows). The difference between the recoverable amount and the carrying amount of an asset is recognized as a loss in earnings. Under U.S. GAAP, a
long-lived asset is considered impaired when the anticipated undiscounted cash flows are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the
long-lived assets. The estimate of fair value is generally based on quoted market prices from the best available information, including prices for similar assets and the results of using other valuation techniques, or discounted cash flows.

We performed periodical review for our long-lived assets and reclassified idle assets from assets held for operating use.
Idle assets are no longer used for production purposes due to technology phase out and replacement and are disposed as buyers are identified. We recognized impairment losses of NT$74 million, NT$118 million and NT$134 million (US$4.4 million) on
idle assets for the years ended December 31, 2009, 2010 and 2011, respectively. No impairment was identified for other long-lived assets besides idle assets and no reconciliation for impairment loss between R.O.C. GAAP and U.S. GAAP were made
for the years ended December 31, 2009, 2010 and 2011.

Stock Dividends

Under R.O.C. GAAP, an issuance of stock dividends is recorded at par with a charge to retained earnings. Under U.S. GAAP, if the ratio of
distribution is less than 25% of shares of the same class outstanding, the fair value of the shares issued should be charged to retained earnings. We did not issue any stock dividends in 2009, 2010 and 2011. Hence, reclassification from retained
earnings to additional paid-in capital is not needed.

Calculation of EPS

Under R.O.C. GAAP, as employees bonuses 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 takes 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 bonuses 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. Under U.S. GAAP, employee bonus shares have been considered separately from the stock dividend or split and have been treated
as outstanding from the date when they were issued for both basic and diluted EPS calculation. No employee bonus shares were issued in 2009, 2010, and 2011.

For the purpose of computing the dilutive effect of the employee stock options, the treasury-stock method is used. Treasury shares that may be repurchased with assumed proceeds from the exercise of
employee stock options may not be sufficient for the shares issued upon exercising options. Therefore, incremental shares are added to the weighted average number of shares outstanding. Under R.O.C. GAAP, the assumed proceeds are the exercise price.
Under U.S. GAAP, the assumed proceeds are the sum of (a) the exercise price, (b) the amount of compensation cost attributed to future services and not yet recognized, and (c) the amount of excess tax benefits that will be credited to
additional paid-in capital assuming exercise of the options. Therefore, the amount of incremental shares calculated under U.S. GAAP is different from the one calculated under R.O.C. GAAP.



43



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Recent Accounting Pronouncements

U.S. GAAP

In May 2011, the Financial Accounting Standards Board, FASB, issued amendments on fair value measurements and related disclosures which clarify the application of existing guidance and disclosure
requirement, change certain fair value measurement principles and prescribe enhanced financial statement disclosures for Level 3 fair value measurements. The updated accounting guidance will be effective for reporting periods beginning after
December 15, 2011. We do not anticipate that the adoption of this amendment will have significant impact on our consolidated financial statements.

In June 2011, the FASB issued amended guidance regarding the presentation of comprehensive income. The new standard eliminates the option to present components of other comprehensive income as part of the
statement of changes in equity. Under this amendment, all changes in other comprehensive income are to be presented either in a single continuous statement of comprehensive income, or in two separate but consecutive financial statements. The
amendments are effective on a retrospective basis for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The new guidance also requires presentation of adjustments for
items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented, which was indefinitely deferred by an update issued by the
FASB in December 2011. We do not anticipate material impacts on our financial statements upon adoption.

In September 2011,
the FASB issued authoritative guidance which simplifies goodwill impairment testing. After assessment of certain qualitative factors, if it is determined to be more likely than not that the fair value of a reporting unit is less than its carrying
amount, entities must perform the quantitative analysis, two-step goodwill impairment test. Otherwise, the quantitative tests become optional. The guidance is effective January 1, 2012 with early adoption permitted. We do not expect the
adoption of the guidance to have any significant impact on our consolidated financial statements.

In December 2011, the FASB,
to help reconcile differences between U.S. GAAP and IFRSs, released updated accounting standard requiring entities disclose both gross and net information for both financial instruments eligible for offset in the statement of financial position. The
amendments are effective for annual reporting period beginning on or after January 1, 2013. An entity should provide sufficient disclosures retrospectively for all comparative periods presented. We do not anticipate material impacts on our
financial statements upon adoption.

R.O.C. GAAP

Effective January 1, 2011, the Company implemented the amendments of R.O.C. SFAS No. 34, Accounting for Financial
Instruments. The major amendment required the Company to include loans and receivables which originated by the entity as financial instruments. The change in accounting principle does not cause significant impact toward the financial
statements for the year ended December 31, 2011.

Effective January 1, 2011, the Company adopted R.O.C. SFAS
No. 41, Disclosure of Operating Segment Information to replace R.O.C SFAS No. 20, Disclosure of Segment Information. The Company, following the standard, restated segments information of 2010 while first
adoption. The change in accounting principle does not cause impact toward the consolidated net income and earnings per share in 2011.

Pursuant to the regulation No. 0990004943 of Financial Supervisory Commission of Executive Yuan (FSCEY), public companies, starting from 2013, shall prepare financial reports by following
International Financial Reporting Standards (IFRSs), which are translated and announced by R.O.C. Accounting Research and Development Foundation (ARDF). To respond to the request, the Company has already formed a team and outlined a plan to
implement the regulations. This change does not cause significant impact on the Companys financial results of 2011.



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##### Table of Contents

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 2011. 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, 2011, we do 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, 2011.



|                                   |  |                        |        |  |                 |  |       |          |  |  |          |  |  |                  |       |  |  |  |    | 
|---------------------------------- |  | ---------------------- | ------ |  | --------------- |  | ----- | -------- |  |  | -------- |  |  | ---------------- | ----- |  |  |  | -- | 
|                                   |  | 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(3)       |  |                        | 9,549  |  |                 |  |      |          |  |  | 6,366    |  |  |                  | 3,183 |  |  |  |   | 
|Short-term loans                   |  |                        | 1,514  |  |                 |  | 1,514 |          |  |  |         |  |  |                  |      |  |  |  |   | 
|Operating leases(2)                |  |                        | 277    |  |                 |  | 72    |          |  |  | 92       |  |  |                  | 36    |  |  |  | 77 | 
|                                   |  |                        |        |  |                 |  |       |          |  |  |          |  |  |                  |       |  |  |  |    | 
|Total contractual cash obligations |  |                        | 11,340 |  |                 |  | 1,586 |          |  |  | 6,458    |  |  |                  | 3,219 |  |  |  | 77 | 
|                                   |  |                        |        |  |                 |  |       |          |  |  |          |  |  |                  |       |  |  |  |    | 



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

|(2) | 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 San Jose,
California.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The interest expenses for long-term loans are calculated based on floating interest rates.
|--- | ------------------------------------------------------------------------------------------

In addition to the contractual obligations mentioned in the above table, other non-current liabilities recorded in our consolidated
balance sheet as of December 31, 2011 include NT$481 million (US$15.9 million) of pension plan obligations for which the timing and actual amount of funding required have not been determined. We expect to contribute NT$49 million (US$1.6
million) to the pension plan in 2012.



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

A. Directors and Senior Management

The following table shows
information regarding all of our directors, supervisors and executive officers as of March 31, 2012. The business address of our directors, supervisors and executive officers is the same as our registered address.



|               |  |     |  |                                    |  |              |  |                                                           
|-------------- |  | --- |  | ---------------------------------- |  | ------------ |  | ----------------------------------------------------------
|Name           |  | Age |  | Position                           |  | Yearswith Us |  | Principal Business Activities PerformedOutside Our
Company
|Bough Lin      |  | 61  |  | Chairman; Executive Vice President |  | 29           |  | Director of SPILs subsidiaries.                          
|Chi-Wen Tsai   |  | 65  |  | Vice Chairman; President           |  | 29           |  | Director of SPILs subsidiaries.                          
|Wen-Lung Lin   |  | 60  |  | Director                           |  | 7            |  | Chairman of Ku-Ming Investment Co.                        
|Yen-Chun Chang |  | 58  |  | Director; Senior Vice President    |  | 29           |  | Director of SPILs subsidiary.                            
|Kun-Yi Chien   |  | 57  |  | Senior Vice President              |  | 24           |  | None                                                      



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|                  |  |     |  |                                         |  |              |  |                                                                                                                    
|----------------- |  | --- |  | --------------------------------------- |  | ------------ |  | -------------------------------------------------------------------------------------------------------------------
|Name              |  | Age |  | Position                                |  | Yearswith Us |  | Principal Business Activities PerformedOutside Our
Company                                                         
|Wen-Jung Lin      |  | 65  |  | Director                                |  | 21           |  | None                                                                                                               
|Cheng-Chich Huang |  | 63  |  | Independent Director(1)                 |  | 1(2)         |  | Chairman of Li Fu Investment                                                                                       
|Randy Hsiao-Yu Lo |  | 55  |  | Director                                |  | 1(2)         |  | President & CEO, Siliconware, USA, Inc.                                                                            
|Ing Dar Liu       |  | 64  |  | Independent Director(1)                 |  | 7            |  | Director of AME Inc; Chairman
of Jing-Hong Investment.                                                             
|Jing-Shan Aur     |  | 63  |  | Independent Director(1)                 |  | 7            |  | Director of RSEA Engineering Corp.                                                                                 
|Wen-Lung Cheng    |  | 64  |  | Supervisor                              |  | 10           |  | Chairman of Joinwin Investment; Director of SPILs subsidiary; Supervisor of Gamania Digital Entertainment Co. Ltd.
|Wen-Ching Lin     |  | 56  |  | Supervisor                              |  | 1(2)         |  | Chairman of Young Fong Investment                                                                                  
|Yu-Hu Liu         |  | 55  |  | Supervisor                              |  | 1(2)         |  | None                                                                                                               
|Mike Ma           |  | 53  |  | Vice President                          |  | 2            |  | None                                                                                                               
|Chien-Hua Chen    |  | 58  |  | Vice President                          |  | 14           |  | None                                                                                                               
|Eric Wu           |  | 47  |  | Vice President                          |  | 12           |  | None                                                                                                               
|C.S Hsiao         |  | 54  |  | Vice President                          |  | 26           |  | None                                                                                                               
|John Yu           |  | 48  |  | Vice President                          |  | 21           |  | None                                                                                                               
|Patrick Lin       |  | 56  |  | Vice President                          |  | 11           |  | None                                                                                                               
|Eva Chen          |  | 55  |  | Vice President; Chief Financial Officer |  | 8            |  | None                                                                                                               
|Ching-Yu Hsu      |  | 50  |  | Vice President                          |  | 25           |  | None                                                                                                               
|Jas Hsieh         |  | 62  |  | Vice President                          |  | 9            |  | None                                                                                                               
|River Gu          |  | 54  |  | Vice President                          |  | 25           |  | None                                                                                                               
|David Tseng       |  | 50  |  | Vice President                          |  | 27           |  | None                                                                                                               
|M.S. Chang        |  | 52  |  | Vice President                          |  | 26           |  | None                                                                                                               



|(1) | Our independent directors independency complies with SECs and NASDAQs independency requirements.
|--- | ---------------------------------------------------------------------------------------------------

|(2) | Rounded-up for ease of reference from June 2011.
|--- | ------------------------------------------------

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. In addition, Mr. Lin is the brother-in-law of Wen-Lung Cheng, who is one of
our supervisors. Mr. Lin is a cousin of Mr. Wen-Jung Lin, our director.

Chi-Wen Tsai is currently 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 currently our senior vice president. 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.

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



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Wen-Jung Lin has been our director since June 1991. He received a Bachelors
degree in architecture from Feng Chia University in Taiwan in 1970. Mr. Lin is a cousin of Mr. Bough Lin, our chairman.

Cheng-Chich Huang has been our director since June 2011. He received a Bachelors degree in electrical engineering from the National Taipei Institute of Technology in Taiwan. Mr. Huang
was a Director of Foxconn in 2010 and also previously the chairman of Premier Image Technology Corp.

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.

Ing-Dar Liu has been our independent director since June
2005. He received a Masters degree in electrics from National Chiao Tung University in Taiwan. He was the vice chairman of AU Optronics Corp. in 2001.

Jing-Shan Aur has been our independent director since June 2005. He received a Bachelors degree in National Taiwan Ocean University. He was previously the chairman of APTOS Corp.

Wen-Lung Cheng has been our supervisor since June 2002. Mr. Cheng received a Bachelors degree in bank and insurance
from Tamkang University in Taiwan in 1969. He is the brother-in-law of Mr. Bough Lin, our chairman.

Wen-Ching Lin
has been our supervisor since June 2011. He received a Bachelors degree from Takushoku University in Japan. He is the brother of Mr. Bough Lin, our chairman.

Yu-Hu Liu has been our supervisor since June 2011 and the vice president in charge of our Changhua Facility since 2007. Mr. Liu graduated from Lien Ho College with a Bachelors degree in
electrical engineering.

Mike Ma has been our vice president in charge of our research and development since April
2011. Before joining us, Mr. Ma was the director in charge of the cooperate research and development division of United Microelectronics Corporation. He graduated from North Carolina State University in the U.S.A. in 1992 with a PhD in
materials engineering.

Chien-Hua Chen has been our vice president in charge of Europe Sales/North America Customer
Service since 1999. Before joining us, Mr. Chen was the general manager of Ling Sheng Co. He graduated from Arizona State University in the U.S.A. with a Masters degree in electrical engineering.

Eric Wu has been our vice president in charge of our Hsin Chu Branch since March 2011. Before joining us, Mr. Wu was the
director in charge of test development division of Caesar Tech. Imc. He graduated from ChungYuan Christian University in Taiwan in 1989 with a Bachelors degree in electronic engineering.

C.S Hsiao has been the vice president in our Engineering Center since 2007. He graduated from Feng Chia University in Taiwan in
1982 with a Bachelors degree in chemical engineering.

John Yu has been our vice president in Asia District
Marketing and Sales Group since March 2010. 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 has been our vice president in charge of our operation supporting division since 2002. Before joining us, Mr. Lin
was the director in charge of operations 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.



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##### Table of Contents

Ching-Yu Hsu has been our vice president in charge of our Changhua Facility since
May 2011. He graduated from Chin-Yi College of Technology in Taiwan in 1983 with a Bachelors degree in electronic engineering.

Jas Hsieh has been our vice president in charge of our quality & reliability center since October 2010. Before joining us, Mr. Hsieh was the vice president in charge of
quality & reliability division of Advanced Semiconductor Engineering, Inc. He graduated from Feng Chia University in Taiwan in 1974 with a Bachelors degree in mechanical engineering.

River Gu has been our vice president in charge of our Manufacturing Division 1 since 2002. He graduated from Feng Chia University
in Taiwan in 1985 with a Bachelors degree in electronic engineering.

David Tseng has been our vice president in
charge of our Manufacturing Division 5 since 2002. He graduated from Oriental Institute of Technology in Taiwan in 1983 with a Bachelors degree in electrical engineering.

M.S. Chang has been our vice president in charge of our operations planning division since 2000. He graduated from Feng Chia
University in Taiwan in 2005 with a Masters degree in industrial engineering and systems management.

B.
Compensation of Directors, Supervisors and Executive Officers

The aggregate compensation paid and in-kind benefits
granted to our directors, supervisors and executive officers in 2011 was NT$172 million (US$5.7 million). According to our articles of incorporation, remuneration provided to our directors and supervisors 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. The remaining amount may be distributed or reserved in a ratio of 10% and 90% as bonuses to our employees and as dividends to our shareholders,
respectively.

C. Board Practices

All of our directors and supervisors were elected on June 22, 2011 for a term of three years. Neither we nor any of our subsidiaries have entered into a contract with any of our directors and
supervisors by which our directors or supervisors are expected to receive benefits upon termination of their employment.

Audit Committee

At the date of this filing, we have three independent directors, Jing-Shan Aur, Ing-Dar Liu and Cheng-Chich Huang, to constitute an 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 R.O.C. Securities and Exchange Act, as amended on November 24, 2010, which requires all publicly listed companies in the R.O.C., including our company, to
establish a remuneration committee for directors, supervisors and managers compensation, which includes salary, stock options and other rewards. On March 18, 2011, the R.O.C. Financial Supervisory Commission promulgated Regulations
Governing the Appointment and Exercise of Powers by the Remuneration 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 remuneration committee composed of no less than three members appointed by the board of directors by September 30, 2011. 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 remuneration committee comprised of William W. Sheng, Professor of the National
Taichung Institute of Technology, Tsai-Ding Lin, Professor of Tunghai University, and Jing-Shan Aur, one of our independent directors.



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##### Table of Contents

Differences between NASDAQ Corporate Governance Requirements and Home Country Practices

See Item 16G.Corporate Governance.

D. Employees

As of December 31, 2009, 2010 and 2011, we, together with our subsidiaries, had 16,077, 18,455 and 19,906 full-time employees, respectively. Of these employees, as of December 31, 2011, 17,719
were located in Taiwan, and 2,126 were located in Mainland China, and 61 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, R.O.C. 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 R.O.C. 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.

Our employees participate in our profit distribution under our articles of incorporation. Employees are entitled to receive bonus shares based on a percentage of our allocable surplus income. We paid
employees cash bonuses of NT$561 million (US$18.5 million) in 2011.

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 do not have any labor union.

E. Share Ownership

Each of our directors, supervisors 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, supervisors and executive
officers as of March 31, 2012, our most recent record date.



|                  |  |                       |            |  |                           |  |      |  
|----------------- |  | --------------------- | ---------- |  | ------------------------- |  | ---- | -
|Name              |  | Number of SharesOwned |            |  | Percentage ofShares Owned | 
|                  |  |                      
|Bough Lin         |  |                       | 68,674,075 |  |                           |  | 2.20 | %
|Chi-Wen Tsai      |  |                       | 43,175,555 |  |                           |  | 1.39 | %
|Wen-Lung Lin      |  |                       | 20,754,751 |  |                           |  | *    |  
|Yen-Chun Chang    |  |                       | 11,776,417 |  |                           |  | *    |  
|Wen-Jung Lin      |  |                       | 5,131,914  |  |                           |  | *    |  
|Cheng-Chich Huang |  |                       | 746,737    |  |                           |  | *    |  
|Ing-Dar Liu       |  |                       | 311,000    |  |                           |  | *    |  
|Jing-Shan Aur     |  |                       | 146,292    |  |                           |  | *    |  
|Hsiao-Yu Lo       |  |                       | 472        |  |                           |  | *    |  
|Wen-Lung Cheng    |  |                       | 10,133,937 |  |                           |  | *    |  
|Yu Hu Liu         |  |                       | 7,438,972  |  |                           |  | *    |  
|Wen-Ching Lin     |  |                       | 11,200,000 |  |                           |  | *    |  
|Teresa Wang(1)    |  |                       | 11,251,831 |  |                           |  | *    |  
|Hsiu-Li Liu(2)    |  |                       | 12,251,189 |  |                           |  | *    |  



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##### Table of Contents

|                 |  |                       |           |  |                           |  |   | 
|---------------- |  | --------------------- | --------- |  | ------------------------- |  | - | 
|Name             |  | Number of SharesOwned |           |  | Percentage ofShares Owned | 
|Fu-Mei Tang(3)   |  |                       | 9,025,917 |  |                           |  | * | 
|Kun-Yi Chien     |  |                       | 360,029   |  |                           |  | * | 
|Chien-Hua Chen   |  |                       | 24,668    |  |                           |  | * | 
|C.S Hsiao        |  |                       | 135,408   |  |                           |  | * | 
|John Yu          |  |                       | 174,894   |  |                           |  | * | 
|Eric Wu          |  |                       | 30,737    |  |                           |  | * | 
|Mike Ma          |  |                       | 0         |  |                           |  | * | 
|Ching-Yu Hsu     |  |                       | 0         |  |                           |  | * | 
|C.Y. Lin(4)      |  |                       | 239,819   |  |                           |  | * | 
|Chien-An Chen(5) |  |                       | 473,833   |  |                           |  | * | 
|Michael Chang(6) |  |                       | 206,560   |  |                           |  | * | 
|Patrick Lin      |  |                       | 130,039   |  |                           |  | * | 
|Eva Chen         |  |                       | 490,164   |  |                           |  | * | 
|Jas Hsieh        |  |                       | 122,000   |  |                           |  | * | 
|River Gu         |  |                       | 15,000    |  |                           |  | * | 
|David Tseng      |  |                       | 0         |  |                           |  | * | 
|M.S. Chang       |  |                       | 75,000    |  |                           |  | * | 



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

|(1) | Representing Pei-Sheng Cultural Educational Foundation. As of June 22, 2011, Teresa Wang was no longer a director of our company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(2) | As of June 22, 2011, Hsiu-Li Liu was no longer a director of our company.
|--- | -------------------------------------------------------------------------

|(3) | As of June 22, 2011, Fu-Mei Tang was no longer a supervisor of our company.
|--- | ---------------------------------------------------------------------------

|(4) | C.Y.Lin resigned in March 2011 and since then has been re-employed as a consultant.
|--- | -----------------------------------------------------------------------------------

|(5) | Chien-An Chen retired in April 2011.
|--- | ------------------------------------

|(6) | As of April 8, 2011, Michael Chang was no longer an executive officer of our company.
|--- | -------------------------------------------------------------------------------------



|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 July 19, 2009, July 18, 2010 and July 24, 2011 (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 19, 2009         |             |  | July 18, 2010             |  |       | July 24,
2011(1)      | 
|Name of beneficial owner                                          |  | Number ofShares Owned |             |  | Percentage ofShares Owned |  |       | Number ofShares Owned |  |  | Percentage ofShares Owned |  |  | Number ofShares Owned |       |   | Percentage ofShares Owned | 
|                                                                  |  |                       |             |  |                           | 
|Citibank(2)(3)                                                    |  |                       | 624,143,605 |  |                           |  | 19.80 | %                     |  |  | 624,143,605               |  |  |                       | 20.03 | % |                           |  | 537,737,915 |  |  |  | 17.26 | %
|                                                                  |  |                       |             |  |                           | 
|JPMorgan in Custody for Capital Income Builder Inc                |  |                       | 68,555,300  |  |                           |  | 2.17  | %                     |  |  | 40,070,300                |  |  |                       | 1.29  | % |                           |  | 173,970,300 |  |  |  | 5.58  | %
|                                                                  |  |                       |             |  |                           | 
|JPMorgan in Custody for Capital World Growth and Income Fund Inc. |  |                       | 78,206,000  |  |                           |  | 2.48  | %                     |  |  | 139,165,000               |  |  |                       | 4.47  | % |                           |  | 139,165,000 |  |  |  | 4.47  | %
|                                                                  |  |                       |             |  |                           | 
|Chunghwa Post Co., Ltd                                            |  |                       | 43,252,067  |  |                           |  | 1.37  | %                     |  |  | 54,688,067                |  |  |                       | 1.75  | % |                           |  | 72,236,067  |  |  |  | 2.32  | %
|                                                                  |  |                       |             |  |                           | 
|Bough Lin                                                         |  |                       | 66,494,075  |  |                           |  | 2.11  | %                     |  |  | 65,294,075                |  |  |                       | 2.10  | % |                           |  | 68,674,075  |  |  |  | 2.20  | %
|                                                                  |  |                       |             |  |                           | 
|Shin Kong Life Insurance Company Ltd                              |  |                       | 6,888,000   |  |                           |  | 0.22  | %                     |  |  | 43,976,000                |  |  |                       | 1.41  | % |                           |  | 66,008,000  |  |  |  | 2.12  | %



50



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|                                                                                 |  |                       |             |     |                           |  |      |                       |  |  |                           |     |  |                       |      |      |                           |  |             |     |  |  |      |     
|-------------------------------------------------------------------------------- |  | --------------------- | ----------- | --- | ------------------------- |  | ---- | --------------------- |  |  | ------------------------- | --- |  | --------------------- | ---- | ---- | ------------------------- |  | ----------- | --- |  |  | ---- | ----
|                                                                                 |  | July 19, 2009         |             |     | July 18, 2010             |  |      | July 24,
2011(1)      | 
|Name of beneficial owner                                                         |  | Number ofShares Owned |             |     | Percentage ofShares Owned |  |      | Number ofShares Owned |  |  | Percentage ofShares Owned |     |  | Number ofShares Owned |      |      | Percentage ofShares Owned | 
|                                                                                 |  |                       |             |     |                           | 
|JPMorgan Chase Bank N.A Taipei Branch in custody for T. Rowe Price New Asia Fund |  |                       | *           |     |                           |  | *    |                       |  |  | 25,458,000                |     |  |                       | 0.81 | %    |                           |  | 61,324,000  |     |  |  | 1.97 | %   
|                                                                                 |  |                       |             |     |                           | 
|Ku-Ming Investment Company Ltd(4)                                                |  |                       | 56,102,878  |     |                           |  | 1.78 | %                     |  |  | 56,102,878                |     |  |                       | 1.80 | %    |                           |  | 56,112,878  |     |  |  | 1.80 | %   
|                                                                                 |  |                       |             |     |                           | 
|Cathay Life Insurance Company Ltd                                                |  |                       | 14,425,000  |     |                           |  | 0.46 | %                     |  |  | 24,589,000                |     |  |                       | 0.79 | %    |                           |  | 45,282,000  |     |  |  | 1.45 | %   
|                                                                                 |  |                       |             |     |                           | 
|Chi-Wen Tsai                                                                     |  |                       | 40,175,555  |     |                           |  | 1.27 | %                     |  |  | 40,175,555                |     |  |                       | 1.29 | %    |                           |  | 43,175,555  |     |  |  | 1.39 | %   
|                                                                                 |  |                       |             |     |                           | 
|Directors and Supervisors as a group                                             |  |                       | 183,841,878 | (5) |                           |  | 5.90 | %(5)                  |  |  | 193,372,878               | (6) |  |                       | 6.21 | %(6) |                           |  | 179,490,122 | (7) |  |  | 5.76 | %(7)



|* | 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 record owner of our ADSs.
|--- | ----------------------------

|(3) | As of December 31, 2011 and based on the Schedule 13Gs filed by Capital Research Global Investors on February 6, 2012, Capital Research Global Investors
beneficially owned 240,670,300 common shares in the form of ADSs individually, which represented 7.7% of our outstanding share capital. The address of Capital Research Global Investors is 333 South Hope Street, Los Angeles, CA 90071.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(5) | As of March 31, 2010.
|--- | ---------------------

|(6) | As of March 31, 2011.
|--- | ---------------------

|(7) | As of March 31, 2012.
|--- | ---------------------

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

As of March 31, 2012, a total of 81,307,236 ADSs and 3,078,319,139 of our shares (including the shares represented by these ADSs)
were outstanding. With certain limited exceptions, holders of common shares that are not R.O.C. persons are required to hold these commons shares through a brokerage or custodial account in the R.O.C. As of March 31, 2012, 406,536,310 common
shares were registered in the name of a nominee of Citibank, N.A., the depositary of our ADS facility. Citibank, N.A. has advised us that, as of March 31, 2012, 406,536,310 common shares were held of record by Cede & Co. We have no
further information as to common shares held, or beneficially owned, by U.S. persons.

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

B. Related Party Transactions

Related Party Transactions Policies

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.

Phoenix Precision Technology Corporation

We purchased semiconductor raw materials from Phoenix Precision Technology Corporation, or Phoenix Precision, totaling
NT$2,085 million in 2009. The average payment period is approximately 90 days from the date of completion of service or purchase.



51



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##### Table of Contents

The purchase price and payment terms for such purchases were generally comparable to those
provided by non-related parties. We have followed our standard procurement policy (which is described in greater details below) in selecting our vendors, and we have evaluated the Phoenix Precision transactions from the perspective of overall
compliance with those factors. We have concluded that the transactions entered into with Phoenix Precision were comparable with (and not worse than) those provided by non-related parties because the general pricing and product quality-related
information regarding non-related parties products are generally available in the market. According to our standard procurement policy, we consider the following factors when evaluating and selecting vendors: (i) quality, (ii) cost,
(iii) delivery time, (iv) customer service, and (v) technological capability to deliver products pursuant to our specifications. We chose Phoenix Precision not only because Phoenix Precision was generally competitive from the
perspectives of those factors, but also because Phoenix Precision has consistently and reliably delivered individually-tailored products to us in the past, and the pricing offered by Phoenix Precision was generally competitive.

On December 1, 2009, Phoenix Precision was merged by Unimicron Technology Corporation. Following this merger, our 16.80% share in
Phoenix Precision was transformed into a 4.94% share in Unimicron Technology. Under the definition of the related party, Unimicron Technology is not defined as a related party of our company.

Vertical Circuits, Inc.

In recent years, we have been licensing packaging technologies from Vertical Circuits, Inc. (VCI). In order to enhance assembly-related techniques, we purchased preferred stocks of Vertical Circuits, Inc.
(VCI) for US$5 million in December 2010. Our percentage of voting right in VCI is approximately 30.69%. Therefore, VCI became a related party of our company.

AcSiP Technology Corp.

In order to develop our System in Package
(SiP) module business, we purchased 1.75 million common shares of AcSiP Technology Corp. (AcSiP) for NT$50.75 million (US$1.68 million) and obtained 20% of the voting rights of AcSiP in May 2011. As a result of an increase in AcSiPs
issued shares, our ownership share in AcSiP decreased to 16.73% as of December 31, 2011. We assess and determine that we maintain significant influence over AcSiP and therefore continue to recognize our investment in AcSiP under the equity
method.

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

As 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.



52



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|        |  |                        |      |  |                             |  |      |                                                  |  |  |                               |  |  |  |               | 
|------- |  | ---------------------- | ---- |  | --------------------------- |  | ---- | ------------------------------------------------ |  |  | ----------------------------- |  |  |  | ------------- | 
|        |  | Cash Dividend pershare |      |  | Stock Dividend 
pershare(1) |  |      | Total Number ofShares Issued asStock Dividend(2) |  |  | Outstanding Sharesat Year End | 
|        |  | (NT$)                  |      |  | (NT$)                       |  |      |                                                  |  |  |                               | 
|1995    |  |                        | 0    |  |                             |  | 4.00 |                                                  |  |  | 70,048,800                    |  |  |  | 280,668,000   | 
|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 | 



|(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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

B. Significant Changes

Our net operating revenues on a consolidated basis for the three months ended March 31, 2012 amounted to NT$15,118 million. Our net operating revenues for the first three months of 2012 are not
indicative of our financial performance on either an unconsolidated or a consolidated basis for the remaining months of 2012. In addition, we cannot predict whether the demand for our services will continue to improve in the near future.



|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 ofshares)     |  |  |        |  |  |     |         
|2007           |  |                                 | 71.70 |  |               |  | 47.90 |                             |  |  | 12,423 |  |  |     | 9,809.88 |  |  |  | 7,344.56 | 
|2008           |  |                                 | 58.10 |  |               |  | 22.95 |                             |  |  | 17,490 |  |  |     | 9,295.20 |  |  |  | 4,089.93 | 
|2009           |  |                                 | 48.90 |  |               |  | 25.90 |                             |  |  | 28,392 |  |  |     | 8,188.11 |  |  |  | 4,242.61 | 
|2010           |  |                                 | 46.65 |  |               |  | 28.85 |                             |  |  | 34,367 |  |  |     | 8,972.50 |  |  |  | 7,071.67 | 
|First Quarter  |  |                                 | 46.65 |  |               |  | 37.25 |                             |  |  | 25,350 |  |  |     | 8,356.89 |  |  |  | 7,212.87 | 
|Second Quarter |  |                                 | 41.95 |  |               |  | 33.80 |                             |  |  | 32,722 |  |  |     | 8,171.94 |  |  |  | 7,071.67 | 



53



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|                               |  |                                 |       |  |               |  |       |                             |  |  |        |  |  |     |          |  |  |  |          | 
|------------------------------ |  | ------------------------------- | ----- |  | ------------- |  | ----- | --------------------------- |  |  | ------ |  |  | --- | -------- |  |  |  | -------- | 
|                               |  | Closing Price for Each Share(1) |       |  | Average Daily |  |       | Taiwan Stock Exchange Index | 
|Period                         |  | High                            |       |  | Low           |  |       | Trading Volume              |  |  | High   |  |  | Low |         
|                               |  | NT$                             |       |  | NT$           |  |       | (in thousands ofshares)     |  |  |        |  |  |     |         
|Third Quarter                  |  |                                 | 37.80 |  |               |  | 28.85 |                             |  |  | 35,612 |  |  |     | 8,240.89 |  |  |  | 7,254.06 | 
|Fourth Quarter                 |  |                                 | 36.35 |  |               |  | 31.20 |                             |  |  | 42,498 |  |  |     | 8,972.50 |  |  |  | 8,046.23 | 
|2011                           |  |                                 | 41.25 |  |               |  | 23.45 |                             |  |  | 38,160 |  |  |     | 9,145.35 |  |  |  | 6,633.33 | 
|First Quarter                  |  |                                 | 41.25 |  |               |  | 32.90 |                             |  |  | 27,601 |  |  |     | 9,145.35 |  |  |  | 8,234.78 | 
|Second Quarter                 |  |                                 | 39.05 |  |               |  | 33.40 |                             |  |  | 43,362 |  |  |     | 9,062.35 |  |  |  | 8,478.86 | 
|Third Quarter                  |  |                                 | 35.20 |  |               |  | 23.45 |                             |  |  | 27,484 |  |  |     | 8,824.44 |  |  |  | 6,877.12 | 
|Fourth Quarter                 |  |                                 | 32.20 |  |               |  | 24.60 |                             |  |  | 53,449 |  |  |     | 7,622.01 |  |  |  | 6,633.33 | 
|November                       |  |                                 | 31.25 |  |               |  | 26.10 |                             |  |  | 65,343 |  |  |     | 7,622.01 |  |  |  | 6,784.52 | 
|December                       |  |                                 | 28.95 |  |               |  | 24.60 |                             |  |  | 51,117 |  |  |     | 7,178.69 |  |  |  | 6,633.33 | 
|2012 (through April 13, 2012)  |  |                                 | 36.50 |  |               |  | 26.80 |                             |  |  | 46,315 |  |  |     | 8,144.04 |  |  |  | 6,952.21 | 
|First Quarter                  |  |                                 | 35.80 |  |               |  | 26.80 |                             |  |  | 47,362 |  |  |     | 8,144.04 |  |  |  | 6,952.21 | 
|January                        |  |                                 | 34.00 |  |               |  | 26.80 |                             |  |  | 36,619 |  |  |     | 7,517.08 |  |  |  | 6,952.21 | 
|February                       |  |                                 | 35.00 |  |               |  | 31.70 |                             |  |  | 47,939 |  |  |     | 8,121.44 |  |  |  | 7,549.21 | 
|March                          |  |                                 | 35.80 |  |               |  | 32.55 |                             |  |  | 53,866 |  |  |     | 8,144.04 |  |  |  | 7,872.66 | 
|April (through April 13, 2012) |  |                                 | 36.50 |  |               |  | 34.55 |                             |  |  | 39,567 |  |  |     | 7,862.90 |  |  |  | 7,600.87 | 



Sources: Taiwan Stock Exchange Statistical Data 1999-2012, Taiwan Stock Exchange and Bloomberg.



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

There is no
public market outside 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.

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$           |  |      | (in thousands ofshares) | 
|2007                           |  |                               | 12.54 |  |               |  | 7.45 |                         |  |  | 1,877,492 | 
|2008                           |  |                               | 9.55  |  |               |  | 3.24 |                         |  |  | 2,506,994 | 
|2009                           |  |                               | 8.11  |  |               |  | 3.85 |                         |  |  | 2,241,612 | 
|2010                           |  |                               | 5.86  |  |               |  | 4.46 |                         |  |  | 1,945,648 | 
|First Quarter                  |  |                               | 7.64  |  |               |  | 5.84 |                         |  |  | 2,822,802 | 
|Second Quarter                 |  |                               | 6.78  |  |               |  | 5.27 |                         |  |  | 1,887,729 | 
|Third Quarter                  |  |                               | 5.86  |  |               |  | 4.46 |                         |  |  | 1,585,380 | 
|Fourth Quarter                 |  |                               | 6.06  |  |               |  | 5.04 |                         |  |  | 1,526,894 | 
|2011                           |  |                               | 7.15  |  |               |  | 3.93 |                         |  |  | 2,166,958 | 
|First Quarter                  |  |                               | 7.15  |  |               |  | 5.68 |                         |  |  | 2,365,869 | 
|Second Quarter                 |  |                               | 6.86  |  |               |  | 5.79 |                         |  |  | 1,825,454 | 
|Third Quarter                  |  |                               | 6.16  |  |               |  | 3.93 |                         |  |  | 2,227,705 | 
|Fourth Quarter                 |  |                               | 5.33  |  |               |  | 3.98 |                         |  |  | 2,250,997 | 
|November                       |  |                               | 5.21  |  |               |  | 4.19 |                         |  |  | 1,924,914 | 
|December                       |  |                               | 4.68  |  |               |  | 3.98 |                         |  |  | 2,322,429 | 
|2012 (through April 13, 2012)  |  |                               | 6.04  |  |               |  | 4.52 |                         |  |  | 1,529,062 | 
|First Quarter                  |  |                               | 6.04  |  |               |  | 4.52 |                         |  |  | 1,567,231 | 
|January                        |  |                               | 5.65  |  |               |  | 4.52 |                         |  |  | 1,810,980 | 
|February                       |  |                               | 5.82  |  |               |  | 5.27 |                         |  |  | 1,708,645 | 
|March                          |  |                               | 6.04  |  |               |  | 5.37 |                         |  |  | 1,217,082 | 
|April (through April 13, 2012) |  |                               | 5.99  |  |               |  | 5.73 |                         |  |  | 1,266,122 | 



Source: NASDAQ Stock Exchange.



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



54



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##### Table of Contents

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.



|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 R.O.C. 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 of the directors and supervisors was held in June 2011. Upon the end of the term of
the directors elected during the 2011 shareholders meeting, our board is required by the R.O.C. Company Act, the Securities and Exchange Act and other relevant laws and regulations to consist of at least three directors, comprising not less
than 20% of the total number of directors. In addition, our shareholders also elect three supervisors whose duties include investigating our services and financial condition, inspecting corporate records, calling shareholders meetings when our
board of directors does not or cannot convene a shareholders meeting or when such a meeting is necessary for our benefit, representing us in negotiations with our directors and notifying our board of directors to cease acting in contravention
of law, our articles of incorporation or the resolutions of our shareholders meetings. The supervisors cannot concurrently serve as our directors or officers. A person may serve as our director or supervisor in his personal capacity or as the
representative of one of our shareholder entities. A director or supervisor who serves as the representative of a legal entity may be removed or replaced at any time, and the replacement director or supervisor may serve the remainder of the term of
office of the replaced director or supervisor. Our audit committee consists of three independent auditors, including Jing-Shan Aur, Ing-Dar Liu and Cheng-Chich Huang. In order to facilitate the function of our board of directors, our audit committee
and board of directors have established procedures for the 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.



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According to the R.O.C. 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
and supervisors 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 remuneration to directors and supervisors. Our board of directors is authorized
to determine the compensation for directors and supervisors 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 and supervisors hold our issued shares at the ratios
as required by the regulatory authority.

Shares

As of March 31, 2012, our authorized share capital was NT$36.0 billion, divided into 3.6 billion shares, of which NT$31.16 billion,
was issued, but due to our share repurchase program, the number of outstanding shares decreased to 3.08 billion shares. As of March 31, 2012, 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, 2012. 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 R.O.C. law.

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 R.O.C. 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 R.O.C. SFB and the Ministry of Economic Affairs. According to the R.O.C. 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.



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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 R.O.C. 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, Chinatrust Commercial 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. In addition, any of our supervisors may convene a shareholders meeting when our board of directors do not or cannot convene a
shareholders meeting and/or when such a meeting is necessary for our benefit. 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 R.O.C. 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 and supervisors 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.

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 R.O.C. 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.



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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 R.O.C. 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 remuneration to our directors and supervisors. 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 R.O.C. 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 R.O.C. company may not acquire its own common shares except under certain exceptions provided in the R.O.C. Company Act or the R.O.C. 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 present, 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 R.O.C. SFB, for the following purposes:



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



| |  |  | 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



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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, supervisors, 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 R.O.C. Company Act.

Other Rights of Shareholders

Under the R.O.C. 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 R.O.C. 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 R.O.C. 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 R.O.C. Company Act, a shareholders voting rights must, as to all matters brought to a vote of shareholders, other than the election of directors and/or supervisors, 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 and/or supervisors, which may be conducted by means of cumulative voting
or other mechanisms adopted in our articles of incorporation. Pursuant to R.O.C. Company Act and our articles of incorporation, the election of directors and/or supervisors 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.



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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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

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 and/or supervisors, 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 and/or supervisors, 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 and/or
supervisors under the deposit agreement. This means that if at least 51% of the votes represented by outstanding ADSs are cast for a particular director or supervisor 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 or supervisor.

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 R.O.C. 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

Immunity Agreement with Freescale
Semiconductor, Inc.

We entered into a license agreement with Motorola Inc. or Motorola, in November 1996 under which
Motorola licensed to us the technology for ball grid array as well as any future technology relating to ball grid array packages.

In April 2004, Motorola spun off its semiconductor product business into a subsidiary Freescale Semiconductor, Inc. Motorola has assigned this agreement to Freescale Semiconductor, Inc., and Freescale
Semiconductor, Inc. has assumed all of its rights, duties and obligations under the agreement, in connection with the spin-off. This license will expire in December 2015.

License Agreement with Flip Chip International, L.L.C.

We entered into a
license agreement in November 1999, under which Flip Chip International licensed to us the package design technology that enables us to attach silicon dies directly to substrates using solder bumping rather than wire bonding technology. Under the
original terms of this agreement, we made royalty payments based on the number of bumped wafers produced. This original license was set to expire in November 2009.

In December 2008, we amended our license agreement with Flip Chip International, in which for a one-time payment, Flip Chip International granted us a perpetual license for the package design technology.



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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.

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 R.O.C. or the branch of a foreign entity which is established within the territory of the
R.O.C., 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 R.O.C. FSC promulgated regulations allowing QDIIs under P.R.C. regulations and certain other P.R.C. persons
to invest in the securities of R.O.C. companies. However, prior approval from the Investment Commission of the R.O.C. Ministry of Economic Affairs is required for a P.R.C. persons ownership of 10% or more of the issued and outstanding shares
of a listed R.O.C. company.

Foreign Investment in Taiwan Securities Market

On December 28, 1990, the Executive Yuan, the cabinet of the Republic of China government, approved guidelines drafted by the
Securities and Futures Commission (the predecessor of the Securities and Futures Bureau), which, since January 1, 1991, has allowed direct foreign investment in Taiwans securities that are listed on the Taiwan Stock Exchange or other
Taiwan securities approved by the Securities and Futures Bureau by certain eligible qualified foreign institutional investors.

In addition to qualified foreign institutional investors, 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, GreTai Securities Market (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.

On September 30, 2003, the Securities and Futures Bureau issued amendments to the Regulations Governing
Investment in Securities by Overseas Chinese and Foreign Nationals and relevant regulations, in which the Securities and Futures Bureau lifted certain restrictions and simplified the procedures required for foreign investments in Taiwans
securities market. The amendment focuses mainly on the following aspects:



| |  |  | The concept of qualified foreign institutional investors no longer exists. Foreign investors are reclassified as off-shore foreign
institutional investors, on-shore foreign institutional investors, off-shore general foreign investors, and on-shore general foreign investors based on whether they are institutions or natural persons, and
whether they have presence in Taiwan.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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 R.O.C. under these guidelines may be remitted out of the R.O.C. at any time after the date the capital is remitted to the R.O.C. Capital gains and income on investments may be remitted out of
the R.O.C. at any time.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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;
| | - |  | --------------------------------



| |  |  | 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.



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The R.O.C. Financial Supervisory Commission announced on April 30, 2009 the
Regulations Governing Mainland Chinese Investors Securities Investments (P.R.C. Regulations). According to the P.R.C. Regulations, a qualified domestic institutional investor (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 (GreTai) Securities Market). 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 P.R.C. persons (including QDIIs) from investing in certain industries in Taiwan. In addition to investments permitted under the
P.R.C. Regulations, P.R.C. investors other than QDII are prohibited from making investments in a Taiwan company listed on the Taiwan Stock Exchange or the Over-the-Counter (GreTai) Securities Market 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 P.R.C. investors in
securities of Taiwan companies, P.R.C. investors may only invest in certain industries in the Positive List, as promulgated by the R.O.C. Executive Yuan in June of 2009. In the semiconductor packaging and testing industry, P.R.C. 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 GreTai Securities Market 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.

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 GreTai Securities Market 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 Financial Supervisory Commission in connection with the offering plus any ADSs issued pursuant to
the events described in (i), (ii) and (iii) above.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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 Financial
Supervisory Commission 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.

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

R.O.C. Tax Considerations

The following summarizes the principal R.O.C. tax consequences of owning and disposing of ADSs and shares for non-residents of Taiwan.
Investors in our ADSs 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.



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The following is a general summary of the principal R.O.C. tax consequences of the
ownership and disposition of 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 R.O.C. citizen, who owns ADSs and who is not physically present in the R.O.C. 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 R.O.C. for profit-making purposes and has no
fixed place of business or other permanent establishment in the R.O.C.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Holders of ADSs are urged to consult
their own tax advisors as to their particular R.O.C. tax consequences from owning the ADSs.

Dividends

Dividends declared by us out of our retained earnings and distributed to the holders are subject to R.O.C. 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, a 10% R.O.C. 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% R.O.C. tax imposed on those distributions.

Capital Gains

Under R.O.C. 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 R.O.C. security and, as a result,
any gains on such transactions are not subject to R.O.C. income tax.

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 R.O.C.
Transfers of ADSs are not subject to R.O.C. securities transaction tax. Withdrawal of common shares from the deposit facility is not subject to R.O.C. securities transaction tax.

Estate and Gift Tax

R.O.C. estate tax is payable on any property within the R.O.C. of a deceased who is an individual, and R.O.C. gift tax is payable on any property within the R.O.C. donated by an individual. Estate tax is
currently payable at rate of 10%. Gift tax is payable at rate of 10%. Under R.O.C. estate and gift tax laws, common shares issued by R.O.C. companies are deemed located in the R.O.C. 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.

Tax Treaty

The R.O.C. does not have a double taxation treaty with the United States. On the other hand, the R.O.C. has double taxation treaties with
Indonesia, Singapore, South Africa, Australia, Vietnam, New Zealand, Malaysia, Macedonia, Swaziland, Gambia, The Netherlands, the United Kingdom, Senegal and Sweden which may limit the rate of R.O.C. withholding tax on dividends paid with respect to
common shares in R.O.C. 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.



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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 R.O.C. 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 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:



| |  |  | 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.
| | - |  | --------------------------------------------------------------------------



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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 (other than certain pro rata distributions of shares to all shareholders) you receive on your shares or ADSs, including net amounts withheld in respect of R.O.C. 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. In determining the net amounts withheld in
respect of R.O.C. taxes, any reduction in the amount withheld on account of a R.O.C. credit in respect of the 10% retained earnings tax imposed on us is not considered a withholding tax and will not be treated as distributed to you or creditable by
you against your U.S. federal income tax. Such income 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.

With respect to U.S. holders who are individuals, certain dividends received from a foreign corporation
before January 1, 2013, 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, but not our shares, are readily tradable on an established securities market in the United States. Thus, 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). Individuals 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 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.



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Subject to certain limitations under the Code, you may be entitled to a credit or deduction
against your federal income taxes for the net amount of any R.O.C. 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 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 shares or ADSs if you (1) have held 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 share 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. For U.S. tax purposes, any such tax-free share or ADS distribution and any distributions in excess of current and
accumulated earnings and profits 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 R.O.C. withholding tax imposed on such distributions unless you can use
the credit against United States 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.

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 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 R.O.C. 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 2011 and do not expect to become one in the future, although there can be no assurance in this regard.



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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 or 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.

Our determination that we were not a PFIC in 2011 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:



| |  |  | 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 are required to file Internal Revenue Service Form 8621.

If we are a PFIC for any taxable year 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 Stock Markets National Market 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 Stock Markets National Market. 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.



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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 PFIC shares or ADSs at the end of the year over your adjusted tax basis in the shares. 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, any gain you
recognize upon the sale or other disposition of your PFIC 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 PFIC 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 prior to January 1, 2013, 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.

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.

Inheritance and Gift Tax

Certain R.O.C. inheritance and gift taxes may be imposed on holders of ADSs. You should consult your own tax advisor
regarding the effect of such taxes on your particular situation.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.



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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 2011, sales in the amount of US$1,796 million were denominated in U.S. dollars. In 2011, material purchases from our overseas vendors in the amounts of US$517 million and
¥6,358 million were denominated in U.S. dollars and Japanese yen, respectively. As of December 31, 2011, we had certificates of deposit, bank deposits and accounts receivable denominated in U.S. dollars of US$355 million. As of
December 31, 2011, we also had accounts payable and other liabilities denominated in U.S. dollars and the Japanese yen of US$140 million and of ¥2,835 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. The table below presents our financial
instruments with foreign exchange risk as of December 31, 2011:



|                                       |  |                        |          |  |      |  |        |      |  |  |        |  |  |            |        |  |       |  |   |            |  |  |          |  |  |  |          | 
|-------------------------------------- |  | ---------------------- | -------- |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---------- | ------ |  | ----- |  | - | ---------- |  |  | -------- |  |  |  | -------- | 
|                                       |  | Expected Maturity Date |         
|Expressed in NT$ amount
(in millions)  |  | 2012                   |          |  | 2013 |  |        | 2014 |  |  | 2015   |  |  | Thereafter |        |  | Total |  |   | Fair value | 
|On-balance sheet financial instruments |  |                        |          |  |      |  |        |      |  |  |        |  |  |            |        |  |       |  |   |            |  |  |          |  |  |  |          | 
|Assets:                                |  |                        |          |  |      |  |        |      |  |  |        |  |  |            |        |  |       |  |   |            |  |  |          |  |  |  |          | 
|Time Deposit (US$)                     |  |                        | 1,719.34 |  |      |  |       |      |  |  |       |  |  |            |       |  |       |  |  |            |  |  | 1,719.34 |  |  |  | 1,719.34 | 
|Liabilities:                           |  |                        |          |  |      |  |        |      |  |  |        |  |  |            |        |  |       |  |   |            |  |  |          |  |  |  |          | 
|Short-term Loans (US$)                 |  |                        | 50.00    |  |      |  |       |      |  |  |       |  |  |            |       |  |       |  |  |            |  |  | 50.00    |  |  |  | 50.00    | 
|Long-term Loans (US$)                  |  |                        |         |  |      |  | 105.15 |      |  |  | 105.15 |  |  |            | 105.15 |  |       |  |  |            |  |  | 315.45   |  |  |  | 315.45   | 

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.



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As of December 31, 2011, we had NT$9,549 million (US$315.45 million), exclusive of loan
arrangement fees of NT$17 million, of long-term borrowings. Our future interest expense on our long-term borrowings may increase or decrease due to changes in market interest rates. Our long-term borrowings had a weighted average interest rate of
1.1037% per annum during 2011 and repayable in 6 semi-annual installments starting from April 2013.

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 have not entered into long-term supply agreements and purchase our raw materials 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.



|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;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

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 2011, we received the following payments (subject to applicable withholding tax) from Citibank, N.A., the depositary bank for our ADR program:



|                                                 |  |                   |         | 
|------------------------------------------------ |  | ----------------- | ------- | 
|Item                                             |  | US$(in thousands) |        
|Reimbursement of investor relations efforts      |  |                   | 16.1    | 
|Reimbursement of legal and consulting fees       |  |                   | 380.7   | 
|Reimbursement of listing fees                    |  |                   | 52.3    | 
|Reimbursement of proxy process expenses          |  |                   | 163.9   | 
|Reimbursement of SEC filing and maintenance fees |  |                   | 1,223.6 | 
|                                                 |  |                   |         | 
|Total                                            |  |                   | 1,836.6 | 
|                                                 |  |                   |         | 

PART II



|Item 13. | Defaults, Dividend Arrearages and Delinquencies
|-------- | -----------------------------------------------

None of these events occurred in any of the years ended December 31, 2009, 2010 and 2011.



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|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 of December 31, 2011, an evaluation has been carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Disclosure controls and
procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and forms
and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosures. There are inherent
limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objectives. Based upon the Companys evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures
are effective at a reasonable assurance level as of December 31, 2011.

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 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.

Management assessed the effectiveness of our internal control over financial reporting as of December 31,
2011 using the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Based on this assessment, our management concluded that our
internal control over financial reporting was effective as of December 31, 2011. 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, 2011, 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, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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|Item 16A. | Audit Committee Financial Expert
|--------- | --------------------------------

Jing-Shan Aur 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.



|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, 2011, 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 2010 and 2011.



|                      |  |                |        |  |      |  |        |      |  |  |        | 
|--------------------- |  | -------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                      |  | 2010           |        |  | 2011 |  |        | 2011 | 
|                      |  | NT$            |        |  | NT$  |  |        | US$  | 
|                      |  | (in thousands) |       
|Audit Fees(1)         |  |                | 18,610 |  |      |  | 18,210 |      |  |  | 601.59 | 
|Audit-related Fees(2) |  |                | 180    |  |      |  | 180    |      |  |  | 5.95   | 
|Tax Fees(3)           |  |                | 3,210  |  |      |  | 3,610  |      |  |  | 119.26 | 
|All other Fees(4)     |  |                | 3,779  |  |      |  | 3,980  |      |  |  | 131.48 | 
|                      |  |                |        |  |      |  |        |      |  |  |        | 
|Total                 |  |                | 25,779 |  |      |  | 25,980 |      |  |  | 858.28 | 
|                      |  |                |        |  |      |  |        |      |  |  |        | 



|(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 include fees billed for consultations of financial accounting and reporting standards. Such fees paid during 2010 and 2011 were primarily for the
consultations regarding conversion from financial statements under R.O.C. GAAP to International Financial Reporting Standards, or IFRSs.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pre-approval Policies and Procedures

Our audit committee is
responsible for the oversight of our independent accountants work. The policy of our audit committee is to pre-approve all audit and non-audit services provided by PricewaterhouseCoopers, Taiwan including audit services, audit-related
services, tax services and other services, as described above.

All audit and non-audit services performed by
PricewaterhouseCoopers, Taiwan for 2010 and 2011 were pre-approved by the Audit Committee.



|Item 16D. | Exemptions from the Listing Standards for Audit Committees
|--------- | ----------------------------------------------------------

None.



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##### Table of Contents

|Item 16E. | Purchase of Equity Securities by the Issuer and Affiliated Purchasers
|--------- | ---------------------------------------------------------------------



|                                       |  |                               |            |  |                                   |  |       |                                                                              |  |  |                                                                          |  |  |  |            | 
|-------------------------------------- |  | ----------------------------- | ---------- |  | --------------------------------- |  | ----- | ---------------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------ |  |  |  | ---------- | 
|Period                                 |  | TotalNumber ofSharesPurchased |            |  | Average PricePaid per Sharein NT$ |  |       | TotalNumber ofSharesPurchased asPart 
ofPubliclyAnnouncedPlans orPrograms(1) |  |  | MaximumNumber ofShares thatMay Yet BePurchasedUnder 
thePlans orPrograms | 
|August 9, 2011  August 31, 2011       |  |                               | 30,450,000 |  |                                   |  | 24.94 |                                                                              |  |  | 30,450,000                                                               |  |  |  | 19,550,000 | 
|September 1, 2011  September 30, 2011 |  |                               | 7,592,000  |  |                                   |  | 26.96 |                                                                              |  |  | 38,042,000                                                               |  |  |  | 11,958,000 | 
|October 1, 2011  October 8, 2011      |  |                               | 0          |  |                                   |  |      |                                                                              |  |  | 38,042,000                                                               |  |  |  | 11,958,000 | 
|                                       |  |                               |            |  |                                   |  |       |                                                                              |  |  |                                                                          |  |  |  |            | 
|Total                                  |  |                               | 38,042,000 |  |                                   |  | 25.35 |                                                                              |  |  | 38,042,000                                                               |  |  |  | 11,958,000 | 
|                                       |  |                               |            |  |                                   |  |       |                                                                              |  |  |                                                                          |  |  |  |            | 



|(1) | On August 8, 2011, our board of directors authorized a share repurchase program for the repurchase of up to 50,000,000 shares of our common stock during the period
from August 9, 2011, to October 8, 2011, at a purchase price range between NT$18 and NT$30 per share. We repurchased a total of 38,042,000 shares of our common stock pursuant to this share repurchase program, at an average price per share
of NT$25.35.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 R.O.C. Company Act, the R.O.C. 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 R.O.C. 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.

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 R.O.C. 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 R.O.C.
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 R.O.C. 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.



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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 R.O.C. Securities and Exchange Act, as amended on
November 24, 2010, which requires all publicly listed companies in the R.O.C., including our company, to establish a remuneration committee for directors, supervisors and managers compensation, which includes salary, stock options and
other rewards. On March 18, 2011, the R.O.C. Financial Supervisory Commission promulgated Regulations Governing the Appointment and Exercise of Powers by the Remuneration 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 remuneration 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 remuneration committee comprised of William W. Sheng, Professor of the National Taichung Institute of Technology, Tsai-Ding Lin, Professor of Tunghai University, and Jing-Shan Aur, one of our independent directors.

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 R.O.C. Company Act expressly grants the power of nomination to the shareholders, as well as to the board of directors. Under the R.O.C. 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 R.O.C. 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 R.O.C. Company Act and the R.O.C. 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 R.O.C. SFB, to approve employee stock option plans and to grant options to employees pursuant to such plans. We follow the home country practice. R.O.C.
law provides for specific safeguards on employee stock option grants. Options granted under the plans are subject to certain statutory volume limitations. Under the R.O.C. 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.



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PART III



|Item 17. | Financial Statements
|-------- | --------------------

We
have elected to provide 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, 2010 and 2011                                                     |  |      | F-4  | 
|Consolidated Statements of Income for the Years Ended December 31, 2009, 2010 and
2011                           |  |      | F-6  | 
|Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 
31, 2009, 2010 and 2011 |  |      | F-7  | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2010 and
2011                       |  |      | F-10 | 
|Notes to Consolidated Financial Statements                                                                       |  |      | F-12 | 



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##### Table of Contents

|Item 19. | Exhibit Index
|-------- | -------------



|              |  |                                                                                                                                                                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibits                                                                                                                                                                                                                                            
|              | 
|*1.1          |  | Articles of Incorporation of Siliconware Precision Industries Co., Ltd., as amended on June 22, 2011 (English translation)                                                                                                                                         
|              | 
|2.1           |  | Form of the Second Amended and Restated Deposit Agreement among Siliconware Precision Industries Co., Ltd., Citibank, N.A. and Holders and Beneficial owners of American Depositary
Shares issued thereunder, including the form of American Depositary Receipts(1)
|              | 
|4.1           |  | Immunity Agreement with Motorola, Inc. (effective from November 5, 1996 to December 31, 2015)(2)                                                                                                                                                                   
|              | 
|4.2           |  | License Agreement with Flip Chip Technologies,
L.L.C.(3)                                                                                                                                                                                                           
|              | 
|4.3           |  | Joint Venture Agreement with Mosel Vitelic, Inc. (English translation)(4)                                                                                                                                                                                          
|              | 
|*8.1          |  | List of Significant Subsidiaries of Siliconware Precision Industries Co., Ltd.                                                                                                                                                                                     
|              | 
|11.1          |  | Code of Ethics(5)                                                                                                                                                                                                                                                  
|              | 
|*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                                                                                                               



|* | filed herewith.
|- | ---------------

|(1) | Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form F-1 (File No. 333-11812) filed with the SEC on April 29, 2000.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Exhibit 10.2 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 10.5 to our Registration Statement on Form F-1 (File No. 333-11812) filed with the SEC on April 29, 2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Exhibit 10.6 to our Registration Statement on Form F-1 (File No. 333-11812) filed with the SEC on April 29, 2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Exhibit 11.1 to our Annual Report on Form 20-F filed with the SEC on June 28, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------



79



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SIGNATURES

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



SILICONWARE PRECISION INDUSTRIES CO., LTD.By:

/S/    EVA
CHENName:

Eva ChenTitle:

Chief Financial Officer


Date: April 26, 2012



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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, 2010 and 2011                                                     |  |      | F-4  | 
|Consolidated Statements of Income for the Years Ended December 31, 2009, 2010 and
2011                           |  |      | F-6  | 
|Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 
31, 2009, 2010 and 2011 |  |      | F-7  | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2010 and
2011                       |  |      | F-10 | 
|Notes to Consolidated Financial Statements                                                                       |  |      | F-12 | 



F-1



---

##### Table of Contents

Report of Independent Registered
Public Accounting Firm

To the Board of Directors and Stockholders of

Siliconware Precision Industries Co., Ltd.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of changes in stockholders 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, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2011 in conformity with Rules Governing the Preparation of Financial Reports by Securities Issuers and accounting principles generally accepted in the Republic of China (ROC GAAP). Also, in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework 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 appearing under Item 15. 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) and auditing standards generally
accepted in the Republic of China. 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.

Accounting principles generally
accepted in the Republic of China vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Notes 31 and 32
to the consolidated financial statements.



F-2



---

##### Table of Contents

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.



LOGO

Taichung, Taiwan

Republic of China

April 26, 2012



F-3



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|---------------------------------------------------------------- |  | ------------ | ----------- | - | ---- |  | ----------- | ------------ |  |  | ---------- | -
|                                                                 |  | December 31, |            
|                                                                 |  | 2010         |             |   | 2011 | 
|                                                                 |  | NT$          |             |   | NT$  |  |             | US$ (Note 2) | 
|ASSETS                                                           |  |              |             |   |      |  |             |              |  |  |            |  
|Current Assets                                                   |  |              |             |   |      |  |             |              |  |  |            |  
|Cash and cash equivalents (Note 4)                               |  |              | 15,519,008  |   |      |  | 15,941,600  |              |  |  | 526,647    |  
|Notes receivable, net                                            |  |              | 73,229      |   |      |  | 22,211      |              |  |  | 734        |  
|Accounts receivable, net (Note 5)                                |  |              | 9,648,610   |   |      |  | 10,231,452  |              |  |  | 338,006    |  
|Other financial assets, current (Note 23)                        |  |              | 1,296,089   |   |      |  | 569,306     |              |  |  | 18,808     |  
|Inventories (Note 6)                                             |  |              | 3,515,897   |   |      |  | 3,985,115   |              |  |  | 131,652    |  
|Deferred income tax assets, current (Note 19)                    |  |              | 588,074     |   |      |  | 307,496     |              |  |  | 10,158     |  
|Other current assets  other                                     |  |              | 551,161     |   |      |  | 594,494     |              |  |  | 19,640     |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|                                                                 |  |              | 31,192,068  |   |      |  | 31,651,674  |              |  |  | 1,045,645  |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|Long-term Investments                                            |  |              |             |   |      |  |             |              |  |  |            |  
|Available-for-sale financial assets, noncurrent (Notes 7 and 27) |  |              | 4,887,007   |   |      |  | 3,198,180   |              |  |  | 105,655    |  
|Financial assets carried at cost, noncurrent (Notes 8 and 27)    |  |              | 1,449,343   |   |      |  | 1,932,643   |              |  |  | 63,847     |  
|Long-term investment under the equity method (Note 9)            |  |              | 148,918     |   |      |  | 173,575     |              |  |  | 5,734      |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|                                                                 |  |              | 6,485,268   |   |      |  | 5,304,398   |              |  |  | 175,236    |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|Property, Plant and Equipment (Note 10)                          |  |              |             |   |      |  |             |              |  |  |            |  
|Cost:                                                            |  |              |             |   |      |  |             |              |  |  |            |  
|Land                                                             |  |              | 2,903,192   |   |      |  | 2,903,192   |              |  |  | 95,910     |  
|Buildings                                                        |  |              | 15,140,684  |   |      |  | 17,370,696  |              |  |  | 573,858    |  
|Machinery and equipment                                          |  |              | 52,257,238  |   |      |  | 56,535,805  |              |  |  | 1,867,718  |  
|Utility equipment                                                |  |              | 1,167,108   |   |      |  | 1,301,488   |              |  |  | 42,996     |  
|Furniture and fixtures                                           |  |              | 940,263     |   |      |  | 1,042,718   |              |  |  | 34,447     |  
|Other equipment                                                  |  |              | 2,432,287   |   |      |  | 2,808,025   |              |  |  | 92,766     |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|                                                                 |  |              | 74,840,772  |   |      |  | 81,961,924  |              |  |  | 2,707,695  |  
|Less: Accumulated depreciation                                   |  |              | (36,040,524 | ) |      |  | (41,179,337 | )            |  |  | (1,360,401 | )
|Construction in progress and prepayments for equipment           |  |              | 4,126,547   |   |      |  | 3,362,217   |              |  |  | 111,074    |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|                                                                 |  |              | 42,926,795  |   |      |  | 44,144,804  |              |  |  | 1,458,368  |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|Other Assets                                                     |  |              |             |   |      |  |             |              |  |  |            |  
|Refundable deposits                                              |  |              | 8,383       |   |      |  | 10,937      |              |  |  | 361        |  
|Deferred charges                                                 |  |              | 711,966     |   |      |  | 1,151,271   |              |  |  | 38,033     |  
|Deferred income tax asset, noncurrent (Note 19)                  |  |              | 1,072,709   |   |      |  | 1,274,263   |              |  |  | 42,097     |  
|Other assets  other                                             |  |              | 159,882     |   |      |  | 153,637     |              |  |  | 5,076      |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|                                                                 |  |              | 1,952,940   |   |      |  | 2,590,108   |              |  |  | 85,567     |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  
|TOTAL ASSETS                                                     |  |              | 82,557,071  |   |      |  | 83,690,984  |              |  |  | 2,764,816  |  
|                                                                 |  |              |             |   |      |  |             |              |  |  |            |  

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

(Continued)



F-4



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|------------------------------------------------------ |  | ------------ | ---------- | - | ---- |  | ---------- | ------------ |  |  | --------- | -
|                                                       |  | December 31, |           
|                                                       |  | 2010         |            |   | 2011 | 
|                                                       |  | NT$          |            |   | NT$  |  |            | US$ (Note 2) | 
|LIABILITIES AND STOCKHOLDERS EQUITY                   |  |              |            |   |      |  |            |              |  |  |           |  
|Current Liabilities                                    |  |              |            |   |      |  |            |              |  |  |           |  
|Short-term loans (Notes 11 and 27)                     |  |              | 1,461,281  |   |      |  | 1,513,750  |              |  |  | 50,008    |  
|Accounts payable (Note 22)                             |  |              | 7,345,871  |   |      |  | 6,404,096  |              |  |  | 211,566   |  
|Income tax payable (Note 19)                           |  |              | 520,613    |   |      |  | 483,595    |              |  |  | 15,976    |  
|Accrued expenses                                       |  |              | 3,075,442  |   |      |  | 2,998,870  |              |  |  | 99,071    |  
|Other payables (Notes 12 and 22)                       |  |              | 3,954,824  |   |      |  | 3,203,519  |              |  |  | 105,831   |  
|Other current liabilities                              |  |              | 185,575    |   |      |  | 278,543    |              |  |  | 9,202     |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|                                                       |  |              | 16,543,606 |   |      |  | 14,882,373 |              |  |  | 491,654   |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|Long-term Liabilities                                  |  |              |            |   |      |  |            |              |  |  |           |  
|Long-term loans (Notes 13 and 27)                      |  |              | 4,368,158  |   |      |  | 9,532,335  |              |  |  | 314,910   |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|                                                       |  |              |           
|Other Liabilities (Note 14)                            |  |              |            |   |      |  |            |              |  |  |           |  
|Other liabilities  other                              |  |              | 349,126    |   |      |  | 481,406    |              |  |  | 15,904    |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|Total Liabilities                                      |  |              | 21,260,890 |   |      |  | 24,896,114 |              |  |  | 822,468   |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|                                                       |  |              |           
|Commitments and Contingencies (Note 24)                |  |              |            |   |      |  |            |              |  |  |           |  
|                                                       |  |              |           
|Stockholders Equity                                   |  |              |            |   |      |  |            |              |  |  |           |  
|Capital stock (Notes 1 and 15)                         |  |              | 31,163,611 |   |      |  | 31,163,611 |              |  |  | 1,029,522 |  
|Capital reserve (Note 16)                              |  |              |            |   |      |  |            |              |  |  |           |  
|Additional paid in capital                             |  |              | 14,290,224 |   |      |  | 14,290,224 |              |  |  | 472,092   |  
|Premium arising from merger                            |  |              | 1,929,136  |   |      |  | 1,929,136  |              |  |  | 63,731    |  
|Other                                                  |  |              | 234,167    |   |      |  | 234,167    |              |  |  | 7,736     |  
|Retained earnings (Note 17)                            |  |              |            |   |      |  |            |              |  |  |           |  
|Legal reserve                                          |  |              | 6,599,402  |   |      |  | 7,162,092  |              |  |  | 236,607   |  
|Unappropriated earnings                                |  |              | 5,644,961  |   |      |  | 4,871,009  |              |  |  | 160,919   |  
|Unrealized gain on available-for-sale financial assets |  |              | 1,788,512  |   |      |  | 111,072    |              |  |  | 3,669     |  
|Cumulative translation adjustments                     |  |              | (85,264    | ) |      |  | 375,051    |              |  |  | 12,390    |  
|Net loss not recognized as pension cost                |  |              | (268,568   | ) |      |  | (377,304   | )            |  |  | (12,465   | )
|Treasury stock (Note 18)                               |  |              |           |   |      |  | (964,188   | )            |  |  | (31,853   | )
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|Total Stockholders Equity                             |  |              | 61,296,181 |   |      |  | 58,794,870 |              |  |  | 1,942,348 |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  
|                                                       |  |              |           
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY             |  |              | 82,557,071 |   |      |  | 83,690,984 |              |  |  | 2,764,816 |  
|                                                       |  |              |            |   |      |  |            |              |  |  |           |  

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



F-5



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|--------------------------------------------------- |  | -------------------------------- | ----------- | - | ---- |  | ----------- | ---- |  |  | ------------ | - |  |  | ---------- | -
|                                                    |  | For the years ended December 31, |            
|                                                    |  | 2009                             |             |   | 2010 |  |             | 2011 | 
|                                                    |  | NT$                              |             |   | NT$  |  |             | NT$  |  |  | US$ (Note 2) |  
|Net Operating Revenues (Notes 22)                   |  |                                  | 59,294,592  |   |      |  | 63,857,470  |      |  |  | 61,236,892   |   |  |  | 2,023,023  |  
|Cost of Goods Sold (Notes 6 and 22)                 |  |                                  | (47,851,772 | ) |      |  | (54,041,264 | )    |  |  | (51,746,475  | ) |  |  | (1,709,497 | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Gross Profit                                        |  |                                  | 11,442,820  |   |      |  | 9,816,206   |      |  |  | 9,490,417    |   |  |  | 313,526    |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Operating Expenses (Note 22)                        |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Selling expenses                                    |  |                                  | (622,208    | ) |      |  | (392,391    | )    |  |  | (730,532     | ) |  |  | (24,134    | )
|General and administrative expenses                 |  |                                  | (1,401,541  | ) |      |  | (1,509,261  | )    |  |  | (1,668,317   | ) |  |  | (55,115    | )
|Research and development expenses                   |  |                                  | (1,276,041  | ) |      |  | (1,538,307  | )    |  |  | (2,001,417   | ) |  |  | (66,119    | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|                                                    |  |                                  | (3,299,790  | ) |      |  | (3,439,959  | )    |  |  | (4,400,266   | ) |  |  | (145,368   | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Operating Income                                    |  |                                  | 8,143,030   |   |      |  | 6,376,247   |      |  |  | 5,090,151    |   |  |  | 168,158    |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Non-operating Income and Gain                       |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Interest income (Note 27)                           |  |                                  | 49,221      |   |      |  | 36,849      |      |  |  | 72,498       |   |  |  | 2,395      |  
|Gain on disposal of investments                     |  |                                  | 1,947,879   |   |      |  |            |      |  |  |             |   |  |  |           |  
|Gain on foreign currency exchange                   |  |                                  |            |   |      |  |            |      |  |  | 202,396      |   |  |  | 6,687      |  
|Others (Note 22)                                    |  |                                  | 263,511     |   |      |  | 303,674     |      |  |  | 439,982      |   |  |  | 14,535     |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|                                                    |  |                                  | 2,260,611   |   |      |  | 340,523     |      |  |  | 714,876      |   |  |  | 23,617     |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Non-operating Expenses and Losses                   |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Interest expenses (Note 28)                         |  |                                  | (36,850     | ) |      |  | (11,461     | )    |  |  | (62,757      | ) |  |  | (2,073     | )
|Others (Note 9)                                     |  |                                  | (153,653    | ) |      |  | (315,529    | )    |  |  | (198,142     | ) |  |  | (6,546     | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|                                                    |  |                                  | (190,503    | ) |      |  | (326,990    | )    |  |  | (260,899     | ) |  |  | (8,619     | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Income from Continuing Operations Before Income Tax |  |                                  | 10,213,138  |   |      |  | 6,389,780   |      |  |  | 5,544,128    |   |  |  | 183,156    |  
|Income Tax Expense (Note 20)                        |  |                                  | (1,423,309  | ) |      |  | (762,873    | )    |  |  | (706,885     | ) |  |  | (23,353    | )
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Net Income                                          |  |                                  | 8,789,829   |   |      |  | 5,626,907   |      |  |  | 4,837,243    |   |  |  | 159,803    |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Basic Earnings Per Share ( in dollars ) (Note 21)   |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Income (Before Tax)                                 |  |                                  | 3.28        |   |      |  | 2.05        |      |  |  | 1.79         |   |  |  | 0.06       |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Income (After Tax)                                  |  |                                  | 2.82        |   |      |  | 1.81        |      |  |  | 1.56         |   |  |  | 0.05       |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Diluted Earnings Per Share ( in dollars ) (Note 21) |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Income (Before Tax)                                 |  |                                  | 3.25        |   |      |  | 2.04        |      |  |  | 1.78         |   |  |  | 0.06       |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  
|Income (After Tax)                                  |  |                                  | 2.80        |   |      |  | 1.80        |      |  |  | 1.55         |   |  |  | 0.05       |  
|                                                    |  |                                  |             |   |      |  |             |      |  |  |              |   |  |  |            |  

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



F-6



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                          |  |                      |           |   |               |                   |            |                 |               |  |            |                        |  |     |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |         |   |       |  |          |   |  |  |          |   |  |  |            |  
|----------------------------------------------------------------------------------------- |  | -------------------- | --------- | - | ------------- | ----------------- | ---------- | --------------- | ------------- |  | ---------- | ---------------------- |  | --- | --------- |  | ---------------------------------------------------- |  | ---------- | -------------------------------- |  |  | -------------------------------------- |  |  | ------------- | ------- | - | ----- |  | -------- | - |  |  | -------- | - |  |  | ---------- | -
|                                                                                          |  |                      |           |   |               |                   |            | Capital Reserve |               |  |            |                        |  |     |           |  | Unrealized 
GainonAvailable-for-sale FinancialAssets |  |            | CumulativeTranslationAdjustments |  |  | Net Loss 
NotRecognized asPension Cost |  |  | TreasuryStock |         |   | Total | 
|                                                                                          |  |                      |           |   |               |                   |            |                 |               |  |            |                        |  |     |           |  |                                                      | 
|                                                                                          |  | Capital Stock Issued |           |   |               | Retained Earnings |            |                 |               |  |            |                       
|                                                                                          |  | Shares(Thousand)     |           |   | Capital Stock |                   |            |                 | Legal Reserve |  |            | UnappropriatedEarnings |  |     |           |  |                                                      | 
|2009                                                                                      |  |                      |           |   | NT$           |                   |            | NT$             |               |  | NT$        |                        |  | NT$ |           |  | NT$                                                  |  |            | NT$                              |  |  | NT$                                    |  |  | NT$           |         |   | NT$   | 
|Balance at January 1, 2009                                                                |  |                      | 3,152,590 |   |               |                   | 31,525,899 |                 |               |  | 16,820,211 |                        |  |     | 5,089,066 |  |                                                      |  | 6,453,435  |                                  |  |  |                                       |  |  |               | 296,866 |   |       |  | (77,172  | ) |  |  | (794,184 | ) |  |  | 59,314,121 |  
|Appropriation for earnings for prior years: (Note)                                        |  |                      |           |   |               |                   |            |                 |               |  |            |                        |  |     |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |         |   |       |  |          |   |  |  |          |   |  |  |            |  
|Legal reserve                                                                             |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     | 631,353   |  |                                                      |  | (631,353   | )                                |  |  |                                       |  |  |               |        |   |       |  |         |   |  |  |         |   |  |  |           |  
|Cash dividends                                                                            |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     |          |  |                                                      |  | (5,674,662 | )                                |  |  |                                       |  |  |               |        |   |       |  |         |   |  |  |         |   |  |  | (5,674,662 | )
|Long-term investment adjustment for investee companys cumulative translation adjustments |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               | (88,289 | ) |       |  |         |   |  |  |         |   |  |  | (88,289    | )
|Unrealized gain on available-for-sale financial assets                                    |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     |          |  |                                                      |  |           |                                  |  |  | 767,157                                |  |  |               |        |   |       |  |         |   |  |  |         |   |  |  | 767,157    |  
|Net loss not recognized as pension cost                                                   |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               |        |   |       |  | (92,142  | ) |  |  |         |   |  |  | (92,142    | )
|Cash dividends for treasury stock held by subsidiary                                      |  |                      |          |   |               |                   |           |                 |               |  | 65,212     |                        |  |     |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               |        |   |       |  |         |   |  |  |         |   |  |  | 65,212     |  
|Retirement of treasury stock                                                              |  |                      | (36,229   | ) |               |                   | (362,288   | )               |               |  | (431,896   | )                      |  |     |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               |        |   |       |  |         |   |  |  | 794,184  |   |  |  |           |  
|Net income                                                                                |  |                      |          |   |               |                   |           |                 |               |  |           |                        |  |     |          |  |                                                      |  | 8,789,829  |                                  |  |  |                                       |  |  |               |        |   |       |  |         |   |  |  |         |   |  |  | 8,789,829  |  
|                                                                                          |  |                      |           |   |               |                   |            |                 |               |  |            |                        |  |     |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |         |   |       |  |          |   |  |  |          |   |  |  |            |  
|Balance at December 31, 2009                                                              |  |                      | 3,116,361 |   |               |                   | 31,163,611 |                 |               |  | 16,453,527 |                        |  |     | 5,720,419 |  |                                                      |  | 8,937,249  |                                  |  |  | 767,157                                |  |  |               | 208,577 |   |       |  | (169,314 | ) |  |  |         |   |  |  | 63,081,226 |  
|                                                                                          |  |                      |           |   |               |                   |            |                 |               |  |            |                        |  |     |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |         |   |       |  |          |   |  |  |          |   |  |  |            |  



Note: The directors and supervisors remunerations and employees bonuses amounted to $56,822 thousand and $630,518 thousand, respectively, have been deducted from the statements of
income.

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

(Continued)



F-7



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                          |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |          |   |       |  |          |   |  |  |   |  |  |  |            |  
|----------------------------------------------------------------------------------------- |  | -------------------- | --------- |  | ------------- |  | ---------- | ----------------- |  |  | ------------ |  |  | ---------------------- | --------- |  | ---------------------------------------------------- |  | ---------- | -------------------------------- |  |  | -------------------------------------- |  |  | ------------- | -------- | - | ----- |  | -------- | - |  |  | - |  |  |  | ---------- | -
|                                                                                          |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  | UnrealizedGain 
onAvailable-for-sale FinancialAssets |  |            | CumulativeTranslationAdjustments |  |  | Net Loss 
NotRecognized asPension Cost |  |  | TreasuryStock |          |   | Total | 
|                                                                                          |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  |                                                      |  |            |                                 
|                                                                                          |  | Capital Stock Issued |           |  |               |  |            | Retained Earnings |  |  |              |  |  |                       
|                                                                                          |  | Shares(Thousand)     |           |  | Capital Stock |  |            | CapitalReserve    |  |  | LegalReserve |  |  | UnappropriatedEarnings |           |  |                                                      |  |            |                                 
|2010                                                                                      |  |                      |           |  | NT$           |  |            | NT$               |  |  | NT$          |  |  | NT$                    |           |  | NT$                                                  |  |            | NT$                              |  |  | NT$                                    |  |  | NT$           |          |   | NT$   | 
|Balance at January 1, 2010                                                                |  |                      | 3,116,361 |  |               |  | 31,163,611 |                   |  |  | 16,453,527   |  |  |                        | 5,720,419 |  |                                                      |  | 8,937,249  |                                  |  |  | 767,157                                |  |  |               | 208,577  |   |       |  | (169,314 | ) |  |  |  |  |  |  | 63,081,226 |  
|Appropriation for earnings for prior years: (Note)                                        |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |          |   |       |  |          |   |  |  |   |  |  |  |            |  
|Legal reserve                                                                             |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        | 878,983   |  |                                                      |  | (878,983   | )                                |  |  |                                       |  |  |               |         |   |       |  |         |   |  |  |  |  |  |  |           |  
|Cash dividends                                                                            |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        |          |  |                                                      |  | (8,040,212 | )                                |  |  |                                       |  |  |               |         |   |       |  |         |   |  |  |  |  |  |  | (8,040,212 | )
|Long-term investment adjustment for investee companys cumulative translation adjustments |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               | (293,841 | ) |       |  |         |   |  |  |  |  |  |  | (293,841   | )
|Unrealized gain on available-for-sale financial assets                                    |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        |          |  |                                                      |  |           |                                  |  |  | 1,021,355                              |  |  |               |         |   |       |  |         |   |  |  |  |  |  |  | 1,021,355  |  
|Net loss not recognized as pension cost                                                   |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        |          |  |                                                      |  |           |                                  |  |  |                                       |  |  |               |         |   |       |  | (99,254  | ) |  |  |  |  |  |  | (99,254    | )
|Net income                                                                                |  |                      |          |  |               |  |           |                   |  |  |             |  |  |                        |          |  |                                                      |  | 5,626,907  |                                  |  |  |                                       |  |  |               |         |   |       |  |         |   |  |  |  |  |  |  | 5,626,907  |  
|                                                                                          |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |          |   |       |  |          |   |  |  |   |  |  |  |            |  
|Balance at December 31, 2010                                                              |  |                      | 3,116,361 |  |               |  | 31,163,611 |                   |  |  | 16,453,527   |  |  |                        | 6,599,402 |  |                                                      |  | 5,644,961  |                                  |  |  | 1,788,512                              |  |  |               | (85,264  | ) |       |  | (268,568 | ) |  |  |  |  |  |  | 61,296,181 |  
|                                                                                          |  |                      |           |  |               |  |            |                   |  |  |              |  |  |                        |           |  |                                                      |  |            |                                  |  |  |                                        |  |  |               |          |   |       |  |          |   |  |  |   |  |  |  |            |  



Note: The directors and supervisors remunerations and employees bonuses amounted to $79,108 thousand and $893,357 thousand, respectively, have been deducted from the statements of
income.

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

(Continued)



F-8



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                          |  |                      |           |  |                |  |            |                   |              |  |                                 |                        |  |                                  |                      |  |                                        |  |            |               |  |  |            |   |  |     |         |   |     |  |          |   |  |  |          |   |  |  |            |  
|----------------------------------------------------------------------------------------- |  | -------------------- | --------- |  | -------------- |  | ---------- | ----------------- | ------------ |  | ------------------------------- | ---------------------- |  | -------------------------------- | -------------------- |  | -------------------------------------- |  | ---------- | ------------- |  |  | ---------- | - |  | --- | ------- | - | --- |  | -------- | - |  |  | -------- | - |  |  | ---------- | -
|                                                                                          |  | Capital Stock Issued |           |  | CapitalReserve |  |            | Retained Earnings |              |  | UnrealizedGain onAvailable-for- |                        |  | CumulativeTranslationAdjustments |                      |  | Net Loss 
NotRecognized asPension Cost |  |            | TreasuryStock |  |  | Total      |  
|                                                                                          |  | Shares(Thousand)     |           |  | Capital Stock  |  |            |                   | LegalReserve |  |                                 | UnappropriatedEarnings |  |                                  | sale FinancialAssets |  |                                        |  |            |              
|2011                                                                                      |  |                      |           |  | NT$            |  |            | NT$               |              |  | NT$                             |                        |  | NT$                              |                      |  | NT$                                    |  |            | NT$           |  |  | NT$        |   |  | NT$ |         |   | NT$ | 
|Balance at January 1, 2011                                                                |  |                      | 3,116,361 |  |                |  | 31,163,611 |                   |              |  | 16,453,527                      |                        |  |                                  | 6,599,402            |  |                                        |  | 5,644,961  |               |  |  | 1,788,512  |   |  |     | (85,264 | ) |     |  | (268,568 | ) |  |  |         |   |  |  | 61,296,181 |  
|Appropriation for earnings for prior years: (Note)                                        |  |                      |           |  |                |  |            |                   |              |  |                                 |                        |  |                                  |                      |  |                                        |  |            |               |  |  |            |   |  |     |         |   |     |  |          |   |  |  |          |   |  |  |            |  
|Legal reserve                                                                             |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  | 562,690              |  |                                        |  | (562,690   | )             |  |  |           |   |  |     |        |   |     |  |         |   |  |  |         |   |  |  |           |  
|Cash dividends                                                                            |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  |                     |  |                                        |  | (5,048,505 | )             |  |  |           |   |  |     |        |   |     |  |         |   |  |  |         |   |  |  | (5,048,505 | )
|Long-term investment adjustment for investee companys cumulative translation adjustments |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  |                     |  |                                        |  |           |               |  |  |           |   |  |     | 460,315 |   |     |  |         |   |  |  |         |   |  |  | 460,315    |  
|Unrealized loss on available-for-sale financial assets                                    |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  |                     |  |                                        |  |           |               |  |  | (1,677,440 | ) |  |     |        |   |     |  |         |   |  |  |         |   |  |  | (1,677,440 | )
|Treasury stocks repurchase                                                                |  |                      |           |  |                |  |            |                   |              |  |                                 |                        |  |                                  |                      |  |                                        |  |            |               |  |  |            |   |  |     |         |   |     |  |          |   |  |  | (964,188 | ) |  |  | (964,188   | )
|Net loss not recognized as pension cost                                                   |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  |                     |  |                                        |  |           |               |  |  |           |   |  |     |        |   |     |  | (108,736 | ) |  |  |         |   |  |  | (108,736   | )
|Net income                                                                                |  |                      |          |  |                |  |           |                   |              |  |                                |                        |  |                                  |                     |  |                                        |  | 4,837,243  |               |  |  |           |   |  |     |        |   |     |  |         |   |  |  |         |   |  |  | 4,837,243  |  
|                                                                                          |  |                      |           |  |                |  |            |                   |              |  |                                 |                        |  |                                  |                      |  |                                        |  |            |               |  |  |            |   |  |     |         |   |     |  |          |   |  |  |          |   |  |  |            |  
|Balance at December 31, 2011                                                              |  |                      | 3,116,361 |  |                |  | 31,163,611 |                   |              |  | 16,453,527                      |                        |  |                                  | 7,162,092            |  |                                        |  | 4,871,009  |               |  |  | 111,072    |   |  |     | 375,051 |   |     |  | (377,304 | ) |  |  | (964,188 | ) |  |  | 58,794,870 |  
|                                                                                          |  |                      |           |  |                |  |            |                   |              |  |                                 |                        |  |                                  |                      |  |                                        |  |            |               |  |  |            |   |  |     |         |   |     |  |          |   |  |  |          |   |  |  |            |  



Note: The directors and supervisors remunerations and employees bonuses amounted to $50,642 thousand and $560,945 thousand, respectively, have been deducted from the statements of
income.

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



F-9



---

##### 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, |           
|                                                                                            |  | 2009                             |            |   | 2010 |  |            | 2011 | 
|                                                                                            |  | NT$                              |            |   | NT$  |  |            | NT$  |  |  | US$        |  
|                                                                                            |  |                                  |            |   |      |  |            |      |  |  | (Note 2)   |  
|Cash flows from operating activities                                                        |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  
|Net income                                                                                  |  |                                  | 8,789,829  |   |      |  | 5,626,907  |      |  |  | 4,837,243  |   |  |  | 159,803 |  
|Adjustments to reconcile net income to net cash provided by operating activities:           |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  
|Depreciation                                                                                |  |                                  | 8,448,458  |   |      |  | 8,479,361  |      |  |  | 9,086,334  |   |  |  | 300,176 |  
|Amortization                                                                                |  |                                  | 505,687    |   |      |  | 433,973    |      |  |  | 559,571    |   |  |  | 18,486  |  
|Provision for (reversal of) bad debts expense                                               |  |                                  | 79,754     |   |      |  | (260,927   | )    |  |  | 4,675      |   |  |  | 155     |  
|Provision for (reversal of) sales allowance                                                 |  |                                  | 290,109    |   |      |  | (293,021   | )    |  |  | (731       | ) |  |  | (24     | )
|Provision for (reversal of) loss on obsolescence and decline in market value of inventories |  |                                  | 6,946      |   |      |  | (25,222    | )    |  |  | 30,554     |   |  |  | 1,009   |  
|Loss on liquidation of investment carried at cost                                           |  |                                  |           |   |      |  |           |      |  |  | 3,087      |   |  |  | 102     |  
|Gain on disposal of investments                                                             |  |                                  | (1,947,879 | ) |      |  |           |      |  |  |           |   |  |  |        |  
|Gain on liquidation of investment                                                           |  |                                  | (5,871     | ) |      |  |           |      |  |  |           |   |  |  |        |  
|Long-term investment loss under the equity method                                           |  |                                  |           |   |      |  | 3,757      |      |  |  | 26,093     |   |  |  | 862     |  
|Gain on disposal of property, plant and equipment                                           |  |                                  | (8,469     | ) |      |  | (44,276    | )    |  |  | (109,596   | ) |  |  | (3,621  | )
|Provision for loss on idle assets                                                           |  |                                  | 73,882     |   |      |  | 117,847    |      |  |  | 134,227    |   |  |  | 4,434   |  
|Foreign currency exchange (gain) loss on long-term loans                                    |  |                                  |           |   |      |  | (157,500   | )    |  |  | 98,565     |   |  |  | 3,256   |  
|Amortization of arrangement fee of co-financing loans                                       |  |                                  |           |   |      |  | 322        |      |  |  | 2,427      |   |  |  | 80      |  
|Amortization of discount on long-term notes                                                 |  |                                  | 2,581      |   |      |  |           |      |  |  |           |   |  |  |        |  
|(Increase) decrease in assets:                                                              |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  
|Notes receivable                                                                            |  |                                  | 5,629      |   |      |  | (32,721    | )    |  |  | 55,721     |   |  |  | 1,841   |  
|Accounts receivable                                                                         |  |                                  | (4,389,987 | ) |      |  | 2,163,598  |      |  |  | (513,196   | ) |  |  | (16,954 | )
|Other financial assets, current                                                             |  |                                  | (2,706     | ) |      |  | (83,528    | )    |  |  | 212,792    |   |  |  | 7,030   |  
|Inventories                                                                                 |  |                                  | (620,639   | ) |      |  | (517,836   | )    |  |  | (471,173   | ) |  |  | (15,566 | )
|Deferred income tax assets                                                                  |  |                                  | 546,367    |   |      |  | 204,791    |      |  |  | 90,487     |   |  |  | 2,989   |  
|Other current assets  other                                                                |  |                                  | (78,480    | ) |      |  | 11,564     |      |  |  | (49,659    | ) |  |  | (1,641  | )
|Increase (decrease) in liabilities:                                                         |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  
|Notes payable                                                                               |  |                                  | (655       | ) |      |  |           |      |  |  |           |   |  |  |        |  
|Accounts payable                                                                            |  |                                  | 3,121,234  |   |      |  | (579,308   | )    |  |  | (985,479   | ) |  |  | (32,556 | )
|Income tax payable                                                                          |  |                                  | 27,473     |   |      |  | (328,738   | )    |  |  | (39,727    | ) |  |  | (1,312  | )
|Accrued expenses                                                                            |  |                                  | 346,707    |   |      |  | (441,547   | )    |  |  | (90,512    | ) |  |  | (2,990  | )
|Other payables                                                                              |  |                                  | 273,954    |   |      |  | 106,784    |      |  |  | 107,538    |   |  |  | 3,553   |  
|Other current liabilities                                                                   |  |                                  | 33,022     |   |      |  | (4,428     | )    |  |  | 21,286     |   |  |  | 703     |  
|Other liabilities  other                                                                   |  |                                  | (797       | ) |      |  | (1,011     | )    |  |  | (136       | ) |  |  | (4      | )
|Accrued pension liabilities                                                                 |  |                                  | (3,867     | ) |      |  | 27,677     |      |  |  | 24,722     |   |  |  | 817     |  
|                                                                                            |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  
|Net cash provided by operating activities                                                   |  |                                  | 15,492,282 |   |      |  | 14,406,518 |      |  |  | 13,035,113 |   |  |  | 430,628 |  
|                                                                                            |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |         |  

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

(Continued)



F-10



---

##### 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, |           
|                                                                          |  | 2009                             |            |   | 2010 |  |             | 2011 | 
|                                                                          |  | NT$                              |            |   | NT$  |  |             | NT$  |  |  | US$         |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  | (Note 2)    |  
|Cash flows from investing activities                                      |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Increase in security deposits                                             |  |                                  |           |   |      |  | (58,100     | )    |  |  |            |   |  |  |         |  
|Decrease (increase) in financial assets carried at cost                   |  |                                  | 6,642      |   |      |  | (1,133,950  | )    |  |  | (490,000    | ) |  |  | (16,188  | )
|Increase of long-term investments under equity method                     |  |                                  |           |   |      |  | (152,675    | )    |  |  | (50,750     | ) |  |  | (1,676   | )
|Proceeds from liquidation of long-term investment                         |  |                                  | 5,871      |   |      |  |            |      |  |  | 3,613       |   |  |  | 119      |  
|Acquisition of property, plant and equipment                              |  |                                  | (5,303,328 | ) |      |  | (15,321,235 | )    |  |  | (10,982,303 | ) |  |  | (362,811 | )
|Acquisition of leased assets                                              |  |                                  | (87,732    | ) |      |  |            |      |  |  |            |   |  |  |         |  
|Proceeds from disposal of assets                                          |  |                                  | 9,277      |   |      |  | 1,254,054   |      |  |  | 603,472     |   |  |  | 19,936   |  
|Payment for deferred charges                                              |  |                                  | (253,402   | ) |      |  | (670,475    | )    |  |  | (984,869    | ) |  |  | (32,536  | )
|Receipt of (payment for) refundable deposits                              |  |                                  | 1,754      |   |      |  | (165        | )    |  |  | (2,501      | ) |  |  | (83      | )
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Net cash used in investing activities                                     |  |                                  | (5,620,918 | ) |      |  | (16,082,546 | )    |  |  | (11,903,338 | ) |  |  | (393,239 | )
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|                                                                          |  |                                  |            |  
|Cash flows from financing activities                                      |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Proceeds (repayment) of short-term loans                                  |  |                                  | (414,024   | ) |      |  | 1,248,592   |      |  |  |            |   |  |  |         |  
|Proceeds of long-term loans                                               |  |                                  |           |   |      |  | 4,525,336   |      |  |  | 5,000,000   |   |  |  | 165,180  |  
|Repayment of long-term loans                                              |  |                                  | (3,000,000 | ) |      |  |            |      |  |  |            |   |  |  |         |  
|Receipt (repayment) of deposit-in                                         |  |                                  | (30,083    | ) |      |  |            |      |  |  | 88,524      |   |  |  | 2,925    |  
|Purchase treasury stock                                                   |  |                                  |            |   |      |  |             |      |  |  | (964,188    | ) |  |  | (31,853  | )
|Payment for cash dividends                                                |  |                                  | (5,609,430 | ) |      |  | (8,040,177  | )    |  |  | (5,048,478  | ) |  |  | (166,782 | )
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Net cash used in financing activities                                     |  |                                  | (9,053,537 | ) |      |  | (2,266,249  | )    |  |  | (924,142    | ) |  |  | (30,530  | )
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Effect of foreign currency exchange                                       |  |                                  | (43,631    | ) |      |  | (153,876    | )    |  |  | 214,959     |   |  |  | 7,102    |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Net (decrease) increase in cash                                           |  |                                  | 774,196    |   |      |  | (4,096,153  | )    |  |  | 422,592     |   |  |  | 13,961   |  
|Cash and cash equivalents at the beginning of the year                    |  |                                  | 18,840,965 |   |      |  | 19,615,161  |      |  |  | 15,519,008  |   |  |  | 512,686  |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Cash and cash equivalents at the end of the year                          |  |                                  | 19,615,161 |   |      |  | 15,519,008  |      |  |  | 15,941,600  |   |  |  | 526,647  |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|                                                                          |  |                                  |            |  
|Supplemental disclosures of cash flow information:                        |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Cash paid for interest                                                    |  |                                  | 33,779     |   |      |  | 7,652       |      |  |  | 81,219      |   |  |  | 2,683    |  
|Deduct: capitalized interest                                              |  |                                  |           |   |      |  | (292        | )    |  |  | (26,106     | ) |  |  | (862     | )
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Interest paid (excluding capitalized interest)                            |  |                                  | 33,779     |   |      |  | 7,360       |      |  |  | 55,113      |   |  |  | 1,821    |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Cash paid for income tax                                                  |  |                                  | 851,721    |   |      |  | 884,903     |      |  |  | 629,075     |   |  |  | 20,782   |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|                                                                          |  |                                  |            |  
|Supplemental disclosures of partial cash paid for investing               |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Acquisition of property, plant and equipment                              |  |                                  | 6,039,790  |   |      |  | 16,920,850  |      |  |  | 10,112,151  |   |  |  | 334,065  |  
|Deduction on payment due to exchange of assets                            |  |                                  | (8,631     | ) |      |  |            |      |  |  |            |   |  |  |         |  
|Net decrease (increase) in other payables due to acquisition of equipment |  |                                  | (727,831   | ) |      |  | (1,599,615  | )    |  |  | 870,152     |   |  |  | 28,746   |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  
|Cash paid                                                                 |  |                                  | 5,303,328  |   |      |  | 15,321,235  |      |  |  | 10,982,303  |   |  |  | 362,811  |  
|                                                                          |  |                                  |            |   |      |  |             |      |  |  |             |   |  |  |          |  

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

(EXPRESSED IN THOUSANDS OF 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 was listed on the Taiwan Stock Exchange in April 1993. The Company is mainly engaged in the assembly,
testing and turnkey services of integrated circuits. As of December 31, 2011, the Company and its subsidiaries had 19,906 employees.

2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements are prepared in conformity with the Rules Governing the Preparation of Financial Reports by Securities Issuers and generally accepted
accounting principles in the Republic of China which vary in certain significant respects from accounting principles generally accepted in the United States. The application of accounting principles in the United States would have affected the
determination of consolidated net income expressed in New Taiwan dollars, for each of the three years ended December 31, 2011 and the determination of consolidated shareholders equity and consolidated financial position also expressed in
New Taiwan dollars, as of December 31, 2010 and 2011 to the extent summarized in Note 31 to the consolidated financial statements. Significant accounting policies are summarized as follows:

(1) Basis of Consolidation



| | A. | Principles of Consolidation
| | -- | ---------------------------

The Company consolidates all of the subsidiaries which it owns, directly or indirectly, more than 50% of the voting rights and which it owns, directly or indirectly, less than 50% of the voting rights but
has effective control. Significant inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.



| | B. | Consolidated subsidiaries:
| | -- | --------------------------



|                              |  |                                         |  |                                                                                           |  |                                                              |     |   |      |  |     |  
|----------------------------- |  | --------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ------------------------------------------------------------ | --- | - | ---- |  | --- | -
|                              |  |                                         |  |                                                                                           |  | % of ownership held by
thenamed investors as of December 31, |    
|Name of investor              |  | Name of subsidiaries                    |  | Main operating activities                                                                 |  | 2010                                                         |     |   | 2011 | 
|The Company                   |  | SPIL (B.V.I.) Holding
Limited           |  | 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 | %



| | C. | Non-consolidated subsidiaries:
| | -- | ------------------------------

None.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | D. | Adjustments for subsidiaries with different accounting periods:
| | -- | ---------------------------------------------------------------

None.



| | E. | Extraordinary risks from foreign subsidiaries:
| | -- | ----------------------------------------------

None.



| | F. | Material limitations for capital transfer from subsidiaries to the parent company:
| | -- | ----------------------------------------------------------------------------------

None.



| | G. | The parent companys stocks held by subsidiaries:
| | -- | -------------------------------------------------

None



| | H. | Convertible bonds and stocks issued by subsidiaries:
| | -- | ----------------------------------------------------

In 2010, the Company increased the capital of Siliconware Technology (Suzhou) Limited by US$30,000 through SPIL (B.V.I.) Holding Limited, and its subsidiary, SPIL (Cayman) Holding Limited.

(2) Use of Estimates

The preparation of consolidated financial statements in conformity with the aforementioned guidelines, law and principles requires
management to make reasonable assumptions and estimates of matters that are inherently uncertain. Actual results may differ from those estimates.

(3) Translation of Foreign Currency Transactions on Subsidiaries Financial Statements

The financial statements of foreign subsidiaries are translated into New Taiwan dollars using the spot rate as of each financial statement date for asset and liability accounts, average exchange rate for
profit and loss accounts, spot rate for dividend and historical exchange rates for equity accounts. The cumulative translation effects for subsidiaries using functional currencies other than the New Taiwan dollar are included in the Cumulative
Translation Adjustments in stockholders equity.

(4) Foreign Currency Transactions

The Company and its subsidiaries maintain their accounts in New Taiwan dollars and the functional currencies of the respective
subsidiaries, respectively. Transactions denominated in foreign currencies are translated into functional currencies at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated
into functional currencies at the exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from the aforementioned translations are recognized in the current years results.

(5) Convenience Translation into US Dollars

The Company maintains its accounting records and prepares its financial statements in New Taiwan (NT) dollars. The United States (US) dollar amounts disclosed in the 2011 financial
statements are presented solely for the convenience of the reader and were translated at the rate of NT$30.27 (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, 2011 as the last quoted rate prior to 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.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



(6) 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:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Assets arising from operating activities that are expected to be realized or consumed, or are intended to be sold within the normal operation cycle;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Assets held mainly for trading purposes;
| | ---- | ----------------------------------------



| | (iii) | Assets expected to be realized within twelve months from the balance sheet date;
| | ----- | --------------------------------------------------------------------------------



| | (iv) | 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:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Liabilities arising from operating activities that are expected to be paid off within the normal operating cycle;
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (ii) | Liabilities arising mainly from trading activities;
| | ---- | ---------------------------------------------------



| | (iii) | Liabilities that are to be paid off within twelve months from the balance sheet date;
| | ----- | -------------------------------------------------------------------------------------



| | (iv) | Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------

(7) Cash Equivalents

Bankers acceptances (BA) acquired with maturities of less than three months from the date of purchase are classified as cash
equivalents. The carrying amount approximates fair value.

(8) Accounts Receivable



| | A. | Accounts receivable expected to be collected over one year are 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.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Allowance for Doubtful Accounts
| | -- | -------------------------------

The Company originally estimated allowance for doubtful accounts based on the evaluation of collectibility and aging analysis. Effective
January 2011, the Company implemented the amended accounting standard, R.O.C. SFAS No. 34, Financial Instruments: Recognition and Measurement to assess on the balance sheet date 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 there is objective evidence that an impairment loss on financial assets carried at
amortized cost has been incurred, the amount of the loss is recognized and measured as the difference between assets carrying amount and the present value of estimated future cash flows discounted at the financial assets original
effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the Company will reverse the previously
recognized impairment loss either directly or by adjusting an allowance account. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at
the date the impairment is reversed. The amount of the reversal shall be recognized in profit or loss.

(9) Allowance for Sales
Discounts

The allowance for sales discounts is provided based on the estimated allowance to be incurred and is recorded as
deduction of accounts receivable.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



(10) Inventories

Inventories are recorded at cost when acquired under a perpetual inventory system and adjusted to cost using the weightedaverage method at the balance sheet date. The allowance for loss on
obsolescence and decline in market value is recorded based on inventory aging and obsolescence, when necessary. Inventories are stated at the lower of cost or net realizable value by item, except where it may be appropriate to group similar 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.

(11) Non-current assets held for sale

Non-current assets (or disposal
groups) whose carrying amount will be recovered principally through a sale transaction, rather than continuing utilization, are measured at the lower of carrying amount or fair value less transaction cost.

(12) Available-for-sale Financial Assets



| | A. | Investments in equity securities are recorded at the transaction date.
| | -- | ----------------------------------------------------------------------



| | B. | Available-for-sale securities are measured at fair value at the balance sheet date with changes in fair value recorded as adjustments to the shareholders equity.
The accumulated adjustments of unrealized gain or loss are realized in earnings in the period when the financial assets are disposed. Fair values of listed securities are measured at their closing price at the balance sheet date.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Company recognizes an impairment loss whenever there is objective evidence of impairment. Subsequent recovery of such impairment loss shall be recorded as
adjustments to shareholders equity rather than current years profit or loss.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(13) Financial Assets Carried at
Cost



| | A. | Financial assets carried at cost are recorded at the transaction date and are initially measured at fair value plus transaction cost related to the acquisition or
issuance.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Investments in unlisted stocks or stocks in emerging stock market are carried at their original cost because their fair values cannot be reliably measured.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Company recognizes an impairment loss whenever there is objective evidence of impairment. Subsequent recovery of such impairment loss shall not be reversed.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

(14) Long-term Investments Accounted for under Equity Method



| | A. | Long-term equity investments in which the Company owns at least 20% of the voting stocks or has significant influence to the investee companies are accounted for under
the equity method. The excess of the acquisition cost over the investees fair value of the identifiable net assets acquired is capitalized as goodwill and tested for impairment annually. No retrospective adjustment is required for amortization
recognized in previous years.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Unrealized gains and losses from transactions between the Company and investee companies accounted for under the equity method are deferred. Profit (loss) from sales of
depreciable assets between the investee and the Company is amortized to income over the assets economic service lives. Unrealized gain from other types of intercompany transactions is reported as deferred credits classified as current or
noncurrent liabilities. Gains or losses on sales from equity method investees to the Company are deferred in proportion to the Companys ownership percentages in the investees until those are realized through transactions with third parties.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | C. | When the Companys proportional interest in an equity investee changes after the equity investee issues new shares, the effect of change in the Companys
holding ratio on long-term investment is adjusted to capital reserve. If capital reserve account is insufficient, the effect is then charged to retained earnings.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | The Companys proportionate share of the foreign investees cumulative translation adjustments related to the translation of the foreign investees
financial statements into New Taiwan dollars is recognized as Cumulative Translation Adjustments in stockholders equity.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(15) Property, Plant and Equipment



| | A. | Property, plant and equipment are stated at historical cost. Interest incurred relating to the construction of property, plant and equipment is capitalized accordingly.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Depreciation is provided on the straight-line method over the assets estimated economic service lives. The service lives of fixed assets are 5 to 15 years, except
for buildings, which are 20 to 55 years.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Maintenance and repairs are expensed as incurred. Significant renewals and improvements are capitalized and depreciated accordingly. When fixed assets are disposed,
their original cost and accumulated depreciation are removed from the corresponding accounts, with gain or loss recorded as non-operating income or loss.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Idle assets are stated at the lower of book value or net realizable value and are reclassified to other assets. Differences between book value and net realizable value
are reported as losses in current earnings.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(16) Deferred Charges

Costs of computer software system purchased externally and tooling costs are recognized as deferred charges and amortized on the
straight-line basis over the useful lives of 2 to 10 years.

(17) Land Use Right

The rental cost for Siliconware Technology Suzhou Limited to lease the land from the local government is recognized as land use right and
amortized on the straight-line method over the contract periods of 50 and 70 years.

(18) Pension Cost

Under a defined benefit plan, the net pension cost is computed based on an actuarial valuation. The unrecognized net asset or net
obligation at transition is amortized over 15 years on a straight-line basis. Under a defined contribution plan, the Company makes monthly contribution to employees individual pension accounts. These contributions are recorded as pension costs
in the current period.

(19) Income Tax



| | A. | The Company computes its income tax based on the income before tax. In accordance with R.O.C. SFAS No. 22, Accounting for Income Taxes, the income tax
effect resulting from temporary differences and investment tax credits is recorded as deferred income tax assets or liabilities using the asset and liability method. Deferred tax assets or liabilities are further classified into current or
noncurrent and carried at net balance. Valuation allowance on deferred tax assets is provided to the extent that it is more likely than not that the tax benefit will not be realized.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Company adopted R.O.C. SFAS No. 12, Accounting for Investment Tax Credits, in determining the investment tax credits. The investment tax credits
relating to the acquisition cost of qualifying equipment or technology, qualifying research and development expenditure, and qualifying personnel training expenditure are recognized as income tax adjustments in the period the tax credits arise.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Over or under provisions of prior years income tax liabilities are included in the current periods income tax expense.
| | -- | ------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | D. | The Taiwan imputation tax system requires that any undistributed earnings be subject to an additional 10% corporate income tax, which is recognized as income tax
expense at the time when the stockholders resolve the distribution of retained earnings.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | Pursuant to the R.O.C. Alternative Minimum Tax Act, the domestic consolidated entities are required to calculate Alternative Minimum Tax (AMT), a supplemental 10% tax
on taxable income including most income that is exempted from regular income tax under various legislations, in addition to the regular tax. If the amount of alternative minimum tax is greater than that of the regular tax, the excess amount shall be
reported as current tax expense.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | When a change in tax law is enacted, the Company will recalculate deferred tax assets and liabilities accordingly. The amount of difference shall be recognized as
current income tax adjustment.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(20) Revenues and Costs

Revenues are recognized when services are provided based on transaction terms and when collectibility is reasonably assured. Related costs
are recorded as incurred based on matching principle and related expenses are recognized as current expenses under accrual basis.

(21)
Employees Bonuses and Directors and Supervisors Remunerations

Effective January 1, 2008,
pursuant to R.O.C. EITF 96-052, Accounting for Employees Bonuses and Directors and Supervisors Remuneration as prescribed by the Accounting Research and Development Foundation, R.O.C., dated March 16, 2007, the
Company should no longer treat such bonuses and remunerations as a reduction of retained earnings but record cost/expense and related liability when the Company has legal obligations and could reasonably estimate such amount. Any difference between
estimated amount and distributed amount resolved in the stockholders meeting in the subsequent year shall be adjusted in the income/loss of the following year. In addition, according to R.O.C. EITF 97-127, Criteria for Listed Companies
in Calculating the Number of Shares of Employees Stock Bonus, shares of the distributed stocks will be calculated based on the closing price at the previous day of the stockholders meeting and after considering the effect of
ex-dividend and ex-right.

(22) Treasury Stock



| | A. | When the Company acquires outstanding shares as treasury stock, the acquisition cost will be debited to the Treasury Stock account, as the deduction of
stockholders equity.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | When the Company sells treasury stock, if the selling price is above the book value, the difference should be credited to the Capital Reserve  from treasury
stock transactions account. If the selling price is below the book value, the difference should first be offset against capital surplus from the same class of treasury stock transactions, and the remainder, if any, should be debited to
retained earnings.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | When the Companys treasury stock is retired, the account Treasury Stock should be credited, and the Capital Reserve  Premium on
Stock account and Capital Stock account should be debited proportionately according to the share ratio. An excess of the carrying value of treasury stock over the sum of its par value and premium on stock first be offset against
capital reserve from the same class of treasury stock transactions, and the remainder, if any, debited to retained earnings. An excess of the sum of the par value and premium on stock of treasury stock over its carrying value should be credited to
capital reserve from the same class of treasury stock transactions.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | The cost of treasury stock is accounted for on a weighted-average basis.
| | -- | ------------------------------------------------------------------------

(23) Earnings Per Share



| | A. | Basic earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share is
calculated by taking into consideration additional common shares that would have been outstanding if the equivalent diluted shares had been issued.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | The Companys dilutive potential common shares are employee bonus. In computing the dilutive effects of the employee bonus, the Company applies the treasury stock
method.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(24) Impairment Loss of Non-financial Assets



| | A. | The Company recognizes an impairment loss whenever an event occurs or evidence indicates the carrying amount of an asset exceeds its recoverable amount. Recoverable
amount is measured at the higher of fair value less cost to sale or value in use. Fair value less cost to sale is the amount obtainable from the sale of an asset in an arms-length transaction between knowledgeable, willing parties, after
deducting any direct incremental disposal costs. The value in use is the present value of estimated future cash flows expected to arise in its remaining useful life.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | An impairment loss recognized in prior years is reversed if the impairment loss caused by a specific external event of an exceptional nature is not expected to recur.
However, the restored amount is limited to the amount of impairment loss previously recognized. Impairment loss for goodwill cannot be reversed.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. Effects of Changes in Accounting Principle



| | A. | Effective January 1, 2011, the Company implemented the amendments of R.O.C. SFAS No. 34, Accounting for Financial Instruments. The major amendment
required the Company to include loans and receivables which originated by the entity as financial instruments. The change in accounting principle does not cause significant impact toward the financial statements for the year ended December 31,
2011.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Effective January 1, 2011, the Company adopted R.O.C. SFAS No. 41, Disclosure of Operating Segment Information to replace R.O.C. SFAS No. 20,
 Disclosure of Segment Information. The Company, following the standard, restated segments information of 2010 while first adoption. The change in accounting principle does not cause impact toward the consolidated net income and
earnings per share in 2011.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. Cash and Cash Equivalents



|                                       |  |              |            |  |      |  |            | 
|-------------------------------------- |  | ------------ | ---------- |  | ---- |  | ---------- | 
|                                       |  | December 31, |           
|                                       |  | 2010         |            |  | 2011 | 
|                                       |  | NT$          |            |  | NT$  | 
|Cash on hand and petty cash            |  |              | 1,405      |  |      |  | 980        | 
|Cash equivalents                       |  |              | 2,648      |  |      |  | 7,372      | 
|Savings accounts and checking accounts |  |              | 1,752,934  |  |      |  | 1,566,971  | 
|Time deposits                          |  |              | 13,762,021 |  |      |  | 14,366,277 | 
|                                       |  |              |            |  |      |  |            | 
|                                       |  |              | 15,519,008 |  |      |  | 15,941,600 | 
|                                       |  |              |            |  |      |  |            | 

As of December 31, 2010 and 2011, the interest rates for time deposits ranged from 0.17 % to
2.20 % and from 0.35 % to 3.60 %, respectively.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



5. Accounts Receivable, Net



|                                    |  |              |           |   |      |  |            |  
|----------------------------------- |  | ------------ | --------- | - | ---- |  | ---------- | -
|                                    |  | December 31, |          
|                                    |  | 2010         |           |   | 2011 | 
|                                    |  | NT$          |           |   | NT$  | 
|Accounts receivable                 |  |              | 9,868,210 |   |      |  | 10,412,304 |  
|Less: Allowance for sales discounts |  |              | (152,672  | ) |      |  | (152,134   | )
|Allowance for doubtful accounts     |  |              | (66,928   | ) |      |  | (28,718    | )
|                                    |  |              |           |   |      |  |            |  
|                                    |  |              | 9,648,610 |   |      |  | 10,231,452 |  
|                                    |  |              |           |   |      |  |            |  

6. Inventories



|                                                                                    |  |              |           |   |      |  |           |  
|----------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---- |  | --------- | -
|                                                                                    |  | December 31, |          
|                                                                                    |  | 2010         |           |   | 2011 | 
|                                                                                    |  | NT$          |           |   | NT$  | 
|Raw materials and supplies                                                          |  |              | 2,788,794 |   |      |  | 3,286,576 |  
|Work in process                                                                     |  |              | 467,190   |   |      |  | 422,407   |  
|Finished goods                                                                      |  |              | 317,039   |   |      |  | 364,039   |  
|                                                                                    |  |              |           |   |      |  |           |  
|                                                                                    |  |              | 3,573,023 |   |      |  | 4,073,022 |  
|Less: Allowance for loss on obsolescence and decline in market value of inventories |  |              | (57,126   | ) |      |  | (87,907   | )
|                                                                                    |  |              |           |   |      |  |           |  
|                                                                                    |  |              | 3,515,897 |   |      |  | 3,985,115 |  
|                                                                                    |  |              |           |   |      |  |           |  

The above allowance for loss on obsolescence and decline in market value of inventories was caused by the
valuation of raw materials and supplies.



|                                                  |  |                                  |            |   |      |  |            |      |  |  |            |  
|------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                                                  |  | For the years ended December 31, |           
|                                                  |  | 2009                             |            |   | 2010 |  |            | 2011 | 
|                                                  |  | NT$                              |            |   | NT$  |  |            | NT$  | 
|Expense / loss incurred related to inventories :  |  |                                  |            |   |      |  |            |      |  |  |            |  
|Cost of goods sold                                |  |                                  | 47,904,790 |   |      |  | 54,169,560 |      |  |  | 51,853,687 |  
|Decline in market value and loss on obsolescence  |  |                                  | 6,946      |   |      |  |           |      |  |  | 30,554     |  
|Recovery of market value and loss on obsolescence |  |                                  |           |   |      |  | (25,222    | )    |  |  |           |  
|Others                                            |  |                                  | (59,964    | ) |      |  | (103,074   | )    |  |  | (137,766   | )
|                                                  |  |                                  |            |   |      |  |            |      |  |  |            |  
|                                                  |  |                                  | 47,851,772 |   |      |  | 54,041,264 |      |  |  | 51,746,475 |  
|                                                  |  |                                  |            |   |      |  |            |      |  |  |            |  

Because some obsolescent inventories were disposed during the period, the Company recognized gains on
recovery of loss on obsolescence.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



7. Available-for-sale Financial Assets, Noncurrent



|                            |  |              |            |   |      |  |            |  
|--------------------------- |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                            |  | December 31, |           
|                            |  | 2010         |            |   | 2011 | 
|                            |  | NT$          |            |   | NT$  | 
|Cost of listed securities   |  |              | 5,167,332  |   |      |  | 5,167,332  |  
|Valuation adjustment        |  |              | 1,863,648  |   |      |  | 174,821    |  
|Accumulated impairment loss |  |              | (2,143,973 | ) |      |  | (2,143,973 | )
|                            |  |              |            |   |      |  |            |  
|                            |  |              | 4,887,007  |   |      |  | 3,198,180  |  
|                            |  |              |            |   |      |  |            |  

8. Financial Assets Carried at Cost, Noncurrent



|                            |  |              |           |   |      |  |           |  
|--------------------------- |  | ------------ | --------- | - | ---- |  | --------- | -
|                            |  | December 31, |          
|                            |  | 2010         |           |   | 2011 | 
|                            |  | NT$          |           |   | NT$  | 
|Unlisted securities         |  |              | 1,842,803 |   |      |  | 2,326,103 |  
|Accumulated impairment loss |  |              | (393,460  | ) |      |  | (393,460  | )
|                            |  |              |           |   |      |  |           |  
|                            |  |              | 1,449,343 |   |      |  | 1,932,643 |  
|                            |  |              |           |   |      |  |           |  



| | A. | There are no active quoted prices or reliable fair value for unlisted securities, and therefore, these investments are measured at cost.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Companys Board of Directors resolved to purchase 133,000 thousand common shares of ChipMOS Technologies Inc. (ChipMOS Taiwan), a 100% owned subsidiary of
ChipMOS Technologies (Bermuda) Ltd. (ChipMOS Bermuda). The purchase of 133,000 thousand shares of ChipMOS Taiwan represents approximately 15.78% of the ownership of ChipMOS Taiwan. Consideration of the share purchase totaled $1,630,580, which is
determined based on the valuation report provided by Horizon Securities Ltd. as well as mutual agreement between the Company and ChipMOS Bermuda. Both parties signed the share purchase / sales agreements on February 26, 2010. As of
January 7, 2011, the Company has obtained entire purchased shares accordingly.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9. Long-term Investments Accounted for
Under the Equity Method



|                        |  |              |         |  |                        |  |       |        |  |  |                        |  |  |  |       |  
|----------------------- |  | ------------ | ------- |  | ---------------------- |  | ----- | ------ |  |  | ---------------------- |  |  |  | ----- | -
|                        |  | December 31, |        
|                        |  | 2010         |         |  | 2011                   | 
|Investee company        |  | Amount       |         |  | Percentage ofownership |  |       | Amount |  |  | Percentage ofownership | 
|                        |  | NT$          |         |  |                        |  |       | NT$    |  |  |                        | 
|Vertical Circuits, Inc. |  |              | 148,918 |  |                        |  | 30.69 | %      |  |  | 110,671                |  |  |  | 30.69 | %
|AcSiP Technology Corp.  |  |              |        |  |                        |  |      |        |  |  | 62,904                 |  |  |  | 16.73 | %
|                        |  |              |         |  |                        |  |       |        |  |  |                        |  |  |  |       |  
|                        |  |              | 148,918 |  |                        |  |       |        |  |  | 173,575                |  |  |  |       |  
|                        |  |              |         |  |                        |  |       |        |  |  |                        |  |  |  |       |  



| | A. | To upgrade assembly related technology, the Company purchased preferred-shares of Vertical Circuits, Inc. (VCI) amounted to US$5,000,000 in December 2010, and obtained
30.69% of the voting right on VCI. In May 2011, the Company acquired common shares of AcSiP Technology Corp. (AcSiP) by paying $50,750, and obtained 20% of the voting right of AcSiP. As a result of the increase of AcSiPs issued shares, the
Companys ownership on AcSiP decreased to 16.73% as of December 31, 2011. The Company assesses and determines that the Company maintains significant influence over the investee and, therefore, continues to recognize the investment on AcSiP
under equity method.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-20



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | For the years ended December 31, 2010 and 2011, the Company recognized investment loss of $3,757 and $26,093, respectively, for investees accounted for under the
equity method based on investees audited financial statements for the same periods by weighted-average percentage of stock ownership.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10. Property, Plant and Equipment



|                                                       |  |                   |            |  |                         |  |             |            |  |  |            | 
|------------------------------------------------------ |  | ----------------- | ---------- |  | ----------------------- |  | ----------- | ---------- |  |  | ---------- | 
|                                                       |  | December 31, 2010 |           
|                                                       |  | Cost              |            |  | Accumulateddepreciation |  |             | Book value | 
|                                                       |  | NT$               |            |  | NT$                     |  |             | NT$        | 
|Land                                                   |  |                   | 2,903,192  |  |                         |  |            |            |  |  | 2,903,192  | 
|Buildings                                              |  |                   | 15,140,684 |  |                         |  | (4,606,516  | )          |  |  | 10,534,168 | 
|Machinery and equipment                                |  |                   | 52,257,238 |  |                         |  | (29,044,684 | )          |  |  | 23,212,554 | 
|Utility equipment                                      |  |                   | 1,167,108  |  |                         |  | (602,642    | )          |  |  | 564,466    | 
|Furniture and fixtures                                 |  |                   | 940,263    |  |                         |  | (533,370    | )          |  |  | 406,893    | 
|Other equipment                                        |  |                   | 2,432,287  |  |                         |  | (1,253,312  | )          |  |  | 1,178,975  | 
|Construction in progress and prepayments for equipment |  |                   | 4,126,547  |  |                         |  |            |            |  |  | 4,126,547  | 
|                                                       |  |                   |            |  |                         |  |             |            |  |  |            | 
|                                                       |  |                   | 78,967,319 |  |                         |  | (36,040,524 | )          |  |  | 42,926,795 | 
|                                                       |  |                   |            |  |                         |  |             |            |  |  |            | 
|                                                       | 
|                                                       |  | December 31, 2011 |           
|                                                       |  | Cost              |            |  | Accumulateddepreciation |  |             | Book value | 
|                                                       |  | NT$               |            |  | NT$                     |  |             | NT$        | 
|Land                                                   |  |                   | 2,903,192  |  |                         |  |            |            |  |  | 2,903,192  | 
|Buildings                                              |  |                   | 17,370,696 |  |                         |  | (5,696,547  | )          |  |  | 11,674,149 | 
|Machinery and equipment                                |  |                   | 56,535,805 |  |                         |  | (32,682,023 | )          |  |  | 23,853,782 | 
|Utility equipment                                      |  |                   | 1,301,488  |  |                         |  | (741,608    | )          |  |  | 559,880    | 
|Furniture and fixtures                                 |  |                   | 1,042,718  |  |                         |  | (589,078    | )          |  |  | 453,640    | 
|Other equipment                                        |  |                   | 2,808,025  |  |                         |  | (1,470,081  | )          |  |  | 1,337,944  | 
|Construction in progress and prepayments for equipment |  |                   | 3,362,217  |  |                         |  |            |            |  |  | 3,362,217  | 
|                                                       |  |                   |            |  |                         |  |             |            |  |  |            | 
|                                                       |  |                   | 85,324,141 |  |                         |  | (41,179,337 | )          |  |  | 44,144,804 | 
|                                                       |  |                   |            |  |                         |  |             |            |  |  |            | 



| | A. | Capitalized interest expense for the years ended December 31, 2010 and 2011:
| | -- | ----------------------------------------------------------------------------



|                                                                 |  |      |        |  |      |  |        |      |  |  |                |  
|---------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | -------------- | -
|                                                                 |  | 2009 |        |  | 2010 |  |        | 2011 | 
|                                                                 |  | NT$  |        |  | NT$  |  |        | NT$  | 
|Total interest expense including capitalized interest            |  |      | 36,850 |  |      |  | 11,753 |      |  |  | 88,863         |  
|Capitalized interest (included in property, plant and equipment) |  |      |       |  |      |  | (292   | )    |  |  | (26,106        | )
|                                                                 |  |      |        |  |      |  |        |      |  |  |                |  
|Interest expense                                                 |  |      | 36,850 |  |      |  | 11,461 |      |  |  | 62,757         |  
|                                                                 |  |      |        |  |      |  |        |      |  |  |                |  
|Interest capitalization rate                                     |  |      |       |  |      |  | 0.8911 | %    |  |  | 0.8911%~1.1599 | %
|                                                                 |  |      |        |  |      |  |        |      |  |  |                |  



F-21



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | On February 26, 2010, the Companys Board of Directors resolved to sell certain equipments to ChipMOS Taiwan. Proceeds of the transaction totaled $1,630,580,
which is determined based on the appraisal report issued by China Credit Information Service, Ltd. as well as mutual agreement between the Company and ChipMOS Taiwan. Both parties signed the equipment purchase / sales agreement on February 26,
2010. The proceeds from the disposal have been collected by January 4, 2011.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11. Short-term Loans



|                |  |              |            |   |      |  |            |  
|--------------- |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                |  | December 31, |           
|Nature of loans |  | 2010         |            |   | 2011 | 
|                |  | NT$          |            |   | NT$  | 
|Credit loans    |  |              | 1,461,281  |   |      |  | 1,513,750  |  
|                |  |              |            |   |      |  |            |  
|Interest rates  |  |              | 0.95%~0.96 | % |      |  | 1.03%~1.61 | %
|                |  |              |            |   |      |  |            |  

12. Other Payables



|                       |  |              |           |  |      |  |           | 
|---------------------- |  | ------------ | --------- |  | ---- |  | --------- | 
|                       |  | December 31, |          
|                       |  | 2010         |           |  | 2011 | 
|                       |  | NT$          |           |  | NT$  | 
|Payables for equipment |  |              | 2,970,374 |  |      |  | 2,100,222 | 
|Other payables         |  |              | 984,450   |  |      |  | 1,103,297 | 
|                       |  |              |           |  |      |  |           | 
|                       |  |              | 3,954,824 |  |      |  | 3,203,519 | 
|                       |  |              |           |  |      |  |           | 

13. Long-term Loans



|                                                                               |  |                                    |  |                                                                                                      |  |              |           |   |      |  |                |  
|------------------------------------------------------------------------------ |  | ---------------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---- |  | -------------- | -
|                                                                               |  |                                    |  |                                                                                                      |  | December 31, |          
|Financial institution                                                          |  | Line of credits                    |  | Loan period and repayment method                                                                     |  | 2010         |           |   | 2011 | 
|                                                                               |  |                                    |  |                                                                                                      |  | NT$          |           |   | NT$  | 
|Mega International Commercial Bank (The management bank of co-financing loans) |  | NT$ 5 billion and US$ 0.15 billion |  | October 29, 2010 ~ October 29, 2015 Repayable in 6 semi-annual installments starting from April 2013 |  |              | 4,377,000 |   |      |  | 9,548,750      |  
|Less: Amortization of arrangement fee of long-term co-financing loans          |  |                                    |  |                                                                                                      |  |              | (8,842    | ) |      |  | (16,415        | )
|                                                                               |  |                                    |  |                                                                                                      |  |              |           |   |      |  |                |  
|                                                                               |  |                                    |  |                                                                                                      |  |              | 4,368,158 |   |      |  | 9,532,335      |  
|                                                                               |  |                                    |  |                                                                                                      |  |              |           |   |      |  |                |  
|Available credit line                                                          |  |                                    |  |                                                                                                      |  |              | 5,000,000 |   |      |  |               |  
|                                                                               |  |                                    |  |                                                                                                      |  |              |           |   |      |  |                |  
|Interest rates                                                                 |  |                                    |  |                                                                                                      |  |              | 0.8911    | % |      |  | 0.8911%~1.6552 | %
|                                                                               |  |                                    |  |                                                                                                      |  |              |           |   |      |  |                |  



| | A. | In order to fulfil operational and capital expenditures, the Company has entered into a co-financing-loan agreement in October 2010 with eleven financial institutions,
including Mega International Commercial Bank, the management bank. The line of credits consisted of credit amount of NT$5 billions and US$0.15 billion with credit period of five years under floating interest rate.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Pursuant to the above loan agreement, the Company should maintain certain financial covenants, such as current ratio, debt ratio as well as the ratio of interest
coverage, calculated based on both semi-annual and annual audited financial statements. As of December 31, 2011, the Company was in compliance with all of the loan covenants.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



14. Pension Plan and Net Periodic Pension Cost



| | A. | In accordance with the Labor Standards Act, the Company has a funded defined benefit pension plan covering all eligible employees prior to the enforcement of the Labor
Pension Act (the Act), effective on July 1, 2005, and employees choosing to continue to be subject to 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 the custodian for labor pension, deposited with the Bank of Taiwan.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | In accordance with the Labor Pension Act, effective July 1, 2005, the Company has a defined contribution pension plan covering employees (excluding foreign
employees) who chose to be subject to the pension mechanism under this Act. 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 accrued dividends from an employees personal pension account are claimed monthly or in full at one time. Under this pension plan, net periodic pension costs amounting to $356,469 and $386,148 were recognized for the years ended
December 31, 2010 and 2011, respectively.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | 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 from SUI to its employees individual pension
accounts. Contributions made in accordance with the Plan amounted to $8,195, and $7,773 respectively, for the years ended December 31, 2010 and 2011, respectively.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Siliconware Technology (Suzhou) Limited contributes monthly an amount equal to certain percentage of employees monthly salaries and wages according to the
specific legal requirements in Suzhou to the Bureau of Social Insurance without bearing other obligations.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | E. | The following tables set forth the actuarial assumptions, funded status and amounts recognized for the Companys defined benefit pension plan:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Assumptions used in actuarial calculations for the years ended December 31, 2009, 2010 and 2011:
| | --- | ------------------------------------------------------------------------------------------------



|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|--------------------------------------- |  | -------------------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                        |  | For the years ended December 31, |     
|                                        |  | 2009                             |      |   | 2010 |  |      | 2011 | 
|Discount rate                           |  |                                  | 2.25 | % |      |  | 2.00 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|Long-term rate of compensation increase |  |                                  | 2.00 | % |      |  | 2.00 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|Expected rate of return on plan assets  |  |                                  | 2.00 | % |      |  | 2.50 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  



|                               |  |              |            |   |      |  |            |  
|------------------------------ |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                               |  | December 31, |           
|                               |  | 2010         |            |   | 2011 | 
|                               |  | NT$          |            |   | NT$  | 
|Vested benefit                 |  |              | (155,412   | ) |      |  | (160,206   | )
|                               |  |              |            |   |      |  |            |  
|Vested benefit obligation      |  |              | (135,300   | ) |      |  | (158,398   | )
|                               |  |              |            |   |      |  |            |  
|Accumulated benefit obligation |  |              | (1,524,750 | ) |      |  | (1,639,945 | )
|                               |  |              |            |   |      |  |            |  



| | (2) | Changes in benefit obligation for the years ended December 31, 2009, 2010 and 2011:
| | --- | -----------------------------------------------------------------------------------



|                                                          |  |                                  |            |   |      |  |            |      |  |  |            |  
|--------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                                                          |  | For the years ended December 31, |           
|                                                          |  | 2009                             |            |   | 2010 |  |            | 2011 | 
|                                                          |  | NT$                              |            |   | NT$  |  |            | NT$  | 
|Projected benefit obligation at the beginning of the year |  |                                  | (1,544,731 | ) |      |  | (1,922,596 | )    |  |  | (2,120,024 | )
|Service cost                                              |  |                                  | (29,786    | ) |      |  | (33,034    | )    |  |  | (28,866    | )
|Interest cost                                             |  |                                  | (34,630    | ) |      |  | (43,083    | )    |  |  | (42,183    | )
|Plan amendments                                           |  |                                  | (73,596    | ) |      |  |           |      |  |  |           |  
|Loss on projected benefit obligation                      |  |                                  | (284,261   | ) |      |  | (154,768   | )    |  |  | (46,010    | )
|Benefit paid                                              |  |                                  | 44,408     |   |      |  | 33,457     |      |  |  | 79,705     |  
|                                                          |  |                                  |            |   |      |  |            |      |  |  |            |  
|Projected benefit obligation at the end of the year       |  |                                  | (1,922,596 | ) |      |  | (2,120,024 | )    |  |  | (2,157,378 | )
|                                                          |  |                                  |            |   |      |  |            |      |  |  |            |  



| | (3) | Changes in plan assets for the years ended December 31, 2009, 2010 and 2011:
| | --- | ----------------------------------------------------------------------------



|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  
|------------------------------------------------------ |  | -------------------------------- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|                                                       |  | For the years ended December 31, |          
|                                                       |  | 2009                             |           |   | 2010 |  |           | 2011 | 
|                                                       |  | NT$                              |           |   | NT$  |  |           | NT$  | 
|Fair value of plan assets at the beginning of the year |  |                                  | 1,130,537 |   |      |  | 1,143,276 |      |  |  | 1,176,476 |  
|Actual return on plan assets                           |  |                                  | 7,487     |   |      |  | 16,981    |      |  |  | 13,837    |  
|Employer contributions                                 |  |                                  | 49,660    |   |      |  | 49,676    |      |  |  | 48,655    |  
|Benefits paid                                          |  |                                  | (44,408   | ) |      |  | (33,457   | )    |  |  | (79,705   | )
|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  
|Fair value of plan assets at the end of the year       |  |                                  | 1,143,276 |   |      |  | 1,176,476 |      |  |  | 1,159,263 |  
|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (4) | Funded status on December 31, 2010 and 2011:
| | --- | --------------------------------------------



|                                |  |              |            |   |      |  |            |  
|------------------------------- |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                                |  | December 31, |           
|                                |  | 2010         |            |   | 2011 | 
|                                |  | NT$          |            |   | NT$  | 
|Fair value of plan assets       |  |              | 1,176,476  |   |      |  | 1,159,263  |  
|Projected benefit obligation    |  |              | (2,120,024 | ) |      |  | (2,157,378 | )
|                                |  |              |            |   |      |  |            |  
|Funded status                   |  |              | (943,548   | ) |      |  | (998,115   | )
|Prior service cost              |  |              | 14,262     |   |      |  | 13,212     |  
|Unrecognized net actuarial loss |  |              | 863,842    |   |      |  | 894,737    |  
|Additional pension liability    |  |              | (282,830   | ) |      |  | (390,516   | )
|                                |  |              |            |   |      |  |            |  
|Accured pension liability       |  |              | (348,274   | ) |      |  | (480,682   | )
|                                |  |              |            |   |      |  |            |  



| | (5) | Components of net periodic cost for the years ended December 31, 2009, 2010 and 2011:
| | --- | -------------------------------------------------------------------------------------



|                                                   |  |                                  |         |   |      |  |         |      |  |  |         |  
|-------------------------------------------------- |  | -------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                   |  | For the years ended December 31, |        
|                                                   |  | 2009                             |         |   | 2010 |  |         | 2011 | 
|                                                   |  | NT$                              |         |   | NT$  |  |         | NT$  | 
|Service cost                                       |  |                                  | 29,786  |   |      |  | 33,034  |      |  |  | 28,866  |  
|Interest cost                                      |  |                                  | 34,630  |   |      |  | 43,083  |      |  |  | 42,183  |  
|Expected return on plan assets                     |  |                                  | (28,862 | ) |      |  | (23,215 | )    |  |  | (29,762 | )
|Amortization of unrecognized net transition assets |  |                                  | (913    | ) |      |  | (912    | )    |  |  |        |  
|Amortization of prior service cost                 |  |                                  | 470     |   |      |  | 1,050   |      |  |  | 1,050   |  
|Amortization of unrecognized loss                  |  |                                  | 10,682  |   |      |  | 24,313  |      |  |  | 31,040  |  
|                                                   |  |                                  |         |   |      |  |         |      |  |  |         |  
|Net periodic pension cost                          |  |                                  | 45,793  |   |      |  | 77,353  |      |  |  | 73,377  |  
|                                                   |  |                                  |         |   |      |  |         |      |  |  |         |  

15. Capital Stock



| | A. | As of December 31, 2011, 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, in June 2000. Each ADS represents five shares of
common stock of the Company with an offering price of US$8.49 per ADS. As of December 31, 2011, the outstanding ADSs amounted to 88,870,636 units. Major terms and conditions of the ADSs are summarized as follows:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Voting Rights:
| | --- | --------------

ADS holders
will have no rights to vote directly in shareholders 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.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (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.

16. 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | According to the Company Law of the R.O.C., the capital reserve is allowed to be transferred to capital in the following year after the registration of capitalization
is approved.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17. 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. The distributed
amount is subject to the resolution adopted by the Board of Directors and approved at the stockholders' meeting.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | 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 exceeds 25% of the capital stock.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | In accordance with the R.O.C. Securities and Future Bureau (SFB) regulation, in addition to legal reserve and prior to distribution of earnings, the Company should set
aside a special reserve in an amount equal to the net change in the reduction of prior years stockholders equity, resulting from adjustments, such as cumulative translation adjustments and unrealized loss on available-for-sale financial
assets. Such special reserve is not available for dividend distribution. In the subsequent year(s), if the year-end balances of the cumulative translation adjustments and unrealized losses on available-for-sale financial assets no longer result in a
net reduction in the stockholders equity, the special reserve previously set aside will then be available for distribution.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | The Taiwan imputation tax system requires that any undistributed current earnings of a company derived on or after January 1, 1998 be subject to an additional 10%
corporate income tax if the earnings are not distributed in the following year. As of December 31, 2011, the undistributed earnings derived on or after January 1, 1998 was $4,871,009.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | E. | As of December 31, 2011, the balance of stockholders imputation tax credit account of the Company was $24,461. The rate of stockholders imputation tax
credit to undistributed earnings for the earnings distributed in 2011 was 9.08%. The rate of stockholders imputation tax credit to undistributed earnings for the earnings to be distributed in the following year is expecting to be approximately
10.27%. However, the rate is subject to changes based on the balance of stockholders imputation tax credit account, the undistributed earnings, and other tax credit amount in accordance with the R.O.C. tax law at the dividend allocation date.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | The distributions of 2009 and 2010 dividends had been resolved at the stockholders meeting on June 15, 2010 and June 22, 2011, respectively. Details are
summarized below:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2008


2009


2010Amount


Dividendsper
share(in NTdollars)


Amount


Dividendsper
share(in NTdollars)


Amount


Dividendsper
share(in NTdollars)Cash dividends

$
5,674,662



1.80


$
8,040,212



2.58


$
5,048,505



1.62


At the stockholders meetings on June 22, 2011, the Companys stockholders also
resolved to distribute $560,945 as employees cash bonuses and $50,642 as directors and supervisors remunerations, respectively. The distributed amount is the same as the estimated amount accrued in 2010. Any information in relation
to the Companys earnings of distribution after the shareholders approval will be posted in the Market Observation Post System at the website of the Taiwan Stock Exchanges.



| | G. | On March 21, 2012, the Board of Directors proposed the following dividends for 2011:
| | -- | ------------------------------------------------------------------------------------



|               |  |         |           |  |                                |   |      | 
|-------------- |  | ------- | --------- |  | ------------------------------ | - | ---- | 
|               |  | 2011    |          
|               |  | Amounts |           |  | Dividendsper share(in dollars) |  
|Cash dividends |  | $       | 4,371,213 |  |                                | $ | 1.42 | 
|               |  |         |           |  |                                |   |      | 

On March 21, 2012, the Companys Board of Directors also proposed to distribute $485,690 as
employees cash bonuses and $43,535 as directors and supervisors remunerations, respectively. As of March 21, 2012, the distribution program has not yet been approved by our Shareholders. Any information in relation to the
Companys earnings of distribution after the shareholders approval will be posted in the Market Observation Post System at the website of the Taiwan Stock Exchanges.



| | H. | According to the Articles of Incorporation of the Company, for the years ended December 31, 2010 and 2011, the Company accrued $560,945 and $485,690 as
employees bonuses and $50,642 and $43,535 as directors and supervisors remuneration, respectively, which were accrued based on 10% and 1% of net income after considering the required capital reserve.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



18. Treasury Stock

The Company did not acquire any treasury stock during 2010. In 2011, the treasury stock purchased by the Company as follows:



|                         |  |                                               |   |  |                                            |  |        |                                            |  |  |                                                 |  |  |  |        | 
|------------------------ |  | --------------------------------------------- | - |  | ------------------------------------------ |  | ------ | ------------------------------------------ |  |  | ----------------------------------------------- |  |  |  | ------ | 
|                         |  | 2011                                          |  
|Reason                   |  | Balance as ofJanuary 1, 2011(thousand shares) |   |  | Increase duringthe period(thousand shares) |  |        | Decrease duringthe period(thousand shares) |  |  | Balance as ofDecember 31, 2011(thousand shares) | 
|To transfer to employees |  |                                               |  |  |                                            |  | 38,042 |                                            |  |  |                                                |  |  |  | 38,042 | 
|                         |  |                                               |   |  |                                            |  |        |                                            |  |  |                                                 |  |  |  |        | 

On August 8, 2011, the Board of Directors approved a share repurchase program for the repurchase of
up to 50,000 thousand shares of the Companys common stock. As of December 31 2011, the Company repurchased a total of 38,042 thousand shares of our common stock pursuant to this share repurchase program, at an average price of
$25.35 (in dollars) per share. The closing price was $27.10 (in dollars) on December 31, 2011.

Pursuant to the Security
Exchange Act, the treasury stocks held by the Company cannot be pledged as collateral, nor be entitled to voting rights or receiving dividends.

19. Income Tax

The
Company and its subsidiaries file separate income tax returns. Reconciliation between the income tax calculated on pre-tax financial statement income based on the statutory tax rate and the income tax expense is as follows:



|                                                                              |  |                                            |           |   |      |  |           |      |  |  |           |  
|----------------------------------------------------------------------------- |  | ------------------------------------------ | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|                                                                              |  | As of end for the years ended December 31, |          
|                                                                              |  | 2009                                       |           |   | 2010 |  |           | 2011 | 
|                                                                              |  | NT$                                        |           |   | NT$  |  |           | NT$  | 
|Income tax expense calculated at the statutory tax rate                       |  |                                            | 2,556,486 |   |      |  | 1,141,154 |      |  |  | 1,015,104 |  
|Tax exempt income and other permanent differences                             |  |                                            | (860,778  | ) |      |  | (287,344  | )    |  |  | (202,864  | )
|Investment tax credits                                                        |  |                                            | (355,923  | ) |      |  | (270,691  | )    |  |  | (91,231   | )
|Changes in allowance for deferred income tax assets                           |  |                                            | (74,349   | ) |      |  | (32,076   | )    |  |  | (27,184   | )
|Adjustment for deferred tax assets due to change of statutory tax rate        |  |                                            | 134,747   |   |      |  | 80,848    |      |  |  |          |  
|Under provision from prior years                                              |  |                                            | 22,375    |   |      |  | 8,387     |      |  |  | 11,489    |  
|Alternative minimum tax                                                       |  |                                            |          |   |      |  | 122,595   |      |  |  |          |  
|Additional 10% tax on undistributed earnings                                  |  |                                            | 751       |   |      |  |          |      |  |  | 1,571     |  
|                                                                              |  |                                            |           |   |      |  |           |      |  |  |           |  
|Income tax expense                                                            |  |                                            | 1,423,309 |   |      |  | 762,873   |      |  |  | 706,885   |  
|Adjustments:                                                                  |  |                                            |           |   |      |  |           |      |  |  |           |  
|Net change of deferred income tax assets                                      |  |                                            | (581,645  | ) |      |  | (244,650  | )    |  |  | (78,965   | )
|Directly debit (credit) shareholders equity                                  |  |                                            | 35,277    |   |      |  | 39,859    |      |  |  | (11,387   | )
|Under provision from prior years                                              |  |                                            | (14,168   | ) |      |  | (4,549    | )    |  |  | (11,466   | )
|Prepaid and withholding tax                                                   |  |                                            | (13,601   | ) |      |  | (32,920   | )    |  |  | (121,472  | )
|Subsidiarys tax refund receivable (shown as other financial assets, current) |  |                                            | 179       |   |      |  |          |      |  |  |          |  
|                                                                              |  |                                            |           |   |      |  |           |      |  |  |           |  
|Income tax payable                                                            |  |                                            | 849,351   |   |      |  | 520,613   |      |  |  | 483,595   |  
|                                                                              |  |                                            |           |   |      |  |           |      |  |  |           |  
|Income tax payable carried over from prior year                               |  |                                            | 7,270     |   |      |  | 6,782     |      |  |  | 5,122     |  
|                                                                              |  |                                            |           |   |      |  |           |      |  |  |           |  



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | A. | For the years ended December 31, 2010 and 2011, significant portion of the permanent differences were derived from the revenue from assembly of certain integrated
circuit products which were exempted from income tax and the income tax exemption of capital gain from domestic security transactions.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The details of deferred income tax assets and liabilities arising from temporary differences, investment tax credits and loss carryforwards as of December 31, 2010
and 2011 were as follows:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|-------------------------------------------------------------------------- |  | ------------ | --------- | - | ---------- |  | --------- | ------ |  |  | ---------- | - |  |  | --------- | -
|                                                                           |  | December 31, |          
|                                                                           |  | 2010         |           |   | 2011       | 
|                                                                           |  | Amount       |           |   | Tax effect |  |           | Amount |  |  | Tax effect |  
|                                                                           |  | NT$          |           |   | NT$        |  |           | NT$    |  |  | NT$        |  
|Current :                                                                  |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|Temporary differences                                                      |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|Unrealized loss on obsolescence and decline in market value of inventories |  |              | 97,762    |   |            |  | 16,619    |        |  |  | 127,580    |   |  |  | 21,689    |  
|Unrealized sales allowance                                                 |  |              | 146,569   |   |            |  | 24,917    |        |  |  | 152,036    |   |  |  | 25,846    |  
|Unrealized foreign currency exchange (gain) loss                           |  |              | (58,841   | ) |            |  | (10,003   | )      |  |  | 40,857     |   |  |  | 6,946     |  
|Allowance for (reversal of) doubtful accounts                              |  |              | (21,261   | ) |            |  | (3,614    | )      |  |  |           |   |  |  |          |  
|Others                                                                     |  |              | 5,218     |   |            |  | 887       |        |  |  | 4,638      |   |  |  | 788       |  
|Investment tax credits                                                     |  |              |           |   |            |  | 559,268   |        |  |  |            |   |  |  | 252,227   |  
|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|                                                                           |  |              |           |   |            |  | 588,074   |        |  |  |            |   |  |  | 307,496   |  
|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|Noncurrent :                                                               |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|Temporary difference                                                       |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|Impairment loss                                                            |  |              | 2,218,381 |   |            |  | 377,125   |        |  |  | 2,218,381  |   |  |  | 377,125   |  
|Depreciation expense                                                       |  |              | (159,311  | ) |            |  | (27,083   | )      |  |  | (92,420    | ) |  |  | (15,711   | )
|Unrealized gain arising from valuation for financial assets                |  |              | (441,977  | ) |            |  | (75,136   | )      |  |  | (374,993   | ) |  |  | (63,749   | )
|Deferred asset - intercompany profit                                       |  |              | 48,646    |   |            |  | 8,270     |        |  |  | 42,718     |   |  |  | 7,262     |  
|Unrealized loss on idle assets                                             |  |              | 212,869   |   |            |  | 36,187    |        |  |  | 152,906    |   |  |  | 25,993    |  
|Others                                                                     |  |              | 5,642     |   |            |  | 959       |        |  |  | 5,874      |   |  |  | 999       |  
|Investment tax credits                                                     |  |              |           |   |            |  | 854,670   |        |  |  |            |   |  |  | 1,017,443 |  
|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|                                                                           |  |              |           |   |            |  | 1,174,992 |        |  |  |            |   |  |  | 1,349,362 |  
|Valuation allowance for deferred income tax assets                         |  |              |           |   |            |  | (102,283  | )      |  |  |            |   |  |  | (75,099   | )
|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  
|                                                                           |  |              |           |   |            |  | 1,072,709 |        |  |  |            |   |  |  | 1,274,263 |  
|                                                                           |  |              |           |   |            |  |           |        |  |  |            |   |  |  |           |  

Valuation allowance for deferred income tax assets relates primarily to unrealized loss of holding foreign
long-term investments and allowance for investment tax credits from qualifying research and development expenditure.



| | C. | The income tax returns of the Company have been assessed and approved by the Tax Authority through 2008.
| | -- | --------------------------------------------------------------------------------------------------------



| | D. | According to the amended Enterprise Income Tax Law of the Peoples Republic of China, effective January 1, 2008, entities like Siliconware Technology (Suzhou)
Limited who were eligible for tax incentives for lower income tax rate are required to move up the tax rate to 25% during a five year transition period. The annual tax rates are gradually adjusted from 2008 to 2012 at 18%, 20%, 22%, 24% and 25%,
respectively. From January 1, 2008, two-year tax exemption and subsequent three-year 50% reduction of applicable tax rate are effective. In 2009, 2010, and 2011, the aggregate tax benefit of such tax holiday was nil, NT$51,841, and NT$86,569,
respectively, and the per share effect was nil, NT$0.016, and NT$0.028 per share, respectively.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | E. | As of December 31, 2011, the Companys unused portion of investment tax credits, under the Statue for Upgrading Industries, were as follows:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                  |           |  |              |  |           |                 |  |  |              | 
|------------------------------------------------------ |  | ---------------- | --------- |  | ------------ |  | --------- | --------------- |  |  | ------------ | 
|Nature of investment tax credit                        |  | Deductibleamount |           |  | Unusedamount |  |           | Expirationyears | 
|                                                       |  | NT$              |           |  | NT$          |  |           |                 | 
|Acquisition cost of qualifying machinery and equipment |  |                  | 967,962   |  |              |  | 963,993   |                 |  |  | 2012 to 2015 | 
|Qualifying research and development expenditure        |  |                  | 556,392   |  |              |  | 305,677   |                 |  |  | 2012 to 2013 | 
|                                                       |  |                  |           |  |              |  |           |                 |  |  |              | 
|                                                       |  |                  | 1,524,354 |  |              |  | 1,269,670 |                 |  |  |              | 
|                                                       |  |                  |           |  |              |  |           |                 |  |  |              | 



| | F. | The Company has met the requirement of Incentives for Emerging Important Strategic Industries in Manufacturing and Technology Services for its
capitalization plans in 2005 and 2006 and is exempted from income tax for revenues arising from the assembly and testing of certain integrated circuit products for a five-year period from 2008, respectively. The five-year income tax exemptions will
expire in December 2012 and May 2013, respectively. Also, the Industrial Development Bureau of Ministry of Economic Affairs has issued permission for the five-year income tax exemption of the Companys 2007 registered capitalization plan in
2008.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20. Earnings Per Share



For the year ended December 31, 2009Income


Weightedaverageoutstandingcommon stock


Earnings per shareBefore tax


After tax



Before tax


After taxNT$


NT$


(in thousand)


(in NT dollars)Basic earnings per shareNet income


10,213,138



8,789,829



3,116,361



3.28



2.82Dilutive effect of employee bonuses










21,912Diluted earnings per share


10,213,138



8,789,829



3,138,273



3.25



2.80For the year ended December 31, 2010Income


Weightedaverageoutstandingcommon stock


Earnings per shareBefore tax


After tax



Before tax


After taxNT$


NT$


(in thousand)


(in NT dollars)Basic earnings per shareNet income


6,389,780



5,626,907



3,116,361



2.05



1.81Dilutive effect of employee bonuses










16,901Diluted earnings per share


6,389,780



5,626,907



3,133,262



2.04



1.80




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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



For the year ended December 31, 2011Income


Weightedaverageoutstandingcommon stock


Earnings per shareBefore tax


After tax



Before tax


After taxNT$


NT$


(in thousand)


(in NT dollars)Basic earnings per shareNet income


5,544,128



4,837,243



3,102,858



1.79



1.56Dilutive effect of employee bonuses










18,913Diluted earnings per share


5,544,128



4,837,243



3,121,771



1.78



1.55




| | A. | The weighted average treasury stocks held by the Company have been deducted from the calculation of weighted-average outstanding common stock in 2011.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Effective January 1, 2008, as employees 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 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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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



21. Personnel Costs, Depreciation and Amortization



|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|-------------------------- |  | ------------------------------------ | --------- |  | ------------------ |  | --------- | ----- |  |  | ---------- | 
|                           |  | For the year ended December 31, 2009 |          
|                           |  | Operating costs                      |           |  | Operating expenses |  |           | Total | 
|                           |  | NT$                                  |           |  | NT$                |  |           | NT$   | 
|Personnel Cost             |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Payroll                    |  |                                      | 6,357,938 |  |                    |  | 1,583,168 |       |  |  | 7,941,106  | 
|Labor and health insurance |  |                                      | 439,657   |  |                    |  | 106,281   |       |  |  | 545,938    | 
|Pension expense            |  |                                      | 258,825   |  |                    |  | 67,927    |       |  |  | 326,752    | 
|Other                      |  |                                      | 528,544   |  |                    |  | 166,604   |       |  |  | 695,148    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|                           |  |                                      | 7,584,964 |  |                    |  | 1,923,980 |       |  |  | 9,508,944  | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Depreciation               |  |                                      | 8,266,502 |  |                    |  | 181,956   |       |  |  | 8,448,458  | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Amortization               |  |                                      | 403,365   |  |                    |  | 91,326    |       |  |  | 494,691    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|                           | 
|                           |  | For the year ended December 31, 2010 |          
|                           |  | Operating costs                      |           |  | Operating expenses |  |           | Total | 
|                           |  | NT$                                  |           |  | NT$                |  |           | NT$   | 
|Personnel Cost             |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Payroll                    |  |                                      | 7,543,043 |  |                    |  | 1,804,289 |       |  |  | 9,347,332  | 
|Labor and health insurance |  |                                      | 600,116   |  |                    |  | 130,295   |       |  |  | 730,411    | 
|Pension expense            |  |                                      | 353,285   |  |                    |  | 88,732    |       |  |  | 442,017    | 
|Other                      |  |                                      | 582,912   |  |                    |  | 131,580   |       |  |  | 714,492    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|                           |  |                                      | 9,079,356 |  |                    |  | 2,154,896 |       |  |  | 11,234,252 | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Depreciation               |  |                                      | 8,166,168 |  |                    |  | 313,193   |       |  |  | 8,479,361  | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Amortization               |  |                                      | 323,086   |  |                    |  | 98,604    |       |  |  | 421,690    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|                           | 
|                           |  | For the year ended December 31, 2011 |          
|                           |  | Operating costs                      |           |  | Operating expenses |  |           | Total | 
|                           |  | NT$                                  |           |  | NT$                |  |           | NT$   | 
|Personnel Cost             |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Payroll                    |  |                                      | 7,729,543 |  |                    |  | 2,069,422 |       |  |  | 9,798,965  | 
|Labor and health insurance |  |                                      | 655,022   |  |                    |  | 159,044   |       |  |  | 814,066    | 
|Pension expense            |  |                                      | 361,311   |  |                    |  | 105,987   |       |  |  | 467,298    | 
|Other                      |  |                                      | 539,902   |  |                    |  | 153,665   |       |  |  | 693,567    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|                           |  |                                      | 9,285,778 |  |                    |  | 2,488,118 |       |  |  | 11,773,896 | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Depreciation               |  |                                      | 8,686,698 |  |                    |  | 399,636   |       |  |  | 9,086,334  | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 
|Amortization               |  |                                      | 322,799   |  |                    |  | 225,505   |       |  |  | 548,304    | 
|                           |  |                                      |           |  |                    |  |           |       |  |  |            | 



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



22. Related Party Transactions



| | A. | Name and Relationship with Related Parties:
| | -- | -------------------------------------------



|                               |  |                                                            
|------------------------------ |  | -----------------------------------------------------------
|Name of related parties        |  | Relationship with the Company                              
|Vertical Circuits, Inc.        |  | Investee company accounted for under equity method (Note 1)
|                               | 
|AcSiP Technology Corp. (AcSiP) |  | Investee company accounted for under equity method (Note 2)

Note 1: The Company obtained equity stocks of VCI on December 1, 2010, and therefore, it became
related party of the Company on the same day. The annual disclosure of related party transactions covers both the years ended December 31, 2010 and 2011.

Note 2: The Company obtained equity stocks of AcSiP on May 26, 2011, and therefore, it became a related party of the Company on the same day. The disclosures of related party transactions include the
transactions incurred in 2011 only.



| | B. | Significant Transactions with Related Parties:
| | -- | ----------------------------------------------



| | (1) | Sales
| | --- | -----



|                        |  |                                  |   |  |              |  |   |        |  |  |              |  |  |        |   |  |              |  |        |  |  |  |   | 
|----------------------- |  | -------------------------------- | - |  | ------------ |  | - | ------ |  |  | ------------ |  |  | ------ | - |  | ------------ |  | ------ |  |  |  | - | 
|                        |  | For the years ended December 31, |  
|                        |  | 2009                             |   |  | 2010         |  |   | 2011   | 
|                        |  | Amount                           |   |  | % ofnet sale |  |   | Amount |  |  | % ofnet sale |  |  | Amount |   |  | % ofnet sale | 
|                        |  | NT$                              |   |  |              |  |   | NT$    |  |  |              |  |  | NT$    |   |  |              | 
|Vertical Circuits, Inc. |  |                                  |  |  |              |  |  |        |  |  | 2,989        |  |  |        |  |  |              |  | 4,014  |  |  |  |  | 
|AcSiP Technology Corp.  |  |                                  |  |  |              |  |  |        |  |  |             |  |  |        |  |  |              |  | 27,246 |  |  |  |  | 
|                        |  |                                  |   |  |              |  |   |        |  |  |              |  |  |        |   |  |              |  |        |  |  |  |   | 
|                        |  |                                  |  |  |              |  |  |        |  |  | 2,989        |  |  |        |  |  |              |  | 31,260 |  |  |  |  | 
|                        |  |                                  |   |  |              |  |   |        |  |  |              |  |  |        |   |  |              |  |        |  |  |  |   | 

The sales price and payment terms provided to related parties were generally comparable to those provided
to non-related parties.



| | (2) | Accounts Receivable
| | --- | -------------------



|                        |  |                    |     |  |                        |  |   |        |  |  |                        |  |  |  |   | 
|----------------------- |  | ------------------ | --- |  | ---------------------- |  | - | ------ |  |  | ---------------------- |  |  |  | - | 
|                        |  | As of December 31, |    
|                        |  | 2010               |     |  | 2011                   | 
|                        |  | Amount             |     |  | % ofaccountreceivables |  |   | Amount |  |  | % ofaccountreceivables | 
|                        |  | NT$                |     |  |                        |  |   | NT$    |  |  |                        | 
|Vertical Circuits, Inc. |  |                    | 415 |  |                        |  |  |        |  |  | 275                    |  |  |  |  | 
|AcSiP Technology Corp.  |  |                    |    |  |                        |  |  |        |  |  | 9,860                  |  |  |  |  | 
|                        |  |                    |     |  |                        |  |   |        |  |  |                        |  |  |  |   | 
|                        |  |                    | 415 |  |                        |  |  |        |  |  | 10,135                 |  |  |  |  | 
|                        |  |                    |     |  |                        |  |   |        |  |  |                        |  |  |  |   | 



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (3) | New Product Development Expense / Deferred Charges
| | --- | --------------------------------------------------



|                        |  |                                            |   |  |                 |  |   |                               |  |  |                 |  |  |                               |        |  |                 |  |       |  |  |  |       | 
|----------------------- |  | ------------------------------------------ | - |  | --------------- |  | - | ----------------------------- |  |  | --------------- |  |  | ----------------------------- | ------ |  | --------------- |  | ----- |  |  |  | ----- | 
|                        |  | As of and for the years ended December 31, |  
|                        |  | 2009                                       |   |  | 2010            |  |   | 2011                          | 
|                        |  | New productdevelopmentexpense              |   |  | Deferredcharges |  |   | New productdevelopmentexpense |  |  | Deferredcharges |  |  | New productdevelopmentexpense |        |  | Deferredcharges | 
|                        |  | NT$                                        |   |  | NT$             |  |   | NT$                           |  |  | NT$             |  |  | NT$                           |        |  | NT$             | 
|Vertical Circuits, Inc. |  |                                            |  |  |                 |  |  |                               |  |  | 3,494           |  |  |                               | 11,920 |  |                 |  | 3,494 |  |  |  | 8,426 | 
|                        |  |                                            |   |  |                 |  |   |                               |  |  |                 |  |  |                               |        |  |                 |  |       |  |  |  |       | 



| | (4) | Other Income / Other Receivables
| | --- | --------------------------------



As of and for the years ended December 31,2009


2010


2011Otherincomes


Otherreceivables


Otherincomes


Otherreceivables


Otherincomes


OtherreceivablesNT$


NT$


NT$


NT$


NT$


NT$AcSiP Technology Corp.


















10



41




| | (5) | Salaries / Remunerations Paid to Directors, Supervisors, and Managements
| | --- | ------------------------------------------------------------------------



|                            |  |                                  |         |  |      |  |         |      |  |  |         | 
|--------------------------- |  | -------------------------------- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                            |  | For the years ended December 31, |        
|                            |  | 2009                             |         |  | 2010 |  |         | 2011 | 
|                            |  | NT$                              |         |  | NT$  |  |         | NT$  | 
|Salary                      |  |                                  | 54,394  |  |      |  | 58,637  |      |  |  | 54,645  | 
|Remuneration / compensation |  |                                  | 35,333  |  |      |  | 55,564  |      |  |  | 45,049  | 
|Operating expenses          |  |                                  | 506     |  |      |  | 1,039   |      |  |  | 1,470   | 
|Earnings distribution       |  |                                  | 145,620 |  |      |  | 105,194 |      |  |  | 71,294  | 
|                            |  |                                  |         |  |      |  |         |      |  |  |         | 
|                            |  |                                  | 235,853 |  |      |  | 220,434 |      |  |  | 172,458 | 
|                            |  |                                  |         |  |      |  |         |      |  |  |         | 



| | i. | Salary includes base salary, job allowance, retirement pension, and etc.
| | -- | ------------------------------------------------------------------------



| | ii. | Compensation includes various kinds of bonus, other financial incentives, and etc.
| | --- | ----------------------------------------------------------------------------------



| | iii. | Operating expenses include transportation fare, dormitory, and other kinds of practical subsidies.
| | ---- | --------------------------------------------------------------------------------------------------



| | iv. | Earnings distribution means directors and supervisors remuneration and employees bonus recognized for the current period.
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | v. | Please refer to the Companys annual report to stockholders for other related information.
| | -- | ------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



23. Assets Pledged as Collateral

As of December 31, 2010 and 2011, the following assets have been pledged as collateral against certain obligations
of the Company:



|                                                         |  |              |         |  |      |  |         |                       |  |                                                                                        
|-------------------------------------------------------- |  | ------------ | ------- |  | ---- |  | ------- | --------------------- |  | ---------------------------------------------------------------------------------------
|                                                         |  | December 31, |         |  |     
|Assets                                                   |  | 2010         |         |  | 2011 |  |         | Subject of collateral
|                                                         |  | NT$          |         |  | NT$  |  |         |                      
|Time deposits (shown as other financial assets, current) |  |              | 336,700 |  |      |  | 336,700 |                       |  | Guarantees for custom duties and leasing lands from Hsinchu Science Park Administration
|                                                         |  |              |         |  |      |  |         |                       |  |                                                                                        

24. Commitments and Contingencies



| | A. | As of December 31, 2011, the Company and its subsidiaries issued but unused letters of credit for imported machinery and equipment was approximately $36,659.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | For the needs of future operations, the Company and its subsidiaries entered into several construction agreements amounting to $2,489,804, of which $226,865 remained
unpaid as of December 31, 2011.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Company entered into several contracts with five foreign companies for the use of certain technologies and patents. The Company agreed to pay royalty fees according
to the contracts. Contracts are valid through March 2012, May 2014, December 2015, May 2018, and until all patents included in the contracts expire or until both parties agree to terminate the contracts, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | On March 1, 2006, the Company was informed of a lawsuit brought by Tessera in the United States District Court for the Northern District of California against it,
its subsidiary, Siliconware USA, Inc., and other semiconductor companies (California Litigation). Tessera alleged that some of our packaging services have infringed patents owned by Tessera and that the Company breached a license agreement with
Tessera. In May 2007, the parties stipulated to a stay pending a final determination of an investigation (605 Case) directed against other parties (including certain co-defendants in the California Litigation) conducted by the International Trade
Commission (ITC). Pursuant to the stipulation, the court stayed the litigation. In December 2011, according to Tesseras petition, the California Litigation lifted the stay and the case will move forward.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In February 2007, the Company filed requests for reexamination of five patents with the U.S. Patent and Trademark Office, or the USPTO,
four of which being asserted by Tessera against the Company in the California Litigation. The USPTO has rejected all of the asserted patent claims on the grounds that each claim is invalid in view of certain prior art. With Right of Appeal Notice,
some of the adverse decisions have been appealed to the Board of Patent Appeals and Interferences by Tessera.

Because
litigation is inherently unpredictable, the Company is unable to accurately predict the ultimate outcome.

25. Significant Disaster Loss

None.

26.
Significant Subsequent Event

See footnote 17G.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



27. Other



| | A. | Fair Values of Financial Instruments:
| | -- | -------------------------------------



|                                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|--------------------------------------------------------- |  | ------------ | ---------- |  | ---------------------------- |  | --------- | ---------------------------------- |  |  | ---------- |  |  | ---------------------------- | ---------- |  | ---------------------------------- |  | --------- |  |  |  | ---------- | 
|                                                          |  | December 31, |           
|                                                          |  | 2010         |            |  | 2011                         | 
|                                                          |  |              |            |  | Fair Value                   |  |           |                                    |  |  | Fair Value | 
|                                                          |  | Book Value   |            |  | Quotation in anactive market |  |           | Estimatedusing avaluationtechnique |  |  | Book Value |  |  | Quotation in anactive market |            |  | Estimatedusing avaluationtechnique | 
|                                                          |  | NT$          |            |  | NT$                          |  |           | NT$                                |  |  | NT$        |  |  | NT$                          |            |  | NT$                                | 
|Non-derivative financial instruments:                     |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|                                                          |  |              |            |  |                              | 
|Financial assets                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|Financial assets with book value equal to fair value      |  |              | 26,545,319 |  |                              |  |          |                                    |  |  | 26,545,319 |  |  |                              | 26,775,506 |  |                                    |  |          |  |  |  | 26,775,506 | 
|Available-for-sale financial assets, noncurrent           |  |              | 4,887,007  |  |                              |  | 4,887,007 |                                    |  |  |           |  |  |                              | 3,198,180  |  |                                    |  | 3,198,180 |  |  |  |           | 
|Financial assets carried at cost, noncurrent              |  |              | 1,449,343  |  |                              |  |          |                                    |  |  |           |  |  |                              | 1,932,643  |  |                                    |  |          |  |  |  |           | 
|                                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|                                                          |  |              | 32,881,669 |  |                              |  | 4,887,007 |                                    |  |  | 26,545,319 |  |  |                              | 31,906,329 |  |                                    |  | 3,198,180 |  |  |  | 26,775,506 | 
|                                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|                                                          |  |              |            |  |                              | 
|Financial liabilities                                     |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|Financial liabilities with book value equal to fair value |  |              | 16,426,214 |  |                              |  |          |                                    |  |  | 16,426,214 |  |  |                              | 14,743,616 |  |                                    |  |          |  |  |  | 14,743,616 | 
|Long-term loans (including current portion)               |  |              | 4,368,158  |  |                              |  |          |                                    |  |  | 4,368,158  |  |  |                              | 9,532,335  |  |                                    |  |          |  |  |  | 9,532,335  | 
|                                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 
|                                                          |  |              | 20,794,372 |  |                              |  |          |                                    |  |  | 20,794,372 |  |  |                              | 24,275,951 |  |                                    |  |          |  |  |  | 24,275,951 | 
|                                                          |  |              |            |  |                              |  |           |                                    |  |  |            |  |  |                              |            |  |                                    |  |           |  |  |  |            | 

Methods and assumptions used to estimate the fair values of financial instruments are as follows:



| | (1) | Financial assets and liabilities with fair values equal to book values are cash, notes receivable, accounts receivable, other financial assets - current, refundable
deposits, short-term loans, notes payable, accounts payable, income tax payable, accrued expenses, other payables, current portion of long-term debts, other current liabilities and other liabilities because of their short maturities.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Available-for-sale financial assets, noncurrent are recorded at quoted market prices as their fair values due to the availability of the quoted price in an active
market.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Financial assets carried at cost, noncurrent are recorded at cost as there are no active quoted market prices and the fair value cannot be measured fairly.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The book value of long-term loans approximates their fair value as floating interest rates are borne for the long term loans.
| | --- | -----------------------------------------------------------------------------------------------------------------------------



| | B. | Financial assets and liabilities with the risk of interest rate fluctuation:
| | -- | ----------------------------------------------------------------------------

As of December 31, 2010 and 2011, the Company and its subsidiaries financial assets with fair value risk of interest rate fluctuation were $4,590,221 and $10,965,777, respectively; financial
liabilities with fair value risk of interest rate fluctuation were $1,461,281 and $1,513,750, respectively. As of December 31, 2010 and 2011, the Company and its subsidiaries financial assets with cash flow risk of interest rate
fluctuation were $9,508,500 and $3,737,200, respectively; financial liabilities with cash flow risk of interest rate fluctuation were $4,368,158 and $9,532,335, respectively.



| | C. | The income or expense of financial assets and liabilities that are not at fair value through profit or loss:
| | -- | ------------------------------------------------------------------------------------------------------------

For the years ended December 31, 2010 and 2011, total interest income of financial assets that are not at fair value through profit
or loss amounted to $36,849 and $72,498, respectively. For the years ended December 31, 2010 and 2011, total interest expense of financial liabilities that are not at fair value through profit or loss amounted to $11,530 and $88,863, respectively.
Available-for-sale financial assets are measured at fair value at balance sheet dates. For the years ended December 31, 2010 and 2011, balance of the shareholders equity due to changes in fair value increased by $1,021,355 and decreased
by $1,677,440, respectively.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | D. | Financial risk control:
| | -- | -----------------------

The
Company and its subsidiaries have implemented appropriate risk management and control processes to identify, measure, and control the risks associated with the market, credit, liquidity and cash flows.



| | E. | Financial risk information:
| | -- | ---------------------------



| | 1. | Financial assets: investments in equity instruments
| | -- | ---------------------------------------------------



|                                    |  |              |           |  |      |  |           | 
|----------------------------------- |  | ------------ | --------- |  | ---- |  | --------- | 
|                                    |  | December 31, |          
|                                    |  | 2010         |           |  | 2011 | 
|                                    |  | NT$          |           |  | NT$  | 
|Available-for-sale financial assets |  |              | 4,887,007 |  |      |  | 3,198,180 | 
|Financial assets carried at cost    |  |              | 1,449,343 |  |      |  | 1,932,643 | 
|                                    |  |              |           |  |      |  |           | 
|                                    |  |              | 6,336,350 |  |      |  | 5,130,823 | 
|                                    |  |              |           |  |      |  |           | 



| | (1) | Market risk:
| | --- | ------------

The Company and
its subsidiaries investments in equity instruments are exposed to the market price risk. However, the Company and its subsidiaries perform risk management controls to minimize the potential loss to an acceptable level. The Company and its
subsidiaries believe that the probability of significant market risk is low.



| | (2) | Credit risk:
| | --- | ------------

The Company and
its subsidiaries investments in available-for-sale financial assets are through creditable financial institutions. The expected credit exposure to such financial institutions is low. For equity investments carried at cost, the Company has
evaluated counter parties credit condition each time when the Company entered into investment transaction. Thus, the credit risk is low.



| | (3) | Liquidity risk:
| | --- | ---------------

The Company
and its subsidiaries available-for-sale financial assets are traded in active markets, which can be sold at the prices not significantly different from their market value. The Company is exposed to a greater liquidity risk for equity
instruments measured at cost due to the fact that no active market exists for these instruments.



| | (4) | Cash flow risk of interest rate:
| | --- | --------------------------------

The Companys investments in equity financial assets are non-interest related. As a result, there is no cash flow risk of interest
rate.



| | 2. | Financial liabilities: debt instruments
| | -- | ---------------------------------------



|                 |  |              |           |  |      |  |            | 
|---------------- |  | ------------ | --------- |  | ---- |  | ---------- | 
|                 |  | December 31, |          
|                 |  | 2010         |           |  | 2011 | 
|                 |  | NT$          |           |  | NT$  | 
|Short-term loans |  |              | 1,461,281 |  |      |  | 1,513,750  | 
|Long-term loans  |  |              | 4,368,158 |  |      |  | 9,532,335  | 
|                 |  |              |           |  |      |  |            | 
|                 |  |              | 5,829,439 |  |      |  | 11,046,085 | 
|                 |  |              |           |  |      |  |            | 



| | (1) | Market risk:
| | --- | ------------

The Company and
its subsidiaries short-term loans are expired within a year; long-term loans are floating interesting rates, so there is no market risk of interest rate fluctuating.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (2) | Credit risk:
| | --- | ------------

Debt instruments
issued by the Company and its subsidiaries do not have significant credit risk.



| | (3) | Liquidity risk:
| | --- | ---------------

The Company
and its subsidiaries maintain sufficient working capital to meet their cash requirements. The Company and its subsidiaries believe that there is no significant liquidity risk.



| | (4) | Cash flow risk of interest rate:
| | --- | --------------------------------

The Company and its subsidiaries obtained short-terms loans with fixed interest rate and long-term loans with floating interest rate.
Effective interest rate of long-term loan will fluctuate accordingly due to the changes in market rate and also affect future cash flow. Under the fixed exchange rate, the Companys cash outflow will be increased by $100,938 annually while the
interest rate raises by 1%.



| | 3. | The information of significant effect of foreign currency financial assets and liabilities:
| | -- | -------------------------------------------------------------------------------------------

The Company and its subsidiaries engaged in certain business denominated in foreign currencies, and therefore the fluctuation of foreign
currency exchange rates had impact on these businesses consequently.

The information of foreign currency financial assets and
liabilities with significant effect by the fluctuation of foreign currency exchange rates as of December 31, 2010 and 2011 are as follows:



|                                             |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|-------------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | ------- | ----------------- |  |  | ------------- |  |  |  | ------- | 
|                                             |  | December 31, 2010 |           |  | December 31, 2011 | 
|(Foreign currencies : Functional currencies) |  | ForeignCurrencies |           |  | ExchangeRates     |  |         | ForeignCurrencies |  |  | ExchangeRates | 
|                                             |  |                   |           | 
|Financial Assets                             |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|Monetary assets                              |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|United States Dollars : New Taiwan Dollars   |  |                   | 292,459   |  |                   |  | 29.08   |                   |  |  | 342,240       |  |  |  | 30.225  | 
|United States Dollars : Chinese Renminbi     |  |                   | 25,647    |  |                   |  | 6.6227  |                   |  |  | 12,522        |  |  |  | 6.3009  | 
|Nonmonetary assets                           |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|United States Dollars : New Taiwan Dollars   |  |                   | 18,628    |  |                   |  | 29.08   |                   |  |  | 15,706        |  |  |  | 30.225  | 
|Long-term investments under equity method    |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|United States Dollars : New Taiwan Dollars   |  |                   | 5,121     |  |                   |  | 29.08   |                   |  |  | 3,656         |  |  |  | 30.275  | 
|                                             |  |                   |           | 
|Financial Liabilities                        |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|Monetary liabilities                         |  |                   |           |  |                   |  |         |                   |  |  |               |  |  |  |         | 
|United States Dollars : New Taiwan Dollars   |  |                   | 277,871   |  |                   |  | 29.18   |                   |  |  | 280,958       |  |  |  | 30.325  | 
|Japanese Yen : New Taiwan Dollars            |  |                   | 3,545,471 |  |                   |  | 0.3602  |                   |  |  | 2,799,317     |  |  |  | 0.3926  | 
|United States Dollars : Chinese Renminbi     |  |                   | 64,466    |  |                   |  | 6.6227  |                   |  |  | 59,259        |  |  |  | 6.3009  | 
|Japanese Yen : Chinese Renminbi              |  |                   | 322,825   |  |                   |  | 0.08126 |                   |  |  | 35,909        |  |  |  | 0.08110 | 



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



28. Special Disclosure Items Required by R.O.C. GAAP



| | A. | Significant Transaction Information
| | -- | -----------------------------------



| | (1) | Loans to third parties attributed to financial activities:
| | --- | ----------------------------------------------------------

For the year ended December 31, 2011: None.



| | (2) | Endorsement and guarantee provided to third parties:
| | --- | ----------------------------------------------------

For the year ended December 31, 2011: None



| | (3) | The ending balance of securities are summarized as follows:
| | --- | -----------------------------------------------------------

As of December 31, 2011:



|                                           |  |                   |  |                                     |  |                                                |  |                                                             |  |                               |         |   |            |   |           |                       |  |  |                                   |   |  |   |        |  |  |                
|------------------------------------------ |  | ----------------- |  | ----------------------------------- |  | ---------------------------------------------- |  | ----------------------------------------------------------- |  | ----------------------------- | ------- | - | ---------- | - | --------- | --------------------- |  |  | --------------------------------- | - |  | - | ------ |  |  | ---------------
|Investor                                   |  | Type ofsecurities |  | Name of securities                  |  | The relationshipof the issuerswith the Company |  | General ledgeraccounts                                      |  | Number ofshares(in thousands) |         |   | Book value |   |           | Percentageofownership |  |  | Market valueper share(in
dollars) |   |  |  
|                                           |  |                   |  |                                     |  |                                                |  |                                                             |  |                               |         |   | NT$        |   |           |                       |  |  | NT$                               |   |  |  
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | SPIL (B.V.I.) Holding Limited       |  | Investee accounted for under the equity method |  | Long-term investments accounted for under the equity method |  |                               | 128,400 |   |            | $ | 5,851,367 |                       |  |  | 100.00                            | % |  | $ | 45.57  |  |  | (Notes 2 and 5)
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | Vertical Circuits, Inc.             |  | Investee accounted for under the equity method |  | Long-term investments accounted for under the equity method |  |                               | 15,710  |   |            |   | 110,671   |                       |  |  | 30.69                             | % |  |   | 1.93   |  |  | (Note 2)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | AcSiP Technology Corp.              |  | Investee accounted for under the equity method |  | Long-term investments accounted for under the equity method |  |                               | 1,750   |   |            |   | 62,904    |                       |  |  | 16.73                             | % |  |   | 21.29  |  |  | (Note 2)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | Unimicron Technology Corporation    |  |                                               |  | Available-for-sale financial assets, noncurrent             |  |                               | 76,502  |   |            |   | 2,723,474 |                       |  |  | 4.97                              | % |  |   | 35.60  |  |  |                
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | ChipMOS Technologies (Bermuda) Ltd. |  |                                               |  | Available-for-sale financial assets, noncurrent             |  |                               | 3,044   |   |            |   | 474,706   |                       |  |  | 9.11                              | % |  |   | 155.96 |  |  | (Note 3)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | ChipMOS Technologies Inc.           |  |                                               |  | Financial assets carried at cost, noncurrent                |  |                               | 133,000 |   |            |   | 1,630,580 |                       |  |  | 15.78                             | % |  |   | 14.36  |  |  | (Note 4)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | Hsieh Yong Capital Co., Ltd.        |  |                                               |  | Financial assets carried at cost, noncurrent                |  |                               | 57,810  |   |            |   | 170,000   |                       |  |  | 7.58                              | % |  |   | 6.30   |  |  | (Note 2)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  |                  |  | Mega Mission Limitid Partnership    |  |                                               |  | Financial assets carried at cost, noncurrent                |  |                               | (Note 1 | ) |            |   | 132,063   |                       |  |  | 4.00                              | % |  |   |       |  |  |                

Note 1: The contributed capital was US $6,000.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



Note 2: The market value is not available. Therefore, the net equity per share as of
December 31, 2011 was used.

Note 3: The closing price of US$5.16 (in dollars) per share on December 31, 2011 was
used. (Exchange rate at US$1: NT$30.225)

Note 4: The market value is not available. Therefore, the net equity per share as of
June 30, 2011 was used.

Note 5: Eliminated under consolidation.



| | (4) | Securities for which total buying or selling exceeds the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ----------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2011:



|                                           |  |                           |  |                                              |  |                                     |  |                                          |   |  |                                    |  |        |          |  |  |                                    |  |  |                |        |  |                                    |  |         |            |  |  |           |  |  |                        |   |  |                                    |  |   |        |  |  |   |  |  |  |         |  |  |   |           | 
|------------------------------------------ |  | ------------------------- |  | -------------------------------------------- |  | ----------------------------------- |  | ---------------------------------------- | - |  | ---------------------------------- |  | ------ | -------- |  |  | ---------------------------------- |  |  | -------------- | ------ |  | ---------------------------------- |  | ------- | ---------- |  |  | --------- |  |  | ---------------------- | - |  | ---------------------------------- |  | - | ------ |  |  | - |  |  |  | ------- |  |  | - | --------- | 
|                                           |  |                           |  |                                              |  |                                     |  | The                                      |   |  | Beginning balance                  |  |        | Addition |  |  | Disposal                           |  |  | Ending balance |       
|Investor                                   |  | Name
of the
security      |  | Generalledgeraccounts                        |  | Name
of the
counter
party           |  | relationshipof theissuerswith
theCompany |   |  | Number ofshares /unit(inthousands) |  |        | Amount   |  |  | Number ofshares /unit(inthousands) |  |  | Amount         |        |  | Number ofshares
/unit(inthousands) |  |         | Salesprice |  |  | Bookvalue |  |  | Gain(loss)fromdisposal |   |  | Number ofshares
/unit(inthousands) |  |   | Amount | 
|                                           |  |                           |  |                                              |  |                                     |  |                                          |   |  |                                    |  |        | NT$      |  |  |                                    |  |  | NT$            |        |  |                                    |  |         | NT$        |  |  | NT$       |  |  | NT$                    |   |  |                                    |  |   | NT$    | 
|Siliconware Precision Industries Co., Ltd. |  | ChipMOS Technologies Inc. |  | Financial assets carried at cost, noncurrent |  | ChipMOS Technologies (Bermuda) Ltd. |  |                                          |  |  |                                    |  | 93,033 |          |  |  | 1,140,580                          |  |  |                | 39,967 |  |                                    |  | 490,000 |            |  |  |          |  |  |                        |  |  |                                    |  |  |        |  |  |  |  |  |  | 133,000 |  |  | $ | 1,630,580 | 



| | (5) | Acquisition of real estate with an amount exceeding the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ---------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2011: None.



| | (6) | Disposal of real estate with an amount exceeding the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2011: None.



| | (7) | Related party transactions with purchases and sales amounts exceeding the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2011: None.



| | (8) | Receivables from related parties exceeding the lower of NT$100,000 or 20 percent of the capital stock: As of December 31, 2011: None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | (9) | Transaction of derivative financial instruments:
| | --- | ------------------------------------------------

For the year ended December 31, 2011: None.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



B. Related Information on Investee Companies



| | (1) | Basic information on investee companies:
| | --- | ----------------------------------------

For the year ended December 31, 2011:



|                                           |  |                                         |  |                                    |  |                                                                                           |  |                            |           |  |                          |                |           |                                             |  |  |                     |   |  |            |        |   |                             |  |           |                               |  |  |          |   |  |  |         |   |  |  |                     |  
|------------------------------------------ |  | --------------------------------------- |  | ---------------------------------- |  | ----------------------------------------------------------------------------------------- |  | -------------------------- | --------- |  | ------------------------ | -------------- | --------- | ------------------------------------------- |  |  | ------------------- | - |  | ---------- | ------ | - | --------------------------- |  | --------- | ----------------------------- |  |  | -------- | - |  |  | ------- | - |  |  | ------------------- | -
|                                           |  |                                         |  |                                    |  |                                                                                           |  |                            |           |  |                          |                |           | The Company /
majorityowned subsidiary owns |  |  |                     |   |  |            |        |   |                             | 
|                                           |  |                                         |  |                                    |  |                                                                                           |  | Originalinvestments        |           |  |                          | Current period |           |                                             |  | 
|Investor                                   |  | Name of Investee                        |  | Location                           |  | Main activities                                                                           |  | Currentperiodendingbalance |           |  | Priorperiodendingbalance |                |           | Shares(in 
thousands)                       |  |  | OwnershipPercentage |   |  | Book value |        |   | Net income(loss) ofinvestee |  |           | Incomerecognizedby
theCompany |  |  | Note     |  
|                                           |  |                                         |  |                                    |  |                                                                                           |  | NT$                        |           |  | NT$                      |                |           |                                             |  |  |                     |   |  | NT$        |        |   | NT$                         |  |           | NT$                           |  |  |          |  
|Siliconware Precision Industries Co., Ltd. |  | SPIL (B.V.I.) Holding Limited           |  | British Virgin Islands             |  | Investment activities                                                                     |  |                            | 3,887,310 |  |                          |                | 3,887,310 |                                             |  |  | 128,400             |   |  |            | 100.00 | % |                             |  | 5,851,367 |                               |  |  | 593,817  |   |  |  | 593,817 |   |  |  | (Notes 1,2, 7 and8  | )
|Siliconware Precision Industries Co., Ltd. |  | Vertical Circuits, Inc.                 |  | Scotts Valley, CA, USA             |  | Assembly service provider                                                                 |  |                            | 151,375   |  |                          |                | 151,375   |                                             |  |  | 15,710              |   |  |            | 30.69  | % |                             |  | 110,671   |                               |  |  | (125,389 | ) |  |  | (38,247 | ) |  |  | (Notes 1and 7       | )
|Siliconware Precision Industries Co., Ltd. |  | AcSiP Technology Corp.                  |  | Taoyuan, Taiwan                    |  | Researching, designing, and selling RF modules                                            |  |                            | 50,750    |  |                          |                |          |                                             |  |  | 1,750               |   |  |            | 16.73  | % |                             |  | 62,904    |                               |  |  | 92,605   |   |  |  | 12,154  |   |  |  | (Note 1             | )
|SPIL (B.V.I.) Holding Limited              |  | Siliconware USA, Inc.                   |  | San Jose, CA, USA                  |  | Communications and relationship maintenance with companies headquartered in North America |  |                            | 37,844    |  |                          |                | 37,844    |                                             |  |  | 1,250               |   |  |            | 100.00 | % |                             |  | 154,623   |                               |  |  | 13,059   |   |  |  | 13,059  |   |  |  | (Notes 3,7 and 8    | )
|SPIL (B.V.I.) Holding Limited              |  | SPIL (Cayman) Holding Limited           |  | Cayman Islands, British West India |  | Investment activities                                                                     |  |                            | 3,941,805 |  |                          |                | 3,941,805 |                                             |  |  | 130,200             |   |  |            | 100.00 | % |                             |  | 5,687,269 |                               |  |  | 580,841  |   |  |  | 580,841 |   |  |  | (Notes 3,7 and 8    | )
|SPIL (Cayman) Holding Limited              |  | Siliconware Technology (Suzhou) Limited |  | Suzhou Jiangsu, China              |  | Assembly and testing service provider                                                     |  |                            | 3,935,750 |  |                          |                | 3,935,750 |                                             |  |  | (Note 5             | ) |  |            | 100.00 | % |                             |  | 5,686,980 |                               |  |  | 582,913  |   |  |  | 581,586 |   |  |  | (Notes 4,6, 7 and 8 | )



Note 1: The Companys investee accounted for under the equity method.

Note
2: The Companys 100% owned subsidiary.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



Note 3: An investee accounted for under the equity method of SPIL (B.V.I.) Holding
Limited, a 100% owned subsidiary of the Company.

Note 4: An investee accounted for under the equity method of SPIL (Cayman)
Holding Limited, a 100% owned subsidiary of SPIL (B.V.I) Holding Limited.

Note 5: The contributed capital was US$130,000.

Note 6: The investment income (loss) recognized during the current period already excludes the amounts of unrealized
intercompany profit on disposal of assets and loss on sales.

Note 7: The foreign currency exchange rates prevailing at the
balance sheet date were used for the currency translation.

Note 8: Eliminated under consolidation.



| | (2) | The ending balance of securities held by investee companies:
| | --- | ------------------------------------------------------------

As of December 31, 2011:



|                              |  |                   |  |                                         |  |                                                |  |                                                             |  |                               |         |   |                           |  |           |                       |  |  |                                           |   |  |  |        | 
|----------------------------- |  | ----------------- |  | --------------------------------------- |  | ---------------------------------------------- |  | ----------------------------------------------------------- |  | ----------------------------- | ------- | - | ------------------------- |  | --------- | --------------------- |  |  | ----------------------------------------- | - |  |  | ------ | 
|Investor                      |  | Type ofsecurities |  | Name of
securities                      |  | The relationship of theissuers with
theCompany |  | General ledger accounts                                     |  | Number
ofshares(in thousands) |         |   | Book value(Notes 3and 4 ) |  |           | Percentageofownership |  |  | Market valueper share(in
dollars)(Note 2) |  
|                              |  |                   |  |                                         |  |                                                |  |                                                             |  |                               |         |   | NT$                       |  |           |                       |  |  | NT$                                       |  
|SPIL (B.V.I.) Holding Limited |  | Stock             |  | Siliconware USA, Inc.                   |  | Indirect subsidiary of the Company             |  | Long-term investments accounted for under the equity method |  |                               | 1,250   |   |                           |  | 154,623   |                       |  |  | 100.00                                    | % |  |  | 123.70 | 
|SPIL (B.V.I.) Holding Limited |  | Stock             |  | SPIL (Cayman) Holding Limited           |  | Indirect subsidiary of the Company             |  | Long-term investments accounted for under the equity method |  |                               | 130,200 |   |                           |  | 5,687,269 |                       |  |  | 100.00                                    | % |  |  | 43.68  | 
|SPIL (Cayman) Holding Limited |  |                  |  | Siliconware Technology (Suzhou) Limited |  | Indirect subsidiary of the Company             |  | Long-term investments accounted for under the equity method |  |                               | (Note 1 | ) |                           |  | 5,686,980 |                       |  |  | 100.00                                    | % |  |  |       | 



Note 1: The contributed capital was US$130,000.

Note 2: The market value is not
available. Therefore, the net equity per share as of December 31, 2011 was used.

Note 3: The foreign currency exchange
rates prevailing at the balance sheet date were used for the currency translation.

Note 4: Eliminated under consolidation.



| | (3) | Securities for which total buying or selling amount exceed the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ----------------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2011: None.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



C. Information of investment in Mainland China:



| | (1) | Information of investment in Mainland China:
| | --- | --------------------------------------------



|                                        |  |                                       |  |         |                       |   |                  |  |         |                                           |  |  |                                |   |  |                                            |         |   |                                                |  |                       |   |  |  |     |  
|--------------------------------------- |  | ------------------------------------- |  | ------- | --------------------- | - | ---------------- |  | ------- | ----------------------------------------- |  |  | ------------------------------ | - |  | ------------------------------------------ | ------- | - | ---------------------------------------------- |  | --------------------- | - |  |  | --- | -
|Name of investee in Mainland China      |  | Main activities ofinvestee            |  | Capital |                       |   | Investmentmethod |  |         | Accumulatedremittance as ofJanuary 1,2010 |  |  | Remitted(collected)this period |   |  | Accumulatedremittanceas
ofDecember 31,2010 |         |   | Ownershipheld by theCompany(Directandindirect) | 
|                                        |  |                                       |  | NT$     |                       |   |                  |  |         | NT$                                       |  |  | NT$                            |   |  | NT$                                        |         |   |                                                | 
|Siliconware Technology (Suzhou) Limited |  | Assembly and testing service provider |  |         | 3,935,750(USD 130,000 | ) |                  |  | (Note 1 | )                                         |  |  | 3,935,750(USD 130,000          | ) |  | $                                          |        |   |                                                |  | 3,935,750(USD 130,000 | ) |  |  | 100 | %
|                                        |  |                                       |  |         | (Note 3               | ) |                  |  |         |                                           |  |  | (Note 3                        | ) |  |                                            | (Note 3 | ) |                                                |  | (Note 3               | ) |  |  |     |  



|                                                                  |                   |  |                             |  |                |                                                                 |  |  |                                                   |  |  |                                                                                    |               |  |                                                                                                        |  |               |  |  |  |          | 
|----------------------------------------------------------------- | ----------------- |  | --------------------------- |  | -------------- | --------------------------------------------------------------- |  |  | ------------------------------------------------- |  |  | ---------------------------------------------------------------------------------- | ------------- |  | ------------------------------------------------------------------------------------------------------ |  | ------------- |  |  |  | -------- | 
|Investmentincome (loss)recognized by theCompany
during the period |                   |  | Ending balanceof
investment |  |                | The investmentincome
(loss)remitted back as ofDecember 31, 2010 |  |  | Accumulatedremittance fromTaiwan toMainland China |  |  | The 
investmentbalanceapproved byInvestmentCommissions,Ministry ofEconomic Affairs |               |  | The ceiling ofinvestment inmainland Chinaaccording
toInvestmentCommissions,Ministry ofEconomic Affairs | 
|NT$                                                               |                   |  | NT$                         |  |                | NT$                                                             |  |  | NT$                                               |  |  | NT$                                                                                |               |  | NT$                                                                                                    | 
|                                                                  | 581,586           |  |                             |  | 5,686,980      |                                                                 |  |  |                                                   |  |  |                                                                                    | 3,935,750     |  |                                                                                                        |  | 3,935,750     |  |  |  |          | 
|                                                                  | (Notes 2,3 and 4) |  |                             |  | (Notes 3and 4) |                                                                 |  |  |                                                  |  |  |                                                                                    | (USD 130,000) |  |                                                                                                        |  | (USD 130,000) |  |  |  | (Note 5) | 



Note 1: The Company set up a subsidiary in the third country to invest in Mainland China.

Note 2: The investment income (loss) was recorded based on the audited financial statements.

Note 3: The foreign currency exchange rates prevailing at the balance sheet date were used for the currency translation.

Note 4: Eliminated under consolidation.

Note 5: Based on the Rule
No. 09704604680, Regulations Governing Security Investment and Technical Cooperation in the Mainland Area set by Ministry of Economic Affairs, the Company received documents from the Industrial Development Bureau of Ministry of
Economic Affairs, which approved that the Companys operation is qualified for operations of operating headquarters. As such, the Company is not required to impute the ceiling of investment in Mainland China.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (2) | Material transactions occurred directly between the Company and its Mainland China investee companies and material transactions occurred indirectly between the Company
and its Mainland China investee companies via enterprises in other areas:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

i. Property transactions between the
parent company and the subsidiary for the years ended December 31, 2010 and 2011:



For the year ended December 31, 2010Name of
the property


Salesamount


Book value


Gain on disposalof property, plantand equipment


OtherreceivablesNT$


NT$


NT$


NT$Siliconware Technology (Suzhou) Ltd.


Equipment



52,325



42,456



9,869



29,481




|                                     |  |                     |           |  |                |  |        |                |  |  |   | 
|------------------------------------ |  | ------------------- | --------- |  | -------------- |  | ------ | -------------- |  |  | - | 
|                                     |  | Name ofthe property |           |  | Purchaseamount |  |        | Other payables | 
|                                     |  |                     |           |  | NT$            |  |        | NT$            | 
|                                     |  |                     |          
|Siliconware Technology (Suzhou) Ltd. |  |                     | Equipment |  |                |  | 13,301 |                |  |  |  | 
|                                     |  |                     |           |  |                |  |        |                |  |  |   | 



For the year ended December 31, 2011Name ofthe property


Salesamount


Book value


Gain on disposalof property, plantand equipment


OtherreceivablesNT$


NT$


NT$


NT$Siliconware Technology (Suzhou) Ltd.


Equipment



65,847



56,063



9,784



4,465




|                                     |  |                     |           |  |                |  |       |                |  |  |     | 
|------------------------------------ |  | ------------------- | --------- |  | -------------- |  | ----- | -------------- |  |  | --- | 
|                                     |  | Name ofthe property |           |  | Purchaseamount |  |       | Other payables | 
|                                     |  |                     |           |  | NT$            |  |       | NT$            | 
|                                     |  |                     |          
|Siliconware Technology (Suzhou) Ltd. |  |                     | Equipment |  |                |  | 7,462 |                |  |  | 786 | 
|                                     |  |                     |           |  |                |  |       |                |  |  |     | 

ii. Transactions above were eliminated in consolidation.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | D. | The business relationships and the significant transactions as well as amounts between the parent company and the subsidiary.
| | -- | -----------------------------------------------------------------------------------------------------------------------------



| | (1) | For the year ended December 31, 2010:
| | --- | -------------------------------------



|    |   |  |              |                                            |              |                                         |              |                           |                      |                   |        |  |         |                   |  |                                                     |  |  |      |  
|--- | - |  | ------------ | ------------------------------------------ | ------------ | --------------------------------------- | ------------ | ------------------------- | -------------------- | ----------------- | ------ |  | ------- | ----------------- |  | --------------------------------------------------- |  |  | ---- | -
|    |   |  |              |                                            |              |                                         |              |                           | Transaction          |                  
|No. |   |  | Company Name |                                            | Counterparty |                                         | Relationship |                           | Generalledgeraccount |                   | Amount |  |         | Transaction terms |  | Percentage ofconsolidatedrevenues ortotal assets    | 
|    |   |  |              |                                            |              |                                         |              |                           |                      |                   | NT$    |  |         |                   |  |                                                     | 
|    |   |  |              |                                            |              |                                         |             
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware USA, Inc.                   |              | Indirect owned subsidiary |                      | Operating expense |        |  | 373,430 |                   |  | As specified in contract                            |  |  | 0.58 | %
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware USA, Inc.                   |              | Indirect owned subsidiary |                      | Accrued expense   |        |  | 21,653  |                   |  | Comparable to those provided by non-related parties |  |  | 0.03 | %
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware Technology (Suzhou) Limited |              | Indirect owned subsidiary |                      | Purchase          |        |  | 195,381 |                   |  | As specified in contract                            |  |  | 0.31 | %
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware Technology (Suzhou) Limited |              | Indirect owned subsidiary |                      | Accounts payable  |        |  | 5,079   |                   |  | Comparable to those provided by non-related parties |  |  | 0.01 | %



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (2) | For the year ended December 31, 2011:
| | --- | -------------------------------------



|    |   |  |              |                                            |              |                       |              |                           |                      |                 |        |  |         |                   |  |                                                     |  |  |      |  
|--- | - |  | ------------ | ------------------------------------------ | ------------ | --------------------- | ------------ | ------------------------- | -------------------- | --------------- | ------ |  | ------- | ----------------- |  | --------------------------------------------------- |  |  | ---- | -
|    |   |  |              |                                            | Transaction  |                      
|No. |   |  | Company Name |                                            | Counterparty |                       | Relationship |                           | Generalledgeraccount |                 | Amount |  |         | Transaction terms |  | Percentage ofconsolidatedrevenues ortotal assets    | 
|    |   |  |              |                                            |              |                       |              |                           |                      |                 | NT$    |  |         |                   |  |                                                     | 
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware USA, Inc. |              | Indirect owned subsidiary |                      | Commision       |        |  | 351,805 |                   |  | As specified in contract                            |  |  | 0.57 | %
|    | 0 |  |              | Siliconware Precision Industries Co., Ltd. |              | Siliconware USA, Inc. |              | Indirect owned subsidiary |                      | Accrued expense |        |  | 25,869  |                   |  | Comparable to those provided by non-related parties |  |  | 0.03 | %



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



29. Segment Information

The Companys chief operating decision maker assesses the performance and makes decision to allocate resources based on the different regulatory environments. All of our segments have identical
economic characteristics and meet all criteria of aggregation. As a result, we disclose a single reporting segment by aggregating all our operating segments.

A. Operation in Different Products and Services:



|                           |  |                                  |            |  |      |  |            |      |  |  |            | 
|-------------------------- |  | -------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                           |  | For the years ended December 31, |           
|Services                   |  | 2009                             |            |  | 2010 |  |            | 2011 | 
|                           |  | NT$                              |            |  | NT$  |  |            | NT$  | 
|Packaging revenues         |  |                                  | 51,356,743 |  |      |  | 54,140,057 |      |  |  | 51,895,114 | 
|Testing and other revenues |  |                                  | 7,937,849  |  |      |  | 9,717,413  |      |  |  | 9,341,778  | 
|                           |  |                                  |            |  |      |  |            |      |  |  |            | 
|                           |  |                                  | 59,294,592 |  |      |  | 63,857,470 |      |  |  | 61,236,892 | 
|                           |  |                                  |            |  |      |  |            |      |  |  |            | 

B. Operations in Different Geographic Areas:

Revenues are summarized by the areas where our customers headquarters locate. Non-current assets, including long-term investment
under equity method, fixed assets, refundable deposits, deferred charges, and other assets, but not including financial instruments and deferred tax assets, are categorized by their locations.



|                 |  |                                  |            |  |      |  |            |      |  |  |            | 
|---------------- |  | -------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|Revenues:        |  | For the years ended December 31, |           
|Geographic areas |  | 2009                             |            |  | 2010 |  |            | 2011 | 
|                 |  | NT$                              |            |  | NT$  |  |            | NT$  | 
|Taiwan           |  |                                  | 20,097,950 |  |      |  | 20,512,347 |      |  |  | 13,593,529 | 
|U.S.             |  |                                  | 26,006,761 |  |      |  | 26,770,635 |      |  |  | 29,993,253 | 
|Canada           |  |                                  | 3,867,950  |  |      |  | 4,553,917  |      |  |  | 3,729,884  | 
|Others           |  |                                  | 9,321,931  |  |      |  | 12,020,571 |      |  |  | 13,920,226 | 
|                 |  |                                  |            |  |      |  |            |      |  |  |            | 
|                 |  |                                  | 59,294,592 |  |      |  | 63,857,470 |      |  |  | 61,236,892 | 
|                 |  |                                  |            |  |      |  |            |      |  |  |            | 



|                   |  |                    |            |  |      |  |            |      |  |  |            | 
|------------------ |  | ------------------ | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|Noncurrent Assets: |  | As of December 31, |           
|Geographic areas   |  | 2009               |            |  | 2010 |  |            | 2011 | 
|                   |  | NT$                |            |  | NT$  |  |            | NT$  | 
|Taiwan             |  |                    | 33,990,629 |  |      |  | 39,068,327 |      |  |  | 40,206,617 | 
|U.S.               |  |                    | 2,516      |  |      |  | 152,124    |      |  |  | 114,043    | 
|Canada             |  |                    |           |  |      |  |           |      |  |  |           | 
|Others             |  |                    | 3,086,896  |  |      |  | 4,735,493  |      |  |  | 5,313,564  | 
|                   |  |                    |            |  |      |  |            |      |  |  |            | 
|                   |  |                    | 37,080,041 |  |      |  | 43,955,944 |      |  |  | 45,634,224 | 
|                   |  |                    |            |  |      |  |            |      |  |  |            | 



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



C. Major Customers:

A major customer is identified as the party that accounts for more than 10 % of the Companys net sales in any given year listed
below.



2009


2010


2011Customers

Amount


% ofnet sale


Amount


% ofnet sale


Amount


% ofnet saleNT$





NT$





NT$Customer A


6,960,529



12



6,297,407



10



7,151,963



12Customer B


4,402,282



7



6,393,270



10



5,182,591



8Customer C


6,293,643



11



5,375,772



8



3,693,185



617,656,454



30



18,066,449



28



16,027,739



26




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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



30. DISCLOSURES RELATING TO THE ADOPTION OF IFRSs



|A. | Pursuant to the regulation, Jin-Guan-Zheng-Shen-Zi Order No. 0990004943, of the Financial Supervisory Commission, Executive Yuan, R.O.C., effective January 1,
2013, a public company whose stock is listed on the Taiwan Stock Exchange Corporation or traded in the GreTai Securities Market should prepare financial statements in accordance with the International Financial Reporting Standards
(IFRSs), International Accounting Standards (IASs), and relevant interpretations and interpretative bulletins that are ratified by the Financial Supervisory Commission. To meet the requirement above, the Company has formed an
IFRSs group headed by the Companys Chief Execute Officer, who is responsible for setting up a plan relative to the Companys transition to IFRSs. The major contents and status of execution of this plan are outlined below:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                                                              |  |                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------
|Working Items for IFRSs Adoption                                                                                                                              |  | Status of Execution         
|                                                                                                                                                              | 
|a.      Formation of an IFRSs Group                                                                                                                           |  | Finished                    
|                                                                                                                                                              | 
|b.      Setting up a plan relative to the Companys transition to IFRSs                                                                                       |  | Finished                    
|                                                                                                                                                              | 
|c.      Identification of the differences between current accounting policies and
IFRSs                                                                       |  | Finished                    
|                                                                                                                                                              | 
|d.      Identification of consolidated entities under IFRSs framework                                                                                        |  | Finished                    
|                                                                                                                                                              | 
|e.      Evaluation of the impact of each exemption and option on the Company under IFRS 1,
First-time Adoption of International Financial Reporting Standards |  | Finished                    
|                                                                                                                                                              | 
|f.       Evaluation of needed information system adjustments                                                                                                  |  | Finished                    
|                                                                                                                                                              | 
|g.      Evaluation of needed internal control adjustments                                                                                                     |  | Finished                    
|                                                                                                                                                              | 
|h.      Determine and establish IFRSs accounting policies                                                                                                     |  | Finished                    
|                                                                                                                                                              | 
|i.       Determine the election of exemptions and options available under IFRS 1, First-time
Adoption of International Financial Reporting Standards          |  | Finished                    
|                                                                                                                                                              | 
|j.       Preparation of statement of financial position on the date of transition to
IFRSs                                                                    |  | To be finished in March 2012
|                                                                                                                                                              | 
|k.      Preparation of IFRSs comparative financial information for 2012                                                                                       |  | To be finished in March 2013
|                                                                                                                                                              | 
|l.       Completion of relevant internal control (including financial reporting process and
relevant information system) adjustments                          |  | To be finished in March 2013



|B. | The Company uses the IFRSs already ratified by the Financial Supervisory Commission currently and the Rules
|-- | ------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



Governing the Preparation of Financial Statements by Securities Issuers that will be applied in
2013 as the basis for evaluation of material differences in accounting policies as mentioned above. However, the Companys current evaluation results may be different from the actual differences that may arise when new issuances of or
amendments to IFRSs are subsequently ratified by the Financial Supervisory Commission or relevant interpretations or amendments to the Rules Governing the Preparation of Financial Statements by Securities Issuers come in the future.

Material differences identified by the Company that may arise between current accounting policies used in the preparation of financial
statements and IFRSs and Rules Governing the Preparation of Financial Statements by Securities Issuers that will be used in the preparation of financial statements in the future are set forth below:



| | (1) | Financial Assets: Equity Instruments
| | --- | ------------------------------------

In accordance with R.O.C. accounting standard, unlisted stocks and emerging stocks held by the Company should be measured at cost and recognized as Financial Assets Carried at Cost. However,
pursuant to IAS 39, Financial Instruments  Recognition and Measurement, investments in equity instruments without an active market but with reliable fair value measurement (i.e. the variability of the estimation interval of
reasonable fair values of such equity instruments is insignificant, or the probability for these estimates can be made reliably) should be measured at fair value.



| | (2) | Pension
| | --- | -------



| | i. | The discount rate used to calculate pensions shall be determined with reference to the factors specified in R.O.C. SFAS No. 18, paragraph 23. However, IAS
No. 19, Employee Benefits, requires an entity to determine the rate used to discount employee benefits with reference to market yields on high quality corporate bonds that match the currency at the end day of the reporting period
and duration of its pension plan; when there is no deep market in corporate bonds, an entity is required to use market yields on government bonds (at the end day of the reporting period) instead.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | In accordance with R.O.C. GAAP, the excess of the accumulated benefit obligation over the pension plan (fund) assets at the balance sheet date is the minimum amount of
pension liability. However, IAS 19, Employee Benefits, has no regulation regarding the minimum pension liability.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | The actuarial pension gain or loss, pursuant to R.O.C. accounting standards, is recognized in net pension cost of current period using the corridor method.
However, under IAS 19, Employee Benefits, the Company elects to recognize the actuarial gain or loss immediately in other comprehensive income in the period in which they occur.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Employee Benefits
| | --- | -----------------

The current
accounting standards in R.O.C. do not specify the rules on the cost recognition for accumulated unused compensated absences. The Company recognizes such costs as salary expense upon actual payment. However, IAS 19, Employee Benefit,
requires that the costs of accumulative compensated absences be accrued as expenses at the end of the reporting period.



| | (4) | Income Tax
| | --- | ----------

In accordance with
current accounting standards in R.O.C., a deferred tax asset or liability should according to the classification of its related asset or liability, be classified as current or noncurrent. However, pursuant to IFRSs, a deferred tax asset or liability
should be classified as non-current.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



Furthermore, in accordance with current accounting standards in R.O.C., the Company
recognizes valuation allowance after evaluating the realization probability of a deferred tax asset. However, under IFRSs, only when a tax benefit is considered highly probable does the Company recognize a deferred tax asset, rather than recognizing
fully with a valuation allowance.



| | (5) | Functional Currency
| | --- | -------------------

In
accordance with current R.O.C. GAAP, only foreign operating entity is required to determine its functional currency. However, pursuant to IAS 21, The Effects of Changes in Foreign Exchange Rates, each of the Groups entities
(including parent company) included in the consolidated financial statements should determine its functional currency.



| | (6) | Business Combinations
| | --- | ---------------------



| | i. | Although no specific rules concerning the recognition of direct costs related to business combination, certain acquisition-related direct costs are usually treated as a
portion of the acquisition cost of the acquirer in practice. However, in accordance with IFRS 3, Business Combination, the acquirer shall account for all acquisition-related costs as expenses when such costs are incurred and services are
received.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | The measurement date for the equity stock issued in a business combination is usually the announcement date of the combination agreement in accordance with current
accounting standards in R.O.C., and is the acquisition date in accordance with IFRS 3, Business Combinations.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | In accordance with current R.O.C. GAAP, when the fair value of identifiable net assets acquired exceeds the acquisition cost, the difference should be assigned to
reduce the fair values of the acquired non-current assets proportionately. If the book values of those non-current assets are reduced to zero, the remaining excess should be recorded as extraordinary gains. However, in accordance with IFRS 3,
Business Combinations, the difference should be directly recognized in profit or loss.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | It is ruled by the R.O.C. standards that the minority interests on the consolidated financial statements should be measured based on the book value of the acquired
corporation in a business combination. In accordance with IFRS 3, Business Combination, the non-controlling interests should be measured at fair value (or at the non-controlling interests proportionate share of the acquired
corporations identifiable net assets).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Pursuant to the current accounting standards in R.O.C., where the distribution of additional consideration may be contingent on maintaining or achieving specified
future earnings level for the acquired corporation and it is reasonably certain that the event is likely to occur and the amount can be reasonably estimated, then such contingent consideration should be recognized as acquisition cost. The Company
shall record additional consideration that may be contingent on the market price of a particular security at current fair value and simultaneously reduce the book value of the securities issued at acquisition date. In accordance with IFRS 3,
Business Combination, the acquirer shall recognize the contingent consideration at fair value at acquisition date as part of the consideration transferred to acquire a business, and classify it as a liability or as equity. When certain
criteria are met, the acquirer shall classify the right to the return of previously transferred consideration as an asset.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Share-Based Payment
| | --- | -------------------

The
share-based payment agreements of the Company include employee stock options, treasury stock transferred to employee, and employees bonus :



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | i. | The employee stock options granted from January 1, 2004 through December 31, 2007 are accounted for in accordance with EITF 92-070, EITF 92-071 and EITF
92-072, Accounting for Employee Stock Options, of the R.O.C. Accounting Research and Development Foundation, dated March 17, 2003. Compensation cost of such employee stock options is recognized as an expense using the intrinsic
value method. The distribution of employees bonus was ruled as distribution of earnings by 2007, and the Company did not recognize it as expense.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | In accordance to IFRS 2, Share-Based Payment, the cost of stock-based compensation agreements stated above should be expensed at fair value at the
measurement date over the vesting period.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Investment in Associates / Long-term Investment Under Equity Method
| | --- | -------------------------------------------------------------------



| | i. | Current accounting standards in R.O.C. do not prescribe that the associate and its investor shall use uniform accounting policies in preparing financial statements.
However, pursuant to IAS 28, Investment in Associates, an associate should use uniform accounting policies as the investor does in the preparation of the financial statements for like transactions and events in similar circumstances;
otherwise, the associates financial statements should be adjusted to reflect the investors accounting policies for the purpose of applying the equity method.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | If an investor company loses its significant influence over an investee company and therefore ceases using the equity method, in accordance with current accounting
standards in R.O.C., the investment cost will be the book value at the time of change. If there is a balance on additional paid-in capital or other equity adjustment items from the long-term equity investment, then an investor company shall
calculate its share when the investment is sold, so that the pro-rata gains or losses from the disposal of the long-term investment can be accounted for. Pursuant to IAS 28, Investment in Associates, when an investment ceases to be an
associate, the fair value of the remaining investment at the date when it ceases to be an associate should be regarded as its fair value on initial recognition of financial asset. If there is a balance on additional paid-in capital or other equity
adjustment items from the long-term equity investment, the investor shall write off related items totally to determine the gains or losses from the disposal of long-term investment.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | In accordance with current accounting standards in R.O.C., if an investee company issues new shares and original shareholders do not purchase or acquire new shares
proportionately, but the investor company does not lose its significant influence over the investee company, the investment percentage, and therefore the equity in net assets for the investment that an investor company has invested, will be changed.
Such difference shall be used to adjust the Additional Paid-in Capital and the Long-term Investments accounts. However, pursuant to IAS 28, Investment in Associates, increase in investment percentage is accounted
for as an acquisition of investment while decrease in investment percentage is accounted for as a disposal of investment and any related disposal gain or loss is recognized.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | Consolidated Financial Statements
| | --- | ---------------------------------



| | i. | If the parents ownership of the subsidiary changes without losing control over the subsidiary, the purchase method of accounting is used to account for the
increase in ownership interest, while the decrease in ownership interest is regarded as disposal of shares and the related disposal gain or loss is recognized in profit or loss in accordance with R.O.C. GAAP. However, pursuant to IAS 27,
Consolidated and Separate Financial Statements, changes in parents ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions, which would not affect profit or loss. Goodwill
is not remeasured as well.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | If the decrease of parents ownership of the subsidiary causes losing control over the subsidiary, any remaining interest in the former subsidiary is measured at
the book value at the date when control is lost. In accordance with IAS 27, Consolidated and Separate Financial Statements, any remaining interest in the former subsidiary should be recognized at its fair value at the date when control
is lost.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | iii. | In accordance with current accounting standards in R.O.C., losses applicable to the minority in a consolidated subsidiary cannot exceed the minority interest in the
subsidiarys equity. The excess, and any further losses applicable to the minority, are allocated against the majority interest except to the extent that the minority has binding obligation and is able to make an additional investment to cover
the losses. However, in accordance with IAS 27, Consolidated and Separate Financial Statements, the excess of losses applicable to the non-controlling interest in a consolidated subsidiary is continuously attributed to the
non-controlling interest even if this results in the non-controlling interest having a deficit balance.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



31. U.S. GAAP Reconciliation

The accompanying consolidated financial statements have been prepared in conformity with Rules Governing the Preparation of Financial Reports by Securities Issuers and accounting principles
generally accepted in the Republic of China (R.O.C. GAAP), which differ in certain material respects from generally accepted accounting principles in the United States (U.S. GAAP). Such differences involve methods for
measuring the amounts shown in the financial statements, as well as additional disclosures required by U.S. GAAP.

The following is a summary
of the material adjustments to net income and shareholders equity, which would be required in reconciling the significant differences between R.O.C. GAAP and U.S. GAAP:

Reconciliation of consolidated net income:



|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|------------------------------------------------------------------ |  | -------------------------------- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | - |  |  | --------- | -
|                                                                   |  | For the years ended December 31, |          
|                                                                   |  | 2009                             |           |   | 2010 |  |           | 2011 | 
|                                                                   |  | NT$                              |           |   | NT$  |  |           | NT$  |  |  | US$       |  
|                                                                   |  |                                  |           |  
|Net income as reported under R.O.C. GAAP                           |  |                                  | 8,789,829 |   |      |  | 5,626,907 |      |  |  | 4,837,243 |   |  |  | 159,803   |  
|U.S. GAAP adjustments:                                             |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Compensated absences                                               |  |                                  | (14,994   | ) |      |  | (8,150    | )    |  |  | (79,911   | ) |  |  | (2,640    | )
|Defined benefit pension plan  net peroidic pension cost           |  |                                  | 95        |   |      |  | (341      | )    |  |  | (340      | ) |  |  | (11       | )
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Total U.S. GAAP adjustments                                        |  |                                  | (14,899   | ) |      |  | (8,491    | )    |  |  | (80,251   | ) |  |  | (2,651    | )
|Taxation effect                                                    |  |                                  | (20,401   | ) |      |  | (21,802   | )    |  |  | (66,088   | ) |  |  | (2,183    | )
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Net income under U.S. GAAP                                         |  |                                  | 8,754,529 |   |      |  | 5,596,614 |      |  |  | 4,690,904 |   |  |  | 154,969   |  
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|                                                                   | 
|                                                                   |  | For the years ended December 31, |          
|                                                                   |  | 2009                             |           |   | 2010 |  |           | 2011 | 
|                                                                   |  | NT$                              |           |   | NT$  |  |           | NT$  |  |  | US$       |  
|                                                                   |  |                                  |           |  
|Earnings per share under U.S. GAAP (in dollars)                    |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Basic                                                              |  |                                  | 2.81      |   |      |  | 1.80      |      |  |  | 1.51      |   |  |  | 0.05      |  
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Diluted                                                            |  |                                  | 2.81      |   |      |  | 1.80      |      |  |  | 1.51      |   |  |  | 0.05      |  
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Weighted average number of common stock outstanding (in thousands) |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Basic                                                              |  |                                  | 3,116,361 |   |      |  | 3,116,361 |      |  |  | 3,102,858 |   |  |  | 3,102,858 |  
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Diluted                                                            |  |                                  | 3,116,361 |   |      |  | 3,116,361 |      |  |  | 3,102,858 |   |  |  | 3,102,858 |  
|                                                                   |  |                                  |           |   |      |  |           |      |  |  |           |   |  |  |           |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



Reconciliation of consolidated stockholders equity



|                                                         |  |              |            |   |      |  |            |      |  |  |            |   |  |  |           |  
|-------------------------------------------------------- |  | ------------ | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | - |  |  | --------- | -
|                                                         |  | December 31, |           
|                                                         |  | 2009         |            |   | 2010 |  |            | 2011 | 
|                                                         |  | NT$          |            |   | NT$  |  |            | NT$  |  |  | US$        |  
|Total stockholders equity as reported under R.O.C. GAAP |  |              | 63,081,226 |   |      |  | 61,296,181 |      |  |  | 58,794,870 |   |  |  | 1,942,348 |  
|U.S. GAAP adjustments:                                   |  |              |            |   |      |  |            |      |  |  |            |   |  |  |           |  
|Compensated absences                                     |  |              | (73,201    | ) |      |  | (81,351    | )    |  |  | (161,262   | ) |  |  | (5,327    | )
|Defined benefit pension plan                             |  |              | (362,506   | ) |      |  | (385,565   | )    |  |  | (299,209   | ) |  |  | (9,885    | )
|Acquisition of Siliconware Corp.                         |  |              | 4,873,500  |   |      |  | 4,873,500  |      |  |  | 4,873,500  |   |  |  | 161,001   |  
|Taxation effect                                          |  |              | (60,710    | ) |      |  | (82,513    | )    |  |  | (148,601   | ) |  |  | (4,909    | )
|                                                         |  |              |            |   |      |  |            |      |  |  |            |   |  |  |           |  
|Stockholders equity under U.S. GAAP                     |  |              | 67,458,309 |   |      |  | 65,620,252 |      |  |  | 63,059,298 |   |  |  | 2,083,228 |  
|                                                         |  |              |            |   |      |  |            |      |  |  |            |   |  |  |           |  

Movements in stockholders equity in accordance with U.S. GAAP:



|                                                                 |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |           |  
|---------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | - |  |  | --------- | -
|                                                                 |  | For the years ended December 31, |           
|                                                                 |  | 2009                             |            |   | 2010 |  |            | 2011 | 
|                                                                 |  | NT$                              |            |   | NT$  |  |            | NT$  |  |  | US$        |  
|Balance at January 1, as reported                                |  |                                  | 63,917,204 |   |      |  | 67,458,309 |      |  |  | 65,620,252 |   |  |  | 2,167,831 |  
|Net income under U.S. GAAP                                       |  |                                  | 8,754,529  |   |      |  | 5,596,614  |      |  |  | 4,690,904  |   |  |  | 154,969   |  
|Cumulative translation adjustment on long-term investments       |  |                                  | (88,289    | ) |      |  | (293,841   | )    |  |  | 460,315    |   |  |  | 15,207    |  
|Change in fair value of available-for-sale marketable securities |  |                                  | 767,157    |   |      |  | 1,021,355  |      |  |  | (1,677,440 | ) |  |  | (55,416   | )
|Treasury Stock                                                   |  |                                  |           |   |      |  |           |      |  |  | (964,188   | ) |  |  | (31,853   | )
|Cash dividends                                                   |  |                                  | (5,674,662 | ) |      |  | (8,040,212 | )    |  |  | (5,048,505 | ) |  |  | (166,782  | )
|Cash dividends for treasury stock held by subsidiaries           |  |                                  | 65,212     |   |      |  |           |      |  |  |           |   |  |  |          |  
|Defined benefit pension plan                                     |  |                                  | (282,842   | ) |      |  | (121,973   | )    |  |  | (22,040    | ) |  |  | (728      | )
|                                                                 |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |           |  
|Balance at December 31                                           |  |                                  | 67,458,309 |   |      |  | 65,620,252 |      |  |  | 63,059,298 |   |  |  | 2,083,228 |  
|                                                                 |  |                                  |            |   |      |  |            |      |  |  |            |   |  |  |           |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



The balance sheet accounts under U.S. GAAP are as follows:



|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|------------------------------------------ |  | ------------ | ---------- |  | ---- |  | ---------- | --- |  |  | --------- | 
|                                           |  | December 31, |           
|                                           |  | 2010         |            |  | 2011 | 
|                                           |  | NT$          |            |  | NT$  |  |            | US$ | 
|Current Assets                             |  |              |            |  |      |  |            |     |  |  |           | 
|Cash and cash equivalents                  |  |              | 13,297,003 |  |      |  | 9,353,631  |     |  |  | 309,007   | 
|Short-term investments                     |  |              | 2,222,005  |  |      |  | 6,587,969  |     |  |  | 217,640   | 
|Notes receivable, net                      |  |              | 73,229     |  |      |  | 22,211     |     |  |  | 734       | 
|Accounts receivable, net                   |  |              | 9,648,610  |  |      |  | 10,231,452 |     |  |  | 338,006   | 
|Inventories                                |  |              | 3,515,897  |  |      |  | 3,985,115  |     |  |  | 131,652   | 
|Other current assets                       |  |              | 2,441,496  |  |      |  | 1,497,552  |     |  |  | 49,472    | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|                                           |  |              | 31,198,240 |  |      |  | 31,677,930 |     |  |  | 1,046,511 | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|                                           |  |              |           
|Long-term investments                      |  |              | 6,485,268  |  |      |  | 5,304,398  |     |  |  | 175,236   | 
|Property, plant and equipment              |  |              | 42,926,795 |  |      |  | 44,144,804 |     |  |  | 1,458,368 | 
|Intangible assets                          |  |              | 4,873,500  |  |      |  | 4,873,500  |     |  |  | 161,001   | 
|Other assets                               |  |              | 2,124,606  |  |      |  | 2,742,313  |     |  |  | 90,595    | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|Total Assets                               |  |              | 87,608,409 |  |      |  | 88,742,945 |     |  |  | 2,931,711 | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|                                           |  |              |           
|Current liabilities                        |  |              | 16,675,599 |  |      |  | 15,152,473 |     |  |  | 500,577   | 
|Long-term liabilities                      |  |              | 4,368,158  |  |      |  | 9,532,335  |     |  |  | 314,910   | 
|Other liabilities                          |  |              | 944,400    |  |      |  | 998,839    |     |  |  | 32,997    | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|Total Liabilities                          |  |              | 21,988,157 |  |      |  | 25,683,647 |     |  |  | 848,484   | 
|Total Stockholders Equity                 |  |              | 65,620,252 |  |      |  | 63,059,298 |     |  |  | 2,083,228 | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 
|Total Liabilities and Stockholders Equity |  |              | 87,608,409 |  |      |  | 88,742,945 |     |  |  | 2,931,712 | 
|                                           |  |              |            |  |      |  |            |     |  |  |           | 

The significant accounting policies for the reconciliation from R.O.C. GAAP to U.S. GAAP are as follows:



| | (1) | Consolidation
| | --- | -------------

Under
R.O.C. GAAP, Statement of Accounting Standards No. 7, Consolidated Financial Statements requires that an entity fully consolidate all of the subsidiaries which it owns, directly or indirectly, more than 50% of the voting rights and
which it owns, directly or indirectly, less than 50% of the voting rights but has effective control. Significant inter-company transactions and balances between the Company and its subsidiaries or investees accounted for under the equity method are
eliminated.

Under U.S. GAAP, ASC Topic 810, Consolidation (ASC Topic 810), requires existing unconsolidated
variable interest entities (VIE) to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. In other words, the Company would be the primary beneficiary of such entity if it has the
power to direct activities of the VIE that most significantly impact the VIEs economic performance, and has the obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The
Company performed analysis for VIEs and did not identify any variable interest entity pursuant to ASC Topic 810.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (2) | Compensated Absences
| | --- | --------------------

Under
R.O.C. GAAP, the Company is not required to accrue for unused vacation at the end of each year. However, under U.S. GAAP, unused vacation that can be carried over to the next year has to be accrued for at each balance sheet date to properly match
the expense with the period in which the employee provided the services. For the years ended December 31, 2009, 2010 and 2011, total amounts of compensated absences reconciled from R.O.C. GAAP to U.S. GAAP were NT$(14,994), NT$(8,150) and
NT$(79,911), respectively.



| | (3) | 10% Tax on Undistributed Earnings and Tax Effect of U.S. GAAP Adjustments
| | --- | -------------------------------------------------------------------------

Under R.O.C. GAAP, a 10% tax on undistributed earnings is recognized as a tax expense in the year of stockholders approval. Under U.S. GAAP, the 10% tax on undistributed earnings should be accrued
during the period the earnings generated and adjusted to the extent that distributions are approved by the stockholders in the following year. Moreover, additional tax benefit (expense) and deferred tax assets or liabilities would be adjusted for
the reconciled items resulting in income differences between R.O.C. GAAP and U.S. GAAP. For the years ended December 31, 2009, 2010 and 2011, total amounts of tax expense reconciled from R.O.C. GAAP to U.S. GAAP were NT$20,401, NT$21,802 and
NT$66,088, of which NT$22,286, NT$22,176 and NT$86,392 were adjusted for the undistributed earnings.



| | (4) | Defined Benefit Pension Plan
| | --- | ----------------------------



| | A. | Net periodic cost variance between U.S. GAAP and R.O.C. GAAP
| | -- | ------------------------------------------------------------

The Company's net periodic pension cost under U.S. GAAP may differ from the one under R.O.C. GAAP due to differences in, but not limited to, service cost, interest cost, expected return on assets and the
amortization in net gain (loss). Reconciliation of the difference between U.S. GAAP and R.O.C. GAAP is required before reaching U.S. GAAP funding status. For the years ended December 31, 2009, 2010 and 2011, total amounts of pension cost
reconciled from R.O.C. GAAP to U.S. GAAP were NT$95, NT$(341) and NT$(340), respectively.



| | B. | Adjustment for the U.S. GAAP funding status:
| | -- | --------------------------------------------

Under R.O.C. GAAP, pension liability is accrued without reflecting the funded status and additional minimum liability is used when the fair value of pension assets is less than the amount of accumulated
benefit obligation. Under U.S. GAAP, additional pension liability or asset is accrued pursuant to ASC Topic 715, Compensation - Retirement Benefits (ASC Topic 715), which requires the recognition of the overfunded or underfunded
status of a defined benefit postretirement plan through other comprehensive income, net of tax, at the balance sheet date and eliminates the use of additional minimum liability. Gains and loss, prior service costs, or transition assets and
liabilities unrecognized as components of net periodic benefit cost of the period in accordance with ASC Topic 715, are now recognized as a component of other comprehensive income. For the years ended December 31, 2009, 2010 and 2011, the
amounts of other comprehensive income reconciled from R.O.C. GAAP to U.S. GAAP due to the aforementioned GAAP difference were NT$(362,506), NT$(385,565) and NT$(299,209), respectively



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (5) | Earnings Per Share (EPS)
| | --- | ------------------------

Prior
to January 1, 2008, in calculating weighted average number of shares outstanding for EPS purposes under R.O.C. GAAP, employee bonus shares have been treated as outstanding for all periods, in a manner similar to a stock split or dividend, and
are retroactively adjusted to previous years calculation of weighted-average outstanding shares. Effective January 1, 2008, as employees 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 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. Under U.S. GAAP, employee bonus shares have been considered separately from the stock dividend or split and have been treated
as outstanding from the date when they were issued for both basic and diluted EPS calculation. No employee bonus shares were issued in 2009, 2010, and 2011.



| | (6) | Goodwill Acquired from Merger
| | --- | -----------------------------

Under R.O.C. GAAP, the fair value of the net assets we received was used as the value of the consideration for the acquisition of the
remaining interests in Siliconware Corporation on December 31, 2000 and reflected in the common stock and capital reserve in our balance sheet. As the consideration is equal to the fair value of the net assets received, no goodwill is recorded.

Under U.S. GAAP, in connection with the acquisition of Siliconware Corporation in 2000, the Company recorded goodwill of
NT$5,415,439 based on an independent appraisal report. Before January 1, 2002, goodwill was amortized on straight-line basis over ten years. Effective January 1, 2002, ASC Topic 350, Intangibles  Goodwill and Other (ASC Topic
350) ceased amortization of goodwill and required the Company to perform an annual impairment analysis using a two-step approach. As of December 31, 2009, 2010 and 2011, the net carrying amount of goodwill for each year was NT$4,873,500
and no impairment of goodwill was identified during 2009 to 2011.



| | (7) | Stock Dividends
| | --- | ---------------

Under R.O.C.
GAAP, an issuance of stock dividend is recorded at par with a charge to retained earnings. Under U.S. GAAP, if the ratio of distribution is less than 25 percent of shares of the same class outstanding, the fair value of the shares issued should be
charged to retained earnings. This different treatment under U.S. GAAP results in reclassifications from retained earnings to additional paid-in capital of NT$34,554,263 as of December 31, 2009, 2010 and 2011, respectively, which causes the
decrease of retained earnings and increase of additional paid-in capital. The adjustments have no effect on shareholders equity.



| | (8) | Impairment of Long-lived Assets
| | --- | -------------------------------

Under both R.O.C. GAAP and U.S. GAAP, the Company is required to evaluate whether long-lived assets are subject to impairment. Impairment
test is performed whenever event occurs or evidence indicates the carrying amount of an asset may not be recoverable.

Under
R.O.C. GAAP, R.O.C. SFAS No. 35, Accounting for Assets Impairment, a long-lived asset is considered impaired when the anticipated recoverable amount is less than the assets carrying value. Recoverable amount is measured as the
higher of fair value less cost to sale or value in use (discounted cash flows). The difference between the recoverable amount and the assets carrying amount is recognized as a loss in earnings.

Under U.S. GAAP, a long-lived asset is considered impaired when the anticipated undiscounted cash flows are less than the assets
carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived assets. The estimate of fair value is generally based on quoted market prices, on the best available
information, including prices for similar assets and the results of using other valuation techniques, or discounted cash flows.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



The Company performs periodical review for its long-lived assets and reclassifies idle
assets from assets held for operating use. Idle assets are no longer used for production purposes due to technology phase out and replacement and are disposed as buyers are identified. These assets are reported at the lower of carrying amount or
fair value less cost to sell. The impairment losses on idle assets for the years ended December 31, 2009, 2010 and 2011 were NT$73,882, NT$117,847 and NT$134,227, respectively. No impairment was identified for other long-lived assets besides
idle assets and no reconciliation for impairment loss between R.O.C. GAAP and U.S. GAAP were made for the years ended December 31, 2009, 2010 and 2011.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



32. Additional Disclosure Required by U.S. GAAP



| | (1) | Risks and Uncertainties
| | --- | -----------------------

The
Company is a provider of subcontract IC assembly and testing services. The Companys revenues are derived primarily from precision dicing of silicon wafers into individual ICs, mounting and wire bonding ICs to lead frames, and sealing ICs in
molded plastic packages. The Companys other products include a variety of turnkey services, including the grinding of wafers to specified thickness, function testing of packaged ICs, and drop shipment to customers of the IC manufactures. The
Company provides its services on a global basis but mainly to customers in Taiwan of 22.2% and North America of 55.1% in 2011. The Companys first two largest customers accounted for a total of 23%, 20%, and 20% of net sales in 2009, 20010 and
2011, respectively, and its five largest customers accounted for 41%, 41% and 39% of the Companys net sales in 2009, 2010 and 2011, respectively.

In 2009, 2010 and 2011, some of the Companys net operating revenues were denominated in currencies other than N.T. dollars, such as U.S. dollar, Japanese Yen and other currencies. The Company did
not hedge any portion of the resulting net foreign exchange position and would be affected by the fluctuations in U.S. dollar, Japanese Yen and other currencies.

Substantially all of the Companys accounts receivables are due from companies in high technology industries located primarily in Asia and North America. Further, the five largest receivables
amounted to NT$4,449,208 and NT$4,036,095 as of December 31, 2010 and 2011, respectively. The Company performs periodic credit evaluations of its customers financial condition and generally does not require collateral. Receivables are
generally due within 90 days.

Other factors that could affect the Companys future operating results and cause actual
results to vary materially from historical results include, but are not limited to, dependence on the highly cyclical nature of both the semiconductor and the personal computer industries, competitive pricing and declines in average selling prices,
availability of manufacturing capacity, dependence on raw materials and competition.



| | (2) | Maturity of Long-term Liabilities
| | --- | ---------------------------------

Aggregate maturities for the Companys long-term loans as of December 31, 2011 are as follows:



|                          |  |         |           |  |     |  |         | 
|------------------------- |  | ------- | --------- |  | --- |  | ------- | 
|Years ending December 31, |  | Amounts |          
|                          |  | NT$     |           |  | US$ | 
|2012                      |  |         |          |  |     |  |        | 
|2013                      |  |         | 3,182,917 |  |     |  | 105,151 | 
|2014                      |  |         | 3,182,917 |  |     |  | 105,151 | 
|2015                      |  |         | 3,182,916 |  |     |  | 105,151 | 
|                          |  |         |           |  |     |  |         | 
|                          |  |         | 9,548,750 |  |     |  | 315,453 | 
|                          |  |         |           |  |     |  |         | 



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (3) | Fair Value Measurement
| | --- | ----------------------

ASC
Topic 820, Fair Value Measurements and Disclosures (ASC Topic 820), defines fair value, provides a framework for measuring fair value and requires additional disclosure about fair value measurements. ASC Topic 820 also established a
three-level fair value hierarchy for valuation inputs as follows:



|         |  |                                                                                                                                           
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Level 1: |  | use quoted prices (unadjusted) in active markets for identical assets or liabilities                                                      
|         | 
|Level 2: |  | use inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|         | 
|Level 3: |  | use inputs that are generally unobservable and reflect the use of significant management judgments and estimates.                         



| | A. | Fair value measurements on a recurring basis:
| | -- | ---------------------------------------------

Assets measured and recorded at fair value on a recurring basis as of December 31, 2010 and 2011 were as follows:



|                                                                   |  |         |           |  |         |  |           |         |  |  |           |  |  |      |           |  |      |  |   |  |  |  |   | 
|------------------------------------------------------------------ |  | ------- | --------- |  | ------- |  | --------- | ------- |  |  | --------- |  |  | ---- | --------- |  | ---- |  | - |  |  |  | - | 
|                                                                   |  | Level 1 |           |  | Level 2 |  |           | Level 3 | 
|                                                                   |  | 2010    |           |  | 2011    |  |           | 2010    |  |  | 2011      |  |  | 2010 |           |  | 2011 | 
|                                                                   |  | NT$     |           |  | NT$     |  |           | NT$     |  |  | NT$       |  |  | NT$  |           |  | NT$  | 
|                                                                   |  |         |           |  |         | 
|Time deposit with original maturities more than 3 months (Note)    |  |         |          |  |         |  |          |         |  |  | 2,222,005 |  |  |      | 6,587,969 |  |      |  |  |  |  |  |  | 
|Marketable securities: available-for-sale (Semiconductor industry) |  |         | 4,887,007 |  |         |  | 3,198,180 |         |  |  |          |  |  |      |          |  |      |  |  |  |  |  |  | 



Note: Included in short-term investments



| | B. | Fair value measurements on a nonrecurring basis:
| | -- | ------------------------------------------------

Financial assets carried at cost: No other-than-temporary impairments recognized during 2009 to 2011. The fair value measurements were determined using a cost approach based on inputs, which were
classified as Level 3 as they were unobservable and required managements judgment.

Idle assets: Idle assets are no
longer used for production purposes due to technology phase out and replacement and are disposed as buyers are identified. These assets are evaluated and reported at the lower of carrying amount or fair value less cost to sell (Level 3). The
impairment losses on idle assets for the years ended December 31, 2009, 2010 and 2011 were NT$73,882, NT$117,847 and NT$134,227, respectively.



| | (4) | Uncertainty in Income Taxes
| | --- | ---------------------------

ASC
Topic 740, Income Taxes (ASC Topic 740) requires the recognition of the impact of a tax position in our financial statements if that position is more likely than not of being sustained on audit. This interpretation also prescribes
measurement of a tax position taken or expected to be taken in a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

The Company adopted the two-step evaluation process required by this interpretation. The first step is to determine whether it is more
likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step is to determine the amount of benefit to recognize in the financial statements if the more-likely-than-not
recognition threshold is met. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. As of December 31, 2010 and 2011, there was no material uncertain tax position
or unrecognized tax benefit identified by the Company.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (5) | Cash and Cash Flow Statements
| | --- | -----------------------------

Under R.O.C. GAAP, all certificates of deposit are classified as cash and cash equivalents. Under U.S. GAAP, cash equivalents are
short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. As of December 31, 2009, 2010 and 2011, the amounts of time deposit with original maturities more
than three months are NT$10,372,361, NT$2,222,005 and NT$6,587,969, respectively. Summarized cash flow information under U.S. GAAP would be presented as follows:



|                                                     |  |                                  |             |   |      |  |            |      |  |  |             |   |  |  |          |  
|---------------------------------------------------- |  | -------------------------------- | ----------- | - | ---- |  | ---------- | ---- |  |  | ----------- | - |  |  | -------- | -
|                                                     |  | For the years ended December 31, |            
|                                                     |  | 2009                             |             |   | 2010 |  |            | 2011 | 
|                                                     |  | NT$                              |             |   | NT$  |  |            | NT$  |  |  | US$         |  
|Net cash provided by operating activities            |  |                                  | 15,492,282  |   |      |  | 14,406,518 |      |  |  | 13,035,113  |   |  |  | 430,628  |  
|Net cash used in investing activities                |  |                                  | (10,094,156 | ) |      |  | (7,932,190 | )    |  |  | (16,269,302 | ) |  |  | (537,473 | )
|Net cash used in financing activities                |  |                                  | (9,053,537  | ) |      |  | (2,266,249 | )    |  |  | (924,142    | ) |  |  | (30,530  | )
|Effect of foreign exchange                           |  |                                  | (43,631     | ) |      |  | (153,876   | )    |  |  | 214,959     |   |  |  | 7,102    |  
|                                                     |  |                                  |             |   |      |  |            |      |  |  |             |   |  |  |          |  
|Net (decrease) increase in cash and cash equivalents |  |                                  | (3,699,042  | ) |      |  | 4,054,203  |      |  |  | (3,943,372  | ) |  |  | (130,273 | )
|Cash and cash equivalents at beginning of the year   |  |                                  | 12,941,842  |   |      |  | 9,242,800  |      |  |  | 13,297,003  |   |  |  | 439,280  |  
|                                                     |  |                                  |             |   |      |  |            |      |  |  |             |   |  |  |          |  
|Cash and cash equivalents at the end of the year     |  |                                  | 9,242,800   |   |      |  | 13,297,003 |      |  |  | 9,353,631   |   |  |  | 309,007  |  
|                                                     |  |                                  |             |   |      |  |            |      |  |  |             |   |  |  |          |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (6) | Comprehensive Income
| | --- | --------------------

Comprehensive income under R.O.C. GAAP for the years ended December 31, 2009, 2010 and 2011 and accumulated other comprehensive
income balances as of December 31, 2010 and 2011 are summarized as follows:



|                                                                             |  |                                  |           |   |      |  |           |      |  |  |            |   |  |  |         |  
|---------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- |  | --------- | ---- |  |  | ---------- | - |  |  | ------- | -
|                                                                             |  | For the years ended December 31, |          
|                                                                             |  | 2009                             |           |   | 2010 |  |           | 2011 | 
|                                                                             |  | NT$                              |           |   | NT$  |  |           | NT$  |  |  | US$        |  
|Net income                                                                   |  |                                  | 8,789,829 |   |      |  | 5,626,907 |      |  |  | 4,837,243  |   |  |  | 159,803 |  
|Other comprehensive income (loss), net of taxes                              |  |                                  |           |   |      |  |           |      |  |  |            |   |  |  |         |  
|Cumulative translation adjustment on equity investments                      |  |                                  | (88,289   | ) |      |  | (293,841  | )    |  |  | 460,315    |   |  |  | 15,207  |  
|Adjustment for unrealized (loss) gain on available-for-sale financial assets |  |                                  | 767,157   |   |      |  | 1,021,355 |      |  |  | (1,677,440 | ) |  |  | (55,416 | )
|Net loss not recognized as pension cost                                      |  |                                  | (92,142   | ) |      |  | (99,254   | )    |  |  | (108,736   | ) |  |  | (3,592  | )
|                                                                             |  |                                  |           |   |      |  |           |      |  |  |            |   |  |  |         |  
|Comprehensive income                                                         |  |                                  | 9,376,555 |   |      |  | 6,255,167 |      |  |  | 3,511,382  |   |  |  | 116,002 |  
|                                                                             |  |                                  |           |   |      |  |           |      |  |  |            |   |  |  |         |  



|                                                                      |  |                    |           |   |      |  |          |     |  |  |         |  
|--------------------------------------------------------------------- |  | ------------------ | --------- | - | ---- |  | -------- | --- |  |  | ------- | -
|                                                                      |  | As of December 31, |          
|                                                                      |  | 2010               |           |   | 2011 | 
|                                                                      |  | NT$                |           |   | NT$  |  |          | US$ | 
|Accumulated other comprehensive income balances                       |  |                    |           |   |      |  |          |     |  |  |         |  
|Cumulative translation adjustment on equity investments               |  |                    | (87,907   | ) |      |  | 372,408  |     |  |  | 12,303  |  
|Adjustment for unrealized loss on available-for-sale financial assets |  |                    | 1,788,512 |   |      |  | 111,072  |     |  |  | 3,669   |  
|Net loss not recognized as pension cost                               |  |                    | (268,568  | ) |      |  | (377,304 | )   |  |  | (12,465 | )
|                                                                      |  |                    |           |   |      |  |          |     |  |  |         |  
|Accumulated other comprehensive income                                |  |                    | 1,432,037 |   |      |  | 106,176  |     |  |  | 3,507   |  
|                                                                      |  |                    |           |   |      |  |          |     |  |  |         |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (7) | Employers Disclosure about Pension Benefit
| | --- | -------------------------------------------



| | A. | The following tables set forth the actuarial assumptions, funded status and amounts recognized for the Companys defined benefit pension plan pursuant to ASC Topic
715:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Assumptions:
| | --- | ------------



|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|--------------------------------------- |  | -------------------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                        |  | For the years ended December 31, |     
|                                        |  | 2009                             |      |   | 2010 |  |      | 2011 | 
|Discount rate                           |  |                                  | 2.25 | % |      |  | 2.00 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|Long-term rate of compensation increase |  |                                  | 2.00 | % |      |  | 2.00 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  
|Expected rate of return on plan assets  |  |                                  | 2.00 | % |      |  | 2.50 | %    |  |  | 2.00 | %
|                                        |  |                                  |      |   |      |  |      |      |  |  |      |  

In determining the discount rate, ASC Topic 715 recommends some factors for consideration, including:
(a) rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of the pension benefits; and (b) rates implicit in current prices of annuity contracts that could
be used to effectively settle the pension obligation. Since Taiwan bond market does not have a deep market for corporate bonds, the yield rates of government bonds with duration years of 15 years or more are mainly used in determining the discount
rate.



| | (ii) | Change in Benefit Obligation:
| | ---- | -----------------------------



|                                                    |  |                                  |            |   |      |  |            |      |  |  |            |  
|--------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                                                    |  | For the years ended December 31, |           
|                                                    |  | 2009                             |            |   | 2010 |  |            | 2011 | 
|                                                    |  | NT$                              |            |   | NT$  |  |            | NT$  | 
|                                                    |  |                                  |           
|Benefit obligation at the beginning of the year     |  |                                  | (1,544,731 | ) |      |  | (1,922,596 | )    |  |  | (2,120,024 | )
|Service cost                                        |  |                                  | (29,786    | ) |      |  | (33,034    | )    |  |  | (28,866    | )
|Interest cost                                       |  |                                  | (34,630    | ) |      |  | (43,083    | )    |  |  | (42,183    | )
|Plan amendments                                     |  |                                  | (73,596    | ) |      |  |           |      |  |  |           |  
|Actuarial loss                                      |  |                                  | (284,261   | ) |      |  | (154,768   | )    |  |  | (46,010    | )
|Benefits paid                                       |  |                                  | 44,408     |   |      |  | 33,457     |      |  |  | 79,705     |  
|                                                    |  |                                  |            |   |      |  |            |      |  |  |            |  
|Projected benefit obligation at the end of the year |  |                                  | (1,922,596 | ) |      |  | (2,120,024 | )    |  |  | (2,157,378 | )
|                                                    |  |                                  |            |   |      |  |            |      |  |  |            |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (iii) | Change in Plan Assets:
| | ----- | ----------------------



|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  
|------------------------------------------------------ |  | -------------------------------- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|                                                       |  | For the years ended December 31, |          
|                                                       |  | 2009                             |           |   | 2010 |  |           | 2011 | 
|                                                       |  | NT$                              |           |   | NT$  |  |           | NT$  | 
|                                                       |  |                                  |          
|Fair value of plan assets at the beginning of the year |  |                                  | 1,130,537 |   |      |  | 1,143,276 |      |  |  | 1,176,476 |  
|Actual return on plan assets                           |  |                                  | 7,487     |   |      |  | 16,981    |      |  |  | 13,837    |  
|Employer contributions                                 |  |                                  | 49,660    |   |      |  | 49,676    |      |  |  | 48,655    |  
|Benefits paid                                          |  |                                  | (44,408   | ) |      |  | (33,457   | )    |  |  | (79,705   | )
|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  
|Fair value of plan assets at the end of the year       |  |                                  | 1,143,276 |   |      |  | 1,176,476 |      |  |  | 1,159,263 |  
|                                                       |  |                                  |           |   |      |  |           |      |  |  |           |  



| | (iv) | Funded Status:
| | ---- | --------------



|                                         |  |              |            |   |      |  |            |  
|---------------------------------------- |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                                         |  | December 31, |           
|                                         |  | 2010         |            |   | 2011 | 
|                                         |  | NT$          |            |   | NT$  | 
|                                         |  |             
|Projected benefit obligation             |  |              | (2,120,024 | ) |      |  | (2,157,378 | )
|Fair value of plan assets                |  |              | 1,176,476  |   |      |  | 1,159,263  |  
|                                         |  |              |            |   |      |  |            |  
|Funded status                            |  |              | (943,548   | ) |      |  | (998,115   | )
|Net prior service cost                   |  |              | 14,624     |   |      |  | 13,557     |  
|Unrecognized net loss                    |  |              | 870,634    |   |      |  | 901,206    |  
|                                         |  |              |            |   |      |  |            |  
|Accrued pension cost - before adjustment |  |              | (58,290    | ) |      |  | (83,352    | )
|Additional liability                     |  |              | (885,258   | ) |      |  | (914,763   | )
|                                         |  |              |            |   |      |  |            |  
|Accrued pension cost - after adjustment  |  |              | (943,548   | ) |      |  | (998,115   | )
|                                         |  |              |            |   |      |  |            |  



| | (v) | Net Pension Cost :
| | --- | ------------------



|                                               |  |                                  |         |   |      |  |         |      |  |  |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                               |  | For the years ended December 31, |        
|                                               |  | 2009                             |         |   | 2010 |  |         | 2011 | 
|                                               |  | NT$                              |         |   | NT$  |  |         | NT$  | 
|                                               |  |                                  |        
|Service cost                                   |  |                                  | 29,786  |   |      |  | 33,034  |      |  |  | 28,866  |  
|Interest cost                                  |  |                                  | 34,630  |   |      |  | 43,083  |      |  |  | 42,183  |  
|Expected return on assets                      |  |                                  | (28,862 | ) |      |  | (23,215 | )    |  |  | (29,762 | )
|Amortization of unrecognized transition assets |  |                                  | (913    | ) |      |  | (912    | )    |  |  |        |  
|Net prior service cost                         |  |                                  | 91      |   |      |  | 1,067   |      |  |  | 1,067   |  
|Amortization of unrecognized net loss          |  |                                  | 10,966  |   |      |  | 24,637  |      |  |  | 31,363  |  
|                                               |  |                                  |         |   |      |  |         |      |  |  |         |  
|Net periodic pension cost                      |  |                                  | 45,698  |   |      |  | 77,694  |      |  |  | 73,717  |  
|                                               |  |                                  |         |   |      |  |         |      |  |  |         |  



| | (vi) | Other Required Disclosure:
| | ---- | --------------------------



|                               |  |              |            |   |      |  |            |  
|------------------------------ |  | ------------ | ---------- | - | ---- |  | ---------- | -
|                               |  | December 31, |           
|                               |  | 2010         |            |   | 2011 | 
|                               |  | NT$          |            |   | NT$  | 
|                               |  |             
|Accumulated benefit obligation |  |              | (1,524,750 | ) |      |  | (1,639,945 | )
|                               |  |              |            |   |      |  |            |  



| | B. | Valuation and allocation of plan assets
| | -- | ---------------------------------------

The plan assets are all maintained in the designated account at Bank of Taiwan (BOT). BOT holds cash contributions made by the Company and invests the contributions into its managed portfolio, which may
contain, but not limited to, government loans, equities, bonds, foreign investment, short-term notes and securitized products. In addition, 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. The government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The Company does not have authority on how to invest the money.
The plan assets increase by the Companys contributions, account interest earned and profit sharing of the portfolio of BOT pension assets and decrease by the payments made to the retired employees.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | C. | Additional disclosures under ASC Topic 715 regarding pension benefits are as follows:
| | -- | -------------------------------------------------------------------------------------



| | (i) | Estimated future benefit payments:
| | --- | ----------------------------------

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:



|                  |  |         |         |  |     |  |        | 
|----------------- |  | ------- | ------- |  | --- |  | ------ | 
|                  |  | Amounts |        
|                  |  | NT$     |         |  | US$ | 
|2012              |  |         | 30,860  |  |     |  | 1,019  | 
|2013              |  |         | 30,290  |  |     |  | 1,001  | 
|2014              |  |         | 33,804  |  |     |  | 1,117  | 
|2015              |  |         | 60,438  |  |     |  | 1,997  | 
|2016              |  |         | 59,064  |  |     |  | 1,951  | 
|Year 2017 to 2021 |  |         | 535,506 |  |     |  | 17,691 | 



| | (ii) | Contributions:
| | ---- | --------------

The Company
expects to contribute NT$48,711 to its pension plan in 2012.



| | (iii) | Plan assets:
| | ----- | ------------

The plan assets
are all maintained at Bank of Taiwan (BOT) and the Company does not have authority on how to invest the money. Hence, the plan assets are regarded as cash and cash equivalents. The subsequent fair value of the fund assets is subject to investment
and distribution decisions made by its monitory committee and will not necessarily result in the proportional fair value of the plan assets. Therefore, the fair value measurement of plan assets contributed by the Company should be categorized in
level 1.



| | (8) | Inventory Provision
| | --- | -------------------

Inventories
are stated at the lower of cost or net realizable value by item, except where it may be appropriate to group similar 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.



| | (9) | Revenue Recognition Accounting Policy
| | --- | -------------------------------------

The Company derives its revenues from the provision of independent assembly, testing services and turnkey services and recognizes service revenues upon shipment or upon completion of various stages of
turnkey services, based upon transaction terms and when collection is reasonably assured, which is essentially the same under U.S. GAAP. If turnkey services are negotiated in one contract, the Company recognizes revenues based on the quoted prices
when all of the revenue recognition criteria are met.



| | (10) | Major Debt Covenants
| | ---- | --------------------

The major
covenants of the Companys long-term loans are as follows:



| | a. | Current ratio should be larger than 100%.
| | -- | -----------------------------------------



| | b. | Liability to equity ratio should be lower than 100%.
| | -- | ----------------------------------------------------



| | c. | Interest coverage ratio should be larger than 400%.
| | -- | ---------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | (11) | Operating Leases
| | ---- | ----------------

The Company
entered into five lease contracts with Science Park Administration for the use of land of the facility located in Hsinchu, Taiwan. None of these five contracts have met any of the four criteria classified as capital leases and no noncancelable lease
terms are included in the leases. Rental expenses recorded for the years ended December 31, 2009, 2010 and 2011 were NT$10,295, NT$18,224 and NT$17,985, respectively.



| | (12) | Valuation and Qualifying Accounts and Reserves
| | ---- | ----------------------------------------------

The information about our valuation and qualifying accounts and reserves are as follows:



|                                                                            |  |                              |         |  |                            |  |           |                      |  |  |                         |  |  |  |         | 
|--------------------------------------------------------------------------- |  | ---------------------------- | ------- |  | -------------------------- |  | --------- | -------------------- |  |  | ----------------------- |  |  |  | ------- | 
|Description                                                                 |  | Balance atbeginningof period |         |  | AdditionsCharged toExpense |  |           | DeductionsWrite-offs |  |  | Balance at endof period | 
|                                                                            |  | NT$                          |         |  |                            |  |           |                      |  |  | NT$                     | 
|                                                                            |  |                              |         | 
|For the year ended 2009                                                     |  |                              |         |  |                            |  |           |                      |  |  |                         |  |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 304,287 |  |                            |  | 79,188    |                      |  |  | 50,939                  |  |  |  | 332,536 | 
|Allowance for sales discounts                                               |  |                              | 156,096 |  |                            |  | 1,344,325 |                      |  |  | 1,054,372               |  |  |  | 446,049 | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 75,581  |  |                            |  | 6,850     |                      |  |  |                        |  |  |  | 82,431  | 
|Allowance for loss on idle assets                                           |  |                              | 223,954 |  |                            |  | 73,882    |                      |  |  | 82,418                  |  |  |  | 215,417 | 
|Allowance for deferred income tax assets, noncurrent                        |  |                              | 256,714 |  |                            |  |          |                      |  |  | 97,020                  |  |  |  | 159,694 | 
|                                                                            |  |                              |         | 
|For the year ended 2010                                                     |  |                              |         |  |                            |  |           |                      |  |  |                         |  |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 332,536 |  |                            |  | 10,717    |                      |  |  | 276,325                 |  |  |  | 66,928  | 
|Allowance for sales discounts                                               |  |                              | 446,049 |  |                            |  | 603,849   |                      |  |  | 897,226                 |  |  |  | 152,672 | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 82,431  |  |                            |  |          |                      |  |  | 25,305                  |  |  |  | 57,126  | 
|Allowance for loss on idle assets                                           |  |                              | 215,417 |  |                            |  | 117,847   |                      |  |  | 106,169                 |  |  |  | 227,095 | 
|Allowance for deferred income tax assets, noncurrent                        |  |                              | 159,694 |  |                            |  |          |                      |  |  | 57,411                  |  |  |  | 102,283 | 
|                                                                            |  |                              |         | 
|For the year ended 2011                                                     |  |                              |         |  |                            |  |           |                      |  |  |                         |  |  |  |         | 
|Allowance for doubtful accounts                                             |  |                              | 66,928  |  |                            |  | 11,142    |                      |  |  | 49,352                  |  |  |  | 28,718  | 
|Allowance for sales discounts                                               |  |                              | 152,672 |  |                            |  | 367,916   |                      |  |  | 368,454                 |  |  |  | 152,134 | 
|Allowance for loss on obsolescence and decline in market value of inventory |  |                              | 57,126  |  |                            |  | 30,781    |                      |  |  |                        |  |  |  | 87,907  | 
|Allowance for loss on idle assets                                           |  |                              | 227,095 |  |                            |  | 134,227   |                      |  |  | 170,638                 |  |  |  | 190,684 | 
|Allowance for deferred income tax assets, noncurrent                        |  |                              | 102,283 |  |                            |  |          |                      |  |  | 27,184                  |  |  |  | 75,099  | 



| | (13) | Recent Accounting Pronouncements
| | ---- | --------------------------------

U.S. GAAP



| | A. | In May 2011, the Financial Accounting Standards Board, FASB, issued amendments on fair value measurements and related disclosures which clarify the application of
existing guidance and disclosure requirements, change certain fair value measurement principles and prescribe enhanced financial statement disclosures for Level 3 fair value measurements. The updated accounting guidance will be effective for
reporting periods beginning after December 15, 2011. The Company does not anticipate that the adoption of this amendment will have significant impact on our consolidated financial statements.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE)



| | B. | In June 2011, the FASB issued amended guidance regarding the presentation of comprehensive income. The new standard eliminates the option to present components of other
comprehensive income as part of the statement of changes in equity. Under this amendment, all changes in other comprehensive income are to be presented either in a single continuous statement of comprehensive income, or in two separate but
consecutive financial statements. The amendments are effective on a retrospective basis for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The Company does not
anticipate material impacts on its financial statements upon adoption.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | In September 2011, the FASB issued authoritative guidance which simplifies goodwill impairment testing. After assessment of certain qualitative factors, if it is
determined to be more likely than not that the fair value of a reporting unit is less than its carrying amount, entities must perform the quantitative analysis, two-step goodwill impairment test. Otherwise, the quantitative tests become
optional. The guidance is effective January 1, 2012 with early adoption permitted. The Company does not expect the adoption of the guidance to have any significant impact on its consolidated financial statements.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | In December 2011, the FASB, to help reconcile differences between U.S. GAAP and IFRSs, released updated accounting standard requiring entities to disclose both gross
and net information for both financial instruments eligible for offset in the statement of financial position. The amendments are effective for annual reporting periods beginning on or after January 1, 2013. An entity should provide sufficient
disclosures retrospectively for all comparative periods presented. The Company does not anticipate material impacts on its financial statements upon adoption.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

R.O.C. GAAP



| | A. | Effective January 1, 2011, the Company implemented the amendments of R.O.C. SFAS No. 34, Accounting for Financial Instruments. The major amendment
required the Company to include loans and receivables which originated by the entity as financial instruments. The change in accounting principle does not cause significant impact toward the financial statements for the year ended December 31,
2011.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Effective January 1, 2011, the Company adopted R.O.C. SFAS No. 41, Disclosure of Operating Segment Information to replace R.O.C SFAS No. 20,
 Disclosure of Segment Information. The Company, following the standard, restated segments information of 2010 while first adoption. The change in accounting principle does not cause impact toward the consolidated net income and
earnings per share in 2011.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Pursuant to the regulation No. 0990004943 of Financial Supervisory Commission of Executive Yuan (FSCEY), public companies, starting from 2013, shall prepare financial
reports by following International Financial Reporting Standards (IFRSs), which are translated and announced by R.O.C. Accounting Research and Development Foundation (ARDF). To respond to the request, the Company has already formed a team and
outlined a plan to implement the IFRSs. This change does not cause significant impact on the Companys financial results in 2011.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-68